Mylan NV (MYL) - Get Report shares were indicated sharply higher Monday amid reports the generic drugs group is set to create a separate business with Pfizer Inc. (PFE) - Get Report for off-patent pharmaceuticals.
The Wall Street Journal first reported terms of the deal, which multiple media reports suggest could see Mylan investors owning around 40% of the newly-formed group, with Pfizer holding the remaining stake and putting key products such as Lipitor and Viagra into its portfolio.
Reports also suggest the combined entity will be based in the United States, a decision that would remove Mylan's Dutch corporate structure and potentially open the group up to potential suitors as it moves to reoganize its business thanks to slowing sales, and falling prices, for generic drugs in the United States.
A Pfizer spokesperson declined to comment "on the stories (about the deal with Mylan) or their speculative contents" when contacted by TheStreet this weekend.
Mylan shares were marked 26% higher in pre-market trading Monday to indicate an opening bell price of $23.26 each, a move that would still leave the stock nursing a 16% year-to-date decline. Pfizer shares, meanwhile, were seen 0.6% higher at $43.35 each with a market value of around $240 billion.
Earlier this year, Pfizer agreed to acquire Array Biopharma (ARRY) - Get Report in an all-cash deal that values the cancer drug specialist at around $11.4 billion as it moves towards innovative medicines under new CEO Albert Bourla, who previously led Pfizer's Innovative Health Business, amid plans to reorganize its business into three separate units.
Mylan also released its second quarter earnings Monday, reporting a loss of 33 cents per share on a GAAP basis, but said on on adjusted basis profits came in at a stonger-than-expected $1.03 per share.
Group revenues, Mylan said, rose 2% to $2.851 billion, and the company reaffirmed its guidance for full-year sales in the region of $11.5 billion to $12.5 billion.
"Mylan's second quarter performance was strong as we delivered or exceeded on expectations across all financial metrics," said CEO Heather Bresch. "In addition, based upon our strong execution against our plan, we remain on track to deliver on our 2019 guidance."