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Pfizer will be hard to stop

The pattern of the global pharmaceutical industry has long been towards cross-border mergers that combine research strength, market access and the capital needed to sustain new drugs through multinational approval processes.The UK has done well in this game, with excellent laboratory work and two giants still headquartered here, GlaxoSmithKline and AstraZeneca. The latter is part-Swedish but has 6,700 British staff and a heritage that descends from the pharmaceuticals business of ICI, greatest of 20th-century British industrial names.

So alarm bells rang with the announcement at the beginning of the week of a takeover bid by Pfizer of the US, which has at least two counts against it: it is suspected of needing a big overseas acquisition more for tax efficiency than for strategic synergy; and it closed down its UK research centre at Sandwich in 2012, even though it was Pfizer’s British research team that invented Viagra, the company’s most money-spinning product.

It’s an exaggeration to claim that the bid threatens the entire UK ‘science base’, but it’s certainly unwelcome at a time when inventions, patents and general brain-power are recognised as key elements of long-term economic recovery. But however much Vince Cable huffs and puffs, the bid will be impossible to stop if Pfizer comes up with a price that pleases international investors who hold AstraZeneca’s stock.

This is an extract from Martin Vander Weyer’s Any Other Business? column in this week’s Spectator. Click here to subscribe to the Spectator.

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