TRENTON, N.J. - Number one drug maker
Pfizer managed with one stroke to overshadow a full house of issues: a 90 percent drop in income, a hefty charge to end an investigation, a severe cut in its dividend, a shockingly low profit forecast for 2009, and 8,000 job cuts starting immediately.
That's all on top of the colossal problem triggering this deal: the expected loss of $13 billion a year in revenue for cholesterol fighter Lipitor starting in November 2011, when it gets generic competition.
By buying Wyeth, Pfizer will mutate from a maker of blockbuster pills to a one-stop shop for vaccines, biotech drugs, traditional pills, and nonprescription products for both people and animals.
The cash-and-stock deal, one of the biggest in the history of the drug industry, is expected to close late in the third quarter or in the fourth quarter. It comes as Pfizer's 2007 fourth-quarter profit takes a brutal hit from a $2.3 billion legal settlement over allegations it marketed pain reliever Bextra and possibly other products for indications that had not been approved.
Pfizer's goals include increasing sales in emerging markets, enhancing the ability to treat specific diseases, such as Alzheimer's, and becoming a top player in vaccines and biologic drugs, which are made from living cells.
The New York-based maker of the impotence pill Viagra and Detrol for overactive bladder said it will pay $50.19 per share for Madison, N.J.-based Wyeth, a 14.7 percent premium to the company's closing price of $43.74 on Friday.
Pfizer shares fell $1.80, or 10.3 percent, to $15.65 yesterday, while Wyeth dropped 35 cents to $43.39.