Pfizer's Read resists merger pressure

Pfizer’s CEO Ian Read is resisting investor pressure to mastermind the next pharma mega-merger, saying that the company will be best served by investing in its drug pipeline.

As the company has been built through several huge mergers, such as the $68 billion acquisition of Wyeth, there has been speculation that Pfizer may attempt to snap up one of its smaller rivals.

But as Pfizer announced a set of so-so first quarter results, chief executive Ian Read said quite clearly that a big merger is not on the cards at the moment.

In 2014, AstraZeneca managed to fend off a takeover bid from Pfizer, and in 2016 the company scrapped its $160 billion merger with Allergan because of changes to US tax laws.

While some commentators expect Read to try for another big merger before he steps down, he said that such a move is not under consideration.

[caption id="attachment_17933" align="alignnone" width="147"] Pfizer CEO Ian Read[/caption]

In a conference call after the results, Read said: “I don’t see that we need a transformational deal, nor do I see one now at an appropriate value in the marketplace.”

He went on to say that the firm will be best served by investing in its pipeline – suggesting that Pfizer may decide to try for “bolt-on” acquisitions of smaller biotechs, or licensing deals, rather than a merger such as that being worked on by Takeda and Shire.

There are 15 potential blockbuster drugs in Pfizer’s pipeline, Read noted, which could be launched by 2022.

In fact Pfizer seems more interested in selling off parts of its business, earlier this year its sale of its consumer health unit fell through after bidders Reckitt Benckiser and GlaxoSmithKline pulled out.

The company reported lower-than-expected Q1 revenues, with total revenues growing 1% to $12.91 billion, short of analysts’ expectations of $13.13 billion.

Sales of key drugs grew – but less than expected as they were affected by inventory stocking issues. Ibrance sales increased 37.4% to $933 million, short of the expected $956.6 million.

Sales of rheumatoid arthritis drug Xeljanz were $326 million, below predictions by $72 million.