Astra faces Chinese threat as Beijing tests Soirot, says ALEX BRUMMER

AstraZeneca’s journey from a struggling pharmaceutical company under siege by Pfizer to Britain’s most valuable company is remarkable.

This would never have been possible without the leadership of French CEO Pascal Soriot and the unwavering support of his Swedish investors.

Life sciences requires companies to make expensive bets on new compounds and Soriot, with its enthusiastic backing of immunological treatments for cancer and its embrace of Oxford’s Covid-19 vaccine, has made many of the right bets.

Soriot decided some time ago to set up his family base in Sydney, about 11 hours by plane from Beijing, and invested heavily in China.

The company has built a real presence in the country, amassing a workforce of almost 17,000 and generating revenues of £4.5bn last year, about 13 per cent of group sales.

Mistakes by foreign companies with a presence in China are not uncommon, and British rival GSK suffered a severe blow a decade ago.

The AstraZeneca boss has in the past played down critics concerned about exposing President Xi Jinping’s increasingly autarkic administration.

China’s opaque judicial system makes it difficult to assess how seriously interested parties should take the arrest of several current and former AZ employees in Shenzhen.

In his first comments on the crackdown, Soriot told Bloomberg that it is “impossible” for all of his company’s employees to act as compliance officers.

It is working closely with Chinese authorities to resolve the dispute. The colleagues involved allegedly failed to meet required standards in collecting patient data and distributing a liver cancer drug.

Soriot is in a much better position to resolve problems in AZ’s relations with China due to his frequent trips to the country where AZ has put down deep roots.

Relations between Beijing and the West are tense, and China has shown it is not averse to using the judicial system to intimidate companies and countries.

Soriot, which has had to weather storms in Europe over Covid-19-related contracts, faces a very different and more mercurial government in Beijing. GSK and countless others who cling to democracy and free-enterprise values ​​in Hong Kong can attest to the difficulties.

Drug trials don’t always work out and Astra has just suffered a setback with experimental cancer drug Dato-DXd, for which it had blockbuster ambitions.

The biggest challenge will be to reset the relationship with China. Beijing often chooses to exact a high price, even from those it perceives as friends.

Technological tests

American authorities tend to tiptoe around Silicon Valley.

Big tech companies contribute enormously to America’s economic hegemony, and their moguls and employees are generous political donors.

There are no such scruples in the European Union, which lacks its own high-tech heroes and has an uncompromising official, such as Denmark’s Margrethe Vestager, in charge of enforcing the law.

After an eight-year battle with Apple, the European Court of Justice in Luxembourg has ruled on the side of Brussels, ordering the tech giant to hand over £11bn in back taxes to Ireland.

In a separate ruling, Google lost its battle against a £2bn fine imposed for manipulating the system by giving its own price comparison service priority over EU-based competitors.

Meanwhile, the founder of social media app Telegram, Pavel Durov, is under arrest in Paris for allegedly violating EU laws, including the Digital Services Act.

A senior US communications regulator visiting London told me yesterday that the fines may seem like huge sums, but they are minor pains for Silicon Valley giants, who will see them as an irritating cost of doing business.

Gold Rush

The yellow metal is shining again amid cautious buying by Russian and Chinese central banks looking for alternatives to the dollar.

The latest manifestation is the £1.9 billion offer by US-listed AngloGold Ashanti for

London-based Centamin, owner of Egypt’s largest gold mines and one of the largest active deposits in the world.

London’s past ambition to be the go-to stock market for natural resource companies has suffered multiple blows.

The war in Ukraine has caused the shares of several Russian mining companies to end up in cold storage.

BHP has moved its listing to Sydney. Anglo American is busy offloading assets after escaping BHP’s control. Tough times.