Pfizer, Inc' Animal Health Products

1
Pfizer, Inc. Animal Health Products

• Janet Glidden
• Karyn Woolley
• 2-28-06

2
The Case

• Less Demand for U.S. beef and the resulting sales
  decline of Pfizer products

3
Who Is Pfizer

• Founded1849 Headquartered in New York, NY
• 70 Manufacturing facilities 9 R D sites in 5
  countries
• Listed on the New York Stock Exchange
• Employs 115,000 employees in 180 countries
• Primary Lines of Business
• Pharmaceutical Human Health (Lipitor, Viagra,
  Celebrex)
• Consumer Health (Listerine, Visine, Rolaids,
  Sudafed)
• Animal Health (Revolution)

4
Pfizer

• Mission Statement "We will become the worlds
  most valued company to patients, customers,
  colleagues, investors, business partners, and the
  communities where we work and live."
• Purpose "We dedicate ourselves to humanitys
  quest for longer, healthier, happier lives,
  through innovation in pharmaceutical, consumer
  and animal health products."

5
Pfizer Animal Health

• Pfizer Animal Health has two divisions
• Companion Animals (pets)
• cats, dogs, horses
• Livestock
• beef cattle, dairy cattle, pork

6
The Environment

• Economic Conditions Trends
• NAFTA Allows imports from Canada Mexico
• Mad Cow Scare prevents Imports to Asia
• Cultural and Social Trends
• Public Concerns over Medicine Safety (celebrex,
  vioxx recalls)
• Working families want fast, microwavable meals
• Nutrition a growing concern (low fat/low
  cholesterol)
• Corporate Responsibility Wanted
• Perceptions high profits Executive pay
  soaring prices
• Asian tsunami Pakistan earthquake relief 1
  million donated
• Hurricane Katrina Rita 2 million donated
• Political and Legal Issues
• Lawsuits US British courts uphold Lipitor
  patents until 2011
• FDA regulations tighten due to recalls
• Access to prescriptions for the needy

7
The Industry

• Increasing Demand
• Demands for animal health products are estimated
  to reach 7.8 billion in 2006
• Gains will be driven by
• Continuing threats of animal disease
• Ongoing food safety concerns
• Growth in pet populations
• The Pharmaceutical industry as a whole has been
  underperforming the past 5 years due to
• Expiring patents
• Less than robust pipeline prospects
• Consumers concern over drug safety
• Managed care controls on spending

8
A Glance at the Competition
9
Marketing Stats

• 3 Billion Ad Budget
• 4th largest in the U.S.
• 38,000 Sales Reps
• equivalent to three U.S. Army divisions
• 8,500 Lipitor Rxs dispensed per hour
• In the U.S. in 2004
• 74.8 million in revenue

10
Marketing Strategy

• Market direct to consumers through
• Prime time t.v. magazine ads
• Marketing Armies
• Physicians have been inundated some seeing 3
  Pfizer reps a day
• Mass marketing approach
• Worked well with drugs targeting large
  populations unmet needs
• Will not be effective for targeted genetic
  drugs of the future
• Pfizer Educational Programs
• Ask Pfizer On-line
• Cartoon Pill Phil
• Pfizer sells animal products only to
• Vets feed and seed stores
• Farmers ranchers perceive vets as their most
  trusted contacts

11
Pfizer SWOT Analysis-Strengths-

• Currently the largest pharmaceutical company in
  the industry
• Cash Rich with a strong balance sheet to borrow
  against Adequate revenues to pursue aggressive
  advertising/marketing programs
• Actively seeking Licensing and Acquisition
  opportunities
• Implementing cost cuts to add 4 Billion in
  savings by 2008
• Educational programs for Consumers
• Pipeline prospects expected to generate 8 billion
  in sales by 2010
• (Potential Blockbuster Torcetrapib/Lipitor)
• Pfizer has consistently superior products that
  competitive products typically cant match
• Pfizers reputation is highly respected among
  vets and ranchers

12
Pfizer SWOT AnalysisWeaknesses

• Reduction of R D spending by 13 2005 to 7.4
  billion
• Compensation packages for top executives are
  under scrutiny
• Poor public relations regarding maintenance of
  high prices bringing drugs beyond the reach of
  the potential users
• Pfizer uses animals to test its products
• Shortage of new blockbuster drugs in the pipeline
• Mass marketing strategy will not be effective for
  future oncology medications unique to individual
  genetics

13
Pfizer SWOT Analysis Opportunities

• China aging population, increasing obesity and
  heart disease offer new growing market
• Potential sale of Consumer Health Division
  Listerine, Benedryl
• Licensing/acquisition opportunities
• 100 million dollar study on Celebrex
• Torcetrapib (lowers LDL, raises HDL)
• Successful Lipitor patent litigation

14
Pfizer SWOT Analysis Threats

• Intense competition from generics
• Fewer pipeline prospects
• Consumer safety concerns (Vioxx, Celebrex)
• Patent expirations drugs that generated 11
  billion sales in the past will lose patent
  protection in 2006 including Zoloft
• Tightening legislation as FDA becomes
  increasingly discriminating in the face of Vioxx
  recall
• Litigations expenses necessary to defend
  intellectual property
• Competition from other pharmaceutical companies
  looking for licensing/acquisition opportunities
• 100 million study on Celebrex to determine
  safety/threats
• Failure of target industry, such as the beef
  industry in the US.

15
The Problem

• Less Demand for U.S. beef and the resulting sales
  decline of Pfizer products
• Consumers Want
• Food Safety (concerns mad cow disease)
• Healthy Alternatives (chicken, fish)
• Ease of preparation (microwaveable products)
• Barriers to potential new markets
• Trade barriers due to mad cow

16
Options

• Reduce expenditures on declining beef market
  recognize invest in new markets such as poultry
  pets
• Focus on Co. reputation work to increase
  publics perception of Pfizer the
  pharmaceutical industry
• Remain committed to working with U.S. beef
  growers to help return producers to profitability

17
RecommendationPartner with U.S. beef
growers to help return producers to profitability

• Stand firm remain committed to working with
  beef producers
• Demand for beef aboard is growing, eventually
  importing will open to U.S. demand will be
  substantial
• Demand for animal pharmaceuticals will follow
• Invest in growing animal health product markets
  abroad
• Target those presently supplying beef to Asia
  (Latin America)
• Establish market share now making it difficult
  for competitors to get a foothold in the future
• Assist beef growers to boost perceptions
  regarding beefs nutritional benefits
• Pfizer has extensive skill and experience in
  marketing and advertisement
• Pfizer has a more than sufficient advertising
  budget
• Pfizers products are recognized as consistently
  high quality
• Build on the Trust that ranchers have in Vets