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Pfizer names next CEO as Read retires

Company's board elects current chief operating officer Dr Albert Bourla

Pfizer, currently the world’s biggest pharma company by revenues, has named its next chief executive.

The company’s board of directors unanimously elected Dr. Albert Bourla, Pfizer's current Chief Operating Officer (COO), to succeed Ian Read as CEO from 1 January, 2019.

Ian Read has been at the helm since December 2010, and will now move into the role of role of executive chairman of the board.

Albert Bourla

Albert Bourla

56-year-old Bourla is very much an inside appointment, as Bourla has worked for the company for the last 25 years.  He was only made COO at the beginning of this year, having previously served as head of Pfizer’s key Innovative Health division since 2016, which has seen sales and profits grow under his leadership.

Ian Read’s tenure has had plenty of ups and downs, and undoubtedly one of his biggest challenges was overcoming the patent expiry of its mega-blockbuster Lipitor in November 2011.

Pfizer slipped down the rankings in the years following the loss of Lipitor, which earned $12bn a year at its peak, but under Read’s leadership the company is once again the industry’s biggest, with global sales in excess of $45bn last year.

This has been achieved thanks to 30 FDA approvals over the period, including market leading breast cancer drug Ibrance, which earned more than £3bn last year.

Read has always had a keen eye for maximising shareholder returns, though his biggest strategic moves didn’t always go to plan.

In 2014, Pfizer pursued a hostile takeover bid for AstraZeneca, but had to concede defeat after a bruising public battle, the company’s ‘tax inversion’ plans being heavily criticised.

Another tax-inversion based (reverse) merger with Allergan was then agreed in 2015, only for the two companies to call it off after then-US President closed the tax loophole.

One M&A deal that did go through was the $14bn acquisition of Medivation in 2016, though many analysts say the big pharma company overpaid for the firm and its oncology assets.

Shantanu Narayen, Lead Independent Director of Pfizer’s Board of Directors, stated: “On behalf of the board of the directors, I want to thank Ian for his remarkable leadership as CEO. During an extraordinary period for the company, he successfully managed through $23 billion of lost revenue due to product losses of exclusivity, while at the same time driving strong and consistent financial performance and investing for the future.

He added “Consequently, Pfizer now has a pipeline that we believe is as deep and strong as ever. In addition, Ian has built a unique ownership culture that increased accountability and encouraged collaboration. As such, the company is now better positioned for success.”

Pfizer’s board said they had been impressed with Bourla’s performance, depth of experience and look to him to drive innovation and change across the business.

Among his achievements, Bourla established the Innovative Health Emerging Markets region, and had also upped the ante of Pfizer Vaccines, Oncology and Consumer Healthcare business unit as its president, through organic growth and dealmaking.

There will great interest around whether or not Bourla will seek a new strategic direction for Pfizer, though the presence of Ian Read in the chairman role, and Bourla's familiarity with Pfizer is likely to limit change.

Nevertheless, the new CEO will undoubtedly consider the M&A market once he takes over in 2019, not least because of impending generic threats to $4bn a year blockbuster Lyrica sales and an expected continued decline in sales of vaccine Prevnar.

Article by
Andrew McConaghie

1st October 2018

From: Sales

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