AstraZeneca said Thursday it could pay up to $4.5 million following a drug import investigation in China. The news buoyed AstraZeneca stock, which has been hamstrung on worries that the impact would be far more costly.
Last year, Chinese officials began investigating AstraZeneca executives and activities in China. That included detaining Leon Wang, the company's former senior executive.
On Thursday, the company said the investigation is related to $900,000 in unpaid drug importation taxes. AstraZeneca believes the taxes are related to cancer drug Imfinzi, but Enhertu could be implicated as well, Leerink Partners analyst Andrew Berens said. Enhertu is a breast cancer treatment.
"While AZN may incur additional fines for the illegal importation allegations, particularly from Enhertu, we think this update suggests the magnitude of the fines may (be) lower than many investors feared," he said in a client note.
In response, AstraZeneca stock jumped 2% to close at 72.36.
AstraZeneca Stock Nears 200-Day Line
Shares took a hit last year after AstraZeneca revealed the investigation in China. China accounted for almost 12% of the company's sales in 2024.
But on Thursday AstraZeneca stock surged within striking distance of its 200-day moving average, according to MarketSurge.
The company also reported core earnings of $2.09 per share and $14.89 billion in sales. Earnings soared 44% year over year, on a strict, as-reported basis. Sales jumped 24%. Both measures beat expectations.
Leerink's Berens noted sales of cancer drugs, collectively, topped analysts' forecasts at $5.34 billion. Sales of Tagrisso, Lynparza, Enhertu and Truqap all came in ahead of expectations, while Imfinzi was in line and Calquence missed.
Berens kept his outperform rating on AstraZeneca stock.
For the year, AstraZeneca guided to sales growth in the high single-digit percentage range. The company also projects core earnings growth at a low double-digit percentage. Wall Street projected earnings of $9.27 per share on $56.79 billion in sales.
