Pfizer said it would not increase its previous offer for AstraZeneca which the London-based drugs company rejected earlier this month.
"Following the AstraZeneca board's rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca," Pfizer said in a statement.
The US-based company's chairman and chief executive Ian Read defended the previous £69 billion offer for AstraZeneca, which was rejected on 19 May, rejecting claims by AstraZeneca that it undervalued its business.
"We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us," Read said. "As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy. We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital."
AstraZeneca, which previously claimed that Pfizer's interest in it was driven by a desire to minimise tax liabilities and deliver "corporate financial benefits" to its shareholders on the back of making cost savings, said that it welcomed Pfizer's decision to withdraw its interest in a takeover deal.
"We are fully focused on the delivery of our strategy," Leif Johansson, AstraZeneca chairman, said. "We have attractive growth prospects and a rapidly progressing pipeline. In the coming months, we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business."
"AstraZeneca has a culture of innovation, with science at the heart of everything we do. I believe this will create significant value for our shareholders, employees and patients who will benefit from our life-changing medicines," he said.
Pfizer's interest in AstraZeneca had prompted calls from Labour leader Ed Miliband for prospective takeover deals for major UK science businesses to be subject to a public interest test before being able to go through in future.
Competition law expert Jenny Block of Pinsent Masons, the law firm behind Out-Law.com, said: "The withdrawal of the offer relieves the UK government of having to consider immediately the legal complexities of seeking to introduce such a right of intervention as a matter of EU law. However, this issue is unlikely to go away, particularly in areas of such strategic and political sensitivity as healthcare services, and as other governments show that they are prepared to consider intervention in a similar way."