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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?


To: BigKNY3 who wrote (4944)8/14/1998 10:07:00 AM
From: Anthony Wong  Read Replies (2) | Respond to of 9523
 
Drug makers push brand loyalty THE NAMING GAME Once content to
focus mainly on research, pharmaceutical companies are starting to think more
about marketing to help fend off competition from generic products.

The Globe & Mail
Friday, August 14, 1998
By Chad Skelton

No one is talking about how sildenafil citrate is making them feel like a teen again.

There are no media reports saying it's the most prescribed drug ever, or that it's giving
hope to millions of impotent men. But perhaps there should be.

After all, sildenafil citrate is the generic, pharmaceutical name for Pfizer Inc.'s
blockbuster drug Viagra.

Few people know this, just as hardly anyone ever talks about the antidepressant
fluoxetine hydrochloride (Prozac) or the new anti-arthritis drug celecoxib cox-2
inhibitor (Celebra). It's testament to the growing power of drug branding.

Once content to focus mainly on research, pharmaceutical companies increasingly think
of themselves as marketers -- as devoted to selling prescription drugs as they are to
discovering them. One of the most important new developments is the scale of research
and creative power that goes into naming a new drug product.

On that front, perhaps no company has been thrust into the spotlight more than Wood
Worldwide Inc. of New York.

The branding company's list of product names includes Finesse shampoo, the Nissan
Altima and Splenda sweetener. And one other well-known name: Viagra.

It was a claim to fame Wood trumpeted at first. In late May, it sent out a press release
offering to speak to reporters about the "untold branding story" behind Viagra. But
New York-based Pfizer didn't want the untold story told and it forbade the company
from discussing the drug.

But a Pfizer spokesperson let slip one secret about the name: It has no relation to the
product it was named for. It was, rather, a "leftover" brand name Wood developed for
a Pfizer urology drug that never came to market.

Though tight-lipped about Viagra, several employees at Wood spoke in detail about
what it takes to name a drug and to launch it effectively. The company, which also
named Celebra, is pushing its pharmaceutical clients to give more thought to drug
branding.

"Ten years ago, there was little thought to it," says David Jaeger, managing director of
Wood's New York office. "[Pharmaceutical companies] seemed to have no problem
committing $400-million to developing a compound. But they had an awful hard time
committing to developing a brand.

"It didn't seem important -- it's five or six letters, figure it out on the back of an
envelope."

One reason so little energy was put into names was that drugs aren't sold like other
goods. They are hardly an impulse buy.

If a drug did what it was supposed to do -- make people happy, give them erections,
reduce arthritis inflammation -- a company could reasonably assume patients would
buy it if they could afford it.

So pharmaceutical firms have traditionally focused on patent legislation -- trying to
extend the period of time only they can make the compound they discovered. After the
patent has expired, generic drug makers can come out with the exact same compound
for as little as half the price.

The focus on branding, therefore, has less to do with the immediate future and a lot to
do with what will happen when a drug goes off patent and the market is flooded with
cheaper generics.

Pharmaceutical companies figure if they do a good marketing job, patients will develop
such an emotional attachment to the brand (be it Prozac, Celebra or Viagra) that they
won't be willing to switch to generics.

"What we're trying to do in this business, like in any business, is get a brand that has a
lot of loyalty," Mr. Jaeger explains.

A doctor may encourage a patient to take the cheaper generic version of a popular
drug, he says. "[But] let him try to give you a generic for Valium if that's what you take,
or Zoloft [an antidepressant], if that's what's saved your life, and you're not going to be
so happy about doing that."

The branding of pharmaceuticals is, in a sense, the marketing of fear. "We know we're
well when we take this brand. We don't know what will happen without the brand,"
Mr. Jaeger says.

While McDonald's or Haagen-Dazs hold on to market share by convincing customers
another product doesn't taste as good, brand loyalty to a drug is based on fears of
relapse, depression, impotence or death.

Jim Keon, president of the Canadian Drug Manufacturers Association, an association
of generic drug makers, says he's not comfortable with promoting brand loyalty to
keep people taking certain drugs. "Medicine is not like Coca-Cola or Levi jeans. You
don't buy medicine because you want to . . .

"You buy prescription medicine because you're ill. You've been to a doctor. He or she
has told you that to get better you need to take the following medicine. It's a very
different market."

Mr. Keon says most public drug insurance programs in Canada demand that
pharmacists switch a brand-name drug for a generic if it's available, making people in
this country less vulnerable to pharmaceutical branding. But in the United States -- with
its largely private health care system -- the stakes are much higher.

Creating a powerful drug brand requires shrewd marketing, Mr. Jaeger says. One key
goal is to position the name in a way that makes it difficult for consumers to even
consider that a generic could be the same product.

"One of the most important things to do is to use your brand as early as possible," he
explains.

Names such as Viagra, Embrel and Celebra -- all coined by Wood -- were used in the
drug companies' first discussions with the media, so the initial news reports mentioned
the brand, not the name of the compound.

Mr. Jaeger points with pride to drugs his company has named. "No one even knows
the generic names."

WHAT'S IN A NAME

Pharmaceutical companies don't have complete freedom to name their drugs. The U.S.
Food and Drug Administration has a labelling committee that approves drug names,
just as the FDA approves the drugs themselves.

It disallows any name that sounds or looks like a drug already on the market or one
that makes explicit claims. For example, several years ago, Pharmacia & Upjohn Inc.
was forced to relabel its minoxidil hair-loss remedy as Rogaine after the FDA initially
rejected Regain.

John Fidelino, creative director at branding company Wood Worldwide Inc., says the
best names "suggest something the patient can aspire to." He points to Wood's naming
of two new anti-arthritic drugs -- Celebra and Embrel. "Celebra begins to express . . .
the idea of an expansive life, a way to celebrate life."

David Jaeger, managing director of Wood's New York offices, compares Celebra and
Embrel with a similar pain medication -- Monsanto Co.'s Arthrotec.

Arthrotec, and other names for arthritic drugs, miss the boat, he argues. "They don't
understand these drugs are all quality-of-life drugs. None of them are going to cure
you, but they're going to make the quality of your life much better. . . .

"I mean, who the hell would want to take Arthrotec? It sounds like you're sick."

Drug companies also want names to be unique. No business wants its brand confused
with that of a competitor, and when it comes to pharmaceuticals, mistaking a product
for something else can be deadly.

AB Astra's antacid drug Losec was renamed Prilosec in 1990, after several patients in
Britain and the United States died when they were mistakenly given the diuretic Lasix.
Messy doctors' handwriting was believed to be the culprit in many cases.

Wood conducts tests on its names to avoid similar problems. It assembles roughly 25
physicians who write out the name of the proposed drug. The papers are then given to
25 pharmacists who -- without knowing the name of the drug -- try to guess what it is.

If other drugs sound or look like the proposed name (almost inevitable given the
number of products), Wood checks to see if similar-sounding drugs share any other
similarities.



To: BigKNY3 who wrote (4944)8/15/1998 1:00:00 PM
From: BigKNY3  Read Replies (1) | Respond to of 9523
 
PFE Analyst Roll-Call: 8/15/98

Listed below are the PFE ratings, 12 month target prices and recent comments from 18 analysts updated as of 8/15/98 and sorted by PFE rating.

Analysts' report should be read with caution...particularly analysts with connections to a company's investment banking. As described in the excellent book "Guerrilla Investing" by Peter Siris: "The analysts are the intelligence-gathering arm of the brokerage houses. It is easy to read their glowing reports and rush out to buy the stocks. But before you do, remember that the analysts are overwhelmingly bullish, that their bullishness is augmented by the fees from investment banking, and that brokerage house ratings are of extremely limited value."

Have PFun!

BigKNY3
______________________________________________________
PFE Analyst Roll Call: 8/15/98

Strong Buy/Outperform

Broker: Gruntal & Co.
Analyst: David F. Saks
PFE Rating: Strong Buy
Target Price: $148
Comments:
7/24/98 PFE@111 5/8: " PFE made it clear that they are a powerhouse marketer and going to get stronger".

7/10/98 PFE@115 5/8: "Viagra sales will approach $1 billion this year and possibly $8 billion at peak (2005)....PFE just blew us out of the water. And we haven't seen the impact yet of the international market where Viagra won't be sold for several months."


Broker: Schroder & Co.
Analyst: Jami Rubin
PFE Rating: Outperform
Target Price: $130
Comments:
7/10/98 PFE@115 5/8: "PFE's high P/E multiple, makes it vulnerable to any disappointments, but weakness creates a great long-term buy opportunity."


Broker: Morgan Stanley Dean Witter
Analyst: Paul A. Brooke
PFE Rating: Outperform
Target Price: $122
7/16/98 PFE@117 "PFE remains a stock investors want to own, based on rising expectations for Viagra and Lipitor, the expected 1999 launch of Celebra, and the fact that the company's sustainable growth rate should remain in the 20% area."

Broker: EVEREN Securities
Analyst: Jeffrey Kraws
PFE Rating: Outperform
Target Price: $127 (Intermediate) $135 (Long-term)
7/27/98 PFE@113 1/2 "Given the strength of PFE's current product line, as well as prospects for a very solid pipeline going forward, we believe PFE could achieve EPS $$2.27 this year, which is ahead of street consensus of $2.12."

Buy/Attractive

Broker: Salomon Smith Barney
Analyst: Christina Heuer
PFE Rating: Buy
Target Price: $155
Comments:
7/24/98 PFE@113 1/2 "PFE has been volatile in 2Q98 as Viagra Rxs decreased and Zeldox failed to win FDA approval. We view this as a buying opportunity."

7/03/98 PFE @107 1/2: "Zeldox is not dead yet. But the drug is in limbo until PFE discloses the results of its pow-wow with FDA. Best case: delayed 6-18 months while PFE generates additional data or re-analyzes current data. Worst case: Zeldox is never approved by FDA."

Broker: Gerard Klauer Mattison
Analyst: Cynthia A. Beach
PFE Rating: Buy
Target Price: $140
Comments:
7/10/98 PFE@115 5/8: "PFE's robust pipeline of new products is expected to provide earnings growth well into the next decade, but much of PFE's current price is based on anticipated significant sales of Viagra."

Broker: Warburg Dillon Read Inc
Analyst: Jerome R. Brimeyer
Date: 7/10/98
PFE Rating: Buy
Target Price: $135

Broker: NationsBanc Montgomery Securities
Analyst: Leonard S. Yaffe MD
PFE Rating: Buy
Target Price: $132
Comments:
8/10/98:PFE@103 1/2: "We continue to believe that Cox-2's will eclipse the potential of other recent blockbusters including Celebra. If Celebra was filed on schedule, we note that priority review would represent upside potential of about $0.05 to our PFE model."

7/14/98 PFE@118 11/16: "With its aggressive near-term investment, impressive line of differentiated products, minimal patent exposure and strong pipeline, PFE has among the best fundamentals in the pharmaceutical industry and tremendous earnings potential."

7/10/98 PFE@ 115 5/8: "The drug of the year is Viagra, but PFE has in hand what should be next year's drug of the year (Celebra). (Earnings) were driven by Viagra, which beat our estimates by a couple of million $."

Broker: J.P. Morgan Securities
Analyst: Carl J. Seiden
Date: 7/10/98
PFE Rating: Buy
Target Price: $131
Comments:
8/10/98 PFE@103 1/2: "Viagra new Rxs have still not reached their trough. However, Refills remain strong and were up 2%...The absolute number of Viagra Rxs are still very strong.. Assuming new Rxs will stabilize at present levels and grow modestly from there and assuming refills grow to 150% (83% at present) of new Rxs, then US Viagra sales would aggregate $0.7B in 1998- still somewhat above our Viagra estimates."

7/10/98 PFE@ 115 5/8: "PFE is best in industry".

Broker: Merrill Lynch
Analyst: Steven C. Tighe
PFE Rating: Buy: Near-term and long-term
Target Price: Unknown
Comments:
7/10/98 PFE@ 115 5/8: "Viagra sales were better than expected....It is likely Celebra will receive expedited review with a launch as early as 1/99.....The company's expectation is Viagra will be introduced in 50 countries by the end of the year."

Broker: A.G. Edwards
Analyst: Kenneth R. Nover
PFE Rating: Buy
Target Price: Unknown
Comments:
7/13/98: PFE@118: "We currently recommend investors to overweight drug stocks...As the strongest large-market capitalization drug stock, we recommend PFE."

Broker: PaineWebber Inc.
Analyst: Jeffrey Chaffkin
Date: 7/10/98
PFE Rating: Attractive
Target Price: $130


Hold/Neutral/Market Perform

Broker: BT/ Alex. Brown
Analyst: Barbara Ryan
PFE Rating: Market Perform
Target Price: Unknown
Comments:
7/24/98 PFE@113 1/2: "We are maintaining our rating due to the current high valuation and our uncertainty over Viagra Rx trends long-term. Our 1998 EPS estimate is $2.10.

7/10/98 PFE@ 115 5/8: "To date, we have admittedly been wrong and missed the stock, but do believe that these next couple weeks/months of Viagra Rxs will be the key focus of investors to see the sustainability of the product. If Viagra continues to perform and exceed expectations, we expect estimates to continue to rise, however, if there is a continued slowdown, investors beware."

Broker: Furman Selz
Analyst: James Flynn
PFE Rating: Hold
Target Price: Unknown
Comments:
7/10/98 PFE@ 115 5/8: "We do not recommend over-weighted PFE positions at this time given the prevalence of highly enthusiastic earnings expectations, management's more cautionary guidance, the present growth curve of Viagra and the company's already generous valuation...Third quarter Viagra sales will come in less than $100 million."

7/07/98 PFE@109 7/16: "Consider our present peak Viagra estimate of $2 billion (2002) to be potentially high".

Broker: Brown Brothers Harriman
Analyst: Michael Krensavage
Date: 7/10/98
PFE Rating: Neutral
Target Price: Unknown
Comments:
7/10/98 PFE@ 115 5/8: "The question is how much reuse will (Viagra) get.The bottom line is that it's a highly effective drug."

Broker: HKS & Co
Analyst: Hemandt Shah
PFE Rating: Neutral
Target Price: Unknown
Comments:
7/10/98 PFE@ 115 5/8: "PFE is doing well across the board..(Viagra ) had just a phenomenal performance. Certainly, Viagra will continue to grow. The real question is by how much."

Broker: Lehman Brothers
Analyst: Butler
PFE Rating: Neutral
Target Price: Unknown
Comments:
7/17/98 PFE@ 117 13/16: "With several blockbusters and relatively few patent expirations, PFE has become a premier pharmaceutical company, however at 46 times 1999E EPS, we feel PFE is fully valued."

Ratings Unknown

Broker: Global Securities
Analyst: Marcel Brichon
Date: 7/07/98
PFE Rating: Unknown
Target Price: Unknown
Comments:
7/07/98 PFE@109 7/16: "PFE's a great hold for all its other products..Once the hesitancy (over Viagra) comes out of the marketplace, I expect strong growth."

Broker: Bear Stearns
Analyst: Shevick
PFE Rating: Unknown
Target Price: Unknown
Comments:
7/21/98 PFE@117 15/16: "Viagra is expected to receive EU marketing authorization in 9/98."

7/10/98 PFE@ 115 5/8: "Viagra Rxs appear to be stabilizing and two year acceleration of Viagra's approval/launch in Japan, we consider to be a significant positive."