Pfizer CEO Signals Pause on Large M&A, Focuses on Oncology and Obesity Opportunities

Jun 12, 2024 08:56 CST Updated 08:56

Pfizer

Pharmaceutical R&D Developer

Over the past two years, Pfizer has been busy with mergers and acquisitions, spending more than $70 billion to acquire companies such as Seagen, Arena, Biohaven, and Global Blood Therapeutics to strengthen its product pipeline. However, Pfizer CEO Albert Bourla said at the Goldman Sachs 2024 Global Healthcare Conference that Pfizer needs a break after the M&A boom.

In response, Pfizer has also implemented a series of cost-reduction and efficiency-enhancement actions. Last month, the company initiated a new round of cost-cutting measures aimed at reducing expenses by $1.5 billion before the end of 2027. These measures cover improving operational efficiency, optimizing work structures, and enhancing product portfolios. Prior to this, due to the decline in demand for COVID-19 products, Pfizer announced a $4 billion cost-saving plan at the end of last year.

At the Goldman Sachs Healthcare Conference held in Miami, Bourla stated that although Pfizer's desire for business development remains strong, the company will not sign any major acquisition agreements in the near future because its focus is on integrating recent acquisitions.

"We need to catch our breath and make sure that we can fully execute on what we have right now," Bourla said. "I don't anticipate that we will go for larger companies right now because I do not want to disrupt our commercial operations, our research or our manufacturing."

This does not mean that Pfizer will completely stop making deals; it will keep the door open for smaller mergers and acquisitions, such as obesity drugs or oncology assets. "We are looking into these projects, and there may be some this year, but these are small-scale projects."

Currently, Pfizer's focus is on digesting Seagen, which was acquired last year for $43 billion, and its ADC products. The CEO believes: "The acquisition of Seagen is the largest acquisition Pfizer has made in the past decade. What we have invested is not only capital, but more importantly, I believe it has the potential to become the most successful acquisition in the company's history."

The acquisition of Seagen doubles Pfizer's pipeline to 60 projects, adding four FDA-approved cancer drugs: Adcetris, Padcev, Tivdak, and Tukysa. The acquisition is expected to bring Pfizer an additional $3.1 billion in revenue in 2024, increasing to $10 billion by 2030.

However, Bourla also acknowledged some of Pfizer's previous setbacks, such as the termination of the oral GLP-1R agonist lotiglipron last year due to liver toxicity, which impacted its position in the burgeoning weight-loss market. He expressed confidence that the company’s still-promising danuglipron could eventually compete with Eli Lilly and Novo Nordisk’s oral medications. Data on the once-daily formulation is expected to be released this month or next.

He added that the company currently has two candidate weight-loss therapies in clinical trials, including PF-07976016 in Phase I, but Pfizer has not disclosed their mechanisms of action.

Bourla also commented on the Inflation Reduction Act (IRA) and the ongoing Medicare drug pricing negotiations, suggesting that the bill could impact the prioritization of R&D.

Despite Pfizer's "luck" of having only one product—Eliquis (apixaban), an anticoagulant developed in collaboration with BMS—selected for the initial Medicare price negotiations, Bourla warned that the law favors biologics over small-molecule drugs, "which will force many companies..."According to the development direction of IRA"Make strategic adjustments."

Notably, through the acquisition of Seagen, Pfizer has gained large-molecule drugs such as ADCs. Bourla pointed out that within five years, large-molecule drugs will account for 60% to 65% of the oncology pipeline.

As for other technical forms Pfizer is interested in, nuclear medicine is drawing the company's "high interest," but "that doesn't mean we've decided to enter this field." Bourla stated that once Pfizer feels it can make a difference, it will enter promising new fields.

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