Pfizer to split generic, branded drugs units

Wednesday, 31 July 2013 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Pfizer Inc, in what could be the prelude to spinning off its generics drug business, said it plans to separate its commercial operations into two units, mainly for patent-protected brands and a third for generics.

Pfizer, the largest U.S. drugmaker, said on Monday the changes will take effect by January in countries that do not require a consultation with labor unions. Earlier this year, Pfizer said it would begin examining the finances of its patent-protected unit, which it calls its “innovative” business, and its generic operation, called its “value” business, to decide whether to spin off the generics operation. It said the review would take three years. Pfizer generics, which have far lower profit margins than patent-protected drugs, had global sales last year of $10.2 billion. The business represents 17% of total sales and overwhelmingly comes from overseas. One “innovative” business will include drugs expected to have patent protection beyond 2015 and focus on treatment areas such as inflammation, immunology, cardiovascular and metabolic, neuroscience and pain, rare diseases and women’s and men’s health. The other “innovative” business will include vaccines, cancer and consumer healthcare, to be headed by Amy Schulman. First-quarter sales of Pfizer generics fell 16% to $2.35 billion, dragging down overall company results.