Pfizer Inc. (PFE) signed a deal to acquire InnoPharma, Inc., a company that specializes in the development of hard-to-make, differentiated, sterile injectables. The acquisition, which could result in Pfizer shelling out up to $360 million, is scheduled to close in the third quarter.
Pfizer will make an upfront payment of $225 million and could end up paying up to $135 million on the achievement of certain milestones. With this acquisition, the company will gain 10 approved generic products plus a pipeline of more than 30 injectable and ophthalmic products. These include products for areas like cancer and central nervous disorders. Once the acquisition is completed, Pfizer’s sterile injectables portfolio will increase to 73 products.
Pfizer is not the only company to announce an acquisition to boost its injectable business. Late last year, Mylan (MYL) boosted its injectables segment through the acquisition of the Agila injectables businesses from Strides Arcolab Limited in a deal worth up to $1.75 billion.
While the InnoPharma acquisition will strengthen Pfizer’s injectables segment, the company needs to boost its pipeline and bring new products to market to drive growth. With this in mind, the company had launched a proposal to acquire UK based AstraZeneca (AZN). The acquisition, had it gone through, would have boosted Pfizer’s pipeline specifically for immuno-oncology drugs, and would have resulted in a more efficient tax structure. However, AstraZeneca was not game and Pfizer subsequently abandoned its plans to acquire AstraZeneca.
Pfizer is a Zacks Rank #2 (Buy) stock. We expect the company to continue pursuing bolt-on acquisitions and in-licensing deals to boost its portfolio. Some equally well-ranked stocks in the pharma sector include AstraZeneca and Allergan (AGN).
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