Pfizer announced Friday it had reached a deal to sell the bulk of its medicines to the Japanese drugmaker Takeda Pharmaceutical for $63 billion. The companies expect the deal to close by the first quarter of 2019.
Pfizer, the world’s largest drugmaker, will continue to produce and sell several of its most successful products, including Viagra, Lyrica and Advil. Meanwhile, the company is agreeing to sell off blockbuster medications like Lyrica and Prevnar, one of the most widely used vaccines in the world. The company believes the sale will allow it to focus on its next-generation treatments, which include blood-thinning drug Eliquis and rheumatoid arthritis drug Xeljanz. In an interview with CNBC Friday, Pfizer CEO Ian Read said the decision was driven by the need to focus on its future growth.
“The vast majority of Pfizer’s medicines will now belong to Takeda and…the entire company’s future will become one focused on new medicines that are relevant to the patient, in the right therapeutic areas, with the right commercial excellence, and with the best commercial channels and resources,” he said.
The sale of one of Pfizer’s biggest consumer health businesses is one of the latest moves in the drug industry’s massive consolidation. The blockbuster pharmaceuticals industry has been in a period of rapid consolidation in recent years, as companies like Merck and Eli Lilly have found it profitable to buy up smaller rivals instead of trying to build their own companies from scratch. The theme has been played out across the entire health care sector, a top investor conference earlier this year found. One pharmaceutical industry representative told the crowd there was “no reason anymore” to build a company from scratch. In fact, they said, large drugmakers are already showing interest in buying up all of their smaller competitors. It’s a trend that has been noticed by U.S. antitrust regulators.
The Wall Street Journal reported on Friday that the Department of Justice has sent letters to CVS Health and Aetna, asking for more information related to CVS’s pending $69 billion buyout of Aetna, a massive deal that would become the biggest merger of the year, but it’s likely to raise antitrust concerns.
Read will be staying at Pfizer and will become chairman of the board, and other senior executives will be staying with the new company. Pfizer shareholders will receive a special $10.00-per-share special dividend as a result of the deal.
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