Biotech Values

[DewDiligence]

PFE sells Capsugel business unit for $2.4B in cash:

#msg-61690988

The cash proceeds from this deal will allow PFE to increase share buybacks above the $5B authorization announced in February (#msg-59431699), which is IMO the best use of PFE’s capital. (I.e. PFE’s balance sheet still has plenty of room to add leverage.)

Absent the $750M annual revenue from the Capsugel unit, PFE has adjusted its 2011 and 2012 revenue guidance by a corresponding amount: the new ranges are $65.2-$67.2B in 2011 and $63.0-65.5B in 2012, the first full year after Lipitor goes generic.

PFE’s revenue from emerging markets was only a small portion of the total in 2010 ($2.4B), but it is growing at a very rapid clip (#msg-59590951).

There is not change in non-GAAP EPS guidance on account of the Capsugel deal: the ranges remain $2.16-2.26 in 2011 and $2.25-$2.35 in 2012 (#msg-59431699).