Pfizer finally lands vaccines bulk-up with $635M Baxter buy

Prevnar's lonely days are over. Pfizer ($PFE) is finally beefing up beyond its best-selling franchise--a long-stated objective of CEO Ian Read's--nabbing Baxter's ($BAX) marketed vaccines portfolio in a $635 million deal.

Through the transaction, Pfizer will grab NeisVac-C--a meningitis C vaccine--and FSME-IMMUN/TicoVac, which protects against tick-borne encephalitis. Both are available outside the U.S., and Baxter said it expects them to rack up about $300 million in 2014 revenue. Along with the pair will come a portion of Baxter's manufacturing facility in Orth, Austria, where the vaccines are produced. 

As for Baxter's vaccine-related R&D activities, the company said it continues to explore strategic options, including the potential for partnering or hiving off its research programs focused on influenza and Lyme disease.

While Pfizer's Prevnar 13 leads the worldwide vaccine market, the pharma giant doesn't have much else in the way of vaccines offerings. With the deal, Pfizer can broaden its lineup--one of the objectives it was eyeing with its unsuccessful bid for AstraZeneca ($AZN) earlier this year.

Susan Silbermann

"We are working hard to bring innovative vaccines to market that prevent and treat serious diseases," Pfizer Vaccines President Susan Silbermann said in a statement. "Through this acquisition, we will add two high-quality and lifesaving vaccines that bring scale and depth to our portfolio."

And Pfizer will need that depth if it hopes to compete with the vaccines market's Big 3 in Merck ($MRK), Sanofi ($SNY) and GlaxoSmithKline ($GSK). The latter is about to get bigger itself, thanks to an April agreement to pick up most of Novartis' ($NVS) vaccines business for $7.1 billion.

Baxter, for its part, is following Novartis' lead, shedding noncore businesses as it looks to double down on its strongest areas. The vaccines sell-off will precede Baxter's biopharma spinoff, set for next year as the company pivots toward a medical-device focus.

Ludwig Hantson

"This action reflects our strategic priority to optimize the portfolio and enhance focus in specific disease areas as Baxter's BioScience organization prepares to become a separate, independent global biopharmaceutical company," Baxter BioScience President Ludwig Hantson said in a statement. "… We are confident that Pfizer, with its recognized global leadership in vaccines, will provide the dedicated, ongoing investments necessary to support and advance the availability of these important vaccines."

- read Pfizer's release
- read Baxter's release

Special Reports: The top 5 vaccine makers by 2013 revenue - Pfizer | Top 10 best-selling vaccines of 2013

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