) recently announced the filing of a registration statement by its
subsidiary, Zoetis Inc. The company said that Zoetis has filed the
statement with the US Securities and Exchange Commission for a
potential initial public offering (IPO) of Class A common stock.
The IPO is for a stake of up to 20% in Zoetis.
Pfizer intends to transfer its Animal Health business to Zoetis
before the offering is completed, potentially in the first half of
2013. The company said that it is yet to decide on the number of
shares and the price range for the offering.
Pfizer had first announced its plans to spin off its Animal
Health business in June 2012. Pfizer's Animal Health
business, which focuses on the discovery, development, manufacture
and marketing of animal vaccines, medicines, biopharmaceuticals,
diagnostics and genetic tests, has a presence in more than 120
countries. The business delivered sales of $4.2 billion in
With the upcoming spin-off of the Animal Health business, Pfizer
should be able to focus on its core business area. Pfizer has
already taken steps to make its operations more streamlined and
focused. The company sold its Capsugel unit to
Kohlberg Kravis Roberts & Co L.P.
) for $2.375 billion in cash in August 2011.
Then, in April 2012, Pfizer announced that it has entered into
an agreement with Nestlé regarding the sale of the Nutrition
business for a cash consideration of $11.85 billion.
We currently have a Neutral recommendation on Pfizer, which
carries a Zacks #3 Rank (short-term Hold rating). The company is in
a major patent cliff with Lipitor losing patent protection in
November 2011. Near-term earnings at Pfizer will be driven by cost
cutting efforts and share repurchases. Longer-term growth will be
dependent on the success of drug development.
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