Pfizer's Acquisition of Wyeth


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : BSTR342 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Mergers and Acquisitions
Case Length : 19 Pages
Period : 2008-09
Pub Date : 2009
Teaching Note : Not Available
Organization : Pfizer Incorporated, Wyeth
Industry : Pharmaceuticals
Countries : US

Abstract:

In January 2009, the US based Pfizer; the world's largest pharmaceutical company announced that it would acquire Wyeth, another leading pharmaceutical company based in the US, by paying US$ 68 billion in stock and cash. Lipitor, the world's best selling drug, developed by Pfizer would loose its patent protection in 2011. Lipitor contributed over 26% to Pfizer's revenues in 2008. However, with the patent expiry nearing and no probable block busters in pipeline, Pfizer faced risk of loosing huge part of its revenues once Lipitor is available for generic competition. Pfizer strategy to expand its product line and diversify its sources of revenue led it to acquire Wyeth.

Wyeth, on other hand, had patent expiry issues around the same time as Pfizer had. However, Wyeth had significant presence in bio-pharmaceuticals where Pfizer was lagging behind considerably. Bio-pharmaceuticals were expected to be growth engines in future and major pharma companies had started research in that area. The case examines the synergies and challenges for Pfizer after its acquisition of Wyeth.

Issues:


Evaluating the growth strategy adopted by Pfizer over the decades.
Examining the benefits to Wyeth from the acquisition deal.
Understanding the synergies and challenges arising out of Pfizer's acquisition of Wyeth.
Analyzing the deal between Pfizer and Wyeth quantitatively and qualitatively.
Appreciating the importance of intellectual property in knowledge based industries.
Understanding the dynamics of the US pharmaceutical industry.

Contents:

  Page No.
Introduction 1
Background Note 3
The Deal 6
The Synergies 7
The Challenges 9
Exhibits 12

Keywords:

Pfizer, Wyeth, Merger, Acquisition, Biopharmaceutical Company, Cash-and-stock transaction, Lipitor, Effexor, Protonix, Clinical Trials, Blockbuster Drugs, Celebrex, Warner Lambert, Pharmacia Corporation, Biopharmaceuticals, Biological Drugs, Biotechnology, Generic Drugs, Patents, Product Overlaps, Merger Integration, Patent Protection, Patent Expiration, Subprime Crisis

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