What's Next For Pfizer R&D

By Cliff Mintz Ph.D.

The enormous size of Pfizer, coupled with a large and growing portfolio of small molecule and biologic drugs, demands careful operational oversight and insightful strategic leadership. One Pfizer executive who has been doing that for the past 15 years is Martin Mackay, Ph.D., president of Pfizer PharmaTherapeutics Research & Development. Almost immediately after Pfizer announced it would acquire Wyeth in late 2009, Dr. Mackay was appointed to his current position to oversee and manage the integration of the two drug makers and manage the combined drug company’s greatly expanded product portfolio. Despite a hectic travel schedule (he is currently visiting all of Pfizer’s global R&D sites), Dr. Mackay found time to chat with me about the Wyeth acquisition, Pfizer’s product pipeline, and the future direction of the combined company.

Question: Many pharma executives have publicly acknowledged that the blockbuster drug model is no longer viable in today’s fast-paced and globally competitive world. Is the blockbuster pharmaceutical business model really dead? If so, what is the new business model that will likely drive the pharmaceutical industry forward?

Answer: The value of the so-called blockbuster drug model has been overly exaggerated. There is no question that there was a golden period in the pharmaceutical industry when a relatively small number of very lucrative pharmaceuticals made it to market. However, if we happen to advance a novel therapy for Alzheimer’s disease or an oncology indication, they still possess the potential to become big sellers because of the growing unmet medical needs for these indications. I think what has happened is that we now recognize there is an increasing need to focus more on so-called personalized medicines or niche drugs because it is apparent that different patient populations can respond to the same drug differently.

However, it is important to understand that while we have entered into a new era of drug discovery and development, there is still going to be a place for “big blockbuster medicines” that we bring forward. But, more and more, you will see a new trend developing focused on medicines directed at smaller, specialized patient populations.

I think that in the future most successful pharmaceutical companies’ product portfolios will contain a balanced mix of a few important big sellers and a number of niche-like molecules directed at smaller patient populations.

Question: Based on the acquisition of Wyeth and several recent licensing deals, it appears that Pfizer may be moving outside of its expertise in small molecule drug development into new areas. What are some of the new business opportunities that Pfizer will aggressively be pursuing in the future?

Answer: We made a very conscious decision by acquiring Wyeth to diversify our business outside of prescription pharmaceuticals. Although these activities currently represent smaller parts of our business, they are important — whether they are nutritionals, consumer products, or animal health products. In the future, they are going to be more prominent in our business because we want to give Pfizer stakeholders and shareholders the types of returns they have grown accustomed to and expect.

A couple of years ago we created a new division within Pfizer called the Established Products Business, whose mission it is to identify potential traditional and branded  generic prescription drugs that we can offer to our patients. The division was established because we have a very good name for quality in the industry, and we wanted to be able to capitalize on that positive theme. To that end, we are looking to grow our established products business. We recently acquired several companies that will enhance our ability to do that, and I imagine we will continue to embrace this strategy moving forward.

Interestingly, on the other side of the business, recent deals with companies like the orphan drug developer Protalix give us the ability to bring good science and medicines to bear in areas where we historically might not have played much of a role. In the future, expect to see a much richer, diverse mix in our product portfolio, which may include generics and possible orphan indications.

From a scientific point of view, our aggressive M&A and licensing strategies give us a much greater ability to work in new areas that we haven’t in the past — for whatever reason. From a business perspective, the Wyeth acquisition has allowed us to become much more diversified than we have been in the last decade. This will be extremely important and pivotal in the future.

Question: Many industry experts believe the Wyeth acquisition was engineered to rapidly expand Pfizer’s pipeline to include a larger percentage of biologics, vaccines, and biotechnology drugs. Does the Wyeth acquisition signal Pfizer’s intent to reduce its efforts in small molecule drug development in favor of a focus on protein-based products?

Answer: Eighteen months prior to the Wyeth acquisition, we laid out a strategic plan for the company, and it included more involvement and prominence in biotherapeutics and vaccines specifically in areas like oncology and infectious diseases. Also, the plan called for diversifying and moving away, at least in part, from traditional small molecule drug discovery and development.

We looked at more than 100 companies — small, medium, and large — and always at the end of our analyses, Wyeth came out at the top of the list by a substantial margin. So, the acquisition made sense. In many ways, Wyeth was a natural fit, and I have to say that the acquisition has exceeded my expectations so far.

With regard to Pfizer’s future R&D focus, what has become apparent over the last few years is that the number of targets we can work on in important diseases has greatly increased. Because of this, we recognized the need to bring to bear new and different modalities to develop new drugs. And, a good way to do that is through biotherapeutics, whether they are antibodies, antisense, or other molecules. We clearly wanted to enhance our abilities to work in these areas, and a company like Wyeth — with franchises in Enbrel, Prevnar, and Prevnar-13 and a strong product development pipeline — allowed us to quickly enter that space.

Following the acquisition, Mikael Dolsten, who leads Pfizer’s Biotherapeutics Division, and I did a very intensive review of the combined company’s preclinical to Phase 2 product portfolio. We reorganized and consolidated 475 projects into 207 active programs, which was no small feat.

Prior to the portfolio review, the ratio of small to large molecule discovery programs was roughly 3:1. After the portfolio review (and consolidation and elimination of several programs), the ratio of projects (small vs. large) of active ongoing discovery programs is now 1.3:1.

There is much more of a balance now at Pfizer across small and large discovery programs. And, this end result was absolutely our strategic intent. While there is still slightly more emphasis on small molecule programs, in the future we are looking for a 50/50 ratio of small to large molecule development programs at the company.

Question: Aside from vaccines, what types of biotechnology products do you think will dominate biotherapeutics markets in the future?

Answer: In the early days of the biotherapeutics industry, companies mainly focused on replacement therapeutic proteins like erythropoietin, growth hormone, and the like. That strategy made complete sense, and some companies did quite well with the approach. But, there is only so far that you can go with that strategy because of the limited therapeutic utility of those types of proteins.

For the next phase of biologics and biotherapeutics development, I believe monoclonal antibodies like our Phase 3 product tanezumab for pain and amyloid antibodies to treat Alzheimer’s disease are going to be profoundly significant and dominate the market. With the acquisition of Wyeth and monoclonal antibody companies like Rinat and CovX, Pfizer intends to become a leader in the therapeutic antibody space including first-, second-, and third-generation products. A good example of this is the acquisition in 2007 of CovX, a Bay Area monoclonal antibody development company. We acquired the company because it had developed an interesting technology platform to attach molecules (including pharmacologically active peptides) via proprietary linker chemistries to an antibody core. We are currently using this technology to develop next-generation, antibody-like molecules that specifically target and treat various forms of cancer.

While diagnostic monoclonal antibodies are receiving a lot of attention these days, I believe that therapeutic antibodies will ultimately dominate the biotherapeutics market. While Pfizer will primarily focus on therapeutic antibody development, we will partner with diagnostic companies when the need arises or when it makes sense to do so to develop so-called personalized medicine products that usually consist of both diagnostic and therapeutic treatment components.

I want to point out that at Pfizer we don’t stop at antibodies with regard to new and novel treatment modalities. Within the last year or so, we opened a regenerative medicine unit that is investigating the use of stem cells as potential therapeutics.

While these are still early days, I believe that stem cell therapeutics will be big in the future, and Pfizer plans on being on the leading edge of the development of these types of treatments.

Question: The news media and many pharmaceutical pundits have declared that we have officially entered the age of “personalized medicine.” Do you see personalized medicine as a growth opportunity for Pfizer?

Answer: Our research philosophy at Pfizer is relatively simple — identify the right target, find the right molecule (large or small) against the target, and get it to the right patient population. I believe the third part, which is part and parcel of personalized medicine, is becoming extremely critical and will be vitally important in the future practice of medicine. To that end, almost every one of the discovery programs we have reviewed at Pfizer has an element of “getting the drug to the right patient population.” This strategy will give all of the medicines we develop at Pfizer the best possible chance to win.

While much of our work on personalized medicine is presently taking place in oncology, we want to apply the very same principles to our programs in Alzheimer’s disease, diabetes, and pain and inflammation. I truly believe this is the way that drug discovery and medicine will be pursued in the future.

A very good example of Pfizer’s commitment to finding the right patient population for a specific medicine is the c-MET-ALK inhibitor that we are developing as a treatment for nonsmall cell lung carcinomas. We recently partnered with Abbott Diagnostics to leverage our discoveries in this area to develop a molecular diagnostic test that will help identify patients with nonsmall cell lung carcinomas who are most likely to respond to the experimental treatment.

Question: Pfizer, like many other big pharma companies, has been steadily downsizing and outsourcing many of its R&D functions to India, China, and elsewhere. If innovation is the lifeblood of the pharmaceutical industry, where do you think innovation will come from if companies continue to abandon internal R&D programs and eliminate experienced scientists?

Answer: As I mentioned earlier, we went through a golden period when the industry grew at tremendous rates with huge investments being made into brick-and-mortar type projects. Unfortunately, at the time, many believed that this business model would be sustained in a linear way. In other words, the more we grew, the more we would produce. Yet, as we invested more, output and productivity didn’t really improve, falling far short of the expected ROI.

Consequently, it became very clear over the last few years that the pharmaceutical business model had to change, and R&D couldn’t continue to be hidden from the realities of the business world. To that end, when I visit Pfizer’s R&D sites, I make it a point to mention that while we perform cutting-edge work to develop new medicines, we are still part of a functioning business, and we have to respond accordingly in an appropriate fiscal manner. While the recent cutbacks, layoffs, and site closures have been hard (both personally and professionally), we had to build a business model that was more reflective of what we are actually delivering as an R&D organization. However, despite these difficult and sometimes uncertain times, I want to stress that innovation is still alive and very healthy in Pfizer’s R&D laboratories.

With regard to Pfizer expanding its research to other parts of the world, it is important to note that while cost certainly is a factor, it isn’t always necessarily the biggest driver from an R&D perspective. The real driver here is access to scientific talent, innovative technologies, and new science, which is experiencing exponential growth in places like India, China, Singapore, Korea, Hong Kong, and Australia. As recently as five years ago, we had absolutely no exposure and little understanding about the quality of the science going on in that part of the world.

I think that global partnerships and alliances enhance our ability to innovate and discover new medicines. Contrary to popular belief, these activities don’t replace, but actually augment, R&D activities going on in the United States. Finally, there is a greater recognition among pharmaceutical executives today of the need to aggressively pursue the best external science to complement the R&D talent, tools, and technologies that exist in their own laboratories.

Used with permission from Life Science Leader magazine.