Pfizer to combine drugs business with Mylan
Pfizer, one of the nation’s largest pharmaceutical companies, is merging its off-patent and generic drug business with Mylan, a global generic and specialty pharmaceutical company based in the Netherlands. The spinoff deal is expected to close mid-2020, pending shareholder and regulatory approvals.
News of the deal was originally reported by the Wall Street Journal before it was confirmed by Pfizer and Mylan July 29.
Pfizer’s off-patent drug business, Upjohn, and Mylan will combine to create a new global pharma company. The agreement is an all-stock, Reverse Morris Trust transaction, which Mylan shares being converted into equal shares of the new company. The deal has already been approved by the board of directors from both Mylan and Pfizer, and the new company will be renamed and rebranded once the transaction has been closed.
Pfizer shareholders would own 57% of the new company, while Mylan shareholders would own the remaining 43%. The company is expected to have revenue between $19 billion and $20 billion, with synergies of about $1 billion by 2023 and pro forma 2020 adjusted EBITDA between $7.5 billion and $8 billion. The company will also have $24.5 billion in total debt outstanding at closing, including $12 billion issued by Upjohn to Pfizer.
The merger brings together Mylan’s geographies and therapeutics areas, which include central nervous system and anesthesia, infections disease and cardiovascular. Upjohn includes brands such as Lipitor, Celebrex and Viagra.
“The new company, which combines the unique assets of Mylan with the iconic brands of Pfizer’s Upjohn business, will not only accelerate our mission to serve the world’s changing health needs, but also further unlock the true value of our platform while delivering attractive returns to shareholders for many years to come,” Robert Coury, Mylan chairman, said in a statement. “Importantly, the combined organization will have a presence across nearly every continent and major market, establishing a new leadership position in Asia, and offering products capable of treating all major therapeutic areas.”
Together, Mylan can expand its prescription medicines, over-the-counter products, biosimilars and complex generics to Upjohn’s markets.
“By bringing Mylan’s growth assets to Upjohn’s growth markets, we will create a financially strong company with true global reach,” Pfizer CEO Albert Bourla said in a statement.
Under terms of the deal, Coury will serve as executive chairman of the new company. Group president of Upjohn, Michael Goettler, will serve as CEO. Mylan President Rajiv Malik will serve as president, while Mylan CFO Ken Park plans to depart the company at closing, along with Mylan’s current CEO, Heather Bresch.
The new company will have a 13-member board, including the executive chairman and CEO, in addition to eight members from Mylan and three from Pfizer.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."