Pfizer has been mulling over the idea of turning into at least two Pfizers for a long time now, but they’re out with an announcement this morning that they’ve decided that their current structure is the one that will help them be the best Pfizer that they can be. That’s going to disappoint a lot of folks on Wall Street, because you can collect the heftiest investment bank fees when companies split up. Or merge, whatever, as long as they’re doing something instead of just sitting there running their flippin’ business.
So Pfizer’s flippin’ business will continue to contain both their Innovative Health and Essential Health divisions, as they’re calling them. Apparently, when they first started running the numbers on a split, it looked as if the two could be worth more apart, but over time, they say, that gap has closed, and now it’s more trouble than it’s worth to split up. That again runs counter to what appears to be the motto of the investment banking industry, that nothing’s more trouble than its worth so long as you do it with them, but I’m willing to bet that in a few years the breakup thesis will appear to make sense again. Every large company seems to go through these cycles. Buy something, you need help/you have too much cash, then break up, you’re too spread out/have too much hidden value.
As a side issue, looking through that Pfizer press release, I note that it says that since 2010, the company has received 20 new drug approvals. I sure couldn’t name them, so I worked back through some lists. Here’s what I have:
2016: Troxyca (oxycodone/naltrexone)
2014: Trumenba (meningococcal vaccine),
2013: Duavee (estrogens/bazedoxifene, acquired with Wyeth)
2012: Equilis (apixaban, a Bristol-Myers Squibb drug that Prizer has been co-developing), Xeljanz (tofacitinib), Inlyta (axitinib), Elelyso (enzyme for Gaucher’s), Bosulif (bosutinib, acquired with Wyeth)
2011: Xalkori (crizotinib), Oxecta (oxycodone formulation)
That ain’t 20 new drugs – in fact, I’d count about 8 new drugs that actually get counted to Pfizer on that list, and three of those were acquired. Clearly they’re counting new indications, which are certainly real, and take real work and real money. But if you read the Pfizer statement as referring to 20 new drugs, then no. They’re certainly not the only company that does this; inflation of this sort happens all the time. But it’s worth keeping in mind next time you see a reference to some such figure.