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NEW YORK—Pfizer Inc. has announced that its wholly-owned subsidiary, Parker Tennessee Corp., has extended the expiration date of its tender offer for all outstanding shares of common stock of King Pharmaceuticals Inc. The offer, which was set to close on Dec. 17, is now extended to Jan. 21, and both the companies now expect the deal to close in early 2011.

Pfizer first announced the $14.25-per-share deal in mid-October, which was a premium of 40 percent to King's value at the time and represents a $3.6 billion offer in total. No terms or conditions have been changed. This is the second deadline extension since November, which Pfizer says is necessary "because certain conditions to the tender offer will not be satisfied as of the previously scheduled expiration date, including the expiration or earlier termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and applicable foreign antitrust or competition laws."

The jewels in the crown for Pfizer in this deal are the abuse-resistant pain drugs made by King, but the deal also would give Pfizer other valuable products, including EpiPen, a pre-filled injection designed to quickly treat serious allergic reactions; Thrombin-JMI, designed to control bleeding; the Flector pain patch; and the pain drug Avinza.

Pfizer already has a significant stage in the pain treatment drug market with Lyrica and Celebrex, which combined had more than $5 billion in sales in 2009. The hope with the King acquisition, in part, is that revenues from abuse-resistant pain medications will help offset revenue losses when the cholesterol drug Lipitor loses patent protection in a few years.

One abuse-resistant pain drug that King already markets is Embeda, and the company is seeking approval for two others under the names Remoxy and Acurox.

If and when the acquisition finally goes through, Pfizer anticipates the transaction to yield initial cost savings from operating expenses of at least $200 million, which are expected to be fully realized by the end of 2013.

As Pfizer has noted, "This strategic combination will allow Pfizer to leverage its existing commercial capabilities and expertise to create one of the leading broad portfolios for pain relief and management in the biopharmaceutical industry, offering both currently marketed opioid and non-opioid products, as well as a pipeline spanning stages of clinical development."

The market for pain relief and management treatments is increasing, Pfizer notes, with physicians in the U.S. writing approximately 320 million prescriptions to treat pain in 2009. However, the widespread misuse and abuse of prescription pain treatments is a major public health issue and a growing economic burden for the entire industry, the company says, and King's leadership in new formulations of pain treatments designed to discourage common methods of misuse and abuse will provide Pfizer with multiple new drug delivery platforms, while providing potential long-term upside.
 

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