Pfizer expects the acquisition of the injectable drug and infusion technologies company to be immediately accretive to its earnings.
February to buy Hospira, which makes intravenous drugs and devices to deliver them, for $17 billion to bolster its roster of generic medicine.
In August, Pfizer followed up those solid second quarter results by announcing US regulators had cleared its Hospira buyout, effectively launching Pfizer to the forefront of the emerging market for generic alternatives to pricey biologic drugs.
Pfizer chairman Ian Reed said completion of the deal had strengthened the firm’s global established products business, citing Hospira’s medication management systems business as a big plus.
Neha Wadhwa, a spokeswoman for New York-based Pfizer, declined to comment beyond the filing.
Global sales of biosimilars are expected to reach $20 billion by 2020, according to Pfizer. The industry-leading medication management systems business, which is now part of GEP, is a complementary business that benefits patients and healthcare systems through improved accuracy and productivity in clinical care. After all, Pfizer is trading at just 13.5 times next year EPS forecasts and if currency headwinds abate, biosimilars demand takes off, and fast-growing drugs like Ibrance gain traction, then that price may be a bargain, especially since shares are paying a 3.48% forward dividend yield. Together, we are also a leading global biosimilars company with a robust pipeline, best-in-class development capabilities and extensive real-world commercialization experience. The acquisition is expect to add 10 cents to 12 cents a share to Pfizer’s earnings in the first full year after the close.
Hospira, Inc.is now a subsidiary of Pfizer Inc. Overall, the acquisition is expected to incrementally provide almost $800 million in cost synergies over the next decade. The combination of local Pfizer and Hospira entities may be pending in various jurisdictions and integration is subject to completion of various local legal and regulatory steps.