One on One with Pfizer Chairman and CEO Jeffrey Kindler
Tuesday, October 21, 2008
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SUSIE GHARIB: Pfizer reported better-than-expected quarterly earnings today, thanks to strong international sales and cost cutting making up for sinking sales of the drug giant's popular cholesterol drug, Lipitor. Excluding items, Pfizer earned $0.62 a share, $0.02 above estimates. Revenues came in just shy of estimates at almost $12 billion. Today, I sat down with Pfizer Chairman and CEO Jeffrey Kindler for an exclusive television interview and asked him if the weak economy will derail the company's strong earnings growth.
JEFFREY KINDLER, CHAIRMAN & CEO, PFIZER: I think today's results, I hope, demonstrate that we have an organization today that is leaner, faster, more disciplined, more focused on execution, meeting our commitments than ever before. So as we face the uncertainties of the environment both for the economy generally and health care in particular, I think we have the means of responding to that very effectively and with a lot of agility.
GHARIB: Mr. Kindler, so many people are worried about a deep recession for the U.S. What is your internal forecast telling you and how are you planning for that?
KINDLER: I think it's too early to really judge. It's been a pretty turbulent time in the last couple weeks. In terms of your question about preparing, we're preparing by continuing to be as responsive to our customers as we can be and as agile as we can be. I can't emphasize enough that uncertainty by its nature is to a degree unpredictable and so what we have to do and what we are doing I believe is creating an organization that's fast enough and responsive enough to deal with what may come.
GHARIB: We hear a lot about how companies are having difficulty getting bank credit, about tight credit conditions, about difficulties in the commercial paper market. What has been Pfizer's experience with all this?
KINDLER: We have a very strong balance sheet. We have more than $26 billion of cash and short-term assets. We have a very strong credit rating. Our investments, our portfolio is very conservative, very stable. We've had no difficulties with liquidity and we continue to be very fortunate about the enormous financial strength of this company.
GHARIB: So you're not in a position to have to slow down any of your expansion plans. Are you going ahead with all of your drug expansion projects?
KINDLER: Yeah, although let me say, independent of the economy, we're being very thoughtful about which ones we want to invest in, which ones we don't want to invest in and we don't feel any constraints in making the investments we think we need to make. That doesn't mean we're going to invest in everything and anything. In fact, one of the things that we've done is we've really focused on those disease areas and therapeutic areas where we want to invest to win and in fact exit or significantly reduce investments in other areas, so that we can meet unmet medical needs.
GHARIB: You're still in the business of selling Lipitor and is coming - sales have been on the decline because of competition from the generics. Is there anything you can do to stabilize that?
KINDLER: Actually we think that they are stabilizing. Outside the United States, Lipitor is growing a bit in many markets because we've had several years of experience in facing generic competition and I think we're doing very well under the circumstances. In the United States clearly there's been a decline over the last couple years, but I do see evidence of stabilization in prescription trends and I think it's very noteworthy that even against all of this competition both brand and generic, Lipitor is still by far the favored statin of choice for people to whom it's appropriate.
GHARIB: Mr. Kindler, given the changing landscape for drug companies and what's going on in the economy, isn't this maybe a good time for a big transformative acquisition and you do have the money you just said?
KINDLER: Yes, well, our view on that has been pretty consistent. I've always said, never say never. I've always said we are open to opportunities. We have some very clear criteria and that is there has to be strategic value in anything that we do. The price has to be right. We have to find ways of managing it to minimize the disruption and the risks to our productivity. In short, it has to produce shareholder value.
GHARIB: Looking at the presidential election, both candidates are calling for a larger government role in health care. Will this inhibit drug companies like Pfizer in creating new medicines and new innovation?
KINDLER: I'm a contrarian on this one. I'm very optimistic that there's a real consensus that has started to emerge across all of the stakeholders that this problem is so serious and so important that we have to approach it on a bipartisan basis and again, every stakeholder will not get exactly what they are looking for and there will be some things in there that we don't like, but in the long run, we're all better off by solving this problem and I'm actually quite optimistic about this.
GHARIB: Mr. Kindler, thank you so much for your time.
KINDLER: Thanks Susie for having me. I appreciate it.
