Jeffrey Kindler, CEO for nearly five years, is leaving more than a year after rival firm Wyeth was acquired
Pfizer Inc.'s chief executive officer (CEO) stepped down without warning, acknowledging the personal toll involved in steering the world's largest drug maker through a multi-billion dollar merger.
The departure of Jeffrey Kindler, 55, comes more than a year after Pfizer completed the signature move of his tenure--the $67 billion (`3 trillion today) acquisition of rival Wyeth. But he leaves before the company confronts the US patent expiration of its top- selling Lipitor cholesterol medicine expected in November.
Kindler said he was leaving to “recharge my batteries “after nearly five years on the job.
He is being replaced by the global head of pharmaceuticals, Ian Read, who is 57, Pfizer said late on Sunday. “The combination of meeting the requirements of our many stakeholders around the world and the 24/7 nature of my responsibilities, has made this period extremely demanding on me personally, “Kindler said in a statement issued by Pfizer.
Les Funtleyder, portfolio manager of the Miller Tabak Healthcare Transformation Fund, said it was unusual for a CEO to resign citing fatigue.
“I'd have liked a little more notice, and a little more orderly process, “said Funtleyder, who does not hold Pfizer shares. “The suddenness of the announcement will make many people think there may be something more here. “Funtleyder said Kindler's resignation may be more connected to Pfizer's poor stock price performance, noting that investors have shown far more enthusiasm about Merck and Co. Inc.'s purchase of Schering-Plough Corp.
Indeed, Pfizer's abrupt management change comes in stark contrast with Merck, which said last week that president Ken Frazier will succeed Richard Clark as CEO in a long-telegraphed and expected move.
Since July 2006, when Kindler assumed the CEO post, Pfizer shares have fallen roughly 27% compared with a 10% decline for the NYSE Arca Pharmaceutical index of large US and European drug makers.
Sanford C. Bernstein and Co. Llc analyst Tim Anderson said Pfizer shares will probably rise on Monday “because investors just want to see change at a washed-out story like Pfizer“.
“The departure is sudden but I doubt there was one event per se “that led to his departure, Anderson said. “Highly likely that he was pushed.
“Kindler, previously the company's general counsel with little drug industry experience, was a surprise choice when he was named to the drug maker's top job in 2006.
Only months after he be- came CEO, Pfizer was dealt a devastating blow when it halted development of its experimental “good cholesterol“ drug torcetrapib over safety reasons. That product had been in- tended to help build on its cholesterol franchise from Lipitor, which had $11.4 billion in sales last year. Instead, Pfizer will lose the vast majority of that revenue when it’s loses exclusivity on the drug.
Its Viagra erectile dysfunction drug is also expected to lose patent protection in the next few years.
The acquisition of Wyeth, which brought Pfizer more access to bio- tech drugs and vaccines as well as cost- cutting opportunities, was intended to help Pfizer maneuver through the Lipitor loss.
So far, investors remain skeptical. Pfizer shares have fallen 5.2% since the company bought Wyeth on 15 October 2009. Merck shares have jumped 15% since it bought Schering-Plough on 3 November 2009.
Read, who joined Pfizer in 1978, has led Pfizer's world- wide pharmaceuticals business since 2006. The business includes primary care, special- ty care, oncology and emerging markets and accounts for around 85% of Pfizer's annual revenue. He has been responsible for more than 40,000 employees.
Pfizer said its board will elect a non-executive chair- man from its current member- ship at its next regularly scheduled meeting that will take place within the next two weeks.
Kindler's resignation comes after the surprise departure of Pfizer research executive Mar- tin Mackay in May. Mackay had been co- head of re- search with Mikael Dolsten, former head of research for Wyeth, after Pfizer acquired Wyeth.
But Mackay unexpectedly jumped ship just seven months later, to head research at rival AstraZeneca Plc, leaving Dolsten in command of research for the world's largest drug maker. REUTERS
Pfizer Inc.'s chief executive officer (CEO) stepped down without warning, acknowledging the personal toll involved in steer- ing the world's largest drug maker through a multi-billion dollar merger.
The departure of Jeffrey Kin- dler, 55, comes more than a year after Pfizer completed the signature move of his ten- ure--the $67 billion (`3 trillion today) acquisition of rival Wyeth. But he leaves before the company confronts the US patent expiration of its top- selling Lipitor cholesterol medicine expected in Novem- ber.
Kindler said he was leaving to “recharge my batteries“ af- ter nearly five years on the job.
He is being replaced by the global head of pharmaceuti- cals, Ian Read, who is 57, Pfizer said late on Sunday. “The combination of meet- ing the requirements of our many stakeholders around the world and the 24/7 nature of my responsibilities, has made this period extremely demand- ing on me personally,“ Kindler said in a statement issued by Pfizer.
Les Funtleyder, portfolio manager of the Miller Tabak Healthcare Transformation Fund, said it was unusual for a CEO to resign citing fatigue.
“I'd have liked a little more notice, and a little more order- ly process,“ said Funtleyder, who does not hold Pfizer shares. “The suddenness of the announcement will make many people think there may be something more here.“
Funtleyder said Kindler's resignation may be more con- nected to Pfizer's poor stock price performance, noting that investors have shown far more enthusiasm about Merck and Co. Inc.'s purchase of Scher- ing-Plough Corp.
Indeed, Pfizer's abrupt man- agement change comes in stark contrast with Merck, which said last week that pres- ident Ken Frazier will succeed Richard Clark as CEO in a long-telegraphed and expected move.
Since July 2006, when Kindler assumed the CEO post, Pfizer shares have fallen roughly 27% compared with a 10% decline for the NYSE Arca Pharmaceutical index of large US and European drug makers.
Sanford C. Bernstein and Co.
Llc analyst Tim Anderson said Pfizer shares will probably rise on Monday “because investors just want to see change at a washed-out story like Pfizer“.
“The departure is sudden but I doubt there was one event per se“ that led to his departure, Anderson said. “High- ly likely that he was pushed.“
Kindler, previously the com- pany's general counsel with little drug industry experience, was a surprise choice when he was named to the drug maker's top job in 2006.
Only months after he be- came CEO, Pfizer was dealt a devastating blow when it halt- ed development of its experi- mental “good cholesterol“ drug torcetrapib over safety reasons. That product had been in- tended to help build on its cholesterol franchise from Lip- itor, which had $11.4 billion in sales last year. Instead, Pfizer will lose the vast majority of that revenue when its loses ex- clusivity on the drug.
Its Viagra erectile dysfunc- tion drug is also expected to lose patent protection in the next few years.
The acquisition of Wyeth, which brought Pfizer more access to bio- tech drugs and vaccines as well as cost- cutting oppor- tunities, was intended to help Pfizer manoeuver through the Lipitor loss.
So far, in- vestors remain skeptical. Pfiz- er shares have fallen 5.2% since the company bought Wyeth on 15 October 2009. Merck shares have jumped 15% since it bought Schering-Plough on 3 Novem- ber 2009.
Read, who joined Pfizer in 1978, has led Pfizer's world- wide pharmaceuticals business since 2006. The business includes primary care, special- ty care, oncology and emerg- ing markets and accounts for around 85% of Pfizer's annual revenue. He has been respon- sible for more than 40,000 em- ployees.
Pfizer said its board will elect a non-executive chair- man from its current member- ship at its next regularly sched- uled meeting that will take place within the next two weeks.
Kindler's resignation comes after the surprise departure of Pfizer research executive Mar- tin Mackay in May. Mackay had been co- head of re- search with Mikael Dol- sten, former head of research for Wyeth, af- ter Pfizer acquired Wyeth.
But Mackay unexpectedly jumped ship just seven months later, to head research at rival AstraZeneca Plc, leaving Dol- sten in command of research for the world's largest drug maker.
REUTERS.
