Pfizer-Wyeth deal gives added heft to Pfizer’s pharmaceutical division
The deal gives a great deal of added heft to Pfizer’s pharmaceutical division — the combined Pfizer/Wyeth entity represents $70 billion in annual sales. Pfizer was already the leading pharmaceutical supplier at retail pharmacy for the 12 months ending November according to IMS Health. And that’s thanks in large part to the company’s Lipitor franchise. While Lipitor is the No. 1 drug sold in retail pharmacy today, the first patent protecting the statin expires as soon as 2010, though most analysts project a generic Lipitor will be introduced by November 2011.
Lipitor isn’t the only blockbuster Pfizer drug facing generic competition in the near future. Pfizer’s erectile dysfunction franchise pioneer Viagra is slated to lose patent protection in 2012.
Together, Pfizer and Wyeth will field 17 different blockbuster drugs on the market this year with no one drug accounting for more than 10 percent of overall revenues.
And while Wyeth has its own share of blockbusters facing generic competition, merging with Wyeth gains Pfizer entry into two promising arenas — biomedicine and vaccines.
The deal also underscores the value of a consumer health division. While OTC division sales are typically dwarfed by their Rx-only sister divisions, OTC affords a company significant free cash flow during economically challenged periods.