Pfizer to Purchase King PharmaceuticalsNews from October 14, 2010 – Pharmtech Newsletter

Magda Neumann – Alina Sachapow – Kasey Navita Phifer [ January 4, 2011 ]www.kNavita.com

News Details• Pfizer produces pharmaceuticals (Viagra,

Lipitor, Celebrex)• Announcement of Purchase: Oct. 12, 2010• $3.6 billion cash • Pfizer paid $14.25 per share (40% higher

than closing price)• Top two Pfizer drug patents (Lipitor &

Xalatan) expire 2011• Purchased Wyeth in early 2009

Magda Neumann – Alina Sachapow – Navi K. Phifer [ January 4, 2011 ]

Financials of the NewsPFE 2008 2009 2010 (3rd Q)

Total Revenue 48.296 50.009 66.78

Net Income 8.104 8.635 7.85

Total Assets 111.148 212.949 191.415

Total Liabilities 53.592 122.935 103.780

Total Debt 17.283 48.662 43.28

Cash And Cash Equivalents

2.122 1.978 2.176

Share Price* 12.31 17.55 16.06

Magda Neumann – Alina Sachapow – Navi K. Phifer [ January 4, 2011 ]

Numbers in billions of USD*Share Price NOT in billions

Magda Neumann – Alina Sachapow – Navi K. Phifer [ January 4, 2011 ]

Theoretical Linkages

• Chapter 7• Technical analysis

- Trends, volume, OBV, MACD, SMA• Fundamental analysis

- Background information• Valuation by comparables

Magda Neumann – Alina Sachapow – Navi K. Phifer [ January 4, 2011 ]

Conclusion

• Purchase of King less dramatic than Wyeth

• Tactical desicion regarding expiring patents,

falling stock prices & growing competition

• Stock price still low (compared to $50

earlier)

Magda Neumann – Alina Sachapow – Navi K. Phifer [ January 4, 2011 ]

Resources

• Brealey/Myers/Marcus, Fundamentals of Corporate Finance, 6th Edition, McGraw-Hill, 2009 [Chapter 7]

• http://www.wikinvest.com/stock/Pfizer_(PFE)/Generic%20Competition (accessed 21.11.2010)

• http://de.finance.yahoo.com/echarts?s=PFE#symbol=pfe;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined; (accessed 15.11.2010)

• http://www.wikinvest.com/stock/Pfizer_(PFE)/Generic%20Competition (accessed 21.11.2010)

• http://drugdelivery.pharmaceutical-business-review.com/news/pfizers_q4_revenue_decreases_290109 (accessed 21.11.2010)

• http://www.wikinvest.com/stock/Pfizer_(PFE)/Data/Key_Metrics (accessed 21.11.2010)

• http://de.finance.yahoo.com/echarts?s=PFE#chart8 (accessed 15.11.2010)• http://www.marketwatch.com/investing/stock/PFE/charts?

countryCode=US&submitted=true&intflavor=advanced&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=9&freq=1&comp=Enter%20Symbol(s)%3A&compidx=aaaaa~0&compind=aaaaa~0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=8&type=2&size=2&optstyle=1013 (accessed 15.11.2010)

• http://www.investopedia.com/university/technical/ (accessed 14.11.2010)

Thank You for Your Attention!

Magda Neumann – Alina Sachapow – Navi K. Phifer [ January 4, 2011 ]www.kNavita.com