BTIG Cautious on Pfizer Inc.’s (PFE) and Allergan PLC’s (AGN) “Mega Inversion” Deal

BTIG analyst Tim Chiang weighed in today with a cautious stance on the “Mega Inversion” deal between Pfizer Inc.(NYSE:PFE) and Allergan PLC (NYSE:AGN), where Pfizer would acquire Allergan in a mostly-stock-financed transaction for a total enterprise value of approximately $160 billion, and would create the largest drug company in the world. The new company will list under the PFE ticker on the New York Stock Exchange.

Chiang wrote, “At the end of the day, we think Allergan shareholders may be left wondering what the rationale of such a deal is, especially given the fact that its shares are currently trading at ~$303, post the announcement of one of the largest pharma deals ever. Given all that’s occurred in the pharma space over the past 3 years, with deal after deal announced, and the recent correction in the specialty pharma space, we think Allergan would be better off as a standalone company with a deleveraged balance sheet (once its sale of its generic segment to Teva for ~$40.5B.”

The analyst concluded, “At this time, we are skeptical on the long-term benefits of a PfizerAllergan combination. While we understand the rationale for an “inversion” deal for Pfizer (and its eventual splitting into two companies), we think the rationale for Allergan is less compelling.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Tim Chiang has a total average return of 12% and a 67.6% success rate. Chiang is ranked #594 out of 3858 analysts.

Out of the 12 analysts polled by TipRanks, 9 rate Pfizer stock a Buy, 2 rate the stock a Hold and 1 recommends a Sell. With a return potential of 34%, the stock’s consensus target price stands at $41.78.


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