The British pharmaceutical company AstraZeneca faces an intense investigation in China as the local manager Leon Wang is at the center of an inquiry. In a statement from Shanghai on Wednesday, the company announced that Wang is "cooperating with an ongoing investigation." Details about the nature of the investigation remain unclear.
Leon Wang, who has been with AstraZeneca since 2013 and was instrumental in building the company in China, plays a central role in the corporation's business. Under his leadership, AstraZeneca achieved a revenue of 5.9 billion US dollars in China last year, making the company the largest foreign pharmaceutical manufacturer in the country. Despite these impressive figures, the recent announcement led to a 4% drop in the company's stock at the London Stock Exchange.
The investigations follow incidents last month where several AstraZeneca employees in Shenzhen were arrested for potential violations of data protection laws and importing unlicensed drugs. Whether Wang's investigation is directly related to these incidents remains unclear. AstraZeneca emphasized that business in China continues to be led by Michael Lai, the current General Manager, and that the company is fully cooperating with the authorities.
The Chinese Government's Anti-Corruption Campaign Continues to Pressure the Private Sector, Affecting Numerous Industries from Finance to Pharmaceuticals. The Aim is to Combat Bribery, Misuse of Public Funds, and Other Irregularities that Drive up Healthcare Costs. These Measures Have Also Led to the Suspension of PwC China's Operating License after the Company was Involved in an Accounting Scandal.
Despite the challenges, the pharmaceutical industry remains an important growth area for China, especially for foreign companies like AstraZeneca. The company recently invested $1.2 billion in the acquisition of the cell therapy company Gracell Biotechnologies to strengthen its presence and innovation capabilities in the country. Pascal Soriot, CEO of AstraZeneca, emphasized earlier this year that China is a "major source of innovation," and the strategic importance of the market for the company's long-term growth is undisputed.
Analysts view the current developments as a sign of growing regulatory risks for international companies in China. While AstraZeneca tries to strengthen its market position through strategic investments and local partnerships, further regulatory interventions could affect its expansion and profitability. The ongoing uncertainty in the Chinese market thus poses a significant challenge for the global pharmaceutical company.
