Former AstraZeneca chief executive attacks Pfizer deal
Sir David Barnes was the chief executive of AstraZeneca until 2000 and deputy chairman until 2002. He oversaw the merger of Astra and Zeneca in the late 1990s which was at the time one of the largest pharmaceutical deals in Europe.
Sir David now says that any Pfizer/AstraZeneca deal would not be in the best interests of patients or Britain's science base. Speaking to the BBC, he said that he feared for the future of AstraZeneca worldwide if the bid goes through.
He told me that, for Pfizer, "tax was one of the key drivers of the deal" rather than a long term commitment to research and development.
"That is a very narrow basis on which to base such a massive task," Sir David told me.
"The risk is that the past history of Pfizer has shown that they tend to extract destructive synergies, they have done that in the past.
"I have a great concern that they will act like a praying mantis and suck the lifeblood out of their prey."
Sir David said that if Pfizer wanted to take advantage of the UK's tax laws and "patent box" - which gives tax breaks for research - it should invest in the UK itself and not attempt to do it via a takeover of AstraZeneca.
"They should be building their own labs in Cambridge," he said.
Sir David argued that the government should make clear its concerns about the deal and that shareholders should give the opinions of ministers "weight".
He said he wasn't necessarily convinced that the government should take on increased powers over takeover deals - a position put forward by Lord Heseltine in an interview with the BBC last week.
Sir David has written to Chuka Umunna, the shadow business secretary, outlining his concerns. In the email, seen by the BBC, he said:
"There is no significant advantage to be gained from the proposed acquisition. Indeed, for the financial arithmetic to stand up, there will need to be significant reduction in the combined activities.
"There is danger in becoming too big. There will be extended lines of communication, greater centralisation of decision taking and increased bureaucracy - none of these consequences is in the interests of patients or shareholders."
He continued: "The pipeline of new products for AstraZeneca is regarded as being much more exciting [than Pfizer's] and as such has formed part of the Pfizer case for acquisition.
"This reasoning, namely the need to make good the shortcomings in Pfizer innovation, was also used by Pfizer to justify the earlier acquisitions of Warner-Lambert, Pharmacia and Wyeth Laboratories. The result? A further reduction in the discovery of new products and a reduction of some US$3bn per annum in the aggregate former R&D expenditure."
Mr Umunna told me that the case against the deal was increasing. He said: "This is a highly significant intervention by a person who knows AstraZeneca well.
"Sir David clearly shares the same reservations as Labour and many in industry, science and the City about this deal. 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."
This is now a highly political story, with Vince Cable due to make a statement to the Commons this afternoon. Sources tell me the business secretary will say there are significant powers the government has to delay any deal without resorting to new legislation on a "national interest" defence.
Mr Cable will say that the government is acting in the best interests of jobs and investment and that it does not favour any side in the deal.
Mr Cable did reject Lord Heseltine's proposals on a national interest defence in 2012 and though a review could be on the cards, there are certainly parts of the government (the Treasury for example) that are against any move that could be construed as "closing the UK" to foreign investment.