Pfizer’s AZ Bid Draws Mixed UK Reaction

The confirmation of Pfizer’s bid for an outright acquisition of AstraZeneca has drawn mixed reactions from the UK.

Linda McCulloch of Britain’s biggest union, Unite, said the bid is “very worrying for the UK workforce”, adding that it is “absolutely crucial” that there should be “guarantees of no jobs losses and for the protection on the UK’s research and development base”.

Meanwhile, the UK’s Business Secretary, Vince Cable, balancing protectionist fears with an obligatory pro-market stance, took a more diplomatic perspective. Tentatively welcoming the deal, he explained that he had spoken to Pfizer CEO Ian Read to underline the importance of the continued provision of high-skilled jobs and long-term investment in UK R&D.

Frost & Sullivan’s Life Sciences Program Manager Ranjith Gopinathan, however, was optimistic that there’s a “strong possibility” Pfizer could move its base to the UK for tax saving purposes. (He does reiterate, however, the suggestion that “avoiding a higher tax in the US could be the major reason” behind the Pfizer move. [See more on this here.])

But U.S. law professor Erik Gordon, writing for the UK  journal The Conversation, warns that the acquisition “is unlikely to produce another Lipitor-like success”. AZ’s potential “hit” cancer drugs are not at the stage Lipitor was when Pfizer got its hands on it, says Gordon. “They need more clinical work and they are riskier.”

Further, he adds, “If Pfizer is true to form, its culture will alienate the very people it needs to maximize the chances of getting AZ’s candidate drugs through the risks of approval and adoption. The result is unlikely to be positive for AZ shareholders who get Pfizer stock in an acquisition.”

Frost & Sullivan’s Gopinathan concedes that post-M&A integration has never been an easy task and that the merged company will still face stiff competition from drugmakers such as BMS and Roche. But, he adds, the move builds on the industry’s current, rapid consolidation strategy and could further help big pharma’s bargaining power with payers and government.