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See all Pharmas Market PostsPharma's Market with Mike Huckman
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Pfizer logo light blue
CNBC.com

I thought I was finished with the post-Pfizer analyst meeting reaction with yesterday's post, but when an extraordinarily bearish 77-page research note from Credit Suisse big pharma analyst Catherine Arnold arrived in my inbox this morning, I had to do one more installment.

In the note, Arnold names names. She thinks Pfizer [PFE  Loading...      ()   ] should buy Wyeth [WYE  Loading...      ()   ] or Amgen [AMGN  Loading...      ()   ]. Quite some time ago, Deutsche Bank analyst Barbara Ryan had suggested Pfizer look at Amgen as well.

Arnold claims Pfizer has four choices:
1. Go it alone.
2. Do a big deal.
3. Do a bunch of small deals.
4. "Divest, or even become an acquisition target." (I put the fourth choice in quotes to make clear it's a direct quote from Arnold's note.)

Arnold argues that a big deal offers the clearest path toward a higher share price. By Arnold's calculation, "PFE value is $29 with a Wyeth deal (and average synergies) and $26 with Amgen." She says a Wyeth deal would add to earnings in the first year and an Amgen deal would boost profit in the second or third year.

The word she uses is "accretive," but I don't like that Wall Street word or the opposite one, "dilutive." In plain English, a deal adds to or subtracts from earnings. Arnold also names six other biotechs and eight "specialty pharmaceutical" companies that passed her team's screening process as potential PFE targets: Biogen Idec [BIIB  Loading...      ()   ], Celgene [CELG  Loading...      ()   ], Cubist [CBST  Loading...      ()   ], Genzyme [GENZ  Loading...      ()   ], Gilead Sciences [GILD  Loading...      ()   ], United Therapeutics [UTHR  Loading...      ()   ], Allergan [AGN  Loading...      ()   ], Cephalon [CEPH  Loading...      ()   ], Endo Pharmaceuticals [ENDP  Loading...      ()   ], Forest Laboratories [FRX  Loading...      ()   ], Medicines Co.