New concerns about the security of jobs in the pharmaceutical sector will be raised this week amid speculation that Pfizer of the US has been in takeover talks with its struggling rival, the Anglo-Swedish group AstraZeneca.
A successful acquisition could cost Pfizer up to $100bn (£60bn), which would be the biggest ever foreign takeover of a British business. It would raise alarm as the New York City-based group recently closed its main UK research and development facility at Sandwich in Kent with the loss of 2,400 staff.
Astra and Pfizer both declined to comment but neither did they deny a report in the Sunday Times that informal discussions about a possible tie-up had already taken place.
Senior investment bankers and industry sources have said Astra resisted the initial approaches but they believe it is likely that Pfizer, famous for its impotence drug Viagra, will be back.
Last week the two companies unveiled plans to work together alongside Cancer Research on new treatments for lung cancer. In 2012 Pfizer acquired the exclusive global rights to market Astra's acid reflux medicine Nexium for approved over-the-counter sales.
The potential takeover talks are bound to be raised by trade unions at the earliest possible moment and by shareholders at the Astra annual general meeting on Thursday, when the company will report its first-quarter financial results.
In February Astra, which employs 50,000 staff worldwide, reported a final-quarter pre-tax loss of $715m (£426m) compared with a $1.8bn profit for the same period of 2012.
Both Pfizer and Astra are keen to shake up their businesses because patents are running out on some of their biggest-selling drugs, including Viagra, Nexium and Astra's cholesterol treatment Crestor.
Pfizer, the world's largest drug group, is said to be keen to use some of a £40bn cash mountain obtained from its foreign subsidiaries, which would trigger huge tax bills if it was repatriated to the US to be handed out in dividends.
The Astra share price currently gives the company a value of less than £50bn, which some analysts believe considerably undervalues the business. AstraZeneca was brought together in a £40bn merger of equals in 1999 that led to the loss of 6,000 jobs.
Pascal Soriot, the chief executive of Astra, is likely to peddle an upbeat message at the AGM on Thursday, with positive updates from the US Federal Drug Administration on the progress of a pipeline of new treatments particularly in the field of oncology, dealing with the study of cancer. In January the company signed a partnership arrangement with Immunocare, a fast-growing biotechnology company that creates drugs to help the body's immune system identify and attack cancer cells.
Soriot, who took over as boss in October 2012, used the announcement of the fourth-quarter figures as a chance to predict a faster return to revenue growth than had previously been expected. He expressed optimism that 2013 had been better than expected and said there had been a doubling in the number of experimental Astra medicines in the final phases of clinical trails.
Astra, second only in size in Britain to GlaxoSmithKline, has been cutting costs, with plans unveiled last year for all research and development at its Alderley Park base to cease by 2016 with the loss or relocation of more than 2,000 jobs.
When Pfizer closed Sandwich, its largest R&D facility in Europe, the business secretary, Vince Cable, expressed disappointment and Colin Blakemore, professor of neuroscience at Oxford University, called it a "shocking wake-up call".
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