Aiming to douse questions about its commitments to British jobs,
Pfizer also said its agreement to complete AstraZeneca's new
research centrer in Cambridge, retain a factory in northwest England
and put a fifth of its research staff in Britain if the deal goes
ahead were legally binding.
The comments are Pfizer's latest counter to critics of its proposed
$106 billion deal, which would be the largest foreign takeover of a
British firm and is opposed by many scientists and politicians - as
well as AstraZeneca itself.
With its bid now the subject of heated debate in Britain's Houses of
Parliament and across the country's news channels, the U.S.
drugmaker took a harder line on Monday, saying the merger would
create "a UK-based scientific powerhouse".
It also took a swipe at AstraZeneca's go-it-alone strategy by
arguing that Britain's second biggest pharmaceuticals business
lacked the financial muscle to make the most of its experimental
"Looming patent expiries and near term revenue losses jeopardize its
ability to deliver on its very promising pipeline," Pfizer said in a
written submission to a parliamentary committee.
Pfizer's Scottish-born Chief Executive Ian Read faces tough
questions from British lawmakers on Tuesday about his plans to
acquire AstraZeneca - a deal driven in large part by Pfizer's wish
to cut its tax bill.
Lawmakers will also interrogate AstraZeneca's French CEO Pascal
Soriot and business minister Vince Cable on Tuesday. Then a second
parliamentary committee on May 14 will question both CEOs again,
along with British science minister David Willetts, about the
science aspects of the deal.
In response to worries about safeguarding the British company's
research, Pfizer's R&D head Mikael Dolsten posted a video on
Pfizer's website saying he had been through five different mergers
which did not disrupt drug research.
"If you keep your sense of curiosity and an open mind, you can learn
tremendously," he said.
"We must stay laser-focused on our important projects. And that's,
of course, true for Pfizer scientists and AZ scientists and will be
true also if we can make a potential combination come together."
Dolsten said there was "a really great fit" with the products that
AstraZeneca had in its portfolio, with potential for combining drugs
in areas such as lung cancer to offer much more effective
There is considerable skepticism about Pfizer's long-term commitment
to British jobs, given its record of cost cutting after past
acquisitions and after it said it could adjust those promises if
circumstances change "significantly."
But Pfizer said the fact it had made the promises as part of its
offer made them legally binding and the pledges should be given
[to top of second column]
Prime Minister David Cameron said on Sunday he had made "very good
progress" in securing guarantees from Pfizer, though the firm's
latest statements contained no new offers.
Pfizer is widely expected to come back with a sweetened offer for
AstraZeneca this week, though people familiar with the matter said
it was likely to wait until after the parliamentary select committee
The British group rejected a May 2 cash-and-stock offer worth 50
pounds a share from its larger American rival, and CEO Soriot has
been on a roadshow to meet leading investors and lay out his
strategy for a prosperous independent future.
Soriot has secured the backing of several high-profile shareholders,
but others have told Reuters they would like him to engage with
Pfizer if the U.S. group makes an improved offer.
In addition to wanting a higher price - many analysts think Pfizer
will have to offer around 55 pounds a share - investors are also
keen to increase the proportion of cash in any deal from 32 percent
Pfizer is limited in the amount of cash it can offer since in order
to keep the tax advantages of re-domiciling to Britain it must
ensure at least 20 percent of the enlarged group is British-owned.
Under British takeover rules, Pfizer has until May 26 to make a firm
bid for AstraZeneca or walk away.
A slide in Pfizer's share price following its first-quarter results
last week has reduced the current value of its May 2 offer to just
under 48 pounds. AstraZeneca shares traded 0.3 percent higher at
46.15 pounds by 1115 GMT.
Pfizer has a tarnished reputation in Britain after shutting down
most of its drug research in Sandwich, southern England, where
Viagra was invented, with the loss of some 1,700 jobs.
(Editing by Sophie Walker)
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