Pfizer (PFE) at Guggenheim Conference Notes

Ian C. Read – Chairman and CEO


Delegation is a necessary evil, and the reason company culture is important

“they told at business schools we have delegations great, and I say it is not, it is the worst thing in the world. The only reason I delegate it is because I can’t do everything. So, you suddenly realize that the only way you are going to move the company is through the culture.”


In fact, company culture is the determinant of success in the pharmaceutical industry

“I have always finished by saying the only thing that in the end will make a difference is our culture. We all in the pharmaceutical industry most of us have capital, most have bright people, we all have the tools we need to be successful but we will make the difference if our culture is better than the culture of the other companies. And so when I took over I wanted to instill a culture.”


Mechanisms and procedures for deciding when to end product development are crucial

“you don’t want to spend money on something that is going to fail so you really want to be very critical as you put things into Phase 2. You don’t certainly want to get what we got to in Phase 3 with our PCSK9 and have it fail. That’s a very expensive failure. Now that’s a drug that started this development eight years ago, nine years ago so, you really want to make sure that you have made very hard and critical decisions in Phase 1. And you don’t let this sort of lingering syndrome of repurposing or staying around…  we need to know the mechanism…  we are not going to bring a product for development unless it’s first in class or best in class and within two years of the first in class. Because that’s the competitor dynamic you need to force yourself to”


95% of research is done outside the company

“research is driven by you believe you need experts inside the company and you need the most brilliant scientists. But you certainly — we certainly have forced ourselves to understand that 95% of the research is outside of the company. And the trick is to get the scientist focused early on, on outside opportunities. So we have a partnership with about 19 universities. We get some 300 submissions on things that our clinicians and our research scientists wants to develop. We go through them, we pick about 16, we put our scientists in their labs, they come to our labs. We are trying to cut out that five to six period where it sort of swims around in universities and doesn’t really go anywhere in the Academy. And then some VC picks it up. What we’re trying to do is get ahead of the VC”


Current US tax policy allows foreign companies to buy US assets at zero tax, putting PFE at a disadvantage

“I think for the US companies there are multinationals, that is the biggest competitive reset against our European competitors if we get an effective tax policy. Suddenly they can’t buy U.S. assets at a zero tax rate because they have no profit in the U.S. and they take it away outside. So your ability to buy U.S. assets compared to Europeans become equalized and all of a sudden they’ll end up paying at least the corporate tax rate or the import tariff on everything they sell in the United States. So I think it’s the biggest level there for us in that sense competitively.”


Responsibility for long-term healthcare costs is best handled by providers

“So I think the long-term risk needs to be with the providers. The providers, the hospitals have formed chains, they’ve formed semi monopolies in geographic areas. So they hold the patient for the patient’s life other than people who leave the area to go to another area. But 90% of their population is theirs for their whole life. So these are the individuals, these are the institutions that you should be able to incentivate to look after long-term healthcare costs. Work on smoking, work on lipids, work on diabetes, work on obesity. Work on smoking cessation where you can pay these institutions to lower and bend the cost curve and they are the natural holders of that. You need to be able to have rewards and incentivate them to hold those risks.”

Pfizer (PFE) at Citi Global Health Conference

Mikael Dolsten – President, R&D


Pipeline has a balanced distribution among phases

“When you look at the pipeline that deliver this flow of Phase 3 and approvals, we have about 90 projects. Slightly more than 40% in Phase 3 registration, slightly less than 40% in Phase 1, and about 20% in Phase 2”


PFE wants a “networked R&D organization” that utilizes both internal and external product development

“Very briefly when it comes to internal versus external, we really have our strategic ambition to be a networked R&D organization, some strong capabilities internally welcoming biotech and pharma partners and you can see three example of that approach. Product acquisitions through M&A, Medivation, access to Xtandi, Talazoparib… Next to that we have strategic acquisition of technology and early product. Bamboo is a company engaged in gene therapy… And then a partnership with Western Oncolytics that provides us with an oncolytic virus particularly interesting for cancer therapy of what we call cold tumors with moderate to low immune activity”


Strategic investments will likely continue into 2017

“I would say we will continue to have appetite for our strategic investment areas. Right now I think we have a very comprehensive immune-oncology portfolio but we would always built and if there is a new agent appearing, you may have seen that we have invested recently in — novel — see, there are four construct that are aimed to be local active in the tumor to circumvent that systemic talks…”


PFE’s Christmas wish list includes finding solutions for Duchene’s Muscular Dystrophy and diseases like Parkinson’s and Alzheimer’s

“And we’re going to Duchene’s Muscular Dystrophy, it would love to see us being able to change fatal outcomes for boys with that disease and we’ll certainly keep our eyes open if there is another gene therapist as we have one of the — I think best manufacturing facilities for clinical studies…One of the few areas of metabolic disease where you could come to market without big outcome studies and I think it would be a disappointment if I didn’t mention that you will always be open on your eyes for breakthroughs in neurological diseases like Parkinson’s and Alzheimer’s and then it’s going to be a combination therapy. Maybe, new agents that deal with newer inflammation which seems to be a major culprit, that would be nice New Year’s gifts”