Pfizer to merge unit with Mylan, sending Mylan shares soaring
Under new CEO Albert Bourla, Pfizer has been beefing up its cancer treatment pipeline, buying cancer drugmaker Array Biopharma in June
Bengaluru — Pfizer will separate its off-patent drugs business and merge it with Mylan, the two companies confirmed on Monday, bringing blockbuster treatments Viagra, EpiPen and Lipitor under one umbrella.
The new company, to be based in the US and incorporated in Delaware, will be helmed by Pfizer's unit president, Michael Goettler, who will become the CEO.
Mylan CEO Heather Bresch will retire after the deal closes and its chair, Robert Coury, will be the executive chair of the new company.
Mylan shares jumped 20% to $22.10, while Pfizer shares slipped nearly 2% to $42.34 in early trading on Monday.
Under new CEO Albert Bourla, Pfizer has been beefing up its cancer treatment pipeline, buying cancer drugmaker Array Biopharma in June for $10.64bn, as some of its older treatments face competition.
The Mylan deal is structured as an all-stock transaction, with each Mylan share to be converted into one share of the new company. Pfizer shareholders would own 57% of the combined new company and Mylan shareholders the rest, the companies said.
The combined company is expected to have 2020 revenue of $19bn-$20bn, with free cash flow expected to be more than $4bn.
Pfizer will separate its off-patent drugs unit, Upjohn, in a tax-free spinoff and combine with Mylan. Upjohn will issue $12bn of debt at or prior to separation. After the deal closes, the new company will have about $24.5bn of total debt outstanding.
Separately on Monday, Pfizer also reported better-than-expected quarterly profit, helped by sales of its branded treatments such as Ibrance, Eliquis and Xeljanz.
In December, GlaxoSmithKline and Pfizer said they would combine their consumer health businesses in a joint venture with sales of £9.8bn, majority owned by the British company.