 |
| Pfizer CEO Ian Read |
Pfizer ($PFE) may have agreed on Thursday to pick up injectable drugmaker Hospira ($HSP) for $17 billion, but don't expect it to stop its dealmaking there, analysts say.
For one, there's the fact that an acquisition of the Illinois-based Hospira won't snag the drug giant a lower tax rate--something it has said it's after even despite new, stricter U.S. rules on inversions that have scuttled other buyouts around the industry, Bloomberg notes.
And for two, there's the logic that if Pfizer was willing to shell out $120 billion for AstraZeneca ($AZN) with its failed bid last spring, it has plenty of room to go after other companies.
"You don't go from potentially paying $120 billion for a major deal to something that's basically an hors d'oeuvre," SunTrust Banks analyst John Boris told the news service. "M&A will continue to be dominant."
So which drugmakers might be on CEO Ian Read's shopping list? The rumored targets haven't changed much since he agreed to add generics and biosimilars specialist Hospira. Analysts are still tossing around Actavis' ($ACT) name, a company that got a whole lot pricier when it agreed to swallow Allergan ($AGN) last November. A deal for the combined drugmaker would add fast-growing products like Allergan's Botox, and it could be large enough for Pfizer to overcome those new tax inversion rules and sink its rate, too.
With an Actavis play, "you would certainly pick up some innovative growth assets, especially through the Allergan portfolio," Gabelli & Co. analyst Kevin Kedra told Bloomberg. "That would help check off a lot of the boxes that still seem to be out there."
Then there's generics player Mylan ($MYL), which could build up Pfizer's established products division for sale or spinoff, much the way the Hospira deal will. While Mylan and Pfizer already have a relationship on projects including EpiPen, the tax implications would be a bit harder to navigate, with the Pennsylvania drugmaker currently wrapped up in a move with Abbott Laboratories ($ABT) to shift its legal address to the Netherlands.
Pfizer could also opt to beef up its oncology and vaccine offerings, which thanks to a recent restructuring are housed under the same roof and could eventually be another divestment option, Boris told Bloomberg. GlaxoSmithKline ($GSK), AbbVie ($ABBV) and Bristol-Myers Squibb ($BMY) have been buzzed about, too.
So if there's anything the Hospira buy tells industry-watchers, it's that Pfizer certainly has its fair share of options.
"There are plenty of assets out there that they could buy that would provide some revenue and feasible growth to the existing infrastructure the company has--I think that's part of what this tells us," Thrivent Financial fund manager David Heupel told the news service. "You could run the gamut in the generic specialty space. I think anything would be feasibly viewed as on the table."
- get more from Bloomberg
Special Report: The top 10 pharma companies by 2013 revenue - Pfizer