Pfizer is in talks with Allergan over what could be the largest takeover deal in an already record-breaking year, it has been reported.
After Pfizer’s six-month talks with AstraZeneca ended in failure last year, the US drugmaker is said to have turned its attentions botox-maker Allergan, which currently has a market value in excess of $110 billion.
The Wall Street Journal cited sources familiar with the matter, who pointed out that the discussions are still at an early stage.
Pfizer is already the world’s second largest pharmaceutical company, and a combination with Ireland-based Allergan would take it past Johnson & Johnson to become the largest in market-value terms, while also potentially allowing it to slash its tax bill by moving its headquarters to the UK.
Pfizer has been hit by falling revenues this year- predicted to be 3.3%, while Allergan’s stock is rising. Thomson Reuters estimates the latter achieving a 39% growth in revenues this year.
Neither company has so far commented on the reports, and while a successful completion is some time away, and may not materialise, both companies have been deal-happy this year. An acquisition would follow Pfizer’s purchase of Hospira last month and Allergan’s own combination with Actavis, completed in March, as well as the $40.5 billion sale of its generics business to Teva in July.
It has been a successful strategy that has seen shares of both Pfizer and Allergan climbing by around 12% so far in 2015. Pfizer recently reported Q3 revenues of $12.1 billion.
A combination with Allergan would gain Pfizer access to $632 million sales of the blockbuster beauty treatment Botox, as well as dry eye treatment Restasis and Alzheimer’s treatment Namenda, strengthening the American company’s dermatology and generics arm.