GlobalData analyst views implications of Pfizer’s acquisition of Hospira

Just days after gaining US Food and Drug Administration breakthrough approval for Ibrance (palbociclib) in breast cancer, US pharma giant Pfizer (NYSE: PFE) entered into an agreement to purchase generic drug maker Hospira (NYSE: HSP) for $90 per share in cash, or around $17 billion, representing about a 40% premium above Hospira’s stock price (The Pharma Letter February 5), noted GlobalData health care industry analyst Adam Dion.

The deal comes a number of months after Pfizer’s failed attempt to acquire AstraZeneca, a move that signaled the company was trying to stem its losses from the patent cliff through inorganic growth means. The purchase of Hospira is expected to be immediately accretive to Pfizer’s earnings, adding nearly $4 billion in sales to Pfizer’s Global Established Pharmaceutical (GEP) segment sales of almost $25 billion, Mr Dion recalled. Hospira’s top-line has been relatively flat over the past six years, increasing by a compound annual growth rate (CAGR) of only about 2%. However, the company’s Specialty Injectable Products business, of primary importance to Pfizer, continues to perform well, he added.

Hospira’s biosimilar activities are of key importance