Investors should be excited. That's right: Excited. Overjoyed. Downright thrilled about the move.
I haven't been the biggest Pfizer supporter since the acquisition, but the culling of the pipeline is a good sign that management can follow through with its goal of not repeating the screw ups integrating Pharmacia and Warner-Lambert. We're only three months into the integration and they've already cut a lot of the fat. Merck's
There were bound to be some overlaps between Pfizer's and Wyeth's compounds, and the culling of the pipeline should leave only the best drugs to treat the diseases they're interested in. Some programs were also cut because the data wasn't strong, and it sounds like the company may cut more programs as data comes in. No reason to spend big bucks on clinical trials for drugs that don't seem like they're working.
Pfizer now has 133 drugs in human trials, 33% more than it had before buying Wyeth. Most importantly, the addition of Wyeth helped boost Pfizer's biologics and vaccines count; the company now has six vaccines and 27 biologics in development, up from just one vaccine and 16 biologic drugs before the integration. Unlike small-molecules drugs, biologics and vaccines tend to have a longer marketing life after their patents expire since they're harder to copy.
It wasn't a perfect announcement for Pfizer though. The company said it's dropping its application to market Lyrica as an add-on treatment for anxiety. That shouldn't come as much of a surprise after two failed attempts at getting the fibromyalgia-nerve pain-seizure drug approved for anxiety, even if it's something its biggest rival, Eli Lilly's
With such a large revenue base to work from, Pfizer needs some major hits from its pipeline -- data due this year for its Alzheimer's disease drugs partnered with Medivation
But Pfizer also needs to be selective on what it chooses to develop. The bloated, unproductive Pfizer of the past just isn't going to cut it. Yesterday's announcement was a move in the right direction.