LINDA A. JOHNSON AP Business Writer — November 10, 2009
TRENTON, N.J. (AP) — Less than a month after buying Wyeth, drug giant Pfizer Inc. has mapped out a new structure for its research and development operations.
The plan, announced Monday, will bring the closure of six of the two companies' 20 research facilities, reorganize and consolidate others, and cut the jobs of up to 2,000 scientists and laboratory technicians.
Pfizer, which is based in New York, solidified its position as the world's biggest drugmaker with its $68 billion purchase of drug and vaccine maker Wyeth on Oct. 15, diversifying overnight by adding Wyeth's biotech drugs and consumer and animal health divisions.
The two executives heading the combined research operation told The Associated Press that integrating and reorganizing the two companies' laboratories will boost research productivity and save money.
In addition, Pfizer will eliminate about 35 percent of the 16 million square feet of research space it now has around the world.
It will now have five key research centers, each focused on specific disease areas, plus nine other laboratories with specialized research capabilities. Research operations in Princeton, N.J.; two sites each in New York and North Carolina, and one in the United Kingdom will be closed.
"We have really built the very best from the two companies," Martin Mackay, president of research and development for traditional medicines such as pills, said in an interview.
The five primary research centers include two Wyeth facilities: a large biotech lab in Cambridge, Mass., that will focus on inflammation disorders, and a plant in Pearl River, N.Y., that will handle vaccine research.
The others are Pfizer facilities. One in Sandwich, United Kingdom, will do pain research, and one in La Jolla, Calif., will do cancer research. The third, in Groton, Conn., will work on diseases including Alzheimer's and diabetes and will add 1,500 workers from a nearby New London facility being closed. Each site will have other operations as well.
"We have positioned them to tap into internal and external science (resources) on the West Coast, the East Coast, in Europe and at our Shanghai (China) research center," said Mikael Dolsten, president of research and development for vaccines and for biotech drugs, which are produced by living cells rather than by synthesizing chemicals.
Major sites being consolidated include a sprawling Wyeth facility in Collegeville, a suburb of Philadelphia, that will keep manufacturing but have most of its research division shifted elsewhere, and a large facility in the St. Louis suburb of Chesterfield, Mo. That site is being sold back to its original owner, Monsanto Co., for $435 million, and Pfizer will keep a small research group there under a lease agreement. About 600 of the 1,000 Chesterfield jobs will be cut, but some workers will get transfer offers.
Mackay would not specify the total number of people who would lose jobs, but said it would make "a significant contribution" to the 15 percent of total staff Pfizer plans to cut.
Before the companies combined, Pfizer had about 9,000 researchers and technicians, and Wyeth, which was based in Madison, N.J., had about 5,500. Besides those losing their jobs, some will be asked to move to other sites.
Some of the savings from the job cuts and the plant closures will be poured into research on key diseases Pfizer is targeting, including Alzheimer's and other neurological diseases, cancer, pain and inflammation, diabetes and infectious diseases, plus new vaccines.
"We essentially will have a portfolio up and running on the diseases that we care about this year," said Mackay.
That's an unusually fast transition for an already-huge company that just completed one of the industry's biggest deals ever, giving it a combined work force of about 129,000 people.
By comparison, when Pfizer acquired Warner-Lambert Co. in 2001, it spent the next two years making a series of decisions about what to do with different parts of the research organization. It still hadn't finished the integration of the two companies when it bought another drugmaker, Pharmacia Corp., in 2003. That delay hurt research productivity.
In trading Monday, Pfizer shares rose 47 cents, or 2.8 percent, to close at $17.43.
Associated Press writer Cheryl Wittenauer in St. Louis contributed to this story.