Pfizer Inc. (PFE) May Spin Off Consumer Health Biz

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Pfizer Inc. (NYSE:PFE) is considering spinning off its consumer health business, according to sources close to the matter.

Pfizer Inc. (PFE)The combination of these brands is worth a reported $15 billion. The move comes as more older people and health-conscious consumers are focused on self medicating through consumer health goods such as over-the-counter drugs and other non-prescription products.

Pfizer’s consumer business is undoubtedly worth less than its prescription business, but the company’s name still carries a lot of weight when considering what common cold medicine or laxative to take.

The company’s consumer health brands include painkiller brands such as Advil, as well as lip balm Chapstick. This segment of its business raked in about $3.4 billion in 2016.

Industry insiders believe that the combination of these brands could be worth about four times its sales, meaning its value would be at nearly $14 billion. However, two healthcare sector bankers said Pfizer hopes to spin off this business at a valuation of at least $15 billion.

People familiar with the matter said that one company that could throw its hat in the ring could be Nestle SA, as well as a number of manufacturers of over-the-counter treatments. Several private equity firms may also jump at the opportunity to get a piece of the consumer health business.

Pfizer is weighing its options, considering both a full or a partial separation of these brands.

PFE stock gained 0.8% Tuesday.


Article printed from InvestorPlace Media, https://investorplace.com/2017/10/pfizer-inc-pfe-2/.

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