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. Enbrel has been on the market for a decade and has shown a good safety-profile. 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.
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.
Note: Corporate expenses accounted for the remaining -6.5% of income.
Total pharmaceuticals revenue increased by 10% in 2007, driven by favorable exchange rates and higher sales of Effexor, Protonix, Prevnar, and Zosyn. 48.0% of worldwide sales comes from outside of the U.S.
Effexor and Protonix accounted for over a quarter of Wyeth's sales in 2007, and their patents are nearing expiration. 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. 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.
Enbrel and Prevnar are biologics (biotechnology products), which are more difficult for generic competitors to produce than traditional drugs. 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.
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.
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.
Effexor competes with Eli Lilly's Cymbalta in the antidepressant market. Effexor's patent expires in 2010, so generic competition is on the horizon. The drug may also face cannibalistic competition from Wyeth's own Pristiq. Since 2006, Effexor has slowly lost market share to generics.
Prevnar holds a monopoly as the vaccine for a specific type of pneumonia-causing bacteria. However, GlaxoSmithKline is seeking approval for Synflorix, a competiting vaccine, in E.U. and international markets.
Enbrel competes with Johnson & Johnson's Remicade, Abbott's Humira, and Pfizer's Celebrex in the arthritis market. Despite strong growth of the drug, Humira is stealing market share from Enbrel due to its superior efficacy
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.