Pfizer, founded in 1849 and headquartered in New York, USA, has a history of 173 years.

As the world's largest pharmaceutical company in terms of prescription drug sales, Pfizer is widely known as the "Cosmic Pharmacy." Since its establishment, Pfizer has been dedicated to drug research and development, while also venturing into diversified businesses and addressing research gaps through acquisitions, making its development history a microcosm of the modern pharmaceutical industry.

Over the past 170 years, what transformations and breakthroughs has Pfizer experienced? What insights does its development journey offer to pharmaceutical companies?

Germination: From a Chemical Workshop to an Iconic Chemical Manufacturer in the United States

In 1849, two cousins from Germany, Charles Pfizer and Charles Erhart, founded Charles Pfizer & Company with a startup capital of $2,500 in a two-story red brick house in Brooklyn, New York. Charles Pfizer, the younger cousin, was a chemist, while Charles Erhart was a confectioner.

In its early days, Pfizer primarily focused on manufacturing chemical products and its main products included iodine, cream of tartar, and borax.

At that time, due to dietary habits and other reasons, Americans suffered from intestinal parasites. Although the commonly used vermifuge, santonin, was effective, it had a bitter taste.

Charles Erhart, being a confectioner, keenly recognized the immense demand in the field of vermifuges. After multiple experiments, he eventually decided to mix santonin with almond-flavored taffy candy in an attempt to improve the taste of santonin using the sweetness of candy.

This transformation was a tremendous success and brought Pfizer significant renown.

In 1861, the American Civil War broke out, increasing the demand for painkillers and preservatives in the military, which provided Pfizer with its first significant growth opportunity.

During the war, Pfizer supplied a large quantity of cream of tartar, iodine, morphine, and chloroform to the Union Army, and the company rapidly expanded as the war progressed. By 1868, Pfizer's revenue had doubled compared to pre-war times, and its production lines expanded substantially.

By the year 1906, when Charles Pfizer passed away, this relatively unknown chemical workshop had grown into one of the iconic chemical companies in the United States.

Rise: Unique Citric Acid Fermentation Technology Establishes the Foundation for Development

In 1880, as new beverages such as the popular Coca-Cola gained popularity in the United States, Pfizer began producing a key ingredient for these beverages, citric acid.

However, at that time, citric acid could only be extracted from sour oranges, resulting in low production. After the outbreak of World War I, the import of sour oranges became severely restricted, prompting Pfizer to seek alternatives.

James Currie, a food chemist, found a solution to this dilemma in 1919. He discovered a pathway to convert sugar into citric acid through mold fermentation. This breakthrough freed citric acid production from its reliance on fruits like sour oranges, leading to a significant increase in production.

By 1929, Pfizer had become the world's largest manufacturer of citric acid, with an annual production capacity reaching 10 million pounds during its peak.

This fermentation pathway not only made significant contributions to Pfizer's growth and development over the years but also laid the foundation for the company's production of antibiotics.

In 1928, British scientist Alexander Fleming accidentally discovered a mold that could "dissolve" Staphylococcus bacteria. He named this mold penicillin, which turned out to be one of the most important drugs of the 20th century.

However, due to difficulties in differentiation and purification, penicillin did not receive much attention initially.

In 1939, World War II broke out, and the intense warfare brought about a massive demand for anti-infection treatments, finally drawing attention to penicillin. Britain, threatened by Nazi Germany, had a significant need for penicillin but couldn't ensure successful research and development on its own. Consequently, they turned to the United States government for assistance.

After conducting research, the U.S. government convened Pfizer, Merck & Co., and Bristol-Myers Squibb to participate in bulk production research for penicillin. Faced with the challenge of mass-producing penicillin, all three pharmaceutical companies invested massive resources in a short period.

While Merck & Co. and Bristol-Myers Squibb focused on determining the molecular structure of penicillin, Pfizer took a different research approach. Leveraging their experience in citric acid production, Pfizer's researcher Jasper Kane applied the "deep tank fermentation method" from the citric acid production line to penicillin production. Within a mere four months, Pfizer's penicillin production reached five times the initially projected amount. In 1942, Pfizer sold a single vial of penicillin to the military, earning $150,000 after packaging.

During the Normandy campaign, 90% of the penicillin carried by the U.S. allies came from Pfizer. The success of penicillin paved the way for Pfizer's journey in the pharmaceutical industry.

Glory: Pfizer's Focus on R&D Yields Multiple Blockbuster Drugs

After World War II, the U.S. government lifted its restrictions on penicillin, allowing its civilian use.

In order to expand penicillin production capacity, Pfizer acquired an old shipyard from the wartime era in 1946. Over the next few years, Pfizer's penicillin production accounted for 85% of the United States' production and half of the global production, resulting in significant financial gains for the company.

Due to the lack of a patent for penicillin, the market quickly faced intense competition, leading to a rapid decline in prices. Pfizer began searching for its own antibiotic. After multiple experiments, in 1949, Pfizer discovered a broad-spectrum antibiotic called Terramycin, which was proven to be effective against 100 diseases at the time. This marked the first true Pfizer-branded drug (bearing the Pfizer label).

In 1950, Terramycin received FDA approval for commercialization. Within two years, Terramycin's sales reached $45 million. Over the next decade, Terramycin generated approximately $500 million in sales revenue for Pfizer. Pfizer subsequently introduced other antibiotics such as tetracycline.

In the latter half of the 20th century, the U.S. government began imposing restrictions on drug prices, causing Pfizer to be concerned about its prospects as a pharmaceutical company.

As a result, Pfizer embarked on a path of diversification. Its business expanded to include consumer goods, cosmetics, perfumes, petroleum, metal materials, and even pet supplies. In the long run, diversification prevented Pfizer from being acquired by competitors, which was significant for its development.

However, one consequence of diversification was a slowdown in the progress of drug pipeline development.

In 1972, Pfizer's newly appointed CEO, Edward Pratt, recognized this issue and started to divest non-profitable businesses, concentrating the company's resources on the pharmaceutical industry. Research and development expenses were increased from 5% to 20% of sales revenue.

With increased research and development investment, Pfizer introduced several blockbuster drugs.

In 1982, the antipyretic and analgesic drug Feldene (piroxicam) was launched, becoming the world's top-selling prescription anti-inflammatory drug at the time and Pfizer's first product to achieve annual sales of $1 billion. In addition to Feldene, Pfizer also launched hypertension medication Minipress (prazosin), antifungal drug Diflucan (fluconazole), diabetes medication Glucotrol (glipizide), and antibiotic Unasyn (ampicillin/sulbactam). These products generated enormous sales revenue for Pfizer.

Having tasted success in the pharmaceutical industry, Pfizer, starting in 1990, divested businesses such as citric acid and chemicals to focus on innovative drug development. In 1992, Pfizer introduced the antihypertensive drug Norvasc (amlodipine), with sales reaching $3.795 billion in 1999. In 1998, Pfizer launched Viagra (sildenafil), a drug initially intended for cardiovascular disease treatment but unexpectedly gained popularity for its role in improving erectile dysfunction. By the end of 1998, Viagra had been launched in 40 countries, generating revenues of $23.2 billion that year. According to statistics, at that time, four Viagra pills were consumed by patients worldwide every second. For over two decades, Viagra has remained a stable source of income for Pfizer.

Downturn: caught in a predicament

In the 21st century, facing the changing landscape of the global pharmaceutical industry and the gradual tightening of FDA drug approval policies, the risks and difficulties of new drug development have significantly increased, resulting in a substantial decline in the return on investment in research and development. Large pharmaceutical companies, including Pfizer, have been facing a survival crisis. Due to the need to maintain extensive infrastructure, Pfizer found itself in a predicament. In order to enhance efficiency, Pfizer aimed to ensure sustained profit growth through strong alliances.

In 2000, Pfizer acquired Warner-Lambert for $90 billion. Through this transaction, Pfizer gained control of the cholesterol-lowering drug Lipitor (atorvastatin), which is one of the best-selling prescription drugs in the pharmaceutical industry. In 2006, Lipitor achieved global sales of $12.9 billion, becoming the first medication in the history of medicine to exceed $10 billion in sales.

In 2002, Pfizer acquired Pharmacia for $60 billion, bringing the arthritis treatment drug Celebrex (celecoxib) under its portfolio. This deal earned Pfizer the nickname of the "universe's drug factory." However, Celebrex did not replicate the success of Lipitor.

In 2009, Pfizer acquired Wyeth for $68 billion, gaining access to star products such as Enbrel (etanercept) and the pneumonia vaccine Prevnar 13, marking Pfizer's entry into the field of biopharmaceuticals. These three acquisitions are the most representative cases in Pfizer's history, and numerous smaller acquisitions were also conducted to expand its product pipeline. However, except for the two years following the acquisition of Wyeth, Pfizer's revenue has remained relatively stable around $50 billion for the past 15 years, with no significant growth in performance.

As multiple blockbuster product patents expired, Pfizer's performance was squeezed, gradually losing its position as the top-ranked global pharmaceutical company. According to the global prescription drug revenue ranking published by the magazine "Pharmaceutical Executive," in 2020, Pfizer was surpassed by Swiss giants Roche and Novartis, ranking third in global prescription drug revenue. In 2021, due to the divestment of mature drugs, Pfizer's ranking in prescription drug revenue dropped to eighth place, narrowly avoiding falling out of the top 10. Net profit decreased by 41% year-on-year, and Pfizer entered a downturn.

Breaking the Deadlock: SARS-CoV-2 Products' Invaluable Contribution

In early 2020, the COVID-19 pandemic erupted, presenting Pfizer with an opportunity to regain its top position. In December 2020, Pfizer and BioNTech's collaborative development of the mRNA vaccine, Comirnaty, became the first SARS-CoV-2 vaccine approved in countries such as the United Kingdom and the United States. According to the Pharm Exec Top 50 list, based on the 2021 prescription drug sales revenue ranking, Pfizer made a strong comeback to the top of the list with a sales revenue of $72.043 billion.

Its total revenue in 2021 increased by a staggering 92% compared to 2020, primarily attributed to the revenue from the Comirnaty vaccine. In 2021, the production volume of Comirnaty exceeded 3 billion doses, with a total sales value of $36.8 billion.

As of now, Comirnaty has been administered in the United States and European countries for over 1 billion doses, and it is estimated that by the end of 2022, the total sales revenue of this vaccine will exceed $70 billion. While Comirnaty has helped countless individuals protect themselves from the ravages of COVID-19, it has also aided Pfizer in reversing its declining revenue trend.

辉瑞1.png — 2022 Global Pharmaceutical Companies TOP10 (Source: Pharmaceutical Executive)

Meanwhile, Pfizer's small molecule oral COVID-19 drug, Paxlovid, has also gained momentum. Paxlovid is a combination formulation of the 3CL protease inhibitor nirmatrelvir and a low dose of ritonavir, and it received FDA approval on December 22, 2021, for use in individuals aged 12 and above weighing at least 40 kilograms.

Paxlovid has received emergency approvals and inclusion in healthcare insurance domestically. According to the recent Vantage Preview Report 2023 published by Evaluate Vantage, Paxlovid has entered the top 10 list of global best-selling drugs for the first time and ranks fourth.

辉瑞2.png — The ranking of the top 10 global best-selling drugs in 2023 (Source: Evaluate Vantage)

Amidst the COVID-19 pandemic, Pfizer has regained its former glory as the "pharmaceutical powerhouse" through the enormous cash returns generated by its anti-COVID products.

In Pfizer's corporate history of over 170 years, it has experienced both prosperity and downturns. Looking at its fluctuating development history, Pfizer's growth into a pharmaceutical giant can be attributed not only to its ability to seamlessly integrate and acquire resources but also to its consistent emphasis on innovative research and development.

Since 2000, Pfizer has accumulated over $133.2 billion in research and development investment, and currently, there are still 104 projects in clinical development. Additionally, Pfizer's leadership possesses keen insight, enabling them to clearly see the direction of the company's development and leverage external forces to strengthen its business capabilities.

In the future, as the COVID-19 pandemic eventually subsides, the revenue from COVID-related products will inevitably be affected. At that time, we eagerly anticipate how Pfizer will optimize its assets and unleash its research and development vitality.

References

1.A history of Pfizer: https://www.drugdangers.com/manufacturers/pfizer/；

2.Arthur A, Daemmrich,Mary Ellen Bowden. The Top Pharmaceuticals That Changed The World，Chemical & Engineer News，2005, 83（25）;

3.Fernando K, Menon S, Jansen K, Naik P. Achieving end-to-end success in the clinic: Pfizer's learnings on R&D productivity. Drug Discov Today. 2021 Dec 15:S1359-6446(21)00544-4.