LONDON: How British is AstraZeneca? With a French chief executive, Swedish chairman, 40 percent of its sales in the United States and 87 percent of its staff overseas, the answer is not simple.
Formed from an Anglo-Swedish merger 15 years ago, even its roots are only half British.
Yet a $106 billion takeover bid from US group Pfizer has forced politicians at Westminster to line up in defence of British jobs and science.
The pharmaceuticals group, which is fighting the approach, is an important science anchor for Britain and has close ties to top universities.
However, it gets a dwindling portion of medicines from its UK laboratories.
That reflects the realities of the modern drugs industry, in which companies chase the best science, regardless of geography.
Of the top 10 medicines sold by AstraZeneca, three - all for cancer - were invented in its labs near Manchester, four came from Sweden, one from its US research site, one from the US biotech industry and one from Japan.
The Japanese drug, cholesterol fighter Crestor, was acquired from Shionogi and is now the group's biggest seller.
Future drug sales will rely even less on its British lab work. Only one of the 13 experimental medicines in the pipeline that AstraZeneca management highlighted when it laid out its defence was invented in-house.
The rest flow from acquisitions and licensing deals that AstraZeneca has struck in recent years with US companies such as Pearl Therapeutics, FibroGen and Amgen, as well as some smaller British biotech firms.
Many of the most promising new drugs come from the Maryland-based biotech business MedImmune, which AstraZeneca acquired for $15.6 billion in 2007 in a deal that was slammed at the time by investors as a waste of money.
"It is difficult to really pinpoint the nationality of a drug company today," said Patrick Flochel, global pharmaceutical sector leader at Ernst & Young.
"Is it where it was originally born or the language they speak or where it is headquartered or where it pays most of its taxes or where most of the employees come from? In many ways, pharma companies are more American than anything else because that's the biggest market."
Pfizer's attempt to pull off the largest foreign takeover of a British company has created a political storm. Many scientists and some politicians have said its record of slashing jobs after previous deals will undermine a vital high-tech sector.
Pharmaceuticals is one area where Britain punches above its weight. Despite accounting for just over 2 percent of the global drugs market, it is responsible for a tenth of research and development expenditure.
FIVE-YEAR PLEDGE
Pfizer CEO Ian Read has made a five-year promise to complete a research centre that AstraZeneca plans to build in Cambridge, retain a big factory in the northwestern English town of Macclesfield and put a fifth of its research staff in Britain.
But five years is not long in an industry with 10 to 15 year product cycles, and Pfizer has also said it could adjust its promises if circumstances change "significantly", prompting government demands for more binding commitments. There are reasons for concern about jobs. The past decade has seen a wave of cutbacks across the pharmaceuticals industry, with Pfizer responsible for many of the deepest cuts after swallowing smaller rivals such as Wyeth, Warner-Lambert and Pharmacia.
AstraZeneca, too, has wielded the knife regularly.
The group was formed in 1999 by the merger of Sweden's Astra and Britain's Zeneca, which was itself created in 1993 by the break-up of Imperial Chemical Industries, for many years the bellwether of the British economy.
After expanding staff numbers from 2000 to 2007, AstraZeneca's headcount has shrunk every year since 2008, reflecting its difficulties in finding enough new drugs to replace those going off patent.
It now employs 51,500 people worldwide, 6,700 of them in Britain - a far smaller ratio of local to international staff than at British bank Barclays, which last week announced 19,000 job cuts in a workforce that is roughly half British-based.
AstraZeneca's planned move to its new state-of-the-art site in Cambridge will also involve further job losses, with the number of research and development posts in Britain expected to fall by around 400 to 2,200 by 2016. "The changes we have made globally and in the UK to the shape and size of our organisation over the recent years are part of the transformation of AstraZeneca to ensure the business is fit for future growth and sustainable success," a company spokeswoman said.
Amidst the growing political controversy on both sides of the Atlantic, Pfizer is weighing its next move, which could be a sweetened offer for AstraZeneca in the coming week.
Comments
Comments are closed.