New York: Pfizer Inc’s chief executive stepped down without warning, acknowledging the personal toll involved in steering the world’s largest drugmaker through a multibillion dollar merger.
The departure of Jeffrey Kindler, 55, comes more than a year after Pfizer completed the signature move of his tenure -- the $67 billion acquisition of rival Wyeth. But he leaves before the company confronts the US patent expiration of its top-selling Lipitor cholesterol medicine expected in November.
Kindler said he was leaving to “recharge my batteries” after nearly five-year on the job. He is being replaced by the global head of pharmaceuticals, Ian Read, who is 57, Pfizer said late on Sunday.
Kindler’s departure comes more than a year after Pfizer completed the signature move of his tenure -- the $67 billion acquisition of rival Wyeth. But he leaves before the company confronts the US patent expiration of its top-selling Lipitor cholesterol medicine expected in November next year.
“The combination of meeting the requirements of our many stakeholders around the world and the 24/7 nature of my responsibilities, has made this period extremely demanding on me personally,” Kindler said in a statement issued by Pfizer.
Les Funtleyder, portfolio manager of the Miller Tabak Healthcare Transformation Fund, said it was unusual for a CEO to resign citing fatigue.
“I’d have liked a little more notice, and a little more orderly process,” said Funtleyder, who does not hold Pfizer shares. “The suddenness of the announcement will make many people think there may be something more here.”
Funtleyder said Kindler’s resignation may be more connected to Pfizer’s poor stock price performance, noting that investors have shown far more enthusiasm about Merck & Co’s purchase of Schering-Plough.
Indeed, Pfizer’s abrupt management change comes in stark contrast with Merck, which said last week that president Ken Frazier would succeed Richard Clark as CEO in a long-telegraphed and expected move.
Since July 2006, when Kindler assumed the CEO post, Pfizer shares have fallen roughly 27% compared with a 10% decline for the NYSE Arca Pharmaceutical index of large US and European drugmakers.
Sanford Bernstein analyst Tim Anderson said Pfizer shares would probably rise on Monday “because investors just want to see change at a washed-out story like Pfizer.”
“The departure is sudden but I doubt there was one event per se” that led to his departure, Anderson said. “Highly likely that he was pushed.”
Kindler, previously the company’s general counsel with little drug industry experience, was a surprise choice when he was named to the drugmaker’s top job in 2006.
Only months after he became CEO, Pfizer was dealt a devastating blow when it halted development of its experimental “good cholesterol” drug torcetrapib over safety reasons.
That product had been intended to help build on its cholesterol franchise from Lipitor, which had $11.4 billion in sales last year. Instead, Pfizer will lose the vast majority of that revenue when its loses exclusivity on the drug.
Its Viagra erectile dysfunction drug is also expected to lose patent protection in the next few years.
The acquisition of Wyeth, which brought Pfizer more access to biotech drugs and vaccines as well as cost-cutting opportunities, was intended to help Pfizer maneuver through the Lipitor loss.
So far, investors remain skeptical. Pfizer shares have fallen 5.2% since the company bought Wyeth on 15 October, 2009. Merck shares have jumped 15% since it bought Schering-Plough on 3 November, 2009.
Read, who joined Pfizer in 1978, has led Pfizer’s worldwide pharmaceuticals business since 2006. The business includes primary care, specialty care, oncology and emerging markets and accounts for about 85% of Pfizer’s annual revenue. He has been responsible for more than 40,000 employees.
Pfizer said its board will elect a nonexecutive chairman from its current membership at its next regularly scheduled meeting that will take place within the next two weeks.
Kindler’s resignation comes after the surprise departure of Pfizer research executive Martin Mackay in May.
Mackay had been co-head of research with Mikael Dolsten, former head of research for Wyeth, after Pfizer acquired Wyeth.
But Mackay unexpectedly jumped ship just seven months later, to head research at rival AstraZeneca Plc , leaving Dolsten in command of research for the world’s largest drugmaker.