2010 R&D budget: $9.4 billion
2009 R&D budget: $7.8 billion
Change: Up 20 percent

The Wyeth buyout kept Pfizer at the top of the heap in terms of R&D spending last year. But Pfizer wants to shed the Big Spender reputation as fast as it can, with no plans to return to the top anytime soon.

After planning to cut R&D down to $8 billion to $8.5 billion in 2012, Pfizer recently decided to chop all the way down to $6.5 billion to $7 billion. Along the way it will slide down past current R&D budgets at Roche, Merck, Novartis and J&J, putting it around fifth place.

Out: Urology, allergies, RNAi, Sandwich, UK, and Groton, CT, which will lose 1,000 jobs.

In: R&D hotbeds, as more of its research efforts are concentrated in Boston, Cambridge, UK, and San Francisco. Also in: Clinical research organizations, which can pick up some of the slack as Pfizer relies more on outsourcing.

Even after the giant pharma company sheds thousands of jobs and bunkers in around oncology, inflammatory conditions and other hot drug arenas, though, Pfizer will continue to be among the top R&D spenders in the industry. And it has high hopes for cancer drugs like crizotinib, slated for a regulatory filing for non-small cell lung cancer later this year, axitinib for kidney cancer and bosutinib for chronic myeloid leukemia.

Last November, researchers said that tofacitinib--an anti-inflammatory drug which recently underwent a tongue twisting name change from tasocitinib--significantly improved patients' disease symptoms and helped improve their ability to function physically in Phase III. And there was more upbeat late-stage news in early March, when the pharma giant said tofacitinib hit its primary endpoint for statistical significance in a Phase III among patients with rheumatoid arthritis. The experimental therapy, probably one of Pfizer's biggest late-stage blockbuster prospects, hit its marks for reducing symptoms of RA.

It is, noted Sanford C. Bernstein's Timothy Anderson, "one of the most exciting compounds in the pharmaceutical industry's collective pipeline."

Apixiban, a partner drug with Bristol-Myers Squibb, has produced highly promising data on stroke prevention. Bapineuzumab, which partners Pfizer with Elan and Johnson & Johnson, is in Phase III for Alzheimer's, but don't expect final data this year. While promising, Alzheimer's drugs have been shot down time and again in clinical trials, making the disease one of the toughest for which to find new drugs.

Pfizer will see if it can develop a new equation for drug discovery, where the billions invested in the process start to deliver hard returns.

"It's like being the New York Yankees and having a huge bankroll and never being able to win the pennant," Tony Butler, an analyst at Barclays Capital, told Bloomberg. "This is saying: I'll take the Cleveland Indian budget and see what we can do with that. Spending more doesn't mean getting anything out."