Pfizer to Acquire Wyeth - Is this a good match?

The speculation that started last year and then reappeared last week surrounding a possible major acquisition by Pfizer has come to a close. This morning Pfizer announced that it plans to acquire Wyeth for $68 billion. There were several reasons why Pfizer would look to make an acquisition such as this. Two of these include Pfizer’s need to compensate for the impending patent loss of Lipitor, the top pharmaceutical product on the market, along with their previously noted desire to push forward into vaccines & biologics.

Is this a good move for Pfizer? We believe that it is. The “new” Pfizer will gain access to several blockbusters, such as Enbrel & Prevnar, along with a very promising pipeline. Wyeth’s diverse pipeline includes strong potential products in Alzheimer’s disease and a “next generation” pneumococcal conjugate vaccine. Pfizer will also gain access to Wyeth’s antidepressant blockbuster, Effexor XR, which will lose patent protection next year.

In addition, Pfizer will now be getting back into the consumer market space through Wyeth’s strong over-the-counter (OTC) franchise. This is an OTC portfolio that includes many very well known products such as Advil, Dimetapp, and Centrum. As noted in the CBR Pharma Insights commentary, “2009 Pharmaceutical Outlook Part 1 – Diversification vs. Development”, acquiring companies with a strong OTC portfolio is one way that they can “buffer the losses they have been suffering due to mature and expired patents.” In this instance, Pfizer appears to both diversify and strengthen development, by acquiring Wyeth.

Overall, this acquisition gives Pfizer a strong product portfolio, a promising pipeline, and very powerful biologics and vaccine franchises. Since it did not appear that Pfizer had an in-house “replacement” for its top blockbuster product, Lipitor, this was a predictable direction many thought they would go. As such, Pfizer has moved forward into 2009 with a great deal of focus and sense of purpose as it looks to keep its standing as the top pharmaceutical company in the world for years to come.