Building a Drug Behemoth

The potential merge between pharmaceutical goliaths Pfizer and Wyeth gets top billing in the Wall Street Journal and on Bloomberg. If realized, the merge “would create a behemoth with combined revenue of about $75 billion and a line of blockbuster drugs including Pfizer's cholesterol drug Lipitor and Wyeth's pediatric vaccine Prevnar,” the WSJ writes. Bloomberg takes the angle that the merge “may set off a rush to consolidate in an industry buffeted by a thinner pipeline of new products and increasing generic competition.”

Sources tell the WSJ that Pfizer is close to landing $25 billion in financing for the deal, but that a deal is not necessarily imminent given market volatility. Interestingly, the paper reported yesterday that a deal could be made as early as next week. Pfizer will pay cash for two-thirds of the deal’s cost, totaling $65 billion to $75 billion, and will fund the remainder with stocks.

CNNMoney reports that the Federal Housing Finance Agency will set new regulations for Fannie Mae and Freddie Mac early next week that will govern the companies’ portfolios, which “play a crucial role in the nation's housing market.” It adds that the agency “will also establish new capital rules for the 12 regional Federal Home Loan Banks, which provide much-needed low-cost funding for more than 8,000 banks nationwide.” In a filing with the SEC yesterday, Freddie Mac revealed that it expects the agency to request an additional $30 billion to $35 billion in government aid to prop up the mortgage lender “as it copes with billions of dollars in losses on the bad loans it backed during the nation’s housing bubble,” according to the Times’ Dealbook blog.

The Financial Times keeps its eye on Washington with a story about President Obama’s first White House meeting with congressional leaders, at which he “voiced confidence” that his proposed  $825 billion fiscal stimulus plan “would be agreed by mid-February as renewed turmoil in the financial markets highlighted the worsening global economic outlook.” As a deadline, he pinpointed the Presidents Day holiday on February 16. The FT reports that “leaders from both parties described the White House talks as ‘productive’ ” but that “Republicans warned that they still had serious concerns about the size and contents of the stimulus.”

Both the Times and the WSJ devote ample space to the plight of charities, which are facing unprecedented troubles in the wake of Bernard Madoff’s alleged Ponzi scheme and the continuing global credit crisis. “As a growing number of states delay payment, nonprofits must rely on lines of credit to help them get by,” the Times writes. However “skittish banks” are reducing their lines of credit or cutting “them off entirely at a time when the need for their services is climbing sharply.” The WSJ reports that the donor base for charities has dwindled and that nonprofits are finding it difficult, if not impossible, to replace those funds.