UPDATED: Pfizer to split operations three ways

Pfizer CEO Ian Read

Pfizer CEO Ian Read wasn't kidding when he said he'd consider a wholesale split-up of the world's biggest drugmaker. The company said today it would carve its operations into three units, two focused on "innovative" drugs and a third comprising what Read calls Pfizer's "value" business.

It's just the latest effort to segregate Pfizer's ($PFE) operations since Read took over as CEO in 2011. Pfizer last year sold its nutrition unit to Nestlé, and this year it finished hiving off its animal health business, Zoetis. Those moves won high praise from investors and analysts, though some thought the moves didn't go far enough.

A few analysts cried out for more, including Bernstein's Tim Anderson and Goldman Sachs' Jami Rubin, who issued an exultant investor note earlier this year after Read allowed that he would consider further breaking up the behemoth company. Read said any such breakup would have to be preceded by an internal reorganization to separate Pfizer's businesses into discrete units.

And now Pfizer is moving ahead with that internal restructuring, with three new units, each headed up by a group president. One unit, led by Geno Germano, will encompass a variety of therapeutic areas including immunology and metabolic diseases, with products that won't go off patent until after 2015. Another, led by Group President Amy Schulman, will focus on vaccines, cancer and consumer healthcare, again with products that boast at least a few more years of patent life.

A third, the value products group, will be headed up by John Young. It will comprise products that have already gone generic, as well as branded drugs set to go off patent through 2015. This unit will also include any biosimilar drugs, plus existing partnerships on generic drugs, such as its deal with Mylan ($MYL).

"This represents the next steps in Pfizer's journey to further revitalize our innovative core, enhance the value of our consumer and off-patent established brands and maximize the use of our capital to create value for Pfizer and our shareholders," Read said in a statement, adding that the reorg will give each unit "greater independence and focus" and "an enhanced ability to respond to market dynamics."

All three units will include operations in both established and emerging markets. The new group presidents will take their posts as of January 1, Pfizer says, and separate financial reporting will begin with 2014's first-quarter results.

- read the release from Pfizer

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