Pfizer is to restructure operations from January 2014 in a bid to make its business more responsive to patient and shareholder needs.
January deadline for Pfizer restructure
Pfizer is to restructure operations from January 2014 in a bid to make its business more responsive to patient and shareholder needs.
The group’s commercial operations will be split into three: two sections containing medicines in various therapy areas which are in patent, and the third made up of drugs which have lost, or will soon lose, market exclusivity.
“This represents the next steps in Pfizer’s journey to further revitalise our innovative core, enhance the value of our consumer and off-patent established brands and maximise the use of our capital to create value for Pfizer and our shareholders,” said chief executive Ian Read.
The changes will give each section ‘greater independence and focus’, he went on, with each one including developed and emerging markets.
“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,” Read concluded.
There will be two ‘innovative business’ segments: the first will include products expected to have market exclusivity beyond 2015, and will take in inflammation and immunology, cardiovascular/metabolic, neuroscience and pain, rare diseases and women’s/men’s health.
Geno Germano, group president, innovative products group, will be in charge of this one while Amy Schulman, group president, vaccines, oncology and consumer healthcare, will lead the other innovative business segment - her title reflecting the therapy areas it will contain.
The third tranche of the business is ‘value’ and comprises products that have lost market exclusivity and those expected to do so after 2015.
John Young, group president, value products group, will be in charge of this segment, which “will include products that generate strong, consistent cash flow, and will be positioned to provide patients access to effective, lower-cost, high-value treatments”, the company insists.
Olivier Brandicourt will lead the change from Pfizer’s existing emerging markets business to the regional structure that is to be established for each of the three business units.
Pfizer has had a torrid time of late, with sales down $1.4 billion in the first quarter of 2013, a year-on-year fall of 9% - largely down to continued erosion of Lipitor sales, the impact of purchasing patterns of Prevnar/Prevenar 13 in various markets, plus other setbacks in emerging markets.
In second quarter results released this morning, the US firm saw its revenue fall 7% to $12.97 billion.
However, the group has also successfully completed the Zoetis IPO and a related debt offering, allowing it to return $8 billion to shareholders in dividends and share repurchases this year already, with more predicted to come.
Primary care revenues have been hit by loss of exclusivity and near-term expiration of co-promotion agreements for Aricept and Spiriva, respectively, although strong volume growth in China has been encouraging.
Pfizer has been at pains already this year to cut operating costs, taking out $545 million - or 7% across the business - including a reduction in the field force and more streamlined corporate support functions and manufacturing network.