Pfizer - The Biggest R&D Spenders In Biopharma

Company: Pfizer
2011 spending: $9.1 billion
2010 spending: $9.4 billion
Change: -3%
Percentage of revenue: 13.5%

Of all the giants, none are more determined than Pfizer ($PFE) to chop away at their R&D bodies, losing investigative limbs in the process.

More than a year ago, Pfizer vowed to carve $1.5 billion out of its pharma R&D budget--with the aim of getting that number down to $6.5 billion to $7 billion--as it slashed expenses and eventually opted to break up the business. Pfizer's storied R&D complex in Sandwich, UK, was slated for closure with the loss of 2,400 jobs, though the company eventually opted to retain a much reduced presence. Groton, CT, has been downsized significantly with a new focus on R&D hubs. RNAi was out, along with neuroscience and other key areas. Asia R&D was in, along with pain (Pfizer bought out King Pharmaceuticals in the fall of 2010) and biosimilars.

Pfizer has been cutting way back, but also noted that it has had to take charges against the cuts while shouldering some legacy expenses accrued from the King takeover. Overall, the R&D number dropped 3% year over year, with a heftier 7% drop for the fourth quarter reflecting an accelerating effort that will continue through 2012.

In order to reach its goal, Pfizer still has to trim away more than a billion dollars in R&D expenses this year. And that's a number that will affect every staffer who hits the exit door. A few weeks ago, Pfizer spread the word that it is cutting severance pay as well as benefits; instead of a year of medical coverage, departing personnel will get 8 weeks.

Even at a much-reduced level, though, Pfizer will easily continue to rank in the top 10, though it will drop out of the Big Three. Pfizer has been earmarking tens of millions of dollars to develop new centers of innovation in places like Boston, San Francisco and New York as it relocates investigators to facilities close to the academic researchers laboring on cutting-edge R&D programs.

The heat, though, is on late-stage R&D, as Pfizer scrambles to account for the slaughter of its Lipitor cash cow. Pfizer R&D chief Mikael Dolsten has been talking up the prospects of bapineuzumab, partnered with Johnson & Johnson, for Alzheimer's. A panel review is looming for the RA drug tofacitinib while an approval for the anti-clotting drug Eliquis would go a long way to ridding the company of its longstanding rep for pipeline pratfalls.

Setting aside the inherent problems of any Alzheimer's drug work, this could be a good year for Pfizer R&D.

Pfizer - The Biggest R&D Spenders In Biopharma

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