"Agouron CEO Johnson Quits"
Union-Tribune
February 11, 2000
<<SAN DIEGO -- Agouron Pharmaceuticals said yesterday that longtime chief executive Peter Johnson has left the company and is planning to retire after completing a special project for Warner-Lambert.
The San Diego biotech, which Warner-Lambert bought last year for $2.1 billion, named vice presidents Barry D. Quart and R. Kent Snyder as presidents, replacing Johnson.
The company said Quart will head research and development while Snyder will be in charge of commercial operations.
Johnson, 54, was a founder of Agouron, which was the first San Diego biotech to get a drug approved by the Food and Drug Administration and became one of the biotech industry's major success stories.
The company's Viracept became the best selling AIDS drug on the market.
An Agouron spokeswoman said Johnson had stepped down as chief executive effective Jan. 1, but she said no date had been set for his retirement from Warner-Lambert.
As one of the company's largest shareholders, Johnson held shares worth more than $40 million at the time of the Warner-Lambert takeover. He had been chief executive since 1984>>
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I'm sure Johnson quit because of Pfizer. Pretty sad end for Warner-Lambert, Agouron, Parke-Davis, all so that Pfizer can keep Lipitor. It will be interesting to see what happens to the rest of Warner-Lambert's products and pipeline. I am surprised and disappointed that no one seems to care that Warner-Lambert will cease to exist. Too bad Agouron didn't hold out another year, when they could have been part of this biotech boom and remained independent. Too bad Warner-Lambert decided to merge with AHP because that made pfe act. .....
Too bad the P&G talks ended.
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From the Financial Times, 2/8/2000
ft.com WARNER/PFIZER:
"Warner forced to swallow sharp medicine"
<Pfizer was on Monday trying to make reassuring noises about its planned "integration" with Warner-Lambert, saying its policy would be that of "best in class" not "scorched earth".
But there was little disguising who would be running the show after the industry's most acrimonious ever takeover battle.>
"Clearly, this is a takeover financially, not a merger of equals," said Henry McKinnell, who as William Steere's anointed successor at Pfizer will eventually lead the combined company."
<Shareholders of Pfizer, which is offering 2.75 of its shares for each Warner-Lambert share, will end up with 61 per cent of the combined group. Pfizer will have nine members of an enlarged 12-member corporate management committee.>*
<Dr McKinnell said Pfizer would find annual cost savings of $1.6bn (œ1.1bn), against $1.2bn when the deal was first proposed last November. That suggests Warner-Lambert, which will lose its name as well as its corporate headquarters, is not going to be treated with kid gloves.>
"It has become clear to us that the opportunities for short-term cost-cutting are higher than we first thought," said Dr McKinnell. Savings would be $200m in the first year, rising to $1bn by year-end 2001 and $1.6bn by the end of 2002. Most savings would be from administrative overlaps in the US and the eradication of duplication in the 60 countries where both companies have full-scale operations.
Analysts were on Monday comparing the deal with Glaxo's 1996 takeover of Wellcome, its smaller UK rival. If Pfizer was anything as aggressive, they said, cost savings could rise to nearer $2bn.
However, Pfizer said it would not slash research and development spending, which at $4.7bn would easily outgun all competitors. Merck, Pfizer's great rival, is increasing its R&D budget by 15 per cent to $2.4bn, and even Glaxo SmithKline, the proposed UK combine, would have a research budget of below $4bn.
Dr McKinnell said that, with the human genome being fully decoded this year, the combined group's 12,000 scientists had a once-and-for-all opportunity to stake a claim to new disease targets. It would have 138 compounds in development.
Yet integrating the R&D organisations will be extremely delicate. Many Warner-Lambert scientists may be tempted to follow their leader, Anthony Wild. Although Dr Wild is co-chairing the transition committee with Dr McKinnell, he will not stay after the merger is completed.
Only days before Pfizer launched its aggressive bid in November, John Niblack, Pfizer's head of R&D, spoke of the difficulty of integrating scientists from different companies.
Not having gone through the "distracting upheaval" of a merger had been one of the secrets of Pfizer's success, he said.
Mr Steere also made assurances that Pfizer would not impose its culture. Warner, for example, had more experience with over-the-counter medicines. Pfizer's operations would thus be folded into Warner's, which are based in Morris Plains, New Jersey.
Whether Pfizer's cultural flexibility will extend to embracing Warner's non-pharmaceutical businesses is more doubtful. Warner brings with it brands such as Schick razors and Listerene mouthwash that do not fit the Pfizer model.
Mr Steere made his reputation in the mid-1990s by focusing on prescription pharmaceuticals just as rivals were diversifying. Pfizer admitted it did not know much about Warner's consumer and confectionery businesses and said it would review its commitment to them in due course.
Of more immediate excitement, was putting the two fastest-growing drugs companies together, said Mr Steere. This would create a company with annual net income growth of 20-25 per cent, excluding one-time restructuring charges. At that rate, and barring other mergers, it would quickly outstrip Glaxo SmithKline as the biggest drugs group.In addition to Lipitor, the anti-cholesterol medicine projected to become the world's biggest selling drug, the new company's range would include six products valued at a billion dollars each. "It will," said Mr Steere, "redefine the industry.">
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From an old article in Fortune: magazine, 5/11/1998: "Why Pfizer is So Hot":
"William Steere, CEO of Pfizer, ....beefed up Pfizer's sales force--at 14,500, it's bigger than Merck's, according to research by Cowen & Co. in Boston. ........Steere argues that the benefits of truly novel medicines, the stuff of blockbusters, often don't register with busy doctors until they get the story from well-versed sales reps. Steere should know: Steere, a former detail man who joined Pfizer in 1959 and rose through its marketing ranks helped spearhead Feldene's rise to blockbuster status.
Stelios Papadopoulos, head of Paine Webber's health-care investment-banking group said (in 1998): "Pfizer is adding to (pipeline) aggressively, via partnerships. "What really distinguishes the company, is that it's become the co-marketer of choice"--the partner preferred by the industry's smaller players hoping to realize the potential of their own blockbusters seeking to promote other companies' drugs used to be a sign of a pipeline weakness, adds J.P. Morgan analyst Carl Seiden; "Pfizer is doing it out of strength as part of its growth strategy." strength???
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Steere's background explains Pfizer's focus on co-marketing other companies drugs. Incidentally, Steere is on the Board of Directors of Dow Jones. DJ owns the Wall Street Journal, Barrons etc.
In '98 analysts predicted Pfizer's share of revenues from the three co-marketed drugs; Lipitor, Celebrex, and Aricept would exceed $2 billion a year by 2001. That figure is probably a lot higher now.
Several 'promising' drugs in Pfizer's research pipeline never made it to market.
Tikosyn, for treatment of atrial fibrillation, was never marketed.
Zeldox for psychotic disorders did not receive FDA approval.
Trovan, a once promising blockbuster, approved for 14 different indications had it's use sharply curtailed by the FDA and never even received approval in Europe.
Tenidap, an anti-arthritic agent, was discontinued several years ago, before receiving FDA approval.
Droloxifene: In January 1998 Pfizer decided not to seek FDA approval for droloxifene against metastatic breast cancer. They planned instead to try using it for osteoporosis.
Message 10183019 Re: Norvasc < Keeney cautioned that Pfizer's best-selling drug, Norvasc for hypertension and angina, could face strong competition by late 2000 from a promising anti-hypertension drug being developed by Bristol-Myers Squibb Co. BMY plans to seek U.S.approval to market its anti-hypertension medicine, Omapatrilat, by December, and considers it the most promising drug in their pipeline.>
Some other Pfizer drugs are Zolofot, Zyrtec, and of course Viagra.
Pfizer's strength appears to be its salesforce: those well-versed, intelligent sales reps who 'educate' the doctors and get them to prescribe the drugs. Imo, it is unlikely Pfizer will find companies that are so willing to have Pfizer co-market their drugs anymore. But with Lipitor, and all the drugs from WLA/agph/Parke Davis clinical and research pipeline including hopefully those collaborations with various biotechs, they shouldn't need anything for awhile..... |
