Pfizer Inc. plans to separate its animal health unit into a stand-alone company, a move Wall Street expected as the largest U.S. drug maker focuses more intently on its core pharmaceuticals business.
Pfizer said on Thursday that preparations were underway for a public offering of a minority stake in the new animal health company, which would be called Zoetis.
The business, which generated revenue of about $4.2 billion last year, sells medicines, vaccines and other products for livestock and pets. It has more than 9,000 employees and markets products in more than 120 countries.
Pfizer said it would provide details of the proposed IPO in the coming months, when it reports second-quarter earnings.
New York-based Pfizer, which agreed in April to sell its baby formula business to Nestlé SA for $11.85 billion, had also been shopping its animal health unit since last year. But chief executive officer Ian Read has said in recent months that any separation of the animal health business would probably be in the form of an IPO, to avoid hefty taxes.
ISI Group analyst Mark Schoenebaum valued the animal health unit at about $15 billion, and estimates Pfizer could generate $3 billion in cash proceeds by spinning off 20 per cent of the business through an IPO.