Filed by Pfizer Inc.
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant Rule 14a-12
of the Securities Exchange Act of 1934
Commission File No: 001-3608
Subject Company: Warner-Lambert Company
The following is the text of a speech by Henry McKinnell, PhD, Pfizer's
President and Chief Operating Officer, on Wednesday, March 8, 2000:
[BRIEF INTRODUCTORY COMMENTS BY JIM GARDNER]
Thank you, Jim.
My thanks also to Steve Scala for the invitation to this year's conference and
to all of you for being here this morning.
I always welcome an opportunity to talk about our company ... and that's
especially true now.
Today, Pfizer stands on the threshold of a new era. Our core businesses have
never been stronger. We have more abundant opportunities than ever before. And
- -- we are consummating a merger with Warner-Lambert that will create a new
standard for our industry.
There's a lot going on -- and it's going very well indeed!!
I will begin by highlighting three themes which are quite familiar to most of
you -- those being:
o our strong financial performance;
o our current product momentum; and
o the benefits of our merger agreement with Warner-Lambert.
In doing so, I will be purposefully brief ... so I can spend most of my time on
our planning for the integration of Pfizer and Warner-Lambert.
Our intent is to have integration plans completed by the "closing" of the deal
so, thereafter, we can shift immediately to implementation.
Effective and rapid implementation will be the key to building upon our strong
financial performance and product momentum and achieving the full benefits of
the merger.
Our 1999 financial results once again reflected impressive top-line and
bottom-line growth. Our fourth quarter performance was one of the strongest in
our recent history.
Excluding our discontinued Medical Technology operation and unusual charges
recorded in both 1998 and 1999, we achieved 20% total revenue growth -- driven
by a broad base of key in-line products and co-promoted products. Diluted
earnings per share on this basis grew at an even more impressive 30%.
That earnings growth performance compared remarkably well with that of our
peers, as shown here.
In 1999, Pfizer and Warner-Lambert clearly led the industry in EPS growth.
1999 also capped a remarkable decade -- one marked by substantial growth in
revenues, net income ... and margins.
Total revenues increased almost four-fold during the 1990s ... ... with our
worldwide pharmaceutical sales growth consistently exceeding that of the global
market ... often by a factor of two or three times.
The result: our rapid rise in the industry rankings -- from 14th in 1990 to 1st
in 1999 -- based on sales of Pfizer-developed prescription pharmaceuticals plus
our share of those products which we co-promote with partners.
But -- perhaps most importantly -- the past decade was only a preamble.
For 2000 through 2002, we anticipate compound annual revenue growth of 16% and
EPS growth of 20% from Pfizer alone, driven by strong in-line product
performance and upcoming new product launches.
In addition -- operating profit margins are expected to further improve,
reflecting broad-based double-digit revenue growth as well as opportunities to
leverage past investments in selling, marketing and R&D!
The principal driver behind Pfizer's outstanding financial performance is our
strong -- and sustainable -- current product momentum.
Ten key products -- representing about 80% of our pharmaceutical revenues --
together grew 31% in 1999!
And -- nine of those products have U.S. patent protections ranging from 2004 to
2013!
In 1999, we had seven products with sales of more than $1 billion each ... an
industry record .... highlighted by Lipitor, Viagra and Celebrex -- the three
most successful launches in pharmaceutical industry history.
These products demonstrate our expertise in both improving our market position
and expanding markets.
For example, Lipitor -- copromoted with the Parke-Davis division of
Warner-Lambert and launched in 1997 -- increased its share to over 41% for
full-year 1999 -- up 22% over 1998. During the same period, other
well-established competitors in this category saw substantial share declines,
including Zocor, down 10%; Pravachol, down 14%; and Mevacor, down 44%.
Evidence of our ability to expand new markets has been visible in the erectile
dysfunction category, where our product Viagra topped one billion dollars in
worldwide 1999 sales.
In just over a year and a half, we've grown the erectile dysfunction category by
more than ten times.
Around the globe, over 6 million men with ED have been treated with Viagra. In
fact, we estimate that worldwide three Viagra tablets are used every second!
Looking back over the past three years, Pfizer's cumulative new prescription
growth -- up 89% -- has outpaced all major pharmaceutical companies ... with
only Warner-Lambert and AstraZeneca coming close.
One reason for the sustainability of our growth is our emphasis on continually
adding value to our marketed products.
As the examples on this slide indicate -- we have many research and clinical
projects underway to explore new uses for our in-line drugs, generate new
product formulations, investigate new patient populations, and develop
convenient new product combinations.
And ... we expect those growth trends to continue.
Those nine major brands -- which are patented to 2004 and beyond, and represent
over $11 billion of our 1999 revenues -- are currently forecast to grow 20%
during 2000.
The "new Pfizer" -- post-merger -- will reflect the financial and product
strengths which I've just highlighted PLUS the many strengths of Warner-Lambert.
Together -- on a proforma 1999 basis -- we had nearly $28 billion in combined
revenues, with nearly $21 billion in prescription pharmaceutical sales.
In addition, we will have major Consumer Products, Animal Health and
Confectionary businesses -- with significant growth potential.
For example, we will have a significant combined presence in consumer health
care:
o With sales of $3.6 billion;
o And, a formidable platform for Rx-to-OTC switches.
But -- more importantly -- the "new Pfizer" will be not just bigger, but better!
The merger offers opportunities for powerful product synergies, combined with an
enhanced global reach.
Combined R&D spending of about $4.7 billion in 2000 -- plus six major research
campuses and a world-class biotechnology firm in Agouron -- will allow us to
address the full-range of exciting medical advances now and on the horizon.
Plus -- we share similar corporate cultures, with team-based,
performance-driven, innovative philosophies.
It is clear that the merger provides substantial benefits to shareholders of
both companies -- in terms of improved financial returns and accelerated
earnings growth.
Besides an estimated 8 "billion-dollar" products and $32 billion in revenues
this year -- we anticipate achieving annual cost savings of $1.6 billion in
2002.
These cost savings alone will accelerate our projected compounded annual net
income growth through 2002 to 25%, excluding one-time transition and
restructuring charges.
There will also be significant operational synergies -- not only in terms of
Lipitor -- but in all areas, most notably sales and marketing and research and
development.
I must emphasize that only cost savings -- not the increased sales that we
expect from these synergies -- are reflected in our earnings projections.
By uniting the industry's two fastest growing major companies with the products
and R&D to sustain that momentum, the Pfizer/Warner-Lambert merger improves the
"bottom line" for both companies.
Counting just cost savings, not increased sales from operational synergies --
the combined entity expects compounded annual EPS growth of 25% through 2002 --
greater than the 20% forecast by Pfizer and Warner-Lambert, individually.
With that quick review of financial performance, current product momentum and
prospective merger benefits -- let me turn to the task at hand ... planning for
the integration of Pfizer and Warner-Lambert.
As we look at the challenge of implementation -- there are three things we must
do: increase our sales and maximize new product opportunities; reduce our costs;
and build a world-class organization capable of strong and sustained growth.
Our prospects for increased sales -- post-merger -- are significantly enhanced
by Warner-Lambert's strong pharmaceutical portfolio -- which includes, as shown
here, several best-in-class products in important therapeutic categories.
The potential for increased sales opportunities is also enhanced by the breadth,
depth and strength of our combined product roster ... with fifteen products
having 1999 third-party sales in excess of $500 million each.
And by ... the sales rankings of our pharmaceutical products within their
therapeutic categories ... which includes ten #1 products.
Among our initial opportunities to increase sales are these --
o The industry's broadest range of products that treat diseases
associated with cardiovascular risks;
o Cross-selling in infectious diseases;
o Clinical opportunites in treating diabetes;
o The expansion of programs for treating central nervous system disorders
such as depression, anxiety, epilepsy, and schizophrenia;
o And -- integrated initiatives in women's health.
Let me briefly touch on each in greater detail ...
Pfizer's already broad cardiovascular franchise will now become broader.
We will market three major products with unique mechanisms of action in treating
hypertension -- the calcium channel blocker Norvasc, which is the world's
largest-selling anti-hypertensive; the alpha-blocker Cardura; and the ACE
inhibitor Accupril.
These products will help patients with diverse medical conditions reach their
cardiovascular goals.
An immediate opportunity in lipid lowering is available in Japan, where -- as
shown on this slide -- Pfizer was the only major pharmaceutical company to
achieve double-digit sales growth in 1999. Pfizer is now the number one
non-Japanese-owned pharmaceutical company in this market -- the second largest
in the world.
Lipitor was recently approved in Japan, where Warner-Lambert and Yamanouchi have
reached agreement to co-market this blockbuster product ... with launch expected
this May.
Pfizer's strong presence in Japan provides the opportunity to nearly double the
potential detailing strength behind Lipitor and to out-promote the current
market leader, Sankyo's Mevalotin (or pravastatin).
Cross-selling opportunities in infectious diseases arise because of Pfizer's and
Warner-Lambert's antibacterial, antifungal and antiviral products.
Zithromax is an effective prophylactic agent for Mycobacterium avium complex --
the most common type of infection in AIDS patients -- and it is being tested for
treatment of that condition. Diflucan has long been an important agent in
fighting the opportunistic fungal infections common in AIDS patients.
Warner-Lambert sells the leading protease inhibitor Viracept and the reverse
transcriptase inhibitor Rescriptor.
Adding these products to the products currently promoted by our respective field
forces should significantly increase their access to, and visibility with,
physicians.
In diabetes, the combined product portfolios and pipelines will cover both
insulin deficiency and insulin resistance.
Pfizer has long had a presence in diabetes -- marketing oral sulfonylurea agents
for type 2 diabetes such as Glucotrol XL. We plan to enhance that presence
greatly in coming years. We are currently developing an inhalable form of
insulin for both type 1 and type 2 diabetes ... in partnership with Aventis and
Inhale Therapeutic Systems. We also are developing a product with a unique
mechanism of action -- CP-368,296, which inhibits the enzyme, glycogen
phosphorylase, that converts glycogen to sugar in the liver.
Warner-Lambert markets a leading glitazone -- Rezulin -- and a promising backup
glitazone CI-1037. They also have advanced into late-stage development an aldose
reductase inhibitor for diabetic neuropathy, zenarestat.
The breadth of this product portfolio clearly provides substantial sales
synergies.
Both companies have an important presence in central nervous system disorders.
Our combined specialist sales forces in this area will be the largest in the
industry --detailing leading products for depression, epilepsy, dementia, and,
hopefully later this year -- migraine and schizophrenia.
Warner-Lambert's pregabalin looks to be one of the more exciting compounds in
the industry, with potentially greater potency and a broader range of uses than
its chemical cousin Neurontin.
And -- we expect to have a combined 400 sales reps calling on specialists in
women's health.
Warner-Lambert's strength in marketing oral contraceptives and hormone
replacement therapy fits in well with Pfizer's leadership in anti-infectives --
Diflucan for vaginal candidiasis and Zithromax for chlamydia and other sexual
transmitted diseases.
Less obvious, but equally profound, strengths are in areas I have already
mentioned: cardiovascular risks, which are the leading causes of death in women,
and in mental health areas such as depression, which is two times more likely to
occur among women than men.
Additional opportunities -- ones worth separate mention -- are derived from
advances in health care information technologies.
Because of such advances -- Physician Communication and Selling, which is the
traditional core activity of pharmaceutical companies, will be enhanced with
richer, more frequent and timely information.
The increasingly important involvement of consumers in healthcare
decision-making and self-management also represents a tremendous opportunity for
Pfizer. With these improved technologies and tools, we will be better able to
communicate the superior quality and efficacy of our products directly to
patients.
Consider our range of "e" activities in the U.S.
As you can see, Pfizer -- through its own efforts and with a variety of external
partners -- has developed and implemented a wide range of health education and
management programs designed to enhance patient health status across the entire
continuum of care.
We are aggressively leveraging the power of the Internet through a number of
distinct and specialized initiatives. Our experience is that these sites, tools,
and services lead to improved patient satisfaction, cost reductions, better
outcomes, and a strengthened patient-physician relationship.
One highly successful example is a program called PfizerforLiving.com, which
targets older consumers with cardiovascular conditions.
The site provides information and customized interactive care management tools
based on their personal health profile -- tools that include diet and exercise
logs, and cholesterol management guides.
Pfizer for Living is just one of our award winning Internet sites. At
eHealthcare World's annual conference last Fall, our internet sites received a
number of awards, including:
o "Best Site for Continuing Medical Education;"
o "Best Site for Seniors;"
o and, "Best Site for Women".
In fact, Pfizer received more awards than any other company, including
DrKoop.com, OnHealthNetwork, and other pharmaceutical companies.
Pfizer's innovative initiatives extend beyond the U.S. to many markets around
the world.
Shown here are three examples of how we are incorporating technology into our
education and selling efforts.
In each circumstance, the unique approaches reflect the regulatory environments,
specific disease states, and the technological capacity of the target audience
- -- demonstrating the power and flexibility of health care information
technologies.
Another example of how we're putting IT to use is Pfizer Health Solutions, a
subsidiary we created in 1995 to advance patient care through the implementation
of technology and clinical solutions.
PHS's portfolio of technology-based products and sophisticated services includes
products like electronic medical records, software-based patient care management
systems, and health information call centers.
As is the case throughout Pfizer's involvement with technology, some of these
have been created internally, some have been secured from other providers, and
some have been created with partners.
Through health care information technology -- as well as the other initiatives I
have outlined -- Pfizer is well positioned to maximize sales. ... while
strengthening our relationships with physicians and patients, and enhancing the
quality of patient care.
[David Shedlarz will now discuss our second essential task: reducing costs.]
[Thank you, Hank ...]
Our initial opportunities for cost reductions regarding the
Pfizer/Warner-Lambert merger involve functional streamlining in the areas noted
on this slide --
- the elimination of organizational redundancies throughout the
combined company -- across all functions, at all levels;
- the leveraging of our combined annual external purchases of over $12
billion;
- the optimization of global manufacturing, involving the almost 100
manufacturing sites of the two companies around the world; and
- the centralization and refinement of our now-separate distribution
systems.
The anticipated realization of our estimated $1.6 billion in annual cost savings
by 2002 is shown here --
$200 million in savings are expected to be achieved in 2000 (from closing at
mid-year, to year-end); $1 billion in 2001; and $1.6 billion in 2002.
It is important to note that these cost savings alone will result in the merger
being accretive in 2001, the first full year of operations.
In pursuing these cost savings -- Pfizer enjoys several advantages.
One is unambiguous leadership. As a result, opportunities will be clearly
defined and aggressively pursued.
A second advantage is the presence of operational managers with solid hands-on
experience in achieving efficiencies and economies.
Over the past few years -- our investments in infrastructure and technology have
made possible the rationalization of worldwide manufacturing; the achievement of
business synergies; and the establishment of a number of shared services --
among many other initiatives.
The result: significant cost savings, improved customer focus, better access to
information, and improved operational speed and flexibility.
These achievements are clearly reflected in Pfizer's 1999 operating margin of
30% as a percentage of revenues -- near the very top of the industry and up
significantly from 16.5% in 1990.
As one example of these achievements -- look at this comparison of Pfizer's
manufacturing productivity in 1990 versus 1999.
During that period, the rationalization of our global production base resulted
in a marked reduction in the number of manufacturing employees -- despite the
introductions of many new products.
These and other initiatives freed up resources to assist in the buildup of
expanded Pfizer Pharmaceuticals capabilities in medical affairs, marketing and
in our field forces around the world.
Similarly dramatic changes resulted from our standardization of financial
processes and systems. For example, by embracing shared financial services in
Europe -- we reduced transactional accounting locations from 32 to 6! That, in
turn, generated a substantial head count reduction -- despite concurrent strong
volume growth.
Our U.S. distribution system has been equally transformed -- through
closures, modernization and operational streamlining.
Today, we have two major "state-of-the-art" facilities -- in Parsippany, New
Jersey; and Memphis, Tennessee.
The service levels at those locations are extraordinary -- and convinced our
Celebrex partner, Searle, to assign us the distribution responsibilities for the
launch of the product in the U.S. In supporting Celebrex's launch -- we sent out
32,000 shipments, covering 80% of American retail pharmacies, in just 24 hours!
And -- finally -- we have experienced success in the strategic purchasing
function -- generating $75 million in savings during 1999 alone.
We see significant opportunities -- given our $12 billion in joint
Pfizer/Warner-Lambert purchases -- in capturing the best prices, leveraging
combined purchases and rationalizing vendors ... while standardizing their
products and services.
These highly successful Pfizer initiatives in manufacturing, shared financial
services, distribution and purchasing have a special added significance today.
We are in the advantageous position of being able to leverage such experiences
and investments -- not just operationally or financially, but in managing the
Warner-Lambert integration process.
[And now ... back to Hank ...]
[Thank you, David ...]
We also foresee an abundance of opportunities -- both short and long-term -- to
enhance our organization by integrating best people and best practices from both
companies, for example:
- upgrading field force productivity, through broader product
offerings, improved training, support and incentives;
- leveraging Pfizer's investments in cutting-edge research
technologies for use by Warner-Lambert's research organization; and
- reinforcing our governmental relations capabilities.
Warner-Lambert brings much to the table (as should be abundantly clear from my
earlier comments).
As such -- a guiding principle of the merger is to draw together the best of
both Pfizer and Warner-Lambert to create an organization superior to either
alone.
As you know -- we have had a strong commitment to full and adequate selling,
informational and administrative investments.
It has been our policy to provide those resources necessary to insure the
successful introduction -- and accelerated international rollout -- of our
continuing series of new products.
The most evident result of those investments has been the regular addition of
new field forces -- whenever the ever-increasing breadth of our product line
required it.
But-- while increasing the numbers of field personnel -- we have also given
attention to increasing their efficiency and effectiveness.
In recruiting new U.S. sales personnel, we have sought individuals with
special healthcare-related skills and training.
Once in place, we have mirrored the geographic alignment of those new field
sales forces ... and have shaped them into tactically-organized and tailored
local marketplace teams.
And -- we have developed an expertise in both internal and external
co-promotions ... to generate focused and coordinated support for our various
products.
The result has been our U.S. field force's recognition -- for the fifth year in
a row (dare I say Dynasty) -- as the highest in productivity and image in
Scott-Levin's annual survey of 10,000 physicians.
Many of our "best practices" will have value -- we believe -- for
Warner-Lambert's field organization.
Within U.S. managed care -- our image has jumped from 49th to 7th place in less
than two years -- based upon the attitude, responsiveness and knowledge of our
representatives.
But there -- Warner-Lambert occupies 5th place -- and undoubtly can reciprocate
with "best practices" of value to us.
In research and development -- we have also had a longstanding commitment to
investing for future growth.
Our industry-leading R&D investments have grown at an average rate of about 20%
per year and are estimated in 2000 at $3.2 billion, from Pfizer alone.
The results of that ramp-up in R&D are obvious: our strong current product
line-up (including Tikosyn, for atrial fibrillation) ... and those products now
before the FDA -- Relpax (for migraine) and Zeldox (for schizophrenia) .... plus
the next wave:
- Vfend (for fungal infections);
- Inhaled Insulin (for diabetes);
- Darifenacin (for urge incontinence), and
- Valdecoxib (a second generation Cox-2 inhibitor for arthritis and pain
that we are co-developing with Searle).
And beyond that -- an additional 64 early candidates that include a number of
especially interesting compounds -- a number of which, pending successful
development, could be delivered to the market by 2003-2005.
In addition, we now have a truly worldwide Central Research organization -- with
strong, closely-linked capabilities located in Groton, Connecticut; Sandwich,
England; and Nagoya, Japan ...... and have fully integrated into our research
processes the most advanced "cutting edge" technologies.
We have also created an ever-growing network of global research alliances with
academic centers and biotechnology and genomic companies .... alliances which
allow us to bring added value to every stage of R&D -- be it in screening
targets, creating leads via combinatorial chemistry, or expediting clinical
testing -- thus helping to "turbocharge" our already finely-tuned and highly
productive internal research and development efforts.
To augment those initiatives -- we will have, post-merger, Warner-Lambert's
world-class biotechnology company -- Agouron -- located in La Jolla, California.
Besides providing the West Coast presence we have long wanted, Agouron brings a
drug library of more than 400,000 compounds -- which, with Warner-Lambert's and
our library, puts over 2 million compounds at the disposal of our researchers.
Of course, Warner-Lambert also brings to Pfizer a highly productive research
campus in Ann Arbor, Michigan.
And -- we have an excellent funding platform for R&D going forward ...
Highlighted on this slide is our proforma combined 1999 R&D spending of $4
billion (tops in the industry) -- and our 2000 estimate of $4.7 billion!
And -- finally -- government relations -- an area of special relevance.
This slide highlights only a few of the factors which have a potential to
influence, or even reshape, the way we do business:
- pharmaceuticals access and pricing issues, driven in large part by
global cost containment measures;
- increased product development constraints and costs, reflecting
shifting regulatory and intellectual property practices;
- the changing needs, and expectations, of patients, physicians and
payers; and
- the enormous opportunities represented by the decoding of the human
genome later this year.
Those factors, in turn, are reflected in a very heavy prospective U.S.
legislative agenda -- running from Medicare prescription coverage, through
consumer advertising, to internet regulation.
As those legislative debates ensue -- we (as a leader within our industry) will
need to effectively communicate certain core messages, those being:
- prescription drugs have a great, and increasing value, to patients
and society at large;
- the growth in total expenditures for pharmaceuticals is
volume-driven, not price-driven;
- the problem, then, is one of coverage and access, not spending; and
- effective public policy must increase access, support innovation and
avoid restrictive formularies and price controls.
To do so, we must urge, and help guide, key audiences to act as shown here:
o The media -- to increase understanding and generate positive
coverage;
o Political leaders -- to support constructive positions;
o Patient advocates -- to speak out for innovation and access;
o Influentials -- to frame sensible policy options; and
o Employees/shareholders -- to educate and inform themselves and
others.
Pfizer has a long history of effective involvement in such matters -- at the
state, federal and international levels.
But -- so has Warner-Lambert!
Together, as the new Pfizer, we can do even better -- at a time when doing well
is essential.
In closing, I offer one final observation -- in which investor uncertainty about
current political issues plays a not insignificant role!
The unique and historic opportunities presented by our merger with
Warner-Lambert -- and our determination to make them happen -- come at a very
interesting time in terms of industry valuation parameters.
As of the end of February -- these were the price-earnings ratios for our
industry peer group, Pfizer, Warner-Lambert and the merged entity -- for 1999,
2000 and 2001.
As you're all aware -- the past few months have seen a notable compression in
pharmaceutical PEs (including ours) ... in the absence of any significant
deterioration of earnings estimates.
Perhaps even more eye-opening is this comparison of P/E to income growth rate
ratios (the traditional PEG analysis).
It should be noted that -- from this perspective -- the Pfizer/Warner-Lambert
combination is currently valued at a considerable discount to our industry peer
group.
Both of these analyses should be of considerable interest to investors ...
especially given our message of this morning ...
"Pfizer. Warner-Lambert. The Best Get Better!"
Thank you --
And now we'd be happy to take your questions ....
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The following are materials presented by Pfizer to investors and analysts
beginning on March 8, 2000:
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SG Cowen Conference
[Pfizer LOGO]
Hank McKinnell, Ph.D.
President & Chief Operating Officer
- --------------------------------------------------------------------------------
[Pfizer LOGO] Agenda
Strong Financial Momentum Current Product Momentum PFE/WLA Merger Benefits
[arrow towards right] [arrow towards right] [arrow towards right]
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[Pfizer LOGO] Agenda
Strong Financial Momentum
PFE/WLA
IMPLEMENTATION Merger Benefits
Current Product Momentum
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<PAGE>
[Pfizer LOGO] 1999 Financial Results*
($ Millions, Except per Share Data)
% Change
---------
Total Revenue $16,204 20
Income Before Taxes 4,758 30
Net Income 3,384 29
Diluted EPS $0.87 30
* Excluding 1999 Trovan Inventory Charge; % Change Also Excludes 1998
Discontinued Operations and Certain Significant 1998 Charges
- --------------------------------------------------------------------------------
[Pfizer LOGO] 1999 Diluted EPS Growth*
(% Change)
(1) 5 10 12 14 14 14 15 18 20 30 35
AHP GLX ABT SBH JNJ PNU MRK BMY LLY SGP PFE WLA
* Excluding Unusual Items
- --------------------------------------------------------------------------------
[Pfizer LOGO] Revenue & Net Income Growth
($ Billions)
1990* 1999
$4.8 $0.7 $16.2 $3.4**
Total Net Total Net
Revenues Income Revenues Income
Net Income as % of Total Revenues
15% -> 21%
*Continuing Operations
**Excluding Trovan Inventory Charge
<PAGE>
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[Pfizer LOGO] Worldwide Pharmaceutical Sales Growth
(% Change)
Pfizer vs. Market
Pfizer Market
1990 17 9
1991 16 13
1992 21 13
1993 14 7
1994 17 6
1995 17 9
1996 19 9
1997 19 8
1998 30 9
1999* 27 12
Source: IMS International
Excludes OTCs (When Possible) and Nutritionals
Includes Alliance Sales Proportionate to Promotional Effort
*Twelve Months Ending September 1999
- --------------------------------------------------------------------------------
[Pfizer LOGO] Rising to Top of Worldwide Rankings
Pharmaceutical Revenues
Rx-only Plus Co-promote Share
1990 1999**
1. Merck 1. PFIZER
2. Bristol-Myers Squibb 2. Merck
3. Glaxo Wellcome 3. Glaxo Wellcome
4. SmithKline Beecham 4. AstraZeneca
5. Ciba-Geigy 5. Aventis*
6. American Home Products 6. Novartis
7. Hoechst 7. Bristol-Myers Squibb
8. Johnson & Johnson 8. Johnson & Johnson
9. Lilly 9. Lilly
10. Bayer 10. Roche
11. Roche 11. American Home Products
12. Sandoz 12. SmithKline Beecham
13. Rhone-Poulenc 13. Schering-Plough
14. PFIZER 14. Abbott
15. Schering-Plough 15. Warner-Lambert
Source: IMS International
Excludes OTCs (When Possible) and Nutritionals
Includes Alliance Sales Proportionate to Promotional Effort
*Pro Forma
**Twelve Months Ending September 1999
<PAGE>
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[Pfizer LOGO] Long-Range Diluted EPS Forecast
$0.87 $1.50 o Compound Revenue Growth of 16%
and EPS Growth of 20% Through 2002
1999* 2002 o Driven by Strong In-line
Product Performance and
Upcoming Launches
o Operating Margin Expansion Despite
Sustained Investment Growth
*Excluding Trovan Inventory Charge
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[Pfizer LOGO] Product Breadth and Growth
1999 Key Pharmaceutical Revenues
($ Millions) % Change
$12,132 31
[Zyrtec LOGO] 552 33
[Cardura LOGO] 794 15
[Diflucan LOGO] 1,002 9
[Viagra LOGO] 1,033 31
[Zithromax LOGO] 1,333 28
[Zoloft LOGO] 2,034 11
[Lipitor LOGO]
[Celebrex LOGO] 2,354 131
[Aricept LOGO]
[Norvasc LOGO] 3,030 18
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[Pfizer LOGO] 1999 PPG "Billion Dollar" Products
[Graphic Depicting Seven Listed "Billion Dollar" Products]
[Norvasc LOGO]
[Diflucan LOGO]
[Lipitor LOGO] 7
[Celebrex LOGO] "Billion
[Zoloft LOGO] Dollar"
[Viagra LOGO] Products
[Zithromax LOGO]
Source: IMS International, Pfizer Analysis
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<PAGE>
[Pfizer LOGO] Three Most Successful Launches
in Pharmaceutical Industry History
1997 Most Successful
[Lipitor LOGO] Product Launched
Each Year Since 1997
[Line Chart Illustrating
Revenue From $0 To $600MM
in the Months Post-Launch]
1998
[Viagra LOGO]
[Line Chart Exceeding 600MM
in Revenues in the Months Post-Launch]
1999
Celebrex LOGO
[Line Chart Illustrating
Sales Growth From $0 To $900MM
in the Months Post-Launch]
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[Pfizer LOGO] Lipitor: Strengthening Market Share
U.S. NRx Share 1999 vs. 1998
Lipid-lowering Category
1998 1999
---- ----
Lipitor 33.9% 41.2% 22%
Zocor 24.0% 21.7% (10%)
Pravachol 16.4% 14.1% (14%)
Mevacor 5.7% 3.2% (44%)
Source: IMS Health
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<PAGE>
[Pfizer LOGO] Viagra: Market Expansion
Worldwide Erectile
Dysfunction Category
Market Growth of
973%
[Pie chart illustrating 86% market share in 1999 for
Viagra and 14% for All Other]
$98 Million Market $1.1 Billion Market
1996 1999
Source: IMS MIDAS - 4Q99 Preliminary Data
- --------------------------------------------------------------------------------
[Pfizer LOGO] U.S. NRx Growth (1996-1999)
Rx-Only Plus Co-Promote Share
1999 Ranking Cumulative U.S. NRx Growth 1996-1999
1. PFIZER +89%
2. Merck +21%
3. Glaxo Wellcome -11%
4. AstraZeneca +52%
5. Bristol-Myers Squibb -7%
6. Novartis -13%
7. Aventis -25%
8. Johnson & Johnson +8%
9. Lilly -7%
10. American Home Products -17%
.
.
15. Warner-Lambert +64%
Source: IMS International; Scott-Levin;
Excludes OTCs (When Possible) and Nutritionals
Includes Alliance Sales Proportionate to Promotional Effort
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] New Indications: Adding Value
to Marketed Products
Zithromax Zoloft Norvasc
- - Atherosclerosis + PTSD - Congestive Heart
- - MAC Treatment + Oral Liquid Form Failure
- - 3-day Treatment - Pediatric Depression - Norvasc-Lipitor
- Social Phobia Combo
- Dysthymia - Pediatric
Indications
Aricept Celebrex Zyrtec
- - Oral Liquid Form + Familial Colon Polyps - Pseudoephedrine
- Sporadic Colon Polyps Combo
- Pain - Pediatric
Indications
Lipitor Viagra
- - Benefits of Even - Female Sexual
Lower Lipid Levels Dysfunction
Status
+ Approved
- -Under Development
- --------------------------------------------------------------------------------
[Pfizer LOGO] Global In-Line Products
($ Millions)
Products 1999 Pfizer U.S. Patent
Revenues Expiration
Norvasc 3,030 2007
Zoloft 2,034 2005
Lipitor* 1,595 2010
Zithromax 1,333 2005
Viagra 1,033 2011
Diflucan 1,002 2004
Celebrex/ 665 2013/2008
Aricept**
Zyrtec 552 2007
---
11,244
* Alliance Revenue of $1,406 + Direct Sales of $189
** Alliance Revenues
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] The New Pfizer
(1999 Pro Forma, $ Billions)
[Pfizer LOGO]
Pharmaceuticals Consumer Health Care Confectionery Animal Health
$20.7 $3.6 $2.0 $1.3
40% International
60% U.S.
Total $27.6 Billion
Source: Pfizer and Warner-Lambert
- --------------------------------------------------------------------------------
[Pfizer LOGO] Major Presence in OTC Market
* Combined 1999 Sales: $3.6 Billion
* Platform for Rx-to-OTC Switches
[Pfizer LOGO] [Warner-Lambert LOGO]
[Pfizer Products] [Warner-Lambert Products]
- --------------------------------------------------------------------------------
[Pfizer LOGO] Not Just Bigger, But Better
Powerful Product Synergies * Breadth of CV, CNS, and
Anti-infective Portfolios
* 15 Products >$500 Million
Enhanced Global Research * Top Five Position in Most Markets
* Largest, Most Admired Field Force
Complementary, High * $4.7 Billion Estimated R&D
Quality R&D Organizations Spend 2000
* Six Major State-of-the-Art
Research Campuses
* Agouron, World-Class
Biotechnology Firm
Similar Corporate Cultures * Team-Based
* Performance-Driven
* Innovative
[Arrow pointing from each point on the left to the points on the right]
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Clear and Obvious Benefits
* $32 Billion in 2000E Revenues Annual Average
Net Income Growth
* Broad, Young Portfolio ----> (2000-2002)
(2000E: 8 "Billion Dollar" Products)
25%
* $1.6 Billion in Annual Cost Savings
by 2002
- --------------------------------------------------------------------------------
[Pfizer LOGO] Significant Operational Synergies
Lipitor Opportunities - Exploit Worldwide Strengths (Japan)/
Lipitor-Norvasc Combination
Sales & Marketing - Enhanced Field Force Productivity/
Shared Best Practices
Research & Development - Depth, Breadth, and Scope of Therapeutic Areas/
Leverage New Technologies
- --------------------------------------------------------------------------------
[Pfizer LOGO] Enhanced Growth/Shareholder Value
($ Billions, Except per Share)
`99-`02
2000 2001 2002 % CAGR
---- ---- ---- ------
Pfizer
Revenue $18.6 $21.6 $25.0 16%
EPS $1.04 $1.25 $1.50 20%
Warner-Lambert
Revenue $14.8 $16.2 $18.0 12%
EPS $2.45 $2.90 $3.36 20%
Combined
Revenue* $31.5 $35.6 $40.4 13%
EPS $0.98+ $1.27+ $1.56+ 25%+
Accretion/ (5.4%) 1.4% 3.9%
(dilution)
*Eliminates Pfizer's Alliance Revenue for Lipitor
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] The Challenge: Implementation
Essential Tasks
Maximize Strengths ----> Increase Sales/New Product Opportunities
Eliminate Redundancies ---> Reduce Costs
Integrate Best People and Practices ---> World-Class Organization
- --------------------------------------------------------------------------------
[Pfizer LOGO] Warner-Lambert
Pharmaceutical Product Portfolio
Sales by Therapeutic Categories and Key Products
[Pie chart]
Cardiovascular 55%
Lipitor
Accupril U.S. Key Product Sales
Ob/Gyn 3% Rankings Within
Loestrin Therapeutic Categories
EstroStep Product 1999 Rank
Diabetes 8% Lipitor #1
Rezulin Viracept #1
HIV/AIDS 8% Neurontin #1
Viracept Rezulin #1
CNS 15% Accupril #3
Neurontin Dilantin #3
Dilantin Source: IMS
Other 11%
1999 Sales
$8.0 Billion
+30%
Source: Warner-Lambert
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Key Pharmaceutical Products [Warner-Lambert LOGO]
1999 Third-party
Products Category Sales (MM)
- -------- -------- ----------
[Lipitor LOGO]*** Lipid-lowering $3,921
[Norvasc LOGO] Hypertension/ Angina $3,030
[Zoloft LOGO] Depression/Anxiety $2,034
[Celebrex LOGO]* Arthritis $1,456
[Zithromax LOGO] Anti-infective $1,333
[Viagra LOGO] Erectile Dysfunction $1,033
[Diflucan LOGO] Anti-infective $1,022
[Neurontin LOGO] Seizure Disorders $913
[Cardura LOGO] Hypertension/BPH $794
[Rezulin LOGO] Diabetes $625
[Zyrtec LOGO] Allergy $552
[Aricept LOGO]** Alzheimer's Disease $551
[Viracept LOGO] AIDS $530
[ProcardiaXL LOGO] Hypertension/Angina $521
[Accupril LOGO] Cardiovascular $514
* Copromoted by Pfizer and G.D. Searle & Co.
** Copromoted by Pfizer and Eisai Co., Ltd.
*** Copromoted by Pfizer and Warner-Lambert; Includes Inter-Company Markup
- --------------------------------------------------------------------------------
[Pfizer LOGO] U.S. Products Sales Rankings
Within Therapeutic Category
Product Rank
------- ----
Norvasc #1
Aricept #1
Diflucan VC #1
Viagra #1
Celebrex #1
Zithromax #1 Ten #1
Lipitor #1 Products
Viracept #1
Rezulin #1
Neurontin #1
Cardura BPH #2
Zoloft #2
Glucotrol XL #2
Zyrtec #2
Accupril #3
Dilantin #3
Loestrin #8
Source: IMS
- --------------------------------------------------------------------------------
[Pfizer LOGO] Initial Opportunities (Increase Sales)
* Maximize Product/Marketing Synergies
* Cardiovascular Risks Portfolio
* Cross-Selling in Infectious Diseases
* Clinical Opportunities in Diabetes
* Significant CNS Program Expansion
* Integrated Women's Health Initiatives
- --------------------------------------------------------------------------------
[Pfizer LOGO] Cardiovascular Risks Portfolio
[Pfizer LOGO] [Warner-Lambert LOGO]
Norvasc Accupril
Cardura
Multiple Pathways One Outcome
Calcium Channel Blockade Get Patients to Blood
----------> Pressure Goal
ACE Inhibition
Alpha Blockade Reduce CV Risk
[Diagram of Heart]
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Japan Market Growth Index*
1999
[Bar graph depicting growth index with 100 as base line]
112 103 102 102 101
Pfizer Daiichi Takeda Novartis Shiongi Seiyaku
Pharm
100 99 99 98 98
Chugai Yamanouchi Otsuka Eisai Sankyo
Seiyaku
Source: IMS MIDAS - 4Q99 Preliminary Data
* Includes Top 10 Companies
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Lipitor Opportunity in Japan
Annual Details
Mavalotin(pravastatin)
Sankyo 1.6 Million
Lipitor
Yamanouchi +
Warner-Lambert 1 Million (est.)
+ Pfizer Logo 1.8 Million (est.)
- --------------------------------------------------------------------------------
[Pfizer LOGO] Cross-Selling in Infectious Diseases
Antibacterials
Antifungals Antivirals
[Pfizer LOGO] [Warner-
Lambert LOGO]
Zithromaz [Illustration of [Illustration of Viracept
Diflucan Hospital] Community] Rescriptor
- --------------------------------------------------------------------------------
[Pfizer LOGO] Clinical Opportunities in Diabetes
[Pfizer LOGO] Diabetes: A Disease of Two Causes [Warner-Lambert LOGO]
Glucotrol XL Insulin Deficiency Insulin Resistance Rezulin
Oral Sulfonylureas Insulin Sensitizers
"A Perfect Combination"
+ Zenarestat
Diabetic Complications
+ Inhaled Exogenous Insulin
insulin
+ CP-368,296 Improved Insulin Sensitization + CI - 1037
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] CNS Program Expansion
[Pfizer LOGO] [Pfizer LOGO] CNS [Warner-Lambert
LOGO]
Zoloft Neurontin
Aricept
[Bar graph: Total CNS Reps
CNS Reps - 186] ---> [Bar graph: [Bar graph:
Pfizer - 321 <--- CNS Reps - 135]
Lilly - 265
GLX/SBH - 175]
+ Relpax (Migraine) Mood and Anxiety Disorders + Pregabalin
(Pain/Anxiety)
+ Zeldox (Schizophrenia) Dementia Schizophrenia
Epilepsy Neuropathic Pain
Migraine
- --------------------------------------------------------------------------------
[Pfizer LOGO] Integrated Women's Health Initiatives
[Pfizer LOGO] ----> 400 <---- [Warner-Lambert
Representatives LOGO]
for Ob/Gyns and Women's Health
Diflucan VC Loestrin
Zithromax STD EstroStep
FemHRT
Yeast Infections Oral Contraceptives
Chlamydia/STD Hormone Replacement
Pursuing Frontiers "Beyond Reproductive Health"
o Cardiovascular Risk (#1 Killer of Women)
o Mental Health (Zoloft for Depression/PTSD)
[Diagram of female sign]
- --------------------------------------------------------------------------------
[Pfizer LOGO] Health Care Information Technologies
Opportunities
Physician
Communication and - More Productive Communication
Selling With Physicians, More Frequency
Consumer Communication - Directly Increase Awareness and
Consultation
- Care Management
- Market Directly to Consumers
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Range of "e" Activities
Physician Communication/ Selling Consumer Communication
o Pfizer CME Site Brand Sites
o Sponsorship of Outside CME Sites
o Extranets (Pfizer Medical) o Celebrex
o Article Reprints (via Pfizer.Com, o Diflucan
Medline) o Viagra
o Sales Force Online Effort o Zyrtec
o Zithromax
o Aricept
o Zeldox
o Relpax
o Zoloft
Disease-Specific Sites
o Depression-Info
o gyn101
o Kidsears
o Kidallergy
o Petallergy
o Unspeakable
o Keepsake.Com
o Schizophrenia Resource Center
Population-Specific Sites
o Pfizerfunzone
o Exploring Your Health
o PfizerForLiving
o Pfizer-Kids
o HealthyGenerations
Pfizer-Sponsored Sites
o Closing The Gap
o Bright Futures
o Cancer Care
o Women's Health Project
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Pfizer for Living
[Illustration of a web page for the site - "Pfizer for Living"]
o Web Site and Direct Mail Patient Information and Education Program
Targeted to Older Adults (50+) Living With Selected
Cardiovascular Conditions
o Personalized and Customized
o Interactive Tools
o No Drug-Specific Messages
- --------------------------------------------------------------------------------
[Pfizer LOGO] Industry- Leading Internet Sites
1999 eHealthcare World Awards
Insight Award for Breakthrough Business Model
[Gold Medal]
Best CME Site
[Gold Medal]
Best Site for Seniors
[Gold Metal]
Webmaster of the Year
[Gold Metal]
Best Interactive Assessment Tools
[Silver Metal]
Best Site for Women
[Bronze Medal]
More Awards Than Any Other Company, Including Dr.Koop.com, onHealthNetwork
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Worldwide Activities
o Doctors Requesting
Product Information
are Notified by Text
Finland Pfizer-On-Call Messages on Cell
Phones and Directed
to Internet Site
Germany HIV-On-Line o HIV Practitioners
Can Access Both
Information and Their
Pfizer Rep Online
Netherlands Integrated Research and o Physicians Receive
Media Customized Information
on a Palm Organizer
- --------------------------------------------------------------------------------
[Pfizer LOGO] Pfizer Health Solutions
"Partnering With Customers to Implement Technology-Based Solutions"
o Formed in 1995 as Pfizer's Health Services Unit
o Stand-Alone Subsidiary (No Rx Ties)
o Mission: To Make the Patient-Provider Interaction as Effective
and as Satisfying as Possible
[Four pictures depicting the following: Care Management, Measurement and
Analysis, Health Information Technology and Community Health Initiatives]
- --------------------------------------------------------------------------------
[Pfizer LOGO] Initial Opportunities (Reduce Costs)
o Functional Streamlining
o Eliminate Organizational Redundancies
o Benefit From Combined Purchasing ($12 Billion)
o Optimize Global Manufacturing
o Centralize Distribution Systems
- --------------------------------------------------------------------------------
[Pfizer LOGO] Cumulative Cost Savings
($ Billions)
$0.2 $1.0 $1.6
2000 2001 2002
- --------------------------------------------------------------------------------
<PAGE>
o Worldwide Manufacturing
Rationalization
o Business Reorganization/Synergies o Cost Savings
o Establishment of Shared Services o Customer Focus
o Information Access
o Finance
o Information Technology o Speed/Flexibility
o Distribution
o Strategic Purchasing
- --------------------------------------------------------------------------------
[Pfizer LOGO] 1999 Operating Margins
{% OF Revenues)
15.5 20.6 21.6 22.1 22.7 23.9 24.2 27.5 28.6 29.9 30.0* 31.1
PNU WLA JNJ SBH AHP ABT MRK GLX BMY SGP PFE LLY
*Excluding Unusual Items
- --------------------------------------------------------------------------------
[Pfizer LOGO] Pfizer Pharmaceuticals Manufacturing Productivity
[Bar graph depicting that the number of employees has decreased from
approximately 10,000 in 1990 to approximately 6,000 in 1999]
Productivity 1990 1999 1990-1999 % Change
Total Mfg Employees 9,773 5,691 (42%)
- --------------------------------------------------------------------------------
[Pfizer LOGO] Pfizer Pharmaceuticals Evolution/Productivity
(Thousands) Number of Employees
[Bar chart]
10K 6K 1K 3K 7K 21K
1990 1999 1990 1999 1990 1999
Manufacturing Med/Mkt Field Force
[Approximate number of employees]
Productivity 1990 1999 1990-1999 % Change
Total # of Employees 21,848 33,448 53%
Approximate Sales/Employee $150 $444 196%
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Shared Financial Services - Europe
o Process/Systems Standardization
o Accounting Sites Reduced: 32 --> 6
o Head Count Reduced by 20%, Despite Strong Volume Growth
- --------------------------------------------------------------------------------
[Pfizer LOGO] Distribution Services - U.S.
o Closures/Modernization/Streamlining:
o 2 "State-of-the-Art" Facilities
o High Service Levels:
o Order Fill Rate: 96%
o Order Cycle Time: 98%
o Fulfillment Quality: 99%
o "Won" Celebrex Distribution Role
[Depiction of a map of the United States, with a star on Memphis, Tennessee
and Parsippany, New Jersey]
- --------------------------------------------------------------------------------
[Pfizer LOGO] Strategic Purchasing
o Centralized, With Strategic Focus
o 1999 Savings: $75 Million
o Opportunities ($12 Billion Joint Purchases)
o Capturing Lowest Current Prices
o Leveraging Combined Future Purchases
o Vendor Consolidation/Standardization
- --------------------------------------------------------------------------------
[Pfizer LOGO] Initial Opportunities (Enhance Organizations)
o Integrate Best People and Practices:
o Enhance Field Force Productivity
o Emphasize Complementary R&D Technologies
o Reinforce Governmental Relations
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Investments:
Selling, Informational, and Administrative
($ Billions)
* Continuing Commitment to Strong
SI&A Investment
$2.0 $2.3 $2.5 $2.6 $2.8 $3.4 $3.9 $4.4 $5.6 $6.4
- --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
[Bar chart]
- --------------------------------------------------------------------------------
[Pfizer LOGO] U.S. Field Force Expansion
($ Billions)
U.S. Pharmaceutical Revenues
SteereRX
Pratt Pediatric Urol/Ob/Gyn
Tikosyn allergy Viagra
Celebrex
Diflucan Zithromax Powers Lipitor
RX Alta
Zoloft Zyrtec Aricept
Cardura Norvasc
$1.6 $1.9 $2.4 $2.8 $3.2 $3.7 $4.5 $5.2 $7.4 $9.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
[Bar chart]
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Field Sales Evolution
Expanded Number and Mirrored Alignment
Type of Field Personnel
Powers Rx Ped/Allergy Force Roerig
Labs
Urology/ Vista Rx Part-Time Pratt
Rheumatology/ Powers Rx
Orthopedics Managed Healthcare Alta
Consultants Steere Rx
Institutional Reps CV Specialists
CNS Clinical Ed
Pediatric/Ob-Gyn Coordinators
Local Marketplace Teams Internal and External
Co-Promotion
[Pictures of Boston, Los Angeles and Internal External
Miami]
Norvasc Lipitor
Zoloft Zyrtec
Zithromax Aricept
Celebrex
- --------------------------------------------------------------------------------
[Pfizer LOGO] Best-in-Class U.S. Sales Organization
#1 in Productivity and Image
# 1 in Image
Calls/Rep Details/Rep
--------- -----------
1. PFIZER 948 1,497 [Graphic depiction of
ribbons for the years
2000 down through 1996]
2. Johnson & Johnson 791 1,055
3. Glaxo Wellcome 748 1,221
4. Bristol-Myers Squibb 633 927
5. Eli Lilly 606 861
6. American Home Products 603 838
7. Merck 584 844
8. AstraZeneca 575 763
9. Aventis 543 749
10. Novartis 484 749
Source: Scott-Levin, 1999;
Scott-Levin Pharmaceutical Company Image Survey
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Growing Image in U.S. Managed Care
Spring 1997 Fall 1999 Reasons for
Improved Ranking
1. Novartis 1. Hoechst Marion Roussel
2. AstraZeneca 2. Novartis o Attitude Toward
3. Merck 3. Glaxo Wellcome Managed Care
4. Schering-Plough 4. SmithKline Beecham o Meeting Customer
5. SmithKline Beecham 5. Warner-Lambert Needs
6. Merck & Co. 6. Merck & Co. o Knowledgeable
7. Hoecht Marion Roussel 7. PFIZER Representatives
8. Parke-Davis 8. TAP
9. Bristol-Myers Squibb 9. Rhone-Poulenc Rorer
10. American Home Products 10. Forest
*****
49. PFIZER
- --------------------------------------------------------------------------------
[Pfizer LOGO] Investments: R&D
($ Billions)
o Continuing Commitment to Strong,
Double-Digit R&D Growth
$0.5 $0.7 $0.8 $0.9 $1.0 $1.3 $1.6 $1.8 $2.3 $2.8 $3.2
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000E
[Bar chart]
- --------------------------------------------------------------------------------
[Pfizer LOGO] Current Products and the Next Wave
[Chart showing duration of U.S. patent protection for certain major products]
64 Additional Compounds in Development, Vfend, Inhaled Insulin, Darifenacin,
Valdecoxib, Zeldox, Relpax, Tikosyn, Celebrex, Animal Health Products and
Viagra: beyond 2009
Lipitor, Aricept, Zyrtec, Norvasc and Zithromax: beyond 2007
Zoloft: Until 2006
Diflucan: Until 2004
Cardura: Until 2000
- --------------------------------------------------------------------------------
<PAGE>
Pfizer LOGO] Central Research: Worldwide
[Photograph of Groton, CT
facility]
[Photograph of Sandwich,
U.K. facility]
[Photograph of Nagoya,
Japan facility]
- --------------------------------------------------------------------------------
Pfizer LOGO] "Cutting Edge" Technologies
[Photograph of [Photograph of laboratory] [Photograph of laboratory]
laboratory]
Genomics Research High Speed Very High
Chemical Synthesis Throughput Evaluation
- --------------------------------------------------------------------------------
[Pfizer LOGO] Global Research Alliances
[Depiction of an Atom with the Term "Pfizer Discovery" as the center with a
number of smaller circles connected with the center. The following names
appear in the smaller circles: Mass General, Cornell University, UHTS,
Washington Univ., X-Ray, Abgenix, Rigel, Gene Therapy, Rockefeller Center,
Celera, Genomics, Affymetrix, Univ. of Washington, Incyte, Chemical
Diversity, Millenium, China Academy of Medicine, Combinatorial Libraries,
Woods Hole, Molecular Modeling, ArQule, NIH, Chip Technology, Neurogen,
HumAb, Yale, OSIP, Aurora and Transgenics]
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Turbocharge Pfizer's R&D Engine
Screening Technology Product Value CORE ED
-------------------- ------------- -------
Neurosearch Oread Alkermes
Aurora Catalytica Bend
Evotec Bend [Arrow Pointing Toward
Neurogen AIDD [Arrow Pointing Toward "Exploratory
[Arrow Pointing Toward "Exploratory Development" Development" on Rocket]
"Screens" on Rocket] on Rocket]
[Picture of a rocket with the following terms printed on the rocket:
Screens
Discovery Candidates Exploratory Development Full Development]
Targets Leads
Targets Combinatorial Candidates Clinical
- ------- Chemistries ---------- --------
Libraries
-------------
Incyte Rigel Abgenix CDXI
DNX Transgenics Tripos Neurogen Lavonte
Immusol ArQule OSIP OGS
OGS [Arrow Pointing OGS [Arrow Pointing
University of Dundee Toward "Leads" on [Arrow Pointing Toward "Full
Affymetrix Rocket] Toward Development" on
Celera "Candidates" on Rocket]
[Arrow Pointing Rocket]
Toward "Targets" on
Rocket]
- --------------------------------------------------------------------------------
[Pfizer LOGO] Agouron: A World-Class Biotechnology Firm
[Graphic depiction of the State of California, pinpointing La Jolla]
o Acquired by Warner-Lambert in 1999
o Leading Firm in Protein Structure-Based Drug Design
o Discovered and Sell Viracept, Number 1 Protease Inhibitor
o 11 Pipeline Drugs in Antivirals/Oncology
o Vast Drug Library Exceeding 400,000 Compounds
o 700 Employees in R&D
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Excellent Platform: R&D
Company 1999 Total R&D Spending
------- -----------------------
($ Billions)
New Pfizer 4.0
2000 Estimate: $4.7 Billion
Glaxo/SmithKline 3.6*
Aventis 2.9*
AstraZeneca 2.8*
Johnson & Johnson 2.6
Novartis 2.5*
Roche 2.3*
Merck 2.1
Bristol-Myers Squibb 1.8
Eli Lilly 1.8
American Home Products 1.7
Pharmacia & Upjohn 1.4
Schering-Plough 1.2
[Bar chart]
* Analysts' Consensus
- --------------------------------------------------------------------------------
[Pfizer LOGO] Challenging Business Environment
Access/Pricing Issues
(Global Cost Containment
Measures)
Product Development Constraints/Costs
(Shifting Regulatory/Intellectual Property
Practices)
Changing Customer
Needs/Expectations
(Patients-Physicians-Payers)
- --------------------------------------------------------------------------------
[Pfizer LOGO] Legislative Agenda (U.S.)
o Medicare Prescription Coverage
o Product Pricing (U.S./International)
o Consumer Advertising
o Patient Bill of Rights
o Internet Regulation
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Core Messages
o Great/Increasing Value of Prescription Drugs
o Expenditure Growth: Volume-Driven, Not Price-Driven
o Problem: Coverage/Access, Not Spending
o Public Policy Must:
Increase Access Support Innovation
Avoid Restrictive Formularies/
Price Controls
- --------------------------------------------------------------------------------
[Pfizer LOGO] Key Audiences and Outcomes
AUDIENCES Outcomes
Media ======> Increase Understanding,
Generating Positive Coverage
Political Leaders ======> Support Constructive Positions
Patient Advocates ======> Speak Out for Innovation and Access
Policy Influentials ======> Frame Sensible Policy Options
Employees/Field ======> Educate/Inform
Force/Shareholders
- --------------------------------------------------------------------------------
[Pfizer LOGO] Comparative Valuation Parameters
As of February 29, 2000
Industry Peer
Group(1) PFE WLA PFE-WLA
-------- --- --- -------
P/E
1999A 26.6x 36.9x 43.7x 41.0X(2)
2000E 23.4 30.9 34.9 33.3
2001E 20.4 25.7 29.5 28.0
(1) I/B/E/S Estimates
(2) Weighted Average P/E
- --------------------------------------------------------------------------------
[Pfizer LOGO] Comparative Valuation Parameters
As of February 29, 2000
Industry Peer
Group(1) PFE WLA PFE-WLA
-------- --- --- -------
P/E to Growth
Rate Ratio (PEG)
1999A 2.1x 1.9x 2.2x 1.6x
2000E 1.8 1.6 1.8 1.3
2001E 1.6 1.3 1.5 1.1
Long Term
Growth Rate 13% 20% 20% 25%
(1) I/B/E/S Estimates
- --------------------------------------------------------------------------------
[Pfizer LOGO]
[Warner-Lambert LOGO]
The Best Get Better
- --------------------------------------------------------------------------------
These communications include certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are naturally
subject to uncertainty and changes in circumstances. Actual results may vary
materially from the expectations contained herein. The forward-looking
statements in this documents include statements about future financial and
operating results and the proposed Warner-Lambert/Pfizer transaction. The
following factors, among others, could cause actual results to differ materially
from those described herein: inability to obtain, or meet conditions imposed
for, governmental approvals for the merger between stockholders to approve the
merger; the risk that the Warner-Lambert and Pfizer business will not be
integrated successfully; the costs related to the merger; and other economic,
business, competitive and/or regulatory factors affecting Warner-Lambert's and
Pfizer's business generally. More detailed information about those factors is
set forth in Warner-Lambert's and Pfizer's filings with the Securities and
Exchange Commission, including their Annual Reports filed on Form 10-K for the
fiscal year ended 1998, especially in the Management's Discussion and Analysis
section, their most recent quarterly reports on Form 10-Q, and their Current
Reports on Form 8-K. Warner-Lambert and Pfizer are under no obligation to (and
expressly disclaim any such obligation to) update or alter their forward-looking
statements whether as a result of new information, future events or otherwise.
On February 22, 2000 Pfizer and Warner-Lambert jointly filed an amendment to the
joint proxy statement/prospectus Pfizer filed in connection with its proposed
merger with Warner-Lambert on November 15, 1999. Pfizer and Warner-Lambert will
be jointly preparing another amendment to the joint proxy statement/prospectus
and will be filing such amendment with the Securities and Exchange Commission as
soon as practicable. WE URGE INVESTORS TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC,
BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders may
obtain a free copy of the joint proxy statement/prospectus and other documents
filed by Pfizer Inc. and Warner-Lambert Company with the Commission at the
Commission's web site at www.sec.gov. In addition, the joint proxy
statement/prospectus and other documents filed with the SEC by Pfizer may be
obtained for free from Pfizer by directing a request to Pfizer Inc., 235 42nd
Street, New York, New York 10017, Attention: Investor Relations, telephone:
(212) 573-2668. Documents filed with the SEC by Warner-Lambert may be obtained
for free from Warner-Lambert by directing a request to Warner-Lambert Company,
201 Tabor Road, Morris Plains, New Jersey 07950, Attention: Corporate Secretary,
telephone (973) 385-4593.
The participants in this solicitation may include the following executive
officers and employees of Pfizer: William C. Steere, Jr. (Chairman of the Board
and Chief Executive Officer), Henry A. McKinnell (President and Chief Operating
Officer), John F. Niblack (Vice Chairman), C. L. Clemente (Executive Vice
President- Corporate Affairs, Secretary and Corporate Counsel), Paul S. Miller
(Executive Vice President and General Counsel), David L. Shedlarz (Executive
Vice President and Chief Financial Officer), Terence J. Gallagher (Vice
President - Corporate Governance), Margaret M. Foran (Vice President - Corporate
Governance), James M. Gardner (Vice President - Investor Relations), Ronald C.
Aldridge (Director - Investor Relations), Kathleen M. Ulrich (Corporate Counsel)
and Laura A. Chenoweth (Corporate Counsel). As of the date of this
communication, none of the foregoing participants individually or in the
aggregate beneficially own in excess of 1% of Pfizer's common stock.
The participants may also own unvested options to purchase shares of Pfizer
common stock and restricted shares of common stock, each granted under certain
Pfizer compensation plans. As of the date of this communication, none of the
foregoing participants individually or in the aggregate own restricted shares or
unvested options to purchase in excess of 1% of Pfizer's common stock.
