Pfizer’s new drug of choice: Ac­qui­si­tions

Lat­est deal gives firm the rights to As­traZeneca pills

Baltimore Sun - - ELECTION 2016 - By Linda A. John­son

TRENTON, N.J. — Drug­maker Pfizer is con­tin­u­ing its shop­ping spree with its fourth ac­qui­si­tion since the April col­lapse of its planned $160 bil­lion deal to buy ri­val Al­ler­gan and move its head­quar­ters, on pa­per, to Al­ler­gan’s base in lower-tax Ire­land.

In its sec­ond deal this week, NewYork-based Pfizer said it’s buy­ing rights to As­traZeneca’s port­fo­lio of ap­proved and ex­per­i­men­tal an­tibi­otic and an­ti­fun­gal pills, a move to boost Pfizer’s busi­ness in one of its pri­or­ity ar­eas. The deal is val­ued in ex­cess of $1.5 bil­lion, in­clud­ing rights to sell the medicines in most coun­tries out­side the U.S., roy­al­ties and other pay­ments.

The ac­qui­si­tion in­di­cates Pfizer’s $1.5 bil­lion deal fol­lows a Mon­day an­nounce­ment that it would buy Me­di­va­tion. a thaw­ing of re­la­tions be­tween the two com­pa­nies barely two years af­ter U.K.based As­traZeneca fought off Pfizer’s hos­tile takeover at­tempt.

Pfizer had planned that $119 bil­lion ac­qui­si­tion as a so-called “tax in­ver­sion” en­abling Pfizer to slash its U.S. tax bill by mov­ing its nom­i­nal head­quar­ters — but not its cor­po­rate of­fices or ex­ec­u­tives — to Eng­land.

The tax in­ver­sion strat­egy had been hot in cor­po­rate Amer­ica for a few years, but it’s cooled down since the U.S. Trea­sury Depart­ment in early April is- sued new tax rules to block the biggest U.S. drug­maker from be­com­ing a cor­po­rate cit­i­zen of Ire­land as part of the Al­ler­gan deal.

Al­ler­gan is tech­ni­cally based in Dublin, but it’s the re­sult of a tax in­ver­sion merger and op­er­ates from Par­sip­pany, N.J.

Un­der the deal an­nounced Wed­nes­day, As­traZeneca will re­ceive an up­front pay­ment of $550 mil­lion.

Pfizer will get rights to some medicines in de­vel­op­ment and ap­proved ones in­clud­ing Mer­rem, for treat­ing bac­te­rial menin­gi­tis and se­ri­ous in­fec­tions of the skin and stom­ach; Zin­foro, for pneu­mo­nia and com­plex skin and soft tis­sue in­fec­tions; and Zav­icefta, a com­bi­na­tion an­tibi­otic the Euro­pean Union just ap­proved for treat­ing se­ri­ous bac­te­rial in­fec­tions.

Luke Miels, the head of the an­tibi­otics busi­ness unit at As­traZeneca, said in a state­ment the com­pany is “pleased that our strong sci­ence in an­tibi­otics will con­tinue to serve a crit­i­cal pub­lic health need through Pfizer’s ded­i­cated fo­cus on in­fec­tious dis­eases.”

Pfizer’s other re­cent deals in­clude:

On Mon­day, it an­nounced a $14 bil­lion deal to buy San Fran­cisco-based Me­di­va­tion, which de­vel­ops pills for treat­ing var­i­ous can­cers. That’s a pri­or­ity area, but Pfizer is play­ing catch-up with ri­vals dom­i­nat­ing the new gen­er­a­tion of tar­geted cancer medicines.

On Aug. 1, Pfizer an­nounced a deal worth $150 mil­lion up­front and po­ten­tially an­other $495 mil­lion to ac­quire what Pfizer didn’t al­ready own of Bam­boo Ther­a­peu­tics of Chapel Hill, N.C. It is de­vel­op­ing po­ten­tially lu­cra­tive gene ther­a­pies for rare dis­eases. Pfizer aims to be­come a leader in gene ther­apy.

In June, Pfizer com­pleted a $5.2 bil­lion ac­qui­si­tion of Palo Alto, Calif.based Ana­cor Phar­ma­ceu­ti­cals, which could get a new eczema drug, crisabo­role, ap­proved by Jan­uary. Pfizer also got top­i­cal toe­nail fun­gus treat­ment Kery­din and some other drugs in early test­ing.

Pfizer shares ended down about 1 per­cent to $34.82 on Wed­nes­day.

JUSTIN LANE/EPA

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