Tuesday, June 24, 2008

Did Pfizer Get A Wedding Favor From Ranbaxy And Daiichi?

By now, you’ve probably heard that Ranbaxy and Daiichi have fallen in love—or at least entered a mutually binding financial agreement to that effect.

So where does this leave others who had a relationship with Ranbaxy—like Pfizer, for example? The brand and generic giants were never romantically linked (although there were rumors) but they did have an involvement that touched each to the core: Ranbaxy was the first-to-file challenger for Pfizer’s mega-blockbuster Lipitor, and they’ve been in court ever since.

But now the fight seems to be over: A week after Ranbaxy and Daiichi announced they were tying the knot, Ranbaxy and Pfizer said they were cutting a deal to end their legal entanglement.

It gives Pfizer closure on its love affair with the blockbuster statin, but what does it do for Ranbaxy? Well, it provides a fair bit of certainty in terms of revenue projection—and that may be what a company looking to settle down wants—but we wondered whether Ranbaxy could have gotten a better deal if it didn’t have to worry about what another corporation would think about it.

Did Daiichi’s heft make Pfizer take the risk of an “at risk” launch more seriously, or did Daiichi tell Ranbaxy that once they moved in together it couldn’t stay out carousing all night in strange legal jurisdictions?

In the discussions we’ve had on the matter, people tend to be divided. Those who look at the world through a merger lens think that Daiichi acted as a sensible ball and chain, helping to wrap up a potentially damaging distraction before it got out of hand. Those who spend their time thinking about selling products and suing people, though, think that Daiichi may have offered a nice dowry that Pfizer was afraid could become a war chest.

Tell us what you think!

--M. Nielsen Hobbs

(Photo courtesy of Flickr user Pardesi via a creative commons license.)

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