Pfizer's $1.5 Billion Antibiotics Buy: Strategic Long-Term Planning Or Pre-Split Prep?

Pfizer Inc. PFE isn't showing any signs of slowing down with its M&A plans. Just days after announcing it will acquire Medivation Inc MDVN for $14 billion, Pfizer said on Wednesday it will pay $1.5 billion to acquire AstraZeneca plc (ADR) AZN's late-stage small molecule anti-infectives business, primarily outside the United States.

As noted by Fierce Pharma, Pfizer's newly acquired portfolio happens to include four products that AstraZeneca shared with Pfizer's attempted takeover target, Allergan plc Ordinary Shares AGN. Specifically, two of the drugs, Zinforo and Zavicefta, are intended for resistant infections and the other two are late-stage pipeline meds in a similar category.

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The other drug, Merrem is an ultra-broad-spectrum antibiotic, which was approved in 1996.

"Does Pfizer know something AstraZeneca doesn't?" Fierce Pharma hypothetically asked.

What Pfizer Bought

"Pfizer gets one set-to-launch drug that's made a solid start in the U.S., suggesting strong potential in EU markets as well. It gets a more seasoned med that's launched in 34 countries, according to AZ's annual report. It gets an older drug that's on the decline, but still delivering dollars. And it gets a couple of pipeline meds that, if approved, could address the growing problem of antibiotic-resistant infections--one of those significant unmet needs that drugmakers look to fill," the pharmaceutical news site added.

AstraZeneca is looking to "restructure and refocus," and its CEO Pascal Soriot wants to focus on respiratory, diabetes and cancer products so its asset sale makes sense from its point of view.

What Will Pfizer Do?

Fierce Pharma suggested that Pfizer could add its newly acquired portfolio into its Essential Health unit to "further beef it up in advance of a split."

Pfizer has been considering a business split for quite some time, but an announcement isn't expected by year's end.

Fierce Pharma also noted that as Pfizer "reshapes" its Essential Health business, the company is concentrating on global public health needs. The segment already sells 60 anti-infectives and anti-fungals around the world.

On the other hand, perhaps Pfizer's latest acquisition is just "another sales-boosting buy."

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