Challenges and Opportunities for Growth and Innovation in Pharmaceuticals and Biotechnology

Colorado’s Bioscience Community: Building on the Foundation August 28, 2007

David K. Rosen, D.V.M.

Head, Development and

Commercial Strategic Alliances

Pfizer Inc

Challenges and Opportunities for Growth and Innovation in Pharmaceuticals and Biotechnology

Colorado’s Bioscience Community: Building on the Foundation August 28, 2007

David K. Rosen, D.V.M.

Head, Development and

Commercial Strategic Alliances

Pfizer Inc

2

Pfizer is an Innovative, Global Research-Based Health Care CompanyPfizer is an Innovative, Global Research-Based Health Care Company

Lipid-Lowering Hypertension/Angina

Arthritis

Depression/Anxiety

Antibiotic

Erectile Dysfunction

Fibromyalgia

Antifungal

Lipid-Lowering Hypertension/Angina

Arthritis

Depression/Anxiety

Antibiotic

Erectile Dysfunction

Fibromyalgia

Antifungal

ProductsProducts CategoryCategory

LyricaLyrica

3

PURSUE AGGRESSIVELY – Increase investment to ensure success Risk: Multiple shots on goal to offset risk Speed: Invest for speed

STANDARD – Current Pfizer approach to drug development

ALTRUISTIC – Targeted investment to address social need

STAGED INVESTMENT Technical Doability: Develop the science Commercial Doability: More market research to understand the opportunity

MONITOR – Do not invest until technical or commercial opportunity clarifies

EXIT – No further investment in this area

Therapeutic Area StrategyHow it Works in PfizerTherapeutic Area StrategyHow it Works in Pfizer

4

Pharmaceutical Industry Challenges

Pharmaceutical Industry Challenges

5

Pfizer Conducts R&D GloballyPfizer Conducts R&D Globally

La Jolla, CA

New London & Groton,CT

Sandwich,ENGLAND

St. Louis,MO

Exiting:

•Kalamazoo, MI•Ann Arbor, MI•Nagoya , Japan

Cambridge, MA

6

Shrinking Market ExclusivityShrinking Market Exclusivity

Inderal - 1965Inderal - 1965

Tagamet - 1977Tagamet - 1977

Capoten - 1980Capoten - 1980

Seldane - 1985Seldane - 1985

AZT - 1987

Mevacor - 1987Mevacor - 1987

Prozac - 1988Prozac - 1988

Diflucan - 1990Diflucan - 1990

Recombinate - 1992Recombinate - 1992

Celebrex - 1999Celebrex - 1999

0 1 2 3 4 5 6 7 8 9 100 1 2 3 4 5 6 7 8 9 10

Years of Exclusivity for Innovative DrugYears of Exclusivity for Innovative Drug

Lopressor - 1978Lopressor - 1978

Zantac - 1983Zantac - 1983

Vasotec - 1985Vasotec - 1985

Hismanal – 1989Hismanal – 1989

Videx – 1991Videx – 1991

Pravachol – 1991Pravachol – 1991

Zoloft – 1992Zoloft – 1992

Sporonox – 1992Sporonox – 1992

Kogenate – 1992Kogenate – 1992

Vioxx– 1999Vioxx– 1999

Innovative Drug /Innovative Drug /Year IntroducedYear Introduced

22ndnd Generation GenerationDrug/YearDrug/Year

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High Attrition Rate in Drug DevelopmentHigh Attrition Rate in Drug Development

~100 Discovery Approaches~100 Discovery Approaches

1 –2 1 –2 ProductsProducts1 –2 1 –2

ProductsProducts

High Risk Process

12-15 years, ~$1 B/candidate

High Risk Process

12-15 years, ~$1 B/candidate

DiscoveryDiscovery Exploratory DevelopmentExploratory Development

IdeaIdea DrugDrug11 - 15 Years11 - 15 Years

Full DevelopmentFull Development

Phase I Phase II Phase III

00 151555 1010

Preclinical Pharmacology

Preclinical Safety

Thousands ofCompounds Screened

Clinical Pharmacology& Safety

~250~250

~5~5

8

MCSF mAbMCSF mAb

MAdCAM mAbMAdCAM mAb

IGF1R mAbIGF1R mAb

PEG-hGHPEG-hGH

ETC-642ETC-642

TLR CPG 7909TLR CPG 7909

T2-TrpRST2-TrpRS

CD40 mAbCD40 mAb

CTLA4 mAbCTLA4 mAb

ETC-588ETC-588 ETC-216ETC-216

(interferon beta-1a) (dalteparin sodium injection)(pegvisomant for injection) human insulin powder

Expanding the Scope of R&DFuture Biologics PowerhouseExpanding the Scope of R&DFuture Biologics Powerhouse

$1.5 Billion Pfizer $1.5 Billion Pfizer 2006 Biologics Sales2006 Biologics Sales

NY 7/31/2006

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Exubera®: The first inhaled insulin

A breakthrough in diabetes treatment

Exubera®: The first inhaled insulin

A breakthrough in diabetes treatment

Non-Invasive Protein DeliveryNon-Invasive Protein Delivery

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Biomarkers, Diagnostics and Devices Biomarkers, Diagnostics and Devices

Pfizer is interested seeing these biomarkers, diagnostics and devices developed and commercialized but our role is enabling

Our interest is in access to the technology for R&D; results and data

How will we use these technologies? Designing medicines Monitoring disease Identifying patients who will respond to a medicine Identifying patients who might respond adversely

to a medicine

Pfizer is interested seeing these biomarkers, diagnostics and devices developed and commercialized but our role is enabling

Our interest is in access to the technology for R&D; results and data

How will we use these technologies? Designing medicines Monitoring disease Identifying patients who will respond to a medicine Identifying patients who might respond adversely

to a medicine

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Data ManagementData Management

Our needs extend beyond what would traditionally be seen or considered as science Applications like medical records are obvious

What else do we need to do or want to do with this data? Data acquisition Data mining Data analysis Data exchange and meta-analysis

– clinical trials– diagnostics and genetic testing

Our needs extend beyond what would traditionally be seen or considered as science Applications like medical records are obvious

What else do we need to do or want to do with this data? Data acquisition Data mining Data analysis Data exchange and meta-analysis

– clinical trials– diagnostics and genetic testing

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Precompetitive and Competitive Technologies an Alzheimer’s Disease ExamplePrecompetitive and Competitive Technologies an Alzheimer’s Disease Example

Precompetitive Technology: We all need better (more accurate at an earlier stage of

disease), faster, less expensive ways to diagnose AD Help us enroll patients in clinical trials with confirmed

AD Determine if drug was having impact on disease

progression Fund as a consortium?

Competitive Technology An AD diagnostic customized for our compound which

would allow us to compare how our drug is impacting the patient as compared with similar therapies

Fund on our own

Precompetitive Technology: We all need better (more accurate at an earlier stage of

disease), faster, less expensive ways to diagnose AD Help us enroll patients in clinical trials with confirmed

AD Determine if drug was having impact on disease

progression Fund as a consortium?

Competitive Technology An AD diagnostic customized for our compound which

would allow us to compare how our drug is impacting the patient as compared with similar therapies

Fund on our own

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Productivity ChallengeProductivity Challenge

Total R&D Investment Total R&D Investment ($Billions)($Billions)

$0$0

$5$5

$10$10

$15$15

$20$20

$25$25

1970

1970

1975

1975

1980

1980

1985

1985

1990

1990

1995

1995

2000

2000

Source: 2006 PhRMA Annual SurveySource: 2006 PhRMA Annual Survey

$30$30

$35$35

2005

2005

$40$40

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Total BioPharmaceutical R&D Spending 2005-2006 ($Billions)($Billions)Total BioPharmaceutical R&D Spending 2005-2006 ($Billions)($Billions)

Source: 2006 PhRMA Annual SurveySource: 2006 PhRMA Annual Survey

$0$0

$5$5

$10$10

$15$15

$20$20

$25$25

1970

1970

1975

1975

1980

1980

1985

1985

1990

1990

1995

1995

2000

2000

$30$30

$35$35

2005

2005

$40$40

$45$45

$50$50

$55$55Biotech

20%

Biotech

20%

Pharma

80%

Pharma

80%

Total spending increased by $3.4 B

From 2005 to 2006

Total spending increased by $3.4 B

From 2005 to 2006

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Staying Competitive in a Changing Global Environment: Pfizer’s evolving strategyStaying Competitive in a Changing Global Environment: Pfizer’s evolving strategy

Technical expertise is available around the globe India has chemistry innovation China has chemistry innovation and clinical trial

capacity South Korea has advanced data collection and

transmission, patient monitoring and clinical trial capacity and implementation

All of these countries have scientific and technical experts educated in the west and trained at the top 20 pharmaceutical companies in the west

Technical expertise is available around the globe India has chemistry innovation China has chemistry innovation and clinical trial

capacity South Korea has advanced data collection and

transmission, patient monitoring and clinical trial capacity and implementation

All of these countries have scientific and technical experts educated in the west and trained at the top 20 pharmaceutical companies in the west

Opportunities for Growth and Innovation

Opportunities for Growth and Innovation

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We are one of the leading source of Biotech fundingWe are one of the leading source of Biotech funding

$7.5$7.5

$1.6$1.8

$2.3$2.3

$4.4$4.8

$5.2

$7.1

$7.7

1996 1998 2000 2002 2004 2006

($Billions)

Source: Pfizer Annual Report

Total Strategic Alliances Spending: >$1.4B in the last 4 years

“Pfizer…the largest source of discovery stage biotech capital” Source: In Vivo, September 2004

Industry leading investment in R&D

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2006: Over 1800 business transactions/ >800 collaborations

Global organization of 56 people at 6 sites in US/EU/AustralAsia - predominantly scientific expertise with enhancements: Finance, Business, Law, Medicine, Marketing/Sales, M&A

Global colleague interaction allows synergistic expertise

Strategic Alliances presently covers all areas of Research and Development including deals/technologies that interface with Manufacturing, Veterinary Medicine, PGP, and Consumer Health Care

2006: Over 1800 business transactions/ >800 collaborations

Global organization of 56 people at 6 sites in US/EU/AustralAsia - predominantly scientific expertise with enhancements: Finance, Business, Law, Medicine, Marketing/Sales, M&A

Global colleague interaction allows synergistic expertise

Strategic Alliances presently covers all areas of Research and Development including deals/technologies that interface with Manufacturing, Veterinary Medicine, PGP, and Consumer Health Care

Extensive External ReachExtensive External Reach

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Agreement TypesAgreement Types

Non-disclosure agreement

Material transfer agreement

License to patent/intellectual property

Research collaboration

Corporate collaboration (major deal)

Consultantship

Fee for service (outsourcing contracts)

Acquisition of new chemical entities

Non-disclosure agreement

Material transfer agreement

License to patent/intellectual property

Research collaboration

Corporate collaboration (major deal)

Consultantship

Fee for service (outsourcing contracts)

Acquisition of new chemical entities

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Alliance TypesAlliance Types

Research – Genes, Leads, Targets, Technology (Scripps)

Candidate Producing (Kosan, ICAgen)

In-Licensing – Early & Late Stage (Renovis, TransTech)

Out-licensing – Assets, IP, Patents, Niche products (Darafenicin)

Joint Venture – Marketing for Products (Insulin production)

Co-promotion Deals – Risk & Reward (Rebif)

M&A – Pipeline, Resources, Financial, Strategic (Rinat, Powdermed)

Research – Genes, Leads, Targets, Technology (Scripps)

Candidate Producing (Kosan, ICAgen)

In-Licensing – Early & Late Stage (Renovis, TransTech)

Out-licensing – Assets, IP, Patents, Niche products (Darafenicin)

Joint Venture – Marketing for Products (Insulin production)

Co-promotion Deals – Risk & Reward (Rebif)

M&A – Pipeline, Resources, Financial, Strategic (Rinat, Powdermed)

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Pfizer Global Research and DevelopmentMajor Alliance Partnerships: March 2006Pfizer Global Research and DevelopmentMajor Alliance Partnerships: March 2006

AthersysChondrogene MetabolexKarolinska U. PittsburghWash. U

AffymetrixDeltagenInPharmaticaXenogenLexicon GenChondrogeneCerepPerlegen/NIHScripps

BiotroveEvotec Stem Cell SciU. DundeeXenoportLillyActivXSangamoOdyssey Th.

AmgenCerepEntelosSpotfireMedarexMorphosysQuorexIsisTRansTechArchimex

NeurionVicuron (acqu)Wake ForestMonogramRigelNicoxAngiosynIdun (acqu)ColeyRenovisNoxxonGeneLogic

AmershamU. CambridgeCuragenGeneLogicLonzaMeridica (acq)Kings Pain CtrNIAVirtual ScopicsYaleSymyxBoehringer IngelheimChromosiCardiac

U. MichiganProModelGenestructCodexisPerlegenLifespanGenizon

Alza Atrix (QTL)VentairaBendNektarFreie Univ. U. RochesterOxford Biosensors

GeneGene FunctionFunction ScreenScreen LeadLead CandidateCandidate DevelopmentDevelopment SpeedSpeedProduct

EnhancementProduct

Enhancement

Altering the R&D Altering the R&D Productivity ParadigmProductivity Paradigm

Altering the R&D Altering the R&D Productivity ParadigmProductivity Paradigm

Speeding/Enhancing Speeding/Enhancing DevelopmentDevelopmentCandidatesCandidates

Speeding/Enhancing Speeding/Enhancing DevelopmentDevelopmentCandidatesCandidates

Enhancing Enhancing Pipeline ValuePipeline ValueEnhancing Enhancing

Pipeline ValuePipeline Value

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How will Pfizer Invest in New Technologies in 2007 and Beyond?How will Pfizer Invest in New Technologies in 2007 and Beyond?

CAN-producing alliances

TAPT Enablers

SPEED/Efficiency/Process

Emerging Sciences

Flexible Budget

Strategic themes for SA investments

Productivity CAN producing alliances TA Enablers- focused alliances Emerging science/technologies investments

Leveraging Scale Cross-line technology investments Technologies enhancing Speed/Efficiency/Process

Strategic themes for SA investments

Productivity CAN producing alliances TA Enablers- focused alliances Emerging science/technologies investments

Leveraging Scale Cross-line technology investments Technologies enhancing Speed/Efficiency/Process

Periodic review of where

we are investing

Periodic review of where

we are investing

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Investing In The FutureInvesting In The Future

Gene Therapy

Therapeutic Vaccines

Biomarkers, Diagnostics and Personalized Medicine

Data Management

Pfizer’s Incubator

Gene Therapy

Therapeutic Vaccines

Biomarkers, Diagnostics and Personalized Medicine

Data Management

Pfizer’s Incubator

NY 7/31/2006

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Pfizer Strategic Alliances

Thank you

Pfizer Strategic Alliances

Thank you