Pfizer and Mylan’s Magic Pill Merger
Merger-mania continues, this time matching illness to cure. Huge pharmaceuticals giant Pfizer is going to open up its drug cabinet with Mylan, a smaller player. What’s that tucked in the back corner? Viagra? Investors are waiting for the stock popping effect to kick in!
The “big pharma” landscape looks pretty ugly. Frenzied mergers and acquisitions may have kept Wall Street busy, but it’s left many famous market picks like J&J and Bayer, looking somewhat makeshift. Given the multi-million-dollar business units sellotaped to the side of pharmaceuticals, hanging off the side after quick and dirty dealings, investors have a job to do in judging pharma stocks.
And now Viagra’s getting involved. Pfizer, whose flagship magic pill has brought in riches, is giving its off-patent and generic medicines business the usual ‘big pharma” treatment. It’ll be split, spun, carved out, and merged, with Mylan, another pharma company, becoming an additional parent. The deal will be cashless, completed in stock-only, and the new CEO and man behind the little blue pills; Pfizer’s own, Michael Goattler.
Sometimes, the motivation behind a spin-off isn’t clear. On Pfizer’s side of the deal, we can hazard a guess. The Viagra effect on profit growth is wearing off for the firm; it’s now wanting to innovate more with newer lab creations. As for Mylan, the company complained for years that its stock was undervalued before sales of a critical drug flopped. The stock could do with some kind of lift.
It’s working! Mylan just soared as Pfizer investors question the company’s decision to share those drugs. This saga isn’t over. Stay in the loop!