Pfizer completes $15 billion Hospira acquisition
pharmafile | September 4, 2015 | News story | | Biosimilar Drugs, Hospira, Pfizer, mergers and acquisitions
Pfizer has completed its acquisition of Illinois-based injectable drugs and infusion device specialist Hospira for around $15 billion.
The deal, first announced in February, strengthens Pfizer’s position in the injectables market, as well as the growing biosimilars market, in which Hospira is a leading name, with products including the Remicade spinoff Inflectra. The global biosimilars market is estimated to be worth approximately $20 billion in 2020.
Hospira has become a Pfizer subsidiary in the New York-based company’s Global Established Pharmaceutical (GEP) business unit.
A key beneficiary of the deal was Hospira CEO Michael Ball, who cashed out shares worth $127.1 million, and walked away with $91.1 million after costs to exercise the shares.
While 57 year-old Ball had only held the CEO position for just over four years, he was admittedly thrown in at the deep end at Hospira amidst FDA warnings over contamination at company plants and product discolouration: issues which saw the company’s share price tumble by around 50%.
However, with the aid of Ball’s strategy, the company was able to revive its fortunes to the point where it was considered a prudent acquisition for Pfizer, which said in a statement that it now considers itself the leader in the sterile injectables market- which is expected to be worth $70 billion by 2020- with “a robust portfolio of both generic and branded products.”
The acquisition means Pfizer now owns two of the largest sterile injectable manufacturing facilities in the world.
Pfizer also welcomed the expansion of its biosimilars business, and said the GEP unit would benefit from its “best-in-class capabilities in monoclonal antibody development and manufacturing.”
Additionally, Pfizer expects the transaction to deliver $800 million in annual cost synergies by 2018.
Ian Read, chairman and chief executive at Pfizer, comments: “We are pleased that Hospira, the world’s leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, is now part of Pfizer.
“We want to welcome our new Hospira colleagues to Pfizer. We are excited to add their talents and proud of the shared commitment of all Pfizer colleagues to serving patients worldwide. We believe that through this transaction, we’ve created value for our shareholders by delivering incremental revenue and expected EPS growth in the near-term by strengthening our GEP business and positioning it for future growth.”
John Young, group president, Global Established Pharmaceutical business, says: “Pfizer and Hospira are now one unified team providing patients with access to one of the broadest and most diverse portfolios of difficult-to-manufacture, life-saving sterile injectable products in the industry. Together, we are also a leading global biosimilars company with a robust pipeline, best-in-class development capabilities and extensive real-world commercialisation experience. We can also deliver novel capabilities through our medication management systems business.
“By increasing the number and availability of high-quality generic injectable drugs and biosimilars that we offer our customers, we are strengthening our commitment to improving the health and quality of life of patients around the world with high quality medicines across key therapeutic areas.”
Joel Levy
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