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Pfizer Q4 2009 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 12:22 AM ET February 09 2010

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Revenues rose 34% to $16.5 billion & net income rose 188.3% to $767 million or 10 cents a share. Operationally Biopharmaceutical revenues increased $2.9 billion or 26% year-over-year due to $2.5 billion or 22% from the addition of Wyeth products & about $400 million or 4% from legacy Pfizer products


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And when we factor in all the data, all the bottoms up work that we''ve done, we are now updating to target the $66 billion to $68.5 billion. And we have confidence in our ability to achieve that number. So that is the 2012 revenue item. On 2010 and on investments, I will touch on this. Ian, I will let you make some comments and we may even want some product comment on this, not just limiting it to SI&A, although Catherine talked about SI&A.

At a high level, at a general ledger level and I will let Ian get into some of the detail, it is the opportunity growth areas that we have been talking about where we continue to see opportunity. So it is Emerging Markets, where we continue to invest, I will call it additional marketing investment, make additional marketing investment in the focus countries. Adding field force, promotional tools, sales tools. We saw some of the benefits of that this past quarter with double-digit growth in legacy Pfizer Emerging Markets and very strong double-digit growth in our priority countries -- in many of our priority countries.

Continuing to invest in Established Markets, once again, sales feet on the street on SI&A and also continuing to just work through other growth opportunity areas that we see. Ian?

Ian C. Read

Thanks, Frank. The first thing I would like to make a point is that in the business structure we are structured for a post-2012 world. So a lot of our incremental investment will be in flexible spending and directed behind products. So certainly in Emerging Markets, we are adding field force as fast as we can with quality field force in China and Brazil and some of the other markets. In Established Products we are adding Dossias and adding opportunities and really focusing on market by market, which requires targeted promotional spend.

In the U.S. Prevnar 13 adult, where we need to ramp up for that, it will probably require a Primary Care field force to really fully explore its opportunity. Similarly in Europe and Western Europe, the same nature of investments, a lot of premarketing investment to prepare the market.

And then inside the U.S. we are putting variable spend behind some of the major products that we need to grow through this period, such as Lyrica, where we have seen in the fourth quarter, with that increased DTC spend, good improvements in market share for DPN, PHN and fibromyalgia.

Chantix, which I would like to point out in the three years that Chantix has been on the market, prior to third quarter it only has had 18 weeks of DTC in those three years. So we are putting substantial effort behind that, both in December and in 2010.

We can look at other areas of spend. Lipitor, we are continuing to defend Lipitor where it makes sense to maximize the revenues of Lipitor through its LOE. And even smaller products such as Toviaz, where we now have new data with head-to-head superiority against Detrol in two clinical trials. So we see a lot of opportunity in that segment and we intend to invest behind this new product. So that gives you scope.

If we take it to 2012, clearly we need to do a lot of market preparation and development for our Alzheimer''s franchise, which Dimebon would be hopefully the first one into the marketplace. We have our JAK3 inhibitor. We have an oncology portfolio where we expect Axitinib to be entering, or the c-Met/ALK inhibitor. We have Apixaban, we have Tanezumab, we have Pristiq, both its depression indication and its vasomotor indication and potentially Aprela. So we have a rich, powerful late stage portfolio, which we need to invest in to produce the growth from ''12 and onwards. And actually, I would like to ask Martin and Mikael if they want to add some color to those really exciting products.

Martin Mackay

Thanks, Ian. And thanks for the question, Catherine. I will keep this very brief, because Ian has touched on many of the high points. You remember in March 5, 2008, we made some commitments about our late stage pipeline in terms of those entities entering Phase 3 and the numbers we would have in Phase 3 by the end of 2009 and we have met all of those commitments. The fourth commitment you will remember was the submissions that we would make over 2010 to 2012 and we are very much on target to do that.

Now to take you up to the close of the deal and add in the really wonderful products from Wyeth in that late stage, where we now have 34 entities and Ian has mentioned the Tanezumab, Axitinib, Dimebon, not to talk of Prevnar and Tanezumab. So I couldn''t be more excited about our pipeline. And of course it needs investment to bring it home. But Mikeal?

Mikael Dolsten

Yes. I am very pleased to hear the excitement from all of you about investment to really make these products reach all the patients that we want to and be able to transform some of the diseases. For example, the Prevnar, both for infant and adult form, I think is a vaccine that can really provide an expanded coverage. And in the adult area it will be the first powerful conjugate vaccine that could allow sustained protection from pneumococcal diseases.

Tanezumab, I think offers the first new biological and where we have pioneered the science and to bring it into that pain setting on the Primary Care over time, as well as working with specialized pain physicians, I think can really advance pain relief in a new setting. And of course, having spent a lot of effort in rheumatology with Enbrel, I am very excited to see a new poweroll [ph] drug that can also provide increased convenience.

Jeffrey B. Kindler

Okay. Thanks. Ian, just briefly on Catherine''s last question and we will move on.

Ian C. Read

Yeah. Catherine, I can''t really comment on any particular company or possible acquisition but clearly Established Products, as it becomes a major player in this field needs to expand its portfolio globally in reality to maximize the infrastructure we have created, both for targeted field force, commercial infrastructure and so we will continue to look at business development opportunities to add to the strength of that portfolio.
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