Pfizer’s Zoetis IPO set to raise $2.2bn

Animal-health business could be valued at $12bn

Zoetis, the animal-health business that Pfizer is spinning off, is set to raise up to $2.2bn in an initial public offering later this month.

According to a filing with the Securities and Exchange Commission, Pfizer will offer $86.1m shares priced at between $22-$25. That would value the new company at about $12bn.

Ian Read, Pfizer’s chief executive, announced last July that the company would turn its animal-health unit into a standalone business as part of its plan to focus on its core drugs business. Last April, Pfizer sold its infant nutrition business to Nestlé for $11.85bn.

The animal-health business generated $4.2bn in revenues in 2011. It sells more than 300 lines of products to livestock producers and veterinarians across 70 countries around the world.

“Growth in the livestock medicines and vaccines sector is driven by human population growth and increasing standards of living, consequently increasing demand for improved nutrition, particularly animal protein, increasing natural resource constraints driving a need for enhanced productivity, and increased focus on food safety,” Zoetis said in the filing.

Earlier this week, a Pfizer executive signalled that more changes could be in store for the company, potentially breaking up the core drugs business into “innovative” and “value” units.

“This should be a busy year for Pfizer as it launches Xeljanz and Eliquis, conducts the partial IPO of the animal-health unit, and potentially spells out in clearer, more definitive terms whether it will split the remaining drugs side of the business up,” noted Timothy Anderson, pharmaceuticals analyst at Bernstein Research. “This would be well-received.”

Xeljanz is a treatment for rheumatoid arthritis while Eliquis is a blood-thinner.

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