Pfizer who will lose it’s US patent protection on it’s best selling Lipitor drug in June 2011, has purchased King Pharmaceuticals as a way to bolster their future line of drugs. They will acquire King Pharmaceuticals for $3.6 billion in cash, giving each shareholder of King $14.25 per share, a premium of 40% over yesterday’s closing price.

King Pharmaceuticals, who specializes in making several pain medications that have mechanisms which prevent patients from getting addicted as easily as other widely used drugs, will contribute approximately 2 cents per share to Pfizer’s 2011 and 2012 earnings.

“We are highly impressed by King’s innovative products and technology in the pain relief disease area, as well as by its success in advancing promising compounds in its pipeline,” stated Jeffrey Kindler, Pfizer’s chief executive.

The acquisition of two of King’s pain medications, Lyrica and Celebrex, will help Pfizer profit in the coming years as the baby boomer population ages. This is the first major deal Pfizer has made since their blockbuster purchase of pharmaceutical giant Wyeth for $68 billion in the beginning of 2009. Pfizer currently employs about 116,000 people, and had a net income of over $8.6 billion last year. King Pharmaceuticals employs just over 3300 people, and reported a net income of $92 million last year. They are the 39th largest pharmaceutical company in the world, and are headquartered in Bristol, TN.

So far in premarket trading Pfizer’s stock was down 5 cents per share, while King’s stock was up about 39%.