Pfizer, Wyeth reported closer to merger deal

NEW YORK - Drugmakers Pfizer Inc. and Wyeth are closing in on a $68 billion deal that could be announced before the markets open today, according to published reports.

The New York Times and Wall Street Journal reported yesterday evening that Pfizer, the maker of Lipitor and Viagra, was working to finish financing for the acquisition.

The deal calls for Pfizer to pay $50.19 a share for the company, with about two-thirds of the price in cash and one-third in stock, the papers reported. It would include about $25 billion in bank financing.

Wyeth, with a worldwide workforce of 47,000, employs about 5,000 people at facilities in Malvern and Collegeville. It is based in Madison, N.J.

Sources at Pfizer, which is based in New York, could not be immediately reached for comment. A Wyeth spokesman said the company had no comment.

A deal would increase Pfizer's revenue by half and add strength in biotech drugs, vaccines, and over-the-counter products, including the Advil and Robitussin brands.

A deal would help Pfizer cushion itself against a steep revenue decline expected over the next several years as Lipitor, the world's best-selling drug, and other major products lose patent protection. The drugmaker is expected to lose billions of dollars in sales to cheaper generics.

Lipitor is set to face generic competition starting in November 2011. Pfizer is expected to lose patent protection on products representing more than 70 percent of its 2007 revenue by 2015.

The "patent cliff" Pfizer faces hasn't been helped by weakness in new products, despite $7.5 billion in yearly research spending.

Its run of iconic blockbusters - Viagra, Lipitor, antidepressant Zoloft, plus blood-pressure blockbuster Norvasc - is long past.

Acquiring Wyeth would transform Pfizer from a pure pharmaceutical company into a broadly diversified health-care giant, given Wyeth's huge presence in biotech drugs, vaccines including the blockbuster pneumococcal vaccine Prevnar, veterinary medicines and consumer health products.

A business combination would also allow the merged companies to slash costs with another round of job cuts.

The deal would be the largest acquisition in the drug industry since Pfizer bought Warner-Lambert Co. for $93.4 billion in 2000, the Journal reported.