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Pfizer Inc. Message Board

  • chrt03 chrt03 Apr 26, 2007 10:49 AM Flag

    The Street seems to like that collaboration with BMY


    It gives Pfizer half interest in a late-stage product that sounds like it could be a near-blockbuster.

    There's certainly no underperformance for Pfizer today.

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    • > You'd think at some time that the loser would have struck up a conversation with one of the innumerable detail men

      I get the feeling that in real Life not too many people wish to converse with chartness any more than absolutely necessary.

    • I thought companies like BMY were supposed to discover, develop and market products from their own labs. That is their business model. Right? Why would they sell future rights to a near blockbuster where they have a strong franchise and a glaring lack of new products? I just do not get it. Earnings on these products that are shared are below average for each company compared to marketing themselves. Did PFE get suckered or should BMY be vigilant about ending up like Warner Lambert (Lipitor discoverer)

      • 2 Replies to earnest.earl
      • >> Why would they sell future rights to a near blockbuster where they have a strong franchise and a glaring lack of new products? <<

        There are a couple of reasons:

        1) If you wrtie a deal like this and do not include a "change of control" clause, it makes you less attractive as a takeover candidate, i.e., such a deal can be part of an anti-takeover protection plan, and,

        2) While the signers of these deals do not often reveal it, often the deal requires the company buying into the product specified to offer a "Quid" of a product from their pipeline several years down the road in return, e.g., the deal may require that Pfizer offer a similar deal in reverse for a product from the Pfizer pipeline several years down the road. This works well in cases like this where PFE needs products quick and BMY could use cash and help with the cost of development quick. And then down the road it offers BMY a bit of protection if their pipeline goes dry.

        But, as I said, these parts of the deal are typically not revealed, as Pfizer would not want their shareholders to know that they essentially mortgaged some of the long-term pipeline upside to get this shorter term opportunity.

    • optionsalchemists2077 optionsalchemists2077 Apr 26, 2007 11:04 AM Flag

      Of course the street likes the BMY deal. Until now, Kindler has been talk, talk, talk, and no action on licensing and acquisitions. This deal, particularly being with a major like BMY, is the first sign of some real action, and shows that maybe PFE can get some of it's business development mojo back, which badly declined under McKinnell.

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