Pfizer, the world’s largest drug company by revenues, announced on Thursday that it would spin off its animal health business next year, ending months of anticipation that a partial flotation was in the works.
“We are on track to create a standalone animal health company by our previously stated target of July 2013,” said Ian Read, Pfizer’s chief executive.
Analysts estimate Pfizer’s animal health business is worth as much as $18bn.
The US group said it would reveal more details this summer when it announces second-quarter earnings. The new company will be called Zoetis.
Pfizer said last year that it would shed its infant nutrition and animal health units in an effort to focus on its core drug business.
In April it agreed to sell the infant nutrition business for $11.85bn in cash to Nestlé, which outbid Danone, its French rival.
Earlier this year the company was talking to bankers about arranging an initial public offering that would look to place up to 19.9 per cent of the unit’s shares in the autumn, in an equity carve-out or partial spin-off, people familiar with the talks said.
It generated $4.2bn in revenues last year and employs more than 9,000 workers. Analysts at Credit Suisse estimate it accounts for 19 per cent of a $20bn market.
Pfizer has been under pressure to revive its stock price and replenish its pipeline after a turbulent period that resulted in the ousting of Jeffrey Kindler, Mr Read’s predecessor, at the end of 2010.
Last year the patent on Lipitor, Pfizer’s top selling anti-cholesterol drug, expired, creating additional pressure for the company to focus its resources on developing new therapies.
“Our focus continues to be on taking the actions that will generate the greatest after-tax value for our shareholders, with share repurchases remaining the case to beat in allocating cash proceeds from the separation,” Mr Read said.
Shares of Pfizer rose 0.5 per cent to $22.02 in midday trading in New York.