Pfizer's chief executive and top scientist, who have been doing the rounds of MPs, research heads and City investors this week promoting their proposed £63bn takeover bid for AstraZeneca, sold more than $12m (£7m) of their own shares in the US giant just two months ago.
Analysts said the sales – coming from such senior employees as Ian Read and Mikael Dolsten – were hardly likely to engender confidence in the company among AstraZeneca shareholders. A large majority of the payment for the UK company is proposed to be made up of Pfizer shares.
The sales followed only a little over six weeks after Pfizer's first bid approach to AstraZeneca and less than two months before the American company came back with an official announcement of a possible offer.
Pfizer's CEO and chairman Ian Read sold $10.6m of his shares on 26 February and subsequently exercised share options worth a further $4.1m. Mikael Dolsten's share sales, totalling about $2m were made on 26 February and 4 March, regulatory filings show. Both men's trades were made before the slump in Pfizer's share price that followed news of its takeover interest.
At today's Pfizer share price, Mr Read's share sale would have fetched $956,000 less, and Mr Dolsten's would been down by $225,000. Both directors remain huge shareholders in the company despite their recent disposals.
Pfizer's Mr Read first sounded out AstraZeneca over a possible takeover in January but was rebuffed. It is not known if Mr Dolsten was aware of that takeover approach, although his status as a key architect of the current deal is clear given that he was chosen to address the Science Select Committee of MPs this week. Mr Dolsten was also chosen to promote the takeover alongside Mr Read in videos earlier this week.
Share prices of the bidding company generally fall before a takeover due to the inherent risk involved in such transactions.
Mr Dolsten and Mr Read were far from being the only top employees selling shares shortly before January's takeover approach was reheated. Frank Damelio, the chief financial officer, sold nearly $9m and exercised $4m of shares.
Loretta Cangialosi, senior vice president and controller sold more than $3m-worth, while Sally Susman, executive vice president of policy, external affairs and communications, sold more than $2.2m-worth.
There is no suggestion of wrongdoing on the part of any of the individuals. When asked about the share sales, Pfizer said directors are only allowed to sell or buy shares at certain times of the year. "These sales were within guidelines and during a permissible period. The executives remain in compliance with their stock ownership requirements," it added.
Details of the share sales came as the Science Select Committee of MPs declared the potential takeover posed a threat to British science unless Pfizer could give more concrete, enforceable guarantees on jobs and investment.
Andrew Miller, who is the chairman of the Science Select Committee, which questioned executives from both firms on Wednesday, said he was not satisfied with Pfizer's promises or convinced of the Government's ability to enforce them.
"The national stake in the proposed transaction with Pfizer is unusually high: any threat to AstraZeneca's research capacity must, to an extent, be considered a threat to UK science," Mr Miller said in a letter to the Science minister David Willetts.
"Whether or not the government is able to hold Pfizer to these promises – and we are not yet confident it can – further, longer-term guarantees need to be obtained before we can be confident of Pfizer's commitment to the UK."
Mr Miller said that five-year commitments were of limited value in an industry that "measures progress by decades rather than years".
Shareholders have received the US company's approaches more warmly, however, and many still say an increased takeover offer, from the latest $50-a-share to more than $55 should be enough to prompt AstraZeneca to open discussions.
However, pressure is clearly mounting on Mr Read over the deal back home in the US, where Pfizer's major shareholders have sold hundreds of millions of dollars of its stock this week.
Bank of New York Mellon alone has sold $392m and FMR has ditched $435m of Pfizer shares according to Bloomberg's share register.