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.

Pfizer not giving up on AstraZeneca

Pfizer and AstraZeneca are known as two of the biggest companies in the pharmaceutical industry. PFE have been trying a lot to join hands with AstraZeneca in recent times but it has failed to do so in a couple of events. AstraZeneca, being one of the top names, are reluctant to merge with Pfizer in the near future. 

The spokesperson of the company, Joan Campion told that the company is looking for every available option. She further added that the company is “evaluate all opportunities, regardless of size, through the lens of value creation for our shareholders and enhancing the competitiveness of our business.” And because of Actavis' recent buying spree, it's worth some $59 billion--large enough to allow Pfizer to shift its domicile to Dublin.” So Actavis will be bolstering a large portfolio of the company by bringing high profile brand names along with newly approved drugs and medicines as well.

Bloomberg reports that “an Actavis buy would build up Pfizer's established products unit, widely seen as the first prospect for another sale or spin-off. It would add some new products to Pfizer's branded stable, which is in need of help. 

As recently, AstraZeneca has raised the bar by increasing its profits and revenues in 2014, it is expected that the company will raise its asking price. There are many analysts who believe that Pfizer is wasting its time in this deal. They are sure that this deal, which can be one of the biggest mergers in the pharmaceutical industry, can and will never go through. Being one of the biggest names, AstraZeneca is too expensive for Pfizer at the moment. Either AstraZeneca are not content with the offer or Pfizer do not really have a great shot at buying AstraZeneca at the moment. Whatsoever be the reason, Pfizer is ready to give it another try as the company eyes Actavis in backup plan to another AstraZeneca bid.