The editorial board of "The Wall Street Journal" weighs in today on the Pfizer-Wyeth deal.
Under the headline "The Pfizer Drug Warning" the opinion piece details all of the well-documented problems facing big pharma and—perhaps not surprisingly coming from the WSJ editorial page—blames Washington for many of them.
The editorial concludes that the mega-mergers are "symptoms of business weakness, and one more sign of Washington's growing dominance in the U.S. economy." And it warns that if politics and "industry gambles" cut off research and development funding that "innovation will wither."
Blogreader Michael McAfee shares the same concerns, but puts most of the blame on industry, not Washington. He emailed "Pharma's Market" to ask, "What happened to innovation in this country? What happened to the real leaders that said, 'Here's the problem and this is how we can fix it?' Not, 'Oh well, our profits and margins are slipping and I think the fix is to acquire another company, rip it apart and keep the products. Yeah, that's our business model.'"
Bill Hook wrote to complain that the banks loaning PFE the money to do the deal got TARP money. "Our tax funds are going to finance a deal that will result in 19,000 people losing their jobs. All so Pfizer can fill its pipeline and pay Wyeth's executives a huge fee. This is ridiculous." PFE Chairman and CEO says the banks are doing what they're supposed to do...loan money. And he points out that the money will go into an industry that has a lot of important intellectual capital.
Jim Mooney sent a follow-up email from one he sent me awhile back accusing me of having it in for Pfizer. He said he bought PFE about a year ago for $22 a share because of the "juicy, safe" yield. Now, Pfizer has cut the dividend in half and Mr. Mooney ain't happy. "I wish I had the b----s to sell this, but I'll hold for now and Mike you have my blessing (lol) to trash present PFE management," he wrote. Thanks, Jim, for your blessing (lol), but I'm not gonna "trash" anyone.
And Norman Ahsanuzzaman sent a really complex financial analysis of the deal and concluded, "It's (Pfizer) a strong buy!! What do you think?"
I don't make buy, sell, hold recommendations. I'm a reporter, not an analyst.
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