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Pfizer Buying Rival Wyeth for $68 Billion

01/26/2009
Pharmaceutical giant Pfizer will purchase smaller rival Wyeth for $68 billion in a cash-and-stock deal that will cement Pfizer's position as the world's largest drug maker. At the same time, Pfizer will cut 10 percent of its staff and close five manufacturing plants, without announcing the locations of those closures. The two companies are positioning the deal as a merger, and say in a joint statement that it will create opportunities for the focus and agility of a smaller company combined with the resources and scale of a global company. Stated goals include enhancing treatments in such areas as Alzheimer's disease, inflammation, oncology, and psychosis; adding vaccine production; and accelerating growth in emerging markets. Industry analysts say Pfizer is looking for a replacement for Lipitor, its cholesterol medication that is the top-selling drug of all time, for which Pfizer will lose patent protection in 2011. New Jersey-headquartered Wyeth's best-selling drug is the antidepressant Effexor, for which it will lose patent protection next year. Analysts believe the deal could signal a wave of consolidation in the pharmaceutical industry as a defense against generic drug makers. Officials for both companies expect the deal to be completed sometime during the third quarter of this year.

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