AstraZeneca's profits surged last year as it overcame a slowdown of sales in China - and reassured investors troubles there may not be as costly as feared, writes Calum Muirhead
The FTSE 100 drug maker reported a pre-tax profit of £7bn (€8.4bn) for 2024, a 38% increase on the prior year, as revenues climbed 21% to £43.6bn (€52.3bn).
That was despite a 3% drop in sales in China, a core market, as a mild winter affected demand for respiratory treatments.
Astra's business has been buffeted by challenges after its former top executive in China, Leon Wang, was arrested in October and placed under investigation.
Boss Pascal Soriot (pictured below) said yesterday the firm had not been able to talk to Wang. The arrest was followed by revelations including that more than 100 former sales staff in China have been sentenced to jail in a large medical insurance fraud case.
And it is being investigated in China over £725,000 of unpaid income taxes which could see it fined of up to £3.6m.
It said the taxes related to two cancer drugs, Imfinzi and Imjudo, and that it was continuing to co-operate with authorities. Analyst Simon Baker at Redburn Atlantic said the update on the investigation was "very reassuring" and penalties would be "a fraction of the extreme scenarios" feared. Shares rose 5.9%, or 660p, to 11,786p.
Astra forecast sales to rise by a "high single-digit percentage".
"This year marks the beginning of an unprecedented, catalyst-rich period," Soriot said.
AJ Bell investment director Russ Mould said: "China import-related tax issues won't derail the business. Any fines will be small fry relative to the typical outflows from a company the size of AstraZeneca."
The results came amid tension between the firm and the Government after Astra scrapped plans to invest £450m in a vaccine factory in Merseyside after concluding the amount of state support was not enough.
"We could not make the business case work, we could not make it economically viable, we needed a certain level of support to make this economically viable," Soriot said.
He added that the environment for pharma firms in the UK "needs to improve" - but stressed this was not connected to the decision to scrap its investment in the Merseyside plant.
(Pic: Jaque Silva/SOPA Images/LightRocket via Getty Images)
