Drug major Pfizer, Inc. (PFE) announced Monday its global research and development network, following the integration of Pfizer and Wyeth, in a bid to consolidate its research facilities. Pfizer would close six of its total 20 research facilities it had upon closure of the Pfizer-Wyeth deal in October. The consolidation of R&D centers would give a boost to productivity and reduce costs with the reduction in staff and real estate.
Pfizer would now continue R&D activities with five main research centers driving scientific innovation along with nine specialized units around the world, seeing a reduction in global R&D square footage by 35%.
In a statement, president of BioTherapeutics Research & Development, Mikael Dolsten said,"By focusing our R&D operations in these centers, we are building the world's premier biopharmaceutical R&D enterprise. This new structure puts Pfizer in the best position to conduct cutting-edge research within and beyond our own laboratories and to deliver a portfolio of high-impact medicines to patients."
Under the new R&D organization, Pfizer's BioTherapeutics division will focus on large-molecule and vaccine research, while PharmaTherapeutics division will focus on small molecule discovery and drug delivery technologies. As for the high-priority disease areas, both the units would work together in the field of neuroscience, pain, inflammation, oncology, metabolic disorders, vaccines and infectious diseases, the company added.
The new R&D model, which is a part of the integration of Pfizer and Wyeth, would also bring together scientific strengths from both companies in order to increase research productivity, focus on disease-area research in single locations and more efficiently use the company's real estate.
New York-based Pfizer's five main research sites would now serve as central hubs for research activities in BioTherapeutics, PharmaTherapeutics and Vaccines. These sites are located in Cambridge, Massachusetts; Groton, Connecticut; Pearl River, New York; La Jolla, California; and Sandwich in the U.K.
These hubs would be complemented by nine R&D centers with specialized research capabilities, such as monoclonal antibody discovery and regenerative medicine work. The company will also move a number of functions to other locations with the closing down of six centers.
"In less than a month, we have made complex business decisions needed to combine these two R&D organizations thoughtfully yet quickly. Moving forward on our aggressive timeline, we are analyzing the combined portfolio and prioritizing research projects that will address unmet medical need and bring Pfizer's scientific and competitive advantage to the benefit of patients," president of PharmaTherapeutics Research & Development, Martin Mackay added.
Meanwhile, earlier in the day, agricultural products company Monsanto Co. (MON) agreed to acquire back the Chesterfield village research facility in Missouri from Pfizer in a deal valued at $435 million to be paid over time. The deal is expected to close in the first half of 2010.
In January, Pfizer agreed to acquire Wyeth in a $68 billion cash-and-stock deal with each outstanding share of Wyeth common stock being converted into the right to receive $33 in cash, without interest, and 0.985 of a share of Pfizer common stock. The deal closed on October 16, 2009.
While announcing the acquisition in January, Pfizer said it would be cutting its global workforce by around 10%, eliminating jobs in sales, manufacturing, research and development, and administration. The company also planed to reduce the number of manufacturing sites to 41 from 46, as well as reduce its facilities square footage by about 15%.
PFE closed Monday's regular trading session at $17.43, up $0.47 or 2.77% on a volume of 46.18 million shares, lower than the three-month average volume of 51.14 million shares.
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