updated 7/28/2006 7:29:18 PM ET 2006-07-28T23:29:18

Pfizer Inc. said Friday it named Vice Chairman Jeffrey B. Kindler as chief executive officer to replace Hank McKinnell, 63, who will remain chairman of the board of the world's largest drug company until his retirement in February 2007.

Kindler, 51, also was elected to the drugmaker's board. He joined Pfizer in 2002 as senior vice president and general counsel, and became vice chairman in 2005.

Before joining Pfizer, Kindler served as chairman and CEO of Boston Market Corp., owned by McDonald's Corp., and president of Partner Brands, also owned by McDonald's. He was executive vice president, corporate relations and general counsel of McDonald's from 1997 to 2001, and from 1996 to 1997 served as that company's senior vice president and general counsel.

"The board and I see the pharmaceutical industry changing rapidly. Pfizer is changing as well and aggressively transforming its business model to build the next-generation Pfizer," said McKinnell. "With these initiatives well underway, it is time to transition to new leadership to accelerate the company's transformation."

He said that after 35 years with the pharmaceutical company, it was “the right time for me personally to pursue other business and philanthropic interests.”

Pfizer shares closed up 46 cents at $26.11 in regular trading Friday on the New York Stock Exchange. The announcement of the change in the executive suite sent the shares up 9 cents more in after-hours trading to $26.20. Its shares traded in a range of from $20.20 to $26.98 in the past year.

The performance of the company’s best-selling drug, cholesterol-lowering agent Lipitor, has been holding up, rising 9 percent in the most recent quarter to $3.1 billion. Analysts have been watching it because Zocor, a competing medicine made by Merck & Co., lost patent protection last month and many health plans have been encouraging patients to switch to generic Zocor.

Other drugs, including pain reliever Celebrex, delivered double-digit percentage revenue growth in the quarter, the company said.

Last month, Pfizer announced that it would sell its consumer business to Johnson & Johnson for $16.6 billion in a deal expected to close later this year.

In announcing Kindler’s selection as CEO, Pfizer said that he has been “responsible for many of the company’s major corporate functions,” including worldwide legal affairs, corporate and regulatory compliance and government relations. It said he has been a member of the senior-most governing body of the company since 2002.

Lead Director Stanley O. Ikenberry said in a statement that McKinnell has led Pfizer through “some of its more challenging times,” taking the company from 14th to first in the global pharmaceutical industry, integrating both Warner-Lambert and Pharmacia into Pfizer and bringing a wide range of new medicines to market.

The Wall Street Journal reported that Kindler bested two other internal candidates for the top job: Karen Katen, 57, and head of the company’s human health group, its principal operating unit, and David Shedlarz, 58, head of finance. All three were appointed vice chairmen and joined McKinnell in a four-person executive committee 18 months ago, a move that set up an intensely watched horse race for the corner office.

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