Thursday, 4 December 2014

The reason behind Pfizer’s paying a lot of money to Merck KGaA



Pfizer is one of the most prominent names in the health care sector that is working for a disease free, healthier and safer world. The sole business of the company is to produce and sell medicines globally. The company came into existence in New York City in the year 1849 by Charles Pfizer and Charles Earnest. PFE is apopular name in the healthcare sector and they have come up with many products that have revolutionized the paradigms of healthcare.  The company is now focusing on buying back stocks which is now their major aim.
However, despite of failing many times in various attempts to sign AstraZeneca, the company switched its attention and signed a block buster deal with Merck KGaA in previous months. This decision left analysts and the board of AstraZeneca inshock as they were expecting that Pfizer will be coming back with another bid to lure the company. According to the deal between Pfizer and Merck KGaA, Pfizer will make an upfront payment of $850 million, with additional payment of $2 billion contingent on regulatory and commercial milestones.
According to Forbes, “The transaction is certainly very significant for Merck KGaA which has found a partner with deep pockets and a quicker entry in the U.S. oncologymarket. From Pfizer’s perspective, this is a massive investment considering the drug’s stage. However, the potential reward could also be big as immuno-oncology market is expected to pick up over the next few years.”
The company is confident in signing a huge cancer deal with Merck KGaA.

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