As the chief executives of AstraZeneca and Pfizer head back to the House of Commons to restate their positions about the US giant’s takeover bid, day one ended with the Anglo-Swedish drugmaker stating its desire for independence while not discounting acceptance of a higher offer.
Pfizer boss Ian Read was first up in front of the Business, Innovation and Skills select committee (see link below) and despite quite a hostile grilling, he gave a robust defence of the firm’s commitment to keeping 20% of researchers in the UK, while acknowledging that a combined group would have a lower R&D budget and jobs would be cut. He was followed into the hot seat by his counterpart Pascal Soriot who got a much easier ride from MPs.
Dr Soriot began by warning that the proposed deal would disrupt the development of life-saving drugs, telling the panel “what will we tell the person whose father died from lung cancer because one of our medicines was delayed because…our companies were involved in saving taxes or saving costs?” He also spoke about AstraZeneca’s commitment to science in the UK, pointing to the building of the Cambridge campus as an example of the firm’s long-term plans here. While Pfizer has made a five-year pledge regarding R&D jobs, Dr Soriot said AstraZeneca’s commitment is not for five or ten years, but decades.
AZ paid no UK tax last year
Dr Soriot also spoke about the reputational damage the company could suffer if Pfizer wins out and takes advantage of lower taxes in the UK. However, he then disclosed that last year AstraZeneca did not pay any tax in the UK last year due to patent losses, its R&D spend and the fact that the company actually made a loss last year.
Committee members jumped on this but Dr Soriot recovered to say the R&D is now producing the goods in the pipeline and that he hopes to start paying tax again very soon “because that will show we are doing very well”.
Despite having rejected Pfizer’s offer, the AstraZeneca chief admitted that “it is impossible to say we would never accept any offer.” He spoke of the firm’s fidicuary duties and if there were a strong enough offer “we would have to accept”.
Messrs Soriot and Read and their teams will return to the Houses of Parliament later this morning, this time to respond to questions from the Science and Technology select committee.
