AstraZeneca hits back at Pfizer with growth plans as political row intensifies

At the heart of AstraZeneca’s show of confidence was an experimental type of cancer medicine known as immunotherapy, which harnesses the body’s own immune system to fight off tumours. The company’s pipeline for cancer immunotherapy is widely recognised as one of the strongest in the industry, with analysts estimating the market value for this type of drug at between $28bn and $35bn.

Mr Soriot also drew attention to a number of drugs in its early stage research, such as an Alzheimer’s treatment which it said could generate $5bn of annual sales at its peak.

In a clear rebuttal of Pfizer’s advances, he said any disruption to AstraZeneca’s strategy could destroy value in the pipeline.

“We are in the race with many competitors to bring products to market as quickly as possible so any distraction that slows us down or causes us to lose the tremendous talent we have, anything that creates disruption here has the potential to destroy value. It’s always easy to sit in office behind a table and spreadsheet and assume it would have no impact on the pipeline,” he said.

The AstraZeneca update drew a mixed response from analysts. Mick Cooper at Edison Investment Research said the forecasts were “credible” and the company had provided a “robust rationale for why Pfizer’s bid significantly undervalues the company.”

Mark Clark at Deutsche Bank, however, sounded a sceptical note on the update. “When they propose $3.5bn of Brilinta sales which has been a serial disappointment so far and big numbers for diabetes where people are sceptical because of the competitive backdrop, that is probably something that will stretch the credulity of some investors,” he said. “The reality is it could be an incredibly exciting pipeline but we’re not at a stage where we can truly make that judgment.”

Savvas Neophytou at Panmure Gordon said while most analysts “remain sceptical” on the likelihood of AstraZeneca hitting these targets, “at least it sets out the rationale why management turned down Pfizer’s advances last week”.

The update came as the political furore over the potential takeover continued apace. Boris Johnson, Mayor of London, said politicians must not be 'aloof' over the implications .

Vince Cable, Business Secretary, also revealed that he would not “rule out intervention” in a Pfizer takeover of AstraZeneca as he warned that the “future of the UK is a knowledge economy not a tax haven”, though he acknowledged the “very serious legal constraints” on state interference. He also promised “even handed neutrality” in dealing with both companies, as is required under UK law, and has been requested by the board of Astra Zeneca.

Under the terms of the 2002 Enterprise Act, the Government only has powers to intervene in deals involving defence, media companies or those that threatened financial stability. Mr Cable repeatedly explained that any intervention would be aimed at protecting the UK’s science and research base. “There is no question of protectionism in this area,” he said.

Meanwhile, George Osborne, the Chancellor, said he would support any deal that would deliver jobs for Britons.

It came as both the Business and the Science & Technology Select Committees announced investigations into the planned takeover. The Business Committee said it would summon bosses from both Pfizer and Astra Zeneca to answer questions on the proposals, while Andrew Miller, chairman of the Science Committee, said David Willetts had been called to answer questions on the deal next Wednesday. The Committee is also expected to call representatives from both companies to describe the impact of a tie-up on the UK science base.

Mr Miller told The Telegraph that British scientists had raised concerns about the deal with him. “We have concerns about the risks to the UK science base, particularly regarding intellectual property and R&D,” he said. He added that he had a “degree of suspicion” about the assurance Pfizer had given to David Cameron in a letter.

Treasury Minister David Gauke said the potential takeover of AstraZeneca by Pfizer showed how “the UK is now very much top of the list for foreign companies looking to increase their activity in the UK”.

“A few years ago [Britain] wasn’t even making the shortlist,” he said. “There is increasingly the sense that the UK is as competitive and attractive as other jurisdictions, whereas previously multinationals might have looked at Ireland”

The proposed bid has also divided shareholders. Martin Gilbert, chief executive of Aberdeen Asset Management, has backed Labour leader Ed Miliband's call for a stronger public interest test into foreign takeovers.

His remarks echoed those of veteran healthcare investor Neil Woodford, who last week said he trusted AstraZeneca's management and believed it had a profitable and viable future as a standalone company .

The Aberdeen boss said AstraZeneca had a “good chance” of remaining independent because the management had “enormous credibility”.

“They’re doing all the right things, they’re moving in the right direction. If [Pfizer] moved a year ago I would say [AstraZeneca] would have had very little chance of remaining independent but they’ve moved on significantly last year.”

Other investors, however, have urged the board to open up talks with the US company.

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