Pfizer Inc on Monday announced that it would merge its off-patent drug business with generic drugmaker Mylan NV to create a global leader in low-cost treatment, a business that faces significant political pressure in the US.
The new entity, which is to be renamed upon the deal’s closure, would have a portfolio that includes impotence drug Viagra, cholesterol pills Lipitor, painkiller Lyrica and the life-saving EpiPen treatment for severe allergic reactions.
The merger comes amid rising competition in generic drugs from companies in India and elsewhere, a segment of pharma that is known for having low barriers to entry and commodity-like products.
Photo: AFP
Joining forces with Pfizer’s off-patent division, called Upjohn, would give Mylan access to more international markets.
The deal is also expected to result in US$1 billion in annual cost savings starting in 2023, the companies said.
“The combined organization will have a presence across nearly every continent and major market, establishing a new leadership position in Asia, and offering products capable of treating all major therapeutic areas,” said Mylan chairman Robert Coury, who is to serve as executive chairman of the new company.
This marks the latest move by Pfizer, which has grown into one of the world’s biggest pharma companies through a string of acquisitions.
The new company will be 57 percent owned by Pfizer shareholders and 43 percent owned by Mylan investors.
Upjohn president Michael Goettler is to serve as CEO of the new firm, while Mylan CEO Heather Bresch is to leave the company.
Pfizer, meanwhile, has announced deals in recent months to combine its consumer healthcare business with GlaxoSmithKline PLC’s unit, and to spend US$11.4 billion to acquire Array BioPharma Inc, which is known for drugs in development focused on oncology and rare disease.
Pfizer chief executive Albert Bourla said the deal with Mylan would sharpen the company’s focus on “breakthroughs that change patients’ lives.”
Separately, Pfizer reported that second-quarter profit jumped 30.3 percent to US$5 billion, due in part to a large one-time boosts from a favorable US tax settlement and a lower tax rate after the late 2017 US tax cut signed by US President Donald Trump.
Revenues dropped 1.5 percent to US$13.3 billion.
Pfizer also cut some of its financial forecasts for this year, citing the accounting of the GlaxoSmithKline and Array transactions.
Mylan’s share price surged 12.6 percent to end the day at US$20.78, while Pfizer fell 3.8 percent to US$41.45.
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