CAMBRIDGE, UK — AstraZeneca said it will continue to be the conduit for sharing Chinese innovation with the rest of the world, but will establish a dedicated supply chain for the Chinese market amid geopolitical tensions.
“We are hopeful for the best and plan for the worst,” CEO Pascal Soriot told reporters Tuesday during the company’s investor day at its R&D center in Cambridge, UK.
AstraZeneca, one of the largest multinational pharma players in China, has maintained its commitment to the region both as a market and an R&D engine even as US lawmakers dial up scrutiny of Chinese biopharma suppliers and seek to ban them from doing business with US companies.
Aradhana SarinThe potential tensions are spurring AstraZeneca’s efforts to build a separate supply chain focused on China, an arrangement Soriot has previously alluded to. Going forward, one big category for China will be inhaled products for asthma and chronic obstructive pulmonary disease, CFO Aradhana Sarin said.
Last year, AstraZeneca’s $5.8 billion in China sales accounted for 13% of its $45.8 billion total, according to the company’s 2023 earnings report.
At the same time, AstraZeneca is still investing in production in other regions, with a goal to build resilient supply chains that cater to China and are “still connected, of course, but can operate as independently as possible,” Soriot said.
At the Tuesday event, the UK drugmaker charted how it plans to generate $80 billion in revenue by 2030 by advancing “difficult-to-copy” therapies. One way for the company to fill its pipeline is through partnerships and R&D work in China. It has 18,000 employees in the country, where Soriot said innovation “has exploded.”
“When you look at innovation from innovation culture, Europe has declined very rapidly,” he said. “Most of the innovation these days takes place in the US or China. So we have to be in China to be able to connect with innovation, partner with innovation.”
Soriot cited cell therapy as a key focus area in China, where regulatory differences with the US can translate to early R&D being done “much faster than anywhere else in the world.” With the help of Gracell Biotechnologies — a Chinese cell therapy outfit that AstraZeneca bought for $1 billion in December — the company plans to use China’s regulatory speed to its advantage, Soriot said.