Pharmaceutical Executive Digest Europe - March 18, 2009 - (Page 6) Megamergers a lot of people, and then take the rest and do whatever it is they do to them to Pfizerize their productivity.” Under Kindler, Pfizer has sliced and diced both its R&D and its sales behemoths into smaller (“nimbler,” “more entrepreneurial,” etc) groups, focusing on primary care, specialty pharma, emerging markets, oncology and established products. The firm is also jettisoning all research into cardiovascular disease, among other areas, to focus exclusively on Alzheimer’s, oncology, diabetes, inflammation, pain and schizophrenia. Kindler has, however, voiced his respect for Wyeth’s R&D process as well as his intention to preserve it. What Wyeth brings to the merged pipeline is significant expertise in immunology and inflammation, including rheumatoid arthritis, leukemia, and lymphoma, as well as the CNS category, especially Alzheimer’s. Only 66% of its portfolio relies on small-molecule drugs, with therapeutic proteins accounting for 18% and vaccines for 16%. But can “learn and confirm” be Pfizerized and survive? “This integration will be different,” says Pfizer’s Ray Kerins. “It will be smoother and quicker because Pfizer has been restructured into many smaller units, and each will do its own integrating. We’re not putting together two big companies as in the past.” Still, the knowledge that 15% of the staff will get the boot has begun to degrade morale and productivity. Both companies’ field offices reportedly will be hardest hit. Pink slips have already started to go out, as have many more resumés. All told, it is forecasted that post-merger Pfizer will eke out a profit of 0.9% over the next four years — a sign of progress when compared to its estimated pre-merger loss of 5.3% for the same period. Big Pharma/Bigger Pharma Many pharma watchers assume that the Pfizer–Wyeth deal, along with a successful takeover of Genentech by Roche, will trigger industry-wide defensive — or desperate — consolidations. (In fact at press time, Merck announced its $41.1 billion acquisition for Schering-Plough, which, among other things, immediately doubles its Phase III pipeline to 18.) “If Pfizer–Wyeth becomes a reality, we enter a new realm of ‘Super-MegaGlobal’ pharmaceutical giants,” says Larry Rothman, a former Capgemini/ Ernst & Young partner who blogs at Pharmservices.com: “This may force other merely mega-globals into a merger frenzy … in an industry known for follow-theleader mentality.” Spot-the-merger-target is a perennial parlour game of analysts, but the fun has suddenly turned serious. Peter Young says: “The rest of the industry is in a panic — they don’t want to be dwarfed by Pfizer,” he says. “This could be seen as an alarm about how serious Pfizer’s troubles are. Or it could be a setback — turning the clock back to the bigger-is-better era.” Yet as the overwhelming skepticism greeting the Pfizer–Wyeth deal suggests, size may offer many costs and few benefits. Is the industry itself big enough to sustain a Big Pharma and a Bigger Pharma? Only time will tell. “The brutally simple problem is innovation,” says Harvard Business School’s Gary Pisano. “To add value, you have to find a way of making good drugs. Every other strategy is a sideshow.” The return of megamergers may mark the return of the elixir of innovation to Pfizer and an industry in deep need of it. But few longtime pharma watchers think so. Still, it’s way too soon to write off Jeffrey Kindler’s fateful gambit. “The spirit of small, the power of scale” may prove to be something more than the epitaph to his career. Additional research for this article was done by Cassandra Blohowiak. To read the article in full, please click here. 1 NEWS 2 FROM THE EDITOR / NEWS 3 MEGAMERGERS 7 NEW SALES MODELS 10 UK NEWS 12 CALENDAR 13 ON THE MOVE CLICK TO SUBSCRIBE TO PHARM EXEC http://www.pharmaservices.blogspot.com/ http://pharmexec.findpharma.com/ http://pharmexec.findpharma.com/ http://www.pharmexeceurope.com/europharmexec/newsletter/subscribeNewsletter.jsp
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Digest Europe - March 18, 2009 Pharmaceutical Executive Digest Europe - March 18, 2009 Contents From the Editor Pfizer-Wyeth Sales News Calendar On the Move Pharmaceutical Executive Digest Europe - March 18, 2009 Pharmaceutical Executive Digest Europe - March 18, 2009 - Contents (Page 1) Pharmaceutical Executive Digest Europe - March 18, 2009 - From the Editor (Page 2) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 3) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 4) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 5) Pharmaceutical Executive Digest Europe - March 18, 2009 - Pfizer-Wyeth (Page 6) Pharmaceutical Executive Digest Europe - March 18, 2009 - Sales (Page 7) Pharmaceutical Executive Digest Europe - March 18, 2009 - Sales (Page 8) Pharmaceutical Executive Digest Europe - March 18, 2009 - Sales (Page 9) Pharmaceutical Executive Digest Europe - March 18, 2009 - News (Page 10) Pharmaceutical Executive Digest Europe - March 18, 2009 - News (Page 11) Pharmaceutical Executive Digest Europe - March 18, 2009 - Calendar (Page 12) Pharmaceutical Executive Digest Europe - March 18, 2009 - On the Move (Page 13)
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