Pfizer reassesses priorities

Pfizer has announced plans for 'enhancing effectiveness and reducing operating costs..in procure-ment and manufacturing'.

In a presentation to financial analysts, company leaders said that they will 'leverage the company's competitive advantages [such as its r&d pipeline, which will have approximately $8bn invested in it in 2005, compared with $7.7bn in 2004] to meet the challenges posed by patent expirations in the 2004-2007 period and other issues in Pfizer's operating environment'.

The company's vice chairman, David Shedlarz, said that: 'revenues in 2005 are expected to be substantially unchanged from 2004, when the company recorded revenues of $52.5bn', before voicing concerns that 'cost of goods sold will be substantially and negatively impacted by changes in geographic and product mix, loss of exclusivity of major products in the US, and lower year-over-year sales of the Cox-2 franchise.'

Pfizer will lose its exclusivity right on more than five big-selling drugs when they lose their patent protection. In addition, the company's arthritis painkillers, Celebrex and Bextra, both Cox-2 inhibitors, could face uncertain futures: Health Canada has issued new restrictions on the use of Celebrex, saying that people who have had suffered from heart attacks or stroke shouldn't use it; while regulatory agencies in the US and the EU have asked Pfizer to withdraw Bextra while they complete a review of the drug.

Earlier this year, a company-wide initiative was launched to 'streamline the organization, fund key investments, and realize significant cost savings'. With its $4bn target for annualised cost savings by 2008, which is approximately 12% of its current cost base, analysts have expressed concern over the company's 120,000 global workforce, saying that it 'looked vulnerable'. The company estimates the cost of implementing this initiative will be $5-6bn through 2008.

'2005 will be a transition year', said Hank McKinnell, chairman and ceo at Pfizer. 'We expect our performance to rebound quickly in 2006 and accelerate in 2007 as we increasingly realize the benefits of the continued growth of major in-line products, new product launches and productivity initiatives.'