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Wellcome Trust slams Pfizer/AstraZeneca bid

Published on 09/05/14 at 09:29am
Wellcome trust image
Wellcome Trust in Euston Road, London

The UK’s largest and most respected medical research charity the Wellcome Trust has warned that Pfizer’s potential takeover of AstraZeneca could lead to major job losses and doubts over the future of medical science in Britain.

Sir William Castell and Jeremy Farrar, who both lead the Wellcome Trust as its chairman and director respectively, outlined their concerns in a private letter to UK chancellor George Osborne last week, it has been revealed.

Sir William tells Osborne that AstraZeneca is ‘critical’ to the UK’s science base and raises doubts over Pfizer’s commitment to investment in Britain.

“Pfizer’s past acquisitions of major pharmaceutical companies have led to a substantial reduction in R&D activity, which we are concerned could be replicated in this instance,” the letter says – which was seen by Pharmafile and is available here.

“The company has not always honoured similar undertakings made following past acquisitions,” he Sir William adds. This includes its last major acquisition of Wyeth in 2009 when it slashed thousands jobs to help pay for the $68 billion spent on the deal.

In 2011 the firm also pulled around 2,000 jobs from its main European R&D centre in Sandwich, Kent, after it fell out of favour with its global strategy.

Sir William also urges the government to ensure that Pfizer does not transfer AstraZeneca’s oncology activities to its site on the US west coast.

The Wellcome Trust has an endowment of £16 billion and is seen as a bedrock of UK science, pouring more than £750 million a year into biomedical research. It has always worked closely with the industry and recently established a new genetic research partnership with London-based GlaxoSmithKline.

The Trust is adding its voice to a growing chorus of criticism over the potential $106 billion (£63 billion) deal, which could see AZ swallowed up by the US firm. Many believe Pfizer’s true intentions are to domicile itself in the UK in order for it to then receive large tax cuts, thanks to the UK’s Patent Box.

Last week AZ’s former chief executive Sir David Barnes told the BBC that Pfizer “will act like a praying mantis and suck the lifeblood out of their prey” if the deal goes ahead.

At the beginning of May the UK’s medical research collective also came together to warn the government that any deal between Pfizer and AstraZeneca could have far-reaching consequences for R&D in the country.

The statement, issued from the leaders of the Society of Biology, Biochemical Society, British Pharmacological Society and Royal Society of Chemistry, made similar warnings to the Wellcome Trust, saying that Pfizer could cut thousands of medical research jobs in the UK if it buys AZ.

Parliamentary probe

The current Conservative-Liberal Democrat coalition originally welcomed the deal when it was first announced last month, but have since become more cautious as media attention increases over the bid (what with an election being less than a year away).

Labour shadow ministers have been quick to jump on the deal as being bad for Britain, with its shadow business secretary Chuka Umunna saying last week: “The priority should be long-term investment and enhancing UK R&D, when many of the signs are that this deal is being driven by short-term concerns and not the long-term interest of a great British company and a key industrial sector.”

The government has now demanded that Ian Read, Pfizer’s chairman and chief executive –and Pascal Soriot, AstraZeneca’s chief executive, attend two parliamentary committees next week to explain the motives and potential impact of the bid.

Ben Adams 

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