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In a deal that will make the world’s largest drugmaker even larger- Pfizer has agreed to offer cash and stock to acquire Wyeth for $68 billion. The deal gives Wyeth a 15 percent premium over Friday’s close by valuing Wyeth’s shares at $50. 19.
"The new company will be an industry leader in human, animal and consumer health," said Pfizer chief executive Jeffrey Kindler, in a press release. "Its geographic presence in most of the world's developed and developing countries will be unrivaled."
Pfizer reporter a 80 percent plunge in quarterly net profits following the prosecution of the company over Bextra. The company had to pay $900 million over allegations it had promoted Bextra, an anti-arthritis drug, for off-label use.
In a statement last October, Pfizer (NYSE: PFE) claimed the amount should resolve about 90 percent of the personal injury claims against Pfizer for the drugs.
While Celebrex is still on the market, Bextra was removed in 2005 due to safety concerns over cardiovascular risks and some life-threatening skin reactions. Celebrex then received a black box warning, the strongest issued by the FDA.
An analyst tells CNN that the Pfizer-Wyeth merger could lead to more job cuts at Pfizer which recently announced it was cutting up to 800 research staff jobs.
Wyeth is the same company that is awaiting a U.S. Supreme Court decision over the Diana Levine case, arguing that federal preemption supersedes her argument that the company did not warn about its drug, Phenergan. #