Friday, July 08, 2011

Pfizer Unit Sales Add Payoff to Pipeline Drugs in Deal Seen at $22 Billion - Bloomberg

Pfizer Inc. (PFE)’s plans to shed two businesses boosts the potential payoff for three experimental drugs moving toward regulatory review later this year.

Pfizer, the world’s biggest drugmaker, yesterday said it plans to sell or spin off its animal health and baby food divisions. The units may command a price of $22 billion, said Seamus Fernandez, an analyst at Leerink Swann & Co. in Boston. Pfizer Chief Executive Officer Ian Read has said he plans to use the proceeds to buy back shares and develop new drugs.

Read is giving new products led by the apixaban blood thinner, the lung cancer drug crizotinib and tofacitinib for rheumatoid arthritis added prominence within Pfizer’s revenue portfolio. Divesting the units -- which generate $5.5 billion in annual sales, or 8 percent of the New York-based company’s revenue -- also lets Pfizer sharpen its focus on developing the three drugs, which analysts surveyed by Bloomberg estimate may reach $3 billion in annual sales by 2015.

“In the next 3 to 6 months, there’s going to be a lot of pipeline news, and as Pfizer gets smaller the pipeline becomes more important,” said David Maris, an analyst with CLSA in New York. “This is a management team that is following through on what they said they would do, which is take a fresh look at the business and decide what is important and what is not.”

Pfizer loses patent exclusivity in November for its biggest product, the Lipitor cholesterol pill with $10.7 billion in sales last year. The drugmaker forecasts sales may fall as much as 8.3 percent in two years as the company’s new medicines fail to offset lower sales of Lipitor.

Posted via email from Jack's posterous

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