Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

One of pharma's biggest potential M&A players doesn't seem to want to leave the sidelines. 

On its earnings call on Tuesday, Pfizer Inc. sounded averse to major deals, saying policy uncertainty and the riskiness of potential targets make this a bad environment for going big. But uncertainty isn't going anywhere. And with Pfizer struggling to grow, it will soon need to find a way to overcome its deal jitters. 

Earned and Burned
Dissapointing Pfizer earnings hurt the company's shares this week
Source: Bloomberg
Intraday times are displayed in ET.

There is little to like about Pfizer's recent performance. Cost cuts helped first-quarter earnings beat analyst forecasts, but sales missed expectations, falling for the second quarter in a row, as Bloomberg News pointed out. Sales of five of Pfizer's eight best selling products in 2016 fell from a year earlier.

Pfizer's fastest-growing major drug in the quarter, Ibrance, is just starting to face competition from a Novartis AG rival. Pfizer's biggest-selling drug, the pain medication Lyrica, will likely get generic competition in the U.S. next year. Sales of Xeljanz, a newer drug expected to be a growth driver, missed analyst estimates for the quarter. 

Long in the Tooth
Pfizer's portfolio of drugs has more aging medicines than the company would like
Source: Bloomberg
*Pfizer splits Enbrel sales with Amgen, and Eliquis sales with Bristol-Myers Squibb

Failed pursuits of AstraZeneca PLC and Allergan PLC  haven't changed Pfizer's fundamental orientation toward big deals. CEO Ian Read said Pfizer expects to get back to being an "active industry consolidator" -- just not any time soon. Read said uncertainties and target risks need to be resolved before Pfizer resumes deal-making.

Good luck with that. 

One of the biggest uncertainties Read cited -- the GOP's Quixotic quest to repeal and replace the Affordable Care Act -- will either drag on for several more months or die, raising a new uncertainty; namely, about how the GOP will deal with the ACA's continued existence. Another uncertainty Read named, tax reform, also looks likely to stick around for a while.

As for the risks of potential deal targets, that's just part of the game with biopharma. Drug trials and FDA decisions are inherently risky. "Derisked" targets are expensive targets -- once a company has an FDA approval in hand, or clinical data that points strongly to one, its value soars.

And even deals that seem derisked can still be risky. Pfizer just paid $14 billion for Medivation largely because its cancer drug Xtandi seemed like a relatively sure thing. But Xtandi sales declined 11 percent in the latest quarter due to reimbursement issues. If those sales don't bounce back, then the pressure on Pfizer to do another deal will only increase.

Don't expect Pfizer to stay on the sideline for long.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Max Nisen in New York at

To contact the editor responsible for this story:
Mark Gongloff at