AstraZeneca shares hit by investigation into top Chinese executive

A senior executive at AstraZeneca is under investigation in China, in a significant escalation of action against the company’s employees that has hit the company’s share price.
The FTSE 100 pharmaceutical giant, Britain’s most valuable public company, said Leon Wang, its executive vice-president for international and its China president, was “co-operating with an ongoing investigation by Chinese authorities”.
In the short statement the Cambridge-based company said the company would also fully co-operate “if requested”.
It is unclear why Wang is under investigation or whether he has been detained. A spokesman for AstraZeneca declined to comment further.
Signs of a widening investigation relating to AstraZeneca in China weakened the company’s share price on the London Stock Exchange, closing down 2.8 per cent, or 328p, at £112.06 on Wednesday.
The development comes after it emerged last month that five present and former AstraZeneca employees, all Chinese citizens, had been detained by police this summer over alleged illegal activities.
The authorities were said to be investigating whether the handling of patient data infringed the country’s data privacy laws, and whether a liver cancer drug was imported without approval for distribution in China, according to a report at the time by Bloomberg.
The Chinese authorities are also investigating Eva Yin, who worked for AstraZeneca for more than 15 years and had been general manager of its China oncology business, local media reported last week.
The inquiries are potentially significant as AstraZeneca has become one of the two biggest multinational pharmaceuticals companies in China, a key part of the Anglo-Swedish group’s transformation over the past decade and of its future growth targets.
Wang, a member of AstraZeneca’s senior executive team, has been a key architect of its rapid expansion in China, having joined the company in 2013 and overseen the country becoming the company’s second-largest market worldwide.
Wang, who previously worked at Roche, the Swiss pharmaceuticals company, also holds several positions in local trade associations and “other prominent organisations” in China.
He made headlines last year when he marked the 30th anniversary of AstraZeneca’s presence in China by vowing that it would be a patriotic company that “loves the Communist Party and loves the country”.
AstraZeneca said that Michael Lai, its general manager in China, would continue to lead its operations in the country.
Beijing launched an anti-corruption investigation into China’s healthcare sector last year, but Sir Pascal Soriot, AstraZeneca’s group chief executive, remained sanguine, saying last autumn that the Chinese government had clarified that its focus was on hospital management and not drug companies.
AstraZeneca employs about 16,000 of its 90,000 global workforce in the country and this year designated Shanghai, where its China business is based, as one of its five global strategic hubs.
China generated almost $5.9 billion of sales last year, accounting for about 13 per cent of AstraZeneca’s group revenues.
Despite the uncertainty of the investigations, the company has continued to deepen its presence in China. This month it agreed a licence agreement with CSPC Pharmaceutical Group, potentially worth up to $2 billion, to develop an experimental drug to tackle unhealthy cholesterol levels and related cardiovascular diseases.