Pfizer, Warner and the Drug Industry's Growth Crisis
Executive Summary
In launching its hostile takeover attempt for Warner-Lambert, its most important partner, in order to get 100% of the revenues of Lipitor, Pfizer underlined its own immense growth challenge, and that of the industry at large. Indeed, the growth problem is so serious that Pfizer is reversing what had seemed a highly successful alternative strategy to M&A--it's late-stage co-promotions. Meanwhile, in signing its own deal with American Home, Warner was sending a similar message: its admission of the difficulty of ever finding, through internal research or alliances, a product important enough to replace the earnings of Lipitor.
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In an interview, Pfizer's head of R&D, John LaMattina, discusses R&D's position as the part of the company most vulnerable to cuts in response to weakening sales. Among other issues, LaMattina discusses Pfizer's increasing interest in large molecules, specialist markets and combination products, and the role external research will play in filling a pipeline facing significant near-term generic pressures. He also details Pfizer's advantages of scale, particularly in developing portfolios of products in individual disease areas for sale to major customers interested in large discounted, disease-managed product packages.
The Best Defense Is a Good Offense: Sanofi's Bid for Aventis
Sanofi's attempt to take over Aventis reflects its own status as takeover material for other companies, particularly after it loses the protection of its current shareholder structure. But it is also convinced that its highly productive R&D organization can make much better use of Aventis' R&D expenditures than Aventis has done. Nonetheless, Sanofi, which has been limited in the past by its Franco-centrism, particularly in the key American market, must use the transaction to transform the company into a far more internationally managed and culturally diverse organization. Indeed, for all the European flavor of this deal, it portends an even greater Americanization of the drug business.
Pfizer R&D: The Biggest Pharmaceutical Experiment
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