Recently it was announced that, as health-conscious consumers and an aging population control increasing demand for self-medication, Pfizer is considering the sale or spin-off of the company’s consumer healthcare business, to the tune of $15 billion.
In recent years, deal-making has become more pronounced as consumers’ desire for self-medication increases, whether in lip balms, headache medications, vitamins, or other OTC products. According to news reports, Pfizer’s announcement puts this sector of its business up for grabs just as Merck looks to divest non-prescription products. Some of Pfizer’s non-prescription healthcare products include Chapstick, Advil, Centrum, Robitussin and Caltrate.
Last year, Pfizer’s consumer healthcare business reportedly had revenue of approximately $3.4 billion. While over-the-counter healthcare remedies typically have lower profit margins than prescription medications, brands that have been successful over the long-term have loyal customers, including Pfizer, who stated the decision would be made regarding its consumer healthcare business’s future next year. Some of the companies reportedly interested in the company’s assets include Abbott, GSK, Proctor & Gamble, and Johnson & Johnson.
Advil pain reliever and the Centrum multivitamins are two of the top 10 selling consumer healthcare brands in the world; Pfizer has an additional 10 brands that, in 2016, reached sales in excess of $100 million. If Pfizer does sell or spin off its consumer healthcare business, it would be the largest corporate move since the abandoned deal to purchase Allergan for $160 billion in 2016.
Pfizer hasn’t made a firm decision yet, however financial advisors reviewing the potential sale of the company’s non-prescription products include Morgan Stanley, Centerview Partners, and Guggenheim Securities. Some of the prescription drugs Pfizer is recognized for include Lipitor, Viagra and Ibrance, a breast cancer drug.
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