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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: derekb.lowe@gmail.com Twitter: Dereklowe

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« New Year - I Hope! | Main | Pharmalot Is No More »

January 5, 2009

Well, Hose Me Down. . .

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Posted by Derek

Pfizer's Jeff Kindler says that the company: "is willing to acquire a large rival drug company to improve its financial health".

In other news, bears have expressed a willingness to defecate in forested areas.

Comments (20) + TrackBacks (0) | Category: Current Events


COMMENTS

1. Petros on January 5, 2009 11:29 AM writes...

A report I've just seen on the source of the top 10 pharma companies revenues shows the following for Pfizer in 2007

Total $38.5 billion

Internal R&D $9.6 bilion (25%)
Product acquistions $1 billion (2.5%)
Inlicensed $2.7 bilion (7%)
Company acquisitions $25.2 billion (66.5%)

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2. fred on January 5, 2009 11:54 AM writes...

Re Petros:

If they have roughly 3 X more confidence in non-PFE chemists than their own, why do they keep any?

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3. jt on January 5, 2009 12:26 PM writes...

Wow, almost 10 billion a year for nothing...impressive.

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4. John Spevacek on January 5, 2009 1:53 PM writes...

I haven't laughed this hard since I heard that GM wants to buy Chrysler.

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5. Hap on January 5, 2009 2:31 PM writes...

Well, combining unproductive research organizations and getting rid of the most expensive (and likely most knowledgeable) scientists is a great way to find new drugs and increase profits. Right?

Pfizer looking for prey seems like the financial equivalent of 0+0=1? (which usually ends up as 0+0=-1), although it could be simply a product of the "positive correlation of company size with CEO pay" theory of pharmaceutical productivity.

GM buying Chrysler actually makes more sense - Chrysler/Dodge seem to make crappy cars with neat designs and premium prices, while GM makes OK cars with OK design - if GM learned to make decent cars with neat design and premium prices they might be OK. If someone could teach Pfizer how to find new drugs more easily and effectively, they'd probably be buying Pfizer, not the other way around. Since any of the partners Pfizer would buy doesn't have that knowledge, the point to buying someone seems not to exist.

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6. KC on January 5, 2009 3:00 PM writes...

Ah. Right, so, the nice cushion of on-hand cash could be used to weather this current storm, and put Pfizer in a competitive location in 2010.

Or, it could be used to continue to bloat Pfizer's overhead with un-needed physical capital from large companies.

Or, they could take all that money, invest it in wood and gasoline, and burn it all in a giant drunken revel.

It seems Kindler is inclined to the latter two plans.

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7. fred on January 5, 2009 3:25 PM writes...

Where do the get the clin dev money for acquired product candidates? From the 10 billion????

Damn glad I didn't waste money on B-school-- on the face of it, it makes less sense than quantum mechanics.

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8. Rammer on January 5, 2009 3:28 PM writes...

Who are the favorites apart from Bayer?

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9. Ty on January 5, 2009 3:45 PM writes...

Kindler said that a while ago, not really in the mega-merger context. I think this is nothing more than a sensationalism on the FT part.

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10. Don B. on January 5, 2009 5:22 PM writes...

Perhaps he will buy McDonalds~0))

He can use his hamburger lawyer experience.

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11. biotechchap on January 5, 2009 7:47 PM writes...

I think Derek has somehing personal against Pfizer. He takes keen interest is criticizing Pfizer every now and then. Well as far as acquisition is concerned Pfizer will definitely go for it but keeping in mind strategic and synergistic value in mind. Well Big pharma (give me one exception thats damn good compared to Pfizer) R&D in not productive and small companies are also unproductive, 2/10 survive and you see them doing good but you ignore the other 8. Pfizer is best as acquisition and Lipitor and their cash reserve proves that, seconly there is no argument who has been the top dog in this decade, and I am am sure Pfizer leadership will manage their resources in efficient manner to stay in top for coming decade too. After extraordinary performance there will be some setback...but with resources they can overcome Lipitor loss sooner than later....

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12. pfired on January 5, 2009 8:05 PM writes...

Jeff Kindler could not lead a drunk sailor to a brothel

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13. anonymous on January 5, 2009 9:58 PM writes...

New G5 jets for all the executives who make the merger a "success".

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14. Chill on January 5, 2009 11:12 PM writes...

Pfizer should bite the bullet and buy General Motors. They could then use the cars to ferry in and out new R&D staff every three months.

It's possible that new Chinese and Indian workers will actually live in the cars in the Pfizer parking lots (Pfizer will not pay them above minimum wage).

I'm not sure what kind of chemistry can be done in a large SUV, but if they invest several billion dollars, I think you could get to kilo scale. The exhausts are perfect for venting the fume hoods. There's nothing in any state law which forbids conducting an extraction while driving.

We have the technology gentlemen.

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15. LFree on January 6, 2009 12:03 AM writes...

Geez, what's the deal Derek L? Every chance you get you go picking on (big, bad but #1 for now) Pfizer. Did you get snubbed by them at somepoint in your career? Or you don't appreciate their M&A strategy in addition to internal research,the latter which historically has had no ultimate success (but maybe soon). Besides Carl I., they are your whipping boys. On the otherhand, biotechchap (#11) is a bit pollyanna-ish though slightly more fair-n-balanced (not in the evil Fox News tradition though) than you. Success in research is ultimately fairly very low. Pick on someone else (like yourself) for the new year.

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16. Jose on January 6, 2009 12:25 AM writes...

Seriously, get a clue. Derek is not "picking on Pfizer." He is poking fun at the staggering absurdity of the pablum coming from its genius CEO. Pfizer's entire business model is a dance of the seven veils to keep industry clueless investors buying in.

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17. LFree on January 6, 2009 12:46 AM writes...

#16. Or is it (see #11 in part)?, versus any other (bio)pharma who really have a precise, reliable business model. D. Lowe's (self-loving) wit could be equi-directed elsewhere and more balanced. Just saying. Must be a genius ceo (at least for himself and his henchmen and henchwomen) 'cause he's very likely living better than us($$).

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18. Herbalife Las Vegas on January 6, 2009 4:49 AM writes...

Wow all the money for nothing.

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19. pandora on January 6, 2009 7:41 AM writes...

Everybody (except Pfizer employees not yet laid off, I guess) is picking on Pfizer, because they are really big, unproductive and eliminated lots of jobs through acquisition.

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20. Indy on January 6, 2009 8:58 AM writes...

Great... Just another example of the classic syndrome of "let's try to buy our way out".

When will these CEOs learn that you cannot buy innovation?

What ever happened to common sense? I guess with their salaries all that money can give "blurry vision" syndrome.

At this pace we will end up with 2 major pharma Frankenstein companies where they are made of all kind of good-companies parts and yet the monsters cannot think or function at all.

And then you will have their 2 CEOs playing rock-paper-scissors to see who buys out the other one first.

Enough said! -Indy.

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