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Pfizer defends research record in vital week for AstraZeneca takeover Pfizer says UK jobs pledge legally binding
(about 2 hours later)
Pfizer's head of research and development (R&D) has defended the US company's record on drug creation and rejected claims that AstraZeneca's programme of new treatments would suffer if Pfizer were to buy the UK pharmaceutical company. Pfizer has said it will keep its promises about keeping high-skill jobs and manufacturing in Britain before the US company's boss faces his first grilling by MPs on the proposed takeover of AstraZeneca.
Mikael Dolsten said Pfizer was working on about 300 projects with more than 80 in clinical development. New products reaching patients include a treatment for rheumatoid arthritis, a medicine for lung cancer and vaccines to protect children against pneumonia. In written evidence to the business, innovation and skills (BIS) select committee, Pfizer said its earlier pledges on investing in the UK were legally binding and that combining the two companies would create and protect high-value jobs.
He was speaking in corporate videos released by Pfizer as Ian Read, Pfizer's Scottish-born chief executive, flies in to the UK for his first public defence of the proposed £63bn takeover of AstraZeneca. Read will face questions from MPs on two select committees on Tuesday and Wednesday amid growing political concern over the damage the deal could do to Britain's science base. Dolsten will be questioned along with Read on Wednesday. "With our commitment to foster research and development in the UK, we are matching words with deeds – and we will keep our word," Pfizer said.
Dolsten said: "There are a lot of exciting projects moving forward. A couple of years ago we started R&D turnaround. It was a response of R&D to Ian Read's first imperative of fixing the innovative core of the company. We have made great progress." Pfizer's chief executive, Ian Read, wrote to David Cameron last week pledging to complete AstraZeneca's Cambridge R&D centre, employ at least 20% of the combined company's R&D workforce in the UK for five years, and locate some manufacturing in Britain.
Pfizer has made a string of acquisitions since 2000 that critics said slashed research spending to boost profits and make up for the paucity of Pfizer's own drug development programmes. Mergers in the drugs industry typically slow scientific development as research is put on hold while the companies decide what activities to cut. Pfizer said the assurances were legally watertight because they were published with the company's takeover proposal for AstraZeneca. Under Britain's takeover code, the pledges created a legal commitment and should "be given full weight", the company said.
However, Pfizer, which has a reputation for preferring cost cuts over investment in treatments, offered no new assurances to the government. Sweden's finance minister, Anders Borg, said last week Pfizer had failed to honour assurances on research jobs it made when it bought Swedish drugmaker Pharmacia in 2002.
Read, Pfizer's Scottish-born boss, flies in to the UK for his first public defence of the proposed £63bn takeover. He will face questions from the BIS committee on Tuesday and the science and technology committee on Wednesday amid growing political concern over the damage the deal could do to Britain's science base.
Pfizer has made a string of acquisitions since 2000 that critics said slashed research spending to boost profits and make up for the paucity of Pfizer's own drug development programmes. The US company reinforced its reputation as a ruthless operator in 2011 when it announced the closure of its research centre in Sandwich, Kent, with the loss of 2,400 skilled jobs.
AstraZeneca has tried to ward off Pfizer's unwelcome approach by emphasising the opportunities it has to bring new drugs to the market compared with Pfizer. It has warned that research will be damaged if Pfizer's takeover attempt is successful.AstraZeneca has tried to ward off Pfizer's unwelcome approach by emphasising the opportunities it has to bring new drugs to the market compared with Pfizer. It has warned that research will be damaged if Pfizer's takeover attempt is successful.
The Anglo-Swedish company set out a plan for revenue growth last week in which it stressed the opportunities it had to treat cancer, diabetes and respiratory illnesses. Chief executive Pascal Soriot said Pfizer had pounced just as AstraZeneca's transformation programme was almost complete and that a takeover would set back drug development. Mergers in the drugs industry typically slow scientific development as research is put on hold while the companies decide what activities to cut.
AstraZeneca said on Monday that its brodalumab treatment for psoriasis, developed in partnership with Amgen, had achieved positive results in a phase III study. In its statement to the BIS committee, Pfizer praised AstraZeneca's drug development prospects but said the Anglo-Swedish company needed Pfizer's financial clout to see its treatments to fruition.
Dolsten said Pfizer wanted to buy AstraZeneca to develop more drugs and capitalise on the UK company's presence in the "golden triangle" of London, Oxford and Cambridge, where AstraZeneca is building a research centre. "Development of pharmaceuticals is an extremely expensive and risky business. AstraZeneca's ability to deliver its pipeline will require very substantial investments during a time when the company's revenues will be declining sharply as a result of the loss of patent exclusivity on important products.
"A combined Pfizer-Astra-Zeneca would provide a financial engine that could support robust, yet thoughtful R&D investment."
AstraZeneca has said Pfizer's approach is unwelcome and that the US company's interest was a distraction just as AstraZeneca's investment in new treatments was bearing fruit.
AstraZeneca set out a plan for revenue growth last week in which it stressed the opportunities it had to treat cancer, diabetes and respiratory illnesses. AstraZeneca said on Monday that its brodalumab treatment for psoriasis, developed in partnership with Amgen, had achieved positive results in a phase III study.
As part of a multipronged charm offensive before Read's sessions with MPs, Pfizer's head of R&D, Mikael Dolsten, said Pfizer wanted to buy AstraZeneca so it could develop more drugs and rejected claims that a takeover would slow AstraZeneca's treatment programme.
"Pfizer has a legacy of being able to bring together cultures from different companies and add experiences from talents, from products and science, and move fast to make a new company," Dolsten said."Pfizer has a legacy of being able to bring together cultures from different companies and add experiences from talents, from products and science, and move fast to make a new company," Dolsten said.
His comments follow video statements by Read at the weekend in which he claimed a deal would be a "win-win" for all concerned. Read has tried to play down Pfizer's reputation as a slasher of costs and to present the company as an enthusiastic investor in new treatments. Dolsten, who will appear with Read on Wednesday, said Read had refocused Pfizer on finding new drugs and that it was working on about 300 projects, with more than 80 in clinical development. New products reaching patients include a treatment for rheumatoid arthritis, a medicine for lung cancer and vaccines to protect children against pneumonia.
Labour has called for a public interest test for the deal while Lord Sainsbury, the former science minister, has said Pfizer's bid should be blocked. Dolsten's claims followed video statements by Read at the weekend in which he claimed a deal would be a "win-win" for all concerned. Read has tried to play down Pfizer's reputation as a slasher of costs and to present the company as an enthusiastic investor in new treatments.
Labour has called for a public interest test for the deal while Lord Sainsbury, the former science minister, has said Pfizer's bid should be blocked. After welcoming Pfizer's plan to base the combined company in the UK for tax reasons, the Prime Minister has hardened his stance on the potential deal.
With politicians and scientists increasingly questioning the proposed deal, Pfizer has sought to dispel accusations that it will cut thousands of highly skilled jobs and damage the government's aim of making Britain a centre for scientific research.With politicians and scientists increasingly questioning the proposed deal, Pfizer has sought to dispel accusations that it will cut thousands of highly skilled jobs and damage the government's aim of making Britain a centre for scientific research.
Read wrote to David Cameron last week pledging to complete the Cambridge R&D centre, employ at least 20% of the combined company's R&D workforce in the UK for five years, and locate some manufacturing in Britain.
But Andrew Miller, the Labour chairman of the science and technology select committee, has called for guarantees to last at least 10 years to reflect the time needed to develop new drugs.But Andrew Miller, the Labour chairman of the science and technology select committee, has called for guarantees to last at least 10 years to reflect the time needed to develop new drugs.
AstraZeneca has twice rebuffed approaches from its US rival. Pfizer's second approach offered £50 a share, mainly in Pfizer's shares, but the company is expected to come back with a new bid this week with a bigger cash element.AstraZeneca has twice rebuffed approaches from its US rival. Pfizer's second approach offered £50 a share, mainly in Pfizer's shares, but the company is expected to come back with a new bid this week with a bigger cash element.