Monday, January 26, 2009
The Wall Street Journal's Health Blog has many pieces today on the merger of Pfizer and Wyeth Pharmaceuticals. Sarah Rubenstein of the Health Blog writes,
Pfizer has agreed to acquire Wyeth in a $68 billion deal that’s the largest merger in the pharmaceutical industry in nearly a decade. In announcing the deal, the companies made clear that Pfizer has in mind to cut its reliance on traditional pills.
“With its broad and diversified global product portfolio and reduced dependence on small molecules, the new company will be positioned for improved, consistent and stable top-line and [earnings] growth and sustainable shareholder value in the short and long term,” the companies say. “It is expected that no drug will account for more than 10 percent of the combined company’s revenue in 2012.” That’s putting the best face on the loss of patent protection for cholesterol-fighter Lipitor in late 2011, we suppose. Last year Pfizer registered $12.7 billion in Lipitor sales, or a quarter of company revenue.
As Credit Suisse analyst Catherine Arnold put it in a note this morning, a Pfizer-Wyeth deal could “mark the beginning of a year of sector consolidation and could trigger other pharma-pharma or pharma-biotech deals.” Big deals often haven’t gone well for the industry, but the combination of lots of cash sloshing around and looming patent expirations may make deals impossible to resist.
She cites Bristol-Myers Squibb as a possible target. Then again, everybody always cites Bristol as a target — including Deusche Bank analyst Barbara Ryan, who in a note this morning mentioned both Bristol and Schering-Plough, whose stock has yet to recover from last year’s Vytorin imbroglio. . . . .