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: January 18, 2000
Date of earliest event reported: January 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 January 18, 2000, reporting Pfizer's
financial results for the fourth quarter of 1999, including fourth quarter
1999 Supplemental Information and "Q & A" discussion.
Item 7(c). Exhibits
99 Press Release of Pfizer Inc. dated January 18, 2000 reporting Pfizer's
financial results for the fourth quarter of 1999, including fourth
quarter 1999 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: January 18, 2000
Index to Exhibits
Number Description
99 Press Release of Pfizer Inc. dated January 18, 2000 reporting
Pfizer's financial results for the fourth quarter of 1999,
including fourth quarter 1999 Supplemental Information and
"Q & A" discussion.
EXHIBIT 99
For immediate release: Contact: Brian McGlynn
January 18, 2000 212-573-2051
REPORTED PFIZER INC FOURTH-QUARTER TOTAL REVENUES INCREASE 17 PERCENT TO
$4,506 MILLION, AS
NET INCOME, EPS INCREASE BY 50 PERCENT AND 56 PERCENT
- ---
FULL-YEAR NET INCOME UP 29 PERCENT, EPS UP 30 PERCENT,
ADJUSTED FOR CERTAIN SIGNIFICANT 1998, 1999 ITEMS.
- ---
Company expects industry-record seven $1 billion-plus products
will drive compound annual growth of 16 percent in revenues and 20 percent in
net income for 2000 through 2002.
NEW YORK, Jan. 18 -- Pfizer Inc today announced fourth-quarter total revenues
of $4,506 million, an increase of 17 percent over the fourth quarter of 1998.
Reported net income was $954 million, a 50-percent increase. Reported
diluted earnings per share (EPS) grew 56 percent to $.25. The company
estimates that Y2K had no material effect on revenues.
For the year, total revenues were $16,204 million, an increase of 20 percent.
Reported net income was $3,179 million and reported diluted EPS was $.82,
declines of 5 percent and 4 percent, respectively. These declines reflect a
one-time after-tax gain of $1.4 billion in 1998 from the sale of the Medical
Technology Group.
For the quarter, excluding the impact of certain significant 1998 charges and
the divestiture of the Medical Technology Group, reported net income rose by
34 percent to $954 million, and diluted EPS increased by 39 percent to $.25.
For the year, excluding the impact of certain significant 1998 charges, the
divested Medical Technology Group and a charge taken in the third quarter of
1999 related to Trovan inventories, net income increased by 29 percent to
$3,384 million and diluted EPS was up by 30 percent to $.87.
"We enter the new year with strong and sustainable sales performances from
our key in-line products as well as our industry-leading alliance products,"
said William C. Steere, Jr., chairman and chief executive officer. "In all,
an industry-record seven of our products, including alliance products, topped
$1 billion in sales to third parties last year. The five Pfizer-discovered
products in that group -- Norvasc, Zoloft, Zithromax, Viagra and Diflucan --
grew at a combined annual rate of 18 percent, and are patent-protected well
into this decade, or beyond. Moreover, we continue to strongly support
additional research for these and other products aimed at increasing their
medical and commercial potential.
"The co-promoted products Aricept (discovered and developed by Eisai Co.,
Ltd.) and Lipitor (discovered and developed by the Parke-Davis division of
Warner-Lambert Company) reinforced their category-leading positions. Lipitor
had worldwide 1999 sales of more than $3 billion. Celebrex, launched last
February with G.D. Searle, the company that discovered and developed the
drug, continued its exceptional performance. G.D. Searle is the
pharmaceutical division of Monsanto. Celebrex, like Viagra and Lipitor in
earlier years, was the most successful new drug launch in the industry in
1999.
"We remain committed to supporting our in-line products, maximizing the value
of our alliance products, expanding the medical utility of those products and
continuing our emphasis on innovation," said Mr. Steere. "In fact, in 2000,
we expect to again set the pace for the industry with an R&D budget of $3.2
billion."
David Shedlarz, executive vice president and chief financial officer said, "The
quarter continued to reflect strong and growing support for in-line and new
products, with total selling, informational and administrative expenditures and
R&D expenses increasing to the highest quarterly levels in Pfizer history.
Growth in these expenses relative to 1998 was tempered by opportunities to
leverage past investments as well as by efficiencies in general administrative
functions."
SEGMENT PERFORMANCE
Pharmaceuticals
Worldwide revenues of Pharmaceuticals for the fourth quarter totaled $4,089
million, an increase of 17 percent over the same period last year. The broad-
based revenue increase reflected the continued strength of in-line products and
robust alliance revenue from Lipitor, Aricept and Celebrex. The continued
strength of our in-line and alliance products drove pharmaceutical revenues in
the U.S. to $2,548 million, an increase of 21 percent. International
pharmaceutical revenues rose to $1,541 million, an increase of 12 percent.
International revenue growth for the quarter was tempered relative to 1998 due
to trade stocking in that year associated with new product launches as well as
the fewer number of selling days during the period in 1999.
For the full year, worldwide pharmaceutical revenues increased by 22 percent,
reaching $14,859 million; U.S. pharmaceutical revenues rose by 21 percent to
$9,258 million; and international pharmaceutical revenues were up by 22
percent to $5,601 million.
Worldwide sales of Norvasc, our once-a-day calcium channel blocker for the
treatment of angina and hypertension, reached $817 million, a 14-percent
increase. Norvasc continues to be the largest-selling antihypertensive
medicine in the world. For many physicians, Norvasc is the treatment of
choice for hypertension because of its outstanding safety and efficacy
profile. Sales of Cardura, a selective alpha-blocker for the treatment of
hypertension and benign prostatic hyperplasia (enlarged prostate), increased
by 16 percent to $215 million.
Worldwide sales of Zoloft, the company's selective serotonin re-uptake
inhibitor for the treatment of depression, obsessive-compulsive disorder and
panic disorder, increased by 6 percent to $517 million. In December, the
U.S. Food and Drug Administration approved the use of Zoloft as the first and
only selective serotonin re-uptake inhibitor approved for the treatment of
post-traumatic stress disorder, a condition that strikes one out of every 13
Americans.
Global sales of Zithromax, Pfizer's industry-leading broad-spectrum oral
antibiotic, rose by 21 percent to $458 million. Growth in sales resulted
from physicians' increasing recognition of the product's broad efficacy,
compliance advantages, favorable side-effect profile and, in the liquid
formulation for children, a pleasant taste.
Worldwide sales of Viagra were $281 million, a 19-percent increase over the
fourth quarter of 1998. Sales benefited from continuing strength in the U.S.
and the ongoing global rollout of the product. Physicians have written more
than 17 million prescriptions for Viagra for more than 6 million patients since
the U.S. launch in April 1998. Total U.S. prescriptions for Viagra were 19
percent higher in the quarter than in the fourth quarter of 1998.
Sales of Diflucan, indicated for a wide range of fungal infections, increased
by 13 percent worldwide to $279 million. Diflucan continues to be the largest-
selling prescription anti-fungal medicine in the world.
Sales of Zyrtec, an anti-allergy medicine, increased by 25 percent to $136
million. Zyrtec 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.
Alliance revenue totaled $619 million, an increase of 107 percent, reflecting
revenue to Pfizer associated with the co-promotion of Lipitor, Aricept and
Celebrex. In the U.S., Lipitor is now receiving more than 42 percent of all
new prescriptions for all cholesterol-lowering agents. Aricept was launched in
November in Japan, which has one of the world's most rapidly growing elderly
populations. Celebrex is receiving about 400,000 weekly total U.S.
prescriptions, and leads all arthritis treatments except ibuprofen.
Consumer health care product sales, which are included as part of the
pharmaceuticals segment, increased 5 percent in the quarter to $128 million.
These results predominantly reflect the performance of category-leading self-
medication products.
Animal Health
Sales of the Animal Health Group (AHG) increased by 8 percent to $417 million
for the quarter. Excluding the impact of foreign exchange, sales increased
by 13 percent.
Exceptional sales performances of companion-animal products were led by the
launch of Revolution, approved in the U.S. in July as the first and only
topical medication for dogs and cats that is effective against heartworm,
fleas, American dog ticks and many other parasites. Sales of Rimadyl, an
anti-arthritis medication for dogs, continue to show strong growth.
Partially offsetting the strong performance of the companion-animal business
was 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.
Commentary
"For the year 2000," Mr. Shedlarz said, "we continue to expect earnings
growth of 20 percent, even in light of our exceptional 1999 performance, and
continued commitment to a strong level of investment to support our broad
product and R&D portfolios. Looking further ahead, as we publicly stated in
November, we anticipate compounded annual revenue and net income growth of 16
percent and 20 percent, respectively, for the years 2000 through 2002. We
believe this performance will enable Pfizer to remain the fastest growing of
the 10 largest pharmaceutical companies in the world."
Mr. Steere said, "This year, as we marked Pfizer's 150th anniversary, our
performance continued to outpace that of the industry, driven by increased
global sales of innovative new pharmaceuticals. Going forward, we have
unprecedented opportunities for growth, both internally and by acquisition.
Today Pfizer stands on the threshold of a new era: our company has never been
stronger, and our prospects have never been brighter. Pfizer employees have
much to be proud of in the company's performance during the decade of the
1990s, and I congratulate each of them for their achievements."
This press release contains some forward-looking statements. Actual results
may differ materially 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. Forward-looking statements in this
document, including projections through 2002, should be evaluated together
with the many uncertainties that affect our businesses, particularly those
mentioned in the cautionary statements in Part 1 of our 1998 Form 10-K and in
our periodic reports on Form 10-Q and Form 8-K which we incorporate by
reference. No assurances can be given that a business combination with
Warner-Lambert will be consummated.
This press release is not an offer to purchase shares of Warner-Lambert, nor
is it an offer to sell any Pfizer common stock which may be issued in a
merger involving Warner-Lambert and a subsidiary of Pfizer. Any issuance of
Pfizer common stock in any merger involving Warner-Lambert and a subsidiary
of Pfizer would have to be registered under the Securities Act of 1933, as
amended, and such Pfizer common stock would be offered only by means of a
prospectus complying with such Act.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Pfizer and certain other persons named below may solicit the consent of
stockholders pursuant to a stockholder action by written consent (the
"Consent Solicitation") (a) to remove the current directors of Warner-
Lambert, (b) to elect seven nominees (the "Nominees") as directors of Warner-
Lambert and (c) to adopt the proposals to amend the by-laws of Warner-
Lambert.
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 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 R. Gardner (Vice President - Investor
Relations), Ronald C. Aldridge (Director - Investor Relations), Kathleen M.
Ulrich (Corporate Counsel) and Laura A. Chenoweth (Corporate Counsel).
Neither Lazard Freres & Co. LLC ("Lazard Freres") nor Merrill Lynch, and Co.
("Merrill Lynch"), the financial advisors to Pfizer, believes that it or any
of its members, partners, directors, officers, employees or affiliates is a
"participant" as defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934 by the Securities and Exchange Commission, or that
Schedule 14A requires the disclosure of certain information concerning Lazard
Freres or Merrill Lynch. However, Steven J. Golub and Stephen H. Sands (each
a Managing Director), Jason R. Bernhard (a Vice President) and Robert Azeke
(an Associate) of Lazard Freres and Jack Levy and Alan J. Biloski (each a
Managing Director), James Boylan (a Vice President) and Tosa Ogbomo (an
Associate) of Merrill Lynch, may assist Pfizer in the solicitation of
consents of stockholders. Both Lazard Freres and Merrill Lynch engage in a
full range of investment banking, securities trading, market-making and
brokerage services for institutional and individual clients. In the normal
course of its business Lazard Freres and Merrill Lynch may trade securities
of Warner-Lambert for its own account and the accounts of its customers, and
accordingly, may at any time hold a long or short position in such
securities. Lazard Freres has informed Pfizer that as of December 10, 1999,
Lazard Freres held a long position of approximately 414,366 shares of Warner-
Lambert common stock, and Merrill Lynch has informed Pfizer that as of
December 10, 1999, Merrill Lynch held a net long position of approximately
21,145,860 shares of Warner-Lambert common stock. As of December 10, 1999,
Mr. Biloski beneficially owned 1,562 shares of Warner-Lambert common stock,
and Mr. Golub's spouse owned 60 shares of Warner-Lambert common stock.
As of the date of this communication, Pfizer is the beneficial owner of 100
shares of common stock, $1.00 par value of Warner-Lambert. Certain Pfizer
pension plans own 74,900 shares of Warner-Lambert common stock. Martin D.
Payson, a Nominee for election to the Warner-Lambert board of directors, is
the beneficial owner of 1,500 shares of the common stock of Warner-Lambert.
Other than set forth herein, as of the date of this communication, neither
Pfizer nor any of its respective directors, executive officers or other
representatives or employees of Pfizer, any Nominees or other persons known
to Pfizer who may solicit proxies has any security holdings in Warner-
Lambert. Pfizer disclaims beneficial ownership of any securities of Warner-
Lambert held by any pension plan or other employee benefits plan of Pfizer or
by any affiliate of Pfizer.
Except as disclosed above, to the knowledge of Pfizer, none of Pfizer, the
directors or executive officers of Pfizer, the employees or other
representatives of Pfizer or the Nominees named above has any interest,
direct or indirect, by security holding or otherwise, in Warner-Lambert.
# # # # #
PFIZER INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(millions of dollars, except per share data)
Fourth Quarter % Inc./ Full Year % Inc./
1999 1998 (Dec.)* 1999 1998 (Dec.)*
Net sales $3,887 $3,567 9 $14,133 $12,677 11
Alliance revenue 619 299 107 2,071 867 139
Total revenues 4,506 3,866 17 16,204 13,544 20
Costs and expenses:
Cost of sales 696 693 -- 2,528 2,094 21
Selling, informational
and administrative exps. 1,745 1,679 4 6,351 5,568 14
Research and development
expenses 760 698 9 2,776 2,279 22
Other deductions--net 1 490 (100) 101 1,009 (90)
Income from continuing
operations before
provision for taxes on
income and minority
interests 1,304 306 326 4,448 2,594 71
Provision for taxes on
income 348 1 M+ 1,244 642 94
Minority interests 2 (1) ** 5 2 241
Income from continuing
operations 954 306 211 3,199 1,950 64
Discontinued operations:
Income/(loss) from
operations of
discontinued businesses,
net of tax -- (33) ** (20) 35 **
Gain on disposal of
discontinued
businesses, net of tax -- 361 ** -- 1,366 **
Income/(loss) from
discontinued operations -- 328 ** (20) 1,401 **
Net income $ 954 $ 634 50 $ 3,179 $3,351 (5)
Earnings per common share
Basic:
Income from continuing
operations $ .25 $ .08 213 $ .85 $ .51 67
Income/(loss) from
discontinued operations -- .08 ** (.01) .37 **
Net income $ .25 $ .16 56 $ .84 $ .88 (5)
Diluted:
Income from continuing
operations $ .25 $ .07 257 $ .82 $ .49 67
Income from discontinued
operations -- .09 ** -- .36 **
Net income $ .25 $ .16 56 $ .82 $ .85 (4)
* - Percentages may reflect rounding adjustments.
** - Calculation not meaningful.
M+ - Change greater than one thousand percent.
1. The above financial statements present the periods ended December 31.
Subsidiaries operating outside the United States are included on a
fiscal year basis ended November 30.
2. Cost of sales for the full year 1999 includes a charge of $310 million
to write off Trovan inventories.
3. Other deductions--net in 1998 includes:
-payments to G.D. Searle & Co. for celecoxib ($240 million in the
full year)
-adjustments to intangible-asset values associated with prior
acquisitions ($123 million in the fourth quarter; $195 million in
the full year)
-charges associated with exiting certain product lines ($91 million
in the fourth quarter and full year)
-legal settlements involving the brand-name prescription drug
antitrust litigation ($57 million in the full year)
-contribution to The Pfizer Foundation ($300 million in the fourth
quarter and full year)
-miscellaneous other charges ($6 million in the fourth quarter;
$26 million in the full year)
4. In the second quarter 1999, Pfizer agreed to pay a fine of $20 million
to settle an antitrust case involving its former Food Science Group.
This charge is reflected in discontinued operations for the full year
1999.
PFIZER INC
SEGMENT/PRODUCT REVENUES
FOURTH QUARTER 1999
(millions of dollars)
QUARTER-TO-DATE
WORLDWIDE U.S. INTERNATIONAL
% % %
1999 1998 Chg 1999 1998 Chg 1999 1998 Chg
TOTAL
REVENUES 4,506 3,866 17 2,753 2,256 22 1,753 1,610 9
PHARMA-
CEUTICALS 4,089 3,481 17 2,548 2,100 21 1,541 1,381 12
-CARDIOVASCULAR
DISEASES 1,259 1,144 10 609 581 5 650 563 16
NORVASC 817 719 14 372 324 15 445 395 13
PROCARDIA XL 142 172 (18) 142 172 (18) 0 0 --
CARDURA 215 185 16 94 82 13 121 103 18
LIPITOR* 61 38 60 0 0 -- 61 38 60
-INFECTIOUS
DISEASES 922 872 6 561 516 9 361 356 2
DIFLUCAN 279 248 13 137 119 16 142 129 10
ZITHROMAX 458 379 21 385 304 27 73 75 (3)
UNASYN 90 87 4 39 40 (2) 51 47 9
SULPERAZON 43 37 17 0 0 -- 43 37 17
-CENTRAL NERVOUS
SYSTEM
DISORDERS 552 519 6 417 391 7 135 128 5
ZOLOFT 517 489 6 414 387 7 103 102 1
ARICEPT* 28 21 30 0 0 -- 28 21 30
-DIABETES 77 72 7 69 63 9 8 9 (2)
GLUCOTROL XL 68 59 16 64 57 14 4 2 57
-ARTHRITIS/
INFLAMMATION 58 65 (10) 2 4 (50) 56 61 (8)
FELDENE 45 56 (19) 2 4 (50) 43 52 (17)
CELEBREX* 2 0 -- 0 0 -- 2 0 --
-ALLERGY 137 110 24 136 109 25 1 1 (50)
ZYRTEC/
REACTINE 136 109 25 135 108 25 1 1 (50)
-VIAGRA 281 236 19 164 131 25 117 105 11
-ALLIANCE
REVENUE
(Lipitor,
Aricept and
Celebrex) 619 299 107 535 264 103 84 35 139
-CONSUMER
HEALTH CARE 128 122 5 51 50 2 77 72 7
ANIMAL HEALTH 417 385 8 205 156 31 212 229 (7)
* - Represents direct sales under license agreements with Warner-Lambert
Company (Lipitor), Eisai Co., Ltd. (Aricept) and G.D. Searle & Co.
(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
SEGMENT/PRODUCT REVENUES
FULL YEAR 1999
(millions of dollars)
YEAR-TO-DATE
WORLDWIDE U.S. INTERNATIONAL
% % %
1999 1998 Chg 1999 1998 Chg 1999 1998 Chg
TOTAL
REVENUES 16,204 13,544 20 9,896 8,205 21 6,308 5,339 18
PHARMA-
CEUTICALS 14,859 12,230 22 9,258 7,647 21 5,601 4,583 22
-CARDIOVASCULAR
DISEASES 4,635 4,186 11 2,251 2,249 -- 2,384 1,937 23
NORVASC 3,030 2,575 18 1,365 1,206 13 1,665 1,369 22
PROCARDIA XL 521 714 (27) 521 714 (27) 0 0 --
CARDURA 794 688 15 359 322 11 435 366 19
LIPITOR* 189 100 90 0 0 -- 189 100 90
-INFECTIOUS
DISEASES 3,145 2,822 11 1,750 1,522 15 1,395 1,300 7
DIFLUCAN 1,002 916 9 480 440 9 522 476 10
ZITHROMAX 1,333 1,041 28 1,046 775 35 287 266 8
UNASYN 349 327 7 142 141 1 207 186 11
SULPERAZON 158 133 19 0 0 -- 158 133 19
-CENTRAL NERVOUS
SYSTEM
DISORDERS 2,156 1,924 12 1,645 1,497 10 511 427 20
ZOLOFT 2,034 1,836 11 1,635 1,484 10 399 352 13
ARICEPT* 92 54 70 0 0 -- 92 54 70
-DIABETES 297 273 9 265 239 11 32 34 (4)
GLUCOTROL XL 262 226 16 250 217 15 12 9 42
-ARTHRITIS/
INFLAMMATION 222 234 (5) 7 12 (41) 215 222 (3)
FELDENE 179 201 (11) 7 12 (41) 172 189 (9)
CELEBREX* 2 0 -- 0 0 -- 2 0 --
-ALLERGY 557 422 32 553 417 33 4 5 (22)
ZYRTEC/
REACTINE 552 416 33 548 411 34 4 5 (22)
-VIAGRA 1,033 788 31 673 656 3 360 132 172
-ALLIANCE
REVENUE
(Lipitor,
Aricept and
Celebrex) 2,071 867 139 1,816 780 133 255 87 193
-CONSUMER
HEALTH CARE 561 526 7 295 279 6 266 247 7
ANIMAL HEALTH 1,345 1,314 2 638 558 14 707 756 (7)
* - Represents direct sales under license agreements with Warner-Lambert
Company (Lipitor), Eisai Co., Ltd. (Aricept) and G.D. Searle & Co.
(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
FINANCIAL RESULTS EXCLUDING THE IMPACT OF
THE 3Q99 CHARGE RELATING TO TROVAN INVENTORIES
AND CERTAIN 1998 SIGNIFICANT CHARGES AND DISCONTINUED OPERATIONS
(millions of dollars, Fourth Quarter % Full Year %
except per share data) 1999 1998 Change 1999 1998 Change
Total revenues $4,506 $3,866 17% $16,204 $13,544 20%
Income from continuing
operations before
provision for taxes on
income and minority
interests 1,304 947 38% 4,758 3,650 30%
Net income 954 711 34% 3,384 2,627 29%
Diluted earnings per share $.25 $.18* 39% $.87 $.67* 30%
* Adjusted for three-for-one stock split effective June 30, 1999
The results above exclude the following items:
A third-quarter 1999 pre-tax charge of $310 million to write off certain
Trovan inventories
Significant pre-tax charges of $1,056 million in the full year 1998 ($641
million in the fourth quarter 1998), which consisted of payments of $240
million in the full year (none in the fourth quarter) to G.D. Searle & Co.
for celecoxib, adjustments to intangible-asset values associated with prior
acquisitions of $195 million in the full year ($123 million in the fourth
quarter), charges associated with exiting certain product lines, plant
rationalizations, and severance payments of $183 million in the full year
($183 million in the fourth quarter), legal settlements involving the brand-
name prescription drug antitrust litigation of $57 million in the full year
(none in the fourth quarter), a contribution to The Pfizer Foundation of $300
million in the full year ($300 million in the fourth quarter), and
miscellaneous other charges of $81 million in the full year ($35 million in
the fourth quarter)
Discontinued Businesses, including income from operations of the Medical
Technology Group, net of tax, of $35 million in the full year 1998 (a loss,
net of tax, of $33 million in the fourth quarter 1998), and gains on the
disposal of these businesses, net of tax, of $1,366 million for the full year
1998 ($361 million, net of tax, in the fourth quarter 1998)
SHARES OUTSTANDING AND REPORTED EPS INFORMATION: 1999 1998
Shares outstanding (millions) - Basic EPS 3,774.7 3,788.5*
Basic EPS $.84 $.88*
Shares outstanding (millions) - Diluted EPS 3,884.0 3,945.3*
Diluted EPS $.82 $.85*
*Adjusted for three-for-one stock split effective June 30, 1999
QUESTIONS:
Q1) What effects did Y2K have on Pfizer?
A1) We estimate that Y2K had no material impact on Pfizer's revenues. We
estimate that Pfizer's total expenditures related to Y2K preparedness were
approximately $94 million in 1999.
Q2) What accounted for Pfizer's strong revenue growth in the fourth quarter
and full year 1999?
A2) We enter the new year with strong and sustainable sales performance from
our key in-line products as well as our industry-leading alliance products.
For the full year 1999, worldwide pharmaceutical revenues increased by 22% to
$14,859 million; U.S. pharmaceutical revenues rose by 21% to $9,258 million;
and international pharmaceutical revenues were up by 22% to $5,601 million.
In all, an industry-record seven of our products, including alliance
products, topped $1 billion in sales to third parties last year. Three of
these products-Lipitor, Norvasc, and Zoloft-had sales of more than $2
billion, and two-Lipitor and Norvasc-had sales of more than $3 billion. The
five Pfizer-discovered products in that group-Norvasc, Zoloft, Zithromax,
Viagra, and Diflucan-grew at a combined annual rate of 18% in 1999 and are
patent-protected well into this decade or beyond. Celebrex, like Viagra and
Lipitor in earlier years, was the most successful new drug launch in the
industry in 1999.
In the quarter, total revenues grew 17% over the comparable period of 1998.
Pfizer's pharmaceutical business in the quarter grew 17%, including a 21%
increase in the U.S. and a 12% increase in international markets.
International revenue growth was tempered in the quarter relative to the
prior year primarily due to trade stocking associated with new product
launches in 1998 as well as the fewer number of selling days during the
period in 1999. 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.
Q3) What was the impact from volume, price, and foreign exchange on
Pfizer's revenues?
A3) 4Q99 4Q98
Total Revenue Growth: 16.5% 25.9%
Volume 17.0% 27.2%
Price 0.3% 0.7%
Foreign Exchange (0.8%) (2.0%)
FY99 FY98
Total Revenue Growth: 19.6% 22.5%
Volume 19.6% 24.8%
Price 0.5% 1.2%
Foreign Exchange (0.5%) (3.5%)
Q4) What were fourth quarter revenue increases by business segment?
As Excluding Effects of
A4) Reported Foreign Exchange
Pharmaceuticals 17% 18%
Animal Health 8% 13%
Q5) How did foreign exchange fluctuations affect Pfizer's fourth quarter
results?
A5) Changes in foreign exchange rates decreased revenues in the fourth
quarter by $32 million, or 0.8%. 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.
Q6) What was the reason for the continued strong sales growth of Norvasc?
A6) Sales of Norvasc, the largest-selling anti-hypertensive medicine in the
world, grew 14% in the quarter to $817 million. Since its introduction in
1990, Norvasc has had more than twelve billion patient days of therapy
worldwide. Norvasc's success has been driven by its package of benefits for
a wide range of patients-outstanding efficacy, once-daily dosing, consistent
24-hour control for both hypertension and angina, and excellent safety and
tolerability.
The results of more than 190 clinical trials support Norvasc's profile. It
is the only drug in its class that can be safely used to treat patients with
hypertension who have congestive heart failure. Norvasc is highly effective
for all stages of hypertension and across a wide range of patient types. It
has also been safely used in patients with a number of other conditions that
frequently accompany high blood pressure-diabetes, chronic obstructive
pulmonary disease, and abnormal lipids-and has shown no adverse interactions
with other drugs.
In the PREVENT clinical trial, involving 825 patients with coronary artery
disease, patients receiving Norvasc experienced significantly fewer
cardiovascular events such as angioplasties, bypass surgeries, and
hospitalizations for severe angina or heart failure compared to those
receiving placebo. Pfizer is undertaking the two-year, 3,000-patient CAMELOT
study comparing Norvasc with the ACE inhibitor enalapril in the reduction of
cardiovascular events and the progression of atherosclerosis in patients with
coronary artery disease. Approximately 14 million American men and women
have coronary artery disease, which claims 500,000 lives annually and is the
leading cause of death in the U.S. The overall cost to treat the disease in
the U.S. is estimated at $96 billion per year. Standard angioplasties and
bypass surgeries cost about $20,000 and $44,500, respectively.
Norvasc and Cardura are being studied in the five-year, 43,000-patient ALLHAT
trial begun in 1994 under the auspices of the National Heart, Lung, and Blood
Institute of the National Institutes of Health, the largest study ever
undertaken in hypertension. Norvasc is also being tested in the five-year,
18,000-patient ASCOT clinical trial to test whether newer antihypertensive
regimens 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.
Q7) What factors contributed to Cardura's growth in the quarter?
A7) Sales of Cardura-up 16% in the quarter to $215 million-continue to grow
as alpha blockers are recognized as effective first-line therapy for
treatment of hypertension as well as for benign prostatic hyperplasia (BPH).
BPH, which is experienced by about half of men over the age of 60, can lead
to discomfort and frequent nighttime urination. An estimated 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.
Q8) What contributed to sales growth of Zithromax in the fourth quarter?
A8) Zithromax sales grew 21% to $458 million in the quarter. Zithromax is
the most-prescribed brand-name oral antibiotic in the U.S. and a leading
brand in international markets. Growth in sales has resulted from the
increasing recognition by physicians of the product's 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 five days.
It is also approved for skin infections in adults, otitis media (middle ear
infections) and strep pharyngitis (strep throat) in children, and a broad
range of other uses. Zithromax is distinguished from all other antibiotics
by its extraordinary pharmacokinetic profile. It is rapidly distributed from
the blood serum into tissues. In addition, migrating white blood cells
absorb quantities of Zithromax and deliver the drug directly to the site of
infection.
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 is in advanced development.
Zithromax's effectiveness may not be limited to traditional antibiotic uses.
The presence of the pathogen Chlamydia pneumoniae in the bloodstream may
increase accumulation and rupture of plaque in arterial walls, contributing
to heart attacks and strokes. Because Zithromax is one of the most potent
anti-Chlamydia drugs known and demonstrates a uniquely long tissue half life,
Pfizer has undertaken the WIZARD study in 3,500 heart attack patients to
study potential mortality and morbidity benefits from once-weekly
administration of Zithromax.
Q9) To what factors can Zoloft's growth be attributed?
A9) 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, increased by 6% to
$517 million in the quarter. International sales growth was tempered by the
fewer number of selling days during the period in 1999. 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.
Also in December 1999, the FDA approved Zoloft's use for treatment of post-
traumatic stress disorder (PTSD). Zoloft is the first and only medicine to
receive an FDA approval for the treatment of PTSD. Approximately one out of
every 13 Americans (8% of the population) will suffer from PTSD at some point
in their lifetimes. Patients suffering from PTSD experience significant
distress or impairment in normal functioning. A traumatic event involves
reaction to serious injury or other physical threat. Symptoms can include
re-experiencing the traumatic event, overall emotional numbness, or increased
anxiety. The prevalence of PTSD is twice as high in women as in men.
Patients with PTSD have high rates of comorbidity with other central nervous
system disorders like depression and panic, for which Zoloft is also
effective.
Q10) How did Diflucan perform during the quarter?
A10) Sales of Diflucan increased 13% to $279 million in the fourth quarter.
In its thirteenth year on the world market, Diflucan remains the world's
best-selling prescription antifungal product, reflecting the product's
continuing acceptance as the therapy of choice for a wide range of fungal
infections. Diflucan treats systemic candidiasis, a major threat to
critically ill AIDS, cancer, transplant, and other immuno-compromised
patients. Such infections are often difficult to diagnose and, if not
treated early, can result in high mortality. Diflucan is also effective in
less severe fungal infections, such as vaginal candidiasis, where it is also
a leader.
Q11) What factors drove Zyrtec's growth in the quarter?
A11) Sales of Zyrtec, a leading prescription antihistamine in the U.S.,
grew 25% to $136 million in the quarter. The product provides rapid and
long-lasting relief for seasonal and perennial allergic rhinitis and chronic
idiopathic urticaria (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
also the only prescription antihistamine approved for children as young as 2
years old. Zyrtec syrup is the most prescribed antihistamine syrup in the
U.S. A formulation with the decongestant pseudoephedrine is in advanced
development.
Q12) How have sales of Lipitor progressed?
A12) Pfizer and the Parke-Davis Division of Warner-Lambert Company, the
company that discovered and developed Lipitor (atorvastatin calcium) as an
adjunct to diet to reduce elevated lipid levels in patients with high
cholesterol, have successfully launched the product in most major world
markets. It is the most-prescribed cholesterol-lowering product in the U.S,
and is now receiving more than 42% of U.S. new prescriptions for all
cholesterol-lowering agents. 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. The
product is meeting a significant medical need and complements Pfizer's
outstanding cardiovascular medicines.
Q13) How has Aricept performed?
A13) Aricept, used for the symptomatic treatment of Alzheimer's disease,
achieved total worldwide sales in the quarter of $138 million, an increase of
19% over the comparable quarter of 1998. 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 revenue in Alliance Revenue. In
certain other countries, Pfizer records sales of the product as Net Sales.
In November, Aricept was launched in Japan, which has one of the world's most
rapidly growing elderly populations.
Approximately 18 million people suffer from Alzheimer's disease, which is
the third-most-expensive illness to treat after heart disease and cancer.
About four million Americans suffer from this mind-robbing and life-
shortening disease, including 1 in 10 adults over the age of 65 and nearly
half over 86. It is the fourth-leading cause of death among American adults.
Aricept is the therapeutic standard for Alzheimer's disease among
cholinesterase inhibitors, with a global market share of about 90%. The
product has provided more than 270 million patient days of treatment
worldwide and is currently marketed in 41 countries. Over one million
patients have been treated with Aricept in the U.S. alone.
Initial clinical trials showed Aricept to be safe and effective in enhancing
or maintaining cognition in people with mild to moderate Alzheimer's disease
over a six-month period. Results from two recently completed one-year,
double-blind trials confirm the long-term benefits of Aricept treatment on
cognition and activities of daily living. Aricept is also the subject of a
three-year, 720-patient study to see if it can delay the onset of Alzheimer's
disease in patients with mild cognitive impairment.
Q14) What factors account for Viagra's growth in the quarter?
A14) Viagra's worldwide sales grew 19% to $281 million in the fourth
quarter. Physicians have written more than 17 million prescriptions for
Viagra for more than 6 million patients, including more than one million
patients on anti-hypertensive medication, since the U.S. launch in April
1998. More than 150 million tablets have been dispensed worldwide. Viagra
is now available in most major markets. In the U.S., Viagra is now
generating more than 200,000 total prescriptions per week, and year-over-year
prescription growth was 19% in the fourth quarter 1999.
Viagra allows many men with erectile dysfunction (ED) to achieve erections
the natural way, in response to sexual stimulation. It improves erections in
about 70% of patients, is effective in a broad range of patients, and offers
the convenience of a pill. Viagra's strong acceptance by physicians and
patients attests to its safety and efficacy and its benefits for many men and
their partners, when the product is taken in accordance with the approved
package insert. According to the results of two major clinical trials
published in The New England Journal of Medicine, Viagra's reliability,
minimal side effects, and ease of use make it the only approved therapy that
meets American Urological Association treatment standards for ED. At the
1999 annual meeting of the American Urological Association, Pfizer reported
that 93 percent of the 401 patients who participated in a recent study
remained satisfied with Viagra after two years. In a study of 268 diabetic
men conducted at the Creighton University Diabetes Center and recently
published in The Journal of the American Medical Association, 56 percent of
patients taking Viagra reported improvement in ED versus only 10 percent who
took placebo.
Q15) How is Celebrex performing?
A15) In February 1999, Pfizer and G.D. Searle & Co., the pharmaceutical
division of Monsanto Company that discovered and developed Celebrex, launched
this new product for relief of the pain and inflammation of osteoarthritis
and adult rheumatoid arthritis. During 1999, Celebrex achieved third-party
sales of approximately $1.5 billion, the highest level of first-year sales of
any drug in history. Celebrex is receiving about 400,000 weekly total U.S.
prescriptions and leads all other arthritis treatments except ibuprofen.
Pfizer records its portion of revenue in Alliance Revenue.
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 works by inhibiting an
enzyme called cyclo-oxygenase-2 (COX-2), which plays a role in arthritis pain
and inflammation, without inhibiting cyclo-oxygenase-1 (COX-1), which helps
maintain the normal stomach lining. 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 December 1999, Celebrex was the first COX-2 specific inhibitor approved
for treatment of familial adenomatous polyposis, a rare and devastating
hereditary disease that, left untreated, almost always leads to colorectal
cancer.
Q16) What is the status of Tikosyn (dofetilide)?
A16) In October, the FDA approved the new anti-arrhythmic agent Tikosyn
(dofetilide), 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. Discovered and
developed by Pfizer, Tikosyn is a selective potassium channel blocker and is
the first new oral anti-arrhythmic for AF to be approved in the U.S. in the
last 10 years. AF is a form of cardiac arrhythmia that is growing due to the
aging population. Patients with AF suffer from rapid and irregular
heartbeats in the atria, or upper chambers of the heart. Many patients
suffering from AF experience debilitating symptoms that include chest pain,
shortness of breath, fatigue, and anxiety. Long-term treatment of AF is seen
as a challenge by specialists due to concerns about safety of the currently
available products and drug side effects.
The clinical program for Tikosyn included 8,500 patients and was the
largest ever conducted for an anti-arrhythmic medicine. The studies showed
that Tikosyn was effective in maintaining patients in normal sinus rhythm for
more than one year and also in converting patients back to their normal heart
rhythm. Additionally, the Danish Investigations of Arrhythmia and Mortality
on Dofetilide in Congestive Heart Failure (DIAMOND-CHF) trial, recently
published in the New England Journal of Medicine, included more than 1,500
patients and showed that Tikosyn did not increase mortality in the severely
ill heart patients enrolled in the study, an important finding in this class
of drugs.
Like other anti-arrhythmic drugs, Tikosyn can cause pro-arrhythmias that
can be life threatening. In clinical trials, the incidence of induced
arrhythmias was reduced by in-hospital initiation and adherence to a
specified dosing algorithm. Pfizer has developed a comprehensive program to
educate institutions and healthcare professionals on the required in-hospital
initiation and on the use of the dosing algorithm. Tikosyn will be available
to prescribers and hospitals that have participated in the educational
program and is expected to be introduced in the first quarter of 2000.
Q17) What is the regulatory status of Relpax?
A17) 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. Our clinical data show that up to 70% of patients
taking Relpax experience significant or complete migraine pain and symptom
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 15% to 18% of women and 6% of men. In spite of the
incapacitating nature of migraines-symptoms of which include severe and
throbbing headaches, visual disturbances, and nausea-the vast majority of
sufferers have never been diagnosed or treated with prescription medication.
Q18) What is the status of the development of Zeldox?
A18) Zeldox has demonstrated efficacy in treating the erratic thought
processes and social withdrawal symptoms of schizophrenia and in preventing
symptom relapse, with a low propensity for weight gain and somnolence and no
need for dose titration. A unique intra-muscular form has also been
developed for control of acute exacerbations, or initiation of therapy in
selected patients. We intend to file an amended NDA on Zeldox in 1Q00.
Q19) How did Pfizer's Consumer Health Care products perform in the quarter?
A19) Consumer Health Care product sales, which are included as part of the
pharmaceutical segment, increased 5% in the quarter to $128 million. These
results predominantly reflect the performance of category-leading self-
medication products.
Q20) How did the Animal Health Group perform during the quarter?
A20) Sales of the Animal Health Group increased by 8% to $417 million for
the quarter. Excluding the impact of foreign exchange, sales increased by
13%. Exceptional sales performances of companion-animal products were led by
the launch of Revolution. In July 1999, the FDA granted marketing approval
for this once-a-month, simple-to-administer topical liquid, which protects
against internal and external parasites, including heartworm, fleas, and ear
mites in both dogs and cats, American dog ticks and sarcoptic mange (scabies)
in dogs, and hookworm and roundworm in cats. It is estimated that more than
half of all dogs and three quarters of all cats are not adequately protected
against these parasites. There are nearly 53 million dogs and nearly 60
million cats in the U.S. alone. The product became available to veterinary
clinics and hospitals in the U.S. in the third quarter. Sales of Rimadyl, an
anti-arthritis medication for dogs, continue to show strong growth.
Partially offsetting the strong performance of the companion-animal business
was 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.
Q21) What happened in cost of sales in the quarter?
A21) Cost of sales in the quarter remained flat, while net sales grew 9%,
mainly due to charges for unusual items recorded in the fourth quarter of
1998.
Q22) What factors accounted for the 4% increase in selling, informational,
and administrative (SI&A) expenses in the quarter?
A22) The quarter continued to reflect strong and growing support for in-
line and new products, with total SI&A increasing to over $1.7 billion, the
highest quarterly level in Pfizer history. Growth relative to the prior year
was tempered by opportunities to leverage past investments as well as
opportunities to drive efficiencies in general administrative operations.
Q23) What factors led to the 9% increase in research and development
expenditures in the quarter?
A23) Pfizer spent $760 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 Searle; an inhalable form of insulin under co-development
with Aventis and Inhale Therapeutic Systems; darifenacin, a muscarinic
antagonist for urinary urge incontinence; lasofoxifene, a selective estrogen
receptor modulator for prevention and treatment of osteoporosis, treatment of
atherosclerosis, and prevention of breast cancer; CP-424,391, a growth
hormone secretagogue for frailty; CP-358,744, an epidermal growth factor
receptor inhibitor for various cancers; 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; CJ-
13,610, a 5-lipoxygenase inhibitor for asthma; and UK-357,903, a type-5
phosphodiesterase inhibitor for erectile dysfunction. Pfizer has 56
additional exploratory development projects.
Pfizer's research and development spending in 1999 totaled $2.8 billion,
the highest level in the worldwide pharmaceutical industry. Pfizer will
continue its strong commitment to R&D in 2000, with budgeted spending of $3.2
billion, again expected to be the highest in the industry.
Q24) What efforts is Pfizer making to develop possible new dosage forms and
indications for its currently marketed products?
A24) 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, Zyrtec, 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 enrolling 8,600 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.
Other new dosage forms and indications under development include, among
others, atherosclerosis and MAC treatment indications and a three-day
treatment regimen for Zithromax; pediatric depression, social phobia,
dysthymia, and pre-menstrual dysphoric disorder indications for Zoloft;
congestive heart failure and pediatric indications for Norvasc; an oral
liquid dosage form of Aricept; sporadic adenomatous polyposis and pain
indications for Celebrex; a decongestant formulation and pediatric
indications for Zyrtec; and a female sexual dysfunction indication for
Viagra.
Q25) What caused the changes in other deductions-net in the fourth quarter?
A25) Other deductions-net in the fourth quarter decreased from $490 million
to $1 million due to the absence of certain significant pre-tax charges of
$520 million that were recorded in the fourth quarter of 1998.
Q26) What are Pfizer's effective tax rates for the fourth quarter and the
full year 1999?
A26) 4Q99 4Q98 FY99 FY98
Reported Operations 26.7% 30.2% 28.1% 35.4%
Continuing Operations Excluding 3Q99
Trovan Charge and 1998 Significant
Charges 26.7% 25.1% 28.4% 28.0%
Pfizer's fourth-quarter and full-year 1999 effective tax rates for reported
results (26.7% and 28.1%, respectively) were lower than the respective rates
in 1998 (30.2% and 35.4%, respectively) due to a higher tax rate in 1998 on
the gain on the divestiture of the Medical Technology Group. The fourth
quarter 1999 and fourth quarter 1998 effective tax rates for continuing
operations excluding 1998 significant charges (26.7% and 25.1%, respectively)
were lower than their respective full-year rates (28.4% and 28.0%,
respectively) due to an adjustment in the fourth quarter of each year to
reflect the extension of the R&D tax credit in the U.S.
Q27) What is the status of the Warner-Lambert negotiations?
A27) As we publicly stated last week, we are pleased that Warner-Lambert
has agreed to meet with us to seek to negotiate a transaction that would
combine the two fastest-growing companies in our industry, creating the best
pharmaceutical company in the world.
Q28) What is the status of Pfizer's share-purchase program?
A28) 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. In the fourth quarter of 1999,
the company purchased approximately 17.6 million shares at a total cost of
about $627 million. 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.
Q29) How does Pfizer view prospects for its financial performance for 2000?
A29) For the year 2000, we continue to expect earnings growth of 20
percent, even in light of our 1999 performance and continued commitment to a
strong level of investment to support our broad product portfolio and R&D.
Looking further ahead, as we publicly stated in November, we anticipate
compounded annual revenue and net income growth of 16 percent and 20 percent,
respectively, over the years 2000 through 2002. We believe this performance
will enable Pfizer to remain the fastest-growing of the 10 largest
pharmaceutical companies in the world. 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 1998 Form 10K and in our periodic reports on Form 10-Q and Form 8-K,
which we incorporate by reference.
Q30) Where can investors obtain investment information about Pfizer on the
Internet?
A30) Financial and other disclosures by Pfizer, including quarterly
earnings releases and other press releases, the Annual Report, and the Mid-
Year Report, are posted on a timely basis to the company's Website-
www.pfizer.com.
