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Pfizer drops bid to buy AstraZeneca — for now

Pfizer, the maker of Lipitor, slipped last year from being the largest drug maker to second place, behind Novartis.

Assocaited Press

Pfizer, the maker of Lipitor, slipped last year from being the largest drug maker to second place, behind Novartis.

NEW YORK — Pfizer Inc. said Monday that it does not intend to make a takeover offer for the British drug maker AstraZeneca PLC, pulling the plug, for now, on what would have been the largest deal in the industry’s history.

The announcement came a week after AstraZeneca’s board rejected a $119 billion buyout proposal from Pfizer, the world’s second-biggest drug maker by revenue.

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The decision ends a bid that had raised concerns about the prospect of job cuts, plant closings, and the loss of science leadership in the United Kingdom, where AstraZeneca is the second-biggest drug maker, behind GlaxoSmithKline PLC.

Because Pfizer still needs to find ways to grow, some analysts think the decision means only a temporary lull.

Pfizer had until 5 p.m. local time in London on Monday to extend a firm offer for AstraZeneca or declare its intent not to do so. Under UK law, Pfizer can’t make another offer for six months, but it can do so in as soon as 90 days if AstraZeneca invites another offer.

Pfizer, the maker of Lipitor and Viagra, has been courting number eight AstraZeneca since January, saying their businesses would be stronger together.

Last week, it raised its stock-and-cash offer for a third time this year, to $93 per share. But AstraZeneca rejected the bid hours later, saying it undervalued the company, which has promising new drugs in the pipeline.

On Monday, chief executive Ian Read reiterated that Pfizer’s last offer ‘‘was compelling and represented full value for AstraZeneca, based on the information that was available to us.’’

Pfizer has said it would not mount a hostile takeover bid. The company had previously said that its proposed offer could not be increased unless AstraZeneca engaged in discussions and recommended the deal to its shareholders before Monday’s deadline.

In a statement, AstraZeneca chairman Leif Johansson acknowledged Pfizer’s decision.

‘‘We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company,’’ Johansson said.

A Pfizer-AstraZeneca combination would have represented the richest acquisition ever among drug makers and the third-biggest deal in any industry, according to the research firm Dealogic.

AstraZeneca repeatedly rejected Pfizer’s offers, insisting they significantly undervalued the company and its portfolio of experimental drugs.

‘‘For Pfizer, this now puts them in a position where they went out there to become the super pharmaceutical company in one fell swoop, and now that’s not going to happen,’’ said Steve Brozak, the president of WBB Securities. ‘‘Now the question becomes, do they look for another target or rethink their strategy?’’

Pfizer’s decision is probably just a temporary strategic retreat, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

That’s because Pfizer still needs to strengthen its new product pipeline and minimize the US taxes it pays on overseas income — two goals an AstraZeneca acquisition could help fulfill.

Gordon expects Pfizer’s next move will be to push the institutional investors who own large blocks of AstraZeneca shares to help persuade the company’s board to open up deal talks with Pfizer after 90 days and share more details on its slate of potential new drugs, informatin that could justify a higher offer.

‘‘I’d be surprised if AstraZeneca doesn’t hear from Pfizer again,’’ he said.

Pfizer slipped from being the world’s largest drug maker to number two last year, behind Novartis AG, mainly because Lipitor got generic competition at the end of 2011, wiping out billions of dollars in sales.

Pfizer also has sold off a couple parts of its business and reorganized as part of preparations to possibly break off another piece of the company, something analysts have been urging it to do.

Still, it has developed a track record for flexing its marketing muscle and pulling off mega mergers, which together have repeatedly propelled it to the top.

Since 2000, it has done three acquisitions that vaulted the company to number one in revenue. It paid $111.8 billion for Warner-Lambert Co. in 2000 to get the rights to Lipitor, $59.8 billion for Pharmacia Corp. in 2003, and $68 billion for Wyeth in 2009, according to Dealogic.

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