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Pfizer, Allergan pondering a tieup

NEW YORK — Pfizer Inc. and Allergan PLC, the maker of Botox, are considering a merger, The Wall Street Journal reported, setting the stage for what could be one of the largest deals in the drug industry’s history.

Pfizer recently approached Allergan and the process is at an early stage, the Journal said, citing people familiar with the matter.

Though details of the talks were unclear, the companies could face obstacles such as agreeing on a price, layoffs, and the closing of facilities, the Journal said.

Late Wednesday, Joan Campion, a spokeswoman for Pfizer, said the company does not comment on speculation, while Mark Marmur at Allergan declined to comment.

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A transaction between the two drug makers, which have a combined market value exceeding $330 billion, could cap a busy year for deals in the pharmaceutical industry, with more than $200 billion in transactions announced.

That includes Pfizer’s $17 billion deal for Hospira Inc., a maker of injectable drugs.

An acquisition of Allergan, which has its legal domicile in Dublin, may also let Pfizer relocate outside of the United States for tax purposes. That was one of the reasons Pfizer sought to acquire AstraZeneca last year before eventually withdrawing its proposal. Pfizer also looked at Actavis as a potential acquisition, people familiar with the matter said last year.

The largest deal ever in the drug industry was Pfizer’s $116 billion acquisition of Warner-Lambert Co. in 2000, data compiled by Bloomberg show.

Pfizer has sought deals in recent years as patents have expired for key drugs, including the cholesterol-lowering medicine Lipitor.

Allergan has been active on both sides of the deal table and has accounted for about $131 billion in deals over the past two years.

Allergan, itself the result of an acquisition earlier this year, is also slimming down, selling its generic-drug unit to Teva Pharmaceutical Industries Ltd. for $40.5 billion. Sales at Allergan, which has a market capitalization of about $113 billion, have benefited from sales of specialty drugs including the cosmetic drug Botox and Namenda for Alzheimer’s disease.

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Pfizer’s shares have risen 14 percent this year, and Allergan’s have gained 12 percent, both outperforming the Standard & Poor’s 1.5 percent advance.