$180bn Pfizer moves into a league of its own
pharmafile | October 28, 2003 | News story | |Â Â Â
$180bn Pfizer moves into a league of its own
The newly enlarged Pfizer has begun life bullishly with a 10% growth in revenues for the first quarter, and the unveiling of a new slogan: 'Beyond Number One'.
Already the clear market leader, the company's acquisition of Pharmacia has catapulted it into a league of its own its market capitalisation makes it 50% bigger than its nearest rival, GlaxoSmithKline, and the third biggest company in the world.
The company's aggressive go-getting style, led by Chairman Chief Executive Hank McKinnell, has its detractors but no-one in the industry can deny Pfizer is now setting the tone for the whole industry.
"Today we go forward as a single company, providing more products to help more patients than any other pharmaceutical company has ever done before", said Mr McKinnell."On any given day, we estimate that nearly 40 million people around the world are treated with a Pfizer medicine".
The company got off to a good start as Pfizer reported a 10% increase in revenues for the first quarter to $8.5 billion. Net income rose from $1.96 billion to $4.67 billion following the sale of the Adams confectionary, Schick-Wilson Sword shaving products and various female health products.
Human pharmaceutical products rose 11% to $7.55 billion, led by a 13% rise in the company top product, the statin Lipitor, which generates sales of $2.1 billion. The drug now has 47% of total US prescriptions for lipid-lowering products.
Antibiotic Zithromax, anti-epileptic Neurontin and erectile dysfunction treatment Viagra all recorded double-digit sales growth. Revenues from co-marketed products Aricept (with Eisai), Bextra and Celebrex (Pharmacia), Spiriva (Boehringer Ingelheim) and Rebif (Serono) also rose by 10% to $331 million.
Mr McKinnell praised staff at both companies for the smooth handling of the $60 billion merger, despite delays in obtaining European regulatory approval, but David Shedlarz, Executive VP and Chief Financial Officer, signalled that job losses would be inevitable.
"Consolidating two global companies with great histories will not be easy, not will it be painless, and it will affect colleagues and facilities from both organisations", he said.
In less circumspect mood, Mr McKinnell recently indicated there will be no future for Pharmacia's New Jersey operations, a fate likely to be shared by many of the company other sites around the world.
Pharmacia's former Chief Executive Fred Hassan has already left the new set-up, taking on instead the challenge of turning around troubled Schering-Plough.
Pfizer now boasts 14 products that are number one in their therapeutic field and 10 with annual global sales exceeding $1 billion. It expects to launch 20 major new products in the period up until 2006 and has over 200 projects in development, including over 100 new molecular entities.
Merger-related cost-savings of $2.5 billion are expected by 2005 and Mr Shedlarz said that the company would be much less dependent on individual products, categories or markets.
He added that the company's financial muscle, including strong cash flow and triple-A credit rating from investment bankers Standard & Poors and Moody's, made it a force to be reckoned with.
"Only seven industrial companies in the world have such ratings, and Pfizer has had them for 17 years. The combined company has the people, products, pipeline, scale and financial flexibility to extend and sustain our leadership", he said.
Chief executives at the major pharmaceutical companies left trailing in Pfizer's wake are undoubtedly under pressure to enter the acquisition market, with Novartis now manoeuvring to take over Swiss rivals Roche.
