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Pfizer says no decisions yet on divestments

Daily News | September 15, 2011


Pfizer says no decisions yet on divestments

Pfizer insists it has made no decision yet on the fate of its non-core units, despite rumours that it has pulled back from a sale of the nutritionals division while it looks into the tax implications of the move.

The US drug giant said in July that it was considering the sale or spin-off of both the nutrition and animal health units to sharpen its focus on its pharmaceuticals business.

A Bloomberg report suggested that Pfizer had decided to delay plans to sell off the nutritionals unit to explore whether tax considerations would make a spin-out more preferable to an outright sale. However, the company's chief financial officer Frank D'Amelio said yesterday that no decisions had been taken and an announcement would be unlikely before 2012, with either a sale or spin-off not expected until the following year.

At the time of the initial announcement, analysts suggested that a tax-free spin-out would be the best option for the animal health business to avoid anti-trust issues, which was the strategy adopted by Bristol-Myers Squibb when it hived off Mead Johnson in 2009. Meanwhile, they said, a sale would be preferable for the nutritionals unit.

The nutrition unit, acquired through the purchase of Wyeth and specialising in baby food and formula, contributed $1.9 billion in sales in 2010. The animal health business brought in revenues of $3.6 billion last year through sales of products such as vaccines, medicines, diagnostics and genetic tests.

The company has already sold its capsules business Capsugel to a private equity firm for $2.38 billion.

Icagen tender drags on

Meanwhile, Pfizer's long-running battle to get shareholders in Icagen continues, with the drugmaker extending the deadline for the tender period from September 12 to September 19. At last count the multinational had amassed a little over 67% of Icagen's stock, giving it control but not outright ownership of the company.

Pfizer has been trying to buy around 8.3 million outstanding shares in Icagen, valuing the transaction at $56 million, but is facing resistance from some shareholders who believe the offer is too low. The deadline for the tender has already been extended twice before.

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