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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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October 29, 2008

Cutbacks - But Not As Bad This Time

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Posted by Derek

So Wyeth is cutting back on its therapeutic areas as well. According to that Bloomberg story, they're going to focus on oncology, inflammation, neuroscience, vaccines, metabolic diseases and muscular-skeletal disorders. That's still a pretty wide swath of territory, but note what it leaves out: cardiovascular and infectious diseases, just to pick two big areas. And there are clearly some details to be worked out - for example, neuroscience clearly encompasses Alzheimer's, where the company has a big effort. But are they going to try dementia, too? Antidepressants? Pain? Multiple sclerosis? These are big fields.

At least this one isn't coming along with its own whopping package of R&D cuts. The company says that some of its research staff will lose their jobs, as their specialty areas disappear, but overall, they claim that they're not cutting staff, and that R&D spending will remain constant. I certainly hope that's true; the last thing we need is another big layoff around this industry. Anyone inside Wyeth care to comment?

What these rounds of research concentration might do, in the longer term, is open up a number of areas to smaller companies. There are a number of less-heavily-populated therapeutic fields now: does that create opportunities to be filled? Of course, the reasons some of these are being abandoned still obtain - lack of good targets, lower profit potential, and so on. But smaller outfits may well be able to colonize these environments, and I hope that they do.

Comments (14) + TrackBacks (0) | Category: Business and Markets


1. Mir on October 29, 2008 8:56 AM writes...

"that these rounds of research concentration might do, in the longer term, is open up a number of areas to smaller companies."

VC funding down about half since 2007. Most biotech stocks now being hammered, IPOs being withdrawn. My optimistic appraisal is that it will be 2 years before start-ups come back into vogue. Existing companies will be pressured by difficulties in raising funds due to credit crisis.

A generation of investors have seen their profits evaporate in the markets and hence this will diminish the appeal of ALL stocks in ALL areas. It may be that many pension funds will exit the stock market all together. It's that bad out there.

On the positive side, the reduction in fuel prices may push some VC away from clean tech to Biotech.
Although I wouldn't count on cheap gas after the election.

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2. Petros on October 29, 2008 9:41 AM writes...

And so it goes on.

Although Wyeth has never been strong in all areas.

CV is a big market but it's already heavily generic and the AT1 antagonists soon starting falling over the patent cliff.

As for AI, is any major outside of Japan still significantly active ?

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3. LNT on October 29, 2008 10:57 AM writes...

It appears that only ~60 people will loose thier jobs as part of this reorganization. (~30 each in women's health and CV) They are all are biologists so far. The net headcount will remain about the same as they beef up a couple other areas (oncology for one).

The more disconcerting thing (from an insider's point of view) is that more of the biology resourses are being shifted away from small molecules and towards biologics. This is probably going to continue to be a major theme in the industry until "biosimilars" or "biogenerics" are authorized by the FDA. Essentially, our biological products have an infinite patent lifetime!

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4. NA on October 29, 2008 11:47 AM writes...

Derek, you need a new picture. Love the blog, keep up the good work!

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5. emjeff on October 29, 2008 3:30 PM writes...

What strikes about this latest announcement is that all of the big pharma players are in lock-step here. Pfizer, GSK, Wyeth are all exiting cardivascular and ID. So much for innovation...

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6. Jay on October 29, 2008 4:19 PM writes...

In the past, Wyeth has been reluctant to have major layoffs. Even in the dark days of phen-fen, they didn't lay off many people, they just froze salaries and left positions open. They have a lot of turnover in the BS/MS positions, though - they bring in people at low salaries and figure they'll leave within a couple of years. So they don't have to lay off as many people.

Wyeth has been out of infectious diseases for a while, other than vaccines. They had a few projects that were hanging on, but they stopped new projects in ID 3 or 4 years ago. No money in it. Cardiovascular is a new development, though. The research in that area used to be at the Princeton site, and there have been rumors for years that Wyeth would close that location. No idea if they're going to finally do it, though.

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7. Diane Lowell on October 29, 2008 5:01 PM writes...

Doesn't it seem that the Pharma industry spends a lot of time and research, involving many personnel, on designer drugs that are pretty similar, especially in the realm of antidepressants or atypical antipsychotics, when some of the older drugs work just as well or better? Could CV drugs be inciting laziness in patients who should be watching their diet and exercising more? Maybe some cutbacks are in order. I am coming at this from both the former consumer and patient advocacy sides, BTW. I am not in the upper echelons of the R & D Illuminati.

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8. NJBiologist on October 29, 2008 6:50 PM writes...

@Derek--Wyeth's four neuroscience TAs are neurodegeneration, affective and anxiety disorders, schizophrenia and pain. But I haven't talked to anyone there in the last week to make sure this will stay true....

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9. Wyeth researcher on October 29, 2008 7:38 PM writes...

I have to say Wyeth is being pretty generous with their severance package. Most PhDs are getting 6 months minimum + health benifits throughout that time. But it kindof sucks when that 6 months is up...

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10. rhovero on October 30, 2008 1:41 AM writes...

Diane - the companies are trying to develop better drugs, possibly breakthrough drugs. Unfortunately, it can often take 10 yrs and $800 million to reach the point where you can actually run a good comparison trial. After spending all that effort and time, it'd be financially hard to just throw it away because it was only as good as what's already out there. Do that enough times, and you just go out of business.
Many "similar" drugs have one or two unique characteristics that make them especially good for certain patients, for use in combination with other drugs, etc. Physicians appreciate having those options available to them as patients are all different from one another. It would be hard to get to personalized medicine if we only had one drug for diabetes, one for Alzheimer's, etc.

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11. Anonymous on October 30, 2008 6:22 AM writes...

What major pharmas are now left in basic drug discovery research for cardiovascular disease? Schering? Novartis? Merck? Is that it?

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12. Kay on October 30, 2008 7:51 AM writes...

What does this say about Ruffolo's legacy?

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13. RA..MD on October 30, 2008 12:24 PM writes...

These companies need to make some new locations in Texas (prefer Austin) to create more jobs and so I could look into Pharma! Nice Pharma blog....hope mine looks this good one day.

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14. Todd on October 30, 2008 2:11 PM writes...

Mir: I feel your pain on the start-up front. As a recently laid-off employee of a start-up (who just interviewed at Wyeth no less), times are hard for start-ups, and only the established companies have a shot of getting capital right now.

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