Pfizer to ax up to 8% of R&D staff
Drugmaker preparing to cut up to 800 researcher jobs; 'prioritizing' drug development for cancer, Alzheimer's and pain management.
NEW YORK (CNNMoney.com) -- The pharma giant Pfizer said it is cutting up to 8% of its research staff.
New York-based Pfizer (PFE, Fortune 500), the leading seller of pharmaceuticals, said on Tuesday that it is reducing research jobs by 5% to 8% worldwide, which could total 800 job reductions.
The company's stock was up less than 1% following the news.
Pfizer spokesman Raymond Kerins said this is part of the company's plan to "raise productivity."
"We're being really methodical about how we're staffing our people so that we can assure we have the right scientific expertise for the future to make sure we can achieve all our goals," said Kerins.
Kerins said company is "prioritizing" the development of drugs and potential treatments for cancer, Alzheimer's and pain, Kerins said. This will include a focus in bringing late-stage pipeline drugs to market, he said.
Also, Kerins said Pfizer aims to be "top tier" in the biotech industry, and the company will "pursue the best science externally through partnerships, licensing and M&A." He said this is all part of Pfizer's "overhaul plan," implemented by Martin Mackay when he took over research and development about one and a half years ago.
"R&D is the lifeblood of pharma but Pfizer has not been that productive," said Les Funtleyder, pharma analyst for Miller Tabak. "So it may be a case that they are trying to eliminate non-productive assets.
He added, "I would imagine the scientists would say the problem is with management."
Tony Butler, pharma analyst for Barclays Capital, said Pfizer has already shed some 13,000 jobs since 2007, down to the estimated level of about 87,000 staffers.
Butler said that Pfizer can probably afford to trim its R&D staff, because it spends more on research than any of its competitors. He estimated that the company spent about $7.5 billion on R&D in 2008.
The drugmaker is scheduled to release its fourth-quarter earnings results on Jan. 28. The company is expected to report a 3% decline in revenue to $12.6 billion, compared to the year before, according to a consensus of analysts from Thomson Reuters.
The company is also expected to report a 14% increase in earnings per share, to 60 cents, compared to the year-ago, according to Thomson Reuters.
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