Pfizer acquires King Pharmaceuticals for $3.6bn
pharmafile | October 13, 2010 | News story | Sales and Marketing | King Pharmaceuticals, Pfizer, pain therapeutics
Pfizer is to purchase King Pharmaceuticals for $3.6 billion to significantly strengthen its pain portfolio and continue to diversify its operations.
The acquisition will allow Pfizer to create one of the leading broad portfolios for pain relief and management, offering currently marketed opioid and non-opioid products, as well as a number of pipeline products.
In addition to Pfizer’s current treatments for pain – which include Lyrica and Celebrex – the Tennessee, US-based King will bring Avinza, the Flector Patch and the recently launched Embeda, the first approved opioid pain product with design features intended to discourage misuse and abuse.
Jeffrey Kindler, Pfizer’s chairman and chief executive, said: “The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe who are in need of pain relief and management.”
“In addition, the revenue generated by King’s portfolio will further diversify Pfizer’s business, while at the same time contributing to steady earnings growth and shareholder value.”
Pfizer anticipates initial cost savings from the transaction of at least $200 million in operating expenses to be fully realised by the end of 2013, but said the deal will not impact its 2010 financial guidance.
Next year the company’s biggest selling products, anti-cholesterol drug Lipitor whose sales peaked at $13 billion, will lose its patent protection and this deal is one of many designed to help offset the impending impact.
Principal analyst at Datamonitor Simon King, said: “The King acquisition represents a small but integral part of a broader diversification strategy that continues to be implemented by Pfizer.
“By 2015, we estimate that King Pharmaceuticals will be the leading player in the US market for opioid pain relief therapies, so this is an important strike for Pfizer.
“Given its significant sales and marketing capabilities in the US market – the sole territory where King operates – the acquisition will provide substantial opportunity for Pfizer to both reduce selling, general and administrative costs but also expand revenues.”
Datamonitor’s King added: “We also anticipate that Pfizer will utilise heavy promotion of the anti-misuse technologies acquired from King to drive sales growth for its newly enhanced pain relief portfolio offering.”
There have been a number of failed trials for pain treatments in the last year including Pfizer’s own tanezumab for chronic low back pain and painful diabetic peripheral neuropathy.
The market for pain relief and management treatments is increasing, with physicians in the US writing approximately 320 million prescriptions to treat pain in 2009, but the widespread misuse and abuse of treatments is a major public health issue and a growing economic burden.
So King’s leadership in new formulations of pain treatments designed to discourage common methods of misuse and abuse will not only provide Pfizer with multiple new drug delivery platforms, but also a competitive edge.
Ben Adams
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