Pfizer to pay $635M for Baxter's vaccine portfolio

Transaction gains Pfizer two vaccines

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NEW YORK—Pfizer Inc. and Baxter International Inc. have struck a definitive agreement under which Pfizer will acquire Baxter’s portfolio of marketed vaccines for $635 million. In conjunction with the transaction, Pfizer will also acquire a portion of the Baxter facility in Orth, Austria, where the vaccines are manufactured.
“Vaccines make a tremendous and valuable impact on public health around the world.  They have significantly reduced the threat of widespread and often fatal diseases, and every day people of all ages benefit from safe and effective vaccines,” Susan Silbermann, president of Pfizer Vaccines, commented in a statement. “For over a decade Pfizer has been the global leader in pneumococcal disease prevention.  We are working hard to bring innovative vaccines to market that prevent and treat serious diseases.  Through this acquisition, we will add two high-quality and life-saving vaccines that bring scale and depth to our portfolio.”
Baxter’s vaccine portfolio consists of two vaccines: NeisVac-C and FSME-IMMUN/TicoVac. NeisVac-C helps to protect against meningitis caused by group C meningococcal meningitis, one of the most prevalent meningococcal serogroups in many parts of the world. FSME-IMMUN/TicoVac helps to protect against tick-borne encephalitis (TBE), an infection of the brain. The TBE virus is responsible for thousands of cases of neuroinvasive illness each year in Europe and Asia, and FSME-IMMUN/TicoVac is currently approved in 30 countries.
“This action reflects our strategic priority to optimize the portfolio and enhance focus in specific disease areas as Baxter’s BioScience organization prepares to become a separate, independent global biopharmaceutical company. We are redirecting resources and investing in our robust pipeline centered on core areas of expertise—hematology and immunology—and through technology platforms like gene therapy and biosimilars,” said Dr. Ludwig Hantson, president of Baxter BioScience, in a press release. “We are confident that Pfizer, with its recognized global leadership in vaccines, will provide the dedicated, ongoing investments necessary to support and advance the availability of these important vaccines.”
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of this year. Pfizer does not expect the transaction to have any impact on its financial guidance for 2014. For its part, Baxter predicts that 2014 vaccines revenues will total approximately $300 million, with adjusted earnings of approximately 25 cents per diluted share, including some $50 million in one-time milestone payments tied to ongoing government collaborations for the development of influenza vaccines. The company expects this deal to be modestly dilutive to Q4 2014 adjusted earnings and dilutive to 2015 adjusted earnings by approximately 15 cents per diluted share.
Pfizer enlisted Kirkland & Ellis LLP as its legal advisor for this transaction, with Credit Suisse Securities (USA) LLC serving as its financial advisor.

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