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    Home > Active Ingredient News > Drugs Articles > Where is the next step for Pfizer / Aerjian?

    Where is the next step for Pfizer / Aerjian?

    • Last Update: 2016-04-07
    • Source: Internet
    • Author: User
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    Source: Biovalley April 7, 2016, yellow! It's really yellow! Although 2016 has just passed three months, there is no doubt that this year's heavyweight news of the biomedical industry has been born Pfizer and Elgin have just announced that the merger agreement they signed last year has officially ended due to the latest treasury policy on tax reversals Search today's news websites, you can easily understand the context of this agreement However, despite this explosive news, we are more concerned today about where the two sides will go after the biggest merger and acquisition in the history of biomedical industry is aborted? Since it's a couple breaking up, we need to talk about the breakup fee first The previous agreement stipulates that if one of the two parties terminates the merger agreement due to policy changes, a $400 million break-up fee must be paid to the other party However, according to the latest news, Pfizer and Elgin have agreed to reduce the number to $150 million It is worth pondering that the termination of this agreement has different effects on both parties Elgin's share price has plummeted by 14.8%, while Pfizer's share price has risen by 2% The fact that the two companies have the same disease and different lives makes people speechless In this wave, Brent Saunders, CEO and chairman of Elgin, quickly issued a statement, saying that although the company regretted that the merger agreement could not continue, the company still had confidence in the future The company's strong R & D ability can guarantee the company's strong growth in the future At present, there are 70 drug research and development projects in the middle and later stages, of which 14 drugs are expected to be approved for marketing in 2016, and another 16 drugs will be submitted to relevant pharmaceutical management departments for approval this year For example, rapastinel, a depression drug developed by the company, is believed to alleviate symptoms in a short period of time The company expects sales of the drug to reach as much as $2 billion after it goes on the market The company had expected Pfizer Elgin to spend as much as $9 billion on research and development when the two companies combined However, according to Xiaobian of Biovalley, Saunders made the above statement at this juncture, which is more or less meant to be mended However, for Elgin, the miscarriage of the deal may turn the company into an acquirer The company had previously reached an agreement with TIWA to sell its generic business to the latter Pfizer, on the other side of the story, could be said to be crying without tears It's the second time that the company's major acquisition failed to break up with Elgin The company had hoped to acquire British pharmaceutical giant AstraZeneca, but due to strong opposition from the British government and AstraZeneca, Pfizer finally turned to join hands with Elgin In fact, for Pfizer, the acquisition of Elgin is not just about reducing its tax burden As an old biomedical giant, Pfizer has been suffering from low R & D output for nearly a decade Merger and acquisition has become an important way for a company to maintain its R & D output On the other hand, the patent cliff also has a great impact on Pfizer For example, Lipitor, the company's statins drug with sales of $13 billion in the previous year, has lost patent protection, which has hit the company hard Previously, Pfizer and Merck signed a $800 million cooperation agreement on tumor immunotherapy However, Pfizer has actually lagged behind top pharmaceutical companies such as MSD and Squibb in this field For these reasons, some analysts believe that Pfizer will not give up the merger and acquisition because of the deal Analysts from Ig believe that Pfizer may take shire as its next acquisition target, while another view is that the company will mainly seek companies with highly competitive pharmaceutical products to expand its product base And the famous biomedical companies Baijian, Zaiyuan and Aberdeen are all likely to be on the list Relevant policies of the U.S Department of finance the U.S Department of Finance launched new policies to combat tax reversals, and increased restrictions on enterprises to transfer their registered address to overseas low tax countries for tax avoidance purposes The new policy is the third wave of policy actions taken by the US government against transactions that erode the tax base Tax inversion means that enterprises move from high tax rate countries to low tax rate countries by changing their registration places, so as to change the high tax rate that should be applied into the low tax rate, so as to achieve the purpose of tax avoidance According to foreign media reports, the new policy includes two parts, and the government has taken further restrictions on companies created through multiple reverse acquisitions or acquisitions of US companies When calculating the tax ratio of merger companies, the government will ignore the value of U.S assets in merger transactions in the first three years After the merger and acquisition, the company can reduce the shareholding ratio of American companies by expanding the share capital of the parent company, so as to meet the requirement that the shareholding of American companies should not exceed 80%, and then change the registration place If U.S shareholders hold more than 60% of the shares in the M & a company, some economic benefits obtained through the M & a transaction will be limited If more than 80%, the company will be taxed according to the U.S company standard If calculated in this way, Erjian may not be able to meet the conditions for becoming the parent company of Ruihui, or will have restrictions on the financial benefits it obtains through merger and acquisition transactions In the Pfizer Elgin deal, U.S shareholders hold 56% of the acquired company The second policy is to limit "income stripping", which limits the possibility that enterprises in the United States can avoid tax by accepting loans from overseas parent companies Income divestiture means that U.S branches can reduce tax by paying interest to overseas parent companies.
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