Pfizer's new R&D site structure will establish East and West Coast innovation corridors in the U.S. a large, centralized Europe-based R&D hub in Sandwich, U.K., and a network of nine specialized laboratories around the world.

In doing so, the drug maker can streamline and simplify its R&D structure and also tap into academic biotech communities in different regions, R&D heads Martin Mackay and Mikael Dolsten said in a joint interview Nov. 10.

"It's a nice combination between streamlining on major, large sites and allowing small networks or specialized units," said Dolsten who previously was president of Wyeth Research and now heads Pfizer's Biotherapeutics Research group, which concentrates on large molecules and vaccines. Mackay, who previously ran Pfizer's Global R&D, now leads its Pharma Therapeutics group, which focuses on small molecule drug development (Also see "Pfizer’s Two New R&D Heads: The Fit Is "Extraordinary”" - Pink Sheet, 9 April, 2009.).

Pfizer has moved quickly to set up the new organization in order to minimize disruptions from its Wyeth acquisition, which closed in October. Just three months after announcing its January 2009 deal, for example, Pfizer named key business and R&D leaders.

On Nov. 9, Pfizer announced that, as part of the integration, it would consolidate R&D sites, closing half a dozen centers and significantly reducing the size of others (Also see "Pfizer Selects Sites for its Post-Merger Global R&D Network" - Pink Sheet, 9 November, 2009.). It also announced plans to cut R&D staff by as much as 15 percent, part of a corporate-wide reduction in headcount. Pfizer CEO Jeff Kindler has told investors the company would provide an update on its R&D budget in January.

In planning the integration, R&D leaders had a key goal learned from past mergers: move rapidly to maintain productivity, despite the post-merger disruptions and budget cuts. "At the same time as we are making these changes, we won't take a hit in productivity," Mackay said, adding, "Having been involved in this a few times now, this is by far and away the fastest we have moved."

MacKay was at Pfizer's R&D site in La Jolla, CA, on Nov. 10 to speak to employees there. The La Jolla location will be the center of the company's oncology R&D programs. "The message I'm going to tell them is that we've laid this out, now continue with our program, bring in new programs, and hit this thing as hard as you can," he said.

Most of the major geographic shuffling will take place in the first and second quarter of 2010, said Mackay, although the process will be ongoing beyond that timeframe. Some experimental programs will continue at certain locations through 2011 before being moved, the execs said, although they were not specific.

"You seldom get the chance to pool together two really good R&D organizations and fit them toward the strategy you want to follow," he said. "This framework we built fits very much with the strategy we outlined earlier this year." (Also see "Pfizer’s New Org Chart Brings Eight Wyeth Execs Topside" - Pink Sheet, 13 April, 2009.)

In addition, Pfizer's top therapeutic priorities, mapped out roughly a year ago before the Wyeth deal was announced, remain in place. The five key areas - oncology, inflammation, pain, diabetes and neurosciences - have been enhanced by Wyeth's portfolio, particularly in diabetes and cancer.

The priorities now include a sixth area: vaccines, which Wyeth also brought to the table, Dolsten said. Pfizer viewed vaccines opportunistically, but by adding Wyeth, is now among the top four companies in both vaccine R&D and revenues, he observed.

The next step in the integration process is portfolio selection. Dolsten, Mackay and their teams are evaluating the R&D portfolio and plan to decide which programs to fund or jettison in the next few weeks.

Execs Are Developing Three-Year R&D Strategic Operating Plan

The criteria include unmet medical needs, and discovery and "clinical doability," as well as commercial potential, confidence in rationale, and the quality of the molecule, the two execs said. "There is some overlap in Wyeth and Pfizer programs, so we have the luxury of choice," said Mackay. Shortly after they finalize the R&D portfolio, they plan to unveil a three-year strategic operating plan for R&D, which they maintain will enhance the portfolio growth.

Going forward, the company is increasingly emphasizing the importance of evaluating experimental compounds based on their differentiation from existing therapies and on their commercial potential in light of that differentiation.

This assessment is starting earlier in the R&D process, even before the pre-clinical phase, as part of an effort to encourage "scientists to think more broadly about a drug," said Dolsten.

"Many companies have traditionally had a culture of more science and lab early on and more emphasis on transition to the clinic later, but with this model we are looking more holistically at what it takes to get a product on the market at the pre-clinical stage and even earlier," he said. "We need to be satisfied that a drug will be fully available for patients once it is on the market and therefore it has to satisfy multiple stakeholders."

A Two-Pronged Approach To Oncology

Pfizer's approach to oncology R&D broadly reflects how it plans to attack big diseases going forward. It also fits with the company's aim to "combine the power of scale with the spirit of small," as Kindler put it recently.

The La Jolla site, which is already an amalgamation of Pfizer's previous acquisitions of biotech, is now designated the company's oncology center. But a former Wyeth site in Pearl River, NY, which will be headquarters for the vaccine group, also has a mass of scientists focused on cutting-edge biotechnologies.

The new group in Pearl River, called the "Center of Integrity, Biology, and Biotherapeutics," consists of 100 to 150 scientists, who will be studying "the molecular pathways of complex diseases," said Dolsten, noting that its initial focus is also oncology.

La Jolla, with slightly more scientists, is taking responsibility for other areas of cancer, including more traditional chemical and small molecule approaches, so the Pearl River team can drill deep without stretching too thin, explained.

The New York group, for example, is working with human patient samples, which have been kept in a laboratory environment that enables them to simulate human tumors better than standard animal mouse models. It is also studying the rapidly evolving fields of tumor stem cells and vasculature in an effort to "hit oncology hard," said Dolsten.

Scientists there will work with novel types of antibodies, RNA constructs, and other new technologies to design oncology drugs, even as their counterparts in La Jolla will continue their work based on a broader mandate: to build a strategic portfolio of cancer drugs based on a disease management approach for patients to cover all important pathways of a disease, Dolsten said.

Pearl River's biotech unit will be headed by Robert Abrams, formerly a top R&D executive at Wyeth, while the La Jolla efforts will be headed by Neil Gibson, who had led oncology research at the pre-merger Pfizer.

Pfizer is taking this two-pronged approach - in which a biotech unit focuses on applying cutting edge technologies to early stage research - in some other parts of its R&D organization, but not across the board, Mackay said.

Under the new R&D geographical structure announced Nov. 9, Pfizer will have four key sites in addition to La Jolla. Groton, Ct., where Pfizer has a large R&D staff, will remain a center of cardiovascular and metabolic disorders, with a strong emphasis on diabetes, neuroscience (Alzheimer's disease and schizophrenia) and anti-bacterials, as well as supportive activities like drug safety studies.

In Cambridge, Mass., where Pfizer and Wyeth each had R&D facilities, will serve as a center of R&D in immunology and inflammation, as well as tissue repair and biocorrection (enzyme and protein replacement). About 1,000 scientists will work in three sites there - Cambridge North, Cambridge South and Andover.

The executives declined to discuss in great detail plans for Sandwich, where Pfizer did much of its pain R&D.

- Wendy Diller (w.diller@elsevier.com)

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