Pfizer Wraps Up Hospira Acquisition

New York, N.Y.-based pharmaceutical giant Pfizer Inc. has completed its acquisition of Lake Forest, Ill.-headquartered Hospira Inc. The $17 billion deal ($15.2 billion, not including debt) originally was announced on Feb. 5. Pfizer funded the acquisition with cash and debt, paying $90 a share to Hospira’s shareholders. Shares of Hospira’s stock ceased trading on the New York Stock Exchange on Sept. 3.

The Hospira business will be integrated within Pfizer’s Global Established Products (GEP) group.

“We are pleased that Hospira, the world’s leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, is now part of Pfizer. We want to welcome our new Hospira colleagues to Pfizer. We are excited to add their talents and proud of the shared commitment of all Pfizer colleagues to serving patients worldwide,” said Ian Read, chairman and CEO, Pfizer. “We believe that through this transaction, we’ve created value for our shareholders by delivering incremental revenue and expected EPS (earnings per share) growth in the near term by strengthening our GEP business and positioning it for future growth.”

According to Pfizer, its GEP business has a leadership position in the “large and growing” sterile injectables category, with a “robust portfolio” of generic and branded products.

The global market for generic sterile injectables is estimated to be $70 billion in 2020.

In addition, GEP has advanced its biosimilars business with a broadened portfolio of marketed products and pipeline assets, which will benefit from Pfizer’s capabilities in monoclonal antibody development and manufacturing. The global market for biosimilars is estimated to be approximately $20 billion in 2020.

“Pfizer and Hospira are now one unified team providing patients with access to one of the broadest and most diverse portfolios of difficult-to-manufacture, life-saving sterile injectable products in the industry. Together, we are also a leading global biosimilars company with a robust pipeline, best-in-class development capabilities and extensive real-world commercialization experience. We can also deliver novel capabilities through our medication management systems business,” said John Young, group president, Global Established Pharmaceutical business. “By increasing the number and availability of high-quality generic injectable drugs and biosimilars that we offer our customers, we are strengthening our commitment to improving the health and quality of life of patients around the world with high quality medicines across key therapeutic areas.”

Pfizer continues to expect the transaction to be immediately accretive to adjusted diluted EPS upon closing, and accretive by 10-12 cents per share in the first full year after the close, with additional accretion anticipated after that. In addition, Pfizer expects the transaction will deliver $800 million in annual cost synergies by 2018. Pfizer plans to update its 2015 financial guidance in the coming weeks to incorporate Hospira. The guidance will reflect the anticipated contribution from Hospira operations from the time of the completion of the Hospira merger to Pfizer’s fiscal year end, which is Nov. 30 for Pfizer’s international fiscal year and Dec. 31 for Pfizer’s U.S. fiscal year.