Thursday, May 29, 2014

Pfizer Blinks!

This week, Pfizer announced that it was renouncing its pursuit of Astrazeneca after its last and “final” offer of $120 billion was rebuffed.  Personally, as far as I am concerned, and for the good of new antibiotics and pharmaceutical research, this can only be a good thing.  Besides, it couldn’t have happened to a nicer company! A combination of these two giants would have had a drastic effect on pharmaceutical research – probably mostly here in the US. Astrazeneca is already trying to shed its antibiotic research centered in Waltham, MA.  Pfizer, of course, discarded theirs several years ago.

The consequence of this will be that either Pfizer will go trawling after other large fish (but I can’t imagine who the next victim might be) or they will continue their breakup and split into a pharmaceutical company and a generics company. There are precious few other companies that offer a tax break (being headquartered in the UK), and that have an attractive pipeline. 

In my opinion, the shining jewel of the Astrazeneca pipeline is their series of antibiotics containing the Beta-lactamase inhibitor, avibactam. Pfizer would not recognize the gold in this rock anyway.  Other companies may have a problem with this jewel since it is tarnished by the deal with Forest (now Actavis) who has the US rights to the compound and who is responsible for US regulatory efforts. Forest has shown itself to be anything but stellar in terms of marketing antibiotics and recently, even in terms of developing them.  Forest took on development of ceftaroline-avibactam, for example – and that seems stuck in place.  Astrazeneca recently showed that ceftaroline (already marketed) is superior to ceftriaxone in the treatment of community-acquired pneumonia.  Superior!  Who says you can’t show that antibiotics are superior? But these data did not come from Forest (really).  So any company wanting to buy Astrazeneca’s antibiotic pipeline will either have to buy out Forest as well or deal with Forest as a partner.  I am sure that this is dissuasive.

I know that several people, including me, have offered to assemble a group of investors to buy out Astrazeneca’s antibiotic franchise, but all have been rebuffed.  I think AZ is looking for a company to buy out the products to be sure that they will be marketed appropriately.  They don’t trust private investors to do that, I suppose. Or – perhaps they just want more money.

In any case, physicians and patients in desperate need of antibiotics like those being developed by AZ-Forest are waiting by the sidelines while Nero fiddles.  So – Roche – in spite of its warts, I think the AZ antibiotics franchise is a good fit for you.  What are you waiting for?


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