By Jessica Hall
PHILADELPHIA (Reuters) - The boards of PFIZER (PFE.NY)Inc
The boards of the U.S. rivals were scheduled to hold separate meetings on Sunday to finalize an agreement and an announcement was seen as imminent, though one source cautioned that the negotiations could be delayed.
The deal would help Pfizer cope with a major gap in revenue in 2011 when its blockbuster Lipitor cholesterol treatment will begin to face U.S. generic competition. Next year, Wyeth loses patent protection on its own top drug, the antidepressant Effexor XR.
Still, buying Wyeth would help Pfizer diversify into vaccines and injectable biologic medicines by adding Wyeth's big-selling Prevnar vaccine for childhood infections and Enbrel rheumatoid arthritis treatment. Pfizer would realize major cost savings by streamlining areas that overlap.
Pfizer was expected to pay roughly $50.19 per share for Wyeth, sources said. Pfizer would pay $33 per share in cash and 0.985 per share of Pfizer stock for each share of Wyeth. Based on Wyeth's 1.33 billion shares outstanding as of October 31, the deal would be valued at about $66.8 billion.
At $50.19 per share, the deal would mark a 15 percent premium over Wyeth's Friday close of $43.74. The stock surged 12.6 percent on Friday on news of the possible deal.
Pfizer could not be immediately reached for comment. Wyeth declined to comment.
Pfizer Chief Executive Jeff Kindler was expected to head the combined company, sources said. The cash and stock deal was expected to be backed by $25 billion in financing.
Pfizer has struggled after digesting two huge deals in the past decade. Kindler previously has called mega-mergers disruptive and distracting.
Wyeth had been in talks to buy Dutch vaccine firm Crucell
Wyeth has been holding talks with both Pfizer and Crucell in recent weeks, and a deal with Pfizer would not necessarily scuttle the Crucell deal, sources said. A combined Wyeth-Pfizer could pursue Crucell as a second step to a deal, sources said.
A merger of Pfizer and Wyeth could trigger a wave of consolidation in the cash-rich pharmaceutical sector as drug makers look to diversify revenues in the face of competition from generic drug rivals.
(Reporting by Jessica Hall, additional reporting by Lewis Krauskopf; Editing by Phil Berlowitz and Ian Geoghegan)