AstraZeneca is splashing out hundreds of millions of pounds on buying the lung drug portfolio of Japan’s Takeda and deepening its presence in China, despite the country’s recent slowdown.
The Anglo-Swedish drugmaker wants to create a new global hub for drug development in China alongside those in the UK and Sweden, with up to 50 scientists based in Shanghai and Wuxi City. China is AstraZeneca’s second-biggest market by sales after the US, and one of its fastest growing areas.
Britain’s second-largest pharmaceutical company has struck a strategic alliance with Chinese biologics firm WuXi AppTec to produce innovative biological drugs (proteins or living cells that are derived from human or animal genes) in the country. AstraZeneca has the option to acquire WuXi AppTec’s biologics factory in Wuxi City for $100m (£66m) and will invest $50m to build another site alongside it.
The alliance builds on a joint venture between the two companies to develop and sell MEDI5117, a biological treatment for autoimmune and inflammatory diseases, in China.
AstraZeneca plans further investments totalling hundreds of millions of dollars developing and making drugs in China over the next few years. Its China headquarters are in Shanghai and it now employs more than 11,000 people in the country, after entering in 1993. It has factories in Wuxi and Taizhou and an innovation centre in Shanghai, which is focused on developing treatments tailored to Asian patients.
AstraZeneca’s push into China comes despite the country’s economic slowdown, which has affected the pharmaceutical market, through restrictions on the use of antibacterial drugs at hospitals and stricter control on health insurance payouts. At the same time, Beijing’s crackdown on corruption led to a damaging scandal and a record 3bn yuan (£312m) fine for rival British firm GlaxoSmithKline.
Separately, AstraZeneca has agreed to buy Takeda’s core respiratory division for $575m, which will give it the global rights to a key lung drug, sold as Daliresp in the US and Daxas in other countries, for the treatment of chronic obstructive pulmonary disease. AstraZeneca has been marketing the drug in the US since buying those rights early this year.
The latest deals come after a string of other acquisitions and alliances, along with disposals, aimed at helping AstraZeneca return to sales growth in 2017 and meet its long-term ambitious sales targets. It is battling to replace lost revenues as its biggest selling drugs come off patent, such as cholesterol pill Crestor next year. When the board fended off a £69.4bn takeover bid from New York rival Pfizer in May last year, chief executive Pascal Soriot pledged to raise annual sales by 75% to $45bn by 2023.
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