A Pfizer Split Is 'Clearly' On The Table

Leerink’s Seamus Fernandez believes the decision to split Pfizer Inc. (NYSE: PFE) into Established and Innovative Businesses was likely to be announced by end-2016, with the split being completed by end-2017.

The analyst maintained a Market Perform rating on the company, while raising the price target from $34.70 to $35.50.

Split Decision

“Given mgmt.'s estimate that dys-synergies would be "immaterial relative to earnings" and conviction that the businesses can stand alone successfully as they are, splitting the businesses clearly is on the table,” Fernandez mentioned.

The analyst also stated that Pfizer intends to continue to look for ways to improve its tax rate, apart from inversions.

Ibrance Impressive

On the other hand, Fernandez pointed out that the uptake of Ibrance was impressive, with the product having already been prescribed by almost 7,000 physicians to more than 28,000 patients.

The data from the PALOMA-2 trials, expected to be presented at ASCO 2016, has also been added to the EMEA application, approval for which is expected in 2016.

The analyst also stated that management was in discussions with the FDA to convert Ibrance to a full U.S. approval.

With regard to Prevnar-13, Fernandez noted that pediatric sales “remain strong,” although the company said that adult sales had declined quarter on quarter in 1Q.