Pfizer pfabricates pfarmaceuticals pfor quite a pfew inpfirmities. The company is the world's largest research-based pharmaceuticals firm, producing medicines for ailments in fields including cardiovascular health, metabolism, oncology, immunology, and neurology. Its top prescription products include cholesterol-lowering Lipitor, pain management drugs Celebrex and Lyrica, pneumonia vaccine Prevnar, and erectile dysfunction treatment Viagra, as well as arthritis drug Enbrel, antibiotic Zyvox, and high-blood-pressure therapy Norvasc. Consumer health products include such leading brands as Advil, Centrum, and Robitussin. Pfizer was founded by cousins Charles Pfizer and Charles Erhart in 1849.
In 2014 Pfizer began organizing its business into three operating segments. The Global Innovative Pharmaceutical segment (GIP) includes immunology and inflammation, cardiovascular and metabolic, neuroscience and pain, rare diseases, and women’s and men’s health. The Global Vaccines, Oncology, and Consumer Healthcare group (VOC) works on vaccines and other products for oncology and consumer healthcare. The Global Established Pharmaceutical segment (GEP) covers sterile injectable products and the company's biosimilar development portfolio. Collaborations and existing agreements, including those with Mylan Inc. in Japan, Zhejiang Hisun Pharmaceutical Co. Ltd. in China, and Laboratório Teuto Brasileiro S.A. in Brazil, fall under the GEP umbrella.
Pfizer's largest patent expiration -- that of former #1 global top-selling drug Lipitor, which brought in $11 billion to $12 billion in annual sales during its prime -- took effect in the US market on November 30, 2011. As generic drugmakers (including Ranbaxy and Actavis) began selling versions of the product, annual Lipitor sales dipped to $9.6 billion in 2011 and then plummeted to $3.9 billion in 2012. Lipitor also lost protection in Japan and most of Europe that year; it had already lost its exclusivity in other markets such as Canada, Mexico, and Spain in 2010. Pfizer has retained some Lipitor revenues through sales in other markets and through direct-to-consumer programs.
Pfizer had three drugs topping $3 billion in sales in 2013: Lyrica, Prevnar, and Enbrel. Two more blockbuster drugs pulled in over $2 billion (Celebrex and Lipitor), and another five offerings are $1 billion earners including Viagra, Norvasc and Zyvox, as well as Sutent (cancer) and Premarin (menopause). The company is working diligently to launch new blockbusters from its robust R&D pipeline to make up for the off-patent losses and return to revenue growth. The firm has some 80 projects in clinical stages of development, including drugs for Alzheimer's disease, psoriasis, diabetes, lung cancer, epilepsy, pain, and infections.
While the US remains Pfizer's largest market (accounting for about 40% of revenues), the drugmaker has a strong global presence, with international countries accounting for more than half of sales. Key international markets include Japan (10% of sales), Australia, Canada, Finland, New Zealand, Scandinavia, South Korea, and countries in Western Europe; the company is also growing in emerging markets such as Brazil, China, India, Mexico, Russia, and Turkey.
Sales and Marketing
The company markets its pharmaceuticals directly to doctors, hospitals, nurses, pharmacists, benefit management firms, managed care organizations, employer groups, and patients themselves. Most of its sales are conducted through wholesale distributors including McKesson, Cardinal Health, and AmerisourceBergen, each of which account for around 10% of annual revenues.
Pfizer has seen continuous revenue decline since 2011 and 2013 was no exception. Revenue dropped 13% to $51.6 billion as the company lost patent protection for Lipitor, Viagra, and other key drugs across the globe. However the sale of its animal health business Zoetis and payments from a couple of patent-protection law suits brought the company a 51% bump in net income, from $14.6 billion to $22 billion. Cash from operations increased $1 million due to deferred income tax.
Though it continues to grow through R&D efforts and acquisitions, Pfizer has been conducting extensive cost-cutting programs in recent years to counteract losses from patent expiration, as well as to integrate the massive 2009 acquisition of Wyeth; it has also cut billions in annual costs. It has also been selling non-core assets during that same time. After selling its capsule manufacturing and nutrition businesses, Pfizer then placed all of its animal health operations into its Zoetis subsidiary and raised some $2.2 billion by selling about 17% of it through an IPO in early 2013; it sold the rest of Zoetis through further share offerings later that year.
Over the past few years Pfizer has been streamlining operations at its research facilities with the overall goal of reducing its adjusted R&D spend to between $6.5 billion and $7 billion by the end of 2013. The company reported $7.3 billion in adjusted R&D expenses during 2012 (down from $8.4 billion in 2011) and $6.6 billion in 2013. As part of this strategy, the company is focusing on its most promising late-stage drug candidates in five key therapeutic areas: immunology and inflammation; cardiovascular, metabolic, and endocrine disease; oncology; pain and neurology; and vaccines. Pfizer has also increasingly relied on partnerships to build its R&D activities, including some team-ups with fellow top pharma companies such as Bristol-Myers Squibb (cardiovascular and metabolic candidates), and GlaxoSmithKline (HIV).
No stranger to large acquisitions, Pfizer in 2014 made a $100 billion offer for fellow pharma firm AstraZeneca. The deal, which was repeatedly rebuffed, would have boost Pfizer's R&D efforts, moved its headquarters to tax-friendly England, and delivered promising oncology drug candidates. Pfizer eventually gave up on the deal.
Mergers and Acquisitions
Pfizer has made a number of acquisitions to beef up its development-stage and commercialized offerings and ward off losses from patent expiration. Its boldest move came with the 2009 acquisition of pharma rival Wyeth for $68 billion, which expanded its therapeutic offerings in a wide variety of areas.
In 2012 the company purchased specialty pharma firm NextWave for $442 million to get the North American rights to Quillivant XR, the first once-daily liquid AD/HD medication.
In 2014 Pfizer acquired Baxter International’s vaccine portfolio and manufacturing facility in Austria for about $635 million. It also said it would buy InnoPharma, a pharmaceutical development company.