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While traveling this week I received a surprising and frightening email from a colleague at Pfizer. He said that Pfizer had just announced that they were moving their antibacterial research and development from Groton, CT in the US to China. They move cardiovascular research to Massachusetts, but antibiotics go to China. Their facility in Sandwich, UK, the origin of Viagra and, if I’m not mistaken, Diflucan, will be closed. This was announced as part of an almost 25% cut in research and development overall within Pfizer. I was able to confirm all of this through various stories in the press.
Pfizer is facing a $15 billion dollar cliff with the patent expiry of Lipitor, their blockbuster statin drug. Global sales were down to $11 billion in 2010 but were expected to be as low as $4 billion in 2012. They have little from the Pfizer legacy to replace this gaping hole in their revenue, although they do have a number of products from the Wyeth legacy that should help. Nevertheless, to keep growing a $66 billion dollar behemoth – cost cutting is the rule of the day. All of these companies are gong to be much smaller in the next decade and some will no longer exist.
Pfizer has been saying publicly for several years that antibiotics was not one of their so-called areas of focus. So while I am disappointed and depressed by the news from Pfizer, I’m not surprised. According to Chemical and Engineering News,
Pfizer will focus research on several core areas: neuroscience, cardiovascular health, metabolic and endocrine diseases, inflammation and immunology, oncology, and vaccines. The company is creating specialized units in pain and sensory disorders, biosimilars, and Asia R&D.
The firm is exiting research in allergy and respiratory medicine, located in Sandwich; internal medicine, which includes some research in lung, kidney, and urinary diseases, also located in Sandwich; oligonucleotides and tissue repair, in Cambridge, Mass.; and antibacterials, in Groton. The company is also abandoning regenerative medicine research in Cambridge, Mass., but will fold similar R&D conducted in Cambridge, U.K., into a new pain and sensory disorder research unit.
The claim that they are only moving their antibiotics R&D to China is an interesting one. While it might be true, it is hard to imagine how that will succeed given the difficulty we are all having in discovering new antibiotics under the best of circumstances. China, still, is not the best of circumstances. It does, however, position them well for intrusions into the pharmemerging markets as noted in a previous blog.
Of course, IF there were a feasible way to develop antibiotics in the US, we could all get righteously indignant and say that the profit motive is preventing us from having new antibiotics. Giving big PhRMA the benefit of the doubt, I think the truth is that the impossibility of developing antibiotics in the US as a result of the FDA’s current stance is playing at least some role in recent decisions by companies like Pfizer and J&J.
It is important to understand that once a company abandons antibacterial research, they lose their internal expertise in the area. This makes it difficult if not impossible for the company to evaluate opportunities in this space from external (i.e. biotech) sources. Therefore, it further erodes opportunities for biotech. This then leads to a ripple effect where no one can work on antibiotics because of a lack of partners with big pockets to support the late stage research required to get the products registered.
I have been warning everyone that this would come. I think we can expect more of the same. When will we act?
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