In order to counteract a potential slowdown in the market for Covid-19 drugs as cases decline, Pfizer Inc. is bolstering its pipeline with the latest in a string of acquisitions, a $5.4 billion transaction for blood disease developer Global Blood Therapeutics. Prior to the Wall Street Journal’s story that Pfizer was in advanced discussions to purchase the business, Pfizer said on Monday that it would pay $68.50 per share, reflecting a premium of 7.3 percent to Global Blood stock’s Friday closing and a 42.7 percent premium to Thursday’s ending.
Since the Covid-19 vaccine, created by Pfizer and BioNTech, was made available worldwide, sales have increased at a never-before-seen rate. Nevertheless, starting last year, sales have started to slacken. However, Pfizer, flush with cash from sales of its Covid-19 vaccine, has been searching for acquisitions that may, by the end of the decade, generate annual sales in the billions. Pfizer recently closed a $6.7 billion deal to acquire Arena Pharmaceuticals, and in May it paid $11.6 billion for migraine medication producer Biohaven Pharmaceutical Holding.
When key assets start to lose their patent protection at the end of the decade, “the Street has wanted PFE to continue to bring in new assets to improve earnings visibility beyond that point, and for the company to diversify its sales concentration in Covid drugs,” Cantor Fitzgerald analyst Louise Chen said. Shares of Global Blood increased 4.5 percent after the news of the acquisition.