Pfizer streamlines research to prepare for post-Lipitor world
Pfizer is going through major structural changes designed to streamline the organisation and position itself for the post Lipitor era. In January 2007 Pfizer announced that it would axe 10% of its global workforce by the end of 2008 to streamline its operations and achieve $2 billion in cost savings. The cuts were expected to lead to the closure of two manufacturing plants (Brooklyn and Omaha) and five research centers in the United States, plants in Japan (Nagoya) and France (Amboise) and the selling of a factory in Germany (Feucht).
The announcement came just weeks after Pfizer was forced to halt its phase III trial for its star heart drug Torcetrapib. Pfizer had hoped the drug would replace its blockbuster drug Lipitor which is due to lose its patent in 2010. Pfizer is predicted to lose 41% of its sales to generic competition between 2010 and 2012 when the patents for Norvasc and Zyrtec as well as Lipitor expire.
The closure of five research centers is part of a general shake-up of Pfizer's research and development management. The company is consolidating its research teams, originally spread globally, into specific therapeutic areas located in a single site headed by one leader. Pfizer has also dropped its discovery research in gastroenterology and dermatology except where compounds had already entered the pipeline. John L LaMattina, he Head of Pfizer's Research and Development resigned in May 2007.
Pfizer is signaling that the changes will have ramifications in the licensing and and alliance management functions. Prior to the reorganization licensing was handled by the research and development department and acquisitions by the financial department. Late last year it was reported Pfizer's vice chair, David L Shedlarz, planned to improve the co-ordination and communication channels for licensing and acquisition and to broaden Pfizer's definition of collaboration beyond mergers and licensing to include co-promotion deals, equity investments, and other options.
Pfizer has pursued a number of avenues to bolster its product portfolio. In February 2007 Pfizer agreed to acquire BioRexis Pharmaceutical, a privately-held biopharmaceutical company based in Philadelphia and founded in 2002. BioRexis has an early stage diabetes pipeline and proprietary protein engineering technologies.
Pfizer is reaching down the corporate life cycle to find value. In May 2007 the company announced it will invest $10 million a year for five years to fund a biotechnology incubator in Pfizer's 26,600 square feet empty laboratory in San Diego. The place has room for between five and eight individual company laboratories. While operating autonomously from Pfizer, the incubator aims to support companies that with potential new drug candidates or technologies favourable to Pfizer's research and development strategy. All tenants entering the incubator will have to agree to an upfront equity-share agreement with Pfizer and give Pfizer an option to acquire rights to any resulting products at a fair market price. Pfizer will provide chemicals, tissue samples, computers to the tenant companies. Occupants are entitled to space and funding for two years, provided they meet certain milestones.
Catherine Mackey, a senior vice president of Pfizer Global Research and Development and head of the laboratories indicated that if the incubator works in San Diego, Pfizer might try it elsewhere. One place that might benefit from such a venture would be Michigan, where Pfizer is currently laying off over 2,100 of its workers.
Pfizer has more than two million square feet of facility space in Michigan, including 45 buildings, of which 50% is devoted to laboratory work. Entrepreneurship incubator and funding programs have been in place in Michigan for some years, many funded by Pfizer. Working with Pfizer the Michigan Economic Development Corporation is offering $12 million in grants to promote life science start-up companies in the state. Aiming to capture some of the scientists laid off from Pfizer, the start-ups could be useful to Pfizer's pipeline in the future.
Start-ups have proved important to Pfizer's pipeline in the past. The Michigan based Esperion Therapeutics which was acquired by Pfizer in 2003 brought to the company the blockbuster drug Lipitor. Pfizer's Esperion unit is among the three research centers to be closed in Michigan, but its former founders and employees are reported to be actively looking to start new companies which may in the future benefit Pfizer's pipeline again.
TAGS: Lay-offs Pfizer Research || Post to del.icio.us 
|| Mail us about this analysis 
