AstraZeneca to invest £2bn in Beijing amid China investigation
AstraZeneca has unveiled plans to invest £2bn in Beijing months after Chinese authorities detained the company's local boss over alleged illegal activity.
The British drug giant said it would be spending $2.5bn (£2.1bn) in Beijing over the next five years to create a new research hub. It has also struck new licencing deals with Chinese biotech companies Harbour BioMed, Syneron Bio and BioKangtai.
The plans will mean AstraZeneca's Beijing workforce will grow to 1,700 employees, from around 600 today.
AstraZeneca is already the largest pharmaceutical company in China and the country accounts for 12pc of its revenues.
However, the pharmaceutical giant has been grappling to contain a scandal over alleged illegal drug imports.
Leon Wang, the president of AstraZeneca's China division, was last year detained alongside several other employees amid an investigation into operations in the country. Authorities are looking into imports of AstraZeneca's cancer drug Imjudo, which is not approved for sale in China.
Pascal Soriot, the company's chief executive, last month said the company was cooperating with authorities, adding that he wished 'Leon the very best'.
However, he said: 'We have no new information to share about Leon. Actually, we don't receive information.'
Separately, more than 100 former sales staff in China have been put in jail over alleged medical insurance fraud. The National Healthcare Security Administration claimed AstraZeneca staff had been involved in scamming medical insurance companies.
The issues have weighed on the company's share price, initially wiping more than £15bn off its market value. It has started to pare some of those losses in recent weeks.
Mr Soriot said: 'This $2.5bn investment reflects our belief in the world-class life sciences ecosystem in Beijing, the extensive opportunities that exist for collaboration and access to talent, and our continued commitment to China.'
As part of the bolstered presence in Beijing, Mr Soriot has also been invited to join the Beijing International Business Leaders Advisory Council (IBLAC), a business steering group.
The investment in China comes weeks after AstraZeneca scrapped plans for a £450m vaccine factory in Liverpool. It followed a decision by the Government to lower the level of financial support it would provide.
Sir Keir Starmer's Government had reportedly offered almost £80m of public money to help fund the new vaccine factory. This was lower than the £90m promised by the Conservatives.
Mr Soriot said last month: 'It was not possible for the Government to justify it, which we totally understand. And on our side, we cannot justify it either. So we were all very disappointed, but that's business life. It happens to us all the time.'
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