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Brent Saunders Makes His Vague, Tedious Case

The Pfizer/Allergan deal is widely rumored to be going through, and Brent Saunder of Allergan is widely rumored to be the new company’s CEO. That prospect cannot be making Pfizer’s research employees happy. Saunders himself has said a lot of not-so-enthusiastic things about in-house drug research, although he’s recently been speaking in a different tone of voice.

And as it happens, Saunders has a short guest post at Matthew Herper’s Forbes blog this morning, an appearance that really does make me think that he is in line to take over. He’s addressing the topic of his attitude towards research, and the piece is. . .well, it’s a bowl of room-temperature instant vanilla pudding. The word “innovation” shows up an awful lot. Here’s a sample:

There has been a lot of discussion about my views about pharmaceutical research and development. Let me cut to the chase. I’m pro-R&D, but I don’t believe that any single company can corner the market on innovation in even one therapeutic area. It doesn’t mean they shouldn’t do basic research where they have special insights, but even then they need to be open to the ideas of others. . .

. . .Much of today’s breakthrough science originates from biotech, specialty pharma and academia. We still find innovation in our own labs, but recognize that much of it will come from these other sources, and have to be humble enough to know we often will find great innovation outside our walls. We need to listen to customers to discover the best way to serve patients. We need to challenge ourselves to think differently.

Yeah, that’s not going to calm anyone down. This sounds like something from the annual report – vetted by Susan in Legal, by Sheila over in HR, by Rob in investor relations and Jim in Corp Comm. Everyone’s OK with it. That’s because it doesn’t say much. No one is claiming, has ever claimed, that one single company can “corner the market on innovation” in some therapeutic area. We all hear time’s winged chariot hurrying near, believe me. So that’s a straw man. And no one’s ever claimed that a company should be a complete autarchy, that it doesn’t need to be “open to the ideas of others”. Another straw man. Neither has anyone proposed that a company should deny that it will find innovation outside its own walls. What was the purpose of this thing again?

Oh, right, it was to advertise Saunders’ fitness to be the CEO of Pfizer after the merger. Well, if part of the job description is rolling out platitudes, answering questions that no one asked, and denying things that no one has asserted, then he’s clearly the man for the job. And who knows, those might be important qualities in a CEO. But this article’s not going to make anyone in the Pfizer labs feel any better this morning.

24 comments on “Brent Saunders Makes His Vague, Tedious Case”

  1. dearieme says:

    “if part of the job description is rolling out platitudes, answering questions that no one asked, and denying things that no one has asserted” … then he should be running for President of the United States. And he’ll get to kill more people that way. Or maybe not?

  2. Hap says:

    It seems like the definition of innovation that lots of people use – someone else needs to do something useful so that I can buy their company, fire them, and sell it more expensively without actually having to employ anyone (or anyone here, anyway). In this theory, there’s always someone with lots of money to buy their products (despite laying off or cutting the salaries of lots of the people who used to), and no one cares that the only people left in the offices are executives getting lots of money and tax breaks (governments don’t get any ideas about hosing them politically because they don’t actually employ anyone in their countries).

    I thought people running companies and buying their stocks were supposed to be realistic, and not relying on the economic version of Candyland for their livelihoods. I guess I was wrong.

  3. Anon says:

    “But this article’s not going to make anyone in the Pfizer labs feel any better this morning.”

    Perhaps they would feel better (safer) if they actually discovered some new drugs?

    And perhaps that was Brent’s point?

    And perhaps it is a fair point?

  4. anon the II says:

    I don’t get it. You and John LaMattina (http://www.forbes.com/sites/johnlamattina/) are whining about the effect of Brent Saunders taking over as CEO of the new Pfizer on all those jobs. Cry me a freaking river. I can think of a lot of people who lost their jobs after joining up with Pfizer. Pfizer has been playing Saunders’ game for years. To me, it’s a match made in heaven.

  5. Chrispy says:

    Pfizer is always the acquire-and-fire example used when talking about the problems in big pharma. Even if Saunders wanted to change this he couldn’t: you can’t move from a bunch of jumpy, Stockholm syndrome afflicted, butt-covering suckups to a team of creative, engaged scientists. The culture has been so bad for so long that the dismal productivity of in-house R&D is readily apparent — these issues are usually hidden because drug discovery has such a long timeline. All of us in this business know good scientists at Pfizer who would say the same thing — in fact, I have never heard anything positive about the Pfizer scientific culture from scientists. Good luck, pfuture pfireds, hopefully you will be appreciated in your next position, and hopefully your current one hasn’t left you with any lasting scars!

    1. Pfrustrated says:

      what, did you run out of Syrian refugee jokes?

  6. ScientistSailor says:

    If Allergan and Amgen merge, will the new company be called Allergen?

    1. anon the II says:

      That reminds me of when American Home Product bought American Cyanamide. They took “American” from American Cyanamide and “Home Products” from American Home Products and called the new company, American Home Products.

  7. Hap says:

    How does getting rid of R+D make it more productive? Magic? At best, it assumes that someone else has the ability to make more functional R+D, and that hiring them wouldn’t be a better solution for a company’s R+D inefficiency.

    Of course, if someone figures out how to make R+D more productive, following the Pfizer model, they will be bought and eradicated. How does that either encourage people to improve R+D or make sure that it actually can be improved?

    1. DC says:

      “How does getting rid of R+D make it more productive? Magic?”

      Reminds me of an Office episode:
      Jan: How would a movie increase productivity Michael? How on earth would it do that?
      Michael: People work faster after…
      Jan: Magically?
      Michael: No… they have to… to make up for the time they lost watching the movie.
      Jan: No.

  8. Anon says:

    I have no sympathy. Reap what you sow, and Pfizer has been sowing the seeds of its own demise for years.

  9. LZ says:

    . . .Much of today’s breakthrough science originates from biotech, specialty pharma and academia. We … recognize that much of it will come from these other sources,

    If Saunder wanted to start a Facebook meme against higher drug prices, this is definitely a good start. I can’t count the number of arguments I’ve had with fellow lefties trying to explain why Sovaldi should cost more than a generic antibiotic. Having the new CEO of Pfizer state that their labs aren’t responsible for innovative research anymore isn’t going to help my case.

  10. John Wayne says:

    @Anon: I know folks who were key to the discovery of several drugs while working at Pfizer in the 90’s; they have all been laid off. All of them. Most pharma companies have the same retirement plan for their scientists as drug cartels, using HR folks instead of thugs to take care of things.

    If an organization cannot provide proper incentives for folks who work in research, they will go to companies that can. We all know which organizations treat their scientists well and give them real opportunities to help people; they the ones coming up with new therapies instead of new mergers.

  11. Rule (of 5) Breaker says:

    While I definitely feel for the scientists at Pfizer, it is impossible to miss the irony here. The kings of purchase, slash, and burn are now on the other side. The Borg of biopharma are now themselves being assimilated. The top executives and board members are the only ones who win here. I am sure this will be a great morale booster, just like their designer / synthesizer model for medicinal chemistry. This merely continues the trend by exposing these companies for what they are – financial engineering companies that happen to produce some drugs on the side.

  12. Andy II says:

    His view on how to grow a pharmaceutical company has been the theme for the last 2 decades as more M&A is the sure-bet strategy recommended by respectful consulting companies…

    —- “Open Science.” It is based on a simple concept: Sometimes great ideas come from places where they are least expected. .. We still find innovation in our own labs, but recognize that much of it will come from these other sources, and have to be humble enough to know we often will find great innovation outside our walls. —- Yeah, they have been eliminating non-productive discovery arms and let these talented people go, who found their small start-ups and have kept doing what they do best. Innovations.

    Pharma should change names as their objective is to make profit by “selling” pharmaceutical products with premium prices. Their internal R&D focuses on clinical studies for label expansion of the existing drugs and copying someone’s profitable therapeutic antibodies (biosimilars) while protecting their own biologics from being copied.

  13. formerchem says:

    I’ve never heard of Allergan – have they ever discovered anything? Genuine question…

  14. Andy II says:

    @formerchem. Allergan was doing innovative things before it got involved in Actavis. One example is: Botox. It is one of the most innovative products IMO.

  15. dp says:

    Having joined a big pharma outfit’s R&D department from a large strategy house a few years ago, I have found myself agreeing tentatively with Saunders’s limited appreciation of corporate discovery R&D.

    The level of business illiteracy among top-company scientists is staggering and well-matched by the weight of personal bias in R&D capital allocation / investment decisions. Having consulted for a number of large pharma companies, I can say that this “one-two-punch” of accelerated value destruction is the rule in big pharma, not the exception. Additionally, coming up trumps in discovery research is a numbers game (cf. attrition rates) and it stands to reason that you’re more likely to access what you need, if you don’t confine yourself to what’s inside one company.

    The difficulty I have with Sanders’s view and a circle that I haven’t squared is two-fold. First, can you be effective at translational research without having a team (and the expertise, skills and technology) of a discovery team? Second, could we argue that new technologies turns discovery research into much less of a numbers game than it has been thus far? I don’t know the answers to either of these questions, but I hope for Pfizer’s employees that these are going to be considered by whoever takes up the CEO spot.

    1. DrSnowboard says:

      mmm… the old attrition rates thing. I seem to remember an Ex-Pfizer head who went over to R&D at GSK crunching the numbers and coming up with having to start 200 new projects / screens a year to garner the ‘3 Zofran units’ of clinical return. And you get what you measure, if you reward screens, you get a slug of unvalidated targets, if you reward compound numbers you get combi hairballs. If you reward in-licensing discovery projects with no in-house expertise (or ignore it) you get SOD catalase or Sirtis or….

  16. Kelvin says:

    Saunders is right to question the limited opportunities and productivity of internal R&D. However, I question whether acquiring drug programs from outside is a viable business model to create value…

    Where is the added value for Pharma, when Pharma acquires assets from biotechs at fair market value, or more in a seller’s market (as it is) where several Pharma companies are bidding against each other for a limited supply of new drugs to ensure their survival. Ever heard of the “winner’s curse” (https://en.wikipedia.org/wiki/Winner's_curse)?

    Surely, any biotechs that manage to create value by discovering new drugs will retain all or most of that value as they can sell their assets at a higher price, leaving Pharma to gamble with a marginal or even negative net expected return. In the long run, you only get what you pay for.

    I would much rather see external collaborations to develop radical new and more efficient *approaches* to drug discovery, rather than just acquiring one-off drug candidates that have been developed by the same old inefficient approach.

  17. Z-squared says:

    I am always equally amused and dumbfounded by the excessive Pfizer-hatred that comes out in the comments. That was understandable back when Pfizer was leading the charge in the “acquire and fire” strategy, but since then every other large pharma company has followed suit and done the exact same thing. Get off from your freaking high horse(s) already people.

    As to the relative efficiency of small biotechs vs. large companies, I think Derek has mentioned it before but there’s nothing to convince me that there’s any statistical advantage held by the small pharma/biotechs. There’s an inherent selection bias because you only hear about the successes and high-visibility failures from small pharma/biotech and not about all the companies that silently die, which is by far the large majority.

    I think Gilead may be one of the few exceptions to some of the above because they are still on the upslope, but I also know enough people there that will tell you the work environment is far from being all sunshine and lollipops.

  18. petros says:

    The deal is now sealed and the link for the press release take syou t o

    http://www.premierbiopharmaleader.com/

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