Pfizer may pay $525 million for Brazil drugmaker: report

SAO PAULO (Reuters) - Pfizer, the world's largest drug company, may pay up to 1 billion reais ($525 million) to buy Brazilian generic drugmaker Neo Quimica, stepping up smaller acquisitions in fast-growing emerging markets, newspaper O Estado de S. Paulo said on Wednesday.

Last month, Pfizer Chief Financial Officer Frank D'Amelio said the company remains on the lookout for smaller deals, as it prepares to complete the acquisition of rival Wyeth. Part of those deals would help counter an expected decline in revenue stemming from the expiration of several drug patents, including cholesterol fighter Lipitor and Viagra.

Talks between the two companies, which started early in 2009, were near conclusion, according to Estado, which cited industry sources it did not identify. A director at Neo Quimica declined to comment on the Estado story.

The newspaper said Pfizer would not comment on market speculation.

Neo Quimica, based in the Brazilian state of Goias, had revenue of 300 million reais last year, Estado said. Both companies mulled the setup of a joint venture, but instead agreed to a full takeover, Estado said, citing the sources.

One advantage of Neo Quimica relative to other rivals is its extensive distribution network across Brazil and a recent factory upgrade that will help to more than double annual production, Estado said.

Pfizer's shares fell for a third day on Tuesday, losing 1.9 percent to $16.38 in New York.

($1=1.905 reais)

(Reporting by Guillermo Parra-Bernal, editing by Maureen Bavdek)