Pfizer ($PFE) may have fallen on its face in its $100 billion effort to cross the Atlantic and snag AstraZeneca ($AZN) with its pipeline of promising products and lower tax structure. But it knows a good deal when it sees one, and so the New York company has moseyed down the road to buy a specialist in generic sterile injectable drugs--a deal that, at most, will hit $360 million.
Pfizer said Wednesday that it would buy New Jersey-based InnoPharma, for $225 million in cash and up to $135 million in contingent milestone payments. "Today's announcement is an important milestone as we continue to look for innovative growth opportunities for our sterile injectables portfolio, which will increase to 73 products with this acquisition," John Young, group president of Pfizer Global Established Pharma (GEP), said in the announcement. It said the deal should close this quarter.
InnoPharma has 10 drugs already approved by the FDA, 19 more filed with the agency and more than 30 injectable and ophthalmic products under development. Pfizer said that the 9-year-old company specializes in the really tricky products, in such treatment areas as cancer and central nervous disorders, that need complex manufacturing capabilities or have particularly challenging bio-equivalency requirements. Pfizer pointed out that its own portfolio of established sterile injectable drugs is none too shabby. It has 44 products with over 190 presentations in the U.S.
Pfizer is joining a slew of companies who see the same potential in the growing market for generic sterile injectable drugs. In fact, also on Wednesday, India's Sun Pharma said it would spend an undisclosed amount to buy Pharmalucence because of that company's sterile injectable capacity. The Billerica, MA, company made its name in radiopharmaceuticals but does contract and private label formulation development and manufacturing of non-cytotoxic injectables in either liquid or lyophilized form. It also has a brand new 70,000-square-foot facility awaiting FDA approval and expected to be online this year.
There has been a string of deals in the sterile injectable market in the last several years. The most notable was Mylan's ($MYL) decision to lay out $1.75 billion for Agila Specialities, the sterile injectables business of India's Strides Arcolab. But just this year Lupin made a deal to buy Netherlands-based Nanomi, and Par Pharmaceuticals said it would spend $490 million to pick up JHP Pharmaceuticals, both sterile injectable players. In May, Jordan-based Hikma said it would spend up to $300 million to buy Bedford Laboratories, the generic injectable drug unit of Boehringer Ingelheim.
Pfizer's small deal to bolster its generics business, of course, does nothing to alleviate its bigger problem: the need to expand its portfolio of novel, potential blockbuster drugs. That is what it hoped to get from AstraZeneca and why it's bid up to $118 billion to buy it. But heavy resistance from AstraZeneca, bolstered by the U.K.'s tough anti-takeover laws, along with sideline support from politicians loath to lose one of the U.K.'s few large drugmakers, finally squelched that effort. There have been musings that Pfizer might find a way to reignite it, but for now it is buying a generic sterile injectable company instead.
- here's the Pfizer announcement
- here's the Sun Pharma announcement