Pfizer Inc. has said it will pay $3.6 billion to purchase King Pharmaceuticals, which specializes in pain medications.
New York City-based Pfizer already has a large stake in the pain drug market with its drugs Lyrica and Celebrex, which together accounted for more than $5 billion in sales in 2009. However the company is keen to shore up its portfolio with King's work on ‘abuse-resistant’ pain drugs, while also taking advantage of the opportunity for cost-cutting.
The market for pain relief and management treatments is increasing, with physicians in the US writing approximately 320 million prescriptions to treat pain in 2009.
Commenting on the deal, Jeffrey Kindler, Pfizer's chairman and chief executive officer, said: "We are highly impressed by King's innovative products and technology in the pain relief disease area, as well as by its success in advancing promising compounds in its pipeline.
“The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe who are in need of pain relief and management. In addition, the revenue generated by King's portfolio will further diversify Pfizer's business, while at the same time contributing to steady earnings growth and shareholder value."
Brian Markison, chairman and chief executive officer of King, added: "By bringing together King's capabilities in new formulations of pain treatments, designed to discourage common methods of misuse and abuse, with Pfizer's commercial, medical and regulatory expertise, global strength in patient services and reimbursement, and global scale and resources, we believe Pfizer can build on our foundation and take our business to the next level.”
Pfizer has estimated that the deal could generate savings of at least $200 million annually by the end of 2013.
It is thought the savings and expected earnings accretion from the deal will go some way towards offsetting the loss of exclusivity for Pfizer’s drug Lipitor and other drugs in coming years. Sales of Lipitor alone could fall to around $4 billion in 2013 from an estimated $10.7 billion this year, due to generic competition.
The King deal is Pfizer's largest since it bought rival Wyeth for $68 billion in 2009.
King is based in Bristol, Tennessee.
