I am sure that has something to do with it. But BIIB already came out and stated they will have an 8% net tax savings. BMY CURIOUSLY stated a neutral effect in taxes, which I doubt. PFE already has a complicated tax scheme in place blending and lowering US tax rates with low tax domiciles, via patents, royalties, manufacturing and licensing strategies.
I would guess PFE gets some tax savings but I think PPS surge more likely do to anticipation of a blockbuster deal. Normally an acquiring company has a dip or stagnation with a big buyout but I think due to all the unique circumstances, even outside of tax reform, that a big deal will
propel PFE PPS. Management does not get enough credit for growth, as they have performed very well even after blockbusters like Lipitor and Viagra fell off patent. With big merger with BMY, as an example, they can get lots of synergies and growth with Eliquis and really expand oncology and biologics. it is much harder to penetrate an off patent biologic for a generic company because of pharmacy inventory issues and the marketing costs that a generic drug company would have to incur.
For instance, lets assume PFE and J&J have a cheaper biosimilar of a BMY biologic. First, the doctor would have to actually prescribe the PFE drug as they do not work like generic drugs. Second, if the Pharmacy only has the main brand and J&J in stock the pharmacy would auto fill the main BMY drug because of how the system works. If there are 4 knockoffs it becomes less likely that a pharmacy will stock all of them. that is simplified walkabout.
I keep guessing BMY as a takeout but whatever company it is I expect it to be the largest pharma buyout. Wouldn't be the first time.
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