The world's biggest drug company is laying off up to 800 research scientists and expects to reduce its research staff by 5 percent to 8 percent this year.
Pfizer Inc. needs one of its own remedies. The world's biggest drug company, is laying off up to 800 scientists this year in its latest effort to refocus disappointing research efforts and cut its massive overhead ahead of an anticipated crash in revenue.
New York-based Pfizer plans to reduce its global research staff -- currently about 10,000 people -- by 5 percent to 8 percent this year, company spokeswoman Kristen Neese said Tuesday.
"This is in line with our refocused research areas," Neese said.
Pfizer's research and development headquarters are in Connecticut in New London and Groton.
The move comes after the company announced in September that it was narrowing its research focus to six disease areas -- Alzheimer's, cancer, schizophrenia, pain, inflammation and diabetes -- and abandoning new research in other areas.
That included cardiovascular disease, where Pfizer had been a dominant player with its $13 billion-a-year cholesterol fighter Lipitor, the world's top-selling drug. But Lipitor is expected to face generic competition in late 2011, and efforts to come up with a successor drug failed, including the flameout of once-promising torcetrapib after it was linked to heart problems in late-stage human testing.
Already, Lipitor sales have dipped slightly, apparently partly due to consumers trying a much-cheaper generic form of a similar drug, Zocor.
Martin Mackay, Pfizer's head of global research, told analysts Tuesday at a J.P. Morgan healthcare conference in San Francisco that since he arrived just over a year ago, one of his priorities has been to ensure the company had its research in the most promising areas.
"We've had extensive reviews of our portfolio, both internal and with external experts, to make sure we had the best portfolio that we could," he said.
That review resulted in the six-disease focus, where he said research is growing despite flat spending.
"Barely a week goes by at Pfizer without one of our compounds going into (a new stage of testing), such is the depth of our portfolio," he added.
Mackay also said the company expects to have 24 to 28 late-stage human studies by the end of this year. About half are on new compounds, the rest on existing drugs being tested for new uses.
An analyst said more cuts are likely.
"This is probably not the end," said biopharmaceuticals analyst Erik Gordon, a professor at University of Michigan Business School.
He said Pfizer likely has identified 500 to 800 scientists not in the new core areas in its first round of review, but more could be cut later.
Gordon said the cuts are not due to the recession but to the long-term problems plaguing the entire drug industry. Those include stiffer generic competition and general lack of research productivity.