AstraZeneca shares up on reassurance over China investigation

U.K. – AstraZeneca’s shares rose on February 6 following a positive Q4 2024 financial report that exceeded market expectations.

The UK-based pharmaceutical company saw a 21% jump in annual revenues, reaching £43 billion (US $54.1 billion), driven by strong sales of treatments in oncology, respiratory, and immunology.

This strong performance reassured investors, boosting the company’s stock by 4.6% in pre-market trading, with prices remaining higher throughout the day.

The upbeat results provided relief amid ongoing challenges for AstraZeneca, including legal issues in China and a controversial decision to cancel a planned £450 million (US $560 million) investment in the UK.

Despite these concerns, the financial performance underscored the company’s resilience and growth.

UK investment withdrawal

One contentious issue AstraZeneca faces is its decision to abandon plans to expand its childhood flu vaccine facility in Speke, Liverpool.

The company had intended to transform the site into a major vaccine hub but scrapped the project due to a lack of agreement with the UK government on financial support.

Science Minister Sir Chris Bryant defended the government’s stance, stating that a “significant offer” was made to AstraZeneca.

However, he explained that the additional support the company sought “simply didn’t add up for the taxpayer.”

Legal troubles in China

Meanwhile, AstraZeneca is also navigating legal challenges in China. The company confirmed it is under investigation for alleged unpaid import taxes on cancer drugs like Imfinzi (durvalumab) and Imjudo (tremelimumab).

CEO Pascal Soriot revealed that the avoided duties amount to approximately US $900,000. If found liable, AstraZeneca could face fines ranging from one to five times that amount, potentially higher if the investigation expands to include other drugs like Enhertu (trastuzumab deruxtecan).

The situation escalated when Leon Wang, president of AstraZeneca’s Chinese operations, was detained in October 2024 alongside other employees amid allegations of insurance fraud, data breaches, and importing unlicensed medicines.

Last December, AstraZeneca named Iskra Reic as its new international executive vice president, who took over from Leon Wang in efforts to stabilize operations in China after Wang was detained by Chinese authorities in October.

Soriot emphasized that AstraZeneca is fully cooperating with Chinese authorities to resolve the matter.

China sales and future outlook

In Q4, AstraZeneca reported a 3% decline in sales in China, primarily due to hospital budget constraints and reduced demand for respiratory treatments during a mild winter.

Despite this decline, the company remains optimistic about its long-term prospects in the Chinese market.

It is working to navigate the challenges posed by China’s volume-based procurement (VBP) policy, which negotiates lower drug prices in exchange for higher sales volumes.

Looking ahead, AstraZeneca is focusing on maintaining its growth momentum while addressing its global challenges.

CEO Pascal Soriot reassured stakeholders that the company’s robust portfolio and strong performance in core therapeutic areas would continue to drive success.

Nonetheless, AstraZeneca cautioned about some headwinds, including in the United States, over changes in Medicare drug price negotiations.