One of the things we learned in Pfizer'searnings press releaseand on the conference call today is that since the start of 2008 the company has eliminated 11,200 positions. And now that the world's biggest pharmaceutical firm has gotten even bigger by swallowing Wyeth, it's going to let go even more people to help wring out about $4 billion in annual expenses by 2012.
You can get details on that in the exclusive interview with Chairman and CEO Jeff Kindler.
It's a cruel reality of big deals like this one.
Saving money, so that more of it falls to the bottom line, is part of the motivation for doing mergers in the first place. There's never a good time to get a pink slip but, of course, it stings even more in the current economy and job market.
The cost cuts are a big deal and a major cause of concern for those inside the company and the drug industry. But Wall Street and investors are primarily concerned about two things: 1. The dividend (again, you can get more on that in the Kindler interview) and 2. What's next. By that I mean what potential new drugs the new Pfizer has in its development pipeline. After that interview with Kindler, I had the rare opportunity (I've only been inside the company's global HQ in Manhattan twice, including today) to sit down and chat with a couple of PFE execs for a bit. One of them was the company's head of PharmaTherapeutics R & D, Martin Mackay. (By the way, it isn't pronounced McKay. It's muh-kai.)
Anyway, he said that over the next few weeks Pfizer will be making a slew of go/no-go decisions on a bunch of drugs that are no further along than mid-stage clinical development. With the help of expert Pfizer retirees who got confidential sneak peeks at Wyeth's stuff over the past several months, Mackay and his team will begin to cull the pipeline. He predicted the number will be in the double-digit percentage range, but wouldn't get more specific than that. "We've got a full pipeline," Mackay said, "(but) we will be judged by our (FDA) submissions over the 2010-2012 time period." In particular, Mackay said 2011 will be the "heaviest" year for turning in applications for FDA drug approval in his 30 or so years in the business. Some of them will be for completely new drugs, some will be for new uses on existing drugs.
The one that gets the most attention is Bap, for short. That was Wyeth's Alzheimer's Disease treatment, which is in late-stage tests right now. Mid-stage clinical trial results were mixed. "I think it's got a fighting chance," Mackay told me. The phase three data should be out sometime next year. Elan and Johnson & Johnson also have a stake in the product.
And just in case you thought something looks a little different about that old Pfizer logo, you're right. I got a tip on this from someone I follow on Twitter, but the Pfizer oval used to be flat or horizontal and now it tilts just ever-so-slightly up to the right. It's supposed to convey the feeling of "moving forward" or something. I'm sure those who are getting laid off are going to have a field day guessing and gossiping about how much that corporate nip/tuck cost.
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