Pfizer to benefit from Wyeth acquisition

A definitive merger agreement has been entered into under which Pfizer will acquire Wyeth in a cash-and-stock transaction, currently valued at US$50.19 per share, or a total of approximately US$68 billion. The Boards of Directors of both companies have approved the combination, which will create one of the most diversified companies in the global healthcare industry.

Under the terms of the transaction, each outstanding share of Wyeth common stock will be converted into the right to receive US$33.00 in cash and 0.985 of a share of Pfizer common stock, subject to the terms of the merger agreement. Based on the closing price of Pfizer stock as of 23rd January, the stock component is valued at US$17.19 per share. The transaction provides immediate value to Wyeth shareholders through the cash component, as well as continued participation in the future prospects expected to result from the combination through their ownership of approximately 16 per cent of Pfizer’s shares. The transaction will be financed through a combination of cash, debt and stock. A consortium of banks has provided commitments for a total of US$22.5 billion in debt. Pfizer and Wyeth expect the transaction to close at the end of the third quarter or during the fourth quarter 2009.

The new company will be an industry leader in human, animal and consumer health. With the combined biopharmaceuticals business, it will lead in primary and specialty care as well as in small and large molecules. Its geographic presence in most of the world’s developed and developing countries will be unrivalled. Wyeth already has a leadership position in growth areas, such as vaccines, nutritionals and biologics. But what will Pfizer be getting for its money?

In the oncology area, Wyeth currently markets the following products: Torisel (temsirolimus) for the treatment of advanced renal cell carcinoma, and also filed in the EU for mantle cell lymphoma; Neumega (oprelvekin) for the prevention of severe thrombocytopenia and the reduction of the need for platelet transfusions following myelosuppressive chemotherapy in adult patients with non-myeloid malignancies who are at high risk of severe thrombocytopenia; Mylotarg (gemtuzumab ozogamicin) for the treatment of patients with CD33+ acute myeloid leukaemia in first relapse who are 60 years of age or older and who are not considered candidates for other cytotoxic chemotherapy; and Relistor (methylnaltrexone) subcutaneous injection for the treatment of opioid-induced constipation in patients with advanced illness who are receiving palliative care. These will be combined with Pfizer's marketed products, which include Camptosar (irinotecan) for colorectal cancer; Sutent (sunitinib) for gastrointestinal stromal tumours and renal cell carcinoma; and Aromasin (exemestane) for breast cancer.

But what about future products? Wyeth's R&D pipeline includes the following oncology compounds: bosutinib, in Phase III for chronic myelogenous leukaemia and Phase II for breast cancer combination therapy; inotuzumab ozogamicin in Phase III for follicular non-Hodgkin's lymphoma (NHL) and Phase II for diffuse large B-cell lymphoma/NHL; and neratinib (HKI-272), which is in late-stage trials for breast cancer. Although Pfizer has many novel drugs in Phase I and II development, its current Phase III pipeline mainly consists of new indications for sunitinib. The main benefit to come from the acquisition of Wyeth will be Pfizer's increased exposure to areas of the oncology market that it does not currently serve, such as haematological cancers and supportive products.

Matthew Dennis - Editor, Cancer Drug News