Dividend stock: Pfizer, Inc.
Pfizer, as we all know it, is one of the largest pharmaceutical corporations on the planet, the second-largest by market capitalization after Johnson & Johnson.
The impact of Pfizer can be felt in every part of the world which started with penicillin during the great wars.
Pfizer is one of those old-timer, well-established, controversy-filled, heart-of-America companies which we all have to get along with during at least some periods of our lives.
It manufactures products for our neural system, blood levels, immune system, hearts and cancers. The company was founded in 1849 by a man named, you’ve guessed it, Pfizer, Charles Pfizer which was accompanied by his cousin Erhart.
These 2 men were actually more German than American.
These guys started their business journey in Brooklyn, New York City and first developed a product called santonin that was a perfect solution for fighting and destroying parasites inside people’s bodies.
From the early beginnings of the company, in the late 1800s, business was growing for these two relatives because what caused this disruption in the market was innovation and loads of it.
At the early stages the company started producing citric acid which still has multiple applications and this new substance had really skyrocketed the business.
Another opportunity arose for Pfizer when during the First World War calcium citrate was going out of stock and it was able to supply different soldier divisions with citric acid which kind of replaced the previously used substance.
However, during the Second World War, another substance was on demand and that was none other than Penicillin.
For Pfizer, this drug was like a child at first, it made the company happy to do business with the US military because the majority of the medical market share during the war was given to the company.
During the events of the infamous Doomsday that took place in the French shores, the main medicine they had for infection treatment. This drug had made the company a fortune.
However, after the war, more and more people started using penicillin for infections and as a result of that, prices went down and hurt Pfizer pretty badly. The company had to create something new and as crucial to the society as penicillin.
So, the brilliant scientists in the company had found a new substance, a new product possibility called Terramycin.
The drug was an antibiotic as well, accelerating the company back to the top. After the second war, the company was already operating in multiple countries offshore which included the United Kingdom, Canada and different places in Latin America like Brazil, Panama and many more.
A super successful new drug followed in the eighties that was named Feldene, which at that time had been the best anti-inflammatory drug out there. This exact drug was practically the secret sauce to Pfizer’s success as it had helped the company reach a billion in sales.
The following decades also happened to be filled with different inventions and new product developments. Medications like Lipitor, Viagra, Aricept and Norvasc arose and put the company in a position where massive growth was completely inevitable.
It is just quite sad that as the company was approaching the new century, it had been making major acquisitions which, of course, let the company grow even more substantially in the short term but built some trouble later on.
The notable acquisitions were Pharmacia, Wyeth, Warner-Lambert and King Pharma.
Some of the great and less great problems arose just after the acquisitions. Why is that? Well, mainly the management and operations which had been newly introduced by the freshmen on board and the leadership style did not match the one Pfizer had in the previous century.
During the last century, leadership was more ruthless and detail-precise but as the “new guys” came, they had brought some irresponsibility, softness and even bureaucracy to the company. As an example we can take a drug named Bextra.
Bextra, a medicine that was supposed to cure arthritis had not been approved by the FDA. Despite that, the company still threw it into the market and advertised it.
That resulted in a massive fraud case which the company had settled with, seeing that there would be even worse consequences if it hadn’t.
Now we shall take a look at the company purchases Pfizer had made and what results they brought, how important they were and why they had changed the company’s leadership style so drastically.
To put these deals chronologically, first came the Warner-Lambert acquisition the value of which was absolutely substantial, Pfizer had thrown more than 110 billion dollars into it in the early 2000s.
This deal in 2020 would be worth nearly 170 billion dollars. That’s around the current value of McDonald’s Corporation. This acquisition was nothing else but elimination of Pfizer’s competition, Warner-Lambert used to be the second-largest pharmaceuticals company on the planet.
3 years later, the company went on and merged with Pharmacia, obviously, another drug-making giant which would later increase Pfizer’s market share substantially after giving it access to billion dollar worth drugs to continue selling.
However, during 2 harsh periods after the merger, the company had to lay off around 300 people each time, first in 2003 and then in 2008 during the global economic crisis. This was either due to aggressive company restructuring, cutting expenses or because of the hardship of the crisis.
Another notable acquisition was the one of Wyeth, another elimination of a competitor, often criticized by people for not bringing any real value to each party. This deal took place after the crisis, in 2009.
A year later, Pfizer was ready for another deal and the company had chosen none other than King Pharmaceuticals, for a lot less money, however, still being in the top 50 pharmaceutical companies in the entire world.
With all these strong or not-so strong acquisitions the corporation was now able to focus on production.
A discovery followed after that, a drug for leukemia was introduced and named Bosuliff. Later on, dozens of acquisitions came along, giving Pfizer access to selling medications for different kinds of conditions and disease.
These acquisitions included drugs for meningitis from GSK, immune system strengthening drugs from Anacor. For cancer medicine research and development the company acquired Medivation for quite a sum of money.
AstraZeneca, a leader in antibiotics manufacturing was also on Pfizer’s radar which it had later purchased.
Pfizer also hadn’t much for more complex conditions, especially genetic-based like dwarfism and was soon to make a purchase of a big player in this industry called Terachon. An Illinois-based company Hospira was also soon to be acquired to help grow the injection drug market share.
The deal had closed at around $63 a share and completely cheered up Hospira shareholders. During the current century that we live in, Pfizer not only did acquisitions and mergers but also got into strategic partnerships with companies like GSK and schools.
The corporation is now working really hard on the Coronavirus vaccine and is pretty much a leader in this global competition for drug-makers. Pfizer is doing this along with a German pharma company called BioNTech.
However, It is really difficult to make predictions for the future and it’s not clear how things are going to turn out. Today we live in a very complicated scenario, when loads of people may have the virus just without any symptoms and it is really difficult to detect everyone who has this very disease and not something else.
It is just absolutely great that companies like Pfizer stand up during these challenging times and are developing things that not many organizations are able to.
Of course, it is safe to consider that a company which creates a product that solves this massive problem that every one of us on this planet is having, will hit a jackpot in its sales.
However, there is absolutely nothing new with this as many profiteers took advantage of both of the great wars we had and made their fortunes during that time.
The company is doing something great for the society and the actions of it should definitely be respected.
It would be even better if the competition of Pfizer, companies like Moderna who is also actively developing its own vaccines would all join together and produce these much needed drugs more efficiently, quickly and productively.
Sales just don’t matter at this time when a development and exploitation of the Coronavirus vaccines are in such high demand. Big pharma still profits from their main products and definitely has time, resources for research.
Pfizer, like many other pharma companies, has its own research facilities which help achieve innovation of new medicine. To be more precise, it has 11 research and development locations all over the place, the majority of them are in the US.
The remaining locations are in the UK and one in India.
Also, Pfizer spends billions each year on these development procedures so it is quite obvious why the company is a leader in the vaccine development and adaptation.
In terms of Pfizer being looked at as an investment, the stock is terrific, not as terrific as Procter & Gamble but still a really good investment. Someone buys and holds it, he or she gets a substantial growth along with one of the highest dividends on the market of more than 4%.
Having such great practices in terms of research, collaboration with schools and public relations, the company will probably thrive, especially if the Covid vaccines are a success. With an army of different drugs and huge innovation potential, Pfizer is one of the greatest.