Pfizer plans to combine its Upjohn off-patent branded and generic established medicines business with Mylan into a new company, the drugmakers announced Monday, confirming a recent report on the matter. Under the all-stock transaction, which has been unanimously approved by the boards of both companies, Pfizer shareholders would own 57% of the combined new drugmaker, and Mylan shareholders would own 43%.
Commenting on the agreement, Pfizer CEO Albert Bourla said “for Pfizer, this transaction represents our sharpened focus on innovative medicines,” adding “at the same time, we’ll maintain the financial flexibility to advance our strong pipeline, invest for growth and continue to return capital to our shareholders.” Meanwhile, Mylan chairman Robert Coury said “I have spent a lot of time speaking with and listening attentively to our shareholders. Today’s announcement builds upon many of those meaningful conversations and represents a transformative move for Mylan.”
The combined company, which will be renamed and rebranded at close, is expected to have revenues next year of between $19 billion and $20 billion, with adjusted earnings in the range of $7.5 billion to $8 billion. Pfizer and Mylan noted that Coury will serve as chairman of the new drugmaker, while Michael Goettler, who is currently president of Upjohn, will serve as CEO.
However, Mylan noted that current CEO Heather Bresch will retire from the drugmaker upon the close of the transaction, which is expected in mid-2020. “Nearly eight years after becoming CEO, I’m proud to say that this milestone represents the culmination of the goals I set for myself when I challenged…to set new standards in healthcare,” Bresch commented.
Pfizer indicated that Upjohn will issue $12 billion of debt at or prior to separation, with gross debt proceeds retained by Pfizer.