Pfizer pays $3.7 billion for King Pharmaceuticals

The world’s largest pharmaceutical company Pfizer said on Tuesday that it had reached an agreement to buy US pain drug developer King Pharmaceuticals in a cash deal worth $3.7 billion.

The deals values King at US$14.25 per share, a 40 percent premium on Monday’s closing price.

The expiry of several drug patents has hit King hard over the last few years, however the company has made considerable investments in technology to prevent the misuse and abuse of pain relief treatments.

Abuse of pain medication for the purposes of obtaining a chemical high is a common and growing problem, with technologies to combat it seen as an important competitive differentiator, especially against cheap generics.

King's pain treatment Embeda incorporates abuse resistant properties and the company is currently filing applications two similar drugs, Remoxy and Acurox. King's other products include the bleeding control drug Thrombin-JMI and the Flector pain patch. Pfizer's pain drugs include Celebrex and Lyrica.

Industry analysts Datamonitor estimates that King will be the leading player in the US market for opioid pain relief therapies by 2015.

Simon King, principal analyst with the group said that Pfizer’s acquisition is in line with its broader strategy for diversification, which follows on from last year’s $US68 billion ($69.3 billion) acquisition of rival Wyeth.

”This strategy has to date encompassed the multi-billion dollar acquisition of Wyeth but also various in-licensing agreements and a concerted movement into the generics market as a means to drive growth in the emerging markets,” King said.