Is Amgen worth $61B to Pfizer?

Yesterday, Deutsche Bank analyst Barbara Ryan proposed a Pfizer-Amgen combo, becoming the third industry watcher to float that particular trial balloon. Today, BNet's Jim Edwards asks, "why not?" If you're an aficionado of the worst-case scenario--and a fan of deal speculation--these are the things you should know.

Does Pfizer look ready to do a deal? Well, the company announced it will be not increasing its dividend, fueling talk that it's hoarding cash to be ready to make the right offer. Is Amgen ready for a buyout? It looked ripe in March, when its stock traded around $40 and Credit Suisse's Catherine Arnold tagged it as a possible Pfizer target. Now, however, the stock has made gains, trading at above $55. So its price tag is lots bigger these days.

Not to mention the fact that, as Edwards points out, Pfizer would inherit a few Amgen problems ... er, challenges. Its anemia drug sales have dropped on safety concerns. Arthritis-and-psoriasis therapy Enbrel just got a new warning on its label, and it will face a competitor next year. Pfizer would be more interested in its late-stage pipeline, which contains five candidates, but carries uncertainty with it, as all drug candidates do. And Amgen has a profit-sharing deal with Wyeth that accounts for a big chunk of its sales-and-marketing-and-administrative expenses.

So is Amgen worth the some $61 billion it would cost now? To Pfizer, which keeps denying that it wants to make a mega-merger deal? You be the judge.

- read the post at BNet

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