Pfizer slots Anacor into deal roster with $4.5B buyout

Pfizer

Pfizer had planned on a seven-course meal with its Allergan buy. But now that the $160 billion buyout is kaput, Pfizer has inked a bite-sized deal worth $4.5 billion for Anacor Pharmaceuticals.

It’s part of Pfizer’s Plan B in the wake of its Allergan deal collapse. CEO Ian Read has said the company will be shopping for deals to beef up the “innovative” side of its business, in preparation for a potential breakup. Investors and analysts have been salivating after that prospect since Read first pitched the idea back in 2013, and Read recently said Pfizer would now decide by year’s end on whether to go forward with a split.

The drug giant will pay $99.25 per share in cash for the smaller pharma, which holds the rights to an anti-fungal drug, Kerydin, that’s marketed in the U.S. by Novartis’ generics unit Sandoz. More importantly, it has an eczema treatment in line for approval at the FDA.

Pfizer figures that the eczema therapy, crisaborole, could top $2 billion in annual sales. The non-steroidal topical gel could be the first new eczema treatment approved in 15 years, the company said in a statement.

The deal will start adding to earnings in 2018, Pfizer said. Next year, earnings will suffer from the buyout, thanks to acquisition costs.

Anacor is “a strong fit” with Pfizer’s inflammation and immunology group, and it’s “expected to enhance near-term revenue growth for the innovative business,” said Albert Bourla, group president of the Pfizer division that includes innovative pharma. The deal complements two “strong existing in-market franchises with Enbrel and Xeljanz,” Bourla added, and Pfizer can bring its considerable marketing expertise to bear on a potential crisaborole launch. 

Meanwhile, Pfizer is said to be in the hunt for Medivation, the maker of a $1.9 billion prostate cancer med, Xtandi. Analysts peg its 2020 sales at $5 billion, potentially a nice add to Pfizer’s top line. The California-based biotech also has a pipeline med that’s pegged as a possible blockbuster, and analysts see the firm as a plum acquisition prospect for oncology-minded companies. It’s among the few--if not the only--cancer target with solid current revenue and promising pipeline assets.

Last week, Medivation reportedly opened its books to Pfizer in anticipation of a bid, but the company would have to contend with other suitors if it does put in an offer. Sanofi has gone hostile with its own $9.3 billion bid, nominating a slate of eight new directors in an effort to take over the board and win the deal. Amgen also got access to Medivation’s books, according to media reports, and AstraZeneca is said to be weighing a bid.

Anacor--with its close-to-market crisaborole--also fits Read’s outline for his current deal focus, which he articulated during the company’s Q1 earnings call. Because Pfizer has already expanded its established products line-up, notably with last year’s Hospira buyout, “there would be a tendency towards a bias to the innovative side,” Read said.

“And we would be biased I think more towards products that are near-market or in-market,” Read added, “that we believe we could generate incremental growth and value by owning them, rather than looking at very early products because we think we have a very full and complete pipeline in that area.”

- read the Pfizer release

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