To sell or not to sell? These days, Big Pharma has to ask

With Pfizer and Abbott reaping spinoff rewards, analysts expect more units on the block

Will the rest of Big Pharma follow in Pfizer ($PFE) and Abbott Laboratories' ($ABT) footsteps? Certainly, Pfizer's animal health spin-off and unit sales have sparked talk--and not only about a bigger break-up down the line. And as a Reuters analysis notes, Abbott Laboratories' successful spin-off of AbbVie ($ABBV), its pharma unit, only added to the speculative fire.

To Ernst & Young's Jeff Greene, the Pfizer and Abbott deals augur more to come. "We will see more," Greene told Reuters. "[T]here is going to be a focus on rationalizing portfolios."

In other words, companies like Bristol-Myers Squibb ($BMY) will keep sifting through their operations for business units and assets that would be better off in other hands. Bristol-Myers reaped some $7 billion in a spin-off of its nutrition unit, Mead Johnson, back in 2009. Earlier this week, the company said it was licensing out a basket of over-the-counter brands sold in Latin America for $483 million.

Other drugmakers aren't necessarily built for big break-ups and sell-offs. European pharma companies are more globalized, UBS analyst Gbola Amusa told Reuters. And that means a wider range of product types are considered "core" to companies like GlaxoSmithKline ($GSK) and Sanofi ($SNY). Indeed, both companies' strategies are built around diversification. Novartis' ($NVS), too.

Still, that doesn't mean they wouldn't sell some assets here and there, such as GSK's unloading of a diverse group of consumer-drug products, and its possible sale of two drinks brands. That kind of judicious closet-cleaning may be just the thing for these companies. But it's not as exciting--or chatter-worthy--as Pfizer's unit-shedding.

- see the Reuters story

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