While they didn’t disclose any financial terms, a combination would probably be the biggest ever in the drug industry.
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Ireland’s corporation tax regime could be a key factor in whether the proposed merger between Allergan and Pfizer happens.
The deal would also strengthen Pfizer’s case for separating into two companies, one selling branded drugs and the other generic and older drugs. Allergen jumped by 6%, closing at $304.38. Pfizer stock rose 1% on the day, up to $35.12 a share. Pfizer, for example, has biosimilar drugs to treat such things as arthritis and Crohn’s disease, and Allergan has four biosimilar drugs in development.
Over the years, the US government has taken a number of steps to limit inversions.
Rival drugstores chains are rushing to combine their resources in order to fend off grocery stores chains, who already have their own pharmacies as well those offering drugs through mail. “Allergan is trading lower than it was this summer before all of the pricing and specialty issues that have caused a general downturn, so it’s a good price but Pfizer needs a good premium to convince Allergan shareholders”, Krutoholow said. Pfizer’s current tax rate is about 25 percent and Allergan’s around 15 percent, he noted. That was one of the reasons Pfizer sought to acquire AstraZeneca Plc past year, before eventually withdrawing its proposal.
Allergan has made five M&A moves in the past three years.
The company is well aware that changes in tax law could scuttle its plans, though-and that’s why the time to act is now, Read said on the call.
Pfizer’s top revenue-producing drugs include a pneumonia vaccine, pain treatment Lyrica and erectile dysfunction drug Viagra.
MGM Resorts gained 5.7 per cent as third-quarter profit came in at US$66.4 million, up from a US$20.3 million loss in the year-ago period following higher hotel occupancy and casino revenues in Las Vegas.
Pfizer Inc., which has been damaged by waves of generic drugs that have entered the market and cut into sales of one-time blockbuster drugs like cholesterol fighter Lipitor, has a history of making large acquisitions to boost revenue and cut costs.
Bernstein analysts, for their part, believe a deal is likely, they wrote in a note to clients.
Lake Forest-based Hospira manufactures injectable drugs and infusion devices.
Joan Campion, a spokeswoman for Pfizer, said the company does not comment on speculation.
Pfizer’s biggest deal was of Warner-Lambert Co. in 2000 for $116 billion.
In 2014, Pfizer pursued a takeover of the British pharmaceutical company AstraZeneca. Its chief executive, Brent Saunders, has been eager to do deals, having first orchestrated the sale of Forest Laboratories Inc, where he was initially CEO, to Actavis, then using the latter to seal the $66-billion purchase of Allergan.
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OVERSEAS: Britain’s FTSE lost 0.9 percent and France’s CAC 40 shed 0.6 percent. Shares of drugmakers have fallen in the United States as pricing in the industry has drawn scrutiny from lawmakers and candidates in the presidential elections.
