Biotech Values

[DewDiligence]

PFE…has been talking to bankers about arranging an initial public offering that would look to place up to 19.9 per cent of the [animal health] unit’s shares in the autumn, in what is known as an equity carve-out or partial spinoff, people familiar with the talks said.

The 19.9% equity stake for the planned IPO of the animal-health business is not arbitrary—it must be <20% for the maneuver to be tax-free for PFE.

I wonder how many drug/biotech investors realize that PFE’s animal-health business could command a valuation as high as $18B as a standalone company.