Post Merger, Pfizer-Wyeth Might Be Structured Like J&J

When Pfizer and Wyeth complete their merger, the new company might look a bit like Johnson & Johnson: a collection of relatively small units working autonomously.

That scenario emerged in a chat over a cup of tea that BNET had yesterday at Pfizer's New York HQ with vp/worldwide communications Ray Kerins and director of worldwide communications Christopher Loder. Merger plans are apparently not very far along. There's an integration team in place with "people from every corner of the company," Kerins said. Pfizer is keen to avoid the rancor caused by the previous merger with Pharmacia. "It is very important for a clean integration," Kerins said.

But none of the major questions -- management structure, redundancies, etc. -- have been resolved yet. "It's hard to say. We're only two and a half weeks into this," Loder said.

The pair noted that the new company, which will have more than 131,000 employees and be the largest drug company in the world, will be shaped largely by the loss of Lipitor which goes off-patent in November 2011. Currently, the statin drug is 13 percent of Pfizer's revenues. Post-Lipitor, no drug will be more than 6 percent of revenues. Pfizer sees this as good news, Kerins said.

In addition, Pfizer sees little overlap between its business and Wyeth. Once aboard, Wyeth's vaccine, cancer and biologics business will be about one third of the company, Kerins said. "We don't have those." Pfizer's post-Lipitor strengths will be in specialty pharma, oncology and "established products."

"So you're not really integrating two large companies, you're integrating a lot of smaller ones," Kerins said.

When it was put to Kerins that that sounds a lot like J&J, which keeps its many businesses housed in disparate companies, some of which don't even carry the J&J name, Kerins replied, "you said that, not me!"

Another unanswered question: What will happen to Wyeth's Madison, N.J., HQ? "That we have not decided," Kerins said.

One possibility is to move post-exclusivity Lipitor to Pfizer's new Established Products group. That group looks after "around 300" medicines that are off-patent or generic, and it brings in $500 million a year, Kerins said. Those drugs get very little attention. "What if we put some of our power behind this and let folks know they're out there?" Kerins said.

BNET previously reported another idea being knocked around Pfizer is to keep Lipitor, perhaps as part of the Greenstone generic unit, but to still charge a small premium over competitors because it's the "real thing." The chat occured as part of Pfizer's "please stop hating us" campaign (my words, not Pfizer's), in which the pr team is looking to repair its relationship with reporters. (Back story here and here: A couple of years ago, Pfizer pr had a "unwritten rule" of not returning reporters' calls until they had left two messages on any issue.)

Kerins said he was surprised at how "hostile" some reporters were to Pfizer -- to the point where, he said, one publication refused to run a correction on an error of fact when Pfizer requested it.

Pfizer will also attempt to write its press releases in clearer language -- which doesn't sound like a big deal until you realize how massive a combined Pfizer-Wyeth earnings statement is going to be. "We're trying to write it now like human beings -- in English," Kerins said.

And Kerins and Loder now have daily blog reading lists, a habit triggered by the dawn of Ed Silverman's now-defunct Pharmalot two years ago. "I don't think you can be a media professional today and not pay attention to blogs," Loder said.

The talk also gave BNET a chance to walk the halls of Pfizer's gigantic 42nd Street office block. Dissappointingly, it was not the Bond-villainesque lair of brushed steel and ornamental shark tanks that BNET was hoping for, but a run-of-the-mill warren of generic cubicles and offices instead. Kerins said one of his next goals is to get all the office walls taken down so his pr team sits in an open-air "bullpen."