Reasons to buy Wyeth (WYE)
- Misery loves company.
Reasons not to buy Wyeth
- Doesn’t come close to solving Pfizer’s (NYSE:PFE) near term need for late-stage pipeline drugs
- Major mergers in pharma almost always destroy shareholder value (Pisano, 2007).
- Fails to address lack of internal R&D productivity (i.e., not a “disease modifying” business move but rather, a superficial band-aid).
- Opportunity cost is too high; Pfizer could buy 10 innovative companies for the cost of 1 Wyeth (e.g., Shire, BioMarin, OSI, Allergan, Forest…) or, move into generics.
- Wyeth’s marketed / late-stage pipeline has issues: Protonix and Effexor lose patent protection by 2011, bifeprunox and Pristiq have been plagued by issues / slow uptake and will probably never reach the combined $4B in projected sales.
I would be astonished if this deal materialized.