UPDATE 2-Pfizer to buy Hospira for $15 bln to boost copycat drug business – Reuters
(Adds generic drug business)
Feb 5 (Reuters) – Drugmaker Pfizer Inc said it would
buy Hospira Inc for about $15 billion to boost its
portfolio of generic injectible drugs and biosimilars, or copies
of biotech drugs.
Pfizer offered $90 per share in cash, a 39 percent premium
to Hospira’s closing stock price on Wednesday. Hospira soared 35
percent to near $88 before the bell Thursday, while Pfizer was
up 3.6 percent.
For Pfizer, the deal is the largest since its failed
takeover attempt of AstraZeneca Plc , which
rebuffed its $118 billion approach last year but has remained a
subject of takeover speculation.
Pfizer said the latest move showed its commitment to deploy
capital and deliver revenue and earnings per share growth in the
near term. The deal is expected to add 10 cents to 12 cents per
share to Pfizer’s earnings in the first full year after the deal
closes, it said.
The move will increase Pfizer’s business in established
drugs, or those no longer covered by patents. Hospira makes
generic versions of injectible drugs that are widely used in
hospitals and sells several biosimilars overseas. It has other
biosimilars in development.
Drugmakers are racing to develop biosimilars, which
typically cost 20 percent to 30 percent less than the original,
as big-ticket patents on biotech drugs expire and cash-strapped
healthcare systems cut costs.
There are no approved biosimilars in the United States yet.
A U.S. regulatory panel endorsed the first one in January from
Novartis AG , a copy of Amgen Inc’s
blockbuster cancer drug Neuopogen, but it has not yet been
Biosimilars are expected to account for about one-quarter of
the $100 billion in sales from off-patent biological drugs by
the end of the decade, according to a study compiled by Thomson
Hospira is seeking approval from the U.S. Food and Drug
Administration to market a copy of Johnson & Johnson’s
blockbuster arthritis treatment Remicade.
The total enterprise value of the deal with Pfizer is about
$17 billion, including debt, the companies said.
Hospira had $1.75 billion in outstanding long-term debt as
of Sept. 30, according to a regulatory filing.
Pfizer’s financial advisers are Guggenheim Securities, J.P.
Morgan and Lazard, with Ropes & Gray LLP serving as legal
adviser and Clifford Chance LLP advising on international
Morgan Stanley is Hospira’s financial adviser, while
Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates served as
its legal adviser.
The deal requires regulatory and shareholder approvals.
(Reporting by Vidya L Nathan and Natalie Grover in Bengaluru
and Caroline Humer in New York; Editing by Don Sebastian, Savio
D’Souza and Jeffrey Benkoe)