1. anon on September 30, 2008 10:11 AM writes...

Good luck to all who are laid off. I found out that I was spared this morning, but the British portion of our CEDD was really hit hard.

2. pharmagossip on September 30, 2008 10:12 AM writes...

Let's watch all those CV key opinion leaders now. Pfizer will be as popular as a fart in an elevator!

3. Hap on September 30, 2008 10:14 AM writes...

I have to wonder where the people running Pfizer, GSK, etc., think drugs come from. If more successful drugs had come from overseas, the outsourcing push would make more sense. Some come from smaller companies, but getting rid of in-house research means that out-of-company drugs are likely to cost more for them to purchase. (In the long term, it might also limit their labor pool, but probably not for a while.) The cuts don't seem to be optimizations of resources but simple cost-cutting, which won't solve their empty pipelines. So why?

4. Canuck Chemist on September 30, 2008 10:25 AM writes...

Hap, you've succinctly summed up the short-sightedness of current industry leaders in a single paragraph...good job. As far as I'm concerned, outsourcing key projects (rather than the simple stuff) will likely only hasten the failure of some of the big pharma monsters. They might as well call themselves marketing companies and sell off the research units completely.

5. Sili on September 30, 2008 10:31 AM writes...

I wonder if you were in some sence 'lucky' to be fired when you did before this oversaturation of the market.

Hope your current job is safe.

6. emjeff on September 30, 2008 10:34 AM writes...

Canuck, you've hit the nail on the head. Pharma is bailing out of the discovery business as fast as they can. I think that they believe that they can buy what they need from smaller companies. Of course, this is like a baseball team who just buys free agents. It might work in the short run, but it's expensive, and you may buy yourself quite a number of non-performers. I heard a futurist at ACCP in Philadelphia who predicted that the big pharma companies would end up just being marketing and distribution companies, since that's all they do well. I think that this may well turn out to be true.

7. emjeff on September 30, 2008 10:38 AM writes...

Also (and this is a slight hijack), can we all agree that in the wake of the latest food scare in the People's Repubic of China, that the bloom is off the Chinese rose? Anyone who thinks they're going to get quality discovery, chemicals, etc., ouit of there is dreaming...

8. c on September 30, 2008 10:45 AM writes...

At the risk of sounding callous, why do so many scientistis lack entrepreneurial sensibility. Buying drugs from small companies, which may even "cost more" (ref. 3), should be good news to people skilled in early drug development. Particularly those whose (scientific) skill set and value is built on 'discovery' and the implicit risk-taking therein.

Sure capital will be hard to come by at the moment, so start out with a low burn and get affiliated to your old professor, get access to all those academic programs your boss didn't seem to recognize the importance of. Etc. I know it's more difficult than this, but probably not as difficult as riding out the wave until big pharma begs you to all come back...

9. Land of the spree on September 30, 2008 11:04 AM writes...

Just like Wall Street the drug companies seem to have grown too big for their shoes and overreached themselves. If nothing less that billion dollar drugs is going to satisfy them, then they will have to be ready to be doomed. Banking on just one or two drugs (like Pfizer did for Lipitor) for a quarter of your revenues and expecting that an equivalent drug will materialize to take their place when they go off patents is nothing short of disastrous and moronic. I hope that such experiences teach companies not to aim ludicrously high and to always invest in diverse portfolios and not monolithic expectations and philosophies.

10. DrSnowboard on September 30, 2008 11:32 AM writes...

for emjeff:
So how much time and money invested do you think it takes to bring one compound/platform technology to a proof of concept stage sufficient for a small company to credibly expect to be bought out / bankrolled by a risk averse, pipeline hungry big pharma behemoth? How long for 2 compounds / successful PoC's?
Any offers / examples?

11. Petros on September 30, 2008 11:46 AM writes...

Certainly the grimmest I can remember, even after the fallout from mergers such as GW

But the blockbusters are falling over the Patent Cliff

BTWForbes has posted Martin Mackay's memo
http://www.forbes.com/business/2008/09/30/pfizer-drug-agenda-biz-bizhealth-cx_mh_0930pfizermemo.html

12. emjeff on September 30, 2008 11:56 AM writes...

Dr. Snowboard;

Based on my current employer's (GSK) recent purchase of Sirtris, I'd say all you need is a somewhat plausible idea. I find the data on sirtuins very unconvincing...

13. Hap on September 30, 2008 12:01 PM writes...

#6: A C+E News article on production outsourcing quoted the man running Hovione in which he thought that the drug companies would follow the model of the big car companies into design and marketing (and outsourcing parts, etc. to others). The companies performing by that model in the US are not faring well, however (the Big Three US carmakers) - it wasn't my impression (though I could be wrong) that other car companies did that. I don't know if the drug companies are trusted enough that someone better at selling can't displace them.

#7: I suspect lots of chemists are risk-averse - the schooling doesn't give much training for the business of drug development (or even the nuts and bolts) and takes enough time that opportunity costs are high. If you want to run a business, there are other fields where the costs of doing so (opportunity costs, development costs) are lower. I suspect some went into chemistry for job security, and those are the people who did not want to be running businesses. If the only jobs in pharmaceutical chemistry are starting your own business, there probably won't be too many drug chemists before long.

(I think c suggested entrepreneurship rather than emjeff).

14. milkshake on September 30, 2008 12:04 PM writes...

The curent big pharma job situation is best understood in the biblical terms: "I will wipe mankind, whom I have created, from the face of the earth — men and animals, and creatures that move along the ground, and birds of the air — for I am grieved that I have made them."

15. Hap on September 30, 2008 12:10 PM writes...

The other problem with the "free agent" model of drug development (buy what you need) is it assumes that you have control over an inexhaustible resource. Boston, NY, Chicago, and LA have large populations with lots of money, the MLB economic system allows them to spend as much as they have (mostly), and the league rules limit the ability of others to poach fans from their market. The drug companies have patented products (and some generic/over-the-counter products) to generate revenue for them, and people's trust in them to inhibit another sales organization from profiting from their model. The patent problems, however, mean that their future revenue streams will likely be lower, while the recent problems (and cost issues) have compromised people's trust in drug companies. Appealing to salesman(person?)ship over knowledge and competence in medicine and drug development seems to move large drug companies into positions from which they can be displaced easily.

16. Ex GSK on September 30, 2008 12:22 PM writes...

Up to 600 to go from pre-clin in GSK.

Some more same time next year if the track reocrd is to be maintanined.

17. Cellbio on September 30, 2008 1:08 PM writes...

To c:

I like your call for entrepreneurial spirit. many scientist do lack this, but they can join the new efforts and work within their discipline and contribute to value creation. There are a few problems I have seen working in the space since leaving big pharma a year ago. Most of the problems stem from the lack of available funding. Credit markets are...well you know. VCs are tight with money, and likely to fund reformulations with a short horizon on return rather than discovery. One large firm that I know, closed a new fund, and are thinking of putting a lot of the money to work in PIPES rather than start-ups. SBIRs are looking like one of the few sources of money for early ventures. The other problem is: too many MBAs leading efforts in VCs and small companies, and taking the attitude that, of course they are key to success, but a "scientist" is a commodity, and outsourcing is viable business strategy. The sense of who is key in driving value is upside down, imo, and leads to underfunding of innovation. It is one thing to have entr. spirit, but another to convince others to invest.

18. c on September 30, 2008 1:43 PM writes...

Cellbio: Not making any promises but feel free to send me an email directly, I work in VC: cjfrancis@gmail.com, I'll return the email from my work account.

19. Cellbio on September 30, 2008 1:48 PM writes...

C, thanks a lot. I'll email you. I look forward to continuing the discussion.

And Derek, thanks for this blog!

20. MTK on September 30, 2008 1:49 PM writes...

c(comment #8) has it right in my book.

Instead of depending on the largesse of others, we need to take control of our careers. Instead of bemoaning our situations, we need to look at it as an opportunity. Instead of yearning for the good old days, we need to accept the new realities and figure out ways to take advantage of those realities.

All of the above I mean in a collective sense as chemists, not necessarily in an individual sense. And I don't think "entrepreneurial sensibilities" means we all try to be entrepreneurs, but rather we take on some of the attributes; looking for opportunities, taking risks, and accepting the chance of failure. In other words, the very things we complain that management doesn't do, we really don't do very well, either. Particularly outside the lab.