Drug giants continue to spar

British company rejects Pfizer bid

LONDON -- The squabble between the U.S. pharmaceuticals giant Pfizer and the British drugmaker AstraZeneca over a potential takeover continued Monday as the companies offered new points and counterpoints about a possible deal.

Pfizer, the maker of best-selling drugs Lipitor and Viagra, posted a series of videos on its website featuring Mikael Dolsten, the president of worldwide research and development, touting the benefits to science from such a transaction.

"When I look at this transaction, a potential combination of AZ and us, I get real excited thinking about what we could accomplish in accelerating the advance of science and medicine to the benefits of patients worldwide," Dolsten said in the video posted Monday.

He said the two companies would be "really a great fit" in terms of combining their product lines.

Last week, Ian C. Read, Pfizer's chief executive, appeared in a series of videos intended to quell the fears of British politicians about the deal and assertions that Pfizer would eliminate jobs. AstraZeneca employs 51,500 people worldwide, including about 6,700 in Britain.

AstraZeneca has, so far, rebuffed the Pfizer approach, which began last year.

Earlier this month, AstraZeneca's board rejected an increased bid by Pfizer that raised the value of the potential deal to more than $100 billion. Pfizer has said that it is willing to pay a combination of cash and shares equal to about $84.50 per share.

On Monday, AstraZeneca announced what it said were "positive results" from the Phase 3 trial of a drug designed to treat inflammatory diseases. The trial is being conducted with a partner, the U.S. biotechnology company Amgen.

AstraZeneca has argued that Pfizer's offer undervalues the company and its pipeline of drugs in development. AstraZeneca has an attractive portfolio of cancer drugs, an area that is a priority for Pfizer.

In a memo Monday to two U.K. parliamentary committees studying its proposed overture, the U.S. drugmaker laid out its vision ahead of its testimony before the science and business committees. Crucially, it sought to ease worries that British jobs will be lost and that the nation's science will be base eroded by the potential merger.

It repeated promises to complete AstraZeneca's research and development hub in Cambridge and to establish the new company's tax residence in England.

"Delivering on these commitments will make us a stronger company that delivers benefits to patients, value to shareholders, and creates and protects high value jobs," the memo said.

Lawmakers in Washington and London have also expressed concerns about a deal.

One crucial aspect of the proposed transaction is Pfizer's plan to reincorporate in Britain, allowing it to avoid higher corporate taxes in the United States. The strategy, known as an inversion, has become increasing popular. Such moves have been adopted eagerly within the pharmaceutical industry despite drawing the ire of politicians in the United States.

Information for this article was contributed by Chad Bray of The New York Times and Danica Kirka of The Associated Press.

Business on 05/13/2014

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