Pfizer Inc., the world’s largest drugmaker, said it was shrinking its operations – including cutting 1,100 research and development jobs conducted in Groton — to deliver on its profit forecast for 2012, according to published reports.
That will be the first full year its $10 billion Lipitor cholesterol fighter faces cheaper U.S. generics, Reuters reports.
The 1,100 job cuts over the next year and a half at its Groton campus will come as the company shifts from a drug-discovery site to a support center for research and development, The Day of New London reports.
The layoffs would leave the pharmaceutical giant with about 3,300 employees in Groton, versus the 4,900 that Pfizer employed at its two local sites about this time last year.
Pfizer said the Groton lab’s neuroscience and cardiovascular research units will be moved to Cambridge, Mass., as part of a new strategy to boost innovation and address productivity issues. Groton’s antibacterials research unit also will be vacating its space in Groton.
Newly appointed Chief Executive Ian Read also announced an additional $5 billion share buyback, Reuters reports.
Both steps were long-awaited by investors, who have worried that Pfizer had grown too large after three mega-mergers to sustain earnings growth. Shares in the company rose 3 percent.
Read, who stepped into the CEO role in early December after the abrupt departure of his predecessor, Jeffrey Kindler, suggested further downsizing may be in store.
“During 2011 we expect to complete our ongoing review of the composition of our business portfolio to determine the optimal mix of businesses that we can appropriately fund and manage in order to achieve consistent growth and maximum return on investment,” Read said in a statement.
Pfizer faces an unprecedented challenge in November, when Lipitor loses U.S. marketing exclusivity. Pfizer bought Wyeth last year for $67 billion to replace vanishing Lipitor revenue, but has failed to sufficiently bolster its drug portfolio.
More than a half dozen other Pfizer drugs also lose U.S. patent protection in the next few years, including impotence treatment Viagra and Xalatan for glaucoma.
Moreover, many of the company’s most important medicines had flat or declining sales in its fourth quarter, according to results released on Tuesday.
