R&D vs. M&A: How is the universe's largest pharmaceutical company (Pfizer) made?!
[Hui Cong Pharmaceutical Industry Network] Pfizer is the largest pharmaceutical company today, but Pfizer is not a traditional pharmaceutical giant. Pfizer was actually a chemical company at the beginning of its establishment. It took about 30 years from the strong to the big in the pharmaceutical industry. time. Pfizer's family history is very legendary, but not as some people say "heavy mergers, light development," but the combination of the two, to do things that other pharmaceutical companies failed to do. With human mirrors, you can know the gains and losses; with history as a mirror, you can know that it is a happy one. Studying Pfizer's 170-year history allows us to take a lot of detours. The author is here to help you. This article is a point of view. If you have any deficiencies, please bear with me.
Citric acid earned Pfizer's first bucket of gold
In 1849, two cousins ​​from Germany co-founded Pfizer, where cousin Charles Pfizer was a chemist and cousin Charles Erhart was a candy merchant. The original Pfizer was a chemical company with major operations such as iodine, tartaric acid and boric acid. The Civil War that broke out in 1861 gave Pfizer a chance to develop. In the war, Pfizer provided a large amount of medicines to the Northern Army. The company developed rapidly with the progress of the war and became one of the largest chemical producers in the United States. In addition, Pfizer was the first company to use lactic acid technology to produce citric acid. After the Civil War, Pfizer supplied large quantities of citric acid to soft drink manufacturers, and the company gradually grew bigger. By the beginning of the 20th century, Pfizer had become the largest chemical company in the United States. First, sales in 1906 reached $3.4 million.
Antibiotics make Pfizer's eyes turn to pharmaceuticals
In 1928, the British Alexander Fleming discovered penicillin. Because of the enormous medicinal potential of penicillin, many scientists were working on the industrialization of penicillin. During the outbreak of World War II in 1941, during the Nazis frequent air raids on London, a large number of wounded people made the British demand for industrialization of penicillin more urgent. In order to get help from American scientists, Dr. Howard Flory of Oxford University went to the United States to ask the US government for help.
Considering that Pfizer used fermentation technology to produce citric acid, the US government took the lead in approaching Pfizer. Shortly thereafter, Dr. Jasper Kane began a laboratory amplification study of penicillin. After the laboratory was gradually enlarged, Pfizer spent $3 million to buy an old ice plant in Brooklyn for trial production of penicillin. After four months of infrastructure renovation, the largest penicillin plant was built. After continuous process improvement, in 1942, Pfizer produced a flask of penicillin that was sold to the military after being packaged, earning $150,000. In the same year, Pfizer was listed in Delaware. In 1944, Pfizer's penicillin was mass-produced.
After the Second World War, the US government liberalized the control of penicillin and allowed penicillin to be used. In 1946, Pfizer bought the old shipyard of the Second World War (Groton Victory Yard) to increase the production capacity of penicillin. In the next few years, the five-story building with a 10,000-gallon fermenter produced penicillin for Pfizer, making Pfizer's penicillin production 85% of the US, half of the world. With the mass production of penicillin, Pfizer earned a large barrel of gold. In 1946, Pfizer's sales reached $43 million.
Since penicillin has no patents, this shared big cake is quickly divided. In just a few years, 20 companies were able to mass produce penicillin, and fierce competition caused the price of penicillin to decline rapidly. However, Pfizer, which has made a lot of money through penicillin, has the ability to develop new products to replace penicillin. Pfizer's original idea was to find a broad-spectrum antibiotic. In 1950, Pfizer introduced oxytetracycline, which has a broader spectrum of antibacterial activity than penicillin. According to the evidence at the time, oxytetracycline is effective against 100 diseases. Relying on oxytetracycline, Pfizer officially entered the pharmaceutical industry. Oxytetracycline became the first branded drug in Pfizer's history, with sales reaching $45 million in two years. In the following decade, oxytetracycline brought about $500 million in sales to Pfizer.
Missing the spring of innovative drug development due to diversity
In the late 1940s, there was a fever of antibiotic research and development in the United States, and Pfizer certainly did not fall behind. After the successful launch of oxytetracycline, then CEO McKee led the company to develop more antibiotics and serialized Pfizer's products in a variety of ways. In the late 1950s, under the leadership of McKee, Pfizer diversified. Through mergers and acquisitions and internal investment, Pfizer has become a major producer of diabetes and psychiatric drugs, as well as vaccine products, and at this time, Pfizer still has a high proportion of sales.
After the 1960s, the US government began to restrict the price of drugs. Due to the pressure of revenue, Pfizer began to develop horizontally and globally. It has successively acquired a number of companies, and its main areas have expanded to eye drops, coated drugs, and soaps. , cosmetics, skin care products, perfumes, shaving soap, etc., in 1965 Pfizer's total sales reached $ 220 million. In the late 1960s, the spring breeze of innovative drugs swept the United States for the first time. Although the diversification strategy made Pfizer a good harvest, it also made Pfizer miss the opportunity in innovative drugs. After the 1970s, the development speed of the chemical industry began to decline, while the development of the pharmaceutical industry was changing with each passing day. During this period, new drugs in the United States have sprung up, from antihypertensive drugs to hypoglycemic drugs to psychotropic drugs. In addition to innovative drug development, research on drug-loading systems has blossomed throughout the United States, and biopharmaceuticals are beginning to sprout.
R&D makes Pfizer stronger
After the successful development of oxytetracycline, Pfizer has strengthened its investment in research and development, and has successively established the Groton Laboratory and the Central Research Department. But after entering the 1980s, Pfizer has already felt that its advantages in the pharmaceutical industry have gradually faded, while the Merck's revenue, which was the sweet spot for innovative medicine, has skyrocketed. The top executives who recognized the status quo began to shift their focus back to the prescription drug business, increasing the share of R&D investment and sales from 5% in 1980 to 9% in 1988.
The early huge R&D investment did not disappoint Pfizer. After entering the 1980s, Pfizer acquired the antihypertensive drugs Procardia (nifedipine), disaccharide (glipizide), and antipyretic analgesic Feldene (piroxicam). Antibiotics Dafukang (voriconazole), Pioneer must cefoperazone and other products, these products have brought huge sales revenue to Pfizer, of which piroxicam also reached the blockbuster level.
In addition, Pfizer also attaches great importance to product upgrades, and invites ALZA to cooperate on the upgrading of nifedipine, glipizide and doxazosin to make osmotic pump tablets to prolong the life cycle. The Procardia XL launched in 1989 also reached The blockbuster level became one of Pfizer's best-selling products in the early 1990s.
After taste the sweetness of drug innovation, Pfizer refocused on the pharmaceutical industry under the leadership of Stur. In 1990, Pfizer sold its citric acid business for centuries. In 1992, it divested its specialty chemicals and refractory chemicals business. Later, the cosmetics and perfume business was sold, and the mouthwash business that had just arrived for two years was sold to Colgate, and the heart valve business was given to the subsidiary of Fiat Italy... After a series of resource optimization, Pfizer concentrated its superior strength on innovative drugs. Launched a general attack.
In the early 1990s, Pfizer began to enter the harvest period of innovative drug research and development. The three products of Zoloft (Sherin), Xishumei (Azithromycin) and Luohuxi (Amlodipine) were launched in 1992 and have reached the level of blockbuster. Despite this, Pfizer is still not in the first place in the US pharmaceutical giant. In 1993, Pfizer ranked sixth in the US pharmaceutical industry with annual sales of US$7.4 billion, lagging behind Bristol-Myers Squibb, Merck, Skebden, Abbott and AHP (Wyeth), if the world is enlarged, Pfizer's ranking is still not in the top ten.
In the mid-to-late 1990s, Pfizer's sales began to rise steadily with the popularity of the three products of Luohuxi, Zuoluo (She Qulin) and Xishumei (Azithromycin). With the gradual advancement of R&D, Pfizer has also acquired Viagra, and its pharmaceutical sales increased from US$4.2 billion in 1989 to US$16.2 billion in 1999, with an average growth rate of 284%. Here, Pfizer's R&D investment has also tripled to $2.8 billion.
Mergers and acquisitions make Pfizer bigger
In the late 1990s, the cost of innovative drug development soared, and the average cost of new drug research and development in the United States rose from $138 million in 1975 to $802 million in 2000. The surge in the cost of innovative drug development has led to increasingly thin profits and increasing risks. Not only that, Pfizer's R&D system has its own problems, and Pfizer's R&D efficiency is lower than the average of pharmaceutical giants. According to statistics, in 1996-2001, Pfizer applied for 1,217 new compound patents, with an average cost of $17.5 million per unit. Merck applied for 1,933 compound patents, averaging only $6 million per cost.
In the late 1990s, due to the low efficiency of R&D and the lack of follow-up products that supported sustained high-speed revenue growth, corporate executives had to find a way out. With the surge in pressure, Pfizer had to think of the "old line", and with the popularity of Lipitor, Pfizer executives could not sit still. The product went on sale in 1997, with sales of $865 million in the first year, $2.2 billion in 1998, and $3.795 billion in 1999. In 2000, Pfizer finally took out, "Wars to sell iron" also eat Warner-Lambert.
Through Warner-Lambert's acquisition, Pfizer sales entered the $20 billion club. The combined Pfizer share price has risen sharply. However, the stock price has risen and Pfizer can raise more funds. At the same time, the selling of its heavy products has provided Pfizer with further confidence. In 2002, Pfizer ate Famasia for $60 billion, and used Celebrex (celecoxib) and Bextra (valdecoxib), Detox (tolterodine), Optima (latanoprost) and Svo Well-known products such as (linezolid) are in the bag.
After eating Pharmacia, Pfizer's sales reached a $30 billion club. In the following years, Pfizer's heavyweight products are increasing, and sales are rising rapidly. Superbshell bombs such as Lipitor, Luohuxi, Xile, and Viagra have generated hundreds of billions of dollars in sales revenue for Pfizer. In 2009, 68 billion acquisitions of Wyeth, entered the field of bio-pharmaceuticals, and acquired the current housekeeping products. After the acquisition, Pfizer has 6 vaccines and 27 biological products in the biologics research product line, becoming the world's leading biopharmaceutical company. Six of the preparations from the Wyeth product line collectively contributed more than $10 billion in revenue to Pfizer annually.
Three large-scale successful mergers and acquisitions made Pfizer executives feel that the capital expansion strategy was tried and tested, so that in the next few years, Pfizer would think of mergers and acquisitions once the revenue pressure appeared. Since 2010, Pfizer has not given up on the goal of large-scale mergers and acquisitions, from AstraZeneca to Aijian, the price ranged from 117 billion to 160 billion. Although the two mergers and acquisitions failed, it also shows that Pfizer’s pocket is really drumming. . The 2017 annual report shows that Pfizer holds up to $16.5 billion in net cash.
Although large-scale mergers and acquisitions have not been completed, small and medium-sized mergers and acquisitions have been full. In 2010, Pfizer acquired King pharma for $3.6 billion and obtained opioid pipeline; in 2015, Pfizer acquired Hospria for $17 billion to integrate medical equipment business; in 2016, it acquired Medivation to obtain small molecule tumor drug pipelines such as nenzaluamide; Anacor gets the rash drug crisaborole. After a series of small-scale mergers and acquisitions, Pfizer's biological products pipeline has been gradually improved, and anti-tumor pipelines have basically formed.
Pfizer's R&D pipeline
The secret of Pfizer's success
One of the secrets of Pfizer's success: Pfizer is a company that will use the heavy products at hand to exchange for more heavy products. First, the resources obtained by the series of products such as the company will be transferred to Warner-Lambert to obtain the blockbuster. Lipitor and Lerica, after which they switched to Pharmacia based on the resources of Lipitor, Luhuo and Viagra, and obtained the Xile, and later they ate Wyeth and got Pei. The evolution of these columns is like playing a "snake-snake" game. Each time you eat a square, the snake body is extended.
The second secret of Pfizer's success: the ability to integrate the resources from the merger. Perhaps many R&D people don't evaluate Pfizer very much because Pfizer has to lay off employees on a large-scale basis after almost every large-scale merger. However, layoffs are a process of resource integration. The divestiture of repetitive resources and unneeded resources can make the company stand out, reduce operating costs and maximize profits. For companies, only when they have high profits, they have more money to do more things.
The secret of Pfizer's success: ingenious packaging of products, to create their own product line from a diversified perspective. Although the product line of self-research and acquisition is already comprehensive, Pfizer still does not forget to sell the products. By selling the products, Pfizer will minimize the cost of sales. At the same time, only the more products, the more powerful the sales pipeline, but the strong sales pipeline is often the guarantee of the impact of the product market. To be frank, if you leave Pfizer aside, the sales of many products may not reach today's height.
The fourth secret of Pfizer's success: recognize the direction of the development of the times, and get the first month in the water. Pfizer was one of the first companies to play large-scale mergers and acquisitions. However, the resources for such mergers and acquisitions are limited, and there is one less family, and some mergers and acquisitions will be blocked by politics. On the contrary, the giants who have been rooted in the development of innovative drugs have missed many opportunities for capital expansion. With the increasing difficulty in the development of innovative drugs, their R&D path has gradually entered the “difficult situationâ€.
The fifth secret of Pfizer's success: large companies do low efficiency in research and development, and diversified cooperation is an inevitable trend. In recent years, many small and medium-sized R&D companies in the United States have been able to develop potential blockbusters because of their flexible models and high operational efficiency. In the face of such a situation, playing "takenism" can not only effectively use R&D resources, but also effectively use cash resources to achieve both. Although Pfizer has pursued its adoption in recent years, it is considered that Pfizer does not focus on R&D. Pfizer only integrates R&D and mergers effectively. Since 2000, Pfizer has accumulated R&D investment of US$133 billion, compared with Novartis has only $110.2 billion, while Merck has $108.4 billion.
The secret of Pfizer's success: no money. Although Pfizer holds $16.5 billion in net cash in 2017, Pfizer spends its time looking for acquisition targets to spend it. In addition, looking at Pfizer's financial report before 2003, it is not difficult to find that although Pfizer's revenue and profits are rising at a high speed, Pfizer's medium and long-term debt is also rising at a high speed. In 2002, the debt was as high as $11.8 billion.
Editor in charge: Chen Wei
. This belt is made of solid materials, which not only receives strict quality control in the whole process of processing and manufacturing, but also has exquisite packaging and magnificent atmosphere. It is a middle and high-grade treasure that you deserve to have.
The belt is made of high-quality cowhide. The surface of dermis is fine and clear, with high gloss, and smooth feeling like skin can be felt when touching. The automatic fastener adopts pure gold design. The simple and solemn Pentagram is placed in the center of the button head. The military color is very strong and the style is powerful.
At the same time, this belt is made of golden monkey standard military production line, which strictly refers to military regulations in terms of material selection standards and process specifications. Not only before being made, it has been subjected to strict quality control, but also has been repeatedly tested and verified after being made, which makes this belt strong in performance, excellent in quality, durable, and can withstand the test of time.
It is worth mentioning that this belt package is particularly exquisite. The color of the gift bag and gift box is integrated. The military green system is vigorous and steady, and it has a sense of weight in the hand. After the box is opened, the interior decoration of the atmosphere and elegant and low-key appearance of a large contrast. Whether it's worn for an important ceremony, as a private collection, or as a gift, it's perfect!
Golden monkey, with a 69 year history of domestic brand, with solid manufacturing experience and strong military background endorsement, has won a wide range of national praise. "Wear golden monkey shoes, walk the Golden Avenue", bearing the common memory of several generations, is a reliable choice for you to shop.
Women's Belt,Men's Belt,Fashion Belt,Canvas Belt
GDMK GROUP WEIHAI SHOES CO., LTD. , https://www.jinhoshoes.com