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Pfizer (PFE - Analyst Report) and BioRestorative Therapies inked a deal for studying human brown adipose tissue and cell lines. The research deal, which is for two years, will permit the companies to jointly conduct a study (Development and Validation of a Human Brown Adipose Cell Model) to characterize further the identity and metabolic operation of these cell lines.

Both Pfizer and BioRestorative Therapies can make use of the data from the study. BioRestorative Therapies, which focuses on developing adult stem cell-based treatments for various personal medical applications, intends to determine through this research whether its cell lines are useful for treating obesity. Obesity, which is the root cause of many severe diseases, is on the rise across the globe.

Although encouraged by the research deal, we believe investor focus will remain on Pfizer’s attempts to take over the UK-based AstraZeneca (AZN - Analyst Report). Earlier in the week, AstraZeneca rejected Pfizer’s latest takeover proposal. We note that this is the fourth and final proposal made by Pfizer. Pfizer’s final proposal valued AstraZeneca at approximately £55 per share.

AstraZeneca stated that the proposal undervalued the company and would be significantly dilutive to its shareholders. Apart from that, AstraZeneca continued to harbor concerns regarding the transaction structure (low proportion of cash, high proportion of Pfizer shares) and risks related to the proposed inversion structure (Pfizer’s intention to redomicile to the UK for tax purposes).

We still believe that AstraZeneca, which is facing declining sales due the genericization of many of its key products, is an attractive acquisition target. Though the offer has been termed as final, we don’t expect this to be the end of the story involving Pfizer and AstraZeneca.

Pfizer carries a Zacks Rank # 3 (Hold). Allergan (AGN - Analyst Report) is a better-ranked stock in the large-cap pharma space with a Zacks Rank # 1 (Strong Buy).

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