Pfizer to spin off animal-health subsidiary
Published: Friday, June 8, 2012
Updated: Friday, June 8, 2012 07:06
PHILADELPHIA - Pfizer Inc. said Thursday that it would spin off its animal health unit and call the stand-alone company Zoetis.
But Pfizer will maintain control, so it's unclear how independent the new entity will be or how the differentiation will help Pfizer overall.
Pfizer filed paperwork with the U.S. Securities and Exchange Commission, perhaps to eventually sell stock in Zoetis, though the shares would represent a minority stake in the new company.
"Pfizer Animal Health is a dynamic business with strong fundamentals, an expanding and loyal direct customer base and a proven management team," Pfizer Chairman and Chief Executive Officer Ian Read said in a statement. "We are on track to create a stand-alone Animal Health company by our previously stated target of July 2013. Our focus continues to be on taking the actions that will generate the greatest after-tax value for our shareholders, with share repurchases remaining the case to beat in allocating cash proceeds from the separation."
Pfizer is based in Manhattan and has a big human pharmaceutical operation in Collegeville, Pa. The animal health unit has about 9,000 employees.
Pfizer recently said it would sell its infant nutrition unit to Nestle for $11.9 billion. It is part of a plan Read announced last year to help the company adjust to life without the profits generated by the cholesterol drug Lipitor, which lost patent exclusivity in November 2011. The idea was that if non-pharmaceutical ventures could be shifted or sold, then the remainder of the company could focus on discovering, developing, and selling drugs to make money.
Pfizer had about $4.2 billion in revenue from that unit in 2011 as it sold products to veterinarians, livestock farmers and pet owners in 120 countries.
The name Zoetis (pronounced zo-EH-tis), the company said in a statement, is rooted in "zo, which is familiar in commonly known words such as zoo and zoology. It derives from zoetic, meaning 'pertaining to life,' and signals the company's dedication to improving the health of animals across species and around the world based on the fundamental understanding that animal and human health are inextricably linked."
Referring to Zoetis, Juan Ramon Alaix, president of Pfizer Animal Health, said in a statement, "The name best captures the company's focus on partnership with veterinarians, livestock producers and companion animal owners by providing innovative products and solutions that advance animal health and human well-being. We are excited about Pfizer's decision to chart an independent future for the Animal Health business and about our new name, Zoetis."