Analysts ponder prospects of $7B Pfizer spinoff

With analysts buzzing over speculation that Pfizer ($PFE) may soon divest its non-pharma businesses, Bloomberg reports that investors are advocating a spin-off of its nutrition business in a deal that could be worth close to $7 billion.

The investors are clamoring for a repeat of Bristol-Myers Squibb's Mead Johnson play. Taking the baby formula and nutrition drinks group public allowed Mead Johnson to grow its business and share price more aggressively as BMS advanced strongly on the pharma front, outperforming many larger companies in the industry. A spokesperson for Pfizer tells the business news group that it is conducting a strategic review of all of its assets.

"If they spin out nutritionals and get a Mead Johnson-type price, it would add value to Pfizer shareholders," Deutsche Bank analyst Barbara Ryan tells Bloomberg. "The question is: what are the business costs in terms of Pfizer building its emerging-market platform?"

With Pfizer’s share price trading at a meager multiple, generic competition for Lipitor looming and a string of pipeline setbacks hindering new product development, analysts are eager to see the Big Pharma company do something that will reposition the company for a brighter future. Increasingly, that something looks like it may well involve parceling off non-pharma businesses.

- see the Bloomberg story