Revitalizing the merger and acquisition outlook for biotech sector exchange traded funds, Pfizer (NYSE: PFE) announced it will buy biopharma company Anacor Pharmaceuticals (NasdaqGS: ANAC).
Pfizer paid a 55% premium to Anacor’s closing price last Friday for $5.2 billion, gaining control over an experimental eczema treatment crisaborole, which posted strong results in Phase 3 clinical trials, reports Charley Grant for the Wall Street Journal. Pfizer projected that crisaborole could potentially generate annual sales of over $2 billion.
ANAC shares surged 56.4% on Monday while PFE gained 0.5%.
The acquisition could help renew investment interest for further M&A activity. For instance, Pfizer held $19.4 billion in cash and short-term investments on hand before the deal. Chief Executive Officer Ian Read said previously said that Pfizer was searching for products that are close to hitting the market and considered a split of the business in the wake of the failed Allergan (NYSE: ACT) acquisition.
“It’s the first of many transactions that Ian will do,” John Boris, a SunTrust Robinson Humphrey Inc. analyst, told Bloomberg.[related_stories]