Pfizer’s chief executive yesterday acknowledged a potential merger with AstraZeneca would lead to job losses – but promised to keep key research jobs in Britain as part of its takeover bid.
US-based Scot Ian Read refused to give specifics on where the cuts might take place as he testified before Westminster’s business innovation and skills committee, but described them as an inevitable outcome of the merger.
However, he revealed the company would honour its promises to keep 20 per cent of its global research and development workforce in the UK.
“There will be some job cuts somewhere, that’s part of being more efficient,” he said.
“Whereabouts in the world I cannot say.”
The US drug-maker has sought to ease worries that British jobs will be lost and research undermined by the transaction – concerns that have made the takeover politically fraught.
Critics on the committee, however, repeatedly attacked what they described as Pfizer’s ruthless track record, accusing the company of buying foreign firms and then downsizing.
But Mr Read said: “We are a highly ethical company. We keep our promises.”
AstraZeneca has rebuffed three approaches since January, saying Pfizer’s last offer undervalues the company.
AstraZeneca’s chief executive, Pascal Soriot, a biologist by training, has warned that new drug development could be hit if it were taken over by Pfizer. He also called the five-year time window offered by the Pfizer on its commitments as too short.
“From the lab to the patient takes many years,” Mr Soriot said, stressing that people who are sick would prefer the company make drugs rather than fight takeover bids. “It’s a question of avoiding distraction.”
Mr Soriot told MPs that a takeover would create huge disruption and distraction as scientists worried about their futures rather than development.
However, Business Secretary Vince Cable later told the business committee that blocking a bid could be “tricky”.
The committee is taking evidence on the proposed takeover amid worries about the damage it could do to UK interests.
Even though no formal offer from US-based Pfizer has been tabled, the proposed £63 billion-plus takeover has generated huge controversy.
Mr Soriot told the business committee that the uncertainty of a takeover could undermine some of AstraZeneca’s work.
He said: “What will we tell the person whose father died from lung cancer because one of our medicines was delayed because our companies were involved in saving taxes or saving costs?
“It is logical to assume that a merger like this could mean substantial cost savings, and cost savings could mean job losses.”
Mr Soriot said that it would be the AstraZenica board’s duty to consider a formal offer from Pfizer, despite rebuffing the US drugmaker’s approaches so far.
Unions also voiced their concerns. “You don’t really buy a second-hand car if the guy says, ‘I’m giving you a guarantee but, hey, if things change the guarantees are null and void’,” GMB national officer Allan Black said.
Besides promises on jobs, Pfizer has pledged to complete AstraZeneca’s research and development hub in Cambridge and establish the new company’s tax residence in England.
Labour’s shadow business secretary, Chuka Umunna, said he was still to be convinced that an acquisition would be good for the UK. “What we heard at the hearing confirms many of the worst fears of many in the business and science community in the UK,” he said
“What do we know? Pfizer confirmed they will be cutting jobs, they’ve confirmed there will be a cut in the spending of the combined merged entity, they’ve confirmed that the business, AstraZeneca, will be split up, and they haven’t ruled out selling off parts of it in the future.”