Pfizer won’t split into two companies, so what’s next?

The more things change, the more they stay the same.

Five years after Pfizer execs first floated the idea of splitting the big drug maker into separate companies, they have officially abandoned the plan. The notion was originally designed to excite shareholders by “unlocking” the value of its different businesses — one would produce older drugs, while another would focus on newer medicines. Still other operations may be shed at some point.

“However, over time, any potential gap between Pfizer’s market valuation and an implied ‘Sum of the Parts’ market valuation has closed,” Pfizer executive vice president and chief financial officer Frank D’Amelio said in a statement. A split would not enhance cash flow, but would disrupt operations, add costs, and fail to yield “incremental” tax benefits, he explained.

The plan emerged after Pfizer had bulked up through a series of huge acquisitions, and investors were looking for growth beyond regular hikes in the dividend. Yet the company never pulled the trigger, and, instead, unsuccessfully pursued two more big deals — first, AstraZeneca and then Allergan — that were all about lowering its corporate tax rate.

So what’s next?

The drug maker argues it has already transformed its pipeline and R&D efforts.

And it’s true that Pfizer can point to the success of the new Ibrance breast cancer treatment, which generated $723 million in sales last year, its first year on the market, and the Prevnar vaccine franchise, which notched $6.25 billion in revenue in 2015. There are also added sales from a big acquisition — the Hospira deal provided a portfolio of biosimilar medicines and further entrée into hospital sales.

However, Pfizer does face some hurdles. As Barclays analyst Geoff Meacham noted, other than the Hospira operation, “organic growth” in what the drug maker calls its ‘Essential Health’ unit “remains the weakest point from our perpective and the biggest operational challenge. Besides biosimilars, this unit includes legacy brand-name drugs, branded generics, and generic sterile injectable products.

Ironically, Pfizer seems poised to return to its reliable playbook — more mergers and acquisitions.

“Management has said previously that targets of all sizes are theoretically on the table,” wrote Sanford Bernstein analyst Tim Anderson in an investor note on Monday. Just last month, Pfizer agreed to spend about $14 billion to buy Medivation, a deal that will add the pricey Xtandi prostate cancer treatment to its oncology lineup, and more transactions seem likely.

“A critic could argue that Pfizer is back to being the same old Pfizer as before, relying on M&A to grow and to refill its pipeline, but at the expense of growing larger in the process, depending on the size of deals it chases,” Anderson continued. But “Pfizer is certainly not alone in looking for things to buy — many other companies claim to be doing the same.”

Yet Pfizer is still hedging its bets.

In announcing its decision, Pfizer Chief Executive Officer Ian Read issued this caveat: “We will continue to generate the financial information necessary to preserve our option to split our businesses should factors materially change at some point in the future.”