COMPANY DESCRIPTION

Pfizer is a research-based biopharmaceutical company involved in the discovery, development and manufacture of healthcare products. Co.'s businesses include: Global Innovative Pharmaceutical business, which comprises medicines within several therapeutic areas including immunology and inflammation, rare diseases and women's/men's health; Global Vaccines, Oncology and Consumer Healthcare business, which focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare; and Global Established Pharmaceutical business, which includes brands that have lost market exclusivity and, generally mature, patent-protected products, and generic pharmaceuticals. 

 

ECONOMIC MOAT

Pfizer's moat is based on patent-protected drugs, economies of scale, intellectual intangibles, and a powerful salesforce. The core of Pfizer's wide moat lies in its patent-protected drugs. The firm's R&D engine is another strong moat contributor. During the past decades, Pfizer has created a database of intellectual insights into drug development that should help it bring new medicines to market. 

 

OUTLOOK

PFE entered a definitive agreement to acquire Hospira. Hospira, a leading provider of injectable drugs and infusion technologies. Under the terms of the deal, Pfizer will pay $90 a share (about $17 billion including debt), which represented a 39% premium to HSP's preannouncement closing price. Board of Directors of both companies and is scheduled for completion in the second half of 2015. Pfizer expects the deal to be immediately accretive upon closing  Management's 2015 guidance came in a bit soft. In 2015, stemming from patent losses on Lipitor , Viagra , and most recently Celebrex. Growth in the Lyrica and Prevnar should help to lighten the generic impact. PFE remains a top quality holding for investors seeking a core income play.

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STRENGTHS

  • Big ticket M&A deals enabled Pfizer to sustain leadership position in the global biopharmaceutical industry

  • Strong commercial infrastructure provides Pfizer 'marketing partner of choice' status

  • Balanced revenue mix from diverse geographic markets 

WEAKNESSES

  • Major products exposed to multi-source generic competition 

THREATS

  • Healthcare reforms and drug pricing controls likely to affect the company’s operating margin

  • Consolidation among managed care organizations

  • Counterfeit medicines may have a negative impact on the company’s business 

OPPORTUNITIES

  • New global commercial structure likely to help Pfizer in its top-line growth

  • Acquisitions likely to strengthen Pfizer’s injectables and vaccines portfolio

  • Launch of Duavee and Nexium OTC could drive Pfizer’s top-line growth

  • Offloading non-core business units enabling Pfizer to focus more on core innovative prescription drugs

  • Cost saving initiatives likely to drive profit growth 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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