Pfizer yesterday stepped up the case for its planned acquisition of AstraZeneca and questioned the UK drug firm’s ability to stand alone in a competitive market.
In an effort to douse questions about its commitments to British jobs, Pfizer also stressed that an agreement to complete AstraZeneca’s new research centre in Cambridge, retain a plant in Macclesfield and locate a fifth of its research staff in the UK if the bumper deal goes ahead, were legally binding.
The comments are the group’s latest counter to critics of its $106 billion (£63bn) takeover proposal, which would be the largest foreign acquisition of a British firm. It is opposed by many scientists and politicians – as well as AstraZeneca itself.
Ian Read, Pfizer’s Scots-born chief executive, and Pascal Soriot, his counterpart at AstraZeneca, today face a grilling from MPs about the proposed deal, which is being driven in large part by the US firm’s desire to cut its tax bill.
Members of Westminster’s business, innovation and skills committee will also interrogate Business Secretary Vince Cable. A second parliamentary committee will question both chief executives again, tomorrow, along with UK science minister David Willetts, about the scientific aspects of the deal.
With its bid now the subject of heated debate, Pfizer took a harder line yesterday, claiming the merger would create “a UK-based scientific powerhouse”.
It also took a swipe at AstraZeneca’s go-it-alone strategy by arguing that Britain’s second biggest pharmaceuticals business lacked the financial muscle to make the most of its experimental medicines. “Looming patent expiries and near-term revenue losses jeopardise its ability to deliver on its very promising pipeline,” the US firm said.
In response to worries about safeguarding AstraZeneca’s research, Pfizer’s head of research and development (R&D), Mikael Dolsten, posted a video on the group’s website saying he had been through five mergers which did not disrupt drug research.
“If you keep your sense of curiosity and an open mind, you can learn tremendously,” he said.
“We must stay laser-focused on our important projects. And that’s, of course, true for Pfizer scientists and AZ scientists and will be true also if we can make a potential combination come together.”
Dolsten said there was “a really great fit” with the products that AstraZeneca had in its portfolio, with potential for combining drugs in areas such as lung cancer to offer much more effective treatments.
Pfizer has a record of cost-cutting after past acquisitions, though Prime Minister David Cameron said on Sunday he had made “very good progress” in securing guarantees on jobs.
The group is widely expected to come back with a sweetened offer for its UK peer this week, though it is likely to wait until after the select committee hearings.
AstraZeneca rejected a cash-and-stock offer worth £50 a share, and Soriot has been on a roadshow to meet leading investors and lay out his strategy for a prosperous independent future.
Under takeover rules, Pfizer has until 26 May to make a firm bid for AstraZeneca or walk away.