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David Cameron has been urged by the chairman of AstraZeneca not to give ammunition to Pfizer’s £63bn takeover approach as the UK group prepares to step up its defence against the bid by trumpeting new drugs under development.

Leif Johansson, AstraZeneca’s Swedish chairman, cautioned the UK prime minister that the government’s active engagement with Pfizer could allow the US group to claim that Downing Street was in favour of the deal, according to one official close to the discussions between the company and Number 10 on Friday.

Details of the conversation emerged after Ed Miliband, leader of the opposition Labour party, on Sunday accused Mr Cameron of acting like a “cheerleader” for Pfizer after ministers entered negotiations with the company over jobs and investment before it has even made a formal offer.

AstraZeneca, which rejected Pfizer’s informal £50-per-share proposal last week as a “substantial” undervaluation, will on Tuesday issue details of its strengthening pipeline of new drugs – including some promising cancer therapies – in an effort to persuade investors to keep faith with it as an independent company.

“We are convinced that we have a good strategy that is making good progress and that we can stand on our own,” said Pascal Soriot, AstraZeneca chief executive. “We have the size and the resources to produce a strong pipeline.”

Pfizer said on Monday it was “very disappointed” by AstraZeneca’s refusal to enter talks and said it was keeping open all options for its next step.

The US group received a boost when an influential UK pharmaceuticals industry figure criticised the “political and nationalistic furore” around the potential takeover.

Sir Richard Sykes, chairman of the Royal Institution and former chairman of GlaxoSmithKline, said on Monday that who owned AstraZeneca and where it was based were “irrelevant”.

“What is really important is that Britain encourages these companies to do their drug discovery and development work here,” he wrote in the Financial Times. “To me that is the critical issue and we should learn lessons from the Indian and Japanese carmakers that have followed this model.”

Ian Read, Pfizer chairman and chief executive, urged AstraZeneca’s board to reconsider its refusal to talk. He said a deal would allow the UK company’s shareholders to “trade up” to a company with “a greater potential for value creation”.

Pfizer has until May 26 under UK takeover rules to persuade AstraZeneca to enter talks or, if it fails, to make a hostile bid or walk away.

Analysts say one of the reasons why Pfizer wants to buy AstraZeneca is the relatively weak prospects of its own development pipeline to replace revenues being lost from older drugs.

This was highlighted on Monday by the announcement of a 9 per cent year-on-year drop in first-quarter sales to $11.4bn in part because of the decline of blockbusters such as Lipitor, the cholesterol drug, and Viagra, the anti-impotence treatment, which are facing increased generic competition.

Mr Read acknowledged “continuing revenue challenges” because of patent expiries but voiced confidence in “the strength of our mid- and late-stage pipeline”.

Net income fell 15 per cent to $2.33bn, hurt by the loss of revenues from the Zoetis animal health business spun off last year. However, excluding exceptional items, earnings per share rose 12 per cent to 57 cents, beating analysts’ expectations.

The rise in underlying earnings reflects Mr Read’s success in keeping profits on track through tough cost control and restructuring.

Monday’s results marked the first time Pfizer had published separate accounts for its three divisions – newer, patent-protected pharmaceuticals; older, established drugs; and a more diverse unit including vaccines, cancer treatments and consumer products.

Mr Read has floated the possibility of spinning off the established products division and many analysts think a full break-up is possible in future.

He said on Monday: “I believe this new commercial structure and the additional financial transparency for each segment will foster a heightened level of strategic focus and discipline within each business.”

People close to AstraZeneca said there was a positive mood among the company’s top management and board, and confidence that they had the backing of most shareholders for resisting Pfizer’s approach.

Several big shareholders have told the Financial Times that they are open to a deal but only at a higher price than Pfizer has so far proposed.

Copyright The Financial Times Limited 2017. All rights reserved.
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