May 13, 2014, 4:37 AM
- Pfizer (PFE) intends to raise its bid for AstraZeneca (AZN) a second time to "modestly" above the current offer of £50 ($84) a share, Bloomberg reports, adding that the U.S. company will increase the cash portion of its proposal.
- The new offer would come after AstraZeneca rejected Pfizer's previous bid of £62.6B ($106B) in which 32% was to be paid in cash and the rest in stock.
- Pfizer is likely to make the new proposal only after U.K. parliamentary hearings about the deal, which are due to take place today and tomorrow. CEO Ian Read and AstraZeneca counterpart Pascal Soriot are set to testify, with Read likely to face questions about the strength of Pfizer's pledge to retain British workers and facilities.
- In the U.S., Read has told the governors of Maryland and Delaware that it's too early to say how any deal would affect jobs and manufacturing in their states.
- Separately, Pfizer has sold $4.5B in bonds to repay securities that mature within a year after increasing the auction from $4.25B.
May 12, 2014, 7:30 AM
- Pfizer (PFE) says the promises it has made over maintaining British science jobs if acquires AstraZeneca (AZN) are legally binding.
- Among other things, Pfizer has made a five-year pledge to keep a fifth of its R&D staff in the U.K., although it has also said it could change its promises if circumstances alter "significantly."
- The U.S. company's comments follow increasing concerns about the veracity of its commitments and come in a statement to U.K. legislators ahead of parliamentary hearings this week about the prospective deal. Pfizer CEO Ian Read and AstraZeneca CEO Pascal Soriot are due to testify at the hearings.
- U.K. Prime Minister David Cameron appears to be wary about intervening too much in the deal, yesterday warning that Britain shouldn't "pull up the drawbridge" against foreign investors.
- Pfizer has been protesting that AstraZeneca's science capabilities are a core part of the reason for a deal, although Bloomberg points out that "AstraZeneca lacks first- and best-in-class experimental drugs in the core cardiovascular, diabetes and cancer sections Pfizer cited as grounds for the offer." Rather, a major motivation, says Deutsche Bank analyst Mark Clark, is the notable tax benefits for Pfizer of moving its HQ to the U.K.
- Part of the concern about Pfizer's commitments to is due to its announcement in 2011 that it would close its facility in Sandwich in southern England with the loss of up 2,400 jobs. As it happens, though, biotech life in Sandwich has remained vibrant. Pfizer sold rather than shut the facility, and it maintained 700 staff there, while some employees moved to other locations. Meanwhile, Mylan moved in and small companies were created.
May 11, 2014, 2:55 AM
- Pfizer (PFE) CEO Ian Read has said that AstraZeneca's (AZN) strong R&D capability is one of the main reasons why his company wants to buy its U.K. rival.
- "When we looked at AZ, we liked their science," Reid said in a series of online videos. "We liked where their science is being done, which is in the U.K., and we know we have good science in the U.K. in Cambridge, Oxford, London and other universities.
- Read was responding to increasing concern that jobs would be lost if Pfizer were to acquire AstraZeneca, especially as the U.S. company said in 2011 that it would cut 1,700 jobs when it closed a facility in Sandwich in southern England.
- Pfizer has promised to protect R&D jobs in the U.K. but said it could adjust its pledges if circumstances "significantly" alter, prompting calls for stronger commitments, such as from British finance chief George Osborne.
- The possible merger has also sparked concern in the U.S. and Sweden. Members of Congress from Maryland and Massachusetts, where AstraZeneca and Pfizer have facilities, are particularly worried about possible job losses.
May 9, 2014, 4:33 PM
- The AMAGINE-1 Phase 3 clinical trial evaluating brodalumab for the treatment of moderate-to-severe plaque psoriasis meets all primary and secondary endpoints for both doses. Brodalumab is a human monoclonal antibody that binds to the interleukin-17 (IL-17) receptor and inhibits inflammation by blocking the binding of several IL-17 ligands to the receptor.
- The primary endpoints were patients achieving at least a 75% improvement from baseline in disease severity at week 12 measured by PASI 75 and patients achieving clear or almost clear skin at week 12 according to the static Physician Global Assessment (sPGA 0 or 1).
- AMAGINE-1 is one of three clinical trails to assess the safety and efficacy of brodalumab. AMAGINE-2 and -3 are trials to evaluate brodalumab versus ustekinumab and placebo.
- Brodalumab is one of five mAbs from Amgen's (AMGN +0.6%) clinical inflammation portfolio that it is developing with AstraZeneca (AZN -1.9%) in a collaboration that began in 2012.
May 9, 2014, 7:18 AM
- U.K. Deputy Prime Minister Nick Clegg says that the pledges that Pfizer (PFE) has made to the British government in connection with the company's proposed takeover of AstraZeneca (AZN) need to be "binding."
- Pfizer has promised to complete AstraZeneca's new R&D center in Cambridge if the deal goes through, keep a factory in Macclesfield, and ensure that 20% of the combined company's research staff are located in Britain for at least five years.
- The government's focus is that "jobs are protected, research is protected, excellence in science is protected," Clegg says.
- It's worth noting, though, that Clegg is from the Liberal Democrats, the minority party in the coalition government, so his influence may be limited.
May 6, 2014, 1:05 PM
- In a clear signal to Pfizer (PFE -1.5%) that it needs to dig quite a bit deeper into its pockets, AstraZeneca (AZN -0.7%) publishes an update to its growth strategy. It states that the company's transformation to growth is underway citing its new management team plus its growing and accelerating late-stage pipeline.
- It provides long-term revenue targets for its five key growth platforms: Brilinta: $3.5B by 2023; Diabetes: $8B by 2023; Respiratory: $8B by 2023; Emerging markets: mid-to-high single digit growth; Japan: low single-digit growth.
- New revenue targets: 2017 revenues in line with 2013's and $45B by 2023.
May 6, 2014, 7:08 AM
- The FDA approves AstraZeneca's (AZN) Epanova (omega-3-carboxylic acids) as an adjunct to diet to reduce triglyceride levels in adults with severe hypertriglyceridemia (>=500 mg/dl). It is the first approved omega-3 in free fatty acid form. Patients can take as few as two capsules/day.
- In some patients Epanova increases LDL-Cholesterol so this parameter should be monitored periodically during therapy. This will undoubtedly be a selling point for Amarin's (AMRN) Vascepa (icosapent ethyl) since it lowers LDL-C.
May 4, 2014, 2:37 AM
- With Pfizer (PFE) pledging to protect R&D jobs in the U.K. if it buys AstraZeneca (AZN), concerns are increasing for overlapping positions in the U.S.
- Employees at risk could include cancer researchers at Pfizer's facilities in La Jolla in California, and the company's immunology and respiratory experts, as well as AstraZeneca's oncology and neuroscience specialists.
- "There's no doubt in my mind that if they are making these concessions to the British government, there will be cuts on this side of the Atlantic," says Aegis Capital analyst Raghuram Selvaraju. "Pfizer has a history of shutting down facilities; they don't thin down head count; they shut down an entire facility and pick up their stakes and move away."
May 2, 2014, 6:48 AM
- AstraZeneca (AZN) has rejected Pfizer's (PFE) improved bid of $106B, saying the offer undervalues the British drugmaker.
- "Pfizer's proposal would dramatically dilute AstraZeneca shareholders' exposure to our unique pipeline and would create risks around its delivery," says Chairman Leif Johansson.
- AstraZeneca's shares are +0.1% premarket. (PR)
May 2, 2014, 3:06 AM
- Pfizer (PFE) has raised its bid for AstraZeneca (AZN) to £50 ($84.47) a share from £46.61 in an offer that values the U.K. drugmaker at $106.4B (£63B) vs $100B previously. AstraZeneca is reviewing the proposal.
- Pfizer has also increased the cash component of the deal to 32% from 30%, proposing to pay $15.98 a share in cash and 1.845 shares in the combined company per AstraZeneca share. (PR)
- Pfizer has written to U.K. Prime Minister David Cameron pledging its commitment to complete AstraZeneca's R&D innovation hub in Cambridge in Britain and to keep the company's key scientific leadership in the country. The proposed deal had attracted criticism from the former science minister that it would be a "devastating blow" for U.K. science. (PR)
May 1, 2014, 2:06 PM
- If history is an accurate predictor of the future, drug research scientists and other lab personnel will have little enthusiasm for Pfizer's (PFE -0.6%) potential mega-acquisition of AstraZeneca (AZN +3%). Since buying Wyeth in 2009, Pfizer has cut $4.6B in research spending, closed seven labs and narrowed its focus to only six areas of medicine.
- AZN employs 9,000 research employees and spends $4.8B annually on R&D.
- PFE closed its Sandwich, England lab several years ago shedding 2,400 jobs.
- After the company bought Warner-Lambert Co. in 2000 and Pharmacia Corp. in 2003, many research projects ground to a halt, hiring was frozen and many employees had to relocate or find work elsewhere.
May 1, 2014, 1:47 PM
Apr. 30, 2014, 7:36 AM
- Reuters reports that the French pharmaceutical firm (SNY) is working with Evercore partners to find a buyer for a portfolio of mature drugs that include treatments for high blood pressure and cardio-metabolic diseases.
- The businesses, which generate ~$3.7B in annual sales, should fetch between $7B and $8B.
- Generic firms or specialty pharma companies are likely acquirers.
- Sanofi's initiative is consistent with other members of big pharma who want to shed smaller, less profitable and/or non-core businesses in order to focus on their principal growth drivers.
- (JNJ) (MRK) (PFE) (GSK) (LLY) (NVS) (AZN)
Apr. 29, 2014, 8:05 AM
- If Pfizer (PFE) is successful in its plan to acquire AstraZeneca (AZN) and redomicile in the U.K., it will join a growing list of other U.S. firms who have executed similar transactions in order to lower their tax bills.
- Members of Congress say that the moves are symptomatic of the need to revamp the U.S. tax code.
- The U.K. corporate tax rate is 21% compared to the top U.S. rate of 35%. American firms must also pay taxes when they repatriate foreign profits after receiving credits for foreign taxes. This is why the ex-U.S. corporate cash horde is so large.
- Pfizer's 2013 tax rate was 27%.
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Apr. 28, 2014, 12:48 PM
Apr. 28, 2014, 9:29 AM
- Pfizer (PFE) is currently reconsidering its options regarding its potential acquisition of AstraZeneca (AZN). It is in a great position to propose an attractive offer to AZN shareholders.
- Predictably, many synergies and efficiencies will be gained. Great long-term value for both companies. Strong sustainable cash flows.
- Mr. Read is selling the benefits of the transaction. He feels that this transaction is the best use of his firm's capital.
- A revised offer will need to happen in the next 28 days per the U.K. Takeover Code.
- Redomicile in the U.K. as a holding company.
- Final synergies in PFE's Wyeth deal was >$4B. Stated in response to an analyst's question re the expected synergies in a potential AZN deal.
- Revised proposal will be cash and stock but it appears that the cash component will be larger this time.
- PFE will maintain its current business segments.
- No expected change in its dividend.
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