Now that the deadline for any quick deal to acquire AstraZeneca ($AZN) has passed, about the only certainty to emerge from the wrecked takeover is that the last thing Pfizer ($PFE) can do now is go back to business as usual.
AstraZeneca has already been doing deals, and more than likely will continue to look at new ways it can partner up with other companies. But the bottom line assertion at the U.K. pharma giant is that the company has turned the corner and positioned itself for a comeback over the next three years, supremely confident that it has enough would-be blockbusters in the pipeline to overcome a brutal onslaught of generics. And it's done enough in recent years to gain significant support for its position among some top analysts and investors.
Pfizer, while it sounds optimistic about its pipeline, does not have what it takes to make that argument stick. Pfizer was not well positioned to be spurned by the likes of AstraZeneca, especially not with the stinging assertion that a Pfizer takeover could wind up killing patients by delaying R&D. The new offer focused ample attention on Pfizer's value-destroying tactics in M&A. And it came out looking weak after the rejection.
But M&A remains the simplest direct route to changing its near-term financial future, which is bleak. So you can expect the focus at Pfizer will stay focused on the bargaining table, though probably not with the same big figures as the ones tied to a potential megamerger.
In a post-deal collapse interview with the Wall Street Journal, Pfizer CEO Ian Read continued to talk deals, saying that he will look for new pacts that stay focused on core areas: vaccines, cancer, inflammation, heart disease and pain. And he's opened to all deals of every shape and size, ranging from new medicines to older therapies.
You can also expect to hear plenty more about a prospective break-up of Pfizer, which is a cause celebre among some top analoysts.
"He (Read) will do what it takes to unlock value, be it a break-up, M&A or whatever drives the most value," Goldman's Jami Rubin said in a Tuesday note to clients, according to TheStreet. "Our long held view has been that Pfizer size is its enemy and that getting smaller through break-ups or merge-spin strategies (acquisition of Wyeth which led to divestitures and spins) could unlock substantial value."
No doubt plenty of Wall Street bankers are shedding tears today about lost fees in the wake of the deal that never happened. And more than a few are likely to be praying devoutly for a return to the bargaining table once the cooling off period is over.
"There is quite a decent chance actually that there will be a deal later this year, most likely I would say after three months," Erik Hultgard, an analyst with Nordea Bank AB in Stockholm, told Bloomberg. "There was quite a small spread between what the board said they could accept and what Pfizer actually wanted to pay. There are likely shareholders on both sides that want this to happen."
Just don't expect AstraZeneca's board to line up behind that maneuver. -- John Carroll, editor-in-chief (email | Twitter)