In a move to grow its biosimilar business, Pfizer just bought hospital drug supplier Hospira for $17 billion. In a way, it’s Pfizer’s do-over in miniature of its failed, $100 billion attempt last year to merge with AstraZeneca – so many of the same conversation points from that era.
A Wall Street Journal article from last April wrote this, when the $100 billion Pfizer-AstraZeneca merger was still on the table:
The lesson for more established companies like Pfizer comes from how the biotechs have used the capital markets to advance new drugs. History tells us that their original ideas often don’t pan out. But companies ultimately succeed because they’re able to keep top research teams intact and learn from early setbacks. They pivot from dead ends to taking new, more-productive paths. Most of all, they’re able to continue to tap capital in the public markets to finance operations through early scientific stumbles while pursuing the long-term research necessary to develop pioneering drugs like Genentech’s Herceptin, which cuts in half the risk that a particularly aggressive form of breast cancer will recur after surgery.
Also, while consolidation make sense for the big pharma overlords, the small fish might ask – will fewer acquirers mean fewer acquisitions?
[Photo from Flickr user Pardee Ave.]
