The deal will not only add to Pfizer’s EPS, but will also provide to stronger traction in the cancer drugs market.
U.S. pharmaceutical giant Pfizer Inc stated it would acquire Array Biopharma Inc for $10.64 billion in cash.
The potential deal would increase its access to the skin cancer market as well as provide it future cancer medicines in its pipeline.
Pfizer’s offer of $48 per Array share represents a premium of around 62% to the stock’s close on Friday.
With the news reaching the market, Array’s shares surged by 56% in light premarket trade.
In recent years, Pfizer has been investing in cancer drugs and gene therapies in the face of competition for its blockbuster pain drug Lyrica.
In 2018, the U.S. Food and Drug Administration (FDA) had approved Array’s oral combination treatment for use in patients with the deadliest form of skin cancer.
Pfizer is also testing its triple combo therapy in colorectal cancer patients.
“(The acquisition) sets the stage to create a potentially industry-leading franchise for colorectal cancer alongside Pfizer’s existing expertise in breast and prostate cancers,” said Pfizer’s Chief Executive Officer Albert Bourla.
The potential deal is expected to close by the second half of this year.
The deal is expected to “add to earnings beginning 2022, and will be dilutive to adjusted earnings per share by between 4 and 5 cents this year and in 2020”, said Pfizer.