Pfizer loses hold on top spot among research spenders
Pfizer Inc., long No. 1 among pharmaceutical firms in spending on research and development, is expected to slide to fifth place by next year, according to the drug-industry blog FierceBiotech.
Last year, Pfizer spent $9.4 billion on R&D, staying in the top spot only because of its acquisition in 2009 of the research assets of Wyeth Pharmaceuticals. Pfizer shed hundreds of research jobs last year, but managed to increase its R&D budget by about 20 percent thanks to its merger with the New Jersey-based Wyeth.
But, with new Pfizer chief executive Ian Read signaling significant cuts in R&D over the next two years - including at least 1,100 job losses locally in Groton and New London - the company's target for research spending next year has been placed at $6.5 billion to $7 billion. The radical strategy, taken as Pfizer's blockbuster cholesterol pill Lipitor faces U.S. patent expiration this year, means the company could finish 2012 in the No. 5 spot for R&D spending, behind Roche, Merck & Co., Novartis and Johnson & Johnson.
Wall Street, which has long urged so-called big pharma firms to rein in R&D costs, hailed Pfizer's move to align research spending with financial results.
"After dumping $70 billion into research and development over the last decade, the company has launched only two drugs that have managed to pass
$1 billion in annual sales," pointed out Matthew Herper, in his blog The Medicine Show.
Neither of the two medicines - pain pill Lyrica and cancer treatment Sutent - came out of Pfizer laboratories.
"Pfizer managed to get nine different new medicines past the Food & Drug Administration between 2000 and 2010, placing it third among drug companies," Herper added. "But most didn't sell."
Pfizer has high hopes for new compounds currently in late-stage development, including rheumatoid arthritis drug tofacitinib, which was developed at the Groton labs.
But, as Pfizer scientists locally began to receive layoff notices this month, it's clear that the future of the company's drug-development work has moved elsewhere.
"Historically, big pharma was driven by manufacturing," Read said in a recent interview with The Wall Street Journal,
"Now, I think you need to be in centers of innovation and hubs of innovation that are represented by La Jolla, Calif; Boston, Mass; and also in the U.K. in Cambridge."
l.howard@theday.com
Top drug firm R&D budgets in 2010
1. Pfizer: $9.4 billion
2. Roche: $9.2 billion
3. Merck: $8.12 billion
4. Novartis: $8.08 billion
5. Johnson & Johnson: $6.84
billion
6. GlaxoSmithKline: $6.09 billion
7. Sanofi-Aventis: $5.94 billion
8. AstraZeneca: $5.3 billion
9. Eli Lilly: $4.88 billion
10. Bristol-Myers Squibb: $3.56 billion
Source: FierceBiotech
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