Pfizer has said it will split its business into three parts – one for generics and two for branded medicines – in the latest phase of its company-wide reorganisation.
The announcement of the internal restructuring set tongues wagging about the possibility of further external splits, given that Pfizer has already hived off its animal health division Zoetis and nutrition unit since chief executive Ian Read took over the helm in 2011.
Some investors have been calling for Read to go even further to streamline the pharma giant, which brought in $59bn in sales last year, with some calling for both the consumer health and the generics businesses to be shed.
Any such move would require internal restructuring, and analysts have been looking at the new structure to try to second-guess whether and where future external splits may come.
A clutch of medicines that have patent protection beyond 2015 are being placed in one branded medicine unit, featuring drugs in categories such as inflammation, immunology, cardiovascular and metabolic, neuroscience/pain, and women’s and men’s health that typically require a lot of sales support. This unit will be led by group president Geno Germano.
The other branded unit will include smaller-scale, speciality prescription products such as vaccines, and cancer drugs – as well as consumer healthcare products. This group will be led by Amy Schulman, who currently serves as Pfizer’s general counsel.
Thirdly, the generics unit – dubbed the ‘value’ business – will include drugs that have already lost protection and those at the end of the patent life. It will be headed by John Young, who is currently president and general manager of Pfizer’s primary care business unit.
Generics represent a $10bn business for Pfizer but there has been speculation for some time that the company may decide to sell off the unit in order to fund the more profitable innovative medicines business. A decision is not expected for at least three years.
“Our new commercial operating model will provide each business with an enhanced ability to respond to market dynamics, greater visibility and focus, and distinctive capabilities optimised to deliver value to patients and shareholders in the coming years,” said Read.
The changes will start to be made in January 2014 in countries that do not require consultation with works councils or unions, said the company, and a breakdown of the finances of each unit will be provided in its first quarter results next year.
All three units will include operations in both established and emerging markets, and the new group presidents will take up their posts on January 1, 2014. Olivier Brandicourt will lead the transition from the current emerging markets organisation to the “regional structure that will be established for each of the three business segments”, said Pfizer.
Along with the organisational changes, Pfizer also said that Douglas Lankler, who is currently chief compliance and risk officer, will replace Schulman as the firm’s general counsel, while his role will be filled by Rady Johnson.