By Anirban Sen
NEW YORK (Reuters) – Pfizer (PFE) is exploring the sale of its hospital drugs unit, as the drugmaker, which has been under pressure from activist investor Starboard Value, looks to shed non-core assets, according to three people familiar with the business. affair.
The unit, now called Pfizer Hospital, was formed after Pfizer bought Hospira for about $17 billion in 2015. The pharmaceutical giant hired Goldman Sachs to gauge initial interest from potential buyers, which include private equity firms and other pharmaceutical companies, the sources said. requesting anonymity as discussions are confidential.
After acquiring Hospira, Pfizer combined the biosimilars business with its own unit that made low-cost near-copies of expensive biotech drugs. In 2017, Pfizer sold the hospital infusion systems business it had acquired through acquisition.
The Pfizer Hospital unit is now a subsidiary focused primarily on antibiotics and other drugs administered as sterile infusions or injectables in hospitals and clinics.
The business, which could be worth a few billion dollars, currently generates nearly $500 million in earnings before interest, taxes, depreciation and amortization, the sources said, cautioning that a deal is not guaranteed and that Pfizer could opt for maintain the division.
Pfizer and Goldman declined to comment.
New York-based Pfizer, which had long-term debt of $61.5 billion at the end of 2023, has divested non-core businesses and stakes in companies to reduce its debt. In October, Pfizer sold a stake worth about $3.26 billion in British consumer healthcare group Haleon.
The moves come as Pfizer, led by Chief Executive Albert Bourla, faces pressure from Starboard, which has criticized management for spending too much on big acquisitions and not producing profitable new drugs from those deals or its internal research and development.
Last year, it acquired cancer drug maker Seagen for $43 billion in what was one of the largest deals in the company’s history.
Pfizer shares have fallen about 7% this year, underperforming the S&P 500, which has risen nearly 26% over the same period.
In its most recent post-earnings conference call, Pfizer Chief Financial Officer Dave Denton said the company has paid down about $4.4 billion of debt this year and would continue to evaluate non-core assets that could be divested.
(Reporting by Anirban Sen in New York; Additional reporting by Michael Erman; Editing by Caroline Humer and Nick Zieminski)