The Pharmaceutical Journal
Vol 269 No 7207 p91
20 July 2002

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Take-over of Pharmacia could lead to more mergers

Pfizer's $60bn (£40bn) take-over of Pharmacia could lead to a further round of mergers among pharmaceutical companies.

The merger, announced earlier this week, will make Pfizer the largest global pharmaceutical company and the first to hold more than 10 per cent of the total market with sales of over $40bn.

Dr Hank McKinnell, chairman of Pfizer, said: "By combining with Pharmacia, we are ensuring that our core capabilities of discovery, development and commercialisation of new medicines are strong around the world."

The combined company will have as many as 12 blockbuster products (those with annual sales of over $1bn), most of which will remain under patent protection for the rest of the decade. Key products include Lipitor (atorvastatin), Istin (amlodipine) and Celebrex (celecoxib). The research and development budget will exceed $7bn with almost 120 new chemical entities in development. Regulatory submissions are to be made for 20 new products over the next five years.

In the United Kingdom, Pfizer has a major research and development centre at Sandwich, Kent, employing over 5,000 people. Istin and Viagra (sildenafil) were both developed at Sandwich. Pharmacia has offices at Milton Keynes, formerly the global headquarters for Pharmacia & Upjohn. The company is now based in the United States.

According to industry analysts Datamonitor, the take-over by Pfizer suggests the first step in a wave of consolidation that might hit the industry. "For rivals such as GlaxoSmithKline, Aventis, AstraZeneca, Merck and Bristol-Myers Squibb, it may be time to follow suit," it says.

"Since its acquisition of Warner-Lambert two years ago, Pfizer has dominated the industry. With an enviable stable containing eight blockbusters with extensive patent protection and a pipeline offering potential blockbusters Spiriva (tiotropium) [being developed with Boehringer Ingelheim] and a new anti-epileptic pregabalin, Pfizer is set to continue the strong growth of the past few years," Datamonitor concludes.

However, the stock market did not react as favourably to the news. Pfizer's shares fell 11 per cent to $28.78 on the day the merger was announced, a day when share prices were falling strongly across the world.