Pfizer Acquires InnoPharma, Injectables Business to Benefit

Pfizer Inc. (PFE) has completed its acquisition InnoPharma, Inc., a company that specializes in the development of hard-to-make, differentiated, sterile injectables.

At the time of announcing the deal in July, Pfizer had said that It would be making an upfront payment of $225 million and could end up paying up to $135 million on the achievement of certain milestones. With this acquisition, Pfizer has gained several approved generic products plus a pipeline of injectable and ophthalmic products. These include products for areas like cancer and central nervous disorders. With the completion of this acquisition, Pfizer’s sterile injectables portfolio should increase to 73 products.

We note that Pfizer is not the only company to close an acquisition to boost its injectable business. Late last year, Mylan (MYL) boosted its injectables segment through the acquisition of the Agila injectables businesses from Strides Arcolab Limited in a deal worth up to $1.75 billion.

While the InnoPharma acquisition will strengthen Pfizer’s injectables segment, the company needs to boost its pipeline and bring new products to market to drive growth.

We expect Pfizer to continue pursuing bolt-on acquisitions and in-licensing deals to boost its portfolio. In late Jul 2014, Pfizer entered into a definitive agreement to acquire Baxter International Inc.’s (BAX) portfolio of marketed vaccines for $635 million. Pfizer will also be acquiring a part of Baxter’s facility in Orth, Austria, where these vaccines are manufactured.

Pfizer is a Zacks Rank #3 (Hold) stock. Some better ranked stocks in the pharma sector include Bristol-Myers Squibb (BMY). Bristol-Myers is a Zacks Rank #2 (Buy) stock.