Pfizer’s generics business up for grabs

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Pfizer’s generics business up for grabs

Home/Pharma News | Posted 24/01/2014 0 Post your comment

In 2013, Pfizer, the world’s largest drugmaker, split its business into two brand-name drug units and a generics business. Now it seems the generics unit, or its ‘established products’ unit, is being circled for a potential takeover bid.

Pfizer’s generics business includes medicines that have lost patent protection and marketing exclusivity, as well as mature, patent-protected products that are expected to lose their protection by 2015. These are lower profit margin products generating global sales of US$10.2 billion during 2013 and accounting for 17% of Pfizer’s total revenue.

Although the company has said that it will take a three-year period to review whether to sell the generics business or not, interest has reportedly already been expressed by Valeant Pharmaceuticals International (Valeant), and generics specialists Actavis and Mylan.

Pfizer has already sold its animal health and nutrition products units. Selling the generics business, if it happens, would allow the company to focus on its core, more lucrative, and higher profit margin, brand-name pharmaceuticals business.

All three possible suitors have been busy making deals lately. Valeant bought Bausch & Lomb in May 2013, while the merger of Swiss-based Actavis and US-based Watson Pharmaceuticals in 2012 created the third largest global generics company [1]. Actavis then snapped up Warner Chilcott in 2013 [2], while Mylan bought Strides Arcolab subsidiary, Agila Specialties [3].

Possible problems to overcome, however, for such a deal to go ahead, include the fact that Pfizer’s generics unit is much larger than any of the three potential suitors and that Pfizer could also receive a substantial tax bill from selling the business.

References

1. GaBI Online - Generics and Biosimilars Initiative. Mergers between Watson/Actavis and ANI Pharma/BioSante [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Jan 24]. Available from: www.gabionline.net/Pharma-News/Mergers-between-Watson-Actavis-and-ANI-Pharma-BioSante

2. GaBI Online - Generics and Biosimilars Initiative. Actavis confirms Rayos patent challenge and Warner Chilcott acquisition [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Jan 24]. Available from: www.gabionline.net/Generics/News/Actavis-confirms-Rayos-patent-challenge-and-Warner-Chilcott-acquisition

3. GaBI Online - Generics and Biosimilars Initiative. India approves Mylan’s purchase of Agila [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Jan 24]. Available from: www.gabionline.net/Pharma-News/India-approves-Mylan-s-purchase-of-Agila

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