Oct 20 2010
Pfizer Inc. (NYSE: PFE) announced today that it is entering into a partnership with Laboratorio Teuto Brasileiro S.A., a leading company in the Brazilian generics industry, to develop and commercialize generic medicines. Pfizer will acquire a 40 percent stake in Teuto and the companies will also enter into a series of commercial agreements. The partnership will enhance Pfizer's position in Brazil, a key emerging market, by providing access to Teuto's broad portfolio of approximately 250 products in more than 400 presentations. Through this partnership, Pfizer will have access to significant distribution networks in rural and suburban areas in Brazil and the opportunity to register and commercialize Teuto's products in various markets outside Brazil. In addition, Pfizer will have two representatives on Teuto's board of directors.
Under the terms of the agreement, Pfizer will make an upfront payment of R$400 million (approximately US$240 million) and Teuto will be eligible to receive a performance-based milestone payment. Pfizer has an option to acquire the remaining 60 percent of Teuto's shares beginning in 2014. Teuto's shareholders have an option to sell their 60 percent stake to Pfizer beginning in 2015.
Pfizer will have the opportunity to register and commercialize Teuto products in Brazil and various markets outside of the country under its own brands, including branded and unbranded generic medicines, covering a broad range of therapeutic areas, such as pain and inflammation, cardiovascular, anti-infectives, central nervous system and respiratory, among others. Teuto will gain access to select Pfizer products for distribution across its extensive distribution network and have the right to commercialize them under Teuto's own brand in Brazil.
In 2008, the global generics marketplace represented US$750 billion and is anticipated to grow up to US$920 billion by 2013, with the bulk of this growth generated in emerging markets. Today, branded and unbranded generics account for approximately 60 percent of the value of the Brazilian retail pharmaceutical market fueled by the increased purchasing power of growing middle and lower-middle income patients.
"We believe this partnership will enable both companies to effectively build upon one another's core capabilities and areas of expertise to help address the needs of more patients than ever before," said Jean-Michel Halfon, president of Pfizer's Emerging Markets Business Unit. "This agreement demonstrates Pfizer's commitment to pursue focused investments in key emerging markets to accelerate our growth and increase patient access to high-quality medicines."
"Teuto's partnership with Pfizer is very complementary to our business goals. It will expand our product portfolio and address the needs of the changing customer base," said Marcelo Henriques, chief executive officer of Teuto Laboratories.
The stake in Teuto demonstrates Pfizer's commitment to continue its expansion in emerging markets through customer-focused efforts by increasing access and affordability, partnering with other companies that offer diverse areas of expertise and leveraging the company's capabilities to build upon local markets.
The transaction is subject to customary closing conditions and is expected to close by the end of fourth-quarter 2010.
Pfizer's financial advisor for the transaction was Goldman Sachs Group, Inc. while Skadden, Arps, Slate, Meagher & Flom LLP and Pinheiro Neto Advogados were its legal advisors. Banco BTG Pactual SA served as Teuto's financial advisor, while Machado, Meyer, Sendacz & Opice and Cleary Gottlieb served as legal advisors.