Under Read, a Scot who joined the company in 1978, Pfizer has weathered patent expirations of several blockbusters, including cholesterol drug Lipitor, through dealmaking, expansion in emerging markets and cost cuts.
Pfizer won 30 approvals from the U.S. health regulator during his tenure. Read, however, failed to pull off two mega deals - acquisition of British drugmaker AstraZeneca Plc in 2014 and Botox maker Allergan Plc in 2016 - that would have helped lower its corporate taxes.
Bourla, 56, was promoted to the newly created post of chief operating officer at the start of this year and was widely seen as the leading candidate for the top job.
Before becoming COO, he led the drugmaker's Innovative Health business, which holds its newer, patent-protected medicines, since the start of 2016. The unit recorded an 8 percent rise in revenue in 2017 to $31.4 billion.
"Now is the right time for a leadership change and Albert is the right person to guide Pfizer through the coming era," Read, who will become executive chairman, said.
Shares of the drugmaker, which have risen about 160 percent since Read took over as CEO in December 2010, were trading up nearly a percent at $44.42. The stock had earlier touched 17-year high of $44.51.
"This looks like a well-considered transition, thus I'm not convinced it will herald a major change in strategic thinking, particularly as Ian will still stay on as chairman," Berenberg analyst Alistair Campbell said.
The leadership change comes at a time when the Trump administration has been pressuring drugmakers to lower prescription costs. Read, after a conversation with President Trump in July, had decided to defer price increases for no more than six months.
Pfizer, which has been trying to sell its consumer healthcare business for the past one year, is bracing for patent expiration of its neurological disease treatment Lyrica, which raked in $1.2 billion in second-quarter sales.
The company's drug pipeline has the potential for about 25-30 approvals through 2022, Pfizer said, adding that it expects up to 15 of them to fetch multi-billions in sales.
"The timing of this transition makes sense given Reed's age and the company's current strong portfolio of new products," Edward Jones analyst Ashtyn Evans said.
Last week, rival Merck & Co Inc said it would amend a policy to allow its head, Kenneth Frazier, to remain CEO beyond 2019 when he was expected to retire.
(Reporting by Tamara Mathias and Ankur Banerjee in Bengaluru; Editing by Patrick Graham and Arun Koyyur)
By Tamara Mathias and Ankur Banerjee