By Pushkala Aripaka and Maggie Fick
(Reuters) – AstraZeneca on Thursday said it could face a fine of up to $4.5 million in China over suspected unpaid import taxes, raising investor hopes that the impact of several probes in the country could be minor and leading its shares to rise about 5%.
The stock was hit hard last year by news of a string of investigations into the company’s executives and activities in China, which is the crown jewel of the company’s international business, accounting for 12% of total sales in 2024.
The shares were among the top gainers on Britain’s blue-chip FTSE-100 index at 1105 GMT after AstraZeneca also forecast 2025 sales above expectations and raised its dividend for the current year.
Redburn Atlantic analyst Simon Baker said the update on the import investigation was “very reassuring” and confirmed that likely financial penalties “would be a fraction of the extreme scenarios discounted in the stock last year”.
The company said that, to the best of its knowledge, the import taxes related to cancer drugs Imfinzi and Imjudo, adding that it continued to cooperate with authorities.
A fine of between one and five times the unpaid tax of $900,000 could be levied if the company is found liable, AstraZeneca said.
That investigation could possibly extend to include another of the company’s best-selling cancer drugs, Enhertu, CEO Pascal Soriot said at a press conference after the release of results.
‘SOOTHING’
Thursday’s share price rise shows investor focus returning to the strength of the company’s drug pipeline, said AstraZeneca shareholder Lucy Coutts at investment firm JM Finn.
“The short statement was soothing with a small decline in (China) sales primarily as a result of low respiratory infections rather than investigation headwinds.”
Last December, AstraZeneca named Iskra Reic as its new international executive vice president, who took over from Leon Wang in efforts to stabilise operations in China after Wang was detained by Chinese authorities in October.
On Thursday, Soriot said the company had no further information to provide about Wang and was not permitted by Chinese authorities to speak to him, adding that AstraZeneca had shared information with authorities when it was approached.
Shares plunged after the news of Wang’s detention, wiping about $18 billion off the company’s value. They have since recovered and are up more than 10% this year, including Thursday’s gains.
AstraZeneca forecast 2025 revenue to increase by a high single-digit percentage, with core earnings projected to grow by a low double-digit percentage, at constant currency rates, after it also beat fourth-quarter sales and profit expectations.
Analysts expect 2025 sales growth of 6.5% and profit to rise by 12.6%, according to a LSEG poll.
Still, AstraZeneca cautioned about some headwinds, including in the United States, over changes in Medicare drug price negotiations.
(Reporting by Pushkala Aripaka in Bengaluru and Maggie Fick in London. Editing by David Goodman and Mark Potter)
