Shareholders of drugmaker Wyeth on Monday voted overwhelmingly to be bought by industry giant Pfizer Inc., pushing aside one of the deal's final hurdles.
More than 98 percent of Wyeth stockholders voted for the $68 billion acquisition, which will solidify Pfizer's standing as the top-selling drugmaker in the world.
The deal transforms New York-based Pfizer overnight from being primarily a maker of the blockbuster pills to a one-stop shop for medical treatments. That's because Wyeth, the No. 12 drugmaker, brings multibillion-dollar products and substantial expertise in creating and manufacturing biologic drugs, vaccines, nonprescription medicines and animal health products.
The tie-up marries Wyeth's blockbuster children's vaccine Prevnar and biologic rheumatoid arthritis drug Enbrel to Pfizer staples such as impotence pill Viagra and cholesterol fighter Lipitor, the world's best-selling drug with about $12.5 billion a year in revenue.
The deal still needs approval by regulators in some foreign countries and by the Federal Trade Commission in the U.S. On Friday, the European Commission granted approval, after requiring the companies to divest some of their animal health businesses.
Boards of both companies have approved the cash-and-stock deal set to close late in the third quarter or in the fourth quarter.
It is one of three mega mergers in the industry announced this year. Swiss drugmaker the Roche Group in March bought the 44 percent of biotech company Genentech it didn't already own for $46.8 billion, and Merck & Co. by year's end is to buy New Jersey neighbor Schering-Plough Corp. for $41.1 billion.
Wyeth's shareholders cast their votes at their annual meeting at a hotel near company headquarters in Madison, New Jersey, although most votes were cast in advance, many by large institutional investors.
"I have mixed feelings" about the deal, Chief Executive and Chairman Bernard Poussot told shareholders, many listening via a Webcast.
Poussot, who will leave once the acquisition is complete, said he had spent 23 years at Wyeth, becoming head of the pharmaceuticals business in 1997, building up a strong executive team and focusing the company on science.
He noted Pfizer will keep several of Wyeth's top scientists. Among them, Mikael Dolsten, president of Wyeth Research, will head up research on vaccines and biologic drugs, and Emilio Emini and Menelas Pangalos will be the chief scientific officers for vaccine research and neuroscience research, respectively.
Plenty of others won't be so lucky.
Pfizer has begun cutting 10 percent of its work force — about 8,190 jobs — and expects a staff reduction totaling 15 percent of the combined companies' workers. That implies nearly 20,000 jobs will be eliminated. Wyeth began its own cost-cutting program in January 2008, aiming to eliminate up to 5,000 of its then-50,000 jobs.
A Pfizer spokeswoman said the company would give an update on Wednesday, when it reports its second-quarter earnings. Wyeth issues its report on Thursday.
Pfizer has said those cuts and reducing the number of manufacturing sites from 46 to 41 will bring about $4 billion in cost savings by 2012 and should add to Pfizer's earnings per share in the second full year after closing.
The vote tally came after Poussot told shareholders that Wyeth had the vision to jump into biologic drugs more than a decade ago, build up its vaccine and infant nutrition businesses, and otherwise diversify the company.
Rivals at the top of the pharmaceutical industry are now rushing to do exactly that, and Wyeth's array of technologies and products made it appealing to Pfizer when its CEO, Jeff Kindler, was looking to do a big deal.
"Pfizer, as you know, aggressively pursued us for over seven months," Poussot said.
Wyeth stockholders are to receive the equivalent of $50.19 per share — a combination of $33.00 in cash and roughly a share of Pfizer common stock. The total was nearly a 15 percent premium to Wyeth's closing price of $43.74 just before the deal was announced on Jan. 26.