Pfizer nabs Wyeth in $68B deal

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