The merger will bring together Pfizer medications such as Lipitor and Viagra with Mylan's EpiPen, used to halt life-threatening allergic reactions.
Coury continued: "The combination announced today also comes with Mylan CEO Heather Bresch's decision to announce her intention to retire upon deal close after 27 years of distinguished service and leadership within Mylan".
Mylan meanwhile has had its own difficulties of late, hit by declining prices for generics in the U.S. and a scandal over price increases for its EpiPen drug for severe allergic reactions that prompted its own strategic review a year ago. EpiPens were added to the FDA's drug shortage list two years after Mylan increased the price of the product by more than 400%, leading to public outrage. They have been in short supply for more than a year because of quality problems and upgrades at a Pfizer factory. We expect the generic pressures to increase as USA generic competition to neuroscience drug Lyrica intensifies.
This controversy, coupled with falling generic drug prices, have resulted in Mylan's share prices falling steadily over the past four years.
Bourla said that separating from Upjohn "represents our sharpened focus on innovative medicines" and will "maintain the financial flexibility to advance our strong pipeline, invest for growth and continue to return capital to our shareholders".
Pfizer Inc.is an American multinational pharmaceutical company with its headquarters in New York Metropolis.
UBS held a "neutral" rating for Pfizer shares with a price target of $43 before news of the spin-off.
Pfizer shares closed lower for the fifth time in the past eleven trading sessions in NY on Monday. Pfizer shares, down from a $46 high late past year, dipped $1.08, or 2.5 percent, to $42.01.
The new company will be based in the United States and incorporated in Delaware. In Canonsburg, Pennsylvania, US. Pfizer spent several years unsuccessfully trying to drugmakers based in lower-tax European countries so it could move there on paper and reduce its USA tax bill, finally giving up after the US tax overhaul last year changed the economics of such a maneuver.
"After much reflection and almost 28 years of service, I believe that this historic milestone in Mylan's awesome journey is also the right time for me to retire from Mylan and pursue a new chapter in my career", Ms. Bresch said in a news release from the company. Erectile dysfunction drug Viagra brought in an estimated $1.4 billion in annual sales for Pfizer before Teva Pharmaceuticals introduced a generic version of the pill in 2017 that quickly ate up market share.
Upjohn will issue $12 billion of debt at or prior to separation, with gross debt proceeds retained by Pfizer. Mylan's bond spreads, meanwhile, tightened to record lows; as part of the deal, the new company expects to refinance its debt, and it would have a richer income stream to draw on to pay its obligations.