Does Pfizer still need AstraZeneca's vaccines business?

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Pfizer CEO Ian Read

Earlier this year, when Pfizer ($PFE) made a play for rival pharma giant AstraZeneca ($AZN), CEO Ian Read listed the British drugmaker's vaccines portfolio as a motivating factor. Now, rumors are swirling that the company could be eyeing Actavis ($ACT) as a backup plan. On the one hand, the New Jersey generics maker lacks vaccines offerings. And on the other, with the recent developments affecting Pfizer's unit, how much does that matter?

As of Tuesday, the window to another round of Pfizer-AstraZeneca bidding is now open, according to U.K. takeover rules, meaning that AZ can now legally invite Pfizer to negotiate a deal. Should a merger happen, Pfizer will achieve Read's long-stated goal of beefing up its vaccines business, nabbing marketed products like FluMist and EU-approved Fluenz Tetra, along with a trio of Phase I candidates.

But things have changed for Pfizer since AZ shot it down. For one, it grabbed Baxter's ($BAX) marketed vaccines portfolio in a $635 million transaction that will build out its lineup beyond the Prevnar franchise. That agreement will add NeisVac-C--a meningitis C vaccine--and FSME-IMMUN/TicoVac, which protects against tick-borne encephalitis. Both are available outside the U.S., and Baxter has said it expects them to rack up about $300 million in 2014 revenue.

For two, it could have another market entrant by next Valentine's Day, the FDA recently announced. A couple of weeks ago, the regulator set a February PDUFA date for the drugmaker's meningitis B candidate, which boasts the agency's breakthrough therapy designation.

And back to Prevnar 13: Analysts say sales of the world's best-selling shot are in for a $2 billion boost now that a CDC committee has recommended it for universal use in adults over 65. "Rapid adoption--impacting the 2014/15 respiratory season--is expected," Leerink Partners analyst Seamus Fernandez wrote in a recent note to clients.

Despite the vaccines void, there are plenty of reasons for Pfizer to consider an Actavis bid, analysts say. Actavis' large portfolio of generic meds would bolster Pfizer's established products unit, widely regarded as the first prospect for another sale or spinoff. And its recent string of deals--including one for Dublin-based Warner Chilcott--could make it a tax-inversion target.

That's not to say Pfizer wouldn't prefer to tango with AstraZeneca. On that front, U.K. takeover rules are forcing Read to keep analysts, investors and other industry-watchers in the dark for now. But even without the London pharma, Pfizer's vaccines unit is already looking heftier--and for that matter, it may be able to look elsewhere for bolt-on vaccine deals if AZ doesn't bite. Novartis ($NVS), for one, is exploring a sale of its own flu vaccine business--the only piece of its vaccines unit GlaxoSmithKline ($GSK) didn't buy in a blockbuster April buyout. Any takers?

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Related Articles:
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Pfizer's Prevnar gets $2B boost with CDC nod in older adults
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Pfizer finally lands vaccines bulk-up with $635M Baxter buy
AstraZeneca merger could bring the vaccines heft Pfizer's been looking for

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