{"id":6418,"date":"2022-11-29T23:56:00","date_gmt":"2022-11-29T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=6418"},"modified":"2025-11-07T11:30:21","modified_gmt":"2025-11-07T03:30:21","slug":"big-pharma-spin-offs","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/","title":{"rendered":"Big pharma spin-offs, and advantages to invest them"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Spin-offs_of_big_pharmas_in_the_past_decade\" >Spin-offs of big pharmas in the past decade<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Pfizer\" >Pfizer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Abbott\" >Abbott<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Johnson_Johnson\" >Johnson &amp; Johnson<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Merck\" >Merck<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#GlaxoSmithKline\" >GlaxoSmithKline<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Novartis\" >Novartis<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Sanofi\" >Sanofi&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#3M\" >3M<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#An_industry_trends\" >An industry trends<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Why_spin-off\" >Why spin-off?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#How_did_the_split_play_out\" >How did the split play out?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#How_does_it_actually_perform\" >How does it actually perform?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#How_are_these_companies_performing\" >How are these companies performing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Their_share_price_performance\" >Their share price performance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#How_is_the_stock_market_valued\" >How is the stock market valued?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Advantage_of_big_pharma_split\" >Advantage of big pharma split<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Capital_activation\" >Capital activation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Suitable_for_conservative_investors\" >Suitable for conservative investors<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/#Relative_articles\" >Relative articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Spin-offs_of_big_pharmas_in_the_past_decade\"><\/span><strong>Spin-offs of big pharmas in the past decade<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following are the big pharma spin-offs  I know of in the past ten years. These pharmaceutical companies are all world-renowned super pharmaceutical companies, so these three spin-off cases are very important. They all have the same purpose, dismantling or selling all businesses that are not the core of human pharmaceutical research and development.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pfizer\"><\/span>Pfizer<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In 2012, <a href=\"https:\/\/www.reuters.com\/article\/us-pfizer-babymilk-nestle-idUSTRE8160YX20120207\" target=\"_blank\" rel=\"noreferrer noopener\">Pfizer (ticker: PFE) sold its Wyeth infant milk formula business to Nestle (ticker: NSRGY) for $78.5 billion<\/a>.<\/li>\n\n\n\n<li>In 2012, <a href=\"https:\/\/archive.nytimes.com\/dealbook.nytimes.com\/2013\/01\/31\/pfizer-spins-off-animal-health-unit-in-2-2-billion-i-p-o\/\" target=\"_blank\" rel=\"noreferrer noopener\">Pfizer spun off its animal health business independently into Zoetis<\/a> (ticker: ZTS), which went public and raised $13.8 billion for Pfizer.<\/li>\n\n\n\n<li>In 2019, <a href=\"https:\/\/www.pfizer.com\/news\/press-release\/press-release-detail\/mylan_and_pfizer_announce_viatris_as_the_new_company_name_in_the_planned_mylan_upjohn_combination\" target=\"_blank\" rel=\"noreferrer noopener\">Pfizer merged its generic drug business with generic drug giant Mylan<\/a>, as a new company Viatris (ticker: MYL).<\/li>\n\n\n\n<li>In 2019, <a href=\"https:\/\/www.forbes.com\/sites\/joecornell\/2021\/07\/15\/glaxosmithkline-to-spin-off-consumer-healthcare-business-by-mid-2022\/?sh=4919de1a72d0\" target=\"_blank\" rel=\"noreferrer noopener\">Pfizer spun off its consumer health products business to GSK<\/a>.<\/li>\n\n\n\n<li>In May 2020, Pfizer divested its anti-infective drug.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Abbott\"><\/span>Abbott<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.genengnews.com\/news\/abbvie-spins-off-from-abbott\/\" target=\"_blank\" rel=\"noreferrer noopener\">In 2013, Abbott (ticker: ABT) spun off its branded pharmaceutical business, which has since been traded under the name AbbVie (ticker: ABBV)<\/a>. <\/li>\n\n\n\n<li>For Abbot, please see my previous post &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/02\/abbott-laboratories\/\" target=\"_blank\" rel=\"noreferrer noopener\">Abbott, the world\u2019s most important medical device and nutritional food supplier, how does it make money?<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Johnson_Johnson\"><\/span>Johnson &amp; Johnson<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In 2021, Johnson &amp; Johnson&#8217;s baby powder will be riddled with cancer-causing lawsuits, and there will be as many as 38,000 lawsuits. For this reason, in October 2021, Johnson &amp; Johnson established a new subsidiary, LTL Management LLC (&#8220;LTL&#8221; for short) . For the purpose of dumping the liability, transfer the liabilities to the new company, let LTL absorb all the debts related to the baby powder cancer lawsuit, and declare that the company has filed for bankruptcy protection and the newly established entity will assume legal responsibility.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.cnbc.com\/2021\/11\/12\/jj-shares-jump-after-ceo-says-health-giant-plans-to-break-up-in-wsj-report.html\" target=\"_blank\" rel=\"noreferrer noopener\">Johnson &amp; Johnson will spin off the health consumer goods company and go public independently<\/a>. New company named Kenvue. The separation is expected to be completed within 18 to 24 months from November 2021.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Merck\"><\/span>Merck<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.merck.com\/news\/merck-announces-completion-of-organon-co-spinoff\/\" target=\"_blank\" rel=\"noreferrer noopener\">In 2022, Merck (ticker: MRK) spin off its $6.5 billion business into a new public company, Organon (ticker: OGN)<\/a>, which includes women&#8217;s health products and biosimilars, a move that will allow Merck focus on high-growth areas such as cancer drugs and vaccines.  <\/li>\n\n\n\n<li>For Merck, please see my previous post &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/24\/stable-dow-component-merck\/\" target=\"_blank\" rel=\"noreferrer noopener\">Stable Dow Component Merck, how does it make money?<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GlaxoSmithKline\"><\/span>GlaxoSmithKline<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In 2014, GlaxoSmithKline bought Novartis&#8217; vaccines unit (excluding flu drugs) for $5.25 billion.<\/li>\n\n\n\n<li>In 2018, GlaxoSmithKline acquired Novartis&#8217; 36.5% stake in the two companies&#8217; consumer healthcare joint venture for $13 billion in cash.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.cnbc.com\/2022\/07\/18\/gsk-spins-off-haleon-in-biggest-european-listing-for-a-decade.html\" target=\"_blank\" rel=\"noreferrer noopener\">On July 18, 2022, GlaxoSmithKline (ticker: GSK) will spin off its consumer health business to form a new company called Haleon<\/a> (ticker: HLN), becoming the world&#8217;s largest independent consumer health company. It owns the toothpaste brand Sensodyne, the anti-inflammatory and pain-relieving Voltaren, the pain-relieving magic drug Panadol, the vitamin brand Shancun, and the calcium supplement Caerqi. <\/li>\n\n\n\n<li>Haleon has been listed on the London Stock Exchange first, which is also the largest listed company in London in the past 10 years. It is also successfully listed in the United States as well.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Novartis\"><\/span>Novartis<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In 2014, Novartis sold its animal health unit to Eli Lilly (ticker: LLY) for $5.4 billion.<\/li>\n\n\n\n<li>In April 2014, Novartis acquired the cancer drug division of GlaxoSmithKline for $16 billion.<\/li>\n\n\n\n<li>In 2015, <a href=\"https:\/\/www.novartis.com\/news\/media-releases\/novartis-completes-divestiture-influenza-vaccines-business-csl-limited-usd-275-million\" target=\"_blank\" rel=\"noreferrer noopener\">Novartis&nbsp;completes divestiture of influenza&nbsp;vaccines business&nbsp;to CSL Limited for USD 275 million<\/a>.<\/li>\n\n\n\n<li>In 2015, <a href=\"https:\/\/www.pmlive.com\/pharma_news\/novartis_completes_sale_of_animal_health_unit_to_lilly_628392\" target=\"_blank\" rel=\"noreferrer noopener\">Novartis completes sale of animal health unit to Elanco (ticker: ELAN) under Lilly<\/a> (ticker: LLY).<\/li>\n\n\n\n<li>In 2018, Switzerland-based&nbsp;<a href=\"https:\/\/www.biospace.com\/article\/novartis-to-spin-off-its-alcon-eye-care-business\/\" target=\"_blank\" rel=\"noreferrer noopener\">Novartis&nbsp;announced it plans to&nbsp;spin off&nbsp;Alcon (ticker: ALC)<\/a>.<\/li>\n\n\n\n<li>In 2022, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-06-30\/novartis-said-to-lean-toward-spinoff-of-25-billion-generics-arm\" target=\"_blank\" rel=\"noreferrer noopener\">Novartis Leaning Toward Spinoff of $25 Billion Generics Arm, sold to Sandoz<\/a>.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-02-01\/blackstone-carlyle-mull-joint-bid-for-25-billion-novartis-unit\" target=\"_blank\" rel=\"noopener\">Novartis (ticker: NVS), decided to sell or divest its generic drug company Sandoz by the end of 2022<\/a>. It is reported that PE giants Blackstone Group and Carlyle Group may jointly acquire Sandoz for $25 billion.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sanofi\"><\/span>Sanofi&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In 2019, Sanofi (ticker: SNY) adjusted its global business framework to a &#8220;3+1&#8221; model, that is, focusing on special medicines, vaccines, and general medicines (diabetes, cardiovascular, etc.), while the original consumer healthcare business ( including products such as over-the-counter pain relievers) was spun off into a separate consumer division.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3M\"><\/span>3M<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>3M announced in July 2022 that it plans to spin off its healthcare business into a company and go public independently. The transaction is expected to be completed by the end of 2023. After the spin-off is completed, 3M will hold 19.9% of the newly established medical company&#8217;s equity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"An_industry_trends\"><\/span>An industry trends<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Why_spin-off\"><\/span><strong>Why spin-off?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The answer is very simple, first in terms of organization and business. Because the business of the spun-off department is too different from other departments of the parent company; usually, the main business of the parent company is biotechnology and pharmaceuticals, and the spun-off department is related to health consumer goods; while the health consumer goods department is more inclined to people&#8217;s livelihood industry.<\/p>\n\n\n\n<p>However, in business and business, the main consideration is capital, and the spin-off can:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Have the more developed sub-group be independent, the prospects of the new company are good, and the stock price valuation is of course much higher than that of the parent company. Why not do it? Remaining in the parent company, the promising group is forced to use a lower valuation to calculate the market value, which is not worth it.<\/li>\n\n\n\n<li>The other is the other way around, to avoid sub-group dragging down the entire company. Of course, it is better to keep the main parent company. The example of Johnson &amp; Johnson I mentioned in my blog a few days ago: Compared with the other two businesses (medical equipment and pharmaceuticals), the revenue and growth rate of the consumer goods business are slightly lower. Both businesses achieved double-digit growth in 2021. After ditching the consumer goods business, spin-offs can increase the parent company&#8217;s valuation, a common practice for companies.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_did_the_split_play_out\"><\/span>How did the split play out?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Of course, not all transitions are successful. According to incomplete statistics, internationally, 39 such companies have embarked on an independent development path. From the perspective of parent companies and the time of spin-off, most of them have been spin-off from 12 large global pharmaceutical companies in the past 10 years. from. Among them, 10 have been successfully listed, 8 are still privately held, 11 have been acquired, and the remaining 10 ended up going bankrupt or no longer active.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_does_it_actually_perform\"><\/span>How does it actually perform?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"How_are_these_companies_performing\"><\/span><strong>How are these companies performing?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Index<\/td><td>Johnson &amp; Johnson<\/td><td>Pfizer<\/td><td>AbbVie<\/td><td>Merk<\/td><\/tr><tr><td>2021 revenue (billion)<\/td><td>93.775 +13.55%<\/td><td>81.288 +95%<\/td><td>56.197 +22.69%<\/td><td>48.704 +17.31%<\/td><\/tr><tr><td>pharmaceuticals<\/td><td>52.08 +14.28%<\/td><td>79.557+95%<\/td><td>56.197 +22.69%<\/td><td>48.704 +17.31%<\/td><\/tr><tr><td>Medical devices \/ Pfizer&#8217;s CDMO<\/td><td>27.06 +17.86%<\/td><td>1.731 +87%<\/td><td>0<\/td><td>0<\/td><\/tr><tr><td>Health consumer goods<\/td><td>14.645 +4.1%<\/td><td>0<\/td><td>In Abbott Laboratories<\/td><td>Become Organon<\/td><\/tr><tr><td>Gross margin<\/td><td>68.27%<\/td><td>62.28%<\/td><td>69.65%<\/td><td>72.81%<\/td><\/tr><tr><td>Operating margin<\/td><td>26.92%<\/td><td>33.02%<\/td><td>35.29%<\/td><td>32.56%<\/td><\/tr><tr><td>Net margin<\/td><td>22.26%<\/td><td>27.04%<\/td><td>22%<\/td><td>26.79%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Their_share_price_performance\"><\/span><strong>Their share price performance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In the past 10 years, the stock prices of Johnson &amp; Johnson, Pfizer, Merck, and AbbVie, as shown in the chart below, have risen by 119.75%, 46.11%, 84.56%, 140.82%, and 297.71%, respectively.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"750\" height=\"383\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/05\/b-1600x1200-1.png\" alt=\"\" class=\"wp-image-6429\" srcset=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/05\/b-1600x1200-1.png 750w, https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/05\/b-1600x1200-1-300x153.png 300w\" sizes=\"auto, (max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 984px) 61vw, (max-width: 1362px) 45vw, 600px\" \/><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"How_is_the_stock_market_valued\"><\/span><strong>How is the stock market valued?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><\/td><td>Johnson &amp; Johnson<\/td><td>Pfizer&nbsp;<\/td><td>AbbVie<\/td><td>Merk<\/td><\/tr><tr><td>Market capital (billion)<\/td><td>474.54<\/td><td>277.14<\/td><td>259.43<\/td><td>221.61<\/td><\/tr><tr><td>Share price<\/td><td>180.46<\/td><td>49.07<\/td><td>146.88<\/td><td>87.65<\/td><\/tr><tr><td>P\/E<\/td><td>24.31<\/td><td>12.5<\/td><td>22.76<\/td><td>15.68<\/td><\/tr><tr><td>P\/S<\/td><td>5.08<\/td><td>3.51<\/td><td>4.91<\/td><td>4.1<\/td><\/tr><tr><td>Dividend yield<\/td><td>2.5%<\/td><td>3.26%<\/td><td>3.84%<\/td><td>3.15%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"166\" height=\"120\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/11\/EE-Time-1600x1200-1.jpg\" alt=\"pharma spin-offs\" class=\"wp-image-15992\"\/><figcaption class=\"wp-element-caption\">credit: EE Time<\/figcaption><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantage_of_big_pharma_split\"><\/span>Advantage of big pharma split<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capital_activation\"><\/span>Capital activation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In the short term, the spin-off of pharmaceutical companies often heralds a good return on capital and has an obvious role in supplementing cash flow. Refinement management can also reduce the negative effects brought about by the parent company&#8217;s overall planning, avoid complex procedures of large enterprises, improve R&amp;D efficiency, enable each business entity to focus on core business, achieve &#8220;specialization in the technical industry&#8221;, and effectively improve the allocation of resources.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Suitable_for_conservative_investors\"><\/span><strong>Suitable for conservative investors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The major pharmaceutical companies in the U.S. stock market are suitable for investors who are conservative but unwilling to hold ETFs tracking the market index for the following reasons:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They are all typical blue-chip stocks, which means that they have decades of stable performance as their history shown, and the chances of losing money in the long-term are very low.<\/li>\n\n\n\n<li>All are, or were, components of the Dow Jones Index.<\/li>\n\n\n\n<li>Dividends will be issued, and dividend yields are considered a very high group in U.S. stocks.<\/li>\n\n\n\n<li>The stock price will not perform worse than the S&amp;P 500 index, which represents the U.S. stock market in the long run.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relative_articles\"><\/span>Relative articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/11\/06\/hca-healthcare\/\">How does HCA Healthcare make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/10\/18\/chinese-biotech-deepseek\/\">Chinese biotech begins to show its DeepSeek moment<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/09\/16\/akesos-beat-best-drug\/\">Akeso\u2019s lung cancer drug beat world best-selling drug, a biotech DeepSeek watershed<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/08\/07\/weight-loss-is-golden-goose\/\">Weight loss is the future golden goose of the drug market <\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/28\/gilead-aids-vaccine\/\" target=\"_blank\" rel=\"noreferrer noopener\">Gilead, lord of antiviral drug, reveals world&#8217;s first AIDS vaccine<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/06\/viking\/\" target=\"_blank\" rel=\"noreferrer noopener\">Viking is developing two future star new drugs at the same time<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/02\/mash-breakthrough\/\" target=\"_blank\" rel=\"noreferrer noopener\">FDA approved first ever MASH drug<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/12\/07\/alzheimer-progress\/\" target=\"_blank\" rel=\"noreferrer noopener\">Alzheimer, the only major disease yet to be conquered, current progress and related companies<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/11\/15\/eli-lilly-value-king\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why Eli Lilly become global pharmaceutical market value king?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/29\/big-pharma-spin-offs\/\">Big pharma spin-offs, and advantages to invest them<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/08\/09\/eli-lilly\/\">Eli Lilly, a big pharma with astonishing valuation<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/22\/pfizer-the-largest-pharma\/\">Pfizer, the world&#8217;s largest pharmaceutical company<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/03\/30\/novo-nordisks-new-diabetes-drug-semaglutide-and-incretin-found-to-have-surprising-weight-loss-effects\/\">Novo Nordisk&#8217;s new diabetes drug Semaglutide,Ozempic,Wegovy and Mounjaro found to have surprising weight-loss effects<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/18\/prescription-leader-abbvie\/\">The next No. 1 pharmaceutical leader AbbVie<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/24\/stable-dow-component-merck\/\">Stable Dow Component Merck, how does it make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/11\/06\/the-ex-largest-pharma-merck\/\" target=\"_blank\" rel=\"noreferrer noopener\">The ex-largest pharma Merck<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/02\/abbott-laboratories\/\" target=\"_blank\" rel=\"noreferrer noopener\">Abbott, the world\u2019s most important medical device and nutritional food supplier, how does it make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/05\/17\/roche\/\">Roche, the lord of anti-cancer<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/21\/how-johnson-johnson-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How the best AAA credit rating Johnson &amp; Johnson makes money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/04\/intuitive-surgical\/\">How does dominated Intuitive Surgical make money?&#8221;<\/a><\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The following are the three big pharma spin-offs  I know of in the past ten years. These three pharmaceutical companies are all world-renowned super pharmaceutical companies<\/p>\n","protected":false},"author":1,"featured_media":15992,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[716,115,527,163,45,131,112,46,733,120,84,28],"tags":[756,757,856,852,851,855,848,847,138,896,752,858,473,854,501,850,758,474,857,853],"class_list":["post-6418","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-spinoff","category-biotech","category-company-bio","category-dividend","category-etf","category-food","category-household-goods","category-market-index","category-medical-device","category-pharmaceutical","category-private-equity","category-us-stock-market","tag-abbv","tag-abt","tag-alc","tag-bx","tag-cg","tag-elan","tag-gsk","tag-hln","tag-jnj","tag-kenvue","tag-lly","tag-mmm","tag-mrk","tag-myl","tag-nsrgy","tag-nvs","tag-ogn","tag-pfe","tag-sny","tag-zts"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/6418","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=6418"}],"version-history":[{"count":73,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/6418\/revisions"}],"predecessor-version":[{"id":39819,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/6418\/revisions\/39819"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/15992"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=6418"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=6418"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=6418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}