Mylan, Pfizer Delay Major Pharmaceutical Merger Due to COVID-19
The proposed pharmaceutical merger between Mylan and a division of Pfizer has been pushed back because of the ongoing COVID-19 pandemic.
Mylan recently announced that the proposed pharmaceutical merger with Upjohn, a division of Pfizer, is delayed due to the COVID-19 pandemic.
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The transaction between the two companies is now expected to close in the second half of 2020, but there are no changes to the previously announced terms or plans regarding the transaction, the company said in the announcement.
“The two companies remain highly confident in the benefits of the pending transaction to their respective shareholders and other stakeholders,” Mylan stated. “Mylan, Pfizer and Upjohn are working closely on integration planning and are making significant progress toward Day 1 readiness. Together the companies continue to progress toward a successful close.”
Last July, Pfizer announced that Mylan would combine with Pfizer’s off-patent branded generic established medicines business, Upjohn, to create a global pharmaceutical company. Under the agreement, each Mylan share would be converted into one share of the new company.
Pfizer shareholders would also own 57 percent of the new company and Mylan shareholders would own 43 percent. The acquisition intended to transform and enhance each businesses’ ability to serve patient need and expand capabilities across over 165 markets.
“Mylan brings a diverse portfolio across many geographies and key therapeutic areas, such as central nervous systems and anesthesia, infectious disease and cardiovascular, as well as a robust pipeline, high-quality manufacturing and supply chain excellence,” Pfizer highlighted in the announcement.
“Upjohn brings trusted, iconic brands, such as Lipitor (atorvastatin calcium), Celebrex(celecoxib) and Viagra (sildenafil), and proven commercialization capabilities, including leadership positions in China and other emerging markets.”
The transaction will also allow the new company to expand the geographic reach of Mylan’s existing broad product portfolio and future pipeline. This includes vital investments that were previously made across generics and biosimilars.
“The combination will drive sustainable, diverse, and differentiated portfolio of prescription medicines, complex generics, over-the-counter products, and biosimilars supported by commercial and regulatory expertise, established infrastructure, best-in-class R&D capabilities, and high-quality manufacturing and supply chain excellence,” Pfizer concluded.
Heather Bresch, CEO of Pfizer voiced the company’s concerns over the novel coronavirus pandemic and how the delay of the merger is greatly affecting exposure.
“Our business exposure in China, specifically, is limited. Given the global nature of our supply chain, operations and businesses, our results could potentially be impacted,” Bresch said. “The guidance we disclosed today does not include any anticipated impact from coronavirus, however, we will continue monitoring the situation very closely from a business perspective.”
The combined business will not start to grow until 2023 due to the outbreak. This is because the business is expected to deteriorate faster than the realization of cost synergies, Ami Fadia, an analyst with SVB Leerink, explained in the announcement. “At this time, we do not see revenues synergies anytime soon.”
Specifically, experts set a price target of $24, down from the previous target of $27. And shares of Mylan have been decreasing exponentially, nearly 3.3 percent last week.
Due to increased restrictions because of the pandemic, Mylan’s meeting of shareholders to approve certain matters in connection with the transaction has been rescheduled from April 27, 2020 to June 30, 2020. It will be hosted in conjunction with Mylan’s annual general meeting of shareholders.
“The primary focus both companies remains the health and safety of our dedicated and valued employees who are working tirelessly towards completion of this transaction while also maintaining responsibility to meet patient needs during this extraordinary time. We continue to look forward to the proposed combination creating a new champion for global health at the close of this transaction,” Mylan concluded.
