Pfizer to buy Hospira for $17 billion
pharmafile | February 5, 2015 | News story | Sales and Marketing | Hospira, Humira, Pfizer, acquisition, biosimilars, merger
Pfizer has struck a deal with Hospira to acquire the company in a deal worth around $17 billion.
Industry analysts had predicted that Pfizer, which posted a 3% decline in revenue in its fourth-quarter report earlier this month, would look to make significant acquisitions following its abortive buyout of AstraZeneca last year.
Pfizer clearly believes it can boost its flagging revenue through the purchase of Hospira, the world’s leading provider of injectable drugs and a global frontrunner in biosimilars.
Illinois-based Hospira was formed when Abbot spun-off its hospital products division in 2001. It is now the world’s largest provider of injectable generic pharma products and infusion therapies, along with medical devices and drug delivery systems.
Both sterile injectables and biosimilars are large and growing markets. The global marketplace for the former is estimated to reach $70 billion in 2020, while biosimilars are set to be worth approximately $20 billion in the same year. Hospira currently has 11 biosimilar molecules in its pipeline.
Hospira already has a biosimilar of Johnson & Johnson’s Remicade (infliximab) approved in Europe and has submitted an application with the FDA.
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, it anticipates the deal to deliver $800 million in annual cost savings by 2018.
Pfizer tweeted: “Hospira’s business aligns well with our new commercial structure and is excellent strategic fit. [The] Proposed Hospira deal shows commitment to shareholder value, delivering incremental revenue and near-term earnings-per-share growth.”
Chief executive of Pfizer Ian Read, says: “The proposed acquisition of Hospira demonstrates our commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and EPS growth in the near-term.
“In addition, Hospira’s business aligns well with our new commercial structure and is an excellent strategic fit for our global established pharmaceutical 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.”
Michael Ball, Hospira’s chief executive adds: “The Pfizer-Hospira combination is an excellent strategic fit, presenting a unique opportunity to leverage the complementary strengths of our robust portfolios and rich pipelines.”
Hospira is due to present its financial results for the fourth quarter of 2014, along with its 2015 forecasts on 12 February.
Lilian Anekwe.
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