Fresenius SE Bid for Pfizer's Pump Biz Stalled, Pfizer Seeking Other Attractive Offers

Fresenius SE Bid for Pfizer's Pump Biz Stalled, Pfizer Seeking Other Attractive Offers July 22, 2016
By Alex Keown, BioSpace.com Breaking News Staff

NEW YORK – A deal between German-based Fresenius SE & Co. KGaA and Pfizer to acquire that company’s pumps and devices business has stalled on valuation, Bloomberg is reporting this morning.

As BioSpace has previously reported, Fresenius SE & Co. and Pfizer have been in talks since May for the business Pfizer gained in its $17 billion acquisition of Lake Forest, Ill.-based Hospira last year. The value of the device and pumps business is worth between $1.5 and $2 billion. Fresenius has been considered the lead bidder for the division, but there are other suitors, including British organization Smiths Group PLC and Pamplona Capital Management, a private equity firm.

Representatives from both Pfizer and Fresenius have declined to discuss the speedbumps in the deal, Bloomberg said. Fresenius is a well-known maker of dialysis machines and services and Pfizer’s pumps and devices division would be a good fit for that company. The infusion pump market is a crowded one, with companies such as Baxter International , Hospira, Fresenius, Medtronic and B. Braun Melsungen AG all vying for a bigger market share.

As talks have stalled, Bloomberg said, citing unnamed people familiar with the matter, Pfizer has begun to resume conversations with private equity firms in order to maximize possible revenue from the deal. Pamplona Capital is a big player in the U.S. hospital market, particularly since its 2015 acquisition of MedAssets, a healthcare performance improvement company that serves four out of five U.S. hospitals. Smiths Group includes a medical division that is a supplier of specialty medical devices and consumables. Infusion systems account for 32 percent of that division’s revenue.

If Pfizer cannot find a more suitable offer for the device and pumps division, those unnamed sources said Pfizer could return to Fresenius or could opt to keep the division within the company folds—even as it considers breaking up into smaller entities. If the company were to split, Pfizer could be comprised of three units—Global Innovation Products (GIP) business, and Vaccines Oncology and Consumer (VOC) business.

Hospira is a maker of injectable drugs and infusion technologies, including its newer Sapphire pumps. However, the U.S. Food and Drug Administration has had some issues with Hospira’s manufacturing facilities for its infusion pumps, including placing a ban on one of its facilities. Not only have federal regulators had concerns over the manufacturing facilities, but last year the FDA put a block on hospital sales of Hospira’s Symbiq Infusion System because of concerns over cybersecurity.

Infusion pumps are designed to deliver specific amounts of blood into a patient. The worldwide global infusion pump market is projected to have a compound annual growth rate (CAGR) of 5.8 percent from 2015 to 2020, with an eventual market value of $10.2 billion by 2020.

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