CES close to drug giant Pfizer yesterday slammed as “irresponsible” claims made by Astrazeneca boss Pascal Soriot that a proposed multi-billion pound takeover of the UK outfit could put lives at risk.
People close to the company told City A.M. that the claim was a “red herring”, adding it was misguided to suggest a merger would slow drug development.
Soriot had earlier told a committee of MPs that a merger threatened to disrupt the research and development of new life-saving drugs in the UK.
“What would we tell the person whose father died from lung cancer because one of our medicines was delayed because our two companies were involved in saving taxes and saving costs,” he said.
However, Soriot’s argument was undermined last night after he admitted that he would back a deal to sell the company at the right price.
“If the price offered reflects the full value of the company and justifies the risks of course we would have to make a positive recommendation [to shareholders],” he told BBC Newsnight.
Pfizer boss Ian Read told MPs his last major takeover deal in 2009 had boosted drug development, leading to the launch of 13 new drugs. “If you want to be productive and get medicines to patients quickly, you need to have a sense of urgency,” he said.
The comments came as MPs on the business select committee grilled Pfizer and Astrazeneca bosses about the impact a proposed takeover would have on UK healthcare.
The highly charged hearing, chaired by Labour MP Adrian Bailey, saw Pfizer labelled as a “praying mantis” by MPs and Read admit for the first time that job cuts would follow a takeover.
“I am not saying we will become more efficient without a reduction in jobs,” he said. “There will be some job cuts somewhere.” Pfizer reiterated its promise to retaining 20 per cent of the combined workforce in the UK for the next five years, adding that these commitments are legally binding. “I’m a man of my word,” Scottish-born Read said. “We do what we say.”
But business secretary Vince Cable warned that the Takeover Panel’s beefed-up rules – introduced in the wake of Kraft’s acquisition of Cadbury – had not yet been tested in the courts.
Astrazeneca, the UK’s second biggest pharmaceuticals company behind GlaxoSmithKline, rebuffed a £63bn takeover approach from the US giant earlier this month. The deal would have been the biggest takeover of a British firm by a foreign institution ever.
Pfizer is expected to return with a sweetened bid as soon as this week after spending yesterday and today sounding out City investors.
Pfizer yesterday bypassed the company board and management by issuing a presentation directly to shareholders. Read and Soriot will appear before MPs again today, as they are grilled by the science and technology committee on drug development issues.