Please login to the form below

Not currently logged in
Email:
Password:

Pfizer faces opposition to AZ takeover as Q1 figures disappoint

Labour leader Ed Miliband calls for public inquiry into deal
Pfizer AstraZeneca

Pfizer's takeover bid for AstraZeneca looks like it could become a political hot potato after the opposition Labour party in the UK called for a public inquiry into the deal.

Labour leader Ed Miliband wrote to UK Prime Minister David Cameron, accusing the government of "cheerleading" for the deal and asking for a cross-party oversight of takeovers involving UK firms.

"In this particular bid the stakes could not be much higher," said Miliband, adding that Pfizer's bid for AZ "affects one of the UK's most significant investors in R&D" and that the US firm's track-record in the UK - including the closure of its R&D campus in Sandwich - raises concerns.

Miliband also commented that Pfizer historically has spent less on R&D than AZ and that assurances provided by Pfizer chief executive Ian Read, such as maintaining 20 per cent of its R&D staff in the UK, only span a few years, while the impact could be felt for decades.

AZ formally rejected Pfizer's £63bn ($106bn) bid late last week, saying it was inadequate, substantially undervalued its business and failed to take into account its "strong momentum" as an independent company.

Downing Street issued a statement saying that it regards the potential takeover bid as a matter for the respective boards and shareholders of the two companies, but denied it was acting as a cheerleader for the deal.

Under UK legislation, Pfizer has until May 26 to table a firm offer or will have to give up on the proposal.

Meanwhile, Pfizer's need to do a deal with AZ was brought into stark focus after the US drugmaker reported a 15 per cent fall in profits to $2.3bn - below analyst expectations - while revenues declined 9 per cent to $11.35bn.

Pfizer's first-quarter woes come on the back of generic competition to big-selling brands, as well as the end of a lucrative co-promotion arrangement with Amgen for arthritis blockbuster Enbrel (etanercept).

Speculation is growing that Pfizer's interest in AZ lies in part on the assets that can be rolled into each of its business units, some of which are slated for divestment.

Discussing the deal on Pfizer's first-quarter result call, Read said: "This is an opportunity for AZ's shareholders to realise near term value creation well in excess of its standalone prospects."

Investors in AZ would also have the opportunity to "trade up their … position for equity in a new combined company with far greater potential for value creation," he added.

Article by
Phil Taylor

6th May 2014

From: Research, Sales

Share

Tags

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Cogora

Cogora has been a leader in healthcare publishing for over 30 years and has become one of the leading full-service...

Latest intelligence

Navigating the antibiotic resistance crisis
Blue Latitude Health speaks to Tara DeBoer, PhD, Postdoctoral Researcher and CEO of BioAmp Diagnostics to explore the antimicrobial resistance crisis, and learn how a simple tool could support physicians...
Combined immunotherapies – potential and pitfalls
‘Combining therapeutic compounds is the first logical step towards better results, namely higher rates of patients responding to treatment, with deeper and more sustained responses’...
Report: Achieving launch excellence in the challenging healthcare markets of today
Our in-depth report is based on original data and expert interviews, which coupled with our own experience, ensures we give you the best recommendations for achieving launch success in challenging...

Infographics