Pfizer Partially Buys AstraZeneca’s Antibiotics Business

Pfizer (NYSE: PFE) partially buys AstraZeneca’s (NYSE: AZN) antibiotics business, which includes three already-approved antibiotics and two additional drugs currently in clinical trials. Pfizer will pay $1.575 billion plus royalties, saying that AstraZeneca’s drugs will help as a substitute for Pfizer’s older products because some of them lost patent protection and are now sold in generic forms.

The deal is very likely to provide Pfizer with revenue growth opportunities. The company’s shares increased in value approximately nine percent year to date.

Even though Pfizer is selling older antibiotics, it is no longer doing any research or develops new antibiotics. This is true in the pharmaceutical industry in general, which generally speaking stopped antibiotic research due to the high risk of low return associated with such investment. Yet, due to antimicrobial resistance, governments are now trying to come up with ways to encourage new antibiotic studies, claiming that lack of new antibiotics in the market may have tragic effects.

Pfizer was founded in New York 167 years ago, after two cousins invented the an antibiotic called oxytetracycline.



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