Kindler Reveals Some do's and don't's for Pfizer
From Day, The (New London, CT) (January 10, 2010)
Jan. 9--Pfizer Inc. chief executive Jeffrey B. Kindler told a group
of health care analysts in New York City this week that he found
"fundamental flaws" in his company's operations after taking over
the pharmaceutical giant four years ago.
The flaws came to the fore about a year after Kindler took over. In
October 2007, Pfizer decided to take a nearly $3 billion hit by
forgoing Exubera, an inhaled insulin discovered by Nektar
Therapeutics but which Pfizer had agreed to market.
Pfizer's sales of the Exubera -- never embraced by doctors or
patients -- had been lackluster.
"In many ways the defining experience of our tenure was Exubera,"
Kindler said, speaking for his management team in the unscripted
forum with analysts. "And so much of what we're doing today is a
reflection of making sure nothing like that happens again."
Kindler said he has spent much of his time reorganizing Pfizer's
research organization to ensure it is more accountable for
expenditures than in the past. One of Pfizer's main research sites
is in Groton, where about 3,500 people work; another 1,400 are
housed in New London, a site to be closed by next year.
"The research organization made the decision to fund the (Exubera)
project over time without a lot of accountability for capital,"
Kindler said. "Nobody was really responsible for making the
decision of whether we were going to continue to pour money into
this."
Kindler said he has been reducing the layers of management and
empowering individual business units to make decisions about
promising therapies to streamline the organization.
"When I find a committee, I blow it up," he told analysts at the
event, called Goldman Sachs Healthcare CEOs Unscripted: A View from
the Top.
Kindler said the R&D operation used to have 56 committees; now
it encompasses 11, perhaps more since he hasn't gone on a "search
and destroy" mission recently. Similarly, the company used to have
15 layers between bench scientists and him, but the bureaucracy has
been cut in half, Kindler said.
"It's probably still too high," he added.
Kindler said Pfizer also used to have four or five layers that had
to O.K. the pursuit of new drug targets.
"We blew that up and said ... the head of the therapeutic area ...
gets to make that decision without any further review," he
said.
While results have not been instantaneous -- Pfizer's stock has
continued a long decline through much of Kindler's tenure -- the
company has shown some life in the past few months. The stock
rebounded from a low of $11.66 last March to close the week at
$18.68, up15 cents.
Kindler said his goal has been to seek "predictable, steady growth"
as opposed to swinging for the fences with blockbuster drug
candidates like Lipitor, the cholesterol fighter that accounted for
about a quarter of Pfizer's sales before the company's acquisition
of Wyeth. Kindler said he doesn't want any one Pfizer drug to
account for more than 10 percent of the company's sales.
"Part of the whole approach we're taking here is not to be a
company that is reliant ... on one or two drugs," he said.
That's a change from early in Kindler's tenure, when torcetrapib --
heralded as the potential successor to Lipitor and a blockbuster
candidate -- crashed and burned during drug trials because of
safety concerns.
"One of my goals in life is not to leave my successor with a
Lipitor problem," Kindler said. "Because my little saying around
the company is that for every Lipitor problem there's a torcetrapib
solution."
Posted: January 2010
