The Scientist : NewsBlog Print: Research loss in Pfizer-Wyeth deal
The Scientist: NewsBlog:
Research loss in Pfizer-Wyeth deal
Posted by Alla Katsnelson
[Entry posted at 16th October 2009 04:19 PM GMT]

Pfizer's $68 billion merger with Wyeth, which officially commences today, will mean the loss of almost 20,000 jobs, the company has said, and analysts predict research could take a hard hit.

The deal involves combining laboratories of the once-competing companies. Martin Mackay, president of Pfizer Global Research and Development, told Bloomberg News that the merger would likely involve cuts in research spending. Though he didn't specify how much, analyst estimates put the number at as much as $3 billion, Bloomberg News reports -- which will translate into job losses.

"These big acquisitions don't do a thing for research," Kenneth Kaitin, director of the Tufts Center for the Study of Drug Development, told Bloomberg News. "I don't think anyone should be fooled into thinking these big acquisitions have anything to do with innovation or increased research and development capacity."

As a result of the merger, many facilities will be shuttered. The Wall Street Journal Health Blog is compiling reports on the fate of individual Wyeth and Pfizer locations.


Related stories:
  • Merck and Schering-Plough to merge
    [9th March 2009]
  • How to save biotech
    [17th February 2009]
  • The urge to merge
    [13th September 2004]

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    Research loss in Pfizer deal
    by anonymous poster

    [Comment posted 2009-10-19 08:36:19]
    I realize that all research & drug discovery doesn't result in the successful development of a new drug or ground breaking studies, but the reality is that you do have to produce something. The pharmaceutical industry is a business and anyone doing research for these companies knows that. This reaches far beyond research. Whether you are research, manufacturing, biotech, nutritionals, etc... you need to be flexible and keep your resume up-to-date.



    M&A have no social or economic justification
    by anonymous poster

    [Comment posted 2009-10-18 01:30:05]
    The corrupted incompetent are in charge of our government that should be disallowing M&A, breaking up monopolies and oligopolies to keep alive diversity and competition (the only economically valid regulator), and working to assist start-ups that are the source of most innovation.

    Instead, they entertain "contributing" special interest-groups to the detriment of the economy and population-at-large while maintaining their misleading titles as "representatives". They only people they represent are themselves - in their quest to seize and hold power, and so-called "stake-holders" of the extreme right, extreme left, and big-corporate interests.



    same old, same old
    by monica marcu

    [Comment posted 2009-10-17 16:58:04]
    ...and dusty ideas and management. Why is it that some people (companies) never learn? If you want to create new products, better drugs, you do not go around engulfing companies with the same way of thinking and type of management like yours. Pharma needs new creators, different people with more diversified backgrounds - in science, nationalities, culture, approaches. But it is precisely these "outsiders" who are still kept outside. If you want to create better drugs bring in for instance biologists specialized in biodiversity and biomimicry - in addition to molecular biologists (who preach that genes hold the secret of the mother load of drugs - pharma has lost already tons of money due to such a reductionist approach). If the science of developing new drugs is left to the same reductionist approaches we can expect the same failures. Ultimately it is not a matter of number but of quality of research(ers).



    Acquisitions in the Medical Device Industry
    by anonymous poster

    [Comment posted 2009-10-16 13:05:46]
    What Kenneth Kaitin relates to drug company acquisitions also holds for medical devices. Bill George and Art Collins, CEO's for Medtronic, went on a major buying spree in the decade from 1998 to 2007, using savings, stock, and a deep cash flow to buy several multi-billion dollar companies (Arterial Vascular Engineering, Sofamor-Danek, Mini-Med/Medical Device Group, Kyphon) and others for many hundreds of millions (Physio-Control, AVECOR, Xomed). To their credit, no layoffs occurred, and these made Medtronic the giant it is today, but unfortunately did nothing for overall research and innovation. Indeed, a new found corporate focus on profitability and further acquisitions depressed innovation.

    While many companies' stock prices have recovered substantially or completely from the current recession, Medtronic has not, and, the company is no longer counted on as a source of major innovation in the medical device sector.



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