Lipitor and strategic collapse at Pfizer, a consultants view

Now global pharma behemoth Pfizer (NYSE: PFE) spent $114 billion in 2000 for a hostile takeover of Warner-Lambert, trumping American Home Products in a bidding war to acquire the $130 billion in sales of all-time blockbuster drug, the cholesterol lowerer Lipitor (atorvastatin) delivered during its 14 years on the market, which came to its fabled end on November 30, 2011.

However, acquisitions are not strategy, and there can be a heavy price to pay in mistaking components of strategy, with strategy itself. On the other side of the fence dividing the Lipitor story are broader lessons in systemic failure, says Blue Spoon Consulting in an analysis of the transaction.

Between 2000 and 2010, the value of shares in Pfizer steadily worked their way into the lower right corner of the charts, ending the decade down by almost 60% relative to the Standard & Poor’s (S&P) 500. This comes out to around $115 billion in market capitalization lost since the day former Pfizer chief executive, William Steere, broke out his "Cheshire grin" at a press conference announcing his Warner-Lambert win, comments Blue Spoon.