"We see the deal is strategically positive and at an acceptable valuation," says Catherine J. Arnold of Credit Suisse First Boston in a research report to clients. Arnold, who has a neutral rating on Pfizer, said the transaction should boost Pfizer's presence in hospitals.

Considering Pfizer's "need for products and its strong financial position, the price is not surprising," says Arnold, who doesn't own shares and whose firm has an investment banking relationship with Pfizer.

"Given Vicuron's two potentially blockbuster products ... plus a development program for novel antibiotics, we view this price as fair," adds Winton Gibbons of William Blair & Co., in a report to clients Thursday. Gibbons doesn't own shares, and his firm doesn't have an investment banking relationship with Pfizer.

Varied Uses

The FDA had been expected to rule on dalbavancin later this month, but the agency recently extended its action date by 90 days to Sept. 21. Gibbons says late-stage clinical trials have shown strong results in fighting complicated skin and soft tissue infections. A midstage clinical trial found the drug worked well in fighting bloodstream infections caused by catheters, Gibbons says.

Dalbavancin belongs to the same class of drugs as vancomycin, one of the most powerful antibiotics on the market that is administered to hospital patients who have dangerous bacterial infections that are resistant to other types of antibiotics. "Dalbavancin has been specifically designed as an improved alternative to vancomycin," Vicuron says.

Anidulafungin has produced positive late stage-clinical trial results for fighting fungal infections that affect the skin or mucous membrane but which also can enter the bloodstream and attack the heart. Test results issued earlier this year showed that Vicuron's drug did a better job than Pfizer's Diflucan.

Vicuron is seeking FDA approval of the drug for fungal infections of the esophagus. The agency is expected to act on Nov. 27.

Pfizer has been working with Vicuron on developing new antibiotics. Pfizer says these experimental pills are being tested to see if they have "improved potency and a broader spectrum of activity than existing classes of compounds." Pfizer is looking at several Vicuron compounds to see if they merit being tested in clinical trials.

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