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Pfizer Grabs Pharmacia, Creates $7 Billion R&D Powerhouse

NEW YORK, July 15-Pfizer's acquisition of Pharmacia, announced today, will create a drug research powerhouse with a total R&D budget projected to top $7 billion.


This research jackpot would dwarf the budgets of other big spenders in the pharmaceutical arena and make Pfizer the undisputed leader in drug development spending.


In 2001, Pfizer spent $4.8 billion on research, and Pharmacia doled out $2.3 billion.


The nearest rival, GlaxoSmithKline, spent 2.5 billion pounds (nearly $4 billion U.S.) on R&D in 2000.


In the acquisition, Pfizer will assume control of a combined R&D pipeline of nearly 120 drugs currently in development.


Pfizer will also take charge of a number of recent collaborations that Pharmacia has struck with companies in the genomics and proteomics sectors.


In the last year, Pharmacia arranged an antisense inhibitor gene validation deal with Isis, a gene library agreement with Galapagos Genomics for target identification and validation, and a pharmacogenomics collaboration with DeCode Genetics. It also has a structural proteomics collaboration with Syrrx, which the biotech company claims is the pharmaceutical industry's first large-scale, multi-family research project in structural proteomics.


Pfizer, for its part, has recently struck an expanded toxicogenomics partnership with Gene Logic, arranged licenses for Gene-IT's sequence-comparing software and for Lion's ADME simulation platform, and launched a deal with Athersys to create human cell lines that express drug targets.


Pfizer will acquire Pharmacia through a stock-for-stock transaction valued at $60 billion. The company will exchange 1.4 shares of Pfizer stock for each share of Pharmacia stock, a premium of roughly 35 percent over Pharmacia's Friday closing price. Pharmacia will continue with its spin-off of Monsanto.

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