Pfizer scouts for bite-sized buyouts after Lipitor sales wilt

Pfizer ($PFE) CEO Ian Read (photo) has been on the lookout for M&A deals that could bring the U.S. pharma giant new treatments for cancer, diabetes and neurological disorders amid plunging sales of the company's blockbuster heart drug Lipitor. And he tells Reuters that he's looking for buyouts with price tags of roughly $4 billion to do the job.

Followers of Pfizer won't be surprised to learn of Read's M&A appetite, yet the pharma chief happens to be scouting for deals at an interesting time in the industry and at his company. Last week, Pfizer announced the sale of the company's baby formula unit for $12 billion, as Reuters notes, providing the company with resources to focus on its core pharma business. At the same time, mid-sized drug companies such as Human Genome Sciences ($HGSI), Amylin Pharmaceuticals ($AMLN) and Warner Chilcott ($WCRX) are up for sale.

Yesterday, of course, the reality of generic competition for Lipitor reverberated after Pfizer reported that U.S. Lipitor sales shrank 71% in the first quarter. The decline of the megablockbuster franchise pressures executives to find new products to replace revenue from the falling Lipitor sales. However, Read isn't interested in filling the hole with another megadeal on par with the $67 billion merger with Wyeth a few years ago.

A "bolt-on" deal akin to Pfizer's $3.6 billion buyout of pain med specialist King Pharmaceuticals suits the company's needs, Read told Reuters. "That's not a hard number--around that [amount] or a multiple of that if it was an attractive asset."

These are good times for companies with attractive assets such as Amylin, which recently won approval for the long-lasting diabetes drug Bydureon. Gilead's ($GILD) buyout of Pharmasset for nearly $11 billion, and Bristol-Myers Squibb's ($BMY) recent offer to acquire Amylin for $3.5 billion, show that buyers are willing to shell out premiums for worthy drug developers.

The upshot: Pfizer will likely have serious competition for the size and types of deals Read wants to make.   

- check out Reuters' analysis
- and news of Warner Chilcott's desire to be sold

Special Report: Ian Read - The 25 most influential people in biopharma today

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