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AstraZeneca has announced a major expansion in the US just days after Donald Trump’s victory in the presidential election, as chief executive Pascal Soriot hailed the prospects for the world’s largest economy.
The UK’s biggest drugmaker said on Tuesday it would spend $2bn to bolster its manufacturing capacity in states including Maryland, Texas as well as on the west coast. This would bring its total investment in the US to $3.5bn by the end of 2026, including an existing plan for a research and development centre in Cambridge, Massachusetts.
The US is already the drugmaker’s largest market, accounting for 44 per cent of its revenue last quarter. AstraZeneca is betting the new investment will help it meet an ambitious target to almost double revenues to $80bn by 2030.
Speaking in New York, Soriot declined to comment on last week’s election, but said: “It won’t escape anyone’s attention the US economy is expected to grow and there’s lots of innovation there. We want to be present in this country and be a big contributor to investment in research and development.”
Its decision to expand in the US comes as AstraZeneca continues to negotiate with the UK government over a £450mn investment in a vaccine plant in Speke, near Liverpool.
Chief financial officer Aradhana Sarin said on Tuesday that the company was “still in discussions with the [UK] government to figure out what type of incentives there may be”, after the Financial Times reported in August that the Labour government wants to cut state aid for the project from £90mn to £40mn.
AstraZeneca’s need to maintain a major presence in the competitive US pharma market comes after it has been rocked in recent weeks by a crisis in its Chinese business.
The FTSE 100 group confirmed last week that the head of its China business, Leon Wang, had been detained, and that two former and two current executives were under investigation in China over allegations of illegally importing oncology medicines.
Soriot said on Tuesday that “I personally take this very seriously and we are putting in place measures to strengthen our compliance even more”.
Asked about the investigation on a call with reporters, Soriot said the company had “not been complacent” but that the issue of “compliance moved outside” of systems that the company had put in place to monitor [employees’] behaviour.
Soriot said that Wang was in discussions with his lawyer but that the company had no new information about his case.
A person familiar with the matter said last week that authorities were investigating the alleged importation of AstraZeneca’s cancer drug Imjudo, which has not been approved for sale in China.
The investigations have cast a shadow over AstraZeneca, the largest overseas drugmaker in China, which generated almost $6bn of sales there last year. Its shares have fallen more than 10 per cent since the company first disclosed that Wang was under investigation on October 30.
However, the company on Tuesday upgraded its full-year outlook for the second time in four months. It now expects “high-teens” percentage growth in revenue and earnings per share, up from a previous forecast of “mid-teens”.
It reported third-quarter revenues of $13.6bn, up 21 per cent at constant exchange rates and ahead of analysts’ estimates, with the company’s oncology division generating $5.6bn in sales. In China sales reached $1.7bn, an increase of 15 per cent compared with the same quarter in 2023.
Sean Conroy, an analyst at Shore Capital, said: “There’s strong momentum across the portfolio that people like but there’s no further clarity with China unfortunately. There’ll be a focus on that going forward.”
Investors’ confidence that AstraZeneca would hit its $80bn sales target sent the group’s market capitalisation to £200bn for the first time in August, but its value has since fallen back to £155bn.
As well as concern over the Chinese investigation, the group’s shares were hit in September by disappointing trial results for its experimental lung cancer drug Dato-DXd.