New York-based Pfizer's acquisition of San Francisco-based Medivation highlights the market trend of U.S. pharmaceutical firms pursuing targeted acquisitions rather than large, transformative ones, according to Fitch Ratings.
With the influx of new drugs entering the market, larger manufactures are seeking out individual companies and smaller biotechnology firms to strengthen innovative drug portfolios, according to the article.
Pfizer's deal with Medivation stands as a testament to the trend. While the deal will be marginally positive for Pfizer's leverage in the market with the introduction of Medivation's prostate cancer drug and two pipeline products, the acquisition will be modestly negative for liquidity, according to Fitch Ratings.
According to Fitch Ratings, a divestiture would be strategically positive for the company. However, it is more prudent for Pfizer to focus its efforts on innovative drug discovery.
The company's recent acquisition of Alexandria, W.Va.-based Ancor in June stands as another example of a targeted acquisition. The release of numerous products by Ancor will serve as an important asset for the company, according to Fitch Ratings.
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