Q21) How is Camptosar performing?
A21) Sales of Camptosar totaled $91 million in the first quarter of 2004.
Because of the important survival benefit Camptosar provides, it is
one of the standard treatments and one of the most widely studied
therapies in colorectal cancer. It is a semisynthetic camptothecin
derivative indicated as first-line therapy for metastatic colorectal
cancer in combination with 5-fluorouracil and leucovorin and as
second-line treatment for advanced colorectal cancer following
failure with initial 5-fluorouracil-based therapy. Camptosar
inhibits the activity of the enzyme topoisomerase 1, which is
essential for cancer-cell division. Colorectal cancer is the
second-leading cause of cancer deaths in the U.S. When detected
early, 90% of colorectal-cancer patients survive five years or more.
However, only 37% of colorectal cancers are diagnosed in early
stages. The product is being studied in both neo-adjuvant and
adjuvant settings for colorectal cancer and in more than 15 other
tumor types.
Only combination therapy with Camptosar has consistently proven to
offer survival advantages in metastatic colorectal cancer. Patients
receiving Camptosar have been proven to live significantly longer
and, because it is generally well tolerated with manageable and
noncumulative toxicities, they are more likely to remain on therapy.
This has been recently shown in the Tournigand study, which
demonstrated the potential to achieve median survivals in excess of
20 months using sequential first- and second-line therapies. The
authors of the study suggested the need to consider treatment
tolerability when establishing the sequence of agents.
Camptosar is being successfully combined with Erbitux and Avastin,
the first successful combinations of molecular-targeted agents with
chemotherapy treatments. A recently published study showed a median
survival of 20.3 months for patients receiving Camptosar/5-
fluorouracil/leucovorin in combination with Avastin.
Pfizer's commitment to oncology is demonstrated by the breadth and
depth of our clinical-development efforts, with more than
510 clinical trials ongoing for marketed products and nearly 80
trials for new cancer agents in development.
Q22) How is Aromasin performing?
A22) Sales of Aromasin were $24 million in the first quarter of 2004.
Aromasin is indicated for post-menopausal breast-cancer patients who
have failed tamoxifen therapy. New data in a study published in the
March 11, 2004, issue of the New England Journal of Medicine (NEJM)
challenge the current standard of care for women with early breast
cancer. The study showed that after using tamoxifen, the current
standard in adjuvant breast-cancer treatment, for two to three years,
women switched to Aromasin for the remainder of the five-year study
had a 32% improvement in disease-free survival versus women who
continued on tamoxifen. New prescriptions in the U.S. for Aromasin
have nearly doubled in the weeks following the NEJM publication.
Q23) How is Xalatan/Xalcom performing?
A23) Sales of Xalatan/Xalcom totaled $279 million in the first quarter
of 2004. In 2003, Xalatan/Xalcom became the first ophthalmic
medicine to achieve $1 billion in annual sales (including 2003 sales
of Xalatan/Xalcom prior to the acquisition of Pharmacia in
April 2003). Xalatan, a prostaglandin indicated for the treatment of
open-angle glaucoma and ocular hypertension, is the #1 prescribed
glaucoma medication in all promoted markets, including the U.S.,
Europe, and Japan. It is the first and only prostaglandin with a
first-line indication for the treatment of elevated eye pressure.
Xalcom consists of Xalatan with the beta blocker timolol.
Glaucoma is a group of eye diseases, characterized by elevated
intraocular pressure (IOP), damage to the optic nerve, and visual-
field loss, that can lead to blindness if not treated. An estimated
67 million people suffer from glaucoma worldwide, including
2-3 million Americans age 40 years and older. Each year, more than
100,000 people in the U.S. are diagnosed with glaucoma, of whom 90%
have open-angle glaucoma, a disease with a pattern of vision loss
associated with an increase in pressure in the eye.
The Ocular Hypertension Treatment Study published in June 2002 in
Ophthalmology demonstrated for the first time the benefit of treating
ocular-hypertensive patients who have not yet developed glaucoma.
Ocular hypertension is a major risk factor for glaucoma and a
potential source of significant market expansion. By treating
patients with IOP-lowering therapies, including Xalatan or other
therapies, the study showed a 60% reduction over five years in the
development of glaucoma.
Future Xalatan/Xalcom global sales growth will come through market
expansion. While the U.S. glaucoma market has been experiencing low
unit growth, about one third of diagnosed glaucoma patients are
untreated. In addition, only 10-15% of ocular-hypertensive patients
(a high-risk group for developing glaucoma, based on the study
described above) are currently being treated in the U.S. Several
comparative clinical trials and recent European Glaucoma Society
guidelines support Xalatan use in newly treated patients before less
efficacious and/or poorly tolerated therapies. Furthermore, Pfizer's
targeted national patient communication in the U.S. will increase the
treatment of diagnosed glaucoma and ocular-hypertensive patients.
Q24) What is the status of Genotropin?
A24) Sales of Genotropin totaled $179 million in the first quarter
of 2004. Growth was driven by a continuing strong performance in the
U.S. and continued high market share in the more slowly growing
markets in Europe and Japan.
Genotropin is the world's leading human recombinant growth hormone,
with about one-third of the worldwide market. It is indicated for
the long-term treatment of pediatric patients who have growth failure
due to inadequate secretion of endogenous growth hormone or due to
Prader-Willi syndrome, and for adult patients with growth-hormone
deficiency. Growth-hormone deficiency affects thousands of children
and 50,000-70,000 adult patients in the U.S. alone. Adults can be
deficient as a continuation of childhood deficiency or as a
consequence of brain trauma or cranial irradiation to treat cancer.
In the U.S. and Europe, Genotropin is also approved for the long-term
treatment of growth failure in children who are born small for
gestational age (SGA) and fail to achieve catch-up growth by age two
(U.S.) or four (Europe). Three percent of all babies are born SGA
each year. While the majority catch up to normal height, as many as
10% do not. In Europe and Japan, Genotropin is also approved for
patients with Turner syndrome, a genetic condition affecting one in
every 3,000 girls, and for children with chronic renal insufficiency.
In 2003, an upgrade to the Genotropin Pen (a growth-hormone injection
device) was introduced in the U.S. and Europe. The new Genotropin
Pen with Geno-Caps has been well received by endocrinologists,
nurses, and patients. The launch of this new device in Japan is
planned for the third quarter of 2004. New medical claims and
improved devices are currently under investigation.
Q25) What factors are driving Zyrtec's growth?
A25) Sales of Zyrtec, the #1 branded antihistamine in the U.S. in new
prescriptions, grew 2% to $299 million in the first quarter of 2004,
compared to the same period in 2003. Revenue and prescription gains
were achieved despite the 16% decline in year-to-date new
prescriptions in the antihistamine market due to the availability of
multiple over-the-counter (OTC) branded and private-label loratadine
(Claritin) products since December 2002.
Zyrtec's growth in this declining market can be attributed in part to
strong performance in a broad range of formulations-tablets, syrup,
and the 12-hour decongestant formulation-for both adult and pediatric
patients. The product remains the only prescription antihistamine
with a syrup formulation and, as of March 2004, became the only
prescription antihistamine with a chewable formulation as well. The
FDA approval of Zyrtec Chewable Tablets represents another
significant advance for pediatric patients who suffer from seasonal
and perennial allergic rhinitis and chronic idiopathic urticaria.
Zyrtec Chewable Tablets are approved for children as young as two
years old but will be aimed at the important pediatric market of
children six and older who have outgrown syrups and are not yet ready
to swallow tablets. Currently, a prescription bridge formulation
does not exist for children as young as two years old. Zyrtec
Chewable Tablets are grape-flavored and will be available in 5 mg and
10 mg strengths for dosing flexibility by physicians. The new
formulation expands upon Zyrtec's existing leadership within the
pediatric segment, which includes an indication to treat seasonal and
perennial allergic rhinitis and urticaria in children 2-11 years old
and an indication to treat perennial allergic rhinitis and chronic
idiopathic urticaria in infants as young as six months old.
Zyrtec-D 12 Hour is still the only prescription oral
antihistamine/decongestant combination medicine approved to treat
both perennial indoor and outdoor allergies as well as nasal
congestion. With 30% of all allergy sufferers also experiencing
nasal congestion, and with decongestant combinations accounting for
more than 15% of total U.S. antihistamine prescriptions, a
significant opportunity exists for Zyrtec-D.
Underlying Zyrtec's strong sales performance is the differentiation
of its efficacy relative to other products, prescription or OTC.
Pfizer and UCB Pharma, who discovered Zyrtec, have substantial
published data demonstrating the superior performance of Zyrtec
versus Claritin, including two two-day environmental-exposure-unit
studies in which Zyrtec provided twice the overall symptom relief of
Claritin. More recently, new data demonstrating Zyrtec's performance
versus Allegra in a two-day environmental-exposure unit were
published in the January/February 2004 issue of Allergy and Asthma
Proceedings. Zyrtec's efficacy is one of the primary reasons that
Zyrtec is now also the #1 prescribed antihistamine among allergists
and pediatricians in new prescriptions.
Q26) How is Spiriva performing?
A26) Spiriva, which was discovered and developed by Boehringer
Ingelheim (BI), is the first once-a-day inhaled bronchodilator
treatment for chronic obstructive pulmonary disease (COPD) and a
significant advance over other treatment options. Spiriva has been
successfully introduced by Pfizer and BI in more than 40 countries,
including Germany, the U.K., and Spain, where Pfizer records a
portion of Spiriva revenue as alliance revenue. Worldwide sales in
2003 were $284 million. In the U.S., Spiriva was approved by the FDA
in January 2004 and will be available in pharmacies by mid-year.
COPD is a chronic respiratory disorder that includes chronic
bronchitis and emphysema and is characterized by limited airflow
accompanied by symptoms such as dyspnea (shortness of breath), cough,
wheezing, and increased sputum production. In the U.S. alone, there
are approximately 17 million sufferers of COPD, although up to 50%
remain undiagnosed. Patients often suffer symptoms for many years
before being diagnosed and getting appropriate treatment. Long-term
smoking is the most frequent cause of COPD, accounting for 80%-90% of
all cases. COPD is the fifth-leading cause of death worldwide and
the fourth-leading cause of death in the U.S.
Spiriva's early success is driven by a strong efficacy profile,
including 24-hour relief of COPD symptoms with once-daily inhaled
dosing. The product is positioned as first-line maintenance
treatment in all severities of COPD. The inclusion of Spiriva as
first-line maintenance treatment in the most recent update of the
Global Initiative for Chronic Obstructive Lung Disease (GOLD)
guidelines further reinforces this positioning. GOLD guidelines are
the most-referenced COPD treatment/practice guidelines worldwide.
A major unmet need in COPD is the ability to slow or halt disease
progression. The UPLIFT (Understanding the Potential Long-term
Impact of Function with Tiotropium) trial, which began in 2003, aims
to determine the impact of Spiriva on disease progression by
assessing the rate of decline in lung function in 6,000 COPD patients
over four years. Enrollment of patients in this global study was
recently completed. Results are expected in 2008.
Another key treatment aim in COPD concerns shortness of breath, the
most common reason for which patients consult a physician. Trapped
air in the lungs is a major contributor to shortness of breath in
COPD patients. A recent trial demonstrated that four weeks of
treatment with Spiriva reduces the amount of air trapped in the
lungs. The author likened the improvement seen with Spiriva to
improvements seen after lung-volume-reduction surgery in COPD. The
article was published in the November 2003 issue of Chest.
Q27) How is Rebif performing?
A27) Rebif (interferon beta 1-a) has been shown to decrease the
frequency of clinical exacerbations and to delay the accumulation of
physical disability associated with relapsing forms of multiple
sclerosis (MS). The product was discovered and developed by Serono
and is co-promoted by Pfizer and Serono in the U.S. Rebif represents
another best-in-class Pfizer neurological product and complements
Pfizer's market leadership in the epilepsy, neuropathic-pain, and
Alzheimer's-disease categories.
Rebif was launched by Serono in March 2002 after Rebif made history
by breaking orphan-drug status of Avonex by showing superior
efficacy, the first time a drug ever broke orphan-drug status based
on efficacy. Pfizer began co-promoting the product in the U.S. in
October 2002 and records a portion of Rebif revenue as alliance
revenue. Rebif has been the fastest-growing MS drug in the U.S.
since its launch and has shown steady increases in prescription
share-almost 18% new-prescription market share and more than 14%
total-prescription share since launch. Rebif passed Betaseron in
new-prescription share during December 2003.
MS is a chronic inflammatory condition of the nervous system and is
the most common non-traumatic neurological disease in young adults,
affecting about 350,000 Americans. While symptoms of MS can vary,
the most common include blurred vision, numbness or tingling in the
limbs, and problems with strength and coordination. The relapsing
forms of the disease are the most common.
In late 2003, data from the PRISMS study were presented at the
European Committee for Treatment and Research in Multiple Sclerosis
meeting. These data support the long-term benefit on relapses,
disability, and magnetic-resonance-imaging (MRI) outcomes and
excellent tolerability of Rebif taken at the highest dose of 44
micrograms subcutaneously three times daily in the treatment of
relapsing-remitting forms of MS. These data provide the most
comprehensive long-term clinical and MRI assessment of a cohort of
patients with relapsing forms of MS on interferon therapy and
highlight the favorable risk/benefit ratio, both short-term and
long-term.
In the EVIDENCE trial, the incidence of flu-like adverse events in
the Avonex group (53% prior to switching to Rebif) was greater than
the flu-like adverse events in the Rebif group. When patients were
switched to Rebif, 91% did not experience new flu-like side effects.
The efficacy of Rebif versus Avonex was confirmed in a 50% reduction
in annualized relapse rate when patients were switched from Avonex to
Rebif.
Q28) How is Caduet (Lipitor/Norvasc dual therapy) performing?
A28) Caduet, dual therapy of Lipitor (atorvastatin) and Norvasc
(amlodipine), was approved by the FDA on January 30, 2004, and
achieved sales of $28 million in the first quarter of 2004. The
product is indicated in the U.S. for use in patients for whom
treatment with both amlodipine and atorvastatin is appropriate. The
strengths of Caduet that will be available in the U.S. include
5 mg Norvasc/10 mg Lipitor, 5 mg Norvasc/20 mg Lipitor,
5 mg Norvasc/40 mg Lipitor, 5 mg Norvasc/80 mg Lipitor,
10 mg Norvasc/10 mg Lipitor, 10 mg Norvasc/20 mg Lipitor,
10 mg Norvasc/40 mg Lipitor, and 10 mg Norvasc/80 mg Lipitor. A
supplemental filing was submitted to the FDA in March 2004 seeking
approval for 2.5 mg Norvasc/10 mg Lipitor, 2.5 mg Norvasc/20 mg
Lipitor, and 2.5 mg Norvasc/40 mg Lipitor. Pfizer will begin
discussing Caduet with doctors in the U.S. next month.
The first E.U. filing was submitted in France, the reference member
state for Caduet, in the first quarter of 2004. We will be pursuing
additional E.U. approvals for Caduet through the mutual recognition
process. Caduet was approved in Brazil in February 2004.
Recently presented clinical studies demonstrate the benefits of
Caduet in helping patients achieve their hypertension and
dyslipidemia goals. The Gemini study, presented at the American
College of Cardiology meeting in March 2004, demonstrated that the
atorvastatin/amlodipine single pill was effective in helping the
majority of patients achieve both their blood pressure and LDL-
cholesterol therapeutic goals, while being well tolerated. Results
from the AVALON trial, presented at the International Society of
Hypertension meeting in February 2004, also support the safety and
efficacy of atorvastatin and amlodipine when administered in
combination.
We believe this product will make a significant contribution to the
management of cardiovascular disease by treating two of the most
common risk factors simultaneously. Current estimates indicate that
9 million deaths and more than 75 million lost healthy years of life
annually may be attributed to suboptimal blood pressure or
cholesterol levels globally. Guidelines advocate that patients at
increased cardiovascular risk require early and aggressive management
of multiple risk factors. Between 35% and 50% of patients with high
blood pressure also suffer from high cholesterol, and vice versa.
This accounts for about 29 million patients in the U.S. alone, of
which 21 million have been diagnosed. Currently, only 10% of these
patients are treated for both conditions and 43% are treated for
neither. As evidenced by the early termination of the lipid-lowering
arm of the Anglo-Scandinavian Cardiac Outcomes (ASCOT) trial,
concomitant lowering of cholesterol and treatment of hypertension
have significant benefit in reducing the risk of coronary heart
disease.
Q29) What is the status of Lyrica (pregabalin)?
A29) Lyrica (pregabalin) received a positive opinion from the CPMP in the
E.U. in March 2004 for the indications of peripheral neuropathic pain
and add-on epilepsy. Final marketing authorization in the E.U. is
expected by June 2004. A regulatory submission for use of pregabalin
in treating diabetic peripheral neuropathy, post-herpetic neuralgia,
and generalized anxiety disorder (GAD) and as adjunctive therapy in
epilepsy was made in the U.S. in the fourth quarter of 2003.
Pregabalin acts by modulating voltage-gated calcium channels in the
central nervous system and thereby has the potential to treat a range
of neurological, pain, and psychiatric disorders. It is effective in
treating neuropathic pain, epilepsy, and GAD and will bring specific
improvement over existing treatments in each condition due to the
combination of efficacy, rapid onset of action, and ease of use. The
efficacy of pregabalin has been demonstrated in nine pivotal trials
in two types of neuropathic pain (post-herpetic neuralgia and
diabetic peripheral neuropathy), three pivotal studies in epilepsy,
five studies in treatment of acute GAD, and one long-term GAD
prevention study. The product's enhanced potency and linear
pharmacokinetic profile are expected to make dosing of pregabalin
simpler for physicians and patients.
In addition to the core indications included in the initial
applications, we have generated positive data in fibromyalgia.
Assuming a positive outcome of planned studies, we intend to submit a
filing for pregabalin for a fibromyalgia indication.
Q30) What is the status of indiplon?
A30) Indiplon is a unique non-benzodiazepine GABA-A-receptor agonist
selective for the alpha-1 subunit. Neurocrine Biosciences, Inc., and
Pfizer are co-developing and will co-market indiplon in the U.S. for
the treatment of transient and primary (chronic) insomnia. In
addition, Pfizer has exclusive marketing rights to indiplon outside
the U.S. and is currently investigating these opportunities. Both
immediate-release (IR) and modified-release (MR) formulations are
expected to be filed for approval. The IR formulation will help
patients who have difficulty with sleep initiation, sleep duration,
and middle-of-the-night awakenings. The MR formulation will address
sleep-initiation, sleep-duration, and sleep-maintenance difficulties.
Efficacy and safety studies completed to date indicate that the two
formulations are efficacious and well-tolerated in both adult and
elderly patients. Enrollment in all Phase 3 trials has been
completed and includes more than 6,000 patient exposures, making
indiplon the largest clinical program to date to be conducted for
sleep.
The prevalence of insomnia is quite high. In fact, 20-30% of people
around the world suffer from insomnia, and 9-12% of insomniacs (about
100 million people) suffer chronically. Despite this high prevalence
of insomnia, treatment rates remain very low. For example,
approximately 40% of the U.S. population (about 85 million people)
report one or more insomnia symptoms annually, while only about
5 million of these patients are being treated with a GABA-A receptor
agonist.
Q31) What is the status of Macugen?
A31) In December 2002, Pfizer and Eyetech Pharmaceuticals, Inc., announced
an agreement to jointly develop and commercialize Eyetech's Macugen.
This product is an aptamer that selectively binds to and neutralizes
vascular endothelial growth factor for potential treatment for age-
related macular degeneration (AMD) and diabetic macular edema (DME).
The leading cause of irreversible vision loss among Americans over
55, AMD occurs in both wet and dry form. The wet form accounts for
approximately 200,000 new cases annually, with a prevalence of
1.2 million cases in the U.S. alone. Wet AMD is characterized by the
growth of abnormal blood vessels into the area beneath the retina.
DME affects roughly 100,000 Americans with diabetes each year and is
the leading cause of blindness in adults under 55. The decreased
vision that characterizes DME results from fluid and lipids leaking
from retinal blood vessels. Eyetech's Phase 3 development program
for wet AMD involves nearly 1,200 patients at 117 investigational
sites, the largest clinical development program for this type of
product. Positive Phase 3 results were recently announced at the
American Academy of Ophthalmology.
Q32) What is the status of Daxas (roflumilast)?
A32) Daxas is a phosphodiesterase-4 (PDE-4) inhibitor, a class of
compounds that provides anti-inflammatory action targeted to the
lungs. Pfizer and our co-promotion partner Altana Pharma filed Daxas
in the E.U. in February 2004 for both asthma and chronic obstructive
pulmonary disease (COPD). We expect that Daxas will be the first
PDE-4 inhibitor to gain regulatory approval for both these
conditions.
Q33) What is the status of Exubera?
A33) Exubera is a novel treatment system for the non-invasive delivery of
insulin that is being developed for adult patients with type 1 and
type 2 diabetes through a collaboration between Pfizer and Aventis.
Pfizer is also collaborating with Nektar Therapeutics, developers of
the inhalation device and formulation process. The product combines
a novel dry-powder formulation of a recombinant human insulin with a
customized inhalation system. It is given before meals to reduce the
meal-related spikes in glucose levels. Exubera demonstrates glucose
lowering equivalent to insulin injections and, when used alone or in
combination with oral agents, it improves glycemic control as
compared to oral agents used alone. In March 2004, Pfizer and
Aventis announced that the regulatory filing of Exubera in the E.U.
had been accepted. Pfizer and Aventis have been working with the FDA
to determine the appropriate timing for filing Exubera in the U.S.
Diabetes is a growing health problem that currently affects about
150 million people worldwide and is projected to affect about
300 million people by 2025. A paper published in the
October 8, 2003, issue of the Journal of the American Medical
Association estimated that the lifetime probability of being
diagnosed with diabetes for Americans born in 2000 is almost 33% for
men and almost 39% for women. People with diabetes are at risk of
significant complications, including cardiovascular disease, end-
stage renal disease, blindness, and other complications that affect
quality of life and productivity and result in significant cost to
the worldwide health-care system. In the U.S. alone, the direct cost
of diabetes in 2002 was $132 billion in medical expenditures and lost
productivity. Improved glycemic control, as measured by hemoglobin
A1c levels below 7%, has been shown to reduce many of the
complications associated with diabetes. Despite this well-known
fact, more than half of the people with diabetes are not at optimal
glycemic control. Though insulin therapy alone or in combination
with oral hypoglycemic agents improves glycemic control, the
injection requirements of current insulin therapies are a huge
barrier to its use and the attainment of good glycemic control.
Q34) What is the status of varenicline?
A34) Varenicline is an innovative compound for smoking cessation that will
offer smokers a new opportunity to successfully quit. The quitting
process is very challenging, and smokers need help in their efforts.
Seven out of ten smokers are contemplating quitting or actively want
to quit. However, only 3-5% of patients can quit on their own.
Smokers attempting to quit experience nicotine cravings and can also
experience withdrawal feelings from the satisfaction or pleasure they
receive from smoking. Varenicline is designed to have a unique dual
effect on smokers to reduce cravings for cigarettes and, if they do
have a setback, to block the rewards from smoking. Varenicline is a
partial agonist that is specific to the alpha 4-beta 2 (nicotinic)
receptor. This is a different mode of action from available
treatments, such as nicotine derivatives or antidepressants.
In early Phase 2 trials, almost half of smokers treated with
varenicline stopped smoking. The compound represents an advance over
existing treatments in both efficacy and safety. Furthermore,
varenicline enhances Pfizer's leadership in providing innovative
products to treat cardiovascular risk factors and the complications
often associated with smoking, including COPD. Varenicline is
currently in Phase 3 development worldwide.
Q35) What is the status of the Lipitor/torcetrapib program?
A35) A combination product of Lipitor and torcetrapib, a cholesteryl ester
transfer protein (CETP) inhibitor, is now in global Phase 3 clinical
trials for dyslipidemia that include 12,000 patients and plans for
enrolling 13,000 patients in mortality and morbidity trials. The
objective of the Phase 3 program is to demonstrate improved efficacy
and comparable safety of the combination product versus Lipitor alone
in a wide range of patients with and without cardiovascular disease
and across a variety of lipid abnormalities. The program is
comprised of imaging trials that include intravascular ultrasound and
carotid ultrasound, as well as a full range of blood-lipid efficacy
studies. The program is designed to provide conclusive evidence of
the benefits of raising HDL cholesterol through torcetrapib, in
combination with the powerful LDL-cholesterol lowering and
established benefits of Lipitor, above and beyond the
well-demonstrated effects of Lipitor alone. Additional scientific
and mechanistic studies are also underway to broaden our
understanding of the effects of CETP inhibition on lipid metabolism
and atherosclerosis. These studies represent a major commitment by
Pfizer to significantly advance our understanding of lipids and
atherosclerosis to provide an important new tool for patients and
prescribers in preventing and treating the global burden of
cardiovascular disease.
The early Phase 2 study published in the April 8, 2004, issue of the
New England Journal of Medicine is the first to assess the effects of
CETP inhibition on lipid parameters in patients with low HDL
cholesterol, as well as the first to assess these effects in patients
who were also on the statin therapy Lipitor. The study found that
CETP inhibition with torcetrapib produced very substantial
HDL-cholesterol elevations, both when given alone and when taken with
Lipitor. It also produced LDL-cholesterol lowering alone and
additive to that provided by Lipitor. In addition, the combination
of torcetrapib with Lipitor produced a shift toward larger LDL and
HDL particles, which is likely to be beneficial. Torcetrapib was
safe and well-tolerated in this study. While the study provides
important initial information, Pfizer is now in the process of
conducting large-scale Phase 3 clinical trials in many types of
patients to provide comprehensive information on the efficacy and
safety of torcetrapib when given in combination with Lipitor.
Q36) What is the status of the in-vitro allergy and autoimmune diagnostic
testing business?
A36) On January 19, 2004, Pfizer announced that it had agreed to sell its
in-vitro allergy and autoimmune diagnostic testing business for
$575 million to Triton and PPM Ventures, Ltd. The transaction is
subject to conditions, including regulatory approvals, and is
expected to close in the second quarter of 2004.
Q37) How did Pfizer's Animal Health business perform?
A37) Sales of the Animal Health business increased 59% to $428 million in
the first quarter of 2004, compared to the same period in 2003.
These results reflect the addition of the Pharmacia product portfolio
and were driven by strong performances by the companion-animal
products Rimadyl, Revolution, and Clavamox/Synulox, and cattle
biologicals, and by the favorable impact of the weakening
U.S. dollar. These benefits were partially offset by the impact of
the bovine spongiform encephalopathy issue (mad cow disease) in
Canada and increased generic and branded competition. With the
acquisition of Pharmacia, Animal Health now is the world leader in
providing products to prevent and treat diseases in animals.
Q38) How did Pfizer's Consumer Healthcare business perform?
A38) Sales of the Consumer Healthcare business increased 39% to
$804 million in the first quarter of 2004, compared to the same
period in 2003. These results for Consumer Healthcare reflect the
addition of the Pharmacia product portfolio; sustained sales strength
for Listerine mouthwash, which benefited from the U.S. launch of a
Natural Citrus flavor; and the favorable impact of the weakening
U.S. dollar.
FINANCIAL MATTERS
Q39) What impact did foreign exchange have on revenues in the quarter?
A39) The weakening of the U.S. dollar relative to other currencies,
principally the euro, Canadian dollar, Japanese yen, Australian
dollar, and British pound, favorably impacted the revenues of legacy
Pfizer products in the first quarter of 2004 by $436 million and
favorably impacted consolidated revenue growth by five percentage
points. The revenues of legacy Pharmacia products do not affect the
impact from foreign exchange, given their treatment as incremental
volume.
Q40) What cost synergies are anticipated from the Pharmacia acquisition?
A40) Cost synergies resulting from the acquisition of Pharmacia totaled
more than $800 million in the first quarter of 2004 and are expected
to be about $3.4 billion in full-year 2004 and about $4 billion in
full-year 2005. Synergies stem from a broad range of sources,
including a streamlined organization, reduced operating expenses, and
procurement savings. Merger-related expenditures (income statement
and balance sheet) incurred during 2003-2005 to achieve these
synergies are expected to be about $5.5 billion, pre-tax.
Q41) What caused cost of goods sold to increase by 69% in the first
quarter of 2004?
A41) Cost of goods sold was impacted primarily by a change in product mix,
given the addition of legacy Pharmacia's product portfolio, which has
a higher product cost relative to legacy Pfizer's product portfolio.
A second factor underlying the rate of growth in cost of goods sold
was the impact of reflecting cost of goods sold activity for Celebrex
and Bextra after the April 16, 2003, acquisition close, compared to
reflecting alliance revenue for those products, which had no
associated cost of goods sold, for co-promotion of Celebrex and
Bextra prior to April 16, 2003. A third factor was the unfavorable
impact of foreign exchange.
Q42) What factors affected the 44% increase in selling, informational and
administrative expenses and 35% increase in R&D spending in the first
quarter of 2004?
A42) The rates of expense growth principally reflect incremental
expenditures associated with the consolidation of Pharmacia-related
activity starting with the April 16, 2003, close of the acquisition
and product support in light of new-product competition, partially
offset by cost synergies from Pharmacia restructuring activities.
Q43) What were the principal factors affecting other (income)/
deductions-net?
A43) ($ millions) First Quarter
(Income)/Deductions 2004 2003
Net Interest Income $0 ($34)
Co-Promotion Charges and Payments
for Intellectual Property Rights -- 255
Amortization of Finite-Lived Intangibles 807 4
Gains on the Sales of Product Lines -- (17)
Other (27) (25)
Other (Income)/Deductions-Net $780 $183
Other (income)/deductions-net for the first quarter of 2004 reflect a
significant increase in expenses, including $800 million in
amortization of identifiable intangibles associated with the
acquisition of Pharmacia. Consistent with purchase accounting,
intangible assets are reflected on Pfizer's balance sheet at fair
value. The income-statement impact reflects the amortization of
these assets over their estimated useful lives (e.g., until patent
expiration for a currently marketed product).
Q44) What is Pfizer's effective tax rate for 2004?
A44) Pfizer's effective tax rate in calculating adjusted income* for the
first quarter of 2004 is 23.0%. This rate is lower than the rate of
24.1% recorded in the first quarter of 2003 due to changes in product
mix and tax-planning initiatives.
Q45) What is the status of Pfizer's share-purchase program?
A45) Pfizer's financial strength and flexibility have allowed the company
to purchase its stock over the past several years. We believe that
purchase of our stock is an excellent investment opportunity. In
December 2003, Pfizer announced an authorization to purchase up to
$5 billion of additional stock, with such purchases to be completed
by the end of 2004. Under the new authorization, Pfizer purchased
about 1.1 million shares at a total cost of $37 million in the
fourth quarter of 2003 and about 24.8 million shares at a total cost
of about $912 million in the first quarter of 2004.
Q46) Why does Pfizer disclose adjusted income* and adjusted diluted EPS*?
A46) The company reports adjusted income* in order to portray the results
of its major operations-the discovery, development, manufacture,
marketing, and sale of market-leading prescription medicines for
humans and animals, as well as many of the world's best-known
over-the-counter products. We believe investors' understanding of
the company's performance is enhanced by disclosing adjusted income,*
defined as net income excluding discontinued operations, the
cumulative effect of changes in accounting principles, significant
impacts of purchase accounting for acquisitions, merger-related
costs, and certain significant items. Management itself analyzes the
company's performance on this basis.
We have excluded significant purchase-accounting impacts, such as
those related to our acquisitions of Pharmacia and Esperion. These
impacts can include charges for purchased in-process research and
development, the incremental charge to cost of sales from the sale of
acquired inventory that was written up to fair value, and the
incremental charges related to the amortization of finite-lived
intangible assets and depreciation of fixed assets for the increase
to fair value. We believe that excluding these non-cash charges
provides a better view of the company's economic performance.
The costs to integrate and restructure the operations of acquired
businesses, such as Pharmacia, can be significant. We have excluded
integration and restructuring costs from adjusted income* because
these costs are unique to the transactions and typically occur over
several years due to the global and highly regulated nature of our
business.
Pfizer excludes gains or losses on the sale of product lines of
discontinued businesses as well as the related results of operations.
While we review our businesses and product lines on an ongoing basis
for strategic fit with our operations, we do not build or run our
businesses with an intent to sell them and, therefore, we have
excluded such gains or losses on sales of businesses or product lines
from adjusted income.*
Certain significant items represent substantive unusual or
non-recurring items. For example, significant charges that relate to
the settlement of legal matters would be considered a certain
significant item.
In 2004, we no longer exclude certain expenses from adjusted income.*
For example, co-promotion charges and payments for intellectual-
property rights for unapproved products being developed by third
parties were previously excluded in the calculation of adjusted
income.* We have revised 2003 adjusted income* to conform to this
presentation.
A reconciliation between actual first-quarter 2004 net income as
reported under U.S. GAAP and adjusted income* is included in the
attached financial schedule titled "Reconciliation From Reported
Income and Earnings Per Share to Adjusted Income and Earnings Per
Share."
Q47) How will the Exposure Draft recently issued by the Financial
Accounting Standards Board (FASB) on expensing employee stock options
impact Pfizer?
A47) On March 31, 2004, the FASB issued an Exposure Draft, Share-Based
Payment - An Amendment of Statements No. 123 and 95. Adoption is
required for Pfizer on January 1, 2005. This Exposure Draft requires
that the fair value of an employee stock option be expensed pro rata
over the vesting term. The fair value is to be determined using an
option-pricing model, such as the Black-Scholes-Merton model or the
binomial model. We are currently evaluating the 2003 pro-forma
impact of the Exposure Draft. The Exposure Draft requires
longstanding public companies to consider the use of the "lattice"
model (for example, a binomial model), which requires the collection
and analysis of data we do not ordinarily collect. In preparing the
current footnote data, Pfizer employs the Black-Scholes-Merton model.
Therefore, upon review of the Exposure Draft and the related model
and assumptions, the net income and diluted EPS impacts may change
from those previously presented. The historical pro-forma impact to
Pfizer for the last three years of expensing stock options using the
Black-Scholes-Merton model, as disclosed in our 2003 Financial
Report, is as follows:
Net Income Diluted EPS
2003 $541 million $.08
2002 $518 million $.08
2001 $560 million $.08
During the first quarter of 2004, Pfizer issued its annual major
stock-option grant to employees. The pro-forma expense related to
this grant will be disclosed in our first-quarter 2004 Form 10-Q,
which will be filed with the SEC in May.
IMPROVING PATIENT ACCESS
Q48) What initiatives is Pfizer supporting to ensure that patients have
access to innovative medicines-both in the U.S. and worldwide?
A48) Pfizer currently donates more medicines to patients than any other
pharmaceutical company. We operate three significant access programs
in the U.S. -- the Pfizer Share Card, Connection to Care, and Sharing
the Care -- all designed to help low-income, uninsured patients gain
access to our medicines. In addition, Pfizer has taken a leadership
role in fighting HIV/AIDS. Pfizer is a member of the Global Business
Coalition on HIV/AIDS as well as the Global Fund to Fight AIDS.
Pfizer's CEO, Dr. Henry McKinnell, is a member of the U.S.
Presidential Advisory Council on HIV/AIDS.
a) Share Card: On January 15, 2002, we launched an innovative
prescription benefit program called the Pfizer for Living Share Card.
The program is designed to help a targeted group of patients access
tools to manage their health. The program includes three elements: a
membership card that enables patients to receive up to a 30-day
supply of a Pfizer medicine for $15, a help line to assist low-income
senior citizens in learning about other healthcare services and
benefits, and easy-to-read health information on 16 common medical
conditions. The Pfizer Share Card is available to Medicare enrollees
with annual gross incomes of less than $18,000 ($24,000 for couples)
who lack prescription-drug coverage or who are not eligible for
Medicaid or any other publicly funded prescription benefit programs.
In June 2003, we issued our first "Report to America" on the Pfizer
Share Card experience in designing and implementing a meaningful
prescription drug program for low-income Medicare beneficiaries. The
response to the Pfizer Share Card has been overwhelmingly positive.
98% of enrollees reported being satisfied with the program. The
report also showed that the Pfizer Share Card improves compliance
with medicine. To date, more than 531,000 enrollees have filled more
than 4.8 million Pfizer prescriptions.
b) Donation of Medicines: Pfizer's Connection to Care is a
comprehensive patient-assistance program providing free medicines to
uninsured, low-income patients who are not eligible for public-
assistance programs. For more than 30 years, Pfizer has worked
directly with physicians on a case-by-case basis to provide
medications to patients in need. The Connection to Care program
provides access to leading Pfizer prescription medicines, including
therapies for illnesses such as diabetes, hypertension, and
depression. Nearly 22 million patients in the U.S. may be eligible
for this program.
c) HIV/AIDS: For several years, Pfizer has been working with a number
of international organizations to battle HIV/AIDS in South Africa and
many other developing nations of the world. The Diflucan Partnership
Program was developed to offer Diflucan at no charge to HIV/AIDS
patients in the 50 least-developed countries where the disease is
most prevalent, as identified by the United Nations. Patient numbers
and clinical sites continue to increase, with more than two million
doses dispensed and more than 81,000 prescriptions processed. Over
11,000 health workers have been trained through our partnership with
the International Association for Physicians in AIDS Care. The
Ministry of Health of South Africa has cited the Diflucan Partnership
Program as a model for donation programs. Patients now receive
Diflucan through 780 medical facilities in 15 countries. In the
50 least-developed countries with an HIV prevalence of greater
than 1%, roughly 12 million people are reported to be infected with
HIV/AIDS. Although Diflucan is not a treatment for HIV/AIDS, it has
proven highly effective in treating two opportunistic infections,
cryptococcal meningitis and esophageal candidiasis, that afflict
large numbers of people with HIV/AIDS. Ground has been broken for
the Infectious Diseases Institute -- a Pfizer-funded, state-of-the-
art treatment and training facility for HIV/AIDS at Makerere
University in Kampala, Uganda. Scheduled for completion in 2004, the
new facility will serve as a training center for hundreds of
physicians working in HIV/AIDS care and prevention across Africa.
In July, Pfizer announced a new agreement with the National Alliance
of State and Territorial AIDS Directors to provide millions of
dollars worth of antiretroviral medicines free or at greatly reduced
prices to state programs serving low-income, uninsured, and
underinsured people living with HIV/AIDS. This is in addition to our
current patient-assistance programs that donate antiretroviral
(Viracept and Rescriptor) and anti-infective (Diflucan, Vfend, and
Zithromax) medicines for AIDS-related opportunistic infections to
low-income, uninsured Americans. Pfizer and its Agouron subsidiary
have also supported AIDS organizations in the U.S. that develop
educational tools and provide services and resources for patients and
their families.
d) Trachoma Initiative: Since its founding in 1998, the International
Trachoma Initiative (ITI), of which Pfizer is an active partner, has
made measurable and meaningful progress toward its goal of helping to
eliminate the world's leading cause of preventable blindness.
Through September 2003, ITI-supported programs in nine countries in
Africa and Asia delivered nearly 9.1 million Zithromax treatments to
patients with active infections and reached millions people with
health-education activities and more than 75,000 people with
sight-preserving surgery. Data from Morocco, Tanzania, and Vietnam
demonstrate that the program is having an overwhelming impact on this
terrible disease: the prevalence of severe, inflammatory trachoma has
been reduced in these countries by as much as 75%. During the fourth
quarter of 2003, the company renewed its commitment to the ITI with a
pledge to increase donations of Zithromax to 135 million doses over
the next five years, a 15-fold expansion. In addition to the nine
countries where the ITI has initiated trachoma programs, it plans to
launch programs in an additional 10 countries.
e) Other Therapies: Pfizer is making inroads against three of the
world's most-feared diseases: malaria, severe acute respiratory
syndrome (SARS), and pox viruses. We have a number of compounds that
have shown activity against these deadly diseases. Phase 2 clinical
trials against drug-resistant malaria using a combination of
Zithromax and chloroquine, an older, commonly used malaria treatment,
have shown very promising results. The combination has been shown to
be three times more effective than either product alone. At least
ten compounds have shown significant activity against the SARS virus
in laboratory tests and have been designated for further development.
In addition, we are sharing an experimental medicine with Harvard
Medical School because of potential utility in treating smallpox.
Although the commercial prospects for these medicines could be
limited, we intend to make them available to those in need in the
developing world using models developed for other Pfizer access
programs.
EVENTS FOR INVESTORS
Q49) When is Pfizer's conference call?
A49) Pfizer will be holding a conference call for analysts and investors
to discuss first-quarter 2004 business performance at 1:00 PM today.
To ensure universal access, the conference call will be
simultaneously broadcast over Pfizer's corporate website
(http://www.pfizer.com) and will be archived for seven days thereafter.
* "Adjusted income," "adjusted basic earnings per share (EPS)," and
"adjusted diluted EPS" are defined as reported net income, reported
basic EPS, and reported diluted EPS excluding discontinued operations,
the cumulative effect of a change in accounting principle, significant
impacts of purchase accounting for acquisitions, merger-related costs,
and certain significant items. A reconciliation to reported net income
and reported diluted EPS is provided within this document.
SOURCE Pfizer Inc
back to top
