Still Fixing Pfizer
No one in their right mind, especially in this economy, likes to see someone lose their job. (Well, unless you really can't stand the person.) But, on the other hand, when you hear the top exec of the world's biggest drug company talk candidly about how much fat there was (is?) at Pfizer, can you really blame him for swinging the ax?
This morning, Goldman Sachs held its "View From The Top: CEOs Unscripted" event for the healthcare sector. Unlike most investor conferences which are pretty tightly scripted and PowerPointed this one, put on by GS' pharma analyst Jami Rubin, is a little more free-wheeling featuring around 30-minutes of q and a.
At least a couple of the questions focused on PFE's spending on research and development, especially now that the Wyeth acquisition is done.
Chairman and CEO Jeff Kindler said he wouldn't put a number on it until the company reports last year's financial results and presumably provides new guidance early next month.
But he also didn't mince words.
I think it's enlightening when execs allow you to look behind the curtain, or at least get a little peak at how things work...or didn't work.
Before I continue, in the interest of full disclosure, I have near zero tolerance for committees and process. Way too often I think it devolves into over-thinking, time-wasting, etc. For my entire 26-year career, I have worked in a very lean, get-it-done-now business. That's how I roll. Okay, moving on.
Kindler said, "We fairly dramatically transformed the R & D organization, but the proof will be in the pudding." Of course, that's where the proof always is. Nonetheless, Kindler talked about how he drastically cut the number of R & D sites and the 15 layers of management in half. "It's still too high," he added. Apparently R & D site managers used to have to go through four or five layers of review before making go/no-go decisions. Now, Kindler claimed he has empowered them to presumably make calls faster and more independently.
But perhaps the most stunning statistic he spewed was that there used to be 56 committees in R & D. Today, it's down to 11 or fewer. "If I see a committee I blow it up. I'm on a search and destroy mission," Kindler quipped. He also mentioned that he didn't want a repeat of integration distractions that occurred the last time Pfizer swallowed a huge company. "People (within the company) were talking about everything, but discovering drugs," Kindler said.
Pfizer's stock is up around four bucks over the past six months. But it's gonna take some mighty fine pudding coming out of the leaner and meaner R & D unit to keep it moving higher.
Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman