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AstraZeneca fights off Pfizer's £63bn takeover AstraZeneca chief attacks Pfizer’s £63bn takeover bid
(about 5 hours later)
AstraZeneca has kicked off defence against US giant Pfizer’s takeover, claiming its drug pipeline means annual revenues will be above $45 billion by 2023 as it won backing for its independence from a top investor. AstraZeneca's chief executive has launched a staunch attack on Pfizer’s £63bn takeover plan, saying it would jeopardise its “fragile” but ambitious drug discovery programme.
The revenue claim is almost double last year’s $26 billion annual earnings. Astra’s strategy update focused on diabetes and respiratory drugs as it tries to convince shareholders that the medicines currently being researched in its labs, due to hit pharmacies after 2020, mean it’s worth far more than the current £50-a-share offer. Pascal Soriot declared the company would grow annual sales to more than $45bn by 2023 from the current $25.7bn thanks largely to its pipeline of new medicines being developed. It was just that process of creating new drugs that would be jeopardised by a takeover, he said.
The drugmaker also won the US Food and Drug Administration’s approval for a pioneering new heart disease medicine: Epanova is the first prescription medicine using fish oils to treat cardiovascular disease hypertriglyceridemia, which affects nearly four million Americans. “I have been through enough mergers to known a company is not a machine. It is a group of people. If you disrupt their work you can really have a negative impact very quickly.”
Chief executive Pascal Soriot claimed Astra’s new drugs meant the pharmaceutical giant is "creat[ing] significant value for shareholders from our independent strategy". AstraZeneca has gone from a position of having 57 drugs in 2012 to 84 now, as it has moved quickly to boost its development programme. Analysts say that, as well as the UK tax status, is what attracted Pfizer to make its bid.
His comments came as Aberdeen Asset Management’s chief executive Martin Gilbert, one of Astra’s top 10 shareholders, said: “As far as we’re concerned, remaining independent remains a viable outcome”. Mr Soriot said: “Our people are very experienced, motivated and excited about what we are doing. We believe we can make an impact on medicine at this time. We have recruited very talented people. When you do this you really want to remain focused on the job at hand. "
Pfizer plans to avoid billions in US taxes by gobbling Astra and shifting its legal domicile to the UK. Gilbert added: “We do have to look at this in UK terms because it is so important for our research and development. It’s got to be about more than tax benefits.” He added: "Any distraction, any disruption, could have a negative impact on our ability to develop these products. A pipeline is something that is very fragile. That is why we believe we are better off focused on what we are doing.”
Pfizer shares fell 2.5 per cent in New York last night after the Viagra maker disappointed investors with a 9 per cent fall in first-quarter revenues. Since part of the bid is in shares, that lowered its offer price by about £1.6 billion. His view chimes with those of many scientists who have spoken out against the huge disruption a takeover of one of Britain’s two key pharmaceuticals champions could have.
Dr Scott Gottlieb, an adviser to pharmaceuticals companies and  resident fellow at the American Enterprise Institute, said: “You get really fundamental product breakthroughs when you have small groups of scientists working together on new areas of science over a period of many years. When companies do these mergers, it can break up these teams and break up the continuity.”
Mr Soriot said AstraZeneca’s shareholders had been supportive so far, adding: "We are in a race with many of our competitors to bring our products to the marketplace as quickly as possible. Anything that creates disruption has the potential to destroy value."
He was speaking just hours after the chief executive of top 10 AstraZeneca shareholder Aberdeen Asset Management backed the Labour leader Ed Miliband’s calls for a public interest investigation into the deal.
Aberdeen chief executive Martin Gilbert told The Independent: “AstraZeneca’s management has done a good job refocusing the business and as far as we’re concerned remaining independent remains a viable outcome.
“We do have to look at this in UK terms because it is so important for our research and development. It’s got to be about more than tax benefits.”
Earlier, he told the BBC: “Pfizer unfortunately has this reputation of being ruthless cost-cutters.”
Mr Soriot added that speed of decisionmaking was critical to bringing new drugs to market – a fleetness of foot that could be disrupted by a massive merger.
However, he declined to get pulled into the increasingly tense political atmosphere around the deal, although he acknowledged that he had been asked to participate in MPs’ select committee hearings. Both the business and science committees yesterday confirmed they would be conducting meetings with the industry including representatives from both Pfizer and AstraZeneca.