Few R&D stories have captured the attention of the biopharma world like Pfizer's ($PFE) controversial decision to take an axe to its pipeline budget--a decision that was widely applauded on Wall Street. Now Forbes' Matthew Herper takes an in-depth look at mounting speculation that Pfizer CEO Ian Read (photo) is steering the company to a big breakup as he restructures the pharma giant's R&D operations. And Read earns some kudos from some longtime industry observers for the new math that will subtract billions from Pfizer's drug development budget.
Read "is transforming the very core of R&D, making painful but necessary cuts and, more important, looking toward new models to harness external innovation and drug discovery," offers Corey Goodman, who headed up Pfizer's biotech arm before leaving the company two years ago.
Herper also offers an encouraging look at Pfizer's two top late-stage programs: A new therapy for rheumatoid arthritis now dubbed tofacitinib and the promising lung cancer therapy crizotinib, which is being developed for patients with a specific genetic profile. In a new world of personalized cancer therapies, crizotinib could well go on to become a blockbuster therapeutic at a cost rivaling Provenge's $93,000 price tag.
"It's a grand example of where the identification of a gene allowed us to capitalize on a finding," Pfizer R&D chief Mikael Dolsten tells Forbes. "What looked like an incremental drug in lung cancer, we turned it into a transformational drug."
Not everyone has endorsed Pfizer's new vision for a significantly smaller R&D budget. Rivals like Merck and Novartis have committed much larger sums than Pfizer plans to spend over the next two years, vowing to make good on their pledge to produce more winners at the FDA. Pfizer's shrinking research budget also comes after a string of setbacks in the clinic, as well as a decade of R&D work which produced a lineup of approved drugs that failed to live up to their projected earnings.
In a separate Q&A with the Wall Street Journal, Read also made clear exactly how Pfizer plans to concentrate R&D in certain biotech hubs.
"Historically, Big Pharma was driven by manufacturing," he says, "and very often they put manufacturing sites up on rivers because there was fermentation involved and they needed access [to water]. Now, I think you need to be in centers of innovation and hubs of innovation that are represented by La Jolla, Calif; Boston, Mass; and also in the U.K. in Cambridge."
Special Report: Pfizer - The world's biggest R&D spenders