glaxosmithkline vs pfizer ubi business & competitive intelligence presentation by : aksenov yuri...
TRANSCRIPT
GlaxoSmithKline vs Pfizer
UBI Business & Competitive IntelligenceUBI Business & Competitive Intelligence
Presentation by :Presentation by :
Aksenov YuriAksenov Yuri
Pascal AndreaPascal Andrea
Hendricx ChrisHendricx Chris
Brussels, December 15th 2006Brussels, December 15th 2006
Key Intelligence Topic
The future of pharma: The future of pharma:
Prevent Prevent oror Cure Cure ??
Analysis of key factors
Industry FiguresPlayers, market shares, evolution
Who are Pfizer and GSKPerformances, products, policies
Investors outlookIn depth analysis
Risks, Opportunities, Capabilities
Implications Recommendations
Strategies, positioning
ConclusionsSources
*both companies are at the top
Top 10 Pharmaceuticals companies in the world
Analysis of key factorsAnalysis of key factors
Top 10 markets evolution
Analysis of key factorsAnalysis of key factors
Market segmentation
Analysis of key factorsAnalysis of key factors
Company fact sheet
Corporate views and valuesCorporate views and values
Mission - to improve the quality of human life
Purpose – dedicated to better health and greater access to healthcare.
Research based pharmaceutical company
Shape a flexible R&D organisation that can respond to the challenges and the opportunities
Mission - become the world's most valued company to patients, customers, colleagues, investors, business partners.
Purpose – dedicated to better health and greater access to healthcare.
Growth through innovation
Research based pharmaceutical company
Company fact sheet
CustomerCustomer understanding and responding to understanding and responding to
their often changing needs.their often changing needs.
Personnel policyPersonnel policy GSK business employs over 100,000 GSK business employs over 100,000
people in 116 countries people in 116 countries
Over 15,000 people work in research Over 15,000 people work in research teams to discover new medicinesteams to discover new medicines
For employees, we create an For employees, we create an environment that allows them to do environment that allows them to do their best work by being themselvestheir best work by being themselves
StakeholdersStakeholders we must provide the right we must provide the right
information in a timely and information in a timely and effective way.effective way.
CustomerCustomer deeply committed to meeting the needs deeply committed to meeting the needs
of our customers, and we constantly of our customers, and we constantly focus on customer satisfactionfocus on customer satisfaction
Personnel policyPersonnel policy Pfizer employs 122,000 people in 60 Pfizer employs 122,000 people in 60
countries and has sales in more than countries and has sales in more than 150 countries.150 countries.
People are the cornerstone of Pfizer's People are the cornerstone of Pfizer's success, we value our diversity as a success, we value our diversity as a source of strength, and we are proud source of strength, and we are proud of Pfizer's history of treating people of Pfizer's history of treating people with respect and dignitywith respect and dignity
StakeholdersStakeholders We work with stakeholders to We work with stakeholders to
share knowledge, skills and goals share knowledge, skills and goals on how to prevent or manage on how to prevent or manage diseases, how to get medicine to diseases, how to get medicine to the people who need it, and how the people who need it, and how to promote good health.to promote good health.
Corporate views and valuesCorporate views and values
9147.74; 28%
5826.39; 17%
4702.38; 14%
2749.39; 8%
2705.95; 8%
2514.09; 7%
1838.96; 5%
2409.11; 7%
1882.4; 6%
Respiratory
Central nervous system
Anti-Virals
Anti-Bacterials
Metabolic
Vaccines
Oncology and emesis
Cardiovascular
Other
3538; 10%
5763; 15%
2633; 7%
1372; 4%
0; 0%
1669; 5%
2434; 7%
17958; 48%
1368; 4%
Respiratory
Central nervous system
Urology
Ophthalmology
Vaccines
Artrithis
Oncology and emesis
Cardiovascular
Other
Segment portfolio
Analysis of key factorsAnalysis of key factors
FINANCIAL PERFORMANCE GSKFINANCIAL PERFORMANCE GSK FINANCIAL PERFORMANCE PFIZERFINANCIAL PERFORMANCE PFIZER
groupgroup groupgroup
20032003 20042004 20052005 20032003 20042004 20052005
SALESSALES 2107021070 1998619986 2166021660 PoundsPounds SALESSALES 4473644736 5251652516 5129851298 USDUSD
EBITEBIT 59545954 57795779 67326732 PoundsPounds EBITEBIT 32463246 1400714007 1153411534 USDUSD
PATPAT 43084308 40224022 48164816 PoundsPounds PATPAT 39403940 1136111361 80858085 USDUSD
EPSEPS 0.720.72 0.680.68 0.820.82 PoundsPounds EPSEPS 0.220.22 1.511.51 1.11.1 USDUSD
R&DR&D 28652865 29042904 31363136 PoundsPounds R&DR&D 74877487 76847684 74427442 USDUSD
SALES GROWTHSALES GROWTH ---- -5-5 88 %%SALES SALES GROWTHGROWTH ---- 1717 -2-2 %%
R&D growthR&D growth ---- 1.31.3 88 %% R&D growthR&D growth ---- -2.1-2.1 -0.1-0.1 %%
R&D as % of salesR&D as % of sales 13.613.6 14.514.5 14.514.5 %%R&D as % of R&D as % of salessales 16.716.7 14.614.6 14.514.5 %%
EBIT growthEBIT growth ---- -3-3 1616 %% EBIT growthEBIT growth ---- --*--* -18-18 % %
31%
22%
Analysis of key factorsAnalysis of key factors
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Reseach 49% 89% 66% 79% 97% 61% 22% 8% 59% 68% 51% 16% 65%
PFE NVS RCH GSK LLY WYE JNJ BMS AVE MRK ABT SGP AZN
Source: Evaluate, Internal Analysis
Industry Supplements internal R&D with BD&L/M&A Activity
Analysis of key factorsAnalysis of key factors
Investor outlook
Analysis of key factorsAnalysis of key factors
Performance analysis, outlook
Analysis of key factorsAnalysis of key factors
• US continued to remain the largest market for pharmaceuticals in the worldUS continued to remain the largest market for pharmaceuticals in the world
•Pfizer, Sanofi-Aventis and GSK remained as the top three companies in terms of pharma Pfizer, Sanofi-Aventis and GSK remained as the top three companies in terms of pharma salessales • Three relatively smaller players namely Amgen, Abbott Labs and AstraZeneca, however, Three relatively smaller players namely Amgen, Abbott Labs and AstraZeneca, however, reported a double digit growth during 2005 with Amgen recording the highest growth reported a double digit growth during 2005 with Amgen recording the highest growth rate of 20.5 per cent. rate of 20.5 per cent.
• Pfizer's own sale in the US market fell by 11.8 per cent to 23.44 billion dollars in 2005 Pfizer's own sale in the US market fell by 11.8 per cent to 23.44 billion dollars in 2005 from 26.58 billion. from 26.58 billion.
•GSK’s US sales fell by 3.5 per cent during 2005. GSK’s US sales fell by 3.5 per cent during 2005.
•Eli Lilly stood out as the largest spender of R&D in 2005 with its spending of 20.7 per Eli Lilly stood out as the largest spender of R&D in 2005 with its spending of 20.7 per cent of gross turnover. Amgen, another relatively smaller player among the 15, has spent cent of gross turnover. Amgen, another relatively smaller player among the 15, has spent 18.6 per cent of its turnover on R&D. On the other hand, Pfizer's R&D expenditure 18.6 per cent of its turnover on R&D. On the other hand, Pfizer's R&D expenditure declined by 3.1 per cent to 7.44 billion dollars in 2005 from 7.68 billion.declined by 3.1 per cent to 7.44 billion dollars in 2005 from 7.68 billion.
•The pharma companies are taking this threat from the generic players quite seriously by The pharma companies are taking this threat from the generic players quite seriously by spending more on R&D. spending more on R&D.
Sales
M&S
R&D
G&A
Price
Units
EBIT
Sales Units
Price
M&S
R&D
G&A
EBIT
Price Pressures limitsPrice Pressures limitsIndustry ability to use Industry ability to use
price for growthprice for growth
Industry continues toIndustry continues toconsolidate in order toconsolidate in order to
cut infrastructure costs:cut infrastructure costs:-Reduce sales reps Reduce sales reps - Eliminate TA areasEliminate TA areas
in Researchin Research-Reduce duplication in Reduce duplication in
support functionssupport functions
Consolidations protectsConsolidations protectsEarnings growth & Earnings growth &
Capital valueCapital value
Price pressures drive consolidations to maintain earning levelsPrice pressures drive consolidations to maintain earning levels
Analysis of key factorsAnalysis of key factors
Overview
MethodologyMethodology RisksRisks OpportunitiesOpportunities ImplicationsImplications
Future Business Impact AssessmentFuture Business Impact Assessment
Exclusively developed to study the two companies in their Exclusively developed to study the two companies in their competitive environment, understanding the impact of future competitive environment, understanding the impact of future events for their future business strategy.events for their future business strategy.
Each risk and opportunity assessed in its magnitude, considering Each risk and opportunity assessed in its magnitude, considering two additional company dimensions:two additional company dimensions:
Risk Opportunity
Likelihood Likelihood
Preparedness Capabilities
Exposure Attractiveness
The PHA® Model
Future Business Impact AssessmentFuture Business Impact Assessment
Product Recall & Litigations Product Recall & Litigations Patent Expiration Patent Expiration BRIC Competition & GenericsBRIC Competition & Generics Free Access & Price Dumping Free Access & Price Dumping Public opinion pressurePublic opinion pressure
Events (risks)
Future Business Impact AssessmentFuture Business Impact Assessment
Glaxo
0
1
2
3
4
5
6
0 1 2 3 4 5 6
Risk Exposure
Pre
par
edn
ess Product Recall & Litigations
Patent Expiration
Free Access & Price Dumping
BRIC Competition & Generics
Public Opinion Pressure
“Safe Zone”
“Danger Zone”
Bubble size denotes event likelihood
Risk assessment
Future Business Impact AssessmentFuture Business Impact Assessment
Pfizer
0
1
2
3
4
5
6
0 1 2 3 4 5 6
Risk Exposure
Pre
par
edn
ess Product Recall & Litigations
Patent Expiration
Free Access & Price Dumping
BRIC Competition & Generics
Public Opinion Pressure
“Danger Zone”
“Safe Zone”
Bubble size denotes event likelihood
Risk assessment
Future Business Impact AssessmentFuture Business Impact Assessment
Cancer TreatmentCancer Treatment Pandemic & BioterrorismPandemic & Bioterrorism Healthcare & AnimalHealthcare & Animal Online Pharmacy Online Pharmacy Developing WorldDeveloping World
Markets (opportunities)
Future Business Impact AssessmentFuture Business Impact Assessment
Glaxo
0
1
2
3
4
5
6
0 1 2 3 4 5 6
Opportunity Attractiveness
Cap
abili
ties
Cancer Treatment
Healthcare & Animal
Pandemic & Bioterrorism
Online Pharmacy
Developing World
“Addressable”
“Missed”
Bubble size denotes market likelihood
Opportunity assessment
Future Business Impact AssessmentFuture Business Impact Assessment
Pfizer
0
1
2
3
4
5
6
0 1 2 3 4 5 6
Opportunity Attractiveness
Cap
abilit
ies Cancer Treatment
Healthcare & Animal
Pandemic & Bioterrorism
Online Pharmacy
Developing World
“Addressable”
“Missed”
Bubble size denotes market likelihood
Opportunity assessment
Future Business Impact AssessmentFuture Business Impact Assessment
Exposed to animal rights Exposed to animal rights activists and public opinion activists and public opinion pressure.pressure.
Betting on pandemic flu Betting on pandemic flu vaccine as next large pharma vaccine as next large pharma opportunity.opportunity.
Implications
Reliant on blockbusters and Reliant on blockbusters and over-the-counter over-the-counter medicaments.medicaments.
Heavily exposed to product Heavily exposed to product recall and BRIC competition recall and BRIC competition on generics.on generics.
Future Business Impact AssessmentFuture Business Impact Assessment
In the near future, risks for pharma seem higher than the In the near future, risks for pharma seem higher than the opportunities.opportunities.
The best equiped to face the new challenges will win.The best equiped to face the new challenges will win.
Summary
Future Business Impact AssessmentFuture Business Impact Assessment
PfizerPfizer : 1 : 1stst Recommendation Recommendation
RecommendationsRecommendations
Pfizer Pfizer
Big companyBig company
Loose piecesLoose pieces
No course of actionNo course of action
Align the businessAlign the business
Get smaller andGet smaller and
align the businessalign the business
Be clear :Be clear :
VisionVision
MissionMission
StrategyStrategy
Be manageableBe manageable
PfizerPfizer : 2 : 2ndnd recommendation recommendation
RecommendationsRecommendations
Co-marketing with generic drug manufacturersCo-marketing with generic drug manufacturers
PfizerPfizer : 3 : 3rdrd recommendation recommendation
RecommendationsRecommendations
Go on-line e-businessGo on-line e-business
Pharmacy
Wholesaler
PfizerPfizer : 4 : 4thth recommendation recommendation
RecommendationsRecommendations
Promotion : Brand or efficacy of productPromotion : Brand or efficacy of product
Pfizer : 5Pfizer : 5thth recommendation recommendation
RecommendationsRecommendations
Research & Development : Better focusResearch & Development : Better focus
Improve OTC portfolioImprove OTC portfolio Avoid entering areas where excellence is reachedAvoid entering areas where excellence is reached
Glaxosmithkline : 1Glaxosmithkline : 1stst Recommendation Recommendation
RecommendationsRecommendations
Research & Development : CONTINUEResearch & Development : CONTINUE
Glaxosmithkline : 2Glaxosmithkline : 2ndnd recommendation recommendation
RecommendationsRecommendations
VaccinationVaccination
Continu effortsContinu efforts
Glaxosmithkline : 3Glaxosmithkline : 3rdrd recommendation recommendation
RecommendationsRecommendations
Go for preventionGo for prevention
Less sofisticated Less sofisticated drugs needed.drugs needed.
Competition ?Competition ?
Glaxosmithkline : 4Glaxosmithkline : 4thth recommendation recommendation
RecommendationsRecommendations
Focus on neglected diseasesFocus on neglected diseases
HIV/AIDSHIV/AIDS
TuberculosisTuberculosis
MalariaMalaria
Obesitas – CholesterolObesitas – Cholesterol
etc …etc …
Enhance participation in Enhance participation in community programmescommunity programmes
Animal testingAnimal testing
Human testingHuman testing
Image buildingImage building
PRPR
Glaxosmithkline : 5Glaxosmithkline : 5thth recommendation recommendation
RecommendationsRecommendations
Acquisition OTCAcquisition OTC
Candidate good prospect for product diversificationCandidate good prospect for product diversification
General for the pharmaceutical marketGeneral for the pharmaceutical market
OpportunitiesOpportunities
Entering new markets : China, East-Europe, Latin-America, VietnamEntering new markets : China, East-Europe, Latin-America, Vietnam
Alliance with BioTech companies : Technology, innovationAlliance with BioTech companies : Technology, innovation
Distinguishing marketsDistinguishing markets
ConclusionConclusion
Future key players:Future key players:
Generics manufacturersGenerics manufacturersFuture Key Players:Future Key Players:
Pharma innovatorsPharma innovators
““Cure” marketCure” market ““Prevent” marketPrevent” market
Distinguishing marketsDistinguishing markets
ConclusionConclusion
pastpast presentpresent futurefuture
CureCure
R&
D
R&
D
Focu
sFo
cus
PreventPrevent
Sale
s Sale
s Fo
cus
Focu
s
QuestionsQuestions
Secondary sourcesSecondary sources
Annual report Pfizer 2005Annual report Pfizer 2005
Annual report GSK 2006Annual report GSK 2006
IMS Health Global IMS Health Global PhPhaarrma forecama forecasst Feb. 2006t Feb. 2006
NYSE, sept.2006NYSE, sept.2006
MIDAS, new market segmentation Feature Dec. 2005MIDAS, new market segmentation Feature Dec. 2005
Neil Mahoney - Neil Mahoney - Global Business Management ConceptsGlobal Business Management Concepts,, presentationpresentation
PharmaBiz, "Struggle of the giants", May. 2006 PharmaBiz, "Struggle of the giants", May. 2006
Wood McKenzieWood McKenzie
www.imshealth.com
www.pharmaexec.com
www.chartsbank.com
BCG e-Health ReportsBCG e-Health Reports
Wall Street JournalWall Street Journal