Facing the loss of patent protection for a handful of blockbuster drugs, Pfizer has decided to merge with Mylan. This will split Pfizer’s portfolio of no-longer-protected drugs off with Mylan’s generic and brand-name drugs into a new pharmaceutical company. In case you were not aware, Pfizer is the company that makes Lipitor, Viagra, Xanax, and Zoloft.; Mylan is the maker of EpiPen (and an impressive list of generics).
After the merger, Pfizer executive Michael Goettler will become the CEO while current Mylan CEO Heather Bresch will leave. On that note, Mylan Board chairman Robert J. Coury said, “On behalf of Mylan’s board of directors, I extend my gratitude and respect for Heather Bresch’s years of extraordinary and passionate leadership at Mylan which helped to pave the way for today’s historic announcement regarding the combination of Mylan and Upjohn.”
Bresch, simply commenting that this is the right time, is officially calling this departure a retirement. After all, she has been with Mylan for 27 years.
Commenting on the Mylan merger, Pfizer CEO Dr. Albert Bourla expresses, “We are creating a new champion for global health—one poised to bring world-class medicines to patients across a wide range of therapeutic areas.”
Looking ahead, though, the new company will certainly have to be rebranded; but while we don’t yet have any more information on this plan, we do know that they will global centers in Shanghai, India, and Pittsburgh. There is also not yet word how the new brand will affect Mylan’s large Morgantown plant.
With that, Pfizer shareholders can expect to own 57 percent of the newly-combined company. Obviously, that means Mylan shareholders will retain 43 percent. On news of the merger, Mylan shares jumped 20 percent, to $22.10 per share. Pfizer, fittingly, took a dip of about 2 percent, to $42.34. Of course, it should also be noted that Mylan’s stock was down 76 percent from its peak in 2015; so the move seems to have pleased investors.
But while shareholders may not necessarily share excitement over the deal, analysts expect the combined company should draw more than $20 billion in annual sales. Mylan very recently reported sales of $11.4 billion (in 2018), but Pfizer has not revealed its full-year numbers for its China-based unit—called Upjohn—so we only have data on more than $3 billion in sales. Pfizer has revealed, though, that 2018 revenue was $53.6 billion.