Pfizer, Inc. (PFE)

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Pfizer Inc. (PFE)

Q4 2009 Earnings Call

February 3, 2010 10:00 am ET


Chuck Triano - SVP, IR

Jeff Kindler - Chairman & CEO

Frank D'Amelio - CFO & SVP

Martin Mackay - SVP & President Pfizer Global Research and Development

Mikael Dolsten - Head BioTherapeutics Research


Catherine Arnold - Credit Suisse

David Risinger - Morgan Stanley

Jami Rubin - Goldman Sachs

Eric Lo - Bank of America

Tim Anderson - Sanford Bernstein

Seamus Fernandez - Leerink Swann

Chris Schott - JPMorgan

Marc Goodman - UBS

Tony Butler - Barclays Capital

Steve Scala - Cowen



Mr. Chuck Triano, Senior Vice President, Investor Relations, you may begin your call.

Chuck Triano

Thank you, operator. And good morning everyone. Thank you for joining us today to review Pfizer's fourth quarter and full year 2009 performance, 2010 financial guidance and 2012 longer range targets. I am here with Jeff Kindler, Frank D'Amelio, Ian Read, Martin Mackay, Mikael Dolsten, Amy Schulman, among others. The financial charts that will be presented on this call can be viewed on our home page at in the Investor Presentations tab by clicking on the link, Quarterly Corporate Performance Fourth Quarter of 2009.

Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements, and actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are discussed in Pfizer's 2008 Annual Report on Form 10-K, and in our reports on Form 10-Q and Form 8-K.

Also, the discussions during this conference call will include certain financial measures that were not prepared in accordance with generally accepted accounting principles. Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in Pfizer's current report on Form 8-K dated February 3rd, 2010. These reports are also available at our website, in the Investors SEC Filing section.

With that, I will now turn the call over to Jeff Kindler. Jeff?

Jeff Kindler

Thanks, Chuck, and good morning everyone and thanks for joining us. A bedrock principle of this team is that we meet our commitments to our stakeholders, starting with the owners of the company. Since this management team has been fully in place we have met or exceeded every element of the adjusted financial guidance we have provided, despite an extremely dynamic operating and policy environment.

The 2009 results we report today continue our adherence to that commitment. And our financial guidance for 2010 reflects our plan to continue to deliver results and meet our commitments. That guidance reflects a careful balance between two critical elements. First, we continue to drive costs out of the business and improve our productivity in everything we do. We are also making our cost structure more flexible so that we can adjust our costs as needed. Second, we are making focused, disciplined investments, where we see the greatest opportunities for growth, whether in Emerging Markets, Established Products, in line products, preparing the market for coming launches, or in the pipeline.

As a result, we see a portfolio with less risk, continued growth in adjusted earnings per share and more consistent earnings growth overtime. In that regard, we are also providing today our targets for 2012, which given their long-term nature are necessarily subject to less certainty than our guidance for this year. We have refined and revised the 2012 targets that we provided when we announced the Wyeth acquisition based on a thorough bottoms up review of all aspects of our business since we closed the transaction.

In developing these targets, we had the benefit of the deep and current understanding that our business leaders around the world have of their respective markets, customers and products. The leaders, who will have accountability for the performance of their businesses. Those targets show that Pfizer has come a long way in a short-time. Only a couple of years ago, we faced a significant clip in revenue and earnings in 2012 due to the coming loss of exclusivity for Lipitor. Today, thanks to the changes that we have made, the Wyeth acquisition and the hard work of thousands of people, our targets for 2012 project adjusted earnings per share that are higher than both our 2009 actual results and our 2010 guidance.

Now, before Frank provides more detail, let me offer some additional perspective. For the past three years, we have been transforming the company's strategy, leadership and culture. First, strategy, we aim overtime for modest top-line growth, better bottom-line growth, and steady, consistent earnings growth. To achieve these goals we are diversifying our sources of revenue, as well as the risks of our investments.

At the same time, we continue to reduce our costs, continuously improve our productivity and make our cost structure more flexible. And above all, we maintain a strong commitment to exercising discipline in how we spend our owner's capital. In 2009, we significantly advanced these strategies in many ways, most significantly, of course, through the Wyeth acquisition.

We also fully implemented our unique business model of customer facing units with responsibility from proof of concept through the entire product lifecycle. Our business leaders are empowered to seize new sources of value, guided by disciplined and appropriate capital allocation requirements. One example this quarter that wouldn't have happened here even a year or two ago, we quickly secured a deal for a promising compounds to treat Gaucher's disease.

Next, leadership. Over the past three years, we have substantially enhanced our leadership at all levels through internal promotions and through external hires from inside and outside the industry. In the fourth quarter, we added several outstanding Wyeth executive to our leadership ranks, including Cavan Redmond, who leads our Diversified businesses, Mikael Dolsten, who leads our BioTherapeutics Research team, and Geno Germano, who leads our Specialty Care business. Two of our world-class Chief Scientific Officers, Emilio Emini in vaccines, and Manny Pangalos in neuroscience, also joined us from Wyeth, along with [Lou Smuckler], our Head of Biomanufacturing, and many others.

During the quarter, in addition to many important internal promotions, we also brought in a number of other key leaders from outside the company. For example, from GSK, [Dr. Gauthier Aias Ramos] in Biotherapeutics Research. From Sanofi, [Dr. Patricia Kabatsoni], heading worldwide safety strategy. From AstraZeneca, where she ran the cardiovascular business and launched major brands including Crestor, Adele Gulfo, our new head of U.S. Primary Care. From PepsiCo, where he led the Gatorade brand, Todd Magazine, our new President of North America for Consumer Healthcare. From J&J, Mark Gilbert, our Head of R&D for Consumer Healthcare. From the Fred Hutchinson Cancer Center, Dr. Norm Greenberg, now our Director or Oncology.

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