With the official deadline for any immediate takeover discussions looming on Monday, Pfizer picked up its ball and bat and headed for the lockers, officially calling an end to its odd quest to buy out AstraZeneca.
In a statement, Pfizer ($PFE) said that it will not be making a further offer for AstraZeneca ($AZN), adding that its fourth and final bid of $120 billion or so was as far as it was willing to go--without a chance to sit down at the bargaining table.
"We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us. As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy. We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients' needs and remaining responsible stewards of our shareholders' capital," said Pfizer CEO Ian Read in a statement.
AstraZeneca Chairman Leif Johansson was clearly relieved to see Pfizer quit its short, turbulent siege.AstraZeneca Chairman Leif Johansson
"We note Pfizer's confirmation that it no longer intends to make an offer for AstraZeneca," Johansson said in a follow-up statement. "We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company. We are fully focused on the delivery of our strategy. We have attractive growth prospects and a rapidly progressing pipeline. In the coming months, we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business."
Just weeks ago Pfizer managed to stun the biopharma world with its bid to acquire AstraZeneca. The pharma giant insisted that its megamerger move would have created the industry's most powerful pipeline. But earlier acquisitions had led only to a slash-and-burn strategy in reducing research costs by the billions. And AstraZeneca's board managed to keep enough big investors on board by insisting that it has turned the corner on R&D and faces a bright future in developing new drugs, while a Pfizer merger could only disrupt development efforts.
The backing from investors, though, was by no means unanimous. A number of big investors went public with their calls for negotiations, clearly miffed that AstraZeneca's board was missing out on an opportunity to score a big price for their shares.
At this stage Pfizer appears ready to go it alone, touting its prospects with palbociclib, a new cancer drug that's headed for an early rendezvous with regulators. And AstraZeneca has its own new prospects in oncology to review at the upcoming ASCO meeting. Pipelines aside, both companies face weakening revenue numbers and some restive analysts waiting to see solid proof of a comeback. For the immediate future, though, it appears you can write a major merger of the two companies out of the story line.
With the spotlight now on their immediate prospects, though, both Big Pharma companies are likely to face growing pressure to execute a buyout that could do something quickly to improve their bottom lines. Continuing to simply go it alone looks increasingly unappetizing.
- here's the release from Pfizer
- read the release from AstraZeneca
Editor's Corner: Angry AstraZeneca investors may hold the only key to a Pfizer deal