Pfizer Inc. (PFE) said Thursday that it plans to separate its animal health business into a standalone company that will be called Zoetis. The drug maker is preparing to submit a regulatory filing in the U.S. for a potential initial public offering of a minority ownership stake in the new company.
Pfizer expects to provide further details regarding the proposed transaction when it announces its financial results for the second quarter. The animal health business will continue to be treated as a continuing operation for Pfizer's financial reporting purposes, the company said.
Ian Read, chairman and chief executive officer of Pfizer said, "We are on track to create a standalone Animal Health company by our previously stated target of July 2013. Our focus continues to be on taking the actions that will generate the greatest after-tax value for our shareholders, with share repurchases remaining the case to beat in allocating cash proceeds from the separation."
The animal health business is engaged in the discovery, development, manufacture and commercialization of products such as vaccines, medicines, diagnostics and genetic tests for livestock and pets.
The business, with more than 9,000 employees, markets its products in more than 120 countries. It generated revenues of about $4.2 billion in 2011.
Pfizer noted that the name Zoetis has its root in zo, which is familiar in commonly known words such as zoo and zoology. It derives from zoetic, meaning "pertaining to life".
Pfizer said in July 2011 that it will explore strategic alternatives for its animal health and nutrition businesses, including full or partial separation of each of these businesses through a spin-off, sale or other transaction.
The move was part of Pfizer's efforts to focus more on its core pharmaceutical business as it copes with the loss of patent exclusivity for its blockbuster cholesterol drug Lipitor in November 2011.
In April 2012, Pfizer said it agreed to sell its nutrition business to Swiss food giant Nestle SA (NSTR.L, NSRGY.PK) for $11.85 billion in cash, culminating its review of strategic alternatives for the unit.
In Thursday's regular session, PFE is trading at $22.11, up $0.20 or 0.94 percent on a volume of 5.96 million shares.
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