Pfizer CEO hints at pause in major acquisitions after M&A spree

In the past two years, Pfizer has aggressively pursued acquisitions, investing over $70 billion in companies such as Seagen, Arena, Biohaven, and Global Blood Therapeutics to enhance its pipeline. However, according to CEO Albert Bourla, the pharmaceutical giant now plans to pause its acquisition spree. Bourla emphasized the need to focus on integrating these recent purchases and ensuring smooth operations across commercial, research, and manufacturing sectors.

At the Goldman Sachs Healthcare Conference in Miami, Bourla discussed the company's current strategy. While Pfizer remains interested in business development, no major acquisitions are planned for the near future. Instead, the company aims to digest its recent $43-billion acquisition of Seagen, which Bourla believes could become one of Pfizer’s most successful acquisitions to date.

Despite the pause on large-scale acquisitions, Bourla indicated that Pfizer is still open to smaller, strategic acquisitions. These "tuck-in" deals could bring in valuable intellectual property, such as an obesity compound or an oncology asset. Bourla suggested that some of these smaller acquisitions might occur this year but stressed that they would not disrupt the company's ongoing operations.

One of the areas Pfizer is keen to address is the obesity market. Bourla acknowledged past setbacks, such as the discontinuation of the oral GLP-1 agonist lotiglipron due to liver toxicity. Although the company remains hopeful about danuglipron, a promising obesity treatment, its twice-daily version was discontinued due to high dropout rates. Data on a once-daily formulation is expected soon, which will determine the future of this program. Additionally, Pfizer is testing two other potential weight-loss treatments, including Phase I asset PF-07976016, though details about their mechanisms remain undisclosed.

Bourla also commented on the impact of the Inflation Reduction Act (IRA) and ongoing Medicare drug pricing negotiations. He expressed concern that the legislation could shift R&D priorities away from scientific advancements and towards compliance with regulatory changes. Pfizer's anticoagulant Eliquis, developed in partnership with Bristol Myers Squibb, was among the ten drugs selected for initial Medicare price talks. Bourla warned that the IRA’s favorable treatment of biologics over small molecules might force pharmaceutical companies to make strategic decisions based on legislation rather than science.

Nonetheless, Pfizer is increasingly focusing on large molecules, particularly following its acquisition of Seagen's antibody-drug conjugates (ADCs). Bourla predicted that within five years, large molecules would represent 60% to 65% of Pfizer's oncology pipeline, up from just 5% today. Radiopharmaceuticals are also attracting significant interest from Pfizer, though the company has yet to make a definitive move into this area. Bourla emphasized that Pfizer is prepared to enter new fields when it believes it can make a meaningful impact.

In summary, Pfizer is taking a strategic pause from large acquisitions to focus on integrating its recent purchases and ensuring operational stability. While the company remains open to smaller acquisitions, its primary focus will be on maximizing the potential of its current assets and navigating the challenges posed by new healthcare regulations.