AstraZeneca backs US and China, but new UK vaccine factory is at stake

AstraZeneca said it is in China “for the long term” and outlined billions of pounds of investment in the United States, but a new vaccine factory in the United Kingdom is on the cards.

The pharmaceutical giant’s chief executive, Pascal Soriot, yesterday supported its Chinese business.

But he admitted that the company knows nothing and has “very little information” about the arrest of its boss in the region.

AstraZeneca also said it would invest 2.7 billion pounds in the United States to expand its research and manufacturing centers.

The engagement with China and the United States came as AstraZeneca said it was locked in talks with ministers about whether it will press ahead with building a £450m vaccine factory in Liverpool.

“We are still in talks with the government to determine what kind of incentives there may be,” finance chief Aradhana Sarin said.

The delay to a major project in the UK – at the same time as AstraZeneca presses ahead with its investments in the US and China – is likely to raise fresh concerns about Labour’s management of the economy.

The anti-drugs group was previously in talks with the Conservative government over state funding for the factory and was expecting more than £90m of support for the project.

But Labor officials have reportedly been trying to reduce this figure to £40m, sparking a debate between the two sides.

The company stressed that plans for the factory are not on hold but are being reviewed in light of the “incentives” being offered.

AstraZeneca also announced a multi-billion pound investment in the United States. The company said it plans to open a research and development center in Massachusetts, as well as a manufacturing plant in Maryland.

Further afield, there are plans to expand its manufacturing capacity on the east and west coasts, as well as more specialized factories in Texas.

“Our multibillion-dollar investment reflects the attractiveness of the business environment along with the quality of talent and innovation capabilities here in the United States,” Soriot said.

The investment is part of the group’s plans to increase its annual sales to £63bn by the end of the decade, a large proportion of which is expected to come from the US market.

AstraZeneca also maintained its commitment to China, where it is the country’s largest pharmaceutical company and employs around 18,000 people.

This was despite a widening investigation into its Chinese employees by local officials that since last week has wiped more than £16bn off its value.

Soriot said the company was taking the situation “very seriously” and would “fully cooperate” with Chinese authorities if approached. The company itself is not under investigation.

Last week AstraZeneca revealed that the head of its China business, Leon Wang, had been detained by authorities in the city of Shenzhen.

About 100 former employees have been sentenced in a separate case based on allegations that patients’ test results were falsified to receive funds from China’s state health insurance system.

Meanwhile, the pharmaceutical giant yesterday raised its 2024 guidance after reporting that pre-tax profits for the third quarter of the year had risen 11 per cent to £1.4bn, while sales rose 18 per cent to the 10.6 billion pounds.