“Pfizer at a pivotal moment in its history and the entire pharmaceutical industry needs to pay attention” says visiongain

San Francisco, CA and London, UK; 1st November 2005: Pfizer, the world’s first druggernaut, has sales of over $52 billion and profits of $14 billion and showed 17% growth from 2003 to 2004, far above the industry average. However, according to the latest visiongain report specifically focussed on the drug company, the next five years may not be as positive.   

Pfizer owns the patents to some of the world’s top drugs, including ten blockbusters (drugs with over $1bn annual sales revenue), but the company is about to lose the patent protection to a number of key products, and consequently suffer significant income loss in a very short space of time.  

Lipitor, the world’s best-selling drug, will have patent protection until at least 2009, but is producing such high revenues that the generic companies are itching to gain some of the market share. Pfizer has already lost one patent court battle for Lipitor, admittedly in the relatively insignificant Austrian market. Even the market strength of Viagra is wilting as competitors take its market share.  

“Although recent Q3 results from Pfizer were not as positive as many in the industry were expecting, they were not a surprise,” says Tristan Heath pharmaceutical market analyst at visiongain. “Whilst Pfizer have dominated the pharmaceutical industry in recent years, the latest downturn in sales and future profit warnings from Pfizer were predicted by visiongain in our latest report – Pfizer, Current Challenges and Future Difficulties, 2005-2010.” 

Pfizer has not given up, and this year plans to spend a staggering $8 billion on research and development. However its search for the next blockbuster is not an easy one and visiongain doubts whether Pfizer will rely on their research alone for continued success. The $60 billion Pharmacia merger propelled Pfizer to the top but was a mixed blessing. Pfizer gained the rights to the painkilling blockbusters, Bextra and Celebrex, but these have suffered under the Vioxx scandal. Visiongain believes that Pfizer will look for other mergers to satisfy the demand for further growth.

As health authorities, particularly in the US and EU, try to reduce their expenditure on drugs still further, this visiongain report explores the key issues for Pfizer and how it plans to remain the most influential drug company in the world today.  

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Pfizer - Current Difficulties and Future Challenges, 2005-2010
Pfizer has just issued a warning on how deep the pharmaceutical industry's problems have gone. The company has cut its profit expectations for this year. It has also withdrawn its previously optimistic forecasts for the next two years. With sales of over $52 billion and 17 per cent growth in 2003/04, it leads the pharmaceutical market and has influenced the way the market is shaped. What Pfizer does, you need to take notice of.

Pfizer currently has 145 products in the pipeline at least in Phase I clinical trials and has committed $8 billion to research and development in 2005.

However, it appears that Pfizer has reached a pivotal moment in its recent history. Branded pharmaceuticals produce 87.8% of the revenue, and 95.4% of the gross profit, but in the next five years Pfizer’s leading pharmaceutical products are set to lose $8 billion of revenue due to the loss in patent protection. Slowing sales trends in some of its biggest branded medicines, including Lipitor, is having an effect today.

What can Pfizer do to halt this slide? Read visiongain's brand new report to find out.

Pfizer had previously issued 10 per cent earnings growth for the next 2 years - but now they have withdrawn this forecast. Uncertainty looms in the company. Visiongain sees this as symptomatic not simply of Pfizer but big Pharma in general. Visiongain's US analysts report of increase pricing pressure in the US market, while patent expirations and safety issues refuse to go away for all the largest manufacturers. Can Pfizer's big brands stand up to generic competition while the US markets seeks cheaper alternatives? Lipitor has already been removed from a drug managers list of preferred drugs says the Financial Times in London.

The report suggests that Pfizer face eight key issues:

> Significant revenue reduction due to patent loss

> Lipitor’s dominance is under threat and a potential weakness to Pfizer

> Illegal/counterfeit drugs

> FDA stringency (particularly in response to Vioxx trials)

> Drug prices

> Antibiotic drug resistance

> The end of blockbuster revenue (and perhaps more personalised medicines – unlikely in the near future)

> Further mergers and alliances

Lipitor produces 25% of Pfizer’s income from branded pharmaceuticals and is predicted to reach over $12 billion of sales in 2005. Already under the threat of generic competition, although to date Pfizer has maintained patent protection, once this level of income is not available it could lead to significant reorganisation from Pfizer.

How will Pfizer choose to solve its problems? Indications are that corporate acquisitions will lead the way, but when? With Pfizer still not showing savings from their acquisition of Pharmacia, many believe it is too early for the company to acquire again.

Why you should buy this report

> Pfizer currently lead a market worth $550 billion.

> Key issues that will influence whether Pfizer are able to maintain this position are examined.

> Detailed analysis of Pfizer’s leading products allow accurate assessment of Pfizer’s current and future risk.

> Comparative analysis of the top ten pharmaceutical companies allows the relative strengths of each to be assessed.

> This report considers the latest information from Pfizer and allows the most accurate assessment of the leading pharmaceutical company.

Lead Analyst: Tristan Heath Publication Date: 27/10/05 Pages: 130 Format: CD-ROM
 

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