Dow component Pfizer ( PFE ) said Tuesday it’s considering selling or spinning off its over-the-counter business, which includes Advil, Centrum and a number of other heavy sales hitters.
[ibd-display-video id=2345591 width=50 float=left autostart=true]The Consumer Healthcare business brought in $3.4 billion in 2016 sales, Pfizer said in a news release. In addition to Advil and Centrum, the segment markets 10 products that exceeded $100 million in sales last year.
Pfizer is considering either a partial or full separation from its Consumer Healthcare unit by selling it, through a spinoff or some other transaction, the firm said in a news release. And it’s still possible Pfizer could opt to retain the business.
“Although there is a strong connection between Consumer Healthcare and elements of our core biopharmaceutical businesses, it is also distinct enough from our core business that there is potential for its value to be more fully realized outside the company,” Chief Executive Ian Read said in a prepared statement.
“By exploring strategic options, we can evaluate how best to fuel the future success and expansion of Consumer Healthcare while simultaneously unlocking potential value for our shareholders,” he said.
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The unit sells dietary supplements, pain management tools, gastrointestinal drugs, therapies for respiratory illnesses and personal care items like ChapStick and Anbesol, a pain-relieving gel for toothaches.
Pfizer said it has tapped Centerview Partners, Guggenheim Securities and Morgan Stanley as financial advisors for the strategic review process. It doesn’t expect a decision regarding the potential separation of its Consumer Healthcare business until 2018.
In 2016, the Consumer Healthcare business brought in 6.4% of Pfizer’s total sales, but growth has stalled over the past several years. Sales were flat in 2016 following a 1.5% decline in 2015. The last year of growth was in 2014, when revenue was up 3.1% vs. the prior year.
At the closing bell on the stock market today , Pfizer was down 0.7% to close at 36.40. Shares began forming a cup in August 2016 with a buy point at 37.49. Pfizer is up 11.3% year to date vs. the broader drugmakers’ group which has risen 15.8%.
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