PHARMACEUTICALS

PFIZER TO BUY VICURON FOR $1.9 BILLION IN CASH

Pfizer, the world’s biggest drug maker, agreed to buy Vicuron Pharmaceuticals for $1.9 billion to gain an antibiotic and a fungal treatment that are close to winning regulatory approval.

Vicuron investors will get $29.10 a share, the companies said in a statement. That’s 84% more than King of Prussia, Pa.-based Vicuron’s closing price Wednesday.

Pfizer, based in New York, is bracing for generic competition to its four top-selling drugs, including the antibiotic Zithromax, by 2010 and is counting on infection treatments to help compensate for lost profits. The antibiotic market has expanded to $26 billion annually as doctors hunt for ways to fight bacteria resistant to existing drugs.

“It’s a good deal, just expensive,” said Les Funtleyder, a health care strategist at Miller Tabak & Company in New York. “Generally you pay a 20 to 30% premium to the market for an acquisition. You don’t double the price.”

– Bloomberg News

ACCOUNTING

KPMG NEGOTIATES WITH FEDS TO AVOID CRIMINAL CHARGES

Accounting firm KPMG, seeking to avoid criminal prosecution that may threaten its survival, said yesterday it is negotiating with the U.S. Justice Department to resolve an investigation into the firm’s sale of improper tax shelters.

“KPMG takes full responsibility for the unlawful conduct by former KPMG partners” from 1996-2002 “and we deeply regret that it occurred,” the firm said.

U.S. Attorney David N. Kelley in New York told KPMG he was prepared to seek an indictment of the firm and gave KPMG until early last week to try to head off the charges by appealing to the Justice Department in Washington, a person familiar with the case said. Justice Department officials are weighing the request, the person said.

– Bloomberg News

IN THE COURTS

BANKS SUE NEW YORK ATTORNEY GENERAL

An association of leading commercial banks and a federal agency sued Attorney General Eliot Spitzer yesterday, saying his probe into the lending practices of national banks violates laws ensuring banks are not subject to supervision by state authorities.

The lawsuit in U.S. District Court in Manhattan asked the court to block Mr. Spitzer from demanding information to enforce federal and state discrimination-in-lending laws against banks belonging to the Clearing House Association.

The Manhattan-based association said it was taking the legal action as part of its role of protecting the rights of its 11 members, eight of which are federally chartered national banks already subjected to federal regulation.

– Associated Press