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Pfizer-Wyeth

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Pfizer – Wyeth Acquisition

Abstract The board of Pfizer, the world’s largest drug maker, has agreed to acquire a long-time rival, Wyeth, for $68 billion. The Pfizer-Wyeth merger will create a prescription pharmaceutical company of extraordinary scale. Despite long-term patent and marketing challenges, most industry observers believe Pfizer has little choice but to engage in some type of major acquisition, especially given the recent loss of income on Lipitor. Pfizer needs to reassure its investors that it can get back on track. With having to freeze its dividends, hundreds of layoffs, and stock prices falling, it is imperative to convince the stakeholders that Pfizer will come out of this economic dilemma on top. The acquisition with Wyeth will reduce Pfizer’s negative sales outlook; however, there is only one route to delivering profit growth to investors, and that is by buying growth and cutting costs. Pfizer has announced that it expects to create savings of $4 billion by the third year after closing the acquisition. This is in part due to the 15% reduction in Pfizer-Wyeth’s combined workforce. After the merger, Pfizer will operate through a patient-centric business units in two major areas, biopharmaceuticals and diversified businesses. Its biopharmaceutical business units are emerging markets
Where as Pfizer currently has one of the largest sales forces in the industry, Wyeth’s antibiotics and specialty drugs will not require a lot of marketing to consumers, and Pfizer may regard that as a big advantage. Another benefit in Pfizer acquiring Wyeth is its strong presence in biotech drugs as Pfizer has had little success in this area of pharmaceuticals. For too long the majority of Pfizer’s drug portfolio has personified the representative Big Pharma product set of small molecule cardiovascular drugs. The merger with Wyeth will bring a positive

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