Pfizer to Purchase King Pharmaceuticals
Pfizer today announced that it will purchase Bristol, TN-based King Pharmaceuticals for $3.6 billion in cash or $14.25 per share: an approximately 40% premium over King’s closing share price yesterday.
King is a diversified specialty pharmaceutical drug delivery and clinical development company with expertise in delivery of easy to abuse or misuse pain medicines, self injecting delivery devices and animal health
The acquisition will help Pfizer push forward with its new emphasis on biopharmaceuticals and rare disease drugs; both currently require parenteral administration to patients.
The King acquisition is consistent with Pfizer’s M&A strategy to enter new therapeutic areas and markets. In the last 10 years or so Pfizer has acquired Warner Lambert, Pharmacia, Wyeth and several smaller companies including Sugen, Copely Pharmaceuticals, Encysive Pharmaceuticals, Serenex and others.
Whether or not Pfizer can successfully integrate King’s expertise and business units into its existing monolithic corporate structure remains to be see. Pfizer is still trying to right itself after it acquired Wyeth Pharmaceuticals for $65 billion early last year.
Big pharma companies—flush with cash—have been on a buying spree of late. Unfortunately, the availability of this cash is directly related to the massive downsizing and layoffs that have taken place in the industry over the past few years. That said, if I were a King employee, I would be dusting off my resume!
Until next time
Good Luck and Good Job Hunting
Until recently, Amgen dominated the biotechnology industry and was anointed the world's largest biotechnology company. However, Amgen recently lost its number 1 ranking to Genentech. Over the past year or so, Amgen, which is now ranked number 2, has been acting a lot like Avis, the car rental company , which in the 1970s adopted the slogan “Avis: We Try Harder” when it was number 2 to Hertz in the car rental rankings. Like Avis, which never overtook Hertz to claim the number 1 spot, Amgen’s efforts to regain its number 1 ranking are failing.