Pfizer plans partnerships and acquisitions in generics

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Pfizer plans partnerships and acquisitions in generics

Generics/News | Posted 31/08/2009 0 Post your comment

Pfizer, the world's biggest drugmaker, is seeking deals with generic pharmaceutical manufacturers to increase sales of medicines that have lost patent protection.

“Pfizer plans to expand the number of generic drugs it sells through internal growth, licensing agreements and acquisitions,” Mr David Simmons, President of Pfizer's Established Products Unit, said today at the Goldman Sachs Healthcare Conference in New York, USA. Pfizer is among major pharmaceutical makers hunting for deals with generic makers preparing to introduce cheaper drug copies as US$10 billion (Euros 7.1 billion) worth of medicines lose patent coverage this year.

The drugmaker is trying to lessen its dependence on brand-name prescription medicines as it braces for the end of patent protection on its top-selling medicine, the Lipitor cholesterol pill, with US$12.4 billion (Euros 8.9 billion) in sales last year. Since March 2009, Pfizer has bought the rights to sell more than 150 generic pills and injections from two Indian drugmakers, Aurobindo Pharma and Claris Lifesciences.

“This off-patent drug market is very big, growing fast and has margins better than anyone thought,” said Mr Simmons. “We are committed to making this business unit grow.”

Daiichi Sankyo of Tokyo paid the equivalent of about US$5 billion (Euros 3.59 billion) for Ranbaxy Laboratories of India in October and London-based GlaxoSmithKline Plc expanded an agreement last month with South African generic-drug maker Aspen Pharmacare. Mr Miles White, CEO at Abbott Laboratories, said at the recently held Goldman conference that he also is interested in pursuing generic drugs, especially ‘more-branded generic’ medicines in emerging markets.

While Mr White said his acquisition strategy favours purchases of non-pharmaceutical companies, he told investors “don't be surprised if we do something in pharma.” Until this year, Pfizer had only sold generic copies of its own medicines through its Greenstone unit. Pfizer's generics sales declined 10% this year. It plans to increase sales in that sector by 2011, the company said.

“Pfizer doesn’t need to make an acquisition to grow the division, though it has not ruled out the option,” Mr Simmons said. Pfizer agreed in January 2009 to buy rival drugmaker Wyeth in a deal valued at US$63.8 billion (Euros 45.8 billion).

About a quarter of Pfizer's 2008 sales came from 300 products that have lost patent protection. Pfizer said in March 2009 it plans to add more than 200 pills and 60 injections to its generic business.

Source: Bloomberg