Pfizer's Big Acquisition ... Is a Tiny Rights Deal With Cytos
The world continues to fuliminate over the notion that Pfizer is poised to make a big deal. Could it be Amgen? Could it be Bristol-Myers Squibb?
The speculation reached a new height of ridiculousness with this column in Today’s Financial News, “Pfizer shouts its message to the world.” The writer speculates, based on “signalling theory” (!), that Pfizer is sending a message telling us that its revenues in 2009 won’t be that great and it needs to do a deal.
As BNET readers saw yesterday, there are good reasons to believe that what was to be learned from CEO Jeff Kindler’s one-line quote to the FT was the exact opposite: That Pfizer will continue as it has been doing, trimming down non-performing areas, doing small deals, and trying its best to grow what brands it has.
There is some skepticism over the current environment of deal frenzy: AstraZeneca CEO David Brennan told the FT:
“I just don’t see it,” he says. “Once you’ve reached a certain size, there is no benefit for R&D productivity, and if it’s about taking out scale, you should be doing that anyway.”
And TheStreet.com took a skeptical line also.
Pfizer confirmed the skeptics’ view today: It did a $140 million licensing deal that give it the right to market vaccines developed by Swiss company Cytos.
That’s exactly the kind of modest, small-payout/big -potential-reward deal that will make Pfizer many times its investment down the line. No, it won’t do anything for the stock price today. But in five years’ time it may look like the smartest deal you’ve ever seen. And if it doesn’t, well, the company need not make the milestone payments.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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