Pfizer may be a bit behind schedule, but it's on track to hack its R&D budget to the $6.5-billion-to-$7-billion target laid out in a radical restructuring plan.
Facing a daunting patent cliff, the pharma giant ($PFE) vowed several years ago to carve billions out of its $9.4 billion R&D budget for 2010--a controversial move aimed at bolstering shareholder returns. Analysts loved it, happy to see a smaller R&D bite, while research specialists often lamented the sudden elimination of a wide range of drug research efforts. Today's fiscal review of 2012 results concludes that the company hacked the research budget back to $7.8 billion in 2012, with up to $1.3 billion more being erased in 2013. Pfizer spent a bit more than $9 billion on R&D back in 2011.
Once the biggest R&D spender in the business, Pfizer is now settling into the middle of the top 10 pack, a repositioning that required the painful reorganization--or elimination--of R&D work in Sandwich, U.K., and Groton, as well as other spots. J&J ($JNJ), for example, ranked 5th among pharma R&D budgets in 2011, spending $7.5 billion.
Pfizer's mega-merger with Wyeth added significantly to its research costs. Former Pfizer R&D chief John LaMattina tweeted this morning that ahead of the merger, Pfizer spent about $8 billion on research. Wyeth, in turn, spent about $5 billion. This year's budget is only about half of the pre-merger total for the two.
While cutting back on the scope of its R&D work, Pfizer can also boast of 5 new drug approvals in 2012--with the potential blockbuster Eliquis in the mix--with some prospective winners in the pipeline. And like its other Big Pharma rivals, Pfizer is pursuing a new round of "bolt-on" acquisitions that can fill any bite-sized gaps in its product line.
"Our mid-to-late stage pipeline continues to strengthen with key potential opportunities, including palbociclib (PD-332991) for advanced breast cancer, RN316 (PCSK9) for lowering LDL cholesterol, dacomitinib for advanced non-small cell lung cancer, inotuzumab for aggressive non-Hodgkin's lymphoma and acute lymphoblastic leukemia, Xeljanz for psoriasis, and the rLP2086 vaccine for meningococcal B in adolescents and young adults," says CEO Ian Read. "In addition, I expect that 'bolt-on' business development will continue to play an important role in supplementing our internal efforts."
- here's the press release
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