Pharmaceutical Executive Digest Europe - March 18, 2009 - (Page 5) Megamergers that had continued to operate with autonomy under Pharmacia. Pfizer’s masterful marketing of Lipitor achieved sales far exceeding expectations, but Celebrex, a Cox-2 inhibitor like Vioxx, got snagged in safety scares. But for all of its troubles, Pfizer’s market cap is no higher than it was a decade ago. Living down that history will be hard for Pfizer. “This merger will not have a happy ending,” says Peter Young. “The real problem is that Pfizer is afraid to get small, but it’s going to have to get smaller anyway in a few years.” Pfizer is scheduled to drop $12 to $13 billion in annual sales when Lipitor loses patent in 2011 — that’s 28% of the company’s total sales for 2008. Once torcetrapib bombed, Kindler lost his only sizeable Lipitor backup — and with it, Pfizer’s future hold on number one. According to Frost & Sullivan projections, Roche (including revenues from its majority Genentech share) was scheduled to overtake Pfizer in 2012, and Novartis, Sanofi, and Glaxo were set to follow by 2015. Roche’s move to buy the rest of Genentech may only have accelerated the sense of urgency. Analysts such as Frost & Sullivan’s Shabeer Hussain see this development as the decisive factor in Kindler’s appreciation that Wyeth was, as he has repeatedly proclaimed, “the right deal at the right price at the right time.” “When Roche announced that it was taking over Genentech, it left no doubt that Pfizer would finally have to yield the number one position,” Hussain says. “That would have had the necessary effect of concentrating Kindler’s mind.” The number one pharmaceutical company with the best-selling drug in history has come to symbolise the “crisis” of the drug industry and its bankrupt blockbuster model. Not so, says Ray Kerins, head of Pfizer’s global communications. “Years ago Pfizer might have focused on that, but it’s different now,” he says. “Folks can rank us left, right and centre, but our goal is bringing the best science to the market place.” And why the wait? “We could not have done a deal like this a year ago,” Kindler told the AP. “The company wasn’t strong enough yet.” For all Kindler’s cheerleading about remaining the industry leader, he has taken great pains to pre-empt his critics by emphasizing that the merger is about strategy, not size. Some experts buy it. Goldman Sachs analyst Jami Rubin says: “Wyeth boasts one of the industry’s most impressive biotech assets: biologicals and vaccines. We continue to believe that these represent the key growth drivers for pharma in the coming years.” With biologics growing by an annual 13% and vaccines by 18% (compared to small molecules’ 2 to 3%), Pfizer gained an immediate footprint in these markets. The one benefit of the merger no one disputes is fast revenue: Pfizer immediately pockets $20 billion from Wyeth’s diverse portfolio of products. Pfizer’s top line jumps from a pre-merger $40 billion to the combined company’s $60 billion (for prescription drugs alone) or $70 billion (including consumer health and veterinary medicines). In addition to diluting the 28% of sales lost after generic Lipitor hits, the merger will give Kindler economies of scale. The planned layoffs, estimated to save $4 billion, are generally assumed to be only the beginning. All told, it is forecasted that post-merger Pfizer will eke out a profit of 0.9% over the next four years — a sign of progress when compared to its estimated premerger loss of 5.3% for the same period. Analysts such as Datamonitor’s Simon King believe that the patent cliff will make $70 billion in annual sales increasingly tough to top. By 2013, Pfizer’s priapic phenomenon Viagra will lose its exclusivity — and $1.9 billion in annual sales. So will Lyrica ($2.5 billion), Detrol LA ($1.2 billion), Caduet ($589 million), and Aricept ($480 million). And Wyeth has its own patent casualties. Although its two top sellers, Prevnar and Enbrel, are safe barring fast follow-on legislation, both Effexor XR ($3.9 billion) and Protonix ($764 million) go generic in 2010. Frost & Sullivan’s Hussain projects that Pfizer will lose at least $21 billion to patent expirations by 2013. Diversification will soften the blow. While total pharma sales will drop by 2.3% in 2013, according to Datamonitor, total company sales will slide by only 0.6%. That’s an improvement over any pre-merger projections, but negative sales growth is what got Kindler to the deal table in the first place. Fears of ‘Pfizerization’ The old Pfizer had a reputation of devouring its acquisitions. In the Pipeline blogger Derek Lowe put it this way: “The fear, among scientists like me, is that Pfizer is going to take another productive research organisation, raid it for what it considers to be of immediate value, fire 1 NEWS 2 FROM THE EDITOR / NEWS 3 MEGAMERGERS 7 NEW SALES MODELS 10 UK NEWS 12 CALENDAR 13 ON THE MOVE CLICK TO SUBSCRIBE TO PHARM EXEC http://www.frost.com http://www.datamonitor.com http://www.datamonitor.com http://www.pharmexeceurope.com/europharmexec/newsletter/subscribeNewsletter.jsp
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Digest Europe - March 18, 2009 Pharmaceutical Executive Digest Europe - March 18, 2009 Contents From the Editor Pfizer-Wyeth Sales News Calendar On the Move Pharmaceutical Executive Digest Europe - March 18, 2009 Pharmaceutical Executive Digest Europe - March 18, 2009 - Contents (Page 1) Pharmaceutical Executive Digest Europe - March 18, 2009 - From the Editor (Page 2) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 3) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 4) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 5) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 6) Pharmaceutical Executive Digest Europe - March 18, 2009 - Sales (Page 7) Pharmaceutical Executive Digest Europe - March 18, 2009 - Sales (Page 8) Pharmaceutical Executive Digest Europe - March 18, 2009 - Sales (Page 9) Pharmaceutical Executive Digest Europe - March 18, 2009 - News (Page 10) Pharmaceutical Executive Digest Europe - March 18, 2009 - News (Page 11) Pharmaceutical Executive Digest Europe - March 18, 2009 - Calendar (Page 12) Pharmaceutical Executive Digest Europe - March 18, 2009 - On the Move (Page 13)
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