US-based pharma major Pfizer has found a buyer for Capsugel, a subsidiary that specialises in capsules and other drug delivery systems. Investment firm Kohlberg Kravis Roberts has agreed to pay $2.4 billion (£1.5 billion) in cash for the business, which it says has 'an excellent portfolio'.

Capsugel generated $750 million in sales in 2010. To reflect the divestiture, Pfizer has dropped its 2011 sales prediction from $66-68 billion to $65-67 billion. It has also revised its 2012 sales prediction, but it has left the rest of its financial guidance as it was. Pfizer was already planning to buy back Pfizer shares worth $5 billion in 2011. It will now use money from the sale of Capsugel buy back additional shares.

The move could have broader significance. Pfizer said in November 2010 that it was looking for a buyer for Capsugel. But there has been much speculation about a potential change of direction for Pfizer since the appointment of Ian Read as chief executive in December 2010 following the unexpected resignation of his predecessor Jeff Kindler. 'Read may be planning on stripping back Pfizer to a much leaner operating model focused exclusively on innovative prescription pharmaceuticals,' says Simon King, a pharma analyst at UK market research firm Datamonitor. He adds that this would represent a significant departure from the Pfizer strategy of recent years, which has relied on acquisitions to stock the drug pipeline: in October 2010, for example, Pfizer agreed to buy for $3.6 billion King Pharmaceuticals, a US company that specialises in pain relief drugs.

The big pharma companies are facing significant loss of sales in the next few years as patents for many key drugs expire and companies become exposed to generic competition. In November, Pfizer faces the expiration of its patents for cholesterol lowering drug Lipitor (atorvastatin), which generated $10.7 billion in sales in 2010. 'Capsugel could be the first step in a progression of divestments,' says King.

Andrew Turley

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