Should Pfizer buy Wyeth?

Pfizer has reached the top of the pharmaceutical ladder in large part thanks to mega-acquisitions. The Warner Lambert acquisition most notably brought Lipitor which Pfizer grew into a $ 12 billion brand. The acquisition of Pharmacia brought a more diversified portfolio, although Celebrex felt to reach full blockbuster status because of post-marketing safety issues.
Yet, despite a $ 7+ billion budget, Pfizer’s R&D productivity has remained dismal, with no blockbuster or not even enough product launches to replace Lipitor when it loses its patent starting in 2010. Bigger was not better in pharmaceuticals, or at least it was not sustainable.
Under the new CEO Jeffrey Kindler, Pfizer promised to re-invent itself, targeting specialty areas and re-deploying its legendary mass marketing approach into a more focused customer-centric communication.
Wyeth has a gone the same trajectory, although from a smaller revenue base, building specialty mega-brands, such as Arthritis biological drug Enbrel and pneumoccocal vaccine Prevnar. Wyeth’s oncology pipeline is also particularly promising, in particular breast cancer drug neratinib (HKI 272) which has the potential to reach over $ 3 billion in sales.
Analysts like the Pfizer-Wyeth combination, because it strengthen the Biotech portfolio of Pfizer. At $ 50 a share, or $ 65 billion valuation, Wyeth is still considered a good buy.
The official agreement to merge could come as early as next week. Once a gain, Pfizer will buy its way in, but doubts remain that this will transform its corporate culture and make a more nimble company with a productive R&D.

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