Pfizer building a brighter future
WHEN you’ve been around almost 45 years, a $30m (€23m) makeover comes in very handy.
Pfizer’s Ringaskiddy plant may be feeling some of the aches and pains of older age. But now, a timely rejuvenation has been promised.
This week’s announcement represents a boost both to the Cork area and to the Irish pharma sector which has been attracting some bad press recently with a succession of ‘patent cliff’ stories highlighting threats posed by the ending of licence protection for household names such as the cholesterol drug, Lipitor and Viagra.
True, the lion’s share of the total Pfizer investment package — $100m — is being allocated to Grange Castle, in Clondalkin, west Dublin, a sum which is on top of $200m committed for this key site in 2011.
However, sources are keen to point out that the investment in Ringaskiddy gives it a capability it did not have.
Ringaskiddy was Pfizer’s first Irish plant, originally established for the manufacture of citric acid. Over the past 35 years, it has been involved in the manufacture of household drugs.
It will soon embark on a new chapter and not before time. Viagra, that boon companion of the ageing Lothario, came off patent in June, in Ireland and is gradually coming off patent, elsewhere. Lipitor has also lost its protection.
Production of these blockbuster drugs, while still high, has declined precipitously, leaving parent drug companies and key big pharma locations such as Ireland with much to ponder.
In 2010, expiring patents pushed Pfizer into the red to the tune of almost $7.5bn while the emergence of generic drug alternatives also hit Ireland’s export figures.
Last September, it was reported that Irish pharmaceutical production had collapsed by 35% — a big development when pharmaceutical products account for over half of all exports.
Irish pharmaceutical exports in 2011 amounted to $50bn. However, the import content is also high, leaving total value added in the economy at just under €14bn in 2011. This led Davy Stockbrokers in a report to suggest that while our export performance has been hit, the overall hit to the economy will be restricted.
In 2010, employment in the sector reached 22,500 — these are high-paying jobs, but they represented 1.2% of total employment, that year.
Few doubt the importance of pharma and the life sciences sector as a whole to the Cork region, in particular.
This week’s announcement will mean 150 construction jobs in Ringaskiddy at peak, along with around 250 in Grange. It coincides with a second shot in the arm for Ringaskiddy in the form of the €15m Beaufort wave energy facility.
Research is playing an increasing role in the sector’s future.
According to Anita Maguire, VP, research & innovation at UCC, there has been a longstanding interaction between the university and the major pharma companies.
“We have worked with Pfizer quite a bit, ensuring that PhD students receive the skills required.”
Students spend three months with Pfizer on assignment learning the ropes and similar placements have been agreed with other companies.
Over the past year, Pfizer has hired 10 people from Maguire’s lab.
She notices a significant upturn in demand for her students and predicts that the country’s move up the value chain will continue. Currently, 70 work at her research centre. Prospects for work for such researchers close to home has never been better.
The Ringaskiddy site is undergoing a major reorientation in line with the industry as a whole.
The plant is being re-engineered so as to produce a much wider range of targeted drugs. Mass manufacture is giving way to customised production in what amounts to a reversal of trends since the Industrial Revolution.
The transition has not been easy.
According to Barry Heavey, IDA head of pharma & life sciences, while the patent cliff is the “eight hundred pound gorilla in the room”, the worst may now be over, employment-wise. Whereas job numbers in the sector in Ireland fell by between 1,000 and 2,000 in 2010-11, those losses have since been made up.
The big shift is towards personalised drugs which do not require the large capital investments of the past, they do call for much greater levels of flexibility in the workforce.
This could present a challenge to unions and management in the big legacy companies used to the profitable manufacture of large runs of established branded drugs.
According to Paul Duffy, vice president, Pfizer, the $130m package was no slam dunk. “In the current environment, any investment is difficult to secure.”
The investment will help Ringaskiddy move up the value chain as the plant shifts towards the production of more personalised medicines.
The move coincides with a resurgence in research at industry level following a worrying tail off.
The IDA is positive about the future in life sciences, here, and Cork, it seems, could be in line for another investment boost similar in scale to the Ringaskiddy announcement before too long. Eli Lilly is undertaking a major upgrade at its Kinsale facility, while Johnson & Johnson is also expanding.
J&J is of interest as it went through its version of the cliff fall a decade ago when the patent on its blockbuster drug, Risberdal, ran out.
It responded by investing in a new facility in Ringaskiddy, initially Centorcor, and now called Janssen Bio.
Employment at Pfizer has been hit by the ending of its big patents. Sales of Lipitor are down from a peak of $11-$12bn a year to between $2.5bn and $3bn.
Pfizer’s current headcount stands at 3,200, together with 500 good quality contract positions. However, it is down by 1,000 from the peak, what with layoffs and the transfer of 600 jobs at Askeaton, Limerick to Nestle.
A tablet manufacture plant at Loughbeg closed with the loss of 200 jobs while 140 jobs are on the line at Little Island where attempts are under way to sell a plant at a time of overcapacity.
This, however, has been achieved before. Pfizer sold its Warner Lambert facility in Dun Laoghaire to Amgem which is undertaking a major expansion, there, while it sold a Cork bio plant to Biomarin.
A revolution in drug manufacture is under way, one which already is offering hope to patients suffering from conditions such as lung cancer and & dementia.
Pfizer is leveraging off the large investments in scientific research through Science Foundation Ireland and the PRTLI third-level education programme, while Irish doctoral students in turn are finding valuable employment close to home. The investment by the State has been huge, but it is yielding real payback.
Conor Healy, CEO, Cork Chamber of Commerce, said that “despite a lot of consolidation in the industry, Pfizer is continuing to invest. This gives us a lot of confidence for the future.”
Company founded in 1849 in Brooklyn, New York, by two cousins, Charles Pfizer and Charles Erhard.
Citric acid.
Lipitor, Viagra.
100,000.
3,700 including 3,200 employees.
Ian Read.
€45bn.
€11.17bn
