Now playing
02:20
Pfizer and GSK to merge consumer health businesses (2018)
CNN
Now playing
03:22
Bank of America CEO reveals his top worry about the economy
US Navy
Now playing
01:28
Pentagon confirms UFO video is real, taken by Navy pilot
marte fotos volcan olympus mons sistema solar hope ultravioleta perspectivas mexico_00000411.png
marte fotos volcan olympus mons sistema solar hope ultravioleta perspectivas mexico_00000411.png
Now playing
04:12
Why we are going to Mars
Twitter | @brady9dream
Now playing
02:10
Pet owners pitch their pups to be dog brew's 'Chief Tasting Officer'
Now playing
01:32
Scientists turned spiderwebs into music and it sounds like a nightmare
LONDON, ENGLAND - DECEMBER 07:  A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile. While digital currencies across the board have divided opinion between financial institutions, and now have a market cap of around 175 Billion USD, the crypto sector coninues to grow, as it continues to see wider mainstreem adoption. The price of one Bitcoin passed 15,000 USD across many exchanges today taking it higher than previous all time highs.  (Photo by Dan Kitwood/Getty Images)
Dan Kitwood/Getty Images
LONDON, ENGLAND - DECEMBER 07: A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile. While digital currencies across the board have divided opinion between financial institutions, and now have a market cap of around 175 Billion USD, the crypto sector coninues to grow, as it continues to see wider mainstreem adoption. The price of one Bitcoin passed 15,000 USD across many exchanges today taking it higher than previous all time highs. (Photo by Dan Kitwood/Getty Images)
Now playing
03:07
Bitcoin has an energy problem
Accused $50 billion Ponzi scheme swindler Bernard Madoff exits federal court March 10, 2009 in New York City. Madoff was attending a hearing on his legal representation and is due back in court Thursday.  (Photo by Mario Tama/Getty Images)
Mario Tama/Getty Images
Accused $50 billion Ponzi scheme swindler Bernard Madoff exits federal court March 10, 2009 in New York City. Madoff was attending a hearing on his legal representation and is due back in court Thursday. (Photo by Mario Tama/Getty Images)
Now playing
03:11
Bernie Madoff, infamous Ponzi schemer, dead at 82
Now playing
05:18
Coinbase CFO: We're an on-ramp to the crypto economy
A man checks vine buds during the burning of anti-frost candles in the Luneau-Papin wine vineyard in Le Landreau, near Nantes, western France, on April 12, 2021, as temperatures fall below zero degrees celsius.
Sebastien Salom-Gomis/AFP/Getty Images
A man checks vine buds during the burning of anti-frost candles in the Luneau-Papin wine vineyard in Le Landreau, near Nantes, western France, on April 12, 2021, as temperatures fall below zero degrees celsius.
Now playing
01:37
See how French winemakers are trying to save their crops from frost
SUEZ, EGYPT - MARCH 29: The container ship 'Ever Given' is refloated, unblocking the Suez Canal on March 29, 2021 in Suez, Egypt. This morning the container ship came partly unstuck from the shoreline, where it ran aground in the canal last Tuesday, and later resumed its course shortly after 3pm local time. The Suez Canal is one of the world's busiest shipping lanes and the blockage had created a backlog of vessels at either end, raising concerns over the impact on global shipping and supply chains. (Photo by Mahmoud Khaled/Getty Images)
Mahmoud Khaled/Getty Images
SUEZ, EGYPT - MARCH 29: The container ship 'Ever Given' is refloated, unblocking the Suez Canal on March 29, 2021 in Suez, Egypt. This morning the container ship came partly unstuck from the shoreline, where it ran aground in the canal last Tuesday, and later resumed its course shortly after 3pm local time. The Suez Canal is one of the world's busiest shipping lanes and the blockage had created a backlog of vessels at either end, raising concerns over the impact on global shipping and supply chains. (Photo by Mahmoud Khaled/Getty Images)
Now playing
00:57
Egypt seizes Ever Given ship, asks for $900M in compensation
CNN
Now playing
03:06
Hear doctor's message for people with J&J vaccine concerns
Barbers from King's Cutz give haircuts indoors while observing COVID-19 safety restrictions on March 13, 2021 in Los Angeles, California.
Mario Tama/Getty Images
Barbers from King's Cutz give haircuts indoors while observing COVID-19 safety restrictions on March 13, 2021 in Los Angeles, California.
Now playing
01:43
US consumer prices increased in March
Now playing
03:21
Teachers under pandemic stress are quitting: I didn't feel safe
Domino's autonomous vehicle will deliver your pizza
Domino's
Domino's autonomous vehicle will deliver your pizza
Now playing
01:12
Watch this robot deliver a Domino's pizza
Now playing
01:27
See the first community of 3D-printed homes
(CNN Business) —  

Pfizer and Mylan announced they are combining two of their businesses to create a global powerhouse in the low-price drug market.

Pfizer said Monday it’s offloading Upjohn, its portfolio of drugs that are no longer protected by patents, including Viagra, Lipitor and Celebrex. It is combining Upjohn with rival Mylan, which makes EpiPens, to create a new company.

Under the terms of the deal, Pfizer shareholders would gain most control of the company with 57% ownership and Mylan shareholders would own the rest.

The new company will have a new, yet-to-be-announced name. The combined company is expected generate annual revenue of $20 billion and will be based in the United States. The Wall Street Journal first reported that talks were happening over the weekend.

The management team will include people from Mylan and Upjohn. Mylan’s current chairman, Robert Coury, will be its executive chairman and Upjohn’s current president, Michael Goettler, will be the CEO. Mylan’s current CEO, Heather Bresch, will retire after the deal closes.

Mylan’s stock is up 15% in early trading. Pfizer (PFE)’s stock is down nearly 3%.

Both drugmakers recently lost exclusive rights to manufacture drugs that were big money makers for the companies. Erectile dysfunction drug Viagra brought in an estimated $1.4 billion in annual sales for Pfizer before Teva Pharmaceuticals introduced a generic version of the pill in 2017 that quickly ate up market share.

The first generic competitor to Mylan’s EpiPen, the emergency treatment for allergic reactions, gained FDA approval last year. EpiPens were added to the FDA’s drug shortage list two years after Mylan increased the price of the product by more than 400%, leading to public outrage.

Mylan’s stock has lost 60% of its value over the past three years. Bresch’s departure is a “clear positive as far as healthcare shareholders are concerned,” Jefferies analyst Jared Holz told CNN Business.

He blames Mylan’s management for a “fairly significant discount” in the company’s stock valuation.

Other drugs in Pfizer’s Upjohn portfolio include anxiety medication Xanax, depression drug Zoloft, and Lipitor, which treats high cholesterol. Upjohn reported a multimillion drop in sales during the first quarter.

Pfizer, one of the largest drugmakers in world, is separately working to expand its portfolio of name brand drugs, and last month the company agreed to spend $11 billion to buy Array BioPharma, a small venture that is developing potentially lucrative cancer treatment drugs.

Pfizer is also launching a joint venture with GlaxoSmithKline (GLAXF) that will have an estimated $12.7 billion in annual sales. That deal, expected to close in the second half of this year, will bring together Pfizer’s big over-the-counter products like Centrum and Caltrate with GSK’s top brands, including Excedrin and Nicorette.

– CNN Business’ Matt Egan and Jackie Wattles contributed to this report.