New Pfizer R&D head tries to think small

Being the world's biggest drug company hasn't meant being the best. Fortune's John Simons outlines Pfizer chief scientist Martin McKay's plans to deliver big drugs to market.

By John Simons, Fortune writer

(Fortune) -- Pfizer's newly-appointed chief scientist Martin Mackay wants to help the company think small.

Mackay, who takes over for outgoing R&D head John LaMattina in January, admits Pfizer's drug-generating laboratories have lacked focus for too long. After a spate of high-profile acquisitions beginning in 2000, Pfizer (Charts) became the world's biggest Big Pharma company.

But even with revenues of close to $50 billion in 2006, Pfizer still it struggled to be the best. Much to the company's embarrassment, its $7.5 billion-a-year research operation - the world's most lavishly funded, public or private - was churning out fewer blockbusters than its competitors. The company has not had a major pharmaceutical hit discovered and deliverered by its own labs since Viagra went on the market in 1998. Part of the problem, says Mackay: Executives - including himself - were fixated on restructuring and integrating far-flung labs.

Now, as Mackay takes over as research chief, he believes Pfizer's scientists are better prepared than ever to make major breakthroughs - and usher them to market. "Why weren't we doing this all along?" asks Mackay. "Well, we were going through this business transformation with more than five years of major change. Now, we're ready for a back-to-basics focus on the business and not dealing with those distractions."

Mackay feels lucky to be taking the job at such an opportune moment. As the former number-two in Pfizer's labs, Mackay oversaw a key reshuffling of the laboratories that organized each of Pfizer's main areas of research - cancer medicines, neurology, respiratory, sexual health, antibacterials, and antivirals - into their own geographic center.

It sounds logical enough. But as the product of mergers, Pfizer had formerly hosted cancer researchers, for instance, at several different labs in multiple countries. Now, Pfizer's main cancer research will occur on its La Jolla, California campus.

The changes are an effort to create what Pfizer calls a "small company structure and mindset," which Mackay hopes will spur greater scientific creativity. More importantly, says Mackay, "there's a single point of accountability."

Mackay still faces a major challenge, however. Pfizer now claims to have a fertile pipeline of some 40 investigative medicines in "phase two," or human testing, trials. But this mid-stage raft of chemical compounds isn't likely to hit the market before the company's top-selling cholesterol medicine, Lipitor loses patent protection, which could happen as soon as 2010.

Mackay is trying not to fret the time pressure. "We just need to make sure we increase our productivity and push these phase two products through to the marketplace," says Mackay. "It's not rocket science here."

Indeed, it's not. Making sure that medicines are safe, effective, and generate billions in revenue, seems harder than rocket science.  Top of page