Pfizer will acquire California-based Anacor Pharmaceuticals – the maker of a new eczema treatment – in a deal worth $5.2 billion.
The pharmaceutical giant announced it had agreed a deal with the board of Anacor.
Anacor’s flagship product is crisaborole, a cream for eczema which is awaiting approval by US regulators.
The deal comes just weeks after Pfizer scrapped a planned $160 billion merger with Irish drugmaker Allergan for tax reasons.
Albert Bourla, head of Pfizer’s global innovative pharma unit, said: “We believe the acquisition of Anacor represents an attractive opportunity to address a significant unmet medical need for a large patient population.”
Crisaborole can achieve $2 billion in annual sales if approved by the Food and Drug Administration, according to Pfizer.
Some 18 million to 25 million people suffer from eczema in the US, but currently there are few safe appropriate treatments, Pfizer said.
Anacor shares jumped 57%, rising above the $99.25 a share agreed with Pfizer.
Pharmaceutical company Pfizer has scrapped a planned merger with Ireland’s Allergan amid plans to change US tax laws.
The decision comes two days after the US Treasury announced fresh plans to prevent deals known as “inversions”, where a US company merges with another company in a country with a lower tax rate.
The Pfizer-Allergan deal, valued at $160 billion, would have been the biggest example of an “inversion”.
It would also have been the biggest pharmaceutical deal in history.
Pfizer said the move was “driven by the actions announced” by the US Treasury.
The company’s chairman and chief executive Ian Read said: “Pfizer approached this transaction from a position of strength and viewed the potential combination as an accelerator of existing strategies.”
He added that the company could look at splitting off part of the business.
“We plan to make a decision about whether to pursue a potential separation of our innovative and established businesses by no later than the end of 2016, consistent with our original timeframe for the decision prior to the announcement of the potential Allergan transaction.”
Pfizer said it would pay Botox-maker Allergan $150 million “for reimbursement of expenses associated with the transaction”.
Under the proposed acquisition, Pfizer would have moved its headquarters to Dublin, where the tax bill would have been lower than in the US.
The corporation tax rate in the Republic of Ireland is 12.5%, compared with 35% in the US.
On April 5, President Barack Obama weighed in on the inversion trend, saying “these companies get all the rewards of being an American company without fulfilling their responsibility to pay their fair share of taxes”.
In 2014, American fast-food chain Burger King bought Canadian coffee and doughnut chain, Tim Hortons. The merged group moved to Ontario in Canada, where the corporate tax rate is at 26.5%.
Analysts had said that Pfizer needed to look at acquisitions to help grow its business and revenue.
Pfizer made an offer to buy UK drugs group AstraZeneca in 2014.
However, AstraZeneca rejected the offer, arguing it undervalued the company.
Pfizer has sealed a deal to buy Botox-maker Allergan for $160 billion in what is the biggest pharmaceuticals deal in history.
The takeover could allow Pfizer to escape relatively high US corporate tax rates by moving its headquarters to Allergan’s Dublin base.
The merged company will be the world’s biggest drug maker by sales.
Allergan shareholders will receive 11.3 shares in the new company for each of their Allergan shares.
Pfizer shareholders will receive one share for each of their shares in that company.
Pfizer’s shares closed down 2.7% in New York at $31.32, while Allergan fell 3.4% to $301.70.
Hillary Clinton, the Democratic presidential hopeful, said inversion deals like Pfizer’s would “leave US taxpayers holding the bag” and called on Washington to ensure that the biggest companies “pay their fair share”.
Senator Bernie Sanders, another Democratic hopeful, said the deal would be a disaster for consumers and allow another major US company to hide its profits overseas.
Republican presidential candidate Donald Trump described Pfizer’s departure from the US as “disgusting”, adding: “Our politicians should be ashamed.”
The merged business will be called Pfizer Plc. The companies said they expected the deal to be completed in the second half of 2016, subject to regulatory approval in the US and Europe.
Pfizer said it expected the merger to result in savings of $2 billion in the first three years.
The company’s CEO Ian Read will be chief executive and chairman of the merged company, with Allergan boss Brent Saunders becoming president and chief operating officer.
“The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and more therapies to more people around the world,” said Ian Read.
Critically, the terms of the deal propose that the merged company will maintain Allergan’s Irish domicile. This means the profits of the new company would be subject to corporation tax of 12.5% – much lower than the 35% Pfizer pays in the US.
In 2014, Pfizer made an offer to buy AstraZeneca in a move that analysts said was designed to reduce Pfizer’s tax bill. The UK pharmaceutical giant rejected the bid, arguing it undervalued the company.
The deal is the latest in a series of mergers and acquisitions in the sector, as pharmaceuticals companies struggle to cope with patents on a number of major drugs expiring.
Allergan has confirmed it has held preliminary talks about a takeover by pharmaceutical giant Pfizer.
The Dublin-based Botox-maker said no agreement had been reached and there was “no certainty that these discussions will lead to a transaction”.
Allergan shares were up more than 6% on October 29 trading in New York.
Analysts said Pfizer needed to boost profits and may be looking to escape relatively high US corporate tax rates by moving its headquarters to Dublin.
“Allergan today confirmed that it has been approached by Pfizer Inc. and is in preliminary friendly discussions regarding a potential business combination transaction,” the company said in a statement.
“The company will not comment on speculation regarding the terms of a potential transaction.”
The talks were first reported in the media on October 28.
In 2014, Pfizer made an offer to buy another UK drugs group, AstraZeneca, but Astra rejected the offer, arguing it undervalued the company.
The Food and Drug Administration (FDA) approved a vaccine for the first time for the deadly type of meningitis that affected the students at Princeton and at the University of California in 2013.
Pfizer’s vaccine Trumenba protects against serogroup B, one of five forms of bacterial meningitis.
The FDA accelerated the approval of Trumenba, completing the approval process in “well under six months,” the typical time frame for completing even a priority review of a new drug, FDA’s Dr. Karen Midthun said in a conference call with reporters on October 30.
Karen Midthun, the director of the FDA’s Center for Biologics Evaluation and Research, said that the 2013 outbreaks “underscored the urgent public health need” for a vaccine for serogroup B meningcoccal disease in the US.
Two existing vaccines, Menactra and Menveo, prevent the other four types of bacterial meningitis and are currently recommended by the Centers for Disease Control and Prevention (CDC) for all preteens and adolescents. Many schools and colleges require students to receive a meningitis vaccine before enrolling.
Serogroup B meningitis caused 160 of the 500 cases of meningococcal disease in the US in 2012, according to the CDC. The agency said that 10 to 15% of these cases are fatal. Among those who survive, 11 to 19% suffer permanent disabilities, including limb loss, hearing loss and brain damage.
Pfizer’s vaccine Trumenba protects against serogroup B, one of five forms of bacterial meningitis
The outbreaks on the two university campuses in 2013 killed one student at Drexel University, who had come into contact with Princeton students, and caused a student in California to lose both of his feet. In September, a Georgetown University sophomore died of serogroup B, in what the university said was an isolated case.
Viral meningitis, though less serious than the bacterial form of the disease, also causes inflammation of the tissue around the brain and spinal cord. There is no vaccine for the illness, which is rarely fatal. Viral meningitis has been reported this month in up to 19 students at the University of Maryland at College Park and a teacher at a District preschool.
Bexsero, the Novartis vaccine administered at the universities last year with special FDA permission, had been approved for use in Europe and Australia, while the U.S. had no serogroup B vaccine.
As part of getting speedy approval, Pfizer has agreed to keep testing the vaccine. Three studies in the U.S. and Europe, involving about 2,800 adolescents, demonstrated that the vaccine generated antibodies in the blood of 82% of participants. The antibodies can kill four strains of serogroup B, according to the FDA.
The further testing will evaluate whether the vaccine is effective at creating antibodies that kill additional strains.
Pfizer said in a press release that the new vaccine must be administered in three doses over the course of six months. It is approved for use in people ages 10 to 25, a key group for meningitis cases, which can easily spread among students living in close quarters in dormitories.
Karen Midthun said that manufacturers might eventually develop one shot containing the vaccines for all five types of bacterial meningitis.
Right now, full protection would require three doses of Trumenba in addition to an existing meningitis vaccine, for which the CDC recommends an initial shot and a later booster.
Pfizer’s bid for AstraZeneca is being questioned by senators and Maryland and Delaware governors.
Maryland and Delaware governors have written to Pfizer’s boss saying they are “very concerned” about the deal and the possibilities of job losses in their states.
Meanwhile senators Carl Levin and Roy Wyden are looking to close the tax loophole that Pfizer plans to use.
One of the attractions of the deal to Pfizer is that it could significantly lower the company’s tax bill.
Pfizer’s bid for AstraZeneca is being questioned by senators and Maryland and Delaware governors
In a strategy known as “tax inversion” Pfizer could pay the UK corporate tax rate of 20%, rather than the 35% rate applied in the US, if it bought AstraZeneca.
Senator Carl Levin said in a statement: “I’ve long been concerned about inversions – companies moving offshore on paper, for tax purposes, while the management and operations remain in the United States.
“It’s become increasingly clear that a loophole in our tax laws allowing these inversions threatens to devastate federal tax receipts.
“We have to close that loophole. I am talking to my colleagues about legislation to close the loophole, which I intend to introduce soon.”
Meanwhile governors Martin O’Malley and Jack Markell are concerned about job losses.
AstraZeneca employs approximately 3,100 people in Maryland, and has around 2,600 staff in Delaware.
The governors are concerned about reports that Pfizer has given assurances to the UK government that there will be no British job losses at AstraZeneca.
They say they have had no similar assurances about AstraZeneca facilities in their states.
“Our concern is exacerbated by Pfizer’s history of closing US research facilities, including sites in Michigan and Illinois, after closing on previous corporate transactions,” Martin O’Malley and Jack Markell said in a statement.
Pharmaceutical company AstraZeneca has rejected the new takeover offer from Pfizer.
Pfizer had earlier raised the price it was offering for AstraZeneca to $80 a share, valuing the firm at $100 billion.
However, the UK company said the new terms offered were, “inadequate, substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer”.
If the deal were to go through it would be the biggest takeover of AstraZeneca by a foreign firm.
AstraZeneca employs more than 51,000 staff worldwide, with 6,700 in the UK. Pfizer – whose drugs include Viagra – has a global workforce of more than 70,000, with 2,500 in the UK.
AstraZeneca has rejected the new takeover offer from Pfizer
Announcing Pfizer’s new offer, Pfizer chairman and chief executive Ian Read said the company believed “that there is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies”.
“We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies.”
Pfizer also sent a letter to UK’s PM David Cameron to try to address concerns over the bid.
On Wednesday, four scientific bodies raised concerns about possible UK lab closures following a Pfizer deal, and a committee of lawmakers is considering an inquiry into the issue.
Pfizer told PM David Cameron it would go ahead with AstraZeneca’s planned research and development (R&D) base in Cambridge, and retain its Macclesfield manufacturing facilities.
The US company also pledged that if the deal went ahead, 20% of the combined company’s R&D workforce would be based in the UK.
Pfizer said its commitments would be valid for five years, unless circumstances changed significantly.
The latest offer from Pfizer is a mixture of cash and shares equivalent to $80 per AstraZeneca share. If the deal goes through, Pfizer also wants to establish its corporate and tax residence in the UK, as well as its European headquarters.
AstraZeneca’s board said the offer was too low, and that it believed a major driver for Pfizer’s takeover was the move to establish a tax residence in the UK by changing its company structure.
“The large proportion of the consideration payable in Pfizer shares and the tax-driven inversion structure remain unchanged. Accordingly, the board has rejected the proposal,” AstraZeneca said.
Leif Johansson, chairman of AstraZeneca, added that the company’s product “pipeline” of new drugs was “rapidly progressing”.
“Pfizer’s proposal would dramatically dilute AstraZeneca shareholders’ exposure to our unique pipeline and would create risks around its delivery,” Leif Johansson said.
AstraZeneca’s shares rose by more than 14% on Monday, after pharmaceutical giant Pfizer confirmed its interest in a takeover bid.
Pfizer said it had contacted AstraZeneca over a multi-billion dollar bid for the UK-based drug maker.
If successful, the deal would be the biggest ever takeover of a UK firm by a foreign company.
Pfizer said it approached AstraZeneca on Saturday, after an initial offer in January, worth $95 billion, was rebuffed.
AstraZeneca’s shares rose by more than 14 percent on Monday, after pharmaceutical giant Pfizer confirmed its interest in a takeover bid (photo Getty Images)
AstraZeneca said the original offer “significantly undervalued” the firm, which employs more than 51,000 staff.
However, AstraZeneca said it was “confident” its strategy would create “significant value” for shareholders on its own.
“The Board remains confident in the ongoing execution of AstraZeneca’s strategy as an independent company,” it added.
Pfizer said in a statement that AstraZeneca’s refusal to engage meant it was currently “considering its options”.
AstraZeneca manufactures drugs in 16 countries focusing on treatments for diabetes, cancer and asthma as well as antibiotics.
Recently the company posted a drop in first quarter profits – and laid off thousands of staff in an effort to reduce its costs to compensate for a fall in sales – due to patent losses on blockbuster medicines.
In April, AstraZeneca posted a drop in first quarter profits after its earnings were by hit by patents expiring on some of its older medicines.
Pfizer said the deal was “a highly compelling opportunity” for AstraZeneca’s shareholders.
It said if the takeover went through, the combined company would have management in both the US and the UK, but would list its shares on the New York Stock Exchange.
Pharmaceutical company Pfizer has agreed to pay $491 million to settle a probe into illegal marketing of a drug by Wyeth, a firm it had acquired in 2009.
The case revolved around Rapamune, a drug prescribed to prevent rejection of transplanted kidneys.
It was alleged that sales staff of Wyeth encouraged doctors to prescribe Rapamune for other organ transplants, which were not approved by regulators.
Pfizer stressed the illegal marketing occurred before it acquired Wyeth.
Pfizer has agreed to pay $491 million to settle a probe into illegal marketing of Rapamune, a drug by Wyeth
“Pfizer was not a subject or target of this matter, and cooperated fully with the government from the time it learned of this investigation in October 2009,” the company said in a statement.
The US Department of Justice said: “Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales.”
This is not the first time that Pfizer has had to settle a dispute surrounding Wyeth.
Last year, it agreed to pay $55 million to settle charges that Wyeth promoted its heartburn drug Protonix for unapproved uses.
The latest settlement comes as Pfizer reported that its earnings more than quadrupled during the second quarter.
Pfizer made a net profit of $14.1 billion during the period, compared with $3.2 billion during the same period a year ago.
Pharmaceutical company Pfizer has paid the US government $60 million to settle charges alleging it paid millions of dollars in bribes to build its business in Europe and China.
Employees made the payoffs to secure sales contracts for Pfizer products, according to court filings.
Healthcare officials “improperly rewarded”, the Securities and Exchange Commission said.
The US drugs giant does not admit any guilt.
“Pfizer subsidiaries in several countries had bribery so entwined in their sales culture that they offered points and bonus programs to improperly reward foreign officials who proved to be their best customers,” said Kara Brockmeyer, chief of the SEC’s foreign enforcement division, which made the allegations.
Pfizer has paid the US government $60 million to settle charges alleging it paid millions of dollars in bribes to build its business in Europe and China
The countries involved are Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia.
However, the SEC said Pfizer officials had not been aware of the payments, and that its good co-operation over the charges meant there was no need for criminal prosecution.
Pfizer first disclosed the misconduct to SEC and Justice Department officials in October 2004, and cooperated with the government’s investigation.
The charges against Pfizer were brought under the Foreign Corrupt Practices Act, which bars publicly traded companies from bribing officials in other countries to get or retain business.
In the past five years, the Justice Department has investigated a number of pharmaceutical and medical device companies that operate overseas in connection with the law.
Last year, Johnson and Johnson agreed to pay $70 million to settle civil and criminal charges of bribery brought by the Department of Justice.
US pharmaceutical companies Pfizer and Johnson & Johnson say they will stop development of Alzheimer’s drug bapineuzumab, because it failed in two late-stage clinical trials.
Bapineuzumab, made by Pfizer and Johnson & Johnson, was designed to halt build-up of plaque in the brain.
But it failed to improve cognitive or functional performance compared with a placebo in certain patients.
Alzheimer’s is the most common form of dementia, as well as the sixth leading cause of death in the United States.
An estimated 36 million people worldwide are believed to have dementia, including Alzheimer’s.
Bapineuzumab, made by Pfizer and Johnson & Johnson, was designed to halt build-up of plaque in the brain
Both firms announced on 23 July that the first clinical trial of the intravenous (IV) version of bapineuzumab had failed.
In that study, patients with a gene that is associated with a greater risk of Alzheimer’s were tested.
But results with the group were largely the same as with those who did not have the gene, who were tested in the second study.
The second trial’s end means that additional studies on the IV version will not take place; however, Johnson and Johnson said a study of subcutaneous use would continue.
Some had predicted that the IV studies of bapineuzumab would fail because they were treating those whose brains were already damaged.
“One of the strong thoughts in the field is that you really have to treat people before they become demented,” William Thies, chief scientific officer of the Alzheimer’s Association told Reuters, adding that the announcement did not prevent the drug from being tested as a preventative.
And William Thies said that despite the trial’s failure, data from the experiment could still be useful.
“These studies are terribly important for us to learn about Alzheimer’s disease, and that part of the process is just starting as the data continues to be crunched in a variety of ways.”
Johnson and Johnson had agreed in 2009 to invest up to $1.5 billion in bapineuzumab.
In a statement, Steven Romano, head of Pfizer’s Medicines Development Group said they were “obviously very disappointed” with the trial’s outcome.
“We are also saddened by the lost opportunity to provide a meaningful advance for patients afflicted with mild-to-moderate Alzheimer’s disease and their caregivers,” he said.
A similar drug being developed by Eli Lilly, solanezumab, is also considered a long-shot to succeed, but results of the trials will not be available until later this year.