US drug giant Pfizer Inc. and Botox maker Allergan Plc have confirmed that they are in talks for a possible merger, the Wall Street Journal reported.
With a combined market value exceeding US$330 billion, a transaction between the two drugmakers could cap a busy year for deals in the pharmaceutical industry, with more than US$200 billion in transactions announced, Bloomberg said.
A union would allow New York-based Pfizer to lower its corporate tax rate because Allergan, which is based in Dublin, has a significantly lower tax rate than companies in the United States, the Journal said.
Details of the talks are unclear, and both companies could face obstacles such as agreeing on price, layoffs and closing of facilities, Bloomberg quoted the the Journal report as saying.
The deal would also add to Pfizer’s line up of biosimilars, or imitations of expensive biologic drugs, the news agency said.
That would help Pfizer build on its US$17 billion deal for injectable drug maker Hospira Inc. earlier this year.
Allergan has launched a number of new products recently, such as the double-chin treatment Kybella, while its older drugs like Botox continue to see double-digit growth, the newspaper said.
Allergan said it remains committed to a US$40.5 billion deal to sell its generics business to Teva Pharmaceutical Industries Ltd.
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