Pfizer beefs up pain relief with $3.6B King buy

Aiming to upsize its pain-management portfolio, Pfizer is snatching up King Pharmaceuticals in a $3.6 billion cash deal. The world's biggest drugmaker will launch a tender offer for King's shares at $14.25 per share, a 40 percent premium to yesterday's closing price.

Pain drugs are a big deal: Pfizer notes in its press release that doctors wrote 320 million scrips for pain meds last year, and the market is growing as the population ages. Pfizer's current offerings include Lyrica for nerve pain and Celebrex, an arthritis relief drug. King brings to the party its Flector Patch, its muscle relaxant Skelaxin, its morphine formulation Avinza, and its tamper-resistant opioid Embeda, recently approved by the FDA as an alternative to the often-abused OxyContin. King also has a pipeline of new pain treatments.

Pfizer chief Jeffrey Kindler named those pipeline drugs as one reason for the deal. Another, of course, is the immediate revenue boost from the already marketed drugs. "[T]he revenue generated by King's portfolio will further diversify Pfizer's business, while at the same time contributing to steady earnings growth and shareholder value," Kindler says in a statement. In other words, it will help make up for the billions lost to generic competition for Pfizer's top seller, Lipitor.

One grey lining to this silver cloud: Pfizer is looking for "at least $200 million" in cost savings from this deal. Which means cuts of some kind, somewhere at King and/or Pfizer. The savings are expected by the end of 2013.

- see the Pfizer release
- check out the New York Times piece
 - get more from Bloomberg
- read the Wall Street Journal Health Blog's take