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Departing Mylan executives will net millions in Upjohn merger golden parachutes

MORGANTOWN — Mylan CEO Heather Bresch will retire with a comfortable golden parachute when the company completes its merger with Upjohn next year.

According to a recent Upjohn SEC filing, Bresch could receive just over $30.8 million upon her departure. That includes $17.9 million in cash, $12.6 million in equity awards and $309,000 in benefits.

The golden parachute payments for Bresch and other Mylan executives are “based on multiple assumptions … and may differ materially” from the listed estimates, the filing says.

Mylan and Upjohn – a division of Pfizer – announced in July that they are merging to create a new global pharmaceutical company that will be renamed and branded upon closure. They are characterizing the new company as a “New Champion for Public Health.”

Ken Parks, Mylan chief financial officer, will also depart. His $10.3 million golden parachute includes $6.2 million in cash, $3.5 million in equity awards and $542,000 in benefits.

Anthony Mauro is Mylan’s chief commercial offer. His plans haven’t been announced, but if he leaves he’ll be entitled to $9.2 million, including $5.2 million in cash, $3.7 million in equity and $303,000 in benefits.

The new company is referred to as Newco until a name is chosen. Mylan Chairman Robert J. Coury will serve as executive chairman of Newco; Michael Goettler, group president of Upjohn, will serve as CEO; Rajiv Malik, Mylan president, will serve as president.

Should Malik leave at some point, his golden parachute is estimated at $20.8 million, including $12 million in cash, $8.2 million in equity and $578,000 in benefits

Upjohn is Pfizer’s off-patent branded and generics subsidiary. It produces such drugs as Lipitor, for cholesterol; Norvasc, for high blood pressure; Lyrica, for nerve pain; and Viagra. It markets in more than 120 countries. It is headquartered in China and employs more than 12,300 people. One of its ongoing challenges is that off-patent drugs lose value as generics enter the market.

Mylan markets more than 7,500 products in more than 165 countries and employs more 35,000 people.

The new company, referred to as Newco until a name is chosen, is expected to generate about $19 billion to $20 billion in revenue, with an estimated annual synergies – cost savings realized by pooling resources and trimming redundancies – reaching $1 billion by 2023. Mylan’s current revenues are about $12.5 billion, with Upjohn’s hitting $8 billion. They foresee about $3 billion in new revenue from products expected to launch by 2023.

Under the merger, Pfizer shareholders will own 57% of Newco and Mylan shareholders will own 43%. The transaction is subject to approval by Mylan shareholders, but no vote is required by Pfizer shareholders.

The board of directors will include its executive chairman and its CEO, along with eight members designated by Mylan, and three members designated by Pfizer, for a total of 13 members.

The new company will be based in the U.S. and incorporated in Delaware and will operate Global Centers in Pittsburgh; Shanghai, China, and Hyderabad, India.

Both companies see advantages in the merger. Upjohn wants to sharpen its focus on innovative medicines and Mylan wants to broaden its Asia-Pacific presence, particularly in China, and expand its drug portfolio.

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