Pfizer rises on talk it will sell-off huge chunk of non-core businesses

US drugs behemoth Pfizer (NYSE: PFE) saw its shares rise nearly 1.8%  to $19.81 yesterday - hitting a new 52-week high - on speculation that the world’s largest pharmaceutical company by sales was set to shed as much as nearly half of its turnover in the form of spin-offs, split-offs or outright divestments.

This was largely the result of comments by Sanford C Bernstein analyst Tim Anderson, quoted by several leading newspapers. The analyst cited a meeting with Pfizer chief executive Ian Read, who last December took over the helm of the company, which he says may be remaking itself as a pharmaceutical “pure-play” - such as Eli Lilly, Bristol-Myers Squibb and AstraZeneca -focused on developing new drugs. Pfizer would split off four non- pharmaceutical businesses as well as other units to reduce annual revenue to $35 billion to $40 billion from $67 billion, Mr Anderson said in a research report on Monday.

Last year, still under the leadership of Jeff Kindler, Pfizer announced that it was reviewing options including a divestiture of Capsugel, which manufactures drug capsules and is a distinct business within the overall operation, generating sales of $740 million in 2009 (The Pharma Letter October 7, 2010). Mr Read “appears to want to narrow both the focus and size of the future Pfizer, presumably with the goal of achieving sustainable growth off a new base,” Mr Anderson opined.