Unraveling the Seismic Shifts in Big Pharma

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April 22 (Bloomberg) -- WBB Securities President Stephen Brozak and Bloomberg's Shannon Pettypiece discuss the deal frenzy in the pharmaceutical industry with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

, president of an investment bank that specializes in the pharmaceutical industry.

Shannon, i know you wrote the story today and have been following what is going on.

This has to do with a swap of a variety of properties.

Novartis, which is based in switzerland, glaxosmithkline, which is based in u.k., and eli lilly to my based in indianapolis.

It is interesting to see all of these big pharmaceutical ceos and executives that usually can keep with each other come together.

-- compete with each other come together.

Basically, what you need to know is novartis is getting bigger into cancer.

Glaxo is getting bigger into vaccines.

And eli lilly is getting bigger into animal health.

The bigger themes across all of these countries -- companies is that they are trying to focus on what they do best.

It is not, let's do everything for everyone and you have to be big.

Now, it is about focusing on not one thing, but a few things.

Novartis, one of the things they want to focus on is cancer drugs.


And one of the things that glaxo smith klein wants to focus on is the vaccine business.

And eli lilly wants to focus on the animal health business.

Steve brozak, do you agree?

Is this what they are trying to do?

Absolutely, and the way we look at it is, not too big, not too little, but just right.

And we saw this yesterday with bill ackman going out there and frankly, spearheading the acquisition of allergan.

We will get into that deal.

I'm curious, why is it that they have chosen now to make this three-way swap?

There is the cynical side of me that says, there is a banking reform act and investors are saying, you've got to do something because revenues are going down, and you can only grow earnings per share by cutting.

Let's focus on core competence.

Let's increase the sales we know are predictable, because shareholders like critic ability.

That is what they are focusing on.

-- because shareholders like predictability.

That is what they are focusing on.

Shannon, is that what is going on here?

A lot of these deals seem to come in clusters.

I don't know if that is the investment bankers talking amongst themselves, but a lot of times when you see one, you see more.

There was the talk about the pfizer astrazeneca deal.

And that would have created a powerhouse.

I mean, they are all powerhouses.

And that is what we are talking about here, with companies specializing.

Pfizer and astrazeneca would have been a megadeal among creating a huge from a surgical behemoth.

And you did have pfizer going out there saying they were taking over a business line.

But the difference here is that you are actually seeing trades.

Different business models are going out there and getting rid of certain business lines.

The mantra is that you either want to be 1, 2, or three.

And you saw that a month ago where j&j got rid of their business model and solar to carlisle.

Now they are saying -- sold it to carlisle.

Now they are saying, what can we buy and what can we go out there and succeed at?

Do you think the shareholders have that kind of logic?

I would say in the short-term, they have no choice.

In the long term, we can talk about that later, but the idea is that you want to introduce new drugs and new technology.

That takes money, though.

Incredible sums of money to my because you have the regulatory hurdles.

But it also takes the ability to's go out there and say -- the ability to go out there and say, this is not just some new type of treatment.

Will ackman, why is he interested in allergan?

It is the biggest stake he's ever put into an investment.

The idea is that you go where the money is or you go with health care.

That is the reason why.

What other businesses can say they have that much kind of democratic -- a demographic

This text has been automatically generated. It may not be 100% accurate.


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