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Pfizer is in the final stages of negotiations to combine its non-patented badets with the $ 10 billion Mylan generics business in a stock contract, according to people familiar with the matter.
The deal, which is expected to be announced on Monday, would create a major seller of non-patented generic drugs, including the old hit brands Lipitor and Viagra. Mylan shareholders will hold just over 40% of the new business and Pfizer will sell a debt of about $ 12 billion, the public said.
The projects also include the departure of Mylan's executive director, Heather Bresch, after running the company for seven years.
Mylan shares have fallen three-quarters since their 2015 highs, as the generic maker struggled against lower prices in the United States. This has also caused controversy by dramatically increasing the price of EpiPens, used to treat allergic reactions.
In August 2018, Mylan's board of directors announced that it would conduct a strategic review of its options, fearing that US government markets would undervalue the company. Last quarter, the company said that sales of its multiple sclerosis drug were worse than expected and that it had not received approval to make a generic version of it. Advair, an asthma medication developed by the British pharmaceutical company GlaxoSmithKline.
If the contract is concluded, Michael Goettler, who heads Upjohn, Pfizer's non-patented drug group based in Shanghai, will become the general manager of the new company, while Robert Coury, president of Mylan, will become its executive chairman, announced the responsibles. The agreement was first reported by the Wall Street Journal.
Pfizer has tried to reposition itself as a small business focused on more innovative medicines and vaccines. To this end, it is splitting its consumer health business into a joint venture with GSK's consumer business. It is also making acquisitions to strengthen its position in advanced areas such as oncology, by buying Array Biopharma, a Colorado-based drug maker, in June for $ 10.6 billion.
Pfizer has also been under political pressure – including from US President Donald Trump – to push up prices for drugs, including treatment for erectile dysfunction, Viagra, and other drugs at Upjohn.
The deal would be the latest in a series of major mergers and acquisitions in the pharmaceutical sector this year. Bristol-Myers Squibb is seeking regulatory approval for its $ 90 billion purchase of Celgene biotech. Last month, AbbVie announced plans to purchase $ 63 billion from Allergan, the maker of Botox.
The unit will focus on drugs for which the exclusivity has expired. It will combine generic drugs – often manufactured by companies different from those of the original drug – with non-patented drugs, which Pfizer previously sold as key brands before the end of patent protection.
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