Shares of pharmaceutical giant AstraZeneca (NYSE: AZN ) were pushed down today after the company turned down an acquisition offer from Pfizer. Pfizer had originally approached AstraZeneca with a deal valuing the company at $106 billion, but AstraZeneca turned it down. The most recently revised offer put a $120 billion price tag on AstraZeneca, but after the company turned that down as well Pfizer decided to walk away.
So what are the near term repercussions of this lost deal? According to Motley Fool analyst Michael Finarelli, he sees the company treading water in the near term. Two of its major drugs, Nexium and Crestor, are going to be losing patent exclusivity in the next few years, which could hurt the company's bottom line considerably. That said, Mike does think that the company has some potential blockbusters in the pipeline--though it's never a good idea to blindly bet on an unproven drug.
But is that reason enough for current shareholders to abandon ship? On today's "Stock of the Day", Michael says not just yet. While today's drop isn't good news for investors, he says it shouldn't have changed a long term investor's thesis. AstraZeneca has some potential future winners in its pipeline, and investors should stay where they are for now.
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