Roopesh Patel (UBS): Could you address the risk the deal poses to R&D momentum and the steps the company plans to take to minimize this?
Jeff Kindler: We are mindful that the research and development is the core innovation engine for our business. We have learned a lot from prior transactions as well as some of the other activities that we have undertaken the last couple of years. We intend to proceed with great speed and focus and we are very mindful of the importance of protecting that very important core of our business.
Martin Mackay: When this deal closes we will be able to launch an R&D organization, maintain our goals and commitments and really build up given the complementarily of both R&D organizations.
Roopesh Patel (UBS): The presentation states that 2012 revenues will be roughly the same as 2008. In light of several patent expirees that are scheduled in 2013, 2014 and 2015, are you expecting any revenue growth even in those years?
Jeff Kindler: We really believe we are creating a company with a wide range of diverse assets, investments in growth opportunities and the financial wherewithal to move the business forward. We are obviously very focused on the here and now and 2012 but this is a very long-term business and we believe this deal positions us extremely well for long-term shareholder value creation through this collection of businesses and their various opportunities in the future.
Frank D’Amelio: We see significant opportunities in emerging markets, established products and other parts of the industry. If you look at Asia Pacific, if you take our Japan, New Zealand and Australia, the current market review, addressable market is about $50 billion of which we have 4%; 4% on $50 billion is $2 billion. We see that market growing between now and 2012 from $50 billion to $80 billion. We believe we can not only maintain our share there but grow our share to 6%. 4% on $80 billion is $3.2 billion. Just by holding share we pick up $1.2 billion. If we can pick up two points of share and go to 6% that is $4.8 billion versus today’s $2 billion, almost $3 billion of incremental growth. Our job is to execute on those opportunities, build a strong platform, get real strong momentum, get the number that we have targeted for 2012 and then build upon that momentum going forward into 2013 and beyond.
Roopesh Patel (UBS): Between now and the deal closing, will Wyeth continue with its cost cutting initiatives or now that the deal is announced, that is on hold?
Gregory Norden: As it relates to Wyeth, what you have seen over the past couple of years and we see continuing into this year is very strong and disciplined financial management and we have been able to execute on our cost management strategies for quite some time. Between now and the time of closing we certainly have an obligation and a responsibility to continue to run our business as if we were going to remain independent. As such, we will continue to run this business the best we can and along the lines of the way we have in the past and that includes continuing with the cost containment initiatives that we started with project impact. We are going to continue that through 2009.
Tim Anderson (Sanford Bernstein): This transaction goes against what you described in March 2008 which was that you would not likely do another big pharma deal. What then changed over the course of those ten months?
Jeff Kindler: As far as what I have said in the past, I have always been very clear that we never say never and we are open to every opportunity and I have identified the conditions that would have to prevail for us to undertake a transaction like this, including the strategic value and our ability to manage the inevitable risks and disruptions that come from any large scale merger of that kind.
We are in a much stronger position than we were two years ago. In fact, we have gotten there faster than I might have even hoped and our confidence in our ability to execute on a transaction like this is very high, thanks to the hard work of our people.
We have also very clearly laid out all of the strategic priorities that we had. This is a very unique deal. I don’t think there is anything else that could have been done that would have more perfectly matched those strategic priorities, all achieved in a single transaction. Hence it is the right deal, at the right time and for the right reasons.
Tim Anderson (Sanford Bernstein): Would you at some point consider splitting up the combined company into separate publicly traded entities?
Jeff Kindler: As far as potential future considerations of the portfolio are concerned, what we are very excited about is that this transaction creates a very broad based, diversified portfolio of businesses that are complimentary with one another and I continue to believe that these various businesses benefit from the combination both of their own ability to maximize their opportunities, but at the same time take advantages of the scale and resources of the combined company.
Seamus Fernandez (Leerink Swann Llc): Could you discuss the context of the $1 billion reinvestment that you mentioned would occur this year on the R&D side and in some of the other parts of the business?
Ian Read: The reinvestment is to ensure we continue to drive the revenue the top line so it includes a portion into supporting the portfolio, progressing the Phase II and Phase III pipeline, which is very important to our 2012 and post revenue opportunities. It is building infrastructure as a field force in emerging markets that is in Turkey, China, Russia, Korea and building our offering of established products. As we widen our portfolio offering in these markets, we should invest in ensuring we have supply and we have appropriate dossiers so to widen that offer.
Seamus Fernandez (Leerink Swann Llc): The combined cost reductions are $4 billion from the combination with Wyeth with an incremental $2 billion from the additional cost program that you envisioned for Pfizer itself. Is that correct?
Frank D’Amelio: Yes. You take the $4 billion in synergies that we talked about from the combined company and you would add the $2 billion that we laid out from the stand-alone Pfizer.
Steve Scala (Cowen and Company): Pfizer sold its consumer business a few years ago because it apparently did not make strategic sense. Why does the Wyeth OTC business makes greater strategic sense or should we assume a similar fate?
Jeff Kindler: On the consumer business a decision was made at the time based on the view that prevailed at that time. Where we are today is a terrific business and one that is very complimentary with our portfolio and one that we believe creates tremendous opportunities for increased shareholder value.
Steve Scala (Cowen and Company): Has an FTC review of the Lipitor patent settlement been finalized and if not, what analysis has Wyeth completed regarding the Lipitor patent settlement?
Amy Schulman: We are very comfortable with the FTC’s review of the Lipitor patent situation and as the course of the diligence both Wyeth and we went for each others products and various issues at some length and both of us were comfortable with what we found. The FTC review is completed; they have not yet issued a decision.
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