Mylan, Pfizer’s Upjohn to combine into new company

The new firm, currently known only as “NewCo,” will be rebranded at the deal’s close. In connection with the agreement, Mylan’s CEO since 2012, Heather Bresch, plans to retire from her position.

One of the world’s largest generic drugmakers and a division of one of the largest pharmaceutical companies are combining to create a new pharmaceutical company.

Pittsburgh-based Mylan and Upjohn – the division of New York-based Pfizer focused on off-patent branded and generic drugs – said Monday the two companies would combine. The new company – which will be centered in Pittsburgh, Shanghai and Hyderabad, India – was referred to only as “NewCo” and will be renamed and rebranded when the deal closes.

The new company’s management will consist of Mylan Chairman Robert Coury serving as executive chairman; Upjohn Group President Michael Goettler as CEO; and Mylan president Rajiv Malik staying on as the new company’s president.

“This is no longer Mylan; this is no longer Upjohn; this is no longer Pfizer – this is an entirely new company,” Goettler said in a call with investors to discuss the news.

Shares of Mylan opened up 15.2 percent on the Nasdaq following the news. Shares of Pfizer opened down 1.4 percent on the New York Stock Exchange. Pfizer shareholders will own 57 percent of the new company, while Mylan shareholders will own 43 percent.

Developed markets in North America and Europe will constitute the largest percentage of the new company’s revenue mix, or about 55 percent, with the U.S. accounting for 45 percent of that, according to an investor presentation. The Asia Pacific region will be the second largest, accounting for 30 percent of revenues, with 40 percent of those coming from China.

The company is targeting about $3 billion in new revenues from products that are expected to launch by 2023, with two-thirds expected to come from complex generics, biosimilars and global brands. All in all, the company is expected to generate $19-20 billion in revenue next year, of which $12-12.5 billion will come from the Mylan side, and $7.5-8 billion will come from Upjohn.

In conjunction with the deal, Mylan CEO Heather Bresch plans to retire from her position.

“The opportunity to represent Mylan, and most especially our thousands of passionate and committed employees around the globe, has been one of the greatest joys and honors of my life,” Bresch said in a statement.

Bresch was appointed as CEO in 2012. But she came under criticism in 2016 when the list price of Mylan’s EpiPen increased to more than $600, from a little more than $100 in 2009.

Photo: AndreyPopov, Getty Images