Pfizer May Sell or Spin Off Over-the-Counter Drug Unit

Pfizer Inc. said Tuesday that it might sell or spin off its over-the-counter drug unit, which makes Listerine mouthwash, Visine eyedrops and other products.

The move comes as New York-based Pfizer struggles to improve its sales and earnings in the wake of patent losses on several important drugs, sluggish sales of key medicines and a more competitive marketplace. Analysts surveyed by Thomson Financial expected only 1% earnings growth this year.

Pfizer said it would discuss alternatives for its consumer business when it meets with analysts and investors Friday to provide earnings guidance and a business overview.

In April, Pfizer told Wall Street that it would have double-digit earnings growth this year, but it rescinded the guidance six months later.

Sales of the consumer business rose 10% to $3.9 billion last year. The business accounted for 7.5% of Pfizer’s $51 billion in overall revenue, but over-the-counter medicines have lower margins than prescription drugs.

Procter & Gamble Co. and Colgate-Palmolive Co. might be interested in the rich array of brands, said analyst Doug Christopher of Crowell, Weedon & Co, a Los Angeles brokerage.

Another suitor could be Madison, N.J.-based Wyeth, Christopher said.

He said that shares of high-profile consumer brand companies trade at three to four times earning and that he would expect Pfizer’s brands to fetch around three times earnings, or about $10 billion to $12 billion.

Pfizer shares rose 9 cents to $25.18 before news of the possible sale was released. The stock gained 46 cents, or 1.8%, in late trading.