Pfizer ($PFE) this morning confirmed that it is closing one of its R&D sites in San Diego, shuttering its CovX operation a little more than four years after the pharma giant bought the biotech operation and added it to a new biologics initiative based in California.
The news first surfaced late Friday, when well-known industry blogger and investigator Derek Lowe reported that he had heard on the grapevine that CovX was being closed. A spokesperson for Pfizer confirmed the rumor to FierceBiotech on Saturday morning.
"We continue to prioritize our R&D capital allocation to drive the next wave of innovative medicines and vaccines to patients, from a robust pipeline," Pfizer said in a statement to FierceBiotech. "There has been no change in the amount we invest in R&D, but rather in the way that we invest it. As a result of this, we have announced the closure of the CovX Research Unit in San Diego, CA. Pfizer is committed to supporting affected colleagues through this transition."
There are about 100 staffers in the CovX unit, notes Pfizer spokesperson Lauren Starr.
Pfizer bought out CovX back in 2008, lured by its drug development platform and preclinical work on oncology and metabolic research. But not long after the acquisition Pfizer launched one of the most thorough, top-to-bottom R&D reorganizations in the industry, looking to lop off billions in research spending and downsizing the development end of the business as generic competition to Lipitor loomed.
CovX was one of the operations scooped up to create Pfizer's new Biotherapeutic and Bioinnovation Center, which was led by Dr. Corey Goodman, now a high-profile venture investor in the biotech industry. Goodman, who had served on the Big Pharma's executive team, left the company in 2009.
CovX had two programs in clinical development at the time Pfizer bought out the company--CVX-045 and CVX-060. Both of these therapies were fusion drugs, combining peptides with antibodies to enhance their effectiveness. Another two drugs were reportedly on track to get into the clinic in short order.
Over the past few years Pfizer has been slashing deep into its R&D budget. Overall research spending dropped from $9.4 billion in 2010 (after the Wyeth acquisition) to $7.8 billion in 2012, ending the year at an adjusted $7 billion annual burn rate. Pfizer estimates that it will spend $6.5 billion to $7 billion on R&D this year. In addition to laying off thousands of investigators in the U.K. and Connecticut over that period, Pfizer has also been applying the ax to smaller operations. Just days ago the company announced plans to close a research center in Singapore. But a spokesperson for the company emphasizes that any new cuts occurring in R&D aren't aimed at reducing the overall amount spent on the research division, which will now operate with a stable budget.
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