Loads of pills

"Landep News" 

Loads of pills

The US pharmaceutical group, Pfizer has determined that it would be in its best interest to shed its nutrition and animal health departments as part of its plan to better manage its business.

This decision comes after Pfizer announced at the beginning of the year that it has decided to review its business especially because of the tough moments the economy had to face recently, leaving the investors having to settle for lower revenues. The decision of giving up two of its activities was taken after the company found out that a profit of only $5.5 billion was obtained from both businesses. That seemed to be a small “slice” of the total $68 billions that Pfizer registered in sales and determined the executives to act accordingly.

The company managed to hold on to its products division which registered revenues of $10 billions in 2010. The explanation given by Pfizer’s officials when they announced that this division will be maintained was that the generics and the off-patent medicines are the fast developing niches of the pharmaceuticals industry. Another business that will still be part of Pfizer’s future is the consumer healthcare activity which had revenues of only $2.7 billions last year. The company thinks that the value of these two businesses will be easily maximized in the future, especially if these businesses will be managed outside the firm.

The consequences of the decision to sell two units were immediately felt on the stock market. A drop of 2.14 percent was registered this afternoon for the Pfizer shares. As a result, the price of a share was established at $20.34.

The move made by this US pharmaceutical company is following the trend of many other pharmaceutical companies which are adjusting their activities to compensate for their falling revenues. The Pfizer Company has hired JPMorgan to analyze the market possibilities available for the animal health business while Centerview and Morgan Stanley will take care of the nutrition business. Pfizer is expecting to finish the transactions in 24 months.

Pfizer’s nutrition business consists in toddler and infant products. That’s why bankers think that companies like Danone or Nestle will be interested in purchasing the business. The second business of Pfizer is focused on producing vaccines which prevent and treat different diseases of pets. The animal health business could be considered interesting by Eli Lilly which already announced its interest in acquiring assets in this sector.

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