Headcount: ~88,000
Revenues: $58,486 (-42%)
Net Income: $2,119 (-93%)
R&D: $10,679 (-7%)

2023 was the year when pharmaceutical giant Pfizer came back down to reality, witnessing a massive slump in revenues. While sales soared to a record-breaking $100 billion in 2022 driven by sales of Comirnaty and Paxlovid, revenues cooled off considerably in 2023 due to reduced demand for the COVID-19 therapeutics.

In the wake of the post-pandemic world, Pfizer reported an astonishing more-than-40% decline in sales to $58.5 billion—quite a dip from its peak during the pandemic. Comirnaty sales declined by 70% to $11.22 billion, whereas Paxlovid’s fall was even steeper, dropping 92% to $1.28 billion during the year.

As part of the fallout, at the end of the year, Pfizer launched a cost-cutting initiative after the U.S. Government amended its Paxlovid supply pact, which saw it return nearly 8 million doses of the antiviral drug to Pfizer. The multi-year cost realignment program involves layoffs and site closures.

However, excluding the contributions of COVID-19 products, the company managed to post a 7% increase in sales and retain the top spot in this year’s report, based on pharmaceutical-only product sales.

While the COVID-19 drugs declined, Pfizer witnessed growth in other key areas. For example, the RSV vaccine Abrysvo, which was approved in May 2023, generated $890 million. At the same time, Nurtec ODT, picked up through the acquisition of Biohaven in 2022, almost achieved blockbuster status after generating sales of $928 million compared to the previous year’s $213 million mark. Other star performers during the year were the rare cardio disease treatment options Vyndaqel and Vyndamax, which grew by 36% up to $3.3 billion.

Oncology Unit Poised for Growth

Even if Pfizer’s oncology unit reported a 3% decline in sales—revenues from the Ibrance breast cancer drug tumbled by 6% to $4.7 billion while other significant drug revenues also decreased by double-digit percentages—Pfizer looks at the bright side: the Seagen acquisition.

In March 2023, Pfizer unveiled the $43 billion mega deal to purchase the antibody drug conjugate (ADC) pioneer and bolster its oncology portfolio. Pfizer is counting on the deal, which closed in December 2023, to place it among oncology leaders.

The acquisition gives Pfizer 25 approved cancer medicines across more than 40 indications—nine of the drugs are reported to have blockbuster potential. Further strengthening its ADC portfolio, the day after Pfizer closed the Seagan deal, it inked a global ADC license agreement with Nona Biosciences for the clinical development and commercialization of Nona’s MSLN-targeted ADC, HBM9033. If all goes according to plan, Pfizer says it plans to double the number of patients treated with its cancer drugs by 2030, and it is using artificial intelligence (AI) to help achieve that goal.

At the end of February 2023, Pfizer announced it teamed up with Tempus, a provider of AI and precision medicine. The multi-year, strategic collaboration is meant to further AI and machine learning-driven efforts in therapeutic development. The partnership aims to more precisely gather insights that will inform novel drug discovery and development in oncology.

Through this collaboration, Pfizer has access to Tempus’ AI-enabled platform and its library of de-identified, multimodal data to uncover insights for therapeutic development in oncology. Pfizer also has access to Tempus’ capabilities that support therapeutic R&D, to advance its own oncology portfolio, including AI-driven companion diagnostic offerings and Tempus’ clinical trial matching program, TIME, that rapidly activates studies for patients in communities across the country.In addition to the oncology unit, Pfizer’s other reporting segments are the specialty care and primary care units. The specialty care franchise was the only business unit reporting growth in 2023, with an increase of 11% in revenues. Primary care sales decreased by 57%, driven mainly by the decrease in sales of COVID-19 products.

Product and Research Developments

2023 was a record-breaking year for FDA approvals for Pfizer, with nine new molecular entity approvals and many more approvals for new indications in already approved products, marking a very productive year of pipeline progress for Pfizer.

In March, Pfizer announced that the U.S. FDA approved Zavzpret, the first and only calcitonin gene-related peptide (CGRP) receptor antagonist nasal spray for the acute treatment of migraine with or without aura in adults. In June, FDA gave the green light to Abrysvo (respiratory syncytial virus vaccine) for the prevention of lower respiratory tract disease caused by RSV in individuals 60 years and older. During the same month, FDA approved Ngenla for pediatric growth hormone deficiency. In October, Pfizer received approval from FDA for Braftovi + Mektovi for the treatment of metastatic non-small cell lung cancer (NSCLC).

To strengthen its R&D efforts, Pfizer entered several collaboration during the year. With Ginkgo Bioworks, a partnership was formed focused on the discovery of RNA-based drug candidates. Pfizer will leverage Ginkgo’s RNA technology to advance the discovery and development of novel RNA molecules across priority research areas. In another tie-up, Riparian Pharmaceuticals, a biotechnology company focused on discovering novel therapeutics for cardiovascular diseases, entered into an exclusive license agreement and research agreement with Pfizer.

Flagship Pioneering and Pfizer partnered to create a new pipeline of innovative medicines with each company investing $50 million upfront to research and develop 10 single-asset programs leveraging Flagship’s ecosystem of more than 40 human health companies and multiple biotechnology platforms. Pfizer is funding and has an option to acquire each selected development program. Flagship and its bioplatform companies will be eligible to receive up to $700 million in milestones and royalties for each successfully commercialized program.

Pioneering Medicines, an initiative of Flagship Pioneering, and Pfizer will lead the exploration process to establish a potential portfolio with a focus on addressing unmet needs within Pfizer’s core strategic areas of interest, including in broad patient populations and diseases with the potential to benefit from a range of technology platforms and modalities.

On the manufacturing front, Pfizer entered a strategic partnership with Samsung Biologics for the long-term commercial manufacturing of Pfizer’s multi-product portfolio. The companies entered into an initial manufacturing agreement in March 2023 for a Pfizer product. Under the new agreement, Samsung Biologics is providing additional capacity for large-scale manufacturing for a multi-product biosimilars portfolio covering oncology, inflammation, and immunology. Samsung will use its newest facility, Plant 4, for the manufacturing.

Also of note, during the first quarter of 2023, Pfizer established an operating segment, Business Innovation, that includes Pfizer CentreOne (PC1), the company’s global contract development and manufacturing organization (CDMO) and a leading supplier of specialty active pharmaceutical ingredients (APIs); and Pfizer Ignite, an offering that provides strategic guidance and end-to-end R&D services to select innovative biotech companies that align with Pfizer’s R&D focus areas.

Headcount: 83,000
Revenues: $100,330 (+23%)
Net Income: $31,372 (+43)
R&D: $11,428 (+10%)

Pfizer revenues soared to a record-breaking $100 billion in 2022 driven by sales of Comirnaty and Paxlovid. Combined these COVID therapeutics raked in $56.7 billion for the year, an increase of $19 billion, or 23%, from the year before. Comirnaty sales were $11.3 billion in the fourth quarter, down 9%, and $37.8 billion for the year, up 3%. Paxlovid sales were $1.8 billion in the fourth quarter and $18.9 billion for the year. Sales of these COVID products are expected to decline as much as 60% in 2023.

Excluding the impact of Paxlovid and Comirnaty, revenues increased 2%, reflecting growth in the Prevnar family, Eliquis and the Vyndaqel family, as well as revenue from recently acquired products, Nurtec ODT/Vydura and Oxbryta. Growth was partially offset by declines in Xeljanz, Chantix/Champix, Sutent, certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, and Ibrance.

In the fourth quarter of 2021, Pfizer began managing its commercial operations through a global structure consisting of two operating segments: Biopharma and PC1, the global contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients.

Looking beyond COVID, at the beginning of 2022 Pfizer entered a research, development, and commercialization agreement with its COVID vaccine partner BioNTech to develop a potential first mRNA-based vaccine for the prevention of shingles based on BioNTech’s mRNA technology and Pfizer’s antigen technology. Pfizer agreed to pay BioNTech $225 million, including $75 million upfront and an equity investment of $150 million. BioNTech is eligible to receive future regulatory and sales milestone payments of up to $200 million.

On March 24, 2022, Pfizer announced the FDA granted Breakthrough Therapy Designation for Abrysvo for the prevention of lower respiratory tract disease caused by RSV in individuals 60 years of age and older. This decision was followed by the FDA’s acceptance of Abrysvo’s Biologics License Application (BLA) under priority review for older adults in November 2022.

Aggressive acquisition strategy

As we moved into 2022, Pfizer kicked off an aggressive acquisition spree when it scooped up Arena Pharmaceuticals for $6.7 billion in December 2021. Arena is a clinical stage biotech developing potential therapies for the treatment of several immuno-inflammatory diseases. Arena’s portfolio includes diverse and promising development-stage therapeutic candidates in gastroenterology, dermatology, and cardiology, including etrasimod, an oral, selective sphingosine 1-phosphate (S1P) receptor modulator currently in development for a range of immuno-inflammatory diseases including gastrointestinal and dermatological diseases.

In April 2022, Pfizer inked a deal with Novo Holdings to buy another clinical stage biotech, ReViral, for as much as $525 million. ReViral, based in London, UK, and Research Triangle Park, NC, is focused on antiviral therapeutics that target respiratory syncytial virus (RSV). ReViral’s lead drug, sisunatovir, is an orally administered inhibitor designed to block the fusion of RSV to the host cell, which has been granted Fast-Track designation by the FDA.

In May 2022 Pfizer unveiled plans to purchase Biohaven Pharmaceuticals for $11.6 billion. Biohaven is the maker of Nurtec ODT (rimegepant), a dual-acting migraine therapy approved for both acute treatment and episodic prevention of migraine in adults. The deal also included rights to zavegepant, which won FDA approval in the U.S. in March 2023 as an intranasal spray for the acute treatment of migraine and is sold under the trade name Zavzpret. The medication is also in development as an oral soft gel for chronic migraine prevention. In addition to these medicines, Pfizer acquired a portfolio of five pre-clinical calcitonin gene-related peptide (CGRP) assets.

In August 2022, Pfizer gained access to rare hematology expertise and a leading portfolio and pipeline when it acquired Global Blood Therapeutics (GBT) for $5.4 billion. GBT is a biopharmaceutical company dedicated to developing treatments for underserved patient communities, starting with sickle cell disease (SCD). GBT’s portfolio and pipeline could add potential combined peak sales of more than $3 billion to Pfizer’s bottom line while allowing it to address a full spectrum of critical needs in this underserved community.

Most recently, in March 2023, Pfizer acquired Seagen, a pioneer in antibody drug conjugate (ADC) technology developing and commercializing cancer medicines, for $43 billion.

Seagen’s portfolio includes four approved medicines that are first- or best-in-class across solid tumors and hematologic malignancies, including three ADCs: Adcetris (brentuximab vedotin), Padcev (enfortumab vedotin), and Tivdak (tisotumab vedotin). The company also commercializes Tukysa (tucatinib).

Seagen expects to generate approximately $2.2 billion of revenue in 2023, representing 12% year-over-year growth, from its four in-line medicines, royalties and collaboration and license agreements. Pfizer anticipates Seagen could contribute more than $10 billion in revenues by 2030, depending on clinical trial and regulatory success.

Expanding manufacturing capabilities

During the year Pfizer bolstered its manufacturing capabilities through the expansion of its contract manufacturing unit, Pfizer CentreOne (PC1). In June 2022, it opened a state-of-the-art facility in Freiburg, Germany, built in partnership with Bristol-Myers Squibb, to offer greater drug manufacturing support to European partners.

The €300 million investment into the existing Freiburg site has created a center for the efficient, reliable production and packaging of innovative medicines for the global market. At 13,500 square meters, the new facility is capable of producing up to 7 billion additional solid dosage forms. Overall, the new site has now increased its total capacity to up to 12 billion tablets and capsules per year, corresponding to an increase of 140%

The new Freiburg facility is equipped with the latest Industry 4.0 standards and is one of the most modern pharmaceutical facilities built for Pfizer in the past three years. In another move, Pfizer acquired a manufacturing facility in Sanford, NC from the CDMO Abzena. Upon completion of the construction, the state-of-the-art facility will have extensive capabilities for producing biologics drug substance and provides additional manufacturing capacity allowing Pfizer to help accelerate its pipeline. In addition, Abzena and Pfizer’s CentreOne contract manufacturing organization will collaborate to advance complex biologic products to market.

Headcount: 79,000
Revenues: $81,288 (+95%)
Net Income: $21,979 (+140%)
R&D: $13,829 (+47%)

TOP SELLING DRUGS

Less than two years after making a commitment to use all resources at its disposal in the fight against the COVID-19 pandemic, in 2021 Pfizer delivered both the first FDA approved vaccine against COVID-19—with partner BioNTech—and the first FDA approved oral treatment for COVID-19.

In August 2021, Pfizer and BioNTech announced that the FDA approved the Biologics License Application (BLA) for Comirnaty (COVID-19 Vaccine, mRNA) to prevent COVID-19 in individuals 16 years of age and older, making it the first COVID-19 vaccine to be granted full approval by the regulator. The vaccine had been available in the U.S. under Emergency Use Authorization (EUA) since December 11, 2020.

In 2021, Pfizer manufactured more than 3 billion doses of Comirnaty. Revenue for the year reflected this incredible output. Pfizer’s sales in 2021 skyrocketed a staggering 95% to $81.3 billion. The vaccines unit raked in $43 billion of revenue—a 550% climb driven by $37 billion of Comirnaty sales. Excluding the revenue contributions of Comirnaty, revenues for the full year grew 6%.

With regards to its oral treatment for COVID-19, in December 2021, FDA authorized Paxlovid for emergency use for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients and those who are at high risk for progression to severe COVID-19, including hospitalization or death. Pfizer plans to file a New Drug Application (NDA) with the FDA for potential full regulatory approval in 2022.

Acquisitions and collaborations

Though headlines have been dominated by Pfizer’s progress with Comirnaty and Paxlovid, the company has been actively strengthening its pipeline across all business segments. The oncology business segment grew 13% to $12.3 billion in revenue in 2021. Internal medicine sales climbed a slight 4% to $9.3 billion. Aside from the vaccines unit noted above, Pfizer’s rare disease unit grew the most at 20% to $3.5 billion. Inflammation and immunology was the only business segment to report negative revenue growth (-3%) for the year, at $4.4 billion of sales.

Pfizer bolstered its oncology pipeline in August 2021 with a deal to acquire the clinical stage immuno-oncology company Trillium Therapeutics for $2.26 billion. Trillium’s portfolio includes biologics that are designed to enhance the ability of patients’ innate immune system to detect and destroy cancer cells. Its two lead molecules, TTI-622 and TTI-621, block the signal-regulatory protein α (SIRPα)–CD47 axis, which is emerging as a key immune checkpoint in hematological malignancies. TTI-622 and TTI-621 are novel, potentially best-in-class SIRPα-Fc fusion proteins that are currently in Phase 1b/2 development across several indications, with a focus on hematological malignancies.

In another acquisition, Pfizer bought Amplyx Pharmaceuticals for an undisclosed sum. The privately-held Amplyx develops therapies for immune system disorders. Its lead compound, Fosmanogepix (APX001), is a novel investigational asset under development for the treatment of invasive fungal infections. In addition to Fosmanogepix, Pfizer now owns Amplyx’s early-stage pipeline that includes potential antiviral (MAU868) and antifungal (APX2039) therapies.

In April 2022 Pfizer inked a deal to acquire Novo Holdings’ portfolio company, ReViral, for as much as $525 million. Founded in 2011, ReViral is a London, UK and Research Triangle Park, NC-based privately held clinical-stage biopharmaceutical company focused on discovering, developing, and commercializing novel antiviral therapeutics that target respiratory syncytial virus (RSV). Its lead drug, sisunatovir, is an orally administered inhibitor designed to block the fusion of RSV to the host cell, which has been granted Fast-Track designation by the U.S. FDA.

In May 2022 Pfizer acquired Biohaven Pharmaceuticals for $11.6 billion. The deal includes Biohaven’s calcitonin gene-related peptide (CGRP) programs including migraine treatment rimegepant, approved in the U.S. under the trade name Nurtec ODT and in the EU as Vydura. Zavegepant is another migraine treatment currently in late-stage development in the U.S. as an intranasal spray and as an oral soft gel. Pfizer also picked up a portfolio of five pre-clinical CGRP assets in the deal.

In July 2021 Pfizer formed a global collaboration with Arvinas to develop and commercialize ARV-471, an investigational oral PROTAC (PROteolysis TArgeting Chimera) estrogen receptor protein degrader. The estrogen receptor is a well-known disease driver in most breast cancers. Pfizer paid Arvinas $650 million upfront and made a $350 million equity investment in the company. Arvinas is also eligible to receive up to $400 million in approval milestones and up to $1 billion in commercial milestones.

In another development deal, in December 2021, Pfizer entered into a multi-year research collaboration with Beam Therapeutics to utilize Beam’s in vivo base editing programs, which use mRNA and lipid nanoparticles, for three targets for rare genetic diseases of the liver, muscle and central nervous system. Pfizer paid Beam a $300 million upfront payment. If Pfizer elects to opt in to licenses for all three targets, Beam would be eligible for up to an additional $1.05 billion in milestone payments for a potential total deal consideration of up to $1.35 billion.

In January 2022, Pfizer and Acuitas Therapeutics, a company focused on developing lipid nanoparticle (LNP) delivery systems to enable mRNA-based therapeutics, entered into an agreement under which Pfizer will have the option to license Acuitas’ LNP technology, which is used in Comirnaty, for up to 10 targets for vaccine or therapeutic development.

Strengthening manufacturing capabilities

In February 2021 Pfizer formed and agreement with CPI, becoming the newest partner of the Medicines Manufacturing Innovation Center—a collaboration between CPI, the University of Strathclyde and founding industry partners GSK and AstraZeneca, with funding provided by Scottish Enterprise and UK Research and Innovation. The center aims to advance emergent and disruptive technologies through a series of flagship “Grand Challenge” projects to increase productivity and patient outcomes in the pharmaceutical industry.

The partnership with Pfizer will focus on Grand Challenge 1, which aims to develop an innovative continuous direct compression (CDC) platform enabling oral solid dosage medicines to be formulated more robustly and efficiently. The CDC platform will feature a digital twin and data predictor model to allow for the modelling of processes in a digital space. This capability will improve efficiency and significantly cut down the quantity of starting materials needed to optimize formulations with the aim of enabling companies to ultimately develop formulations faster and at reduced cost.

More recently, Pfizer strengthened its manufacturing capabilities through its contract manufacturing unit, Pfizer CentreOne, which opened a state-of-the-art facility in Freiburg, Germany, built in partnership with Bristol-Myers Squibb, to offer greater drug manufacturing support to European partners. The roughly $312 million investment into the existing Freiburg site has created a center for the efficient, reliable production and packaging of innovative medicines for the global market. At 13,500 square meters, the new facility is capable of producing up to 7 billion additional solid dosage forms. Overall, the new site has now increased its total capacity to up to 12 billion tablets and capsules per year, corresponding to an increase of 140%. The new Freiburg facility is equipped with Industry 4.0 standards, and is one of the most modern pharmaceutical facilities built for Pfizer in the past three years.

Headcount: 78,500
Revenues: $41,908 (+2%)
Net Income: $9,616 (-41%)
R&D: $9,405 (+12%)

TOP SELLING DRUGS

Despite the challenges created by the pandemic, Pfizer reported 2% revenue growth in 2020 to $42 billion. Not surprisingly, the biggest story of 2020 for Pfizer was its work with BioNTech to develop and deliver the world’s first COVID-19 vaccine.

In March 2020, as the scale of the COVID-19 pandemic became apparent, Pfizer announced it was partnering with BioNTech to study and develop COVID-19 mRNA vaccine candidates and would be doing so without joining the U.S. government-sponsored Operation Warp Speed vaccine development program.

In May 2020, Pfizer began testing four different COVID-19 vaccine variations in humans. Two months later in July, Pfizer and BioNTech announced that two of the partners’ four mRNA vaccine candidates had won fast track designation from the FDA. The company began Phase II-III testing on 30,000 people in the last week of July and was slated to be paid $1.95 billion for 100 million doses of the vaccine by the U.S. government. In September 2020, Pfizer and BioNTech completed talks with the European Commission to provide an initial 200 million vaccine doses to the EU, with the option to supply another 100 million doses at a later date.

On November 9, 2020, Pfizer announced that BioNTech’s COVID-19 vaccine, BNT162b2), tested on 43,500 people, was found to be 90% effective at preventing symptomatic COVID-19, with no serious side effects. The efficacy was updated to 95% a week later. The announcement made Pfizer the first company to develop and test a working vaccine for COVID-19.

Over the following month and a half, regulators in various countries approved Pfizer’s vaccine for emergency use with the UK leading the way on December 2, 2020. Little more than a week later, on December 11, the U.S. FDA officially approved the use of Pfizer’s vaccine under an Emergency Use Authorization (EUA), making it the fifth country to do so. From the initial announcement that it was partnering with BioNTech to the day Pfizer received FDA’s EUA took just 269 days.

As of early May 2021, Pfizer and BioNTech had manufactured at least 430 million vaccine doses, which have been distributed to 91 different countries and territories. The companies have said they expect to manufacture nearly 3 billion total vaccine doses in 2021.

Also on the pandemic front, during the year Pfizer launched its five-point COVID-19 plan, including a commitment to use any excess manufacturing capacity and to potentially shifting production to support other companies’ efforts to expand the supply of investigational treatments for the disease. As part of this promise, Pfizer Global Supply in McPherson, KS, made a deal to manufacture remdesivir for Gilead Sciences through Pfizer CentreOne, a global contract development and manufacturing organization embedded within Pfizer and a leading supplier of specialty active pharmaceutical ingredients.

Other initiatives
While COVID dominated the headlines for Pfizer in 2020, the firm remained active with other business development initiatives.

In September 2020, Pfizer expanded its operations in China when it pumped $200 million into CStone Pharmaceutical for a 9.9% stake in the company, for the development and commercialization of CStone’s sugemalimab (CS1001, PD-L1 antibody) in mainland China. The deal also includes a plan a between CStone and Pfizer to bring additional oncology assets to the Greater China market.

In October 2020, Pfizer acquired Arixa Pharmaceuticals to develop ARX-1796 which, if approved, has potential to be the first novel oral beta-lactamase inhibitor + antibiotic combination in more than 35 years.
In another acquisition deal, Pfizer acquired Amplyx Pharmaceuticals, a privately-held company dedicated to the development of therapies for immune system disorders. Amplyx’s lead compound, Fosmanogepix (APX001), in Phase II when the deal was announced, is a novel investigational asset under development for the treatment of invasive fungal infections. In addition to Fosmanogepix, with this acquisition, Pfizer has secured ownership of Amplyx’s early-stage pipeline that includes potential antiviral (MAU868) and antifungal (APX2039) therapies.

Pipeline highlights
During the year Pfizer continued its pursuit of therapeutic candidates for debilitating conditions, including tanezumab, a potential first-in-class chronic osteoarthritis (OA) pain treatment. Tanezumab is a monoclonal antibody that is part of an investigational class of non-opioid chronic pain medications known as nerve growth factor inhibitors. Regulatory applications for tanezumab have been filed in the U.S., EU and Japan with decisions expected in 2021.

In 2020 Pfizer announced key data and regulatory milestones for abrocitinib, an investigational oral once-daily Janus kinase 1 (JAK1) inhibitor for people with moderate to severe atopic dermatitis. Through Phase 3 testing, abrocitinib demonstrated statistically superior improvements in skin clearance, disease extent and severity, as well as rapid improvements in itch versus placebo. The potential treatment option has been filed with regulators.

Pfizer is also progressing a pipeline of potential first or best-in-class treatments for nonalcoholic steatohepatitis (NASH) that could fill a significant unmet need for patients.

In oncology, Pfizer made some noise when the FDA approved two treatments: Braftovi plus cetuximab for adults with metastatic colorectal cancer and Bavencio plus chemotherapy for adults with advanced urothelial carcinoma. Bavencio was approved in June by the FDA under its RealTime Oncology Review pilot program for the first-line maintenance treatment of patients living with advanced urothelial carcinoma.

Pfizer’s work in rare disease continued with several promising clinical-stage developments in gene therapy. Notably, Pfizer’s therapeutic candidate for Duchenne muscular dystrophy was granted fast-track designation by the U.S. FDA. For patients living with severe hemophilia A, a groundbreaking Phase 1/2 trial exploring a potential single-dose treatment option revealed positive findings.

In addition to leading the charge for the development of a COVID-19 vaccine, Pfizer continued to advance vaccine candidates for underserved patient populations worldwide, saying it aims to deliver six innovative vaccines by 2025. In 2020, Pfizer initiated five new global Phase 3 trials across nine programs in active clinical development. Candidates for the potential “six by 2025” are vaccines to help prevent COVID-19, pneumococcal disease in adults and pediatric populations, C. difficile in adults, meningococcal disease in adolescents, respiratory syncytial virus in young infants and Lyme disease.

Also on the vaccines front, in January, Pfizer launched its Centers of Excellence Network, a global program of collaborations with academic institutions to conduct real-world epidemiologic research to accurately identify and measure the burden of specific vaccine-preventable diseases and potentially evaluate vaccine effectiveness affecting adults. Pfizer Vaccines has designated the University of Louisville as its first Center of Excellence and is planning to establish a few additional centers for epidemiological research strategically located around the world in coming years.

Headcount: 88,300
Revenues: $51,750 (-4%)
Net Income: $16,273 (+46%)
R&D: $8,650 (+8%)

TOP SELLING DRUGS

For Pfizer, the world’s largest drug maker, 2019 set in motion a year of transformation. Revenues slid a couple percentage points for the New York-based biopharma major to $51.75 billion as it pivoted towards a new global organizational structure. Commercial business operations consist of three distinct segments: Biopharma, Upjohn, and Consumer Healthcare. By year’s end two-thirds of this structure would undergo a major overhaul.

Pfizer’s strategy began to unfold in July 2019, when it unveiled plans to combine Upjohn, its primarily off-patent branded and generic established medicines business, with Mylan, creating a new global pharma major called Viatris.

Pfizer will own 57% of the new company, which will launch when the deal closes mid-2020 with an immediate commercial presence in more than 165 countries. Revenue projections are in the $20 billion range.

Mylan brings a diverse portfolio across many geographies and key therapeutic areas, such as central nervous system and anesthesia, infectious disease and cardiovascular, as well as a robust pipeline, high-quality manufacturing and supply chain operations. Upjohn brings iconic brands, such as Lipitor (atorvastatin calcium), Lyrica (pregabalin), Celebrex (celecoxib) and Viagra (sildenafil), along with proven commercialization capabilities, including leadership positions in China and emerging markets. The combined portfolio will also include complex generics like Wixela Inhub (fluticasone propionate and salmeterol inhalation powder, USP) and biosimilars, such as Fulphila (pegfilgrastim-jmdb).

A few days after the Mylan deal, Pfizer made another transformative move. The Consumer Healthcare business, an over-the-counter medicines business, was combined with GlaxoSmithKline’s (GSK) Consumer Healthcare business to form a new consumer healthcare joint venture in which Pfizer owns a 32% stake.

With the formation of the GSK Consumer Healthcare venture and the pending combination of Upjohn with Mylan, Pfizer is repositioning itself into a more focused, global leader in science-based innovative medicines. The combination aims to enable Pfizer to sharpen its focus on the research and development of medical innovations to address unmet needs of patients.

Biopharma investments abound
Part of Pfizer’s repositioning and refocusing efforts included investment in its Biopharma business. Most notably, it paid $11.4 billion to acquire Array BioPharma, a commercial-stage biopharmaceutical company focused on targeted small molecule medicines to treat mostly cancer.

Array’s portfolio includes the approved combined use of Braftovi (encorafenib) and Mektovi (binimetinib) for the treatment of BRAF mutant unresectable or metastatic melanoma. The combination therapy has significant potential for long-term growth via expansion into additional areas of unmet need and is currently being investigated in more than 30 clinical trials across several solid tumor indications, including the Phase III trial in BRAF-mutant metastatic colorectal cancer (mCRC).

Array also brings a broad pipeline of targeted cancer medicines in development, as well as a portfolio of out-licensed potentially best-in-class and/or first-in-class medicines, which are expected to generate significant royalties over time. In addition, Array’s Boulder, CO site adds a new and highly productive hub to Pfizer’s research network.

In another deal, Pfizer acquired the biotech Therachon for $340 million upfront, plus potential milestone payments of up $470 million. The deal expands Pfizer’s rare disease portfolio with a potential first-in-class therapy for achondroplasia, a genetic condition and the most common form of short-limb dwarfism.

Pfizer also entered into a worldwide exclusive licensing agreement for AKCEAANGPTL3-LRx, an investigational antisense therapy being developed to treat patients with certain cardiovascular and metabolic diseases, with Akcea, a majority-owned affiliate of Ionis. The transaction closed in November 2019 with an upfront payment of $250 million—regulatory and sales milestones could reach as much as $1.3 billion.

New gene therapy facility
Pfizer continued to expand its end-to-end capabilities in gene therapy in North Carolina by investing in facilities focused on all stages of research, development, and manufacturing. In the Kit Creek facility, scientists work at a small scale—from 2L flasks up to 250L bioreactors—to develop the process that may eventually be used in larger scale manufacturing. That process is optimized at the Chapel Hill facility, where Pfizer colleagues continue to work at a 250L scale while implementing quality control measures included in GMP standards.

During the year, Pfizer celebrated the first phase of its new state-of-the-art gene therapy manufacturing facility in Sanford, NC and also made an additional investment of $500 million there for further expansion. The Sanford site is one of Pfizer’s largest biotech manufacturing sites globally.

By expanding its manufacturing footprint in Sanford, Pfizer expects to strengthen its ability to produce and supply both clinical- and commercial-scale quantities of critical, potentially life-changing gene therapy medicines to patients living with rare diseases around the world. Specifically, the new facility would help advance Pfizer’s work in manufacturing highly specialized, potentially one-time gene therapies that use custom-made recombinant adeno-associated virus (rAAV) vectors.

In addition to its gene therapy operations, the Sanford facility also manufactures components for the company’s vaccine portfolio, including Prevnar 13 and several vaccines currently in Pfizer’s research pipeline.

Headcount: 92,400
Revenues: $53,647 (+2%)
Net Income: $11,153 (-48%)
R&D: $8,006 (+4%)

TOP SELLING DRUGS

In 2018, Pfizer reported revenues of $53,647 billion, an increase of two percent, as several of its biggest-selling medicines and vaccines continued to grow, including Ibrance, Eliquis, Xeljanz and Prevnar 13. Pfizer also reported growth in emerging markets and in biosimilars, which helped to absorb $1.7 billion in lost revenue because of products that recently lost marketing exclusivity. Eight billion dollars was invested during the year in research and development (R&D).

During the year, Pfizer unveiled plans to reorganize into three businesses, which became effective at the beginning of the company’s 2019 fiscal year, and are Pfizer Biopharmaceuticals Group, that now includes biosimilars and a new Hospital business unit for anti-infectives and sterile injectables; Upjohn, an off-patent branded and generic medicines business based in China that is bringing 20 of its most iconic brands to more than 100 markets around the world; and a Consumer Healthcare business aligned with the growing trend of consumers taking their health into their own hands.

Also on the consumer side of the business, at the end of the year Pfizer and GlaxoSmithKline entered a joint venture to create a global consumer healthcare company. The deal calls for Pfizer contributing its consumer healthcare business to GlaxoSmithKline’s existing consumer healthcare business. The 2017 global sales for the combined business were approximately $12.7 billion. The deal is expected to close in the second half of 2019.

The joint venture will be a category leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health. It’s expected to be among the largest consumer healthcare players in key geographies, including the U.S., Europe, China, India and Australasia. The joint venture will operate globally under the GSK Consumer Healthcare name. Following the integration, GSK intends to separate the joint venture as an independent company.

As we moved into 2019, it was announced that Dr. Albert Bourla, chief operating officer at the time, would be taking over the reins of the stripped down Pfizer organization as its new chief executive officer, succeeding Ian Read. Under Mr. Read, Pfizer received 30 FDA approvals and amassed a pipeline with the potential for approximately 25-30 approvals through 2022, of which as many as 15 have the potential to be blockbusters.

Sterile manufacturing investment
In terms of growth, Pfizer is investing $465 million to expand its U.S. manufacturing with technically advanced sterile injectable pharmaceutical production facilities in Portage, MI, which will create approximately 450 new jobs over the next several years. Known as Modular Aseptic Processing (MAP), the new 400,000 square foot production facility expands Pfizer’s presence in Portage, located in Kalamazoo County, where the company now employs more than 2,200 people at one of its largest plants.

MAP will incorporate technically advanced aseptic manufacturing equipment, systems and design, including multiple, self-contained modular manufacturing lines. This allows the manufacturing line in each module to be entirely separate from all other manufacturing lines. Construction is expected to be completed in 2021. After the facility is validated by regulatory agencies, production should begin in 2024.

The investment is part of Pfizer’s overall plan to invest approximately $5 billion in U.S.-based capital projects as a result of the enactment of the Tax Cuts and Jobs Act. During the next six years, the company expects to invest approximately $1.1 billion in Kalamazoo County, which is in addition to the $1 billion it has invested in the site over the past decade.

The Portage site is a primary global supplier of sterile injectable, liquids and semi-solid medicines, and active pharmaceutical ingredients (APIs), producing more than 150 products. Its biggest product is Solu-Medrol, a widely used injectable anti-inflammatory medicine.

Cancer research collaborations
Pfizer remained active during the year on the cancer research front. It inked a deal worth up to $520 million with Kineta Immuno-Oncology (KIO), to develop RIG-I agonist immunotherapies for the treatment of cancer.

Leap Therapeutics entered into a collaboration with Pfizer and Merck KGaA to evaluate Leap’s GITR agonist, TRX518, in combination with avelumab, a human anti-PD-L1 IgG1 monoclonal antibody, and chemotherapy. Avelumab has received accelerated approval by the FDA for the treatment of patients with metastatic Merkel cell carcinoma (MCC) and previously treated patients with locally advanced or metastatic urothelial carcinoma (mUC), and is under further clinical evaluation across a range of tumor types under a global strategic alliance between Merck KGaA and Pfizer.

Daiichi Sankyo also entered into a clinical trial collaboration agreement with Pfizer and Merck KGaA to evaluate the combination of [fam-] trastuzumab deruxtecan (DS-8201), an investigational HER2 targeting antibody drug conjugate (ADC), in combination with the checkpoint inhibitor avelumab and/or an investigational Merck KGaA DNA damage response (DDR) inhibitor, in patients with HER2 expressing or mutated solid tumors.

A separate research collaboration to conduct preclinical studies evaluating [fam-] trastuzumab deruxtecan in combination with avelumab, the DDR inhibitor and other investigational compounds in Merck KGaA’s and Pfizer’s pipelines is also underway.

Aside from cancer, during the year Pfizer also signed a $425 million flu vaccine deal with BioNTech AG, a biotech focused on precise immunotherapies for the treatment of cancer and infectious disease. The multi-year R&D collaboration’s goal is to develop mRNA-based vaccines for the prevention of influenza (flu).

Headcount: 90,000
Revenues: $52,546 (-1%)
Net Income: $21,308 (+195%)
R&D: $7,657 (-3%)

TOP SELLING DRUGS

While 2017 wasn’t bad for Pfizer, it wasn’t anything to write home about either. Revenues dropped $278 million, or 1%, to $52.5 billion compared to 2016. Despite the falloff, Pfizer maintained its number one spot in this report by a wide margin—more than $10 billion.

The company’s two business segments—innovative health and essential health—generated revenues of $31.4 billion and $21.1 billion respectively, compared with $29.2 billion and $23.6 billion the year prior. Sales dropped in essential health most notably due to loss of exclusivity for several drugs, including Viagra, which reported revenues of $1.2 billion, a 23% drop.

While innovative health did post a small gain, sales of its largest revenue generator, the Prevnar family of pneumococcal vaccines, dropped 2% to $5.6 billion. At the same time, sales of the rheumatoid arthritis drug Enbrel dropped by 16% to $2.5 billion due to competition.

If there was one shining spot in Pfizer’s 2017 product portfolio it was the cancer drug Ibrance, which reported revenues of $3.1 billion, a 47% spike. The robust growth is attributable to the drug’s favorable benefit-risk profile, strong clinical data, and first mover advantage in this class of drugs.

Some experts say there is reason to believe that 2018 could be a better year for Pfizer. For one, Ibrance is looking at strong sales growth in the $1 billion range. There are also high expectations for Pfizer’s blood thinner Eliquis.

Last year wasn’t an active one on the acquisition front across the entire pharma landscape compared to previous years. However, things could be different this year after the U.S. enacted changes to its corporate income tax system in December. The new policy brings down corporate tax rates and creates a much friendlier business environment for M&A activity. After all, in October Pfizer did mention that is was evaluating options for its consumer healthcare business (read: divestiture or spinoff). If this does happen we could see the pharma giant on the M&A hunt to boost its pipeline.

Business development highlights

While the year was relatively quiet, at the very end of 2016, which falls in the first fiscal quarter of 2017 for Pfizer’s international operations, Pfizer completed the acquisition of AstraZeneca’s late-stage small molecule anti-infectives business, gaining commercialization rights primarily outside the U.S.

The agreement included development and commercialization rights to the newly EU approved drug Zavicefta, marketed products Merrem/Meronem and Zinforo, and the clinical development assets aztreonam-avibactam (ATM-AVI) and CXL. Zavicefta specifically addresses multi-drug resistant Gram-negative infections, including those resistant to carbapenem antibiotics, which represents significant unmet medical needs in bacterial infections.

Pfizer paid $550 million upfront with a deferred payment of $175 million in January 2019. AstraZeneca is eligible to receive as much as $250 million in milestones, $600 million in sales-related payments, as well as royalties on sales of Zavicefta and ATM-AVI in certain markets.

In February 2017, Pfizer completed the sale of its global infusion therapy business, Hospira Infustion Systems, to ICU Medical for $1 billion. The Hospira Infusion Systems business includes IV pumps, solutions, and devices.

At the end of the year, Pfizer and Basilea Pharmaceutica amended their existing license agreement for Europe, Russia, Turkey and Israel for Basilea’s Cresemba (isavuconazole) to include China—with Hong Kong and Macao—and sixteen countries in the Asia Pacific region. Isavuconazole is an antifungal for the treatment of life-threatening invasive mold infections.

Basilea received an upfront payment of $3 million and is eligible to receive up to approximately $223 million in additional payments upon achievement of regulatory and commercial milestones related to China and the Asia Pacific region. In addition, Basilea will receive royalties in the mid-teen range on Pfizer’s sales in the territory. Pfizer is granted an exclusive license to develop, manufacture and commercialize isavuconazole in China, Hong Kong and Macao, and sixteen countries in the Asia Pacific region, including Australia, India, South Korea, Singapore and Taiwan.

In June 2017, Basilea signed a license agreement with Pfizer for Europe—excluding the Nordics—Russia, Turkey and Israel. Basilea received a $70 million upfront payment and is eligible for additional milestone payments of up to $427 million and mid-teen royalties on sales.

In January 2018, Pfizer and Sangamo Therapeutics formed a collaboration for the development of a potential gene therapy using zinc finger protein transcription factors (ZFP-TFs) to treat amyotrophic lateral sclerosis (ALS) and frontotemporal lobar degeneration (FTLD) linked to mutations of the C9ORF72 gene. Sangamo received a $12 million upfront payment from Pfizer. Sangamo will be responsible for the development of ZFP-TF candidates.

Pfizer will be operationally and financially responsible for subsequent research, development, manufacturing and commercialization for the C9ORF72 ZFP-TF program and any resulting products. Sangamo is eligible to receive potential development and commercial milestone payments of up to $150 million, as well as tiered royalties on net sales. With this agreement, Pfizer is expected to establish a strong foothold in gene therapy.

Also of note in the beginning of 2018, the FDA upgraded the status of Pfizer’s McPherson, KS manufacturing facility to Voluntary Action Indicated (VAI) based on an October 2017 inspection. The change to VAI status lifted the compliance hold that the FDA placed on approval of pending applications and is an important step toward resolving the issues cited in the February 2017 FDA Warning Letter.

Research pacts

Pfizer entered several notable research collaborations during 2017. It also announced early this year its decision to end internal neuroscience discovery and early development efforts and re-allocate funding to other areas where the company has stronger scientific leadership.

In a deal with AbCellera Biologics, it formed a new therapeutic antibody discovery collaboration to apply AbCellera’s monoclonal antibody (mAb) screening platform to discover function-modulating antibodies against undisclosed membrane protein targets. AbCellera received an upfront payment and research support, and will be eligible to receive as much as $90 million in milestones, and royalties based on Pfizer’s development and commercialization of antibodies generated under this collaboration.

With Domain Therapeutics, a biopharma company specializing in new drug candidates that target G protein-coupled receptors (GPCRs), Pfizer entered a collaboration agreement to assess the impact of mutations on different signaling pathways engaged by GPCRs. Domain will use its bioSensAll technology to define signaling signatures for each of the wild-type and mutant receptors. The bioSensAll technology allows for easier understanding of signaling pathways activated by each candidate molecule, predicting its pharmacological profile. This makes it possible to choose at an early stage molecules that have the required activity but do not present side effects or induce tolerance to treatment.

The collaboration aims to validate potential targets across a range of therapeutic indications. Pfizer will use the results of specific mutations on intracellular signaling to guide further investigations in disease-specific models.

Lastly, with Encycle Therapeutics, a Toronto-based drug discovery company that enables the synthesis of a new type of constrained peptide called “nacellins,” Pfizer has entered a research collaboration to optimize certain nacellins, which were previously identified by Pfizer during a screening of Encycle’s nacellin library, that act on an undisclosed therapeutic target.

Nacellins are a type of peptide macrocycle that can often exhibit higher permeability, solubility, and stability compared to conventional constrained peptides.

Pipeline developments

On the cancer front, Pfizer and partner Merck have developed a robust immuno-oncology research pipeline involving close to 30 studies and 6,300 enrolled patients. In March 2017 the FDA approved Pfizer and Merck KGaA’s key immuno-oncology drug, Bavencio (avelumab), as first as well as a later line of therapy for patients suffering with metastatic Merkel cell carcinoma (or MCC). In September the European Commission approved Bavencio for this indication.

However, Pfizer reported in November that Bavencio failed to meet its primary endpoint in Phase III Javelin Gastric 300 trial, as a third line therapy for patients with advanced gastric cancer. The trial evaluated the efficacy of Bavencio based on the primary endpoint of overall survival as compared to chemotherapy. Pfizer and Merck are also exploring Bavencio in other gastric cancer settings such as first-line switch maintenance settings in the Javelin Gastric 100 study.

Pfizer expects data readouts from around seven more pivotal trials by 2019, includimg for Bavencio in the second-line lung cancer indication as well as the second-line ovarian cancer indication by the end of 2018 or early 2019. Additionally, data readouts from trials evaluating Bavencio in indications such as first-line maintenance therapy in gastric cancer, an earlier line of therapy for kidney cancer, first-line lung cancer, first-line bladder cancer, first-line ovarian cancer are also expected in 2019. Bavencio is expected to enable Pfizer to compete aggressively with other immuno-oncology players such as Merck, Bristol-Myers Squibb, and Roche.

In December 2017, Pfizer and Merck announced that their oral sodium-glucose cotransporter two (SGLT2) inhibitor, Steglatro (ertugliflozin), and fixed-dose combination therapy of ertugliflozin and sitagliptin, Steglujan, received approval from the FDA. These drugs are indicated as adjunct therapy in addition to diet and exercise for controlling glycemic values in adults with type two diabetes.

In the same month, Pfizer reached its primary endpoint in its Phase III trial, Embraca, which compared the efficacy of investigational PARP inhibitor, talazoparib, with a physician’s choice of standard of care chemotherapy, in patients with germline BRCA1/2-positive, locally advanced, or metastatic breast cancer.

Additionally, Pfizer also plans to explore the combination of avelumab and talazoparib in multiple cancer indications as well as a combination of Xtandi and talazoparib in prostate cancer.

In October, Pfizer published positive results from the phase two trial, evaluating investigational next-generation tyrosine kinase inhibitor, lorlatinib, in patients suffering with ALK-positive and ROS1-positive advanced non-small cell lung cancer (or NSCLC). This investigational drug has demonstrated meaningful activity in patients with lung tumors as well as brain metastases and may prove to be an effective option for heavily pretreated NSCLC patients.

Headcount: 64,000
Year Established: 1849
Revenues: $52,824 (+8%)
Net Income: $7,215 (+4%)
R&D: $7,872 (+2%)

TOP SELLING DRUGS

Headquartered in New York City, Pfizer jumped past Novartis to reclaim its spot as the largest pharmaceutical company in the world by revenue. The company reported an 8% growth to $52.8 billion for 2016 as compared to $48.9 billion in 2015. Pfizer’s portfolio includes medicines, vaccines, and consumer healthcare products separated into two businesses: Innovative Health and Essential Health.

The Innovative Health segment includes the global innovative pharmaceuticals segment and the global vaccines, oncology, and consumer healthcare segment and accounts for more than half of the company’s total revenues. The revenue contribution from the segment rose to 55% of total revenues for 2016. The Innovative Health revenues increased 11% to $29.2 billion in 2016 primarily due to an increase in sales of Lyrica, Ibrance, Eliquis, Xeljanz, Xtandi, and the strong performance of new products.

Pfizer Essential Health, formerly known as the Global Established Pharma segment, is focused on non-viral anti-infectives, biosimilars and sterile injectable medicines. The Essential Health business also includes legacy Hospira products. In September 2015, Pfizer acquired Hospira to create a leading provider of global sterile injectables that now encompasses one of the broadest and most diverse portfolios of sterile injectable medicines in the industry. The Essential Health segment revenue’s rose 11% to $23.6 billion in 2016, driven by increased sales of legacy Hospira products.

Regulatory milestones

Many of Pfizer’s R&D pipeline’s new molecular entities are aimed at a range of cancers, including kidney, breast, prostate, lung and blood cancers, and include biologics, chemicals, immunotherapies, gene therapies and biosimilars.

In 2016, Pfizer achieved several regulatory milestones. Its breakthrough oncology product Ibrance, which was approved by the FDA in the U.S. in 2015 for the initial treatment of the most common form of advanced breast cancer, received a new U.S. indication for recurrent disease. Ibrance also was approved in 2016 by the European Medicines Agency (EMA) for both initial and recurrent disease. There are 77 ongoing or completed collaborative Ibrance studies with investigators, 43 of which are in breast cancer and 34 in non-breast tumors including pancreatic and head and neck cancers.

Xalkori, Pfizer’s treatment for non-small cell lung cancer, was approved by the FDA for a certain type of lung cancer known as ROS-1.

Two therapies in development for cancer were accepted for regulatory review in 2016. Inotuzumab for acute lymphoblastic leukemia is now in registration in the EU, and avelumab for metastatic Merkel cell carcinoma is being reviewed in the U.S. and EU.

Together with its partner Merck KGaA, Pfizer is expanding its foothold in immuno-oncology where it currently has 30 avelumab clinical programs in the clinic and in 2016, launched four “first-in-patient” studies and now has eleven immuno-oncology entries in the clinic. Pfizer is now well positioned to capitalize on what many believe will be the future of cancer treatment—immuno-oncology agents combined with more conventional therapies.

Driving progress in the biosimilars market

As the leading global biosimilars company, Pfizer currently has three marketed biosimilars as part of its acquisition of Hospira—Inflectra (infliximab-dyyb), Retacrit (epoetin zeta) and Nivestim (filgrastim)—available to patients in several markets. Inflectra, which is marketed under other brand names in some countries, is approved in more than 70 countries. Pfizer’s robust biosimilars pipeline consists of eight distinct molecules in mid-to-late stage development, and six in early-stage development. Three of its late-stage pipeline products have reported positive top-line data from Phase III studies, and full data results are anticipated in 2017-2018.

Over the past year, the company has also worked to advance the U.S. biosimilars marketplace. In 2016, Pfizer launched Inflectra, a biosimilar for Remicade in the U.S. It marks the first monoclonal antibody (mAb) biosimilar to be both approved and launched in the U.S. It received FDA clearance in November 2016 and will treat difficult conditions including rheumatoid arthritis (RA), Crohn’s disease, plaque psoriasis and ulcerative colitis (UC).

Pfizer’s 14 biosimilars in the pipeline are expected to compete in a global market that may grow to $17-20 billion over the next five to 10 years. To offer support to patients and providers in the U.S., Pfizer launched the Pfizer enCompass Program, a comprehensive reimbursement and patient support program for biosimilars.

Pfizer is also developing new therapies for improving the quality of life of people who live with debilitating conditions such as RA, lupus, psoriatic arthritis and inflammatory bowel disease (IBD), including UC. It’s expertise in Janus kinase inhibitors (JAK), which interfere with the inflammation process in autoimmune diseases, is enabling it to advance several other potential anti-inflammatory therapies beyond the marketed product Xeljanz. Pfizer anticipates initiating approximately six JAK studies in 2017.

In addition, Pfizer has a rich history in vaccine research and development, and in 2016 continued to improve and expand its portfolio of potentially life-saving vaccines. The European Commission approved an expanded indication for its Nimenrix vaccine making it the first and only conjugate vaccine in the EU for immunizing infants six weeks of age and older against invasive meningococcal disease caused by a certain group of bacteria. In addition, Pfizer’s Meningococcal Group B (MenB) vaccine, Trumenba, was approved by the FDA for a new two-dose schedule designed to help prevent MenB in healthy adolescents and young adults. Pfizer also continued to advance its Staphylococcus aureus (S. aureus) and Clostridium difficile (C. difficile) vaccine candidates, designed to prevent widespread and increasingly drug-resistant infections.

Collaborations and Acquisitions

Collaboration is an important element of Pfizer’s overall discovery and early development process. In 2016, it received breakthrough therapy designation from the FDA for a hemophilia gene therapy being developed in partnership with SPARK Therapeutics. It also acquired Bamboo Therapeutics, a privately held biotech based in Chapel Hill, NC, focused on developing gene therapies for the potential treatment of patients with certain rare diseases including Duchenne muscular dystrophy (DMD) and Friedreich’s ataxia (FA). Through this acquisition Pfizer acquired a number of novel assets, key technology and manufacturing capabilities that position it to be ahead of the curve in this developing area of research that the company says has the potential to be game-changing.

In December 2016, Pfizer completed the acquisition of AstraZeneca PLC’s small molecule anti-infective business, primarily outside the U.S., including the commercialization rights and development rights in certain markets to the newly approved EU drug Zavicefta (ceftazidime-avibactam), the marketed agents Merrem/Meronem (meropenem) and Zinforo (ceftaroline fosamil), and the clinical development assets aztreonam-avibactam (ATM-AVI) and ceftaroline-avibactam (CXL).

Zavicefta specifically addresses certain multi-drug resistant Gram-negative infections, including those resistant to carbapenem antibiotics, one of the largest threats to global health in the field of infectious disease.

Pfizer also advanced its collaboration with Merck & Co. on ertugliflozin, which is in a new class of treatments for type 2-diabetes, the world’s most prevalent type, and expects regulatory action in 2017. Through a partnership with Eli Lilly & Co., Pfizer has initiated six new Phase III trials to continue the development of tanezumab, a novel potential treatment option for chronic, debilitating pain in patients with osteoarthritis, lower back pain and cancer.

Pfizer also entered into several research collaborations and business relationships. They include collaborations with Biolnvent International AB to develop antibodies targeting tumor-associated myeloid cells and Western Oncolytics to advance their novel oncolytic vaccinia virus, WO-12, adding another novel technology platform to its cancer vaccine efforts, as well as a relationship with IBM where it will utilize IBM Watson for Drug Discovery to help accelerate research in immuno-oncology by identifying potential new targets and combination therapies.

Domain Therapeutics, a biopharma company specializing in new drug candidates that target G protein-coupled receptors (GPCRs), entered a collaboration agreement with Pfizer to assess the impact of mutations on different signaling pathways engaged by GPCRs. Domain will use its bioSensAll technology to define signaling signatures for each of the wild-type and mutant receptors. The bioSensAll technology allows for easier understanding of signaling pathways activated by each candidate molecule, predicting its pharmacological profile. This makes it possible to choose at an early stage molecules that have the required activity but do not present side effects or induce tolerance to treatment. The collaboration aims to validate potential targets across a range of therapeutic indications.

Pfizer also entered a new therapeutic antibody discovery collaboration with AbCellera Biologics to apply its mAb screening platform to discover function-modulating antibodies against undisclosed membrane protein targets. AbCellera’s platform allows it to screen natural immune repertoires with unparalleled depth to unlock challenging discovery programs.

Lastly, Pfizer gained an eczema asset when it paid $5.2 billion for Anacor Pharmaceuticals. The company’s lead asset, crisaborole, is a non-steroidal topical PDE4 inhibitor with anti-inflammatory properties for the treatment of mild-to-moderate atopic dermatitis, or eczema. In two Phase III studies, crisaborole achieved statistically significant results on all primary and secondary endpoints. Pfizer received FDA approval at the end of the year and said it believes peak sales for crisaborole could potentially reach $2.0 billion annually.

Headcount: 73,800
Revenues: $48,851 (-2%)
Biopharma Revenues: $45,708 billion (-5%)
Net Income: $6,960 (-24%)
R&D: $7,690 (-8%)

TOP SELLING DRUGS

Pfizer was at the center of the biggest story to rock the pharma world in 2015 when it was announced in November that it and Allergan would merge in a $160 billion deal, catapulting the combined company past Novartis atop the pharma leader boards.

But, the inversion deal didn’t happen. It was called off at the last minute after a change in U.S. tax law.

If it had gone through Allergan would have acquired Pfizer and the two businesses would be combined under Allergan plc, to later be renamed Pfizer plc. Although on paper Allergan would be buying Pfizer, Pfizer would have retained control of the company with Pfizer stockholders holding 56% of the combined company and Allergan shareholders owning 44%.

In addition, the combined company was expected to maintain Allergan’s headquarters in Ireland creating a huge tax incentive for Pfizer. The U.S. corporate tax rate is 35%, while Ireland’s is just 12.5%. Pfizer’s global operational headquarters would be in New York and its principal executive offices in Ireland.

However, the U.S. Treasury Department introduced rules aimed at reducing the incentives for companies to carry out inversions and taking advantage of another nation’s lower tax rate.

According to Pfizer, the change in rules was impactful enough to reduce the advantages expected from the merger. Pfizer paid Allergan $150 million to cover expenses related to calling off the deal.

If it still has its eyes set on becoming the largest pharma giant in the world, they’re going to have to wait for the time being. That being said, 2015 wasn’t just about the failed Allergan deal.

Pfizer gained a portfolio of biosimilars and sterile injectable products when it bought Hospira for $17 billion. Hospira has built a reputation as a leading provider of injectable drugs and infusion technologies, as well as biosimilars. The global market value for both generic sterile injectables and biosimilars is expected to grow, estimated to be $70 billion and $20 billion in 2020, respectively.

The acquisition expands Pfizer’s portfolio of sterile injectable pharmaceuticals with Hospira’s generic sterile injectables product line, including acute care and oncology injectables, with a number of differentiated presentations. Pfizer’s branded sterile injectables include anti-infectives, anti-inflammatories and cytotoxics. Pfizer also plans to employ its commercial capabilities, global scale, and scientific and development capabilities to significantly expand Hospira’s portfolio of marketed biosimilars, including Retacrit to treat anemia associated with chemotherapy, and Nivestim, a biosimilar version of filgrastim (GCSF), to treat neutropenia.

In another deal, Pfizer acquired a minority equity interest in AM-Pharma and secured an exclusive option to acquire the company. AM-Pharma is a privately held Dutch biopharma company focused on the development of recombinant human alkaline phosphatase (recAP) for inflammatory diseases.

Pfizer made an upfront payment of $87.5 million for the minority interest and exclusive option, with additional potential payments of up to $512.5 million upon the potential launch of any product from this agreement.

Pfizer may exercise the option upon completion of a Phase II trial of recAP in the treatment of Acute Kidney Injury (AKI) related to sepsis, for which there are no drugs currently approved. Results from the Phase II trial are expected in 2H16.

During the year Pfizer also acquired a controlling interest in Redvax GmbH, a spin-off from Redbiotec AG, a privately held Swiss biopharma company, gaining access to a preclinical human cytomegalovirus (CMV) vaccine candidate, as well as intellectual property and a technology platform related to a second, undisclosed vaccine program. CMV is a herpes virus, infecting 50-90% of the adult population, with a majority remaining asymptomatic. A large segment of young adults, especially women of childbearing age, are at high risk of CMV infection during pregnancy and of passing the infection on to the unborn child. One out of every five children born with CMV infection may experience hearing loss and severe neurologic disorders.

In another transaction, Pfizer entered into an agreement with GSK to acquire its quadrivalent meningitis ACWY vaccines, Nimenrix and Mencevax, for a total consideration of approximately $130 million. Nimenrix is a single dose meningococcal ACWY-TT (tetanus toxoid) conjugated vaccine designed to protect against Neisseria meningitidis, an uncommon but highly contagious disease that can lead to disability and death. It was launched three years ago and is indicated for all age groups one year and older. Nimenrix is currently approved in 61 countries, with registrations under review in another 18 countries across Africa, Asia, Eastern Europe and the Middle East. Mencevax is a single-dose meningococcal ACWY unconjugated polysaccharide vaccine used to control outbreaks of meningococcal infection and for travelers to countries where the disease is endemic. It’s indicated for use across all age groups from two years of age, and is currently registered and approved in 79 countries across Africa, Asia, Australia, Europe, Latin America, Middle East and New Zealand.

Segment and product performance

Total revenues for Pfizer were $48.9 billion in 2015, driven by the performance of several key products in developed markets, including the continued strong uptake of Prevnar 13, Ibrance, Eliquis, Lyrica and Xeljanz. Direct product sales of more than $1 billion were reported for seven products in 2015.

Pfizer operates through two distinct businesses: an Innovative Products business and an Established Products business. The Innovative Products business is composed of two operating segments—the Global Innovative Pharmaceutical segment (GIP) and the Global Vaccines, Oncology and Consumer Healthcare (VOC). The Established Products business consists of the Global Established Pharmaceutical segment (GEP).

GIP recorded sales of $13.9 billion in 2015. Key therapeutic areas include inflammation/immunology,cardiovascular/metabolic, neuroscience/pain and rare diseases and include leading brands, such as Xeljanz, Eliquis, Lyrica (U.S. and Japan), Enbrel (outside the U.S. and Canada) and Viagra (U.S. and Canada).

VOC netted $12.8 billion in sales and focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare manufacturing and marketing several well known, over-the-counter (OTC) products.

GEP is the largest of Pfizer’s business areas with $21.5 billion in revenue and includes legacy brands that have lost or will soon lose market exclusivity in both developed and emerging markets, branded generics, generic sterile injectable products, biosimilars and infusion systems. Hospira and its commercial operations are now included within GEP.

Geographically, in the U.S., revenues increased $2.6 billion, or 14%, in 2015, compared to 2014, reflecting, among other things the performance of several key products, including Prevnar 13 primarily in adults, up approximately $1.9 billion; Ibrance, which was launched in the U.S. in February 2015, up approximately $720 million; as well as Lyrica (GIP), Eliquis, Xeljanz, Viagra (GIP) and Nexium 24HR, collectively up approximately $1.0 billion in 2015.

Performance was offset by losses of exclusivity and associated multi-source generic competition for Celebrex in the U.S. in December 2014, down approximately $1.6 billion in 2015; the loss of exclusivity for Zyvox and Rapamune, as well as the termination of the Spiriva co-promotion collaboration, collectively, down approximately $620 million in 2015; and the performance of Lipitor and BeneFIX, collectively, down approximately $160 million in 2015.

In Pfizer’s international markets, revenues decreased $3.4 billion, or 11%. Total share of international revenues also dropped in the year from 62% the prior year to 56% in 2015.

Emerging markets represented continued strong operational growth primarily from the Innovative Products business, including Prevenar and Enbrel, among other products, and Lipitor, up approximately $600 million in 2015; higher revenues in developed markets for Eliquis and Lyrica (GIP), as well as from vaccines acquired in December 2014 from Baxter in Europe, collectively, up approximately $590 million in 2015.

Business was offset by lower revenues in developed markets for Lyrica (GEP), Celebrex, Inspra and Viagra (GEP) as a result of the loss of exclusivity, as well as the performance of Lipitor and Norvasc in developed markets, and Zosyn/Tazocin in emerging markets, collectively down approximately $1.0 billion in 2015.

R&D Collaborations

During the year Pfizer and Adaptive Biotechnologies entered into a translational research collaboration to leverage next-gen sequencing of the adaptive immune system to advance Pfizer’s immuno-oncology pipeline. The companies will combine drug development and platform technology biomarker expertise to identify patients who may benefit from immunotherapy.

Adaptive’s immunosequencing platform measures the patient’s immune-cell repertoire, providing a translational tool to accelerate Pfizer’s immuno-oncology biomarker and drug development programs. Adaptive will work with Pfizer to apply its platform technology, bioinformatics capability, and scientific expertise.

Merck KGaA and Pfizer entered into a collaboration Syndax Pharmaceuticals to evaluate avelumab, an investigational fully human anti-PD-L1 IgG1 monoclonal antibody, in combination with Syndax’s entinostat, an investigational oral small molecule that targets immune regulatory cells (myeloid-derived suppressor cells and regulatory T-cells), in patients with heavily pre-treated, recurrent ovarian cancer. Avelumab is currently being investigated across a broad range of tumor types under the alliance between Merck KGaA and Pfizer. This is an exclusive agreement with Syndax to study the combination of these two compounds in ovarian cancer. Syndax will be responsible for conducting the Phase Ib/II trial.

Pfizer and BIND Therapeutics extended the terms of their global collaboration through to create Accurins that optimize two of Pfizer’s targeted oncology drugs. The collaboration was established in April 2013 under which Bind employs its nanomedicine platform to develop targeted and programmable therapeutics known as Accurins.

Pfizer has the exclusive option to pursue development and commercialization of the Accurins selected, at which point Pfizer will have responsibility for development and commercialization of the selected Accurins. Both companies will work together on preclinical research. BIND has the potential to receive as much as $88.5 million based on specified development and regulatory milestones, as well as $110 million for specified commercial events and royalties for each Accurin commercialized.

Headcount: 77,700
Revenues: $49,605 (-4%)
Biopharma Revenues: $45,708 (-5%)
Net Income: $9,135 (-58%)
R&D: $8,393 (+26%)

TOP SELLING DRUGS

Sales from biopharmaceutical products made up around 92% of Pfizer’s total revenues in 2014 and the pharma giant recorded direct product sales of more than $1 billion for each of 10 biopharmaceutical products in the year under review as well. These products represented 54% of total revenues from biopharmaceutical products.

In all, global biopharma revenues dropped to $45.7 billion, a decrease of 5%, partly due to negative foreign exchange rates, which impacted revenues by $857 million, or 2%.

Geographically, in the U.S., biopharma sales dipped 8% to $1.4 billion, reflecting, among other things, according to the company, lower alliance revenues, primarily due to Enbrel, reflecting the expiration of the co-promotion term of the collaboration agreement in October 2013—approximately $1.3 billion in 2014—and Spiriva, reflecting the final-year terms, and termination on April 29, 2014, of the co-promotion collaboration, which, per the terms of the collaboration agreement, resulted in a decline of Pfizer’s share of Spiriva revenue—approximately $395 million in 2014.

Lower revenues were recorded for Detrol LA ($321 million) and Celebrex ($198 million) due to loss of exclusivity and lower revenues from Lipitor ($191 million), which were partially offset by the strong performance of Lyrica ($352 million) as well as the growth of Prevnar, Xeljanz, Eliquis, Xalkori and Inlyta, which collectively, accounted for about $760 million.

Pfizer’s international markets, which accounted for 62% of the firm’s total biopharma revenues, decreased $764 million, or 3% also due to the unfavorable impact of foreign exchange of approximately $857 million, or 3%. However, higher revenues were recorded for Lipitor in China, Lyrica in developed markets, Enbrel outside Canada, and the performance of recently launched products Eliquis, Xalkori, and Inlyta, which collectively added approximately $941 million in 2014. Prevenar and Xeljanz also grew (approximately $228 million).

These positive growth factors were partially offset by the operational decline of certain products, including Norvasc, Zithromax, Xalabrands, Detrol, Effexor and Chantix/Champix, in developed international markets, and Sutent in China (collectively, approximately $320 million in 2014). Lower revenues were also reported as a result of the loss of exclusivity and subsequent multi-source generic competition for Viagra in most major European markets and Lyrica in Canada (collectively, approximately $248 million in 2014); lower alliance revenues (approximately $218 million in 2014, excluding Eliquis), primarily due to the expiration of the co-promotion term of the collaboration agreement for Enbrel in Canada, the ongoing termination of the Spiriva collaboration agreement in certain countries, the loss of exclusivity for Aricept in Canada and the termination of the co-promotion agreement for Aricept in Japan in December 2012; and the continued erosion of branded Lipitor in most international developed markets (approximately $197 million in 2014).

On the R&D front, Pfizer’s expenses increased 26% compared to the previous year due mostly to a charge associated with a collaboration with Merck to jointly develop and commercialize an investigational anti-PD-L1 antibody currently in development as a potential treatment for multiple types of cancer. The charge includes an $850 million upfront cash payment as well as an additional $309 million, reflecting the estimated fair value of certain co-promotion rights for Xalkori given to Merck.

Additional R&D expenditures include ongoing Phase 3 programs for certain new drug candidates, including Pfizer’s PCSK9 inhibitor, and ertugliflozin, also in collaboration with Merck; investments in Ibrance (palbociclib) and Pfizer’s vaccines portfolio, including Trumenba, as well as potential new indications for previously approved products, especially for Xeljanz.

Significant Transactions

Hospira Acquisition. Pfizer entered into a definitive merger agreement to acquire Hospira, the world’s leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, for approximately $17 billion. The global market value for both generic sterile injectables and biosimilars is expected to grow, estimated to be $70 billion and $20 billion in 2020, respectively. The transaction, subject to customary closing conditions, is expected to close in 2H15.

The acquisition expands Pfizer’s portfolio of sterile injectable pharmaceuticals with Hospira’s generic sterile injectables product line, including acute care and oncology injectables, with a number of differentiated presentations. Pfizer’s branded sterile injectables include anti-infectives, anti-inflammatories and cytotoxics. Pfizer also plans to employ its commercial capabilities, global scale, and scientific and development capabilities to significantly expand Hospira’s portfolio of marketed biosimilars, including Retacrit to treat anemia associated with chemotherapy, and Nivestim, a biosimilar version of filgrastim (GCSF),

Collaboration with OPKO Health. On December 13, 2014, Pfizer entered into a collaborative agreement with OPKO to develop and commercialize OPKO’s long-acting human growth hormone (hGH-CTP) for the treatment of growth hormone deficiency (GHD) in adults and children, as well as for the treatment of growth failure in children born small for gestational age (SGA) who fail to show catch-up growth by two years of age. hGH-CTP has the potential to reduce the required dosing frequency of human growth hormone to a single weekly injection from the current standard of one injection per day.

Acquisition of Marketed Vaccines Business of Baxter International. On December 1, 2014 Pfizer completed the acquisition of Baxter’s portfolio of marketed vaccines for $635 million. The portfolio that was acquired consists of NeisVac-C and FSME-IMMUN/TicoVac. NeisVac-C is a vaccine that helps protect against meningitis caused by group C meningococcal meningitis and FSME-IMMUN/TicoVac is a vaccine that helps protect against tick-borne encephalitis. As part of the agreement, Pfizer also acquired a portion of Baxter’s facility in Orth, Austria, where these vaccines are manufactured.

Collaboration with Merck KGaA. On November 17, 2014, Pfizer formed a collaboration with Merck to jointly develop and commercialize avelumab, an investigational anti-PD-L1 antibody currently in development as a potential treatment for multiple types of cancer. Pfizer and Merck will explore the therapeutic potential of this novel anti-PD-L1 antibody as a single agent as well as in various combinations with it and Merck’s broad portfolio of approved and investigational oncology therapies. Both companies will collaborate on up to 20 high priority immuno-oncology clinical development programs expected to commence in 2015. These clinical development programs include six trials (Phase II or III) that could be pivotal for potential product registrations. Pfizer and Merck will also combine resources and expertise to advance Pfizer’s anti-PD-1 antibody into Phase I trials.

As part of the deal, Pfizer made an upfront payment of $850 million to Merck, who is also eligible to receive regulatory and commercial milestones of as much as $2 billion. Both companies will jointly fund all development and commercialization costs, and split equally any profits generated from selling any anti-PD-L1 or anti-PD-1 products from this collaboration. Also, as part of the agreement, Pfizer gave Merck certain co-promotion rights for Xalkori in the U.S. and several other key markets. The deal cost Pfizer $1.2 billion of research and development expenses.

Acquisition of InnoPharma. On September 24, 2014, Pfizer completed the acquisition of InnoPharma, a privately-held pharmaceutical development company, for $225 million.

License from Cellectis SA. On June 18, 2014, Pfizer entered into a global arrangement with Cellectis to develop Chimeric Antigen Receptor T-cell immunotherapies in the field of oncology directed at select cellular surface antigen targets. Pfizer made an upfront payment of $80 million to Cellectis and will also fund R&D costs associated with 15 Pfizer-selected targets and, for the benefit of Cellectis, a portion of the R&D costs associated with four Cellectis-selected targets within the arrangement. Cellectis is eligible to receive development, regulatory and commercial milestone payments of up to $185 million per product that results from the Pfizer-selected targets. Cellectis is also eligible to receive royalties on sales of any products commercialized by Pfizer.

Segment Performance

At the beginning of fiscal 2014, Pfizer formed two distinct businesses: an Innovative Products business and an Established Products business. The Innovative Products business is composed of two operating segments––the Global Innovative Pharmaceutical segment (GIP) and the Global Vaccines, Oncology and Consumer Healthcare segment (VOC). The Established Products business consists of the Global Established Pharmaceutical segment (GEP).

GIP is focused on developing, registering and commercializing novel, value-creating medicines. These therapeutic areas include inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases and women’s/men’s health and include leading brands, such as Xeljanz, Eliquis and Lyrica (U.S. and Japan). GIP has a pipeline of medicines in inflammation, cardiovascular/metabolic disease, neuroscience and pain, and rare diseases. Revenues in the segment decreased 3% to $13,861 million in 2014. Total GIP revenues from emerging markets were $1.6 billion in 2014. R&D expenses increased 31% reflecting incremental investment in late-stage pipeline products.

Pfizer’s VOC segment focuses on vaccines and products for oncology and consumer healthcare. Consumer Healthcare manufactures and markets several well known, over-the counter (OTC) products. Each of the three businesses in VOC operates as a separate, global business. Revenues increased 9% during the year.

Global Vaccines revenues increased 13% to $4,480 million in 2014, primarily due to the performance of Prevnar 13 in the U.S. Total Vaccines revenues from emerging markets were $1.0 billion.

Global Oncology revenues increased 12% to $2,218 million due to continued strong underlying demand for recent product launches, Xalkori and Inlyta globally, as well as growth from Bosulif, primarily in the U.S. Total Oncology revenues from emerging markets were $375 million in 2014.

Consumer Healthcare revenues increased 3% to $3,446 million due to the launch of Nexium 24HR in the U.S. in late-May 2014 and growth of vitamin supplement products in emerging markets. Total Consumer Healthcare revenues from emerging markets were $942 million in 2014.

The GEP segment includes the brands that have lost market exclusivity and, generally, the mature, patent-protected products that are expected to lose exclusivity through 2015 in most major markets and, to a much smaller extent, generic pharmaceuticals. Additionally, GEP includes Pfizer’s sterile injectable products and biosimilar development portfolio. Revenues decreased 9%, to $25,149 million. Total GEP revenues from emerging markets were $7.5 billion in 2014.

Headcount: 77,700
Pharma Revenues: $51,220 (-6%)
Total Revenues: $51,584 (-6%)
Net Income: $22,072 (51%)
R&D Budget: $6,678 (-11%)

TOP SELLING DRUGS 

Pfizer is often portrayed as a corporate predator, even on pharma industry blogs, which have chronicled the company’s acquisition of Warner-Lambert, Pharmacia, and Wyeth. “The only way for a shark to survive is to keep going forward,” wrote John Lamattina in his blog on Forbes.com in May. “To maintain its leadership, Pfizer will again need to make a major acquisition in the next four to five years.” Lamattina, an alumnus of Pfizer, spent several years as head of the corporation’s R&D.

By the end of May, the company decided to bail on its $120-billion bid for AstraZeneca, which would have formed the largest pharma company in the world.

Looking within, Pfizer has shaken off divisions, such as its animal health products, which was spun off as Zoetis last year, to invest in R&D in areas such as oncology immunotherapies.

On the other extreme, however, it is also taking advantage of the trend of brand-name pharmaceuticals to OTC formulations, acquiring Nexium rights from AstraZeneca two years ago. This quarter, the FDA approved OTC Nexium 24HR.

This summer, Pfizer opened a new 280,000 sq.-ft. R&D hub in Cambridge, MA, which will allow 1,000 scientists from three

locations to work in one spot, closer to academic institutions, hospitals and patient organizations, on treatments for lupus,

inflammatory bowel disease, kidney disease, Type 2 diabetes, muscular dystrophy and Parkinson’s disease.

This year, Pfizer plans to submit a NDA with the FDA for palbociclib combined with letrozole, as first-line treatment of estrogen receptor positive (ER+) human epidermal growth factor receptor 2 negative (HER2-) breast cancer.

Pfizer is also working with Merck, exploring the therapeutic potential of Merck’s anti-PD-1 therapy, MK-3475, in combination with two Pfizer oncology assets. A Phase I/II study will evaluate MK-3475 with axitinib (INLYTA) in renal cell carcinoma, and a Phase I study will evaluate MK-3475 and PF-2566, a fully humanized mAb involved in regulation of immune cell proliferation and survival.

Last year, FDA approved Xalkori for the treatment of patients with metastatic non-small cell lung cancer.

Headcount: 91,500  (incl. 9,300 in Animal Health)
Pharma Revenues: $51,214 (-11%)
Total Revenues: $58,986 (-10%)
Net Income: $14,598 (46%)
R&D Budget: $7,870 (-13%)

Top-Selling Drugs

As we’ve seen in past years, Pfizer reflects the trends and tones of the rest of the Top Pharma cohort. This isn’t to say that they’re all following the #1 player in our market, but rather that Pfizer is so large that it manages to create a sort of microcosm for pharma as we know it.

Big patent expirations? Check!

Patent problems in India? Check!

Fewer acquisitions? Check!

Niche blockbusters for orphan indications? Check! (well, soonish)

Partnerships with other majors? Check!

Working up some biosimilars? Check!

More layoffs? Check!

Settlements large and small with governments and individuals? Check!

Non-traditional collaborations in emerging markets? Check!

Tough decisions on pursuing risky but lucrative therapeutic programs? Check!

Deep thinking about what a pharma company needs to be? Check!

[LATE NEWS: Pfizer to split internal operations between Innovative and Generic business units!]

This year, that involved seeing what happens when the biggest drug in the world goes off the patent cliff. Because of Ranbaxy’s 180-day exclusivity period, Pfizer’s Lipitor didn’t go through a full year of race-to-the-bottom pricing for its statin, but the results were rough nonetheless; Pfizer lost $5.6 billion in Lipitor revenues in 2012. If you’re scoring at home, $5.6 billion is larger than all but eight drugs’ 2012 sales: Lantus, Advair, Crestor, Remicade, Humira, Rituxan, Herceptin and Avastin, (The fact that the last three of those drugs all come from Roche helps explain why that company is our #1 Biopharma.)

Lipitor’s free-fall continued in 1Q13, with the drug shedding another $769 million in sales to come in at $626 million. That collapse has dropped Lipitor to #5 in Pfizer’s sales ranks, behind Lyrica, Enbrel, Prevnar 13 and Celebrex. In a case of “what the patent gods take away, they also giveth,” Pfizer received a patent extension for Celebrex in March 2013, extending coverage for that drug through December 2015, rather than May 2014.

One of the stated reasons that Pfizer purchased Wyeth in 2009 — helping the company reduce the overall impact of Lipitor’s expiration — did in fact hold up, despite our snarky comments. Pfizer’s top three sellers, as of 1Q13, come from the Wyeth deal.

That doesn’t mean Pfizer now has a stable structure. In January 2013, Pfizer spun out it animal health business in an IPO as Zoetis, a move it announced in June 2012. That move was one of a series of divestitures for the company. At the time, Pfizer held on to 80% of the new company’s shares. The stock performed well in its first several months and, in May 2013, the decision was made to divest control entirely, offering Pfizer shareholders an opportunity to exchange shares and pick up an interest in Zoetis at a 7% discount, beginning in June. If it can’t find enough takers, it may try again or use a special dividend to dispose of its remaining shares.

Meanwhile, top management is still considering whether to split Pfizer up further. In January 2013, chief executive officer Ian Read said the company may reorganize Pfizer around two units for branded and generic drugs. According to a Bloomberg report, Mr. Read told analysts in a conference call, “We will move toward separate management [for those segments], and at that point we’ll evaluate whether shareholders would prefer to have the opportunity to invest in two separate companies or not.” He also added that speculation was fruitless.

Three months later, chief financial officer Frank D’Amelio told Bloomberg that the company is in “a study year” and would spend 2013 assessing whether to make such a split. At that time, Mr. Read noted that a move of that proportion would take three years to execute. In the short term, the company will build a framework where those two segments are a bit more transparent, so investors can get a better idea of the health of each business. Speculation, however, remains fruitless.

We’ve covered this topic in past years, and it looks like Pfizer is waiting to see how the Abbott/AbbVie split is received by the investing public. Abbott was in a much thornier situation than Pfizer is, dependent as Abbott was on the sales of a single drug (Humira) to fuel more than half of its pharma revenues. No Pfizer drug accounted for more than 8% of total pharma revenues in 2012 (9% in 1Q13, as Lyrica sales grew 12%).

There’s one aspect of this branded/generic spit that’s never been clear to us: what happens when current branded drugs go generic? Does the new branded company just stop making them, keep producing it as a new “established portfolio,” or hand them off to the old generic company, even though the two firms are supposed to be independent? I suppose we’ll find out the answer to that from AbbVie soon.

However Pfizer is structured, it’s going to see a nice earnings bump of $1.4 billion courtesy of Protonix, a Wyeth drug that saw its patent expire in 2011. How will they get that much money out of an expired med? Well, Teva and Sun Pharma both launched at-risk generics of Protonix in 2007 and 2008, lost an infringement case, and recently settled with Pfizer and Takeda (which now owns Protonix’ other seller, Nycomed) for $2.2 billion. Pfizer will receive 64% of the payout. And that’s why they call it an “at-risk launch”.

Pharma R&D remains even riskier, of course. Pfizer has seen several approvals in the past year that may help propel it into the post-Lipitor era. The most anticipated of these was Eliquis, the antiplatelet treatment Pfizer co-developed with Bristol-Myers Squibb. That drug was cleared for reduction in the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation by the FDA in December 2012 after several delays. It’ll battle Pradaxa (Boehringer Ingelheim) and Xarelto (J&J) to supersede the longstanding standard of care warfarin.

Pfizer and BMS are hoping to expand Eliquis’ label to cover recurrent venous thromboembolism (VTE), which will help push the drug toward its predicted mega-blockbuster status. For now, sales were quiet in 1Q13 as Eliquis had to gain a foothold against those established competitors. Strong head-to-head data will help.

Pfizer also got approval in the U.S. and Japan for Xeljanz, its oral treatment for rheumatoid arthritis (RA), in November 2012. That JAK3 inhibitor will try to carve out a niche against the injectable drugs that dominate the market: Humira, Remicade, Enbrel, and others. As with those treatments, trials are underway in a number of immunological areas. If it snags a fraction of the sales of those biologics (as well as reaching patients who can’t tolerate them), Xeljanz could reach blockbuster status in short order. There are other JAK inhibitors reaching the market soon, which is why Pfizer began direct-to-consumer ads for Xeljanz in recent months.

In April 2013, the EU’s Committee for Medicinal Products for Human Use (CHMP) rejected the drug based on its risk/benefit profile. CHMP was concerned about serious infections, GI perforations and malignancies, and did not feel that the drug produced consistent reduction in disease activity and joint damage. Pfizer appealed the ruling.

The EU also dragged its heels a bit on Bosulif, an oral treatment for chronic myeloid leukemia that the FDA approved in September 2012. The European Commission gave the drug conditional marketing authorization in March 2013, pending a CHMP review.

That sounds like a somewhat productive pipeline, albeit one fraught with uncertainty about market uptake and competition. On the development side, analysts are intrigued by palbociclib, an investigational compound for breast cancer. Phase II results were impressive enough that the FDA gave the treatment Breakthrough Therapy designation, which could speed it to market. (We’re talking a near-quadrupling of progression-free survival on average.) In drug development terms, that means maybe 2015 or ‘16. Some analysts think it could become hit peak sales of $5 to $8 billion, which would constitute a real game-changer for our mega-pharma company. Palbociclib is being co-developed with Onyx, in a deal that stretches back to the Warner-Lambert days.

As big as Pfizer is, it doesn’t have an infinite R&D budget. In fact, the company slashed R&D spending by 13% in 2012, with plans to drop it by another 10% or so in 2013. Examining its pipeline and the research cuts that Pfizer has made, it looks like the company is less involved in early research and more focused on development, a model proposed by other major pharmas in recent years. That’s ironic, because several of its new drugs were actually discovered and developed in house. Which is also ironic, because Pfizer was criticized for many years for not being able to develop anything that wasn’t licensed or acquired.

In March 2013, Pfizer quit development of filibuvir, a treatment for hepatitis C. That field has gotten so competitive, Pfizer concluded that it wouldn’t be able to make enough of an impact, and bowed out.

The company also surrendered on an Alzheimer’s disease treatment it was developing with Johnson & Johnson, after a trial failed in July 2012. Pfizer and J&J did continue a Phase II study of the biologic as a subcutaneous formulation, which wrapped in February 2013, according to clinicaltrials.gov. There’s been no word on the results, but we’re going to assume that there was no fantastic result in a subpopulation that will warrant continued development.

As we said at the outset, many of the stories that you’ll find in other Top Company profiles can be found within Pfizer. The world’s biggest pharma has finally begun to fall back to the pack. Lucky for them, everyone else’s patent woes mean they’ll likely stay in the top spot for another year.

Lowe Down
Pfizer’s continued to divest itself of all distractions (nutritional products, animal health) and put its money down on what got them to the position they’ve reached today. Buying other companies and stripping them down like ears of corn? No, no, discovering drugs is what they’re about! It’s a process so important that they’re building a big new site in Cambridge, just up the street from a massive Novartis construction site, and they’re planning to fill it with steely-eyed drug designers. And the compounds they dream up are so important to Pfizer’s pfuture that the company is going to have them made by the cheapest labor they can find, many time zones away. So you know that they mean business. Drug development, however, will take place in Groton. It’s a good thing that Pfizer never bought an island in the Indian Ocean; that’s probably where the toxicology testing would end up being done. If you know someone with project-management software or videoconferencing equipment to sell, put them onto this big opportunity. Chinese phrasebooks might come in handy, too — suggested entries include translations for, “You said this would be ready two months ago,” and ,”No, I don’t think that they have any more starting material in Groton, either.”

—Derek Lowe

Asia News
Pfizer had . . . interesting times in the far east this past year. In October 2012, India’s patent board revoked Pfizer’s patent for cancer treatment Sutent. That followed earlier moves by the patent board to permit generics of Sutent competitor Nexavar (Bayer) and Tarceva (Roche), and for India’s Supreme Court to deny a patent to Gleevec (Novartis). Pfizer appealed the board’s decision, and in June 2013 the Intellectual Property Appellate Board set aside the revocation and asked the patent board to reconsider the case in light of new information.

In August 2012, Pfizer ended its three-year supply agreement with Claris Life Sciences. The companies began working together in 2009 to supply Claris’ generic parenterals to the U.S., Europe and Australia under Pfizer’s name. In 2010, the FDA issued a warning to Claris regarding quality issues and banned the sale of its products in the U.S. until compliance issues were resolved. The FDA lifted the ban in August 2012 following a facility inspection in February.

Also in August, Pfizer and Mylan signed a long-term strategic collaboration to develop, manufacture, distribute and market generic drugs in Japan. Pfizer will be responsible for commercialization of the combined generics portfolio, and managing the marketing and sales effort. Mylan will be responsible for operations, including R&D and manufacturing. The pact will include a portfolio of more than 350 marketed products, as well as more than 125 additional products in development. Products included in the collaboration will be sold under the Pfizer brand with joint labeling.

A month later, Pfizer set up a joint venture to manufacture and sell generics in China with Hisun Pharmaceuticals. Making the announcement, the companies noted that Hisuin will transition from an API manufacturer into an established branded generics company. Presumably, the JV will involve investment in significant dosage form development expertise, as well as building a sales force.

In February 2013, Pfizer announced plans to close its Singapore clinical research unit, laying off 30 employees as part of global R&D cuts. The site had been established in 2000.

Acquisition News
Target: NextWave
Price: $255 million upfront, with $425 in milestones
Announced: October 2012
What they said: “By combining the advantages of Quillivant XR with Pfizer’s commercialization expertise, we will be able to provide ADHD patients and their caregivers a new treatment option.”

—Albert Bourla, president and general manager, Pfizer’s Established Products Business Unit

Outsourcing News
In June 2013, Pfizer sold a 500,000-sq.-ft. commercial manufacturing facility in Bristol, TN to UPM Pharmaceuticals. Financial terms weren’t disclosed, but as part of the deal UPM will continue to manufacture Pfizer’s current portfolio of products within the facility for two years. The site was part of King Pharmaceuticals, which Pfizer acquired in 2010.

The acquisition will provide UPM with large-scale commercial capabilities for manufacturing and packaging of solid oral dosage tablets and capsules, as well as semi-solid manufacturing of creams and ointments. The facility will also provide for tech transfer support, pilot plant scale-up capabilities, analytical and microbial testing, as well as dedicated suites for potent compounds.

UPM’s president, James E. Gregory, noted that the facility “will give UPM the capability to annually produce 3.5 billion tablets and 680 million capsules; this will be a dramatic growth opportunity for our company and our clients.”

Headcount: 103,700
Pharma Revenues: $57,747 (-1%)
Total Revenues: $67,425 (1%)
Net Income: $10,009 ( 21%)
R&D Budget: $9,112 (-3%)

Top-Selling Drugs

Alliance Revenues**
Aricept                Alzheimer’s disease
Exforge               hypertension
Rebif                   multiple sclerosis
Spiriva                COPD

Account for 77% of total pharma sales, up from 75% in 2010

PROFILE

Headcount: 110,600

Pharma Revenues: $58,523 (29%)

Total Revenues: $67,809 (36%)

Net Income: $8,257 (-4%)

R&D Budget: $9,413 (20%)

Top-Selling Drugs in 2010

Account for 77% of total pharma sales, up from 72% in 2009.

* inaccurate comparison with 2.5 months’ of Wyeth revenues in 2009

** Listed as Alliance Revenues: Aricept revenues shared with Eisai, 10 weeks of Enbrel revenues (U.S. and Canada), Exforge revenues with Novartis; Rebif revenues with Merck Serono, and Spiriva revenues with Boehringer-Ingelheim.

PROFILE
Is our #1 company too big to fail, or is it too big to succeed? I asked that question when the Wyeth merger was an-nounced in early 2009, and we‚ are seeing signs that Pfizer’s top management believes the latter to be true.

In December 2010, Pfizer’s chief executive officer Jeffrey Kindler abruptly retired, citing burnout. His successor, Pfizer lifer Ian C. Read, hasn’t hesitated to put his stamp on the company, which is in the final year of U.S. patent protection for Lipitor, the world’s top-selling drug. Three months into his tenure, Mr. Read announced a shrinking of Pfizer’s R&D structure. By 2012, he said, R&D spending would be approximately $6.5 billion, a figure lower than Pfizer was spending before the Wyeth acquisition. The company will exit several areas — allergy, urology, respiratory, internal medicine and tissue repair — and focus on more profitable ones — cancer, neurology, inflammation, vaccines and immunology — while closing and consolidating several R&D sites. Mr. Read remarked, “At some point your shareholders and stakeholders demand you have a return on investment in research. We’re looking at areas where we think it’s not a competitive advantage.”

Mr. Read’s decision was immediately compared and contrasted with Merck’s move to withdraw its earnings guidance and stick with expensive R&D programs. Pfizer was cast as investor-beholden (making earnings targets) and Merck as science-driven (keeping R&D sacrosanct).

There’s more about that in Merck’s profile, but suffice to say, I think those comparisons are a bit simplistic and facile. Both companies are working to manage investor expectations and develop effective drugs. And it’s not like either of them have burned up the charts these last few years.

As surprised as observers were by the R&D cutbacks, no one was expecting the next big move.

In late March, an investor analyst reported Pfizer executives mentioning to him that they were thinking of breaking the company into five pieces, and keeping innovative pharma as a standalone. Mr. Read confirmed the possibility in May, admitting in a Bloomberg interview, “We need to fix the innovative core. Part of that may be we become a smaller company.” He said that he is reviewing the spinoff or sale of four units with more than $18.4 billion in revenues: Animal Health, Consumer Healthcare, Nutrition, and Established Products. (Pfizer previously announced that it was looking to sell its Capsugel division, and did so in April, getting $2.4 billion for the unit from KKR & Co.)

The divisional reviews will be completed and the decisions announced at the end of this year and early next year, Mr. Read said. If it goes through in its most extreme form, the remaining Pfizer will be a $35 to $40 billion company, still big enough for a Top-5 rank (barring someone else’s mega-merger). Lots of people have noted the irony of a company that has made three mega-mergers since 1999 shrinking to become more nimble and innovative, so I’ll pass.

So how did Pfizer get to the point where such a move is even being considered? The same way much of the industry got into the trouble it’s in: not enough new drugs coming out of the pipeline. This is where Pfizer’s scale actually hurts it. Since the company is so immense, new products need to be blockbusters or mega-blockbusters to get noticed. It’s a theme I’ve harped on before in relation to Pfizer and other huge pharmas; everyone pays lip service to how they’d be happy to develop several sub-billion-dollar drugs, but they need to swing for the fences just to keep up with the major products are at the end of their lifecycle. If Pfizer becomes appreciably smaller, then a “modest” success can have a bigger impact on the company as a whole.

When you get down to it, whoever runs Pfizer is in a no-win situation. Losing Lipitor’s revenues once its U.S. patent expires in November 2011 will lead to an unprecedented drop in sales (unless Ranbaxy’s manufacturing problems get so bad that it’s barred from importing generic Lipitor to the U.S.). One school of thought — illustrated by Mr. Kindler’s decision to purchase Wyeth — is to acquire so much scale in diverse fields that the Lipitor loss constitutes a smaller overall percentage of total business. Another school, characterized by Bristol-Myers Squibb’s biopharma strategy, is to get out of everything that’s not related to drug R&D, gamble on the strength of the pipeline (with strategic in- and out-licenses and partnerships, of course), and take the hit when your big drug loses patent protection. (See BMS’ profile for some idea of how they’re getting ready for the loss of Plavix revenues.)

That’s not to say that I don’t understand the rationale of the Wyeth acquisition. A close look at Pfizer’s Top-Selling Drugs list from 2010 tells the story: Pfizer’s top legacy products ($500+ mil. sales) posted a 3% drop in 2010, or $810 million. Only Sutent and Lyrica showed significant growth among Pfizer’s legacy drugs. Without Wyeth’s legacy products, things could have gotten ugly. In fact, the new Pfizer posted a 2% drop in pharma sales in 1Q11, with flat revenues overall.

After all, it’s not like Wyeth was the picture of perfect health before it was acquired either. Because of accounting quirks, there are no complete sales figures for Wyeth’s products in 2009, so we can’t compare those legacy products to their immediate past results. We do have numbers for 2008, Wyeth’s last full year of reporting. That year, Effexor brought in $3.9 billion; in 2010, it was $1.7 billion (and down 72% to $216 million in 1Q11). Zosyn also dropped more than $300 million between those years. On the plus side, Enbrel revenues have grown nearly $700 million since 2008, and the Prevnar franchise is up nearly $1.0 billion.

Despite all this rough news from the boardroom and the sales charts, I don’t want to give the impression that Pfizer is in bunker mode as it waits out the expiration of Lipitor (although I will pay cash money to see a Downfall mashup of Hitler flying into a rage over Mr. Read’s devolution plan). Pfizer has a ton of irons in the fire, both with internal R&D and through a myriad of partnerships, licensing deals and, yes, acquisitions.

Pfizer’s biggest move in the past year was the $3.6 billion acquisition of King Pharmaceuticals. That purchase set up Pfizer with a platform in the pain management segment. King had $1.8 billion in 2009 revenues, including side businesses in animal health and in EpiPen auto-injectors. In June, Pfizer and partner Acura got FDA approval for Oxecta, a version of Oxycodone with an abuse-deterring formulation that came over from King. It was previously developed as Acurox.

This being the Top Companies report, I can’t let the bad news slide, although I swear I’m not trying to harp on these things. Two weeks after the deal closed, Pfizer had to withdraw King’s painkiller Embeda, after stability problems. The drug had $67 million in 2010 sales and early estimates had it as a $300 to $400 million product.

As with every other company in the ranks, Pfizer’s R&D is a mix of good and bad news. The NDA for crizotinib, a treatment for non-small-cell lung cancer, was filed in May 2011. The drug is intended for a relatively narrow patient population, and it delivers awfully strong results in it. Some analysts estimate it could be a $1.5 billion product for Pfizer by the end of the decade. Originally developed by Sugen, which Pfizer acquired as part of Pharmacia in 2003, it received Orphan Drug status from the FDA in September 2010 and fast track in December, and the rolling submission began in January.

Eliquis, the blood-thinner Pfizer is co-developing with Bristol-Myers Squibb, was approved in the EU in May 2011 for venous thromboembolic events and recently racked up impressive results in a Phase III trial for atrial fibrillation, demonstrating superiority to warfarin, the standard treatment. The companies are hoping to have it filed in the U.S. and EU for that indication before the end of the year. Sales estimates for Eliquis range wildly, but the low-end seems to be around $1.5 billion a year. The high end? Well, then we’re getting back to excitement over the mega-blockbuster model . . .

In June 2011, Pfizer filed axtinib with the EMA for treatment of renal cell carcinoma, after a Phase III trial showed significant progression-free survival improvement over Bayer’s Nexavar. Meanwhile, Pfizer is creeping closer to filing its oral rheumatoid arthritis drug tofacitinib with the FDA, and Prevnar-13 awaits approval for adult pneumococcal disease.

On the other side of the coin, the FDA in April 2011 sent Pfizer a Refuse To File letter for the NDA for Tafamidis, a treatment for Transthyretin Familial Amyloid Polyneuropathy, a fatal neurodegenerative disease with around 8,000 patients worldwide. Pfizer acquired the drug with the September 2010 acquisition of FoldRx Pharmaceuticals and is planning to resubmit the NDA.

In December 2010, Pfizer scrapped development of Thelin, a treatment for pulmonary arterial hypertension, after fatal liver side effects turned up in two users. The drug was marketed in Canada, Australia and Europe, but hadn’t been approved in the U.S. It came over with Pfizer’s 2008 acquisition of Encysive.

Also, Dimebon failed yet another trial.

As part of its push into biologics, Pfizer and partner Protalix BioTherapeutics have submitted an MAA for a plant-cell-based protein treatment for Gaucher’s disease. The drug’s NDA received a complete response letter in February 2011, but that covered CMC data and a request for further data from a completed trial, not a new study.

In another intriguing biologics move, but Pfizer’s also making an interesting play for the insulin market. In October 2010, Pfizer acquired worldwide rights from India-based Biocon for its human insulin and insulin analogs. It’s a relatively small deal — $200 million upfront and $150 million in milestones — but it’s also “a very strong foundation stone in our biosimilar strategy,” according to David Simmons, president and general manager of Established Products. The deal covers biosimilars of Lantus (Sanofi), Novolog (Novo Nordisk) and Humalog (Lilly), U.S. patent coverage of which expires from 2015 to 2017. Pfizer’s previous play in the diabetes market was Exubera, the inhaleable insulin that nobody inhaled.

Pfizer has boosted its Established Products portfolio — which is why I’m a bit surprised by including that in the spinoff/selloff review — with several investments in the past year. In December 2010, Pfizer agreed to purchase 16 generic injectables and another six that are filed for approval from Akorn-Strides, a U.S.-Indian joint venture, for $63 million. Bangalore-based Strides will manufacture and supply the products, as well as 44 other injectables that Pfizer bought from the company in January 2010. Overall the Established Products group markets around 200 drugs from suppliers in India.

In recent months, Pfizer has signed a pair of memoranda of understanding with Chinese companies to boost business in that market: Hisun Pharmaceuticals for branded generics and Shanghai Pharma for an undisclosed (branded) Pfizer drug. Shanghai already helps promote Prevnar-7 in China, and the companies plan to boost that alliance.

As you read through the rest of this issue, you’ll notice that this profile is a bit longer than the others. I wish I could’ve kept it shorter, but this company is so complex, and has so many choices ahead of it, that I feel compelled to explore as many of them as I can. Even then, I’ve had to omit some events and trends, especially among early R&D prospects and innovative translational models. But those won’t pay off for years, and Pfizer is characterized by its more immediate concerns.

Like everyone else in the industry, I’m fascinated by the position that Pfizer is in, and can’t wait to find out how the company tries to move forward. Pfizer’s issues encapsulate much of what the rest of the companies on our list must address. But bigger.  —GYR

NEWSMAKERS

Read our Online Exclusive Newsmakers Interview with Pfizer Global Supply’s vice president of Strategy and Transitioning Sites, John Kelly!

For more on Pfizer’s recent CRO initiatives, check out our Newsmakers Interviews with Parexel’s Josef von Rickenbach and ICON’s Alan Morgan!

CUT! THAT’S A WRAP!

Pfizer’s cuts and restructuring programs announced or alluded to in the past year:

June 2011: $1 billion in cuts ($500 million in 2011, $1 billion going forward), mainly from administrative costs. No layoffs announced initially, but cuts would take 5% off of the company’s selling, informational and administrative expenses, and that likely won’t come from getting rid of the free coffee.

February 2011: $2.9 billion in R&D cuts, taking R&D spend from $9.4 billion down to $6.5 to $7.0 billion in 2012. More than 5,500 people will be laid off, including 2,400 from Pfizer’s R&D facility in Sandwich, UK, best known as the birthplace of Viagra. There was some talk that one or more CROs would take over Pfizer’s R&D operations in Sandwich, UK, but nothing has been announced. In June 2011, Pfizer announced that the site is up for sale as Discovery Park. Total cost of R&D cuts: $2.2 to $2.9 billion.

November 2010: SEC filing states that Pfizer expects to exceed its original estimate of 15% workforce reduction (19,000 employees) announced at the close of the Wyeth deal. No numbers given.

Restructuring charges and acquisition-related costs:

2010: $3.2 billion

2009: $4.3 billion

2008: $2.7 billion

2007: $2.5 billion

2006: $1.3 billion

THE LOWE DOWN

There is a tide in the affairs of men, and apparently there’s one in the affairs of gigantic drug companies, too. After years and years of relentless expansion (followed by rounds of relentless cost-cutting), Pfizer is now talking seriously about divesting assets. It’s possible, they say — just possible — that the company may have grown too large to respond as quickly as it should. And perhaps the cost savings and synergies (and all the other wonderful things that were promised during the previous mergers and takeovers) haven’t quite worked out the way that they were supposed to.

Could be! And we should file this entire rethink under “Better Late Than Never‚“ although it’s definitely too late for the research organizations that have been Pfizerfied over the years. That’s not to say that all of them would have made it on their own — some of them, in fact, might even have been as unproductive as they’ve been since Pfizer bought them. But we’ll never know, will we?

At any rate, all speculation about Pfizer now is Pre-Lipitor Expiration, and is not yet aligned with reality. But if they do go ahead and start shrinking, watch them do it with an improbably straight face. As if they meant to all along. —Derek Lowe

ACQUISITION NEWS

Target: FoldRx Pharmaceuticals

Price: not disclosed

Announced: September 2010

What they said: “By combining Fold’s proprietary expertise in identifying and developing treatments for protein misfolding diseases with Pfizer’s commercial, medical and regulatory expertise, and global strengths in patient services and reimbursement, we are taking a significant step toward potentially bringing . . . a non-surgical treatment option for underserved patients affected by the deadly disease ATTR-PN.”

—Geno Germano, president and general manager,

Pfizer Specialty Care Business Unit

Target: King Pharmaceuticals

Price: $3.6 billion

Announced: October 2010

What they said: “We are highly impressed by King’s innovative products and technology in the pain relief disease area, as well as by its success in advancing promising compounds in its pipeline. The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe who are in need of pain relief and management. In addition, the revenue generated by King’s portfolio will further diversify Pfizer’s business, while at the same time contributing to steady earnings growth and shareholder value.”

—Jeffrey Kindler, chairman and

chief executive officer, Pfizer (ret.)

Target: Synbiotics

Price: Approx. $20 million

Announced: December 2010

What they said: “[W]ith its best-in-class product portfolio, promising research and development pipeline, and manufacturing capability, [Synbiotics] will bring Pfizer Animal Health closer to its goal of becoming a comprehensive solutions provider to the animal health industry.”

—Juan Ramon Alaix, president of Pfizer Animal Health

In February 2011, Pfizer acquired the consumer business of Ferrosan for an undisclosed sum.

OUTSOURCING NEWS

During the big R&D cut announced in February, Pfizer chief executive officer Ian Read noted that “an increased level of outsourcing for services that do not drive competitive advantage for Pfizer” was a key step in improving innovation and overall productivity.

In May, Pfizer announced five-year strategic partnerships with Parexel and ICON, in an attempt at whittling its clinical services provider list from 17 to two. “This new strategic partnership model is part of a comprehensive program to sharpen our research focus at Pfizer, and creates a more flexible cost base through outsourcing of certain R&D services. We are creating partnerships for activities that can be performed most effectively and efficiently outside of the company, and have selected PAREXEL because it is a leader in providing combined technology and clinical capabilities,” said John Hubbard, senior vice president, Worldwide Development, Pfizer.

We conducted Newsmakers Interviews with Josef von Rickenbach, Parexel’s chief executive officer, and Alan Morgan, ICON’s group president, Clinical Research Services, about this pact and how the strategic alliance trend between big pharma and CROs is reshaping the business, so click through to learn more!

In December 2010, Pfizer agreed to outsource its distribution and logistics from its site near Knoxville, TN to Exel, a unit of DHL. Nearly 200 workers were affected by the deal, in which Exel took over the 640,000-sq.-ft. former Wyeth plant in Vonore, TN. Pfizer decided to outsource the services after concluding its post-Wyeth network review.

Pfizer also considers its branded generics marketing deals — such as the Akorn-Strides deal — to constitute outsourced manufacturing.

Next Profile: Novartis

Headcount: 116,500
Pharma Revenues: $45,448 (+3%)
Total Revenues: $50,009 (+4%)
Net Income: $8,635 (+7%)
R&D Budget: $7,845 (-1%)

Account for 74% of total pharma sales, up from 76% in 2008.

PROFILE

It’s a brand-new year and a brand-new Pfizer! (I’ll repeat this refrain throughout the report, I’m afraid; so many of our Top Companies are in the process of reinvention.) On October 16, 2009, Pfizer completed its acquisition of Wyeth, marking its third mega-acquisition in a decade. As big a deal as it was, many of Pfizer’s long-standing problems remain. The company posted minuscule pharma growth in 2009 even with the inclusion of 10 weeks of post-merger Wyeth revenues. Nine of Pfizer’s legacy drugs had sales above $1 billion for the year, but only two of them grew from 2008; the rest were either flat or fell by 2% to 12%. And the top performer, Lyrica, is under multiple generic threats in the U.S.

Good thing they added Wyeth! In 1Q10, revenues grew 54%, thanks to the addition of Wyeth and funky currency exchange rates (a factor that will cause chaos throughout this report). Without those two boosts, Pfizer’s total revenues would have slipped 1%. Legacy pharma revenues would have fallen 3%, but Wyeth and exchange rates boosted the numbers 44% to a mind-blowing $14.5 billion. (Which means the new Pfizer’s first quarter would rank as the #11 company in our Top 20 list.) So there are some immediate benefits in adding Enbrel ($802 million), Effexor ($716 million), the Prevnar vaccine franchise ($806 million), Zosyn ($264 million) and the Premarin family ($256 million).

On top of that, units in the Diversified segment — Animal Health, Consumer Healthcare, Nutrition and Capsugel — contributed another $2.1 billion for 1Q10, more than half coming from Wyeth’s consumer and nutrition products.

Now that they’ve got the scale, what are they going to do with it? The biggest problem with super-sized pharma, in my opinion (and it’s an opinion I’ve aired before), is that it’s so difficult to move the needle with any new product, but it’s very easy to move the needle with sales erosion of its existing brands. An 8% drop for some drugs wouldn’t be the end of the world; for Lipitor, that equals a $1 billion shortfall.

In his annual letter to shareholders, Pfizer chairman and chief exec referred to “the spirit of small and the power of scale” to explain Pfizer’s best-of-both-worlds benefits of having enormous resources but also giving accountability to (relatively) small business units. I’m a sceptic, but I’ve spent my career at companies with fewer than 50 employees.

In that same letter, Mr. Kindler made two important points about The New Pharma and Pfizer’s place in it. He wrote:

and

Which is to say, Pfizer still plans to go after blockbusters, but is trying to “drive profitable growth from multiple additional sources.” This is a theme that will crop up throughout this year’s report; after years of R&D shortfalls, pharma is hedging its bets on big new drugs and is trying to bring in surer (but lower-margin) revenues. But companies are also trying to go after major therapeutic classes (just fewer of them) where they have a chance to make a big splash.

And, boy, could Pfizer use just a couple of big hits. Cancer treatment Sutent is gaining greater market-share, but a trial of the drug in advanced hepatocellular carcinoma recently had to be halted because of adverse events and lack of superiority/non-inferiority to a competitor. Two more trials of it against advanced breast cancer also failed to hit their endpoints. Pfizer’s attempts at expanding Lyrica’s label to cover generalized anxiety disorder and chronic pain were both met with Complete Response Letters. And after 10 years on the market, Mylotarg, a Wyeth-originated leukemia treatment, will be withdrawn due to safety questions and a lack of clinical benefits.

On the investigational side, Figitumumab, an IGF-1R inhibitor, failed in Phase III trials against non-small cell lung cancer. Dimebon, a weird longshot drug to treat Alzheimer’s, suffered the fate most every Alzheimer drug has suffered. In June 2010, Pfizer cut development of a new RA drug, and ended trials tanezumab in osteoarthritis because of safety and efficacy problems (Pfizer will continue trials of the MAb in other pain indications).

I don’t mean to harp on the bad pipeline news, but these are some significant events for a company that needs to start marketing new drugs to replace its end-of-lifecycle products. (Just before press time, Teva began authorized marketing of Effexor XR in the U.S. It will have 180 days before other generics can jump in and drive revenues down significantly.)

After all, there’s been some good news, too: the 13-valent version of the Prevnar vaccine was approved in the U.S. and other markets, and Apixaban, an anticoagulant co-developed with Bristol-Myers Squibb, is showing better than expected results in its Phase III trials.

R&D Re-think

So how is the new Pfizer going to find the new products to offset all that generic loss? By mixing internal and external R&D! In November 2009, three weeks after the merger was finalized, Pfizer revealed its new global research network. The five main research sites are Cambridge, MA, Groton, CT, Pearl River, NY, La Jolla, CA, and Sandwich, UK., while shutdowns were slated for R&D at Princeton, NJ, Chazy, Rouses Point and Plattsburgh, NY, Sanford and RTP, NC, and Gosport and Slough/Taplow, UK. The moves, along with reallocation from some sites, will reduce Pfizer’s R&D footprint by 35%.

Pfizer made a pipeline update in January 2010, in which it cut 100 projects down to a “new prioritized portfolio” of 500 projects, focusing on the following areas: oncology, pain, inflammation, Alzheimer’s disease, psychoses, and diabetes. Overall, the company plans reduce the combined R&D spending of Pfizer & Wyeth by $3 billion by 2012, falling somewhere between $8 and $8.5 billion. Pfizer plans to find a total of $7 billion in cost savings, between merger cuts and previous restructurings.

In its original plans for the post-merger company, Pfizer separated research into two units, BioTherapeutics and PharmaTherapeutics, the former headed by Mikael Dolsten (former Wyeth R&D head) and the latter by Pfizer veteran Martin Mackay. That structure was scotched when Dr. Mackay left Pfizer in May 2010 to join AstraZeneca in the newly created role of president of R&D. Dr. Dolsten was then named president of Pfizer Worldwide R&D. He’ll head R&D up through Phase II, at which point development will get passed on to clinical teams in the Worldwide Biopharmaceutical Business unit.

None of my “deep throat” sources will tell me whether Pfizer merged the two units in response to Dr. Mackay’s departure or his departure was prompted by the plan to merge the two units (under Dr. Dolsten), but when anyone tells you that a mega-merger can have a seamless integration, hold onto your wallet.

Supply-Side

The manufacturing infrastructure is also in the process of shrinking. In May 2010, Pfizer Global Manufacturing unveiled its post-Wyeth cuts to its worldwide plant network. Eight sites will be shut down and six more will reduce operations, leading to 6,000 layoffs. For more about the manufacturing overhaul, check out our Newsmakers interview with Tony J. Maddaluna, senior vice president, Strategy and Supply Network Transformation for Pfizer Global Manufacturing (PGM), right after this profile.

In past conversations with Mr. Maddaluna, we talked about Pfizer’s plans to outsource as much as 30% of its manufacturing, by cost. As we talked about our differing ideas of what this entailed, the term “outsource” gave way to “external,” and licensing agreements, in which Pfizer sells products manufactured by other companies, were understood to be part of that 30% figure (now lower, because of the company’s increased base).

One of the problems with licensing agreements is that they don’t always work out as planned. In May 2009, for example, Pfizer signed a deal with Claris Lifesciences to bring as many as 15 generic sterile injectables into several western markets. In June 2010, Pfizer had to initiate a voluntary recall of three of those products from the U.S. due to non-sterility. Two of the drugs were IV antibiotics and the third was an IV product to treat nausea and vomiting from chemotherapy or surgery. The event left me wondering about the expertise needed to handle these new areas that major pharma companies are getting into.

After all, Pfizer has two similar significant deals with Aurobindo and Strides Arcolab, and competitors in these pages are pursuing the same path. Pharma companies — and I’m not singling out Pfizer here — are pursuing a lot of alternative revenue streams to survive the R&D drought, and I hope they have the processes in place to stay on top of all of them. All the scale in the world won’t help if you can’t trust your product supply.

Return to Top Pharma Report homepage.

Headcount: 81,800
Pharma Revenues: $44,174 (-1%)
Total Revenues: $48,296 (flat)
Net Income: $8,106 (flat)
R&D Budget: $7,945 (-2%)

Account for 78% of total pharma sales, up from 75% in 2007.

PROFILE

In some respects, Pfizer is like a microcosm — or should that be “macrocosm”? — of major pharma. Restructuring while cutting internal R&D? Check! Adding biologics? Check! Building generics unit? Check! Expanding into emerging regions? Check! Highly profitable CNS drug? Check! First quarter of 2009 was a wreck? Check! Major litigation settlement? Check! Abandoned a cannabinoid-1 receptor blocker after years of development? Check! Teetering on the edge of a patent cliff? Check! Using M&A to maneuver its way out of short-term problems? . . .

Well, that’s where Pfizer really sets the tone for the rest of the industry. Its January 2009 announcement that it planned to acquire Wyeth touched off one $40-billion-plus deal and a frenzy of rumors about others to come. I ended last year’s profile of Pfizer with the request, “Please: No mega-merger!” largely for that reason: the domino effect.

But, as we point out each year, Pfizer has an unprecedented challenge: the loss of exclusivity on the biggest selling drug in history. (I would like to point out, however, that Plavix actually accounts for a bigger percentage of Bristol-Myers Squibb’s pharma sales and total revenues — 32% and 27% — than Lipitor does for Pfizer, at 28% and 26%, respectively.) All told, patent expirations and other generic pressure may cost Pfizer as much as 70% of its 2007 revenues by 2015, and a series of high-profile R&D misses and disappointing new products (there’ve been some hits, too) help justify the company’s decision to make this move.

That said, Wyeth isn’t the model of perfect pharma-health, either; its key moneymaker (Effexor) is set to lose exclusivity in a few years, and its followup (Pristiq) has yet to catch on. Wyeth’s also mired in legal issues, most recently a whistleblower investigation into scamming Medicare over drug pricing. That’s not good.

I’ve read some criticism of the acquisition on the grounds that Wyeth has a significant business in consumer healthcare products. The haters complain that Pfizer sold off its own OTC business to J&J only a few years ago, and must be admitting to some mistake. Since the current chief executive officer wasn’t involved in that transaction, I won’t join the chorus. In fact, I don’t think the OTC component of Wyeth matters all too much to Pfizer. Sure, it generates cash, but the margins aren’t terrific; I mean there’s a reason Pfizer sold its OTC unit to J&J in the first place. I don’t think Pfizer is in this for the Advil, and I don’t think it’s Effexor, either.

No, I think the Wyeth acquisition is about biologics and vaccines. Faced with the multi-year timeline of building a biologics infrastructure and developing the expertise of running it, Pfizer chose to buy it ready-made. Pfizer had been referring to itself as a biopharmaceutical company of late — a lot of small-molecule companies do that — and it put its money where its mouth is. The price was big, but hey: Pfizer had sizeable cash on hand and the financial markets were basically begging companies to take loans at low rates around that time. If they’re lucky, they’ll be able to flip that consumer health business to someone in a few years and recoup a chunk of their purchase price.

In addition, the move gives Pfizer some cover as it reviews its own infrastructure and tries to shrink the pre-merger company to appropriate levels. Chief executive officer Jeffrey Kindler has mentioned that the combined companies will fire around 19,000 people, or 15% of their workforce. This is on the heels of Pfizer’s previous four years of layoffs and restructuring programs. From 2005 to 2008, the company has laid off nearly 20,000 workers, with plans for another 10,000. In 2008, Pfizer took $2.6 billion in restructuring charges; since 2005, the program has cost $6.9 billion. In comparison, the 2008 loss of revenues from Zyrtec/Zyrtec-D ($1.4 billion), Norvac ($757 million), Camptosar ($457 million) and Lipitor ($863 million) add up to $3.5 billion.

The merger-day restructuring plan is intended to save Pfizer approximately $3.0 billion in annual operating costs by 2011, with a third of that being reinvested into the company. The new plan involves closing another five of Pfizer’s manufacturing facilities, along with cuts in marketing and R&D (Pfizer announced around 800 R&D layoffs in December 2008).

Meanwhile, during the merger announcement, Pfizer chief financial officer Frank Amelio commented, “As part of the proposed acquisition of Wyeth, we expect to achieve synergies of approximately $4 billion by the end of 2012.”

So with all this restructuring tumult going on, how does Pfizer plan to keep track of its large and small molecule pipelines? By keeping them apart! In April 2009, Pfizer explained what its post-merger setup’s going to look like, and the main division in R&D will occur between small molecules and large ones. Martin Mackay, the current head of Pfizer Global R&D, will run the new PharmaTherapeutics Research Group, while Mikael Dolsten, current president of Wyeth Research, will head up the BioTherapeutics Research Group. They’ll both report directly to Pfizer chief executive officer Jeffrey Kindler.

The goal — another one of those pharma-in-a-microcosm moments — is to make R&D “more nimble,” akin to a biopharma startup. You can thank me later for not including the same passage in most of the other profiles, but most of our top companies espouse similar sentiments. Personally, I think history is filled with examples in which massive scale is irreconcilable with agility, but maybe there’s a potential (young) Shaquille O’Neal lurking within one of these companies.

One of Pfizer’s pipeline drugs that intrigues me is its JAK inhibitor, an oral treatment for rheumatoid arthritis. Given that the big breakthroughs in RA treatment have come from biologics this decade, I think it’s great that Pfizer is developing a small-molecule drug that may undercut the growth rate of several biologics on the market, even while it’s diving into bio.

Pfizer is trying to reinvent itself in a number of ways, not just through cost-cutting and adding biopharma capabilities. The company has also pushed into generics, vying with other major players to pick up product lines in emerging regions (see this issue’s From the Editor column for more on that topic). In May 2009, Pfizer signed a pact with Claris Lifesciences to commercialize 15 post-patent sterile injectables in North America, Europe, Australia and New Zealand. That same month, Pfizer extended its licensing agreements with Aurobindo in India, acquiring rights to 55 solid oral dose and five sterile injectables in 70 markets. Two months earlier, Pfizer bought from Aurobindo rights to 39 generic solid oral dose products in the U.S. and 20 in Europe, and another 11 in France, as well as rights to 12 sterile injectable products in the U.S. and Europe.

Those moves are all part of the company’s new Established Products business unit, which covers generics and innovative products that are near the end of the protected phase of their lifecycle. Established Products is one of nine units that Pfizer has lately demarcated for itself. The others are: Primary Care, Specialty Care and Vaccines, Emerging Markets, Oncology, Animal Health, Capsugel, Consumer Health and Nutritional Health.

Except for Specialty, every one of these new divisions got hammered in 1Q09, due to factors such as currency exchange rates (which wreaked havoc on most of our Top Companies), patent expirations, pressure from same-class generics, and revised warning labels. Pfizer’s overall revenues dropped 8% in the quarter, with Lipitor revenues falling 13% to $2.7 billion, and accounting for 40% of Pfizer’s overall drop.

Our top-selling drugs chart on the first page of this profile shows a number of products with double-digit growth. By 1Q09, the double-digits are almost solely on the side of the decliners. The only Pfizer product to show a significant increase in 1Q09 sales was Lyrica, up 17% to $684 million (after growing 41% in FY08 revenues). Zyvox sales grew 9% to $283 million, half the rate of growth it showed in 2008.

Sutent, the company’s up-and-coming cancer drug, also slowed dramatically in sales growth, up 7% for the quarter. That drug is still getting its legs under it, while getting buffeted by waves of good news and bad news from clinical trials for new cancer indications. Most recently, it failed a trial as a first-line treatment for metastatic colorectal cancer.

At least Sutent has room to grow. Early in July 2009, Pfizer revised the label for its smoking cessation drug, Chantix. Both Chantix and GSK’s anti-smoking drug, Zyban, will now carry “black box” warnings about mental illness and suicide. Pfizer’s drug had already struggled because of warnings in 2008, dropping 4% to $883 million and falling 36% in 1Q09 to $177 million in revenues. With the black box, it looks like another one of Pfizer’s blockbuster-in-the-making will be cut down to size.

Back in March, I wrote my editorial about this merger, wondering if it was “too big to succeed.” Mr. Kindler seems pretty aware of the horrible R&D reputation Pfizer earned during its previous mega-acquisitions this decade (Warner-Lambert, Pharmacia), and is promising that this mega-merger will be different. And it is different inasmuch as it doesn’t promise a can’t-miss pipeline to replace Pfizer’s R&D shortfalls. He commented at the announcement that the new company will have “a distinct blend of diversification, flexibility, and scale.”

Pfizer encapsulates most of the challenges that the pharma industry faces, as well as many of the new approaches the industry is trying out. As ever, I’m dying to see whether its new structures and strategies pan out.

Return to Top Pharma Report homepage.

Headcount: 100,000
Pharma Revenues: $44,424 ( -1%)
Total Revenues: $48,418 (flat)
Net Income: $8,144 ( -58%)
R&D Budget: 8,089 (+6%)

Account for 79% of total pharma sales, up from 78% in 2006.

PROFILE

It seems that I start Pfizer’s profile every year with news of multi-billion-dollar patent expirations. Despite it all, Pfizer manages to hold onto the #1 spot in the Top 20 Pharma rankings year after year. I suppose it’s a tribute to the absolutely enormous scale they built up in the earlier part of this decade.

Still, those expirations make for a good jumping-off point, because they set the tone for the rest of Pfizer’s activities. The company lost patent protection for four significant drugs in the past two years: Zoloft (August 2006), Norvasc (March 2007), Zyrtec/Zyrtec-D (January 2008), and Camptosar (February 2008).

In 2007, Zoloft and Norvasc dropped $3.4 billion in revenues. By the time 1Q08 wrapped up, Zyrtec sales fell $344 million (-75%), Camptosar was down 16%, and Pfizer’s pharma revenues dropped 6%.

The good news is that Pfizer has no major expirations coming until 2011. The bad news is, it’s a doozy.

Timewave?

According to the techno-shaman and ethnopharmacologist Terence McKenna’s Timewave Zero theory, the world is going to end on December 21, 2012. For Pfizer, the date has been moved up to November 30, 2011; that’s when Ranbaxy is permitted to begin selling generic Lipitor (and Caduet, the Lipitor/Norvasc combo). The two companies negotiated that date as part of their patent settlement in June 2008. It’s my unfounded assumption that Ranbaxy’s buyer, Daiichi Sankyo, applied some pressure to get the Lipitor issue settled.

Others contend that the June 2008 settlement between the two companies was the first step in Pfizer’s counterbid to take over Ranbaxy. Since the final day for a Pfizer bid (by Indian regulatory law) occurs after this issue goes to press, I shall stick my neck out on a limb and tell you why Pfizer should not / did not buy Ranbaxy. (Mr. McKenna also believed in alternate realities, so maybe there’s at least one universe where my predictions turned out to be correct.)

The purchase price — probably $5 or $6 billion — wouldn’t be difficult for Pfizer to swallow — they netted $11 billion in the 2006 selloff of their consumer health business to J&J — but I don’t think the company wants any part of the complications that would ensue. Personally, I don’t believe the FTC would allow Pfizer to acquire the company to which it just licensed a generic of the biggest-selling drug in history. And invalidating the agreement would likely open the door to patent lawsuits from other generics companies, throwing Pfizer right back into the uncertainty that led it to settle with Ranbaxy in the first place.

Once again: I don’t run a company and this is a million times more complicated than I’m making it out to be. That said, I don’t think the business model or the culture of a generics-heavy company are what Pfizer wants or needs.

But back to Lipitor. U.S. sales of Lipitor dropped 18% in 1Q08, with competition from generics and other statins. I hate to say that this is a blessing in disguise, but a gradual decline in Lipitor revenues before its expiration may actually be healthier for the company than a jolt. Sales are still going to fall off a cliff after November 2011, but if there’s a downhill slope leading to the cliff, maybe the drop will be more manageable. (DISCLAIMER: I have no experience running a company and should not be trusted when it comes to theories like the previous one.) Total sales of Lipitor were still $3.1 billion in 1Q08, so it’s not like Pfizer’s flagship is exactly running aground.

Contracting and Contracting

Pfizer’s new management team — including chief executive officer Jeffrey Kindler, global R&D president Dr. Martin Mackay, chief financial officer Frank A. D’Amelio and senior vice president of strategy and business development William Ringo — has its work cut out for it. The company needs to produce or in-license new compounds, build markets for existing products, and trim costs, while making sure there’s enough cash on hand to pay its quarterly dividend.

Pfizer’s been in restructuring mode since 2005, when it announced plans to cut its workforce by 20,000 and radically reduce its costs. In January 2007, following the cancellation of torcetrapib, a new plan was instituted, calling for 10,000 layoffs and overall savings of $1.5 to $2.0 billion per year. From 2005 to the end of 2007, the company let 13,000 staffers go; the bulk of severance costs came in 2007, when Pfizer paid out $2.0 billion in employee termination, compared to $809 million in 2006 and $303 million in 2005.

Following this profile, there’s an interview with Anthony J. Maddaluna, vice president of Pfizer Global Manufacturing (PGM) Strategy and Supply Network Transformation. Mr. Maddaluna is one of the men in charge of right-sizing Pfizer’s manufacturing network, which is in the process of shrinking from a net of 100 sites to 43. In our conversation, we discuss Pfizer’s goal of doubling its manufacturing outsourcing expenditure and how that jibes with Pfizer’s reduced internal network.

In addition to shrinking the manufacturing network, Pfizer has also been reducing its R&D headcount, either by closing sites or spinning them off, by selling research facilities and some drug programs to venture capital and private equity groups.

Compound Interest

At an August 2007 R&D event, Pfizer mentioned that it had 99 projects in the pipeline: 85 NMEs and 14 line extensions and new indications. Of the 85 projects, 20 were treatments for cancer; 16 for cardiovascular, metabolic and endocrine diseases, 17 for pain and inflammation, 17 for neurological disorders and 10 for infectious diseases. The rest were “other.”

At a followup event in March 2008, Pfizer announced that it had boosted its biologics pipeline thanks to several small-scale (for them) acquisitions, with 26 projects in development across eight therapeutic areas. Like many of its competitors, Pfizer is pursuing biologics intensely and has no qualms about using its war chest to snap up small players in the field. So far, there’s been little chatter about Pfizer making a play for one of the bigger biopharmas in play; perhaps AstraZeneca’s valuation of MedImmune ($15.5 billion) put a damper on big bio buyouts.

In March 2008, the company announced the creation of an Oncology Business Unit. More than 20% of the company’s development budget goes toward cancer treatments, a market that grew 14% to $17.8 billion in the U.S. in 2007, according to IMS Health. During 2008, Pfizer plans to have seven Phase III trials underway for three different oncology drugs. Sales of the company’s new cancer drug, Sutent, passed $500 million in 2007 and were up 86% (to $190 million) in 1Q08.

Smoke in the Air?

Pfizer has had success with several other new compounds. Pain medication Lyrica is zooming up the ranks and will be Pfizer’s #3 drug by the end of this year, behind only Lipitor and Celebrex. In June 2007, Lyrica received approval for treatment of fibromyalgia. The company also added a first-in-class HIV treatment in 2007 in Selzentri.

The company has also seen an explosion in demand for its smoking cessation drug Chantix, which more than octupled in sales in 2007 before slowing down to 71% growth in 1Q08. However, I wouldn’t count Chantix as a perennial blockbuster just yet; there are some ugly side effects for the drug. The recent label update includes the rather scary “serious neuropsychiatric symptoms, including changes in behavior, agitation, depressed mood, suicidal ideation and suicidal behavior.” (I’ve only smoked about two dozen cigarettes in my life, but those side effects sound awfully similar to what I’ve seen people go through when they quit cold turkey.) In May 2008, those side effects led the FAA to bar pilots and air traffic controllers from taking Chantix. I think that sales are going to be curtailed in future.

At this point, I’m not too optimistic that Pfizer-as-we-know-it is going to be here by the end of 2011, but I’m sure interested in seeing the company that emerges from this process. (But please: no mega-merger!)

Next Profile: GlaxoSmithKline

Top 20 Pharma Report homepage