Pfizer Bid for Wyeth Will Stall Mass. Biotech Deals, CEO Says, State Official Still Sees Growth
A combination of drug giants Pfizer and Wyeth could have many implications for the greater Boston life sciences sector, where both companies employ thousands of workers and have ties to many local biotech firms.
News of New York-based Pfizer’s $68 billion proposed acquisition of Wyeth drew mixed reviews from biotech executives and officials in the Boston area. For now, there are more questions than answers about how the major merger would impact Pfizer’s and Wyeth’s operations in New England and partnerships with biotech firms in the region.
Yet a completed Pfizer-Wyeth merger would definitely mean that biotech startups have one less pharmaceutical firm available to form lucrative partnerships with or acquire them. Russ Herndon, CEO of Cambridge, MA-based biotech startup Hydra Biosciences, says Pfizer and Wyeth may slow down partnership activities with firms like his for several months while the drug giants focus on the merger.
“It wouldn’t be surprising if for some period of time there was some ambiguity as to… who’s going to take responsibility for what types of programs,” Herndon says, “and because of that being able to execute properly on external opportunities becomes challenging.”
Pfizer and Hydra ended a partnership last summer to develop one of Hydra’s experimental pain treatments as part of broader cost-cutting at Pfizer, Herndon says. Even so, he still considers Pfizer as a potential partner for future deals.
Daphne Zohar, whose Boston venture firm PureTech Ventures launched startup Enlight Biosciences in partnership with Pfizer and two other drug firms last year, wrote in an e-mail that her initial take is that the Pfizer-Wyeth merger won’t affect Enlight. Enlight is developing technologies to be used by Pfizer and other pharma partners to accelerate the discovery and development of new drugs that has stalled in recent years.
Pfizer says that the merger would eventually bring $4 billion in savings to the combined company in areas such as sales, R&D, administrative support, and manufacturing—which could mean job cuts at both companies. Pfizer has about 5,000 employees at its R&D labs in New London, CT, and Groton, CT, as well as some 400 workers at Pfizer’s labs in Cambridge, MA, according to a company spokeswoman. Madison, NJ-based Wyeth has said it employs some 1,800 people at its Andover, MA, facilities where it manufactures recombinant-protein drugs, and Wyeth also has its own R&D labs in Cambridge.
Susan Windham-Bannister, president and CEO of the Massachusetts Life Sciences Center, the agency that manages state investments in life sciences, says that the state is likely to benefit from having Pfizer increase its presence in the state through the merger with Wyeth.
“We know that Wyeth was developing a stronger presence in Massachusetts, so I’m going to assume that now… Pfizer will join suit,” Windham-Bannister says. “So I think it’s great that we are going to continue to expand the pharmaceutical presence in Massachusetts.”
In its $1 billion stimulus package for the life sciences industry passed last year, the Bay State earmarked $12.6 million to fund improvements that Wyeth has requested at the Interstate 93 interchange near the company’s biotech drug plant in Andover. Windham-Bannister, who notes that the funding was not awarded to Wyeth, says that the project is intended to support the expansion of businesses in the entire area that the interchange serves.