How Ian Read launched a raid on Britain’s national champion

Ian Read
Ian Read: the revenge of the nerds?

Who could blame if, in a moment of private career reflection, he dreamt of the moment of returning, all-conquering, to the land of his birth.

Routinely described in unflattering terms as a “short, bald and bespectacled” career auditor, whose only noted talent is cutting costs and axing jobs, it could be the ultimate Revenge of the Nerd fantasy for the Scots-born Pfizer boss.

Read arrived for a charm offensive by private jet last week and “draped himself in a Union Jack… waxing lyrical about the wonders of British science”, says The Times. So can he really be trusted with AstraZeneca?

Even if he doesn’t eventually land the deal, Read can comfort himself that he’s caused a minor explosion in Britain, igniting a politically charged debate over whether free market ideology should prevail over the perceived “national interest”, says The Independent.

He has put the government in a fix. Having wooed multinationals like Pfizer with a new low-tax regime, ministers can’t very well turn round and stab them in the back. On the other hand, the furore over this bid is becoming politically toxic (see below).

That won’t trouble Read, says The Observer. His near 40-year long career at Pfizer suggests that he’s a disciplined, understated player who thrives on the chaos of others.

He joined Pfizer in 1978, after studying chemical engineering at Imperial College, then qualifying as a chartered accountant. Working his way up, he gained a reputation as a safe pair of hands. By 2006, he was running the core pharmaceuticals business.

“He’s a pragmatist rather than a revolutionary and very straightforward,” a colleague told the Financial Times. He is popular with senior Pfizer board members, “counting the chairman as a golf partner”. Nevertheless, it took a big internal crisis to land him the top job in 2010.

The four-year reign of Read’s predecessor, Jeff Kindler – who had continued Pfizer’s acquisitive tradition, notably grabbing Wyeth for $68bn in 2009 – ended in “turmoil, backstage manoeuvring and trauma”, says Fortune. Kindler’s abrasive (some would say abusive) regime alienated other senior managers, including Read, who, urged on by his wife, threatened to quit.

His timing was impeccable. In the ensuing “palace coup”, he was the natural safety choice for the Pfizer Old Guard.

Shareholders chose the right man, says the FT. Shares, which had hit a nadir under Kindler, have doubled since Read took over, largely due to stringent cost-cutting. One of his first moves was to shut Pfizer’s research and development centre in Sandwich, Kent.

The cuts have kept earnings on track, but sales and innovation continue to disappoint, explaining why Pfizer is “once again looking to buy growth and innovation from the outside”. Maybe Read isn’t “so different from his deal-making predecessors after all”.

Does it matter who owns AstraZeneca?

“Call me old-fashioned,” said GlaxoSmithKline (GSK) boss, Sir Andrew Witty in 2011, “but I don’t buy that you can be this mid-Atlantic floating entity with no allegiance to anybody but the lowest tax rating”. That sums up Pfizer, says Nils Pratley in The Guardian.

The plan to change domicile to Britain by buying AstraZeneca is “corporate disloyalty at its purest”. The City is betting that Pfizer will pull off the deal by improving its rejected £50-a-share offer. “Let’s hope this plot turns out differently.”

Britain’s “open door” policy on takeovers is crucial to our prosperity, argue some. Rubbish. “The future of Britain’s life sciences matters more than the freedom of Pfizer’s tax department to play clever games.”

It doesn’t matter who owns AstraZeneca if the skills remain here, says former GSK boss, Richard Sykes, in the FT. “We should learn” from the successful investments of Indian and Japanese carmakers in Britain.

Yet Read’s sketchy “five-year commitment” to maintain Astra’s research and development facilities, “doesn’t amount to much”, says Neil Unmack on Breakingviews. And Pfizer’s “woeful record of innovation” hardly inspires confidence, says Andrew Ward in the FT.

Even the anti-impotence pill Viagra – a rare homegrown success story – came about by accident when scientists at the now defunct Sandwich plant were developing an angina drug.

Previous target countries, such as Sweden, warn of a trail of desolation. Will it really be any different this time?

It now seems “woefully clear” that life sciences should have been included in the Enterprise Act as a “strategic asset”, says Camilla Cavendish in The Sunday Times. But it’s too late – the decision rests with shareholders.

Fund manager Neil Woodford thinks it would “be foolish to cash out”, given Astra’s promising pipeline, notes The Times. But others think Astra needs to put more flesh on its future profitability story.