Hank McKinnell, Chairman and CEO of Pfizer

This is a partial transcript from Your World with Neil Cavuto, January 22, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: On the rise -- Pfizer. The world's largest drugmaker seeing its profits climb 46 percent in the latest quarter, topping estimates. Revenues up 14 percent, driven by sales of its cholesterol-fighting drug, Lipitor, and of course that little blue pill, Viagra. The stock though down 24 percent in the last year.

Here to talk about Pfizer's earnings, the man at the top, chairman and CEO Hank McKinnell. Hank, good to have you.

HANK MCKINNELL, CHMN. & CEO, PFIZER (PFE): Hello, Neil. Good to be with you.

CAVUTO: You know, Hank, I could never understand, looking at your stock, I think we have a chart of it as I speak here, you earn more than some of your major competitors combined and you are getting bludgeoned. What is going on?

MCKINNELL: We're down last year and this year about in-line with the S&P 500. We're doing a little better than the pharmaceutical industry, but we're not very happy.

CAVUTO: And now all of the attention seems at least in the market to be on Merck, but again they are not doing squat compared to you. And I just don't understand why the attention has shifted away.

MCKINNELL: Well, we do have a lower price-to-earnings ratio and a higher future growth rate that looks like a buying opportunity to a lot of people.

CAVUTO: All right. Not as yet though do you think the Street is just not getting it or what?

MCKINNELL: No, they get it. They are looking for completion of the merger with Pharmacia, which we expect to happen sometime later this first quarter. And the Street does pay for actuals not so much promises, but it's been performing well for two years now.

CAVUTO: All right. As the drug stocks have taken it on the chin, we're looking at some of your competitors there. I want to talk about products allegedly in the pipeline, maybe you can correct me, a pink Viagra, a Viagra for women, where does that stand?

MCKINNELL: Well, we spent about $15,000,000 discovering that sexual function in women was more complicated than men. We've unraveled part of that mystery. And we do have a number of drugs in development including Viagra for female sexual arousal disorder, for example, along with other problems in women's health.

CAVUTO: Do you find though that there is a market for women as there was for men, Viagra created, of course, a sensation. And now there is the hope that maybe you can do the same for women, but that women just would not buy a product like this, what do you say?

MCKINNELL: Too early to tell. We've not got a product ready for application the FDA yet, let alone having done the market research. But there is an unmet medical need here, one we are seeking to fill.

CAVUTO: What about the move now, a lot of individuals are getting their drugs from Canada, they think they can get it cheaper there, how would this affect you?

MCKINNELL: Well, some drugs are cheaper in Canada. The government of Canada sets those prices, not us. Some drugs are actually more expensive. The brand name products from the research-based industry tend to be priced relatively lower in Canada, not all but some. Canada does not have a research-based industry. They destroyed that decades ago. They do have a generic industry. And generic prices are higher in Canada than the United States. The simple facts, however, are that you can see larger differences within the city in which you live by shopping around pharmacy to pharmacy, than you can by going to Canada.

CAVUTO: All right. Hank McKinnell, always a pleasure seeing you. Thank you for stopping by.

MCKINNELL: Thank you, Neil.

CAVUTO: Hank McKinnell of Pfizer, the chairman and CEO in New York.

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