We are watching some big mergers, buyouts, you name it and this would stand to be one very large move. Does Pfizer want to buy a pipeline? But maybe better yet, will that purchased pipeline result in additional sales and profits? We have seen some different and strange things happening today compared to the way the Pharma business has been run in the past, so it just adds a little more risk management assessments to the calculated potential acquisition.
We have a certain amount of given constants, but some of what used to be constants have become very variable and that accounts in every business transaction today, but Pharma is produces what we need to treat illness and continue living, so a bit higher impact here. Years back the Warner Lambert deal was pretty much a no brainer and has been very profitable, but then there are times when a change of venue or marketing changes a company's direction, example maintaining inventory and warehousing facilities to handle the "just in time" shipping requirements to get the product to market, and yet still keep the proper levels of inventory at the drug store retailers warehouses and/or stores to keep them happy and satisfied as a customer. That is big money today and you do need an automated system to handle much of this, as well as the commitment to the continued resource updates.
If you don't want to continue to invest in this area, find another company who has a similar system that can absorb and incorporate into theirs and you have a sale, like the Johnson and Johnson purchase, who already has their massive network and distribution channels well established, I know I used to do business with both Pfizer and J and J. Profit levels are not as high on the percentage scale with consumer products as they are with prescription drugs, and you need to warehouse and move many more to realize similar profits, if it can be done. In the past with negotiating transportation contracts, those were the difference too of whether or not a product was sold with or without a profit, something we don't pay a lot of attention too unless your are a logistics manager reporting back to company executives. Logistics is not necessarily a big concern for the smaller items, but once you hit the consumer over the counter products, things change dramatically and you need the business model to support it. I guess we can wait and see if the two companies in determine if their 2 current business models will compliment each other and see where it goes from there. BD
Market matchmakers won't leave Pfizer alone. Today, rumors are circulating that the drugmaker is negotiating to buy Bayer, which has a healthy pipeline and a strong consumer drugs business. The euro-conglomerate saw its stock rise about 4 percent on the market chatter.
Would Pfizer do such a thing? Well, we all know that the drugmaker needs to pump up its business, fast. It's losing a major chunk of revenue when Lipitor goes off patent, and so far there's not much waiting to fill that gap. And Bayer's market cap of some $59 billion wouldn't be too big to swallow for the $157 billion-cap Pfizer--especially considering that Bayer would presumably be broken up in such a deal. Bayer's healthcare business accounts for only a third of its revenue, and Pfizer wouldn't be interested in the chemicals businesses.
http://www.fiercepharma.com/story/bayer-pfizer-buyout-talk/2008-09-09?utm_medium=rss&utm_source=rss&cmp-id=OTC-RSS-FP0
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