Agencies
NEW YORK, February 6
Drugmaker Pfizer Inc on Thursday 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 per cent premium to Hospira’s closing stock price on Wednesday. Hospira soared 35 per cent to near $88 before the bell on Thursday, while Pfizer was up 3.6 per cent.
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 20-30 per cent 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 approved. 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 Reuters BioWorld.
Hospira is seeking approval from the U.S. Food and Drug Administration to market a copy of J&Jarthritis treatment Remicade.
