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Business and Markets

AstraZeneca: Don’t Buy Us

After Pfizer’s less-than-wonderful earnings report yesterday, AstraZeneca is out today painting a picture of how great things will be if they don’t get swallowed by them. John Carroll at FierceBiotech has the details, but I especially enjoyed his pithy comment on Twitter: “AZN made more promises today than I will ever see broken again.”

20 comments on “AstraZeneca: Don’t Buy Us”

  1. Jon Snow says:

    So… can we say that Pfizer is like the Lannisters of pharma companies?

  2. Anonymous says:

    You know nothing, Jon Snow.
    Okay, actually you do. But it had to be said.

  3. The Aqueous Layer says:

    My fear is that the merger of these two underperforming companies will result in a black hole that will destroy the universe.

  4. Anonymous says:

    @3: Perhaps we should try merging these two companies in the Large Hadron Collider, or is there a BPC (“Big Pharma Collider”)?

  5. Hap says:

    I think Mr./Dr. Carroll is very optimistic. As long as there are desperate or dishonest (or both) companies (of which there seem to be many in pharma), there will be no upper bound to the number of false or unachievable promises that can be made.
    Perhaps records should be kept. The records could be counted in units of density (false promises/unit time) and treated like steroid-assisted home run records.

  6. oldnuke says:

    Perhaps Astra Zeneca is a poison pill? gr

  7. Magrinho says:

    AstraZeneca: I don’t want to talk to you no more, you empty-headed animal food trough wiper! I fart in your general direction! Your mother was a hamster and your father smelt of elderberries!
    Pfizer: Is there someone else up there we can talk to?
    AstraZeneca: No, now go away or I shall taunt you a second time!

  8. Don’t believe a word AZ says. This is all a part of the game.
    “Oh you want to buy us? Well, maybe you didn’t know how wonderful we’re doing? Let me tell you! We’re actually doing just fine on our own, our best years are ahead of us! That’s right, we’re actually doing MUCH better than you or the public knows. Oh! You still want to buy us? Well it’ll cost you a little more since we have all these wonderful products!”

  9. Anonymous says:

    $63 billion is a lot of fish oil.

  10. Anon says:

    Meanwhile, Pfizer’s punchline is: “Don’t tread on us”.
    “We’ll tread on you instead”.

  11. Sharp Tool says:

    On the topic of “it’s all about the price”, I am reminded of a commentary I heard recently on the trials and tribulations of the supermarkets, in particular the potent reminder that, for them, it is not all about the price. It’s about the relationships between price, range, value and customer service. Of course in the context of the AZ shareholders where we are talking about the harsh realities of the markets we can narrow that choice down to price and value. Do they always have to ‘have their price’ or do they value AZ shares over Pfizer shares?
    At least it does not have to be all about price.

  12. bank says:

    The UK government appears to be weighing-in on the side of AZ:
    http://www.bbc.co.uk/news/business-27291162

  13. davesnyd says:

    What is the goal of the acquisition?
    What were the goals of previous M&A activity in the industry?
    If you look at many of them– and I’m not singling PFE out– it looks like a story of acquire, take market share and pipeline, and shut down R&D.
    Why? Why not just purchase the patent rights and let the remaining (now product-free) company continue to function as an R&D entity– essentially, using the purchase dollars to fund future research?
    If the R&D laboratories have no intrinsic value– which is what I think they’re saying by doing shutdowns– then why not leave them intact, independent, and continuing to do R&D?
    Or– buy the company and spin the R&D units off with at least enough cash to continue functioning until they can produce new entities?
    Somehow– the leftover shells of buildings, fully stocked with lab equipment, but vacant of researchers– it seems like a waste; I’m not sure any of the strategies proposed above make business sense– but there must be some better use for both the fully stocked research facilities and the now laid off research personnel.

  14. oldnuke says:

    @8 Ah, the dreaded “pufferfish defense”!
    https://www.youtube.com/watch?v=XYXg3W28_ZI

  15. PIN says:

    Any other mergers that would make business sense due to pipeline syngergies?

  16. rtw says:

    @1, and 2
    For the might is dark and full of Pfizer!
    @13
    The University of Michigan made out rather well when they bought the former Parke-Davis/Pfizer facility. Property that PD and later Pfizer purchased from the UoM was purchased back after the facility shut down for pennies on the dollar, which also removed them from Ann Arbors Tax rolls. This caused a double whammy to the economy in the area as the housing bubble burst, loss of tax revenue to the city and state, and home values dropping because of an over abundance homes needing to be sold as R&D folks relocated or otherwise had to move on to find other work. In many cases unemployment or at best under employment. I am sure the same will occur in those areas where AZ is located at some point in the next 2 to 5 years. Michigan unfortunately was home to two of Pfizers previous targets (3 if you consider Esperion which Roger bought back I believe.)
    Good luck to those communities that have AZ facilities in them.

  17. Mike C says:

    @13:
    “If the R&D laboratories have no intrinsic value– which is what I think they’re saying by doing shutdowns– then why not leave them intact, independent, and continuing to do R&D?”
    “Or– buy the company and spin the R&D units off with at least enough cash to continue functioning until they can produce new entities?”
    Without the IP, the R&D facilities, staff, and obligations are a cash sink for a good 5-10 years. It is probably less expensive for Pfizer to buy AZ outright than it is to just buy the IP and bits necessary to continue selling existing drugs.

  18. aa3 says:

    One aspect of these deals I believe is over-competition amongst the big pharma companies. Look at areas like diabetes where a bunch of huge global companies are building portfolios and pushing me-too drugs.
    The buyers of the drugs have consolidated into just a few entities, and they will play the companies off against each other, to get a lower and lower price. That seems fair to the me-too players, but it seems unfair to the original creator of the breakthrough.
    Another example is with Solvadi, which seems the biggest breakthrough of the decade. The analysis I was reading said the greatest threat to the drugs revenues are the rival compounds going through trials now by competing companies that do the same thing. And plan to undercut the first to market Solvadi.
    Yet on the questions that really matter.. like the lifespan and quality of life for the patients, the drug passes with flying colors. And on the question of the cost, while payers naturally want a lower cost, the drug at 80k is far cheaper over time for payers than a lifetime of costs involved with a failing liver.
    Where I do wonder about the takeover ideas, is if this is the best strategy. The Glaxo-Novartis deal trades areas where each company had development but was relatively weak compared to rivals, to the other company where it was strong. This path seems beneficial to the researchers(going from a weak unit to a strong unit in their area of expertise). And the main goal of the Glaxo-Novartis deal is building strength, as opposed to cost cutting.

  19. Inthebubble says:

    While no fan of M and A in general, I have to say that AZ’s v rosy projections give me pause. AZ mgmt dissed pfizer”s offer saying any offer can be made to look good on a spreadsheet. Sounds like any defence can be made to look good on a spreadsheet too

  20. Anonymous says:

    Let’s face it, AZ is worth a lot more to Pfizer and its shareholders than it is to AZ’s shareholders, simply due to the “synergies” as well as the tax shield/avoidance/evasion.
    This deal WILL go through, unless we are prepared to question our own fundamental capitalist values and the importance of a free market.

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