Merck, Pfizer Among Cash Stashers as Markets Gyrate
World markets in free fall mode; rioting in London; intransigent U.S. politicians; no wonder investors are rushing to buy gold. Next, they'll be burying cash in coffee cans in the backyard. But actually, big drugmakers are one step ahead of the cash-hoarders. They've already been squirreling their money away.
Billions of Big Pharma cash sits in figurative coffee cans around the world, waiting for executives to feel ready to spend. Some companies are saving up for the right acquisition to come along. Unfortunately for the U.S. economy, some plan to invest their money in emerging markets. Some are in the midst of share buybacks that will return a lot of their cash to shareholders as they try to soothe investors through their patent-cliff fears.
But others are just saving up. And that's natural in the current environment. "Companies feel like they don't have strong confidence that things will be better in the next year," job-market watcher John Challenger told the Star-Ledger. "Why take risks right now?"
Among the cash-rich drugmakers are Merck (NYS: MRK) , which has stashed away an additional $1 billion this year. Johnson & Johnson (NYS: JNJ) has added another $3 billion to its stores, the newspaper reports, giving it some $27 billion on hand. Pfizer (NYS: PFE) has beaucoups cash, $24 billion as of last week, especially in the wake of its $2.375 billion Capsugel sale; it's spending some of that money on shareholder dividends.
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