The world’s largest drugmaker Pfizer plans to divest its off-patent drug business Upjohn and combine it with generic drugmaker Mylan, which will create the biggest specialty-generic drug company. The new entity is expected to generate revenue worth $20 billion. The deal is expected to be closed by mid-2020 and the new entity will also be named during the same period.
According to the deal, each Mylan share would be converted into one share of the new company, with Pfizer shareholders owning 57 percent of the new company and Mylan shareholders owning the remaining 43 percent.
The move will see high selling drugs such as Viagra, Lipitor and Mylan’s EpiPen all come under one umbrella. The recent developments are also a part of Pfizer’s plan to disintegrate into three parts- innovative medicines, lower margin off-patent drugs facing generic competition and consumer healthcare.
After the completion of the deal, Pfizer will be left with its more profitable innovative drugs such as cancer treatment drugIbrance and pneumonia vaccine Prevnar.
While Michael Goettler, president of Upjohn will serve as CEO of the new company, Mylan President Rajiv Malik will continue in the role of president. The new board will comprise of eight members appointed Mylan and three appointed by Pzifer. The board will also comprise of the executive chairman and the CEO.
The new company will be based in the US and incorporated in Delaware. According to media reports, around 3000 employees who work in Mylan’s Robert J. Coury Global Center in Southpointe and Mylan Pharmaceuticals’ plant in Morgantown will be part of the new entity.
Pfizer and GlaxoSmithKline earlier announced that they would combine their consumer health businesses.
According to media reports, Upjohn generated 22 percent of Pfizer’s total revenue in the drugmaker’s second quarter.