AstraZeneca, a leading global biopharmaceutical company, has recently experienced a notable uptick in its stock performance, attributed to developments in its operations within China. On February 6, 2025, the company’s shares rose by approximately 5%, reflecting investor optimism following updates on an ongoing investigation by Chinese authorities. This investigation pertains to suspected unpaid import taxes related to AstraZeneca’s cancer drugs, Imfinzi and Imjudo. The potential fine, estimated at up to $4.5 million, is considered by analysts to be a minor business impact, thereby alleviating investor concerns.
In October 2024, AstraZeneca’s China President, Leon Wang, was detained by Chinese authorities as part of an investigation into alleged illegal importation of drugs from Hong Kong. This event raised significant concerns among investors, given China’s critical role in AstraZeneca’s international business, accounting for 12% of total sales in 2024.
Subsequent revelations included the sentencing of over 100 former sales staff in China for alleged medical insurance fraud related to the Tagrisso cancer drug. Additionally, investigations into the illegal importation of drugs from Hong Kong have been ongoing.
Financial Performance Amidst Challenges
Despite these challenges, AstraZeneca reported a 21% increase in revenue, reaching almost $54.1 billion, surpassing expectations. This growth was primarily driven by strong performance across its medicine portfolio in regions outside China. In the fourth quarter of 2024, the company reported total revenue of $14.89 billion, exceeding analyst expectations.
However, sales in China declined by 3% to $1.36 billion, attributed to lower seasonal respiratory infections and hospital dynamics at the year’s end.
Investor Reassurance and Future Outlook
The announcement of a potential fine of up to $4.5 million for suspected unpaid import taxes on Imfinzi and Imjudo has been interpreted by analysts as a minor business impact. This perspective has contributed to the positive movement in AstraZeneca’s stock price.
Looking ahead, AstraZeneca has forecasted a high single-digit percentage increase in revenue and a low double-digit rise in core earnings per share for 2025, indicating confidence in its growth prospects despite the challenges faced in China.
AstraZeneca’s recent stock performance reflects a complex interplay of challenges and strategic responses within its operations in China. While the company navigates regulatory investigations and market dynamics in this key region, its robust financial performance and optimistic outlook for 2025 underscore its resilience and commitment to growth in the global pharmaceutical landscape.
