Pfizer may not get a great shot at buying AstraZeneca this fall--but it's preparing to give it a try. Meanwhile, Bloomberg reports, the U.S.-based drug giant is looking at Actavis, the generics maker with a new home address in Ireland, among other targets.
That domicile is a key factor, of course, given Pfizer's ($PFE) desire for a deal with tax breaks on the side. Actavis ($ACT) moved its nominal headquarters to Dublin when it bought Warner Chilcott last year.
That deal--and its subsequent buyout of U.S.-based Forest Laboratories--also built up Actavis' business in branded pharmaceuticals. So in addition to the company's large portfolio of generic meds, Actavis would bring along a few notable brands, and some newly approved meds.
So, an Actavis buy would build up Pfizer's established products unit, widely seen as the first prospect for another sale or spin-off. It would add some new products to Pfizer's branded stable, which is in need of help. And because of Actavis' recent buying spree, it's worth some $59 billion--large enough to allow Pfizer to shift its domicile to Dublin, Bloomberg says.
Whether Actavis is receptive to Pfizer's advances isn't clear; the smaller company didn't comment. Whether Pfizer would prefer Actavis, AstraZeneca ($AZN) or another buy? The company won't say, of course; Pfizer's spokeswoman Joan Campion told Bloomberg her company is continuing to "evaluate all opportunities, regardless of size, through the lens of value creation for our shareholders and enhancing the competitiveness of our business." That pretty well echoes what CEO Ian Read said during the company's Q2 earnings call.
Analysts and media reports have trotted out a variety of other potential Pfizer targets--even GlaxoSmithKline ($GSK). There's also Valeant ($VRX), Bloomberg points out, but the Canadian drugmaker is embroiled in a hostile move to buy Allergan ($AGN).
The history of Pfizer's AstraZeneca bid is well documented. So is the U.K. M&A code that prevents Pfizer from mounting a new offer until November. What Bloomberg points out now is that, since Pfizer's most recent foray, AstraZeneca has raised its 2014 revenue forecast, bought a portfolio of respiratory meds from Spain's Almirall and trotted out some promising data for three cancer drugs.
|Pfizer CEO Ian Read|
That means AstraZeneca would likely raise its asking price even further, Helvea analyst Odile Rundquist told the news service. "My impression is that the deal will never go through, because it is too expensive for Pfizer."
As for Actavis, Read is on record as saying that he's not in the mood to buy a generics giant. "It would be unlikely to create sufficient value," he said. But now that Actavis plays in the branded league in a bigger way, it might not fit Read's generic definition.
- read the Bloomberg story
Special Reports: The top 10 pharma companies by 2013 revenue - Pfizer - AstraZeneca - GSK | Pharma's top 10 M&A deals of 2013 - Actavis/Warner Chilcott