Pfizer CEO Sees No Immediate Need For Merger With Another Drug Maker
04/13/99
NEW YORK -(Dow Jones)- Pfizer Inc. remains focused on its fast-growing pharmaceutical business and sees no need to merge with another drug manufacturer, Pfizer's chief executive officer, William C. Steere, said Tuesday.
"This is not to say we wouldn't merge at some point in time," Steere said. That, however, would occur only "if our rate of growth stopped or if there were major gaps in our pipeline. Nobody's growing as fast as we are."
Pfizer (PFE), the seller of the blockbuster impotence drug Viagra , continues to form partnerships with outside companies to develop new drugs. "All good ideas don't necessarily reside with Pfizer," he said. He mentioned Pfizer's venture with Monsanto Co.'s (MTC) G.D. Searle unit to market the Celebrex arthritis medicine as one example.
Steere said that since he became CEO in 1991, Pfizer has divested 15 nonpharmaceutical businesses and trimmed 20,000 jobs - but the company has, at the same time, added about the same number of jobs, many of them in sales and marketing as well as scientific research. He said the challenge now is to "keep general and administrative costs from creeping up."
Crucial to Pfizer's success has been the company's ability to integrate marketing into the drug-development process. Because of this, Steere said, the company has managed to introduce products that have become huge sellers, like Viagra .
Besides being a big moneymaker for Pfizer, Steere said, Viagra has had another benefit: "It has brought men into doctors' offices who might not otherwise have come." As a result, many men seeking Viagra prescriptions have had other medical conditions diagnosed during these visits.
The challenge in the pharmaceutical industry, he said, is handling "risk." The rate of "attrition" - drugs that fail in development - is "high. The risk in this business is just extraordinary. We're trying to find ways to reduce the attrition."
Steere said Pfizer has agreed to join an unusual consortium of drug makers that is forming to produce a gene map of their own to compete against gene-hunting companies. Big drug makers are worried that small biotech companies, rushing on their own to decode the human genome, will patent their discoveries and monopolize crucial gene information - and then be able to either keep it private or charge drug companies huge fees for access to it.
"We want this stuff in the public domain. We don't want it patented. It's mainly a research tool that may or may not lead to therapeutics," Steere said.
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