Ian Read

Ian Read
Born	Ian C. Read 1953 Forfar, Scotland
Nationality	British-American
Education	University of London (B.Sc.) Chartered accountant (1978)
Alma mater	Imperial College London
Occupation	Business executive, chartered accountant
Years active	1978-2019
Employer	Pfizer (1978-2019)
Title	Chairman and chief executive officer
Term	2010-2018
Predecessor	Jeffrey Kindler
Successor	Albert Bourla
Board member of	Pfizer, Kimberly-Clark
Known for	CEO of Pfizer Attempted acquisitions of AstraZeneca and Allergan

Ian C. Read (born 1953) is a British-American business executive and chartered accountant who served as chief executive officer of Pfizer from 2010 to 2018 and as executive chairman until the end of 2019. He spent his entire career of more than four decades at the company, joining as an operational auditor in 1978.

Read took charge of the world's largest pharmaceutical company as it faced the expiry of the patent on atorvastatin, marketed as Lipitor and the best-selling prescription drug ever sold, together with persistent difficulty converting research spending into approved medicines. His response combined substantial reductions in research expenditure, divestment of non-pharmaceutical businesses, and a series of large attempted acquisitions, two of which, for AstraZeneca and Allergan, were abandoned.

Early life and education

Read was born in 1953 in Forfar, Scotland, to a Scottish mother. His parents returned to Rhodesia, now Zimbabwe, when he was six weeks old, and he grew up there.

He returned to Britain for his education, receiving a bachelor's degree in chemical engineering from the University of London in 1974. He qualified as a chartered accountant in 1978, a combination of engineering and accounting training that shaped his later reputation as an executive focused on capital allocation rather than on science.

Career

Early career at Pfizer

Read joined Pfizer in 1978 as an operational auditor and remained with the company for the whole of his working life.

He spent his first 17 years in Latin America, holding a series of financial and general management positions. These included chief financial officer of Pfizer Mexico, the company's largest Latin American subsidiary, and country manager for Brazil. In 1996 he was appointed president of the Pfizer International Pharmaceuticals Group for Latin America and Canada.

His responsibilities widened over the following decade. He became executive vice president for Europe and Canada in May 2000, added Africa and the Middle East in January 2004, and Latin America again in March 2006. He was named a vice president of Pfizer in 2001 and promoted to president of worldwide pharmaceutical operations in 2006, a position that placed him among the candidates to lead the company.

Chief executive of Pfizer

Read was appointed chief executive on 5 December 2010, succeeding Jeffrey Kindler, whose departure followed board dissatisfaction with the company's performance and direction.

The Lipitor patent cliff

Read inherited an immediate and quantifiable problem. Lipitor, which had generated revenues of roughly $13 billion a year at its peak, lost its United States patent protection in November 2011. Generic competition reduced those revenues sharply within months. Pfizer faced additional patent expiries across its portfolio over the following years.

The company's research organisation, among the most heavily funded in the industry, had not produced enough approved medicines to replace the expiring products. Pfizer had also absorbed several very large acquisitions, including Warner-Lambert, Pharmacia and Wyeth, each of which had been followed by consolidation of research sites.

Strategy

Read's response departed from the assumption that a large research budget would eventually generate returns. He reduced research and development spending substantially, closed sites, and concentrated the remaining investment in a smaller number of therapeutic areas, principally oncology, immunology and vaccines. He also introduced tighter internal review of research projects against commercial criteria.

He simplified the portfolio by separating businesses outside prescription medicines. Pfizer listed its animal health business as Zoetis through an initial public offering in early 2013 and completed the separation later that year. The infant nutrition business was sold to Nestlé in 2012.

Read pursued growth through acquisition of products and companies rather than internal discovery alone. Pfizer acquired Hospira, the injectable drugs and biosimilars manufacturer, in 2015 for approximately $17 billion; Medivation, which held the prostate cancer drug enzalutamide, in 2016 for approximately $14 billion; and Anacor Pharmaceuticals the same year.

The strategy produced results that were contested at the time and better regarded afterwards. Palbociclib, marketed as Ibrance for breast cancer, became a substantial product, and the vaccines business developed under his tenure provided the platform on which Pfizer later developed its COVID-19 vaccine with BioNTech.

Attempted acquisition of AstraZeneca

In 2014 Pfizer made a series of approaches to acquire the British pharmaceutical company AstraZeneca, ultimately valuing it at approximately £69 billion, or about $118 billion. It would have been one of the largest acquisitions in corporate history.

A significant part of the rationale was tax. The transaction was structured so that the combined company would be domiciled in the United Kingdom, reducing Pfizer's tax burden through what is known as a corporate inversion. The proposal generated political controversy in Britain over the likely effect on domestic research employment, and Read gave evidence to parliamentary committees on the company's intentions.

AstraZeneca's board rejected the approaches as undervaluing the company. Pfizer withdrew in May 2014.

Attempted merger with Allergan

In November 2015 Pfizer agreed a merger with Allergan, the Dublin-domiciled pharmaceutical company, in a transaction valued at approximately $160 billion. As with the AstraZeneca approach, the structure would have moved Pfizer's tax domicile out of the United States.

In April 2016 the U.S. Treasury issued new rules targeting serial inversions, which removed much of the transaction's financial rationale. The companies abandoned the merger days later. Read criticised the rule change publicly, arguing that it was issued to block a specific transaction and disadvantaged American companies competing internationally.

Executive chairman and retirement

Albert Bourla succeeded Read as chief executive on 1 January 2019, with Read becoming executive chairman. In September 2019 Pfizer announced that he would retire as executive chairman at the end of that year, concluding a career of more than 40 years with the company.

Read has served as a director of Kimberly-Clark. He became an American citizen during his career.

Business philosophy and management style

Read approached pharmaceuticals primarily as a capital allocation problem. His background in accounting and general management rather than in science informed a view that research spending should be judged by the same return criteria as any other investment, and that a company unable to generate acceptable returns from internal research should reduce that spending and acquire products instead.

This position was contested within the industry. Critics argued that cutting research at a company of Pfizer's scale reduced the total capacity for pharmaceutical innovation and that the productivity of research cannot be assessed over the short intervals that capital markets use. Supporters argued that Pfizer's research organisation had demonstrably failed to justify its cost over an extended period and that redirecting the money was the responsible course.

Read was also willing to pursue very large structural transactions, including two that would have moved the company's tax domicile abroad. His public defence of inversions on competitiveness grounds made him a prominent figure in the American debate over corporate taxation in the mid-2010s.

Controversies

Corporate tax inversions

Both the AstraZeneca and Allergan transactions were structured to relocate Pfizer's tax domicile. The proposals attracted criticism from politicians in the United States, where they were characterised as tax avoidance by a company that had benefited from publicly funded research, and in the United Kingdom, where the concern was the effect on research employment.

Read defended the approach as a response to a tax code that he argued placed American companies at a disadvantage against international competitors. The Treasury rules issued in April 2016 that ended the Allergan transaction were widely understood to have been directed at it.

Drug pricing

Pfizer raised prices on existing medicines substantially during Read's tenure. Analysis reported in 2015 indicated that a large share of the company's revenue growth over the preceding three years derived from price increases on existing products rather than from new medicines.

The practice drew criticism during a period of intense public and political attention to prescription drug costs in the United States. Read argued that prices reflected the value medicines delivered and the cost of developing them, and that pricing power was necessary to fund research.

Research reductions

The reductions in research spending and the closure of research sites, including facilities in the United Kingdom and the United States, drew criticism from scientists and from communities affected by the closures.

Personal life

Read maintains a holiday home near Bonita Springs, Florida. He became a United States citizen during his career at Pfizer, having been born in Scotland and raised in Rhodesia.

He has generally avoided public attention outside his professional role, and gave relatively few personal interviews during his tenure.

Legacy

Read's tenure is assessed differently depending on the period considered. During his time in office Pfizer's strategy attracted criticism for prioritising financial engineering over science, particularly given the two attempted inversions and the reductions in research spending.

Later assessments have been more favourable, on the basis that the narrowing of research focus toward oncology and vaccines, and the acquisitions that strengthened those areas, left his successor with a portfolio capable of the response Pfizer mounted during the COVID-19 pandemic. The vaccines business that produced the BioNTech partnership was among the areas he protected during the reductions elsewhere.

The failed AstraZeneca and Allergan transactions remain significant in the history of corporate tax policy. The Allergan deal in particular prompted the Treasury rules that effectively ended the practice of serial inversions by American companies.

External links

• Pfizer Inc. filings at the U.S. Securities and Exchange Commission