Sunday, September 28, 2008

Does a Pfizer Breakup Make Sense?

Peter Benesh of Investor's Business Daily asks here if Pfizer would not be better off if it broke up the company. Peter writes,
"
One idea, whispered more than hollered, is to break up Pfizer and sell it in pieces to unlock shareholder value."
Les Funtleyder, an analyst at Miller Tabak agrees with the premise that a breakup may also be better for shareholders:
"Investors wonder if the share price reflects the value of the assets and the business and, if not, will a breakup unlock that value?"

Others quoted in the article ask if Pfizer's size and its culture stifle innovation and if a "smaller and nimbler" Pfizer wouldn't be more successful.

I am not sure exactly what is the best route for Pfizer to take in order to address its problems.
But there is one thing I am sure of....The problems that Pfizer faces are not unique to Pfizer.
Every other big Pharma company is wrestling with the same issues and problems.
Bottom line: The Big Pharma business model is outdated and ineffective in today's environment.

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