The merger of Pfizer and Wyeth is expected to create the second-biggest drug maker among multinational companies in India. The world's largest drug maker Pfizer yesterday announced a $68-billion acquisition of US-based Wyeth.
The combine will have sales of more than Rs 1,000 crore in India, overtaking Aventis Pharma, Abbott India and Novartis. Aventis last year reported sales of Rs 873 crore, Abbott Rs 594 crore and Novartis Rs 553 crore. More than that, the combined entity will have cash reserves of over Rs 700-900 crore, which can be potentially utilised for acquisition of brands or units in India. Pfizer alone had a net profit of Rs 331 crore last year.
The Pfizer- Wyeth combine will, however, lag GlaxoSmithKline (GSK), which recorded sales of Rs 1,577 crore in 2007-08. Independently, Pfizer, the maker of erectile dysfunction drug Viagra, is ranked 27th and Wyeth 37th in 2007-08. Pfizer last year reported net sales of Rs 672 crore while Wyeth had sales of Rs 331 crore. Still, the combined entity will lag much behind its local Indian rivals and is expected to rank 19th among all the drug makers in the country.
In India, Pfizer employs close to 2,000 people and Wyeth employs 860, which includes 627 sales representatives. "It is early to say whether Pfizer will trim Wyeth employees in India as India is a key geography for any drug company in the changing global pharmaceutical landscape," said Sujay Shetty, associate director, pharmaceutical and life sciences of PriceWaterhouseCoopers.
Both Pfizer and Wyeth have only one manufacturing unit in India, in Mumbai and Goa, respectively. Analysts point out that the deal will bring together a wide basket of drugs, complimenting each other with synergistic benefits in the Indian market. "While Pfizer has a good portfolio of established brands in respiratory and cough syrups, Wyeth has strength in vaccines and certain key antibiotics which Pfizer is not operating in at present," said Sarabjit Kaur Nagra, vice-president, research with Angel Broking.
Though Pfizer has indicated the acquisition process is targeted to be completed by mid-2009, the merger of India-listed entities require a lot of regulatory clearances from Sebi, RBI and the shareholders of both companies, experts say. Pfizer and Wyeth also have independent privately-held arms in India.
While the share price of Wyeth closed at Rs 434.20 today on BSE with a marginal 0.57 per cent rise, Pfizer rose 2.11 per cent to close at Rs 525.50.
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