Pfizer management, more bullish than the Street on long-term revenue forecasts for the combination of Pfizer and Wyeth, assured investors that incremental growth opportunities will emerge from the mega merger during a follow-up meeting with investors Jan. 27.

The follow-up meeting, coming one day after Pfizer announced the $68 billion acquisition of Wyeth, gave management an opportunity to address investor concerns over Pfizer's long-range revenue guidance for the combined business in 2012.

Pfizer has said it expects combined revenues to total about $70 billion in 2012, but Street consensus estimates are lower, at about $66 billion.

"Pfizer's '12 revenue guidance of $70 billion for the combined Pfizer-Wyeth entity is $4 billion above our forecast, implying major pipeline successes, a weaker dollar, and/or a surge in emerging market sales growth," one analyst, Leerink Swann's Seamus Fernandez, said in a Jan. 27 research note.

Pfizer management responded to the pessimistic outlook by advising investors that indeed, incremental growth opportunities exist and are under-appreciated by the market.

"I think the gap between their models and ours is reasonably small when you look at the opportunities we have," Worldwide Pharmaceutical Operations President Ian Read told investors.

"We see lots of opportunities quite frankly to generate new sources of revenues that we don't believe are in the street numbers," CFO Frank D'Amelio added.

Emerging markets are a key opportunity, he said, using Asia Pacific (minus Japan, New Zealand and Australia) as one example. The $50 billion market is expected to grow to $80 billion by 2012. "If we just kept our 4 percent share on that $80 billion, that's $3.2 billion, [or] $1.2 billion of incremental revenue," he said. If Pfizer successfully increases its share in the region to 6 percent that would translate into incremental revenue of $3 billion, D'Amelio said.

Wyeth's vaccines business in Asia also offers opportunities.

"For instance, take Prevnar , which in China, is virtually untouched," Read said. "We have the infrastructure. We have the outreach to governments to make sure that vaccination occurs and the feet on the street to make sure those vaccinations occur with the pediatricians."

Access to Wyeth's vaccines and biologics portfolio and pipeline, including the pneumococcal vaccine Prevnar, are among the key reasons cited by Pfizer for the acquisition (Also see "With Wyeth, Pfizer To Become Second-largest Multinational Pharma In India" - Scrip, 27 January, 2009.)

Animal health, another under-appreciated asset, also will benefit from the combination of Pfizer's infrastructure with Wyeth's vaccines capability, Read said. The deal has the potential to make the animal health business as important to Pfizer as the launch of a new chemical entity pharmaceutical, he maintained.

If the deal were to fall through, Pfzier would be on the line for a hefty breakup fee, $1.5 billion within 30 days of the announcement. After that, the breakup fee increases to 3 percent of the total value of the deal (about $2.4 billion)," D'Amelio said.

- Jessica Merrill (j.merrill@elsevier.com)

[Editor's note: This story also appeared in the 'The Pink Sheet' DAILY, Jan. 27, 2009.]

Pfizer/Wyeth Will Produce (Incremental) Growth, Pfizer Assures Investors

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