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Posted on Mon, Nov 9, 2009 : 2:30 p.m.

Today's Pfizer cuts show inevitability of Ann Arbor site's transition

By Nathan Bomey

(Update 4:13 p.m.: I just confirmed that today's Pfizer cuts are likely to impact ex-Ann Arbor Pfizer workers who transferred to the company's St. Louis site. Story here.)

Pfizer's massive downsizing announcement today underscores the inevitability of the pharmaceutical giant's recent exodus from its Ann Arbor site and serves as further reminder of the importance of the site's repositioning.

Pfizer, which completed its $68 billion acquisition of pharmaceutical firm Wyeth on Oct. 15, is expected to close six of its 20 research facilities, the Associated Press reported. It will also consolidate other operations, cutting 15 percent of its 13,500 research employees and some 35 percent of its R&D space.

The announcement comes just five months after the University of Michigan completed its $108 million acquisition of Ann Arbor's 174-acre ex-Pfizer site and nearly three years after Pfizer announced it would abandon the site, displacing more than 2,100 workers.

By comparison, Pfizer's January 2007 announcement, which included the shuttering of the Ann Arbor campus, called for a 10 percent reduction in the company's workforce.

The wide-ranging, continuous contraction in the pharmaceutical industry offers constant reminders that any hope of Ann Arbor's 30-building pharma campus being sold to another pharmaceutical company was far-fetched at best.

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Dr. James Woolliscroft, dean of the University of Michigan Medical School, and Stephen Forrest, vice president for research, at the former Pfizer facility. (Photo by's Lon Horwedel)

That much local officials realized early on.

Michael Finney, CEO of economic development organization Ann Arbor SPARK, acknowledged within weeks of Pfizer's original announcement that it was "unlikely" the site would be sold to another pharmaceutical company. Instead, local officials held out hope that major real estate developers would acquire the site and turn it into a multi-tenant facility.

Those hopes, however, became unlikely after the global financial crisis crushed redevelopment hopes and sapped the financing opportunities for all interested parties without deep resources.

Enter U-M. The university understandably pounced on the opportunity to acquire the site, and now President Mary Sue Coleman envisions leveraging the new property to expand the university's annual research budget from $1 billion to $2 billion by 2017.

That, ultimately, explains why the university's acquisition of the site earned Business Review's "Deal of the Year" award Friday night.

U-M expects to add 2,000 to 3,000 workers at the ex-Pfizer site over the next 10 years.

Early-stage life sciences research is being shifted toward universities as the pharmaceutical industry seeks to mitigate its exposure to risk.

That, in part, makes it possible for U-M to pursue a major research expansion as corporations strike more research relationships with academia. In fact, the University Research Corridor - a coalition between U-M, Michigan State University and Wayne State University - spent more than $887 million on life sciences research in 2008, according to a study by East Lansing-based Anderson Economic Group.

Meanwhile, pharmaceutical companies are increasingly choosing to outsource services to small contract research organizations - a growing industry for the Ann Arbor region.

Thus, the shifting complexion of the pharmaceutical industry, once Ann Arbor's curse, is ultimately its blessing.

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter.



Mon, Nov 9, 2009 : 7:02 p.m.

I don't think Pfizer (PFE) was in Ann Arbor long enough, or under good enough terms to warrant calling that site the "former Pfizer" site. How about the "former Warner-Lambert/Parke-Davis" site? The look, feel and history of the site is more tied to that legacy. I mean... did PFE erect the egg sculpture (a pretty cool series of massive stone forms on the site)? No way! It's the former WL/PD site for me.

Nathan Bomey

Mon, Nov 9, 2009 : 4:52 p.m.

An update: Some ex-Ann Arbor Pfizer workers who transferred to the pharmaceutical company's St. Louis site will likely be cut as part of today's announcement.

John Galt

Mon, Nov 9, 2009 : 3:48 p.m.

Pfizer again shows their inability to conduct research within their labs. The company resembles nothing more than a pirate that raids others and stips the drugs and fires the staff. Every two years (on average) it finds another victim and repeats the procedure (Warner Lamber, Pharmacia, Wyeth, etc). Nobody wins. The acquired company is shut down and employees thrown on the street. The long-term Pfizer shareholder has seen the value of the stock cut in half over the last decade. Society loses many independent, productive research operations. Well...maybe one group benefits--management. Last week we learned that the Pfizer management awarded itself million dollar bonuses for the great job they did with the Wyeth acquisition. Meanwhile about 15,000 are scheduled to be cut. AND last month we hear about a $2.3 Billion dollar record fine for illegal marketing practices. Some of the self-proclaimed "Pfizer Values:" Integrity, Community, Performance, Team Work, etc. (Yes, it is said with a straight face.)