Pfizer Inc. said Wednesday it is reviewing strategic alternatives — including a possible sale — for its Capsugel business unit, which makes capsules for oral medicines and dietary supplements.
The world's biggest drugmaker by revenue has been tweaking most of its business since its acquisition of drug and vaccine maker Wyeth for $68 billion last October. Pfizer has reduced costs by eliminating thousands of jobs, closing or selling some manufacturing plants and other facilities and prioritizing some research programs while eliminating others perceived as less promising.
"The decision to consider strategic alternatives for Capsugel is part of Pfizer's strategy to optimize its business mix and leverage its competitive strengths to deliver value for shareholders," Cavan Redmond, senior vice president and group president of Pfizer's diversified businesses, said in a statement.
Pfizer said Wednesday that Capsugel has strong potential for growth outside of Pfizer.
Capsugel makes hard gelatin, liquid-filled and vegetarian capsules. It also helps formulate liquid medicines and provides equipment for research labs to fill capsules.
The business is tiny compared to the other segments at Pfizer, having generated just $740 million in revenue in 2009. Altogether, Pfizer posted about $50 billion in revenue last year, and that could jump by roughly $15 billion this year due to the incorporation of Wyeth's many prescription and nonprescription drugs, vaccines and veterinary medicines.
Pfizer, which makes the cholesterol blockbuster Lipitor and impotence pill Viagra, said it has hired Morgan Stanley to conduct the Capsugel review.
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AP Business Writers Damian Troise in New York and Linda A. Johnson and Trenton, New Jersey, contributed to this report
