From today’s Wall St. Journal:
Pfizer Inc. said Wednesday that it plans to cut research-and-development spending by as much as $3 billion by 2012, in an attempt to wring efficiencies following its take-over of Wyeth without sacrificing future product development.
The New York pharmaceutical giant outlined the aggressive cuts, which represent more than a quarter of the two companies’ combined research budgets in 2008, as it reported fourth-quarter earnings of $767 million, or 10 cents a share, up from $266 million, or four cents a share, a year earlier.
The drug maker also forecast lower financial targets from the Wyeth deal than it provided last year, sending Pfizer shares down 2.3% to $18.62 on the New York Stock Exchange.
R&D is considered the lifeblood of pharmaceutical companies. Big drug makers like Eli Lilly & Co. and Bristol-Myers Squibb Co. are increasing their spending to find new products that can replace aging blockbusters. Yet drug discovery is unpredictable, and industry scientists have struggled in coming up with big new products. Pfizer’s announcement suggests executives believe its research hasn’t been worth the high levels of investment.
Add this news to the fact that I know two major pharma companies have laid off a combined 20,000 employees since November and you have serious signs that one of the last economic innovative engines of America is in trouble.
Thanks Washington. Anti-industry rhetoric and anti-capitalism policies have direct consequences out here in the real world.