Pfizer has entered into a partnership with Laboratorio Teuto Brasileiro S.A., a Brazilian generics company, to develop and commercialize generic medicines. Pfizer will acquire a 40% stake in Teuto, expanding its presence in Brazil with access to Teuto’s portfolio of approximately 250 products. Pfizer will have access to distribution networks in Brazil and the opportunity to register and commercialize Teuto’s products in markets outside Brazil. Additionally, Pfizer will have two representatives on Teuto’s board of directors.

Pfizer will make an upfront payment of $240 million and Teuto will be eligible to receive a success-based milestone payment. Pfizer has an option to acquire the remaining 60% of Teuto’s shares beginning in 2014.

Pfizer will have the opportunity to register and commercialize Teuto products in Brazil and other markets under its own brands, covering therapeutic areas such as pain and inflammation, cardiovascular, anti-infectives, central nervous system and respiratory, and others. Teuto will have access to select Pfizer products for distribution and the right to commercialize them under Teuto’s own brand in Brazil.

“We believe this partnership will enable both companies to effectively build upon one another’s core capabilities and areas of expertise to help address the needs of more patients than ever before,” said Jean-Michel Halfon, president of Pfizer’s Emerging Markets Business Unit. “This agreement demonstrates Pfizer’s commitment to pursue focused investments in key emerging markets to accelerate our growth and increase patient access to high-quality medicines.”

“Teuto’s partnership with Pfizer is very complementary to our business goals. It will expand our product portfolio and address the needs of the changing customer base,” said Marcelo Henriques, chief executive officer of Teuto Laboratories. The transaction, subject to customary closing conditions, is expected to close in 4Q10.