Melding $11.3 billion worth of research and development budgets from two different companies won't be easy for Pfizer
The biggest change will come from a split of the biologics and small-molecule research groups. As long as that doesn't create an unreasonable level of duplication in the support departments, the split seems intelligent to me. Protein-based biologics like those made by Amgen
But what does the company do about research areas like oncology, which span both research groups? While their molecules may look nothing alike, researchers developing an antibody-based drug for cancer should surely be discussing their findings with researchers developing a small-molecule drug. In the end, though, this change in structure might not mean a whole heck of a lot, as long as the research groups are still holding the same meetings they always were.
The big problem with this integration -- and, although their impending union is smaller, let's throw Merck
Pfizer claims to have learned its lessons after the acquisition of Pharmacia and Warner-Lambert, but I'd rather see proof than simply take management's word for it. Pfizer will be considerably larger after its acquisition; whether it can turn that size into increased productivity remains to be seen.
Merged Foolishness
- These pharma companies still have cash to spend.
- So do these non-pharmas.
- It was all generated by wonderful cash flow.
