Drug­maker Pfizer says busi­ness won’t split

Baltimore Sun - - BUSINESS - By Linda A. John­son

TREN­TON, N.J. — Drug gi­ant Pfizer says it won’t split into two pub­licly traded com­pa­nies, de­spite pres­sure from in­vestors frus­trated by its lag­ging stock price, end­ing years of Wall Street spec­u­la­tion over its strat­egy and fu­ture.

The big­gest U.S.-based drug­maker said Mon­day it be­lieves it is best po­si­tioned to max­i­mize share­holder value in its cur­rent form, but it re­serves the right to split in the fu­ture if the sit­u­a­tion changes.

For sev­eral years, the maker of Vi­a­gra and the pain treat­ment Lyrica has been un­der grow­ing pres­sure from an­a­lysts and in­vestors who ar­gued that by split­ting up the re­sult­ing two com­pa­nies might grow faster than one.

As a re­sult, Pfizer has been re­port­ing de­tailed fi­nan­cial re­sults for each of its busi­ness seg­ments, in­for­ma­tion that would be re­quired by reg­u­la­tors for a split. Ear­lier this year, Pfizer promised a de­ci­sion by the end of the year, but then it re­or­ga­nized and re­named those seg­ments — a sign a breakup was less likely.

Chances of the breakup be­gan to fade even more over the sum­mer, due in part to in­creas­ing sales for key new drugs from Pfizer and ris­ing prospects for its drugs un­der de­vel­op­ment.

Pfizer CEO Ian Read told an­a­lysts last month that the prospect of a split was not a “make- or-break de­ci­sion” for the com­pany. The com­pany re­cently said it had spent $600 mil­lion on prepa­ra­tions for such a split.

Pfizer said Mon­day that a split would not help the com­pet­i­tive po­si­tion­ing of its busi­nesses and that such a move would cre­ate dis­rup­tions and in­creased costs.

The drug­maker’s most likely path for­ward in­volves hunt­ing for more ac­qui­si­tion tar­gets, ac­cord­ing to Bern­stein an­a­lyst Dr. Tim An­der­son, who had pressed Pfizer re­peat­edly to break up.

MARK LENNI­HAN/AP 2015

Pfizer for sev­eral years has been un­der grow­ing pres­sure from an­a­lysts and in­vestors to break up the com­pany.

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