In short, we are a company whose mission is to apply science and our global resources to improve health and well-being at every stage of life.
I believe the people, capabilities and assets that we have brought together make Pfizer uniquely valuable to people around the world. We now have more ways than ever to help the tens of millions of people who live with disease today—as well as the tens of millions of people we can help by preventing illnesses and disease in the future.
For shareholders, this means enormous opportunities. And, it also means we will no longer be overly dependent on one or two in-line blockbuster drugs or potential blockbusters. In fact, no Pfizer product is expected to account for more than 10 percent of our annual revenue once Lipitor loses U.S. exclusivity.
Clearly, we are still pursuing blockbusters—medicines that can individually prevent, treat or cure dreaded illnesses that afflict tens of millions of people. We are bringing together the best scientific minds—inside and outside our company—to attack some of the most feared diseases of our time. In many therapeutic areas, we believe our late-stage pipeline provides potential new medicines and vaccines that will address enormous unmet medical needs—like Alzheimer's disease, chronic pain and rheumatoid arthritis.
At the same time, however, we will continue to respond to unmet medical needs across our business in numerous other ways. We will drive profitable growth from multiple additional sources—from new indications for existing products; from medicines to treat diseases that afflict relatively smaller, but still large, segments of the population; from opportunities across emerging markets; from our established products portfolio; and from our diversified businesses.
Together with continuing improvements in productivity, and smart, disciplined capital allocation, we expect our strategy to produce, over time, modest top-line growth, stronger and consistent bottom-line growth, and continued strong dividend payments—all of which, in turn, should enhance shareholder value.
2009: Challenges and Progress
As I noted earlier, our acquisition of Wyeth, which we closed late in 2009, significantly advanced each of the strategies in Our Path Forward.
Thanks to the extraordinary work of thousands of individuals at Pfizer and Wyeth, the transaction was closed on time. The integration has so far met or exceeded our expectations in terms of speed, in achievement of milestones, and, most importantly from my point of view, in advancing a culture through which we gain the best thinking and talent from both legacy companies and move forward together on behalf of our shareholders and other stakeholders.
Our performance in 2009 clearly demonstrates the ability of our colleagues to remain focused and to deliver solid operational performance, while also working to ensure a successful integration. From the moment the acquisition received required legal approvals, our colleagues moved quickly. The day after the acquisition closed, we announced the identity of all country leaders and the location of all headquarters sites. Within six days, U.S. Primary Care field force members knew their status. Within 30 days, we announced an integrated plan for R&D site reductions. And within 90 days, we completed a scientifically complex prioritization and announced Pfizer's new combined R&D pipeline.
The rapid pace of the Wyeth integration reflects the most fundamental principle at Pfizer: We meet our commitments to our stakeholders, starting with our commitments to you, the owners of the company. Since this management team has been fully in place, we have consistently met or exceeded the adjusted financial guidance1 that we have provided—despite an extremely dynamic operating and policy environment. We did so again in 2009, and our financial guidance for 2010 reflects our plan to continue delivering results and meeting our commitments.
The Spirit of Small...The Power of Scale
Delivering commitments requires clear accountability. But big companies often produce bureaucracy the way gardens produce weeds, and bureaucracy is the enemy of accountability. And, of course, it can suffocate the ability of leaders closest to their customers to act quickly in a highly competitive and fast-moving global marketplace.
At the same time, there are significant aspects of our business where size and scale are not only a competitive advantage but, in some ways, essential. High-throughput screening; large, global clinical trials; extensive field forces in certain markets; economies of scale in manufacturing—these are just a few examples of areas in which Pfizer can, when we do it right, use our size and scale to our advantage.
So, at Pfizer, we follow a principle that I call "the spirit of small and the power of scale." Whether competing in different geographies or different businesses, our general managers have clear accountability for business units that are now small enough to focus on meeting the very different needs of the unique customers they serve. Similarly, the Chief Scientific Officers of our research units lead small groups of scientists focused on specific therapeutic or technology areas. In each of these cases, accountability and authority are clear. At the same time they are backed by Pfizer's global scale and resources—providing a level of efficiency and other advantages that they could not achieve on their own.
In the last year, this approach produced results that are hard to imagine happening at Pfizer, even two or three years ago.
- We joined forces with GlaxoSmithKline to create ViiV Healthcare, a separate company that brings together the industry's best assets in combating HIV/AIDS.
- By empowering our Established Products business to move quickly, we beat out competitors to collaborate with Protalix in developing an orphan drug to treat Gaucher's disease. The Protalix partnership represents Pfizer's first entry in the biosimilar drug market.
- We entered into major licensing agreements with three India-based pharmaceutical companies—Aurobindo Pharma Ltd., Claris Lifesciences Ltd. and Strides Arcolab—that add new non-Pfizer products to our portfolio, enhancing the availability of medicines to underserved people around the world.
- We formed a partnership with Bausch & Lomb, a leading global supplier of eye care treatments, in which both companies will promote each other's prescription ophthalmic products, allowing each of us to extend our level of support to eye care professionals.
- We created the industry's first Regenerative Medicine Unit to harness the potential of stem cells. This scientific team is less than 2 years old and it already plans to start clinical studies this year—an achievement that would not be possible without combining our willingness to empower them to move at their own speed with our experience and scale in regulatory strategy, policy and pharmaceutical sciences.
- We joined forces with Eli Lilly and Merck to establish the Asian Cancer Research Group, an independent, not-for-profit company. Its goal is to improve the knowledge of cancers prevalent in Asia and to accelerate drug discovery efforts by sharing the resulting data with the scientific community.
- We joined with Private Access, an innovator in privacy-enhanced search technology, to increase recruitment into clinical trials by creating the first online community to address privacy concerns, by giving participants full control over the amount and type of information they share with researchers.
- We developed CUE, an integrated, multichannel, closed loop marketing system designed to provide customized information to physicians and health care providers based on their unique needs. Pfizer's scale allowed us to make this important investment across business units and ensure a consistent experience for U.S. physicians and other health care providers, while tailoring content to ensure those important customers have the information they need to make important prescribing decisions.
1 See note 3 on 2010 Guidance.
