Pfizer Breakup Talk Stoked by Discount to Drug Stocks

Pfizer Inc.’s industry-leading profit margins and disposal of non-drug businesses still haven’t closed the valuation gap with rival drugmakers. No wonder its chief executive officer is contemplating a full breakup.

CEO Ian Read said last week that he may consider separating Pfizer’s branded medicines from its generic products businesses as part of his strategy to slim down the world’s largest drugmaker. Despite already divesting animal health and infant nutrition units from one of the most profitable pharmaceutical companies, Read still is faced with a stock that trades for a lower price relative to earnings than almost 80 percent of similar-sized peers, according to data compiled by Bloomberg.