(By Balachander) Pfizer Inc. (NYSE:PFE) announced plans to spin off its animal health division into a standalone company with the name Zoetis. The New York-based drug giant said it is preparing for a potential initial public offering (IPO) of a minority stake in the new company.
The company expects to provide more details on the proposed transaction during its 2012 second quarter earnings announcement.
Pfizer has been seeking to bolster its drug portfolio to address the lower demand for its blockbuster cholesterol reduction drug Lipitor, which is facing generic competition.
The company had on July 2011 said it was exploring strategic alternatives for the Animal Health business, which posted revenue of roughly $4.2 billion in 2011. Animal Health's value "may be best maximized outside the company," Pfizer had said.
The company announced at that time it was considering options that may include, among others, a full or partial separation of each of these businesses from Pfizer through a spin-off, sale or other transaction.
Chief Executive Ian Read said the company is on track to create the standalone company by its target of July 2013.
Earlier this year, Pfizer agreed to divest its nutrition unit to Nestle SA for $11.85 billion.
On Thursday, PFE shares added 14 cents or 0.64 percent to trade at $22.05.