Pfizer said today that it is now officially looking to sell or spin off its animal health and nutritional units as part of CEO Ian Read's strategy to focus on its core pharmaceutical business. It remains to be seen whether this move will help Pfizer transform the core into more of a "growth business" as is the stated desire.
Analysts have questioned whether the core business is capable of this type of growth -- with some opining that Pfizer's R&D cuts have hampered any ability it may have had to generate growth spurring new products. Pfizer does seem to be hedging its bets by hanging on to its Consumer's Health business which had previously also been slated to go -- saying it has " a strong connection" to the company's core biopharmaceutical businesses and strong connections in emerging markets.
Analysts also say the Pfizer could spin off Animal Health (projected CAGR 7.2%) and Nutrionals (projected CAGR 8%) now and sell at a later date. BMS followed this strategy with its Mead Johnson business and realized above market returns. See Pharmalot and WSJ Health blog.
Posted by Bruce Lehr July 7th 2011.