Pfizer to Buy Hospira for $17 Billion

The acquisition announcement concentrated on Hospira's injectable drugs and biosimilars, versus its infusion tech.

Chris Newmarker

Pharmaceutical giant Pfizer will spend $90 per share, a total $17 billion, to acquire Lake Forest, IL-based Hospira, the companies announced Thursday.

Infusion pumps, software, gravity administration sets and other device products make up nearly a fifth of Hospira's roughly $4 billion a year in sales. But the announcement of the proposed merger from Pfizer and Hospira mainly focused on Hospira's drug offerings.

"The addition of Hospira has the potential to fundamentally improve the growth trajectory of the Global Established Pharmaceutical business, vault it into a leadership position in the large and growing off-patent sterile injectables marketplace by combining the specialized talent and capabilities of both companies, including enhanced manufacturing, and advance its goal to be among the world's most preeminent biosimilars providers," John Young, group president of the Pfizer Global Established Pharmaceutical business, said in a news release.

New York-based Pfizer expects $800 million a year in annual cost savings from the merger, which is expected to close in the second half of 2015 pending customary closing conditions, regulatory approval, and approval of Hospira's shareholders. Pfizer plans to finance the transaction through a combination of existing cash and new debt, with approximately two-thirds of the value financed from cash and one-third from debt.

Hospira's infusion pumps business has had some issues in recent years. The company has seen eight Class I-level recalls over the past three years; seven were infusion pump related.

Hospira, however, reported an improved situation last month, with the FDA lifting its import alert that prohibited U.S. importation of infusion pump devices made in Hospira's Costa Rica device manufacturing facility. Hospira also said it expected to offer its customers next-generation pump technology this year.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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