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Pfizer Mends With Vicuron Buy

In a move to bolster its anti-infective franchise, Pfizer (PFE - Get Report) said Thursday it would pay $1.9 billion in cash -- representing a gigantic premium -- to acquire Vicuron Pharmaceuticals (MICU).

Vicuron has two anti-infective drugs pending before the Food and Drug Administration, which should rule on both later this year.

Pfizer's offer places a value on Vicuron's stock at $29.10 a share. The stock jumped to $27.53 on Thursday, adding $11.73 or 74.2%. The shares rose as high as $27.93 and easily vaulted past the 52-week high of $18.33. Pfizer's stock was off 4 cents to $28.39.

The deal is expected to close during the third quarter, subject to regulatory approval and a vote by Vicuron's shareholders.

Pfizer has four big anti-infective drugs that produced $4.72 billion in sales last year, representing 9% of corporate revenue. But one of those drugs, Diflucan, an antifungal, lost patent U.S. protection in July 2004 and is losing sales. Its $945 million in sales last year represented a 20% drop from 2003.

An even bigger drug, the antibiotic Zithromax, will lose U.S. patent protection in November. Zithromax had worldwide sales of $1.85 billion last year, down 8% from 2003. The drug is most often used in treating respiratory infections. On Monday, the FDA approved Zmax, a one-dose version of Zithromax, as a treatment for mild to moderate acute bacterial sinusitis and community-acquired pneumonia in adults.

The other Pfizer anti-infectives are Zyvox ($463 million in sales last year) and Vfend ($287 million in 2004 sales).

Waiting for a Payoff

Vicuron, based in King of Prussia, Pa., has two drugs awaiting decisions by the FDA this year -- the antibiotic dalbavancin and the antifungal anidulafungin. Because both are so far along in the clinical and regulatory process, Pfizer is paying a big, but digestible price.
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