July 31, 2023: On Friday, AstraZeneca’s chief financial officer stated that geopolitical tensions are not affecting the company’s China operations, pursuing a report that the pharma giant is considering spinning off its business there.
“We’re in an industry that is producing life-saving medicines, helping China and citizens all across the globe in improving their health in reducing costs overall for healthcare systems. So I think we’re just in a unique space, and we don’t see geopolitics playing a role in doing business in China,” Aradhana Sarin said.
The Financial Times reported that AstraZeneca had plans to spin off its China business and potentially list it in Hong Kong to shield it from China’s weakened relationship with the U.S. and Europe. The same report stated that the plans were uncertain and that a Shanghai listing was another possibility.
She added that AstraZeneca has been working in China for a decade and is its largest pharmaceutical company.
“China has been a great business for us,” Sarin stated, observing that the company’s China branch had registered four consecutive quarters of growth.
“But what’s interesting about China is not just the commercial business, which is doing well, but all the innovation coming out of China when we run our…global clinical studies. And many of the studies are also running in China,” she said.
“There’s also the ability to tap into local creation. And it’s not just us; even many of our peers have done licensing deals with really innovative biotech companies in China,” she added. “So it’s not just commercial, but being able to tap into that innovation.”
On Wednesday, AstraZeneca earnings showed revenue growth ahead of estimates at 6% in the second quarter, tracking 1% growth in the first half. Core earnings per share increased by 25% to $2.15.
The company’s China revenues expanded by 7%, slightly above the 6% recorded in Europe but below the 10% growth in the U.S., including Covid-related figures.