Paper - Wyeth
The pharmaceutical-biotechnology industry has become increasingly consolidated over the past 15 years; in 1985 the 10 largest firms accounted for about 20 percent of worldwide sales, whereas in 2002 the 10 largest firms accounted for 48 of sales. Much of this consolidation is the result of mergers. The value of M&A activity in this industry exceeded $500 billion during the 1988 to 2000 period. A commonly cited rationale for this consolidation by proponents of these mergers is the existence of economies of scale in research and development (R&D) and in sales and marketing. However, despite rising R&D spending the productivity of the pharmaceutical industry, as measured by the number of compounds approved …show more content…
In addition to strength in Wyeth biologics and vaccines, at the end of 2008 Wyeth claimed to have one of the “strongest late-stage pipelines of novel therapeutics in the industry.” One of the products in Phase 3 trials was bapineuzumab, a biotechnology product for modifying progression of Alzheimer’s disease, an area with much opportunity for growth.
It is clear that Wyeth had potential to bring a lot of value to Pfizer. The main question to address is to understand how the products at Wyeth fit within Pfizer’s capabilities and which business segments, more specifically which pharmaceuticalceutical segments, could Pfizer leverage to achieve economies of scope from the acquisition of Wyeth.
To consider how the two product portfolios coalesce, it is critical to examine Pfizer’s pharmaceuticalceutical pipeline in 2008, prior to the Wyeth acquisition. Exhibit 3 shows the categories which Pfizer used to align its major pharmaceuticalceuticals.
To assess how Wyeth pharmaceuticalceutical portfolio fit into Pfizer’s pharmaceuticalceutical segments, Exhibit 4 describes the form of the pharmaceuticalceutical, primary indicator and its alignment to Pfizer’s segment. Pharmaceuticalceuticals highlighted in red are of greatest concern when it comes to fitting with Pfizer’s capabilities at the time of the Wyeth acquisition.
As previously mentioned, Pfizer did not have