Pfizer and Mylan merge to create new global health business

Pfizer has announced it will merge its off-patent generic drugs business with Mylan to create a new global pharmaceutical company.

Mylan will merge with Upjohn – Pfizer’s off-patent drugs business – to create a new business with a portfolio of complex generics and biosimilars.

Mylan’s portfolio consists of a number of therapies such as those focused on the central nervous system and anaesthesia, whereas Upjohn brings with it established brands including Lyrica and Viagra.  

The merger also means that Mylan’s controversial CEO Heather Bresch will retire when the deal is officially closed. During her tenure as CEO, Mylan was criticised for raising prices of its EpiPen, fixing drug prices and manufacturing delays.  

This controversy, coupled with falling generic drug prices, have resulted in Mylan’s share prices falling steadily over the past four years.

Mylan’s share prices rose by over 12% after the deal was announced on Monday (29 July), though Pfizer’s fell by 2% perhaps indicating a lack of faith in the deal by investors.

The companies have stated they expect the new business to generate revenues of $19-20 billion in 2020. Under the agreement, Pfizer will retain 57% of the combined new company with Mylan shareholders owning 43%.

Once the deal is approved, Michael Goettler, Upjohn’s current group president, will become chief executive of the new business.

“I’m honoured by the opportunity to lead this new company, which will deliver more medicines to more patients across the globe. I’m also excited to combine two talented and deeply experienced teams that share a passion for providing patients with access to medicines,” Goettler said.

Robert J. Coury, Mylan chairman, added: “Over the past year and a half, I have spent a lot of time speaking with and listening attentively to our shareholders. Today’s announcement builds upon many of those meaningful conversations and represents a transformative move for Mylan. The new company, which combines the unique assets of Mylan with the iconic brands of Pfizer’s Upjohn business, will not only accelerate our mission to serve the world’s changing health needs, but also further unlock the true value of our platform while delivering attractive returns to shareholders for many years to come."

Dr Albert Bourla, Pfizer CEO, said: “We are creating a new champion for global health—one poised to bring world-class medicines to patients across a wide range of therapeutic areas. I believe that Mylan’s unique profile and strategy has made it the obvious partner of choice in creating this powerful combination. By bringing Mylan’s growth assets to Upjohn’s growth markets, we will create a financially strong company with true global reach."