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5 Things You Probably Didn't Know About Pfizer Inc.

By Keith Speights – Jul 23, 2017 at 5:01AM

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Creating tasty tapeworm medicines and helping win World War II? Yep. And there's more you probably didn't know about the big drugmaker.

Many people can name one of Pfizer's (PFE 0.43%) products. From over-the-counter products such as Advil and Robitussin to powerful prescription drugs such as Eliquis and Ibrance, Pfizer makes some of the best-selling products in the world.

For investors, probably one of the main things that stands out about Pfizer is the company's dividend, whose yield ranks among the top in the biopharmaceutical industry.

There's more about Pfizer that isn't as well known, though. Here are five things you probably didn't know about the big pharma company. 

Pfizer headquarters

Image source: The Motley Fool.

1. Tapeworm origins 

Two cousins, Charles Pfizer and Charles Erhart, founded Charles Pfizer & Company back in 1849. The two young men, raised in Germany, borrowed $2,500 from Charles Pfizer's father to start the company in a red-brick building in Brooklyn, N.Y.

Their first product was a tastier form of a drug used to treat intestinal tapeworms. Pfizer was a chemist, while Erhart was a confectioner. They combined forces and expertise to develop a version of the drug santonin with almond-toffee flavoring. 

2. Two major turning points during World War II

Pfizer remained privately held throughout most of its first century in business. However, in 1942 the company offered 240,000 new shares of common stock to the public.

Its primary product in the years leading up to becoming publicly traded was citric acid. In 1941, though, Pfizer launched a major effort to produce penicillin using deep-tank fermentation. Just a few years later, Pfizer made most of the penicillin given to the Allied forces that stormed Normandy on D-Day in World War II.

3. No pharmaceuticals sold in the U.S. under its own label until 1950

After the end of World War II, Pfizer initiated a significant effort to identify new organisms to treat diseases. This effort paid off, with the company launching its first pharmaceutical sold in the U.S. under the Pfizer label. That drug was an antibiotic marketed as Terramycin.

The launch of Terramycin also led Pfizer to establish its first pharmaceutical sales force. A grand total of eight salesmen formed the beginnings of what would grow to become one of the world's largest pharmaceutical sales teams. 

4. The world's largest drugmaker

Pfizer doesn't have the highest market cap among big pharma companies. That distinction belongs to Johnson & Johnson. However, much of J&J's revenue stems from consumer products and medical devices. In terms of prescription-drug sales, Pfizer holds the title of largest drugmaker in the world.

It's possible that Pfizer might lose its No. 1 position in a few years. Even if that happens, though, the company should continue to rank near the top.

5. The biggest spender on R&D and M&A 

There are a couple of big pharma companies that spend more on research and development (R&D) than Pfizer does. However, when mergers and acquisitions (M&A) are added to R&D spending over the period from 2006 to 2016, Pfizer ranks at the top.

Pfizer's latest major deals were its acquisitions last year of Anacor Pharmaceuticals and Medivation. Some might question the amount of money Pfizer has spent on M&A. It's likely, though, that several of the drugs gained through the company's deals should be big winners for Pfizer in the future.

The company's buyout of Anacor added Eucrisa to Pfizer's lineup. The eczema drug is expected to generate peak annual sales of $2 billion. Pfizer's purchase of Medivation allowed it to pick up prostate cancer drug Xtandi and experimental breast cancer drug talazoparib. Peak sales for Xtandi could reach close to $5 billion, while talazoparib may eventually bring in $3 billion per year if approved.

Keith Speights owns shares of Pfizer. The Motley Fool owns shares of and recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

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