Pfizer/Mylan Merger Creates Generic Drugs Giant

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Pfizer (NYSE:PFE) (New York, New York) and Mylan (NASDAQ:MYL) (Canonsburg, Pennsylvania) are to merge their off-patent drugs businesses into a new company that will have estimated revenues of $19 billion to $20 billion to become the world's largest generic drugmaker.

Mylan will be combined with Upjohn, Pfizer's off-patent branded and generic established medicines business, which includes former blockbuster drugs Lipitor, Viagra and Celebrex. Pfizer shareholders will control 57% of the new company and Mylan shareholders 43%, while Pfizer is expected to receive close to $10 billion-$12 billion in proceeds from the sale of debt. This is the latest in a long run of big-pharma mergers and product purchases as companies seek new breakthrough drugs, divest unprofitable assets and protect themselves against falling profits as their biggest products lose patent protection.

This year saw AbbVie snap up Botox king Allergan in a $63 billion deal, Bristol-Myers Squibb Company (NYSE:BMY) (BMS) agreed to buy Celgene Corporation (NASDAQ:CELG) in a merger deal worth about $74 billion, and in May, Swiss pharmaceutical company Novartis International AG (NYSE:NVS) (Basel, Switzerland) paid $5.3 billion to purchase a number of eye-disease medicines from Takeda Pharmaceutical (Osaka, Japan). For additional information, see May 27, 2018, article - Novartis Snaps Up Xiidra Eye Drops in $5.3 Billion Deal.

The deal brings some financial stability to Mylan, where share values have crashed in recent years as well access to new markets via Upjohn's strong presence in emerging markets, especially China. Mylan, with a workforce of 35,00 people, has a portfolio of more than 7,500 marketed products including antiretroviral therapies used by more than 40% of people being treated for HIV/AIDS globally. Upjohn offers 20 of the industry's leading branded products and has 11,500 employees in commercial and manufacturing roles.

Dr. Albert Bourla, Pfizer chief executive officer, stated: "We are creating a new champion for global health. By bringing Mylan's growth assets to Upjohn's growth markets, we will create a financially strong company with true global reach. For Pfizer, this transaction represents our sharpened focus on innovative medicines and is a testament to our purpose -- breakthroughs that change patients' lives."

Robert J. Coury, Mylan chairman, said, "Over the past year and a half, I have spent a lot of time speaking with and listening attentively to our shareholders. The new company, which combines the unique assets of Mylan with the iconic brands of Pfizer's Upjohn business, will not only accelerate our mission to serve the world's changing health needs, but also further unlock the true value of our platform while delivering attractive returns to shareholders for many years to come. Importantly, the combined organization will have a presence across nearly every continent and major market, establishing a new leadership position in Asia, and offering products capable of treating all major therapeutic areas."

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