Pfizer in talks to merge off-patent assets with Mylan
Deal would create large seller of drugs including former blockbuster brands Lipitor and Viagra
Pfizer is in the late stages of talks to combine its off-patent assets with Mylan’s $10bn generics business in a stock deal, according to people familiar with the matter.
The deal, likely to be announced on Monday, would create a large seller of off-patent and generic medicines, including former blockbuster brands Lipitor and Viagra. Mylan shareholders will hold just over 40 per cent of the new venture, and Pfizer will sell debt of about $12bn, the people said.
The plans would also see Mylan’s chief executive Heather Bresch depart, after leading the company for seven years.
Shares in Mylan have fallen by three-quarters since their peak in 2015, as the generics maker as struggled with declining prices in the US. It also caused controversy by dramatically raising the price of EpiPens, used to treat allergic reactions.
In August 2018, Mylan’s board of directors announced it would undertake a strategic review of its options, as it feared US public markets were undervaluing the company. Last quarter, the company said sales of its multiple sclerosis drug were worse than expected, and it failed to received approval to make a generic version of Advair, an asthma medicine developed by UK pharmaceutical company GlaxoSmithKline.
If the deal goes through, Michael Goettler, who runs Upjohn, Pfizer’s off-patent drugs business based in Shanghai, will become chief executive of the new venture, while Robert Coury, Mylan chairman, would become its executive chairman, the people said. The deal was first reported by The Wall Street Journal.
Pfizer has been trying to reposition itself as a smaller company focused on more innovative medicines and vaccines. To this end, it is spinning off its consumer health business into a joint venture with GSK’s consumer business. It is also making acquisitions to bolster its position in advanced areas like oncology, buying Array Biopharma, a Colorado-based drugmaker, in June for $10.6bn.
Pfizer has also been under political pressure — including from US President Donald Trump — about raising drug prices, including for erectile dysfunction treatment Viagra and other drugs in the Upjohn business.
The deal would be the latest in a series of large pharmaceutical mergers and acquisitions this year. Bristol-Myers Squibb is seeking regulatory approval for its $90bn purchase of biotech Celgene. Last month AbbVie announced its intention to buy Allergan, the maker of Botox, for $63bn.
The unit will focus on drugs where exclusivity has expired. It will combine generic medicines — often made by different companies than the original drug — with off-patent drugs, which Pfizer used to sell as key brands before their patent protection ended.