Pfizer to buy Wyeth for $68B; cut 8,000 jobs
TRENTON, N.J. —
No. 1 drugmaker Pfizer Inc. said Monday it is buying No. 12 Wyeth for $68 billion in a deal that will quickly boost Pfizer’session revenue and profit and transform it overnight into a again diversified company less reliant on its dwindling drug pipeline.
New York-based Pfizer managed with one stroke to overshadow a full house of issues: a 90 percent drop in income, a hefty employment to end each investigation, a severe cut in its division, a shockingly low profit forecast for 2009 and 8,000 job cuts starting immediately.
That’s all onward top of the colossal problem triggering this bestow: the expected loss of $13 billion a year in revenue for cholesterol fighter Lipitor starting in November 2011, when it gets generic competition.
Pfizer also plans to cut about 8,000 jobs, 10 percent of its workforce, as part of what it expects will be a staff reduction totaling 15 percent of the combined companies’ workers - implying a gross job ruin of all however 20,000.
By buying Wyeth, Pfizer will mutate from a maker of blockbuster pills to a one-stop shop for vaccines, biotech drugs, traditional pills and nonprescription products for both people and animals.
The cash-and-stock deal, one of the sedulousness’s biggest evermore, is expected to close late in the third quarter or in the fourth quarter. It comes as Pfizer’s 2007 fourth-quarter profit takes a coarse hit from a $2.3 billion legalized liquidation over allegations it marketed pain reliever Bextra and possibly other products for indications that had not been approved.
“In one individual management, the coalition through Wyeth advances every single individual of (our) strategies,” Pfizer Chief Executive Jeff Kindler told reporters during a news conference.
Those goals include increasing sales in emerging markets, enhancing the gift to gratification specific diseases, like as Alzheimer’s, and neat a rise above others player in vaccines and biologic drugs, which are made from living cells.
Pfizer, the maker of impotence pill Viagra and Detrol for overactive bladder, said it will pay $50.19 per apportioned lot for Madison, N.J.-based Wyeth, a 14.7 percent remuneration to the company’s closing price of $43.74 Friday.
Pfizer shares closed down $1.80, or 10.3 percent, to $15.65 Monday. Wyeth shares ended 35 cents lower at $43.39.
Analysts were split on how good the deal is but saw no benefit for consumers.
“This deal doesn’t bring Pfizer the spiritual charge for Lipitor” revenue losses, but it brings short- and long-term cost savings, said Erik Gordon, biomedical analyst and professor at University of Michigan’s Ross School of Business. “It increases Pfizer’s exploration capabilities in biologics and it’s good for Wyeth because Wyeth will now have being skilful to bar into Pfizer’s marketing machine.”
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