SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: April 18, 2000
Date of earliest event reported: April 18, 2000
PFIZER INC.
(Exact name of registrant as specified in its charter)
Delaware 1-3619 13-5315170
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
235 East 42nd Street
New York, New York 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 573-2323
Item 5. Other Events
Attached and incorporated herein by reference as Exhibit 99
is a copy of a press release of Pfizer Inc. dated April 18, 2000,
reporting Pfizer's financial results for the first quarter of
2000, including first quarter 2000 Supplemental Information and
"Q & A" discussion.
Item 7(c). Exhibits
99 Press Release of Pfizer Inc. dated April 18, 2000 reporting
Pfizer's financial results for the first quarter of 2000,
including first quarter 2000 Supplemental Information and "Q
& A" discussion.
SIGNATURE
Under the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its
behalf by the authorized undersigned.
PFIZER INC.
By: /s/ Margaret M. Foran
Name: Margaret M. Foran
Title: Vice President-
Corporate Governance
Dated: April 18, 2000
Index to Exhibits
Number Description
99 Press Release of Pfizer Inc. dated April 18, 2000
reporting Pfizer's financial results for the first
quarter of 2000, including first quarter 2000
Supplemental Information and "Q & A" discussion.
EXHIBIT 99
For immediate release: Contact: Brian McGlynn
April 18, 2000 212-573-2051
PFIZER INC REPORTS FIRST QUARTER NET INCOME GROWTH OF
45 PERCENT
AND REPORTED DILUTED EARNINGS PER SHARE GROWTH OF 48 PERCENT
---
Net income and diluted EPS each grew by 33 percent,
excluding
gain from research-related equity investments
NEW YORK, April 18 -- Pfizer Inc today announced first quarter
total revenues of $4,315 million, an increase of 10 percent over
the first quarter of 1999. Reported net income was $1,180
million, a 45-percent increase. Reported diluted earnings per
share (EPS) grew 48 percent to $.31.
Excluding the pre-tax gain recognized during the quarter of $135
million from the sale of research-related equity investments, net
income was $1,085 million, up 33 percent, and diluted EPS grew 33
percent to $.28 for the quarter.
The revenue increase reflected extraordinary performances from
the company's alliance products, with further contributions from
key in-line products. Higher sales volume increased reported
revenue by more than 11 percent, with foreign exchange reducing
reported revenue by almost 2 percent. Price changes had no
material effect.
Worldwide pharmaceuticals revenue grew by 11 percent for the
quarter. Excluding the negative effect of foreign exchange (2
percent) and the absence of Trovan sales in 2000 (2 percent),
pharmaceutical revenue grew by 15 percent. U.S. pharmaceutical
revenue grew by 10 percent (13 percent excluding Trovan) and
international pharmaceutical revenue grew by 13 percent (17
percent excluding the impact of foreign exchange). Driving the
company's performance is a portfolio of market-leading Pfizer-
discovered and alliance products, which continue to exhibit
strong prescription growth. Through March, U.S. total
prescriptions have grown by 162 percent for Celebrex, 36 percent
for Lipitor, 29 percent for Zyrtec, 27 percent for Viagra, 13
percent for Norvasc and 8 percent for Zoloft.
"The first quarter provided a strong start for what we expect
will be a very successful and historic year for Pfizer," said
William C. Steere, Jr., chairman and chief executive officer.
"With the acquisition of Warner-Lambert, we will set a new
standard of excellence for our industry, a standard unimagined
just a few years ago. Not only will this combination enhance our
R&D capabilities, but it will continue to allow us to reinforce
our proven expertise in marketing and sales to recognize the full
global potential of a broad range of significant product
opportunities."
Henry A. McKinnell, Ph.D., president and chief operating officer
of Pfizer Inc and president of the Pfizer Pharmaceuticals Group,
said, "We have made significant progress in planning and
positioning the company for the integration with Warner-Lambert.
Joint teams of Pfizer and Warner-Lambert people have been working
hard to ensure a smooth and orderly transition.
"Our objective remains to draw on the best practices of both
Pfizer and Warner-Lambert to create an organization superior to
either alone," Dr. McKinnell continued, "making us not just
bigger, but better. Together we are committed to increasing
sales, realizing significant cost savings and maximizing the
productivity of our $4.7 billion year-2000 combined R&D budget."
David Shedlarz, executive vice president and chief financial
officer, said, "We had an excellent first quarter, and the strong
underlying demand for our pharmaceutical products shown by
prescription trends bodes well for our full-year prospects. We
continue to provide strong support for our products, with the
modest growth in 'Selling, Informational and Administrative'
expenses for the quarter being driven largely by reductions in
general and administrative expenses as we begin to position
ourselves for our integration with Warner-Lambert.
"We believe our full-year growth prospects remain outstanding,
and expect at least a 20-percent increase in EPS for Pfizer on a
'stand alone' basis for the year, excluding the gain on the sale
of research-related equity investments, and compound annual EPS
growth for the combined companies of at least 25 percent from
2000 to 2002." The latter growth figure includes $1.6 billion of
cost savings phased in over the time period, but does not include
any increased sales from collaborative activities, the $1.8
billion termination fee paid by Warner-Lambert to American Home
Products Corporation, merger-related charges or the gain from the
sale of investments cited earlier.
FIRST-QUARTER SEGMENT PERFORMANCE
Pharmaceuticals
Worldwide pharmaceutical revenue of $4,047 million grew 11
percent, with each major region contributing double-digit growth,
excluding the impact of foreign exchange. The revenue increase
reflected robust growth of alliance revenue from Lipitor, Aricept
and Celebrex, and strong performances by Viagra, Norvasc and
Zyrtec. U.S. pharmaceutical revenues increased 10 percent to
$2,585 million and international pharmaceutical revenues grew 13
percent to $1,462 million.
Worldwide sales of Norvasc, our intrinsic once-a-day calcium
channel blocker for the treatment of angina and hypertension,
reached $792 million, a 13 percent increase. Norvasc continues
to be the largest-selling antihypertensive medicine in the world,
and U.S. prescription growth in the quarter was strong at 13
percent. For many physicians, Norvasc is the treatment of choice
for hypertension because of its outstanding safety and efficacy
profile.
In the first quarter, Zoloft, the company's selective serotonin re-
uptake inhibitor (SSRI) for the treatment of depression, obsessive-
compulsive disorder, panic disorder and post-traumatic stress
disorder, became the most-prescribed branded SSRI in the U.S.
Global sales in the quarter decreased by 1 percent to $523 million,
with sales in the U.S. not reflecting the strong underlying demand
as prescriptions grew by 8 percent.
Zithromax is the most-prescribed brand-name antibiotic in the U.S.
Due to a significantly milder flu season in 2000, sales decreased
by 5 percent to $419 million. Zithromax was approved in Japan
during the quarter.
For Viagra, worldwide sales were $333 million, an increase of 73
percent. As previously noted, U.S. prescriptions increased by 27
percent in the quarter. To date, physicians in the U.S. have
written more than 19 million prescriptions for more than 6 million
patients. Viagra has been approved in more than 100 countries in
the two years since it was first introduced.
Sales of Diflucan, the therapy of choice for a wide range of
fungal infections, increased by 1 percent worldwide to $247
million. Diflucan continues to be the largest-selling
prescription anti-fungal medicine in the world.
Sales of Zyrtec, an anti-allergy medicine, increased by 20
percent to $151 million, and prescriptions grew by 29 percent.
The product provides rapid and long-lasting relief for seasonal
and perennial allergies and hives with once-daily dosing in
adults and children over the age of two. A formulation of Zyrtec
with the decongestant pseudoephedrine was filed with the U.S.
Food and Drug Administration during the first quarter.
Alliance revenue totaled $665 million, up by 65 percent,
reflecting revenue to Pfizer associated with the co-promotion of
Lipitor, Celebrex and Aricept. Lipitor is now receiving
approximately 44 percent of U.S. new prescriptions for
cholesterol-lowering agents. Celebrex is receiving more than
400,000 total prescriptions weekly in the U.S., where it is the
most prescribed brand name arthritis medicine. Aricept is
receiving a substantial portion of the new prescriptions for
Alzheimer's medicines in the U.S., and first-quarter total
prescriptions increased by 25 percent.
Consumer health care product sales, which are recorded as part of
the pharmaceutical segment, decreased by 5 percent in the quarter
to $140 million as a result of the divestiture in late 1999 of the
Bain de Soleil line of products. Excluding the effect of that
divestiture, sales increased by 3 percent, driven by the self-
medication products Visine, Cortizone, Unisom and Ben-Gay.
Animal Health
Sales of companion-animal products rose by 31 percent, driven by
sales of Revolution, a topical medication for protection against
heartworm and fleas in dogs and cats, and Rimadyl, an anti-
arthritis medication for dogs.
However, sales of the Animal Health Group were down 6 percent to
$268 million for the quarter due to a weak livestock market in
the U.S. and Europe, as well as by the decision of the European
Commission to ban certain antibiotic feed additives, including
virginiamycin, in the European Union after June 30, 1999.
Commentary
"Pfizer enters this new century with remarkable momentum," Mr.
Steere said. "Our fundamentals are strong, our product line and
pipeline are broad and deep, and our field forces are second to
none. We have never been stronger, and our prospects have never
been brighter. This is an exciting time in our company's
history. As we look forward to the closing of our acquisition of
Warner-Lambert, we can see a new era for Pfizer, one which will
forge an even stronger company than our predecessors envisioned.
I have no doubt that our shareholders will be pleased as they see
the new Pfizer unfold during the second half of this year."
Forward-looking statements in this document should be evaluated
together with the many uncertainties that affect our business,
particularly those mentioned in the cautionary statements in Part
1 of our 1999 Form 10-K, which we incorporate by reference.
# # # # #
PFIZER INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(millions of dollars, except per share data)
First Quarter % Inc./
2000 1999 (Dec.)*
Net sales $3,650 $3,524 4
Alliance revenue 665 403 65
Total revenues 4,315 3,927 10
Costs and expenses:
Cost of sales 490 546 (10)
Selling, informational
and administrative exps. 1,663 1,570 6
Research and development
expenses 712 655 9
Other (income)/deductions--net (163) 7 **
Income before provision
for taxes on income
and minority interests 1,613 1,149 40
Provision for taxes on
income 432 333 30
Minority interests 1 1 53
Net income $1,180 $ 815 45
Basic earnings per
common share $ .31 $ .22 41
Diluted earnings per
common share $ .31 $ .21 48
* - Percentages may reflect rounding adjustments.
** - Calculation not meaningful.
1. The above financial statement presents the periods ended April 2, 2000
and April 4, 1999. Subsidiaries operating outside the United States
generally are included on the basis of interim quarterly periods ended
February 27, 2000 and February 28, 1999.
2. The financial results for the period ended April 2, 2000 are not
necessarily indicative of the results which ultimately might be
achieved for the current year.
PFIZER INC
SEGMENT/PRODUCT REVENUES
FIRST QUARTER 2000
(millions of dollars)
QUARTER-TO-DATE
WORLDWIDE U.S. INTERNATIONAL
% % %
2000 1999 Chg 2000 1999 Chg 2000 1999 Chg
TOTAL
REVENUES 4,315 3,927 10 2,702 2,463 10 1,613 1,464 10
PHARMA-
CEUTICALS 4,047 3,641 11 2,585 2,346 10 1,462 1,295 13
-CARDIOVASCULAR
DISEASES 1,182 1,100 7 555 551 1 627 549 14
NORVASC 792 703 13 354 314 13 438 389 13
PROCARDIA XL 110 141 (22) 110 141 (22) 0 0 --
CARDURA 204 194 5 90 95 (5) 114 99 15
LIPITOR* 54 38 42 0 0 -- 54 38 42
-INFECTIOUS
DISEASES 850 938 (9) 484 561 (14) 366 377 (3)
ZITHROMAX 419 441 (5) 327 344 (5) 92 97 (5)
DIFLUCAN 247 245 1 122 124 (2) 125 121 3
UNASYN 92 95 (3) 34 37 (8) 58 58 --
SULPERAZON 42 39 9 0 0 -- 42 39 9
TROVAN (2) 62 -- (1) 54 -- (1) 8 --
-CENTRAL NERVOUS
SYSTEM
DISORDERS 556 553 1 431 437 (1) 125 116 7
ZOLOFT 523 527 (1) 428 434 (1) 95 93 2
ARICEPT* 26 19 38 0 0 -- 26 19 38
-DIABETES 75 76 (1) 67 68 (2) 8 8 8
GLUCOTROL XL 67 67 -- 63 64 (2) 4 3 39
-ARTHRITIS/
INFLAMMATION 53 55 (3) 2 2 10 51 53 (3)
FELDENE 36 45 (20) 2 2 10 34 43 (22)
CELEBREX* 3 0 -- 0 0 -- 3 0 --
-ALLERGY 152 128 19 152 127 20 0 1 (100)
ZYRTEC/
REACTINE 151 126 20 151 125 21 0 1 (100)
-VIAGRA 333 193 73 227 149 53 106 44 140
-ALLIANCE
REVENUE
(Lipitor,
Aricept and
Celebrex) 665 403 65 586 360 63 79 43 83
-CONSUMER
HEALTH CARE 140 147 (5) 85 91 (7) 55 56 (2)
ANIMAL HEALTH 268 286 (6) 117 117 -- 151 169 (10)
* - Represents direct sales under license agreements with Warner-Lambert
Company (Lipitor), Eisai Co., Ltd. (Aricept) and Pharmacia
Corporation (Celebrex).
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
REPORTED EPS INFORMATION: 1Q00 1Q99
Shares Outstanding (millions) -
Basic EPS 3,764.6 3,782.5*
Basic EPS $.31 $.22*
Basic EPS Excluding the
Gain on Sale of Certain
Equity Investments $.29 $.22*
Shares Outstanding (millions) -
Diluted EPS 3,859.6 3,932.4*
Diluted EPS $.31 $.21*
Diluted EPS Excluding the Gain
on Sale of Certain Equity Investments $.28 $.21*
*Adjusted for Three-for-One
Stock Split Effective June 30, 1999
QUESTIONS:
Q1) What accounted for Pfizer's revenue growth in the first
quarter?
A1) Pfizer's revenue increase reflected extraordinary
performances from the company's alliance products, with
further contributions from key in-line products. Worldwide
pharmaceutical revenues grew 11 percent. Excluding the
negative effect of foreign exchange (2%) and the absence of
Trovan sales in 2000 (2%), pharmaceutical revenue grew by
15%. Use of Trovan was curtailed last year following
reports of unforeseen rare side effects. U.S.
pharmaceutical revenue grew by 10% (13% excluding Trovan)
and international pharmaceutical revenue grew by 13% (17%
excluding the impact of foreign exchange). Driving the
company's performance is a portfolio of market-leading
Pfizer-discovered and alliance products, which continue to
exhibit strong prescription growth. Through March, U.S.
total prescriptions have grown by 162% for Celebrex, 36% for
Lipitor, 29% for Zyrtec, 27% for Viagra, 13% for Norvasc,
and 8% for Zoloft. The most recent twelve-month audit data
of Pfizer's worldwide pharmaceutical sales indicate that it
grew at more than twice the rate of the industry as a whole.
Pfizer's pharmaceutical sales growth rate exceeded that of
the industry average in every major region of the world.
These data reflect actual sales of Pfizer products and
third-party sales of co-promoted products reflecting our
relative promotional effort.
Q2) What was the first quarter impact from volume, price, and
foreign exchange on Pfizer's revenues?
A2) Total Revenue Growth: 9.9%
Volume 11.4%
Price 0.1%
Foreign Exchange (1.6%)
Q3) How did foreign exchange fluctuations affect Pfizer's first
quarter results?
A3) Changes in foreign exchange rates decreased revenues in the
first quarter by $64 million, or 1.6%. The year-over-year
decline in the value of certain European and Latin American
currencies, relative to the U.S. dollar, was offset in part
by the relative strengthening of the Japanese yen.
Q4) What was the reason for the continued strong sales growth of
Norvasc?
A4) Sales of Norvasc, the world's largest-selling medicine for
hypertension and angina, grew 13% in the quarter to $792
million. Since its introduction in 1990, Norvasc has had
more than 12 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. It is the
only drug in its class that can be safely used to treat
angina and hypertension in patients who also have congestive
heart failure.
Norvasc has been studied in several hundred clinical trials
worldwide. For example, in the PREVENT clinical trial, a
three-year study involving 825 patients with coronary artery
disease, patients receiving Norvasc experienced
significantly fewer cardiovascular procedures or events,
such as angioplasties and hospitalizations for severe
angina, compared to those receiving placebo. Pfizer is
currently undertaking a two-year, 3,000-patient study,
CAMELOT, comparing Norvasc with the ACE inhibitor enalapril
and placebo in the reduction of cardiovascular events and
the progression of atherosclerosis in patients with coronary
artery disease. Norvasc is also being studied in the
largest trial ever undertaken in hypertension, the five-
year, 43,000-patient ALLHAT trial begun in 1994 under the
auspices of the National Heart, Lung, and Blood Institute.
The five-year, 18,000-patient ASCOT clinical trial will test
whether Norvasc and other newer antihypertensive therapies
can show reduced rates of heart attacks compared with older
therapies. ASCOT will also examine whether combination of
the lipid-lowering agent Lipitor with Norvasc reduces the
rates of heart attacks. The recently published results from
the CAPARES trial concluded that significantly fewer major
adverse clinical events occurred in patients who underwent
an angioplasty if Norvasc therapy was started before the
procedure and continued for the four-month duration of the
study.
Q5) What factors contributed to Cardura's growth in the quarter?
A5) Sales of Cardura grew 5% in the quarter to $204 million.
The change in sales growth relative to the prior year did
not reflect the strong underlying demand exhibited during
the first quarter, as U.S. total prescriptions grew by 9%,
while U.S. sales declined by 5%. Cardura is an alpha
blocker offering clinicians and patients a unique, cost-
effective option for treating hypertension and benign
prostatic hyperplasia (BPH). Studies have found that more
than 40% of men diagnosed with BPH also have hypertension.
Cardura can be used to treat patients with BPH who also have
hyperlipidemia, insulin resistance, and diabetes. Cardura
patients in the PREDICT trial, a one-year, 1,089-patient
study, experienced significantly better relief of BPH
symptoms than patients on finasteride. An extended-release
formulation, Cardura XL, has been launched in some European
countries.
Q6) How did Zithromax perform during the quarter?
A6) Zithromax sales declined 5% to $419 million in the quarter.
Sales growth was tempered by an early end to the flu season
relative to the first quarter of 1999. Zithromax is the
most-prescribed brand-name oral antibiotic in the U.S. and a
leading brand in international markets. The product's
success results from the recognition by physicians of its
broad efficacy, compliance advantages, favorable side-effect
profile, and a good-tasting liquid formulation for children.
Zithromax treats most respiratory infections in adults and
children with once-daily dosing for just three to five days.
It is also used for skin infections in adults, middle ear
infections and strep pharyngitis in children, and a broad
range of other illnesses.
Product enhancements approved by the FDA in recent years,
including treatment of the atypical pathogens Chlamydia
pneumoniae and Mycoplasma pneumoniae, an intravenous dosage
form, an oral tablet dosage form that allows the product to
be taken with food, and an indication for prevention of
Mycobacterium avium complex (MAC), a common infection in
AIDS patients, have further increased physician acceptance
and patient compliance. A new indication for treatment of
MAC was filed with the FDA in the first quarter. Zithromax
was approved in Japan in the first quarter, and Pfizer
anticipates a launch in Japan around mid-year 2000.
The 3,500-patient WIZARD study is testing whether 600 mg of
Zithromax taken once weekly reduces cardiac events in post-
heart-attack patients with atherosclerosis who are positive
for previous Chlamydia presence.
Q7) How did Zoloft perform during the quarter?
A7) Worldwide sales of Zoloft, the company's selective serotonin
re-uptake inhibitor (SSRI) for the treatment of depression,
obsessive-compulsive disorder (in adults and children), and
panic disorder, and the first and only treatment for post-
traumatic stress disorder, decreased by 1% to $523 million
in the quarter. The change in sales growth relative to the
prior year did not reflect the strong underlying demand
exhibited during the first quarter, as U.S. total
prescriptions grew by 8%, while U.S. sales declined by 1%.
SSRI's are widely accepted for their efficacy and their
favorable safety profiles compared to older anti-
depressants. A supplemental filing for an oral liquid
dosage form of Zoloft, which provides more convenient dosing
in children or in patients who have difficulty swallowing
pills, was approved by the FDA in December 1999.
Q8) How did Diflucan perform during the quarter?
A8) Sales of Diflucan increased 1% to $247 million in the first
quarter. This continued growth after 12 years on the market
reflects the unique properties of Diflucan and the growing
medical need that it continues to fulfill. It treats
systemic fungal infections, often present in critically ill
AIDS, cancer, transplant, and other immuno-compromised
patients. Such infections are difficult to diagnose and, if
not treated early, can result in high mortality. Diflucan
is also effective as an oral treatment for vaginal
candidiasis and other non-life-threatening infections.
Q9) What factors drove Zyrtec's growth in the quarter?
A9) Sales of Zyrtec, a leading prescription antihistamine in the
U.S., grew 20% to $151 million in the quarter. The change
in sales growth relative to the prior year did not reflect
the strong underlying demand exhibited during the first
quarter, as U.S. total prescriptions grew by 29%, while U.S.
sales increased by 21%. The product provides strong, rapid,
and long-lasting relief for seasonal and perennial allergies
and hives with once-daily dosing. In two clinical studies
conducted in an artificially controlled pollen environment,
Zyrtec began working in about one hour, compared to about
three hours for Claritin. In a survey of 623 allergy
sufferers, 93% wanted fast relief most. Zyrtec is the only
prescription antihistamine approved for children as young as
two years old. Zyrtec syrup is the most-prescribed
antihistamine syrup in the U.S. A formulation with the
decongestant pseudoephedrine was filed with the FDA during
the first quarter.
Q10) How have sales of Lipitor progressed?
A10) Pfizer and the Parke-Davis Division of Warner-Lambert
Company, which discovered and developed Lipitor
(atorvastatin calcium) as an adjunct to diet to reduce
elevated lipid levels in patients with high cholesterol, are
continuing to achieve outstanding success in their joint
marketing of the product in most major world markets. It is
the most-prescribed cholesterol-lowering product in the U.S.
and received more than 44% of U.S. new prescriptions for all
cholesterol-lowering agents for the month of March.
Introductions in other world markets have also been strong.
In the U.S. and certain other countries, the product is
being co-promoted by Pfizer and Warner-Lambert, with Warner-
Lambert recording sales and Pfizer recording a portion of
revenue in Alliance Revenue. In certain other countries,
Pfizer records sales of the product as Net Sales.
Q11) How has Aricept performed?
A11) Aricept, used for the symptomatic treatment of Alzheimer's
disease, achieved total worldwide sales in the quarter of
$193 million, an increase of 41% over the comparable quarter
of 1999. In the U.S., U.K., France, Germany, and Japan, the
product is being co-promoted by Pfizer and Eisai Co., Ltd.,
the company that discovered and developed the compound, with
Eisai recording sales and Pfizer recording a portion of
profit in Alliance Revenue. In certain other countries,
Pfizer records sales of the product as Net Sales.
Approximately 10% of people over 65 suffer from Alzheimer's
disease, including 4 million Americans. Aricept has been
taken by more than a million patients with mild-to-moderate
Alzheimer's disease to enhance or maintain cognition by
preserving levels of a neurotransmitter in the brain.
Together with our partner Eisai, we recently concluded two
landmark one-year studies that demonstrate Aricept's benefit
in maintaining patient cognition and function. It is also
the subject of a three-year, 720-patient study designed to
investigate whether Aricept, vitamin E, or placebo can delay
the conversion of patients with mild cognitive impairment to
Alzheimer's disease.
Q12) What factors account for Viagra's growth in the quarter?
A12) Viagra's worldwide sales grew 73% to $333 million in the
first quarter. Physicians have written more than 19 million
prescriptions for Viagra for more than 6 million patients in
the U.S. alone, including more than one million patients on
anti-hypertensive medication. More than 250 million tablets
have been distributed worldwide. Viagra has been approved
by more than 100 countries in the two years it has been on
the market.
Viagra allows many men with erectile dysfunction to achieve
erections in response to sexual stimulation. It showed
improvement in up to 82% of men taking it, is effective in a
broad range of patients, and offers the convenience of a
pill. Ninety-three percent of the 401 patients who
participated in a Viagra study remained satisfied with the
drug after two years.
Q13) How is Celebrex performing?
A13) Pfizer and Searle, the company that discovered and developed
Celebrex and that is now a part of Pharmacia Corporation,
co-promote this product for relief of the pain and
inflammation of osteoarthritis (OA) and adult rheumatoid
arthritis (RA) in most major world markets. Celebrex is
receiving over 400,000 weekly total U.S. prescriptions and
is the #1 prescribed arthritis brand in the U.S. In the
countries where Pfizer and Searle co-promote Celebrex,
Pharmacia records sales and Pfizer records a portion of
revenue in Alliance Revenue. In certain other countries,
Pfizer records sales of the product as Net Sales. The
product has received mutual recognition approval in Europe,
with launches in major European markets expected later in
the year.
Celebrex was tested in more than 50 clinical trials that
involved more than 13,000 patients and healthy volunteers in
23 countries. In these trials, Celebrex was shown to be as
effective as the maximum recommended dose of the
prescription-strength nonsteroidal anti-inflammatory drug
(NSAID) naproxen in treating arthritis pain and
inflammation. Celebrex is believed to work primarily by
inhibiting an enzyme called cyclo-oxygenase-2 (COX-2), which
plays a role in causing arthritis pain and inflammation, and
at therapeutic doses does not inhibit cyclo-oxygenase-1
(COX-1), which helps regulate normal cell function in the
stomach and blood. NSAID's in general inhibit both COX
enzymes, so they treat arthritis pain and inflammation but
may damage the stomach lining, potentially leading to ulcers
in some patients. There are approximately 40 million
Americans with arthritis.
In a long-term outcomes study of 5,800 OA patients and 2,200
RA patients, patients taking four times the recommended OA
and twice the recommended RA dose of Celebrex experienced
fewer symptomatic gastrointestinal ulcers and ulcer
complications than patients taking ibuprofen and diclofenac,
a difference that was statistically significant. Celebrex
showed no increase in thromboembolic or other
cardiovascular-related events, even among non-aspirin users.
Celebrex also was associated with a significantly lower
incidence of blood loss than ibuprofen or diclofenac, an
event that can often signal serious hidden damage throughout
the GI tract.
In December 1999, Celebrex was approved as an oral adjunct
to usual care (e.g., endoscopic surveillance and surgery)
for patients with familial adenomatous polyposis (FAP), a
rare and devastating hereditary disease that, left
untreated, almost always leads to colorectal cancer.
Celebrex is the first pharmacologic agent to be indicated to
reduce the number of adenomatous colorectal polyps in
patients with FAP.
Q14) How does Pfizer view the patent litigation filed by the
University of Rochester regarding Celebrex?
A14) There are substantial questions as to the validity of the
patent in view of the very substantial amount of research
that has been conducted in this area, including pioneering
work by Searle (now a part of Pharmacia Corporation).
Moreover, there are substantial questions as to whether the
broad claims issued are appropriate in view of the specific
disclosures of the patent. The patent has only issued in
the U.S. at this time.
Q15) What is the status of Tikosyn?
A15) In the first quarter, Pfizer introduced in the U.S. its new
anti-arrhythmic agent Tikosyn, which is indicated for the
conversion to, and maintenance of, normal sinus rhythm in
highly symptomatic patients with atrial fibrillation
(AF)/atrial flutter of greater than one week duration.
Tikosyn is now available in the U.S. to prescribers and
hospitals that have participated in an educational program
on treatment initiation and dosing. Like other anti-
arrhythmic drugs, Tikosyn can cause pro-arrhythmias, called
torsades de pointes, that can be life-threatening. In
clinical trials, the incidence of induced arrhythmias was
reduced significantly by in-hospital initiation and
adherence to a specified dosing algorithm. The incidence of
pro-arrhythmias in Tikosyn's indication was 0.8% across all
doses.
Discovered and developed by Pfizer, Tikosyn is a selective
potassium channel blocker and is the first new oral anti-
arrhythmic for persistent AF to be approved in the U.S. in
the last 10 years. AF is the most common form of cardiac
arrhythmia. It is also growing due to the aging population.
Patients with AF suffer from rapid and irregular heartbeats
in the upper chambers of the heart. Many experience
debilitating symptoms that include chest pain, shortness of
breath, fatigue, and anxiety.
Q16) What is the regulatory status of Relpax?
A16) In October 1999, Pfizer received an approvable letter from
the FDA for Relpax, an oral 5-HT 1d agonist for migraine.
Pfizer and the FDA are in labeling discussions. Clinical
data show that within an hour of taking an oral dose of
Relpax, up to 40% of patients with moderate or severe
migraine experience significant or complete headache relief,
and up to 70% of patients experience relief within two
hours. The Relpax clinical program consisted of seven
controlled clinical trials, three of which compared Relpax
to the market leader, Imitrex. Migraine is one of the most
common medical problems, experienced by 18% of women and 6%
of men. In spite of the incapacitating nature of migraines-
symptoms of which include severe headache pain, nausea, and
sensitivity to light or sound-the vast majority of sufferers
have never been diagnosed or treated with prescription
medication.
Q17) What is the status of the development of Zeldox?
A17) During the quarter, Pfizer refiled with the FDA the New Drug
Application for the anti-psychotic Zeldox, including new
data requested by the agency. Following consultation with
the FDA, after it issued a non-approvable letter for Zeldox
in 1998, we undertook a specially designed clinical trial to
more fully characterize the modest electrocardiogram (ECG)
changes seen with Zeldox and other antipsychotic drugs.
Data from this trial and the underlying clinical development
program demonstrate the absence of a significant risk
associated with the ECG changes seen with Zeldox. FDA
advisory committee review is expected on the compound later
in the year. Zeldox is effective in treating a broad
spectrum of symptoms of schizophrenia. In testing to assess
the cardiovascular risk profile of the drug, Pfizer found
that Zeldox has a favorable effect on blood lipids and
causes little or no weight gain. Schizophrenia is a
psychotic disorder that affects approximately 1-2% of the
world's population. It is characterized by symptoms such as
hallucinations, delusions, social withdrawal, and cognitive
impairment. Pfizer has also developed a unique
intramuscular form of Zeldox that has been shown to be
effective in the management of acute agitation in patients
with psychosis.
Q18) How did Pfizer's Consumer Health Care products perform in
the quarter?
A18) Consumer Health Care product sales, which are recorded as
part of the pharmaceutical segment, decreased 5% in the
quarter to $140 million as a result of the divestiture of
the Bain de Soleil line of products in late 1999. Excluding
the effect of that divestiture, sales increased by 3%,
driven by the self-medication products Visine, Cortizone,
Unisom, and Ben-Gay.
Q19) How did the Animal Health Group perform during the quarter?
A19) Sales of the Animal Health Group decreased by 6% to $268
million for the quarter. Exceptional sales growth of 31% in
companion-animal products, led by Revolution and Rimadyl,
was more than offset by continuing weakness in the livestock
market in the U.S. and Europe. Sales of virginiamycin, an
antibiotic for poultry, cattle, and swine, were adversely
affected by the decision of the European Commission to ban
certain antibiotic feed additives, including virginiamycin,
in the European Union after June 30, 1999. Revolution
(launched in Europe under the tradename Stronghold) is a
once-a-month, simple-to-administer topical liquid that
protects dogs and cats against internal and external
parasites, including heartworm and fleas.
Q20) What happened in cost of sales in the quarter?
A20) Cost of sales in the quarter decreased 10%, while net sales
grew 4%, mainly due to product and business mix,
improvements in manufacturing efficiency, and the impact of
foreign exchange.
Q21) What factors accounted for the 6% increase in selling,
informational, and administrative (SI&A) expenses in the
quarter?
A21) During the quarter, we continued to provide strong support
for our products. On the other hand, the modest growth in
SI&A expenses was attributable mainly to reductions in
general and administrative expenses as we begin to position
ourselves for our integration with Warner-Lambert.
Q22) What factors led to the 9% increase in research and
development expenditures in the quarter?
A22) Pfizer spent $712 million in research and development in the
quarter, advancing many promising drug candidates in various
stages of discovery and development. Advanced-stage
clinical studies are continuing for Vfend (voriconazole), a
new antifungal; valdecoxib, a second-generation COX-2
inhibitor for osteoarthritis, rheumatoid arthritis, and pain
under co-development with Pharmacia; an inhalable form of
insulin under co-development with Aventis Pharma and Inhale
Therapeutic Systems; darifenacin, a muscarinic antagonist
for overactive bladder; lasofoxifene, a selective estrogen
receptor modulator being initially developed to prevent and
treat osteoporosis; CP-424,391, a growth hormone
secretagogue for frailty; CP-101,606, an NMDA receptor
antagonist for head trauma; UK-279,276, or neutrophil
inhibitory factor, for stroke; CP-368,296, a glycogen
phosphorylase inhibitor for diabetes, and other compounds.
Pfizer will continue its strong commitment to R&D in 2000,
with projected spending of $3.2 billion on a stand-alone
basis, or $4.7 billion when combined with Warner-Lambert.
Q23) What efforts is Pfizer making to develop possible new dosage
forms and indications for its currently marketed products?
A23) Pfizer is conducting many large clinical trials that seek
possible new indications or dosage forms for the currently
marketed products Lipitor, Zithromax, Zoloft, Norvasc,
Aricept, Celebrex, and Viagra. For example, Pfizer and the
Parke-Davis Division of Warner-Lambert Company are
conducting a broad cardiovascular-care clinical program for
Lipitor. Well over 100 Lipitor clinical trials are in
progress or being planned. MIRACL is a four-month study of
Lipitor in patients with acute coronary syndromes. ASPEN
will evaluate the effect of Lipitor on cardiovascular
endpoints in non-insulin dependent diabetes. ASCOT is
evaluating the effectiveness of Lipitor in reducing
cardiovascular risks in hypertensive patients with average
cholesterol levels. The TNT (Treating to New Targets) trial
is a five-year study with more than 10,000 patients at 250
sites to determine whether there are further benefits to
using higher doses of Lipitor to lower LDL cholesterol
levels down to around 75 mg/dl, compared to current
treatment target levels of 100 mg/dl. The IDEAL trial is
investigating whether additional lives can be saved by
aggressively lowering patients' LDL cholesterol. Each of
these trials is designed to test the benefit on clinical
outcomes of the cholesterol-lowering action of Lipitor.
New dosage forms and indications under development include,
among others, an atherosclerosis indication and a three-day
treatment regimen for Zithromax; pediatric depression,
pediatric post-traumatic stress disorder, and social phobia
indications for Zoloft; long-term panic, long-term pediatric
and adult obsessive-compulsive disorder, long-term post-
traumatic stress disorder, and long-term depression labeling
enhancements for Zoloft; pediatric indications for Norvasc;
an oral liquid dosage form of Aricept; sporadic adenomatous
polyposis and pain indications for Celebrex; and a female
sexual dysfunction indication for Viagra.
Q24) What caused the changes in other (income)/deductions-net in
the first quarter?
A24) Other (income)/deductions-net in the first quarter amounted
to income of $163 million in 2000 and expense of $7 million
in 1999. The first quarter 2000 amount includes a gain on
the sale of research-related equity investments of $135
million before tax and increased net interest income.
Q25) What is Pfizer's projected effective tax rate for the full
year?
A25) Pfizer's projected full-year effective tax rate is 26.8%.
Excluding the gain on the sale of research-related equity
investments, which was taxed at a higher rate, the company's
projected full-year effective tax rate would be 26.5%.
These rates were lower than the 29.0% rate in the first
quarter of 1999 primarily due to certain tax planning
initiatives.
Q26) What is the status of Pfizer's share-purchase program?
A26) In September 1998, Pfizer's board of directors approved a
share-purchase program with authorization to purchase up to
$5 billion of the company's stock during the next two years.
To date, approximately 80.4 million shares (on a post-split
basis) have been purchased at a total cost of about $3.0
billion under the current authorization.
Q27) How does Pfizer view prospects for its financial performance
for 2000 and the next few years?
A27) We had an excellent first quarter, and the strong underlying
demand for our pharmaceutical products shown by prescription
trends bodes well for our full-year prospects. We believe
our full-year growth prospects remain outstanding, and
expect at least a 20% increase in EPS for Pfizer on a stand-
alone basis for the year, excluding the gain on the sale of
research-related equity investments in the first quarter.
We continue to expect that the company formed by combining
Pfizer and Warner-Lambert will have (excluding any impact of
anticipated restructuring charges and transaction fees of
$1.7 billion to $2.2 billion) compound annual earnings
growth of 25% through 2002. This growth rate includes $1.6
billion of cost savings phased in over this time period, but
does not include any increased sales from collaborative
activities or the $1.8 billion termination fee paid by
Warner-Lambert to American Home Products Corporation. While
we previously stated that we expected $200 million of cost
savings to be achieved by year-end 2000, $1 billion by year-
end 2001, and $1.6 billion by year-end 2002, our confidence
is growing that these cumulative cost savings may be more
front-end-loaded than originally anticipated. Of course,
actual results may differ from these expectations. We
undertake no obligation to publicly update any forward-
looking statement, whether as a result of new information,
future events, or otherwise. These forward-looking
statements should be evaluated together with the many
uncertainties that affect our business, particularly those
mentioned in this document and in the cautionary statements
in Part I of our 1999 Form 10K and in our periodic reports
on Form 10-Q and Form 8-K, which we incorporate by
reference.
Q28) What is the status of the merger with Warner-Lambert?
A28) Since the agreement to merge with Warner-Lambert was
announced on February 7, we have made significant progress
in planning the integration of the two companies. Joint
teams of Pfizer and Warner-Lambert people have been working
hard to ensure a smooth and orderly transition. Our
objective remains to draw on the best practices of both
Pfizer and Warner-Lambert to create an organization superior
to either alone. The Securities and Exchange Commission
approved the S-4 filing on the merger, which included the
use of pooling of interests accounting for the transaction.
In a shareholder meeting on April 27, Pfizer shareholders
will be asked to approve issuance of additional Pfizer
common stock and to approve an increase in the maximum size
of the board of directors from 18 to 24. At a shareholder
meeting on May 12, Warner-Lambert shareholders will be asked
to approve adoption of the merger agreement and the merger.
Regulatory reviews are advancing with the Federal Trade
Commission in the United States and with the European
Commission. Assuming that these steps are completed
successfully, we are hopeful that the merger can close by
the end of May.
