AGN Allergan plc

By Anne Steele and Jonathan D. Rockoff 

Pfizer Inc. said Monday it would buy Anacor Pharmaceuticals Inc. for about $4.5 billion, as it turns to smaller deals after walking away from its scuttled acquisition of Allergan PLC.

Pfizer will pay $99.25 a share in cash for Anacor, a 55% premium to Friday's closing price. The companies said the deal, including debt, is valued at $5.2 billion.

Last month, Pfizer and Allergan terminated their planned $150 billion merger after the Obama administration took aim at the deal that would have moved the biggest drug company in the U.S. to Ireland to lower its taxes. Since then, Pfizer has been looking for deals of its own.

Pfizer executives have said they would like to boost their portfolio of patent-protected drugs. The company plans to decide by the end of the year whether to split into separate businesses focused on new drugs and medicines that have lost patent protection.

Palo Alto, Calif.-based Anacor has no products on the market. Its flagship asset, crisaborole, is currently under review by the U.S. Food and Drug Administration for the treatment of eczema.

Pfizer said that drug could add peak sales of $2 billion, and noted that Anacor also holds the rights to Kerydin, a topical treatment for toenail fungus, which is distributed in the U.S. by Novartis AG's Sandoz business.

Skin treatment isn't a focus of Pfizer, but the company said that Anacor's drugs would complement Pfizer's lineup of inflammation and immunology products. Pfizer's biggest offering in the lucrative market is rheumatoid-arthritis pill Xeljanz, and the company has several more drugs in development.

Pfizer said the transaction, which is expected to close in the third quarter, won't affect its guidance for the year. It said it anticipates the deal will hurt adjusted earnings slightly in 2017 and add to them beginning in 2018.

Pfizer stock was relatively flat on the news. Anacor shares, which had slipped 43% this year, added 55% to $99.22 in midday trading Monday. Pfizer's purchase price is roughly where Anacor traded in January before lingering in the $60s the past several months.

Write to Anne Steele at Anne.Steele@wsj.com and Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

May 17, 2016 02:51 ET (06:51 GMT)

Allergan (NYSE:AGN)
Historical Stock Chart
From Mar 2024 to Apr 2024

Allergan (NYSE:AGN)
Historical Stock Chart
From Apr 2023 to Apr 2024