Pfizer Inc has failed to improve its top line as well as bottom line during the full year ended December 2008 on account of lower sales of its cardiovascular and metabolic products. Despite cost cutting measures, the net earnings declined by 0.5 per cent to US $8,104 million from $8,144 million in the year 2007. The worldwide revenues also declined marginally by 0.3 per cent to $48,296 million from $48,418 million.
As part of cost-reduction initiative, Pfizer intends to reduce its workforce by approximately 10 per cent. Reductions will span sales, manufacturing, research and development, and administrative organizations. The company also intends to reduce the number of manufacturing sites to 41 from 46 today, as well as reduce its facilities square footage by approximately 15 per cent.
The pharmaceutical sales declined to $44,174 million from $44,424 million as its US pharmaceutical sales declined by 11.7 per cent to $20,435 million from $23,153 million in the last year. The lower sales impacted by the loss of exclusivity of Norvasc, Zyrtec and Camptosar, which collectively decreased revenues by $2.6 billion. The international sales of pharmaceutical products increased by 10.3 per cent to $27,861 million from $25,265 million in 2007. Its US reported revenues accounted for 42 per cent of the total compared with 48 per cent in the year-ago period.
The overall sales of Lipitor declined by 2.2 per cent to $12,401 million from $12,675 million and that of Norvasc went down sharply by 25 per cent to $2,244 million from $3,001 million. The sales of Lipitor and Norvasc in US declined by 12 per cent and 87.4 per cent to $6,332 million and $76 million respectively. The sales of Lyrica, for the treatment in Central Nervous System disorders, improved by 40.7 per cent to $2,573 million from $1,829 million in the last year. The sales of Celebrex also moved up by 9 per cent to Re $2,489 million from $2,290 million. Sales of oncology products declined by 3.4 per cent to $2,551 million as the sales of Camptosar declined in US by over 85 per cent to $82 million.
The company successfully reduced its cost of sales by 28 per cent to $8,112 million during 2008 from $11,239 million in the previous year. Further it reduced its R&D expenditure to $7,945 million from $8,089 million.
Jeff Kindler, chairman and CEO, said, "We are pleased with our performance in 2008. We achieved our financial objectives, including exceeding our cost-reduction target, despite the tumultuous global economy. Notwithstanding an extremely competitive and increasingly challenging environment in 2008, we made significant progress by: establishing customer-focused business units; reprioritizing and refocusing our research on the greatest opportunities for scientific, medical and commercial success; and increasing our Phase 3 portfolio by approximately 60 per cent, from 16 to 26 programmes at year-end. These successes have provided the ideal platform from which we're advancing Pfizer forward."
Frank D'Amelio, chief financial officer, stated, "In 2008, we exceeded our cost-reduction target by decreasing our adjusted total costs by $2.8 billion in comparison to 2006 on a constant currency basis. In addition, we are implementing a new cost-reduction initiative that will drive a lower, more variable cost structure to achieve anticipated incremental savings of approximately $3 billion by the end of 2011 compared with our 2008 adjusted total costs level."
"Further, as part of the proposed acquisition of Wyeth, we expect to achieve synergies of approximately $4 billion by the end of 2012, which will be in addition to the savings from our previous cost-reduction initiatives," continued D'Amelio.
"In 2009, Pfizer expects to generate revenues of $44.0 to $46.0 billion, and adjusted diluted EPS of $1.85 to $1.95, which includes most of the anticipated $1 billion investment intended to create new sources of revenue. This also assumes a reduction in revenues of approximately $3.0 billion compared with 2008 directly related to the strengthening of the U.S. dollar," stated D'Amelio.