Pfizer Confirmed to be Mystery Bidder of $4.3 Billion Sobi
May 1, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK -- Pfizer Inc. is the mystery suitor for Swedish Orphan Biovitrum AB, Reuters reported reported Thursday evening.
Sobi, as the Stockholm-based company is known, develops medications for rare diseases. In its latest filings the company reported a market value of about $4.3 billion, which made it a ripe target for large pharmaceutical companies looking to bolster its pipeline.
Analysts speculated that likely bidders were either Pfizer Inc. or Biogen, Inc..
On Monday Sobi’s board of directors confirmed a company was in talks to acquire the Swedish company, but did not disclose which company was courting them.
“There can be no certainty that an offer will be made, nor as to the terms of any such offer. A further announcement will be made when appropriate,” the board said in a statement.
Following Sobi’s revelation Monday, shares of the company that was founded in 2001 soared 19 percent on the Swedish stock exchange.
Pfizer and Sobi, which was founded in 2001, have a marketing deal for Sobi’s hemophilia drug ReFactor AF. In addition to the hemophilia drug, Sobi also manufactures arthritis drug Kineret and Orfadin, a drug used to slow the effects of hereditary tyrosinemia type 1.
Sobi has been rumored to have been entertaining suitors for a while now, with Bloomberg reporting last week that the company “has held on-and-off again talks with potential buyers since last year as its stock trades at an all-time high.” The news agency also reported that Sobi had brought in experts from Goldman Sachs to help facilitate the deal.
The past year about $193 billion has been spent on major and minor pharmaceutical company acquisitions, more than double than the previous year, and Pfizer has been in the thick of many of the deals.
Pfizer has been actively seeking acquisitions and partnerships, especially since the proposed $119 billion acquisition of AstraZeneca PLC fell through. In February Pfizer entered into merger agreements with Illinois-based Hospira, Inc. for $17 billion. Earlier this week rumors swirled that Pfizer was once again making a play for AstraZeneca PLC as well as GlaxoSmithKline .
Part of the reason the company is itching to make a deal is due to funds it has parked in overseas banks, about $40 billion – money that cannot be brought back to the United States due to the taxes the company would have to pay on overseas earnings. One reason Pfizer has eyed British companies is so the pharmaceutical giant can move its headquarters to England to take advantage of better tax rates.
Pfizer reports paying an effective rate as high as 27.5 percent recently and in Britain would pay no more than 20 percent, about one billion dollars in savings annually. In February Ian Read, Pfizer’s chief executive officer, decried the tax structure in the United States, saying the higher taxes puts U.S-based companies at a disadvantage. The U.S. federal corporate tax rate is 35 percent with an average of 4.1 percent added by states, makes the rates the highest in the world. Loopholes in the law can lower some of the rates for companies.