The sales and marketing perspective on the Pfizer/Wyeth deal
January 26, 2009 – 5:30 pm by Steven NilesMike Luby, co-founder, TargetRx, is a frequent contributor to Med Ad News. I have always found his perspective, as a long-time industry observer, to be invaluable. I asked him to offer his take on Pfizer’s plan to acquire Wyeth, particularly from a sales and marketing perspective.
Does Wyeth offer any marketing strengths Pfizer might have been lacking?
The biggest unique asset Wyeth brings in sales and marketing is its experience and presence in the marketing and selling of vaccines and biologics. While the R&D and manufacturing assets in these areas are bigger deal drivers, the sales and marketing experience is definitely a major strength. Wyeth markets two blockbusters in these areas, Enbrel and Prevnar, as well as Torisel for renal cell cancer, and the company’s sales and marketing expertise in these areas is of significant value in the evolving “biopharmaceutical” space.
In recent years, Wyeth has been reshaping itself into a major biotechnology player. How might that have influenced Pfizer’s decision to buy?
I think that is the primary driver for the deal. There are a number of other benefits, such as diversification, additional pipeline and increased scale, but I believe the biologics and vaccines are the primary drivers of this deal. The resulting company has the potential to be the pre-eminent biopharmaceutical company, with the scope and scale to put more resources into R&D than any other company in the industry. This gives Pfizer the opportunity to address the market opportunity that biologics and vaccines represent from a position of experience and strength rather than as a relative newcomer. In this sense, I see this acquisition as a very different strategic play than the Warner Lambert or Pharmacia acquisitions, as they served to make Pfizer a bigger player in the game they were already playing. This makes Pfizer a much more significant player in a very different game.
Any other general thoughts you’d like to share?
I believe this deal will be looked back on as a seminal moment in the evolution of what is now the pharmaceutical business to a more diversified “biopharmaceutical” business. The promise of this deal is the scale and presence to leverage technology and research platforms to improve disease prevention and treatment on a very broad global scale as well as (secondarily) to leverage core technologies to pursue complementary business opportunities. The potential for biologics and vaccines is enormous, and it seems as though these technologies could spark a revolution on the order of the small molecule revolution of the 80s and 90s. It is encouraging that what will become the largest company in the industry is well positioned to leverage the latest in science to address unmet needs of major diseases. This deal in some ways sets or at least influences the industry’s agenda, but the scale of R&D of the combined company, with the significant presence in vaccines and biologics, also holds the promise for patients of innovative approaches to disease prevention and treatment. In addition, Pfizer’s return to the consumer products and nutritionals business and the expansion of animal health all signal the growing diversification push that we will see take deeper root on the road ahead.
Over the previous 10 years, we have seen many companies move to divest of “non-core” assets, as several, including Pfizer, sold off consumer product divisions or other non-pharmaceutical assets. Times have changed, and the prevailing thinking seems to be that diversification brings strength, provided there is some leverage of know-how to create synergies. Examples of these synergies include things like bringing approved pharmaceutical products over the counter or into animal health, or leveraging manufacturing expertise in vaccines and biologics into bio-similars. You see examples of this in the execution of GlaxoSmithKline, Johnson & Johnson, Abbott, Roche, and others. I believe we will see more diversification going forward – whether it’s vaccines, biologics, bio-similars, diagnostics, devices, consumer goods, or other areas, this is a big step in the transformation of the pharmaceutical industry to the more diversified biopharmaceutical industry. If Pfizer and Wyeth can execute on this merger (and I believe that these companies can), the outcome should be good for the science and especially for the patient.
