Pfizer (PFE.US) is considering selling its hospital drug business and has hired Goldman to help evaluate the asset.
1min read Pfizer (PFE.US) is considering selling its hospital drugs business, according to three people familiar with the matter, as the drug giant weighs divesting non-core assets under pressure from activist investor Starboard Value.
The business unit, now known as Pfizer Hospital, was created after Pfizer bought Hospira for about $17bn in 2015. The company has hired Goldman to help assess initial interest from potential buyers, including private equity firms and other drugmakers, the people said.
After the Hospira acquisition, Pfizer merged its biosimilars business with its own low-cost biosimilars production. In 2017, it sold the hospital intravenous systems business it acquired through the deal. Today, Pfizer Hospital is a subsidiary focused mainly on antibiotics and other drugs administered in sterile injections or infusions in hospitals and clinics.
The business generates annual Ebitda of about $500m, according to the people, who cautioned that a deal is not guaranteed and Pfizer may choose to retain the unit. Pfizer and Goldman declined to comment.
Pfizer, based in New York, had long-term debt of $61.5bn at the end of 2023. The company has reduced its debt in recent years through divestments of non-core businesses and share sales. For example, in October it sold its stake in Haleon, the UK consumer healthcare group, for about $3.26bn.
Pfizer is under pressure from Starboard, which has criticised management for spending too much on large acquisitions and failing to produce high-margin new drugs through those deals or internal research and development. The company last year bought Seagen, a cancer drugmaker, for $43bn, one of its largest deals ever.
Pfizer's shares have fallen about 7 per cent this year, lagging the 26 per cent rise in the S&P 500. During a recent earnings call, Dave Denton, the company's chief financial officer, said it had repaid about $4.4bn of debt this year and would continue to assess potential sales of non-core assets.
As of writing, Pfizer was up 0.19 per cent at $26.29.