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Exclusive-Pfizer is exploring sales of its hospital drug unit, sources said

Written by Anirban Sen

NEW YORK (Reuters) – Pfizer ( PFE ) is looking at a sale of its hospital drug unit, as the drugmaker, under pressure from activist investor Starboard Value, looks to poach a non-core asset, according to three people familiar with the matter. matter.

The unit, now called Pfizer Hospital, was created after Pfizer bought Hospira for about $17 billion in 2015. The pharma giant has hired Goldman Sachs to assess interest from potential buyers, including private equity firms and other pharmaceutical companies, the sources said. requesting anonymity as the discussions are confidential.

After its acquisition of Hospira, Pfizer combined the biosimilars business with its unit that builds low-cost copies of expensive biotech drugs. In 2017, Pfizer sold the hospital injection system business it acquired through a takeover.

The Pfizer Hospital division is now a division specializing in antibiotics and other drugs that are delivered as lethal injections or injections to hospitals and clinics.

The business, which could be worth several billion dollars, currently generates about $500 million in earnings before interest, taxes, depreciation and amortization, the sources said, warning that the deal is not guaranteed and Pfizer may choose to keep the division.

Pfizer and Goldman declined to comment.

New York-based Pfizer, which held $61.5 billion in long-term debt at the end of 2023, has been shedding non-core businesses and ownership in companies to reduce its debt pile. In October, Pfizer sold a $3.26 billion stake in British consumer health group Haleon.

The moves come at a time when Pfizer, led by Chief Executive Albert Bourla, is facing pressure from Starboard, which has criticized management for overspending on major acquisitions and failing to produce profitable new drugs from those deals or from its internal research and development.

Last year, it acquired cancer drug maker Seagen for $43 billion in what was one of the company's largest deals.

Shares of Pfizer are down about 7% this year, underperforming the S&P 500, which is up about 26% over the same period.

In its latest conference call, Pfizer CFO Dave Denton said the company has paid off about $4.4 billion in debt this year and will 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)


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