Big Pharma firm Pfizer eyes potential sale of its hospital drugs unit

The news: Pfizer tapped Goldman Sachs to gauge potential buyer interest in its hospital drugs unit, Pfizer Hospital. The decision to sell the unit isn’t final and the drugmaker could choose to keep it.

For context, Pfizer Hospital was formed after Pfizer purchased Hospira for $17 billion in 2015. Its portfolio includes sterile injectables like antibiotic brand Zithromax, immune globulin treatment Panzyga, and the steroid Medrol.

Pfizer Hospital has been plagued by recalls in recent years, with reports of leaking products and the potential presence of glass particulates in vials and syringes of certain medications, per FiercePharma.

What’s driving the news? Activist investor Starboard Value recently took a nearly $1 billion stake in Pfizer with aims of turning its performance around.

• The drugmaker’s market cap has plummeted from about $290 billion in late 2022 to just over $150 billion as of the time of writing.
• Starboard recently called on Pfizer’s board to “hold management accountable” and scolded the drugmaker’s leadership for what it perceives as approximately $20 billion to $60 billion in value destruction since 2019. It pointed to inadequate returns on R&D investments and a $70 billion M&A spree.