With layoffs in Kalamazoo and Ann Arbor, Mich. just a week old, a Pfizer, Inc. (NYSE:PFE) spokesman for the company’s Midwest operations revealed that the pharmaceutical company has “no plans at this stage to equip our local manufacturing facility to produce protein-based drugs” like Exubera inhaled insulin.

Those comments were made by Pfizer’s Rick Chambers to the Kalamazoo Gazette newspaper.
The company currently makes Exubera at its Terre Haute, Ind. manufacturing facility, then transports the diabetes medication nearly 300 miles to its Portage, Mich. plant for final packaging.

Three months ago this blog reported that investment WR Hamcrecht + Co. — which “maintains a market” (i.e., owns) in shares of the co-developer of the inhaled insulin, Nektar Therapeutics (NASDAQ:NKTR) — may have inadvertently disclosed an production risk:

Nektar makes all the dry powder insulin (the doses that are inhaled) at its headquarters in San Carlos[, Calif.], and Pfizer has been getting all that it has ordered there.

Could having all the Exubera powder made at one facility create a supply-chain risk for Exubera production and sale to diabetic consumers? On a purely practical level, this seems like a rather risky move.

It appears that some Pfizer, Inc. (NYSE:PFE) sales reps are complaining about meeting their Exubera sales quotas. Others, as explained below, are highly critical of the pharmaceutical company’s launch of the diabetes drug.

A recent post on CafePharma’s message board for the Pfizer drug sales team suggests that the company didn’t put enough money into Exubera’s launch and marketing campaign:

The problem with Exubera is that is was launched half-assed, before we had production ramped up to meet expected demand. Then, when we had enough product, we had no promotional money and then everyone was focused on NOT GETTING FIRED. Oh, and they changed the dates of the phases of the launch repeatedly (sometimes twice in the same month), changed the compensation and contests, and then finally they changed the division selling it (to the division that should have had it to begin with).

Exubera is a great product but it has to be launched well, with the $$$ for both education/promotion and DTC (which will drive sales). The launch, to date, has been, without a doubt, the worst in the history of Pfizer… a complete, utter back-alley abortion performed by a retarded monkey with a chain saw.

But just two (2) days after this apparent Pfizer sales rep. made the post above, Pfizer launched a slick new marketing campaign using video news releases (’VNR’) saying that Exubera is “now available in pharmacies.”

The videos (the first one here, and the second here) include comments by paid Pfizer consultant Dr. Jay Skyler.  He is a former president of the American Diabetes Assocation.  Skyler says in the first video that “one of the Holy Grails of diabetes…is the need to overcome the need for insulin injections.” By subtlely trying to suggest that insulin injections may be feared by people with Type 1 or Type 2 diabetes, Pfizer is apparently hoping that fear will be an effective marketing tool.This is part of Pfizer’s new DTC (”direct-to-consumer”) Exubera advertising campaign.  The VNR’s are troubling, however, because of their potential ability for misuse and creation of false impressions.

The effect of the VNRs and Exubera marketing have been examined by this blog before. First, when a San Francisco reporter broke a story charging that a Bay Area T.V. station reporter’s broadcast violated station “policy and…FCC rules.”

Second, the CBC (Canadian Broadcasting Corporation) improperly gave photo credit for a story they did on Exubera, claiming it was a CBC photo when, in fact, it was part of a Pfizer Exubera media release and marketing campaign.

The recent Pfizer, Inc. (NYSE:PFE) decision to slash ten percent of the company’s global workforce should not affect the company’s production of its Exubera inhaled insulin product for diabetics.

A report by the Kalamazoo Gazette says that, despite massive Pfizer layoffs in Ann Arbor and Kalamazoo, Michigan, more than 3,000 workers at the company’s Portage manufacturing facility are apparently not part of the drug company’s restructing.  The newspaper says that the plant “is stable and should be unaffected.”

Pfizer’s Portage facility does the final packaging work for Exubera inhaled insulin diabetes drug, which is produced at the pharmaceutical company’s nearby Terre Haute, Indiana manufacturing plant.

It would appear that Pfizer would not be likely to halt Exubera sales to save money since:

• The company is just starting to move Exubera sales this month by targeting primary care physicians and general practititioners, and moving beyond endocrinologists;
• Today Pfizer rolled out video news releases targeting Type 2 diabetics, launching a marketing campaign that says Exubera is “now available in pharmacies.”
• The vidoes (the first one here, and the second here).  Paid Pfizer consultant Dr. Jay Skyler — a former president of the American Diabetes Assocation — says in the first video that “one of the Holy Grails of diabetes…is the need to overcome the need for insulin injections.”  By subtlely trying to suggest that insulin injections may be  feared by people with Type 1 or Type 2 diabetes, Pfizer is apparently hoping that fear will be an effective marketing tool.
• Pfizer paid French drug maker sanofi-aventis (ADR) (NYSE:SNY) $1.3 billion in early 2006 to acquire all worldwide rights to Exubera.

How much Exubera will Pfizer’s Michigan plant end up helping produce this year?  It’s too early to tell.

On Monday the world’s largest pharmaceutical company announced it was laying off approximately 10 percent of its workforce around the world. One big questions is whether the Pfizer, Inc. (NYSE:PFE) layoffs will result in outsourcing a significant amount of research and development from the drugmaker’s Ann Arbor and Kalamazoo research facilities, in addition to those in France and Japan.

Pfizer explained that its rationale for letting go of the large number of staff was, in part, designed to:

generate cost savings through site rationalization in research and manufacturing, streamlined organizational structures, staff function reductions, increased outsourcing and procurement savings. (emphasis added)

Does this mean that Pfizer will outsource even more R&D and drug trials to countries where costs are signficantly less? It seems likely. One report estimates that companies that conduct clinical trials in India “can save as much as 50 percent in clinical trial costs.”

Pfizer’s Ann Arbor and Kalamazoo, Michigan facilities have conducted significant R&D projects. The Ann Arbor facility grew tremendously when Warner-Larmbert bought Parke-Davis, and then Pfizer subsequently acquired Warner-Lambert. The company’s Kalamazoo facility was formerly the base of Upjohn’s operations, followed by Pharmacia, which was subsequently bought by Pfizer.

The exact number of employees being terminated from the company’s Michigan locations appears unclear. Pfizer has said that Ann Arbor had 2,700 employees. A facility in Holland, Mich. had another 100 employees. But on Tuesday, a Pfizer spokesman told Ann Arbor’s local newspaper that “maybe up to 70 percent of the colleagues they would hope to transfer. So exactly how many employees Pfizer is permanently laying off from its Ann Arbor location is unclear.
According to the Kalamazoo Gazette, Pfizer had 1,200 employees at its Western Michigan facility four years ago. The Ann Arbor News reported that after Pfizer acquired Pharmacia, it laid off 1,200 employees. On Monday, the company’s layoffs were reported to impact some 250 employees. Pfizer’s Kalamazoo facility conducted drug-safety and metabolism research.

Some Pfizer employees, however, will reportedly be offered relocation opportunities to other company facilities. That’s according to the Kalamazoo Gazette and, again, the Ann Arbor News.

Barbara Ryan, an analyst with Deutsche Bank AG USA (NYSE:DB) told Business Week that she thinks Pfizer could move clinical trials to Eastern Europe or outsource data management from those trials to India or China.
Pfizer’s Sales Force Cuts

What remains unclear is exactly how will Pfizer’s cuts to its sales force will help improve bottom line revenues.

According to the drug company, the figure of 10,000 employees being let go “includes the U.S. sales organization reductions announced previously,” in addition to an estimated 20 percent of its European sales force. That seems like a lot of drugs which the world’s biggest pharmaceutical company could have been selling.
One reporter recently concluded that Pfizer’s Exubera sales of its new inhaled insulin for diabetics remain so low, that the company isn’t even reporting the. Will signficant cuts to the company’s drug sales teams in the U.S. and Europe impact future sales of Exubera? It seems like it would, particularly for a new drug that a number of doctors and diabetics are reluctant to consider using.

In a widely expected move, today Pfizer, Inc. (NYSE:PFE) announced that it will elminate “10,000 positions, or about 10 percent of [the drug company]’s worldwide workforce by the end of next year.” Also announced was the closing of three Pfizer research facilities in Ann Arbor and Kalamazoo, Michigan

No mention, however, was made in one Pfizer statement of the company’s Exubera inhaled insulin sales.

Another statement, however, reiterated that Exubera was launched in 2006:

Against an original target of six new-product entries in the U.S., we launched four products — Eraxis, Sutent, Exubera, and Chantix.

That statement was in an SEC filing showing a breakdown of Pfizer’s Q4 2006 revenues by segment and product. While figures were given for some drugs used to treat cardiovascular and metabolic diseases (Lipitor, Norvas, Cardura, Caduet, Accupril, and Chantix), Exubera was not listed among them.

Only a lump-sum figure was given for sales of drugs treating “Endocrine Disorders”; no individual figures for drug sales were given. Of the $261M in reported worldwide sales of endocrine drugs, the majority of Pfizer’s sales were overseas ($194M), while U.S. sales lagged far behind ($67M).

Several questions remain unanswered:

• What percentage of Pfizer’s sales force be affected by the drugmaker’s layoffs?
• Will Pfizer’s cost-cutting measures affect the company’s Exubera inhaled insulin sales?

Last fall, Pfizer Vice Chairman David Shedlarz announced to attendees at the UBS AG (NYSE:UBS) Global Life Sciences Conference that Exubera sales would be an “important source of revenue growth” for the company.

If Pfizer lays off not only research facility personnel, but also signficant numbers of its sales force, it would seem harder for the remaining sales team to sell Exubera, unless they can sell it more effectively.