After Cutting Hundreds of Hospira-Related Jobs, Pfizer Sells Hospira Infusion Systems Biz in in $1 Billion Deal
October 6, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Pfizer announced today it was selling its global infusion therapy business, Hospira Infusion Systems (HIS) to ICU Medical for $1 billion in cash and stock.
Pfizer acquired Hospira in September 2015 in a deal worth about $17 billion. Hospira, headquartered in Lake Forest, Illinois, develops and markets injectable drugs and infusion technologies. It employs 19,000 people worldwide.
And pretty much from the moment it closed, Pfizer has been selling off Hospira assets. In August 2015, it sold three injectable drugs and one inhaled product to Pine Brook, NJ-based Alvogen. They were Clindamycin injection and Acetylcystine inhalation solution, and Voriconazole injection and Melphalan injection.
Part of the reason Pfizer sold these assets is related to regulatory requirements over the Hospira acquisition. The generic acetylcysteine inhalation solutions, if it had been kept by Pfizer, would have cut the number of generic suppliers in the U.S. from three to two. The clindamycin phosphate injection, an antibiotic for lung, skin, blood, bone, joint and gynecological infections, was marketed under several branded and generic labels that competed against each other. After the Pfizer-Hospira merger, suppliers would have dropped from four to three.
Under the new deal, Pfizer will receive about $400 million in newly issued shares of ICU common stock and $600 million in cash. The transaction is expected to close in the first quarter of next year. As a result, Pfizer will own about 16.6 percent of ICU Medical.
“We are pleased that Hospira Infusion Systems is combining with ICU Medical,” said John Young, Pfizer Essential Health’s group president, in a statement, “and we believe the combined company will be well positioned in the marketplace to deliver value to customers through its strong product portfolio and the expertise of colleagues from both companies. I’m proud of the Hospira Infusion Systems team and their positive impact on patients around the world.”
Vivek Jain, ICU Medical’s chief executive officer, noted in a statement, “By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company. We look forward to serving more customers as we continue to bring clinical and economic value to the marketplace.”
In Rocky Mount, North Carolina, it appears that Pfizer will possibly be laying off 400 people, although the company has not confirmed that number. Pfizer picked up the facility during the Hospira acquisition. About 2,000 people work at the facility currently.
In a statement, a Pfizer spokesperson said, “Based on current information, we expect the production level changes will impact a few hundred full time roles in the second half of 2016.”
In August, Pfizer slashed 151 jobs from its factor in Pearl River, New York.
The company has plans to close four of Hospira’s legacy logistics centers in Atlanta, Dallas, Los Angeles, and King of Prussia, Pennsylvania by the second quarter of 2017. Distribution from those locations will be moved to Pfizer logistic centers in Memphis, Tennessee and Pleasant Prairie, Wisconsin.
As a result, the Atlanta location will lose 40 jobs, 22 in Los Angeles, 22 in King of Prussia, and 19 in Dallas. Several months earlier it indicated that it was closing a Hospira manufacturing plant in Boulder, Colorado, and eliminating about 100 jobs.