Pfizer to Reorganize into Three Business Units
Pharma giant Pfizer will reorganize itself into three different business units that will include an innovative medicines business that includes a new hospital-focused segment for anti-infectives and sterile injectables.
The three new units are an established medicines business, a consumer healthcare business and the innovative medicines business. The changes are expected to become effective at the beginning of the 2019 fiscal year.
The innovative medicines business will be the largest of the new business units. It will include all the current innovative health business units, as well as the new hospital medicines unit. That unit will commercialize Pfizer’s portfolio of sterile injectable and anti-infective medicines. Pfizer said it will include its biosimilar portfolio in its oncology and inflammation and immunology business units.
John Young and Angela Hwang will lead the innovative medicines business. Young will be responsible for the internal medicine, oncology (including biosimilars), and rare disease business units. Hwang will be responsible for the inflammation and immunology (including biosimilars), vaccines, and hospital medicines business units.
In its announcement, Pfizer said the innovative medicines unit is poised for strong growth due to an aging population that is leading to increased demand for new innovative medicines. The company said it has a robust portfolio and new market launches that are expected to begin in 2020.
That 2020 date is crucial for the company as it will be looking for new drugs to replace revenue it will likely lose at the end of this year when it loses exclusivity in the United States for Lyrica, which brought in about $5 billion last year.
Ian Read, chairman and chief executive officer of Pfizer, said the reorganization represents “a natural evolution” of the businesses due to the continued strength of the company’s in-market products and late-stage pipeline.
“As we transition to a period post-2020 where we expect a higher and more sustained revenue growth profile we see this new structure better positioning each business to achieve its growth potential,” Read said in a statement.
The established medicines business will include the majority of the company’s off-patent solid oral dose legacy brands, including Lyrica, Lipitor, Norvasc and Viagra, as well as some generic medicines, the company said. The business unit will have a global focus and will have “distinct and fully-dedicated manufacturing, marketing, regulatory” functions in order to operate with speed and flexibility. Pfizer said this will enhance its autonomy and position it to operate as a true stand-alone business within Pfizer. The established medicines business will be led by Michael Goettler.
Although the company will be negatively impacted by the loss of exclusivity for Lyrica, Pfizer said the established medicines business has the potential to generate “sustainable modest revenue growth.” That will largely be due to the rise of a middle class in emerging markets, such as Asia, which will provide access opportunities and revenue growth for established branded and generic medicines.
The consumer healthcare business will include all of Pfizer’s over-the-counter medicines. It will continue to operate relatively autonomously with dedicated manufacturing and regulatory capabilities. Pfizer said it continues to evaluate strategic alternatives for its consumer healthcare business.
These changes in Pfizer’s organizational structure are not expected to impact current capital allocation priorities or full-year 2018 financial guidance.