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Research unit going to China, Pfizer says

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Pfizer Inc. plans to move its antibacterials research unit in Groton to Shanghai, China, but said some local scientists involved in the research will remain in Groton for up to two years as the company builds the new Shanghai unit.

Analysts said allowing the local researchers, who are working on antibiotics to fight the scourge of superbugs such as MRSA, to remain in Groton lets them see their late-stage experimental drugs to conclusion, while relatively new programs will move to China as soon as the unit there opens.

Industry analysts said Pfizer's action would be the first wholesale move of a major U.S. pharmaceutical research unit to China. Previously, U.S. firms had relied on China mostly for support functions rather than high-level discovery work.

"Ten years ago, no one would have thought to go to Shanghai," said James O'Malley, a former Pfizer researcher who now runs the New London biotech firm Myometrics.

"It's an acknowledgment of labor cost and high intellect in China," added Larry Rothman, a respected industry blogger.

O'Malley and another industry executive, who didn't want to be named because his company does business in China, said placing a major research unit in Shanghai would garner favor from Chinese officials, giving Pfizer more ready access to the huge potential drug market there.

"It's the same in Europe," O'Malley said. "You can't sell unless you manufacture in Europe."

Some analysts said the Pfizer move could be a way to skirt the strict regulatory guidelines of the U.S. Food and Drug Administration. But others said they weren't sure Chinese standards are any looser than in the United States and wondered whether clinical trials conducted in China would be accepted by the FDA.

Antibacterials research has not been fruitful of late, and antibiotics aren't huge sellers because so many generic medicines are available. Moving the antibacterials research unit to Shanghai could be a way for Pfizer to maintain a presence in the field at a lower cost than remaining in Groton.

Pfizer said in an e-mail that it will continue to run clinical and pre-clinical programs related to antibacterials research at its Groton research site "to ensure uninterrupted progress on these important programs."

"This means Groton will continue work on current projects in antibacterials," according to Pfizer spokeswoman Sperry Mylott.

Pfizer has already said its antibacterials unit would be leaving Groton as part of a downsizing of its local research-and-development hub. Pfizer would not furnish specifics about its planned move to China, but in 2009 Pfizer officials said they planned to expand an existing research site in Shanghai and said the city would house one of the company's main global R&D sites.

"We are shifting the global footprint of our R&D network to more fully align with key hubs for science and technology, which has caused us to take a look at all areas of research," Pfizer said in an e-mail response to questions about the move to Shanghai.

Other changes in Pfizer's R&D operations includes a downsizing of the Indications Discovery Unit in St. Louis, which attempts to find new uses for older drugs. Pfizer said it plans to continue a collaboration with Washington University in St. Louis that enlists academics' help in finding new uses for Pfizer's established products.

Pfizer said its Groton autism unit will make the move to Cambridge, Mass., along with those neuroscience staff asked to stay on. But the company had no specific information on when neuroscientists or those associated with Pfizer's cardiovascular, metabolic and endocrine disorders unit would be moving to Massachusetts.

Pfizer said its plans to vacate its New London office towers are on track to be completed at the end of the year, when the site's transition to Electric Boat is completed. Pfizer said the downsizing of its overall local presence has not changed the schedule for scientists to leave New London.


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