Pfizer Sells Capsugel Unit to KKR for $2.4 Billion

Pfizer Sells Capsugel Unit to KKR for $2.4 Billion

Pfizer Sells Capsugel Unit to KKR for $2.4 Billion

Kohlberg Kravis Roberts & Co. agreed to acquire Pfizer Inc.'s Capsugel business for $2.38 billion in cash, as the drug giant also disclosed its application to market a treatment for a deadly genetic disease was deemed incomplete by the U.S. Food and Drug Administration.

Like many large pharmaceutical companies, Pfizer is facing generic competition on some of its biggest-selling drugs in coming years and has been adjusting its strategy accordingly. While the company recently completed its $3.6 billion deal for painkiller maker King Pharmaceuticals Inc., analysts have been expecting Pfizer to spin off several of its business units.

Pfizer said in October it was reviewing options for Capsugel, which makes capsules and other drug-delivery systems. Capsugel, which generated abut $750 million in revenue last year, became part of Pfizer through a series of acquisitions. It was originally part of Parke-Davis, a drug maker bought in 1970 by Warner-Lambert, which was then bought by Pfizer in 2000.

Capsugel has manufacturing operations in the U.S., along with similar locations in Europe and Asia, including China and India.

Pfizer also revised its 2011 revenue guidance to $65.2 billion to $67.2 billion from its prior estimate of $66 billion to $68 billion as a result of the deal.

The company plans to expand its share buyback program, assuming the deal closes this year, on top of its current $5 billion share repurchase program.

Meanwhile, Pfizer said it is working with the FDA to resubmit its application quickly and that further clinical studies aren't needed.