Pfizer's megamerger pitch undermined by empty promises of the past

Pfizer CEO Ian Read

Back in early 2009, when Pfizer ($PFE) pulled off its big merger with Wyeth, the pharma giant boasted that the combined company "will have more resources to invest in research and development than any other biopharmaceutical company." Combined, they easily outspent every other Big Pharma research operation around the world. And the company touted its new prospects with the Alzheimer's R&D group at Wyeth, including the Phase III program for bapineuzumab.

Today, Pfizer is pulling a page from the same playbook in trying to win over AstraZeneca ($AZN). In a one-page infographic, Pfizer said a combined company would have 82 R&D projects in development targeting 17 of the top 20 diseases; 9 R&D centers in the U.S. and U.K., more than 250 R&D partnerships around the world and a shot at bringing "together powerful and world leading research expertise in key therapeutic areas," in a quote from CEO Ian Read.

But Read and the rest of the Pfizer team now face a U.K. backlash because of what happened after the big Wyeth merger. As of last year Pfizer had chopped its R&D budget down to $6.67 billion, well below the $8 billion budget it had racked up all by itself, pre-Wyeth, in 2008. Faced with repeated failures in the clinic--which would eventually include that big new Phase III for bapineuzumab--Pfizer would make the case for a smaller and more focused pipeline by slashing thousands of researchers, including 1,700 workers at Sandwich in the U.K. FiercePharma did the math on jobs recently and found that Pfizer has laid off or spun off more than 51,000 jobs since 2008.

Next week, Read is likely to hear a lot about Sandwich as M.P.s grill him over the past restructurings and his new vow to keep 20% of Pfizer's R&D jobs in the country and finish a major research center planned for Cambridge.  According to The Telegraph, the British government wants something more than what Read has put on the table.

Fighting back, AstraZeneca research chief Briggs Morrison has been lobbying shareholders against selling by raising the specter of the kind of R&D disruption that follows every megamerger--including the big Wyeth tie-up.  

Of course, AstraZeneca has a past of its own. Downsizing has claimed 13,500 of the company's rank and file workers over the past 5 years. When it comes to Big Pharma reorganizations, just about all the top 10 have a past to explain.

- here's the Pfizer infographic (PDF)
- read the report from The Telegraph