AstraZeneca has said the drugmaker is taking investigations by Chinese authorities into its business in the country “very seriously” and will “fully cooperate” with them.
Authorities are thought to be investigating the importation of two cancer treatments manufactured by Britain’s biggest pharmaceutical company into China.
Pascal Soriot, the AstraZeneca chief executive, said: “We take the matters in China very seriously. If requested, we will fully cooperate with the authorities. We remain committed to delivering innovative life-changing medicines to patients in China.”
The company’s share price has fallen over the past fortnight, since it announced that its China president, Leon Wang, who was executive vice-president for international, was stepping back because he is under investigation by Chinese authorities.
Alongside Wang, two former and two current executives have also been detained over allegations of illegally importing oncology medicines. AstraZeneca’s China business is now being run by Michael Lai, the general manager.
Chinese authorities are thought to be investigating the importation of AstraZeneca’s cancer drug Imjudo, which has not been approved for sale in China, as well as shipments of Enhertu between Hong Kong and the mainland.
Enhertu is another cancer treatment, which was first licensed in Hong Kong and then in mainland China. Sources said shipments may have been made from Hong Kong before it was approved on the mainland.
The investigations concern the five individuals, and not the company itself.
There has been a wider crackdown by Beijing on international drugmakers and hospitals in recent years as part of an anti-corruption campaign, aimed at bringing rising medical spending under control.
AstraZeneca’s market value fell by £14bn in a single day a week ago after a report that dozens of senior executives at its China unit could be implicated in an insurance fraud case in the country’s pharmaceutical sector. This relates to a separate issue dating back to 2021.
AstraZeneca said that “to the best of the company’s knowledge, the investigations include allegations of medical insurance fraud, illegal drug importation and personal information breaches”.
Soriot’s remarks came as AstraZeneca lifted its 2024 revenue and profit forecasts, and announced it was spending $3.5bn (£2.7bn) on research and development and manufacturing of cancer and other drugs in the US, its biggest investment in at least a decade.
On Tuesday, AstraZeneca reported a 21% rise in revenues to $13.6bn between July and September, catapulting pre-tax profit 24% higher to $1.8bn, stripping out currency moves.
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In China, sales grew by 15% to $1.7bn. It has become an important market for the Anglo-Swedish drugmaker, which has invested heavily in the country, announcing plans last year to build a $450m factory and signing licensing deals with Chinese companies.
The company now expects 2024 revenues and core earnings a share to increase by a high teens percentage.
AstraZeneca’s investment in the US includes $2bn of new money, including in its R&D centre in Kendall Square in Massachusetts and a next-generation factory for biologic drugs in Maryland. The company is still in negotiations with the UK government over expanding its vaccine site in Speke, near Liverpool, with talks centring on the amount of Treasury funding.
Sheena Berry, a healthcare analyst at the investment firm Quilter Cheviot, said: “China is the only slight overhang affecting the business presently. Clearly the outcome is unknown and that will concern investors, so any swift resolution will be greatly welcomed.
“But despite these overseas concerns, AstraZeneca remains on a very solid footing. Its strong, and crucially full, pipeline with a number of trial readouts and catalysts through 2025 bring an element of further growth even after this strong run.”
Berry said a long-term target to hit $80bn in revenues by 2030 appeared “very achievable”.
AstraZeneca’s share price fell more than 1% on Tuesday morning.