Cash Rich Pfizer Splashing $7 Billion On Arena Acquisition Makes Sense - Here's Why

Dec. 17, 2021 4:07 PM ETPfizer Inc. (PFE) StockPFE30 Comments

Summary

  • Pfizer is set to acquire Arena Pharmaceuticals in a $6.7bn deal.
  • The pharma is the stand out success story of the COVID era as its strong outperformance against sector rivals in the past 6 months shows.
  • The stock is up >50% since June, and many analysts believe Pfizer can target >$100bn of revenues in 2022 - up from $42bn in FY20.
  • That is staggering growth, but Pfizer will need its M&A deals to come off if it to keep growing long term, and not collapse if - as expected - COVID revenues fall fast in a BAU environment.
  • The Arena deal is likely the first of many, and the lead asset Etrasimod may be a $5 - $10bn peak sales opportunity - it's a good start and a matches the COVID era change of pace by mgmt.
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Investment Thesis - COVID Success Has Been Transformational For Pfizer, But M&A May Be The Key To Sustained Growth

2021 - and especially the last three months of it - has been a wonderful time to be a Pfizer (

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This article was written by

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Edmund Ingham is a biotech consultant. He has been covering biotech, healthcare, and pharma for over 5 years, and has put together detailed reports of over 1,000 companies. He leads the investing group Haggerston BioHealth.

The group is for both novice and experienced biotech investors. It provides catalysts to look out for and buy and sell ratings. It also provides product sales and forecasts for all the Big Pharmas, forecasting, integrated financial statements, discounted cash flow analysis and market by market analysis. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PFE over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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