Kindler Suddenly Leaves as Pfizer CEO
From Day, The (New London, CT) (December 6, 2010)
Dec. 06--Pfizer Inc. Chairman and Chief Executive Jeffrey B. Kindler, who oversaw the closure of the company's manufacturing plant in Groton and the sale of its worldwide research headquarters in New London, unexpectedly announced his retirement Sunday after four-and-a-half stormy years as head of the world's largest pharmaceutical company.
The 55-year-old Kindler, who said he decided to retire to "recharge my batteries" after the 24/7 demands of Pfizer, will be replaced in the top spot immediately by Ian Read, currently head of the company's sales and marketing operations. The 57-year-old Read, who has been with the company for more than 30 years, has a background in chemical engineering but started at Pfizer as an operational auditor before working his way through the ranks to become a corporate vice president in 2001.
Kindler, a former McDonald's fast-food chain executive, had no background in science when he joined Pfizer eight years ago as general counsel. He has transformed the company's structure to create smaller, more nimble business units, and moved last year to acquire Wyeth Pharmaceuticals, but the company's stock has fallen during his tenure and no blockbuster medicines have come to market to compensate for the loss next year of cholesterol treatment Lipitor, the world's best-selling medicine.
"Now that we are about to complete a full year of operating Pfizer and Wyeth together, with our world-class team fully in place, I have concluded the time is right to turn the leadership of the company over to Ian Read," Kindler said in a statement.
Kindler's departure will kindle speculation about what his exit package will look like. When previous CEO Hank McKinnell retired in 2006, he received a golden handshake of nearly $200 million; Karen Katen, who lost out on a bid to replace McKinnell, left the company the following year with $76.8 million.
Last month, Pfizer reported a 70 percent decrease in profits during the third quarter as a one-time $701 million hit to pay for an asbestos-suit settlement affected the bottom line. Analysts noted that Pfizer products didn't fare well during the quarter and got a boost only from gains in legacy Wyeth operations.
A swirl of changes occurred at Pfizer during Kindler's tenure, none so important locally as the company's decision last year to vacate its nearly $300 million office complex in the Fort Trumbull area of New London as part of the company's global downsizing. Earlier this year, Pfizer announced the building's sale to Electric Boat for $55 million, and said it would be consolidating all of its local operations by the end of next year to its Groton campus.
Kindler also pulled the plug on local manufacturing operations, which had been a major source of employment for six decades. The last of the region's Pfizer manufacturing workers, about 300, were dismissed in 2007 as the company turned largely to overseas production of pharmaceuticals.
Efforts to absorb the drug companies Pfizer has bought in the past decade, including Warner Lambert and Pharmacia, caused major upheaval among local scientists. What had once been considered the "Pfizer family" had, under Kindler and McKinnell, turned into a revolving door of scientists who stayed for a while and then were dismissed as part of efforts to control costs.
Pfizer rarely acknowledged when it eased back on the local work force, but last year it cut 500 local jobs as part of a reduction of 800 research-and-development positions worldwide. The company also drew criticism locally when it cut the number of local contractors doing information-technology work, replacing them with a largely Indian-born contingent brought to the United States using controversial H-1B visas.
Still, Kindler drew praise from Pfizer for his accomplishments.
"He moved aggressively to drive change at the company, including putting new, more focused and agile business units in place, building and enhancing world class compliance systems, recruiting talented new leaders, and refocusing and streamlining operations in every part of the world," said Constance J. Horner, a Pfizer board member, in a statement.
Kindler, who made nearly $15 million last year, sat at the head of Pfizer when the U.S. Justice Department imposed a $2.3 billion fine for illegal marketing of various drugs. He also was at the helm as the company acknowledged two of its biggest mistakes: the multibillion-dollar fiasco that led the company to pull the plug on Exubera, its inhaled insulin treatment, and the equally embarrassing failure of torcetrapib, a highly touted Lipitor replacement that crashed and burned in clinical trials after regulators noted serious safety concerns.
"In many ways the defining experience of our tenure was Exubera," Kindler said earlier this year during an unscripted forum with health care analysts. "So much of what we're doing today is a reflection of making sure nothing like that happens again."
Kindler instead sought slow and steady growth for the company, and decided to diversify into such areas as generic medicines and so-called orphan drugs -- treatments geared toward people with rare conditions who didn’t currently have a medicine to help them. He said he didn’t want to have Pfizer too reliant on any one drug, such as Lipitor, which is expected to have about $11 billion in sales this year.
"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."
Kindler, who oversaw the sale of Pfizer's consumer products division to Johnson & Johnson early in his tenure, later backtracked, getting back into over-the-counter medicines by buying Wyeth for $67 billion.
He also changed gears on the research side, naming the popular Scotsman Martin Mackay of Salem as head of worldwide research in 2007, then downgrading his title two years later. Mackay left Pfizer earlier this year, and Kindler named Wyeth holdover Mikael Dolsten in his place.
Kindler told a group of health care analysts earlier this year that he found "fundamental flaws" in his company's operations after taking over the pharmaceutical giant.
Among his concerns were the layers of management that had been weighing down the company.
"When I find a committee, I blow it up," he said.
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Posted: December 2010