AstraZeneca's boss said on Wednesday he would engage with Pfizer if the price was right and the risks posed from forcing the British drugmaker's operations into the U.S. company's new three-unit model were addressed.
Chief Executive Pascal Soriot stressed his company had a bright future as a stand-alone firm but acknowledged that shareholders would expect AstraZeneca's board to negotiate if terms were sufficiently attractive in a sweetened offer.
"Every shareholder says at the right level with the right offer you should consider it - that is very clear. But there is nobody who has told us a specific price at which we should engage," he told Reuters in an interview.
"If the offer was reflecting the value of the company but also addressing some of the integration aspects, the operating model and execution risks we are concerned about, then we certainly should engage - there's no doubt."
Soriot and his team have held talks with the group's leading investors during a round of meetings in London, Sweden and the United States over the past week.
Pfizer made a cash-and-stock takeover approach on May 2 worth 50 pounds a share to create the world's largest drugs company, valuing AstraZeneca at $106 billion. The bid was promptly dismissed by the British group's board - a decision that Soriot said had the firm backing of investors.
"There is no single shareholder who has told me or our CFO (chief financial officer) or our chairman that we should have accepted the offer," he said.
Buoyed by progress with its new drug pipeline - including a lung cancer medicine called AZD9291 for which data was released late on Wednesday - Soriot believes AstraZeneca can enjoy a strong independent future, but he has left the door ajar to a compelling offer.
In addition to price and the share of cash in any increased offer, Soriot said AstraZeneca would also need assurances about the risks faced by Pfizer in implementing a complex merger and integrating operations across two sprawling organisations.
In particular, he highlighted the problems posed by the fact that Pfizer is now separating its operations into three business units - a structure that would clash with AstraZeneca, where the MedImmune biotech unit, for example, serves all parts the group.
Pfizer provided detailed financial results for its three business units for the first time last week, when it reported first-quarter results, as a prelude to possibly divesting one or more of them in 2017.
Soriot is also worried about diluting the focus on science in the new group and the risk to reputation in Pfizer's controversial plan to re-domicile in Britain in order to minimise its tax payments.
"All those issues will need to be discussed, but step one is to get to an offer that reflects the value of the company," Soriot said.
He was speaking after being questioned for two days by British politicians who are concerned about the impact of a Pfizer takeover on British science jobs.
CANCER DRUG HOPES
Soriot stressed there was "no inevitability" to a deal with Pfizer, since AstraZeneca's improving pipeline of new drugs was transforming its prospects, following a lean period in its research labs and a wave of patent expiries.
AstraZeneca predicted last week that its sales would increase by 75 percent to more than $45 billion a year by 2023.
Much of the hope for the pipeline hinges on the company's suite of experimental cancer drugs, further details of which are due at the annual American Society of Clinical Oncology (ASCO) conference on May 30-June 3.
One of those drugs, lung cancer treatment AZD9291, has produced promising results in an early-stage clinical trial, details of which were released ahead of the ASCO meeting. The drug, which shrank tumours in more than half of patients, is a potential replacement for established lung cancer pills Tarceva and Iressa.
Soriot also highlighted the potential of MEDI4736, a medicine designed to boost the immune system, and a promising combination of two other cancer drugs, olaparib and cediranib.
"We think we can succeed because we have innovative products, not because we have a large commercial offering," Soriot said.
"At ASCO, we will show Phase I (clinical trial) results but also share some information about our development plans, which will show people where we think we can be first and where we think we can potentially come up with treatment algorithms that will totally change the way some types of cancer are treated."