Pfizer Considers Selling Its Hospital Pharmaceuticals Division

Pfizer Inc. (NYSE:PFE) is currently assessing the potential sale of its hospital drugs business, known as Pfizer Hospital. This decision is part of the company's strategy to divest assets outside its core operations under pressure from activist investor Starboard Value. Established after the $17 billion acquisition of Hospira in 2015, Pfizer Hospital specializes in antibiotics and other sterile injectable drugs for hospital use.

The pharmaceutical giant has engaged Goldman Sachs to gauge initial interest from potential buyers, which may include private equity firms and other pharmaceutical companies. The value of the business could be worth several billion dollars, with annual earnings before interest, taxes, depreciation, and amortization estimated at around $500 million.

However, sources who wish to remain anonymous due to the private nature of the discussions noted that the sale is not certain and that Pfizer may prefer to retain this subsidiary. Pfizer is actively divesting non-core businesses and stakes in other companies to reduce its substantial debt, which stood at $61.5 billion by the end of 2023. In October, Pfizer sold its $3.26 billion stake in the British consumer health company Haleon.

The company, led by CEO Albert Bourla, has faced criticism from Starboard for spending on major acquisitions without generating profitable new drugs from these investments or its own research and development efforts. As a significant expansion move, Pfizer acquired cancer drug maker Seagen for $43 billion last year.

Despite these strategic maneuvers, Pfizer's stock has not performed well this year, falling about 7%, while the S&P 500 has seen an increase of nearly 26%. In a recent post-earnings conference call, Pfizer's CFO, Dave Denton, stated that the company has reduced its debt by approximately $4.4 billion this year and continues to look into non-core assets for potential sale.