Pfizer eyes bigger push into emerging markets
* Pfizer says emerging markets will be profitable
* Focus on China, Mexico, Turkey, Brazil, Russia, India
* Sees further acquisitions in emerging markets
By Ransdell Pierson and Bill Berkrot
NEW YORK, Jan 19 (Reuters) - The head of Pfizer Inc's (PFE.N) emerging markets unit said on Tuesday that the drugmaker's plans for a big push into high-growth underdeveloped countries is still very much a work in progress, but one that will eventually yield solid profits.
"The psychology that emerging markets is not profitable is a myth," Jean-Michel Halfon, Pfizer's president of emerging markets, told a group of reporters at the company's New York headquarters.
Halfon said about 75 percent of pharmaceutical sales growth will come from emerging markets in the next 3 to 5 years, and the world's largest drugmaker aims to be a significant player.
He said Pfizer has had a presence in emerging markets for 50 years but is gearing up for a much bigger and broader push now, with an initial focus on the most promising of those markets: China, Mexico, Turkey, Brazil, Russia and India.
He also cited Saudi Arabia, Thailand and Taiwan as promising areas of interest.
Pfizer of course is not alone in its push, with most major pharmaceutical companies looking to China and other emerging markets as potential new sources of revenue.
Pfizer had third-quarter sales from emerging markets of about $1.6 billion, which represented growth of 9 percent. Including revenue from recently acquired Wyeth, that quarterly figure would have been between $2 billion and $2.1 billion, Halfon said.
Although he declined to forecast emerging market sales for 2010, on an annualized basis that would be about $8 billion.
Halfon said the childhood disease vaccine Prevnar and rheumatoid arthritis drug Enbrel -- both acquired with Wyeth -- would be big growth drivers in developing markets, as would oncology medicines and specialty drugs. He said the cholesterol fighter Lipitor, kidney cancer drug Sutent and Lyrica pain and anti-seizure medicine were also doing very well overseas.
"We have a very broad portfolio because of our heritage of acquisitions, but to build partnerships in emerging markets in the future we will need a broader profile," Halfon said.
"We will need more Aurobindos to build our portfolio," he added, referring to a licensing deal Pfizer signed with the Indian company Aurobindo Pharma Ltd (ARBN.BO) last May.
More recently, Pfizer struck a collaboration deal with India's Strides Arcolab Ltd (STAR.BO) that will significantly expand its injectable generics business.
By 2011 China is expected to become the world's third-largest pharmaceutical market. Halfon called China, which is currently No. 5 globally, "a market ready for consolidation" and one in which Pfizer aims "to play a catalyst role" not only commercially, but in research and development.
He sees Shanghai becoming the nerve center of Pfizer's Asian strategy. "We feel Shanghai will play a significant role in China and Asia," he said.
"We need to move step by step," Halfon said. "This is difficult. We're trying to manage profitability, but at the same time reach patients we have not reached before."
Halfon declined to provide any forecasts of just how profitable emerging markets could become for Pfizer.
"Profitability comes from low-cost manufacturing. We're working on it," Halfon said.
"Governments in the developing world are looking for low-cost solutions. Low-cost solutions developed in emerging markets could be useful everywhere," Halfon predicted.
"I'm not talking about a quick win here, but a very important direction." (Reporting by Ransdell Pierson; writing by Bill Berkrot, editing by Gerald E. McCormick)