Pfizer's new CEO hopes to bring new perspective to Wyeth acquisition

 

 

Pfizer Inc. new CEO Jeffrey Kindler is expected to execute a mega-merger that shareholders will be delighted to make happen.

  

Kindler, 53 and a lawyer by profession, joined the drug giant only seven years ago as general counsel, after executive posts in other industries including fast food. He is expected to deliver a good deal with rival US$60 billion Wyeth merger billion that will pull off necessary financing and integrating of nearly 130,000 employees and facilities in countries with minimal trouble.

 

He took over as Pfizer's chief executive post in 2006, beating out two other officials who were more directly involved in Pfizer's operations and finances.

 

Analysts believe that Kindler's leadership would have Pfizer have a few other good options to bolster its financial performance when it loses patent protection for its top drug, Lipitor, in 2011.  Kindler has strongly opposed on Pfizer's merger faulty mergers in the past.

 

Kindler and some industry watchers think that his outsider status could put him in a unique position to do things better this time around.

 

Daniel Ruppar, industry manager of North American pharmaceuticals and biotechnology at research and consulting firm Frost & Sullivan said Kindler's outsider status may enable him to have a little open nind to do new things as players that have been with the industry for 35 years could have been "ingrained in older business models".

 

Kindler said noted that Wyeth (WYE) Chief Executive Bernard Poussot is an industry veteran and will help him with the acquisition, although Poussot's long-term role remains unclear.

 

Kindler acknowledged that past deals such as Pfizer's purchases of Pharmacia and Warner-Lambert were disruptive, and hurt employee morale. He said Pfizer would try to minimize such disruption, and that its rationale for buying Wyeth is different from those past deals.

 

The excess layers of management and Pfizer's attempt to eliminate these layers, especially in its research division, have been troublesome.

 

Still, Kindler admits the deal will run into the same problems that he identified last year when he was less enthusiastic about mega-mergers, adding that there is anything that "would meet the definition of a mega-deal with a large cap biopharma company where the strategic value to our shareholders would outweigh the potential concentration of risk, the inevitable disruption it would bring and its price."

 

Pfizer's share price is feeling that stress Monday as shares recently fell 10.6 percent to US$15.60. Under that stock price, the deal now values Wyeth at US$48.37, or about US$64.4 billion total. Wyeth shares recently fell 22 cents to US$43.51, or about 10 percent below the current offer price.