NEW YORK | Tue, July 5, 2011 2 pm EDT
NEW YORK (Reuters) - Pfizer Inc. (PFE).(N) may have won over the shareholders with the recent decision of barrier back research and development spending, but could be forced to them in the long term, according to his research former Chief.
Pfizer, the world largest drugmaker, said in February that it would cut its research provided by as much as one-quarter of spending in 2012. The drugmaker is layoff more than 2,000 researchers and closure of a site in Sandwich, England, where he created the erectile dysfunction drug Viagra.
John LaMattina, who led Pfizer from 2004 to 2007 research organization, said in an interview with Reuters, that he was surprised by the planned cuts of Pfizer.
Trimmed to $ 7 billion to $ 6.5 billion, Pfizer research budget represents approximately 10 to 11 per cent of the estimated revenue of the company in 2012.
"This is a very low percentage for the largest pharmaceutical company in the world," said LaMattina, now senior partner of PureTech Ventures health venture capital firm.
"This industry historically spent anywhere from 15 to 20% of the sales of high-end R & d," said LaMattina. "It is their lifeblood." If you do not have new products you do business more. »
The LaMattina comments add fuel to a debate on the research of industry spending.
Many investors want firms pharmaceutical to be more effective with their research funds and ensure more return on their investments, after companies have struggled to develop new drugs. But some officials say such a posture risk sacrificing discoveries and the industry of the future.
Shares of Pfizer rose when he announced reductions in the research, which helped support its benefit of 2012, forecast, with a $ 5 billion Stock Buyback. LaMattina noted that shortly after Merck (MRK.)(N) actions fall when its CEO, said that the company would refuse to take an axe to its research budget.
"In the short term, I guess it's OK in terms of delivery for shareholders," LaMattina said. "But, four, five, ten years, I don't know who is going to be very good position to be in."
LaMattina contrast Pfizer with Eli Lilly (LLY).(N) and its CEO John Lechleiter, who promised last week continued to research and questioning of the cuts expenses by his rivals.
"It was nice to see John Lechleiter come out and say what that at least I and others have to be thinking," said LaMattina, who, as the head of Lilly, is a chemist in training. "And that is: what is happening here?". "R & D is our engine and we have to essentially better support we can."
GOOD MONEY AFTER BAD?
Despite of research budgets hefty, as Pfizer and Lilly have struggled to develop new products fairly successful that their best-selling products lose patent protection, some companies to cut spending.
The global pharmaceutical industry cut research spending for the first time in 2010, after decades of incessant increase, according to Thomson Reuters data released last week.
In an interview with Reuters in March, current leader of the search for Pfizer, Mikael Dolsten, said that the drugmaker is still maintained a "big R & D budget … and which will enable us to foster innovation in a number of areas."
"I am not convinced that more is necessarily better," Dolsten said. "If you take all the perspective of science, business and finance, where you want to provide a good return on investment to shareholders and future investors and important products to patients, and we have really tried to have a comprehensive approach."
LaMattina worked for Pfizer for 30 years, starting as a chemist in the laboratory. He retired in 2007, shortly after previous CEO of Pfizer, Jeffrey Kindler, took charge. Kindler resigned suddenly in December and was replaced by veteran Ian Read company, which has announced that research reduced in February.
In recent years, said LaMattina, development costs have increased due to the requirements for the studies of two regulatory agencies who want more data on the effectiveness and the safety and health payers seeking evidence that they must pay for these new products.
When he was at Pfizer, only approximately 15 per cent of the budget research went to the work of preclinical to discover new drugs.
"Much of the increase in R & D budgets in the past decade have made more development and issues discovered, not necessarily" said LaMattina.
The wave of mergers in the last decade has also disrupted the efforts of pharmaceutical research, said LaMattina. Even in mergers where cost reduction is not a determining factor, he says, offers may be problematic entities combined to determine which scientists will work on the research of various projects.
"I do not think people have recognized the impact that has on R & d and the productivity of R & D organizations", he said. "When you have almost all enterprises in the industry, doing so, that really shakes the situation a little."
(Statement by Lewis Krauskopf, mounting by Matthew Lewis)
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