Pfizer to buy Wyeth for $68B
Pfizer today entered into a definitive merger agreement to acquire Wyeth in a cash-and-stock transaction, valued at approximately $68 billion. The boards of directors of both companies have approved the highly anticipated merger.
With a combined product portfolio and reduced dependence on small molecules, Pfizer said that the new company will be positioned for top-line and EPS growth and sustainable shareholder value in the short and long term. The company said it is expected that no drug will account for more than 10 percent of combined revenue as of 2012.
In 2011, Pfizer will face generic competition in the U.S. for its $13-billion-a-year blockbuster Lipitor.
To counteract for the expected losses associated with losing the Lipitor patent, the New York City-based company said that it would ramp up its focus in treatments for Alzheimer's disease, inflammation, cancer, pain and psychosis, and continue to focus on vaccines and biotechnology.
Wyeth’s main cardiovascular products are Cordarone, an anti-arrhythmic drug, and Altace, an ACE inhibitor, which the company markets with Monarch Pharmaceuticals. The Madison, N.J.-based Wyeth also has an atherosclerosis collaboration with Karo Bio to identify and develop candidates for treatment of atherosclerosis and to evaluate additional clinical possibilities by targeting a nuclear hormone receptor, LXR.
“The new company will be an industry leader in human, animal and consumer health," said Pfizer’s CEO Jeffrey Kindler. He added that the new company will have a geographic presence in most developed and developing countries.
Pfizer said that the deal is expected to be accretive to its adjusted diluted earnings per share in the second full year after closing. The transaction is anticipated to yield cost savings of approximately $4 billion to be fully realized by the third year after closing, according to the company.
The transaction will be financed through a combination of cash, debt and stock. A consortium of banks has provided commitments for a total of $22.5 billion in debt.
With a combined product portfolio and reduced dependence on small molecules, Pfizer said that the new company will be positioned for top-line and EPS growth and sustainable shareholder value in the short and long term. The company said it is expected that no drug will account for more than 10 percent of combined revenue as of 2012.
In 2011, Pfizer will face generic competition in the U.S. for its $13-billion-a-year blockbuster Lipitor.
To counteract for the expected losses associated with losing the Lipitor patent, the New York City-based company said that it would ramp up its focus in treatments for Alzheimer's disease, inflammation, cancer, pain and psychosis, and continue to focus on vaccines and biotechnology.
Wyeth’s main cardiovascular products are Cordarone, an anti-arrhythmic drug, and Altace, an ACE inhibitor, which the company markets with Monarch Pharmaceuticals. The Madison, N.J.-based Wyeth also has an atherosclerosis collaboration with Karo Bio to identify and develop candidates for treatment of atherosclerosis and to evaluate additional clinical possibilities by targeting a nuclear hormone receptor, LXR.
“The new company will be an industry leader in human, animal and consumer health," said Pfizer’s CEO Jeffrey Kindler. He added that the new company will have a geographic presence in most developed and developing countries.
Pfizer said that the deal is expected to be accretive to its adjusted diluted earnings per share in the second full year after closing. The transaction is anticipated to yield cost savings of approximately $4 billion to be fully realized by the third year after closing, according to the company.
The transaction will be financed through a combination of cash, debt and stock. A consortium of banks has provided commitments for a total of $22.5 billion in debt.