Warburg Gets a Boost from {Viagra}
This article was originally published in Start Up
Executive Summary
Warburg Pincus bought Pfizer's American Medical Systems, looking to create a platform to consolidate the very deconsolidated urology field. Warburg thinks it got a good price because AMS' penile implant sales have been hurt by Pfizer's {Viagra}, depressing the division's value. But the venture fund thinks {Viagra} will bring lots of new patients in for whom drug therapy won't work; moreover, it thinks it can add technology to AMS to differentiate it in this largely commoditized field. Warburg, in short, sees AMS as its specialized urology venture fund.