Pfizer in talks to buy rival Wyeth: sources
Pfizer Inc, the world’s largest drugmaker, is in talks to acquire U.S. rival Wyeth, sources familiar with the situation said on Friday.
The deal could be valued at more than $60 billion, according to The Wall Street Journal. Wyeth’s market capitalization as of Thursday, before news of the talk lifted the stock 8.2 percent, was about $52 billion.
Such a mega-deal would help Pfizer, whose shares fell 2.5 percent, manage its revenue “cliff” in 2011 when its blockbuster Lipitor cholesterol treatment loses U.S. patent protection.
It would diversify Pfizer into vaccines and injectable biologic medicines, two enticing areas, by adding Wyeth’s big-selling Prevnar vaccine for childhood infections and Enbrel rheumatoid arthritis treatment, while generating major cost savings by eliminating overlaps between the two huge organizations.
“It sort of takes out the cliff and it balances their revenues with a portfolio of products that have a different profit lifecycle” than traditional pills, said Barbara Ryan, an analyst with Deutsche Bank who has predicted the pharmaceutical industry’s woes would lead to large-scale consolidation.
“I think it’s imminently doable,” Ryan said. “The question is whether others enter the fray. It’s going to come down to price. The deal is attractive at this price, it’s not attractive at any price.”
Ryan said Pfizer could pursue Bristol-Myers Squibb or Amgen Inc if a Wyeth deal falls through paydayloans.
Pfizer and Wyeth have been in talks for months, but no deal is seen as imminent due to the difficulty Pfizer may have getting funding for the deal in the currently tight credit markets, sources said.
One source said any deal could be “weeks, if not months” away due to the difficulty getting funding. A second source added that pressure on the deal could intensify, and potentially speed up negotiations, now that news hit the public markets.
Pfizer would likely use a combination of cash and stock to acquire Wyeth. Details on pricing have not been worked out, The Wall Street Journal said.
Spokesmen for Pfizer and Wyeth declined to comment, citing company policies not to comment on market rumors.
Wyeth itself has also been in talks to buy Dutch vaccine firm Crucell — a deal that might now be in doubt, sending Crucell shares tumbling 10.5 percent on Friday.
Wyeth has been talking to both Pfizer and Crucell in recent months, exploring both possible avenues, one source said.
ANOTHER DEAL FOR PFIZER?
Pfizer became the world’s largest drugmaker with its purchase in 2000 of Warner-Lambert Corp and the $60 billion acquisition three years later of Pharmacia Corp.
Filed under: economics by Wolf