Free Newsletter
Pfizer nabs Wyeth in $68B deal
Free newsletter via e-mail
Tools
Looking for a cure to its financial ailments, Pfizer has opted for a $68 billion dose of Wyeth Pharmaceuticals. The merger of the pharma giants--which was announced bright and early this morning--is the largest corporate tie-up since 2006.
Pfizer immediately announced that it is cutting its dividend as it prepares to follow through on the cash/stock transaction. And more cuts lie ahead. Pfizer said today that it is laying off 10 percent of its workforce. Even before the announcement, Deutsche Bank was outlining $2.3 billion in savings the combined company could make by slicing advertising, manufacturing and research expenses.
"The new company will be an industry leader in human, animal and consumer health. With our combined biopharmaceuticals business, it will lead in primary and specialty care as well as in small and large molecules," said Pfizer CEO Jeffrey Kindler (photo). "Its geographic presence in most of the world's developed and developing countries will be unrivaled."
Pfizer was widely viewed as a company in need of a dramatic acquisition. The pharma giant has been steadily painting itself into a corner as it approaches the 2011 loss of patent protection on Lipitor, which provides $13 billion in annual revenue--roughly one quarter of its overall income. Wyeth's arthritis drug Enbrel and pneumonia vaccine Prevnar would go a long way to filling that hole with their $6 billion in yearly revenue. And by 2012, says Pfizer, no single product will account for more than 10 percent of total revenue.
The companies highlighted a combined pipeline that includes programs in diabetes, inflammation/immunology, oncology and pain, "as well as significant opportunities in Wyeth's Alzheimer's disease pipeline, which has a number of compounds in development, including phase three biotech compound Bapineuzumab."
- check out the press release
- read the story in the New York Times
- read the analysis in the Wall Street Journal
ALSO: And with Wyeth spoken for, Crucell is no longer in merger talks with the pharma company, and that news took a big bite out of Crucell's share price today. Release l Report
Related Articles:
Wyeth - Biotech Market Share Report
Pfizer in talks to buy Wyeth for $60B
Can Pfizer weather the coming storms?
Expecting drama, Goldman upgrades Pfizer
Pfizer, Wyeth merger bad idea?
Comments
By Pharma analyst | Posted 11:50am | January 26, 2009
Note to Pfizer shareholders. SELL! Pfizer has made this move twice before, with Warner Lambert and Pharmacia. Both times the results were the same. A convoluted corporate structure, no boost in Pfizer's pipeline, and no boost to share price. Wyeth may have some drugs in the pipeline, but there's no blockbuster to be seen, and once Wyeth's R&D people start leaving in droves, which happens every time Pfizer buys a company, the resulting value of this acquition is $0.
Add in the cut in dividends and the increase in debt to pay for it and this deal is a loser all around. Sell.
By jose lopez | Posted 5:26am | January 27, 2009
Wyeth's business in South America ,and particuarly their cold chain ,which is unic in Latin America,can help Pfizer a lot.Wyeth has this drugs that have recently (two years ago been introducied in LATAM countries.There are 450 million people there,and one of the main selling products is Prevnar,a vacine for the meningitis!
If Pfizer is clever this time,they will do a good aquisition.
By jcmornod | Posted 4:34am | January 29, 2009
What a pityful world.
The crisis is on paretly because some only think of short term money.
The merger folly just result in less competition, which in turn reduces new disciveries.
Just think again big guys.
Small is beautiful....and is the future !
