Despite overcoming a whopping $23 billion in branded patent expirations over the course of 2011 to 2016 and returning to growth on an operational basis, Wall Street thinks Pfizer (NYSE:PFE) still has a lot more to work to do. The basic issue is that Pfizer is barreling toward another round of high-value patent expirations. The erectile-dysfunction medicine Viagra and top-selling pain drug Lyrica, for example, could both face generic competition in the United States by next year. 

Compounding matters, sales of Pfizer's pneumococcal vaccine Prevnar 13 have been flattening in recent quarters, and the drugmaker's foray into the next-generation cholesterol market ended in disappointment after the company shuttered its bococizumab program last year.

As Pfizer's recent acquisitions of Anacor Pharmaceuticals, Hospira, and Medivation simply aren't enough to overcome these headwinds to maintain a respectable growth trajectory, analysts are once again clamoring for the drugmaker to revisit the idea of engaging in a so-called "megadeal."

After all, Pfizer could conceivably go after big game such as AstraZeneca (NASDAQ:AZN) and Bristol-Myers Squibb (NYSE:BMY), based on its enormous financial resources. But are either of these large-cap biopharmas a good fit? Let's dig deeper to find out. 

With the land masses of Earth as a backdrop, two figures in silhouette push two gigantic puzzle pieces together.

Image source: Getty Images.

Coming full circle

Not long ago, Pfizer was in hot pursuit of the British pharma giant AstraZeneca. But Astra balked at Pfizer's previous overtures, because the company believed that its immuno-oncology and traditional oncology pipelines were strong enough to generate double-digit compound annual growth heading into 2023.

Thanks to a few clinical setbacks, and the entrance of some unexpectedly strong competitive threats in the meantime, though, the Street has throttled back on its own forecasts for the drugmaker's top-line growth in a big way. Astra, for instance, is now expected to produce top-line growth that's basically on par with the rest of the industry over the next six years. But even pedestrian levels of top-line growth may prove enticing to Pfizer, for one obvious reason.

A cancer cell.

Image Source: Getty Images.

In effect, Pfizer still wants to build out a top-notch immuno-oncology pipeline. Although the drugmaker has had some success with its ongoing cancer immunotherapy partnership with Merck KGaA -- illustrated by the rapid FDA approval of Bavencio (avelumab) for the treatment of metastatic Merkel cell carcinoma -- Pfizer doesn't have a surefire backbone therapy in hand that can become a cornerstone of this high-growth drug market.

Astra, for its part, offers one clear solution to this problem with Imfinzi, its immuno-oncology medicine that's nearing an all-important late-stage readout in non-small-cell lung cancer, which could catapult it into contention for one of the best-selling checkpoint inhibitors over the next decade. So if Imfinizi hits the mark in this critical trial, Pfizer may indeed come full circle by approaching Astra yet again. 

A secondary option in immuno-oncology

Bristol-Myers Squibb's name has been repeatedly floated as a possible acquisition target by Pfizer. The core reasons are that Bristol's Opdivo is a proven commodity in the world of immuno-oncology, the company has a robust pipeline of cancer immunotherapy assets outside of Opdivo, and this pairing would also consolidate the rapidly growing revenue stream of the breakthrough blood thinner Eliquis that it currently shares with Bristol. 

Perhaps most importantly, though, Bristol would be a fundamentally sound bolt-on acquisition. After going through its own troubling stint with the patent cliff, Bristol has improved its operational efficiency, brought several new major medicines to market, kept its debt to reasonable levels, and continues to grow its free cash flows at a healthy clip. So as long as Pfizer doesn't overpay, this acquisition should create immediate value for the company and its shareholders.  

On the flip side, there's a good chance that Opdivo could lose its edge against other checkpoint inhibitors after flaming out as a monotherapy for non-small-cell lung cancer. In fact, Opdivo's days as the market share leader could be cut short if it doesn't eventually reach the first-line lung cancer setting as part of a combination therapy down the line. That's not to say this key indication is a long shot, but Pfizer may stand pat until the future of the checkpoint inhibitor market becomes a bit more predictable. 

Is a deal imminent? 

Pfizer has shown that it would be amenable to a megadeal if the right opportunity presented itself. The drugmaker has attempted to take out both Astra and Allergan in the recent past as proof. That doesn't mean a game-changing acquisition is imminent, however.

Long story short, Pfizer is probably going to wait until Imfinzi's lung cancer data begins to hit the wires before making a decision on which target to pursue. Another key factor is the possibility of corporate tax reform coming out of Washington, which would allow Pfizer to repatriate some of its foreign earnings to facilitate a massive deal.

So while analysts and investors alike have been urging the drugmaker to get with the deal-making already, Pfizer doesn't appear ready to push the button just yet. Even so, Astra and Bristol are likely to be at the top of the drugmaker's wish list come acquisition time. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.