Fresh off Pfizer’s acquisition of Hospira for $17bn, Read told attendees at the BIO CEO conference on Tuesday that discussions of breaking up the company are still in the works, though it still needs to iron out the details of whether its innovative and established products businesses are “sustainable if they’re independent.” Ultimately he said a decision will be made “to create maximum shareholder value.”
In terms of the Hospira purchase, Read praised the company’s research engine, as well its presence in sterile injectables and locations in the US. The acquisition also “strengthened our position in biosimilars, and I think the value was right,” Read said.
US Tax Situation
Read was his most forthcoming when addressing the problems with the US tax code, noting that it “puts all American companies at a huge disadvantage” and “stimulates foreign investment.”
“The US has great scientists, but what’s the competitive advantage?” he added, perhaps still bitter over AstraZeneca’s rejection of Pfizer’s takeover bid from last spring.
Read also revealed that Pfizer had “discussions with several partners looking at portfolio/geographic swaps,” adding that “industry has to consolidate.”
And as far as acquisitions moving forward, Read said the “problem is that when we look at opportunities, other companies are willing to pay more because of their tax situation or to fill in their pipeline.”
He also added that because of the vast number of innovative biotech companies, “it’s difficult to pick winners. We as a company try to be investor friendly, but we don’t score very well…most small biotechs don’t rate Pfizer very highly, maybe that’s because we don’t pay enough.”
Read seemed skeptical of the public’s negative perception of the pharma industry in general, noting that “most of the population doesn’t know what we do. Most people believe research isn’t done by biotech and pharma industry and we need to educate. Finding a target or a gene can takes 20 years – [and that’s] a huge capital risk.”
Although Read seemed hesitant to reveal that Pfizer would be spending more on its R&D moving forward, noting: “We’re reasonably firm on how much capital we want to allocate on research.”
He also seemed hesitant to consider Google a direct competitor, telling attendees that they don’t discover and develop drugs, though they will “enable the better use of pharma.”
The tiered marketplace in the US for pharmaceuticals -- where everyone pays a different price for medicines, “is the best way to ensure access” to innovative therapies, Read said. “That’s not true in India or other countries, where it’s more difficult to access highly innovative products.”
In emerging markets it’s still all about primary care physicians and gaining access to them, Read noted. Whereas in the US, it’s less about the sales force and more about science, he said.