U.S. drugmaker Pfizer (PFE) announced a new share repurchase program of up to $11 billion of its common stock Thursday night, deflating expectations that it will make a new bid for AstraZeneca.
The New York-based pharmaceuticals company, whose shares gained nearly 2% after the announcement, said the move was in addition to the $1.3 billion remaining under the company’s current repurchase plan.
Pfizer, which currently has a market cap of about $185B/$29.11, earlier this year failed in its $119B takeover bid for British rival AstraZeneca. But as Reuters notes, the world’s second biggest drugmaker by revenue has an opportunity to make a fresh run at its acquisition target from late November under British takeover rules.
With shares of Pfizer currently priced at 18.29x this year’s forecasted earnings, and trading near the lows of the year, the share repurchase will be cost effective for the company.
Shares of Pfizer rose 1.78% to $29.11 at the close in New York’s Friday trading session, leaving them down 1.66% year-over-year and 2.48% year-to-date.
Pfizer is set to announce 3Q earnings on Tuesday, October 28 before the opening bell.