Pfizer says UK jobs pledge legally binding

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Pfizer has said it will keep its promises about keeping high-skill jobs and manufacturing in Britain before the US company's boss faces his first grilling by MPs on the proposed takeover of AstraZeneca.

In written evidence to the business, innovation and skills (BIS) select committee, Pfizer said its earlier pledges on investing in the UK were legally binding and that combining the two companies would create and protect high-value jobs.

"With our commitment to foster research and development in the UK, we are matching words with deeds – and we will keep our word," Pfizer said.

Pfizer's chief executive, Ian Read, wrote to David Cameron last week pledging to complete AstraZeneca's Cambridge R&D centre, employ at least 20% of the combined company's R&D workforce in the UK for five years, and locate some manufacturing in Britain.

Pfizer said the assurances were legally watertight because they were published with the company's takeover proposal for AstraZeneca. Under Britain's takeover code, the pledges created a legal commitment and should "be given full weight", the company said.

However, Pfizer, which has a reputation for preferring cost cuts over investment in treatments, offered no new assurances to the government. Sweden's finance minister, Anders Borg, said last week Pfizer had failed to honour assurances on research jobs it made when it bought Swedish drugmaker Pharmacia in 2002.

Read, Pfizer's Scottish-born boss, flies in to the UK for his first public defence of the proposed £63bn takeover. He will face questions from the BIS committee on Tuesday and the science and technology committee on Wednesday amid growing political concern over the damage the deal could do to Britain's science base.

Pfizer has made a string of acquisitions since 2000 that critics said slashed research spending to boost profits and make up for the paucity of Pfizer's own drug development programmes. The US company reinforced its reputation as a ruthless operator in 2011 when it announced the closure of its research centre in Sandwich, Kent, with the loss of 2,400 skilled jobs.

AstraZeneca has tried to ward off Pfizer's unwelcome approach by emphasising the opportunities it has to bring new drugs to the market compared with Pfizer. It has warned that research will be damaged if Pfizer's takeover attempt is successful.

Mergers in the drugs industry typically slow scientific development as research is put on hold while the companies decide what activities to cut.

In its statement to the BIS committee, Pfizer praised AstraZeneca's drug development prospects but said the Anglo-Swedish company needed Pfizer's financial clout to see its treatments to fruition.

"Development of pharmaceuticals is an extremely expensive and risky business. AstraZeneca's ability to deliver its pipeline will require very substantial investments during a time when the company's revenues will be declining sharply as a result of the loss of patent exclusivity on important products.

"A combined Pfizer-Astra-Zeneca would provide a financial engine that could support robust, yet thoughtful R&D investment."

AstraZeneca has said Pfizer's approach is unwelcome and that the US company's interest was a distraction just as AstraZeneca's investment in new treatments was bearing fruit.

AstraZeneca set out a plan for revenue growth last week in which it stressed the opportunities it had to treat cancer, diabetes and respiratory illnesses. AstraZeneca said on Monday that its brodalumab treatment for psoriasis, developed in partnership with Amgen, had achieved positive results in a phase III study.

As part of a multipronged charm offensive before Read's sessions with MPs, Pfizer's head of R&D, Mikael Dolsten, said Pfizer wanted to buy AstraZeneca so it could develop more drugs and rejected claims that a takeover would slow AstraZeneca's treatment programme.

"Pfizer has a legacy of being able to bring together cultures from different companies and add experiences from talents, from products and science, and move fast to make a new company," Dolsten said.

Dolsten, who will appear with Read on Wednesday, said Read had refocused Pfizer on finding new drugs and that it was working on about 300 projects, with more than 80 in clinical development. New products reaching patients include a treatment for rheumatoid arthritis, a medicine for lung cancer and vaccines to protect children against pneumonia.

Dolsten's claims followed video statements by Read at the weekend in which he claimed a deal would be a "win-win" for all concerned. Read has tried to play down Pfizer's reputation as a slasher of costs and to present the company as an enthusiastic investor in new treatments.

Labour has called for a public interest test for the deal while Lord Sainsbury, the former science minister, has said Pfizer's bid should be blocked. After welcoming Pfizer's plan to base the combined company in the UK for tax reasons, the Prime Minister has hardened his stance on the potential deal.

With politicians and scientists increasingly questioning the proposed deal, Pfizer has sought to dispel accusations that it will cut thousands of highly skilled jobs and damage the government's aim of making Britain a centre for scientific research.

But Andrew Miller, the Labour chairman of the science and technology select committee, has called for guarantees to last at least 10 years to reflect the time needed to develop new drugs.

AstraZeneca has twice rebuffed approaches from its US rival. Pfizer's second approach offered £50 a share, mainly in Pfizer's shares, but the company is expected to come back with a new bid this week with a bigger cash element.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for theguardian.com on Monday 12th May 2014 11.49 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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