Pfizer Inc. (NYSE: PFE) is making mainstream headlines this morning, and for good reason. The company announced that it plans on reorganizing its business, splitting it into three different sebments. Today, we’ll talk about:
- The reorganization of the company;
- what we’re seeing from PFE as a result; and
- what we’ll be watching for ahead.
PFE Announces Reorganization
As mentioned above, Pfizer is making headlines early this morning, and for good reason. The company announced in a press release early this morning that it would be reorganizing its business into three business units. The big kicker here is the goal to open a new hospital business unit for anti-infectives and sterile injectibles. In the release, PFE said that the new hospital medicines unit will be part of Innovative Medicines, which will also include all of the current innovative health units and biosimilars.
In the release, the company said that the other units involved include the Established Medicines Unit and the Consumer Healthcare Unit. On the Established Medicines side, the company will include most off-patent solid oral dose legacy grands like Lyrica, Lipitor and Viagra as well as some generics. The Consumer Healthcare unit will include all of the company’s over-the-counter medicines. In the release, the company said that the changes are expected to take effect in the beginning of 2019. In a statement, Ian Read, Chairman and CEO at PFE, had the following to offer:
This new structure represents a natural evolution of these businesses given the ongoing strength of our in-market products and our late-stage pipeline and the expected significant reduction in the impact of patent protection losses post-2020 following the loss of exclusivity for Lyrica in the U.S which is expected to occur in or after December 2018. As we transition to a period post-2020 where we expect a higher and more sustained revenue growth profile we see this new structure better positioning each business to achieve its growth potential.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of Pfizer, the news is being taken by investors as mixed. While the new business units will allow for more focus by the teams within them, investors are unsure of whether or not this will actually help with growth. This can be seen through the minimal gains that we’re seeing on the stock this morning. At the moment (7:35), PFE is trading at $37.49 per share after a gain of $0.06 per share or 0.16% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on PFE. In particular, we’re interested in following the story surrounding the company’s continued work to bring a more defined focus to its efforts and whether or not this defined focus will convey positively on the bottom line. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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