Pfizer set for big Chesterfield expansion

ST. LOUIS POST-DISPATCH  08/22/2007
By Rachel Melcer

Pfizer Inc. is breaking ground today on a $50 million expansion in Chesterfield that signals the increasing importance of biotech drugs to the struggling pharmaceutical giant.

The company, based in New York, is doubling the size of a pilot plant that produces protein-based, injectible biologic drugs for clinical trials. All of the biologics developed by Pfizer globally will pass through the facility.

The investment %u2014 on top of a $200 million research center also under construction in Chesterfield %u2014 comes at a time when Pfizer is aggressively cutting costs. The company is trying to offset a string of financial setbacks: declining market share for mega-blockbuster Lipitor; the failure in clinical trials of a promising cholesterol fighter; and the loss of patent protection on drugs such as Zoloft and Norvasc, opening them up to low-cost generic competition.

"They're pulling back on expense items, but not in money for research and development. They recognize that R&D obviously is the growth driver in this industry," said Joseph Tooley, pharmaceuticals analyst at A.G. Edwards & Sons Inc.

Pfizer is "trying to research its way back to prosperity," he said.

At Pfizer, as with its big-pharma competitors, that means an increased focus on biologic drugs. These therapeutics and vaccines are expensive to make and produce and require cutting-edge scientific expertise and facilities. But they typically are targeted at patients with serious illnesses %u2014 such as cancer, diabetes and certain neurological diseases %u2014 who have not responded to or lack other treatments.

As a result, biologics may be fast-tracked to commercial

approval, and insurers are less likely to question paying high prices for them. That price advantage may last a long time, since U.S. regulators have not established a process for approving generic competitors, which in biologics are known as "follow-on" drugs.

Pfizer's goal is to have as much as one-fourth of its drug development pipeline comprised of biologic drugs. It has four biologics in phase-one trials to test safety and tolerance; eight in phase-two early human trials; plus a lung cancer treatment that is about to advance into broad phase-three patient trials.

"We're relative novices at this, but we've got some really exciting things early on" in the pipeline, said John LaMattina, Pfizer's head of global research and development.

The company's president and chief executive, Jeff Kindler, told analysts in a July conference call that chemical-compound pills remain Pfizer's core strength.

"But we believe (biologics) offer significant, promising R&D opportunities that we need to pursue, and we are intent on doing so," he said. "We're looking at various ways to really jump-start our activities in that area. %u2026 All I can ask you to do is stay tuned."

The Chesterfield campus is key to that ambition. Its scientists educate Pfizer researchers worldwide about the potential of biologic treatments, then work with them to develop, formulate and refine manufacturing processes for promising candidates, said Dan Getman, vice president of R&D and St. Louis site manager.

The expansion includes the addition of fermenters, bioreactors and other equipment used to grow, purify and isolate the proteins that patients eventually will inject. The site will be able to make greater quantities of a single biologic needed for later-stage clinical trials, and to work on more projects at once, Getman said.

Along with the bricks and mortar, about 35 jobs will be added over two years. The facility should be operational by mid-2010.

"This is big for us. It's another significant investment in the site, which speaks to the people here and the impact they're having both within the company and in bringing forward important medicines," Getman said.

St. Louis County is providing tax abatements on the building and equipment valued at about $670,000 a year over a decade, said Denny Coleman, president and chief executive of the St. Louis County Economic Council. Pfizer also stands to get incentives through the state's Quality Jobs program.

"At a time when many pharmaceutical firms are cutting back on investment and cutting jobs, we're very fortunate to have Pfizer making the kind of commitment they are to St. Louis County," Coleman said. "Each company or institution that makes a substantial investment adds to the strengthening of the entire (biotech) industry" in the region.

rmelcer@post-dispatch.com | 314-340-8394