Comments
If Pfizer has been the architect of many a deal in the innovative space, this time it is involved in the making of a mighty generic drugs company. And the coming together of Pfizer’s Upjohn division with generic drugs maker Mylan will do just that.
Mylan already holds pole post in the generic drugs space. So, business only gets further fortified with Pfizer’s off-patent generic drugs including internationally known brands such as Lipitor (atorvastatin calcium), Celebrex (celecoxib) and Viagra (sildenafil) joining the product basket of the Mylan-Upjohn combine.
The new company will get a new name, a global reach and a diversified portfolio of complex generic drugs and biosimilar products. And as industry-watchers describe it, such deals are strategies to not just survive, but thrive, too.
In 2014, for example, a tectonic three-way asset swap deal was inked between GlaxoSmithKline (GSK), Novartis and Eli Lilly. GSK got the vaccines portfolio from Novartis, which in turn got the cancer products business from GSK. The two drug majors also created a joint consumer products company, while Novartis sold its animal health business to Eli Lilly. The Mylan-Upjohn deal will go down on this list of strategic transactions that will help Pfizer sharpen its innovative drugs focus, and Mylan strengthen its generic drugs business.
The generic landscape
The Mylan-Upjohn deal is a growth strategy against a generics landscape fraught with challenges in terms of competition and stringent regulatory scrutiny. Generic drugs or chemically similar versions of original drugs are usually a lot less expensive than the original medicine. Hence, they are sought after by governments as they try to keep the spiralling cost of healthcare in check.
Early pickings from the deal announcement for India include affirmation that its Hyderabad base will continue to be a global centre, along with Pittsburgh, Pennsylvania and Shanghai. Contrary to reports that preceded the deal announcement, Mylan’s President Rajiv Malik will be the President of the new company. His name had come up in the ongoing price collusion case in the US, though the company had stood by him.
In India, Mylan has a deal going with Biocon on biosimilars and it’s early days how this will proceed. But in the international generics arena, the first move has just been made and it remains to be seen how other generic majors like Sandoz, Teva and Indian-contenders like Sun Pharma, Cipla, Lupin or a Dr Reddy’s Labs will respond.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.