Pharmaceutical giant Pfizer has offered to buy Hospira for about $15 billion (€13bn) to boost its portfolio of generic injectible drugs and biosimilars, or copies of biotech drugs.

Both groups have operations in Ireland.

Pfizer offered $90 per share in cash, a 39 per cent premium to Hospira’s closing stock price on Wednesday. Hospira soared 35 per cent to near $88 before the bell on Thursday, while Pfizer was up 3.6 per cent.

For Pfizer, the deal is the largest since its failed takeover attempt of AstraZeneca, which rebuffed its $118 billion approach last year but has remained a subject of takeover speculation.

Pfizer said the latest move showed its commitment to deploy capital and deliver revenue and earnings per share growth in the near term. The deal is expected to add 10 cents to 12 cents per share to Pfizer’s earnings in the first full year after the deal closes, it said.

The move will increase Pfizer’s business in established drugs, or those no longer covered by patents. Hospira makes generic versions of injectible drugs that are widely used in hospitals and sells several biosimilars overseas. It has other biosimilars in development.

Biosimilars

Drugmakers are racing to develop biosimilars, which typically cost 20 per cent to 30 per cent less than the original, as big-ticket patents on biotech drugs expire and cash-strapped healthcare systems cut costs.

There are no approved biosimilars in the United States yet. A US regulatory panel endorsed the first one in January from Novartis, a copy of Amgen's blockbuster cancer drug Neuopogen, but it has not yet been approved.

Biosimilars are expected to account for about one-quarter of the $100 billion in sales from off-patent biological drugs by the end of the decade, according to a study compiled by Thomson Reuters BioWorld.

Hospira is seeking approval from the US Food and Drug Administration to market a copy of Johnson & Johnson’s blockbuster arthritis treatment Remicade.

The total enterprise value of the deal with Pfizer is about $17 billion, including debt, the companies said.

Bloomberg