Pfizer Splits Up Operations Ahead of Possible BreakupDrew Armstrong
Pfizer Inc., the world’s biggest drugmaker, said it will split up its three major internal businesses and shuffle the management that leads them, part of the company’s preparation for a further break up.
Pfizer in 2012 sold its infant nutrition business to Nestle SA for $11.9 billion and this year spun off its $4.3 billion-a-year animal-health unit. The latest reorganization divides what’s left of the company into two brand-name drug units and a generics business, the company said in a statement today.
Chief Executive Officer Ian Read is positioning the New York-based drugmaker for a potential breakup that may leave just two units intact: A brand-name drug business with higher margins and growth, and a cash-generating “value” business composed of the company’s off-patent products. Such a split could happen in two to three years, Read has said.
“This represents the next steps in Pfizer’s journey to further revitalize our innovative core,” Read said in the statement. “Our new commercial operating model will provide each business with an enhanced ability to respond to market dynamics, greater visibility and focus, and distinctive capabilities.”
Pfizer shares rose less than 1 percent to $29.54 at 4 p.m. New York time, after jumping 24 percent over the last 12 months. The company reports second-quarter earnings tomorrow.
The changes will give investors a detailed look at the financial results of each segment to help them assess a split. Geno Germano, who previously ran Pfizer’s specialty and oncology units, will head one, the company said. Amy Schulman, the company’s top lawyer who also ran the drugmaker’s consumer unit, will head another. John Young, who ran Pfizer’s primary care business, will head the generics business.
Germano’s business unit will have drugs in inflammation and immunology, cardiovascular disease, rare disease, men’s and women’s health, pain and neurosciences, and rare diseases. That would include new potential blockbusters Eliquis, a blood thinner, and Xeljanz, a rheumatoid arthritis drug.
Schulman’s business will include vaccines and cancer drugs, as well as consumer products. Palbociclib, an experimental therapy being studied in breast and other cancers, has the potential to be one of Pfizer’s biggest future products. It would also include Prevnar, a pneumococcal disease vaccine that was the company’s fourth-biggest product in 2012.