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Presentation on- Pfizer and the Pharmaceutical Industry

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Presentation on- Pfizer and the Pharmaceutical Industry
Presentation on:
Pfizer and the Pharmaceutical Industry
Fletcher Leung
Analyst

Investment Analysis Group
February 15, 2002

Presentation Agenda
• Industry Overview: Research Based Pharmaceuticals
• Pfizer
– Company Specifics
– Performance
– Growth Drivers

• Valuation
– Comparables Analysis
– DCF

• Recommendation

February 15, 2002

Page 2

Investment Analysis Group

1

Industry Overview
Economic
•Cost Effective

Demographic

Sociocultural

•Aging Population

•Quality of Life

General
Environment
Political/Legal

Global

•Gov’t Regulation
•Unauthorized Imports

•Price Controls
•Intellectual Property

Technological
•Human Genome
•Development Time

February 15, 2002

Page 3

Investment Analysis Group

Industry Overview
Threat of New
Entrants
LOW
•High R&D Costs
•Long Production Cycle

Bargaining Power
Of Suppliers
LOW
•Bulk Purchasing

Rivalry Among Competing
Firms in Industry
HIGH

Bargaining Power of Buyers
HIGH

•Fragmented
•Shrinking exclusivity periods

•Managed Care
•Government

Threat of
Substitutes
HIGH
•Generics
•Counterfeit
•Unauthorized Imports

February 15, 2002

Page 4

Investment Analysis Group

2

Industry Overview

• Pharmaceuticals (Rx Drugs) only 8% of all health care spending
Rx Drugs,
0.08

Physician
Services,
0.22

Nursing,
0.07
Admin &
Net, 0.06

Other, 0.24
Hospital
Care, 0.32
February 15, 2002

Page 5

Investment Analysis Group

Industry Overview

• Health care growing as a percentage of
GDP
13%
12%

% of GDP

11%
10%
9%
8%
7%
6%
5%
1970
February 15, 2002

1980
Page 6

1990
Investment Analysis Group

3

Pfizer: Company Specifics

• Research based, global pharmaceutical company Other, 2%

– Pharmaceuticals
– Confectionery
– Animal Health
– Consumer Products

Consumer
Prodcuts, 11%

Animal Health,
4%
Confectionery,
7%

Pharmaceuticals
, 76%

February 15, 2002
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