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Stocks got off to a bad start to the week, and while the Dow Jones Industrial Average (DJINDICES:^DJI) has made its way back from tough losses earlier today, the index was still 40 points in the red as of 2:30 p.m. EDT. A clear majority of its member stocks were taking hits on the day. Pfizer (NYSE:PFE) has dropped 1% to stand as one of the big losers on the Dow so far. Meanwhile, fellow pharma giant AbbVie (NYSE:ABBV) has lost roughly 1.6% after clinching a market-shaking deal on Friday. Let's catch up on what you need to know.

Turnaround time for Pfizer?

Pfizer Logo

Source: Wikimedia Commons

Pfizer is looking to turn its falling sales around after rival AstraZeneca spurned its takeover attempts, and the company got to work late last week when it snapped up private drugmaker InnoPharma. While the deal was comparatively small by the health-care sector's standards in a year marked with huge acquisitions, the purchase worth up to $360 million gives Pfizer access to a number of generic products already approved by regulators. InnoPharma's pipeline also boasts more than 30 products in ophthalmology under development.

While InnoPharma isn't likely to add serious punch to Pfizer's bottom line in the long term, it is part of a step-by-step plan the company is undertaking to return to sales growth after patent expirations hammered the financials. Pfizer has yet to recover fully from the loss of former top-selling drug Lipitor's exclusivity back in 2012, and promising up-and-coming drugs such as blood thinner Eliquis have yet to live up to their hype.

With Pfizer's earnings on tap for next week, investors must keep an eye on drugs such as Eliquis and immunology therapy Xeljanz, both of which have blockbuster hopes riding on them. The drugs have begun to show signs of better growth in 2014, but if their picture can't clear up, Pfizer will need to be more proactive on both research and development and in acquisitions.

AbbVie, meanwhile, has hit the acquisitions jackpot. While this stock has fallen in the wake of the drugmaker's $54 billion deal to acquire British pharmaceutical company Shire (NASDAQ:SHPG), this big move opens up huge savings in the long run. Like Pfizer planned with its attempt to buy AstraZeneca, AbbVie is aiming for a tax inversion to incorporate in the United Kingdom. AbbVie aims to lower its 22% U.S. tax rate to 13% in the U.K. by 2016 with the deal. Shire's stock has fallen by more than 1%, and investors still are wary about potential action from Congress as Washington attempts to stem the tide of tax inversions that have dominated market headlines lately -- particularly in the health-care sphere.

However, AbbVie is set to gain much more than significant tax savings with its purchase of Shire. The British drugmaker last year posted sales of nearly $5 billion, boosting the combined 2013 drug revenue of the two companies to more than $23 billion, per The Wall Street Journal. Shire also boasts a potent portfolio of rare-disease drugs. AbbVie likely will need time to integrate the two portfolios, given its immunology focus around star drug Humira and a drug lineup that offers fewer synergies with Shire's portfolio than investors may like. Still, if the deal clears, it would be a huge boost to AbbVie's revenue and tax savings that could propel this stock to big gains.

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Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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