Report: Pfizer had talks about buying AstraZeneca

Pfizer Inc., the world's biggest drugmaker, held informal talks with AstraZeneca P.L.C. about possibly buying the London-based maker of asthma and heart drugs, said two people familiar with the matter.

The companies aren't currently negotiating, said the people, who asked not to be identified. One said the talks happened several months ago and there are no plans to resume. The discussions were first reported Sunday by London's Sunday Times, whose unnamed bank and industry sources said Pfizer made a tentative approach about a takeover valuing AstraZeneca at more than 60 billion pounds ($101 billion).

If revived, such an acquisition would be among the largest in the industry. Pfizer has reorganized its business over the last three years, shuttering some research projects and emphasizing others. A deal with AstraZeneca would add early-stage drugs in a field of cancer treatments that use the body's own immune cells to recognize and attack cancer.

"We don't comment on market speculation or rumors," said Andrew Topen, a Pfizer spokesman, in an e-mail. Esra Erkal-Paler, am AstraZeneca spokeswoman, declined to comment.

Pfizer is headquartered in Manhattan, but has a large operation in Collegeville, Montgomery County.

AstraZeneca is based in London. In recent years, it drastically cut its workforce in Wilmington, but still operates there, along with smaller units elsewhere in the region.

AstraZeneca shares in New York rose $5.61, or 8.8 percent, to $69.10 in trading Monday. Pfizer shares rose 61 cents, or 2 percent, to $30.86.

Pfizer shares increased about 35 percent in the last two years as it benefited from the revamping that focused it into three units: two for new drugs and one for older products.

AstraZeneca in January announced an agreement with Immunocore Ltd. to develop new cancer treatments that use the body's own immune cells, and it also has several of its own immune-based drugs being tested in multiple cancers. The company's shares have risen about 32 percent over two years, even as sales have fallen from $33.6 billion in 2011 to $25.7 billion last year, with further losses projected by some analysts as drugs lose patent protection.

While a deal would be highly accretive through cost cutting, Pfizer shareholders may have doubts about AstraZeneca's pipeline as well as its eroding revenue, said Mark Schoenebaum, an analyst with ISI Group LLC.

A merger of this reported size would top Pfizer's 2000 purchase of Warner-Lambert Co. for $87 billion, the industry's largest deal, according to data compiled by Bloomberg. Pfizer has been at the center of the biggest drugmaker megamergers, making up three of the 10 deals worth more than $30 billion in the last two decades.

It would also provide a use for Pfizer's cash from profits that have been stashed overseas instead of being brought back to the U.S., where they would be taxed at a higher rate. Pfizer had $69 billion in untaxed cash overseas as of last month, according to data compiled by Bloomberg.