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Pfizer’s pipeline purchase: Pfizer feeds pipeline with $1.9 billion buyout of Vicuron
July 2005
by Lisa Espenschade  | 
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NEW YORK–Pfizer Inc. in mid-June announced its $1.9 billion acquisition of Vicuron Pharmaceuticals, Inc., a biopharmaceutical company focused on developing anti-infectives. Vicuron's pipeline includes two drugs — anidulafungin, for fungal infections, and dalbavancin, for Gram-positive infections — that Vicuron expects will reach markets in early 2006.
 
Dov Goldstein, Vicuron's executive vice president and chief financial officer, says the acquisition was "driven by the two late-stage assets," demonstrating Pfizer's commitment to researching, selling, and marketing anti-infectives. The deal, he believes, assures that anidulafungin and dalbavancin, both currently under review at the U.S. Food and Drug Administration, will "reach the maximum physicians and patients."
 
Jon Stephenson, senior research  analyst at Summer Street Research Partners, agrees that Pfizer's existing sales force can bring the drugs "right into revenues." Pre-acquisition, he estimated 2009 sales of anidulafungin and dalbavancin at around $75 million and $300 million, respectively. Stephenson sees both as "excellent products," with dalbavancin "the big winner in terms of the most desirable product of the company" thanks to its efficacy against methicillin-resistant Staphylococcus aureus; for outpatients, once-weekly infusions would be "a huge advance" over daily vancomycin infusions. Stephenson says anidulafungin treats invasive candidiasis, which can cause 30-40 percent  mortality. Phase III clinical trial data showed anidulafungin's superiority over fluconazole.
 
Kate Robins, director, media relations, at Pfizer, says Pfizer values highly anidulafungin and dalbavancin, which she calls "an excellent fit with our current anti-infective line, both in research and outside, so it comes down to building on the very, very important strengths of fighting resistant diseases and building on that strength at a time when others may not be able to do it. And it's probably more important than ever."
 
Vicuron's Goldstein called the acquisition "a very attractive financial return for our investors." Pfizer will acquire all outstanding shares of Vicuron common stock at a cost of $29.10 per share in cash; the aggregate equity purchase price totals about $1.9 billion. The price represents a 74 percent premium over Vicuron's 90-day average closing share price and a 21 percent premium over Vicuron's highest historical closing price of $24.10 on January 16, 2004.
 
The transition process for the acquisition includes winning Vicuron shareholder support and receiving regulatory approval. Despite overlap in Pfizer and Vicuron products, Stephenson expects competition in anti-infectives, plus differing drug mechanisms will preclude regulatory difficulties.
 
Vicuron's research – including a six-year collaboration with Pfizer on oxazolidinones– has flourished, says Goldstein, thanks to the work of "a very focused small team" of microbiologists, molecular biologists, and chemists who form a close drug discovery group. Goldstein says it is "too early in the process" to know where or how that 50-person team will fit into Pfizer when the acquisition closes later this year.
 
Robins also could not say how the acquisition will proceed, though she noted that Pfizer's scale is flexible, ensuring successful acquisitions despite being "the largest pharmaceutical company in the world [with] the largest R&D operation," valued at $8 billion. "We have actually quadrupled, since 2000, our drug discovery forces alone," she says, allowing Pfizer to "continue to work in this area and develop this area, and it comes back to a lot of things, not the least of which is: Somebody's got to do it."
 
Code: E070501

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