Pfizer Considers Sale of Hospital Drugs Unit
Pfizer, the pharmaceutical giant, is reportedly considering the sale of its hospital drugs unit as part of its strategy to divest non-core assets. This move comes in the wake of pressure from activist investor Starboard Value. The unit, now known as Pfizer Hospital, was established following Pfizer’s acquisition of Hospira for approximately $17 billion in 2015.
Goldman Sachs has been hired by Pfizer to assess potential interest from buyers, including private equity firms and other pharmaceutical companies. The Pfizer Hospital unit focuses on antibiotics and other drugs administered as sterile infusions or injectables in hospitals and clinics.
The business, valued at potentially billions of dollars, currently generates close to $500 million in earnings before interest, taxes, depreciation, and amortization. However, there is no guarantee that a deal will be reached, and Pfizer may ultimately decide to retain the division.
The decision to explore the sale of the hospital drugs unit is part of Pfizer’s broader efforts to reduce its long-term debt, which stood at $61.5 billion at the end of 2023. In recent months, Pfizer has been selling off non-core businesses and ownership stakes in other companies to address its debt obligations.
The potential sale of the hospital drugs unit follows Pfizer’s acquisition of cancer drugmaker Seagen for $43 billion last year, marking one of its largest deals to date. Despite these strategic moves, Pfizer’s shares have seen a 7% decline this year, lagging behind the S&P 500 index, which has seen a nearly 26% increase during the same period.
During a recent post-earnings conference call, Pfizer’s Chief Financial Officer, Dave Denton, noted that the company had already paid down $4.4 billion in debt this year and intends to continue evaluating non-core assets that could be divested to further reduce its debt load.
As Pfizer navigates these changes and responds to investor pressures, the pharmaceutical industry will be watching closely to see how the company’s strategic shift impacts its long-term growth and profitability.
Stay tuned to Extreme Investor Network for the latest updates on Pfizer’s potential sale of its hospital drugs unit and other key developments in the pharmaceutical sector.