Pfizer hails profitable 2006, but plans to cut 10,000 jobs

Pfizer, struggling with fierce competition from manufacturers of generic drugs, is to cut 10,000 jobs and close at least five facilities to slash annual costs by up to US$2bn. It is the second time in two years that the company has announced a major cost reduction plan to combat revenue losses. It will lose about $14bn in revenue this year because of expiring patents on key drugs.

Despite this, Pfizer's revenues for full-year 2006 increased by 2%, diluted earnings per share (EPS) grew by 144%, and adjusted diluted EPS was 6% up on 2005. 'In the face of many challenges in 2006, we substantially achieved a number of financial targets that we set early in the year,' said Pfizer chairman and ceo Jeffrey Kindler.

'We took decisive action and delivered solid performance despite challenges, including the significant revenue impact due to the loss of exclusivity of Zithromax and Zoloft in the US.'

Worldwide pharmaceutical revenues were $45.1bn for full-year 2006. In the US, revenues increased by 4% compared with the same period in 2005.

'We continued to advance the candidates in our pipeline during the fourth quarter of 2006,' said John LaMattina, president of Pfizer global r&d. Maraviroc, the CCR5 receptor antagonist to treat HIV infection, was submitted for approval in the US and EU in December 2006. Maraviroc has been accepted for filing and granted an accelerated review in the EU.

Four new programmes advanced into Phase III during the final quarter of 2006: Axitinib an anti-angiogenesis agent to treat thyroid cancer; CP-945,598, a cannabinoid-1 antagonist to treat obesity and its complications, Sutent for the treatment of metastatic breast cancer and Zithromax/chloroquine to treat malaria.

As part of the continuing consolidation of Pfizer's worldwide manufacturing operations, two additional manufacturing sites will be closed: Brooklyn, NY and Omaha, NE. In addition, the company will pursue the sale of a third site in Feucht, Germany. Including these three sites, Pfizer will have reduced its network of manufacturing plants around the world from 93 to 48 in the period 2003 to 2008.

In r&d, the company is planning to close three sites in the US - Ann Arbor, MI, Esperion (also in Ann Arbor) and Kalamazoo, MI, although at the latter it will maintain a large manufacturing and animal health presence. It is also proposing to close research sites in Nagoya, Japan, and Amboise, France.

It will also simplify its r&d organisation and improve productivity by consolidating each of the research teams focused on any given therapeutic area to one of four major sites. Pfizer plans to exit discovery research in gastroenterology and dermatology, but will continue to develop compounds already in the pipeline and to seek external opportunities in these areas.