Pfizer ($PFE) may, in fact, split itself in two, CEO Ian Read says. But don't hold your breath for the securities filings. The company would have to make a lot of structural changes before a legal separation is even possible.
That means paperwork, paperwork, paperwork--and for investors and eager analysts, patience. Though Pfizer may move toward separate operations for its branded prescription drugs and generics, it won't be making any split-up decisions soon, Read says.
"I believe we will move toward separate management, and, at that point, we'll evaluate whether shareholders would prefer to have the opportunity to invest in two distinct companies," Read said during the fourth-quarter earnings call. "There's no point in speculating on this."
Think of it as a billionaire's divorce, with no prenuptial agreement in place. As Bloomberg notes, Pfizer's operations in established markets such as the U.S. and Europe already keep branded and generics operations in separate baskets. But in other countries, particularly emerging markets, operations are structured geographically. All of that would have to be reorganized first.
"It is still possible that Pfizer will go the full distance and eventually split up the drugs side of the business," Sanford C. Bernstein's Tim Anderson told the news service. "Pfizer has begun to raise this possibility consistently in its meetings with investors, and the question is whether it could really happen."
Some analysts have been touting a full-on Pfizer split. The company already sold off its Capsugel business, and its nutrition unit went to Nestle for $11.8 billion last year. Its animal health business, Zoetis, is on the verge of an IPO, which will pave the way for a complete separation if Pfizer chooses.
- read the Bloomberg story