Is Pfizer looking for another shot of Botox?

Today has seen news break that Pfizer, the US pharmaceutical company, is again interested in merging with Allergan, the manufacturer of Botox, in a deal that could potentially be worth upwards of USD 100bn (based upon Allergan’s closing share price on the 28th October). If the deal proceeds it adds to the giant pharmaceutical merry go round of deals that has happened over the course of the last year. To recap in case you haven’t been paying attention... in March of this year Actavis managed to outbid Valeant to acquire Allegan, paying USD 70.5bn and taking over the Allergan company name. Meanwhile, in 2014 Pfizer tried and was unsuccessful in its USD 118bn takeover of AstraZeneca, having to make do with the relatively “small” USD 17bn acquisition of Hospira that completed at the beginning of September. Add the potential Pfizer/Allergan tie up to this year’s USD 182bn of announced deals involving pharma companies and 2015 is on record to become the most active year by deal value in the pharma industry since 2000, where two deals (the USD 176bn merger of Glaxo Wellcome and SmithKine Beecham and the USD 90bn takeover of Warner Lambert by Pfizer) accounted for 91 per cent of the total deal value.

2015 has seen five USD 10bn+ pharma deals announced, demonstrating that these global drug companies have money to spend and are willing to spend it in order to achieve significant market synergies and growth.

If the Pfizer/Allergan deal goes ahead, the resulting company would become the largest pharma company by market cap (USD 219bn and USD 113bn by market cap), surpassing Johnson & Johnson whose current market cap stands at USD 278bn. Potentially a deal that is sure to give Pfizer shareholders a boost without using Pzifer’s most well-known drug!