A roundup of the local news reports on Ann Arbor Pfizer, Inc. closings. The short summary: the looming end of the Lipitor patent made it imperative to seek out new drugs to work with it; that drug was torcetrapib; it didn't work out.
Detroit Free Press: Pfizer cuts will cost Michigan 2,410 jobs
At Pfizer’s massive Ann Arbor research facility, the news came as a blow. Once the sight of a Parke-Davis facility acquired by Pfizer, the research and development complex occupies 177 acres and 2 million square feet of industrial, laboratory, and office space.
Gov. Jennifer Granholm met with the media in Ann Arbor this afternoon, saying she wants to do everything she can to keep former Pfizer employees in the state.
“We’re going to have a whole ‘Stick Around Ann Arbor’ campaign for these employees, because we want them to stay here,” Granholm said.
The research now done in Ann Arbor, and a small Esperion Group facility in Plymouth, will transfer to other Pfizer sites in Groton, Conn.; St. Louis, Mo.; LaJolla, Calif.; and Sandwich in the United Kingdom. Pfizer said it expects that “a substantial number” of the workers in Ann Arbor will transfer.
Arbor Update: Pfizer Closing. From contributor juliew:
Last year Pfizer donated $2 million to the local United Way (employees gave $1 million and Pfizer matched it for a total of $2 million donation/25% of the total). They donated $10,000 for school environmental education programs in Ypsilanti, $1500 to the Adopt-A-Class initiative for the Leslie Science Center, somewhere between $50,000 and $100,000 to the University School of Music Theatre and Dance, they sponsored a horse for the Therapeutic Riding Inc., sponsored SPARK, the Ark, Michigan Theater, Ann Arbor Summer Festival, the Miller’s Creek watershed study, K-9 police dog Czar (and his vehicle), Huron River Day, and many other programs large and small (to the tune of about $1 million corporation donation to these types of programs annually, not including the United Way). Not included in this are all the donations made by individuals, most of whom made quite a good salary. I can’t imagine there is a single nonprofit or social organization in Ann Arbor that will not be affected by this closing.
Pfizer has been in Ann Arbor in some form since 1960 (as Warner-Lambert, then Warner-Lambert/Parke-Davis) so they and the employees are an entrenched part of our community. Honestly, the tax abatements given to Pfizer are a drop in the bucket compared to what we lose when they leave (for so many reasons). As it stands, they are the largest taxpayer in Ann Arbor by far. As a matter of fact, the tax abatements given in 2001 were considered a win in many ways for the city because although they were giving 50% tax relief on a large piece of land, it was land that Pfizer bought from the University (which had paid no taxes on it at all). For one synopsis of the tax abatements, see the following site. As one person noted at the time of the tax abatements, half of something is far better than half of nothing.
Dr. John LaMattina, president of Pfizer Global Research and Development, said he wasn't satisfied with the company's development performance. To improve its success, he said Pfizer would end discovery efforts in dermatology and gastroenterology because the funds could be better used elsewhere.
LaMattina said the company would also centralize research efforts so work on any one disease is handled at one location. For example, in the past Pfizer conducted cancer research at six different sites, which LaMattina said only increased costs without improving productivity.
Forbes on Big Pharma's Black Hole:
Between 2010 and 2011, Big Pharma will lose 28% of their current sales, according to pharmaceutical analyst James Kelly of Goldman Sachs--who is calling this period "the patent black hole." Starting in 2008 and going through 2011, Kelly predicts annualized sales growth of only 2% for big drug makers.
Timothy Anderson of Prudential Equity Group says that this generic "cliff" is the largest in the history of pharma. Most of the companies he covers, including Pfizer (nyse: PFE - news - people ), Merck (nyse: MRK - news - people ), GlaxoSmithKline (nyse: GSK - news - people ), and Eli Lilly (nyse: LLY - news - people ), will lose top-sellers between 2010 and 2013. Already, he says, the loss of blockbuster products like Pfizer's Lipitor for high cholesterol, the world's best-selling drug, and Eli Lilly's Zyprexa for schizophrenia, is shaping decision-making at big drug makers.
Pfizer had another drug in the pipeline to go along with Lipitor, but torcetrapib turned out to be not the wonder drug they had hoped for. From Derek Lowe's In The Pipeline:
This is a complete clinical disaster: the world's largest drug company just ditched their potential biggest drug. And this comes two days after a press conference where they talked about how they were planning to submit it for approval within months. Development of torcetrapib, the cholesteryl-ester transfer protein inhibitor designed to raise HDL levels, has been halted. Last week, that sentence would have been the subject of nightmares at Pfizer, but now it's the top of the news. No alarm clock buzz will make it go away. If you're looking for an example of just how difficult drug development is, look no more.
The story broke on Saturday: the 15,000-patient trial that was underway (half on Lipitor, half on Lipitor plus torcetrapib) showed excess deaths in the combination group (82 versus 51). That figure's impossible to ignore or explain away, and now the problem will be to explain what caused it. There are other CETP inhibitors in development, such as JTT-705 (from Japan Tobacco and Roche) and one from Merck as well. Both these companies have just had a tremendous shock, since we don't know (yet) if the patient deaths were due to CETP inhibition itself, the combination of it with the HMG CoA reductase inhibition of the statin, an off-target effect of torcetrapib with the statin, or just an off-target effect of the drug on its own. I'm sure that intense reviews of all the clinical data are going on. Things just got much more complicated.
As for Pfizer, they now have a monstrous hole in their near-term pipeline. Looking back, they've had a terrible run the last couple of years, with a number of promising drugs dropping on them, but nothing compared to this. I don't think anyone's had one to compare with this, at least in terms of the expectations for a drug. I was just talking with some people from the company last week (along with many of my colleagues), looking into employment possibilities. After this, I think we may have to keep moving. I don't think that Pfizer's going to be in the mood for hiring.
The best knowledgable industry gossip spot I found in all this was In The Pipeline; here's their Pfizer's Pfinances post about the closings.