Thesis on "Pfizer Viagra"

Thesis 11 pages (3059 words) Sources: 2

[EXCERPT] . . . .

Pfizer Inc

Current Situation

Pfizer Inc. is reported to be "one of the biggest players in what is widely considered the most influential industry in Washington: pharmaceutical manufacturers." (Center for Responsive Politics, 2009) Reports state that Pfizer Inc. is one of the five largest pharmaceutical companies worldwide producing several of the prescription drugs that are the best-selling on the market to include Viagra. Pfizer has maintained continuous growth and has purchased Warner-Lambert (2000) and announced it would purchase Pharmacia in 2002. (Center for Responsive Politics, 2009, paraphrased)

Pfizer is stated to have undergone "a period of extremely rapid growth resulting from the commercial success of products including Viagra, Lipitor and Celebrex. This aggressive growth strategy, enabled through mergers and acquisitions, was designed to achieve the scale required to gain synergies, invest in costly technologies, and spread the enormous risk of the drug development process. Yet size can itself become an impediment to the agility and flexibility which are critical to lasting business success. Retaining these characteristics can be a serious challenge for successful companies." (Tradeline, 2004)

It is related that the Global Operations within the R&D division of Pfizer, Inc. has responded to this challenge by building a foundation for the future based on best practices from the companies of which it is now comprised." (Tradeline, 2004) the company is now stated to be "the world's largest research-based pharmaceutical company" and it is organized into three primary business units:

(1) Human health care (developing, manufacturing, and marketing prescription drugs);

(2) Animal health care; and (3) Consumer health care (over-the-counter drugs). (Tradeline, 2004)

Pfizer Global Research and Development (PGRD) is part of the human health care business unit which has major Research & Development sites in the U.S., Europe and Asia producing "...leading products in 14 therapeutic categories" with a Research and Development budget of more than $7 billion. (Tradeline, 2004)

Corporate headquarters for Pfizer Inc. are located in New York, NY in the United States and the Research and Development Divisions are located in Connecticut, England, California, Missouri, Massachusetts, and California. Pfizer is listed on the New York Stock Exchange as PFE and on the London Stock Exchange is PFZ. 2008 Revenues for Pfizer Inc. are stated at $48.3 billion. Products manufactured by Pfizer Inc. include those as follows:

(1) Key Pharmaceutical Products

Aricept®

Aromasin®

Caduet®

Camptosar®

Celebrex®

Chantix™

Detrol/Detrol LA®

Eraxis®

Genotropin®

Geodon/Zeldox®

Lipitor®

Lyrica®

Norvasc®

Rebif®

Relpax®

Revatio®

Spiriva®

Sutent®

Vfend®

Viagra®

Xalatan/Xalacom®

Zmax®

Zoloft®

Zyvox®

(2) Key Animal Products

Draxxin®

Excede®

Naxcel/Excenel®

RespiSure/Stellamune®

Dectomax®

Rimadyl®

Revolution/Stronghold®

Clavamox/Synulox®

BoviShield®

Lutalyse®

Slentrol®

Cerenia®

Convenia®

Improvac®c

II. Corporate Governance

(1) Board of Directors

There are presently 14 individuals on the Board of Directors for Pfizer Inc. And the average age of the Directors is stated at 65 years of age. There are 12 independent directors on the Board at Pfizer Inc. And the board is inclusive of a Lead Independent Director, and Independent Audit Committee and an Independent Compensation Committee. The Board of Directors for Pfizer Inc. meets more than 13 times per year and holds their board elections on an annual basis. Corporate Governance Guidelines are approved by the Board of Directors and the outside directors hold meetings without management present. The Board conducts an annual self-evaluation and an annual review of the independence of the Board. Furthermore, there is a requirement of key committee self-evaluations. The Board is complete with board orientation and education programs and a corporate compliance program. Further the board has a disclosure committee for financial reporting and is governed by a Code of Ethics.

(2) Top Leadership

The Executive Leadership Team (ELT) is Pfizer's senior-most leadership management and decision-making body. This team is stated to bring together the top leaders at Pfizer Inc. "to focus on major financial, strategic and operational decisions for the company. According to Pfizer Inc. "To best position our business for continued success, the ELT is focused on working with agility, speed and collaboration to ensure that opportunities are rapidly seized and challenges immediately perceived and addressed." (2009)

Pfizer states that they have "...created an integrated, streamlined, "one company" organizational structure in which line management, functional experts, and a few centers of excellence work in close collaboration to advance our business objectives. With this structure, we are aligned to meet the needs of our markets and customers, and rapidly capitalize on opportunities to advance our business by increasing support for successful new medicines, forging partnerships with key customers, entering into co-promotion and licensing agreements, investing in new technologies to add value to our core product offerings, and acquiring new products and services from outside the company." (Pfizer Inc., 2009)

III. External Environment -- Opportunities and Threats

The market opportunity has been stated by Pfizer Inc. To be shifting over the next ten years. The following illustration shows the shift that is expected to take place in the pharmaceutical industry.

Figure 1

Market Opportunity Shift over the Next Ten Years

Source: Pfizer Inc. (2007)

Pfizer Inc. states that it will expand into areas of need that are yet unmet including:

(1) Anti-Virals; and (2) Vaccines. (Pfizer, Inc., 2007)

Pfizer Inc. announced in 2007 that its 'plan of attack' on infectious diseases includes the following:

(1) Deliver targeted anti-fungals and anti-bacterials;

(2) Discover and develop differentiated anti-virals for HIV and HCV therapies; and (3) Address prevention through a novel and differentiated vaccine platform. (Pfizer Inc. 2007)

Pfizer Inc. additionally reports that its Fungal Portfolio is "well-positioned to address needs in the hospital setting." (2007) in addition the Bacterial MRSA market is stated to be growing globally as shown in the following chart labeled Figure 2 in this study.

Figure 2

Bacterial MRSA Market

Source: Pfizer Inc. (2007)

Pfizer Inc. reports a breakthrough pharmaceutical medication in HIV Therapy and specifically 'Selzentry' which received FDA approval and is expected to be approved in Europe very shortly. Pfizer is stated to be well-positioned to compete in the future ID market and states that is a significant unmet need persisting due to escalating resistance. Pfizer's disease development portfolio is stated to be:

(1) aligned with environmental influences;

(2) Contain a diverse suite of opportunities; and (3) Invested in near, middle and long-term deliverables. (Pfizer Inc., 2007)

It is reported that Pfizer's 'Powermed: DNA Vaccine Company" is complete with a unique technology platform in which DNA vaccines offer advantages over vaccines that are traditional and cell-based and as well the proprietary technology of PowerMed offers other advantages. PowerMed has the potential for significant revenue and an attractive margin as the Vaccine market is projected for significant growth due to the increased awareness and the desire of consumers for preventive vaccines. As well specialty vaccines command premium pricing. Finally there is a unique opportunity as an entry point for Pfizer's vaccine strategy. (Pfizer Inc. 2007)

Threats identified in this study include those in which Pfizer's pharmaceutical have been released for generic duplication by other companies and the fact that those pharmaceuticals will be released into the market and some of which have already been released.

Pfizer Inc. states that one of the primary limitations of their operations in some countries outside of the United States "is the lack of effective intellectual property protection" for Pfizer Inc. products. Pfizer primary businesses are stated to be conducted in "intensely competitive and often highly regulated markets." (Pfizer Inc. Report to the United States Securities and Exchange Commission, 2008) Furthermore, most of Pfizer Inc.'s human pharmaceutical products face competition in the form of branded drugs or generic drugs that treat similar diseases or indications." (Pfizer Inc. Report to the United States Securities and Exchange Commission, 2008)

Stated as the principal forms of competition are those of "...efficacy, safety, ease of use, and cost effectiveness." (Pfizer Inc. Report to the United States Securities and Exchange Commission, 2008) Competitors are identified as other companies that manufacture and sell products treating diseases and indications that are similar to the products manufactured and sold by Pfizer Inc. This competition is stated to affect Pfizer Inc.'s "core product business, which is focused on applying innovative science to discover and market products that satisfy unmet medical needs and provide therapeutic improvements." (Pfizer Inc. Report to the United States Securities and Exchange Commission, 2008)

Another identified threat in this study is that of generic pharmaceuticals and Pfizer states that this is "one of the biggest competitive challenges" faced by Pfizer, Inc. Furthermore, it is stated that several such competitors "make a regular practice of challenging our product patents before their expiry. Also stated as a potential threat is the rise in the price of crude oil as it has "resulted in pricing pressures on raw materials that are derived from petroleum" and used in the pharmaceutical business. Inc. Report to the United States Securities and Exchange Commission, 2008)

Regulatory issues both inside of and outside of the United States are cited as well as are legislative issues. There are also stated to be high prices of complying with Environmental Law and it is stated that in 2008 Pfizer Inc.… READ MORE

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