AstraZeneca CEO defends corporate oversight, $80B revenue target amid China probes

Despite China’s investigations into insurance fraud, allegedly illegal importation of unapproved drugs and improper collection of patient data that have implicated senior executives, AstraZeneca CEO Pascal Soriot argued that the company did not lose oversight.

“You really cannot police 18,000 people from the headquarter,” Soriot said during a press call Tuesday, pointing to AZ’s large organization in China.

“The organization in China is not on its own—it’s totally integrated in our global organization,” Soriot said. “We have strong [compliance] policies in place.”

Concerns over AZ’s large China business escalated in the past few days after word came out that the company’s China president and executive vice president of international, Leon Wang, and its former China oncology business chief Eva Yin were detained in China. AZ’s stock price in London on Nov. 5 registered the biggest single-day loss since March 2020 thanks to speculations of China expanding its probe.

AZ later said that it believes Chinese authorities are looking into whether the company’s employees had illegally imported HER2-targeted antibody-drug conjugate Enhertu and the cancer immunotherapy Imjudo from Hong Kong to the mainland as well as allegations that they had violated data privacy laws.

Wang and Yin were not the only current and former AZ executives that have been detained as part of this investigation. But the Chinese government has not approached AZ, Soriot said, as AZ stressed that the ongoing investigation is not about the company itself.

Separately, an insurance fraud case in which multiple AZ employees have been convicted since 2022 appears to remain open as it has in recent years scooped up more and higher-ranking AZ staffers in China. The case involves fabricating genetic testing data to boost sales of AZ’s EGFR lung cancer med Tagrisso.

“[W]e take the matters in China very seriously,” Soriot said in a Tuesday statement alongside AZ’s third-quarter earnings report. “If requested we will fully cooperate with the authorities.”

Despite AZ’s compliance system that monitors internal records such as emails and expense reports, “recent lack of compliance moved outside of these systems,” Soriot explained on the call. To close the gap, AZ recently introduced new measures “to be even closer to people to make sure that we identify these behaviors that our systems cannot capture.” These include introducing field-based compliance officers and rotating regional sales directors on a regular basis.

AZ’s shareholders are worried because the scope of the China probe remains unclear, and the fact that top leadership was involved is not a good sign. During Tuesday’s call, Soriot repeatedly said that AZ remains mostly in the dark and didn’t have much information on the investigation to share.

China has long been an important market for AZ. The country contributed $5.05 billion in sales in the first nine months of 2024, or 13% of the British pharma’s total haul of $39.2 billion during the period. AZ’s China business recently bounced back from a slowdown caused by price cuts, and its third-quarter revenue in the country, at $1.67 billion, marked a 15% year-over-year increase. 

“We are committed to China, and we are in China for the long haul,” Soriot said.

The ongoing probe raised the possibility of another slowdown in China, potentially threatening Soriot’s ambitious $80 billion-by-2030 revenue goal for the entire company.

“We have great confidence in the $80 billion,” Soriot said on Tuesday’s call, noting that the number was risk-adjusted.

“Not everything is expected to work,” Soriot said. “In fact, the average risk we have across our portfolio is closer to the average success rate of the industry for phase 3. In the past few years, we've done better than that.”

Still, while AZ is currently on track toward that target, Soriot said the company will have a better sense of its progress by the end of 2025 after several key pipeline readouts. 

As to the China business itself, Soriot on a separate Tuesday call with analysts said while “it’s reasonable to assume that there will be some impact,” it’s still too early to judge the potential impact from the probe. The company will need more information and wait a bit longer to evaluate the trend, he said.

Already, Soriot is expecting potentially smaller growth in China next year as its blockbuster SGLT2 inhibitor Farxiga is slated to face volume-based procurement, a price-cutting scheme targeting off-patent drugs in the country.