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Albert Bourla helped build Pfizer Inc.'s growing drug pipeline. Now, he will lead the largest US pharmaceutical company, as he relies on this channel for future sales.
The New York-based drug maker said on Monday that Bourla veteran will succeed Ian Read as chief executive next year, a change that ensures continuity but also symbolizes Pfizer's recent move to upgrade its business. laboratory at the center of a larger merger or acquisition.
"It's the strongest pipeline they've had in a long time. Its goal is innovation and new products, "said Ashtyn Evans, an analyst at Edward D. Jones & Co.. "They have generally worked well in the construction of the pipeline, and it is he who is in charge."
Bourla, 56, the company's chief operating officer, helped build a new product, the flagship cancer drug Ibrance, which now sells $ 3.1 billion a year. Pfizer expects regulatory approval of at least 30 drugs by 2022, half of which could reach $ 1 billion in sales. New scientific data have led doctors to predict that a drug under development, tafamidis, could become the treatment of choice for a fatal heart problem.
The company works in lucrative, even competitive, fields such as rare diseases, oncology and personalized medicine. In July, Pfizer announced that it would spend more on research and development. It also builds a gene therapy drug development facility and has numerous partnerships and investments in breakthrough anticancer drugs known as CAR-T-Cell Therapy.
The declaration of not seeking a major takeover, repeated several times this year, is a pivotal part of Pfizer's traditional acquisition strategy. The drug manufacturer has become the largest drug manufacturer in the United States in terms of turnover, including engulfing companies, which has allowed it to expand its commercial reach and fill its laboratories with promising drugs. In 2016 alone, it acquired at least eight companies or product lines, including Medivation Inc., for $ 14 billion.
Investors, perhaps encouraged by the pipeline of drug manufacturers, seem insensitive to the abandonment of mergers and acquisitions. Pfizer shares rose 22% in 2018, making it one of the best-performing countries in the Dow Jones Industrial Average.
Pfizer's biggest deal in the 65-year-old Read case was unsuccessful, including a proposed $ 160 billion merger with Allergan PLC and a $ 120 billion takeover bid by Britain's drug maker AstraZeneca PLC. He also decided not to split into two companies.
Pfizer's aversion to big deals is likely to persist because of the leadership transition, but also because Bourla has not suggested otherwise, said Jeff Jonas, portfolio manager at Gabelli & Co., a Pfizer shareholder.
"Ian has obviously made some of these megadars, and I do not know if Albert is a big supporter of that," said Jonas.
Pfizer said that Bourla was not available to comment.
The success of its pipeline would offset other setbacks, including disappointing sales of biosimilars, which are cheaper versions of biologics. Pfizer is trying to raise the bar for this segment, which has grown thanks to its largest contract in 10 years, the acquisition of Hospira Inc. for $ 17 billion in 2015.
Some of Pfizer's best-performing drugs have been sourced from acquisitions, including Prevnar, the flagship flagship vaccine franchise, under the $ 68-billion deal with Wyeth in 2009. Its current pipeline is no different. Tafamidis arrived following the acquisition of FoldRx, a closely related company, in 2010. Rivipansel, which is currently being tested on sickle cell patients, is licensed by GlycoMimetics Inc.
There were some cracks in the pipeline, though. In August, Pfizer stated that domagrozumab, which was being tested in patients with a life-threatening muscle disease, had failed essential tests in mid-phase. The drug maker said it would check whether domagrozumab could affect other diseases.
Still, there are questions about the long-term growth of society. Evans, of Edward Jones, said it was difficult for a company with $ 52.5 billion in sales to "move the needles" just for sales.
Analysts such as John Boris of SunTrust Robinson Humphrey Inc. do not expect the drug maker, which has billions of dollars, to completely abandon its contracts. Boris, who believes that the shares are "owned", expects Pfizer to buy small businesses or specific products, including those dealing with infectious diseases. In fact, Read said in a recent call for results that gene therapy drugs are an area in which an agreement could be considered.
Despite Read's earlier comments, a new CEO could mean a new strategy.
"I've seen pharmaceutical companies say it, then turn around [and] Doing Business, "Brian Skorney, an analyst at Robert W. Baird & Co., said in an interview. "They feel like they're the only ones who can recognize something special."
– Bloomberg
To contact the reporter on this story: Jared S. Hopkins in New York at [email protected]. To contact the editors responsible for this story: Drew Armstrong at [email protected]
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