Pfizer muscles in on Ratiopharm sale
pharmafile | March 11, 2010 | News story | Sales and Marketing | Pfizer, Ratiopharm, Teva, generics
Pfizer has reportedly bid $4 billion for German generics firm Ratiopharm in a bid to rapidly expands its portfolio in the sector.
According to the German press, Pfizer’s chief executive Jeff Kindler and his team arrived unannounced at Ratiopharm’s headquarters in Ulm in an effort to entice the drugmakers away from current suitors Teva and Actavis.
Pfizer’s bid is thought to be slightly less than that of Actavis, with Pfizer hoping to persuade Ratiopharm in person they would secure better returns for shareholders.
If successful, Pfizer is expected to merge Ratiopharm into its Established Products Division, whose sales reached $2.7 billion last year.
Following the Pfizer presentation, Ratiopharm’s management reportedly wrote an internal letter summarising its content. “The investor is targeting significant growth in the coming years and, with the Ratiopharm group, aims to achieve market leadership in generics,” Ratiopharm chief executive Oliver Windholz said in the letter, a copy of which was obtained by Reuters.
Windholz continued: “The bidder emphasised the high efficiency of Ratiopharm’s domestic and foreign production sites and told the meeting it was ready to make investments in Ulm.”
The acquisition would be a major coup for Pfizer’s generics business unit, which it wants to be among the biggest and most competitive in the sector.
Pfizer is pursuing a rapid expansion in generics in parallel with its traditional core business of patent-protected medicines. Pfizer acquired Wyeth in October last year for $68 billion, helping to keep the company in single digit growth. Its biggest sellers, Lipitor and Effexor, are set for patent expiry next year, wiping billions of dollars from its revenue.
Ratiopharm is the world’s fourth largest generics firm and will add significant revenue to whichever company succeeds in acquiring it. If Pfizer wins out, the merger would make the new business unit the world’s second largest manufacturer of generic drugs.
Analysts think a Ratiopharm acquistion could also help Pfizer cut its production costs across its existing generics business.
Ratiopharm is expected to make a decision by the end of the month.
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