Pfizer and Allergan weigh up merger

Pfizer has held takeover talks with Allergan to create a pharmaceutical giant that would have a market capitalisation of around $300 billion, according to the Wall Street Journal.

Merger talks are in early stages, and may not yield an agreement, while other details are unclear, the WSJ noted. Buying Allergan, which is best-known for Botox and its own merger with Actavis in March, would give Pfizer the chance to secure a lower tax bill, as the former is domiciled in Ireland.

Any deal is thought to be less politically sensitive than Pfizer’s ultimately unsuccessful $118 billion offer for AstraZeneca or a possible bid for GlaxoSmithKline.

Allergan’s chief executive Brent Saunders  is a keen dealmaker, having sold Forest Laboratories, where he was CEO, to Actavis, then negotiating the latter’s $66 billion purchase of Allergan.

Following the Actavis tie-up, Allergan sold its generic drugs business to Israel’s Teva Pharmaceutical Industries in July for $40.5 billion in cash and stock. Neither Pfizer nor Allergan have commented on the rumours.

Strong sales growth  

Meantime, Pfizer posted a strong set of financials for the third quarter, boosted by a 43% rise in vaccine sales and healthy performances from breast cancer drug Ibrance and bloodthinner Eliquis.

Revenues were down 2% to $12.1 billion, helped by $300 million from recently-acquired Hospira, but up 8% when currency effects are taken into account. Net income fell to $2.13 billion from $2.67 billion.

Much of the rise in vaccines sales came from the pneumonia jab Prevnar, up 38% to $1.58billion, while the rheumatoid arthritis pill Xeljanz (tofacitinib) jumped 50% to $127 million. As for its new products, Ibrance (palbociclib) generated $230 million, while B-MS-partnered Eliquis (apixaban) saw sales double to $466 million.