AstraZeneca’s shares rose today (6 February) after the pharma company reported better-than-expected Q4 2024 results.
The strong financial performance helped ease investor concerns following ongoing legal issues in China and the company’s recent decision to cancel a planned £450m investment in Merseyside, UK.
The UK-based drugmaker reported a 21% increase in annual revenues, reaching £43bn ($54.1bn), driven by strong sales in oncology, respiratory, and immunology treatments. Investors responded positively, with AstraZeneca’s stock climbing 4.6% in before the markets opened and continued to trade a higher price than the previous day.
Despite the positive financial results, AstraZeneca’s recent decision to withdraw from its planned expansion in Liverpool, UK, remains a contentious issue. The company had intended to transform its childhood flu vaccine factory in Speke into a major vaccine hub but abandoned the project after failing to come to an agreement with the UK government on state support. The UK government has defended its position, with Science Minister Sir Chris Bryant telling MPs that that a “significant offer” was made to AstraZeneca, but additional support “simply didn’t add up for the taxpayer”.
Legal challenges in China
In addition to the UK investment controversy, AstraZeneca is also dealing with legal challenges in China. The company confirmed that its Chinese business is under investigation for alleged unpaid import taxes on certain cancer drugs, including Imfinzi (durvalumab) and Imjudo (tremelimumab).
On 30 October 2024, AstraZeneca’s Chinese operations president Leon Wang stood down and was detained along with other current and former employees amidst accusations of insurance fraud, data breaches, and import of unlicenced medicines.
AstraZeneca CEO Pascal Soriot explained that the avoided import duties amount to $900,000, and if found liable, AstraZeneca could face a fine of one to five times this amount. He also added that a similar issue could also be raised around Enhertu (trastuzumab deruxtecan), meaning the fine could be bigger but not “massively bigger”. Soriot emphasised that the company is fully cooperating with the Chinese authorities.
Also, on the company’s business in China, a decline in Q4 China sales of 3% was attributedto hospital budget management and a mild winter that reduced the demand for respiratory treatments. However, looking ahead, the company remains optimistic about its China business despite pricing pressures from the country’s volume-based procurement (VBP) policy, a drug pricing policy aimed at reducing healthcare costs by negotiating lower prices for medicines in exchange for guaranteed high sales volumes.
