Pressure Lead Pfizer CEO to Approach Teva Pharmaceutical Industries Limited Late Last Year
January 26, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Pressure from internal decision makers at Pfizer Inc. pushed Chief Executive Officer Ian Read to approach Israeli drug company Teva Pharmaceutical Industries Ltd. at the end of 2014 about a possible merger, people familiar with the matter told Bloomberg News Monday, but that bid was immediately rejected.
Neither Teva or Pfizer would comment on the story Monday, but Read has said in the past that he is dedicated to building out the company’s businesses via “bolt-on” acquisitions or even wholesale takeovers.
“Certainly I feel a sense of urgency on utilizing our balance sheet and our capital to do deals that are incremental, add incremental value and certainly add revenue growth in the innovative space,” said Read on a conference call with analysts in October. “We are aggressively looking at all alternatives.”
That aggressive pursuit led Pfizer to take an unsuccessful run at acquiring British drugmaker AstraZeneca PLC for $119 billion—but that bid, too, fell apart, leaving Pfizer with a stack of cash and frustrated aspirations.
With a current market cap of $50 billion, Teva’s heavy generic drugs pipeline could have been a significant boom to Pfizer, which has a stable of legacy drugs but is likely to be pressured soon by a competitive market for biosimilars. Teva’s portfolio includes a generic drug line estimated to be worth more than $9 billion, including a knock-off of Pfizer’s own blockbuster Lipitor.
Teva also makes generics for perennial antibiotic favorite amoxicillin and well-known blood pressure drug Diovan. Its generics business is so strong that analysts have speculated Pfizer could be looking to spin out its own off-patent medicine company, a consideration it will keep at the forefront while shopping for new deals.
“While they do a lot of share repurchases, there’s still a lot left for them to make acquisitions,” Damien Conover, an analyst from Morningstar Inc, told Bloomberg. “They’re really motivated to get some growth through some external collaborations.”
But Pfizer needs to be careful not to go overboard with the acquisitions, said some analysts, because its internal strengths are still significant and it still has a long list of strategic goals to meet.
“I think operationally there are a lot of positives that are overlooked,” David Heupel, senior health-care analyst at Thrivent Financial, told Bloomberg. “I’d rather them execute on that kind of strategy than go out and really stretch to do a big deal.”
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(See Story from BioSpace.com)
(01/26/2015)