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-{{hide_logo|path=[[Image:pfizer_logo.gif|150px|left]]}}'''Pfizer Inc. ([[NYSE]]:PFE)''' is the largest pharmaceutical company in the world. It owns the [[cholesterol]]-lowering drug '''Lipitor''', which brings in a quarter of its revenue and was the best selling medicine in the world in 2009.<ref name=PFE17 /> +{{hide_logo|path=[[Image:pfizer_logo.gif|150px|left]]}}'''Pfizer Inc. ([[NYSE]]:PFE)''' is the largest pharmaceutical company in the world. It owns the best selling medicine in the world, [[cholesterol]]-lowering drug '''Lipitor''' and has 14 other blockbuster drugs (annual sales >$1B).<ref name=PFE17 /> In FY 2010, Pfizer generated revenues of $67.8 billion and net income of $8.26B.<ref>[http://www.pfizer.com/files/investors/presentations/q4performance_020111.pdf Four Quarter 2010 Earnings Transcript]</ref>
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-In 2009, Pfizer achieved sales of $50 billion, an increase of 4% over the previous year. However, excluding legacy sales of $3.3 billion from the Wyeth acquisition, Pfizer product sales actually decreased from 2008. Blockbusters Norvasc, Viagra, Detrol, and Geodon all saw double digit declines in sales, while $12 billion drug Lipitor saw a 5% decline due to the entrance of competing generics into the market. Moreover, the patent for Lipitor will expire in 2010, which will enable the entrance of generics that identically mimic the drug's composition, creating even more formidable competition for the company.<ref>[http://www.pfizer.com/news/press_releases/pfizer_press_releases.jsp?rssUrl=http://mediaroom.pfizer.com/portal/site/pfizer/index.jsp?ndmViewId=news_view&ndmConfigId=1006615&newsId=20100203005875&newsLang=en Pfizer Reports Fourth-Quarter and Full-Year 2009 Results]</ref>+
-As the largest player in the market, Pfizer has greater power in marketing and forming alliances.<ref name=sun>{{cite web|url=http://seekingalpha.com/article/92386-the-long-case-for-pfizer| title=The Long Case for Pfizer}}</ref> The company also consistently posts the highest dividends in the industry.<ref name=sun/> However, Pfizer faces challenges common to all players in the pharmaceutical industry, including issues surrounding [[generics|patent expiration]] and [[FDA regulation]]. Pfizer's established product portfolio included approximately 600 products at the end of 2009,<ref name=PFE2009>[http://media.pfizer.com/files/annualreport/2009/annual/review2009.pdf Annual Report 2009]</ref> and investors in Pfizer will be betting that one of these drugs is the firm's next big hit.+As the largest player in the pharmaceutical market, Pfizer has greater power in marketing and forming alliances.<ref name=sun>{{cite web|url=http://seekingalpha.com/article/92386-the-long-case-for-pfizer| title=The Long Case for Pfizer}}</ref> The company also consistently posts the highest dividends in the industry.<ref name=sun/> However, Pfizer faces challenges common to all players in the pharmaceutical industry, including issues surrounding [[generics|patent expiration]] and [[FDA regulation]].
 + 
 +Pfizer CEO, Ian Reid, who took the helm of the company in 2010, announced that the company would look to divest significant portions of the company in order to focus on pharmaceuticals.<ref>[http://www.reuters.com/article/2011/03/17/pfizer-idUSN1722182020110317 Pfizer reviewing possible divestitures, exec says]</ref>
== Corporate Overview == == Corporate Overview ==
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=== History === === History ===
-Pfizer was founded in 1849 as Charles Pfizer and Company, a chemicals business. Over the last century, it has aligned itself with the developing trends to become a research-based pharmaceutical company. Notably, Pfizer produced most of the penicillin used during World War II. Pfizer is now the world's largest pharmaceutical company, with $50 billion in revenue in 2009.+Pfizer was founded in 1849 as Charles Pfizer and Company, a chemicals business. Over the last century, it has aligned itself with the developing trends to become a research-based pharmaceutical company.. Notably, Pfizer produced most of the penicillin used during World War II. Pfizer is now the world's largest pharmaceutical company with $67.8B in revenues and net income of $8.26B in FY 2010.
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-=== Business Update ===+
-In Q3 of 2010, Pfizer reported sales of $16.2 billion, a growth of 39% from the same quarter of 2009. However reported net income decreased by 70 % to $866 million for the quarter. Pfizer's revenue for the quarter was positively impacted by $5.2 billion from products that it inherited through the Wyeth acquisition in 2009. Excluding these numbers, Pfizer's own product line had a loss of 4% in revenue compared to the same quarter in 2009. Pfizer earned 54 cents per share beating average analyst predictions of 51 cents per share. The company's marque product '''Lipitor’s''' sales decreased by 11%, as the drug faced generic competition. The company increased its expected 2010 profit from $2.20 per share to $2.17 to $2.22. <ref name=Q3_2009>[http://www.fiercepharma.com/press_releases/pfizer-reports-third-quarter-2010-results Pfizer Reports Third-Quarter 2010 Results]</ref> +
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-In Q2 of 2010, Pfizer reported sales of $17.3 billion, a growth of 58% from the same quarter of 2009. Reported net income increased 9% to $2.47 billion for the quarter. Pfizer's revenue for the quarter was positively impacted by $5.4 billion from products that it inherited through the Wyeth acquisition in 2009. Excluding these numbers, Pfizer's organic revenue growth for the quarter was 3%. <ref>[http://media.pfizer.com/files/investors/presentations/q2performance_080310.pdf [Pfizer Reports Second Quarter Results]</ref> Excluding special items, Pfizer earned 62 cents per share beating average analyst predictions of 52 cents per share. The company's marque product '''Lipitor's''' sales increased by 5% to $2.81 billion. The company also stated that it expects the 2010 profit to be on the upper end of its previous forecast of $2.10 to $2.20 per share, excluding special items. <ref>[http://in.reuters.com/article/idINIndia-50595620100803 Pfizer profit beats, reassures on long-term view]</ref>+
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-In Q1 of 2010, Pfizer reported sales of $16.8 billion, a growth of 54% from the same quarter of 2009. Reported net income, however, fell 26% to $2.0 billion for the quarter. Pfizer's revenue for the quarter was positively impacted by $5.3 billion from products that it inherited through the Wyeth acquisition in 2009. Excluding these numbers, Pfizer's organic revenue growth for the quarter was 5.4%. Lipitor, which began to face generic competition, exhibited 1% growth for the quarter, and Pfizer saw strong growth from Lyrica and Sutent.<ref>[http://www.pfizer.com/news/press_releases/pfizer_press_releases.jsp [Pfizer Press Releases]</ref> Pfizer's earnings for the quarter beat analyst estimates by almost $200 million as Lipitor largely exceeded expectations. The company also stated that it expects to achieve $4 to 5 billion in cost savings by the end of 2012 through its merger with Wyeth.<ref>[http://finance.yahoo.com/news/Pfizer-Merck-results-beat-rb-2914988843.html?x=0&.v=4 Pfizer, Merck results beat estimates, shares rise]</ref>+
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-For Q4 of 2009, Pfizer reported revenues of $16.5 billion, a 34% increase from the same quarter of the previous year, largely due to a $3.3 billion influx of legacy revenue from the Wyeth acquisition. Pfizer also reported net income of $767 million for the quarter.<ref>[http://www.pfizer.com/news/press_releases/pfizer_press_releases.jsp?rssUrl=http://mediaroom.pfizer.com/portal/site/pfizer/index.jsp?ndmViewId=news_view&ndmConfigId=1006615&newsId=20100203005875&newsLang=en Pfizer Reports Fourth-Quarter and Full-Year 2009 Results]</ref> Pfizer's earnings fell short of analyst expectations, as did its 2010 forecasts, in which it projected earnings of $2.10 to $2.20 per share from $67 to $69 billion in revenues. Analysts had estimated earnings per share at, on average, $2.27.<ref>[http://www.reuters.com/article/idUSN0210707020100203 Pfizer profit misses; 2010 outlook below Street]</ref>+
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-For Q3 of 2009, Pfizer reported sales of $11.6 billion, a decrease of 3% from the same quarter of the previous year. Pfizer reported decreases in revenue from all of its major segments except for specialty care products, which grew 3% and includes the products Rebif and Revatio. Notable drivers of the decreased revenues include decreased Lipitor sales, loss of European exclusivity for the cancer drug, Camptosar, and continued decreased sales among drugs that are currently facing generic competition. Despite, the decrease in sales, Pfizer reported a 26% increase in net income to $2.89 billion, which the company attained through major cost-reduction initiatives.<ref>[http://www.pfizer.com/news/press_releases/pfizer_press_releases.jsp?rssUrl=http://mediaroom.pfizer.com/portal/site/pfizer/index.jsp?ndmViewId=news_view&ndmConfigId=1006615&newsId=20091020005838&newsLang=en Pfizer Reports Third-Quarter 2009 Results]</ref> Pfizer raised its earnings outlook to $2.00-$2.05 from $1.30-$1.45 earnings per share, largely due to its acquisition of Wyeth, which it formally completed on October 15, 2009.<ref>[http://www.reuters.com/article/marketsNews/idCNN20874120091020?rpc=44 Pfizer 3rd-quarter profit rises, tops Street]</ref>+
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-In the second quarter of 2009, sales fell by 9% from a year before to $10.98 billion. Net income fell 19% from $2.78 billion to $2.26 billion.The company cited adverse foreign exchange rate movements as the main driver of the weaker numbers Sales from established products like Lipitor and Zyrtec continued to weaken, the former due to patent loss and the latter due to intense competition.+
-<ref>[http://www.google.com/hostednews/afp/article/ALeqM5ifD79AuYHULEAVJFhlAe5l1N5Utg AFP. "Pfizer earnings down 19%." 22 July 2009.]</ref>+
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-===Recent News===+
- +
-In 2009, Pfizer and [[GlaxoSmithKline]] announced starting an innovative specialist HIV company. This company will solely focus on research, development and commercialization of HIV medicines. GSK initially held 85% equity with Pfizer holding the other 15%. The company had altogether 17 molecules at its disposal, and will contract R&D services directly from GSK and Pfizer to develop these medicines.<ref>[http://www.viivhealthcare.com/media-room/press-releases/2009-04-16.aspx GSK and Pfizer announce innovative agreement to create a new world-leading, specialist HIV company]</ref>+
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-On 21st July 2010, ViiV announced that it will be progressing its investigational integrase inhibitor S/GSK1349572('572) into Phase III clinical trials. This was based on promising results from two Phase IIb trials. Currently ViiV has 19% of the global AIDS drug market, and a product approval of the only once-a-day formulation would help the collaboration increase marketshare.<ref>[http://www.reuters.com/article/idUSLDE66L0J7 ViiV sees one new HIV product a year by 2012]</ref>+
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-Following [[GlaxoSmithKline]]'s structured venture into rare diseases, on June 14 2010, Pfizer announced the launch of a new research unit that will be devoted to developing new biologics to treat rare diseases. The unit will pursue treatments across all therapeutic areas and modalities and will serve as the focal point for the company's existing research on rare diseases.<ref>[http://www.fiercebiotech.com/press-releases/pfizer-announces-creation-rare-disease-research-unit Pfizer Announces Creation Of Rare Disease Research Unit]</ref> On September 1 2010, the company announced the structured buyout of FoldRx, a biotech startup, whose lead molecule tafamadis, is a therapy for TTR amyloid polyneuropathy.<ref>[http://www.fiercebiotech.com/story/pfizer-buys-foldrx-rare-disease-division/2010-09-01?utm_medium=nl&utm_source=internal Pfizer buys FoldRx]</ref>+
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-On January 19, 2011, Pfizer announced signing a deal with Theraclone, a Seattle based biotech, to use the latter's ''I-STAR platform technology'' to help PFE identify monoclonal antibodies against up to four undisclosed targets--two for infectious disease and two for cancer. The platform is designed to allow screening tens of thousands of antibodies to identify ones with most biological activity. Terms of the deal were not announced but Pfizer gets exclusive rights to therapeutic antibodies discovered in the deal.<ref>[http://www.fiercebiotech.com/story/pfizer-theraclone-ink-632-rd-deal-cancer-infectious-disease/2011-01-19?utm_medium=nl&utm_source=internal Pfizer, Theraclone ink $632 R&D deal for cancer, infectious disease]</ref>+
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==== Restructuring ==== ==== Restructuring ====
 +On February 1, 2011, Pfizer announced plans to restructure its R&D operations. Overall the company plans to take $1.5 billion out of its drug research programs and use the proceeds to fund a $5 billion dollar stock repurchase program. The reduction in R&D was driven by a decision to reduce the number of disease areas the company will focus on.
-On November 5, 2008, Pfizer announced it had abandoned research on "changing regulatory perspectives" on prescription diet drugs. The news came after competitor [[Sanofi-Aventis]] announced they would be abandoning research of a drug of the same class, Acomplia, due to increased regulatory concerns over major psychological side effects.+Pfizer has announced plans to shift its research and development focus away from heart disease drugs to cancer and biotechnology drugs, which it says are more profitable. The former category includes the company's most profitable product, Lipitor. <ref>{{cite web| url=http://ap.google.com/article/ALeqM5haJ55eGwshez0IrsbjxH_DWDDrOAD93H7D300| title=Pfizer shifts focus to cancer and biotech drugs}}</ref>
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-On January 22, 2007, Pfizer announced plans to restructure its business dramatically, cutting costs and streamlining the drug development process. The downsizing initiative reduced its worldwide workforce by 10%, or 10,000 employees, as well as close three research and two manufacturing facilities.<ref>{{cite web|url=http://money.cnn.com/2007/01/22/news/companies/pfizer/index.htm| year=January 22, 2007| title=Pfizer to cut 10,000 jobs, close five plants; profit grows| accessdate=2008-06-10| publisher=CNNMoney.com}}</ref> The company also remains on track to reduce annual expenses by $2B by 2011, and it further expects to realize $4B in cost reduction synergies through the Wyeth merger. <ref>[http://seekingalpha.com/article/150574-pfizer-inc-q2-2009-earnings-call-transcript?page=-1 Q2 2009 Earnings Call]</ref>+
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-Pfizer has announced that it plans to shift its research and development focus away from heart disease drugs to cancer and biotechnology drugs, which it says are more profitable. The former category includes the company's most profitable product, Lipitor. <ref>{{cite web| url=http://ap.google.com/article/ALeqM5haJ55eGwshez0IrsbjxH_DWDDrOAD93H7D300| title=Pfizer shifts focus to cancer and biotech drugs}}</ref>+
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-In 2006, Pfizer sold its Consumer Healthcare unit to [[Johnson & Johnson]] for $16.6 billion.<ref>{{cite web| url=http://www.newsmax.com/money/archives/articles/2006/6/26/082230.cfm| year=June 26, 2006| title=Johnson & Johnson to Buy Pfizer Unit| accessdate=2007-07-19| publisher=MoneyNews.com}}</ref> The sale of the Consumer Healthcare unit, which included many over-the-counter brands such as Listerine, Nicorette, Visine, Sudafed, and Neosporin, indicates Pfizer's renewed focus on pharmaceuticals.+
==== Illegal Marketing Settlement ==== ==== Illegal Marketing Settlement ====
- +On January 28, 2011 Pfizer was ordered to pay $ 142.1 million as damages for illegally promoting Neurontin for unapproved uses. The epilepsy drug, according to the judgment, was promoted for off-label use to help with migraines and bipolar disorder. The company currently faces 300 other lawsuits for illegal promotion of this drug. Pfizer has announced it will appeal this judgment.<ref>[http://www.bloomberg.com/news/2011-01-28/pfizer-ordered-to-pay-142-1-million-in-damages-over-neurontin-marketing.html Pfizer to Pay $142.1 Million Over Neurontin Marketing]</ref>
-On September 2, 2009 Pfizer agreed to pay $2.3 billion to settle both civil and criminal allegations that it had illegally marketed its painkiller, Bextra, outside of the bounds of its label.<ref>[http://dealbook.blogs.nytimes.com/2009/09/03/pfizer-pays-23-billion-to-settle-marketing-case/ Pfizer Pays $2.3 Billion to Settle Marketing Case]</ref> The case had been ongoing for several months and Pfizer had already marked that exact sum for litigation costs on their 2008 year-end report.<ref>[http://mediaroom.pfizer.com/portal/site/pfizer/?ndmViewId=news_view&newsId=20090126005627&newsLang=en Pfizer Reports Fourth-Quarter and Full-Year 2008 Results and 2009 Financial Guidance]</ref> When a drug is prescribed as a treatment outside of what the FDA has approved the drug for, it is known as off label usage. While it is legal for a physician to prescribe a drug off label, it is not legal for the pharmaceutical company to encourage such practices. In addition to the fine, Pfizer agreed to disclose information about its relationship with physicians who conduct clinical trials for its experimental drugs.<ref>[http://www.portfolio.com/views/blogs/heavy-doses/2009/09/02/pfizer-pays-record-health-care-fraud-settlement/ Pfizer's $2.3]</ref>+
==== Recent Acquisitions==== ==== Recent Acquisitions====
-On January 25, 2009, Pfizer agreed to acquire rival [[Wyeth]] for $68 billion, or $50.19 per share, a 29 percent premium over the market price before rumors of the deal leaked. After the merger, Pfizer expects annual sales of over $70 billion and net income of over $20 billion. The company has stated that it plans to save $4 billion a year with the merger, which is one of the largest deals to hit Wall Street after the credit crisis.<ref>http://www.nytimes.com/2009/01/26/business/26drug.html?hp</ref> On October 15, 2009, Pfizer formally completed the acquisition of Wyeth following the receipt of regulatory approval of the acquisition from the required government authorities.<ref>[http://pfizer.com/news/press_releases/pfizer_press_releases.jsp?rssUrl=http://mediaroom.pfizer.com/portal/site/pfizer/index.jsp?ndmViewId=news_view&ndmConfigId=1016273&newsId=20091015005867&newsLang=en Pfizer Completes Acquisition Of Wyeth]</ref>+On January 25, 2009, Pfizer agreed to acquire rival [[Wyeth]] for $68 billion, or $50.19 per share, a 29 percent premium over the market price before rumors of the deal leaked. The deal was one of the largest deals to hit Wall Street after the credit crisis.<ref>http://www.nytimes.com/2009/01/26/business/26drug.html?hp</ref> On October 15, 2009, Pfizer formally completed the acquisition of Wyeth following the receipt of regulatory approval of the acquisition from the required government authorities.<ref>[http://pfizer.com/news/press_releases/pfizer_press_releases.jsp?rssUrl=http://mediaroom.pfizer.com/portal/site/pfizer/index.jsp?ndmViewId=news_view&ndmConfigId=1016273&newsId=20091015005867&newsLang=en Pfizer Completes Acquisition Of Wyeth]</ref>
==Business Segments== ==Business Segments==
 +Pfizer's business divisions are divided into two major divisions: biopharmaceuticals (86% of total revenues), and diversified (14% of total revenues). The diversified division includes animal health, consumer healthcare, nutrition amongst others.<ref name=10K2010>[http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1odHRwOi8vaXIuaW50Lndlc3RsYXdidXNpbmVzcy5jb20vZG9jdW1lbnQvdjEvMDAwMTE5MzEyNS0xMS0wNDg4NzcvZG9jLzAwMDExOTMxMjUxMTA0ODg3Ny5wZGYmdHlwZT0yJmZuPTAwMDExOTMxMjUxMTA0ODg3Ny5wZGY= 10K 2010 Pfizer]</ref>
-=== Revenue Sources ===+===Biopharmaceuticals (86% of 2010 Revenue)===
-Pfizer's pharmaceutical sales accounted for $45.4 billion (90.9%) of its total 2009 revenue of $50 billion. The remainder of revenue came from the animal health division and miscellaneous corporate income.<ref name=PFE16 />+Pfizer's pharmaceutical sales accounted for $58.5 billion (86%) of its total 2010 revenue. The division includes primary care, specialty care, established products, emerging markets and oncology.<ref name=10K2010 /> Some major products in this division are listed below:
-{| border="1" cellpadding="3" width="300" | align=center+*'''Lipitor''' is a statin that decreases LDL levels, and, due to its unprecedented safety and effectiveness, is the best selling drug in the world. It is by far the most important drug for Pfizer and has contributed significantly to the company's growth in the past several years. However, the patent for Lipitor expired in 2010, opening it to competition from [[Generic Drugs (Small Molecule)|generic drugs]] in addition to '''Pravachol''' by [[Bristol-Myers Squibb]] and '''Zocor''' by [[Merck]].<ref>[http://www.google.com/hostednews/afp/article/ALeqM5ifD79AuYHULEAVJFhlAe5l1N5Utg AFP. "Pfizer earnings down 19%." 22 July 2009.]</ref>
-|+ '''Revenue & Net Income (in US$ billions)+
-|- bgcolor=lightblue+
-!+
-!2009+
-!2008 +
-!2007 +
-!2006+
-|-+
-|Revenue+
-|50.0+
-|48.3+
-|48.4+
-|48.4+
-|-+
-|Net Income+
-|8.6+
-|8.1+
-|8.1+
-|19.3*+
-|-+
-|R&D+
-|7.8+
-|7.9+
-|8.1+
-|7.6+
-|-+
-|}+
-<center>''*Note: Pfizer sold its OTC unit for $16 billion in 2006.''</center>+*'''Enbrel''' is prescribed to treat various forms of arthritis, plaque psoriasis, and ankylosing spondylitis. This was the largest drug that Pfizer acquired with its purchase of Wyeth. The drug's profits are split with [[Amgen (AMGN)]], which owns half the rights to Enbrel.
 +*'''Lyrica''' is prescribed to treat epilepsy (see [[Antiepileptic Drug Market]]). Lyrica was one of Pfizer's most successful pharmaceutical launches, and it has since been approved to treat other conditions such as central nerve pain and generalized anxiety disorder.
-=== Major Pfizer Drugs ===+*'''Prevnar'''' is a vaccine that prevent invasive pneumonia. Pfizer acquired it with its purchase of Wyeth.
-As people today are living longer and making poorer lifestyle choices, significant research and several blockbuster drugs are related to the treatment of long-term ailments such as [[cardiac disease]], arthritis, and [[diabetes]]. The following are some notable trends in drug development and how Pfizer's most important drugs fit in.+*'''Celebrex''' is a well-prescribed drug used to treat arthritis-related joint pain. Celebrex belongs to a family of drugs called COX-2 selective non-steroidal anti-inflammatory drugs (NSAIDs). There have been concerns that all NSAIDs (such as naproxen and ibuprofen), as well as COX-2 selective NSAIDs, (such as Celebrex), may increase the risk of [[heart attacks]]. Merck's Vioxx, which was once a competitor drug to Celebrex, has been taken off the market due to these concerns and now faces significant [[medical litigation|liability issues]]. Although there are no signs that Celebrex will suffer a similar fate, all NSAIDs, whether non-selective or COX-2 selective, now carry a warning of increased cardiovascular risk.
-==== Cholesterol and Hypertension ====+*'''Viagra''', the famous erectile dysfunction drug, lost its patent protection in 2010 but continues to be an important drug for Pfizer.
-The public is generally aware of "good" (HDL) and "bad" (LDL) cholesterol and their consequences on long-term cardiovascular health. The development of a class of effective cholesterol lowering drugs known as "statins" is relatively recent. Statins currently on the market work to decrease LDL, and there is little to distinguish them in terms of LDL-reducing efficacy. Although high LDL levels are an important predictor of cardiovascular risk, a low HDL may be just dangerous. Currently, there is no drug on the market that raises HDL. +*'''Norvasc''' is the world's most-prescribed branded medicine for lowering blood pressure.<ref name=10K2010 /> Norvasc is also used to treat angina, or a feeling of tightness in the body. Norvasc faces significant generic competition, which has led to steadily declining revenues.
-Pfizer's '''Lipitor''' is a statin that decreases LDL levels, and, due to its unprecedented safety and effectiveness, is now the best selling drug in the world. In 2009, Lipitor brought in $11.4 billion in revenue for Pfizer, accounting for more than 20% of the company's total revenue.<ref name=PFE17 /> Currently, it is by far the most important drug for Pfizer and has contributed significantly to growth in the past several years. However, the patent for Lipitor will expire in 2010, which will have a major financial impact on Pfizer. It faces competition from the statins '''Pravachol''' by [[Bristol-Myers Squibb]] and '''Zocor''' by [[Merck]], which dented Q2 2009 Lipitor sales.<ref>[http://www.google.com/hostednews/afp/article/ALeqM5ifD79AuYHULEAVJFhlAe5l1N5Utg AFP. "Pfizer earnings down 19%." 22 July 2009.]</ref>+===Research and Development===
-Torcetrapib had previously been Pfizer's strongest candidate to replace Lipitor as a highly successful blockbuster drug. Torcetrapib increases HDL levels as well as lowers LDL levels, but clinical trials also showed a 60% increase in deaths in patients taking the drug, halting further development.<ref name=nyt_torc />+Pfizer has an enormous R&D budget; it spent $9.48 billion on research and development expenses in 2010. The increase was primarily due to the inclusion of Wyeth's R&D facilities on the balance sheet following the merger. <ref name=10K2010 />
-High blood pressure is another risk factor of [[cardiovascular disease]]. Pfizer's '''Norvasc''' is currently the world's most-prescribed branded medicine for lowering blood pressure, with sales totaling $1.97 billion in 2009.<ref name=PFE17 /> Norvasc is also used to treat angina, or a feeling of tightness in the body. Norvasc faces significant generic competition, which has contributed to a sales decline of 12% in 2009.+Researching and developing new drugs is the single most important consideration when identifying the prospects of any pharmaceutical company. A successful drug pipeline is critical because former blockbusters losing patent protection must be constantly replaced by new viable drugs.
-Since high cholesterol levels and hypertension often go hand-in-hand, Pfizer combined Norvasc and Lipitor into a single-pill drug marketed as Caduet, which acheived sales of $548 million in 2009, a decline of 7% from 2008.+The company's largest drug, Lipitor, will lose its patent protection in late 2011, with its the next four largest drugs losing patent protection in 2012, 2013, 2027 (a new form of Prevnar) and 2014, respectively.
- +
-==== Central nervous system disorders ====+
- +
-Pfizer makes a wide range of drugs used to treat a variety of central nervous system disorders. The most significant drugs in this category include '''Zoloft''' for depression (see [[Antidepressant Drug Market]]), '''Lyrica''' for epilepsy (see [[Antiepileptic Drug Market]]), and '''Geodon''' for schizophrenia (see [[Antipsychotic Drug Market]]). After its patent expired in 2006, Zoloft experienced significant declines in sales, bringing in only $516 million in sales in 2009, an 84% drop from $3.3 billion in 2005.<ref name=PFE17 /> Lyrica is one of Pfizer's most successful pharmaceutical launches, and sales improved as it continues to be approved to treat other conditions such as central nerve pain and generalized anxiety disorder. Lyruca saw sales growth of 10% in 2009 to a total of $2.84 billion. Geodon was a fast growing [[Antipsychotic Drug Market|antipsychotic]] treatment, however, sales have stagnated at around $1 billion as generic competition for some of the market leading medications, such as Risperdal have entered the market.<ref>[http://www.wikinvest.com/concept/Antipsychotic_Drug_Market Antipsychotic Drug Market]</ref>+
- +
-==== Arthritis ====+
- +
-Arthritis is a group of painful conditions caused by damage to the joints of the body, as a result of disease, injury, or [[aging baby boomers|aging]]. Osteoarthritis, one of the most prevalent forms of arthritis, commonly accompanies aging and is one of the leading causes of disability of the elderly. Pfizer's '''Celebrex''' is a well-prescribed drug used to treat arthritis-related joint pain. Celebrex belongs to a family of drugs called COX-2 selective non-steroidal anti-inflammatory drugs (NSAIDs). Recently, there have been concerns that all NSAIDs (such as naproxen and ibuprofen), as well as COX-2 selective NSAIDs, (such as Celebrex), may increase the risk of [[heart attacks]]. Merck's Vioxx, which was once a competitor drug to Celebrex, has been taken off the market due to these concerns and now faces significant [[medical litigation|liability issues]]. Although there are no signs that Celebrex will suffer a similar fate, all NSAIDs, whether non-selective or COX-2 selective, now carry a warning of increased cardiovascular risk. The success of Celebrex will depend on the outcome of [[clinical trials]], including a large trial run by the Cleveland Clinic comparing Celebrex to naproxen and ibuprofen.+
- +
-On January 10, 2008, the New York state court ruled in favor of Pfizer, deciding that there is no evidence that Celebrex causes heart attacks at the recommended 200 milligram dose.<ref>{{cite web|url=http://www.nj.com/business/index.ssf/2008/01/pzizers_celebrex_gets_break_in.html|title=Pfizer's Celebrex gets break in court}}</ref> Although many Celebrex lawsuits are still pending, this decision sets a favorable legal precedent for the company. The drug is making a gradual comeback, with sales up to $2.3 billion in 2007 compared to $2.0 billion in 2006, but still falls short of 2004 sales of $3.3 billion.<ref name=PFE17 />+
- +
-Results of a study released on May 15 showed that Celebrex may also prevent lung cancer. The COX-2 enzyme fuels tumor growth, and as a COX-2 inhibitor, the drug decreases incidence of cancer. If this effect is proven to be substantial in future studies, the company may market Celebrex with its newly launched anti-smoking drug Chantix.<ref>{{cite web| url=http://seekingalpha.com/article/77686-pfizer-s-chantix-and-celebrex-an-anti-smoking-double-play?source=feed| title=Pfizer's Chantix and Celebrex: An Anti-Smoking Double Play}}</ref>+
- +
-==== Other ====+
-* '''Viagra''' is the first drug to treat [[erectile dysfunction]] and remains a top seller with sales of $1.89 billion in 2009.+
- +
-* The newly launched anti-smoking drug '''Chantix''' has been touted as the company's next blockbuster. Launched in 2006, sales have picked up with $883 million in 2007. It is currently the only branded and most effective [[smoking cessation]] on the [[Smoking cessation| market]].<ref name=Cowen>Cowen and Company. "Therapeutics Categories Outlook." March 2008.</ref> It was fast tracked for FDA approval after its superior efficacy was demonstrated in clinical trials<ref name=findpharma>{{cite web| url=http://pharmexec.findpharma.com/pharmexec/News/Pfizers-Full-Court-Press-to-Save-Chantix/ArticleStandard/Article/detail/521432?contextCategoryId=43753| title=Pfizer's Full-Court Press to Save Chantix}}</ref> However, Chantix has been plagued by negative media after studies linked it to accidents, vision problems, heart problems, and suicidal ideation. Although further studies are needed to determine whether the problems are caused by the drug itself or are symptoms of nicotine withdraw,<ref>{{cite web|url=http://www.theday.com/re.aspx?re=4a0802ed-ca5c-47fb-a1ee-542f4ca0f440| title=Pfizer stock down again as Chantix takes its toll}}</ref> new prescriptions of Chantix have dropped by half since January and the company has launched a media campaign to emphasize the benefits of quitting smoking over risks of Chantix.<ref name=findpharma />+
- +
-The product's contribution towards sales for 2009 decreased by 17% to $700 million compared to $846 million in 2008.<ref>[http://media.pfizer.com/files/annualreport/2009/financial/financial2009.pdf Financial Report 2009]</ref>+
- +
-== Research and Development==+
- +
-Pfizer has an enormous R&D budget; It trailed only Roche in terms of the money spent by big pharma in 2009 on research and development of new products ($7.4 billion to Roche's $8.7 billion). +
- +
-Although the company invested about 15% of its earnings back into R&D in 2009, it has dealt with a few setbacks:+
- +
-*Dimebon - After spending $225 million upfront to license the Alzheimer drug from Medivation, PFE found the product lacked effectiveness. There is an ongoing trail for Huntington's Disease but after the poor showing for Alzheimer's there is not much excitement for this particular molecule.<ref>[http://www.fiercebiotech.com/special-reports/top-10-phase-iii-failures-2010/dimebon-top-ten-phase-iii-failures Dimebon - Top Ten Phase III Failures 2009 - FierceBiotech.com]</ref>+
- +
-*Tanezumab - On June 24,2010, the FDA announced a clinical hold on the trails ongoing for pain medication tanezumab. A small number of patients with osteoarthritis saw their condition get worse after taking tanezumab, which was the reason cited by the FDA when it asked PFEto stop enrolling new patients with osteoarthritis and also stop giving the drug to people in the trial till more safety studies are performed<ref>[http://www.fool.com/investing/value/2010/06/24/pfizers-painful-fda-news.aspx Pfizer's Painful FDA News]</ref> +
- +
- +
-Not all clinical trials underway have ended with a negative endpoint. On Nov 8th,2010, PFE announced tacositinib, the first oral medication for rheumatoid arthritis, significantly reduced pain and inflammation for almost three out of every four patients in Phase III trials. Analysts believe that if approved, the drug could be a $2 billion dollar product for the company <ref>[http://www.fiercebiotech.com/story/pfizers-ra-pill-tasocitinib-garners-blockbuster-phiii-results/2010-11-08#ixzz16qBMI5AT Pfizer's RA pill tasocitinib posts blockbuster PhIII results - FierceBiotech]</ref>+
== Trends and Forces == == Trends and Forces ==
Line 144: Line 56:
===Tightening FDA Regulations=== ===Tightening FDA Regulations===
-When FDA commissioner Margaret Hamburg began her tenure in 2009, she announced that the FDA would toughen it's enforcement efforts to protect public health.<ref>[http://www.nytimes.com/2009/06/17/us/17fda.html New F.D.A. Chief Says She’ll Toughen Enforcement Efforts]</ref> As the FDA has drawn criticisms for its failures in preventing deaths caused by drugs such as Vioxx, Hamburg has come in with several fixes that include stricter monitoring of drug adverse events, more funding for the agency, stronger ability to force product recalls, and more scientific expertise within the agency.<ref>[http://www.nature.com/news/2009/091125/full/462406a.html The FDA: A tough tonic]</ref> On May 19, 2010, the FDA announced 21 proposals aimed at increasing transparency to the public regarding regulatory information.<ref>[http://www.minyanville.com/businessmarkets/articles/fda-fda-new-guidance-drug-approval/5/20/2010/id/28410?camp=syndication&medium=portals&from=yahoo FDA Transparency Could Tank Pharma Stocks]</ref>+Beginning in 2009, the FDA implemented a series of reforms that include stricter monitoring of drug adverse events, more funding for the agency, stronger ability to force product recalls, more scientific expertise within the agency, more transparency. While the tightened regulations and increased transparency will eventually improve the overall quality of pharmaceutical products, companies will have to adjust to the stricter standards and stronger enforcement.<ref>[http://www.nature.com/news/2009/091125/full/462406a.html The FDA: A tough tonic]</ref>
- +
-Such information will increase the amount of information accessible to the public with regard to companies' pipeline drugs and manufacturing facilities that might otherwise not have been disclosed. While the tightened regulations and increased transparency will eventually improve the overall quality of pharmaceutical products, there will be growing pains as companies adjust to the stricter standards and stronger enforcement. Pfizer's ability to adjust to these new standards will impact its valuation and financial success.+
-===Pfizer's foray into the biogenerics market===+===Pfizer's Foray Into the Biogenerics Market===
-In December 2009, Pfizer announced that it would be entering into the biogenerics business, creating generic versions of popular biologic drugs such as [[Amgen (AMGN)|Amgen's]] Enbrel or [[Sanofi-Aventis SA (SNY)|Sanofi Aventis']] Lovenex.<ref>[http://www.bloomberg.com/apps/news?pid=20601202&sid=aJcKOMUh7ZK0 Pfizer Seeks Boost From Copying Biotechnology Drugs]</ref> Biologic drugs are much harder to replicate than small molecule drugs, and current legislation makes it very difficult for competitors to produce generic versions of the drug. However, proposed new legislation may pave a pathway for generic biologics, which if approved will affect the arthritis market by enabling the entry of generic competition which will lower prices and decrease the overall market size.<ref>[http://www.bio.org/healthcare/followonbkg/ BIO: Biosimilars, Follow-On Biologics]</ref> Such legislation already exists in the European Union.<ref>{{cite web|url =www.eahp.eu/content/download/25698/168176/file/SSR36-37.pdf| title = Biogeneric drugs: from promise to reality in Europe}}</ref> Generic biologics are more expensive to manufacture than their small-molecule counterparts, and will likely sell at a higher price. In addition, there will be a higher barrier to entry as manufacturing expertise and clinical proof are required at higher levels. Pfizer's acquisition of Wyeth in early 2009 enhances its ability to compete in this market.<ref>[http://www.bloomberg.com/apps/news?pid=20601202&sid=aJcKOMUh7ZK0 Pfizer Seeks Boost From Copying Biotechnology Drugs]</ref> Pfizer's success in the biogenerics business will significantly affect its growth in the next decade.+In December 2009, Pfizer announced that it would be entering into the biogenerics business, creating generic versions of popular biologic drugs such as [[Amgen (AMGN)|Amgen's]] Enbrel or [[Sanofi-Aventis SA (SNY)|Sanofi Aventis']] Lovenex.<ref>[http://www.bloomberg.com/apps/news?pid=20601202&sid=aJcKOMUh7ZK0 Pfizer Seeks Boost From Copying Biotechnology Drugs]</ref> Biologic drugs are much harder to replicate than small molecule drugs, and current legislation makes it very difficult for competitors to produce generic versions of the drug. However, proposed new legislation may pave a pathway for generic biologics, which if approved will affect the arthritis market by enabling the entry of generic competition which will lower prices and decrease the overall market size.<ref>[http://www.bio.org/healthcare/followonbkg/ BIO: Biosimilars, Follow-On Biologics]</ref> Such legislation already exists in the European Union.<ref>{{cite web|url =www.eahp.eu/content/download/25698/168176/file/SSR36-37.pdf| title = Biogeneric drugs: from promise to reality in Europe}}</ref> Generic biologics are more expensive to manufacture than their small-molecule counterparts, and will likely sell at a higher price. In addition, there will be a higher barrier to entry as manufacturing expertise and clinical proof are required at higher levels. Pfizer's acquisition of Wyeth in early 2009 enhances its ability to compete in this market.<ref>[http://www.bloomberg.com/apps/news?pid=20601202&sid=aJcKOMUh7ZK0 Pfizer Seeks Boost From Copying Biotechnology Drugs]</ref>
=== [[Pipeline]] Risks=== === [[Pipeline]] Risks===
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{{cite web| title="2007 Pharmaceutical Industry Profile| url=http://www.phrma.org/files/2006%20Industry%20Profile.pdf}}</ref> {{cite web| title="2007 Pharmaceutical Industry Profile| url=http://www.phrma.org/files/2006%20Industry%20Profile.pdf}}</ref>
-Pfizer spends more on research and development than its competitors, spending $7.95 billion on research in 2008.<ref name=PFE14>{{cite 10k| ticker=PFE| year=2008| form=Annual Report| link=http://media.pfizer.com/files/annualreport/2008/financial/financial2008.pdf| pg=14}}</ref> Its product pipeline includes over projects in development, as of Q2 2009.<ref>[http://seekingalpha.com/article/150574-pfizer-inc-q2-2009-earnings-call-transcript?page=-1]</ref> However, the demise of Torcetrapib, a potential blockbuster [[cholesterol]] medication, illustrates the great risks that drug companies face. After reaching the last stage of clinical trials, Pfizer terminated Torcetrapib development in 2006 after studies showed a significant increase in mortality. This failure cost Pfizer nearly $1 billion and negatively impacted investor confidence. <ref name=nyt_torc>{{cite web| url=http://www.nytimes.com/2006/12/05/health/05pfizer.html?_r=1&oref=slogin |title=Pfizer Shares Plummet on Loss of a Promising Heart Drug]}}</ref>+Pfizer spends more on research and development than its competitors, spending $9.48 billion on research in 2010.<ref name=10K2010 /> The company has a number of drugs in development, with 13 in late-stage clinical trials for indications that range from prevention of stroke and deep vein thrombosis to alzheimer's disease and cancer.<ref name=nyt_torc>{{cite web| url=http://www.nytimes.com/2006/12/05/health/05pfizer.html?_r=1&oref=slogin |title=Pfizer Shares Plummet on Loss of a Promising Heart Drug]}}</ref>
-After the failure of Torcetrapib and several other smaller pipeline products, Pfizer forecasts sales of $1.44 billion in 2012 from its current pipeline products, compared to $8.54 billion that analysts predicted five years ago. With plenty of cash on hand but the imminent expiration of Lipitor in 2010, the company has announced a strategy of acquiring multiple small biotechs, rather than the mega-mergers of the past, in an attempt to re-energize its pipeline.<ref>{{cite web|url=http://seekingalpha.com/article/79447-big-pharma-pipelines-failing-to-meet-expectations |title=Big Pharma Pipelines Failing to Meet Expectations}}</ref>+===Competition From [[Generic drugs]]===
- +
-=== [[Generic drugs]]: stiff competition===+
:''For a detailed discussion of brand name vs generic medication, see also [[Brand name vs Generic medications]].'' :''For a detailed discussion of brand name vs generic medication, see also [[Brand name vs Generic medications]].''
-Due to [[FDA regulation|Food and Drug Administration (FDA) regulations]], pharmaceutical patents last 17 years, during which a pharmaceutical company has an exclusive right to manufacture a particular drug. After the patent expires, [[Genericl drugs|generic]] versions of the product can be produced and sold by competitors. Generic medication is cheaper to produce (due to the substantially lower research and development costs) than brand medication, and the lower cost is often a strong incentive for consumers to choose generics over branded drugs. In addition, the presence of a generic alternative may force a decrease in the brand name medication's price, through increased competition.+Due to [[FDA regulation|Food and Drug Administration (FDA) regulations]], pharmaceutical patents last 17 years, during which time a pharmaceutical company has an exclusive right to manufacture a particular drug. After the patent expires, [[Genericl drugs|generic]] versions of the product can be produced and sold by competitors. Generic medication is cheaper to produce (due to the substantially lower research and development costs) than brand medication, and the lower cost is often a strong incentive for consumers to choose generics over branded drugs. In addition, the presence of a generic alternative may force a decrease in the brand name medication's price, through increased competition.
-Pfizer's business model is highly dependent on patent protection and the enforcement of intellectual property rights, and weak patent protection decreases the profitability of drugs. After the antidepressant '''Zoloft''' lost patent exclusivity in the last year, revenues declined to $531 million in 2007, compared to $3.3 billion 2005.<ref name=PFE17>{{cite 10k| ticker=PFE| year=2007| form=Annual Report| link=http://media.pfizer.com/files/annualreport/2007/financial/financial2007.pdf| pg=17}}</ref> Although this was offset by the launch of new products, major pharmaceutical companies like Pfizer are constantly threatened by the entrance of generics.+One of the biggest concerns for Pfizer in the near future is that the patent for Lipitor will expire in 2011.<ref>[[stock:Pfizer_%28PFE%29/Patents%20Intellectual%20Property%20Rights | PFE 10-K 2008 "US Basic Product Patent Expiration Year"]]</ref> In addition, the [[Cardiac Disease|blood pressure]] medicine '''Norvasc''' and allergy medicine '''Zyrtec''' went generic in 2007; '''Camptosar''', a [[Incidence of Cancer|chemotherapy]] drug, went generic in 2008. After patent expiration, all of these products saw precipitous drops in revenue.<ref name=PFE2009 />
- +
-One of the biggest concerns for Pfizer in the near future is that the patent for Lipitor will expire in 2010.<ref>[[stock:Pfizer_%28PFE%29/Patents%20Intellectual%20Property%20Rights | PFE 10-K 2008 "US Basic Product Patent Expiration Year"]]</ref> If the company cannot create another blockbuster drug to fill in this $12 billion gap, it will need to downsize, as it has done already to some extent.+
- +
-In addition, the [[Cardiac Disease|blood pressure]] medicine '''Norvasc''' and allergy medicine '''Zyrtec''' went generic in 2007, as did '''Camptosar''', a [[Incidence of Cancer|chemotherapy]] drug, in 2008. Sales of Norvasc dropped from $4.9 billion in 2006 to $1.9 billion in 2009.<ref name=PFE17 />. After its patent expiry, Camptosar's revenues also dropped 41% in 2009 when compared to 2008.<ref name=PFE2009 />+
=== Political pressures: pricing/licensing=== === Political pressures: pricing/licensing===
-Like other global pharmaceutical companies, Pfizer faces constant [[Pharmaceuticals - Political pressure|pressure from governments]] and activist organizations to increase access by either lowering prices substantially or granting generic licenses. Although these policies would increase the volume of sales, there would be a significant impact on total profits. Pfizer is also facing increase in cost containments globally from managed care organizations, institutions and government agencies and programs. The board price cuts may decrease the global revenues. Additionally, the legislation related to price controls could affect the company’s business. Pfizer continues to [[Medical litigation|lobby]] for favorable regulation and access policies.+Like other global pharmaceutical companies, Pfizer faces constant [[Pharmaceuticals - Political pressure|pressure from governments]] and activist organizations to increase access by either lowering prices substantially or granting generic licenses. Although these policies would increase the volume of sales, there would be a significant impact on total profits. Pfizer is also facing increase in cost containment globally from managed care organizations, institutions and government agencies and programs. The broad price cuts may decrease the global revenues. Additionally, the legislation related to price controls could affect the company’s business. Pfizer continues to [[Medical litigation|lobby]] for favorable regulation and access policies.
=== Dependence on [[health insurance]]=== === Dependence on [[health insurance]]===
-Changes in [[health care]] coverage may impact Pfizer's sales. If an insurance program changes its policies and removes coverage for a certain treatment, sales of related drugs are likely to decrease. In general, insurance programs are more likely to cover essential expenses, such as [[heart disease]] medication, and less likely to cover nonessential expenses, such as cosmetic surgery. For example, Pfizer's ''Viagra'' sales have fallen as [[erectile dysfunction]] coverage has been eliminated from many health care programs.+Changes in [[health care]] coverage may impact Pfizer's sales. If an insurance program changes its policies and removes coverage for a certain treatment, sales of related drugs are likely to decrease. In general, insurance programs are more likely to cover essential expenses, such as [[heart disease]] medication, and less likely to cover nonessential expenses, such as cosmetic surgery. For example, Pfizer's ''Viagra'' sales fell as [[erectile dysfunction]] coverage was eliminated from many health care programs.
===[[Outsourcing]]=== ===[[Outsourcing]]===
-Pharmaceutical companies are seeking to cut manufacturing costs by outsourcing drug production overseas. Pfizer currently outsources 15 percent of its manufacturing operations, but recently announced that it will aim to double this figure to 30 percent. This increase in outsourcing is part of the company's ongoing restructuring efforts.<ref>{{cite web| title=Pfizer considers outsourcing up to 30 percent of manufacturing, much of it to Asia| url=http://www.iht.com/articles/ap/2007/11/30/business/AS-FIN-Asia-Pfizer-Outsourcing.php}}</ref>+Pharmaceutical companies are seeking to cut manufacturing costs by outsourcing drug production overseas. As of 2007, Pfizer outsourced 15% of its manufacturing operations, bu planned to double this figure to 30%. This increase in outsourcing is part of the company's ongoing restructuring efforts.<ref>{{cite web| title=Pfizer considers outsourcing up to 30 percent of manufacturing, much of it to Asia| url=http://www.iht.com/articles/ap/2007/11/30/business/AS-FIN-Asia-Pfizer-Outsourcing.php}}</ref>
==Competition Among Major Drug Manufacturers== ==Competition Among Major Drug Manufacturers==
-Major competitors to Pfizer include [[Novartis]], [[Merck]], and [[Bristol-Myers Squibb]]. All three are pharmaceutical powerhouses, some with competing drugs. For example, Merck produces the cholesterol drug Zocor, which is in direct competition with Lipitor.+Pfizer's major competitors include [[Novartis]], [[Merck]], and [[Bristol-Myers Squibb]]. All three are pharmaceutical powerhouses, some with competing drugs. For example, Merck produces the cholesterol drug Zocor, which is in direct competition with Lipitor. Pfizer also has a number of drug candidates in development that they have co-developed with the companies above as well as [[JOHNSON & JOHNSON (JNJ)]] and other smaller pharmaceutical companies.
- +
-<wikichart width="400" height="400" flashvars="ticker=NYSE:PFE,NYSE:NVS,NYSE:MRK,INDEX:SPX&tickerAlias=Share Prices of PFE and Competitors"/>+
Competition in the pharmaceutical industry lies mostly in specific drug markets. For example, a new [[diabetes]] drug is not going to have any effect on an existing [[cholesterol]] drug, no matter how successful it is. As a result, financial data on the pharmaceutical companies do not tell the whole story. Instead, it may be more appropriate to analyze Pfizer's competitors by each drug market (See section on [[#Major Drugs and Industry Trends|Major Drugs and Industry Trends]]). Competition in the pharmaceutical industry lies mostly in specific drug markets. For example, a new [[diabetes]] drug is not going to have any effect on an existing [[cholesterol]] drug, no matter how successful it is. As a result, financial data on the pharmaceutical companies do not tell the whole story. Instead, it may be more appropriate to analyze Pfizer's competitors by each drug market (See section on [[#Major Drugs and Industry Trends|Major Drugs and Industry Trends]]).
- 
-The table below displays competitive operating metrics for competitors within the pharmaceutical industry. Note that the total revenue for Merck and Pfizer was influenced by revenue inherited from their acquisitions of Schering-Plough and Wyeth, respectively. In addition, net income for Merck was bolstered by $3.2 billion from the sale of its animal division <ref>[http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjY2NzI1NnxDaGlsZElEPTM2ODkxOXxUeXBlPTI=&t=1 Merck Announces Fourth-Quarter and Full-Year 2009 Financial Results]</ref>, while Bristol-Meyers Squibb's net income saw a one-time $7.2 billion increase from the sale of its nutrition division.<ref>[http://www.reuters.com/article/idUSN2713809320100128 Bristol beats forecast, helped by lower taxes]</ref>  
- 
-<center> 
-<table class=MsoTableMediumShading1Accent1 border=1 cellspacing=0 
- cellpadding=0 style='border-collapse:collapse;border:none'> 
- <tr> 
- <td width=878 colspan=14 valign=top style='width:9.15in;border:solid #7BA0CD 1.0pt; 
- background:#4F81BD;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><b><span style='font-family:"Calibri","sans-serif"; 
- color:white'><br> 
- </span></b><b><span style='font-size:14.0pt;font-family:"Calibri","sans-serif"; 
- color:white'>Pharmaceutical and Biotech Industry — Competitive Operating 
- Metrics (2009)<br> 
- <br> 
- </span></b></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-family:"Calibri","sans-serif"; 
- color:black'>&nbsp;</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[JNJ|Johnson &amp; Johnson (JNJ)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[PFE|Pfizer (PFE)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[NVS|Novartis (NVS)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[ABT|Abbott Laboratories (ABT)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[MRK|Merck (MRK)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[BMY|Bristol-Meyers Squibb (BMY)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[LLY|Eli Lilly (LLY)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[AMGN|Amgen (AMGN)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[GILD|Gilead (GILD)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[AstraZeneca (AZN)]]</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>[[RHHBY|Roche (RHHBY)]]</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=878 colspan=13 valign=top style='width:9.15in;border:solid #7BA0CD 1.0pt; 
- border-top:none;background:#4F81BD;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"; 
- color:white'>Revenue (in billions of USD)</span></b></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>Total Revenue</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$61.9</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$50.0</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$44.3</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$30.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$27.4</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$18.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$21.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$14.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$7.0</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$32.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$49.1</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>Gross Profit</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$43.5</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$41.1</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$32.1</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$17.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$18.4</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$13.7</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$17.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$12.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$5.4</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$27.2</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$34.4</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>Revenue Growth from 2008</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>-2.9%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>3.5%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>4.0%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>4.2%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>15.0%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>6.2%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>7.2%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>-2.4%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>31.4%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>3.8%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>7.5%</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=878 colspan=13 valign=top style='width:9.15in;border:solid #7BA0CD 1.0pt; 
- border-top:none;background:#4F81BD;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"; 
- color:white'>Income</span></b></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>Net Income</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$12.3</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$8.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$8.4</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$5.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$12.9</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$10.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$4.3</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$4.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$2.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$7.5</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$7.8</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>Net Profit Margin</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>19.8%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>17.3%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>19.0%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>18.7%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>47.0%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>56.4%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>19.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>31.5%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>37.6%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>22.9%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>15.9%</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>Operating Income</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$15.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$10.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$10.0</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$6.2</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$15.3</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$5.6</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$5.4</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$5.5</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$3.5</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>-$11.5</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- background:#D3DFEE;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$11.9</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>Diluted EPS Growth from 2008</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>-3.7%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>2.5%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>3.7%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>21.8%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>55.6%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>20.7%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>NA</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>19.6%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>36.9%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>23.6%</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>-11.8%</span></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=878 colspan=13 valign=top style='width:9.15in;border:solid #7BA0CD 1.0pt; 
- border-top:none;background:#4F81BD;padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"; 
- color:white'>Other</span></b></p> 
- </td> 
- </tr> 
- <tr> 
- <td width=139 valign=top style='width:1.45in;border-top:none;border-left: 
- solid #7BA0CD 1.0pt;border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal><span style='font-size:10.0pt;font-family:"Calibri","sans-serif"; 
- color:black'>R&D Spending</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$7.0</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$7.8</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$7.5</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$2.7</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$5.9</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$5.1</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$4.3</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$2.9</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$0.9</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$4.4</span></p> 
- </td> 
- <td width=62 valign=top style='width:46.2pt;border-top:none;border-left:none; 
- border-bottom:solid #7BA0CD 1.0pt;border-right:solid windowtext 1.0pt; 
- padding:0in 5.4pt 0in 5.4pt'> 
- <p class=MsoNormal align=right style='text-align:right'><span 
- style='font-size:10.0pt;font-family:"Calibri","sans-serif";color:black'>$9.9</span></p> 
- </td> 
- </tr> 
-</table> 
-</center> 
==References== ==References==

Revision as of 16:03, February 26, 2012

Pfizer Inc. (NYSE:PFE) is the largest pharmaceutical company in the world. It owns the best selling medicine in the world, cholesterol-lowering drug Lipitor and has 14 other blockbuster drugs (annual sales >$1B).[1] In FY 2010, Pfizer generated revenues of $67.8 billion and net income of $8.26B.[2]

As the largest player in the pharmaceutical market, Pfizer has greater power in marketing and forming alliances.[3] The company also consistently posts the highest dividends in the industry.[3] However, Pfizer faces challenges common to all players in the pharmaceutical industry, including issues surrounding patent expiration and FDA regulation.

Pfizer CEO, Ian Reid, who took the helm of the company in 2010, announced that the company would look to divest significant portions of the company in order to focus on pharmaceuticals.[4]

Corporate Overview

History

Pfizer was founded in 1849 as Charles Pfizer and Company, a chemicals business. Over the last century, it has aligned itself with the developing trends to become a research-based pharmaceutical company.. Notably, Pfizer produced most of the penicillin used during World War II. Pfizer is now the world's largest pharmaceutical company with $67.8B in revenues and net income of $8.26B in FY 2010.

Restructuring

On February 1, 2011, Pfizer announced plans to restructure its R&D operations. Overall the company plans to take $1.5 billion out of its drug research programs and use the proceeds to fund a $5 billion dollar stock repurchase program. The reduction in R&D was driven by a decision to reduce the number of disease areas the company will focus on.

Pfizer has announced plans to shift its research and development focus away from heart disease drugs to cancer and biotechnology drugs, which it says are more profitable. The former category includes the company's most profitable product, Lipitor. [5]

Illegal Marketing Settlement

On January 28, 2011 Pfizer was ordered to pay $ 142.1 million as damages for illegally promoting Neurontin for unapproved uses. The epilepsy drug, according to the judgment, was promoted for off-label use to help with migraines and bipolar disorder. The company currently faces 300 other lawsuits for illegal promotion of this drug. Pfizer has announced it will appeal this judgment.[6]

Recent Acquisitions

On January 25, 2009, Pfizer agreed to acquire rival Wyeth for $68 billion, or $50.19 per share, a 29 percent premium over the market price before rumors of the deal leaked. The deal was one of the largest deals to hit Wall Street after the credit crisis.[7] On October 15, 2009, Pfizer formally completed the acquisition of Wyeth following the receipt of regulatory approval of the acquisition from the required government authorities.[8]

Business Segments

Pfizer's business divisions are divided into two major divisions: biopharmaceuticals (86% of total revenues), and diversified (14% of total revenues). The diversified division includes animal health, consumer healthcare, nutrition amongst others.[9]

Biopharmaceuticals (86% of 2010 Revenue)

Pfizer's pharmaceutical sales accounted for $58.5 billion (86%) of its total 2010 revenue. The division includes primary care, specialty care, established products, emerging markets and oncology.[9] Some major products in this division are listed below:

  • Lipitor is a statin that decreases LDL levels, and, due to its unprecedented safety and effectiveness, is the best selling drug in the world. It is by far the most important drug for Pfizer and has contributed significantly to the company's growth in the past several years. However, the patent for Lipitor expired in 2010, opening it to competition from generic drugs in addition to Pravachol by Bristol-Myers Squibb and Zocor by Merck.[10]
  • Enbrel is prescribed to treat various forms of arthritis, plaque psoriasis, and ankylosing spondylitis. This was the largest drug that Pfizer acquired with its purchase of Wyeth. The drug's profits are split with Amgen (AMGN), which owns half the rights to Enbrel.
  • Lyrica is prescribed to treat epilepsy (see Antiepileptic Drug Market). Lyrica was one of Pfizer's most successful pharmaceutical launches, and it has since been approved to treat other conditions such as central nerve pain and generalized anxiety disorder.
  • Prevnar' is a vaccine that prevent invasive pneumonia. Pfizer acquired it with its purchase of Wyeth.
  • Celebrex is a well-prescribed drug used to treat arthritis-related joint pain. Celebrex belongs to a family of drugs called COX-2 selective non-steroidal anti-inflammatory drugs (NSAIDs). There have been concerns that all NSAIDs (such as naproxen and ibuprofen), as well as COX-2 selective NSAIDs, (such as Celebrex), may increase the risk of heart attacks. Merck's Vioxx, which was once a competitor drug to Celebrex, has been taken off the market due to these concerns and now faces significant liability issues. Although there are no signs that Celebrex will suffer a similar fate, all NSAIDs, whether non-selective or COX-2 selective, now carry a warning of increased cardiovascular risk.
  • Viagra, the famous erectile dysfunction drug, lost its patent protection in 2010 but continues to be an important drug for Pfizer.
  • Norvasc is the world's most-prescribed branded medicine for lowering blood pressure.[9] Norvasc is also used to treat angina, or a feeling of tightness in the body. Norvasc faces significant generic competition, which has led to steadily declining revenues.

Research and Development

Pfizer has an enormous R&D budget; it spent $9.48 billion on research and development expenses in 2010. The increase was primarily due to the inclusion of Wyeth's R&D facilities on the balance sheet following the merger. [9]

Researching and developing new drugs is the single most important consideration when identifying the prospects of any pharmaceutical company. A successful drug pipeline is critical because former blockbusters losing patent protection must be constantly replaced by new viable drugs.

The company's largest drug, Lipitor, will lose its patent protection in late 2011, with its the next four largest drugs losing patent protection in 2012, 2013, 2027 (a new form of Prevnar) and 2014, respectively.

Trends and Forces

Tightening FDA Regulations

Beginning in 2009, the FDA implemented a series of reforms that include stricter monitoring of drug adverse events, more funding for the agency, stronger ability to force product recalls, more scientific expertise within the agency, more transparency. While the tightened regulations and increased transparency will eventually improve the overall quality of pharmaceutical products, companies will have to adjust to the stricter standards and stronger enforcement.[11]

Pfizer's Foray Into the Biogenerics Market

In December 2009, Pfizer announced that it would be entering into the biogenerics business, creating generic versions of popular biologic drugs such as Amgen's Enbrel or Sanofi Aventis' Lovenex.[12] Biologic drugs are much harder to replicate than small molecule drugs, and current legislation makes it very difficult for competitors to produce generic versions of the drug. However, proposed new legislation may pave a pathway for generic biologics, which if approved will affect the arthritis market by enabling the entry of generic competition which will lower prices and decrease the overall market size.[13] Such legislation already exists in the European Union.[14] Generic biologics are more expensive to manufacture than their small-molecule counterparts, and will likely sell at a higher price. In addition, there will be a higher barrier to entry as manufacturing expertise and clinical proof are required at higher levels. Pfizer's acquisition of Wyeth in early 2009 enhances its ability to compete in this market.[15]

Pipeline Risks

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.[16]

Pfizer spends more on research and development than its competitors, spending $9.48 billion on research in 2010.[9] The company has a number of drugs in development, with 13 in late-stage clinical trials for indications that range from prevention of stroke and deep vein thrombosis to alzheimer's disease and cancer.[17]

Competition From Generic drugs

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

Due to Food and Drug Administration (FDA) regulations, pharmaceutical patents last 17 years, during which time a pharmaceutical company has an exclusive right to manufacture a particular drug. After the patent expires, generic versions of the product can be produced and sold by competitors. Generic medication is cheaper to produce (due to the substantially lower research and development costs) than brand medication, and the lower cost is often a strong incentive for consumers to choose generics over branded drugs. In addition, the presence of a generic alternative may force a decrease in the brand name medication's price, through increased competition.

One of the biggest concerns for Pfizer in the near future is that the patent for Lipitor will expire in 2011.[18] In addition, the blood pressure medicine Norvasc and allergy medicine Zyrtec went generic in 2007; Camptosar, a chemotherapy drug, went generic in 2008. After patent expiration, all of these products saw precipitous drops in revenue.[19]

Political pressures: pricing/licensing

Like other global pharmaceutical companies, Pfizer faces constant pressure from governments and activist organizations to increase access by either lowering prices substantially or granting generic licenses. Although these policies would increase the volume of sales, there would be a significant impact on total profits. Pfizer is also facing increase in cost containment globally from managed care organizations, institutions and government agencies and programs. The broad price cuts may decrease the global revenues. Additionally, the legislation related to price controls could affect the company’s business. Pfizer continues to lobby for favorable regulation and access policies.

Dependence on health insurance

Changes in health care coverage may impact Pfizer's sales. If an insurance program changes its policies and removes coverage for a certain treatment, sales of related drugs are likely to decrease. In general, insurance programs are more likely to cover essential expenses, such as heart disease medication, and less likely to cover nonessential expenses, such as cosmetic surgery. For example, Pfizer's Viagra sales fell as erectile dysfunction coverage was eliminated from many health care programs.

Outsourcing

Pharmaceutical companies are seeking to cut manufacturing costs by outsourcing drug production overseas. As of 2007, Pfizer outsourced 15% of its manufacturing operations, bu planned to double this figure to 30%. This increase in outsourcing is part of the company's ongoing restructuring efforts.[20]

Competition Among Major Drug Manufacturers

Pfizer's major competitors include Novartis, Merck, and Bristol-Myers Squibb. All three are pharmaceutical powerhouses, some with competing drugs. For example, Merck produces the cholesterol drug Zocor, which is in direct competition with Lipitor. Pfizer also has a number of drug candidates in development that they have co-developed with the companies above as well as JOHNSON & JOHNSON (JNJ) and other smaller pharmaceutical companies.

Competition in the pharmaceutical industry lies mostly in specific drug markets. For example, a new diabetes drug is not going to have any effect on an existing cholesterol drug, no matter how successful it is. As a result, financial data on the pharmaceutical companies do not tell the whole story. Instead, it may be more appropriate to analyze Pfizer's competitors by each drug market (See section on Major Drugs and Industry Trends).

References

  1. Four Quarter 2010 Earnings Transcript
  2. 3.0 3.1 The Long Case for Pfizer.
  3. Pfizer reviewing possible divestitures, exec says
  4. Pfizer shifts focus to cancer and biotech drugs.
  5. Pfizer to Pay $142.1 Million Over Neurontin Marketing
  6. http://www.nytimes.com/2009/01/26/business/26drug.html?hp
  7. Pfizer Completes Acquisition Of Wyeth
  8. 9.0 9.1 9.2 9.3 9.4 10K 2010 Pfizer
  9. AFP. "Pfizer earnings down 19%." 22 July 2009.
  10. The FDA: A tough tonic
  11. Pfizer Seeks Boost From Copying Biotechnology Drugs
  12. BIO: Biosimilars, Follow-On Biologics
  13. [www.eahp.eu/content/download/25698/168176/file/SSR36-37.pdf Biogeneric drugs: from promise to reality in Europe].
  14. Pfizer Seeks Boost From Copying Biotechnology Drugs
  15. "2007 Pharmaceutical Industry Profile.
  16. Pfizer Shares Plummet on Loss of a Promising Heart Drug].
  17. PFE 10-K 2008 "US Basic Product Patent Expiration Year"
  18. Pfizer considers outsourcing up to 30 percent of manufacturing, much of it to Asia.
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