pfizer pharmaceuticals. history, ceo, background ceo: ian read develops and produces medicines &...
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PFIZ
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HISTORY, CEO, BACKGROUND
CEO: Ian Read
Develops and produces medicines & vaccines Lipitor Lyrica Celebrex Viagra
Founded in NYC by Charles Pfizer & Charles Erhart as a chemical business which morphed into pharmaceuticals in the 1950’s with the discovery of Terramycin.
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BASIC RELATIONSHIP TO CIGNA
Cigna customers purchase their products for their medical needs through Pharmacies/Home Delivery
Cigna negotiated rates for drug prices Catamaran – future
Cigna receives rebates from Pfizer one we “sell” their products to our customers
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PFIZER PRODUCT OPERATING SEGMENTS
• Primary Care• Medication prescribed by PCP• (Lipitor, Viagra, Celebrex)
• Specialist Care• Medication Prescribed by Specialty Physicians (Oncologists, etc.)• Therapeutic Drugs (For specific diseases like multiple sclerosis or ALS)• Consumer Healthcare• Over the counter • Advil• Robotussin• Preparation H
• Other non-prescription products (chapstick)• Animal Health • Vaccination, tick collars
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DISTRIBUTION CHANNELS
• Pfizer distributes its pharmaceutical products through pharmacies, hospitals and clinics.
• Over The Counter medications and products are sold in drug stores and other retail locations.
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CUSTOMER DEMOGRAPHICS
• If you have access to their medication then you probably are a Pfizer customer.
• They make everything from vaccines to arthritis medication to chapstick, nearly impossible to avoid
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GEOGRAPHIC LOCATIONS
• Headquartered in New York City
• R&D across numerous states + the UK
• Consumers are worldwide
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CORE STRATEGIES, VALUE PROPOSITION, RELATIONSHIP TO 5 DRIVERS• Core Strategies: • Innovate and Lead – Improve Pfizer’s ability to innovate in biomedical
R&D and develop a new generation of high-value, highly differentiated medicines and vaccines.
• Maximize Value - Invest and allocate our resources in way that create the greatest long term returns for our shareholders.
Earn Greater Respect – Earn society’s respect by generating breakthrough therapies, improving access, expanding the dialogue on health care and acting as a responsible corporate citizen. Own our Culture – Build and sustain a culture where colleagues view themselves as owners, generating new ideas, dealing with problems in a straightforward way, investing in open and candid conversations and working as teammates on challenges and opportunities.
• Value Proposition: To be the Premier Innovative Biopharmaceutical Company
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RELATIONSHIP TO 5 DRIVERS:
• Cash: Sales rose 9% in emerging markets in 2012. Acquiring companies in major growth markets also brought the company 2.4 billion in Q1FY13
• Profit: Obamacare will result in increased drug purchases. Expansion of the Medical program will also add revenue
• Assets: Pfizer will repurchase $10 Billion worth of stock funded by the sale of Pfizers Nutrition Business to Nestle S.A. for 11.8 Billion.
• Growth: The Affordable Care Act (Obamacare) should result in roughly $115 billion in extra revenue over the next 10 years.
• People: In addition to the Affordable Care Act (Obamacare), it’s expected to have a major impact on the drug industry. In 2014, it’s expected to provide pharmaceutical companies an additional 30 million customers after it becomes mandatory for employers to provide employees with healthcare.
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FINANCIAL STATEMENT ANALYSIS
Component Pfizer Cigna SignificanceCash & Cash Equivalents
2.18 B 2.8 B Very similar cash position
Cash Provided by Operations
17.8 B 719 M Cigna without the Reinsurance business sale, would have been around 3 B
Total Revenue 51.6 B 32.4 BIncome before Taxes 15.7 B 2.1 BOperating Profit Margin 30.50% 6.72% Significant difference possibly due to patents, drug
markup, etc.Shareholders' Net Income
22 B 1.55 B
Net Profit Margin 42.70% 4.55%EPS (Diluted) $3.19 $5.18 Return on Equity 28.80% 13.97
%Revenue Growth -5.60% 11.20
%Net Income Growth 51% -
9.10%Pfizer has realized more income from investing/financing activities than from their operations, whereas Cigna has performed better operationally
Earnings per Share Growth
64.40% -7.67%
Pfizer had a large contribution from an acquisition for which they have discontinued operations
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PFIZER’S ROLE IN THE HEALTHCARE ENVIRONMENT• Provide access to safe, effective and affordable medicines
• Partner with health service companies (Cigna)
• Partner with Pharmacy Benefit Managers (Catamaran)
• Direct influence on the expense of operation
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SUMMARY
• Ensure Pfizer is creating the safest – most effective products possible for our customers
• Stay knowledgeable of pharmaceutical costs so we can negotiate fair prices
• Provide Cigna customers with new alternative pharmaceutical drugs for chronic conditions, improving the customers health and well being . This will reduce the number of claims, calls, and improve NPS