Drugmaker Pfizer says business won’t split
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.
Pfizer for several years has been under growing pressure from analysts and investors to break up the company.