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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

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December 6, 2010

Exit Kindler

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Posted by Derek

Came the sudden news over the weekend that Jeff Kindler is stepping down as CEO of Pfizer. Actually, it's not so sure that "stepping down" is the right verb phrase to use. No one knew that he was retiring, and the departure of a CEO is usually given a bit more foreshadowing. (It's also usually press-released during the working week, for that matter).

No, this looks sudden. Honestly, though, I'd be surprised if Kindler doesn't feel a sense of relief stealing over him. Pfizer's had a horrendous time of it under him, but a lot of the horrendousness was already in motion when he took over. He's done nothing (given the Wyeth deal) to slow down the horrendous momentum, but Pfizer seems to have decided on its runaway-train corporate model many years ago.

So it's hard to see how changing CEOs is going to affect things much. The company is way too huge, and Lipitor is still going off patent. Even if the new guy (Ian Read) were to have an absolute magic wand effect on research productivity (and research luck), he won't be in the job long enough (ten years? twelve?) to see the effects at the other end of the pipeline. And if he wants to reverse course, to stop trying to acquire-your-way-out-of-trouble, that's going to be very difficult. In fact, given how Pfizer's unloaded various facilities (and people) after these acquisitions, it's going to be like trying to unbake a cake.

I wish Read luck. But I wouldn't run Pfizer, not for what twice they're paying him.

Comments (50) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. SP on December 6, 2010 8:40 AM writes...

"I wouldn't run Pfizer, not for what twice they're paying him"
Bull. Maybe everyone hates you and they fire you after a year and you get your multimillion golden parachute.

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2. emjeff on December 6, 2010 8:41 AM writes...

Oh, I'd run Pfizer, for WHAT they're paying him. Go in, sit for pictures, make some decisions, lay people off, close facilities, travel the world. Most importantly do all this for multi-millions of dolars per year (plus stock and Lord knows what else) and almost zero accountability. Because when you are finally shown the door, there's another huge bundle of cash waiting for you, and you are set for life.

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3. silicon scientist on December 6, 2010 8:47 AM writes...

Hell, I'd take 1/8th of what they paid Kindler ($1.6 million.)

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4. BravoZulu on December 6, 2010 8:50 AM writes...

Pfizer's business model seems to be to keep as many balls in the air as possible, making it impossible to gauge what performance would be in the steady-state.

Having acquired, sold, merged, fired and closed all at the same time, one is reminded of "Lord Ronald said nothing; he flung himself from the room, flung himself upon his horse and rode madly off in all directions".

Maybe Pfizer and it's shareholders would do better if it were to be broken up into five or more manageable companies.

Bigger is bigger, but most often not better.

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5. RB Woodweird on December 6, 2010 9:05 AM writes...

Wasn't this just made into a major motion picture with Denzel Washington as Jeff Kindler and Chris Pine as Ian Read?

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6. dearieme on December 6, 2010 9:06 AM writes...

"he won't be in the job long enough (ten years? twelve?) to see the effects at the other end of the pipeline": maybe that's the real problem, right there. In such circumstances, what's a chap to do but loot the shareholders?

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8. londonlad on December 6, 2010 9:21 AM writes...

Was it coincidence that The Biotech Rumor Mill was down all weekend?

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9. Jerck on December 6, 2010 9:35 AM writes...


Prognosis of things to come at Merck....say in another 2 to 3 years down the road. They have been mimicking Pfizer at all steps including the would be CEO (Mr. Ken Frazier), another lawyer with little or no knowledge of science. Two blind mice…

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10. Nick K on December 6, 2010 9:40 AM writes...

@7: Kindler says that the last few years have been "extremely demanding personally" for him. Nowhere nearly as demanding as for the thousands of loyal ex-employees he's shafted.

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11. processchemist on December 6, 2010 9:41 AM writes...

The most distubing thing about Kindler is that most people think it's normal that, with a background at MacDonalds, you can run the biggest big pharma in the world. O tempora, o mores...

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12. LMP on December 6, 2010 9:46 AM writes...

Well, even if he's being paid shedloads of stock it'll be worth nothing if the company karks it. The fact that big bosses are offered sheds of stock is so that theoretically there's an incentive for them to keep the company going, in some form or another.

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13. PharmaHeretic on December 6, 2010 9:52 AM writes...

It is too bad that he is retiring. Many of his current and past employees would have loved to see Kindler kill himself.

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14. Watcher on December 6, 2010 10:08 AM writes...

I wouldn't run Pfizer, not for what twice they're paying him"

Sure you would. One or two years, then out and set for life.

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15. glinkst on December 6, 2010 10:22 AM writes...

Quite a legacy. Destroying one major company is noteworthy, but four? Pfizer, Wyethe, Warner Lambert, Pharmacia.
@rbwoodweird, good one.

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16. Hap on December 6, 2010 10:45 AM writes...

LMP - If CEO's were paid almost exclusively in stock, that would be true (assuming, of course, that the price on them isn't set at well below market, which isn't supposed to be done, but...), but they do get paid an awful lot, too, which is usually supplemented with retirement benefits and a severence package much nicer than that of almost anyone, anywhere. They do have incentive to keep the company going, but not necessarily in the long term (also, note Hassan's payoff - you can get paid if your company ceases to exist, as well).

I don't see how to make Pfizer work, though, so while the money would be nice, incompetence really doesn't help anyone.

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17. BFS on December 6, 2010 10:51 AM writes...

10. Nick K on December 6, 2010 9:40 AM writes...

@7: Kindler says that the last few years have been "extremely demanding personally" for him. Nowhere nearly as demanding as for the thousands of loyal ex-employees he's shafted.

Indeed. Good riddance.

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18. Aspirin on December 6, 2010 11:01 AM writes...

Kindler memoir forthcoming: "From Freedom Fries to the Pfizer Files: How I Screwed Up the World's Largest Pharmaceutical Company (And Made Millions While I Was At It)"

Permalink to Comment

19. Pete on December 6, 2010 11:54 AM writes...

Better though than being left in the study with a glass of whisky and a loaded revolver...

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20. partial agonist on December 6, 2010 12:03 PM writes...

Does that mean we are not still in the "golden age of drug discovery at Pfizer"???

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21. Jeff Kindler on December 6, 2010 12:13 PM writes...

Hey guys, they're making me take a million compound vials with me when I leave since they don't want them any more- anyone got a garage where I can store these things?

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22. David Formerly Known as a Chemist on December 6, 2010 12:24 PM writes...

Is there a pharma CEO or executive anywhere that isn't hated by everyone that posts to this blog? Is anyone doing a good job?

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23. Hap on December 6, 2010 1:07 PM writes...

Well, everybody's cutting chemists, so there probably won't be much love here in the first place. The love gets harder to find as well when most big pharma CEOs seem to make boatloads of cash whether or not they enhance either the futures of their companies, and there aren't many with either being enhanced right now. Finally, Pfizer has been the leader of the "buy your way to greatness" theory of pharma growth, which has seemed to grow chemist/biologist/drug employee unemployment, outsourcing, and CEO pay but not stock prices or drug output.

At the moment, it doesn't appear any drug company has a path to success - since that's what CEOs are (allegedly) being paid for, then the answer to the second question is probably No as well.

Permalink to Comment

24. Chemjobber on December 6, 2010 1:13 PM writes...

Derek is partial to the Novartis (?) CEO who said that if you're risk-averse, you don't belong in pharma or something to that effect.

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25. Hap on December 6, 2010 1:33 PM writes...

But that's hypocritical, no? While CEO pay doesn't seem to decrease when they suck, it goes up a lot when they do well. They thus make money by risking lots of other people's money, and lose nothing (well, comparatively little) if they lose some or all of it. If you had that recipe for pharma employee pay, I'm sure you'd see a lot less risk aversion. Who would pay for it or whether it would work, well...

Permalink to Comment

26. wwjd on December 6, 2010 1:43 PM writes...

CEO salaries corelate with size of company not performance. Therefore CEOs increase the size of their companies not performance.

Permalink to Comment

27. Anonalso on December 6, 2010 2:49 PM writes...

If a McDonald's CEO can't run Pfizer, how much hope is there for the ketchup guy at Novartis?

Permalink to Comment

28. Petros on December 6, 2010 3:07 PM writes...

Kindler was only a Big Mac lawyer not a CEO

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29. Frank Adrian on December 6, 2010 3:19 PM writes...

@Kindler...

"Hey guys, they're making me take a million compound vials with me... anyone got a garage where I can store these things?"

From the tenor of the comments, I believe there are several people who have an idea where you could put them...

Permalink to Comment

30. milkshake on December 6, 2010 3:38 PM writes...

@22: there is a former major pharma CEO that used to be well-liked by almost everyone. He had a pleasant way about him. He was not arrogant, he was a good listener. He was full of compliments in front of the scientists, he took the trouble visiting the various research sites and giving pep talks, and he was repeatedly heard that he was not going to consider the sale of Pharmacia.
I hear he gave a rather similar spiel while at Shering-Plough...

Permalink to Comment

31. Chemjobber on December 6, 2010 3:46 PM writes...

Isn't Lechleiter at Lilly a former process chemist? He sounds more CEO than scientist, these days.

Permalink to Comment

32. Aspirin on December 6, 2010 3:51 PM writes...

21: Jeff, the question you should be asking is "Anyone got a garage I can hide in?"

Permalink to Comment

33. MTK on December 6, 2010 3:56 PM writes...

@22: No. They're all hated. And they're all incompotent idiotic boobs. Every one of them got to the top in spite of their obvious intellectual, organizational, and psychological deficiencies. If only they had our brains.

@31: I would hope so. His job title is CEO after all.

Permalink to Comment

34. CMCguy on December 6, 2010 4:09 PM writes...

No wonder Kindler became exhausted because if he tired to implement "McModel" on Pfizer he probably wore himself out pounding a round peg in a square hole. I agree with Derek that the monster that is Pfizer has been in a gobble up and spit out mode long before Kindler became CEO there however he continued in the extreme with Wyeth swallow. At least Read and the new Merck CEO (even though a lawyer) apparently have long backgrounds in Pharma (at the respective companies) so would suspect they are possibly better equipped with awareness to establish focused leadership and vision that might help improve things.

Permalink to Comment

35. StarkChoice on December 6, 2010 4:35 PM writes...

Perhaps the problems at Pfizer may lessen some of the anti-GSK carping we find here on occasion and incline us more favorably towards Andrew & Co who have renounced the mega M&A model. Their strategy of increased synergization and de-risking looks to have been vindicated when one observes the calamitous state of many of its competitors. Vive la difference!

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36. MTK on December 6, 2010 4:46 PM writes...

Bahahaha! Good one, Stark.

You almost had me there for a second.

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37. pete on December 6, 2010 5:18 PM writes...

@ 36 -- I laughed.

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38. Anonymous on December 6, 2010 5:50 PM writes...

@22 There used to be, at Genentech

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39. Anonymous on December 6, 2010 7:13 PM writes...

@30 milkshake Yes, Freddie did do all those nice things at SP. He was liked and trusted more than any other pharma CEO that I am aware of. He even swore repeatedly that he would never sell the company...altho he stopped saying that in Jan 2008 (Vytorin).

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40. anon on December 6, 2010 8:54 PM writes...

Clearly, he was not fired for incompetence, or he would not have lasted this long. So was he bangin' the secretary or was there some funny accounting a la Mark Hurd?

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41. Esteban on December 6, 2010 9:09 PM writes...

@31: He is indeed a chemist, medicinal if memory serves. To hear him talk though, he speaks in the same manner as any other big pharma CEO. A recent laugher: "I still believe Effient has a great future". Of course he had to say that.

Permalink to Comment

42. Former Wyeth Screener on December 7, 2010 12:14 AM writes...

Kindler, here's a dime. Call someone who cares.

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43. likeitis on December 7, 2010 4:37 AM writes...

Thinks, a la JK:
Must follow up that offer from Burger King.
Neatly symmetrizes [exec speak ;-)] with my purchase of King Pharma.
Can't resist these empire-builder brand names...
mmmm...King of England *post* looks like it might be coming up for grabs soon...

Permalink to Comment

44. Annette Bak on December 7, 2010 8:38 AM writes...


Prognosis of things to come at Merck....say in another 2 to 3 years down the road. They have been mimicking Pfizer at all steps including the would be CEO (Mr. Ken Frazier), another lawyer with little or no knowledge of science. Two blind mice…

Permalink to Comment

45. johnnyboy on December 7, 2010 11:19 AM writes...

@22: Good point. CEOs make good punching bags, but frankly I don't think they have nearly as much importance to the running and success of a company as they, and other folks, think - especially in pharma. It's more a matter of the culture of the top executive team, and frankly, a lot of blind luck. The last thing I would want from a CEO and executive team is visionary leadership and all that management crap; what they really need to do is gentle steering and keeping the ship steady, so that the people at the bottom who do the real work have the necessary time and stability to do their jobs.
As far as big pharmas go, as a relatively distant observer, the companies that seem to me to be relatively well-managed are those that are the least prone to make terrible decisions, like exorbitant and disruptive mergers and acquisitions (eg. Pfizer, Merck), over-aggressive and downright dishonest marketing leading to massive lawsuits (eg. Merck, GSK) or poor quality control over manufacturing (eg. J&J and countless others). At the moment I like Novartis and BMS (and own their stock), although I may be proven wrong at any time of course. Which companies do other folks here like ?

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46. Fred on December 7, 2010 12:33 PM writes...

"At the moment I like Novartis and BMS (and own their stock), although I may be proven wrong at any time of course. Which companies do other folks here like ?"

In big pharma, ABT is "less dysfunctional" than the rest. They have had stealth lay offs in research, but not like PFE, and their financials are pretty good. I like GILD. They do great science and are pretty strategic about selecting programs.

It was a tragedy to see SGP, WYE, and DNA close shop, and PFE close more research sites this past year.

Permalink to Comment

47. Morten G on December 7, 2010 4:02 PM writes...

Beginning of Kanye West's POWER
(I think of it as the The CEO Song)

I’m livin’ in the 21st century
Doin’ something mean to it
Do it better than anybody you ever seen do it
Screams from the haters, got a nice ring to it
I guess every superhero need his theme music

No one man should have all that power
The clock’s tickin’, I just count the hours
Stop trippin’, I’m trippin’ off the power
(21st century schizoid man)

The system broken, the schools closed, the prisons open
We ain’t got nothin’ to lose, ma’f-cka, we rollin’
Huh? Ma’f-cka, we rollin’
With some light-skinned girls and some Kelly Rowlands
In this white man’s world, we the ones chosen
So goodnight, cruel world, I see you in the mornin’
Huh? I see you in the mornin’
This is way too much, I need a moment

No one man should have all that power
The clock’s tickin’, I just count the hours
Stop trippin’, I’m trippin’ off the power
‘Til then, f-ck that, the World’s ours

Permalink to Comment

48. Anon on December 8, 2010 12:22 PM writes...

More than just chemistry or pharma research readers of this blog lurk around:
http://www.philly.com/philly/blogs/healthcare/What_was_Pfizers_board_thinking_when_they_hired_their_former_CEO.html

Permalink to Comment

49. yaro on December 8, 2010 6:09 PM writes...

there should be a basic industry-specific education/experience level for these CEO types. Chemist/biologist/scientist to run a pharma co. Engineers to run an engineering firm. Software gusy with programming experience or such to run software firms etc. It's when hired help type people, ie, service providers such as lawyers and accountants and bookkeepers start playing chief -executive roles you get these idiocies. Throw in the helpful 'consulting' firms and you get the idea.

Look at Ford. An Engineer revived it. In a very simple manner. Make a thing 'good' and not 'cheap' and people will love it and buy it. Simple.

OTOH, you have boards firing scientist leaders and putting in place these 'professional CEOs to run companies.

Everything should be private and run on what they can earn or borrow.

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50. Fiore on December 9, 2010 5:10 PM writes...

-- Pfizer CEO Kindler, 55, steps down unexpectedly

a few days later

-- Wikileaks: Pfizer 'used dirty tricks to avoid payout'

Permalink to Comment

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