Albert Bourla spent 25 years getting to the top at Pfizer, and now he’ll complete the last stride into the CEO’s office, taking control of one of the world’s biggest pharma giants.
Pfizer announced this morning that Bourla would be taking the reins at the company on January 1, with Ian Read moving from chairman and CEO to executive chairman.
The big move was widely heralded late last year, when Bourla was tapped to move from the company’s Innovative Health group to the new position of chief operating officer. That promotion gave Bourla tremendous influence in shaping a late-stage development pipeline which has begun to pay sufficient dividends for Read to de-emphasize M&A, a long-favored strategy at the company.
Read made a series of big changes at the end of his rein.
He was an outspoken advocate of regular price hikes for the portfolio, an approach that grew increasingly controversial in the last two years. Then he abruptly shifted, acquiescing a few months ago to President Donald Trump’s demand that Pfizer roll back a slate of price hikes and keep the lid on the cost of their drugs at least through the end of this year.
Read was also one of the last remaining Big Pharma players to continue to insist that mega-M&A deals in the industry still made sense, a position that attracted considerable criticism in the wake of a series of mergers that caused deep disruption in the companies involved. By the time Read pushed for an AstraZeneca buyout, the kickback was so sharp and hard that he was forced to back off.
In the meantime, though, his oncology group and the rest of the R&D group began to roll out late-stage results, gaining new approvals and seeing real progress with potentially game-changing drugs like tafamadis. Read backed off his M&A drive, last illustrated by the $14 billion Medivation buyout, and declared his belief that R&D could provide the products needed to grow the bottom line.
Read claimed a long line of achievements in his statement on the transition, highlighting an R&D group which now has the potential to achieve new drug OKs on 25 to 30 therapies — half of which could be blockbusters. Over his 8-year run investors snagged a 250% return with a 70% increase in dividends.
All that will come under intense pressure, though, as the giants face a future filled with rising pricing pressure and increased demands for innovation from R&D groups that have never managed to keep up with the demand for new drugs.
This is the legacy that Bourla will inherit, as well as the strategy he clearly intends to carry on under Read’s tutelage. At least for awhile.
Image: Albert Bourla in Davos, January 2018. AP IMAGES
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