Boston, MA 04/21/2014 (wallstreetpr) – The reported merger talks between AstraZeneca plc (ADR) (NYSE:AZN) And Pfizer Inc. (NYSE:PFE) occurred several months ago but are currently dormant. In other words, the two drug companies are not currently in any tie-up talks.
However, high-placed sources revealed that there were informal talks for a tie-up during which Pfizer reportedly offered to take over the control AstraZeneca’s operations with a $101 billion deal. The talks may or may not resume.
The acquisition of AstraZeneca would be very strategic for Pfizer considering that the company is facing expiration of patent protection on a number of its blockbuster drugs. Pfizer has in recent years acquired smaller drug makers to boost its product portfolio and gain access to promising pipeline.
AstraZeneca develops drugs for the treatment of cancer. Its treatments empower human body immune cells to fight cancer.
It cannot be farfetched that Pfizer Inc. (NYSE:PFE) might be plotting for another mega acquisition with target on AstraZeneca. Pfizer requires new products and rich pipeline to ensure revenue growth at a time when it expects to lose patent protection on most of its bestselling drugs. Moreover, the company would be more than willing to spend its overseas cash in an acquisition instead of bringing it to the U.S. where it could face huge tax burden.
Out of the many possible drug developers, AstraZeneca plc (ADR) (NYSE:AZN)’s product portfolio and pipeline are attractive enough for Pfizer.
AstraZeneca plc (ADR) (NYSE:AZN) works on its own and also in partnerships, in the development of cancer drugs. Although the company suffered revenue decline in the fourth quarter and predicted further drop in sales in the current year, AstraZeneca’s strong pipeline is reason for hope and interest for industry peers interest in making a bid for its purchase. In addition to the takeover advances from Pfizer, AstraZeneca is also being targeted for possible acquisition by GlaxoSmithKline (NYSE:GSK) and Novartis AG (ADR) (NYSE:NVS).
With reports that talks between AstraZeneca plc (ADR) (NYSE:AZN) and Pfizer are currently inactive, it remains to be seen who among the mentioned major drug companies will make a successful bid for AstraZeneca.
Shares of AstraZeneca plc (ADR) (NYSE:AZN) are up about 32 percent in the past two year. However, sales have continued to decline, falling from $33.6 billion in fiscal 2011 to $25.7 billion in fiscal 2013. Analysts expect the company to suffer further losses in the future as it continues to lose patent protection on some key products. That being said; Pfizer shareholders might have reservations about a move to acquire the company.
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