LONDON (Reuters) - Pfizer (PFE.N) said it would ringfence the development of important drugs if it acquired AstraZeneca (AZN.L), rejecting a charge from the British company that a takeover would disrupt important research and put lives at risk.
“As we put these companies together, we will continue with our pipeline, AZ will continue with theirs,” Pfizer’s Chief Executive Ian Read told lawmakers on a second day of questioning about what could be the biggest ever UK corporate deal.
“We would ringfence any important products and they would continue to be developed. There is absolutely no truth to any comment that some products of critical nature would be delayed getting to patients, if anything we would accelerate that to patients.”
AstraZeneca said on Tuesday that Pfizer’s proposal risked disrupting its research and delaying getting life-saving new drugs to market, as well as undervaluing the business.
“What will we tell the person whose father died from lung cancer because one of our medicines was delayed - and essentially was delayed because in the meantime our two companies were involved in saving tax and saving costs?” the British company’s Chief Executive Pascal Soriot said on Tuesday.
On a second day in Parliament focused on the concerns of the science community, Read faced calls from a committee of lawmakers and other speakers for Pfizer to extend its commitment to UK jobs and research from five years to 10 or more.
“I would like to see a longer period than that (five years),” science minister David Willetts told the committee.
British Prime Minister David Cameron said he was seeking the best possible guarantees from Pfizer.
“This government has been absolutely clear that the right thing to do is get stuck in to seek the best possible guarantees on British jobs, on British investment, and British science,” he told lawmakers in parliament on Wednesday.
The U.S. boss had earlier defended his five-year horizon, saying it was enough time to select medicines that had the greatest chance of approval and the biggest opportunity to meet the needs of patients.
Pfizer had changed its R&D strategy to avoid lengthy, and ultimately fruitless, research by bringing in commercial and development expertise at the proof of concept stage in the assessment of experimental drugs, he said.
“It’s very important for me for productivity to ... hold (scientists) accountable, to say ‘I‘m allocating you capital on a five-year period and I‘m going to review that on five-year periods’,” he said.
Pfizer has indicated it could raise its offer for Britain’s second-biggest drugmaker from $106 billion, if AstraZeneca is prepared to talk, but lawmakers are deeply concerned about the impact of a takeover on the country’s science base.
The U.S. company has a record of making deep job cuts after past takeovers of companies including Wyeth, Warner-Lambert and Pharmacia.
Read said on Wednesday there would likely be fewer scientists in a newly combined company than currently work in the two firms, but he declined to put any numbers on it.
Nobel laureate Paul Nurse, the president of the Royal Society, Britain’s national academy of science, wrote to the chairman of Parliament’s science committee Andrew Miller to express his concern that Pfizer’s promises so far were vague and inadequate.
Pfizer’s five-year commitment includes completing AstraZeneca’s new research center in Cambridge, retaining a factory in the northwestern English town of Macclesfield and putting a fifth of its research staff in Britain if the deal goes ahead.
But it has also said this could be altered if circumstances changed “significantly” and Scottish-born Read said he could not commit to maintaining a specific R&D budget for Britain.
Nurse said a five-year pledge was simply not good enough.
“A five-year commitment to the UK is insufficient. A commitment of at least 10 years is required. Science is not a quick win,” he wrote.
AstraZeneca has rejected Pfizer’s cash-and-stock offer, which was worth 50 pounds a share at the time it was made on May 2, arguing it has a bright future as an independent business, with a pipeline of promising new drugs.
So-called Parliamentary select committees cannot block corporate transactions but they can question executives ferociously, as banks, energy companies and Rupert Murdoch’s News Corp (NWSA.O) have all found out in the past.
Additional reporting by William James; Editing by Mark Potter, Greg Mahlich