Pfizer, the world's biggest pharmaceutical company, announced a major reorganization aimed at cutting billions in costs and boosting profitability. The program calls for Pfizer to "sustain long-term growth through investments in innovative current and new medicines from its strong R & D pipeline, while enhancing effectiveness and reducing operating costs," the firm said in a statement.
The maker of blockbuster drugs like Lipitor and Viagra said the effort would hurt profits in the short term, requiring spending of between $5 -6 billion by 2008.
Hank McKinnell, Pfizer's chairman and chief executive officer, said that although Pfizer has a strong position in the industry, 2005 will be a transition year" because of the expiration of key drug patents and a murky outlook on the class of painkillers including Celebrex. The company's net profit for 2005 is likely to fall to $8.6 billion from $11.4 billion last year.
Pfizer plans to invest some eight billion dollars in research in 2005, compared with 7.7 billion in 2004. The overall cost-cutting plan, the outline of which was announced earlier this year, is aimed at saving $4 billion in annualized cost savings by 2008, or about 12% of Pfizer's current cost base.
Copyright Agence France-Presse, 2005