Pfizer has unveiled plans to internally carve up its business into three different sections, in a move designed maximise the value of its entire portfolio.
The drug giant said that from January next year, it will house two separate ‘innovative’ business units and a ‘ value’ one, with each operating in both emerging and established markets.
One of these innovative business units will include products across multiple therapeutic areas expected to have market exclusivity beyond 2015, and will be led by Geno Germano, Group President, Innovative Products Group.
The other will include Vaccines, Oncology and Consumer Healthcare, and will be under the direction of Amy Schulman, Group President, Vaccines, Oncology and Consumer Healthcare.
The Value business segment will include products that “generate strong, consistent cash flow, and will be positioned to provide patients access to effective, lower-cost, high-value treatments,” with John Young, Group President, Value Products Group, at the reins.
“Through this evolution, we will enable greater independence and focus for the Innovative and Value businesses,” said Pfizer chief executive Ian Read, explaining the decision.
The move may not have been altogether a surprise given that Pfizer said earlier this year it is carrying out a three-year review of its generics and innovative segments.
Leerink Swann analyst Seamus Fernandez described the new structure as “sound”, and predicted that it would please analysts, according to Reuters.
Big not always best?
Speaking at a recent PharmaTimes SOPHIE meeting, IMS thought leader Sarah Rickman said that in the pharma world of today big is not necessarily better, particularly with regard to new product launches, as focus can be muddied and priorities mixed.
Holding pharma giants back, she said, is the “mature junk” that has accumulated over the years, but there is often a reluctance to let go of this and become a smaller but faster growing business.
Now it seems that Pfizer has indeed decided to take this route, cleaving off its older products – which still provide a significant stream of revenue – in order to provide its innovative business with a clearer focus, and give each of the segments greater freedoms to adapt to market conditions.
Others believe believe that the move could be the first signs of an eventual company breakup.
However, a spokesperson for the company was quick to quash these claims. “At this time, we have not made and are not in a position to make any decision regarding any potential future action that could involve and external split of these business segments,” she told the Wall Street Journal.
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