Pfizer to buy Hospira in US$17B deal

• Pfizer Inc. agreed to buy Hospira Inc., the biggest provider of injectable drugs, in a transaction valued at about US$17 billion, beefing up its roster of generic medicine ahead of a potential spinoff.

Pfizer will pay US$90 a share in cash, the drugmaker said Thursday in a statement.

Buying Hospira will add a broad range of generic sterile injectable medicines to Pfizer’s portfolio and bolster the company’s strategy to offer more biosimilar drugs. That could help the biggest U.S. drugmaker head to- ward a company breakup, a shift in strategy after a failed US$120-billion bid for AstraZeneca Plc last year.

“It’s all about fattening up the established pharma business,” said Sam Fazeli, an analyst at Bloomberg Intelligence in London. “This way they can get the established products into a much larger organization and potentially spin that off.”

Pfizer has about US$33 billion in cash and equivalents, leaving it with room to pursue further deals.

The Hospira acquisition adds to Pfizer’s collection of biosimilars — imitations of expensive biologic drugs. Hospira and South Korean partner Celltrion Inc. developed a biosimilar copy of Johnson & Johnson’s Remicade, a US$7-billion arthritis therapy that was approved by European regulators in June 2013. Remicade is losing patent protection in several European markets this year.

Pfizer has been seeking its next blockbuster after a series of expiring patent. The company’s sales have been falling from a US$67.1-billion peak in 2010, the year after the drugmaker acquired Wyeth in a transaction valued at more than US$60 billion.

Pfizer “will benefit from a significantly enhanced product portfolio in growing markets,” Ian Read, the company’s chairman and chief executive officer, said in the statement.

The global market for generic sterile injectables is expected to reach US$70 billion in 2020, Pfizer said, while the market for biosimilars may be US$20 billion by that time.