Filed by Pfizer Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Commission File No.: 001-03619
Subject Company: Pfizer Inc.
THE FOLLOWING PRESENTATION WAS GIVEN BY
HANK MCKINNELL, PH.D., PRESIDENT & CHIEF OPERATING OFFICER
OF PFIZER INC. ON FEBRUARY 8, 2000
MERRILL LYNCH CONFERENCE 98 FEBRUARY 2000
[PFIZER LOGO]
HANK MCKINNELL, PH.D.
PRESIDENT & CHIEF OPERATING OFFICER
- --------------------------------------------------------------------------------
Thank you, Steve.
I always welcome an opportunity to talk about our company ... and that's
especially true now.
The reason: There's never been a better time to be a shareholder or employee of
Pfizer!
Today, we stand on the threshold of a new era. Our core businesses have never
been stronger. We have greater competitive strength than ever before.
And -- we are consummating a merger with Warner-Lambert that will create a new
standard for our industry.
There's a lot going on at Pfizer -- and it's going very well indeed!!
This morning, I will focus on our strong financial performance and its drivers
going forward:
- the powerful momentum of our current product portfolio;
- the next sustaining waves of products from R and D; and
- the remarkable platform for future growth, created by our aggressive
investment initiatives.
In addition -- given yesterday's events -- I will comment briefly on our merger
agreement with Warner-Lambert ....
Our 1999 financial results once again reflected impressive top-line and
bottom-line growth. In fact -- our fourth quarter performance was one of the
strongest quarters in the company's recent history.
Excluding our discontinued Medical Technology operation and unusual charges
recorded in both 1998 and 1999, we achieved 20% total revenue growth, driven by
a broad base of key in-line products and co-promoted products. And, diluted
earnings per share on this basis grew at an even more impressive 30%.
That earnings growth performance compares remarkably well with that of our
peers, as shown here.
In 1999, Pfizer and Warner-Lambert clearly led the industry in EPS growth ...
and did so by a considerable amount.
1999 also capped a remarkable decade -- one marked by accelerating growth in
both revenues and net income.
Total revenues increased almost four-fold during the 1990s -- while the
divestiture of our medical technology and non-health care businesses
significantly sharpened our focus on pharmaceuticals for humans and animals.
During the decade, our worldwide pharmaceutical sales growth consistently
exceeded that of the global market ... often by a factor of two or three times
...
... while we rose rapidly in the rankings -- from 14th in 1990 to 1st in 1999 --
based on sales of Pfizer-developed prescription pharmaceuticals plus our share
of those products which we co-promote with partners.
But -- perhaps most importantly -- the past decade was only a preamble ....
For 2000 through 2002, we anticipate compound revenue growth of 16% and EPS
growth of 20% from Pfizer alone, driven by strong in-line product performance
and upcoming new product launches.
And -- operating profit margins are expected to further improve, reflecting
broad-based double-digit revenue growth as well as opportunities to leverage
past investments in selling, marketing and R&D!
The principal driver behind Pfizer's outstanding performance is our unmatched,
broad and powerful current product portfolio.
Ten key products -- representing about 80% of our pharmaceutical revenues --
together grew 31% in 1999!
And -- nine of those products have U.S. patent protections ranging from 2004
to 2013!
In 1999, we had seven products with sales of more than $1 billion each ... an
industry record ...
... highlighted by Lipitor, Viagra and Celebrex -- the three most successful
launches in pharmaceutical industry history.
Moreover -- we have continued to demonstrate our expertise in both capturing
market share and expanding markets.
Zithromax, for example, increased its U.S. new prescription share 36% in 1999 --
significantly outdistancing its principal competitors in the anti-infective
category.
Lipitor -- copromoted with the Parke-Davis division of Warner-Lambert and
launched in 1997 -- is also growing its share at a rapid pace -- up 22% over
1998. At the same time, other well-established competitors in this category have
seen substantial share declines, including Zocor, down 10%; Pravachol, down 14%;
and Mevacor, down 44%.
Sold in partnership with our colleagues from Eisai -- Aricept is the world's
standard of care in cognitive therapy for Alzheimer's Disease -- with over one
million patients having been treated with Aricept in the U.S. alone.
Aricept provides an excellent illustration of our ability to expand markets,
thereby maximizing product value. Today's Alzheimer's market is ten-fold larger
than at the end of 1994.
Further evidence of Pfizer's capacity for developing and growing new markets is
found in the erectile dysfunction category, where our product Viagra topped one
billion dollars in worldwide 1999 sales.
In just over a year and a half, we've expanded the erectile dysfunction category
by more than ten times.
Around the world, over 6 million men with ED have been treated with Viagra. And
over 250,000 doctors have written Viagra prescriptions. In fact, we estimate
that around the world, three Viagra tablets are used every second!
As important as developing new drugs is -- adding value to our present portfolio
can be a major source of new revenues, and is a major strategy for Pfizer.
We have many research and clinical projects underway to explore new uses for our
in-line drugs, generate new product formulations, investigate new patient
populations, and develop convenient new product combinations. This table shows
some of the programs now ongoing.
An example of one such program is the WIZARD study, designed to explore the
potential efficacy of Zithromax in treating atherosclerosis and heart disease --
an unusual application for an antibiotic.
Chlamydia infections have been observed in arterial plaques, where -- it is
speculated -- they lead to plaque instability, rupture and heart attack.
Zithromax's uniquely long tissue half-life and high anti-chlamydial potency make
it the ideal agent for use in this setting.
That's a rapid-fire review of the nine major, in-line pharmaceutical products
... which represented $11 billion of our 1999 total revenues.
Looking back over the past three years, Pfizer's cumulative new prescription
growth -- up 82% -- has outpaced all major pharmaceutical companies ... with
only Warner-Lambert and AstraZeneca coming close.
We expect that trend to continue -- with these nine major brands currently
forecast to grow 20% during 2000.
Also driving future performance are our next waves of products from R&D --
At the top of the chart in the green and yellow bars you see seven new chemical
entities -- in later stages of development or nearing launch -- that have not
yet begun to contribute to Pfizer's revenues. They are expected to kick in
beginning this year, and then roll-out around the world over the next three to
four years.
On October 1, the FDA approved Tikosyn, Pfizer's newest cardiovascular drug for
the cardiac condition called atrial fibrillation. Discovered and developed by
Pfizer, Tikosyn is the first new oral anti-arrhythmic for AF to be approved in
the U.S. in 10 years.
Atrial fibrillation causes rapid, low-efficiency pumping of the heart, leading
to fatigue, somnolence, and lethargy. Tikosyn converts and maintains AF patients
in normal heart rhythm.
Pfizer will be launching this scientifically exciting new product early this
year.
On October 27, we received an approvable letter from the FDA for Relpax, our new
serotonin agonist for migraine headache. In spite of the incapacitating nature
of migraines -- 85% of sufferers have never been diagnosed or treated with
prescription medication!
Our clinical data show that up to 70% of patients taking Relpax experience
significant or complete migraine pain and symptom relief within two hours.
Our clinical data also show Relpax to be effective in treating menstrually
associated migraine, a label claim no other triptans have achieved.
Zeldox is Pfizer's new treatment for psychotic disorders.
Zeldox is effective across its dose range in treating a broad spectrum of
symptoms of psychosis: positive, negative, and depressive. Zeldox offers proven
long-term efficacy, little to no weight gain (an important patient compliance
benefit), and a favorable effect on lipid levels.
As a big plus -- Zeldox is also uniquely available in an intra-muscular form for
initiation of therapy or control of acute exacerbations.
Vfend is being developed to complement the clinical profile of Diflucan, the
number one selling antifungal agent on the market.
Vfend will provide new treatment options and hope for patients who suffer from
serious fungal infections. It will also find important use in patients who are
at high risk as a result of leukemia or bone marrow transplants. Importantly,
Vfend should be safe and effective enough for use in children.
Our ambitious phase III program is almost complete and will include data from
2200 patients collected at 400 sites in 35 countries. The data are demonstrating
clear advantages for Vfend over existing therapies.
Valdecoxib, the potent second-generation COX-2 inhibitor that we are
co-developing with Searle, is being evaluated in osteoarthritis, rheumatoid
arthritis and pain.
Valdecoxib has already reached phase III clinical trials, and we are seeing
robust activity.
More details on the emerging characteristics of Valdecoxib will be coming out
over the next few months from Searle. Pay attention to Valdecoxib -- it clearly
has the potential to turn out to be the best COX-2 inhibitor around.
Inhaled insulin is a brand new technology for the treatment of diabetes which we
are developing in collaboration with Inhale Therapeutic Systems and Aventis, for
the treatment of both Type 1 and Type 2 diabetes.
Our clinical data in Type 1 diabetics show this patient-friendly insulin
delivery system to be as effective as subcutaneous injections of short-acting
insulin. In Type 2 diabetes, we are demonstrating that Inhaled Insulin can be
used as either monotherapy or as an adjunct to oral hypoglycemic agents.
We and our co-promotion and co-development partner Aventis have begun
construction of a new, state-of-the art plant for manufacturing human insulin by
recombinant DNA technology. Groundbreaking took place last June in Frankfurt,
Germany.
The inhaled insulin program is now in full-scale, global clinical development,
with studies underway at 120 sites worldwide, and we continue to see high
enthusiasm for the product by both investigators and patients.
Darifenacin has recently entered phase III trials in treating over-active
bladder (OAB) syndrome -- increased frequency, urgency, and incontinence. OAB
represents a major underserved opportunity that afflicts an estimated 57 million
people in the US, EU and Japan.
Phase III trials have begun, with submission to the FDA targeted for 2002.
Beyond these seven -- and the 20 or so supplemental indications that will also
roll out during this period -- are 64 development programs!
Those 64 early candidates include a number of especially interesting compounds
- -- which, pending successful development, could be delivered to the market by
2003-2005.
At the top of the list are:
o Lasofoxifene, targeting post-menopausal conditions in women;
o CP-424,391 -- for frailty -- which works by increasing growth hormone levels
in the body; and
o CP-358-774 -- for cancer -- which inhibits an enzyme that facilitates
abnormal tumor cell growth.
There's another exciting activity shaping up in Pfizer R&D that you should
notice.
We are also operating the most active, most productive Animal Health R&D
operation in the world industry ... and are active in over a dozen therapeutic
areas.
We have a growing pipeline of genetically engineered vaccines, gene-therapy
products, and novel, convenient-to-use drugs, that could dramatically expand the
standard of care and the overall market for companion animal and livestock
medicines -- a pipeline that we estimate could add as much as $3 billion in new
revenues to Pfizer by 2005.
One example is Revolution, discovered in our research laboratories and launched
this Fall in the U.S.
Revolution is a topically administered endectocide. A single drop once each
month will control fleas, American dog ticks, ear mites, heartworm and mange in
dogs -- and fleas, ear mites, hookworm and roundworm in cats.
In its first three months on the US market, orders for over 100 million dollars
of Revolution have been placed. We expect that Revolution will soon be the
number one selling companion animal anti-parasitic, and may well become the
largest companion animal product of any kind.
Our third driver of future performance is our uniquely powerful platform for
growth --
During the past several years -- we have aggressively invested in sales and
marketing, in research and development, and in infrastructure and technology.
The result has been strong growth for our in-line products, powerful launches
for our new and co-promoted products, and new standards for the industry in
sales and R&D productivity.
However -- that broad program of investment has created something of even
greater strategic consequence -- an unparalleled platform for future growth --
one that gives us a uniquely powerful competitive position going forward.
Our industry-leading investments in R&D have grown at an average rate of 19% per
year and are estimated at $3.2 billion, from Pfizer alone, in 2000.
The result: a truly worldwide Central Research organization -- with strong,
closely-linked capabilities located in Groton, Connecticut; Sandwich, England;
and Nagoya, Japan ...
... and the full integration into our research processes of the most advanced
"cutting edge" technologies.
We have been equally aggressive in our selling, informational and administrative
investments during the decade.
We have regularly added new field forces -- whenever the ever-increasing breadth
of our product line required.
It has been our policy to provide the resources necessary to insure the
successful introduction of -- and accelerated international rollout for -- our
continuing series of new products.
That policy has been well-rewarded ... with, in the case of the U.S. market
shown here, a correspondingly strong annual expansion in revenues.
While increasing the number of field personnel -- we have also given equal
attention to increasing their efficiency and effectiveness -- through the use of
special training, local marketplace teams, and internal co-promotions.
The result has been our U.S. field force's recognition -- for the fifth year in
a row -- as the highest in productivity and image in Scott-Levin's annual survey
of 10,000 physicians ....
And -- our growing image in U.S. managed care -- jumping from 49th to 7th place
in less than two years -- based upon the attitude, responsiveness and knowledge
of our representatives. [Warner-Lambert, by the way, occupies 5th place!]
Our investments in infrastructure and technology have also made possible the
rationalization of worldwide manufacturing; the achievement of business
synergies; the establishment of shared services; and so on.
The result: significant cost savings, improved customer focus, better
information access, and improved operational speed and flexibility.
As you have seen, Pfizer is exceptionally well positioned for the future on its
own. We have, however, always been willing to reach for opportunities that
appear unexpectedly.
And -- we saw a unique opportunity in November when Warner-Lambert announced
that they had entered into an agreement to merge with American Home Products.
This allowed us to make a proposal that represented a unique opportunity for
Pfizer and better value by far for Warner-Lambert's shareholders.
In light of yesterday's announcements -- let me highlight the nature of our
agreement with Warner-Lambert and the opportunities it presents for "the best to
get better"!
Our merger with Warner-Lambert reflects the result of combining strength with
strength.
Together, we have nearly $28 billion in combined revenues, with nearly $21
billion in prescription pharmaceutical sales.
In addition, we have major Consumer Products, Animal Health and Confectionary
businesses -- with significant growth potential.
Our merger combines the two fastest-growing research-based companies in the
pharmaceutical industry ...
- -- and creates a new Pfizer that will be not just bigger, but better!
It offers opportunities for powerful product synergies, combined with an
enhanced global reach.
Combined R&D spending of about $4.7 billion in 2000 -- plus six major research
campuses and a world-class biotechnology firm in Agouron -- will allow us to
address the full-range of exciting medical advances now and on the horizon.
Plus -- we share similar corporate cultures, with team-based,
performance-driven, innovative philosophies.
The major terms of the merger agreement are as follows:
o Pfizer will exchange 2.75 shares of Pfizer common stock for each outstanding
share of Warner-Lambert stock in a tax-free transaction valued at $98.31 per
Warner-Lambert share, or $90 billion, based on Pfizer's February 4 closing
price of $35.75. This represents a 34% premium over the average closing
prices of Warner-Lambert during October 1999. Upon completion, Pfizer's
shareholders will own approximately 61% of the new company on a fully diluted
basis, and Warner-Lambert shareholders 39%.
o The transaction is subject to usual conditions in such mergers, including
pooling-of-interests accounting, shareholder approval at both companies, and
customary governmental and regulatory approvals. It is expected that the
transaction will close in mid-2000.
o And, Warner-Lambert has reached agreement to terminate its merger agreement
with American Home Products. Warner-Lambert agreed to pay AHP the $1.8
billion break-up fee, as required by the terminated merger agreement.
Warner-Lambert and American Home also agreed to mutually waive their
respective cross options for no consideration.
Our merger provides substantial benefits to shareholders of both companies -- in
terms of improved financial returns and accelerated earnings growth.
Besides our size and market presence, and 7 or 8 billion dollar products this
year -- we anticipate cost savings and efficiencies over the next three years
totaling $1.6 billion.
These cost savings alone will accelerate our projected compounded annual net
income growth through 2002 to 25%, excluding one-time transition and
restructuring charges.
There will also be significant operational synergies -- not only in terms of
Lipitor -- but in all areas, most notably sales and marketing and research and
development.
It should be emphasized that only cost savings -- not the increased sales that
we expect from these synergies -- are reflected in our increased earnings
projections.
Our actions in pursuing this merger were -- as noted -- a pragmatic response to
an unusual opportunity. As such, they reflected our bias for decisive actions,
vigorously implemented -- which will also define the next phase -- combining the
two companies to create a world-class organization.
We are keenly aware that achieving our joint and full potential requires a clear
focus on the implementation tasks at hand.
Simply put -- to make the most of our competitive strengths, there are three
things we must do: increase our sales; reduce our costs; and build a world-class
organization capable of strong and sustained growth.
The abundance of opportunities to increase sales by leveraging the combined
organization are reflected in two key facts --
One: the breadth, depth and strength of our combined product portfolios ...
And -- two: the sales rankings of our pharmaceutical products within their
therapeutic categories -- including ten #1 products.
Among our initial opportunities to increase sales are these --
o The industry's broadest range of products that treat diseases associated
with cardiovascular risks, including: Norvasc for high blood pressure and
angina; Lipitor for high cholesterol; Accupril for high blood pressure; and
Glucotrol XL and Rezulin for diabetes;
o Cross-selling opportunities in infectious diseases, represented by Pfizer's
Zithromax and Diflucan anti-infectives and Agouron's cutting edge HIV
research;
o Clinical synergies in diabetes, allowing us to address the twin issues of
insulin deficiency and insulin resistance;
o A significantly expanded program in treating central nervous system
disorders such as depression, anxiety, epilepsy, and schizophrenia.
Parke-Davis brings to Pfizer valuable expertise in this area and a sales
force that has considerable experience in calling on mental health
professionals;
o And -- integrated initiatives in women's health, to include: Diflucan for
vaginal candidiasis, Zithromax for bacterial infections and
Warner-Lambert's products for hormone replacement.
Our initial opportunities for cost reductions involve functional streamlining
in the areas noted --
- - the elimination of organizational redundancies throughout the combined
company -- across all functions, at all levels;
- - the leveraging of our combined annual external purchases of over $10
billion;
- - the optimization of global manufacturing, involving the almost 100
manufacturing sites of the two companies around the world; and
- - the centralization and refinement of our and Warner-Lambert's now-separate
distribution system.
The anticipated timing of our estimated $1.6 billion in cumulative cost savings
over the next three years is shown here --
The savings are expected to be achieved as follows: $200 million in 2000 (from
closing at mid-year, to year-end); a cumulative $1 billion by 2001; and a
cumulative $1.6 billion by 2002.
It is important to note that the merger will be accretive in 2001, the first
full year of operations.
And -- we foresee an abundance of opportunities -- both short and long-term --
to integrate our best people and best practices by:
- - upgrading field force productivity, via improved training, support and
incentives;
- - leveraging Pfizer's investments in cutting-edge research technologies for
use by Warner-Lambert's research organization;
- - reinforcing our marketing strengths across therapeutic areas by pooling
resources and insights;
- - and, drawing upon, and learning from, Warner-Lambert's expertise in consumer
health care.
Regarding that last point -- one should not overlook our combined presence in
consumer health care --
o Sales of $3.5 billion;
o And, a formidable platform for Rx-to-OTC switches.
By uniting two of the industry's fastest growing companies with the products and
R&D to sustain that momentum, the Pfizer/Warner-Lambert merger clearly results
in a company with a strong financial position -- one that improves the "bottom
line" for both companies.
The combined entity expects revenues to grow at a 13% compound annual growth
rate over the next three years.
And -- counting just cost savings, not increased sales from operational
synergies -- it expects future EPS growth of 25% -- greater than the 20%
forecast by Pfizer and Warner-Lambert, individually.
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Conference (8 February 2000)
[Pfizer LOGO]
Hank McKinnell, Ph.D.
President & Chief Operating Officer
- --------------------------------------------------------------------------------
[Pfizer LOGO] Financial Performance
Current Next Product Platform for
Product Waves (R&D) Future
Momentum Growth
PLUS: Pfizer/Warner-Lambert Merger
- --------------------------------------------------------------------------------
[Pfizer LOGO] 1999 Financial Results*
($ Millions, Except per Share Data)
% Change
---------
Total Revenue $16,204 20
Income Before Taxes 4,758 30
Net Income 3,384 29
Diluted EPS $0.87 30
* Excluding 1999 Trovan Inventory Charge; % Change Also Excludes 1998
Discontinued Operations and Certain Significant 1998 Charges
<PAGE>
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[Pfizer LOGO] 1999 Diluted EPS Growth*
(% Change)
(1) 10 10 14 14 14 15 18 20 30 35
AHP ABT SBH** JNJ PNU** MRK BMY LLY SGP PFE WLA
* Excluding Unusual Items
** Estimate
- ----------------------------------------------------------------
[Pfizer LOGO] Revenue & Net Income Growth
($ Billions)
1990* 1999
$4.8 $0.7 $16.2 $3.4**
Total Net Total Net
Revenues Income Revenues Income
Net Income as % Total Revenues
15% -> 21%
*Continuing Operations
**Excluding Trovan Inventory Charge
- --------------------------------------------------------------------------------
[Pfizer LOGO] Revenue Mix by Business
($ Millions)
[Pie chart illustrating the following:]
51% Pharmaceuticals 88% Pharmaceuticals
10% Consumer Health 4% Consumer Health
8% Animal Health 8% Animal Health
14% Non-Health Care
17% Medical Devices
1990 -> 1999
<PAGE>
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[Pfizer LOGO] Worldwide Pharmaceutical Sales Growth
(% Change)
Pfizer vs. Market
Pfizer Market
1990 17 9
1991 16 13
1992 21 13
1993 14 7
1994 17 6
1995 17 9
1996 19 9
1997 19 8
1998 30 9
1999* 27 12
Source: IMS International
Excludes OTCs (When Possible) and Nutritionals
Includes Alliance Sales Proportionate to Promotional Effort
*Twelve Months Ending September 1999
- ----------------------------------------------------------------
[Pfizer LOGO] Rising to Top of Worldwide Rankings
Rx-only Plus Co-promote Share
1990 1999**
1. Merck 1. PFIZER
2. Bristol-Myers Squibb 2. Merck
3. Glaxo Wellcome 3. Glaxo Wellcome
4. SmithKline Beecham 4. AstraZeneca
5. Ciba-Geigy 5. Aventis*
6. American Home Products 6. Novartis
7. Hoechst 7. Bristol-Myers Squibb
8. Johnson & Johnson 8. Johnson & Johnson
9. Lilly 9. Lilly
10. Bayer 10. Roche
11. Roche 11. American Home Products
12. Sandoz 12. SmithKline Beecham
13. Rhone-Poulenc 13. Schering-Plough
14. PFIZER 14. Abbott
15. Schering-Plough 15. Warner-Lambert
Source: IMS International
Excludes OTCs (When Possible) and Nutritionals
Includes Alliance Sales Proportionate to Promotional Effort
*Pro Forma
**Twelve Months Ending September 1999
<PAGE>
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[Pfizer LOGO] Long-Range Diluted EPS Forecast
$0.87 $1.50 o Compound Revenue Growth of 16%
and EPS Growth of 20% Through 2002
1999* 2002 o Driven by Strong In-line
Product Performance and
Upcoming Launches
o Operating Margin Expansion Despite
Sustained Investment Growth
*Excluding Trovan Inventory Charge
- --------------------------------------------------------------------------------
[Pfizer LOGO] Unmatched Product Breadth
1999 Key Pharmaceutical Revenues
($ Millions) % Change
$12,132 31
[Zyrtec LOGO] 552 33
[Cardura LOGO] 794 15
[Diflucan LOGO] 1,002 9
[Viagra LOGO] 1,033 31
[Zithromax LOGO] 1,333 28
[Zoloft LOGO] 2,034 11
[Lipitor LOGO]
[Celebrex LOGO] 2,354 131
[Aricept LOGO]
[Norvasc LOGO] 3,030 18
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[Pfizer LOGO] 1999 Billion Dollar Products
[Graphic Depicting Seven Listed Billion Dollar Products]
[Norvasc LOGO]
[Diflucan LOGO]
[Lipitor LOGO] 7
[Celebrex LOGO] Billion
[Zoloft LOGO] Dollar
[Viagra LOGO] Products
[Zithromax LOGO]
Source: IMS International, Pfizer Analysis
<PAGE>
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[Pfizer LOGO] Three Most Successful Launches
in Pharmaceutical Industry History
1997 Most Successful
[Lipitor LOGO] Product Launched
Each Year Since 1997
[Line Chart Illustrating
Sales Growth From $0 To $600MM]
1998
[Viagra LOGO]
[Line Chart Moving From
$0 To Over $600MM]
1999
Celebrex LOGO
[Line Chart Illustrating
Sales Growth From $0 To $900MM]
Celebrex is a Trademark of GD Searle and Company
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[Pfizer LOGO] Proven Expertise
[Graphic showing Pfizer's Expertise in Capturing Market Share
and Expanding Markets]
<PAGE>
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[Pfizer LOGO] Zithromax: Capturing Market Share
U.S. NRx Share 1999 vs. 1998
Anti-Infective Category
1998 1999
---- ----
Zithromax 9.2% 12.5% +36%
Cipro 6.7% 6.8% + 2%
Biaxin 5.8% 5.5% (5%)
Augmentin 4.8% 5.4% +13%
Source: IMS Health
- --------------------------------------------------------------------------------
[Pfizer LOGO] Lipitor: Capturing Market Share
U.S. NRx Share 1999 vs. 1998
Lipid-lowering Category
1998 1999
---- ----
Lipitor 33.9% 41.2% +22%
Zocor 24.0% 21.7% (10%)
Pravachol 16.4% 14.1% (14%)
Mevacor 5.7% 3.2% (44%)
Source: IMS Health
<PAGE>
- --------------------------------------------------------------------------------
[Pfizer LOGO] Aricept: Market Expansion
Worldwide Alzheimer's
Disease Category
Market Growth of
900%
[Pie Chart indicating 90% market share in 1999 for
Aricept and 10% for All Other]
$60 Million Market $600 Million Market
1994 1999
- --------------------------------------------------------------------------------
[Pfizer LOGO] Viagra: Market Expansion
Worldwide Erectile
Dysfunction Category
Market Growth of
925%
[Pie chart illustrating 85% market share in 1999 for
Viagra and 15% for All Other]
$117 Million Market $1.2 Billion Market
1994 1999
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[Pfizer LOGO] New Indications: Adding Value
to Marketed Products
Zithromax Zoloft Norvasc
- - Atherosclerosis + PTSD - Congestive Heart
- - MAC Treatment + Oral Liquid Form Failure
- - 3-day Treatment - Pediatric Depression - Norvasc-Lipitor
- Social Phobia Combo
- Dysthymia - Pediatric
- PMDD Indications
Aricept Celebrex Zyrtec
- - Oral Liquid Form + Familial Colon Polyps - Pseudoephedrine
- Sporadic Colon Polyps Combo
- Pain - Pediatric
Indications
Lipitor Status Viagra
- - Benefits of Even + Approved - Female Sexual
Lower Lipid Levels - Under Development Dysfunction
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Zithromax -- WIZARD Study
* Investigating Benefits in Heart Disease
* Over 3,500 Patients Enrolled
* Key Data Available This Year
- --------------------------------------------------------------------------------
[Pfizer LOGO] U.S. NRx Growth (1996-3Q99)
Rx-Only Plus Co-Promote Share
U.S. NRx Growth
3Q 1999 Ranking Cumulative 1996-3Q99
- --------------- --------------------
1. PFIZER +82%
2. Merck +20%
3. Glaxo Wellcome -13%
4. AstraZeneca +53%
5. Aventis -21%
6. Novartis -14%
7. Bristol-Myers Squibb -4%
8. Johnson & Johnson +7%
9. Lilly -6%
10. Roche -62%
11. American Home Products -16%
.
.
15. Warner-Lambert +62%
Source: IMS International; Scott-Levin;
Excludes OTCs (When Possible) and Nutritionals
Includes Alliance Sales Proportionate to Promotional Effort
- --------------------------------------------------------------------------------
[Pfizer LOGO] Global In-Line Products
Growth Opportunity
Nine Major Brands
- $11 Billion in 1999 Revenues +20%
- Patented to 2005+ in
- Major Line Extensions 2000
<PAGE>
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[Pfizer LOGO] Major Products and the Next Wave
[Chart showing duration of U.S. patent protection for certain major products]
Vfend, Inhaled Insulin, Darifenacin, Valdecoxib, Zeldox, Relpax, Tikosyn,
Celebrex, Animal Health Products and Viagra: beyond 2009
Lipitor, Aricept, Zyrtec, Norvasc and Zithromax: beyond 2007
Zoloft: Until 2006
Diflucan: Until 2004
Procardia XL: Until 2003
Cardura: Until 2000
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[Pfizer LOGO] Tikosyn
Atrial Fibrillation (AF)
Approved October 1999
* Cardioverts AF Patients and Maintains Normal Heat Rhythm
* Available in Early 2000
- --------------------------------------------------------------------------------
[Pfizer LOGO] Relpax
Migraine Headache
Approvable October 1999
* Rapid Onset of Action
* Superior Efficacy
* Low Headache Recurrence Rate
* Effective in Menstrually Associated Migraine
<PAGE>
- --------------------------------------------------------------------------------
[Pfizer LOGO] Zeldox
Psychotic Disorders
Advantages
* Treats Positive, Negative, and Depressive Symptoms
* Long-term Efficacy
* Little Weight Gain
* Favorable Lipid Effects
- --------------------------------------------------------------------------------
[Pfizer LOGO] Vfend
Targeting Serious Fungal Infections
* High Unmet Medical Need
* Cerebral Fungal Infections
* Eye Infections
* Resistant Candidiasis
* Acute Invasive Aspergillosis
* Empirical Therapy in High Risk Patients
* Leukemia
* Bone Marrow Transplants
* Childhood Infections
- --------------------------------------------------------------------------------
[Pfizer LOGO] Valdecoxib [Searle LOGO]
Second Generation Arthritis Treatment
* Co-developing with Searle-Monsanto
* Broad Array of Indications
* RA
* OA
* Pain
* In Phase III
- --------------------------------------------------------------------------------
[Pfizer LOGO] Inhaled Insulin Aventis
Diabetes
New Therapy in Diabetes
* Type 1 and Type 2 Diabetes
* Patient-Friendly Insulin Delivery System
- --------------------------------------------------------------------------------
[Pfizer LOGO] Inhaled Insulin Aventis
Diabetes
Insulin Plant Groundbreaking June 1999
Full-scale Global Development Underway at 120 Sites
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Darifenacin
Overactive Bladder (OAB)
Pharmacology
* Potent M(3) Receptor Antagonist
* Inhibits Bladder Contractility
* Intrinsically More Selective for Bladder than Detrol(R) and Ditropan(R)
* Phase III Begun
* NDA Target 2002
- --------------------------------------------------------------------------------
[Pfizer LOGO] Early Development Candidates
[U.S. patent protection beyond 2009]
* Lasofoxifene (Osteoporosis/Breast Cancer/Lipid Lowering)
* CP-424,391 (Frailty)
* CP-358,774 (Cancer)
* CP-101,606 (Head Trauma)
* UK-279,276 (Stroke)
* CP-368,296 (Diabetes)
* CJ-13,610 (Asthma)
* UK-357,903 (Erectile Dysfunction)
- --------------------------------------------------------------------------------
[Pfizer LOGO] Animal Health
Development Portfolio
[Graphic of a globe indicating the breadth of veterinarian products being
developed by Pfizer for companion animals and livestock]
Livestock Products: Vaccines, Antimicrobial and Antiparasitics.
Companion Animal Products: Metabolic, Reproductive, Antiparasitics,
Antimicrobials, Vaccines, Inflammation/Pain, Cardiovascular, Allergy and
Cancer.
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Animal Health
Development Portfolio
Number of Candidates
Companion Animal Livestock
1997 8 3
1998 13 10
1999 14 14
- --------------------------------------------------------------------------------
[Pfizer LOGO] Revolution (selamectin)
Differentiation from the Competition
Revolution(TM) Advantage(R) Frontline(R)
Fleas X X X
Ticks X - X
Heartworm X - -
> $100 MM Orders in First 3 Months
- --------------------------------------------------------------------------------
[Pfizer LOGO] Balanced Growth and Investment
Investment
(Degree) Sales/Marketing
(Degree) R&D Powerful Platform
for Future Growth
(Degree) Infrastructure and
Technology
Growth
(Degree) In-Line Products
(Degree) New Products
(Degree) Sales/R&D Productivity
- --------------------------------------------------------------------------------
[Pfizer LOGO] R&D Investments
*2000 R&D Budget: $3.2 Billion
($Millions)
$545 $654 $776 $880 $1,036 $1,340 $1,567 $1,805 $2,279 $2,776
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] Central Research: Worldwide
[Photograph of Groton, CT
facility]
[Photograph of Sandwich,
U.K. facility]
[Photograph of Nagoya,
Japan facility]
- --------------------------------------------------------------------------------
Pfizer LOGO] "Cutting Edge" Technologies
[Photograph of
laboratory]
Genomics Research
[Photograph of laboratory]
High Speed
Chemical Synthesis
[Photograph of laboratory]
Very High
Throughput Evaluation
- --------------------------------------------------------------------------------
Pfizer LOGO] SI&A Investments
* Strong Support for New & In-line Products
($Millions)
$2,002 $2,250 $2,457 $2,611 $2,793 $3,395 $3,859 $4,401 $5,568 $6,351
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Continuing Operations
- --------------------------------------------------------------------------------
[Pfizer LOGO] U.S. Field Force Expansion
($ Billions)
U.S. Pharmaceuticals Revenues
$1.6 $1.9 $2.4 $2.8 $3.2 $3.7 $4.5 $5.2 $7.4 $9.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<PAGE>
- --------------------------------------------------------------------------------
[Pfizer LOGO] Best-in-Class U.S. Sales Organization
#1 in Productivity and Image
#1 in Image 1996-2000
Calls/Rep Details/Rep
--------- -----------
1. PFIZER 884 1,395
2. Glaxo Wellcome 701 1,150
3. Johnson & Johnson 707 949
4. SmithKline Beecham 601 860
5. WARNER-LAMBERT 550 797
6. Eli Lilly 559 795
7. Bristol-Myers Squibb 540 790
8. American Home Products 556 771
9. AstraZeneca 510 684
10. Merck 535 680
Source: Scott-Levin, YTD October 1999;
Scott-Levin Pharmaceutical Company Image Survey
- --------------------------------------------------------------------------------
[Pfizer LOGO] Growing Image in U.S. Managed Care
[Chart comparing the ranking of over fifty U.S. Pharmaceutical companies' image
in U.S. Managed Care with Pfizer ranked 49th in Spring 1997 and improving to 7th
in Fall 1999]
Reasons for Improved Ranking:
* Attitude Toward Managed Care
* Meeting Customer Needs
* Knowledgeable Representatives
Source: Scott-Levin
- --------------------------------------------------------------------------------
[Pfizer LOGO] Infrastructure/Technology
(Degree)
o Worldwide Manufacturing
Rationalization
o Business Reorganization/Synergies o Cost Savings
o Establishment of Shared Services o Customer Focus
o Finance o Information Access
o Information Technology
o Distribution o Speed/Flexibility
o Strategic Purchasing
- --------------------------------------------------------------------------------
[Pfizer LOGO]
[Warner-Lambert LOGO]
The Best Get Better
- --------------------------------------------------------------------------------
<PAGE>
[Pfizer LOGO] The New Pfizer
(1999 Pro Forma, $ Billions)
[Pfizer LOGO]
Pharmaceuticals Consumer Animal Health Confectionery
$20.9 Health Care $1.4 $2.0
$3.5
International 40%
U.S. 60%
Total $27.7 Billion
Source: Pfizer and Warner-Lambert
- --------------------------------------------------------------------------------
[Pfizer LOGO] Decade of Unprecedented Growth
Pharmaceutical Revenues ($ Billions)
[Chart showing upward sales growth from 1993 to 1999 of Pfizer's and
Warner-Lambert's pharmaceutical revenues]
Pfizer Warner-Lambert
1993-1999 1993-1999
* Three-fold increase * Three-fold increase
* 19% CAGR * 25% CAGR
* $9.2 Billion Growth * $5.8 Billion Growth
Source: Company Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
[Pfizer LOGO] Not Just Bigger, But Better
Powerful Product Synergies * Breadth of CV, CNS, and
Anti-infective Portfolios
* 13 Products >$500 Million
Enhanced Global Research * Top Five Position in Most Markets
* Largest, Most Admired Field Force
Complementary, High * $4.7 Billion R&D Budget (2000)
Quality R&D Organizations * Six Major State-of-the-Art
Research Campuses
* Agouron, World-class
Biotechnology Firm
Similar Corporate Cultures * Team-based
* Performance-driven
* Innovative
- --------------------------------------------------------------------------------
[Pfizer LOGO] Merger Summary
* Tax-free Stock-for-Stock Exchange
* 2.75 Pfizer Shares for Each Warner-Lambert Share
* Conditioned on:
* Pooling-of-Interests Accounting
* Shareholder/Regulatory Approvals
* AHP/Warner-Lambert Agreement Terminated
- --------------------------------------------------------------------------------
[Pfizer LOGO] Clear and Obvious Benefits
* $28 Billion in 1999 Revenues Annual Average
Net Income Growth
* Broad, Young and Powerful Portfolio (2000-2002)
(2000: 7-8 Billion Dollar Products)
25%
* $1.6 Billion in Cost Savings
(2000-2002)
- --------------------------------------------------------------------------------
[Pfizer LOGO] Significant Operational Synergies
Lipitor Opportunities
* Exploit Worldwide Strengths (Japan)/Lipitor-Norvasc
Combination
Sales & Marketing
* Enhanced Filed Force Productivity/Shared Best Practices
Research & Development
* Depth, Breadth, and Scope of Therapeutic Areas/
Leverage New Technologies
<PAGE>
- --------------------------------------------------------------------------------
[Pfizer LOGO] Our Focus: Implementation
Essential Tasks
* Leverage Strengths -> Increase Sales
* Eliminate Redundancies -> Reduce Costs
* Integrate Best People and Practices -> World-class Organization
- --------------------------------------------------------------------------------
[Pfizer LOGO] 1999 Key Product Performance
Combined Portfolios ($ Millions)
13 Products Over $500 Million
Lipitor $3,732
Norvasc $3,030
Zoloft $2,034
Zithromax $1,333
Viagra $1,033
Diflucan $1,002
Neurontin $913
Cardura $794
Rezulin $625
Celebrex $554 ($1,456 Total)
Zyrtec $552
Viracept $530
Accupril $514
Glucotrol XL $262
Dilantin $255
Aricept $205 ($551 Total)
Source: Pfizer, Warner-Lambert, Lehman Brothers
<PAGE>
- --------------------------------------------------------------------------------
[Pfizer LOGO] U.S. Product Sales Rankings
Within Therapeutic Category
Ten #1 Products
Product Rank
------- ----
Norvasc #1
Aricept #1
Diflucan VC #1
Viagra #1
Celebrex #1
Zithromax #1
Lipitor #1
Viracept #1
Rezulin #1
Neurontin #1
Cardura BPH #2
Zoloft #2
Glucotrol XL #2
Zyrtec #2
Accupril #3
Dilantin #3
Fempatch #6
Loestrin #8
Source: IMS
- --------------------------------------------------------------------------------
[Pfizer LOGO] Initial Opportunities (Increase Sales)
* Leverage Product/Marketing Synergies
* Pre-eminent Cardiovascular Presence
* Cross-selling in Infectious Diseases
* Clinical Synergies in Diabetes
* Significant CNS Program Expansion
* Integrated Women's Health Initiatives
- --------------------------------------------------------------------------------
[Pfizer LOGO] Initial Opportunities (Reduce Costs)
* Functional Streamlining:
* Eliminate Organizational Redundancies
* Leverage Combined Purchasing ($10 Billion)
* Optimize Global Manufacturing
* Centralize Distribution Systems
- --------------------------------------------------------------------------------
[Pfizer LOGO] Cumulative Cost Savings
(Amounts in $ Billions)
$0.2 $1.0 $1.6
2000 2001 2002
<PAGE>
- --------------------------------------------------------------------------------
[Pfizer LOGO] Initial Opportunities (Enhance Organizations)
* Integrate Best People and Practices:
* Upgrade Field Force Productivity
* Leverage Research Technologies
* Reinforce Therapeutic Area Strengths
* Exploit Consumer/OTC Expertise
- --------------------------------------------------------------------------------
[Pfizer LOGO] Major Presence in OTC Market
* Combined 1999 Sales: $3.5 Billion
* Platform for Rx-to-OTC Switches
[Pfizer LOGO] [Warner-Lambert LOGO]
[Pfizer Products] [Warner-Lambert Products]
- --------------------------------------------------------------------------------
[Pfizer LOGO] Enhanced Growth/Shareholder Value
($ Billions, Except per Share)
`99-`02
2000 2001 2002 % CAGR
Pfizer
Revenue $18.6 $21.6 $25.0 16%
EPS $1.04 $1.25 $1.50 20%
Warner-Lambert
Revenue $14.8 $16.2 $18.0 12%
EPS $2.45 $2.90 $3.36 20%
Combined
Revenue $31.5 $35.6 $40.4 13%
EPS $0.98 $1.27 $1.56 25%
Accretion/ (5.4%) 1.4% 3.9%
(dilution)
<PAGE>
THE FOLLOWING IS AN ADVERTISEMENT PUBLISHED IN NEWSPAPERS, INCLUDING THE
NEW YORK TIMES AND THE WALL STREET JOURNAL ON FEBRUARY 8, 2000.
A MESSAGE FROM WILLIAM C. STEERE, JR.,
CHAIRMAN OF PFIZER, AND LODEWIJK J.R. DE VINK,
CHAIRMAN OF WARNER-LAMBERT
Pfizer and Warner-Lambert are joining together to create the world's leading
research-based pharmaceutical company.
This a merger of the world's two fastest-growing major pharmaceutical
businesses, driven by innovation, a broad array of leading pharmaceutical and
consumer products and a powerful portfolio of research candidates.
This year, our company will invest $4.7 billion in research and development -
the largest pharmaceutical research program anywhere. We will have a combined
scientific staff of 12,000 with six state-of-the-art research campuses. With 138
compounds under development, our R&D uses cutting-edge technology to pursue
treatments for cardiovascular disease, cancer, diabetes, mental health disorders
and HIV/AIDS, among other areas.
Our enthusiasm for what we can accomplish together is based on the partnership
we built with Lipitor, which today is the world's most rapidly growing
medication for lowering cholesterol. This success is based on mutual respect,
teamwork and continuous innovation. These values will be at the core of our new
company.
It is a historic day for us, our shareholders, employees and the communities in
which we do business. We will be leaders in an era of exciting medical
breakthroughs, bringing new treatments and cures to patients around the world.
/s/ William C. Steere, Jr. /s/ Lodewijk J.R. de Vink
William C. Steere, Jr. Lodewijk J.R. de Vink
Chairman and CEO of Pfizer Inc. Chairman and CEO of
Warner-Lambert
[Pfizer Logo] [Warner-Lambert Logo]
THE WORLD'S FASTEST-GROWING
PHARMACEUTICAL COMPANY
<PAGE>
These communications include certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are naturally
subject to uncertainty and changes in circumstances. Actual results may vary
materially from the expectations contained herein. The forward-looking
statements in this document include statements about future financial and
operating results and the proposed Pfizer/Warner-Lambert transaction. The
following factors, among others, could cause actual results to differ materially
from those described herein: inability to obtain, or meet conditions imposed
for, governmental approvals for the merger with Warner-Lambert; failure of the
Pfizer or Warner-Lambert stockholders to approve the merger; the risk that the
Pfizer and Warner-Lambert businesses will not be integrated successfully; the
costs related to the merger; and other economic, business, competitive and/or
regulatory factors affecting Pfizer's and Warner-Lambert's businesses generally.
More detailed information about those factors is set forth in Pfizer's and
Warner-Lambert's filings with the Securities and Exchange Commission, including
their Annual Reports filed on Form 10-K for the fiscal year ended 1999,
especially in the Management's Discussion and Analysis section, their most
recent quarterly reports on Form 10-Q, and their Current Reports on Form 8-K.
Pfizer and Warner-Lambert are under no obligation to (and expressly disclaims
any such obligation to) update or alter their forward-looking statements whether
as a result of new information, future events or otherwise.
* * * * * * * * * * * * * * * * * * * * *
On November 15, 1999, Pfizer filed a joint proxy statement/prospectus in
connection with its proposed merger with Warner-Lambert. Pfizer and
Warner-Lambert will be jointly preparing an amendment to the joint proxy
statement/prospectus and will be filing such amendment with the Securities and
Exchange Commission as soon as practicable. WE URGE INVESTORS TO READ THE JOINT
PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE
SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION, Investors and security holders
may obtain a free copy of the joint proxy statement/prospectus and other
documents filed by Pfizer Inc. and Warner-Lambert Company with the Commission at
the Commission's web site at www.sec.gov. The joint proxy statement/prospectus
and these other documents may also be obtained for free from Pfizer Inc. by
directing a request to Pfizer Inc., 235 42nd Street, New York, New York 10017,
Attention: Shareholder Relations, telephone: (212) 573-2668. READ THE DEFINITIVE
JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING
THE MERGER.
Pfizer, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Pfizer stockholders in
favor of the merger. Information concerning the participants in the solicitation
will be set forth on a Schedule 14A filed as soon as practicable.
Warner-Lambert, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Warner-Lambert
stockholders in favor of the merger. Information concerning the participants in
the solicitation will be set forth on a Schedule 14A filed as soon as
practicable.
CONTACTS:
Name: Andy McCormick
Pfizer Inc.
212 573-1226
Name: Stephen Mock
Warner-Lambert
973 540-6696
