New York - Large deals make sense for Pfizer and AstraZeneca, even if not with each other.

While the talks between Pfizer, the world's biggest drugmaker, and $87 billion AstraZeneca have fizzled, Citigroup expects Pfizer to approach the company again, or AstraZeneca could opt to merge with another peer such as Amgen as a defense tactic. Pfizer's backup plan could be to acquire Dublin-based Shire, Albert Fried & Co. said.

Both companies face stalling growth over the next few years, with Pfizer needing new products to replace drugs that lost patent protection and AstraZeneca's promising cancer treatments still years from hitting the market. At the same time, smaller rivals are scooping up assets and building their presence as drug takeovers surged to a five-year high, led by Actavis Plc's $21 billion bid for Forest Laboratories, according to data compiled by Bloomberg.

"Everybody's scrambling for these assets," Sachin Shah, a special situations and merger arbitrage strategist at Albert Fried in New York, said in a phone interview. "When you have these large transactions back to back to back, it just begs the question of what do the big pharma guys think about this? Right now, Pfizer's probably coming to the conclusion that it needs to have a 'buy' mentality."

New York-based Pfizer held informal, now-discontinued talks with AstraZeneca about possibly buying the London-based company, two people familiar with the matter told Bloomberg News this week, asking not to be identified. One said the talks happened several months ago and there are no plans to resume.

Joan Campion, a spokeswoman for Pfizer, and Michele Meixell, a spokeswoman for AstraZeneca, said the companies don't comment on market speculation, when asked about the deal talks.

Pfizer's sales are projected to climb at a compound annual rate of 0.5 percent over the next five years, lagging behind the median rate of 2.4 percent for its closest peers, estimates compiled by Bloomberg show. An acquisition of AstraZeneca would add early-stage drugs in a field of cancer treatments that use the body's own immune cells to recognize and attack cancer.

"This deal could make a lot of sense for Pfizer," Alex Arfaei, a New York-based analyst at BMO, wrote in a report Monday. "First, it would significantly improve Pfizer's pipeline, particularly in immuno-oncology. Second, obviously there would be significant operating synergies."

AstraZeneca spent the last couple of years trying to restock its own pipeline as patents expire on some of its best-selling medicines, such as Crestor for cholesterol and Nexium for heartburn. The ADRs have risen 35 percent in the past 12 months, triple their gain in the prior 12-month period.

"Presumably, AstraZeneca's gotten its mojo back," Shah said. "That's why it's in play now."

That said, AstraZeneca's own growth won't return until 2018, so it wouldn't necessarily be an ideal fix for Pfizer, Tim Anderson, a New York-based analyst at Sanford C. Bernstein & Co., wrote in a report dated April 21.