Could Pfizer (PFE) Be Eyeing AbbVie (ABBV)?
Analysts continue to speculate on possible acquisition targets for Pfizer Inc. (PFE) Again, in a news report Jan. 1, the speculation is that Chicago-based AbbVie (ABBV) could be a potential target.
Ever since Pfizer’s May 2014 bid worth $119 billion for British company AstraZeneca (AZN) fell apart, rumors have swirled over a possible replacement target. Pfizer’s interest in AstraZeneca was at least partly due to its tax domicile in the U.K., which would have cut Pfizer’s tax load. But changes in U.S. tax policy regarding so-called “tax inversion deals” have made these types of acquisitions less worthwhile.
In October Pfizer announced a stock repurchase plan of $11 billion in conjunction with a previous $1.3 billion share repurchase program. Analysts suggested that this was an attempt to strengthen the company’s stock value. Pfizer also has a number of patents ending, which will make the company more vulnerable to inexpensive generics.
Other possible acquisition targets for Pfizer have been UK-based GlaxoSmithKline (GSK), Dublin-based Actavis plc (ACT) and New York-based Bristol-Myers Squibb Co. (BMY). Bristol-Myers is valued at $81 billion.
Neither a Bristol-Myers or AbbVie deal would offer Pfizer any tax-inversion benefits, with primary headquarters in the U.S. A deal with Bristol-Myers Squibb would help Pfizer in the oncology market, in which the company has expressed interest. AbbVie’s strongest product is the rheumatoid arthritis medication Humira, with sales projected to rise by 20 percent by 2020.
AbbVie has also recently received promising news for its hepatitis C virus treatment, VIEKIRAX + EXVIERA. The compound was granted positive opinions by the European Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). A final decision is expected in the first quarter of this year.
AbbVie also had plans for acquiring Dublin-based Shire PLC for $54 billion, but killed the deal after the U.S. Treasury Department changed its tax-inversion regulations. Analysts have speculated that potential alternate targets could include Cubist (CBST) and NPS Pharmaceuticals (NPSP).
Shire acquired a $1.64 billion break-up fee from AbbVie and recently arranged a $2.1 billion loan facility. Analysts have speculated that Shire may also be interested in Bedminster, N.J.-based NPS Pharmaceuticals, Inc. Shire focuses on neuroscience, rare diseases, GI and internal medicine. They are best known for ADHD medications and ulcerative colitis drugs.
Clearly analysts expect a lot of merger and acquisition activity in 2015.
04 – January -2015