Celgene’s Chairman and CEO Robert Hugin (pictured) has been appointed chairman of the Pharmaceutical Research and Manufacturers of America (PhRMA).

He succeeds Eli Lilly’s John Lechleiter and said his priorities for his 12-month term are to defend intellectual property and the incentives for new medicines.

John Castellani, PhRMA President and CEO, said the new chair will provide a “strong foundation for the millions of US jobs our industry creates and supports” through his policies.

Mr Hugin was appointed Celgene chair in 2011 having served as president since 2010 and chief operating officer since 2006.

“I look forward to working with our leadership team, the PhRMA staff, and our member companies to advocate for policies that support the advancement of medical innovation and that ensure access for patients to life-extending therapies,” Mr Hugin said. “Through our actions, we must ensure that continued medical innovation is part of the solution to healthcare costs and economic growth in the long term.”

Alongside Hugin’s appointment, the trade body also appointed Pfizer’s president and CEO Ian Read as the next chair and Merck and Co’s chief executive Kenneth Frazier as treasurer.

Pfizer has appointed new heads of three of its major business units from 1^st June.

Olivier Brandicourt (pictured) will become President and General Manager of the Emerging Markets and Established Products business units, replacing David Simmons.

John Young will replace Brandicourt as President and General Manager of the Primary Care business unit.

David Simmons is leaving Pfizer after 15 years to become CEO of global contract research organisation Pharmaceutical Product Development (PPD).

Ian Read, CEO of Pfizer, said: “We are indeed fortunate to have such a deep bench of talented leaders who can quickly assume new roles and maintain our momentum.”

Dr Brandicourt, a member of Pfizer’s Executive Leadership Team, has 20 years’ experience in the pharmaceutical industry. He has held a range of senior positions at Pfizer including medical, marketing and country management roles.

“Olivier is both a physician and a proven business leader who understands the many challenges of today’s changing industry and healthcare landscape,” said Read.

John Young will join the Executive Leadership Team. Currently Regional President of Europe and Canada for the Primary Care business unit, he has held a number of commercial positions in 25 years at Pfizer.

Read noted: “John has a deep understanding of the primary care landscape and will be a strong leader for this significant part of our business.”

Pfizer continued to suffer from generic exposure on its former cholesterol blockbuster Lipitor in Q1 2012 after overall sales and earnings both dropped.

Reported revenues fell 7% to $15.4bn and net income decreased by nearly a fifth (19%) after sales of Lipitor fell by almost half (42%) to just under $1.4 billion.

Ian Read, Pfizer Chairman and CEO, said he was “pleased” with the results after witnessing growth in “certain brands” and “key geographies”.

Biopharmaceutical sales decreased 8% to just over $13bn as revenue for Lipitor in the US dropped by nearly three-quarters (71%) to $383 million.

Sales of Prevenar 13 dropped by 6% to $941m, Xalatan fell by 42% to $227m with Novasc also recording a fall in revenue by 6%, compared to the same period last year.

The news was better for Lyrica up 16% to $955m, whilst Enbrel earned $899 million outside the US and Viagra generated a 6% rise in sales to earn $496m.

As a result of the losses, Pfizer has adjusted its revenue guidance for the full year from $60.5-$62.5 billion to $58-$60 billion.

Frank D’Amelio, Chief Financial Officer, said the adjustment reflects Pfizer’s recent $11.58 deal with Nestlé for its nutrition business. He commented: “We remain on-track to finalise a strategic decision for our Animal Health business this year and continue to expect that any separation of that business will occur between July 2012 and July 2013.

“Further, this quarter we continued to prudently allocate our capital by returning over $3.3 billion to our shareholders in first-quarter 2012, through $1.6 billion in dividends and $1.7 billion from the repurchase of 77 million shares.”

Nestlé has won the battle to purchase Pfizer’s nutritional business for $11.85 billion.

The sale follows Pfizer’s decision to sell its nutrition and animal health divisions to focus and invest in its pharmaceutical business.

Ian Read, Pfizer CEO, says the deal with Nestlé is “consistent with Pfizer’s intention to generate the greatest value for shareholders”.

Analysts had previously predicted a deal would be in the region of $10bn for the division which generated sales of $2.4bn last year.

It’s expected Pfizer’s veterinary division will be generate a higher fee than the nutritional business after its revenue totalled $4.2 billion in 2011. Novartis has already reportedly had a $16bn offer rejected by the company with Bayer also allegedly hoping to secure an $18bn deal.

Industry analysts now predict the generated revenue from the sales of the two divisions may be used to fund future large scale acquisitions such as Bristol-Myers Squibb and the Abbott pharma spin-off.

John Lechleiter, the Chairman, President and CEO of Eli Lilly and Company, has been elected as Chairman of the Pharmaceutical Research and Manufacturers of America (PhRMA).

He succeeds Sanofi CEO Christopher Viehbacher and is joined by Celgene’s Robert Hugin, elected as Chairman-elect of the Board of Directors, and Pfizer’s Ian Read, elected as treasurer.

John Castellani, PhRMA President and CEO, said it will be an honour to “work closely with these visionary, passionate leaders of our sector”.

Mr Lechleiter initially joined Lilly in 1979. He has served as Chairman, President and CEO of the company for the past four years after becoming President and Chief Operating Officer in 2005, when he joined the company’s board of directors.

“I’m honoured to lead PhRMA during this very important time in the history of our industry,” Mr Lechleiter said. “PhRMA member companies play an incredibly important role in the delivery of high-quality, cost-effective health care for our citizens. Continued progress against diseases like Alzheimer’s disease, cancer, and diabetes requires policies that enable medical innovation to thrive. I look forward to the opportunity to advance these important conversations at an industry level.”

Pfizer Inc. has cut its redundancy payouts to US employees by a third just before its anticipated spring round of layoffs.

Employees of the world’s largest drug company will see their basic severance pay cut from 12 to eight weeks.

Other aspects of Pfizer’s severance package will remain in place, but employee health benefits will now last eight weeks instead of a year.

Pfizer CEO Ian Read (pictured), whose pay package rose by 44% in 2011, has promised to cut $1bn from global operations in 2012.

This continues the slimming process that saw the company’s costs reduced by $642m in 2011.

Pfizer has already shed 20% of its total workforce since its acquisition of Wyeth in 2009.

An internal memo announcing the changes in terms and conditions noted: “We will continue to analyze all of our benefit programs to support our long-term competitiveness and the sustainability of benefits in today’s challenging business environment.”

The measure suggests that major job losses are planned, since the company is now taking steps to manage the cost of redundancy itself.

Pfizer may consider separating its branded and generic pharmaceutical businesses by 2015, according to business analysts briefed by its CEO Ian Read.

The announcement caused Pfizer’s share prices to rise to their highest value in more than four years.

Coming after Pfizer’s announcement that it will divest its animal health and nutrition businesses, the news is seen as indicative of an industry trend towards reversal of M&A.

At a meeting with Goldman Sachs analysts, Read (pictured) indicated that he was willing to consider further divestment of non-core assets. According to analyst Jami Rubin, “a potential full-scale breakup” of Pfizer is on the cards.

However, Rubin said, such a move would depend on Pfizer’s gaining regulatory approval for new branded drugs: “If the pipeline is successful and drives meaningful top-line growth, management will want to separate the businesses so investors can better value the pharma business.”

This would mirror the recent split of Abbott into separate branded drugs and medical products businesses.

In her report to investors, Rubin noted that other leading pharma companies may follow suit, since in many cases “the sum of the parts is greater than the whole”.

Les Funtleyder, a fund manager for Miller Tabak, which owns Pfizer stock, commented that moves towards the breakup of the Pfizer corporation represent the company’s answer to the question of what can follow the blockbuster era.

After years where M&A were the prevailing trend, he said, the industry may be shifting towards a more ‘lean’ model. In the case of Pfizer, having survived the Lipitor ‘patent cliff’ appears to be the trigger for a major restructure, with the long-term aim of reviving the company’s core focus on R&D.

Pfizer CEO Ian Read received a 44% rise in his total income last year as a reward for guiding the company in its first steps beyond the ‘patent cliff’.

Read, who was appointed CEO in December 2010, saw his salary and bonuses package rise to $25m.

Pfizer said in a regulatory filing that the company had survived the loss of exclusivity on its blockbuster drug Lipitor by cutting $1bn per year from its R&D budget.

Before taking over as CEO after Jeffrey Kindler’s resignation, Ian Read held several senior executive roles at Pfizer for 32 years, including global head of pharmaceuticals.

“Under the leadership of Ian Read, we set a course to redefine and strengthen Pfizer,” the filing claimed.

The US patent on Pfizer’s cholesterol-lowering drug Lipitor, the world’s bestselling pharmaceutical product, expired in November 2011. The company also faced pricing pressure on many products.

Read led a programme of R&D spending cuts that saw thousands of research jobs and many facilities axed, with the long-term goal of cutting $2bn from the company’s R&D budget.

According to the filing, Pfizer returned $15.2bn to shareholders through dividends and stock buybacks in 2011.

Another strategy announced by Read is the divestment of the company’s nutritional products and animal health units, which will be either sold or spun off and the money used to buy back company shares.

Read’s 2011 income package included a salary rise from $1.2m to $1.7m, while his cash incentive awards more than doubled to $3.5 million. His stock awards, stock option awards and pension compensation also increased significantly.

Pfizer, the world’s largest pharmaceutical company, has declared financial results for 2011 indicating that its new products largely compensated for its loss of exclusivity on Lipitor and other ‘blockbuster’ drugs.

The company declared a full-year revenue increase of 1% for 2011, reflecting an operational decline of only 2% ($1.6bn) despite losing $5bn of its former market share through patent expiry.

The results were described by Pfizer Chairman Ian Read (pictured) as showing the company’s “new direction and focus” with a strong pipeline and a more “results-driven” R&D programme.

Pfizer’s full-year revenues for 2011 were $67.4bn compared to 2010’s $67.1bn, reflecting an operational decline of $1.6bn. Its US revenues were $26.9bn, down 7% from 2010. Its international revenues were $40.5 billion, 6% above the 2010 figure, reflecting 1% operational growth and a 5% positive impact of foreign exchange. Pfizer’s international revenues represented 60% of the total in 2011, compared with 57% in 2010.

The company’s Primary Care unit saw growth in sales of Celebrex, Lyrica, Pristiq and Spiriva balancing losses from patent expiries: Lipitor and Caduet in the US in November 2011, Lipitor in other developed markets over 2010, and Aricept in the US in November 2010. These losses of exclusivity cost the unit $775m (13%) relative to the last quarter of 2010.

The Specialty Care unit saw growth in Enbrel in developed markets and Prevenar in Japan. In the US, revenues from Prevnar 13 were lower than in 2010 due to a successful vaccination programme that year. The patent expiries of Vfend and Xalatan in the US cost the unit $205m, 5% of fourth-quarter 2010 revenues.

The Emerging Markets unit saw volume growth more than offset by the negative impact of foreign exchange and increased price pressures, as well as the patent expiry of Lipitor in Brazil and Mexico in 2010. Patent expiries cost the unit $29m, 1% of the fourth-quarter 2010 figure.

The Established Products unit suffered from the patent expiries of Effexor XR, Protonix and Zosyn in the US, which cost the unit $208m (9% relative to fourth-quarter 2010). It also suffered from multi-source generic competition to Aricept in the US. These losses were partially offset by $150m from the addition of legacy King products, as well as by foreign exchange and by the licensing of Watson Pharmaceuticals to sell the authorised generic version of Lipitor in the US.

Pfizer reduced its total costs, excluding the impact of foreign exchange, by 5% relative to fourth-quarter 2010. This was achieved through cost-reduction and productivity initiatives, particularly in R&D, as well as reductions in the US field force and in marketing spend.

Ian Read, Pfizer’s Chairman and CEO, said: “Overall, 2011 was a year of setting new direction and focus for Pfizer. I am pleased with our 2011 financial performance, which was achieved in the face of a challenging global market and product losses of exclusivity of approximately $5 billion.

“In 2011, we advanced our pipeline and improved the rigour and productivity of our R&D efforts, while also changing the culture within the R&D organisation to be more accountable and results-driven. With the steady cadence of new product launches, marketing submissions and approvals, and positive late-stage clinical data presentations, we are clearly seeing the benefits of our investments and new approach.

“Prevnar/Prevenar 13 for adults, tofacitinib, Xalkori, Inlyta (axitinib) and Eliquis are well positioned to be important new product opportunities that may enhance the performance of our business. Additionally, we have a next wave of compounds that have shown promise in early and mid-stage studies, and we look forward to progressing them through the pipeline.”

Looking to 2012, he concluded: “We will continue to fix the innovative core in order to enhance our post-proof-of-concept portfolio of compounds in high-priority disease areas and successfully launch additional novel products. I look forward to continuing the significant progress we’ve made.”

Pfizer looks set to adopt a new M&A strategy after CEO Ian Read ruled out any future blockbuster deals.

Mr Read said the company may favour bolt-on acquisitions and research alliances instead of the billion dollar deals it has completed in the past for Wyeth, Pharmacia and Warner-Lambert.

Speaking at the JP Morgan Global Healthcare Conference in San Francisco, he said he was “disinclined” to look at the “possibility of another mega-acquisition”.

Instead, the Chief Executive pointed towards acquisitions or licensing deals “that make sense financially”. Mr Read did not completely rule out major deals in the future but said the company has “all the science we need and we have the geographic breadth”.

He highlighted five products that will drive the growth of the company in the short term: Prevnar 13, a pneumococcal vaccine, lung cancer drug Xalkori (crizotinib), kidney cancer drug axitinib, tofacitinib for rheumatoid arthritis and, in partnership with BMS, Pfizer’s anti-clotting drug Eliquis (apixaban).

The CEO also revealed that the company had terminated more than 90 pre-proof-of-concept programmes in a move to establish a smaller and more flexible cost base. Its chief scientific offers are also “operating with increased cost transparency and accountability for a greater proportion of the total spend,” he said.