Biotech Values

[DewDiligence]

Symmetric breakup fees in PFE-AGN deal (from SEC filings):

• General Case: $3.5B payable by withdrawing party to non-withdrawing party.

• Special Case 1: $1.5B payable by the company whose shareholders vote against the deal to the company whose shareholders vote in favor of the deal. (If both companies’ shareholders vote against the deal, there is no breakup fee.)

• Special Case 2: $400M if a company withdraws due to a material change in law (presumably tax law). In this case, the withdrawing party would almost certainly be PFE.

The low breakup fee in Special Case 2 suggests that the companies think a material adverse change in tax laws before deal closing is fairly likely.