Thursday 16 August 2018

AstraZeneca boss says drug-maker may be a bid target

A sign is seen at an AstraZeneca site in Macclesfield, central England. Photo: Reuters
A sign is seen at an AstraZeneca site in Macclesfield, central England. Photo: Reuters

Ben Hirschler

AstraZeneca's chief executive believes a rival could spot the growing value of its drug pipeline but declined to say yesterday if the group was likely to be a takeover target once more, two years after seeing off a bid from Pfizer.

This time speculation has moved to the idea of a possible offer from Swiss-based Novartis, which would increase its cancer drug operations significantly by acquiring its smaller British rival. It could also lead to cost savings.

The comments by AstraZeneca chief executive Pascal Soriot encouraged talk of another mega-deal in the pharmaceuticals sector, after a run of deal-making by companies seeking promising new medicines. This helped to send AstraZeneca shares to a record high yesterday, breaching the £50 mark for the first time. Citi analyst Andrew Baum suggested in a note this week that AstraZeneca's biotech expertise and advanced immunotherapy cancer pipeline made it an attractive target for Basel-based Novartis.

AstraZeneca has a current market value of just over $80 billion, while Novartis is worth around $215bn. Reporting quarterly results yesterday, Soriot said development of new drugs for cancer was now reaching a critical point, with important clinical data due in the next 12 months, which would be an inflection point for the company.

"As to whether we would be exposed (to a bid), we certainly have been very aware over the last few years that as we create value then at some point our pipeline becomes attractive," he told analysts. "Hopefully, it becomes attractive to our shareholders but, of course, it may be attractive to anybody."

AstraZeneca spurned a £55 a share offer from Pfizer in 2014. (Reuters)

Irish Independent

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