Another Setback for Pfizer Inc. (PFE) as R&D Exec Moves to Biogen

Pfizer Inc. (NYSE:PFE) held its annual meeting of shareholders on Thursday. Ian Read, chairman and CEO of the firm said that they remain focused on strengthening the two main divisions, i.e. innovative and established businesses. They will also strive to advance the commercial and late-stage pipeline, while still keeping finances flexible in order to go for attractive business development. In the usual course of business, 11 director nominees were re-elected for one more year. The selection of KPMG LLP as the independent registered public accounting firm was ratified by the shareholders for the 2016 fiscal year. The latter also voted in favor of the board’s proposal to approve on an advisory basis the pay of the firm’s named executive officers. However, four shareholder proposals were not approved by others.

Pfizer Inc. Chief Neuroscientist Moves to Biogen

Biogen Inc (NASDAQ:BIIB) has hired Pfizer’s Michael Ehlers to head its R&D unit. Before this, Ehlers was also Pfizer’s VP for biotherapeutics R&D. This is the latest in a series of setbacks that Pfizer Inc. (NYSE:PFE) has seen recently. The firm recently pulled out of the much-hyped deal with Allergan which was seen to be aimed at reducing the tax burden.

For Biogen Inc (NASDAQ:BIIB), Ehlers, 47, will be filling a post that was vacant for nearly nine months. He will step into the shoes of former Biogen head of R&D, Doug Williams. Doug had left the post to lead a biotech startup. Ehlers has a lot of experience in biotech. Before joining Pfizer, he taught neurobiology at the Duke University Medical Center. After joining Pfizer, he climbed up the ladder, filling in for those who left. Eventually, he came to head one of the firm’s most critical units: the neuroscience and pain research division. Ehlers was responsible for looking after the research for drugs for serious conditions that affect the brain. Biogen too has similar programs going on.

Now with Ehlers, Biogen Inc (NASDAQ:BIIB) hopes that it can grow its pipeline and speed up the development of its various candidates. At present, Biogen‘s pipeline includes a compound called aducanumab, which is being seen as a potential treatment for Alzheimer’s disease. There is also opicinumab, which is mainly meant for people affected by multiple sclerosis. Later this year, Biogen is expected to report the results of phase 2 of the trial of these compounds for the cited conditions.

Biogen’s CEO, George Scangos, termed Ehlers as a great fit for their firm. About the long delay since July in filling the seat, Scangos said they took their time to look worldwide for the perfect talent and they found the right mix of the talents that they were looking for in Ehlers. However, it is not going to be a walk in the park for the latter. Hitting the ground running, he will have to deal with low sales of the firm’s lead product Tecfidera. Runaway costs have gone up and that has led to the R&D budget often being squeezed.

Enbrel and Lyrica Sales are Likely to Drop

Lyrica is a drug for treating epilepsy. It is expected to remain the main cash cow for Pfizer. However, analysts are expecting that its sales for Q1 2016 would be about a 7% drop on a Y-o-y basis and a 9% drop compared to the last quarter. As for Enbrel, it is a drug that is owned by Amgen and is co-marketed by the two firms. Enbrel’s sales are expected to drop 14% on a Y-o-y basis and 27% compared to the last quarter. Pfizer is set to release the earnings report tomorrow.

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Hiren Mehta

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