Pfizer’s Read Gets Easier Ride in Second U.K. Parliament Hearing
After a rough ride in front of the U.K. Parliament’s Business Committee yesterday, Pfizer Inc. (PFE) Chief Executive Officer Ian Read got gentler treatment from its science and technology panel today over his plan to take over AstraZeneca Plc. (AZN)
There was a smaller audience for the hearing in London, with empty seats compared with the standing-room-only session the previous day. It was still a larger one than the committee chairman, Andrew Miller, was used to. “A lot of people are interested,” he commented, looking around.
Much of the questioning focused on how a merged company would look. Read said it would “enable us to be competitive.” Testifying separately later for AstraZeneca, CEO Pascal Soriot argued it was “a little bit more complicated than putting two pieces of paper together.”
While neither committee has any formal influence over a possible takeover, both show how much Pfizer is operating in an atmosphere of anxiety about its offer of more than $100 billion, which AstraZeneca has rebuffed. With European and local elections next week, the bid has been pushed to the center of British political debate and dominated Prime Minister David Cameron’s questions session in the House of Commons today for the second week running.
There was little fresh argument today from either side. Read said there was “no truth” in yesterday’s suggestion from AstraZeneca that a merger would delay the development of life-saving drugs. Such work would be “ring-fenced,” he said.
Soriot replied that mergers cause anxiety, with scientists “not sure if their job will exist tomorrow.” In such a situation, he said, “you can quickly lose momentum.”
Jim Dowd, a lawmaker from the opposition Labour Party, which has opposed the takeover, again raised Pfizer’s record in Sweden, where it closed a research center after a takeover. “Why do people say your word’s not to be trusted?” he asked.
“People who talk to me don’t say my word’s not to be trusted,” Read replied. “I’d like people to tell me a commitment Pfizer hasn’t met.”
Soriot was questioned by Miller about why a merger would be more disruptive than his own plan to move research from Manchester, in England’s northwest, to Cambridge in the east. Mene Pangalos, AstraZeneca’s vice president in charge of development and a former Pfizer executive, said the two companies had entirely different research structures.
Soriot declined to say whether the government should intervene to block the takeover. “I’m a biologist, I just try to do my job,” he said. “I’m not a policy maker.”
Last to appear before the panel was Science Minister David Willetts, who insisted he was optimistic about the future, whatever the outcome.
Asked about Pfizer’s 2011 decision to close its Sandwich plant in southeast England, he said it had worked out well thanks to government intervention.
“There was a nightmare scenario where that would end up as an empty building, with a padlock swinging in the wind,” he said. “We’ve ended up instead with a discovery park with 40 tenants.”
Willetts argued that while the government was “pressing very hard” for Pfizer commitments, there was no need for “national pessimism” because Britain was known as a great place for science.
“You’d be idiotic if you weren’t doing research and development in the U.K. -- it’s a great place,” Willetts told the committee.
“We’re all proud,” Tory lawmaker Sarah Newton replied.
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