The parent company of Pfizer Animal Health is in talks to acquire the parent company of Fort Dodge Animal Health, The Wall Street Journal reported Jan. 23. The deal could be valued at more than $60 billion. A deal isn’t imminent and given recent market volatility and overall economic uncertainty, the talks are fragile and could collapse, people familiar with the matter told the newspaper. Spokesmen for the parent companies, New York, N.Y.-based Pfizer and Madison, N.J.-based Wyeth, said they don’t comment on marketplace rumors. The deal, if completed, could create billions of dollars in cost savings through the combination of back-office operations, research and development, sales and manufacturing, according to The Wall Street Journal. The two companies face the upcoming expiration of patents on their most lucrative products as well as competition from makers of generic drugs. Also, because of a tougher regulatory environment, gaining approval of new treatments is more difficult, forcing many companies to narrow their research focus. “Those realities have prompted calls for industry consolidation from the investment community,” the newspaper reported. “For years, companies have withstood pressure to merge, hoping that new discoveries would allow them to maintain independence. But with drugs generating an estimated $30 billion in sales losing patent protection over the next several years, many analysts have been saying industry consolidation is inevitable.” In 2007, the most recent year for which data is available, Pfizer posted revenue of $48.4 billion and a profit of $8.1 billion. Wyeth reported revenue of $22.4 billion and a profit of $4.6 billion. Pfizer will release 2008 fourth-quarter and yearly results Jan. 28. Wyeth will do so Jan. 29. <HOME>
