It is about how Pfizer changed its strategies after covid and revenue increase

1. Cracking the Code of Pfizer's Success: A Comprehensive Analysis

2. Framework
• Introduction
• Pre Covid Standing of Pfizer
• Impact of Covid on Pfizer
• Financial Benchmarking
• ESG & Litigation
• Financial Sustainability
• Conclusion

3. HISTORY & BRAND ESTABLISHMENT
• Founded in 1849 by cousins Charles Pfizer and Charles Erhart in Brooklyn, New York.
• Initially operated as a fine chemicals business, producing citric acid and other chemical
compounds.
• Expanded into antibiotics production during the late 19th and early 20th centuries.
• Shift towards pharmaceuticals began with the development of antibiotics, setting the stage for
Pfizer's future success in the pharmaceutical industry
Cornerstones of Pfizer's Market Domination Strategy
• Pfizer's move from chemicals to pharmaceuticals sparked a consumer-focused strategy.
• Through innovative research, Pfizer established itself as a dependable provider of healthcare
solutions.
• It's early branding established trust through quality and innovation in healthcare.
• The pharmaceutical leader emphasized patients by creating health-oriented products within a
consumer-centered strategy.
• Expanding worldwide, Pfizer broadened its impact and enhanced its brand's global recognition.

4. Pre Covid standing of Pfizer

7. Revenue
Underlying reason for the
decline was competition from
generic drugs that entered the
market when key patents expired
Pfizer’s revenues were also
impacted by the decision to spin
off some of its business
segments, such as its animal
health division in early 2010’s
and its Upjohn business in 2020.

9. Patent Cliff
• Around 19 billion loss of revenue in 2010-2020 decade due to expiry of
major patents with Lipitor contributing substantially.
• In response to patent expirations, increased R&D investment was
undertaken to fortify the patents pipeline, resulting in a temporary
reduction in revenues.

10. 5-Year Clinical Trial Success Rate
Improvement
Clinical Trial
Success Rates
(NMEs only)
Phase 1
(3-year
avg.)
Phase 2
(5-year
avg.)
Phase
3/Approval
(5-year avg.)
End-to-
End
Success
Rate
Pfizer (2015) 48% 15% 70% 5%
Industry (2015) 63% 31% 51% 10%

11. Pfizer's Operational
Efficiency
• Efficiency Ratios are ratios that determine how effectively a
company is using its resources.
• Three ratios helped us in making a concrete deduction about
its operations.
• Asset turnover ratio measures a company's efficiency in
generating revenue from its assets.
• Inventory turnover reflects how often a company sells and
replaces its inventory within a specific time period
• Accounts payable days represent the average number of days
a company takes to pay its suppliers or creditors

13. ESG - Exploring ESG: Driving
Sustainability and Impact
• A comprehensive framework used to evaluate a
company's impact and practices in key areas beyond just
financial performance.
• In today's dynamic business landscape, stakeholders are
increasingly concerned about the broader consequences
of corporate activities
• Pfizer understands that its success goes hand in hand
with creating positive societal impacts, ensuring a
healthy planet, and practicing responsible.

14. PRE-COVID Trends

15. COVID-19 OPERATIONS

19. Vaccine Manufacturing Process
Step 1:
Developing
DNA Plasmids
Step 2:
Frozen, Packaged,
& Transported
Step 3:
DNA Transformed
into mRNA
Step 4:
mRNA
Utilized
Step 5:
Distribution to
Different
Locations

20. Distinctive Features Amidst the Pandemic
Step 1:
Developing
DNA Plasmids
Step 2:
Frozen, Packaged,
& Transported
Step 3:
DNA Transformed
into mRNA
Step 4:
mRNA
Utilized
Step 5:
Distribution to
Different
Locations
 Swift Partnership Response: Just six days after WHO's pandemic declaration on March 17, 2020, Pfizer
partnered with BioNTech, combining mRNA expertise to rapidly develop a potential COVID-19 vaccine.
 Collaboration with other firms: Pfizer's collaborative approach enabled manufacturing 3 billion doses by
2021-end and ongoing operations, expanding facilities, collaborating with CMOs, and employing tech
transfer for secure vaccine production
 Simultaneous Supply Chain Development: Pfizer's manufacturing division innovated, investing $700
million to establish parallel supply chains, ensuring redundancy and meeting escalating vaccine demand.
 Internal Raw Material Manufacturing: Pfizer's intricate vaccine, composed of 280 components,
prompted innovative solutions including in-house manufacturing of key lipid components and a unique
cold chain packaging approach.

21. Collaboration with Other Firms

22. BENCHMARKING

23. Ratio Analysis
Profitability Ratios
Gross Margin
Net Margin
Operating Margin
ROE
Efficiency Ratios
Asset Turnover
Accounts Receivable Turnover
Inventory Turnover
Accounts Payable Days

25. Analysis
Pfizer has consistently stayed above the industry median for
Gross Margin, except in 2021 and 2022. This is due to:
• Increased competition - Pfizer also faced increased
competition from generic drugs and biosimilars in 2021 and
2022. This led to lower prices for some of its products,
• The COVID-19 pandemic - The company spent heavily on
research and development for its COVID-19 vaccine and
treatments, which led to higher costs.
• The pandemic disrupted the global supply chain, which made
it more difficult for Pfizer to get the materials it needed to
produce its products.

27. Analysis
2018
The net margins, operating margin, and ROE
were affected in 2018 due to the loss of
exclusivity of products such as Viagra, Lyrica,
Zyvox, Relpax, etc.
2021 and 2022
The margins all increased again in 2021 and
2022, due to the staggering increase in revenue
during the COVID 19 pandemic.

29. Analysis
The asset turnover also rose, showing
improved revenue generation per asset
dollar. This increase is connected to
Pfizer's work on the COVID-19 vaccine,
which boosted revenue.
There was an increase in their accounts
receivable turnover in 2021. This could
be due to the fact that large wholesalers
made up around 80% of Pfizer's
Accounts Receivables in 2021.
There was an increase in the inventory
turnover. This is connected to the
increase in sales of Comirnaty.
There was a drop in Accounts Payable
Days in 2021 – the company showed
signs of improving financial health due
to the COVID-19 vaccine and so it is
possible that this has reduced the
Accounts Payable Days.

30. Pfizer from ESG perspective

31. ESG in pharmaceutical industry:
 Clinical trials -
- Following ethical and legal concerns
- Diverse & Inclusive trial group
 Climate Change -
- Reduction in carbon emissions, focusing on better transportation
- Energy efficient production, usage of renewable energy sources
 Medication Access-
- Working on drug pricing (eliminating gouging)
- Efficient supply chain to provide access to underdeveloped nations
 Waste disposal
 Workplace parity

32. COVID Trends

33. Focus on Pfizer's Lawsuits
benchmarking J&J's lawsuits

34. Lawsuits Trends -
Pfizer
• Note: A stands for approved, D for dismissed, P for pending
Medine Protronix Prempro Chantix
Depo-
Testosterene
Effexor Zoloft Eliquis Lipitor Trovan
Issues/reasons
kidney
problems
Breast
cancer
Psychological
disorders
strokes, blood
clots
birth
defects
Birth
defects
severe
bleeding
diabetes in
women
unapproved
clinical trials
in
children and
liver damage
Approved/dismissed A A A D D A D P A
Amount paid (in
million $)
55 1000 288 N/A N/A N/A N/A N/A 42
Estimated # of
lawsuits
>3500 >10000 >2700 >10000 N/A >700 N/A >1000 N/A

35. J&J' lawsuits
• Note: A stands for approved, D for dismissed, P for
pending
Medicine
DePuy ASR
XL
Pinnacle
Acetabular
cup
Xarelto
Johnson's talcum
powder
Rispersdal Pelvic mesh
Pinnacle hip
implant
Mortin products Transvaginal mesh
Issues/reasons
Dislocation,
metal poisoning
etc.
loosening,
dislocation
Bleeding
Multiple reasons Multiple reasons Multiple
issues
Multiple reasons
Misrepresentation Multiple reasons
Accept/dismissed P P A A A A A A A
Amount paid (in
million $)
N/A N/A 27.8 1200 6.8 50 940 33 20
Estimated # of
lawsuits
>1400 >4000 >25000 >40000 >7000 4000 >9800 N/A N/A

36. Major comparisons drawn

37. Comparison continued:

38. Comparison continued....
J&J HAS MORE
LAWSUITS THAN
PFIZER – PRIMARILY
FROM ITS TALCUM
POWDER
THE RATE CASE
DISMISSALS ARE HIGHER
FOR PFIZER
PFIZER AND J&J HAD TO
PAY HUGE PENALTIES,
BUT J&J HAS PAID
HIGHER AMOUNT
POST COVID VACCINE
LAWSUITS ON PATENTS
HAVE RISEN FOR PFIZER
MODERNA FILED A
LAWSUIT ON THE USAGE
OF MRNA TECHNOLOGY
SCRIPPS RESEARCH
INSTITUTE HAS FILED A
LAWSUIT AGAINST ITS
COMIRNATY VACCINE.

39. Post Covid - Financial Sustainability

40. Biggest Challenges
Patent "Cliff" Impact:
Pfizer is confronted with a patent "cliff"
resulting in the loss of market exclusivity for key
drugs.
Blockbuster drugs like Eliquis and Ibrance are
affected, contributing to a projected $18 billion
revenue loss by 2030.
Pfizer's Challenges Post-COVID:
•Pfizer is facing difficulties in convincing Wall
Street about managing a transition.
The transition is expected to reduce annual
revenues by almost a third to approximately $70
billion in 2023 ($100 billion in 2022).

43. Clinical Trials Success
• Historical Clinical Success Rate:
- In 2015, Pfizer's success rate for assets from
first-in-human studies to approval was just 5%,
compared to an industry average of 10%.
• Improved Success Rate:
- Pfizer reported a success rate of 21%
through 2020, surpassing the industry average
of 11%.

48. Global Expansion & Breakdowns Analysis
• Comirnaty & Paxlovid Success: Revenue growth in 2022 driven by global demand for
COVID-19 vaccine and antiviral treatment. (2019 Annual Report)
• Emerging Markets Focus: Targeting fast-growing emerging markets with urbanization and
middle-class expansion.
• Market Expansion: Supplying medicines and vaccines to 185+ countries, increasing revenue
in multiple international markets.
• Supply Chain Synergies: Allows for a lower inventory turnover ratio. (2020 Annual Report)

52. Post Covid - Financial Sustainability
• Pipeline Diversity: Pfizer's pipeline for the next two years comprises a mix of internally developed candidates and
externally acquired prospects, including potential blockbusters targeting various medical areas.
• Potential Blockbusters: Notable candidates, such as treatments for respiratory disease RSV, migraine, and blood
cancer, hold the potential to generate substantial annual sales, contributing to revenue growth.
• Short-Term Reliance: In the short term, Pfizer relies on the launch of 19 new drugs, projected to yield
approximately $20 billion in annual revenues by 2030, helping offset the impact of patent cliff challenges. (2023
Annual Report)
• M&A Strategy: Pfizer has been actively pursuing acquisitions, investing nearly $30 billion in the past two years. These
strategic moves are projected to contribute around $10 billion in annual revenues by 2030.
• Future Growth: Pfizer's acquisition choices are applauded by most analysts, though some suggest a more accelerated
approach to M&A to meet the goal of generating an additional $15 billion in annual revenues by 2030.

53. Conclusion
• Weak market positioning
• Low clinical trials success rate
Pre Covid Challenges
• Emerged as global leader
• Improved synergies and global partnerships
• Strong clinical trials results and R&D expansion
Covid
• Promising pipeline
• Benefits from Covid expansion
Post Covid Positioning

54. Dr. Liping Ma
Sumi Lee
Jose Alvarez
And our beloved audience

55. References
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56. References
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Retrieved from https://www.genengnews.com/news/pfizer-acquires-bamboo-therapeutics-in-a-645m-deal/
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