John Boris (Bear Stearns): There was a manufacturing facility in Germany that went along with your acquisition of the full rights on Exubera. What are you going to be doing with that?
Ian Read: We have been shutting that facility.
John Boris (Bear Stearns): When do you anticipate seeing stabilization of the Lipitor trends in the United States?
Ian Read: We were down about 13% in the U.S. On scripts, the pricing and rebates were basically a watch given the fact that we had a favorable settlement in the third quarter of 2006, which basically offset our favorable pricing of impact for quarter. We appear to stabilize the switch loss at about 50% below the peak, post the advent of multi-generic simvastatin, in fact, we are now at the pre-multi-simvastatin level. New patient population or volume is fluctuating around to a 20% share. We are competitive, against the brand of statins in this marketplace. Our access remained strong, our access remains in the range of 65 to 70 at Tier 2 across commercial and medicare lives. We see the market while slowing up from 12 to plus growth to about high single-digits coming out of this year and I see that being maintained in 2008. Our strategy is to continue using our commercial resources on the switch, the new patients and maintaining access. Those strategies are being applied against on the professional platform to differentiate Lipitor on the efficacy across the dosage range; it is safety and outcomes, a strong DTC program using print and web ads. We are also looking at using those resources and targeting those sites where we see the most activity on generic switching. We are also using related things like value cards to deal with co-pays. That is the environment we see going forward for Lipitor.
Jami Rubin (Morgan Stanley): Could you talk about the level of cost reduction for 2008?
Frank D''Amelio: We are making good progress on our cost reduction initiatives. In SI&A in 2007, we increased the guidance from $500 million to $600 million. That was the SI&A element of overall cost only. If you think about some of the things we are doing, just operationally to demonstrate progress, you can bucket most of our cost reduction initiatives into five categories. Field force reductions, manufacturing site closures, research site closures, outsourcing and offshoring. In the field force, we have implemented 20% reductions in the US and similar reductions in many markets outside of the US. In manufacturing of sites alone, we have announced nine exits this year. In R&D, we have announced six exits. In terms of outsourcing, we have outsourced some of our IT operations. In terms of outsourcing and offshoring, we have outsourced and offshored some of our financial back office operations. It is a macro statistic. At the end of last year, we had 98,000 employees. We had announced the 10,000 employee reduction at the end of this past quarter we had about 87,000. We have a wide range out there for 2008. We are still in our planning process. We are comfortable enough at a macro level to reaffirm the guidance we have provided on the various elements. We updated the $1.5 billion to $2 billion at constant currency, given some of the things that are going on with the dollar relative to other currencies. We have reaffirmed the range and the guidance.
Jami Rubin (Morgan Stanley): Why are you stopping development in the second generation insulin device?
Ian Read: When we look at the marketplace, there are two barriers we underestimated. First one is the barrier to moving patients with the physician community earlier to Exubera. That is the resistance from physicians and patients to going on to insulin in any form earlier than they have been to-date. That is one major barrier. The second one is per se, the burden that the Exubera technology represented to the practice, which went from the lung function testing, the training on the device, and while the size of device may be a component of that, you have to look at the totality of it.
Jami Rubin (Morgan Stanley): Where the Lipitor 993 patent fits at the Patent and Trade Office?
Allen Waxman: You referred to the 993, I assume you completing the 995 and 893. Both are before the Patent office. In August, we received comments from the Patent office on 995 enantiomer patent that was in the form of an initial rejection which is typically the way these things come out. We have filed a respond to those comments and that will continue to work its way through the Patent office over the next year, 18 months. It can be a lengthy process. The 893 is the subject of a reexamination request by a law firm associated with Ranbaxy. That request has been granted as the norm and we will wait to hear from the Patent office. Typically a response can be in the form of an initial rejection of some of the claims. We will have an opportunity to respond to that and that will too work its way through the Patent office and what can be a lengthy process.
Steve Scala (Cowen): Within your overall 2008 P&L guidance, what is the expectation for Lipitor''s trend?
Ian Read: When we look at the guidance we gave on the revenue, we looked at a lot of our major products and we talked about the opportunities and challenges of those products to get to the macro-levels. We expressed our judgment; we reflect that through the balance of the portfolio.
Jami Rubin (Morgan Stanley): How would you characterize generics Simvastatin relative to its ultimate market share and do you feel it is full penetrated?
Ian Read: We have got a year and a half; we are coming up to the year review. I am seeing a stabilization of our access, I think we got to look at how Lipitor continuous to be competitive against Crestor and Vytorin and we will see how it goes forward, may be as Simvastatin will continue to make some further marginal gains, but it is going to be via some market pressure and not major contracting changes.
Jami Rubin (Morgan Stanley): Giving the apparent success of your competitors in developing a CETP inhibitor without hypertension, are you reconsidering starting your efforts on your follow-ons towards atropine?
Martin Mackay: We are still currently reviewing the prospect of daytime going through that. We will present, some of this work at the American Heart Association, in November and layout the studies that we have done in that regard. We have no plans at this stage to restart our CETP Inhibitor program, until we have thoroughly reviewed all those results and I can not comment on the med programs.
David Risinger (Merrill Lynch): How accretive it will be for you to drop Exubera?
Frank D''Amelio: Exubera sales for the year were modest. They were $7 million in the quarter, $12 million year-to-date, so there is no impact on our margins.
David Risinger (Merrill Lynch): Could you talk about your biotech and vaccine transaction agenda?
Jeff Kindler: The deal environment is challenging, there is a relatively finite number of assets, especially in the later stages and the prices are high. We feel that there are still a lot of opportunities out there if we take a thought on disciplined approach to it and through creative deal structures in the like. I am not going to comment on any particular transactions we might be considering, but there has been activity in that area and there will continue to be and we have to strike the balance between our desire and need to supplement our internal portfolio, which we have recognized. At the same time exercise discipline to ensure that we make smart investments that will payoff for the shareholders that is not an easy thing to do in this environment, but we are going to keep at it.
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