The Chief Executive of Pfizer (PFE.N) said that it is more likely to spin off its animal health unit than sell it. It will reflect the expected investor’s appeal of such a large standalone business.
No final decision has been taken but Ian Read told that there were clear attractions for shareholders in a tax-free spin-off of the operation, which is the biggest in the industry in the global market.”I would probably handicap animal health as more likely to be a spin than a sale," the CEO of the world's biggest drug maker said in an interview in London.
Ian Read, who took over as Pfizer’s Nucleus in December 2010 at a challenging time, is shrinking the group by divesting non-core businesses, including veterinary medicine and infant nutrition.
The company is losing billions of dollars of revenue from cholesterol blockbuster “Lipitor”, which is now off patent in many markets, although he hopes to carve out a new future for the medicine as an over-the-counter product. The nutrition business is widely expected to be sold outright for around $10 billion.
Bidders were asked to submit offers last week, with Nestle SA (NESN.VX) and a partnership of Danone SA and Mead Johnson Nutrition Co (MJN.N) seen as front-runners.
"It's the largest animal health business and it would stand alone as an individual company. There's huge interest among investors to own a company like that,"………"with nutritional there are lots of companies that are already in the nutritional business and have it as a major development area." he stated.
The plans to dispose of both units, which Pfizer has said would be completed between July 2012 and July 2013, follow a far-reaching review and a decision to focus on core pharmaceutical operations. The outcome of that review was to concentrate on five core areas of drug research, while maintaining a strong presence in generic and OTC medicines.
Pfizer hoped to introduce a non-prescription form of “Lipitor”,but this would not happen in a short span. The company is now discussing the issue with the U.S. Food and Drug Administration, which is seeking public comment on the idea of making more medicines available OTC.
"We would like to sell it over the counter. We're in discussions and development with the FDA on that," Read stated, adding a recent change to remove the need for liver monitoring was positive for the drug class.