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UPDATE 1-Pfizer in talks to transition EpiPen maker into generics spinoff -spokeswoman

Carl O'Donnell and Tamara Mathias

-spokeswoman@ (Adds context about Meridian's relationship with EpiPen)

July 29 (Reuters) - Pfizer Inc is in talks to merge its contract manufacturer that produces Mylan's EpiPen emergency allergy treatment into the new generics business it is creating by combining its older off-patent medicines unit with Mylan NV , a Pfizer spokeswoman said.

The discussions on the arrangement are still ongoing and there is no guarantee that a deal will be reached, but the parties are aiming to reach a final decision before the close of the larger Pfizer-Mylan deal in 2020, Pfizer said.

Merging Meridian into the spun-off business could potentially help it cope with ongoing shortages of one of Mylan's flagship products, EpiPen, an epinephrine injector used for treating severe allergic reactions.

Meridian, which produces all EpiPens sold globally at a single plant near St. Louis, has been hit by a series of manufacturing problems. The company said in early July it anticipates further supply shortages over the coming months.

There is traditionally high demand for the devices in the summer as families look to renew prescriptions ahead of sending children to summer camp or the new school year.

Mylan, a generic drugmaker, has been facing new competition for the emergency allergy treatment. Teva Pharmaceuticals Industries (TEVA.TA> has launched its own EpiPen rival product, and other companies including Novartis AG, Kaleo Inc and Amneal Pharmaceuticals Inc. also are in the market. (Reporting by Carl O'Donnell and Tamara Manias in Bengalaru Editing by Paul Simao Editing by Bill Berkrot)