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Pfizer to buy King Pharmaceuticals
October 12th, 2010
NEW YORK and BRISTOL, Tenn. – Pfizer Inc. plans to acquire King Pharmaceuticals Inc. for $3.6 billion in cash.
Pfizer said Tuesday that the deal to buy King will allow it to create one of the leading broad portfolios for pain relief and management in the biopharmaceutical industry, offering both currently marketed opioid and non-opioid products, as well as a pipeline spanning stages of clinical development.
In addition to Pfizer's current treatments for pain — which include Lyrica and Celebrex — King will bring Avinza, the Flector Patch and the recently launched Embeda, the first approved opioid pain product with design features intended to discourage misuse and abuse, two compounds in registration, which have the potential to lower the risk of abuse, as well as other compounds in development, according to Pfizer.
"We are highly impressed by King's innovative products and technology in the pain relief disease area, as well as by its success in advancing promising compounds in its pipeline. The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe who are in need of pain relief and management," stated Jeffrey Kindler, Pfizer's chairman and chief executive officer. "In addition, the revenue generated by King's portfolio will further diversify Pfizer's business, while at the same time contributing to steady earnings growth and shareholder value."
"By bringing together King's capabilities in new formulations of pain treatments, designed to discourage common methods of misuse and abuse, with Pfizer's commercial, medical and regulatory expertise, global strength in patient services and reimbursement, and global scale and resources, we believe Pfizer can build on our foundation and take our business to the next level," commented Brian Markison, chairman and chief executive officer of King.
Pfizer said the market for pain relief and management treatments is increasing, with physicians in the U.S. writing approximately 320 million prescriptions to treat pain in 2009. However, the widespread misuse and abuse of prescription pain treatments is a major public health issue and a growing economic burden for the entire industry, the company reported, noted that King's leadership in new formulations of pain treatments designed to discourage common methods of misuse and abuse will provide Pfizer with multiple new drug delivery platforms, while providing potential long-term upside.
Under the terms of the merger agreement, Pfizer will acquire King, a diversified specialty pharmaceutical discovery and clinical development company, for $14.25 per share, which represents a premium of approximately 40% to King's closing price as of Oct. 11. The transaction, approved by the boards of both companies, is expected to close in the late fourth quarter of 2010 or first quarter of 2011, pending regulatory approval.