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Randi Hernandez was science editor at BioPharm International from September 2014 to May 2017.
The deal may offset billions of dollars in waning sales from Pfizer drugs slated to lose patent protection and provides Pfizer with a whole portfolio of biosimilar products.
Pfizer announced on Feb. 5, 2015 that it is acquiring injectable, infusible, and biosimilar manufacturer Hospira for nearly $17 billion after the assumption of debt. According to a press release, the merger will create a “leading global sterile injectables business.” Hospira currently markets an erythropoietin (Retacrit), filgrastim (Nivestim), and Remicade (Inflectra) biosimilar and has a number of other biosimilars in development.
"The addition of Hospira has the potential to fundamentally improve the growth trajectory of the Global Established Pharmaceutical business, vault it into a leadership position in the large and growing off-patent sterile injectables marketplace by combining the specialized talent and capabilities of both companies, including enhanced manufacturing, and advance its goal to be among the world’s most preeminent biosimilars providers," said John Young, group president, Pfizer Global Established Pharmaceutical business.
Pfizer noted the global marketplace value for generic sterile injectable drugs is estimated to be $70 billion in 2020, and the global marketplace value for biosimilars is estimated to be approximately $20 billion in 2020.
Pfizer’s CEO Ian Read stated the company was open to future deals after its $120 billion bid for AstraZeneca was rejected. Read alluded to a big deal such as this one on Pfizer’s 4Q call, when he said, "Given the strength of our late and mid-stage pipeline, we will evaluate business development opportunities biased towards deals with the potential for creating value in the near-term."
The company said the transaction is thought to be immediately accretive and anticipates the deal to create $800 million in annual cost savings by 2018. According to an emailed statement from Pfizer, “Slightly more than half of the savings are expected to come from SI&A [structure inventory and appraisal] expenses. Of the remainder, the majority will come from COGS [cost of goods sold] and to a much lesser extent, from R&D expenses.”
While the deal may be a lucrative one, Hospira has recently been plagued by quality issues with its injectable products. Hospira initiated a voluntary nationwide user-level recall of one lot of Heparin Sodium in September 2014. FDA reprimanded the manufacturer in October 2014 for not addressing “significant violations of current good manufacturing practice” the agency observed earlier in the year on lots of Mitoxantrone and cited lack of corrective action on visible particulates in its carboplatin injection. In the same month, Hospira recalled certain lots of the company’s LifeCare line of flexible intravenous solutions due to the potential for leakage. In December 2014, the company voluntarily recalled lots of Mitoxantrone due to confirmed subpotency and elevated impurity levels.
Pfizer said it will provide an update to BioPharm International as to whether the deal will include Hospira's contract manufacturing organization arm.