AstraZeneca’s boss has broken its silence since ditching a £450m vaccine plant expansion in Liverpool a week ago, saying the drugmaker was “very disappointed” to have been unable to make a business case for the investment.
Pascal Soriot told reporters on Thursday: “This is one of those cases and we see that regularly, where we could not make the business case work … and we needed a certain level of support to make this economically viable. And that was not possible for the government to justify, which we totally understand. On our side, we cannot justify this either. We were all very disappointed, but that’s business life.”
He denied there was any tension between Britain’s biggest drugmaker and the government, saying AstraZeneca had even intended to raise its investment in the Speke factory to more than £500m.
The expansion of the facility had been agreed under the previous Conservative government, which pledged £90m in grants and other aid, but this was cut after Labour came to power and sought savings to help the public finances.
The science minister Chris Bryant told MPs this week the difference between the two offers was “remarkably small”, adding that AstraZeneca’s U-turn was “deeply disappointing”.
Speaking on Thursday, Soriot said: “We had a prior agreement but in the end the final proposal didn’t really match what we needed.” He added: “It’s a very competitive world, and we make investments in many countries.”
Soriot said the drugmaker had received “very substantial support” from Singapore, where it is building a $1.5bn (£1.2bn) site to make antibody drug conjugates, next-generation treatments for cancer.
He urged the government to do more to attract investments, arguing that an increase in the drug rebate scheme, whereby pharmaceutical companies pay a percentage of their sales back to the NHS, would not “encourage people to invest, but it’s an industry issue that has nothing to do with Speke”.
A government spokesperson said: “All government funding must demonstrate value for the taxpayer and, due to a change in the terms originally agreed, we could not justify offering the same amount of funding.”
AstraZeneca on Thursday reported a jump in annual profits it said were bolstered by strong sales of its cancer, lung and immunology treatments.
The company said revenues rose by 21% to $54.1bn in 2024. Pre-tax profit increased by 38% to $8.7bn on a constant currency basis.
Shares in the drugmaker, which is Britain’s largest listed company at £184bn, increased by nearly 6% after the announcement, the biggest daily percentage rise since last April. It helped lift the FTSE 100 index past 8,700 points to a new all-time high.
There was also relief for investors after AstraZeneca gave an update on an investigation in China, where the president of the local business, Leon Wang, and other senior executives have been detained over allegations of illegally importing cancer medicines. Shares in the drugmaker tumbled after the news broke, wiping £14bn off its market value to £156bn in early November. This compared with a peak valuation of more than £200bn in mid-August.
AstraZeneca said the case involved suspected unpaid importation taxes of $900,000, which could lead to a fine of up to five times that amount if the company was found liable. Soriot said he wished Wang, who remains in detention and has been replaced by Iskra Reic, “the very best”. AstraZeneca has also faced a separate investigation into medical insurance fraud in China.
Cancer and respiratory and immunology treatments were AstraZeneca’s fastest-growing areas last year, with 24% and 25% annual rises in revenues respectively. The firm forecasts total sales growth will slow this year, to a high single-digit percentage.
The drugmaker stuck to its $80bn revenue goal by 2031, with late-stage results for seven new medicines expected this year.
