Restructure unveiled as Pfizer takes merger hit
pharmafile | October 28, 2003 | News story | |
Pfizer has unveiled a restructuring of its business to maximise its R&D and marketing might following the acquisition of Pharmacia earlier this year.
The US giant also announced third quarter results which showed the continued strong growth investors now expect of it, but also had to declare a 27% drop in earnings, largely due to the cost of the merger.
Pfizer Chief Executive Dr Hank McKinnell said: "Over the past four years, we acquired two global healthcare companies Warner Lambert and Pharmacia and divested a group of non-core businesses to focus even more intensely on our core human pharmaceuticals business." He added that 90% of Pfizer revenues come from its prescription medicines.
The company will now focus around the new 'Pfizer Human Healthcare', its renamed pharmaceutical division, which will be split into Pfizer Global Research and Development (PGRD) Pfizer Global Pharmaceuticals (PGP) and Pfizer Global Manufacturing (PGM).
"Pfizer 's continued success in the pharmaceutical business hinges on the alignment of our research, commercial and manufacturing operations," McKinnell said.
Increasingly, our strategies and tactics span all three of these groups, and to meet our global business objectives we are moving now to integrate them with closely coordinated planning and action.
"Our primary goal is end-to-end alignment across the full range of our global pharmaceutical business," McKinell said.
PGRD will be headed up by John LaMattina, PGP by Karen Katen and PGM by John Mitchell, all presidents at the company.
Pfizer hopes the new organisational structure will streamline its decision-making and enhance global alignment. The company's stated goal is to have submitted 20 major new drug applications for regulatory approval in the five-year period to 2006.
It recently made some progress towards this by filing its treatment for neuropathic pain and adjunctive therapy in epilepsy pregabalin for US approval.
Meanwhile, Pfizer continued to be bullish about its prospects. The company said it has more products in the number one spot of their therapeutic category (14) than any of its rivals, eight of the world 25 top-selling medicines and it has seven blockbuster products, according to 2002 full year sales.
Karen Katen, president of PGP, said: "Despite new competition in key markets worldwide, we reinforced our position as the global industry leader and pre-eminent in every major worldwide market."
In particular she acknowledged the market introduction of competition for the company erectile dysfunction treatment Viagra, which has come in the shape of GSK/Bayer Levitra, which was approved by the FDA in August. But she said that Viagra's US market share remained strong, capturing 85% of new prescriptions as of mid-October.
The company's revenue increased by 56% in the third quarter to $12.5 billion, reflecting growth in what Pfizer declared to be the pharmaceutical industry broadest product portfolio. But profits for the quarter fell 5% to $3.6 billion.
David Shedlarz, executive VP and chief financial officer, said total 2003 revenue was expected to be about $45 billion with $7 billion expected to be invested in R&D.
For 2004, Pfizer targets include increasing sales to $54 billion and achieving merger-related cost savings of $3 billion, he said.Pfizer has unveiled a restructuring of its business to maximise its R&D and marketing might following the acquisition of Pharmacia earlier this year.
