Pfizer Ltd is in the process of merging with Parke-Davis India Ltd, the affiliate of Warner-Lambert that was acquired by the US parent two years ago.
It spent much of the year training a new field force formed by the consolidation, though the legal formalities for the merger are expected to be completed only by December.
The two companies, in which Pfizer Inc now owns a 40 per cent each, will report results separately for the year to November 30. Weve had difficulties in combining two large sales forces, and our sales growth in this quarter is down to single digits, which is a source of frustration, managing director Hocine Sidi Said said in an interview late on Tuesday.
He said Pfizers sales would dip and Parke-Daviss would rise, though combined turnover would remain at around last years Rs 6.5 billion ($134.27 million). But the operating profit to sales ratio would improve in both companies.
He said the merger would result in savings of Rs 50 million in the first year and Rs 100 million in the next. The two firms have cut their workforce by around nine per cent with 258 of 2,900 staff opting for employee separation.
I see the merged entity recording 11-12 per cent sales growth about two percentage points more than the market in the next two quarters as the changes start taking effect, he said. Pfizer shares have lost eight per cent to Rs 411 in 2002, in line with the Bombay benchmark which has lost 7.77 per cent. The merger has increased the size of Pfizers field force by about two-thirds to near 1,200. Mr Said said Pfizer would also integrate its Indian operations with those of Pharmacia Corp by March, though a legal merger of the companies in India would likely take till end-2003.
Pfizer Inc said in July it would buy Pharmacia for about $60 billion. Pharmacia operates two Indian firms, fully owned Pharmacia India Pvt Ltd and the 75-per cent held Pharmacia Healthcare Ltd it bought from Abbott Inc.
Mr Said declined to comment on the modalities of the Pharmacia merger in India.
Once the global transaction is closed we can officially approach our colleagues in Pharmacia and then get into operational consolidation mode, he said, adding this merger process would move faster than in the case of Parke-Davis India.
According to current figures from market audit firm ORG Marg, the two mergers will move Pfizer from the 11th position in terms of market share to fourth, ahead of Nicholas Piramal and the fast-growing Sun Pharma.
But the multinational has had to face cut-throat competition in the past from Indian firms, which are allowed by local law to make cheap copies of drugs patented in the West as long as they use a different process.
Competition forced Pfizer to slash prices of its heart drug Amlogard after many Indian copies hit chemists shelves.
But Mr Said, an outspoken advocate of stronger patent laws, said Pfizers new drug launches would continue. The anti-depressant drug Daxid is to be launched in a weeks time.