Pfizer: Dealing with Lipitor side-effects

January 23, 2009

Pfizer’s at it again. The world’s largest drugmaker by revenue¬†has set its sights on rival Wyeth and the two are talking about a deal that could be valued at more than $60 billion, according to the Wall Street Journal.

Pfizer was built in the last 10 years on two of the biggest deals in the sector — the purchase of rivals Warner Lambert and Pharmacia.

And another big deal would not come as a surprise. Some analysts and investors have made pleas to the company to make another acquisition to obtain products to prepare for an expected loss in earnings in 2011, when the patent on its flagship cholesterol drug Lipitor expires.

But a deal may not be a panacea to its problems, and Chief Executive Jeff Kindler has said so in as many words.

“Business development — whether it is a small deal, a medium-sized deal or a large deal, is an enabler for strategies. It is not a strategy in and of itself,” he told Reuters Health Summit¬†last November.

Kindler’s strategy to deal with Lipitor’s side effects: maximizing sales of current products, jump-starting sales in emerging markets, launching new medicines and cutting costs.

Now, apparently he is adding deal-making to the list.


** French banks Credit Agricole and Societe Generale have agreed in principle to a possible merger of their asset management divisions, financial paper l’Agefi reported.

** Germany’s Siemens plans to dispose of its 34 percent stake in the nuclear power plant unit of France’s Areva, Les Echos reported.

** Spanish construction and services firm ACS has received four bids for its port assets, which could fetch between 1.2 and 1.4 billion euros ($1.56-$1.82 billion), Expansion reported.

** The European Bank of Reconstruction and Development plans investments into Hungarian banks, focusing on OTP, which does not have a foreign parent bank, the EBRD chairman told Nepszabadsag.

** French state-controlled Banque Postale could seal a liquidity deal with Dexia to allow the Belgian-French financial services group to refinance itself on financial markets, French daily Les Echos reported.

** Hannover Re is buying a life insurance portfolio of ING Groep from Scottish Re to become the fifth-biggest individual life reinsurer in the United States.

** Swiss department store Jelmoli said it had settled litigation with Tivona in a deal that will see it pay 60 million Swiss francs ($52 million) and 80,000 shares to acquire a 55.5 percent stake in the real estate firm.

(Photo: A woman walks into the Pfizer headquarters in New York in a file photo. REUTERS/Jeff Christensen)

One comment so far | RSS Comments RSS

Pfizers Panacea:
Mooted acquisition of Wyeth.Although im not a shareholder of Pfizer or Wyeth I would hope the intended acquisition makes financial sense. It appears that too many acquisitions are made at ‘over the top prices’ and shareholders pay dearly for the mistakes executive management commit.Maybe Pfizer together with all the other pharmaceutical businesses around the globe should put more time and dosh into R&D.Reduce their indebted balance sheets and review their remuneration packages (they so gladly bestowe upon each other) and stop robing the owner/shareholders.London to a brick should Pzizer acquire Wyeth they pay too much!

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