MORGANTOWN — Mylan and Upjohn – a division of Pfizer – announced Monday that they are merging to create a new global pharmaceutical company that will be renamed and branded upon closure. They are characterizing the new company as a “New Champion for Public Health.”
Upon completion of the merger, expected for mid-2020, Mylan CEO Heather Bresch will retire.
The Dominion Post asked Mylan about what effects, if any, the merger might have on the Morgantown plant. Spokeswoman Christine Waller said that at this time they are unable to comment beyond what’s been released.
Morgantown plant workers are represented by United Steelworkers Local 8-957. A union spokesman told MetroNews on Monday they are still sorting through the news and weren’t ready to comment.
Upjohn is Pfizer’s off-patent branded and generics subsidiary. It produces such drugs as Lipitor, for cholesterol; Norvasc, for high blood pressure; Lyrica, for nerve pain; and Viagra. It markets in more than 120 countries.
Both company’s boards have approved the transaction, according to releases from Mylan. The merger is structured as a Reverse Morris Trust transaction, which means, according to Investopedia and other sources, a way for a company to spin off a subsidiary and sell it to another party while avoiding taxes on the gains of the sale.
In the merger, each Mylan share would be converted into one share of the new company. Pfizer shareholders would own 57% of the combined new company, and Mylan shareholders would own 43%.
The new company, referred to as Newco until a name is chosen, is expected to generate about $19 billion to $20 billion in revenue, with an estimated annual synergies – cost savings realized by pooling resources and trimming redundancies – reaching $1 billion by 2023. Mylan’s current revenues are about $12.5 billion, with Upjohn’s hitting $8 billion. They foresee about $3 billion in new revenue from products expected to launch by 2023.
They expect Newco to operate in more than 165 countries. Combined, they’ll have 51 manufacturing sites worldwide, including Morgantown.
“The transaction will allow the new company to meaningfully expand the geographic reach of Mylan’s existing broad product portfolio and future pipeline – including significant investments that have been made across complex generics and biosimilars – into new growth markets where Upjohn has existing sales infrastructure and local market expertise,” Mylan said.
Mylan explained that Upjohn is expected to be spun off or split off to Pfizer’s shareholders and simultaneously combined with Mylan. The transaction is expected to be tax free to Pfizer and Pfizer shareholders and taxable to Mylan shareholders.
The transaction is subject to approval by Mylan shareholders and customary closing conditions, including receipt of regulatory approvals. No vote is required by Pfizer shareholders.
The new company will be led by Mylan Chairman Robert J. Coury, who will serve as executive chairman of the new company; Michael Goettler, group president of Upjohn, who will serve as CEO; and Rajiv Malik, Mylan president, who will serve as president.
Ken Parks, Mylan CFO, has agreed to depart the company at closing.
The board of directors of the new company will include its executive chairman and its CEO, along with eight members designated by Mylan, and three members designated by Pfizer, for a total of 13 members.
The new company will be based in the U.S. and incorporated in Delaware and will operate Global Centers in Pittsburgh; Shanghai, China, and Hyderabad, India.
Mylan and Pfizer are not strangers. Meridian Medical Technologies, another Pfizer subsidiary, manufactures the EpiPen for Mylan. But the EpiPen has been in short supply and Mylan said in a June release that Meridian “continues to experience manufacturing challenges” in production of the EpiPen and its authorized generic version.
“These challenges are expected to result in tighter supplies and greater variability in pharmacy-level access and will potentially continue through the summer months as seasonal demand increases,” Mylan said in June.
Regarding the merger, Coury commented, “Over the past year and a half, I have spent a lot of time speaking with and listening attentively to our shareholders. Today’s announcement builds upon many of those meaningful conversations and represents a transformative move for Mylan. The new company, which combines the unique assets of Mylan with the iconic brands of Pfizer’s Upjohn business, will not only accelerate our mission to serve the world’s changing health needs, but also further unlock the true value of our platform while delivering attractive returns to shareholders for many years to come.
“Importantly, the combined organization will have a presence across nearly every continent and major market, establishing a new leadership position in Asia, and offering products capable of treating all major therapeutic areas.
“As important, the transaction we are announcing today will enhance the strength of our balance sheet. … There will also be potential for share repurchases once the long-term leverage target is achieved. This powerful new profile positions the new company for sustained success and long-term value creation.”
Coury said Bresch has served Mylan for 27 years. “Heather has left a significant positive mark to the benefit of our company, patients and shareholders in so many ways including through her leadership and execution of our efforts to create a more sustainable Mylan. Her leadership helped to further position Mylan for this important milestone. Her presence and her impact will not only be missed by our board of directors, but also by our entire workforce of 35,000 across the world. We wish her much success with her future endeavors.”
Bresch commented, “Nearly eight years after becoming CEO, I’m proud to say that this milestone represents the culmination of the goals I set for myself when I challenged Mylan and our amazing workforce to set new standards in healthcare. And so, as the company prepares to set out on this exciting new journey under the next era of leadership, I too have decided to pursue a new chapter – one that will continue to be focused on serving people, patients and public health.”
Bresch discussed her departure in an open letter to Mylan employees. She noted that she began in 1992 as a data entry clerk and served in more than 15 roles in her rise to CEO.
“My focus throughout my time as CEO has been to build upon the “fingerprint” as well as the “footprint” that was established before me and create a ‘blueprint’ for the organization to instill not only disciplined global processes, infrastructure and diversification but a future-focused ‘Healthcare 2020’ strategy that allowed us to explore opportunities to further differentiate Mylan for success in 2020 and beyond.
“Looking back nearly eight years later, I am proud to say that with the creation of this new company, the goals I set for myself and for Mylan will be met. So, as the company sets out on this exciting new journey, I too will be beginning a new chapter that will continue to be focused on serving people, patients and public health.”
Albert Bourla, Pfizer CEO, also commented on the merger. “We are creating a new champion for global health—one poised to bring world-class medicines to patients across a wide range of therapeutic areas. I believe that Mylan’s unique profile and strategy has made it the obvious partner of choice in creating this powerful combination. By bringing Mylan’s growth assets to Upjohn’s growth markets, we will create a financially strong company with true global reach.
“For Pfizer, this transaction represents our sharpened focus on innovative medicines and is a testament to our purpose – breakthroughs that change patients’ lives. At the same time, we’ll maintain the financial flexibility to advance our strong pipeline, invest for growth and continue to return capital to our shareholders.”
nd branded upon closure.
Upon completion of the merger, expected for mid-2020, Mylan CEO Heather Bresch will retire.
The Dominion Post is awaiting word from Mylan about what effects, if any, the merger might have on the Morgantown plant.
Upjohn is Pfizer’s off-branded and generics subsidiary. It produces such drugs as Lipitor, for cholesterol; Norvasc, for high blood pressure; Lyrica, for nerve pain; and Viagra. It markets in more than 120 countries.
Both company’s boards have approved the transaction, according to releases from Mylan. The merger is structured as a Reverse Morris Trust transaction, which means, according to Investopedia and other sources, a way for a company to spin off a subsidiary and sell it to another party while avoiding taxes on the gains of the sale.
In the merger, each Mylan share would be converted into one share of the new company. Pfizer shareholders would own 57% of the combined new company, and Mylan shareholders would own 43%.
Mylan explained that Upjohn is expected to be spun off or split off to Pfizer’s shareholders and simultaneously combined with Mylan. The transaction is expected to be tax free to Pfizer and Pfizer shareholders and taxable to Mylan shareholders.
The transaction is subject to approval by Mylan shareholders and customary closing conditions, including receipt of regulatory approvals. No vote is required by Pfizer shareholders.
The new company will be led by Mylan Chairman Robert J. Coury, who will serve as executive chairman of the new company; Michael Goettler, group president of Upjohn, who will serve as CEO; and Rajiv Malik, Mylan president, who will serve as president.
Ken Parks, Mylan CFO, has agreed to depart the company at closing.
The board of directors of the new company will include its executive chairman and its CEO, along with eight members designated by Mylan, and three members designated by Pfizer, for a total of 13 members.
The new company will be based in the U.S. and incorporated in Delaware and will operate Global Centers in Pittsburgh; Shanghai, China, and Hyderabad, India.
Coury commented, “Over the past year and a half, I have spent a lot of time speaking with and listening attentively to our shareholders. Today’s announcement builds upon many of those meaningful conversations and represents a transformative move for Mylan. The new company, which combines the unique assets of Mylan with the iconic brands of Pfizer’s Upjohn business, will not only accelerate our mission to serve the world’s changing health needs, but also further unlock the true value of our platform while delivering attractive returns to shareholders for many years to come.
“Importantly, the combined organization will have a presence across nearly every continent and major market, establishing a new leadership position in Asia, and offering products capable of treating all major therapeutic areas.
“As important, the transaction we are announcing today will enhance the strength of our balance sheet by scaling and increasing our existing strong cash flows, providing the new company with the financial flexibility to support and accelerate deleveraging and the expected initiation of a meaningful dividend from the first full quarter after the transaction closes. There will also be potential for share repurchases once the long-term leverage target is achieved. This powerful new profile positions the new company for sustained success and long-term value creation.”
Coury said Bresch has served Mylan for 27 years. “Heather has left a significant positive mark to the benefit of our company, patients and shareholders in so many ways including through her leadership and execution of our efforts to create a more sustainable Mylan. Her leadership helped to further position Mylan for this important milestone. Her presence and her impact will not only be missed by our Board of Directors, but also by our entire workforce of 35,000 across the world. We wish her much success with her future endeavors.”
Bresch commented, “Nearly eight years after becoming CEO, I’m proud to say that this milestone represents the culmination of the goals I set for myself when I challenged Mylan and our amazing workforce to set new standards in healthcare. And so, as the company prepares to set out on this exciting new journey under the next era of leadership, I too have decided to pursue a new chapter – one that will continue to be focused on serving people, patients and public health.”
Bresch discussed her departure in an open letter to Mylan employees. She noted that she began in 1992 as a data entry clerk and served in more than 15 roles in her rise to CEO.
“My focus throughout my time as CEO has been to build upon the “fingerprint” as well as the “footprint” that was established before me and create a ‘blueprint’ for the organization to instill not only disciplined global processes, infrastructure and diversification but a future-focused ‘Healthcare 2020’ strategy that allowed us to explore opportunities to further differentiate Mylan for success in 2020 and beyond.
“Looking back nearly eight years later, I am proud to say that with the creation of this new company, the goals I set for myself and for Mylan will be met. So, as the company sets out on this exciting new journey, I too will be beginning a new chapter that will continue to be focused on serving people, patients and public health.”
Dr. Albert Bourla, Pfizer CEO, also commented on the merger. “We are creating a new champion for global health—one poised to bring world-class medicines to patients across a wide range of therapeutic areas. I believe that Mylan’s unique profile and strategy has made it the obvious partner of choice in creating this powerful combination. By bringing Mylan’s growth assets to Upjohn’s growth markets, we will create a financially strong company with true global reach.
“For Pfizer, this transaction represents our sharpened focus on innovative medicines and is a testament to our purpose – breakthroughs that change patients’ lives. At the same time, we’ll maintain the financial flexibility to advance our strong pipeline, invest for growth and continue to return capital to our shareholders.”
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