Memorandum

Pfizer and Allergan announce $160 billion merger – November 23, 2015

Pfizer and Allergan announced this morning that they will combine in a transaction worth approximately $160 billion (~$364 per Allergan share of Pfizer common stock). This deal is the latest and largest merger in a year of significant consolidation in the healthcare and pharmaceutical industries. It will also likely spark some political backlash, as the agreement is structured to allow Pfizer to benefit from the lower corporate tax rate in Allergan’s Irish headquarters – see the New York Times article on the deal for more. We assume there will be no implications for Pfizer’s diabetes-related portfolio (or Allergan’s small one). As a reminder, Pfizer has several diabetes candidates in its pipeline, headlined by the phase 3 SGLT-2 inhibitor ertugliflozin, partnered with Merck. Allergan markets Ozurdex for diabetic macular edema and sold its struggling obesity intervention business to Apollo Endosurgery in 2013.