This article is originally published at BS B2B Bureau | New York, USA February 6, 2015|
Acquisition will expand Pfizer’s portfolio of sterile injectable and biosimilars, making it one of the global leaders in sterile injectables segment
US based pharma major Pfizer will acquire Hospira – the world’s leading provider of injectable drugs, infusion technologies and biosimilars – for a total enterprise value of approximately $17 billion. Ian Read, chairman and chief executive officer, Pfizer, said, “Hospira’s business aligns well with our new commercial structure and is an excellent strategic fit for our global established pharmaceutical (GEP) business, which will benefit from a significantly enhanced product portfolio in growing markets. Coupled with Pfizer’s global reach, Hospira is expected to drive greater sustainability for our global established pharmaceutical business over the long term.”
This strategically complementary combination will add a growing revenue stream and a platform for growth for Pfizer’s GEP business. The expanded portfolio of sterile injectable pharmaceuticals – composed of Hospira’s broad generic sterile injectables product line, including acute care and oncology injectables, with a number of differentiated presentations, as well as its biosimilars portfolio, combined with GEP’s branded sterile injectables, including anti-infectives, anti-inflammatories and cytotoxics – will create a leading global sterile injectables business.
Both sterile injectables and biosimilars are large and growing categories. The global marketplace value for generic sterile injectables is estimated to be $70 billion in 2020. The global marketplace for biosimilars is estimated to be approximately $20 billion in 2020.
The combination also reinforces GEP’s growth strategy to build a broad portfolio of biosimilars in Pfizer’s therapeutic areas of strength through the addition of Hospira’s portfolio that includes several marketed biosimilars. Pfizer will also use its existing commercial capabilities, global scale, scientific expertise and world class development capabilities to significantly expand the reach of Hospira’s products, which are currently distributed primarily in the US, to Europe and key emerging markets, where GEP has a significant presence.
“The addition of Hospira has the potential to fundamentally improve the growth trajectory of the global established pharmaceutical business, vault it into a leadership position in the large and growing off-patent sterile injectables marketplace by combining the specialized talent and capabilities of both companies, including enhanced manufacturing, and advance its goal to be among the world’s most preeminent biosimilars providers,” said John Young, group president, Pfizer Global Established Pharmaceutical business.
Pfizer expects to finance the transaction through a combination of existing cash and new debt, with approximately two-thirds of the value financed from cash and one-third from debt. In addition, Pfizer anticipates the transaction to deliver $800 million in annual cost savings by 2018.
The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and approval of Hospira’s shareholders, and is expected to close in the second half of 2015.