Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Pfizer makes the competition sneeze - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Aug 31, 2000

    Pfizer makes the competition sneeze

    The proposed merger of Parke Davis with Pfizer would further tighten the latter’s hold in the OTC segment. With Warner Lambert also coming into the Pfizer fold internationally, Pfizer would further inherit brands such as Benadryl, Gelusil and Listerine in its fold. These brands form part of Parke Davis (as Warner Lambert is known in India).

    Despite apprehensions about the intentions of the management, after the setting up of a 100% subsidiary, Pfizer continues to report healthy growth rates.

    The company has delivered a 74% increase in pre–tax profits in the first six months of the current year, despite Becousules (its B–complex vitamin) being brought under price control. Becousules contributes around 20% to the company’s turnover and the National Pharmaceutical Pricing Authority has reduced its prices by 30% in the current year.

    Interestingly, Corex and Benadryl dominate the cough segment and merger would only consolidate Pfizer’s dominance in this segment. Infact, Corex has even upstaged Becousules as the top selling brand (as per ORG MARG quoted in the Financial Express) in July 2000.

    Brand/Company Value (Rs m) Mkt Share Growth
    Overall Mkt 4,844 100% 0.90%
    Corex (Pfizer) 694 14.3% 14.1%
    Phensedyl (RP) 379 7.8% 21.0%
    Beandryl (P.Davis) 246 5.1% -20.4%

    Source: Glemark Pharma

    Further, Pfizer’s dependence on its six brands would also reduce post meger. (In India six brands viz. Becousules, Lorex, Protinex, Dolonex, Terramycin and Minipress XL account for 80% of the company’s sales.)

    Besides, Pfizer has entered into a co–marketing tie up with Shanta Biotech to market the latter’s Hepatitis B vaccine under the brand name Hepashield. Shanta Biotech markets the vaccine under the brand name ‘Shanvac’.

    The key impact of the co–marketing deal is the fact that competition within Hep B segment will become considerably tighter. Smithkline Pharma has by far been the leader in this segment with its brand Engerix B dominating the segment, but with Pfizer’s brand name attached to Hepashield, doctors would now be more comfortable recommending Hepashield.

    Further the company has plans to introduce an anti–cancer vaccine in India, which if introduced through the listed company could propel’s Pfizer’s bottomline by over 30% next year. (Pfizer’s year ends in November.)

    We expect the company to report a net profit in the range of Rs 400 m for the current year (without considering Parke Davis’ numbers) which implies a per share earnings in the range of Rs 17.50. The stock currently quotes at an earning multiple of 33 times. Going forward, this multiple is expected to be sustained despite the presence of 100% subsidiaries of both Pfizer and Parke Davis.



    Equitymaster requests your view! Post a comment on "Pfizer makes the competition sneeze". Click here!


    More Views on News

    Sun Pharma: Bottomline Slips into the Red Amidst Challenging Environment (Quarterly Results Update - Detailed)

    Aug 14, 2017

    A challenging environment and one-time expense pushes Sun Pharma into a loss in the first quarter.

    Lupin: Bigger Challenges or Bigger Margin of Safety? (Quarterly Results Update - Detailed)

    Aug 14, 2017

    GST impact coupled with price erosion in US leads to lower profits for the quarter.

    Dr Reddy's: US Pressure Continues to Haunt (Quarterly Results Update - Detailed)

    Aug 8, 2017

    Profits plunge due to higher raw material costs.

    Biocon: Lower Licensing Income Leads to Muted Growth for the Quarter (Quarterly Results Update - Detailed)

    Jun 23, 2017

    Net Profit lower due to exceptional items in the previous year.

    Sun Pharma: Price Erosion in US Impacts Growth (Quarterly Results Update - Detailed)

    May 30, 2017

    US markets decline while other geographies grow in the quarter.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 21, 2017 (Close)



    Compare Company With Charts