Pfizer Buys Array: A Smart Move?


Pfizer, in an attempt to bolster its oncology portfolio, is set to acquire Array Biopharma for USD 10.6 billion in the second half of 2019. The deal will give Pfizer access to Array’s cancer treatments which are showing promise in phase III trials and protect it against the looming patent expiries of some of its key products.


Pfizer has an ageing product pipeline. The American giant is facing a patent cliff for its blockbuster Lyrica in 2019 and its four major drugs (Eliquis, Ibrance, Xtandi, and Tafamidis) stand to lose patent protection from 2026. These four drugs alone will contribute USD 19 billion (30 percent) to 2025 revenue.


Against this backdrop, the rationale behind the Array acquisition – replenishing Pfizer’s pipelines and complementing organic growth initiatives – is clear.


Indeed, Albert Bourla, since becoming Pfizer CEO in January 2019, has been relentlessly focusing on growing the company’s development pipeline and plans to push 15 experimental treatments to market over a five year period. Additionally, the company is investing heavily in cancer treatments and gene therapy to add to its expertise in breast and prostate cancer drugs.


Pfizer has had its eye on Array due to the fact that Array’s cancer therapy combination for patients with the BRAF gene mutation showed statistically significant improvements in phase III trials, and is set to be submitted for regulatory review in the second half of 2019. 


Since the early 2000s, Pfizer has engaged in a number of mergers and acquisitions, gobbling up Warner-Lambert in 2000, Upjohn in 2002, and Wyeth in 2009. The organisation now counts well over 100,000 employees. Although Pfizer has a mixed history of successfully executing on acquisitions, analysts feel that inorganic growth of this nature is crucial to replenishing the firm’s ageing product portfolio and revenue pipeline


Pfizer is paying USD 48 per Array share, a 62 percent premium, and expects to see a return on investment starting in 2022. The company plans to finance the majority of the deal with debt and the remaining with existing cash, the total value of the deal reaching nearly USD 11.4 billion.

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