UK research services company Peakdale Molecular has concluded an agreement with pharmaceuticals giant Pfizer, under which it its wholly-owned subsidiary Peakdale Chemistry Services will supply custom synthetic chemistry services to Pfizer Research at its site in Sandwich. As Big Pharma begins to hack away at its R&D base, some believe that this could be the shape of things to come in the industry.

Under the agreement, Peakdale will build a team of over 50 synthetic chemists at Sandwich, supplementing the 90 at its main facility at Chapel-en-le-Frith in central England. As well as chemistry services for Pfizer, the two said, this will also “provide a resource for other developing companies in the vicinity”, adding to the attractions of Sandwich as a regional innovation hub.

“Synthetic organic chemistry sits at the centre of drug discovery,” commented Dr Tony Wood, vice-president of Pfizer World-Wide Medicinal Chemistry. “This collaboration will allow Pfizer to continue to develop a strong community of experienced synthetic chemists within its facilities and enhance the overall culture of synthetic chemistry at the Sandwich site.”

There is speculation that other giants of the pharmaceuticals industry may find similar models. As the ‘patent cliff’ looms and the industry braces itself for a massive fall in sales, previously core areas of its work, most notably R&D, have come under the spotlight for potential outsourcing. Pfizer, as ever, has been in the vanguard.

Following its merger agreement with Wyeth, Pfizer announced in November 2009 that it would implement a new R&D model. This involves consolidating its main research activities at five main research-oriented laboratories – four in the US, plus Sandwich – supplemented by nine specialised sites.

Eight major R&D sites in the US and the UK are closing and operations are generally being consolidated. The net result is that the global R&D area occupied by the combined firm will fall by 35%. This will mean major job cuts on top of thousands that have come already, though precise numbers are not available yet. At corporate level, 4,200 have already gone from the pre-merger total of 120,800.

On 27 January, Pfizer also updated analysts on its development pipeline of projects from development to near-commercialisation. This has been trimmed from 600 to nearer 500 by prioritising those in the six ‘Invest to Win’ areas where Pfizer has identified “significant opportunities for innovation and market leadership”: oncology, pain, inflammation, Alzheimer’s disease, psychoses and diabetes.

In announcing its 2009 results on 2 February, Pfizer reaffirmed its commitment to the cost-reduction programme it began in January 2009. Aggregating anticipated synergies and net of reinvestment plans, this is expected to save €3-4 billion/year on 2008 figures by 2012.

In its own 2009 results presentation in late January, AstraZeneca detailed some even more swingeing cuts. By 2014, when it plans to exit manufacturing, the firm will lose about 8,000 more jobs on top of the 12,600 that went between 2007 and 2009. AstraZeneca is facing some major patent expiries in 2010, but hopes to save about €1.4 billion in costs.

The R&D and supply chain functions are among those that will be hit hardest. AstraZeneca will cut some 3,500 R&D jobs as it outsources more drug development, potentially to the benefit of CROs all over the world, though planned expansions in biologics and relocations to other sites and functions mean that the net loss may be more like 1,800.

GlaxoSmithKline (GSK) is also implementing major cuts in the coming years, though CEO Andrew Witty would not be drawn on the total at the company’s results announcement on 4 February. Various media estimates put the total at around 3,000-4,000 out of its total of 99,000, with R&D very much in the firing line.

The existing programme of restructuring is to be further expanded, with a view to yielding pre-tax savings of some €570 million/year by 2012, half through R&D and half through sales, general and administration. A “significant proportion” will come by reducing infrastructure, Witty said, though the firm will try to “preserve jobs” as much as it can.

More generally, GSK has already ‘externalised’ about 30% of its discovery research with 47 different partners and plans to increase the level of externally sourced compounds in the pipeline via option-based agreements. It is also, like Pfizer, sharpening its R&D focus on the therapies where it sees the greatest prospects of success through differentiation.