Exhibit 99
Pfizer Inc First-Quarter 2005 Performance Report
Pfizer Delivers Steady Performance
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First-Quarter Reported Net Income of $301 Million,
Reported Diluted EPS of $.04, Reflect Tax Provision
for Cash Repatriation of Overseas Earnings and
Charges Attributable to the Suspension of Sales of Bextra
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First-Quarter Adjusted Income* of $4.000 Billion;
First-Quarter Adjusted Diluted EPS* of $.54
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Quarter Marked by Revenue Growth of Key In-Line
and New Products, New Clinical Data for Lipitor,
U.S. Launch of Macugen, FDA Acceptance of
Exubera Filing
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Due to Suspension of Bextra Sales and Other Factors, Pfizer Now Projects 2005
Adjusted Diluted EPS* of Approximately $1.98,
Reported Diluted EPS of Approximately $1.04
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Pfizer Expects 2005 to Be 'a Transition Year,'
Double-Digit Adjusted
Diluted EPS* Growth in 2006, and
Accelerating Double-Digit Adjusted Diluted EPS* Growth in 2007
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Pfizer Remains On Track to Submit an Industry-Record
20 Major U.S. Regulatory Filings in 2001-2006
NEW YORK, April 19 /PRNewswire-FirstCall/ -- Pfizer today reported
financial results for the first quarter of 2005.
"Pfizer continues to deliver steady performance," said Hank McKinnell,
chairman and chief executive officer.
"Pfizer's revenue growth of 5 percent in the first quarter was the
product of two underlying forces. One Pfizer markets the broadest array of
in-line and new products in the industry. Excluding the U.S. revenues of
Neurontin, Diflucan, and Accupril -- products that faced generic competition
beginning in 2004 -- and total revenues of Celebrex and Bextra, Pfizer revenues
for the first quarter of 2005 achieved strong double-digit growth. The other
Pfizer is a business going through the natural process of reinventing itself. We
are addressing the loss of exclusivity of a number of products, a situation that
we have long planned for, by advancing a number of internally developed,
in-licensed, and co-promoted product candidates.
"As the leader of the worldwide pharmaceutical industry, Pfizer has
important competitive advantages that will serve us well and distinguish us from
others in our industry. The unparalleled breadth and depth of our product
portfolio and pipeline clearly demonstrate the unique benefits of Pfizer's scale
and our skill at leveraging the opportunities it provides us. Scale also
enhances our status as 'partner of choice' with other companies who have
promising product candidates and technologies, as well as giving us influence as
a global purchaser of goods and services.
"Our strategic and operating flexibility allows us to marshal and focus
resources when and where they are needed, to change with a changing environment,
and to recognize and seize emerging opportunities. And our will to succeed in
the important work of improving human health remains as strong as ever," Dr.
McKinnell continued.
Pfizer revenues for the first quarter of 2005 grew 5 percent to $13.091
billion, compared to the first quarter of 2004, reflecting strong performances
by Lipitor, Zithromax, and other product lines. Revenue growth was also due to
three additional days in our fiscal calendar in the quarter as well as the
weakening of the U.S. dollar relative to a number of foreign currencies, offset
in part by sales declines for Celebrex and Bextra and recent generic competition
in the U.S. against Neurontin, Diflucan, and Accupril.
The Company's Human Health business generated revenues of $11.440
billion, up 4 percent, in the first quarter compared to the same period in 2004.
Quarterly revenues of Pfizer's Consumer Healthcare business were $945 million,
up 17 percent. Pfizer's Animal Health revenues increased 16 percent in the
quarter to $496 million.
Reported first-quarter net income of $301 million and reported diluted
earnings per share of $.04 included $622 million ($.08 per share) of significant
impacts of purchase accounting for acquisitions (primarily non-cash charges
attributable to the acquisition of Pharmacia); merger-related costs of $151
million ($.02 per share); certain significant items of $2.955 billion ($.40 per
share), which included $2.189 billion of tax expense related to the planned
repatriation of $28.3 billion in overseas cash later in 2005 and $766 million of
charges attributable to the suspension of sales of Bextra; and income from
discontinued operations of $29 million, all on an after-tax basis. Excluding
these items, adjusted income* in the first quarter of 2005 grew 1 percent
relative to the prior year to $4.000 billion, and adjusted diluted EPS* in the
quarter increased 4 percent to $.54, compared to the same period in 2004.
Human Health Continues Industry-Leading Revenue Performance
"While 2005 will be a transitional year for Pfizer, the underlying
strengths that will sustain us through this period and extend our growth into
the future were clearly evident in the solid first-quarter performance of the
Human Health business," said Karen Katen, vice chairman and president, Pfizer
Human Health. "These strengths are founded in the continued growth of many of
our major in-line medicines, along with the growing contributions of our newer
introductions -- growth that is driven by clinical data, continued investment in
new science and clinical trials, and operational execution."
First-quarter Human Health revenue growth of 4 percent, compared to the
same period in 2004, was led by Lipitor (+23 percent), Aromasin (+134 percent),
Camptosar (+132 percent), Detrol/Detrol LA (+22 percent), Xalatan/Xalacom (+19
percent), Zithromax (+71 percent), Zoloft (+4 percent), Zyrtec (+14 percent),
and Zyvox (+47 percent), as well as newer introductions including Geodon (+56
percent), Relpax (+77 percent), Vfend (+38 percent), and Caduet (+10 percent).
This solid performance across the in-line portfolio more than offset sales
declines, particularly in the U.S., for Celebrex and Bextra, as well as declines
for Neurontin, Diflucan, and Accupril due to generic competition.
Ms. Katen continued, "Beyond the performance of our current portfolio,
we continue to make significant progress in our longstanding efforts to address
important health needs. Some notable achievements during the first quarter
include the successful introduction in the U.S. of Macugen, a major new medicine
to treat a leading cause of blindness, with the product's discoverer Eyetech
Pharmaceuticals, Inc.; the approval of Vfend in Japan; the acceptance by the FDA
of the filing for Exubera, potentially an important new treatment option for
diabetes under co-development with sanofi-aventis and Nektar Therapeutics;
significant progress in building a flow of new products to replenish and grow
our portfolio, with a pipeline that now spans 149 new molecular entities and 78
product enhancement projects; the evolution of our Human Health organization to
better respond to market needs and become more efficient and productive, which
will also help achieve Pfizer's targeted $4 billion in annualized cost savings
by 2008; and piloting new business approaches that represent solutions to some
of the most urgent problems affecting current healthcare systems in the U.S. and
around the world."
Response to COX-2 Developments. Following the FDA decision to require
boxed warnings of potential cardiovascular and gastrointestinal risk for all
COX-2-specific pain relievers and all non-steroidal anti-inflammatory drugs
(NSAIDs), including older non-specific drugs such as ibuprofen and naproxen,
Pfizer will work with the FDA to add expanded risk information in the Celebrex
label. Pfizer has accumulated extensive Celebrex clinical data over the past 10
years involving more than 40,000 patients, and we remain committed to conducting
additional long-term clinical studies evaluating the benefits and risks of
Celebrex. Pfizer will also work closely with the FDA to develop a guide to
assist patients and their healthcare professionals in making the best decisions
for treating their arthritis pain.
Regarding Bextra, Pfizer has suspended its sales in the U.S. in
accordance with the FDA's request. The FDA view is that Bextra's cardiovascular
risk could not be differentiated from other NSAIDs. However, the agency has
concluded that the additional, increased risk of rare but serious skin reactions
associated with Bextra, already described in its label, warrants its withdrawal
from the market. Pfizer respectfully disagrees with the FDA position regarding
the overall risk/benefit profile of Bextra. However, in deference to the
regulatory agency's views, the company has suspended sales of the medicine
pending further discussions with the FDA. For now, patients should stop taking
Bextra and contact their physicians about appropriate treatment options. In
addition, at the request of European and other regulators, Pfizer has also
suspended sales of Bextra in the European Union, Canada, Hong Kong, Singapore,
Malaysia, South Africa, the Philippines, and Mexico. We will explore options
with the regulatory agencies under which the company might be permitted to
resume making Bextra available to physicians and patients. The company is in
contact with other regulatory agencies around the world and will take
appropriate measures based on those discussions.
Strong Core Business. "While a reduced outlook for the COX-2-specific
medicines and the loss of exclusivity for a number of important products will
make 2005 a transition year for Pfizer, the strong performance across our broad
portfolio of patent-protected medicines during the first quarter indicates that
our core Human Health business remains fundamentally sound. Our portfolio of
medicines is strong, with five of the world's 25 best-selling medicines, and
with 11 medicines that lead their therapeutic areas," Ms. Katen continued. "We
anticipate continued growth for many of our major in-line and recently launched
medicines based on four major drivers: favorable demographic trends as people
live longer; the outstanding need to improve quality of life as people live
longer; epidemiological trends showing enormous unmet medical needs in major
disease areas; and a continual stream of new clinical data demonstrating the
efficacy and therapeutic value of our medicines."
The ongoing strength of our major in-line medicines, many of which are
fully patent-protected through 2005 and beyond, is most apparent in the
performance of Lipitor. After eight years on the market, it continues
double-digit growth off the largest base of any pharmaceutical medicine ever.
Lipitor had first-quarter revenue of $3.075 billion, ahead 23 percent compared
to the same period in 2004, and showed strong growth in market share and
prescription volume worldwide. Its ongoing success is based on ever-expanding
clinical evidence reinforcing unmatched efficacy and safety. This includes the
most recent results from the Treating to New Targets (TNT) study. TNT found that
intensive therapy with Lipitor 80 mg can reduce cholesterol and cardiovascular
events to among the lowest levels ever achieved in the history of statin trials,
with a safety profile comparable to that of lower-dose Lipitor therapy. These
results take the treatment of cholesterol to new frontiers, while also
reinforcing data from the ASCOT, CARDS, and PROVE-IT studies -- which have all
demonstrated early and significant improvement in cardiovascular outcomes.
Norvasc first-quarter revenue reached $1.175 billion and is ahead 3
percent compared to the same period in 2004 -- a reduced rate of growth that is
attributable in part to loss of exclusivity in several E.U. countries. Its
performance in the U.S. continues to be strong, with 11 percent growth in the
first quarter, and its new-prescription growth in the U.S. continues to exceed
that of the cardiovascular market. The longstanding leadership of Norvasc in the
antihypertensive market, based on its excellent safety and efficacy, has been
reinforced by recent clinical trials, such as ASCOT, that demonstrate and extend
evidence regarding the outstanding effectiveness of Norvasc.
Zithromax performance was strong in the first quarter of 2005, based on
its clear benefits as well as an active flu season. It achieved $797 million in
first-quarter revenue, ahead 71 percent compared to the same period in 2004.
Pfizer has filed with the FDA a single-dose Zmax formulation, which would
represent a valuable extension of this important medicine. It offers a one-time
antibiotic course of therapy that will improve compliance by allowing directly
observed therapy in the presence of a healthcare provider.
With $438 million in first-quarter revenue, ahead 5 percent compared to
the same period in 2004, Viagra is maintaining its market leadership in the face
of competition due to its unique functional and emotional benefits. Additional
growth opportunities for this medicine are expected to result from new clinical
data and sales and marketing efforts that encourage more men to see their
healthcare provider. In December, Pfizer submitted a regulatory filing for
Revatio, which has the same active ingredient (sildenafil) as Viagra, for
treatment for pulmonary arterial hypertension in the U.S., E.U., and other
markets. The FDA accepted the Revatio application for priority review.
The strong performance of Camptosar during the first quarter, with
revenue of $212 million, ahead 132 percent compared to the same period in 2004,
is due to clear clinical evidence that using Camptosar as standard first-line
treatment in advanced colorectal cancer results in improved survival for
patients, as well as Pfizer's acquisition of rights to this gold-standard
medicine in Europe and Asia (except Japan) in 2004. In the U.S., which
represents approximately half of total Camptosar worldwide sales, revenue was
ahead 30 percent in the first quarter. Camptosar continues to show strong growth
as second- and third-line advanced colorectal cancer therapy, and we anticipate
that new clinical data establishing its efficacy in the first-line setting will
accelerate its growth there as well.
Among other major in-line medicines, Xalatan/Xalacom achieved
first-quarter revenue of $333 million, ahead 19 percent compared to the same
period in 2004, as well as strong market performance in both new and total
prescriptions. Xalatan is the most-prescribed branded glaucoma medicine in the
world. Clinical data showing its advantages in treating intra-ocular pressure
compared with beta blockers should support the continued growth of this
important medicine.
Zyrtec revenue reached $342 million, ahead 14 percent compared to the
same period in 2004, and it continues to be the most-prescribed antihistamine
agent in the U.S. in a challenging market. Zyrtec has the broadest range of
formulations and treats patients as young as six months old. Zyrtec received a
warning letter from the FDA on April 13, 2005, addressing three print consumer
advertisements. Pfizer will respond to the FDA in the requested timeframe.
Worldwide Zoloft sales reached $845 million, ahead 4 percent compared to
the same period in 2004. It has been the number-one prescribed antidepressant in
the U.S. since 2000. A large body of clinical data supports the safety and
effectiveness of Zoloft.
In addition, recently launched medicines are increasing their revenue
contributions, with additional growth anticipated based on new clinical data and
increasing market acceptance. Lyrica, one of Pfizer's newly launched medicines
in the U.K., Germany, and Mexico, is showing strong performance in its first
year on the market. It is experiencing rapid uptake, with more than an 8 percent
revenue share of the total anti-epileptic market in Germany, and more than a 5
percent share in the U.K, after just five months on the market. This early
success indicates the clear benefits offered by Lyrica, including its efficacy,
with rapid, robust, and sustained pain reduction across the entire dosing range;
its tolerability; and its ease of use. New clinical data from studies presented
at the American Pain Society meeting last month further support the efficacy of
Lyrica in easing neuropathic pain in difficult-to-treat patients, such as those
with spinal-cord injury, and those who have not received adequate relief from
other therapeutic agents. In the U.S., Lyrica is approved for the two most
common forms of neuropathic pain -- diabetic peripheral neuropathy and
post-herpetic neuralgia -- and it is expected to be launched later in 2005.
Among other recently introduced products with strong first-quarter
performance, Vfend revenue reached $88 million, ahead 38 percent compared to the
same period in 2004. Approval of the new candidemia indication in December 2004
will further strengthen its position in the high-risk market of patients at risk
for both mold and yeast infections, as Vfend is the only intravenous/oral
antifungal with first-line indications for both these infections. Vfend also
received approval in April 2005 in Japan, which is the world's second largest
antifungal market, for a broad first-line antifungal indication.
Geodon continues to outperform the market, with revenue of $138 million
in the first quarter, ahead 56 percent compared to the same period in 2004. Its
recently launched bipolar mania indication has expanded the pool of patients who
can benefit from this important medicine. The market is accepting its very
distinct benefits, including its efficacy, dosing flexibility, and favorable
metabolic and weight-gain profile compared to older agents. Pfizer, along with
other manufacturers of atypical antipsychotics, recently received a request from
the FDA to add a black-box warning to the Geodon label regarding an increased
mortality risk in patients with dementia-related psychosis. The proposed new
labeling is based on data from 17 placebo-controlled clinical trials of other
atypical antipsychotic agents in patients with dementia-related psychosis.
Geodon is not approved for use in this patient population.
Revenue for Relpax of $53 million in the first quarter was ahead 77
percent compared to the same period in 2004, and it continues to gain market
share in the $2.3 billion global oral triptan market. It is outperforming the
overall triptan market in the U.S., with the fastest rates of growth in both new
and total prescriptions (65 percent and 87 percent, respectively). Despite being
the sixth medicine to the market, the clear benefits Relpax offers have driven
its growth to be the number-one triptan in switch prescriptions and number-two
in new-to-market prescriptions, behind only Imitrex. The migraine market
continues to represent a large untapped growth opportunity for Relpax, with
diagnosis rates below 50 percent and treatment rates below 20 percent.
A Promising Pipeline. Beyond the in-line portfolio, Pfizer has also
assembled a range of late-stage pipeline candidates through our internal R&D and
external product sourcing activities that have significant promise for
replenishing and expanding our future portfolio of medicines. Many of these
candidates target disease areas with significant unmet medical needs. For
example, indiplon is for the treatment of patients with insomnia -- a condition
that the National Sleep Association estimates affects at least 70 million
Americans, with potentially another 75 million coping with minor sleeping
disorders. Oporia (lasofoxifene) is for the treatment of osteoporosis, which
affects around 10 million Americans and results in an annual economic cost of
about $14 billion, not to mention the huge toll on health from 300,000 hip
fractures a year caused by untreated osteoporosis. Exubera is for the treatment
of patients with diabetes, the sixth-leading cause of death in the U.S. with
over 50,000 deaths annually.
Ms. Katen noted, "These statistics are startling. They certainly
highlight the urgency of getting our new medicines to the market as important
new treatment options for patients and their caregivers. Our research and
development organization is well on its way to delivering these and many other
important new medicines from our labs to the market."
"The first quarter of 2005 was again productive for Pfizer R&D," said
Dr. John LaMattina, President, Pfizer Global Research and Development. "Pfizer's
development pipeline continues to grow and now includes 149 new molecular
entities and 78 product enhancement projects. Our discovery research engine is
reliably generating new development substrate, advancing ten new candidates into
pre-clinical development during just the first quarter. Research and early
development output is augmented by an active licensing and technology alliance
effort that is completing deals at a pace of one every two weeks. The advanced
development pipeline, including key compounds such as Sutent, varenicline,
maraviroc (UK-427,857), asenapine, torcetrapib/ atorvastatin, and Daxas,
continues to progress. We expect to achieve our goal of filing 20 U.S.
regulatory filings in the five-year period ending in 2006, or about one new
filing per quarter.
"Our productivity initiative to better utilize our wide-ranging R&D
capabilities is proceeding on schedule," Dr. LaMattina continued. "We are
maintaining a clear focus on key objectives -- increasing R&D productivity while
operating at ever higher levels of efficiency."
Specific R&D highlights during the first quarter include the following:
* The FDA accepted the New Drug Application (NDA) filing for Exubera,
or inhaled insulin. In Europe, review of the Marketing Authorization
Application for Exubera is actively proceeding.
* A revised NDA for Lyrica for the treatment of add-on epilepsy was
submitted to the FDA. Lyrica was approved by the FDA in 2004 for the
treatment of diabetic peripheral neuropathy and post-herpetic
neuralgia and will be launched in the U.S. for these indications,
pending the completion of a scheduling designation by the U.S.
Department of Health and Human Services and the U.S. Drug
Enforcement Administration.
* A supplemental NDA was approved for Depo-subQ Provera for treatment
of endometriosis pain.
* The development program for Sutent, a multi-targeted tyrosine kinase
inhibitor for potential treatment of gastrointestinal stromal
tumors, renal cell carcinoma, and breast cancer, was accelerated
when an independent data safety monitoring board halted pivotal
Phase 3 trials seven months early because a statistically
significant efficacy endpoint was successfully achieved.
Important new-product sourcing deals that have been completed in the
first quarter include the acquisition of Idun Pharmaceuticals, a
biopharmaceutical company that we agreed to acquire during February of this
year. Idun is focused on the discovery and development of therapies to control
caspase activity. Their lead compound, IDN-6556, is a first-in-class pan-caspase
inhibitor, currently in clinical trials to treat liver disease and hepatitis C
infection. In addition, Pfizer reached a collaborative research and license
agreement with Rigel Pharmaceuticals for the development of inhaled products for
treating allergic asthma and other respiratory diseases; entered an agreement
with LifeSpan Biosciences to develop an automated pathology system for rapid and
accurate evaluation of tissue specimens in preclinical studies; and gained an
exclusive license from Coley Pharmaceuticals to develop, manufacture, and
commercialize Coley's ProMune (CPG 7909), a toll-like receptor (TLR 9) agonist
delivered by subcutaneous injection for the potential treatment, control, and
prevention of cancers in humans.
Streamlining Business to Improve Performance and Efficiency. Ms. Katen
continued, "Beyond extensive efforts in the Human Health organization to support
our business performance through growing our current portfolio and supporting
the medicines that will create our future portfolio, we are also focused on
targeting our resources toward activities that are most vital to ensuring the
continued success of our pharmaceutical operations. Various efforts are underway
across our Human Health organization to accomplish this, including the
realignment of our U.S. field force, already long recognized as the industry's
best in quality and productivity, in response to a changing promotional
environment."
Other organizational changes include the continued implementation of
Pfizer Global Manufacturing's (PGM's) Plant Network Strategy, initiated after
the Pharmacia acquisition in 2003 to assure that our global manufacturing plant
network is in close alignment with Pfizer's current and future product supply
requirements. Recent announcements include the divestment of facilities in
Augusta, Georgia; Holland, Michigan; Angers and Val-de-Reuil, France; and
Morpeth, U.K.; and the restructuring of facilities in Arecibo, Caguas, and Cruce
Davila, Puerto Rico, and Sandwich, U.K.
Pfizer is also working to better realize the strategic advantages and
meet the efficiency goals of our unmatched global research and development
organization, which, with an annual investment in 2005 of approximately $8
billion -- or more than $20 million a day -- make it one of the world's largest
research institutions. Some actions include concentrating certain operational
functions such as bio-imaging in selected "centers of emphasis"; considering the
potential benefits of sourcing certain tasks in lower-cost environments;
streamlining our wide-ranging sample and clinical supply network; implementing
more efficient clinical-study designs; and continuing to fully leverage our
scale advantage in procurement.
New Approaches to Healthcare Delivery. "Beyond efforts to improve our
internal operational efficiencies, we are implementing a series of initiatives
that respond to the most urgent constraints on our continued vitality as a
pharmaceutical innovation business," Ms. Katen said. "These pressures are
grounded in concerns about the cost of, and access to, medicines; a deep-seated
mistrust of some industry practices; and strained healthcare systems that are
increasingly unable to finance quality care delivery.
"We recognize the urgent need to expand how we provide value to
stakeholders beyond medicines. We are moving toward that goal by extending our
tradition of innovation to the entire process of getting new medicines to the
people who need them, effectively and efficiently. By doing so, we believe that
we will ultimately both enhance our leadership in health and protect our future
in pharmaceutical innovation."
To that end, our efforts include:
Expanding Easy Access to Affordable Medicines. Pfizer already has among
the industry's most comprehensive, generous, and easy-to-use access programs for
uninsured and low-income patients. We are now focused on expanding, and
enrolling more people in, these programs through community-based outreach
efforts and by participating in Partnership for Prescription Assistance, a new
industry-wide umbrella program created by the Pharmaceutical Research and
Manufacturers of America.
Piloting New Models of Care. We are developing and implementing a series
of initiatives to address inefficiencies in healthcare, both in the U.S. and
around the world. These are all based on the fundamental premise that better
health at lower costs is possible through patient-centered and integrated care
delivery that is focused on prevention, early intervention, and appropriate use
of medicines. These initiatives include our first model, the Florida: A Healthy
State program; its expansion to several European markets; the redesign of
Pfizer's own employee healthcare program in the U.S. to be focused more on
health and well-being; and our new Green Ribbon Health program in partnership
with Humana to provide care-management services to approximately 20,000 Medicare
patients in Florida with congestive heart failure, diabetes, or both.
"While it will undoubtedly take time for these efforts to deliver
results, we are confident in their ultimate success because they all have one
primary purpose: serving patients. Meeting the needs of patients and
establishing the value of health will also serve the best interests of the
public, of our communities, of our business, and ultimately of all our
stakeholders," Ms. Katen concluded.
Pfizer Provides Revised Financial Guidance for 2005-07
David Shedlarz, vice chairman, noted, "In the first quarter, Pfizer
performed well, and the company's long-term prospects remain strong.
"We expect 2005 to be a transition year for Pfizer due to a number of
factors. Results in 2005 are being, and will continue to be, impacted by loss of
U.S. exclusivity of four major products -- Diflucan, Neurontin, and Accupril
during 2004 and Zithromax in 2005. Revenues also have been, and will continue to
be, impacted by publicity and regulatory actions regarding COX-2-selective
inhibitors. Full-year revenues are expected to be substantially unchanged from
2004, as growth from other product lines generally offsets these factors. The
suspension of sales of Bextra in the U.S., E.U., and other markets in early
April is expected to reduce our previously announced targeted full-year 2005
adjusted and reported diluted EPS* by approximately $.05 per share. Bextra asset
write-offs are expected to reduce our previously announced targeted full-year
2005 reported diluted EPS by an additional $.10 per share. However, 2005 results
are no longer expected to be impacted by the adoption of new accounting
regulations relating to the expensing of stock options, pursuant to a deferral
in the implementation date of the new regulations, as announced by the SEC last
week. These regulations had been expected to result in an after-tax expense
reducing 2005 adjusted and reported diluted EPS* by $.03 per share. Pfizer
expects to implement SFAS 123R regarding expensing of stock options as of
January 1, 2006. From an efficiency perspective, in 2005 we continue to
anticipate Pharmacia merger-related synergies of $4.2 billion this year, an
increase of $600 million over 2004 Pharmacia merger-related synergies. Pfizer
will also achieve modest cost savings during 2005 from its newly announced
productivity initiative. Given these and other factors, we expect 2005 adjusted
income* of approximately $14.7 billion, adjusted diluted EPS* of approximately
$1.98 per share, reported income of approximately $7.7 billion, and reported
diluted EPS of approximately $1.04 per share, subject to the Disclosure Notice
in this report.
"The differences between targeted 2005 adjusted income* and adjusted
diluted EPS* and 2005 reported income and reported diluted EPS are attributable
to anticipated non-cash charges of $2.6 billion ($.36 per share) relating to
purchase accounting for the acquisition of Pharmacia and an in-process research
and development charge relating to our recently completed acquisition of Idun
Pharmaceuticals, Inc.; merger-related and restructuring costs of $1.4 billion
($.18 per share), which include both Pharmacia-related charges and charges
related to the recently announced planned productivity initiative; and charges
relating to the suspension of sales of Bextra of $.8 billion ($.10 per share),
all on an after-tax basis. In addition, reported net income for 2005 will
include a tax charge of $2.2 billion ($.30 per share) relating to the cash
repatriation of foreign earnings in 2005, with a possible subsequent reduction
of this charge by about $850 million, due to anticipated technical corrections
legislation. All of these estimates are subject to the variables cited in the
Disclosure Notice found in this report.
"We will sustain both the capability and will to make those investments
necessary to support long-term growth. Pfizer's financial strength remains
unprecedented and will be enhanced by the cash repatriation of $28.3 billion in
foreign earnings during this year. With the current quarterly dividend of $.19
per share, which is 12 percent higher than last year, we are continuing the
company's commitment to strong growth in dividends, both today and in the
future. We will accelerate and complete our current share-purchase program in
the second quarter by purchasing approximately $2.4 billion of the company's
stock in this quarter, and early in the second half we will consider additional
opportunities to purchase the company's stock.
"A number of factors are expected to drive a return to double-digit
adjusted earnings* growth in 2006. We are undertaking a new, broad-based,
multi-year productivity initiative to increase efficiency and effectiveness of
all operations company-wide. Annual savings are projected to total $4 billion by
2008. Improved revenue performance is also anticipated, as many of our in-line
products continue to grow, we experience renewed growth of Celebrex, and the
contribution of new products increases.
"Revenue growth, enhanced by continuing productivity initiatives, is
expected to drive a strong 2007, when we anticipate accelerating double-digit
adjusted earnings* growth," Mr. Shedlarz concluded.
"Several factors affected first-quarter results, including several
unique to the quarter," said Alan Levin, chief financial officer. "Revenue
growth benefited from strong performances of many major in-line medicines, as
well as three additional days in our fiscal calendar compared to the first
quarter of 2004. Cost of sales as a percentage of revenues in the first quarter
of 2005 was adversely impacted by changes in production volume, as well as
geographic, segment, and product mix, reflecting the loss of exclusivity of
certain major products in the U.S. and lower year-over-year sales of COX-2
products, compared to the first quarter of 2004, and charges for write-offs of
inventory related to the suspension of Bextra sales. Cost of sales as a
percentage of revenues will remain under pressure in 2005. R&D spending
increased 7 percent in the quarter, reflecting the advancement of our pipeline
products. Full-year R&D spending is expected to be approximately $8 billion.
Finally, the effective tax rate on adjusted income* increased to 23 percent,
reflecting changes in geographic and product mix.
"In connection with the decision to suspend sales of Bextra, we recorded
certain charges totaling $1.213 billion ($766 million, net of tax) in the first
quarter of 2005. These pre-tax charges included $1.145 billion relating to the
impairment of Bextra's intangible assets for developed technology rights, $10
million related to the write-off of machinery and equipment, $56 million in
write-offs of inventory, and $2 million relating to the costs of administering
the suspension of sales. In addition, we recorded in the first quarter of 2005 a
net charge of $71 million, substantially against revenues, for estimated
customer returns of Bextra."
Pfizer Expands Patient-Access
And Corporate-Citizenship Initiatives
During the first quarter of 2005, Pfizer continued its mission to expand
patient access to medicines and to demonstrate good corporate citizenship.
In the aftermath of the tsunami disaster, Pfizer has donated
approximately $60 million (at wholesale price) of antibiotics, antifungal
medicines, and other health products to local and international relief
organizations operating in the Asian region. We are partnering with the United
Nations by sending Pfizer experts in supply-chain management to the affected
areas to support the U.N.-led relief efforts. We have also sent more colleagues
to lend support in areas of critical need, such as water purification.
In February, Pfizer also convened a first-ever conference for healthcare
professionals from tsunami-affected countries in managing post-traumatic stress
disorder. The company also is working closely with medical associations and the
Ministry of Public Health in Thailand to build local mental-health treatment
capacity through programs to train local health professionals, including nurses,
social workers, and psychologists, and other community leaders. In Indonesia,
Pfizer has pledged more than $600,000 to establish a Public Health Laboratory to
monitor potential infectious-disease outbreaks in the disaster-affected region.
The laboratory will become a permanent component of the provincial health
infrastructure in Banda Aceh as services are re-established following the
emergency relief period.
In addition to these activities, Pfizer employees have committed
personal funds totaling more than $2 million to non-profit organizations
assisting in the relief effort, with Pfizer and the Pfizer Foundation providing
matching support.
Pfizer Has the Capabilities to Meet the Challenges Ahead
"Pfizer today faces a paradox," Dr. McKinnell concluded. "On the one
hand, the opportunities for bringing innovative, life-saving medicines to the
world's patients have never been greater. On the other hand, the challenges for
innovative companies like Pfizer have also never been greater. But Pfizer has
faced important challenges before and has always addressed them with energy and
resolve and emerged a stronger company. Pfizer has a dynamic organization of
dedicated colleagues to navigate the challenges that lie ahead, and I appreciate
all their efforts. I am confident that Pfizer's people, equipped with our
innovative products and unsurpassed capabilities, will rise to the occasion once
again and propel our company to long-term success."
For additional details, please see the attached financial schedules,
product revenue tables, and supplemental information.
DISCLOSURE NOTICE: The information contained in this document and the
attachments is as of April 19, 2005. The Company assumes no obligation to update
any forward-looking statements contained in this document and the attachments as
a result of new information or future events or developments.
This document and the attachments contain forward-looking information
about the Company's financial results and estimates, business prospects, and
products in research that involve substantial risks and uncertainties. You can
identify these statements by the fact that they use words such as "will,"
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe,"
"target," and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. Among the factors that
could cause actual results to differ materially are the following: the success
of research and development activities; decisions by regulatory authorities
regarding whether and when to approve our drug applications as well as their
decisions regarding labeling and other matters that could affect the commercial
potential of our products; the impact of the FDA's decision to require a boxed
warning including expanded risk information in the Celebrex label; final actions
relating to Celebrex that may be taken by the European Medicines Evaluation
Agency following its review of the benefits and risks of COX-2-specific
inhibitor medicines; the speed with which regulatory authorizations, pricing
approvals, and product launches may be achieved; competitive developments
affecting our current growth products; the ability to successfully market both
new and existing products domestically and internationally; difficulties or
delays in manufacturing; trade buying patterns; the ability to meet generic and
branded competition after the loss of patent protection for our products; trends
toward managed care and healthcare cost containment; possible U.S. legislation
or regulatory action affecting, among other things, pharmaceutical pricing and
reimbursement, including under Medicaid and Medicare, the importation of
prescription drugs that are marketed outside the U.S. and sold at prices that
are regulated by governments of various foreign countries, and the involuntary
approval of prescription medicines for over-the-counter use; the potential
impact of the Medicare Prescription Drug, Improvement and Modernization Act of
2003; legislation or regulations in markets outside the U.S. affecting product
pricing, reimbursement, or access; contingencies related to actual or alleged
environmental contamination; claims and concerns that may arise regarding the
safety or efficacy of in-line products and product candidates; legal defense
costs, insurance expenses, settlement costs, and the risk of an adverse decision
or settlement related to product liability, patent protection, governmental
investigations, ongoing efforts to explore various means for resolving asbestos
litigation, and other legal proceedings; the Company's ability to protect its
patents and other intellectual property both domestically and internationally;
interest-rate and foreign-currency exchange-rate fluctuations; governmental laws
and regulations affecting domestic and foreign operations, including tax
obligations; changes in generally accepted accounting principles; any changes in
business, political, and economic conditions due to the threat of future
terrorist activity in the U.S. and other parts of the world, and related U.S.
military action overseas; growth in costs and expenses; changes in our product
mix; and the impact of acquisitions, divestitures, restructurings, product
withdrawals, and other unusual items, including our ability to integrate and to
obtain the anticipated results and synergies from our acquisition of Pharmacia,
and our ability to realize the projected benefits of the multi-year productivity
initiative announced on April 5, 2005. A further list and description of these
risks, uncertainties, and other matters can be found in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2004, and in its
periodic reports on Forms 10-Q and 8-K.
* "Adjusted income" and "adjusted diluted earnings per share (EPS)" are
defined as reported net income and reported diluted earnings per share
excluding discontinued operations, significant impacts of purchase
accounting for acquisitions, merger-related costs, and certain significant
items. A reconciliation to reported net income and reported diluted EPS is
provided within this document.
PFIZER INC AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(millions of dollars, except per common share data)
First Quarter
---------------------------- % Incr./
2005 2004 (Decr.)*
------------ ------------ ------------
Revenues $ 13,091 $ 12,487 5
Costs and expenses:
Cost of sales 2,191 1,794 22
Selling, informational and
administrative expenses 4,085 3,933 4
Research and development expenses 1,764 1,649 7
Amortization of intangible assets 882 823 7
Merger-related in-process research
and development charges 2 955 (100)
Merger-related costs 219 247 (11)
Other (income)/deductions--net 1,038 (43) **
Income from continuing operations
before provision for taxes on income
and minority interests 2,910 3,129 (7)
Provision for taxes on income 2,635 809 226
Minority interests 3 2 31
Income from continuing operations 272 2,318 (88)
Discontinued operations:
Income/(loss) from discontinued
operations--net of tax (12) 13 **
Gains on sales of discontinued
operations--net of tax 41 - -
Discontinued operations--net of tax 29 13 125
Net income $ 301 $ 2,331 (87)
Earnings per common share - Basic:
Income from continuing operations $ .04 $ .31 (87)
Discontinued operations--net of tax - - -
Net income $ .04 $ .31 (87)
Earnings per common share - Diluted:
Income from continuing operations $ .04 $ .30 (87)
Discontinued operations--net of tax - - -
Net income $ .04 $ .30 (87)
Weighted-average shares used to
calculate earnings per common share:
Basic 7,415.9 7,586.4
Diluted 7,473.8 7,678.5
* - Percentages may reflect rounding adjustments.
** - Calculation not meaningful.
1. The above financial statement presents the three-month periods ended April
3, 2005 and March 28, 2004. Subsidiaries operating outside the United
States are included for the three-month periods ended February 27, 2005 and
February 22, 2004.
2. The financial results for the three-month period ended April 3, 2005 are
not necessarily indicative of the results which ultimately might be
achieved for the current year.
3. For selected variance explanations, see accompanying Pfizer Inc
Supplemental Information.
PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION FROM REPORTED INCOME AND EARNINGS PER SHARE TO ADJUSTED
INCOME AND ADJUSTED EARNINGS PER SHARE
(UNAUDITED)
(millions of dollars, except per common share data)
First Quarter
---------------------------- % Incr./
2005 2004 (Decr.)
------------ ------------ ------------
Reported net income $ 301 $ 2,331 (87)
Discontinued operations--net of tax (29) (13) 125
Purchase accounting adjustments--net
of tax 622 1,513 (59)
Merger-related costs--net of tax 151 126 20
Certain significant items --net of
tax 2,955 19 M+
Adjusted Income $ 4,000 $ 3,976 1
Reported diluted earnings per common
share $ .04 $ .30 (87)
Discontinued operations--net of tax - - -
Purchase accounting adjustments--net
of tax .08 .20 (60)
Merger-related costs--net of tax .02 .02 -
Certain significant items --net of
tax .40 - -
Adjusted diluted earnings per common
share $ .54 $ .52 4
** - Calculation not meaningful.
M+ - Change greater than one thousand percent.
Certain amounts and percentages may reflect rounding adjustments.
1. The above financial information presents the three-month periods ended
April 3, 2005 and March 28, 2004. Subsidiaries operating outside the United
States are included for the three-month periods ended February 27, 2005 and
February 22, 2004.
2. Adjusted Income and Adjusted diluted earnings per common share as shown
above reflect the following items:
(millions of dollars)
First Quarter
----------------------------
2005 2004
------------ ------------
Discontinued operations, pre-tax:
Loss/(income) from discontinued
operations (a) $ 18 $ (20)
Gains on sales of discontinued
businesses and product lines (a) (65) -
Total discontinued operations, pre-tax (47) (20)
Income taxes 18 7
Total discontinued operations--
net of tax (29) (13)
Purchase accounting adjustments, pre-tax:
In-process research and
development charges (b) 2 955
Intangible amortization and other (c) 851 803
Sale of acquired inventory
written up to fair value (d) 4 -
Total purchase accounting
adjustments, pre-tax 857 1,758
Income taxes (235) (245)
Total purchase accounting adjustments--
net of tax 622 1,513
Merger-related costs, pre-tax:
Integration costs -- Pharmacia (e) 102 101
Integration costs -- Other (e) 4 3
Restructuring charges -- Pharmacia (e) 113 143
Total merger-related costs, pre-tax 219 247
Income taxes (68) (121)
Total merger-related costs--net of tax 151 126
Certain significant items, pre-tax
Costs associated with the suspension of
selling Bextra (f) 1,213 -
Operating results of divested
legacy Pharmacia research facility (g) - 32
Total certain significant items, pre-tax 1,213 32
Income taxes (447) (13)
Tax impact for the repatriation
of foreign earnings (h) 2,189 -
Total certain significant items--
net of tax 2,955 19
Total discontinued operations, purchase
accounting adjustments, merger-related costs
and certain significant items--net of tax $ 3,699 $ 1,645
(a) Included in Discontinued operations--net of tax.
(b) Included in Merger-related in-process research and development charges.
(c) Included primarily in Amortization of intangible assets.
(d) Included in Cost of sales.
(e) Included in Merger-related costs.
(f) Included in Cost of sales ($56 million), Selling, informational and
administrative expenses ($2 million) and Other (income)/deductions- net
($1,155 million).
(g) Included in Research and development expenses.
(h) Included in Income taxes.
PFIZER INC
SEGMENT/PRODUCT REVENUES
FIRST QUARTER 2005
(UNAUDITED)
(millions of dollars)
QUARTER-TO-DATE
--------------------------------------------------------------------------------------------------
WORLDWIDE U.S. INTERNATIONAL
------------------------------ ------------------------------ ------------------------------
% % %
2005 2004 Chg 2005 2004 Chg 2005 2004 Chg
-------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL
REVENUES 13,091 12,487 5 6,976 7,149 (2) 6,115 5,338 15
HUMAN HEALTH 11,440 11,041 4 6,206 6,462 (4) 5,234 4,579 14
- - CARDIOVASCULAR AND
METABOLIC DISEASES 4,726 4,186 13 2,566 2,266 13 2,160 1,920 12
LIPITOR 3,075 2,497 23 1,913 1,573 22 1,162 924 26
NORVASC 1,175 1,141 3 540 489 11 635 652 (3)
CARDURA 153 148 4 1 3 (44) 152 145 4
ACCUPRIL/ACCURETIC 100 191 (47) 29 125 (77) 71 66 7
CADUET 31 28 10 30 28 6 1 0 -
- - CENTRAL NERVOUS
SYSTEM
DISORDERS 1,591 1,947 (18) 954 1,380 (31) 637 567 13
ZOLOFT 845 810 4 661 644 3 184 166 10
NEURONTIN 182 696 (74) 56 570 (90) 126 126 (1)
GEODON 138 88 56 112 72 56 26 16 53
XANAX/XR 102 86 19 34 25 33 68 61 13
ARICEPT* 85 71 19 0 0 - 85 71 19
RELPAX 53 30 77 32 16 97 21 14 54
LYRICA 20 0 - 0 0 - 20 0 -
- - ARTHRITIS AND PAIN 637 1,176 (46) 328 828 (60) 309 348 (11)
CELEBREX 411 769 (47) 265 558 (53) 146 211 (31)
BEXTRA 56 270 (79) 18 244 (93) 38 26 43
- - INFECTIOUS AND
RESPIRATORY DISEASES 1,482 1,234 20 883 723 22 599 511 17
ZITHROMAX 797 466 71 632 335 89 165 131 25
ZYVOX 143 97 47 104 73 42 39 24 62
DIFLUCAN 138 304 (55) 6 176 (97) 132 128 4
VFEND 88 64 38 34 27 28 54 37 45
- - UROLOGY 702 636 11 415 371 12 287 265 9
VIAGRA 438 416 5 230 220 4 208 196 6
DETROL/
DETROL LA 252 206 22 180 145 24 72 61 18
- - ONCOLOGY 479 312 54 164 125 31 315 187 69
CAMPTOSAR 212 91 132 104 81 30 108 10 891
ELLENCE 90 80 13 18 17 9 72 63 14
AROMASIN 55 24 134 20 4 463 35 20 77
- - OPHTHALMOLOGY 333 279 19 105 99 5 228 180 27
XALATAN/
XALACOM 333 279 19 105 99 5 228 180 27
- - ENDOCRINE
DISORDERS 257 219 17 88 79 11 169 140 20
GENOTROPIN 203 179 13 63 58 9 140 121 15
- - ALL OTHER 991 908 9 561 507 11 430 401 7
ZYRTEC/
ZYRTEC-D 342 299 14 342 299 14 0 0 -
- - ALLIANCE REVENUE
(Aricept, Macugen,
Mirapex, Rebif and
Spiriva) 242 144 68 142 84 69 100 60 67
CONSUMER HEALTHCARE 945 804 17 483 416 16 462 388 19
ANIMAL HEALTH 496 428 16 219 199 10 277 229 21
OTHER ** 210 214 (2) 68 72 (6) 142 142 1
* - Represents direct sales under license agreement with Eisai Co., Ltd.
** - Includes Capsugel and Pfizer CenterSource.
Certain amounts and percentages may reflect rounding adjustments. Certain prior
year data have been reclassified to conform to the current year presentation.
PFIZER INC
SUPPLEMENTAL INFORMATION
SHARES OUTSTANDING AND EPS INFORMATION:
1Q05 1Q04
------------ ------------
Shares Outstanding (millions) - Basic EPS 7,415.9 7,586.4
Basic EPS $ .04 $ .31
Adjusted Basic EPS* $ .54 $ .52
Shares Outstanding (millions) - Diluted EPS 7,473.8 7,678.5
Diluted EPS $ .04 $ .30
Adjusted Diluted EPS* $ .54 $ .52
QUESTIONS:
PRODUCT PERFORMANCE / NEW PRODUCT DEVELOPMENT
CARDIOVASCULAR / METABOLIC / ENDOCRINE
Q1) How is Lipitor performing?
A1) Worldwide sales of Lipitor totaled $3.075 billion in the first quarter
of 2005, reflecting growth of 23% compared to the same period in 2004.
Lipitor is the best-selling pharmaceutical product of any kind in the
world and the industry's first $10 billion product. Lipitor's full-year
2004 growth outpaced the lipid- lowering market in both sales and unit
volume worldwide. Lipitor's strong worldwide performance is supported by
the continued strong performance in the U.S. market. Year-to-date U.S.
new prescriptions for Lipitor grew 11%, setting the pace in a strong
growth market.
This impressive performance can be attributed to the safety and efficacy
profiles of Lipitor, including demonstrated strong cholesterol
reduction, a proven cardiovascular (CV) outcomes benefit, and safety for
patients across the full dosing range in more than 400 ongoing and
completed clinical trials involving more than 80,000 patients and in 100
million patient years of experience. Also supporting this impressive
performance are new groundbreaking clinical data, more aggressive
treatment guidelines, and increased promotion within the category.
Lipitor has a growing body of evidence demonstrating benefit to patients
by impacting disease progression and by reducing heart attacks and
strokes (the ASCOT, CARDS, REVERSAL, PROVE-IT, and ALLIANCE clinical
trials).
Emerging results from a new clinical study -- Treating to New Targets
(TNT) -- were reported at the American College of Cardiology on March 8.
These results take the treatment of high cholesterol to new frontiers,
while also reinforcing data from the ASCOT, CARDS, and PROVE-IT studies,
which all demonstrated early and significant improvement in
cardiovascular outcomes. TNT is an innovative and important landmark
outcomes study that investigated the CV benefit of lowering LDL
cholesterol well below current guidelines in patients with coronary
heart disease (CHD). It is the largest and longest clinical trial of its
kind. TNT found that intensive lipid- lowering therapy with Lipitor 80
mg in patients with stable CHD provides significant clinical benefit
beyond that afforded by treatment with Lipitor 10 mg. This five-year
trial builds on the well-established safety profile of Lipitor 80 mg,
demonstrating musculoskeletal safety comparable to the 10 mg dose. The
TNT results have been published online in the New England Journal of
Medicine and will appear in its April print issue.
There continues to be an opportunity for further growth of the
cholesterol-lowering market. Of the tens of millions of people around
the world who need medical therapy for high cholesterol, only about one
third are actually receiving treatment. Worldwide, millions of people
with high cholesterol are not diagnosed, are not treated, or are treated
with a dose inadequate to achieve their cholesterol goals. Evolving
treatment guidelines continue to encourage the broad use of statin
therapy.
Q2) How is Caduet performing?
A2) Worldwide sales of Caduet totaled $31 million in the first quarter of
2005, reflecting growth of 10% compared to the same period in 2004. The
market performance of Caduet in the U.S. continues to improve. U.S.
sales of Caduet doubled, and weekly new-prescription volume increased
27%, in the first quarter of 2005 versus the fourth quarter of 2004.
Momentum continues to grow behind Caduet due to increased product
awareness and acceptance by physicians.
The FDA approved Caduet in January 2004, and Pfizer launched the product
in the U.S. in May. The first E.U. filing was submitted in France, the
reference member state for Caduet, in the fourth quarter of 2003. We
will be pursuing E.U. approvals through the mutual recognition process.
Caduet has been launched in Mexico and has been approved in ten
additional countries throughout Latin America and Asia.
Caduet provides an opportunity to address simultaneously two of the most
common risk factors of cardiovascular disease with the world's most
prescribed branded blood-pressure medication -- Norvasc -- and
lipid-lowering medication -- Lipitor -- in one pill. In September 2004,
the FDA approved changes to the prescribing information for Lipitor and
Caduet to include prevention of cardiovascular disease. The results of
the Anglo-Scandinavian Cardiac Outcomes Trial-Lipid Lowering Arm
(ASCOT-LLA) bring a critical new insight into the management of
hypertensive patients -- that hypertensive patients benefit from Lipitor
in addition to blood-pressure -- lowering therapy.
In December 2004, Pfizer announced that the independent ASCOT steering
committee had decided to stop the study in its entirety due to favorable
benefits being seen in patients receiving the Norvasc- based treatment
regimen. Preliminary results were presented at the American College of
Cardiology (ACC) meeting on March 8, 2005. The fully analyzed ASCOT
results are anticipated later in 2005. The clinical benefits of Caduet
are reinforced by these positive results from Norvasc as well as those
for Lipitor, including the results of the Treating to New Targets study
that were also presented at the ACC meeting. These robust scientific
data continue to reinforce Caduet's efficacy and safety in preventing
cardiovascular events in hypertensive patients, with or without coronary
heart disease.
By current estimates, each year 9 million deaths around the world,
equaling more than 75 million lost years of healthy life, may be
attributed to suboptimal blood-pressure or cholesterol levels. Treatment
guidelines advocate early and aggressive management of multiple risk
factors for patients at increased cardiovascular risk.
Q3) How is Norvasc performing?
A3) Worldwide sales of Norvasc in the first quarter of 2005 totaled $1.175
billion, reflecting growth of 3% compared to the same period in 2004.
The reduced rate of growth is attributable in part to patent expirations
throughout the E.U., except for Italy, France, Sweden, and Switzerland.
Norvasc maintains exclusivity in many markets globally, including the
U.S., Japan, Canada, and Australia. Norvasc's performance in the U.S.
continues to be strong, with 11% growth in sales, and its
new-prescription growth in the U.S. continues to exceed that of the
cardiovascular market.
Since its introduction in 1990, Norvasc has become the world's most-
prescribed branded antihypertensive therapy. Overall, Norvasc has been
studied in more than 400,000 patients and has been used in more than 30
billion patient days of therapy worldwide. Its success has been driven
by its outstanding efficacy, once-daily dosing, consistent 24-hour
control of hypertension and angina, and excellent safety and
tolerability. In addition, the results from the ALLHAT, VALUE, and
CAMELOT/NORMALISE trials demonstrate the beneficial effects of Norvasc
on multiple cardiovascular outcomes. An FDA advisory committee is
anticipated later this year to review the ALLHAT filing for Norvasc.
Hypertension affects about 50 million Americans and one billion people
worldwide. Currently 69% of American adults diagnosed with hypertension
are not at their blood-pressure goal. Recent guidelines call for early,
aggressive blood-pressure management and make clear that the majority of
patients may require two or more medications to reach their
blood-pressure targets.
In December 2004, Pfizer announced that early indications from the
landmark Anglo-Scandinavian Cardiac Outcomes Trial (ASCOT) showed that
patients receiving a treatment regimen based on Norvasc experienced
favorable cardiovascular benefits. As a result of these findings, the
independent ASCOT steering committee decided to stop the trial early so
that investigators and patients in the trial could discuss their optimum
hypertension treatment moving forward. Preliminary results were
presented at the American College of Cardiology meeting on March 8,
2005. These data showed that patients receiving the Norvasc-based
regimen demonstrated a 25% reduction in cardiovascular death and a 15%
reduction in total mortality. These patients experienced a 10% reduction
in the primary endpoint (fatal coronary heart disease and non-fatal
heart attack), which did not reach statistical significance. This is
thought to be due to the widespread use of statins throughout the trial
as well as its premature termination, which reduced the number of
primary endpoints. Among the Norvasc-based regimen's other benefits were
significant reductions in stroke, coronary events, and new-onset
diabetes. The final results of this study are expected to be presented
and published in a peer-review journal later in 2005.
Q4) What is the status of Exubera?
A4) Exubera(R) is a dry powder form of insulin that is inhaled into the
lungs prior to eating using a specially designed inhalation device. The
product candidate is under development through a collaboration between
Pfizer and sanofi-aventis. Pfizer is also collaborating with Nektar
Therapeutics, developer of the inhalation device and formulation process
for Exubera. The product has been studied in more than 3,500 patients,
some for more than seven years. As an effective alternative to insulin
injections, Exubera has also been shown in clinical trials to be
preferred by patients. This patient preference may encourage patient
acceptance of, and compliance with, insulin therapy, thereby improving
the health of diabetics and reducing the healthcare costs associated
with the disease.
On March 2, 2005, Pfizer and sanofi-aventis announced that the FDA had
accepted for filing a New Drug Application for Exubera. The companies
seek approval to market Exubera for adult patients with type 1 and type
2 diabetes. A filing for Exubera is currently under review by the
European Medicines Evaluation Agency.
It is estimated that nearly 180 million people worldwide suffer from
diabetes, and the number is expected to rise to 300 million people in
the next 20 years. More than half of people with diabetes remain
uncontrolled or poorly controlled and are at risk for common
complications such as heart disease, stroke, kidney failure, nerve
damage, and blindness. Annual costs associated with the disease are
estimated at $186 billion worldwide.
Q5) What is the status of Revatio?
A5) Revatio(TM) (sildenafil citrate) was submitted to the FDA, the European
Medicines Evaluation Agency, and Health Canada in December 2004 as a
treatment for pulmonary arterial hypertension (PAH). PAH is a rare,
progressive, and life-shortening vascular disease affecting
approximately 100,000 people in North America and Europe. The FDA has
accepted the Revatio application for priority review.
If approved, Revatio is expected to offer an unprecedented combination
of efficacy, safety, and cost effectiveness for a disease in need of new
oral treatment options. In a large, multinational clinical trial
(SUPER-1) presented at the 2004 American College of Chest Physicians
annual meeting, Revatio 20mg taken three times daily was found to be
effective, safe, and well tolerated over 12 weeks. One-year data from
SUPER-1 showing the effects of Revatio on exercise capacity, survival,
and disease severity (based on functional class) will be presented at
the 2005 International Conference of the American Thoracic Society in
May. Health-related quality-of-life data from SUPER-1 will also be
presented at the conference. Sildenafil is the same active ingredient in
Viagra(R), the world's leading erectile-dysfunction medication, used by
more than 23 million men worldwide based on its excellent efficacy and
safety.
Q6) What is the status of the torcetrapib/atorvastatin program?
A6) A combination product of torcetrapib, a cholesteryl ester transfer
protein (CETP) inhibitor, and atorvastatin (Lipitor) is now in global
Phase 3 clinical trials. The objective of this comprehensive
12,000-patient subject program is to demonstrate improved efficacy and
comparable safety of this novel product versus atorvastatin alone, other
statins, and fibrates in a wide range of patients at cardiovascular
risk. The program includes comparative atherosclerotic imaging trials
involving coronary intravascular ultrasound and carotid ultrasound
technology, as well as a full range of blood-lipid efficacy studies. The
program is designed to provide substantive evidence of the vascular
benefits of raising HDL cholesterol and further lowering LDL cholesterol
over the established clinical benefits of atorvastatin's powerful LDL-
cholesterol lowering. Although a high hurdle has been created,
demonstration of such benefits would provide support for use of
torcetrapib/atorvastatin in patients currently being treated with
atorvastatin and other statins. Additional scientific and mechanistic
studies are also underway to broaden our understanding of the effects of
CETP inhibition on lipid metabolism and atherosclerosis. The development
program is also enrolling 13,000 patients in a definitive mortality and
morbidity trial. This program represents the major commitment by Pfizer
to significantly advance our understanding of lipids and atherosclerosis
to provide an important new tool for patients and prescribers in
preventing and treating the global burden of cardiovascular disease.
Data from Phase 2 studies assessing torcetrapib's impact on lipid levels
in patients with low HDL cholesterol alone and on a background of
atorvastatin treatment were reported at the recent American College of
Cardiology meeting. Torcetrapib, both alone and on a background of
atorvastatin, was found to substantially raise HDL cholesterol. However,
consistent LDL-cholesterol lowering with torcetrapib was only seen in
the patients taking background atorvastatin. Torcetrapib, both alone and
in combination with atorvastatin, was well tolerated in these early
Phase 2 studies.
The rationale for initial development of a fixed-combination tablet of
torcetrapib and atorvastatin, rather than of torcetrapib alone as a
monotherapy or as add-on therapy to any statin, is to provide optimal
lipid treatment for the majority of dyslipidemic patients. The basis for
this decision includes the complementary pharmacologic actions of HMG
Co-A reductase inhibition -- the mechanism of action of statins -- and
CETP inhibition on modifying lipid metabolism, with supporting Phase 2
clinical observations. The torcetrapib/atorvastatin combination also
provides the mandatory LDL-cholesterol control that patients at risk for
heart disease need. Current guidelines recommend intensive
LDL-cholesterol reduction in patients with cardiovascular risk, using a
dose of a statin that would provide at least a 30% reduction in LDL
cholesterol. This is the case even for patients with "isolated" low HDL
cholesterol, since current treatment guidelines recommend LDL-
cholesterol reduction in these patients. Torcetrapib as a monotherapy
did not adequately or consistently lower LDL cholesterol in the Phase 2
studies described above and therefore would not be appropriate as a
monotherapy. The choice of atorvastatin as the companion statin was
based on its powerful LDL-cholesterol and triglyceride lowering, which
has been proven to be safe and clinically effective across its full dose
range. Atorvastatin is the best statin on the market, with a robust
clinical-trial database. Therefore, we believe it was critically
important to combine torcetrapib with the best available agent --
atorvastatin. The combination of torcetrapib with atorvastatin has the
potential as a novel therapy to extend the proven benefits of
LDL-cholesterol lowering by adding substantial HDL-cholesterol elevation
to further reduce atherosclerosis and cardiovascular events beyond what
is currently achievable.
Q7) What is the status of varenicline?
A7) Varenicline is an innovative agent, in Phase 3 development, that was
researched and developed specifically for smoking cessation. Data
presented at the recent American College of Cardiology and Society for
Research on Nicotine and Tobacco meetings showed that varenicline may
offer an advance over existing prescription smoking- cessation
treatments. In two Phase 2 trials evaluating the efficacy, safety, and
tolerability of different doses of varenicline in healthy smokers, about
half of smokers treated with varenicline 1mg twice daily stopped
smoking. In 2000, it was estimated that there were 1.25 billion smokers
worldwide and that nearly 5 million premature deaths per year globally
were attributable to smoking. Seven out of ten smokers are contemplating
quitting or actively want to quit; however, only 3-5% of patients can
quit on their own. More-effective treatments are needed for smoking
cessation than are provided by currently available products. In contrast
to a nicotine derivative or an antidepressant, varenicline was designed
to selectively target the alpha 4-beta 2 nicotine receptors in the brain
and therefore to have the unique benefits of reducing craving and the
related withdrawal symptoms of quitting and of blocking the rewards from
smoking that perpetuate dependence. Varenicline illustrates Pfizer's
leadership in providing innovative products to treat cardiovascular risk
factors and the complications often associated with smoking.
RESPIRATORY
Q8) How is Spiriva performing?
A8) Spiriva is an anticholinergic medication and the first inhaled chronic
obstructive pulmonary disease (COPD) treatment to provide significant
and sustained improvements in lung function with once- daily dosing.
Pfizer co-promotes Spiriva with the product's discoverer, Boehringer
Ingelheim. With 136% year-over-year growth in full-year 2004 worldwide
audited sales, Spiriva's performance continue to outpace the overall
COPD market. The product is currently available in more than 50
countries and is the best- selling COPD product in seven countries,
including Germany and Australia. Recent launches in the U.S. (June
2004), Italy (July 2004), and, most recently, Japan (December 2004)
continue to go well.
Clinical trials have shown that patients with all stages of COPD, from
mild to severe, can benefit from taking Spiriva. Trials have also
demonstrated that Spiriva provided superior and sustained improvements
in lung function, breathlessness, health-related quality of life, and
exercise tolerance in COPD patients. Spiriva also provides sustained and
significant improvements in lung function compared to ipratropium, the
currently recommended first- line therapy outlined in many treatment
guidelines. Spiriva has also been shown to significantly reduce COPD
exacerbations and related health-resource burden versus placebo on top
of usual care, including inhaled corticosteroids and long-acting beta
agonists.
In a study recently published in Chest, Spiriva was shown to be the
first product to consistently enhance the well-known exercise- training
benefits of pulmonary rehabilitation in patients with COPD. This study
builds upon previous studies with Spiriva, which have demonstrated
significant improvement in exercise tolerance, shortness of breath, and
quality of life when compared with placebo. In the study, Spiriva was
associated with prolonged (24-hour) improvements in lung function as
well as improvements in exercise- endurance time, further augmenting
benefits of pulmonary rehabilitation. Spiriva may be an important tool
for physicians to break the vicious downward spiral of dyspnea,
inactivity, and subsequent deconditioning.
Q9) How is Zyrtec performing?
A9) Worldwide sales of Zyrtec totaled $342 million in the first quarter of
2005, reflecting an increase of 14% compared to the same period in 2004.
The product continues to be the most-prescribed antihistamine agent in
the U.S. in a challenging market. Zyrtec continues to lead Allegra by a
wide margin in prescriptions by key specialists -- allergists and
pediatricians. The decline experienced in the prescription antihistamine
market for the past two years has leveled off, as much of the impact of
cheaper over-the-counter and private-label loratadine (Claritin)
products has been realized and the majority of managed-care plans have
completed their formulary tier changes in this category. Zyrtec is
indicated for both seasonal and perennial allergic rhinitis. It has the
broadest range of formulations and treats patients as young as six
months old.
Q10) What is the status of Daxas (roflumilast)?
A10) Daxas is a phosphodiesterase-4 inhibitor, a class of compounds that
provides anti-inflammatory action for respiratory diseases. The compound
is currently being studied for both asthma and chronic obstructive
pulmonary disease (COPD), two respiratory diseases associated with
substantial morbidity and mortality. COPD affects 600 million people
worldwide and kills more than 2.75 million people each year, according
to estimates by the World Health Organization. The Global Burden of
Disease Studies found that COPD was the sixth- most-common cause of
death worldwide in 1990 and predicted that it would become the
third-most-common cause of death by 2020. In the U.S., COPD is currently
the fourth-leading cause of death (behind heart disease, cancer, and
stroke), with death rates having increased 22% in the last decade.
Asthma affects more than 300 million people worldwide and kills 180,000
people each year. Pfizer and our co-promotion partner Altana Pharma
filed Daxas in the E.U. for both asthma and COPD indications. For other
markets, the product is in late-stage development.
UROLOGY
Q11) How is Detrol/Detrol LA performing?
A11) Worldwide sales of Detrol/Detrol LA totaled $252 million in the first
quarter of 2005, reflecting growth of 22% compared to the same period in
2004. The robust performance was due to Detrol LA's strong competitive
positioning in the U.S. and E.U. and successful launches of the
once-daily formulation in Asia and Latin America. For the first time,
in-market sales of Detrol/Detrol LA, as reported by IMS, exceeded $1
billion on an annualized basis. Recent competitive launches have
stimulated overall growth of the overactive bladder (OAB) category, with
minimal impact on Detrol/Detrol LA's leading position in the market.
Detrol/Detrol LA remains the most-prescribed brand globally, with more
than 8.5 million patients worldwide since launch and a 51% market share.
OAB is a highly prevalent and bothersome condition, affecting 50-100
million people worldwide, with an approximate 16% prevalence in adults
in the U.S. and E.U. The market opportunity is significant, since OAB
remains underdiagnosed and undertreated. Detrol/Detrol LA is the leading
OAB therapy worldwide, delivering proven 24-hour efficacy across OAB
symptoms of urge incontinence, urgency, and frequency, resulting in
excellent patient-reported treatment outcomes.
Further evidence of Detrol/Detrol LA's patient benefits was presented in
March at the annual Congress of the European Association of Urology in
Istanbul. Study results confirmed that Detrol LA reduces OAB symptoms in
as little as five days. A systematic review of 56 clinical trials
covering all antimuscarinics in widespread clinical use demonstrated
very low total withdrawals from treatment for Detrol LA. In addition,
new data were released demonstrating Detrol LA significantly reduced
nighttime OAB voids with favorable tolerability, as well as long-term
efficacy and safety.
Q12) How is Viagra performing?
A12) Worldwide sales of Viagra totaled $438 million in the first quarter of
2005, a 5% increase compared to the same period in 2004, reflecting
Viagra's stabilization after the introduction of competition. Viagra
maintains a strong leadership position, with a 68% worldwide market
share of audited sales of phosphodiesterase-5 inhibitors for the twelve
months ending January 2005.
More than 130 clinical trials worldwide and more than six years of
real-world experience have shown that Viagra provides hard, long-
lasting erections that instill confidence in men, while maximizing both
patient and partner satisfaction. Studies have shown that Viagra
improves erections in up to 82% of men with erectile dysfunction (ED).
Men taking Viagra also report a 77% improvement in their confidence to
get and maintain an erection, compared to only 18% taking placebo. After
four years of treatment, 96% of Viagra users and 92% of their partners
report being highly satisfied with the product, with 95% of partners
expressing a desire for their men to continue with Viagra treatment. A
recently published study demonstrates that men taking Viagra with
constant visual sexual stimulation reported a hard erection lasting on
average for 33 minutes, compared to seven minutes for men on placebo. No
other ED therapy has been proven to work better or faster than Viagra.
NEUROSCIENCE
Q13) How is Aricept performing?
A13) Aricept, approved for the treatment of symptoms of mild-to-moderate
Alzheimer's disease (AD), continues to lead the AD market with a 59%
worldwide market share and more than one billion cumulative patient days
of therapy. Aricept is co-promoted with Eisai, the company that
discovered the product. Entering its ninth year on the U.S. market,
Aricept is the most prescribed treatment for AD, with new prescriptions
maintained at around 28,000-30,000 per week. Total prescriptions are up
14% versus 2004.
Aricept's strong market leadership has been built on a large body of
clinical evidence supporting its excellent efficacy and tolerability and
a keen customer focus. About 10% of people over 65 suffer from AD,
including 4.5 million Americans. Cognition -- including thinking,
memory, and judgment -- is typically the first area affected by AD. The
benefits of early intervention with Aricept were confirmed in a study
published in December 2004 in the Archives of Neurology. In this 24-week
study of patients with early-stage or mild AD, Aricept significantly
improved cognitive performance compared with placebo.
In February 2005, the National Institute of Clinical Excellence (NICE)
in the U.K., issued a preliminary recommendation against the use of
cholinesterase inhibitors. Advocacy groups, professional associations,
patients, and caregivers have publicly criticized this recommendation.
Eisai and Pfizer strongly disagree with NICE's recommendation and
formally submitted a response on March 22, 2005. NICE is expected to
issue final guidance in October 2005.
Q14) How is Geodon performing?
A14) Worldwide sales for Geodon totaled $138 million in the first quarter of
2005, reflecting growth of 56% compared to the same period in 2004.
Available in both an oral capsule and rapid-acting intramuscular
formulation, Geodon is now launched in 49 countries, where more than
five million prescriptions have been written for more than one million
patients worldwide. In the U.S., weekly new- and total-prescription
shares for Geodon continue to grow, achieving a new share high of 6.2%
for new prescriptions in March 2005. The current growth rates of both
new- and total-prescriptions for Geodon are more than five times the
growth rate of the overall U.S. antipsychotic market. In addition,
Germany and Spain enjoyed strong double-digit sales growth of 30% and
45%, respectively, in the first quarter compared to the same period in
2004.
Schizophrenia affects approximately one in every 100 people and is among
the most disabling of chronic mental illnesses, presenting in early
adults and often persisting throughout adult life. In the selection of
antipsychotics for schizophrenia, there is an increasing appreciation of
metabolic effects. In the treatment of schizophrenia, clinical trials
have demonstrated Geodon to be as effective as risperidone (Risperdal)
and olanzapine (Zyprexa) in controlling both positive and negative
symptoms, with a lower incidence of extra-pyramidal side effects than
risperidone, and significantly less weight gain and adverse changes in
other metabolic indices than olanzapine. In a head-to-head study versus
olanzapine published in the October 2004 issue of the American Journal
of Psychiatry, Geodon demonstrated efficacy equivalent to olanzapine in
treating schizophrenia, while being associated with a lower incidence of
weight gain and more favorable effects on lipids, triglycerides, and
low-density lipoproteins. A head-to-head study comparing Geodon to
risperidone in patients with schizophrenia or schizoaffective disorder
was published in the December 2004 issue of the Journal of Clinical
Psychiatry. This study found that Geodon improved psychotic symptoms,
was generally well tolerated, and demonstrated less effect on prolactin
and weight than risperidone. A one-year extension study of stable
completers of a six-week trial of outpatients demonstrated that patients
who were switched from olanzapine to Geodon sustained their weight loss,
recorded significant improvement in lipid parameters and triglycerides,
and maintained long-term improvement in their clinical symptoms. These
data were presented at major psychiatry congresses in 2004 and are soon
to be submitted for publication.
On April 11, 2005, the FDA issued a request to manufacturers of all
atypical antipsychotics to add a black-box warning to product labeling
regarding increased mortality in patients with dementia- related
psychosis, an indication for which Geodon is not approved. The request
for this label change was based on meta-analyses of 17
placebo-controlled trials of aripiprazole (Abilify), olanzapine
(Zyprexa), risperidone (Risperdal), and quetiapine (Seroquel) in
patients with dementia-related psychosis. Data for Geodon (ziprasidone)
were not included. The results of these analyses reveal the risk ratio
for death in the drug-treated patients compared to the placebo-treated
patients of 1.6 to 1.7. The majority of deaths appeared to be
cardiovascular or infectious in nature. Product labeling changes and a
Dear Health Care Practitioner letter are expected soon.
Risperidone, olanzapine, and aripiprazole already had bolded warnings in
their labels indicating the increased mortality risk in elderly patients
with dementia-related psychosis. It is anticipated that the addition of
the black-box warning for all atypical antipsychotics may slow the rate
of growth in elderly patients with dementia-related psychosis, affecting
all agents. Less than 4% of Geodon's current use is in the elderly (over
age 65) group of patients, and less than .3% in dementia patients.
Geodon does not currently have extensive data or broad usage in the
elderly population. Geodon is growing quickly in the core adult
population. As part of Geodon's lifecycle management, Pfizer is focused
on new indications for the core adult population in schizophrenia and
bipolar disorder. Pfizer does not anticipate this warning will have a
significant impact on Geodon's performance, nor will it prevent
clinicians from using antipsychotic agents for primary indications.
Q15) How is Lyrica (pregabalin) performing?
A15) Worldwide sales of Lyrica totaled $20 million in the first quarter of
2005. Lyrica is currently approved for various forms of neuropathic pain
and as adjunctive therapy for partial epilepsy in 36 countries,
including the E.U., and has been launched in 11 countries. The launches
in Germany, the U.K., and Mexico represent the most successful
introductions of any neuropathic-pain or adjunctive-epilepsy product to
date. Strong initial adoption is attributable to the significant unmet
medical need in both conditions, the compelling clinical evidence
compiled in the Lyrica clinical program -- the largest ever for a
neuroscience compound, with more than 9,000 patients in clinical trials
-- and the positive initial results experienced by patients and
physicians.
Lyrica offers outstanding efficacy -- demonstrated by rapid, robust, and
sustained pain reduction across its entire dose range of 150-600 mg --
and favorable tolerability. Two critical studies presented at the
American Pain Society meeting in March 2005 further support Lyrica's
neuropathic-pain profile. One of these studies is the first ever
demonstrating Lyrica's efficacy and tolerability in patients suffering
from central neuropathic pain caused by spinal- cord injury. The other
is an analysis of an ongoing open-label trial demonstrating Lyrica's
efficacy in highly refractory neuropathic-pain patients who did not
respond to at least three different treatments, including Neurontin
(gabapentin). Recent publications also highlight Lyrica's efficacy in
epilepsy, generalized anxiety disorder, and fibromyalgia, as well as its
potential to improve sleep quality in healthy volunteers.
In the U.S., Lyrica was approved on December 30, 2004, and is the first
FDA-approved product for the treatment of neuropathic pain associated
with both diabetic peripheral neuropathy and post- herpetic neuralgia.
Pending the completion of a scheduling designation by the U.S.
Department of Health and Human Services and the U.S. Drug Enforcement
Administration, Lyrica is expected to be launched in the U.S. for these
indications later in 2005. In September 2004, Lyrica received an
approvable letter for adjunctive treatment of partial seizures in
adults. Pfizer recently submitted a revised regulatory filing to the FDA
for Lyrica's use in epilepsy, and this filing is under review.
Q16) How is Neurontin performing?
A16) Worldwide sales for Neurontin (gabapentin) totaled $182 million in the
first quarter of 2005, reflecting a decline of 74% compared to the same
period in 2004. This decline in sales is due to the at- risk launches
last year of generic gabapentin products by Ivax, Alpharma, and Teva in
the U.S. Pfizer's Greenstone subsidiary followed suit by launching its
own generic version of gabapentin. Pfizer has sued these and other
companies for patent infringement, and if the court determines that
these companies have infringed Pfizer's Neurontin patent, Pfizer will
seek all appropriate remedies and damages, including damages based on
Pfizer's lost profits.
Neurontin continues to be available in more than 100 countries and has
been prescribed to more than 12 million patients since its initial
approval in 1994. It is approved for adjunctive therapy in epilepsy in
more than 100 countries and for treatment of a range of neuropathic-pain
conditions in more than 60 countries.
Q17) How is Relpax performing?
A17) Worldwide sales of Relpax totaled $53 million in the first quarter of
2005, reflecting growth of 77% compared to the same period in 2004.
Launched in more than 25 countries, the product continues to gain market
share in the $2.3 billion global oral triptan market. In the U.S.,
Relpax achieved a 12% new-prescription share year-to- date through
March, representing share growth of 65%, compared to the same period in
2004. Relpax was launched in Canada, the fifth- largest triptan market,
in November 2004.
Recent data presented at the European Federation of Neurological
Societies and the Migraine Trust International Symposium show that
treating a migraine attack early, when the pain is still mild, with
Relpax provides greater efficacy for migraine sufferers than waiting
until the pain becomes more severe. The highest two-hour pain-free rates
were seen among patients with mild pain taking Relpax 40 mg within 30
minutes of pain onset. Sustained pain-free rates were higher for
patients treated with Relpax 40 mg when the pain was mild versus
moderate-to-severe. Published data also demonstrate that Relpax 40 mg
provides better and more sustained relief from the symptoms of migraine
than the market leader, sumatriptan (Imitrex), even if patients wait to
treat and the pain is more severe. Relpax 40 mg also provides
significantly more sustained relief than zolmitriptan (Zomig) or
naratriptan (Amerge) based on two comparator studies. In addition,
Relpax 40 mg has demonstrated efficacy in patients who have previously
failed to obtain adequate relief with other prescription products or
with over-the-counter migraine medications, such as Imitrex, Maxalt,
Excedrin Migraine, non- steroidal anti-inflammatory drugs, and
Fiorinal/Fioricet.
The migraine market still represents a large untapped opportunity and a
significant opportunity for continued Relpax growth. The prevalence of
migraine is estimated to be 12% globally, with fewer than 50% of these
patients being diagnosed and fewer than 20% receiving prescription
medicine.
Q18) How is Zoloft performing?
A18) Worldwide sales of Zoloft totaled $845 million in the first quarter of
2005, reflecting growth of 4% compared to the same period in 2004. It
has been the most-prescribed antidepressant in the U.S. since 2000.
Physicians have written approximately 250 million Zoloft prescriptions
for a variety of psychiatric disorders, accounting for more than 13
billion patient days of therapy. A large body of clinical data supports
the product's safety and effectiveness in its indicated uses. Zoloft, in
the U.S., is approved for six mood and anxiety disorders -- major
depression, panic disorder, obsessive-compulsive disorder (OCD) in
adults and children, post-traumatic stress disorder, pre-menstrual
dysphoric disorder (PMDD), and social anxiety disorder. For each of
these indications except PMDD, Zoloft is approved for both acute and
long- term use.
In the E.U., the Committee for Human Medicinal Products (CHMP) is
conducting a review of 12 antidepressants, including Zoloft, regarding
their use in children and adolescents. In February 2005, Pfizer provided
a response to the review, and an assessment report from the CHMP is
expected in the second quarter of 2005.
In the U.S., in February 2005, Pfizer implemented FDA instructions that
require the makers of all currently marketed antidepressants, including
tricyclic agents, MAO inhibitors, selective serotonin reuptake
inhibitors such as Zoloft, selective norepinephrine reuptake inhibitors,
and atypical antidepressants, to include a black-box warning that
antidepressants increased the risk of
suicidal thinking and behavior in children and adolescents in pooled,
short-term studies. In the nine completed clinical trials of Zoloft in
pediatric and adolescent patients, which included studies of Zoloft in
children diagnosed with depression, OCD, or both, no suicides occurred.
The trials found no statistically significant differences between
Zoloft-treated patients and placebo controls in their rates of suicide
attempts or ideation.
Q19) What is the status of asenapine?
A19) Pfizer, through its collaboration with Organon, continues to advance the
clinical development of asenapine, a novel psychotropic agent discovered
by Organon and currently in Phase 3 studies. Asenapine is being studied
in more than 3,000 patients for the treatment of the acute symptoms and
maintenance therapy of schizophrenia, as well as for treatment of the
acute manic episodes associated with bipolar disorder. Results of Phase
2 results are encouraging and indicate that asenapine has demonstrated
strong efficacy and good tolerability, with no clinically significant
side effects. If approved, Pfizer and Organon plan to co-promote
asenapine, which would enter a global antipsychotic market currently
valued at more than $14 billion in annual sales and growing about 12%
per year.
Q20) What is the status of indiplon?
A20) Indiplon is a novel GABA-A receptor potentiator being developed by
Pfizer and Neurocrine Biosciences for the treatment of multiple aspects
of insomnia. Neurocrine Biosciences has announced that it will resubmit
U.S. regulatory filings for indiplon capsules and tablets during the
second quarter of 2005. The clinical development program has
demonstrated a compelling profile for the product: consolidation of
sleep via sleep maintenance, fast onset of action, increased sleep
duration, improved sleep quality, and no next-day sedation, tolerance,
or rebound insomnia.
Insomnia is a prevalent condition. In the U.S. alone, approximately 40%
of the adult population report having trouble sleeping a few nights per
week or more, according to the National Sleep Foundation's Sleep in
America Poll 2002. Approximately 35% of the adult population reports
that they have experienced insomnia every night or almost every night
within the past year. Insomnia remains a disorder with high unmet
medical needs, including problems of frequent night-time awakenings and
difficulty falling back to sleep, sometimes referred to as sleep
fragmentation. Fewer than 10% of patients are treated in this market.
ANTI-INFECTIVES
Q21) How is Vfend performing?
A21) Sales of the antifungal Vfend increased 38% to $88 million in the first
quarter of 2005, compared to the same period in 2004. Strong growth has
resulted from sustained demand and continuing product launches. Vfend
has been launched in 51 countries, including the U.S. and most major
overseas markets. It is now the leading hospital antifungal product in
France and Germany.
Vfend is a new-generation azole antifungal with an extended spectrum of
activity against both yeasts and molds. The risk of serious fungal
infections in hospitalized patients grows as more patients undergo bone
marrow/stem cell and solid organ transplants, as well as aggressive
chemotherapy for cancer and treatment for AIDS. Fungal infections in
these immunocompromised patients are associated with high morbidity and
mortality and require prompt and effective treatment. Vfend can be an
important tool for physicians fighting these infections. Approved
indications in the U.S. include primary treatment of acute invasive
aspergillosis, salvage therapy for rare but serious fungal infections
caused by the pathogens Scedosporium apiospermum and Fusarium spp.,
treatment of esophageal candidiasis, and candidemia in non-neutropenic
patients and the following Candida infections: disseminated infections
in skin and infections in abdomen, kidney, bladder wall, and wounds
(approved in December 2004).
In Europe, Vfend is also approved for the treatment of serious,
invasive, fluconazole-resistant Candida infections (including C. krusei)
and first-line treatment of candidemia in non- neutropenic patients
(approved in January 2005). Vfend is available as oral tablets, powder
for oral suspension, and in an intravenous form. The main competing
medicines can only be administered intravenously. In both tablet form
and liquid suspension, Vfend shows excellent bioavailability. As a
result, some patients may be discharged from the hospital sooner, with
orally administered therapy continuing at home.
Data from Pfizer Global Comparative Aspergillosis Study presented at the
American Society of Hematology meeting in December 2004 demonstrated
that patients with invasive aspergillosis who were treated with Vfend as
primary therapy required fewer days of intensive care compared to
patients receiving standard treatment. Data from the same study
published in the Journal of Antimicrobial Chemotherapy indicated that
Vfend as primary therapy provided both total treatment cost savings,
resulting from reduced consumption of hospital resources and fewer
changes in antifungal therapy, and better medical outcomes in terms of
survival and safety compared with amphotericin B.
Data on the efficacy and safety of long-term Vfend treatment for
invasive aspergillosis with bone involvement were published in Clinical
Infectious Diseases in April. This report represents the largest study
of cases (20 cases) of bone aspergillosis treated with the same
antifungal agent. Patients, most of whom were experiencing treatment
failure or did not tolerate other antifungals, had a global response
rate to Vfend of 55%.
Q22) How is Zithromax performing?
A22) Worldwide sales of Zithromax increased 71% to $797 million in the first
quarter of 2005, compared to the same period in 2004. The global
antibiotic sales declined 3% over this time frame. In the U.S.,
Zithromax remains the number-one branded product in all key
respiratory-tract-infection (RTI) indications, with more than three
times as many prescriptions written as the second-leading branded
competitor. Through the first quarter of 2005, Zithromax's U.S.
new-prescription growth of 38% was more than twice the market growth,
leveraging strong positioning relative to the competition as well as a
strong RTI season.
Zithromax continues to be used as first-line therapy for a number of key
indications, including acute exacerbations of chronic bronchitis (AECB),
community-acquired pneumonia (CAP), and acute bacterial sinusitis (ABS).
Zithromax has a proven track record of clinical efficacy across the
spectrum for mild to moderate RTI, an unsurpassed safety profile, and a
short therapeutic course that may improve patient compliance.
The regulatory filing for the new, single-dose azithromycin microspheres
product is currently under review at the FDA. The filing includes
indications for adult AECB, ABS, and CAP. To date, this product has also
been filed for regulatory approval in 10 other countries around the
world. This innovative technology makes it possible to deliver a single
2-gram dose.
Q23) How is Zyvox performing?
A23) Worldwide sales of Zyvox totaled $143 million in the first quarter of
2005, reflecting growth of 47% compared to the same period in 2004.
While days of therapy for all anti-staphylococcal products have
increased 15% worldwide in the past year, days of Zyvox therapy have
increased more than 50%. The product is now marketed in 62 countries.
The clinical value of Zyvox is growing, due to the rising incidence of
infections caused by methicillin-resistant Staphylococcus aureus (MRSA)
and multi-drug-resistant enterococci and their associated morbidity and
mortality. Zyvox has proven efficacy in the treatment of patients with
pneumonia and skin and soft-tissue infections, including diabetic foot
infections, often caused by MRSA. The product has a unique mechanism of
action that stops the initial stage of bacterial protein production,
without which bacteria cannot multiply. This results in no
cross-resistance with other antibiotics. Zyvox is available in
intravenous and oral formulations. This allows for earlier discharge for
some patients, who can switch from the intravenous Zyvox in the hospital
to the oral form at home and thereby reduce their hospital costs. Zyvox
is also approved for pediatric use.
Published literature showing advantages of Zyvox continue to emerge. A
post-hoc analysis of MRSA patients with surgical-site infections was
published in the American Journal of Surgery in December 2004. Patients
treated with Zyvox had microbiologic success rates of 87% compared to
48% for patients on vancomycin. In January 2005, the American Thoracic
Society and Infectious Diseases Society of America published new
recommendations in their evidence-based guidelines for the management of
adults with hospital-acquired pneumonia, ventilator-associated pneumonia
(VAP), and healthcare-associated pneumonia, positioning Zyvox as an
alternative to the market volume leader, vancomycin, based on
preliminary data suggesting Zyvox may have an advantage for proven VAP
cases due to MRSA.
Q24) What is the status of maraviroc (UK-427,857)?
A24) Maraviroc is in Phase 3 clinical development for the treatment, in
combination with other antiretroviral agents, of patients with HIV
infection. A CCR-5 antagonist, maraviroc belongs to a new group of HIV
antiretrovirals known as entry inhibitors that work extracellularly to
block the HIV virus from gaining entry into the cell. It has been shown
in vitro to be effective against HIV strains resistant to the current
classes of HIV antiretroviral agents, potentially addressing a
significant unmet medical need in HIV therapy. Phase 1 studies have
shown maraviroc to be well tolerated across a range of potential doses,
and efficacy and safety have been studied in Phase 2 monotherapy trials
in HIV patients.
The global HIV/AIDS epidemic killed more than 3 million people in 2003.
An estimated 5 million people acquired HIV during the year, bringing to
38 million the number of people living with the virus around the world
(UNAIDS Report, July 2004). Worldwide sales of antiretroviral products
in 2004 totaled just under $7.3 billion and are anticipated to grow to
$10 billion by 2009.
OPHTHALMOLOGY
Q25) How is Xalatan/Xalacom performing?
A25) Sales of Xalatan/Xalacom totaled $333 million in the first quarter of
2005, reflecting growth of 19% compared to the same period in 2004.
Xalatan/Xalacom are the leading brands in sales in the glaucoma market
and are outperforming all competitors in market- share gain.
Worldwide, an estimated 67 million people suffer from glaucoma, a group
of eye diseases characterized by damage to the optic nerve, visual-field
loss, and elevated intraocular pressure (IOP). Each year, more than
100,000 people in the U.S. are diagnosed with glaucoma. In the U.S.,
approximately one third of the diagnosed glaucoma patients are
untreated, and only 10-15% of the ocular hypertensive patients receive
treatment. Xalatan, a prostaglandin analogue used to lower the
intraocular pressure associated with glaucoma and ocular hypertension,
continues to lead the worldwide anti-glaucoma market and has displaced
beta blockers as the accepted gold standard. It provides comprehensive
IOP management by combining the benefits of product efficacy,
tolerability, patient persistency, and five-year safety data. Effective
IOP management has been shown to prevent or delay optic-nerve damage
from glaucoma that can lead to blindness. Xalacom, a combination of
Xalatan and the beta blocker timolol, provides incremental efficacy for
patients who have an insufficient response to monotherapy while
maintaining the simplicity of a single daily dose.
An article published in the September 2004 issue of the American Journal
of Ophthalmology compared the nocturnal effects of the once- daily beta
blocker timolol and Xalatan on IOP in a small number of patients with
ocular hypertension or early glaucomatous changes. Both treatments were
effective in lowering IOP during the day. Xalatan also reduced IOP at
night. No statistically significant difference was found in the
nocturnal IOP between timolol treatment and no medication. Raised IOP is
a risk factor for glaucoma progression, and thus control of IOP, both
day and night, is critical for the control of glaucoma.
Publication of the European Glaucoma Prevention Study in Ophthalmology
in March 2005 expands the evidence supporting the need for effective
medical therapy to treat ocular hypertension and to delay progression to
glaucoma. An article published in the September 2004 issue of the
American Journal of Ophthalmology addresses physicians' decisions about
when to treat an ocular- hypertensive patient. The article establishes
the concept of global risk assessment and supports early initiation of
treatment in ocular-hypertensive patients. As in cardiovascular disease,
the concept of global risk assessment, when applied to glaucoma, may
enable ophthalmologists to identify and treat glaucoma patients earlier.
Q26) What is the status of Macugen?
A26) In December 2004, the FDA approved Macugen for the treatment of
neovascular (wet) age-related macular degeneration. Pfizer and Eyetech
Pharmaceuticals, Inc., the discoverer of Macugen, launched the product
in the U.S. in January 2005. Macugen has also been filed in the E.U.,
Canada, Australia, Switzerland, and Brazil.
Macugen is an aptamer that selectively binds to, and neutralizes,
vascular endothelial growth factor (VEGF) for the treatment of age-
related macular degeneration (AMD). AMD is the leading cause of
irreversible vision loss among Americans over 55 and occurs in both wet
and dry forms. In wet AMD, blood vessels grow abnormally into the area
beneath the retina.
Positive Phase 3 results from the VEGF Inhibition Study in the Ocular
Neovascularization (VISION) trial were published in the December 30,
2004, issue of the New England Journal of Medicine. This study
demonstrated that Macugen is an effective and well- tolerated treatment
for a broad group of wet AMD patients irrespective of lesion subtype or
size, unlike existing therapies.
Macugen is now reimbursed by Medicare carriers covering all 50 states in
the U.S., all according to the broad FDA label without restrictions.
Pfizer and Eyetech have also developed a Macugen Access Program(TM)
(MAP), which is now available to physicians and patients for additional
support in gaining access to, or reimbursement for, Macugen. MAP offers
pre-treatment and post- treatment services such as insurance
verification, authorization assistance, claims and reviews tracking,
denials and appeal assistance, and patient assistance programs.
ARTHRITIS AND PAIN
Q27) What recent regulatory actions have been taken concerning the safety of
prescription and over-the-counter non-steroidal anti-inflammatory drugs
(NSAIDs), including COX-2-specific medicines?
A27) The FDA Arthritis and Drugs Safety Committee and the Risk Management
Advisory Committee met jointly on February 16-18 to review COX-2-
specific inhibitors and other non-steroidal anti-inflammatory drugs
(NSAIDs). After evaluating a substantial body of clinical data regarding
Celebrex and Bextra and weighing the benefits and risks of these
products, the advisory committees recommended to the FDA that these
medicines remain available to patients with revised labeling.
On April 7, 2005, the FDA announced its plans for changes to the
warnings sections of labels of NSAIDs, including COX-2 medicines, sold
either by prescription or over-the-counter. These labeling changes will
include boxed warnings for prescription NSAIDs regarding potential
cardiovascular, gastrointestinal, and skin- reaction risks. Pfizer will
continue to work closely with the FDA to implement labeling revisions
for Celebrex that ensure its appropriate prescribing and use.
The FDA also requested the suspension of Bextra sales and marketing,
based on its assessment of an unfavorable risk/benefit profile due to
the additional increased risk of rare, serious skin reactions compared
to other NSAIDs, including Celebrex. While Pfizer disagrees with this
assessment of Bextra, it has respectfully complied with the FDA's
request and began the process of suspending Bextra sales on April 7.
Discussions between Pfizer and the EMEA, Health Canada, and several
other regulatory agencies in early April have led to similar regulatory
requests regarding Bextra. Pfizer, while disagreeing with these
agencies, has complied with their requests for suspension of sales and
marketing of Bextra.
Q28) What is Pfizer's position on Celebrex?
A28) In keeping with the FDA's position, Pfizer is advising physicians to
consider the evolving information in evaluating the risks and benefits
of all NSAIDs, including its COX-2-selective medicine Celebrex. While
awaiting final labeling from the FDA, physicians should consider the
available data on all these medicines when assessing individual patients
to be treated for osteoarthritis, rheumatoid arthritis, or acute pain.
Factors to be considered include information concerning the existing
body of data, the risks of alternative treatments, and the individual
patient's underlying cardiovascular and gastrointestinal risk status. As
with all prescription NSAIDs, Celebrex should be used at the lowest
effective dose for the shortest duration, consistent with individual
patient treatment goals.
ONCOLOGY
Q29) How is Aromasin performing?
A29) Sales of Aromasin totaled $55 million in the first quarter of 2005,
reflecting growth of 134% compared to the same period in 2004. This
growth can be attributed primarily to data in the early breast- cancer
setting for Aromasin and the increasing awareness of the utility of
aromatase inhibitors, the class to which Aromasin belongs. In addition,
updated efficacy data on Aromasin were presented in December 2004 at the
San Antonio Breast Cancer Symposium, showing an improving trend toward
overall survival for Aromasin-treated patients in the Intergroup
Exemestane Study (IES). The American Society for Clinical Oncology and
the National Comprehensive Cancer Network recently updated adjuvant
treatment guidelines, endorsing the use of aromatase inhibitors,
including Aromasin, in the treatment of early breast cancer.
Pfizer submitted a supplemental regulatory filing in December 2004 in
both the U.S. and the E.U. for an adjuvant indication for Aromasin.
Based on the pivotal IES trial, this would allow Aromasin to be used in
the estimated 500,000 breast-cancer patients currently on tamoxifen for
two to three years. The study showed a 32% better probability of
disease-free survival and a 37% better probability for
breast-cancer-free survival for patients switched to Aromasin.
Statistically significant risk reductions were also shown for
distant-recurrence, contralateral breast cancer and serious events such
as the development of non-breast primary cancers and thromboembolism.
Q30) How is Campto/Camptosar performing?
A30) Sales of Campto/Camptosar totaled $212 million in the first quarter of
2005, reflecting growth of 132% compared to the same period in 2004.
Sales growth was impacted in part by Pfizer's acquisition of marketing
rights to Campto/ Camptosar in Europe and Asia (except Japan) in late
2004. In the U.S., total metastatic colorectal- cancer (CRC) patient
share totaled nearly 30% in January 2005, narrowing the share gap with
Eloxatin to about five percentage points.
The worldwide presence of Campto/Camptosar has driven the growth of this
cytotoxic drug. Campto/Camptosar continues to be the backbone of
metastatic CRC treatment. When used in combination with the newly
introduced targeted agents like Avastin, Campto/Camptosar with
5-fluorouracil (5FU) and leucovorin (LV) is the only regimen that has
demonstrated a survival benefit for patients in first-line metastatic
CRC. Campto/Camptosar and 5FU/LV are the only drugs approved to be used
in combination with the other newly introduced targeted therapy Erbitux
in second-line treatment. Campto/Camptosar has also demonstrated a
survival benefit when compared with 5FU/LV alone. The overall survival
rate for patients with metastatic CRC has almost doubled since the
introduction of Campto/Camptosar in 1999.
Q31) What is the status of Sutent (SU-11248)?
A31) Sutent, or SU-11248, is a breakthrough oral anti-cancer product
candidate that targets tumors both by cutting off blood supply to the
tumor and by directly killing tumor cells. It has shown unprecedented
activity in clinical trials involving patients with advanced
gastrointestinal stromal tumors and renal cell carcinoma who did not
respond to, or could not tolerate, standard treatment options. At the
upcoming American Society of Clinical Oncology meeting in May, Pfizer
anticipates presentation of exploratory clinical research involving
Sutent in other major tumor types.
OSTEOPOROSIS
Q32) What is the status of Oporia (lasofoxifene)?
A32) Oporia (lasofoxifene) is a selective estrogen receptor modulator (SERM)
under development for the prevention and treatment of osteoporosis and
for the treatment of vaginal atrophy. The U.S. regulatory filing for
osteoporosis prevention was submitted in August 2004, and a supplemental
filing for the treatment of vaginal atrophy was submitted in December
2004. Regulatory submissions in other markets are expected in 2005.
Osteoporosis affects some 8 million American women. An additional 22
million women are estimated to have low bone mass, placing them at
increased risk of osteoporosis. In the U.S., osteoporosis is responsible
for more than 1.5 million fractures per year. Vaginal dryness becomes
increasingly more common throughout the menopausal transition. SERMs may
offer benefits beyond just the bone effects provided by other treatment
options, such as bisphosphonates.
ANIMAL HEALTH
Q33) How did Pfizer's Animal Health business perform?
A33) Sales of the Animal Health business totaled $496 million in the first
quarter of 2005, reflecting growth of 16% compared to the same period in
2004. These results were driven by solid growth of Draxxin, cattle
biologicals, and other livestock products and by the companion-animal
products Rimadyl and Revolution and small-animal biological products, as
well as the favorable impact of a weaker U.S. dollar relative to the
prior year. Pfizer Animal Health is the world leader in providing
products to prevent and treat diseases in animals.
CONSUMER HEALTHCARE
Q34) How did Pfizer's Consumer Healthcare business perform?
A34) Sales of the Consumer Healthcare business totaled to $945 million in the
first quarter of 2005, reflecting growth of 17% compared to the same
period in 2004. These results reflect sustained sales strength for
Listerine mouthwash, which benefited from the launch of Listerine
Advanced in September 2004; growth from Sudafed and other
upper-respiratory products, Zantac, and tobacco-dependence products; and
a weaker U.S. dollar relative to the prior year.
FINANCIAL MATTERS
Q35) How were first-quarter revenues impacted by Pfizer's accounting
calendar?
A35) Pfizer's U.S. fiscal year runs from January 1 through December 31, and
its international fiscal year runs from December 1 to November 30. The
start dates of the second, third, and fourth quarters and ending dates
of the first, second, and third quarters can vary slightly from year to
year because Pfizer's quarterly accounting calendar closes on the Sunday
in closest proximity to the end of the calendar quarter, not the
calendar quarter-end. This practice resulted in three additional
business days in the first quarter relative to 2004. Pfizer's second and
third fiscal quarters of 2005 have the same number of business days as
the prior year. The fiscal fourth quarter of 2005, however, has four
fewer business days than the prior year.
Q36) What impact did foreign exchange have on revenues in the quarter?
A36) The weakening of the U.S. dollar relative to other currencies,
principally the euro, Japanese yen, British pound, and Canadian dollar,
favorably impacted revenues in the first quarter of 2005 by $399 million
and favorably impacted consolidated revenue growth by about three
percentage points.
Q37) What cost synergies from the Pharmacia acquisition were achieved in the
first quarter? What costs to achieve these synergies are expected?
A37) Cost synergies resulting from the acquisition of Pharmacia exceeded $1
billion in the first quarter of 2005. Our estimate for full-year 2005
synergies remains $4.2 billion. Synergies stem from a broad range of
sources, including a streamlined organization, reduced operating
expenses, and procurement savings. Merger-related expenditures (income
statement and balance sheet) incurred during 2003-2005 to achieve these
synergies continue to be expected at about $6 billion.
Q38) What caused cost of sales to increase by 22% in the first quarter of
2005, compared to the first quarter of 2004, given the revenue increase
of 5%?
A38) Cost of sales as a percentage of revenues in the first quarter of 2005
was adversely impacted by changes in production volume, as well as
geographic, segment, and product mix, reflecting the loss of exclusivity
of certain major products in the U.S. and lower year- over-year sales of
COX-2 products, compared to the first quarter of 2004 and charges for
write-offs of inventory related to the suspension of Bextra sales. Cost
of sales as a percentage of revenues will remain under pressure in 2005.
Q39) What factors affected the 7% increase in research and development
expenses in the first quarter of 2005?
A39) During the transitional year of 2005, Pfizer will sustain both the
capability and will to make those investments necessary to support
long-term growth. R&D spending increased 7% in the quarter, reflecting
this commitment to continued investment, the advancement of the
portfolio, and the unfavorable impact of foreign exchange. Full-year
2005 R&D spending is expected to be approximately $8 billion.
Q40) What impact did the suspension of sales of Bextra, announced on April 7,
2005, have on first-quarter results? What is the anticipated impact on
Celebrex sales from the product's additional labeling information?
A40) The suspension of sales of Bextra in the U.S., E.U., and other markets
in early April is expected to reduce our previously announced targeted
full-year 2005 adjusted and reported diluted EPS* by approximately $.05
per share. Also in connection with the decision to suspend sales of
Bextra, Pfizer recorded certain charges totaling $1.213 billion ($766
million net of tax, or $.10 per share) in the first quarter of 2005.
These pre-tax charges included $1.145 billion related to the impairment
of Bextra's intangible assets for developed technology rights, $10
million related to the write-off of machinery and equipment, $56 million
in write-offs of inventory, and $2 million related to the costs of
administering the suspension of sales. In addition, we recorded in the
first quarter of 2005 a net charge of $71 million, substantially against
revenues, for estimated customer returns of Bextra.
The market for pain relievers has shown considerable change since the
withdrawal of Vioxx in September 2004. Following the FDA and EMEA
regulatory reviews of these medicines in February 2005, the market for
prescription pain relievers, including Celebrex, indicated lower, but
stabilizing, sales levels compared to pre-Vioxx withdrawal levels. We do
not expect the additional labeling information for Celebrex to further
impact 2005 revenues due to anticipated switching by patients among pain
relievers, including those previously using Bextra.
Q41) What were the principal factors affecting pre-tax other (income)/
deductions-net?
A41) First Quarter
($ millions) ------------------
(Income)/Deductions 2005 2004
-------------------------------------------------- ------- -------
Net Interest (Income)/Expense $ (17) $ 0
Impairment of Bextra-Related Long-Lived Assets 1,155 --
Royalties (78) (55)
Other, Net (22) 12
Other (Income)/Deductions--Net $ 1,038 $ (43)
In connection with the decision to suspend sales of Bextra, we recorded
a charge of $1.145 billion relating to the impairment of Bextra's
intangible assets for developed technology rights and the write-off of
machinery and equipment of $10 million.
Q42) What is Pfizer's projected effective tax rate for 2005?
A42) Pfizer's effective tax rate in calculating adjusted income* from
continuing operations for 2005 is projected to be 23%. This is the same
rate recorded for the first quarter of 2004. The difference between the
23% rate projected for 2005 and the 21.75% rate recorded for full-year
2004 relates mainly to changes in geographic and product mix.
Q43) What was the impact of Pfizer's decision to repatriate cash from foreign
earnings?
A43) In the first quarter of 2005, we decided to repatriate cash from foreign
earnings totaling $28.3 billion during 2005 in accordance with the
American Jobs Creation Act of 2004, and we recorded a related tax charge
of $2.2 billion. This tax charge may be reduced by approximately $850
million in future periods due to technical corrections legislation
expected to be considered by Congress in 2005.
Q44) What is the status of planned divestitures?
A44) In the first quarter of 2004, Pfizer announced its intention to divest
the legacy Pharmacia in-vitro allergy and autoimmune diagnostic testing
business; the legacy Pharmacia surgical ophthalmology business, certain
legacy Pfizer and Pharmacia non-core European over-the-counter and
personal-care product lines; and three legacy Pharmacia European generic
businesses. First-quarter net income from discontinued operations of $29
million reflects the gain on the sale of one of the two remaining
European generic businesses, less a loss from operations of these
businesses prior to their sale.
Q45) What is the status of Pfizer's share-purchase program?
A45) Pfizer's financial strength and flexibility have allowed the Company to
purchase its stock over the past several years. We believe that purchase
of our stock is an excellent investment opportunity. During the past six
years, Pfizer has purchased more than $30 billion of its common stock.
In October 2004, Pfizer announced a new authorization to purchase up to
$5 billion of the company's common stock. During the first quarter of
2005, the company purchased approximately 36 million shares at a total
cost of about $919 million under this authorization. The company has
purchased approximately 99 million shares at a total cost of about $2.6
billion under this authorization. In light of Pfizer's financial
strength and cash flow, we will accelerate and complete our current
share-purchase program in the second quarter by purchasing approximately
$2.4 billion of the company's stock in this quarter alone, and early in
the second half we will consider additional opportunities to purchase
the company's stock.
Q46) Why does Pfizer disclose adjusted income* and adjusted diluted EPS*?
A46) General Description of Adjusted Income Measure
Adjusted Income is an alternative view of performance used by management
and we believe that investors' understanding of our performance is
enhanced by disclosing this performance measure. The company reports
Adjusted Income in order to portray the results of our major operations
-- the discovery, development, manufacture, marketing, and sale of
prescription medicines for humans and animals, as well as our
over-the-counter products, prior to considering certain income-statement
elements. We have defined Adjusted Income as net income before
discontinued operations, significant impacts of purchase accounting for
acquisitions, merger- related costs, and certain significant items. The
Adjusted Income measure is not, and should not be, viewed as a
substitute for U.S. GAAP Net Income.
The Adjusted Income measure is an important internal measurement for
Pfizer. We measure performance of the overall company on this basis. The
following are examples of how the Adjusted Income measure is utilized:
* Senior management receives a monthly analysis of the operating results
of our company that is prepared on an Adjusted Income basis;
* The annual budgets of our company are prepared on an Adjusted Income
basis; and
* Annual and long-term compensation, including annual cash bonuses,
merit-based salary adjustments, and stock options, for various levels of
management is based on financial measures that include Adjusted Income.
The Adjusted Income measure currently represents a significant portion
of target objectives that are utilized to determine the annual
compensation for various levels of management, although the actual
weighting of the objective may vary by level of management and job
responsibility, and may be considered in the determination of certain
long-term compensation plans. The portion of senior management's bonus,
merit-based salary increase, and equity-compensation awards based on the
Adjusted Income measure ranges from 10% to 30%.
Despite the importance of this measure to management in goal setting and
performance measurement, we stress that Adjusted Income is a non-GAAP
financial measure that has no standardized meaning prescribed by U.S.
GAAP and, therefore, has limits in its usefulness to investors. Because
of its non-standardized definition, Adjusted Income (unlike U.S. GAAP
Net Income) may not be comparable with the calculation of similar
measures for other companies. Adjusted Income is presented solely to
permit investors to more fully understand how management assesses the
performance of our company.
We also recognize that, as an internal measure of performance, the
Adjusted Income measure has limitations and we do not restrict our
performance-management process solely to this metric. A limitation of
the Adjusted Income measure is that it provides a view of operations
without including all events during a period, such as the effects of an
acquisition, merger-related or other restructuring charges, or
amortization of purchased intangibles, and does not provide a comparable
view of our performance to other companies in the pharmaceutical
industry. We also use other specifically tailored tools designed to
ensure the highest levels of performance in the company. For example,
our Research and Development organization has productivity targets, upon
which its effectiveness is measured. In addition, for senior levels of
management, a portion of their long-term compensation is based on U.S.
GAAP net income.
Purchase-Accounting Adjustments
Adjusted Income is calculated prior to considering significant
purchase-accounting impacts, such as those related to our acquisitions
of Pharmacia and Esperion as well as net-asset acquisitions. These
impacts can include charges for purchased in- process research and
development, the incremental charge to cost of sales from the sale of
acquired inventory that was written up to fair value, and the
incremental charges related to the amortization of finite-lived
intangible assets for the increase to fair value. Therefore, the
Adjusted Income measure includes the revenues earned upon the sale of
the acquired products without considering the aforementioned significant
charges.
Certain of the purchase-accounting adjustments associated with a
business combination or a net-asset acquisition, such as the
amortization of intangibles acquired in connection with our acquisition
of Pharmacia, can occur for up to 40 years (these assets have a
weighted-average useful life of approximately 10 years), but this
presentation provides an alternative view of our performance that is
used by management to internally assess business performance. We believe
the elimination of amortization attributable to acquired intangible
assets provides management and investors an alternative view of our
business results by trying to provide a degree of parity to internally
developed intangible assets for which research and development costs
have been previously expensed.
However, a completely accurate comparison of internally developed
intangible assets and acquired intangible assets cannot be achieved
through Adjusted Income. This component of Adjusted Income is derived
solely with the impacts of the items listed in the first paragraph of
this section. We have not factored in the impacts of any other
differences in experience that might have occurred if Pfizer had
discovered and developed those intangible assets on its own, and this
approach does not intend to be representative of the results that would
have occurred in those circumstances. For example, our research and
development costs in total, and in the periods presented, may have been
different; our speed to commercialization and resulting sales, if any,
may have been different; or our costs to manufacture may have been
different. In addition, our marketing efforts may have been received
differently by our customers. As such, in total, there can be no
assurance that our Adjusted Income amounts would have been the same as
presented had Pfizer discovered and developed the acquired intangible
assets.
Merger-Related Costs
Adjusted Income is calculated prior to considering integration and
restructuring costs associated with business combinations because these
costs are unique to each transaction and represent costs that were
incurred to restructure and integrate two businesses as a result of the
acquisition decision. For additional clarity, only restructuring and
integration activities that are associated with a purchase business
combination or a net-asset acquisition are included in merger-related
costs. We have not factored in the impacts on synergies that would have
resulted had these costs not been incurred.
We believe that viewing income prior to considering these charges
provides investors with a useful additional perspective because the
significant costs incurred in a business combination or net-asset
acquisition result primarily from the need to eliminate duplicate
assets, activities, or employees-a natural result of acquiring a fully
integrated set of activities. For this reason, we believe that the costs
incurred to convert disparate systems, to close duplicative facilities,
or to eliminate duplicate positions (for example, in the context of a
business combination) can be viewed differently from those costs
incurred in other, more normal business contexts.
The integration and restructuring costs associated with a business
combination may occur over several years with the most significant
impacts ending within three years of the transaction. Because of the
need for certain external approvals for some actions, the span of time
needed to achieve certain restructuring and integration activities can
be lengthy. For example, due to the highly regulated nature of the
pharmaceutical business, the closure of excess facilities can take
several years, as all manufacturing changes are subject to extensive
validation and testing and must be approved by the FDA. In other
situations, we may be required by local laws to obtain approvals prior
to terminating certain employees. This approval process can delay the
termination action.
Discontinued Operations
Adjusted Income is calculated prior to considering gains or losses on
the sale of businesses and product lines included in discontinued
operations as well as the related results of operations. We believe that
this presentation is meaningful to investors because, while we review
our businesses and product lines on an ongoing basis for strategic fit
with our operations, we do not build or run our businesses with an
intent to sell them.
Certain Significant Items
Adjusted Income is calculated prior to considering certain significant
items. Certain significant items represent substantive, unusual items
that are evaluated on an individual basis. Such evaluation considers
both the quantitative and the qualitative aspect of their unusual
nature. Unusual, in this context, may represent items that are not part
of our ongoing business; items that, either as a result of their nature
or size, we would not expect to occur as part of our normal business on
a regular basis; items that would be non-recurring; or items that relate
to products we no longer sell. While not all-inclusive, examples of
items that could be included as certain significant items would be a
major non- acquisition-related restructuring charge, if non-recurring in
nature, such as those related to our recently announced productivity
initiative; costs associated with a significant recall of one of our
products, such as costs related to our suspension of sales of Bextra
(such costs would not reflect customer returns); charges related to
sales or disposals of products or facilities that do not qualify as
discontinued operations as defined by U.S. GAAP; certain intangible-
asset impairments; the impact of certain significant tax legislation,
such as charges attributable to the repatriation of foreign earnings in
accordance with the American Jobs Creation Act of 2004; or possible
charges related to legal matters, such as those discussed in Legal
Proceedings in our Form 10-K and in Part II: Other Information; Legal
Proceedings included in our Form 10-Q filings. Normal, ongoing defense
costs of the company or settlements and accruals on legal matters made
in the normal course of our business would not be considered a certain
significant item.
Q47) What are Pfizer's financial expectations for 2005-07?
A47) We expect 2005 to be a transition year for Pfizer due to a number of
factors. Results in 2005 are being, and will continue to be, impacted by
loss of U.S. exclusivity of four major products- Diflucan, Neurontin,
and Accupril during 2004 and Zithromax in 2005. Revenues also have been,
and will continue to be, impacted by publicity and regulatory actions
regarding COX-2-selective inhibitors. Full-year revenues are expected to
be substantially unchanged from 2004, as growth from other product lines
generally offsets these factors. The suspension of sales of Bextra in
the U.S., E.U., and other markets in early April is expected to reduce
our previously announced targeted full-year 2005 adjusted and reported
diluted EPS* by approximately $.05 per share. Bextra asset write-offs
are expected to reduce our previously announced targeted full-year 2005
reported diluted EPS by an additional $.10 per share. However, 2005
results are no longer expected to be impacted by the adoption of new
accounting regulations relating to the expensing of stock options,
pursuant to a deferral in the implementation date of the new
regulations, as announced by the SEC last week. These regulations had
been expected to result in an after-tax expense reducing 2005 adjusted
and reported diluted EPS* by $.03 per share. Pfizer expects to implement
SFAS 123R regarding expensing of stock options as of January 1, 2006.
From an efficiency perspective, in 2005 we continue to anticipate
Pharmacia merger-related synergies of $4.2 billion this year, an
increase of $600 million over 2004 Pharmacia merger-related synergies.
Pfizer will also achieve modest cost savings during 2005 from its newly
announced productivity initiative. Given these and other factors, we
expect 2005 adjusted income* of approximately $14.7 billion, adjusted
diluted EPS* of approximately $1.98 per share, reported income of $7.7
billion, and reported diluted EPS of approximately $1.04 per share,
subject to the Disclosure Notice in this report.
The differences between targeted 2005 adjusted income* and adjusted
diluted EPS* and 2005 reported income and reported diluted EPS are
attributable to anticipated non-cash charges of $2.6 billion ($.36 per
share) relating to purchase accounting for the acquisition of Pharmacia
and an in-process research and development charge relating to our
recently completed acquisition of Idun Pharmaceuticals, Inc.;
merger-related and restructuring costs of $1.4 billion ($.18 per share),
which include both Pharmacia-related charges and charges related to the
recently announced planned productivity initiative; and charges relating
to the suspension of sales of Bextra of $.8 billion ($.10 per share),
all on an after-tax basis. In addition, reported net income for 2005
will include a tax charge of $2.2 billion ($.30 per share) relating to
the cash repatriation of foreign earnings in 2005, with a possible
subsequent reduction of this charge by about $850 million, due to
anticipated technical corrections legislation. All of these estimates
are subject to the variables cited in the Disclosure Notice found in
this report.
We will sustain both the capability and will to make those investments
necessary to support long-term growth. Pfizer's financial strength
remains unprecedented and will be enhanced by the cash repatriation of
$28.3 billion in foreign earnings during this year. With the current
quarterly dividend of $.19 per share, which is 12% higher than last
year, we are continuing the company's commitment to strong growth in
dividends, both today and in the future. We will accelerate and complete
our current share-purchase program in the second quarter by purchasing
approximately $2.4 billion of the company's stock in this quarter, and
early in the second half we will consider additional opportunities to
purchase the company's stock.
A number of factors are expected to drive a return to double-digit
adjusted earnings* growth in 2006. We are undertaking a new, broad-
based, multi-year productivity initiative to increase efficiency and
effectiveness of all operations company-wide. Annual savings are
projected to total $4 billion by 2008. Improved revenue performance is
also anticipated, as many of our in-line products continue to grow, we
experience renewed growth of Celebrex, and the contribution of new
products increases.
Revenue growth, enhanced by continuing productivity initiatives, is
expected to drive a strong 2007, when we anticipate accelerating
double-digit adjusted earnings* growth.
IMPROVING PATIENT ACCESS
Q48) How is Pfizer promoting access to innovative medicines-both in the U.S.
and worldwide?
A48) For more than 30 years, Pfizer has maintained a commitment to making its
medicines available to patients in need. Our efforts include:
U.S.
* Partnership for Prescription Assistance: A pharmaceutical-
industry-wide umbrella program created by the Pharmaceutical
Research and Manufacturers of America to lead patients and doctors
to a single point of navigation to more than 275 public and
private-patient assistance programs, including more than 150
programs offered by pharmaceutical companies.
* Medicare-Approved Discount Cards: Pfizer has offered Medicare-
approved discount cards its $15 flat fee for qualified Medicare
beneficiaries.
* Helpful Answers: A Pfizer initiative that includes substantial
savings on Pfizer medicines for America's uninsured through Pfizer
Pfriends; expanded eligibility for existing Pfizer access programs
(Connection to Care, Sharing the Care, Hospital Partnership) that
provide free medicines; and creation of a consumer-friendly,
single-entry-point navigation component for all uninsured patients.
* Pfizer Pfriends: A Pfizer program that offer substantial savings on
Pfizer medicines to uninsured Americans, regardless of age or
income, with average savings of 37% for families making less than
$45,000, and average savings of 15% for families making more than
$45,000.
* Together Rx Access: A collaboration of more than ten pharmaceutical
companies, offering savings on more than 275 medicines to uninsured
Americans under age 65.
* Connection to Care: A Pfizer program for eligible families earning
less than $31,000/year, or $19,000/year for individuals
(approximately 200% of the federal poverty level), who can receive
Pfizer medicines through their physicians' offices free of charge.
* Sharing the Care: A Pfizer program that provides Pfizer medicines
free of charge to participating federally qualified community health
centers. Eligible families earning less than $31,000/year, or
$19,000 for individuals (approximately 200% of the federal poverty
level) can receive Pfizer medicines from eligible community health
centers.
* Hospital Partnership: A Pfizer program that provides Pfizer
medicines free of charge to participating hospitals that serve a
disproportionately large number of low-income patients who lack
health insurance. Eligible families earning less than $31,000/year,
or $19,000/year for individuals (approximately 200% of the federal
poverty level), can receive Pfizer medicines from eligible
hospitals.
* Medicine-Specific Programs: Pfizer's medicine-specific programs work
in partnership with physicians to help patients with complex medical
conditions.
-- Pfizer HIV/AIDS Patient Assistance Program: Viracept and
Rescriptor are donated to eligible low-income HIV/AIDS
patients.
-- Anti-Infective Patient Assistance Program: Diflucan, Vfend,
and Zithromax are provided at no cost to eligible
low-income patients with chronic medical conditions.
-- Aricept Patient Assistance Program: Aricept is donated
to eligible low-income uninsured patients with
Alzheimer's disease.
-- Geodon Patient Assistance Program: Geodon is donated at
no cost to eligible low-income uninsured patients with
schizophrenia.
-- FirstRESOURCE: Aromasin, Camptosar, Celebrex, Ellence,
Emcyt, Idamycin, Trelstar, and Zinecard are made available
to eligible low-income uninsured oncology patients.
-- The Bridge Program: Genotropin and Somavert support
programs are designed to assist eligible patients in
obtaining these medications.
International
* Diflucan Partnership Program: We partner with governments to donate
Diflucan for opportunistic infections associated with HIV/AIDS in
developing countries. In all, Pfizer has committed $110 million to
the program, which has distributed more than 4 million free doses of
Diflucan and trained more than 18,000 healthcare workers.
* International Trachoma Initiative: We partner with the public sector
to eliminate trachoma, the world's leading cause of preventable
blindness, through training and medicine donations in 10 countries
in Africa and Asia. We helped train healthcare professionals who
treated 10 million patients and completed 85,000 surgeries. We
intend to help the World Health Organization achieve its goal of
eliminating blinding trachoma by the year 2020.
* Infectious Diseases Institute: We helped to build a regional
treatment and training institute in Uganda to strengthen local
capacity in HIV/AIDS care. We helped train 150 physicians in Uganda
and the region to provide care to 400 patients per week.
* Global Health Fellows: We support a volunteer medical corps to fight
HIV/AIDS in 14 developing countries that partners with
nongovernmental organization. Pfizer colleagues (physicians,
epidemiologists, nurses, educators, business consultants) spend up
to six months on site advancing knowledge and practice in infectious
diseases.
* International AIDS Grant Program: The Pfizer Foundation supports
more than 30 organizations in 12 countries in Africa, Asia, and
Latin America for HIV/AIDS training and capacity building.
EVENTS FOR INVESTORS
Q49) When is Pfizer's conference call?
A49) Pfizer will be holding a conference call for analysts and investors to
discuss first-quarter 2005 business performance at 1:00 PM today. To
ensure universal access, the conference call will be simultaneously
broadcast over Pfizer's corporate website (http://www.pfizer.com) and
will be archived for seven days thereafter.
* "Adjusted income," "adjusted basic earnings per share (EPS)," and
"adjusted diluted EPS" are defined as reported net income, reported
basic EPS, and reported diluted EPS excluding discontinued operations,
significant impacts of purchase accounting for acquisitions, merger-
related costs, and certain significant items. A reconciliation to
reported net income and reported diluted EPS is provided within this
document.
SOURCE Pfizer Inc
-0- 04/19/2005
/CONTACT: Andy McCormick, +1-212-573-1226, or Paul Fitzhenry,
+1-212-733-4637, both of Pfizer Inc /
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