Pfizer fulfilled the expectations of many Industry watchers yesterday by revealing a significant cost-cutting plan – intended to save $4 billion dollars by 2008 – as it weathers patent expirations out to 2007 and safety concerns surrounding its painkiller Celebrex (celecoxib) [[04/04/05c]].

The company’s shares closed up over 4% after the presentation to financial analysts in New York, at which Pfizer chief financial officer David Shedlarz said that revenues would be around the same in 2005 as last year, when the company pulled in $52.5 billion. Earnings per share would come in at around $2.00, some 6% below the 2004 figure, he added, but investors seemed to respond favourably to his forecasts of a return to double-digit earnings growth in 2006 and 2007.

The cost-cutting measures will include staff reductions – mostly from attrition rather than redundancies, according to Pfizer – a reorganisation of its salesforce around states to bring it into alignment with Medicaid and Medicare customers, and facility closures, said the company, without delivering much in the way of detail. The $4 billion in savings, some 12% of Pfizer’s annual costs, will come at a cost of $5 to $6 billion, the firm said.

However, speculation ahead of the meeting that Pfizer may rein in its research and development spending proved unfounded, and the company said that it had earmarked $8 billion for this purpose in 2005, up from $7.7 billion last year.

Pfizer chief executive, Hank McKinnell, said: “2005 will be a transition year. In addition to the loss of exclusivity on several important products, we are facing a number of uncertainties. These include the outlook for our COX-2 franchise, continued pricing pressures, and market acceptance of new products.”