Pfizer Inc., the world's biggest drugmaker, said it is considering job cuts as it faces a decline in sales of the painkiller Celebrex and the loss of patent protection on drugs that account for a quarter of revenue.
Pfizer may eliminate about 10,000 jobs, including sales representatives, out of its 120,000 employees worldwide, according to analysts Tony Butler at Lehman Brothers and Christopher J. Sylvester at Banc of America Securities.
Company spokesman Paul Fitzhenry, in a telephone interview in New York, said "any speculation about decisions is premature."
"More billion-dollar drugs are being pulled from the market than added," said Jon Fisher, who helps manage about $25 billion at Fifth Third Asset Management in Cincinnati, including Pfizer shares. "I don't know why sales-force numbers should be the same that they were five years ago."
Job cuts may save Pfizer $1.5 billion a year and boost 2005 profit by about 15 cents a share, according to Butler.
Chief executive Hank McKinnell, 61, is bracing for generic competition within two years on drugs that generate $14 billion in annual revenue.
New prescriptions of Manhattan-based Pfizer's Celebrex painkiller, its fourth-biggest drug, have fallen 59 percent since the medicine was linked to heart risks Dec. 17.
The company's strategy review "includes all aspects of our business, including employee headcount," Pfizer spokesman Fitzhenry said. "It's important to stress that at this point we are conducting a thorough analysis of our operation," and the company will provide a "detailed strategic plan and financial forecast" at an April 5 meeting with analysts.
Merck & Co., the No. 2 U.S. drugmaker, cut about 5,100 jobs last year as it lost revenue from the withdrawal of its Vioxx painkiller Sept. 30. Merck, based in Whitehouse Station, N.J., also faces declining sales of its Zocor cholesterol treatment.
Pfizer may cut as much as 30 percent of its 38,000-member sales force, according to Lehman's Butler, who cited "industry contacts." Such a staff reduction may add 16 cents a share to 2006 and 2007 profit, Butler said in a note to clients.
The patent on the antidepressant Zoloft, Pfizer's third-biggest seller at $3.36 billion last year, expires in 2006, and on the blood-pressure treatment Norvasc, the company's No. 2 drug, in 2007.
"We understand the primary reductions will be in sales and marketing and will be above and beyond the current plans in administration and manufacturing," Butler wrote in his note. "Management would not comment on the size of the possible reduction."
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