February 16, 2006
McKinnell highlights changes for ‘new generation’ Pfizer
Pfizer CEO Hank McKinnell expects a “new generation” of Pfizer to emerge in the next few years as the company executes a wide-ranging strategy to transform all areas of its business and offset several product patent expirations looming on the horizon. “This is a time of transformation for Pfizer and our industry,” McKinnell said during a conference call with financial analysts last Friday. “We all understand the effects of the numerous and closely spaced patent expirations we face. Challenging as these may be, we are moving through this difficult period and we will talk today about accelerating revenue growth. … To build the platform for the next-generation Pfizer, we've gained scale, revitalized R&D, streamlined our company, launched many new medicines and learned to prosper in an environment of increased payer-power.” Karen Katen, vice chairman and president of Pfizer Human Health, added, “We are expecting strong growth for Lipitor, Celebrex and Lyrica in 2006, and we see excellent prospects for a number of new medicines we plan to launch this year. These include recently approved Sutent and Exubera, breakthrough treatments for cancer and diabetes, respectively, as well as our smoking-cessation medicine Champix, which is currently under priority review by the FDA.” Katen said sales of cholesterol-lowering Lipitor, the world’s best-selling prescription medicine, would exceed $13 billion in 2006, up from $12.2 billion in 2005. Sales of the COX-2 prescription pain drug Celebrex will exceed $2 billion in 2006, and sales of nerve-pain treatment Lyrica should triple to more than $900 million this year, she said. The New York–based drugmaker faces 2006 patent expiration for its antidepressant Zoloft, which saw sales of $3.3 billion in 2005. In 2007 Pfizer stands to lose patent protection for its blood pressure treatment Norvasc, which brought in $4.7 billion, and on its allergy drug Zyrtec, which saw $1.3 billion in sales last year. The New York drugmaker also said last week that it is exploring strategic alternatives for its Pfizer Consumer Healthcare (PCH) business, including retaining, spinning off or selling the business. “The objective of the review is to unlock the value of the business for Pfizer shareholders at a time when market valuations are attractive for large, high-quality consumer businesses,” the company said in a statement. PCH’s product line includes products such as Listerine mouthwash, Bengay pain-relieving cream, Dramamine for motion sickness and Visine eye drops. The division’s sales rose 10% to $3.8 billion last year as sales of Pfizer’s prescription products fell 4% to $44 billion. Based on values of similar consumer-products companies, PCH, if sold outright, could fetch $8 billion to $11 billion, according to estimates. PCH is likely to be attractive to large consumer-products companies such as Colgate-Palmolive, Unilever and Procter & Gamble.