Pfizer to Buy Biotech Firm for $1.9 Billion
Pfizer Inc. on Thursday said that it planned to buy Vicuron Pharmaceuticals Inc., a biotechnology company with two promising infection treatments that could soon receive regulatory approval, for $1.9 billion in cash.
Pfizer hopes the acquisition will help it offset lost sales from its anti-fungal treatment Diflucan, which recently lost patent protection, and an expected slide in sales of its antibiotic Zithromax, which could face generic competition later this year.
Pfizer, the world’s biggest drug company, will pay $29.10 a share for Vicuron, an 84% premium to Vicuron’s closing stock price Wednesday of $15.80.
Pfizer is paying a hefty premium for the products, but the price would be worth it if both drugs get approved, analysts said. Both are under review by U.S. regulators, having completed all three phases of clinical trials needed for approval.
Pharmaceutical companies typically must pay more for products from biotechnology companies that have completed or are in Phase III clinical trials than for those that are in earlier stages of development, as the risk of failure is less.
Competition for such drugs, however, is intense as big drug companies battle to fill gaps in their product portfolios caused by generic competitors.
Pfizer paid $1.3 billion in 2003 to acquire Esperion Therapeutics Inc., which is developing a cholesterol drug whose sales Pfizer hopes will exceed those of its cholesterolfighter Lipitor, the world’s top-selling drug with sales of $10 billion in 2004.
Shares of Vicuron rose $12.41 to $28.21. Shares of Pfizer rose 17 cents to $28.60.
Vicuron, based in King of Prussia, Pa., develops drugs to treat infections acquired in hospitals and other settings. Its two most advanced products are anidulafungin for fungal infections and dalbavancin for skin and soft tissue infections.
Both have shown positive results in late-stage studies.
Dalbavancin is in the same drug class as vancomycin, a leading treatment for methicillin-resistant staphylococcus aureus.
