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Pfizer , the world's largest drug company, followed the announcement of a 20% reduction in its U.S. sales force last week with a briefing for analysts on advances in its R&D pipeline.
The staff cut of about 2,200 jobs, an overall 2% workforce reduction, results from a strategic review announced by Pfizer in October, following the replacement of CEO Henry A. McKinnell Jr. by Jeffrey B. Kindler, a former General Electric executive. Industry analysts say the cuts are in response to a drop in new drug introductions since the industry's heyday of the 1990s, when Pfizer and its competitors ramped up their sales forces.
Kindler told analysts, however, that the company's research efforts, combined with an aggressive acquisition, partnership, and licensing push, will result in a significant stream of new drugs beginning in 2010. He said Pfizer currently has 242 development programs spanning 11 therapeutic areas-the largest pipeline in its history.
"The depth of our midstage pipeline gives us confidence that we can generate a steady stream of new products that will address significant unmet medical needs," Kindler said.
John LaMattina, president of global R&D at Pfizer, told analysts that the company's Phase III drug portfolio "will grow dramatically and may even triple from 2006 to 2009." He said he is targeting four new product introductions per year beginning in 2011.
The company's main areas of focus include cardiovascular, metabolic, and endocrine diseases; infectious disease; oncology; and neuroscience. Its lead drug candidate combines torcetrapib, which raises levels of so-called good cholesterol, with Lipitor, Pfizer's top-selling bad-cholesterol-lowering drug. LaMattina said the Phase III product "has the potential to change the face of cardiovascular medicine."
Michael Krensavage, a drug industry analyst with Raymond James & Associates, acknowledges Pfizer's R&D headway, noting its recent launch of Exubera, an inhaled insulin, and Chantix, a smoking-cessation pill. "Pfizer has become more successful in R&D," he says. "Spending $7.5 billion a year on R&D, it should be more successful."
As to the staff reduction, Krensavage says it reflects a shift in management under Kindler. McKinnell, he contends, was slow to recognize that Pfizer was "no longer a growth company."
The analyst adds that Pfizer, a bellwether among the drug majors, is leading what is likely to be a trend of sales staff reductions in the pharmaceutical industry. "It's like the beginning of nuclear disarmament," he says.
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