Prior to its acquisition by Pfizer (PFE), Wyeth was the fourth largest biotech and pharmaceutical company with sales of $22.3 billion, of which more than a quarter came from sales of the antidepressant Effexor and children's pneumonia vaccine Prevnar.[1][2] The patents for Effexor and the heartburn drug Protonix expire in 2010, but both have been challenged by generic manufacturers since 2007, several years ahead of schedule.[3][4] On the other hand, Prevnar and the arthritis drug Enbrel are relatively sheltered from generic competition since biotechnology drugs (biologics) are harder to copy and the FDA does not have a process to approve of generic biologics yet.[1]

While Effexor and Protonix have experienced relatively stagnant growth due to generic threats, sales of Enbrel have been strong, with international sales tripling in three years.[1] Enbrel has been on the market for a decade and has shown a good safety-profile.[1] Wyeth is also focusing on Pristiq, an antidepressant launched in 2008 that is designed to be Effexor's successor, and Prevnar v13, a version of the pneumonia vaccine for adults. Wyeth also makes consumer health products including the brands Advil, ChapStik, and Robitussin and animal health products.[3]

On January 25, 2008, Pfizer agreed to acquire Wyeth for $68 billion, or $50.19 per share, a 29 percent premium over the market price before rumors of the deal leaked. Pfizer is already the largest pharmaceutical company in the world, and combined with Wyeth, the company expects to earn over $20 billion in cash each year. Pfizer has stated that it plans to save $4 billion a year with the merger.[5]

Corporate Overview

Major products

Pharmaceuticals (83.1% of 2007 sales, 95.5% of net income)

  • Effexor (16.9% of sales), a depression and anxiety disorder drug, is Wyeth's best-selling product and the number one selling antidepressant in the world with sales of $3.8 billion in 2007 (see Antidepressant Drug Market).[3][6][3] It belongs to a different class of antidepressant (SNRIs) than older drugs (SSRIs), and is often effective for patients not responding to SSRIs, but also has significant side effects including nausea, insomnia, sexual dysfunction, and higher risk of suicide -- the drug increased suicide risk by 1.6-fold compared to no treatment.[6][7]
  • Prevnar (10.9% of sales) is a pneumonia vaccine for infants and young children. It is the first and only vaccine to exceed $2 billion in annual sales.[3] The Centers for Disease Control recommends the vaccine to every young child, and production could not keep up with demand from the introduction of the drug in 2001 until 2004.[8] Prevnar is included in 16 national immunization programs, meaning it is given to almost every child in those countries.[9] Prevnar is only indicated for young children, but Wyeth is developing a more comprehensive version of the vaccine for adults.
  • Enbrel (9.1% of sales) is a biotechnology drug that reduces inflammation and is used to treat autoimmune diseases such as rheumatoid arthritis and psoriasis. Enbrel belongs to a class of drugs called TNF inhibitors, which are all immunosuppressants and cause side effects such as infections, blood disorders, and increased risk of certain cancers.[10] Wyeth co-markets the drug with Amgen within U.S. and Canada and owns exclusive rights outside of U.S. and Canada.[3]
  • Protonix (8.5% of sales) treats gastroesophageal reflux disease (heartburn). Although the Protonix patent expires in 2010, Teva produced a generic version of the drug in 2007, claiming that the Protonix patent was not valid.[11] Wyeth has been unsuccessful in halting Teva's sales but is continuing the appeals process, and has even launched it's own generic version to compete with Teva.[11] Sales fell by 67% since the launch of Teva's generic.[4]
  • Zosyn/Tazocin (5.1% of sales) is an antibiotic used in intensive care medicine, diabeties-related infections, and chemotherapy.[12]
  • Premarin (4.7% of sales) primarily consists of estrogen isolated from animal sources and is taken by women to balance hormone levels.[13]

Consumer Health (12.2% of sales, 8.0% of income)

  • This segment makes over-the-counter products such as Advil, ChapStik, and Robitussin.

Animal Health (4.7% of sales, 3.0% of income)

  • Products include pharmaceuticals, vaccines, and nutritional products for veterinary care.

Note: Corporate expenses accounted for the remaining -6.5% of income.

Wyeth 2007 Product Sales
Wyeth 2007 Product Sales[2]

Upcoming drugs

  • Pristiq is a depression drug that is also being targeted for menopause treatment.[14] The active ingredient in Pristiq is a metabolite of Effexor. Pristiq was introducted to the US market in 2008, and partially mitigates the loss of exclusivity for Effexor in 2010.[14] However, Pristiq will face competition from both Effexor and its generic equivalents. A major challenge for the drug is the lack of differentiation from Effexor.[9]
  • Prevnar 13v is a new version of the Prevnar vaccine that provides protection against more strains of bacteria and is intended to be indicated for adults.[1] Prevnar 13v is in Phase III trials and expected to enter the market in 2009.[9]
  • Bapineuzumab is an Alzheimer's drug that has shown mixed results in clinical trials. As a monoclonal antibody, bapineuzumab works by inducing an immune response against the amyloid protein that is thought to contribute to the development of Alzheimer's disease.[15] However, in July of 2008, Wyeth and partner Elan announced results that only showed efficacy in a third of Alzheimer patients with a specific gene mutation.[15]

Business Financials

Total pharmaceuticals revenue increased by 10% in 2007, driven by favorable exchange rates and higher sales of Effexor, Protonix, Prevnar, and Zosyn.[16] 48.0% of worldwide sales comes from outside of the U.S.[17]

Wyeth Financials
Wyeth Financials[18]

Trends and Forces

Effexor and Protonix patents expire in 2010 and are already under attack

Effexor and Protonix accounted for over a quarter of Wyeth's sales in 2007, and their patents are nearing expiration.[2] However, generic manufacturers have launched generics even before the expiration of these patents. The patent on Effexor's active ingredient (venlafaxine) ran out in 2008, although Wyeth still holds patent on the capsule form until 2010. Sun Pharmaceuticals, an Indian generics manufacturer, is seeking FDA approval for a generic version with the same active ingredient but in tablet form.[19] Protonix is also under siege from Teva, which challenged Wyeth's patent and produced a generic Protonix in 2007. Even though Wyeth and Teva reached an undisclosed settlement and Teva has stopped making the generic Protonix, Teva had already shipped out a year's of supply to wholesalers and sales fell by 67% after the launch of the generic.[4]

For a detailed discussion of brand name vs. generic medication, see also Brand name vs Generic medications.

Biologics such as Enbrel and Prevnar are sheltered from generics

Enbrel and Prevnar are biologics (biotechnology products), which are more difficult for generic competitors to produce than traditional drugs.[1] This is because it is generally more difficult to prove that generic biologics have the same efficacy and safety as the original since biologics have more complex structures than chemical drugs. Currently, FDA does not offer a process to apply for generic biologics.[1]

Pipeline risks

Wyeth's Alzheimer's candidate bapineuzumab experienced a major setback after late stage trial results did not show statistical significance for most types of the disease. Wyeth and partner Elan had invested significant resources into developing and testing the drug, and this news came as a disappointment to investors and the companies' stocks dropped in late-July of 2008 as a result.[15]

Developing a new drug is a time-consuming and costly endeavor. Hundreds of thousands of candidate compounds must be screened to identify a handful of potential drugs, and even fewer of these candidate drugs are found to be effective at treating a disease. The drug must then pass strict safety standards in several series of clinical trials. The entire process of developing a new drug and bringing it to the market takes up to 10 to 15 years and on average costs $800 million.[20]

Competing drugs and market share

Effexor competes with Eli Lilly's Cymbalta in the antidepressant market. Effexor's patent expires in 2010, so generic competition is on the horizon.[1] The drug may also face cannibalistic competition from Wyeth's own Pristiq. Since 2006, Effexor has slowly lost market share to generics.[21]

Antidepressant Market Monthly Total Prescription Share
Antidepressant Market Monthly Total Prescription Share[21]

Prevnar holds a monopoly as the vaccine for a specific type of pneumonia-causing bacteria.[1] However, GlaxoSmithKline is seeking approval for Synflorix, a competiting vaccine, in E.U. and international markets.[22]

Enbrel competes with Johnson & Johnson's Remicade, Abbott's Humira, and Pfizer's Celebrex in the arthritis market.[9] Despite strong growth of the drug, Humira is stealing market share from Enbrel due to its superior efficacy[1]

Protonix competes with AstraZeneca's Prilosec/Nexium, Prevacid, and Johnson & Johnson's Aciphex in the gastrointestinal drug market. Protonix and other branded proton pump inhibitors have been steadily losing market share to omeprazole, a generic drug in the family.[21]

Proton Pump Inhibitor (PPI) Market: Franchise Shares (% of total RXs)
Proton Pump Inhibitor (PPI) Market: Franchise Shares (% of total RXs)[21]


  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 WYE Morningstar Analyst Report. 9-10-2008
  2. 2.0 2.1 2.2 WYE 2007 Financial Report Exhibit 13 pg. 65  
  3. 3.0 3.1 3.2 3.3 3.4 3.5 WYE 2007 Financial Report Exhibit 13 pg. 65  
  4. 4.0 4.1 4.2 Generic Protonix and Wyeth as Takeover Bait.
  6. 6.0 6.1 Wikipedia:Effexor
  7. Tiihonen J, Lönnqvist J, Wahlbeck K, Klaukka T, Tanskanen A, Haukka J (2006). "Antidepressants and the risk of suicide, attempted suicide, and overall mortality in a nationwide cohort". Arch. Gen. Psychiatry 63 (12): 1358–67. doi:10.1001/archpsyc.63.12.1358. PMID 17146010. 
  8. Wikipedia:Prevnar
  9. 9.0 9.1 9.2 9.3 Cowen and Company. Therapeutic Categories Outlook. March 2008.
  10. Wikipedia:Enbrel
  11. 11.0 11.1 Wyeth Raises The Stakes: Shipes a Generic Protonix.
  12. Wikipedia:Tazocin
  13. Wikipedia:Premarin
  14. 14.0 14.1 Wikipedia:Pristiq
  15. 15.0 15.1 15.2 Elan, Wyeth's Alzheimer Drug News Doesn't Please Investors.
  16. WYE 2007 Financial Report Exhibit 13 pg. 87  
  17. WYE 2007 Financial Report Exhibit 13 pg. 66  
  18. WYE 2007 Financial Report Exhibit 13 pg. 2  
  19. Patent Trouble Pending: Wyeth And Effexor XR.
  20. "2007 Pharmaceutical Industry Profile".
  21. 21.0 21.1 21.2 21.3
  22. GSK files Synflorix in the EU - let the battle commence.
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki