The Predicament of Pfizer

Brooklyn, New York, Pfizer Headquarters.

The atmosphere in the expansive conference room was tense. Ian Reid, the Chairman of the Board and CEO of Pfizer, sat at the head of the conference table, his brows furrowed. He scrutinized the senior executives with an intensity that resembled a prosecutor.

"Gentlemen, is this what you're telling me? Do you think I can relay the same message to the board? Announce to the world that as the largest pharmaceutical manufacturer globally, all our new products are trash?"

A bunch of incompetents! Ian Reid felt like throwing these imbeciles off the roof. The company had poured nearly ten billion dollars into R&D over the past year, with little to show for it. Without significant progress, it was challenging to address the board members' pressing questions.

In a massive corporation like Pfizer, none of the board members are pushovers. Consider these names: Constance Horner, former Deputy Secretary of Health and Human Services; George Lorch, former CEO of Armstrong World Holdings; and Bill Gray, a former Philadelphia councilman...

Although Pfizer is a behemoth, it isn't without its struggles. R&D is undeniably one of the critical competencies for sustained growth in pharmaceutical companies. Still, the dismal state of their new drug development, coupled with the disproportionate risk of the massive investments and outcomes, was a constant headache for Ian Reid.

The Director of R&D and other senior executives looked despondent. Yet, they were all subdued by Ian's tempestuous roar. They had long become accustomed to their boss's style and silently endured, hoping his fury would soon burn itself out.

"I'll say it again, Pfizer is a company that needs to make a profit, and only new products can grant us a voice in the market!" Ian's eyes, sharp as a hawk's, bore into everyone present. "I hope you haven't forgotten last year's lesson!"

Last year, Pfizer lost its top position among global pharmaceutical companies, momentarily surpassed by the Swiss pharmaceutical giant Novartis. If not for his decisive actions and swift measures to reverse the decline, they might still be struggling to recover.

The senior executives exchanged glances, silently conveying their grievances, blaming the Director of R&D for dragging them into this mess. However, the director felt wronged. R&D was inherently risky. Was it fair for him to be the only one holding the bag for this?

"It seems no one has any good suggestions? Well, take a look at this." After venting his frustration for quite some time, Ian's fury had diminished considerably. He gestured to his assistant to distribute the folders.

"Is this for real?" Holding significant positions in such a large company, these executives were naturally not novices. They instantly grasped the content of the documents. "A mere university lab has developed a drug that far surpasses Viagra? And it's already in the large-scale clinical trial phase?"

Were the researchers they had hired at such high salaries nurtured on crap? Giants in the pharmaceutical industry like Pfizer and Novartis poured countless funds into R&D annually, seemingly with no return. The expressions on the executives' faces were priceless.

"Why are we only hearing about this now? Everyone here should reflect on this. I'm very disappointed in all of you," Ian said, his anger evident again.

In all fairness to the executives, no one could have anticipated that such a powerful drug would materialize, especially one that had bypassed the typical R&D process and been synthesized in just three days.

"If this is true, we must acquire this drug!" The fact that a superior product had emerged from a university lab didn't dishearten Douglas, the Chief Business Development Officer. He didn't care about the embarrassment of the R&D team. What caught his eye was that the new drug seemed to have no pharmaceutical company backing, which meant there was potential for acquisition.

"At last, someone gets it," Ian said, his tone slightly softer. But he quickly added, "I want every detail on this drug. If its efficacy is as reported, get it for me at all costs and as fast as possible!"

If they had received the news, then it was only a matter of time before their competitors did too. Some might already be closely watching, and once the large-scale clinical trials concluded, the new drug might end up in others' hands—something Ian Reid wouldn't tolerate.

...

Wearing a thick, textured purple master's robe and a custom-made graduation cap, Bruce felt none of the solemnity that a graduation ceremony usually demanded. Compared to the amiable and smiling dean of the law school shaking his hand, he was more focused on the empty sunlight on the lawn.

The school had sent invitations to Bruce's parents well in advance, adhering to the tradition of American universities. However, Bruce was sure they wouldn't come. For parents with blue-collar jobs, the expense of traveling overseas was beyond their means. Bruce, not eager to interact with the family of this body, didn't mention that finances weren't a problem for him now.

Yet, none of his distraction showed on his face. Like everyone else, Bruce quickly completed the ceremony and immediately spotted Fowler in the audience. Although the senior lawyer was there for his daughter's graduation, his attention on Bruce was undeniable. Seeing Bruce descend from the stage, his eyes lit up and he approached.

"Congratulations, Bruce. How does it feel to be graduating?" Fowler asked with a smile.

"As you know, Fowler, I'm quite busy. I haven't really had time to ponder it." Bruce glanced around at the excited students posing for pictures and looked disinterested.

"Of course. But you've got bigger things on the horizon. Our firm has evaluated the patent value of your new drug. We estimate it to be worth between $300 to $500 million. You'll likely need an accounting team soon," Fowler said, feeling a tad envious watching a new millionaire in the making.

"Really? That's good news. Now it's up to your negotiations with the pharmaceutical companies," Bruce replied nonchalantly.

Is this guy really just a young man? Fowler thought, finding Bruce harder to read with each encounter. Despite his impending windfall, Bruce didn't show much excitement, seeming even less enthused than Fowler, his agent. At times, Fowler felt he was conversing with someone older and more jaded than himself.

"Don't worry, our negotiation team is top-tier. Also, Merck and Roche have expressed interest in meeting with you again. Novartis hasn't mentioned anything, but I bet they've tried," Fowler said, admiring Bruce's calm demeanor that gave no chances to those trying to bypass the negotiation team.

"What's the current offer?" Bruce inquired. He knew the ins and outs of these corporations. Their information networks would quickly identify that Samson wasn't the primary patent applicant and would approach Bruce in hopes of lowering the patent's transfer price. But Bruce believed in assigning the right job to the right people. The Pearson Hardman law firm was highly skilled in such negotiations, and he wouldn't interfere.

That was precisely why he had promised Fowler a commission-based cut. The higher the negotiated price, the higher their earnings, ensuring they would pull out all the stops against the pharmaceutical companies vying for the drug patent.