Pharma Takeovers' Effect on New Jersey Economy

Pfizer (PFE) takes over Wyeth (WYE), a Madison, New Jersey company. Merck (MRK) takes over Schering-Plough (SGP), a Kenilworth, NJ company.

What happens if Johnson & Johnson (JNJ) takes over Bristol-Myers Squibb, headquartered in New York City with facilities spread out over New Jersey? Wall Street brokers and Money Center banks losing jobs has to some extent been absorbed into the New Jersey economy. Mergers and acquisitions in the pharmaceuticals space could push the state into further economic contraction. I am not saying that New Jersey becomes Michigan or Nevada or California but a manageable problem could get worse.

Disclosure: At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC was long shares of SGP convertible preferred stock --- although positions can change at any time.

Comments

[Chris of NH:]

New Jersey, which over the past several years, has added 15 public jobs for each private job added will need to accelerate that effort.. perhaps it can make it 100 to 1 or 1,000 to 1. There's really no limit on how it will overcome the job losses.

I bet it will raise Atlantic City casino taxes versus reduce them as is being requested by the now mostly bankrupt industry. Further, the state can always increase income, sales and property taxes to pay for the new state jobs.

NJ is very resourceful.

It's quite resilient.

Mar 10 08:30 AM

[TeresaE:]

Come to Michigan to see how government bought jobs fares in the market place.

More government, less industry equals depression.

Which is EXACTLY where the rest of the country is heading.

It isn't just banking and housing, they were just the only game in town until last year.

Now, we have NOTHING except government.

At what point do people figure out, if the ONLY jobs are government jobs the government workers will have to pay 100% tax to support their own industry.

Every job in government kills 2 to 3 jobs in private industry.

Let's hope that government workers are charitable (most I know aren't-they are greedy and "entitled"), we will need the free soup.

Mar 10 08:42 AM

[bonzo373:]

NJ voters should have thought about this before they voted Democrat (again). What did they think was going to happen when they elected a president and Congress that is anti-pharma? The new administration wants to lower drug prices and tax foreign profits - great! Guess what that does to income and profit for pharma companies? And when income and profit are reduced, guess what happens? Costs are reduced and that means jobs are cut.

No one should be shocked by this and more is coming.

Mar 10 12:51 PM