Analysts have been looking for a major buyout from the Pfizer camp, and rumor has it that one is in the works. The Wall Street Journal is reporting that Pfizer has been in talks with Wyeth for months to buy the company for $60 billion, according to "people familiar with the matter." Pfizer, as you know, is looking for ways to fill its pipeline, especially with the impending loss of Lipitor patent protection in 2011. Industry watchers have been speculating about a possible major buyout ever since Pfizer CEO Jeffrey Kindler indicated the company was willing to acquire a large rival drugs company to improve its financial health.
A deal with Wyeth, the twelfth-largest drugmaker, would give Pfizer access to Wyeth's vaccines and biologics, which Wyeth says makes up the majority of its revenue. Pfizer has repeatedly stressed it's plan to invest heavily in biotech drugs. Wyeth is the tenth-largest biotech company by sales. It's top-selling biologic is Enbrel, a monoclonal antibody is approved for rheumatoid arthritis and a variety of other immunological diseases. Wyeth's biggest pipeline biologic is bapineuzumab, is a humanized monoclonal antibody being investigated for the treatment of Alzheimer's disease and possibly glaucoma. The drugmaker also markets pediatric vaccine Prevnar.
This isn't the first time Pfizer/Wyeth rumors have surfaced. In August 2008 analysts noticed that Wyeth may be a good match for Pfizer, though one critic blasted the potential match-up as a "marriage of weakness."
Both Pfizer and Wyeth have laid off thousands of employees in recent years, and any deal would almost certainly results in a further reduction in redundant workforce. Though such a deal would give Pfizer a boost, the WSJ's sources warned that, at this point, a buyout is far from a sure thing. "The two sides have been in discussions for months and a deal isn't imminent... Given recent market volatility and overall economic uncertainty, the talks are especially fragile and could collapse..." the paper reported. That didn't stop the rumors from sending Wyeth's stock up 10 percent in pre-market trading this morning.
- here's the WSJ report
- check out this Forbes article