Pfizer China Responds to Global Cost Adjustment Plan Amid Strategic Restructuring

On October 13, Pfizer released the announcement "Pfizer Revises U.S. Government Paxlovid Supply Agreement and Updates 2023 Financial Guidance." In addition to lowering its full-year revenue guidance, the company also announced a multi-year, company-wide cost adjustment plan, which is expected to achieve savings of at least $3.5 billion.

Without providing further details, Pfizer stated that these costs would "mainly include severance payments and implementation costs," with "severance payments" sparking much speculation in the market.

According to a report by "Pharmaceutical Academic Plus" on October 25, Pfizer China responded: "Although the COVID-19 vaccine accounts for a significant portion of Pfizer's global revenue, we have not commercialized the Pfizer COVID-19 vaccine in China, so the impact on our business in China is minimal. To date, our business has achieved double-digit growth compared to last year and has exceeded the budget, indicating that the situation in China is different from other regions of the world. Therefore, cost reductions in China will be minimal."

COVID-19 Product Sales Decline, Full-Year Guidance Revised Downward

In the announcement released on October 13, Pfizer stated that it lowered its full-year revenue guidance to a range of $58 billion-$61 billion due to the impact of COVID-19 products.

Specifically, Paxlovid's sales this year will be $7 billion lower than previously forecast, due to reasons includingThe U.S. government will return approximately 7.9 million courses of Paxlovid marked with Emergency Use Authorization (EUA).In addition, due to vaccination rates being lower than expected, Pfizer has reduced the full-year expected revenue for its COVID-19 vaccine Comirnaty by approximately $2 billion.

In fact, the decline in Pfizer's COVID-19 product performance had been anticipated. On August 1 this year, Pfizer announced its second-quarter financial report, showing a second-quarter revenue of $12.7 billion, a year-on-year decrease of 54%; excluding COVID-19 products, the revenue increased by 5% year-on-year. At this point, the COVID-19 oral drug Paxlovid was no longer on Pfizer's list of best-selling drugs.

At the same time as announcing the Q2 financial report, Pfizer had lowered its full-year revenue guidance from $67 billion - $71 billion to $67 billion - $70 billion. The reason Pfizer gave for the downgrade was some short-term adverse factors, including the impact of the tornado that hit the United States in July this year on the pharmaceutical plant.

Nevertheless, Pfizer's Chief Financial Officer and Executive Vice President David Denton pointed out: We are fully prepared to accelerate the growth of non-COVID products in the second half of 2023.

Restructure the R&D department leadership and seek new growth points

In order to find new growth points, Pfizer announced on July 27 this year to reorganize its oncology department into an independent business unit, and appointed Chris Boshoff as the new Executive Vice President and Chief Oncology R&D Officer. He will be responsible for Pfizer's entire oncology product line and report directly to Pfizer CEO Albert Bourla.

At the same time, Pfizer Chief Scientific Officer and President of Global Research, Development and Medical Mikael Dolsten's responsibilities will be expanded to lead all non-oncology therapeutic areas, serving as the Chief Scientific Officer and President of R&D in this field.

Notably, on March 13 this year, Pfizer announced a $43 billion acquisition of U.S.-based Seagen, marking the fourth-largest investment in Pfizer's acquisition history. Seagen has four marketed products: brentuximab vedotin, enfortumab vedotin, tisotumab vedotin, and tucatinib, with the first three being ADC drugs. Among them, brentuximab vedotin generated $840 million in global sales in 2022, second only to Roche's ADC drug trastuzumab emtansine. This acquisition is expected to bring more growth opportunities to Pfizer.

Pfizer China Announces Adjustments in Multiple Departments

In September this year, Pfizer's organizational structure in China was also adjusted.

Specifically, the Vaccine Business Unit has established the North China Region, South China Region, and Market Platform. Hao Yikai has been appointed as the Sales Head of Pfizer's Vaccine Business Unit for the North China Region, fully responsible for the sales management across 20 provinces and municipalities in northern China. Shi Yinli has been appointed as the Sales Head of Pfizer's Vaccine Business Unit for the South China Region, fully responsible for the sales management across nine provinces and municipalities in southern China. Jin Xinqing has been appointed as the Head of Pfizer's Vaccine Business Unit Market Platform, responsible for building an innovative market platform, creating a vaccine ecosystem, promoting the market-oriented model of innovation, and improving business efficiency.

As of September 1, the Hospital Emergency Division will be divided into two business lines: the Cornerstone Product Business Line and the Innovative Product Business Line. Xu Decai will serve as the head of the Cornerstone Product Business, Gu Guangping as the head of the Northern Sales Team for Innovative Products, and Ji Ying as the head of the Southern Sales Team for Innovative Products. Li Yang will be in charge of the Cornerstone Product marketing team, while Wang Jihua will oversee the Innovative Product marketing team.

There are also changes in the Oncology Business Unit. Under the G&H Franchise Head, there are: Central Marketing Team, Regional Marketing Team, North China Urology Sales Team, South China Urology Sales Team, North China Hematology Innovative Sales Team, and South China Hematology Innovative Sales Team.