The pharmaceutical company informed shareholders that it does not believe the detention of its Executive Vice President International and China President, Leon Wang, is connected to a high-profile fraud case. Chinese authorities have detained Wang, as confirmed by the company. AstraZeneca stated that they are unaware of the specifics of the investigation and do not think it is related to a major health insurance fraud case involving the company.
The news of Wang’s detention came a week after AstraZeneca announced that the senior executive was under investigation. The company published a statement on October 30, revealing that Wang was cooperating with the Chinese authorities’ ongoing investigation. A report by Chinese state-controlled financial media company Yicai suggested that Wang might be linked to the fraud case, causing AstraZeneca’s shares to drop over 8 percent.
AstraZeneca’s Chief Financial Officer addressed concerns from analysts on Wednesday, and the investor relations team briefed shareholders on the issue. The company clarified that it is not aware of any current or former senior executives being involved in the fraud case. There is a separate case regarding the alleged illegal importation of oncology medicines into China and the improper collection of patient data, with two current and two former senior executives under investigation.
AstraZeneca highlighted its significant investments in China, the world’s second-largest pharmaceutical market. The company reported that China sales accounted for 13 percent of its overall sales in the first half of 2024. The company emphasized that its operations in China, led by China general manager Mike Lai, are continuing as usual.
According to AstraZeneca’s 2023 annual financial report, the company was the largest pharmaceutical firm in China, making it the third-largest market for AstraZeneca. The company stated that it would continue to provide medicines to patients in China and that its operations are ongoing.
Barclays analysts commented that the sell-off of AstraZeneca’s shares was excessive and presented an attractive entry point for investors. They noted that anticipated clinical trial data readouts in 2025 could impact the company positively.
The investigations into AstraZeneca coincide with a series of raids and arrests of foreign companies’ employees in China, causing concern among foreign investors. The Chinese government has implemented stricter laws and regulations to control the flow of information out of the country.
In August, Japan’s Astellas Pharma reported that one of its employees had been indicted in China on suspicion of espionage. Additionally, U.S. due diligence firm Mintz Group was fined $1.5 million after a raid on its Beijing office in May 2023.
The article also mentions the contributions of Dorothy Li and Reuters to the report. Please rewrite this sentence.
Source link
