About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

Chemistry and Drug Data: Drugbank
Chempedia Lab
Synthetic Pages
Organic Chemistry Portal
Not Voodoo

Chemistry and Pharma Blogs:
Org Prep Daily
The Haystack
A New Merck, Reviewed
Liberal Arts Chemistry
Electron Pusher
All Things Metathesis
C&E News Blogs
Chemiotics II
Chemical Space
Noel O'Blog
In Vivo Blog
Terra Sigilatta
BBSRC/Douglas Kell
Realizations in Biostatistics
ChemSpider Blog
Organic Chem - Education & Industry
Pharma Strategy Blog
No Name No Slogan
Practical Fragments
The Curious Wavefunction
Natural Product Man
Fragment Literature
Chemistry World Blog
Synthetic Nature
Chemistry Blog
Synthesizing Ideas
Eye on FDA
Chemical Forums
Symyx Blog
Sceptical Chymist
Lamentations on Chemistry
Computational Organic Chemistry
Mining Drugs
Henry Rzepa

Science Blogs and News:
Bad Science
The Loom
Uncertain Principles
Fierce Biotech
Blogs for Industry
Omics! Omics!
Young Female Scientist
Notional Slurry
Nobel Intent
SciTech Daily
Science Blog
Gene Expression (I)
Gene Expression (II)
Adventures in Ethics and Science
Transterrestrial Musings
Slashdot Science
Cosmic Variance
Biology News Net

Medical Blogs
DB's Medical Rants
Science-Based Medicine
Respectful Insolence
Diabetes Mine

Economics and Business
Marginal Revolution
The Volokh Conspiracy
Knowledge Problem

Politics / Current Events
Virginia Postrel
Belmont Club
Mickey Kaus

Belles Lettres
Uncouth Reflections
Arts and Letters Daily
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Ycombinator Gets Into Biotech | Main | Concert's First Drug: Not So Great »

April 28, 2014

Pfizer and AstraZeneca: What the Hell.

Email This Entry

Posted by Derek

What the hell is Ian Read thinking? Pfizer is apparently going hostile with their attempt to buy out AstraZeneca, all but ensuring that the deal, if it goes through, will take place at the highest price and in the messiest fashion that it possibly could. And for what? Update: Matthew Herper asks the same question, in detail.

This news developed over the weekend, with an article in the Financial Times as Pfizer's public shot across the bow. This morning, a press release from AZ gives their side of the story:

On 26 April 2014, Ian Read, Chairman and CEO of Pfizer, contacted Leif Johansson, the Chairman of AstraZeneca for the first time since January 2014. In this discussion, the Chairman of Pfizer did not make a specific proposal regarding an offer to acquire AstraZeneca, but nevertheless Pfizer requested that both companies issue a joint statement, prior to the market open on 28 April 2014, announcing that they had entered into discussions regarding a combination. The Board of AstraZeneca considered this request and concluded that, absent a specific and attractive proposal, it was not appropriate to engage in discussions with Pfizer.

The release says that the companies discussed a possible deal back in November, but that AstraZeneca's board concluded that Pfizer's proposal valued the company far too cheaply (not an uncommon conclusion for a board of directors to take, to be sure). So now we have a big public grab instead. Here are overviews from Reuters and the New York Times. As Reuters has it:

Pfizer's declaration turns up the heat under AstraZeneca Chief Executive Pascal Soriot, who has been in the job since October 2012 and who made clear last week he saw an independent future for the group, flagging spin-offs of two non-core units as one option to create more value.

Soriot has been credited with reviving AstraZeneca's previously thin pipeline of new drugs, which is badly needed to offset a wave of patent expiries on older drugs.

However, his overhaul - including an ambitious plan to move the company's research and corporate headquarters to Cambridge, England - is still a work in progress and he has also come under from some shareholders over executive pay.

That should give you some idea of the innate silliness of the business coverage of the pharma industry. It's 2014 - how can someone who's been CEO since 2012 revive an internal drug pipeline in that time frame? Neither Reuters nor the Times mentions something that Adam Feuerstein brought up on Twitter - that Pfizer has, potentially, all sorts of opportunities in the biotech/small pharma sector with that kind of money, but they're not having any. They'd rather buy another behemoth instead.

What is that? Both of those writeups go on to mention a hidden factor for this deal - taxes. Buying a non-US company would allow Pfizer to avoid repatriating a large amount of money (nearly $70 billion) from its foreign operations and exposing it to US taxes. Of course, if Pfizer wanted a substantial operation in the UK to put money into, they might have thought about not closing their large site in Sandwich back in 2011, but hey, that was all of three years ago, and who remembers such things? And not being an accountant, I can't tell you if they'd have been able to do that without running the cash past the US jurisdiction, anyway.

But that makes a person wonder what Pfizer would do with AZ if they got them. Take the drug pipeline, close down everything in the UK again, and just leave a corporate structure intact for the tax break? Stop that whole move-to-a-new-research-site-in-Cambridge idea before it gets any further? (After all, if Pfizer wanted to have a new research site there, they could have built one themselves when they vacated Sandwich). I hate to say it, but those seem like the most likely alternatives, especially given the company's past behavior in these situations. Pfizer's statement that the new company would be incorporated in Great Britain fits that view alarmingly well.

So there's the answer, perhaps, to the question I asked in the first paragraph. What the hell is Ian Read thinking? He's thinking about getting someone else's late-stage pipeline, because that's how Pfizer finds things to sell. He's thinking about working the tax laws to save the company billions of dollars, because Pfizer's innovations, in recent years, have mostly been financial ones. And he's thinking about ripping up yet another large patch of the drug industry in a continuing effort to keep Pfizer going, while causing vast disruption and loss of productivity along the way. Because that's what Pfizer does.

Update: Matthew Herper listened to Pfizer's conference call this morning, and here's what they plan to do with AZ's drugs if they get them.

A personal footnote: I've written a lot of fairly negative things about Pfizer over the years, since they have been very generous with the opportunities to do so. Every so often, people say to me "Well, you're never going to get a job with them, are you?", and I would just laugh. (The only time I might have been in the market for that, they were firing PhD chemists left and right, so it wasn't something that would have ever happened). I do know quite a few people who work at Pfizer, though - they have a lot of good people there, when you take them one at a time. But the corporation itself? No, I don't think they'd ever offer me a job. And what a relief that is.

Comments (76) + TrackBacks (0) | Category: Business and Markets


1. A Nonny Mouse on April 28, 2014 8:25 AM writes...

....which will be a uniform rate of 20% for big and small companies from next year, and reforms by this government which mean UK-based multinationals pay no UK tax on dividends they receive from their overseas operations.....

From the BBC News website; this may explain the purchase and the proposal to headquarter the joint business in the UK. I suppose that, had they not shut Sandwich, they would not need to go after A-Z.

Permalink to Comment

2. No one on April 28, 2014 8:26 AM writes...

This is as bad as it gets, however, not surprising.

Permalink to Comment

3. Quintus on April 28, 2014 8:27 AM writes...

I wonder if this is Martin Mackay's way of getting back at AZ for firing him? BUT, wait he also worked for Pfizer!

Permalink to Comment

4. small biotech CEO on April 28, 2014 8:35 AM writes...

$100B = about 100 acquisitions of small biotechs. This could give Pfizer awesome new technologies and products for their pipeline at many different stages of development in many different sectors.

Such a wasted opportunity!

Permalink to Comment

5. petros on April 28, 2014 8:40 AM writes...

Talking about this with assorted other chemists last Thursday no one could think of any logic behind the deal, except that it would be bad news for what is left of pharma R&D in the UK

Permalink to Comment

6. rogi on April 28, 2014 8:44 AM writes...

I do believe you might have just the skills we at Pfizer need. An ombudsman's position is being created and we could use your skills to bullsh..., oh, we meant advocate for our forward looking business plan. Oh, by the by, we are underwriting the cinema sequel to "Independence Day". Should come out chronologically in concert with our merger.

Permalink to Comment

7. Hap on April 28, 2014 8:48 AM writes...

This looks ugly, as destruction doesn't have to be pretty, and as noted before, the workings of capitalism don't have to be pretty - they simply have to generate value that didn't exist before.

As also noted, though, all destruction isn't creative, and Pfizer's destroyed an awful lot of drug development capacity without creating much of worth. This seems like a larger example of their M.O. Given that, is this better than it looks (by converting A-Z into startups or some other form of pharma that can create better things? by converting them into money that can be better spent elsewhere), or is it in fact as bad as it looks (destructive to nearly everyone but M+A firms and Pfizer management)? And if it's bad, is it a cost worth paying for other things that the financial system brings, or it is a harbinger of more virus-like behavior where value bulit up in generations is subsumed so that more value can be subsumed elsewhere until we've spun a useful economy into an oligopoly where nothing worthwhile actually makes money)?

The aliens in "Independence Day" (or "Aliens") seem to have a lot in common with Pfizer's management, unfortunately. Ripley's comment in the latter movie ("At the least they [the aliens] don't %&$# each other over for a percentage.") seems also relevant in that analogy.

Permalink to Comment

8. Anchor on April 28, 2014 8:52 AM writes...

Like I said in my previous postings, Pfizer is a serial rapist in a pharmaceutical World and want to "have it," desperately! They just do not give it a damn to what others think of them as long as they get what they want!

Permalink to Comment

9. dearieme on April 28, 2014 8:53 AM writes...

This is all just a rotten conspiracy to stop AstraZeneca driving up the value of our house. Our heirs will never forgive Pfizer.

Permalink to Comment

10. Anonymous on April 28, 2014 8:59 AM writes...

I think this would be bad news for UK med chem, at a time when it really doesn't need it....

Permalink to Comment

11. Anonymous on April 28, 2014 9:00 AM writes...

Best wishes to everyone on the ground at AZ. The fact it's a tax dodge, and will be welcomed with open arms by the spineless British government, makes it all the more sickening

Permalink to Comment

12. Roberto Ros on April 28, 2014 9:10 AM writes...

If this really happens, I am sorry for all AZ guys, it will be Wyeth all over again, take the pipeline and make tens of thousands redundant.

Permalink to Comment

13. Fat Old Man on April 28, 2014 9:15 AM writes...

Wow! What déjà vu.

I was a participant in the last acquisition. So I would say the following: if you're in small molecules plan ahead now. I have useen probabilities of 90% that this will happen. Remember Warner Lambert resisted at 1st. It didn't do them any good. Pfizer is now very efficient at integration like transfers of projects and employee exits. I was real sad to see the destruction of the equipment they couldn't move/sell (like small reactors) reminding me of the Romans and Carthage.
. Expect to see a flood of equipment on the auction sites.

I must say Pfizer was good to me with my exit package. I hope a lot of other people will be able to say the same.

Permalink to Comment

14. Rock on April 28, 2014 9:32 AM writes...

Pfizer did maintain a presence in Cambridge England after they shut down the Sandwich site. It is their pain research group (in combination with the ion channel company they bought Icagen). The unit is now called Neusentis.
Surely, the SEC will finally put a stop to this takeover nonsense......bwaaahahahahahaha....

Permalink to Comment

15. steve on April 28, 2014 9:46 AM writes...

The tax angle is an interesting one but I think this is really a cancer play for Medimmune/AmplImmune.

Permalink to Comment

16. PharmaHeretic on April 28, 2014 9:46 AM writes...

And it just keeps on getting better and better.

"Welcome to Thunderdome. Two men enter, one man leaves."

Permalink to Comment

17. The Aqueous Layer on April 28, 2014 9:49 AM writes...

I think the Ian Read has been watching too much Game of Thrones.

Pfizer is coming.

Permalink to Comment

18. UK Chemist on April 28, 2014 9:50 AM writes...

Having just seemingly got through the patent expiry of Lipitor, why would you want to go through Nexium and Crestor?

Permalink to Comment

19. NoDrugsNoJobs on April 28, 2014 9:51 AM writes...

They are so big they don't even understand nor how to launch their newly enhanced pipelines after mergers. Their marketing management of Wyeth's Women's Health Plan pipeline product has been atrocious because Pfizer had no clue about that area nor the innovation that was involved. Their last several drug launches have crashed and burned, they can't recognize innovation and have little capability to manage the assets they are acquiring in their demolition of company after company. Imagine the pharm world without Pfizer; all of the mid size companies that were so much more productive still doing their thing. Imagine the opportunities for med chemists in that environment compared to now. I look at Pfizer's still declining revenues and poor stock performance and think really, all this destruction to build this? I'm not saying the challenges of our industry would all be solved, just saying it would be a better place than it is now - and that's for workers, patients and shareholders if Pfizer had not become an eat and crap it out company.

Permalink to Comment

20. Justin on April 28, 2014 9:52 AM writes...

Just when you thought you had Pfizer figured out...oh, wait a minute.

Permalink to Comment

21. Shocker on April 28, 2014 9:53 AM writes...

#3 Quintus - Having just seen Mackay give a smooth talk last week at the World Orphan Drug Congress on behalf of his new employer Alexion, he seems to have converted to the rare disease side of things..and based on what I saw of Pfizer rare disease unit at the same meeting- it may be a while before they start buying into that space in a bigger the return of Mackay may be a ways off.

Permalink to Comment

22. PPedroso on April 28, 2014 9:54 AM writes...


If Pfizer is the Winter, who the hell is Daenerys and their fiery dragons?

Permalink to Comment

23. John Wayne on April 28, 2014 10:08 AM writes...

@17 Pfizer seems to insist on paying 'the Iron Price' for all of its assets; business brutality has a simpler ROI than basic research

Permalink to Comment

24. Anonymous on April 28, 2014 10:09 AM writes...

This has nothing to do with improving R&D.

Pfizer has 60Billion sitting offshore and it either donates it to the US government or spends it buying a late stage pipeline for the glory of shareholder value - just read the press release.

AZ or the British gov can not stop them so they will. AZ board will extract top dollar but PFE will pay - what else is there to do with the money? It is still good value at top dollar and is better than paying taxes, investing the remnants in research and hoping in 20 years they get something. PFE still does spend 6Billion plus on R&D and has little to show for it - the board ask ' we spend 6B on R&D and get little, why spend another 6B?'

Yes, this is about short term investor gain. AZ will be pillaged - PFE realised after WL that extracting value from other companies R&D lines was pointless. A few bits will be left for political reasons for a few years (see Neusentis) but everything else will go. At least AZ redundancy packages are better than most. PFE will then need another target in a few years time to do the trick again. I'm looking at you GSK...

Drug Discovery will be dead before I am. I'm advising my kids to take an interest in science but get a job as a tax accountant.

Permalink to Comment

25. Yancey Ward on April 28, 2014 10:09 AM writes...

While I won't comment about the wisdom of Pfizer buying Astrazeneca, I take the bid and the market's reaction as a sign of a late stage market mania. Seriously- both stocks are up significantly this morning. Simply unreal.

Permalink to Comment

26. Quintus on April 28, 2014 10:12 AM writes...

@Shocker: yes he was always a slick presenter but so far not much has materialised. In fact he de-materalised jobs at AZ before his went!

Permalink to Comment

27. oldnuke on April 28, 2014 10:17 AM writes...

I suppose that AZ will probably close its remaining R-D in the United States then? They just sold their relatively new office space in Wilmington (DE) to Chase-Manhattan. Several big lab buildings have been sitting vacant for several years, some of the lab equipment was donated to local education.

Sorry to see -- it is like watching DuPont (up the street) imploding. Maybe it's in the water supply in Wilmington.

Permalink to Comment

28. Anonymous BMS Researcher on April 28, 2014 10:25 AM writes...

I already have friends who own Pfired coffee mugs. I guess more people will be joining them.

Permalink to Comment

29. Doctor Memory on April 28, 2014 10:28 AM writes...

Talk to me like I'm stupid:

If the primary goal in buying A-Z is to acquire a UK company such that they can park financial assets away from the prying eyes of the US IRS, wouldn't it be easier to accomplish that by buying... almost any other company?

To the best of my knowledge, there's no requirement in US or UK tax law or corporate regulations that acquired companies must be in a similar line of business: they could just as easily acquire a corner chip shop in London, rechristen it "Pfizer's Fries" and promptly park £30B in its bank accounts. They wouldn't even have to make the counterman redundant, and the chip shop would probably even be net profitable quarter over quarter.

What's the actual upside in buying AZ instead of the chip shop?

Permalink to Comment

30. Anonymous Big Pharma Researcher on April 28, 2014 10:33 AM writes...

Permalink to Comment

31. wowchem on April 28, 2014 10:42 AM writes...

Crazy. I always laugh at the tax rationale. They have 70B off shore and will end up paying like 20% or 14B after breaks and welfare. They could take the rest and give big bonuses and dividends. Instead they "don't want to pay taxes" and will spend all 70B plus more on AZ, lawyer costs, accounting costs, severance packages, figuring out what to do with all the redundancy ect.

I know several people that "don't want to pay taxes" so they buy a house and pay 2X-3X larger mortgage. But hey no taxes, except you're broke!
its illogical

Permalink to Comment

32. oem chemist on April 28, 2014 11:36 AM writes...

it's all about money, buy AZ, move HQ to UK. no tax on Pfz money in US. perfect accounting sense. unlock money for shareholders.

we have lawyers, accountants, sales reps. we have modern equipment, fancy lab coats with our corp logo. but we dont have a damn clue how to plan for the future. after all, 7yrs is too long to wait for success

Permalink to Comment

33. Bring the Movies on April 28, 2014 11:45 AM writes...

Hopefully this will end those stupid-annoying- cutsey Nexium commercials.

Permalink to Comment

34. Hap on April 28, 2014 11:47 AM writes...

@24: If they can't get anything of value from their R+D, then 1) why keep spending lots of money on it and 2) why keep buying other companies so you can destroy their R+D? If you're in a business that depends on your ability to do R+D well (because Pfizer's spent a long time proving that buying what you can't make doesn't work so well), and you can't do R+D, why are you there?

The only reason for 1) and 2) that comes to mind is a massive Ponzi scheme - the only way current investors can make money is for Pfizer to swallow another company and feed on it; they can't do that so cheaply without an R+D infrastructure, and the merger frenzy allows them to get out before the new investors realize they still don't have anything to sell. Don't Ponzi schemes work really badly for almost all involved?

Permalink to Comment

35. Bioorganic Chemist on April 28, 2014 11:52 AM writes...

Has anyone quantified the total number of scientist jobs, and the total annual R+D spending per year, that Pfizer has destroyed? (So far...)

I'm eternally annoyed by (fellow) academics who are single-mindedly obsessed with the effects of static NIH budgets and loss of TT positions as the primary threat to the biomedical work force ("industry is just an alternative career"...). Yes, those are very significant (as the bulging grant applications folder on my computer will attest). However, in total jobs lost and in dollars terms, the destruction of research capacity by Pfizer alone is probably greater than the effect of static (declining after inflation) NIH budgets. And the dramatic loss of research jobs in industry is doing more to hurt future scientific advances in this country than anything the federal government is or is not doing, since the top students are far less likely to be drawn to science and more likely to go to things that are safer, like medicine or business. That is Pfizer's biggest long-term effect.

Permalink to Comment

36. David Formerly Known as a Chemist on April 28, 2014 12:06 PM writes...

A laughable, though ultimately sad, quote reported in FiercePharma this morning:

"One big reason why some analysts are all for the deal is one reason why AstraZeneca might not be. In a word? Synergies. Pfizer sees big opportunities for cost cuts; ISI Group analyst Mark Schoenebaum ballparks that expectation at 25%. As the product of one major merger after another over the past couple of decades, Pfizer has a history of shedding many thousands of jobs and billions in costs. "We have a strong track record on synergies," CFO Frank D'Amelio said during a call with investors and analysts Monday. "It's something we are very good at doing.""

Yes, they're very good at synergies, aren't they?

Permalink to Comment

37. Hap on April 28, 2014 12:35 PM writes...

Well, they can lay off people and destroy research organizations like no one's business. Making the vacuums where once operated effective research produce drugs...not so much.

I think that pretty much says what value investors want from this deal. Why don't they just fund a worldwide pirate army and be done with it? It would probably be less destructive, in the long run.

Permalink to Comment

38. Rock on April 28, 2014 12:49 PM writes...

@36 you just answered the question @29 posed. They prefer to buy a company with as many employees (i.e. "synergies") as possible to allow for several more years of cost cutting (aka layoffs) to keep their profit margin at 30% which was what had been promised to Wall Street years ago.

Permalink to Comment

39. anon on April 28, 2014 12:56 PM writes...

"Pfizer - sucking the marrow out of tomorrow since 2000!"

Permalink to Comment

40. Ron Burgundy on April 28, 2014 1:03 PM writes...

time to reload "Transformation Gun" ... 1-2-3-4

Permalink to Comment

41. Miramon on April 28, 2014 1:24 PM writes...

One horrible company buying another. This would matter if they were buying some worthwhile and important firm, but AZ? Ha. Who mourns for them? Wake me when the bell tolls for Vertex or someone like that.

Permalink to Comment

42. Am I Lloyd peptide on April 28, 2014 1:50 PM writes...

#41: "This would matter if they were buying some worthwhile and important firm."

Not really; knowing Pfizer that would end up with the firm's research becoming worthless and unimportant.

Permalink to Comment

43. oldwellcie on April 28, 2014 2:23 PM writes...

Looks like we are nearing the end game for small molecule R & D in Big Pharma. How did it come to this? Obviously many Big Pharma directors believe small molecule medicines are no longer economically viable to discover and develop. They may be right when lengthy complex clinical trials are involved. When the FDA required more stringent criteria for approval it would have been logical for an increase in patent life of 5-10 years to keep the show on the road for small molecules. The consensus that this was impossible to bring about has been rock- solid . Considering the damage done to employees and patients etc I’m surprised they were no dissenting voices to try and change this. Will the same happen to biologicals or will we have a long era of small Pharma and big molecules?

Permalink to Comment

44. Anonymous on April 28, 2014 2:24 PM writes...

@38 Yes, it's all about wealth transfer. So the execs and M&A bankers get richer and everybody else gets poorer. As simple as that. Why Pfizer wants nothing to do with biotech start-ups - too much hard work, time and expense to eventually bring in uncerrtain revenue...

Permalink to Comment

45. Former Med Chemist on April 28, 2014 2:25 PM writes...

Pfizer is the White Walkers. Too bad there isn't a wall.

Permalink to Comment

46. anonymous on April 28, 2014 2:32 PM writes...

As a former AZ employee (downsized 2012), my friends still left at my old site have my sympathy, & I hope the aquisition doesn't go through. But so far as the ccompany goes, I agree with Miramon (#41). To quote Elvis Costello, "I used to be disgusted, now I try to be amused."

Permalink to Comment

47. processchemist on April 28, 2014 2:36 PM writes...

In AZ worked some of the best process chemist around the world. Most of them, now, fired, I fear. And what about the current AZ pipeline? The sum of two tragedies can't give an happy end... in the current climate, drugs became only a byproduct of financial operations.

Permalink to Comment

48. sp3 on April 28, 2014 2:40 PM writes...

This is more of the inevitable shift of research from big and established pharma to small pharma.
Two drivers: 1) the lower tax rate in the UK and a way to deploy their $70B in retained earnings, and 2) a huge conglomerate to break up into 3 fragments, which PFE was already interested in doing. I have to believe this will drive shareholder value but will cause a huge shedding of jobs. As Pfizer arithmetic has proven from past mergers, regarding employee head count, 1 + 1 = 1.

Permalink to Comment

49. Medchem on April 28, 2014 2:57 PM writes...

I vote for Derek to replace Read as Pfizer's new CEO. I have a hunch he'd do a lot of good for all of us.

Permalink to Comment

50. Lunar landing on April 28, 2014 2:59 PM writes...

This is a disturbing development on a number of fronts. Most concerning is the current tax structure in the US. Would we be having this discussion if the federal tax code would allow the repatriation of this $70 billion dollars at a lower tax rate? Now the US economy gets little in the form of tax revenues, thousands will be laid off in the US and abroad and those that do get laid off wiLl likely not only be collecting unemployment but also not paying taxes. How is this healthy for the long term prospects of any industry in the US but also for the economic future of the country? I am not taking sides politically but this IMHO is a HUGE issue.

Permalink to Comment

51. Anonzy on April 28, 2014 3:09 PM writes...

The negative comments on this post make sense if you assume that the goal of the pharmaceutical industry is to discover or invent new drugs. They do not make sense if you assume that the goal is to make money for shareholders and management.

Permalink to Comment

52. ton on April 28, 2014 3:17 PM writes...

i'm not sure how to spew the appropriate amount of vitriol

Permalink to Comment

53. Anonymous on April 29, 2014 9:12 AM writes...

What he is thinking is this is a chance to destroy a competitor at little real cost and no government oversight.

Permalink to Comment

54. Anonymous on April 29, 2014 9:13 AM writes...

What he is thinking is this is a chance to destroy a competitor at little real cost and no government oversight.

Permalink to Comment

55. DCRogers on April 29, 2014 9:39 AM writes...

Most 'financial innovation' is simply tax rate arbitrage. See Valeant - entire model is to buy companies with headquarters in higher-tax locales, burn down R&D, and book the tax savings.

Yeah, I know 'corporations are people', but I can't reincorporate in the Bahamas; also, if I break a law, I won't just pay a fine ("without admission of wrongdoing"), I'll be looking out through bars. Tell me again about the efficiencies gains of pure capitalism!

Permalink to Comment

56. a. nonymaus on April 29, 2014 9:46 AM writes...

Re: 50
OK, let's discuss tax law. There is a loophole that allows corporations to not pay tax on foreign income until it is repatriated. The real problem is that this income was not taxed when it was booked as revenue. Perhaps its time to nationalize Pfizer in lieu of back taxes plus interest and penalties.

Permalink to Comment

57. Dr. Manhattan on April 29, 2014 10:23 AM writes...

"One big reason why some analysts are all for the deal is one reason why AstraZeneca might not be. In a word? Synergies. Pfizer sees big opportunities for cost cuts; ISI Group analyst Mark Schoenebaum ballparks that expectation at 25%."

Having been present for 2 of Big PFE's acquisitions, the "synergies" all come out of shutting sites and firing staff. True synergy would be to keep the bulk of the R&D that made the company attractive in the first place. Instead Ann Arbor & Kalamazoo were shuttered.

What happens to all of the pharmaceutical analysts when there is only one company left standing (Pfizer) after acquiring everyone else? That's the direction it is heading, as this will be Big Merger #4 for PFE. After flogging these kinds of value destroying acquisitions (in the sense of drug R&D), but making a bundle of cash off of them, it would be ironic if there were no further need for analysts, since there is only One Company. Incorporated in the UK…or maybe Russia if they can get a better tax deal.

Permalink to Comment

58. annon on April 29, 2014 11:03 AM writes...

Looks to me that GSK is setting themselves for being taken over by Pfizer as they continue to divest some of its parts. But wait, Pfizer wants pipelines, and GSK's is pretty pathetic now. Oh well, nice ping of a thought in wishful way for the GSK stock increase.

Permalink to Comment

59. anonner on April 29, 2014 4:00 PM writes...

@58 ALL of that is truly laughable.

Permalink to Comment

60. Anonymous on April 29, 2014 8:59 PM writes...

Synergies = you're pfired!

Permalink to Comment

61. AnotherChemist on April 29, 2014 8:59 PM writes...

So...I guess Pfizer is learning from the Peter Dolan School of Business? Perhaps acquiring AstraZeneca would be as fruitful as the "celebrated" purchase of DuPont-Merck Pharma by BMS a few years ago.

Rather than buying AZ, wouldn't it behoove Pfizer to follow Roche's example and diversify with a strong biotech like Amgen or Biogen-Idec? Or maybe it can put Merck out of its misery...perhaps Fred Hassan can be contracted to broker such a deal.

Permalink to Comment

62. Pfiring squad on April 29, 2014 9:06 PM writes...

"Synergies" as in nuclear fission? The fallout may not be pretty. Actually, wouldn't it be hilarious if Aerotek, Kelly Scientific, and other temp agencies pooled their funds to make a hostile bid for Pfizer?

Permalink to Comment

63. Anonymous on April 29, 2014 9:16 PM writes...

I once saw an eagle swoop in and slam a pigeon off a power line, drag it to the ground...stomp it and chew its neck off. I ran over to try to scare it away but was too late. This acquisition will likely go through. Good luck to all at AZ

Permalink to Comment

64. Combine King on April 29, 2014 10:47 PM writes...

I too will burn the bridge with Pfizer. After being being acquired by PFE in the P&U round, I was in the position to re-apply for my job. PFE Human Resources interviewer asked me the following question. "Considering Pfizer is the premier pharmaceutical company in the world, what is you reason for wanting to work for us?" I allowed my honesty to shine through and the dead silence on my part sealed my fait. How could I respond to that? ... not even if they were the last pharma Co. on earth.

Permalink to Comment

65. Anonymous on April 29, 2014 11:11 PM writes...

I recently interviewed at Pfizer and was asked the same question as @64.
All I could say was that I need a job to earn some money. I did not add that no other place is hiring, including Home Depot. I did not get the job.
What do they expect you to say?

Permalink to Comment

66. Hap on April 30, 2014 8:50 AM writes...

64/65: I guess they want some "validation" that they're not really as evil as they're acting. Apparently their HR has been reading 1984. If you have to force people to tell you what you want to hear, that says all you need to know about your character and the truth of what you want to hear.

The other problem is that Pfizer may soon be the only pharma company left. They seem to have gotten the virus emulation part of capitalism down pat, just not the producing useful things part.

Permalink to Comment

67. NMH on April 30, 2014 10:11 AM writes...

I interviewed at a company that was acquired by Pfizer years ago. The interview did not go well, and I clearly made mistakes. However, one of the guys there was the biggest jerk I had probably met in my entire life--ego the size of Alaska, with a strong cruelity streak. There are not too many instances when I meet someone and get an extremely bad feeling about him immediately, but he was definitely one of these guys.

He now is a higher manager at Pfizer

Permalink to Comment

68. Anonymous on April 30, 2014 10:25 AM writes...

67. Was he stroking a cat at your interview?

Permalink to Comment

69. NMH on April 30, 2014 10:56 AM writes...

@Hysterical! Yea, I guess I was lucky not to fall through a trap door into a shark tank.

No, just talking about how great he was because 1.) he had all of these other companies wanting to hire him 2.) he had lame research associates doing experiments for him 3.) his graduate advisor ripped him off (he said "he ripped me!") of his ideas, and he threw around names like "Christopher Walsh" and "Richard Wolfenden", like he was their close buddy.

Burned in my memory, Like it happened yesterday

Permalink to Comment

70. Anonymous on April 30, 2014 11:22 AM writes...


A friend of mine was let go by Pfizer during one of the many layoffs the last few years. They told him the reason he was being let go was that he was 'too nice', so your story sounds about right. Said he didn't trust anyone there.

Permalink to Comment

71. Anonymous on April 30, 2014 12:59 PM writes...

"Bailey’s committee will discuss on May 6 whether to hold hearings with executives. “I view it with great concern,”Bailey, who is a Labour lawmaker, told reporters yesterday. “We have a company which closed its operations in Sandwich for tax purposes and now says it’s buying a British company for tax purposes.”

Bailey certainly outsmarts those WallStreet fellas, but money talks eventually?

Permalink to Comment

72. DrSnowboard on April 30, 2014 2:59 PM writes...

@71 Expect Cameron and the government to wax lyrical about how the 'merger' will increase investment into basic sciences in the UK and how much of a powerhouse the UK financial sector is. They will not mention that its a tax dodge, that huge fees will be earned by lawyers and consultants (ie their mates) and that the overall effect will be the shuttering of anything AZ except maybe an office on a Cambridge campus with a sign saying 'we buy for cash' .
Also expect some posturing by AZ management (Soriot et al) before accepting the proffered hand into the golden lifeboat.

Permalink to Comment

73. Shake and Bake on April 30, 2014 5:06 PM writes...

Regarding PFE-style interviews (above), when asked to respond to "Considering Pfizer is the premier pharmaceutical company in the world, what is you reason for wanting to work for us?" consider taking a page from Rickie Bobby:

Permalink to Comment

74. petros on May 1, 2014 8:41 AM writes...

And Pfizer's Ian Read, who's British, is proclaiming the value of the UK's science base!

Tell that to the successful group at Sandwich

Permalink to Comment

75. Skip on May 13, 2014 6:23 AM writes...

Why have I heard nothing about Pfizer, closing
their Sandwich Kent Factory a couple of years ago! Every single employee sacked!
Don't let them have the chance to do it again!!

Permalink to Comment

76. Skip on May 13, 2014 6:24 AM writes...

Why have I heard nothing about Pfizer, closing
their Sandwich Kent Factory a couple of years ago! Every single employee sacked!
Don't let them have the chance to do it again!!

Permalink to Comment


Remember Me?


Email this entry to:

Your email address:

Message (optional):

The Last Post
The GSK Layoffs Continue, By Proxy
The Move is Nigh
Another Alzheimer's IPO
Cutbacks at C&E News
Sanofi Pays to Get Back Into Oncology
An Irresponsible Statement About Curing Cancer
Oliver Sacks on Turning Back to Chemistry