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 That could ease concern that if Allergan Inc's "friendly" talks with
Pfizer Inc end in a merger, the combined company may not remain one
of the world's largest inventors of new medicines.
"I practice a very open minded management structure and learn new
things all the time that change my opinion," Saunders, 45, said in a
phone interview with Reuters from an Allergan discovery lab. "For
instance, when Actavis and Allergan merged, we didn't have any
discovery capabilities, but we assessed Allergan's discovery
capabilities in ophthalmology and aesthetic medicine and recognize
they added a lot of value. Not only have we kept them; we've
invested in them."
While sources close to the ongoing negotiations stress that no
decision on Saunders' role has been taken yet, the possibility of
Pfizer being led or influenced by an executive who has not overseen
the full development, from discovery to approval, of a single drug
raises concerns among many industry insiders.
Pfizer refused to comment on Saunders' role in any potential deal
with Allergan. Pfizer board member Dennis Ausiello, chief of
medicine at Massachusetts General Hospital in Boston, said in an
interview that Pfizer would not be Pfizer without drug discovery.
"Innovation is at the heart and core of the business, and discovery
is at the heart and core of innovation," Ausiello said, also
acknowledging that acquisitions also have an important role to play
in Pfizer's drug development strategy.
The New York-based company sees one or more additional new product
launches each year through 2022 and plans to have 10 new immuno-oncology
drugs in clinical testing by next year.
Saunders has said that drug discovery is too inherently risky and
costly, and called the idea that big pharma players need to do it a
"fallacy." He prefers to license or acquire medicines that have
already been shepherded through the riskiest stages of their
development by other companies.
That's in contrast to Ian Read, Pfizer's 62-year-old CEO. When Read
took over Pfizer in 2010, he declared reigniting a moribund research
engine that had produced no important new medicines in a decade as
one of his most important tasks.
Since then, Read can claim credit for the regulatory approval of 10
new medicines, including breast cancer drug Ibrance, which analysts
forecast will eventually generate $5 billion a year, and Trumenba, a
meningitis vaccine, both products of Pfizer labs.
Some Pfizer insiders don't see Saunders as a good match for the
166-year-old company, whose expected revenue of $48 billion this
year is about three times as much as Allergan's.
"Saunders is not going to come to Pfizer and get religion on the
need for drug discovery. I would doubt that would happen," John
Lamattina, who served as Pfizer's research chief between 2003 and
2007, said in an interview.
Saunders declined to discuss any future role he might assume. He
said he believed he would in fact be able to fit in with a company
that has discovery culture.
"I believe as an executive of any company, it's your job to invest
in things you do better than your competition and reassess things
you don't do better," he said in the interview.
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TOP-NOTCH EXPERTISE
In his meteoric career, Saunders has lead Bausch & Lomb, Forest
Laboratories and Actavis, which took the Allergan name after
acquiring the Botox maker this year, all in the past five years.
While his faith in drug discovery credentials may be questioned, he
is highly regarded among his peers as a CEO with top-notch
operational expertise.
A portage of industry veteran Fred Hassan, who fixed Pharmacia and
sold it to Pfizer, Saunders is credited with helping turn around
struggling Schering-Plough and then leading its integration with
Merck & Co.
When Actavis acquired Forest, Actavis CEO Paul Bisaro replaced
himself with Saunders, who had previously sold Bausch & Lomb to
Valeant Pharmaceuticals International Inc. In a recent interview,
Bisaro called Saunders the best young CEO in the industry.
"It just didn't make any sense to let him get away," said Bisaro,
who remained as executive chairman.
To be sure, Saunders has also shown a determination to move away
from commoditized offerings. Last July, just four month after
Actavis acquired Allergan, Saunders agreed to sell Allergan's
generic drugs portfolio to Teva Pharmaceutical Industries Ltd for
$40.5 billion.
Despite their different backgrounds, Read may see Saunders' skill
set as complementary to his, some industry experts said. Raghuram
Selvaraju, healthcare analyst with Rodman & Renshaw, said he
believes Read would even be willing to cede his title to Saunders
and become executive chairman.
"Ian's main concern is to get lower taxes for Pfizer through an
inversion. He would rather be able to say he pulled this tax
inversion off, and now I'm going to let Brent crack the whip and
wield the axe," Selvaraju said, referring to the many job cuts that
typically follow large mergers.
Saunders said he has known Read for many years, from the time they
both sat on the board of PhRMA, the largest U.S. trade group for the
pharmaceutical industry. He declined to comment further on his
relationship with him in light of the ongoing deal talks.
(Reporting by Ransdell Pierson and Bill Berkrott in New York;
Editing by Greg Roumeliotis and John Pickering)
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