Should Pfizer bulk up or break up?

Now that Pfizer has agreed to add King Pharmaceuticals to the list of companies it has bought, there are two schools of thought: One, Pfizer needs to buy more--much more. Two, Pfizer might need to split its behemoth self into smaller pieces.

In the "more deals" corner, we have Peter Loftus at the Wall Street Journal. By his thinking, the $68 billion Wyeth buy last year wasn't enough to make up for the revenue losses Pfizer faces as blockbuster drugs--e.g., Lipitor--go off patent. The King deal, while all well and good, is just an incremental addition, adding only pennies to annual earnings per share. So, Pfizer will need more buys to reach its revenue goals.

Agreed, says Matthew Herper at Forbes. Provided, that is, it intends to remain the Biggest Big Pharma. But would Pfizer be worth more if it was split into several parts? As Herper reports, Sanford Bernstein analyst Tim Anderson put that question to CFO Frank D'Amelio during the King acquisition conference call. D'Amelio said Pfizer execs have "no preconceived notion" about its future, only that they'll handle the company "from a total shareholder return perspective." So the question remains: Is the sum of the parts worth more than the whole? Or vice-versa?

- see the Deal Journal piece
- get more from Forbes

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