Pfizer CEO Ian Read makes no apologies for his interest in working a deal to move his tax home overseas. Despite the U.S. government's attempt to discourage tax inversions--like the one Pfizer ($PFE) would have achieved by buying AstraZeneca ($AZN)--Read says he's not deterred.
"If we believe the value is still there and we believe, under our interpretation of these rules, there is still value, I see no reason why we wouldn't be able to do an inversion," Read told Bloomberg in an interview.
An inversion might be more complicated to value, however. During Tuesday's earnings call with analysts, Read pointed out that the inversion payoff would be less immediate under Treasury's new limits on their tax benefits. But that doesn't mean it wouldn't be worth the effort. Last month, Pfizer execs told Bernstein analyst Tim Anderson that the company needs an inversion deal to compete on equal footing with overseas companies, both for tax-rate purposes and for access to overseas cash.
Read says he's "aggressively looking at all alternatives." Analysts figure Pfizer needs to make some sort of move--either a big deal or, perhaps, an earlier-than-anticipated spinoff or sale for one of the divisions Read created in a restructuring announced last year. During Tuesday's call, Read said Pfizer isn't set on splitting up the company--likely by hiving off its established products business--but will look at the idea next year after the units have a few more quarters' worth of financial results to show.
Beyond inversions, Read is ready to deal if a deal meets Pfizer's needs. "Certainly I feel a sense of urgency on utilizing our balance sheet and our capital to do deals that are incremental, add incremental value and certainly add revenue growth in the innovative space," Read said during the earnings call (as quoted by Bloomberg).
Meanwhile, however, the company has announced an $11 billion buyback program, which led some market-watchers to speculate that Pfizer is no longer on the hunt for AstraZeneca. Read abandoned his quest to buy AstraZeneca in May, after the U.K. drugmaker spurned a final $118 billion offer. Takeover rules would allow Pfizer to return with a new offer next month, but Read has been understandably silent about the prospect.
ISI Group analyst Mark Schoenebaum, however, doesn't see the buyback necessarily precluding another run at AstraZeneca. "We cannot and should not necessarily make that read-across," he wrote in an investor note last week. Other rumored options? Actavis ($ACT), which moved its domicile to Ireland by buying the Dublin-based drugmaker Warner Chilcott and has since picked up Forest Laboratories.
- read the Bloomberg story
Special Reports: The top 10 pharma companies by 2013 revenue - Pfizer - AstraZeneca