Welcome to the Senior PGA Tour... Pfizer has decided to get rid of its seasoned drugs that used to be hugely profitable, but have gone off-patent and aren't cut out for the big leagues anymore. We're talking its drugs whose patents have expired. And Pfizer's merging those oldies with fellow drugmaker Mylan, which specializes in has-been generic and off-patent drugs:
- From Team Pfizer: Xanax (anxiety), Viagra (erectile dysfunction), and Lipitor (cholesterol)
- From Team Mylan: EpiPens (allergies)
- Team Name — TBD: The not-yet-named mixed will be a separate, publicly-traded company with $20B in annual sales, combining all the above.
Patent protection = profit protection... Drugmakers thrive off patents — That protection from competition lets them develop a unique medicine and pretty much name their price. Once the patent expires, the competition arrives.
- Viagra used to bring in $1.4B in sales annually for Pfizer. In 2017 competition came with Hims, Roman, and Teva Pharmaceutical's brazenly-named "Generic Version Viagra".
- Mylan has lost profits and stock price after the generic version of EpiPen (also by Teva) was approved last year.
This is cheap drugs vs. expensive drugs... Pfizer's spinning off its classics so it can focus on more "lucrative" drugs that are patent-protected (it just bought an expensive cancer-treating one for $11B last month). But now Pfizer's losing its ol' faithful revenue generators. The pressure is on their scientists now to pass those clinical trials and unleash new blockbuster drugs.