As Pfizer acquires CovX and Coley buy clears, small deals are expected to continue

Pfizer regroups businesses under global umbrellas
Pfizer regroups businesses under global umbrellas

Pfizer Tuesday agreed to buy biotherapeutics firm CovX. Financial terms were not disclosed.

La Jolla, CA,-based CovX will function as a division of Pfizer's new Biotherapeutic and Bioinnovation Center in California. CovX specializes in preclinical oncology and metabolic research. The deal is expected to close in the first quarter of 2008.

Meanwhile, Pfizer said it has cleared antitrust review in its acquisition of Massachusetts-based Coley Pharmaceutical, a biotech developing compounds to treat treat cancers, infectious diseases, asthma and allergy.

In a note to investors last week, Sanford Bernstein analyst Tim Anderson wrote that he expected Pfizer to continue to pursue smaller targets, an approach essentially in-line with peers and similar to Bristol-Myers Squibb's "string of pearls" approach.

“Our ‘best guess' is that for the next two years or so, Pfizer will continue to pour money into R&D and take the ‘string of pearls' approach to acquisitions, but after that, if the pipeline doesn't deliver the company may end up rethinking doing major deals within the sector,” Anderson wrote.