Competitive advantages of Pfizer-Warner Lambert combine

The global merger of Pfizer and Warner-Lambert is expected to result in several competitive advantages for the merged entity. The new company, which will be known as Pfizer, will have unprecedented depth and breadth of products, including seven billion-dollar products, says Dr McKinell, president and chief operating officer at Pfizer. These are Norvasc, Lipitor, Zoloft, Zithromax, Diflucan, Celebrex and Viagra.

Emphasizing Pfizer’s competitive strengths, Dr McKinell has detailed specific areas of product focus. They include the following:

• Pfizer will have the industry’s broadest range of products that treat diseases associated with cardiovascular risks, including: Norvasc for high blood pressure and angina; Lipitor for high cholesterol, Accupril for high blood pressure; and Glucotrol XL and Rezulin for diabetes.
• A significantly expanded programme in treating central nervous system disorders such as depression, anxiety, epilepsy and schizophrenia. Parke Davis brings to Pfizer valuable expertise in this area and a sales force that has extensive experience in calling on mental health professionals.
• Infectious diseases, where Pfizer will now have a vastly expanded portfolio, including Pfizer’s Zithromax and Diflucan anti-infectives. Cutting-edge HIV research comes from Warner-Lambert’s Agouron, one of the world’s foremost biotechnology companies. Pfizer’s hospital-based field force fits seamlessly with Agouron’s outstanding community-based specialists. Pfizer will also have a research programme in cancer, including work in anti-angiogenesis.
• Women’s health, with an expanded field force dedicated to women’s health professionals. Pfizer will emphasise not only reproductive health but also the importance of cardiovascular and mental health for women.
• The continuing success of cholesterol-lowering medication Lipitor, which has been co-promoted by Warner-Lambert and Pfizer since 1996. Lipitor is the number one statin in the US and the fastest growing product among cholesterol-lowering agents. This year, Lipitor is expected to exceed $5 billion in worldwide sales and a spring introduction is planned in Japan. The companies will benefit from Pfizer’s strength in Japan. In addition, the Lipitor-Norvasc combination product represents an important opportunity.
• The combined research and development operations of the company, headed by Pfizer vice chairman Dr John F Niblack, will have a worldwide scientific staff of over 1,200 and $4.7 billion in annual R&D expenditures in 2000, the largest in the industry. The combined entity have few research overlaps, and a total of 138 compounds in development in areas including central nervous system disorders, oncology, cardiovascular disease, metabolic disease and infectious disease. The Parke-Davis research centre will continue to be located in Ann Arbor, Michigan.
• A strong international presence with enhanced global reach in all major markets, including Japan, the second largest market in the world, where Pfizer is the leading non-Japanese pharmaceutical company. The company will be in the top tier in most major markets.
• Excellent opportunities for additional earnings growth based on anticipated cost savings and efficiencies totaling $1.6 billion. Two hundred million dollars of these savings are expected to be achieved by year-end 2000, $1 billion by year-end 2001, and $1.6 billion by year-end 2002. These cost savings alone will accelerate the projected compounded annual net income growth though 2002 for the new company from 20-25 per cent, excluding one-time transaction and restructuring charges. Diluted earnings per share for Pfizer as a stand-alone company are projected to be $1.04 for 2000, $1.25 for 2001, and $1.56 for 2002, representing 25 per cent average compounded growth per year. These numbers include the $1.6 billion of cost savings phased over this time period, but do not include any increased sales from collaborative activities.
• A major presence in the consumer healthcare field, including the Warner-Lambert confectionery business, through global brands including Halls, Benadryl, Sudafed, Listerine, Desitin, Schick, Visine, Ben gay, Lubriderm and Barbasol. Warner-Lambert’s and Pfizer’s long experience in retail and over-the-counter products provides a platform for future prescription-to-OTC switches for both companies.
• Significant opportunities for the company’s animal health business, which has a growing pipeline of genetically engineered vaccines, gene therapy products and novel, convenient-to-use medicines.