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Not-For-Profit Proposal Would Save 25 Jobs Affected By Layoffs At Pfizer

Not-For-Profit Proposal Would Save 25 Jobs Affected By Layoffs At Pfizer [The Day, New London, Conn.]

From Day, The (New London, CT) (March 27, 2011)

March 27--A behind-the-scenes effort is under way to create a not-for-profit antibacterials research unit in New Haven, in the hopes of retaining 25 highly skilled jobs that otherwise would be lost at Pfizer Inc.’s Groton laboratories.

Led by Brad Spellberg, an infectious-disease specialist at UCLA, the proposal would use 9,000 square feet of incubator space at Yale Science Park. Spellberg said in a phone interview that he hopes to convince the government to spend $150 million over a 10-year period to retain America’s critical skills in antibiotics research and is asking Pfizer to donate at least one potential drug candidate to the resulting public-private partnership.

Pfizer announced earlier this month that it will be moving its antibacterials unit to China over a two-year period.

"This is a unique opportunity which will never come again," Spellberg said. "We have only a matter of perhaps two to three months before the scientists in the antibacterial group at Pfizer have all found other jobs and moved on. Timing is of the essence."

Spokeswoman Sperry Mylott said Pfizer has not received a formal proposal from Spellberg, who said he has met informally with company representatives and government leaders to discuss his ideas.

"As we make decisions about our pipeline assets, we are open to considering many different types of proposals," Pfizer said in a statement. "However, we are not at a point in that process where we can make detailed comments on any proposal."

Pfizer has not said how many jobs will be moving to China, but analysts said it was unlikely many of the company’s American scientists would be leaving for the new unit in Shanghai.

The move is part of a previous announcement that Pfizer would be cutting 1,100 high-paying scientific jobs in the state over the next year and a half, including about 350 from the company’s neuroscience and CVMD (cardiovascular, metabolic and endocrine disorders) units that will move to Cambridge, Mass., as part of a company downsizing.

Several analysts said they see the antibacterials unit’s move to China as essentially an abandonment of a critical research area at a time when "superbugs" are developing resistance to longtime, life-saving antibiotics. An estimated 70,000 people die each year in American hospitals from drug-resistant bacterial infections -- a number that is growing.

Spellberg and a business specialist he is working with, Mike Floyd, have proposed that the government fund and Pfizer help launch an antibacterials research unit that would move laid-off company scientists -- and perhaps a promising antibiotic molecule or two -- to Yale laboratory space. The idea would be to fund the project two-thirds with government money and one-third with private contributions in an effort to spur lagging antibiotics research.

"We have a market failure of antibiotics," Spellberg said. "The for-profit motive for developing antibiotics is failing us."

Some skeptical about plan

Robert Guidos, vice president of government relations for the Infectious Disease Society of America, said Pfizer’s move to China has created a stir in high-level government and scientific circles concerned with the lack of new antibiotics coming to market. He added that Pfizer’s new direction leaves only two major companies -- AstraZeneca and GlaxoSmithKline -- with strong and active efforts in the field.

"It’s an awful, awful situation," Guidos said.

Guidos pointed out that drug companies can make much more on cancer drugs -- for which a course of treatment might cost $30,000 or $40,000 -- than they can for antibiotics, the cost of which runs no more than $1,500. And many effective generic antibiotics can be bought at WalMart for $4, leaving expensive new drugs at a distinct disadvantage in the marketplace.

Guidos said a variety of proposals are about to be debated in Congress to boost antibiotics research. Some of the bills include economic incentives for companies like Pfizer to devote more attention to the field, he added.

While Guidos wouldn’t comment on Spellberg’s plan to bolster antibiotics research in the United States, he said public-private partnerships in drug discovery can work, depending on how they are structured.

"It’s certainly important that the government steps in," he said. "Government exists to step in and find pathways to protect citizens when all else fails."

But David Shlaes of Stonington, a drug-industry consultant and former vice president for Wyeth Pharmaceuticals who has authored a book on the implications of cutbacks in antibiotics research, said he was skeptical of the proposal to save Pfizer jobs. While Spellberg’s proposed budget appeared workable when he ran through the numbers, Shlaes said the chances are small that such an expensive plan would pass in the current budget environment.

Shlaes added that he would like to see Pfizer researchers keep their jobs and the United States to retain the country’s capabilities in antibiotics. But he said a more workable alternative to Spellberg’s plan would have Pfizer selling off its antibacterials unit to another entity.

"Even if you just spun off a discovery group with a good molecule, that might be enough, depending on how far along that molecule was," he said. "I could find investors in three seconds flat."

But Pfizer so far has shown little inclination to sell off its research units, even in areas such as antibacterials that are considered relatively low profit. Still, Spellberg hopes to convince the company that providing a promising antibiotic drug candidate to former Pfizer scientists working out of Yale would be a good business decision as well as benefiting the public health.

"Dissociating these molecules from the incredibly talented scientists who discovered and have developed them will set back their development by years, and inherently increase the probability of development failure down the line," Spellberg said.

Spellberg said his proposal would allow Pfizer to retain "claw-back rights" to the medicines once the unit at Yale brings a drug forward to late-stage clinical trials. This would give Pfizer a chance to retain rights to a promising drug or to gain a share of any revenue from the sale of a molecule if the company decides not to pursue a line of research.

Spellberg said he expects the research unit would be self-supporting after the initial 10-year investment period. But he’s afraid that if funding for the effort isn’t in place by July or August, it may be too late to stave off a brain-drain resulting from Pfizer antibiotics experts dispersing across the country.

"The timeline is really driven by the talent," he said. "People are already looking for jobs. ... If we can’t get this done quickly, that decreases the probability of success."

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Posted: March 2011