Pfizer’s top two bidders may have both walked away from a consumer health deal last week, but that doesn’t mean the pharma giant doesn’t still have options.
On the contrary, it’s got one path left to unloading the unit, and it’s one the company’s plenty familiar with: a spinoff.
As Bloomberg notes, a spinoff would not only spare Pfizer the taxes it would have had to pay on sale proceeds, but spinning off the unit could take some debt off Pfizer’s hands, too. And the company, which executed a successful spinoff of animal health unit Zoetis in 2013, knows what it’s doing in that department.
Of course, Pfizer, which had reportedly been looking for $20 billion or more before GlaxoSmithKline and Reckitt Benckiser backed out of talks, could still decide to keep the division until a better buyer comes calling. The business is still growing—at a rate of between 2% to 4% per year—and the portfolio accounts for a significant chunk of its dividend.
Plus, the company has made clear that it doesn’t have an immediate need for cash. “I suppose if no one is prepared to pay their asking price, then why sell it?” Daniel Mahony, a partner with Polar Capital in London, said.
But with online retailers putting the squeeze on drugstores, waiting around isn’t necessarily such a great idea, some industry watchers contend.
“The world has changed,” UBS Group analyst Michael Leuchten told Bloomberg. “That means these businesses or assets probably won’t be able to fetch the multiples they have in the past.”
By Carly Helfand
Source: Fierce Pharma
The United Arab Emirates (UAE) Ministry of Health and Prevention (MoHAP) has established a partnership with Novo Nordisk Pharma Gulf focusing on the creation of a national scientific guide for obesity management and weight control. The collaboration also aims to enhance public awareness of cardiovascular diseases and their complications.
Pharma giant Eli Lilly is teaming up with Haya Therapeutics in a $1bn deal to find multiple regulatory-genome-derived RNA-based drug targets, as it eyes up new targets in obesity. Under the deal, the companies will use Haya’s proprietary regulatory genome discovery platform to identify and validate long non-coding RNA (lncRNA) targets for developing potential treatments for obesity and related metabolic disorders.
The sale includes custom formulation and contract manufacturing capabilities for the nutrition market from the production facilities in New Jersey and Utah in the United States, and Tamaulipas, Mexico. Financial terms of the transaction were not disclosed.
