Pfizer, the US pharmaceutical group, said it is examining shedding its animal health and nutrition units as part of its efforts to streamline its activities, while retaining its generics business.
The move comes after the company earlier this year said it was reviewing its mix of businesses, at a time of investor criticism over poor returns.
With $5.5bn in combined revenues, the two businesses constitute a small slice of Pfizer’s $68bn sales, thwarting some investors’ hopes that it would opt for more radical surgery.
Pfizer has resolved to hold on to its established products division, which sits within its biopharmaceutical business with revenues of $10bn last year.
The fastest-growing part of the pharmaceuticals industry within the emerging markets is off-patent medicines and generics, Pfizer said on Thursday, explaining why it had chosen to keep the unit. The company will also retain its consumer healthcare business, with revenues of about $2.7bn.
Tim Anderson, analyst at Bernstein Research, said jettisoning the established products unit would have been a more radical tack for Ian Read, the chief executive, who took over after Jeffrey Kindler’s sudden departure last December.
“While it is good that Pfizer is taking action to shake things up ... some investors may be disappointed that [the company] is not going the full distance by getting rid of everything,” he wrote.
Pfizer shares dropped 2.14 per cent in afternoon trading to $20.34.
Pfizer’s move comes as large pharmaceutical companies are adjusting their businesses to cope with the challenge of falling revenues as successful drugs lose patent protection.
It has hired JPMorgan to explore alternatives for animal health, while Centerview and Morgan Stanley will work on the nutrition business. The transactions could take up to 24 months, the company said.
The nutrition business includes infant and toddler products which bankers believe could draw interest from companies such as Nestlé or Danone.
Eli Lilly this week said that it would consider acquiring assets in the animal health sector, and on Thursday bought the animal health unit of Janssen, a division of Johnson & Johnson, for an undisclosed sum.
Pfizer’s business includes vaccines and parasiticides to prevent and treat diseases in livestock and pets.