GlobalData views potential of Pfizer's rumored acquisition of Strides' Agila unit

As drug makers continue to jostle for market share and deal with declining revenues from their off-patent blockbuster drugs, M&A activity is showing no indication of slowing down in 2013. Pfizer (NYSE: PFE), the world’s largest pharmaceutical company on revenues, is definitely not leaving any stone unturned as the company continues its aggressive inorganic growth, says business intelligence group GlobalData.

Less than two months after completing its acquisition of NextWave Pharmaceuticals, the multinational company is weighing up a $2 billion bid for Indian drugmaker Strides Arcolab’s (BO: 532531) Agila Specialties unit. GlobalData believes the deal will potentially strengthen Pfizer’s injectables business, which generated only $54 million, around 0.4% of the company’s total revenue ($14 billion), in third-quarter 2012.

According to Adefemi Adenuga, GlobalData's analyst covering Healthcare Industry Dynamics: “Agila’s focus on cancer treatments and antibiotics makes the company a strategic fit for Pfizer’s specialty care and oncology operating segment. Making a swoop for Agila could also be a ploy by Pfizer to ward off other multinationals, including Mylan and Novartis, that are currently interested in the Bangalore-based company. However, Strides may need to reposition itself if the deal goes through, as the Agila unit has so far been crucial to the generics manufacturer’s success.”