Pfizer to buy King Pharmaceuticals for $3.6 billion

Pfizer Inc., looking to increase its footprint in the market for pain treatments, has agreed to pay $3.6 billion to purchase King Pharmaceuticals, which specializes in tamperproof medications.

The deal, announced Tuesday, is the largest by Pfizer since it acquired Wyeth - including large operations in the Philadelphia area - for $68 billion last year.

The purchase of King helps Pfizer, the world's largest drug company, expand its product offerings as it prepares for patent expirations on billions of dollars worth of drugs in the next few years, including its best-selling cholesterol pill, Lipitor. Lipitor, which had $11.4 billion in revenue last year, will lose patent protection next year.

Pfizer is paying $14.25 a share for King, which was trading at $10.15 at the close Monday. With the news, Pfizer's stock responded with a modest increase Tuesday, ending up 10 cents, at $17.48.

King, located in Bristol, Tenn., had $1.78 billion in revenue last year. It has focused on pain medications that are resistant to being abused. They includes Embeda, a morphine tablet that contains naltrexone, which neutralizes the effect of the morphine if it is crushed or chewed.

King also has two more abuse-resistant drugs in its pipeline, Remoxy and Acurox.

These will be added to Pfizer's current treatments for pain, which include Lyrica and Celebrex.

Pfizer expects the deal will result in $200 million in operational savings over time.

"We are highly impressed by King's innovative products and technology in the pain-relief disease area, as well as by its success in advancing promising compounds in its pipeline," Jeffrey Kindler, Pfizer's chairman and chief executive officer, said in a statement.

"The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe who are in need of pain relief and management."

King, which has 2,600 employees, has been particularly aggressive in acquiring and developing pain medication that is resistant to abuse.

The field is considered lucrative. The current class of prescription pain medications, including oxycodone, is susceptible to abuse. The timed-release versions of the drugs, for instance, can be crushed into powder form to speed dispersion in the body, creating a high for users.

King's version of time-released oxycodone, Remoxy, seeks to counter that by submerging its opiate in a thick liquid base. Acurox is intended to be a fast-acting form of the drug. If exposed to alcohol or water, the oxycodone inside gets trapped in a gel mixture that is hard to draw into a needle. The drug creates a burning sensation when snorted.