Pfizer has enjoyed, or rather endured, a hectic day which saw the firm confirm major job losses, post reasonable fourth-quarter financials and be hit by a lawsuit over its adverts for Viagra.
Firstly, the company noted at a meeting with analysts that as part of its bid to reduce costs by up to $2 billion from next year, it will cut 10,000 jobs, or 10% of its work force, a figure that includes the previously-announced elimination of 2,200 jobs from its US sales teams. Pfizer noted that it is looking to reduce its European field force by more than 20% and is closing two US manufacturing sites (at Brooklyn and Omaha). In addition, the company will put a third site, in Feucht, Germany, up for sale and through these measures, Pfizer says that from 2003 to 2008, it will have reduced its network of manufacturing plants around the world from 93 to 48.
As for R&D, the state of Michigan will be hardest hit as three research sites will be closed, notably the massive Ann Arbor facilities while R&D units at Nagoya, Japan and Amboise, France, are also scheduled for closure, subject to consultation with works councils and local labour laws.
Staying with R&D, Pfizer said it will exit discovery research in gastroenterology and dermatology, and scientists now working on medicines for a particular therapeutic area, “currently distributed in multiple locations around the globe, in many cases,” will now be based at one of four major sites.
John LaMattina, head of Pfizer’s global R&D, said the “simplified structure will help drive the growth of our expanding pipeline – including our goal to deliver four new internally generated products per year by 2011 – while maintaining current R&D investment levels."
The restructuring details came hot on the heels of Pfizer announcing fourth-quarter earnings rose to $9.45 billion compared to last year's $2.73 billion, due primarily to a $7.9-billion one-time gain related to the sale of its consumer healthcare unit to Johnson & Johnson. Excluding special items, however quarterly earnings fell 15.1% to $3.05 billion, while revenues were flat at $12.6 billion, though that figure was above analysts’ expectations.
Generic competition hammers Zoloft, Zithromax sales
The figures were hit hard as generic competition took its toll on the antidepressant Zoloft (sertraline), fourth-quarter sales of which were down 79% to $166 million and antibiotic Zithromax (azithromycin), which fell 73% to $109 million. Revenues from the cholesterol-lowerer Lipitor (atorvastatin), were flat at $3.34 billion, while Celebrex (celecoxib) for arthritis climbed 15% to $540 million. The erectile dysfunction drug Viagra (sildenafil) contributed $450 million (+5%), but the most pleasing performances came from its new epilepsy and neuropathic pain medication Lyrica (pregabalin), up 131% to $353 million and the schizophrenia drug Geodon (ziprasidone), which enjoyed a 32% sales increase to $210 million.
At the analysts’ meeting, Pfizer said that it will “maximize revenues” by highlighting “Lipitor’s unique package of benefits” but there is no doubting the dramatic effect that the loss of patent protection on the blockbuster in 2011 will have on earnings and the firm’s pipeline is unlikely to come close to making up the deficit.
Accused of 'reckless' advertising
Finally, a lawsuit has been filed against the company by the AIDS Healthcare Foundation, which accuses Pfizer of irresponsible direct-to-consumer drug advertising for Viagra. Michael Weinstein, president of the foundation, said that the company’s marketing is primarily aimed at men who don't necessarily suffer from a clinical diagnosis of ED, “and we believe it is not only irresponsible, but also illegal, especially in light of the drug's known use as part of a 'circuit party cocktail' of drugs that is fuelling the spread of sexually-transmitted diseases and HIV."
The lawsuit has been filed to “seek an injunction against Pfizer to force it to stop advertising…in the reckless manner it has been doing,” he added.