What happened
Hardly for the first time in the recent past, on Friday Pfizer (PFE -3.85%) stock landed in positive territory while the S&P 500 index sagged. The high-profile pharmaceutical company's shares recorded a more-than 2% gain on the day thanks to some good company news in the mergers and acquisition sphere.
So what
On Friday, Pfizer officially became the proud new owner of Arena Pharmaceuticals as its $6.7 billion deal for the healthcare industry peer closed.
Image source: Getty Images.
Buying Arena is Pfizer's latest move at bolstering its already considerable pipeline. Arena concentrates on the treatment of immuno-inflammatory diseases and has a clutch of drugs currently in various stages of development. One, etrasimod, is currently in phase 3 testing for the treatment of ulcerative colitis; other potential diseases it's being tested for include Crohn's disease and eosophilic esophagitis.
"We are excited to add the impressive experience and pipeline of Arena Pharmaceuticals to Pfizer's inflammation and immunology therapeutic area," Pfizer quoted its global president and general manager of that segment, Mike Gladstone, as saying.
"In particular, we're hopeful that we can accelerate clinical development of etrasimod successfully to have a positive impact on those living with these debilitating diseases," he added.
Now what
It's hard to see a downside in Pfizer's acquisition of Arena, especially as the pharmaceutical sector giant secured a rather advantageous price for its clinical-stage peer.
Pfizer, which has done particularly well lately as the co-developer of the widely administered Comirnaty coronavirus vaccine, is exercising a smart strategy here. It's utilizing its increasingly large cash pile to buy a company with a relatively large and promising pipeline. No wonder investors were bullish on the stock after the announcement was made.
