Interview with Bill Steere.
BigKNY3
BUSINESS
On personal finance.
POPULAR DRUGS GIVE PFIZER HEALTH FOR YEARS TO COME
Andrew Leckey.
06/07/98
Chicago Tribune
CHICAGOLAND FINAL; C
Page 3
(Copyright 1998)
Pfizer Inc.--more than just sex.
With longtime pharmaceutical industry leader Merck & Co. slipping a bit due to expiring patents on some popular drugs, Pfizer is easing into the position of premier U.S. drug company. Pfizer has little exposure to drugs losing patent protection and an unsurpassed drug pipeline that's growing faster than that of rivals, causing Wall Street analysts to predict it will outpace Merck's earnings the next five years.
And then, of course, there's Viagra. The dramatic introduction of this pill to treat male impotence has boosted Pfizer's name recognition among the public in unaided tests from a lowly 8 percent to nearly 34 percent. From the cover of Time magazine to an endorsement from former presidential candidate Bob Dole, Viagra is what's happening these days.
William Steere Jr., Pfizer's trim and dapper 61-year-old chairman and chief executive officer, hasn't seen anything like it in his time at the company since joining it as a medical service representative in 1959. Steere says he hears Jay Leno's Viagra jokes on "The Tonight Show" before he goes to bed, then hears more Viagra jokes on Don Imus' syndicated morning radio program.
While Viagra has had record sales, Pfizer doesn't want to become known as a one-drug company. Its leading pharmaceutical products, after all, are popular Norvasc for cardiovascular disease, anti-depressant Zoloft, antibiotic Zithromax, anti-diabetic agent Glucotrol XL and the cholesterol-lowering drug Lipitor, which is co-marketed with Warner Lambert.
The company will spend $2.2 billion on research and development this year and has 6,000 researchers on three continents.
"Our sales representatives are virtually threatened with death if they don't mention our other products before they talk about Viagra," said Steere, his attire featuring a starched white monogrammed shirt and yellow and blue suspenders with patterned red tie. "Not only does Viagra have a 'halo' effect that gets physicians to listen to us talk about other drugs, but many of the patients in need of Viagra have additional ailments that require additional treatment."
Regarding the six deaths of Viagra users, the company is emphasizing to emergency rooms and physicians the fact that Viagra's label warns against combining the drug with heart disease medicines containing nitrate-type chemicals such as nitroglycerin.
The Food and Drug Administration and Pfizer maintain the drug is safe. "Our worst fear, which is the fear of anyone introducing a new drug, is that there will be some rare but serious side effect," Steere said. "We haven't seen that, the only concern being the low chance of having a heart attack during sex."
Merrill Lynch, who rates Pfizer stock a short- and long-term buy, surveyed fifty urologists who predicted a 95 percent compounded annual growth rate in the number of patients treated with Viagra over the next three years.
In an interview for my coming book "Global Investing 1999: The 50 Best Companies in the World to Invest In," to be released in January by Warner Books, Steere criticized the overwhelming global move to merge businesses, talked about worldwide marketing and expressed his displeasure over drug piracy.
"Our company is becoming dominant because we didn't get sidetracked by mergers, which helped us to stay focused, and because other people had bad luck because of expiring patents," said Steere, whose office facing out over New York's East River has a large wall sculpture of the world's continents.
As a lucrative world business, pharmaceuticals are experiencing pervasive thefts of patents, Steere noted. Companies in India have been sending out bulk supplies of a Viagra-type drug, Argentina has a reputation as a big pirate due to its lack of patent laws and Egypt is also involved in unauthorized manufacture and sales, he said.
"In the 1990s, a company must have focus, because there's never been a time when the competition has been more fierce," declared Steere, who is looking to sell the company's medical devices business because it's not a perfect fit with its pharmaceuticals, consumer products and veterinary medicines. "You need a critical mass in this business, but after that, size isn't that important."
In most really big mergers, he believes, too much time is wasted with everyone worrying about their jobs, their offices, and their futures. That keeps everyone from their more important duties. "If we had a failed pipeline and low growth, we'd look for a partner, but now is certainly not the time for us to do so," Steere concluded, dismissing the thought that his company is anywhere but in the catbird's seat.
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Andrew Leckey, a financial anchor on the CNBC cable television network, answers reader questions each Monday in Your Money |
