Pfizer model challenged

Source: Sinopharm 2015-12-01 Bernard munos, a famous pharmaceutical analyst, questions Pfizer's business model of relying on acquisitions to maintain growth in a Forbes column today Although repeated acquisitions have greatly increased sales, the increase in net profit has been limited In 2000, Pfizer's market value was 120 billion yuan, and now it is 200 billion yuan, which is similar to the price growth rate of McDonald's hamburger Although shareholders received a dividend of $95 billion, Pfizer shares are now lower than in 1999 (of course, there was a bubble in biopharmaceutical) He believes that the decline of patients using innovative drugs is the main pressure for the growth of the whole industry, which is the same for all pharmaceutical companies The key to survival is to increase the profit per unit patient, but there is limited space for price increase He said Pfizer has talent, drive and resources, and does not need to transfer its headquarters to avoid taxes (overseas cash can be used to acquire overseas technology) Bernard munos, the former head of marketing department of Lilly, has always been fond of R & D he once wrote the famous article "lessons from 60 years of pharmaceutical innovation" His article today is titled "Pfizer does not need a merger, it needs a reballion", which means that acquisition is an unsustainable development model, "reballion" means that Pfizer needs to abandon its original R & D model The article was apparently triggered by Pfizer's acquisition of Elgin He said Pfizer could either keep its internal R & D growing by slimming down or completely change its R & D model, but the acquisition of Elgin would not help either It is also pointed out that although Ian read and Brent Saunders are rare talents, they have no R & D experience, so Pfizer needs another leader Pfizer has spent at least $260 billion in the past 15 years to acquire more than 20 pharmaceutical companies, large and small, each of which is said to strengthen the product line and enhance innovation, including the acquisition of Elgin Although the acquisition has increased the number and investment of R & D, Pfizer has invested $80 billion in R & D in the past 10 years, but only 10 drugs have been listed, so the R & D efficiency has not improved Of course, I don't agree with the measurement of R & D efficiency by the number of new drugs One Lipitor drug is about 10 very good new products It's not important to find several drugs What's important is that Pfizer is still profitable these years Although the stock performance is poor, it is basically in the same camp with other pharmaceutical companies So Pfizer's strategy in the past is basically effective What we really need to question is whether this model will maintain Pfizer's growth in the current and future environment Pfizer's R & D level is no lower than that of any other pharmaceutical factory Although the five rules and three pillars are not golden rules, they play a positive role in defining the dangerous areas of R & D projects Pfizer is also the first large pharmaceutical company to participate in virtual clinical trials Of course, Pfizer has made a number of major mistakes in its decision-making, but I don't think that shows their decision-making level, just their bad luck Torcetrapib's failure is considered a stupid mistake, but mosadon is still insisting on clinical trials of CETP inhibitors, and Lilly and Roche have also voted heavily for it The inhaled insulin Exubera was another big failure, but it was a bold innovation It was hard to say that it was worse than PD-1 in terms of decision-making level Of course, the result was quite different Acquisition cannot be a sustainable development model One is that the large-scale acquisition itself has a great interference on the whole enterprise In addition, although the acquisition can immediately increase sales, the cost is also very high, and usually needs to pay 25-30% premium Can a CEO with R & D background change Pfizer's growth model? It's hard to say Lilly's CEO is a scientist, but his R & D efficiency over the years is not as good as Pfizer's When sales decline, taking acquisition as the last choice rather than the first choice may break the R & D decision, but many large pharmaceutical companies such as Wyeth and Schering that did not adopt acquisition disappeared before Pfizer Perhaps the acquisition is just an inevitable result of overcapacity or poor quality projects in the whole industry Compared with the ideal state that all the big pharmaceutical companies are the MSD of Vagelos, of course, the large-scale acquisition of Pfizer every few years is not ideal, but it is a good choice to take turns with the big pharmaceutical companies to acquire Pfizer, an experienced acquisition master, to do this thing.