Pfizer will appoint Wyeth's consumer health president to manage its new Diversified Businesses group, which will include consumer, nutritional and animal health, as part of a reorganization following the companies' planned merger.

As president of the Diversified Businesses unit, Cavan Redmond will oversee Pfizer's Capsugel capsule business, both firms' animal health businesses and Wyeth's consumer and nutritional health businesses, Pfizer announced April 7.

Redmond's appointment underscores the importance of consumer health in diversifying Pfizer's portfolio (¹ Also see "Pfizer’s Wyeth Buy Rebuilds OTC Switch Potential" - Pink Sheet, 2 February, 2009., p. 10).

It also acknowledges the value of Wyeth's institutional knowledge about the consumer health industry and keeps it in the company.

The prominent position of Redmond, who will report to Pfizer CEO Jeff Kindler, and of Wyeth's consumer business in the company's new structure also may quiet speculation that Pfizer might sell the consumer business after the merger closes.

Redmond took over Wyeth's consumer health division in January 2008 after serving as executive VP and general manager of Wyeth Pharmaceutical's BioPharma unit. Consumer health care sales were relatively flat in Wyeth's fiscal 2008 - increasing less than 1 percent to $2.7 million.

Pfizer will promote two other Wyeth executives to head the Diversified Businesses' consumer health and nutritionals divisions under Redmond.

Sturman Succeeds Redmond

Paul Sturman, Wyeth's current president of U.S. and global business development, will succeed Redmond as president of consumer health for the merged companies, Pfizer said.

Sturman's arrival will be a homecoming of sorts. He served as senior VP of U.S. marketing at Pfizer Consumer Healthcare until Pfizer sold its consumer business to Johnson & Johnson in 2006 for $16.6 billion (² Also see "J&J, Pfizer Satisfy FTC Conditions To Clear Deal; EC Signs Off" - Pink Sheet, 18 December, 2006., p. 9).

At J&J, Sturman was president of J&J Consumer Healthcare, North America.

J&J's overall consumer health business 2008 revenue was $16 billion compared to Wyeth's $2.7 billion.

The consumer business, which will account for 3.8 percent of the combined company's business, includes the Centrum , Advil , Caltrate , ChapStick , Preparation H and Robitussin brands (see chart: " ³ Wyeth's Consumer Health Brands ").

Of these brands, Preparation H was the only OTC drug to grow in fiscal 2008 - creeping up 1.8 percent to $112 million in sales, according to Wyeth. It is also a category leader, accounting for 46 percent of hemorrhoid remedy sales in the 52 weeks ending Dec. 28, according to Information Resources, Inc.

Even though sales of Robitussin and ChapStick fell in fiscal 2008, Wyeth is the leader in the cough syrup category with 28.6 percent and the lip balm/cold sore medication category with 21 percent, according to Chicago-based IRI.

Wyeth's dietary supplements may be the real consumer health prize for Pfizer, though.

Wyeth's top-selling consumer brand is the multivitaminCentrum, which brought in $728 million in sales in fiscal 2008 - a 3.3 percent jump from 2007.

The OTC pain reliever Advil came in at No. 2 with $673 million in 2008, down 2 percent from 2007.

A dietary supplement holds third place and was a growth leader for Wyeth in 2008: Caltrate calcium supplements grew 10.3 percent to $249 million.

As these figures show, Wyeth's dietary supplements will give Pfizer "a very strong position" in the vitamin and dietary supplement market, which is a "highly growing area in OTC" that has "big room for expansion," said EuroMonitor International analyst Daniel Latev.

He notes VDS makes up about 42 percent, or $65 billion, of the $153 billion global OTC market, according to EuroMonitor's estimates, which includes supplement-only and pharmaceutical players in the VDS market.

Wyeth's VDS sales account for 2.9 percent of the market, a position that will help the combined company set itself apart from some of its competitors and further its diversity.

Nutritionals Exec Mann May Play Key Role

Pfizer also will promote Erica Mann, currently managing director of Wyeth Australia and New Zealand, to president of the nutritionals business under Redmond, Pfizer said.

Sales of Wyeth's nutritional products, including infant formulas SMA , Promil and Visoy , increased 13 percent to $1.6 billion in 2008 and should continue to grow with manufacturing site expansions for nutritionals under way in the Philippines, Singapore and Suzhou, China (⁴ Also see "Wyeth Nutritionals: Pfizer’s New MVP, Or Benchwarmer?" - Pink Sheet, 9 February, 2009., p. 10).

Additionally, Pfizer's Juan-Ramon Alaix will remain president of animal health, and Guido Driesen will continue as president of Capsugel.

Placing Capsugel in the same group as consumer health care products could create additional synergy opportunities.

Pfizer proposed acquiring Wyeth Jan. 26 in a $68 billion deal that Wyeth stockholders and regulators, including the Federal Trade Commission, still need to approve. FTC requested additional information about the proposed acquisition April 3.

Pfizer says it is cooperating with FTC and expects the deal to close at the end of the third quarter or during the fourth quarter of 2009.

The Bigger Picture

The new Diverse Businesses group is only one of three groups that house a total of nine businesses on the commercial side under Pfizer's reorganization. The other groups are BioPharmaceutical Businesses and Specialty Care and Vaccines Businesses.

The reorganization also includes forming two research units: the PharmaTherapeutics Research Group focused on the discovery of small molecules and related modalities and the BioTherapeutics Research Group focused on large-molecule research, including vaccines.

Pfizer's new approach to research is the most substantial change in the restructuring, and is an effort to create a more flexible company that can create "a broad and deep pipeline," Pfizer says.

- Elizabeth Crawford (e.crawford@elsevier.com); Carlene Olsen (c.olsen@elsevier.com) contributed to this story.

Pfizer To House Consumer, Nutritional Divisions In Diversified Businesses Unit

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