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Pfizer to chop off 40% of its business?
  pharmatimes World News | March 15, 2011
Selina McKee
Pfizer stock was nudged up on news that the firm might be considering a radical trim of its business units to place itself in better stead for future growth.
According to a research note by Bernstein Pharmaceuticals analyst Tim Anderson, the world's number one drugmaker could get rid of divisions responsible for almost half of its $67 billion revenues, in a gutsy strategy to reinvent itself as an undiluted pharmaceutical research business.
Anderson notes that the move could see Pfizer not only give its non-pharma divisions the chop but also its multi-billion-dollar Established Products operation, which sells off-patent medicines, in a bid to shrink its size and sustain momentum.
His comments come on the back of a meeting with Pfizer's new chief executive Ian Read. "Had we not heard it firsthand, we might not have appreciated just how serious he is about potentially splitting up the company," Anderson said, as reported by Forbes.
Read previously announced that the drug giant's entire portfolio is up for review this year, and it appears that high on the agenda is shrinking the business and honing its focus for a better footing going forward.
After years at the top Pfizer looks set to lose its crown as the biggest pharmaceutical firm in the world as its grapples with patent losses on some its flagship drugs next year - including what is currently the world's number one seller Lipitor (atorvastatin), the antiulcerant Protonix (pantoprazole) and Viagra (sildenafil) for erectile dysfunction - cutting a huge chunk out of its sales.
The company has already embarked on a rather aggressive cost-cutting programme under which it plans to reduce global R&D spend by up to $2.0 billion, closing down facilities and dumping no less than 46 of its research projects in the last six months or so alone, as well a 15% reduction in its workforce, but it seems that other major changes could be on the horizon.
Pfizer dumps 15 R&D projects, completes King buy
World News | March 02, 2011
Selina McKee
The world's number one pharma Pfizer has trimmed its R&D pipeline again, this time axing 15 experimental projects in a bid to streamline its operations and save some cash.
Those that have been given the chop span early to late development stages, and include Lyrica for Generalised Anxiety Disorder, which was in the registration phase, as well as three Phase III projects: apixaban for Acute Coronary Syndrome; Thelin (sitaxentan) for Pulmonary Arterial Hypertension; and Lyrica (pregabalin) for post-operative pain.
The move follows an earlier cut into its R&D pipeline unveiled in Autumn last year, when the drug giant said no less than 31 different projects had to go to help it leverage its best assets and thereby maximise efficiency.
Then, in February, Pfizer announced plans to cutback its global R&D spend by some $1.5-$2.0 billion, a move which spelled the end of its largest European research facility, based in Sandwich, England, as well as other sites in Europe and North America, in order to create a more focused and sustainable R&D engine for innovation.
The company's reign as the world's biggest drugmaker could be coming to an end, as it is forced to grapple with a huge patent cliff that could put a significant dent in its sales.
In 2012, four of Pfizer's key earners will lose their protection and face generic competition - the cholesterol buster Lipitor (atorvastatin), the antiulcerant Protonix (pantoprazole), Viagra (sildenafil) for erectile dysfunction and antipsychotic Geodon (ziprazidone), fuelling the group's need to reduce spending and increase productivity.
King deal closed
Meanwhile, Pfizer announced the completion of its $3.6 billion purchase of King Pharmaceuticals.
The deal provides the company with access to King's Meridian auto-injector business for emergency drug delivery, which develops and manufactures the EpiPen, as well as its Alpharma animal health business, "both of which are complementary to and aligned with Pfizer's existing businesses," noted Ian Read, Pfizer's president and chief executive officer.
"With the addition of King's talented colleagues and innovative products and technology, Pfizer will offer patients who are in need of pain relief and pain management a broader spectrum of treatment options," he added.
Pfizer said it continues to expect the transaction to be accretive to its adjusted diluted earnings per share by around $0.02 in both 2011 and 2012, and $0.03 $0.04 annually through 2015, with initial cost savings (from operating expenses) of at least $200 million by the end of 2013.
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