Like natives encountering a strange explorer in an old B movie, investors hailed Jeffrey Kindler (photo) when he was picked to succeed Pfizer CEO Hank McKinnell. Now, 19 months into his tenure, the natives are getting restless. Kindler hasn't delivered the kind of sweeping change he promised. The company is no closer to replacing the fast-running revenue engine that is Lipitor, which could face generic competition in 2010. And shares have fallen 15 percent. "We're getting close to the end of the period where one can say it's too early to see change," one portfolio manager told The Wall Street Journal. Another said, "I've been a buyer for two years and I don't have a lot to show for it."
Observers had high hopes for Kindler in part because of his heritage as an ex-McDonald's exec; he was seen as an outsider who could see pharma's challenges more objectively and meet them in a nontraditional way. But last year's strategy update for analysts disappointed some in the audience, the WSJ said, because far from featuring radical solutions to Pfizer's problems, it revolved around old-hat tactics like layoffs and plant closures. This year's strategy, scheduled to be announced tomorrow, may prove little better, a source told the newspaper. "The Street may be disappointed with what he says Wednesday because he may not be as bold" as investors want.
Granted, Kindler inherited a tough situation. Pfizer stock dropped by half while his predecessor held the reins, and the company is still digesting two big acquisitions. Kindler may have good reason to be cautious, not least of which is a fear of over-promising and under-delivering. Some say he'll soft-pedal his initiatives tomorrow but his actions in the coming months will show just how aggressive he can be. One hint might lie in his hiring a Pfizer outsider but industry insider--venture capitalist and ex-Eli Lilly exec William Ringo--to head up strategy and business development. But for more specifics we'll just have to watch and wait.
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