Pfizer to Sell Most of Shiley’s Product Lines to Fiat Unit
Pfizer Inc. said Friday it is selling most of the product lines of its trouble-plagued Shiley Inc. heart-valve manufacturing subsidiary to an Italian company for an undisclosed price.
Shiley’s line of cardiovascular products will be sold to Italy’s SNIA BPD S.p.A. unit of the Fiat Group, a diversified industrial company based in Milan, with $2 billion in annual revenue.
Pfizer, which expects the deal to close in February, will retain the Shiley Heart Valve Research Center, as well as responsibility for legal liabilities generated by the alleged defects in heart valves marketed by the subsidiary from 1979 to 1986.
Shiley faces class-action lawsuits on behalf of 55,000 patients who received heart-valve implants. As of Aug. 31, the most recent company figures available, 448 heart valves had fractured, resulting in death for roughly two-thirds of the patients, the company said.
“We do not anticipate a significant impact on the financial statements of Pfizer when the transaction is recorded in 1992,” said Edward C. Bessey, chief executive of Pfizer Hospital Products Group. “We are pleased to have been able to sell these product lines to a large technologically oriented company with the resources in place to enable it to maintain these medically important product lines.”
Pfizer stock closed at $74.50 a share on Friday, up $1.25 cents in trading on the New York Stock Exchange. Volume was a heavy 1.3 million shares.
“Although they will still have the liability, I think this sale allows Pfizer to get away from some of its mental anguish and focus on its pharmaceutical businesses,” said David Saks, an analyst with Wedbush Morgan Securities in New York. “In that sense, this sale is a positive development for Pfizer.”
The product lines to be sold include cardiovascular devices used in open-heart surgery, automated blood transfusion devices, the Monostrut artificial heart valve (which is sold outside the United States) and a line of tracheostomy tubes, which are used to help patients with breathing difficulties. The sale includes the Irvine plant where the allegedly faulty heart valves were made.
Most of Shiley’s 2,100 employees will be retained by the new owner, Bessey said in a statement. Robert Fauteux, spokesman for Shiley in Irvine, said most of the 1,100 employees in Irvine would be employed by the Fiat Group.
Bessey said the sale of the product lines represents the completion of a three-phase restructuring in which the company earlier this year sold two other subsidiaries, Pfizer Laser Systems and Deknatal.
Pfizer Slims Down
Pfizer Inc. is selling a substantial portion of its Shiley Inc. subsidiary in Irvine.
Headquarters: New York
Performance: Pfizer earned $721.2 million on sales of $5.1 billion for the first nine months of this year.
Pfizer product lines to be sold:
Cardiovascular devices, automatic blood transfusion devices, Monostrut artificial heart valves, tracheostomy tubes.
Pfizer will keep its Hospital Products Group, which had $1.1 billion in sales last year, and includes:
Howemedica, artificial joints maker
Valleylab, electrosurgical and ultrasonic surgery systems
Schneider, artery-clearing devices
American Medical Systems, impotence and incontinence implant products
Infusaid, infusion pumps
Strato Medical Corp., vascular access products
Shiley Inc. name and legal liabilities
Shiley Heart Valve Research Center, Irvine
Shiley Biomedical Sensors division, England
