AstraZeneca: 'Execution risk' to Pfizer deal
AstraZeneca's chief executive Pascal Soriot said "execution risks" to another Pfizer bid over tax inversion remain, as he announced better-than-expected results.
He argued that such risks were partly behind the substantial price tag of £59-plus per share, which the company wanted to start discussions with Pfizer earlier in the year.
Tax inversion, one of the main drivers behind the Pfizer bid, has come under the spotlight in the U.S., with legislation backed by President Barack Obama that could retroactively wipe out the benefits of inversion being debated.
Shire, another U.K. pharma company which is being bought by the U.S.'s AbbVie, partly for tax inversion purposes, secured a £500 million ($844 million) break clause because of concerns over possible execution risks.
AstraZeneca claimed to have "one of the most exciting pipelines" in the pharmaceutical industry, as the U.K. pharma giant reported second-quarter revenue rose by 4 percent.
The company stepped into a glare of publicity this year when its management battled with Pfizer, the biggest pharmaceuticals company in the world, for control of the company. Pfizer is now excluded from making a further approach until November under U.K. law (although it may be able to open talks earlier if AstraZeneca makes the first move).
The company has now raised its forecasts for earnings and sales for the year, after a better-than-expected revenue rise of 4 percent to $6.45 billion in the second quarter. Core earnings were up 8 percent at $1.30 a share, higher than the $1.10 expected on average by analysts.
Management are under pressure to prove they can deliver as much as shareholders would have got from the £55 per share offered by Pfizer. AstraZeneca's share price closed at £43.57 Wednesday, down from the peak of £48.23 reached during the bid battle with Pfizer.
The pharma giant announced it is buying Almirall's lung medicines in a deal worth up to $2.1 billion on Wednesday.
- By CNBC's Catherine Boyle