Pfizer Pharmaceutical Company SWOT Analysis Report

Pfizer Pharmaceutical Company SWOT Analysis Report

Summary

• Pfizer had a 2.7% share of the pharmaceutical market in the BRIC countries generating $1.6bn sales in 2009, year-on-year growth of 8.6%.
• China was Pfizer’s largest BRIC market where it accrued 2009 sales of $641m at a year-on-year growth of 30.8%.
• Cardiovascular drugs were the largest therapeutic category for Pfizer in the BRIC markets with $321m sales in 2009 closely followed by general anti-infectives with sales of $314m.
• Cardiovascular drug Lipitor was Pfizer’s leading brand in the BRIC markets with sales of $182m and a share of 11.7% in 2009. The brand recorded a robust 23.1% year-on-year growth and a CAGR of 27.7% during 2005–09.
• Pfizer acquired Brazilian company Teuto and partnered with Biocon in India, and MicuRx/Cumencor in China to bolster its BRIC operations.

Company overview

US drug major Pfizer has a diversified healthcare portfolio ranging from prescription products to consumer goods and animal health. Pfizer has nine healthcare businesses including primary care, specialty care, oncology, emerging markets, established products, consumer health, animal health, nutrition and Capsugel. The company has two research organizations named PharmaTherapeutics Research & Development Group focused on small molecules research, and the BioTherapeutics Research and Development Group focuses on large molecules including vaccines. In addition, the company has three Phase I Clinical Research Units (CRU) based in Singapore, Belgium and Connecticut. Pfizer acquired Wyeth in 2009 to improve its position in the vaccines and biologics markets

Table 27: Overview of Pfizer
Headquarters	New York, US
Global sales	$57bn
BRIC sales	$1.6bn
Market share (% of total global sales in BRIC)	2.7
Major therapeutic focus	Cardiovascular system

Source: IMS Health, copyright ©, reprinted with permission, company reports

Therapeutic focus

Drugs indicated for cardiovascular system disorders were the largest therapeutic category for Pfizer in 2009. The drug class had a CAGR of 16.5% during 2005–09. Pfizer’s flagship brand Lipitor (atorvastatin) accounted for 56.7% of the cardiovascular sales share. China was the leading market for Pfizer’s cardiovascular portfolio, equivalent to 52.8% of the company’s BRIC sales followed by Brazil which was responsible for 35.9% of these sales. General anti-infectives and anti-neoplastic drugs have shown robust year-on-year growth of 23.7% and 20.4% respectively. The increase in demand for these drug classes reflects the changing disease patterns in the BRIC countries

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Source: IMS Health, copyright ©, reprinted with permission

Geographic focus

China and Brazil together contributed a third of Pfizer’s BRIC sales. China had robust 30.8% year-on-year growth with sales of $641m in 2009, 41.3% of the company’s BRIC sales. The cardiovascular and the anti-infective drug classes contained the majority of the company’s best selling products in China with brands including Lipitor, Norvasc, Sulperazon and Diflucan. Pfizer had a 5% decline in sales in Brazil in 2009. Brands including Viagra, Celebrex and Centrum had falling sales in 2009 due to the availability of generics.

Table 28: Pfizer’s sales distribution across BRIC countries, 2009
Country	Sales 2009 ($m)	Sales growth, 2008–09 (%)	Sales share, 2009 (%)	CAGR, 2005–09 (%)
China	641	30.8	41.3	27.4
Brazil	530	-5.0	34.2	5.5
India	230	10.1	14.8	10.9
Russia	150	-12.2	9.7	0.2
Total	1,550	8.6	100.0	12.4

Source: IMS Health, copyright ©, reprinted with permission

Marketed products

Table 29: Leading brands of Pfizer in the BRIC market, 2009
Brands	Sales 2009 ($m)	Sales growth, 2008–09 (%)	Sales share, 2009 (%)	CAGR, 2005–09 (%)
Lipitor	182	23.1	11.7	27.7
Viagra	141	-3.7	9.1	9.4
Norvasc	86	18.1	5.6	10.0
Sulperazon	80	29.4	5.2	19.6
Diflucan	63	8.0	4.1	13.6
Medrol	55	15.9	3.5	20.1
Celebrex	41	-22.1	2.6	13.3
Corex	35	2.1	2.2	10.4
Tazocin	32	31.6	2.1	23.7
Xalatan	28	4.8	1.8	21.6
Top 10	743	10.5	48.0	16.5
Others	807	7.0	52.0	9.2
Total	1,550	8.6	100.0	12.4

Source: IMS Health, copyright ©, reprinted with permission

R & D

Following Wyeth’s acquisition, Pfizer has integrated the two companies’ R&D structures in to a new global research & development network model. It has shut six out of 20 odd research centers globally. The new R&D model is comprised of the BioTherapeutics division which concentrates on large molecules and vaccines and the PharmaTherapeutics which focuses on small molecules and drug delivery technology. Pfizer’s research focus has now shifted to more lucrative areas including Alzheimer’s disease, pain, cancer, inflammation, vaccines, metabolic disorders and infections. Pfizer has halted its research on developing drugs for the therapeutic areas of anemia, liver disease, bone diseases, muscle diseases, obesity and cardiovascular diseases. The company has also decided to cut its R&D expenses by $3bn in 2010.

Table 30: Pfizer’s late stage R&D pipeline
Molecule	Indication
Moxidectin	Onchocerciasis(River Blindness)
Bapineuzumab	Malaria
Axitinib	Renal Cell Carcinoma
Bosutinib	Chronic Myelogenous Leukemia
Apixaban	Acute Coronary Syndrome
Zithromax/chloroquine	Alzheimer’s Disease

Source: Company reports

Growth strategy

According to the United Nations, the prevalence of tuberculosis in China was 88/100,000 people in 2008. In China, one out of every two infectious diseases is tuberculosis and a large percentage is exposed to the drug-resistant strain of the disease. Pfizer is capitalizing on these numbers and has teamed up with MicuRx and Cumencor Pharmaceuticals, China to develop antibiotics for drug-resistant tuberculosis. As part of the deal, Pfizer will fund the research and undertake commercialization of developed products.
Pfizer’s expansion plans in China also include an expansion of its sale force in the country by 33% through 2011. Pfizer has also teamed up with Takeda pharmaceuticals, a Japanese company to market its blockbuster anti-diabetes drug Actos in China. Pfizer’s partnership with an NGO, PlaNet is a step towards meeting local healthcare needs in China. Under the terms of the partnership, products catering to the healthcare needs of the domestic market will be researched and developed, giving Pfizer an impetus for growth in China. Pfizer has also recently completed its acquisition of Wyeth and has signed a memorandum of understanding (MoU) to establish an R&D center in Wuhan, China. This new center will act as a support to the existing center in Shanghai. The Wuhan center will initially support Pfizer’s global R&D programs and further initiate research with local institutes and universities.
Pfizer has entered into a licensing agreement with Indian pharmaceutical company Aurobindo whereby it has acquired rights to 55 solid oral dosage products and five sterile injectable products for patients in over 70 emerging markets. The medicines include antibiotics and other anti-infectives. As per the deal, Pfizer has gained rights to market the products in US and Europe. In US, Pfizer’s Greenstone unit will sell the products. It has also entered into a commercialization agreement with Claris Lifesciences of India to market the latter’s injectables in the highly regulated market of North America, Europe and Australia.
Pfizer has partnered with Biocon, India to market the latter’s biosimilar insulin products Glargine, Aspart and Lispro. Pfizer will also have co-exclusivity rights to products belonging to Biocon’s licensees especially in developing markets. Biocon will hold co-exclusive rights to market the drugs in India, Malaysia and Germany. Biocon will receive a payment of $200m with an additional payment of $150m upon reaching regulatory milestones.

Mergers and acquisitions

Pfizer acquired its US rival Wyeth in 2009 for $68bn. This merger is designed to prop up Pfizer’s revenues in the face of the looming expiry of its blockbuster products patents including Lipitor and Viagra in the next two years. With the acquisition, Pfizer also gets to diversify its healthcare business to vaccines and biologics. Pfizer also aims to use this acquisition as a means of expanding in the emerging markets. Wyeth’s blockbuster vaccine Prevnar indicated for pneumococcal disease is being introduced in national vaccination programs and Pfizer plans to further promote vaccination programs.
Pfizer’s focused investment in key emerging markets led to the acquisition of Teuto Laboratories, a generic company in Brazil. Pfizer acquired a 40% stake in the company for $240m. Teuto’s production capacity will be utilized for both domestic supply and export purposes. Through this partnership, Pfizer gained access to a wide range of Teuto’s brands and to a substantial distribution network in the suburban and rural Brazil. The generic drugs from Teuto belong to therapeutic categories of pain, inflammation, cardiovascular, respiratory, CNS disorders.

Emerging market business unit

The Emerging markets Business Unit started in 2009 by Pfizer will primarily capture the emerging markets in Latin America, Asia and Eastern Europe. The aim of the unit is to drive organic growth, sell key brands, pursue acquisitions and partnerships and accelerate clinical trials in the emerging markets. Pfizer is contributing towards increasing healthcare awareness in emerging countries and has expanded the size of its sales force in China, established smoking cessation centers in India, partnered with organizations including the Clinton foundation and Grameen Health in its attempt to target the BRIC countries, Turkey and Mexico for growth.
Pfizer acquired the pain-specialty major King Pharmaceuticals for $3.6bn in October 2010. With looming patent expiries of blockbuster products, Pfizer aims to partially offset the impact by gaining immediate revenues through this acquisition. King Pharmaceuticals has a large pain portfolio composed of opioid and non-opioids and additional products in its pipeline. King’s pain franchise will add to Pfizer’s own pain brands including Lyrica and Celebrex.

SWOT

Table 31: SWOT analysis – Pfizer
Strengths	Weaknesses
Strong presence in the vaccines and biologics market following Wyeth's acquisition.	Late-stage trial discontinuation of Sutent for use in combination with prednisone for the treatment of advanced castration-resistant prostate cancer (CRPC) & hepatocellular carcinoma.
Pfizer is the world’s largest pharmaceutical company with significant presence in therapy markets including cardiovascular and CNS disorders. The company is also the leader in terms of research expenditure.
Integration of its R&D structure, thereby reducing costs and focusing on key therapy areas.
Opportunities	Threats
Acquisition of Brazilian company Teuto Laboratories will boost Pfizer’s presence in the country.	Looming patent expiry of its blockbuster brands Lipitor and Viagra.
Shift of research focus to capitalize on lucrative therapy areas including Alzheimer's disease, cancer and pain.	Maturing lifecycles of products including Xalatan, Celebrex and Detrol.