Indiplon. Exubera. Dalbavancin. Torcetrapib. Chantix. Quick quiz: What do these names have in common? No, they're not rap stars or distant planets. They're all high-profile drugs from New York's Pfizer Inc. that have tanked or run into big problems the past couple years. The antibiotic dalbavancin, aimed at nasty super-resistant bugs like
MRSA, was in line for regulatory approval when Pfizer said Tuesday it would have to put it through more testing.
Pfizer's poor track record of late was the backdrop to unfounded rumors Tuesday morning that it was mulling a takeover bid of Germany's Bayer AG. Investors reacted by driving up Bayer's Frankfurt-traded stock 4%, but the froth soon settled. Bayer closed the day up just over 1% at €53.31, putting its market cap near €40 billion ($57 billion).
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Both companies refused to comment on the rumors, which seemed no more
substantive than last September's rumors allegedly fueled by European
traders, which pegged Swiss firm Novartis SA, loaded with cash from
its recent $5.5 billion sale of its Gerber baby food business, as the
buyer.
But Pfizer's struggles are no rumor. Because of the
revenue gap when cholesterol fighter Lipitor and its $13 billion in
annual sales go off-patent in 2011, Pfizer is usually on the list of
suitors when a major drug firm is rumored on the block.
However,
Bayer would make an ungainly target with its several nonpharma
divisions, including chemicals, agriculture products and consumer
products. Pfizer sold its own consumer line to Johnson & Johnson
for $16 billion two years ago. Pfizer's remaining side business is
animal health -- vaccines and antibiotics for livestock and pets --
which it recently bolstered by taking on Schering Plough Corp.'s portfolio
for an undisclosed sum.
Even if Pfizer spun out Bayer's
nonpharma businesses, a merger of the two drug pipelines wouldn't make
much sense, either. One of Bayer's crown jewels, the cancer drug
Nexavar, competes with one of Pfizer's few recent success stories,
Sutent. Both are approved for kidney cancer, and both companies are
aggressively testing it against other indications. Muddling the picture
more, Bayer shares Nexavar rights with Onyx Pharmaceuticals Inc., the
biotech that did the early R&D grunt work on the compound.
The
dalbavancin delay is a microcosm of Pfizer's deal headaches. It
acquired the drug when it bought Vicuron Pharmaceuticals Inc. for $1.9
billion three years ago at a 74% premium. The other late-stage asset in
that deal, Eraxis, was approved in 2006 for the fungal infection
candidemia. But Pfizer doesn't break out Eraxis sales, a sign they're
probably insignificant. And a study last year showed Eraxis performed
no better than a generic version of Pfizer's own diflucan. -
Alex Lash
