How Pfizer Inc. (NYSE:PFE) Makes A Comeback After It Was Written-Off?
Pfizer Inc. (NYSE:PFE) was written off after its effort to acquire Allergan and AstraZeneca failed leaving plenty of doubts about the road ahead. However, that seems to be taken care of by the company with recent acquisition of Medivation Inc (NASDAQ:MDVN) and purchase of antibiotics business from AstraZeneca.
What investors were worried about?
1) Failed Mergers (Allergan and AstraZeneca)
2) Generic drugs making inroads (Mylan and Allergan offer different version of Lyrica)
3) Legal challenges with regard to Biosimilars (Though it continues to have huge potential considering it could well be worth $20 billion a year business by 2020, According to company statement)
How the company is making a comeback?
1) Pfizer Inc. (NYSE:PFE) acquired 78% stake in Bamboo Therapeutics for $150 million. So, what Pfizer acquired out of the deal? It gets into gene therapy and with the latter having licenses for two clinical-stage therapies makes it interesting.
2) The company by winning bidding war for Medivation Inc (NASDAQ:MDVN) meant that it took apart other companies which were in the race.
3) Pfizer Inc. (NYSE:PFE) boosts its earnings by 5 cents for the first full year
4) Pfizer adds Xtandi which is Medivation Inc (NASDAQ:MDVN) ‘s prostate cancer treatment drug with global sales worth $2.2 billion during last one year. The company will also add talazoparib and pidilizumab to its pipeline.
5) Pfizer Inc. (NYSE:PFE) has boosted its portfolio for cancer which is one of the leading causes of death worldwide.
Did hedge funds exit early?
Many hedge funds exited Pfizer after its failed merger with Allergan. Senator Investment Group and Jana Partners were among the prominent ones which exited 28 million shares in total between them while; Karp’s Tourbillion sold 7 million shares. Diamond Hill bought 11.6 million shares at the end of second quarter, According to Fortune.
Pfizer Inc. (NYSE:PFE) continues to create value for investors in the long run and strengthen its pipeline with acquisitions. The addition of Medivation Inc (NASDAQ:MDVN)’s Xtandi along with Talazoparib in pipeline strengthens its innovative segment.
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