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Pfizer aims high

New Pfizer chief reveals his plans to turn the US giant into a 'scientific powerhouse'

Pfizer's new chief executive, Jeffrey Kindler, has big plans for the firm and has wasted little time in explaining to analysts how he wants to reposition the company as a scientific powerhouse.

Proclamations made at the comprehensive research update highlighting the firm's scope as an advantage in a broad spectrum of therapy areas, sounded a familiar tune. However, news of plans to improve its scientific image and broaden its links with academics and the research communities, signalled a new focus, starting with the formation of a start-up incubator.

The incubator will provide investment funding for new technologies and will comprise three to seven start-ups.

Pfizer outlined new research and development goals, which include creating four new experimental drug candidates from its lab each year by 2011. It expects to gain two new products each year via external deals, beginning in 2010 and revealed a five-year collaboration with Scripps Research Institute. The company also expects an increase on its 2006 profit, with prices rising to $2.05 per share up from $2.

Some analysts have been caught off-guard by the new strategy and believe it represents a real change of direction for the firm.

Size matters
Talk of the benefits of size came just two days after Pfizer said that it will slash its salesforce
by about 20 per cent, cutting approximately 2,200 jobs as part of a wide-ranging cost-savings initiative.

The layoffs will include senior sales personnel, as well as field representatives. However, Pfizer said that, despite the cuts, it would maintain ìstrong support for all of its in-line products, including Lipitor, Celebrex and Geodon, as well as important new products, such as Lyrica, Exubera, Chantix and Sutentî.

ìOur fieldforce will now be in a much better position to adapt to changes in our product mix and capitalise on the growth opportunities we see for our innovative medicines,î Kindler said in a statement.

ìWhile we pursue these opportunities and respond to the accelerating changes in our marketplace, our fieldforce will continue to be a critical competitive advantage in ensuring the success of both our products and our company as a whole.î

The cost-cutting effort, which aims to save $4bn annually by 2008 through a variety of measures, is the brainchild of Kindler, who replaced Hank McKinnell as CEO this summer. Kindler has already implemented a number of changes, including whittling down Pfizer's executive leader-ship team.

The company is struggling with the loss of patents on key drugs, as well as a pipeline that many industry observers consider to be lacklustre.

30th September 2008

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