Despite myriad challenges facing Pfizer these days, it keeps plugging ahead with its strategic plan. Yesterday, the company announced a restructuring plan that will create three new drug development operations entities. One will focus on primarily on Brazil, Russia, India and China (the BRIC countries) in an effort to increase market share in emerging markets. The other two will focus on physicians--one on primary care docs and the other on specialists. Only lab testing and identifying compounds will remain under current research operations.
The move follows news last month that Pfizer would realign its drug discovery efforts and strategically shift its focus. Pfizer execs say that the change will not involve layoffs--this week, at least--but the company has a layoff record that includes cutting 13,500 positions since the end of 2006. Pfizer admits job cuts are not out of the question in the future, and the new units will begin operating at the start of 2009. Previously, the company organized operations units based on geographical location.
At the same time, Pfizer waved goodbye to Ann Arbor as it closed its doors on its Michigan lab--the lab where its blockbuster drug, Lipitor, came to be. In its heyday, the site housed about 2,100 Pfizer employees. However, Pfizer isn't going without a fight and this particular fight is with the property tax assessors. Currently assessed at $238 million, Pfizer would like the value of the property cut down to 50 percent of that, which would save the company over $6 million each year in taxes and drop the revenue Ann Arbor receives by $2 million. Currently, Pfizer is the largest taxpayer in Ann Arbor and, according to the CFO of Ann Arbor, the reduced assessment would definitely affect the municipal budget.
On an amusing note, Pfizer is in a lawsuit over some unwelcome free advertising. A company called JetAngel placed a "Viva Viagra" logo for one of Pfizer's best selling drugs on a replica missile, and then drove said missile through Manhattan, briefly resting in front of Pfizer headquarters on 42nd Street. Pfizer execs were not pleased with the complimentary tribute and filed a lawsuit in the federal court in New York for misappropriation of the trademark.
The previously unknown, yet gutsy, company, followed up its marketing tour of Manhattan with an email to Pfizer announcing that it would repeat the "free PR" stunt next week as it starts a 12-city tour, and will add a twist: bikini-clad models will ride atop the logo-laden missile, handing out condoms with pictures of McCain and Obama on them. JetAngel's "new, non-traditional outdoor medium" that aims to "capture the consumer's attention" has certainly gotten our attention.
For investors, Pfizer shares dropped 4.0 percent to $18.18 Tuesday afternoon.
- read about the reorganization at Forbes.com
- see this Wall Street Journal blog post for the tax story
- find out more about the missile stunt at Pharmalot.com
- see this WSJ blog post about the missile