Pharma stocks soar on back of Pfizer's move for AstraZeneca

Pfizer, the biggest US drugmaker, has confirmed its interest in acquiring AstraZeneca of the UK for about £58.8 billion  (€70 billion). A Pfizer acquisition of the UK's second largest pharmaceutical company would be one of the largest takeovers in the industry's history.

Both companies have operations in Ireland, with Pfizer employing about 3,200 in various locations around the country, and AstraZeneca employing about 60 people in Dublin.

Pfizer proposed buying London-based AstraZeneca on January 5th for £46.61 pounds a share in cash and stock, and AstraZeneca declined to pursue negotiations, the New York-based company said in a statement today. That’s about 14 per cent above the closing price April 25th for AstraZeneca.

“The combination of Pfizer and AstraZeneca could further enhance the ability to create value for shareholders of both companies and bring an expanded portfolio of important treatments to patients,” Pfizer chief executive officer Ian Read said in the statement.

“A potential combination with AstraZeneca aligns with Pfizer’s current structure and fully supports its existing strategy to build world-class businesses.”

An acquisition of AstraZeneca would add to the $127 billion of mergers in the pharmaceuticals sector this year, according to data compiled by Bloomberg. An industrywide recalibration that has been building since 2011 reached a peak last week with a flurry of activity by GlaxoSmithKline, Novartis and Valeant Pharmaceuticals International.

AstraZeneca has no immediate comment, spokeswoman Esra Erkal-Paler said. The company is in the process of reviewing Pfizer’s statement, she said, without elaborating further.

The combination of Pfizer and AstraZeneca would create the largest health-care company by revenue, based on trailing 12- month financials, a position it may lose as the UK company loses $2.5 billion of sales by 2017, Sam Fazeli, senior analyst for pharmaceuticals at Bloomberg Industries wrote last week. A deal with AstraZeneca would help Pfizer add early-stage drugs in a field of cancer treatments that use the body’s own immune cells to recognise and attack cancer.

Pfizer closed at $30.75 in the U.S. last week, up 0.4 percent this year.

Bloomberg