Pfizer Inc. (PFE - Free Report) announced that chief executive officer (“CEO”), Ian Read, will step down from the post, beginning 2019. Ian will be succeeded by the company’s current chief operating officer (“COO”), Albert Bourla.
Read has served as the CEO of the company for eight years and has been the chairman of its board of directors since December 2011. He will serve as executive chairman of Pfizer’s board of directors from next year.
During Read’s term, Pfizer did well despite patent expiration of some of its blockbuster drugs. The company also received 30 FDA approvals in these eight years. Its share price also rose during the time and has outperformed the broader S&P 500.
Pfizer has also built a strong pipeline, which includes 15 candidates with blockbuster potential. These are expected to get approved by 2022. The company has formed strategic collaboration agreements with other pharma companies like Bristol-Myers Squibb (BMY - Free Report) for Eliquis and Japan based Astellas for Xtandi.
Read’s successor, Bourla also has a strong track record with more than 25 years of service at Pfizer. Prior to his appointment as COO on Jan 1, 2018, he led the company’s Innovative Health business, which recorded operational growth of 7% in revenues in 2017, and established the segment in emerging markets. Moreover, Pfizer’s oncology business tripled under his supervision in the past four years. We expect him to continue with his impressive performance going forward.
Talking about CEO transitions, we remind investors that Pfizer’s competitor Merck (MRK - Free Report) announced last week that it has amended its retirement policy, repealing the mandatory retirement age of 65 years for a CEO. The amendment was done to retain its current CEO, Kenneth Frazier, beyond his term, which is scheduled to end in 2019.
Moreover, General Electric Company (GE - Free Report) also announced on Oct 1 that its current CEO and chairman, John Flannery, will be replaced by another board member, H. Lawrence Culp, Jr. The company has struggled so far this year. This more than a century-old company was removed from Dow Jones Industrial Average index in June. Investors expect the new CEO to help the company post a turnaround.
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