Pfizer, the giant drug maker being buffeted by the loss of patent protection on its leading medicines, is to embark on another round of deep cost cuts which will include axeing one-fifth of its European sales force.
The company said yesterday that it was eliminating 8,000 more jobs across the globe, on top of a reduction of 2,000 in its US sales force announced at the end of last year.
Jeff Kindler, who was installed as chief executive last July, said there were "no longer any sacred cows" within the company. "Incremental evolution is not enough. Fundamental change is imperative and it must start happening now."
Pfizer has been skewered by a combination of relentless downward pressure on drug prices in its main market, the US, and its own inability to replace sales from a string of blockbuster drugs that now face copycat competition. Its planned successor to Lipitor, its best-selling cholesterol medicine, had to be scrapped in December after trials showed it was unsafe.
Job cuts in the UK are likely to run to several hundred, and although the country has escaped unscathed from the plant closures announced yesterday in the US, Japan, Germany and France.
It could still be affected, however, by a wide-ranging shake-up in the way Pfizer does research and development. Pfizer has been in the UK since the 1950s and employs 6,000 people, a little over half of whom are based at its site in Sandwich, Kent, where the company is the backbone of the local economy.
John LaMattina, head of global R&D, said that the company would start consolidating research teams focused on particular disease areas - currently distributed in multiple locations around the globe, in many cases - to one of four sites.
Sandwich will focus on four areas, including pain-killers and sexual health. Each area will be run by a single leader with more control over resources.
"Our simplified structure will help drive the growth of Pfizer's expanding pipeline - including our goal to deliver four new internally generated products per year by 2011 - while maintaining current R&D investment levels," said Dr LaMattina.
The job cuts and plant closures announced by Mr Kindler at a strategy presentation in Manhattan yesterday afternoon will save Pfizer between $1.5bn and $2bn a year by the end of next year, he said.
The company's profit in the fourth quarter of 2006 was inflated by the proceeds from the sale of its consumer health division, but underlying earnings were down 12 per cent. Sales were flat at $12.6bn.Reuse content