Pfizer stock was nudged up on news that the firm might be considering a radical trim of its business units to place itself in better stead for future growth.
According to a research note by Bernstein Pharmaceuticals analyst Tim Anderson, the world’s number one drugmaker could get rid of divisions responsible for almost half of its $67 billion revenues, in a gutsy strategy to reinvent itself as an undiluted pharmaceutical research business.
Anderson notes that the move could see Pfizer not only give its non-pharma divisions the chop but also its multi-billion-dollar Established Products operation, which sells off-patent medicines, in a bid to shrink its size and sustain momentum.
His comments come on the back of a meeting with Pfizer’s new chief executive Ian Read. “Had we not heard it firsthand, we might not have appreciated just how serious he is about potentially splitting up the company,” Anderson said, as reported by Forbes.
Read previously announced that the drug giant’s entire portfolio is up for review this year, and it appears that high on the agenda is shrinking the business and honing its focus for a better footing going forward.
After years at the top Pfizer looks set to lose its crown as the biggest pharmaceutical firm in the world as its grapples with patent losses on some its flagship drugs next year – including what is currently the world’s number one seller Lipitor (atorvastatin), the antiulcerant Protonix (pantoprazole) and Viagra (sildenafil) for erectile dysfunction – cutting a huge chunk out of its sales.
The company has already embarked on a rather aggressive cost-cutting programme under which it plans to reduce global R&D spend by up to $2.0 billion, closing down facilities and dumping no less than 46 of its research projects in the last six months or so alone, as well a 15% reduction in its workforce, but it seems that other major changes could be on the horizon.
