US drug giant Pfizer has announced plans to sell off its Capsugel unit to an affiliate of investment firm Kohlberg Kravis Roberts (KKR) for nearly $2.4 billion in cash.
It has been known for a while that the drugmaker was thinking of divesting the division under plans to narrow its business focus.
As a result of its decision to go ahead with the sale, Pfizer has lowered its sales expectations for the year, given that Capsugel, "a world leader in hard capsules and an innovator in drug-delivery systems", pulled in revenues of around $750 million last year.
Previous 2011 reported revenue guidance is now expected to fall in the range $65.2 - $67.2 billion instead of $66.0 - $68.0 billion, while the 2012 prediction has been reduced to $62.2 - $64.7 billion from $63.0 – $65.5 billion, though all other aspects of its 2011 and 2012 targets remain the same.
Pfizer said the deal would allow it to make further share repurchases this year, in addition to the previously anticipated repurchase of $5 billion, and that it would co continue to search for other opportunities to maximise its value.
Explaining the firm's interest in the deal, Henry Kravis and George Roberts, co-founders, chairmen and chief executive of KKR, highlighted Capsugel's "excellent portfolio and outstanding reputation for providing high-quality, innovative drug-delivery solutions", and said they shared the group's "enthusiasm for its future potential to grow, develop and continue to deliver an unmatched quality of products".
The transaction is expected to close sometime during the third quarter, assuming all customary closing conditions are satisfied.
Tafamidis file rejected in US
Meanwhile, the drug giant said US regulators have refused to file its marketing application for tafamidis, a novel, investigational pill for patients with Transthyretin Familial Amyloid Polyneuropathy (TTR-FAP).
The condition is a progressively fatal genetic neurodegenerative disease, for which liver transplant is the only treatment option currently available. Tadamidis, which offers hope of a new means of treating the condition, was acquired by Pfizer via its purchase of FoldRx Pharmaceuticals last year.
Tafamidis has been filed in Europe and holds orphan drug status on both sides of the pond, but the US Food and Drug Administration said it needs more data before it can conduct a full review of the marketing application.
On the plus side, Pfizer believes that it can provide the necessary additional information without the need to conduct extra time-consuming and costly clinical trials, and said it is working closely with regulators to resubmit the application as soon as possible, which will no doubt come as a relief to investors.