Less than 48 hours after announcing plans to cut its US salesforce by 20%, marking a cull of over 2,000 jobs, drug giant Pfizer said yesterday that it is lifting its earnings guidance for the full year, largely on the back of positive sales trends and aggressive cost savings.
Shares in the group had risen nearly 2% by early afternoon trading in New York, as investors revelled in the news that adjusted earnings per share for 2006 are now expected to come in at at least $2.05, a $0.05 rise over the previous target.
In addition, the group also said a number of candidates in its late stage pipeline would be ripe in the next few years, fuelling near- and long-term growth, and helping it overcome any competition from generic rivals.
"Our fundamental objective is to create a broad and very diversified stream of new products that will, year after year, drive Pfizer's growth and enhance the value of our shareholders' investment," explained Jeffrey Kindler, Pfizer's Chief Executive. "We are developing new products for a broad cross-section of therapeutic and specialty areas with strong growth potential. The depth of our mid-stage pipeline gives us confidence that we can generate a steady stream of new products that will address significant unmet medical needs."
Late stage portfolio to triple
"We now expect that our Phase III portfolio will grow dramatically and may even triple from 2006 to 2009,” added John LaMattina, President of Pfizer Global Research and Development “This will give us a steady stream of new and important products from our internal development pipeline. We are targeting four a year - starting in 2011."
The group laid out its three-tiered business development strategy at an analyst meeting yesterday, explaining that the first stage will focus on complementing its current pharmaceutical portfolio by “both addressing gaps in our existing portfolio as well as quickly seizing potential opportunistic investments.” In the near term, the company plans to focus on areas such as diabetes, neurology, infectious disease and oncology, which combined have a global market potential “significantly in excess of $200 billion.”
Secondly, the firm intends to go shopping for synergistic products and services to help it magnify the value of its pipeline, with potential opportunities including drug delivery systems such as the Exubera inhaler or “evidence-based medicine tools and diagnostics.” And the final component of the strategy is centred on investment in novel healthcare products, such as the vaccine delivery technology it bought from PowderMed in October.
According to the company, this strategy should contribute two new externally-sourced products a year starting in 2010, which are expected to drive growth significantly, thereby helping it remain one of the world’s leading pharmaceutical groups.