AstraZeneca’s chief executive, Pascal Soriot, has told The Independent of his intense belief that his company will produce more breakthrough medicines alone and without Pfizer’s takeover.
Ahead of a grilling by MPs of him and the boss of Pfizer in Parliament this week, Mr Soriot declared: “We are creating and investing in new drugs which we believe will transform how we tackle diseases and change patients’ lives. It is through this process that we create real value for our shareholders.”
In words Mr Soriot will reiterate to the Commons Business Select Committee this week, he added: “Our message is clear. We have transformed the business and are confident in our ability to continue to execute on our independent strategy and generate significant value for shareholders.”
Mr Soriot has stated from the beginning of the bid battle that he believes AstraZeneca has been transformed over the past two years to have what he described to The Independent as “one of the most exciting pipelines of new products in the industry”.
Mr Soriot is back in London having met investors in London and the United States last week. He and his opposite number at Pfizer, Ian Read, are being prepared by their lobbying advisers, RLM Finsbury (for AstraZeneca) and Brunswick (for Pfizer), on how to respond to the barrage of questions they will face from MPs in the gruelling two-day hearing starting tomorrow.
Pfizer is not expected to come back with a higher offer until after those meetings.
Meanwhile, analysis by this newspaper of its last bid, made on 2 May, highlights that $2.7bn (£1.6bn) has been wiped from the offer’s “£63bn” value due to the subsequent collapse in the American company’s share price. This is because it is offering to pay AstraZeneca shareholders mostly in Pfizer shares – a factor that has put off many investors almost as much as the perceived low offer price itself.
With Pfizer’s share price tumbling 10 per cent since the latest bid, pressure is mounting on the US company’s board both to raise the overall value and to increase the proportion of the payment to be made in cash rather than in Pfizer’s erratic shares.
Before the fall in Pfizer’s stock value, the increased offer was worth some £50 a share for AstraZeneca. Investors are looking for nearer to £60, but have told AstraZeneca’s board that it should start talking to the Americans when they next make a higher offer, even though it is likely to come in far lower than that.
The political battle around the bid continued yesterday as the Prime Minister repeated his party’s warm words towards Pfizer. David Cameron told the BBC: “Don’t underestimate the power of some of the things they have already said, about making sure, for instance, 20 per cent of their R&D jobs will be here in the UK.” That was in reference to the letter of reassurance on jobs in the UK from Mr Read which Labour has described as “not worth the paper it’s written on”.
The shadow Business Secretary, Chuka Umunna, has written to his opposite number in government, Vince Cable, to push for a change to the Enterprise Act 2002, extending the provisions allowing a public interest test in takeovers of British companies. Mr Umunna stressed that such a test did not require primary legislation and could be achieved quickly enough to affect the AstraZeneca move.