Pfizer Streamlines R&D Activities; Plans Job Cuts

DOW JONES NEWSWIRES

Pfizer Inc. (PFE) said it will streamline its global research and development activities, reducing global square footage by 35%, as part of its integration of Wyeth.

The world's biggest drug maker said research and development activities will be conducted at five main sites and nine specialized units around the world as compared with 20 sites upon closing its merger with Wyeth last month.

On top of reducing costs, Pfizer said the changes would result in job cuts. A spokeswoman wasn't immediately available to comment further.

The five main research sites that will serve as central hubs for research activities are Cambridge, Mass.; Groton, Conn.; Pearl River, N.Y.; La Jolla, Calif.; and Sandwich in the United Kingdom.

The company will move a number of functions from Collegeville, Pa.; Pearl River, N.Y.; and St. Louis to other locations and will discontinue research and development operations in Princeton, N.J.; Chazy, Rouses Point and Plattsburgh, N.Y.; Sanford and Research Triangle Park, N.C.; and Gosport, Slough/Taplow, in the U.K. In addition, Pfizer will consolidate research and development functions from its New London, Conn., site to its nearby research facility in Groton.

"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," said Martin Mackay, president, PharmaTherapeutics Research & Development.

The Wyeth deal was intended to transform Pfizer from a company heavily reliant on primary-care prescription drugs to a more diversified company that also sells vaccines, biotechnology-style drugs and consumer-healthcare products.

Pfizer and Wyeth have been separately reducing their head count throughout the year. Pfizer has said it plans to reduce the combined entity's work force by about 15%, or nearly 20,000 jobs. Some Wyeth jobs were eliminated within days after the deal's closing.

Pfizer began restructuring its worldwide marketing and research and development operations in 2005, with about 30,900 employees expected to be let go when the process is complete. As of the end of the third quarter, about 26, 300 of those employees have been terminated, mainly in manufacturing and sales and research.

Drug makers have been cutting costs in recent years in response to challenges including generic competition and drug-research setbacks. Last week, Merck & Co. (MRK) said it still plans to reduce its post-Schering-Plough acquisition work force by 15%, or nearly 16,000 employees. Also, Johnson & Johnson (JNJ) announced last week it would cut up to 8,200 workers.

Pfizer's shares were up 2.5% to $17.39 in recent trading, amid a broad market rally.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

(Peter Loftus contributed to this report.)

  (END) Dow Jones Newswires
  11-09-091242ET
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