London - Pfizer defended the business case behind its plan to acquire AstraZeneca yesterday and questioned the UK drug maker’s ability to stand alone for much longer.
This came as the New York-based group’s chief executive prepared for a grilling from British MPs today.
Aiming to douse questions about its commitments to British jobs, Pfizer also said its agreement to complete AstraZeneca’s new research centre in Cambridge, retain a factory in north-west England and put a fifth of its research staff in Britain if the deal went ahead were legally binding.
The comments were Pfizer’s latest counter to critics of its proposed $106 billion (R1.1 trillion) deal, which is opposed by many scientists and politicians as well as AstraZeneca itself.
The US drug maker took a harder line yesterday, saying the merger would create “a UK-based scientific powerhouse”.
It also took a swipe at AstraZeneca’s go-it-alone strategy by arguing that the British 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,” Pfizer said in a written submission to a parliamentary committee.
Pfizer chief executive Ian Read faces tough questions from British MPs today. They will also interrogate AstraZeneca chief executive Pascal Soriot and British Business Minister Vince Cable. Tomorrow another parliamentary committee will question both chief executives again, along with Science Minister David Willetts, about the scientific aspects of the deal.
In response to worries about safeguarding the British company’s research, Pfizer’s research and development head, Mikael Dolsten, posted a video on Pfizer’s website saying he had been through five mergers, which did not disrupt research.
“We must stay laser-focused on our important projects. And that’s, of course, true for Pfizer scientists and AstraZeneca 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 to offer much more effective treatments.
There is considerable scepticism about Pfizer’s long-term commitment to British jobs, given its record of cost cutting after past acquisitions and after it said it could adjust those promises if circumstances changed “significantly”.
But Pfizer said the fact it had made the promises as part of its offer made them legally binding and the pledges should be given “full weight”.
Pfizer is widely expected to come back with a sweetened offer for AstraZeneca this week, although people familiar with the matter said it was likely to wait until after the parliamentary select committee hearings.
AstraZeneca shares were 0.3 percent higher at £46.15 (R804) by 11.15am in London. On May 2 the British group rejected a cash-and-stock offer worth £50 a share. A slide in Pfizer’s share price last week reduced the value of its offer to just under £48 a share.– Reuters