Flávio Maluf Makes Sense of Pfizer Allergan Merger

According to the president of Eucatex, Flávio Maluf, there are some very good reasons for the impending merger of the two giant pharmaceutical companies, Pfizer and Allergan. Eucatex is in Brazil and its president Maluf is carefully watching the unfolding of the biggest merger in big pharma history. The two companies are combining to become Pfizer PLC. Pfizer is a US company most famous these days for it’s cosmetic drug Botox.

According to Flávio Maluf from his twitter account, it is Allergan that actually purchased Pfizer. The goal seems to be not only to form the most powerful drug laboratory in history, but to increase drug invention productivity while simultaneously reducing operating overhead. Twelve new drugs to treat several different diseases are being loaded in the approval pipeline. The US Food and Drug Administration (USFDA) is already in the process of approving the first of these new drugs. It is a new treatment for breast cancer.

Other new drugs are slated to begin trials for the treatment of Alzheimer’s disease and for diabetes. The new company will immediately move to Ireland, where corporate taxes are a low 10%, especially as compared to their current tax rate in the United States of 25%. Flávio Maluf points out that the 15% difference results in savings of more than many company’s profit margins. This significant reduction in operating costs has more than justified Pfizer management’s decision to do the merger and the move to Ireland.

The US Federal Government has taken measure to reduce the migration of large companies out of the country. But, they have not found any way to block the merger. The concern is very real after so many US companies have already moved to India and East Asia. This has no bearing on Allergan, which is well known to have done much basic research in diseases of the eye. They have always worked for women’s health and well being.

Wikipedia indicates that Flávio Maluf is the son of a long time politician in Brazil, Paulo Maluf. He founded the companies Eucatex and GrandFood Group, which owns the Golden Rations and Premier Pet brands. His entrepreneurial tips would indicate Flávio is an effective businessman who attended the famous FAAP in Brazil, graduating with a degree in Mechanical Engineering.

February 12, 2016