The tide has officially no turned it seems. Over the past decade (or more) Big Pharma wanted to get BIGGER and BIGGER through mergers and acquisitions. Now, as pipelines dwindle, patent cliffs are reached, and revenue holes develop --- its time to turn the ocean liner many pharma companies have become to get smaller smaller smaller and fast.
Abbott officially kicked off the activity with its break up into a diagnostic and pharma company (now called AbbVie). Reports are now circulating that Pfizer's Ian Read wants to to begin his break up plan first discussed way back in March of last year. See In the Pipeline and Bloomberg for more.
In general, the market has thus far rewarded Pfizer's stock price for this proposed move, and the closer it seems to reality the more the investors seem to like it. Analysts seem more torn on the long-term (not short term) wisdom of such a move as Pfizer's portfolio does appear to provide some diversification protection and one could argue that the non-pharma businesses are doing better than the "core pharma" property that Read wants to invest in.
Needless to say, in a monkey see monkey do world, if two very large players decide to follow this path, many more lemmings are sure to follow.
Posted by Bruce Lehr Mar 29th 2012.