This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

So Much for a Pfizer Biotech Play

Updated from 1:28 9.m. EST

For all the chatter about Pfizer (PFE - Get Report) wanting to take the bold step of gobbling up a big biotech firm, the pharmaceutical giant may instead revert to familiar ways by merging with its one of its own, Wyeth (WYE), delivering a blow to biotech's solar plexus.

Pfizer is reportedly in talks to acquire Wyeth, although a deal may not be imminent, according to a report Friday in The Wall Street Journal.

A Pfizer-Wyeth combination would create a global pharmaceutical giant with about $75 billion in combined revenue. Pfizer would also be able to wring out considerable cost savings by consolidating back-office staff, and streamlining research and development and sales and manufacturing operations.

The drug sector is rife with problems, which is why consolidation seems like the easy solution. In recent years, cheaper generic competitors have chopped down Big Pharma drugs that once racked up billions of dollars in sales annually. And despite vast spending on R&D, drug companies have been unable to come up with new replacement products to make up for all the eroding revenue. Meantime, government officials and health insurers are starting to take a more aggressive line on drug pricing, adding to the bottom-line pressures of the sector.

If Pfizer's play for Wyeth seems familiar, that's because it is. Pfizer has grown to be the largest drug maker, mainly by swallowing up its rivals -- Warner Lambert in 2000 and Pharmacia in 2003. Both deals appeared to provide Pfizer with short-term relief, but neither solved the company's more intractable problems.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ELN $0.00 0.00%
AMGN $167.91 0.00%
BIIB $401.71 0.00%
GILD $103.70 0.00%
PFE $35.27 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs