Pfizer today announced another bid for AstraZeneca, this time for 58.8 billion pounds ($98.7 billion). In January 2014 the offer was only 46.6 billion pounds. If the acquisition goes through, it would be one of the largest-ever pharmaceutical deals. However, AstraZeneca continues to play hard to get. Leif Johansson, Chairman of AstraZeneca’s Board of Directors, continues to express confidence in AZ’s prospects as an independent business. His proof is in Pascal Soriot. Since AstraZeneca hired Soriot as CEO in October 2012, the company has been focusing more on R&D than M&A. (Just the opposite of Valeant’s strategy.) Under Soriot’s leadership, AstraZeneca has been busy advancing four experimental medicines into late-stage clinical tests – two for cancer and two for breathing disorders – exactly what Pfizer needs to flood its drying pipeline of new drugs. (The acquisition would also, of course, create significant tax savings for Pfizer.)
Chances are Pfizer CEO Ian Read will eventually win the battle for AstraZeneca. What might help Read–a Pfizer lifer who began his career there in 1978–is a change in approach. He’s been talking to Chairman Leif Johansson (a Swedish businessman who’s also Chairman of Ericsson) when he might have more luck wooing Soriot (a veterinarian by training) who isn’t afraid to take risk. Immediately after Soriot joined AstraZeneca, Soriot put the ovarian cancer drug olaparib (that AZ ditched as “too unpromising to pursue”) back in development. The FDA will review its status on June 25. There’s no guarantee it will make it to the market but if it does, the results of olaparib will open a doorway to a line of new medicines for ovarian cancer. It’ll also validate Soriot’s strategy to stick with R&D instead of M&A. A strategy that, ironically, may make him part of one of the biggest M&A deals ever.
