May 3, 2014 in Business

Pfizer to persist in pursuit of deal for AstraZeneca

Danica Kirka Associated Press
 

LONDON – Pharmaceutical giant Pfizer said Friday that it hasn’t given up on a deal after British drugmaker AstraZeneca flatly rejected its latest takeover bid, worth $106 billion.

Pfizer Inc., the world’s second-biggest drugmaker by revenue, made a third unsuccessful attempt for its London-based rival Friday with an offer of $84 per share in cash and stock – a 7.3 increase from its last bid. AstraZeneca Plc, the No. 8 drugmaker, called that inadequate and said the potentially lucrative “pipeline” of new drugs it is developing would be disrupted by a takeover.

Pfizer said in a statement that it is disappointed and that a “friendly, negotiated transaction” would be best for shareholders of both companies.

Proposed deals to swap assets or acquire other companies are roiling the pharmaceutical industry. Many companies are narrowing their product and research focus to their areas of expertise to save money. They are cutting costs as cheaper generic competition slashes sales of off-patent medicines that had been top earners. Pfizer’s revenue has dropped sharply amid generic competition to multiple drugs, particularly its cholesterol blockbuster, Lipitor, which once brought in $13 billion a year.

Pfizer’s bid for AstraZeneca would give it access to promising assets, particularly in immuno-oncology, new types of cancer drugs that work by boosting the immune system. Analysts say the deal also gives Pfizer tax advantages. They estimate Pfizer has earned and held $30 billion to $70 billion in cash overseas, on which it would have to pay taxes at relatively high U.S. rates should it be brought back.

The deal would be the biggest-ever foreign takeover of a British business, and quickly became political in Britain. Critics fear the takeover could mean big job cuts and potential loss of stature in the country’s science sector.

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