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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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The increase in investments through ''10 and 12 I am talking about are principally in the Emerging Markets. And the DTC is exclusively in the United States. And it is behind products that we believe there is an opportunity for growth and we intend to invest behind them, such as I have said, Lyrica in its indications of fibromyalgia and DPN and PHN. We hope to expand those indications as we go through this period. Chantix, where we believe we need to put sustained support behind it, both from a field force and from DTC, given we now have the label changes over and targeted support behind Lipitor.

In regard to Prevnar 13, I really can''t make any more comments on the FDA. As I said, we are very confident of our submission and we are working towards approval in the United States.

Abroad, we are beginning to launch. But in reality probably the only small countries have launched so far. We won the tender in the U.K. for their program. There are some important tenders still pending, like Turkey and other major markets. We have won some tenders in small countries like Gambia and Rwanda. And in general the product is evolving as we predicted in our forecasts.

Jeffrey B. Kindler

Thank you. Next question, please.

Operator

Our next question, Chris Schott, J.P. Morgan.

Chris Schott - J.P. Morgan

Great. Thanks. Maybe first, when we think about $7 billion of gross expense reduction and the $4 billion to $5 billion of net reductions that you''re planning by 2012, how much of that do you expect to be completed in 2010? If I am hearing you right, are we anticipating, are you anticipating in the near term maybe only modest net reductions to expenses, as you saw ''09, as your investment activities are nearly fully offsetting the gross expense reductions?

And then the second question relates to R&D, that $8 billion to $8.5 billion by 2012. Are you assuming incremental R&D spend associated with future business development activity in that number? I guess in other words, when we think about the targeted R&D spend for the pro forma company, would it be even below that $8 billion to $8.5 billion range?

And maybe just a final question. What should we think about in terms of updates this 2012 guidance and long-term synergy targets? Is this something that we will hear about quarterly or is this going to be something that is going to be more part of an annual review process that will get updated? Thanks.

Jeffrey B. Kindler

Go ahead, Frank.

Frank A. D’Amelio

So let me do the second question first, then I will do the third and I will come back to the first.

In terms of the $8 billion to the $8.5 billion that does not assume incremental business development. So just to the extent that we were to do some business development and there was…I will call it significant R&D involved, that would not be in the $8 billion to the $8.5 billion, point one.

In terms of the 2012 targets, we will update those as needed is the way I would describe it. Clearly we will do that for sure next January. But in terms of the quarters as we go through the year, we will make sure we update those numbers as needed relative to making sure we are providing information and disclosure that needs to be provided.

On the 2010 gross net question, clearly as we are investing, the investment is biased earlier in the cycle. The reason it is biased earlier is so that we could see the returns as we work our way through 2011, 2012 and beyond.

So, I think directionally, Chris, you''re right, you will see more of the investments earlier over the three-year stage.

Operator
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