By Maggie Fick
LONDON (Reuters) – AstraZeneca said on Friday it will spend $2.5 billion on a research and development hub in Beijing, as the drugmaker scrambles to revive business in its second-biggest market after scandals including the arrest of its China president last year.
Chief Executive Pascal Soriot was in Beijing and met with the city’s mayor to reveal the investment, along with two licensing deals with Chinese companies, and a joint venture with a third Chinese firm on vaccines, saying they all showed the company’s commitment to the world’s No. 2 economy.
“This $2.5 billion investment reflects our belief in the world-class life sciences ecosystem in Beijing, the extensive opportunities that exist for collaboration and access to talent, and our continued commitment to China,” Soriot said in a statement.
The R&D centre “will partner with the cutting-edge biology and AI science in Beijing and be a critical part of our global efforts to bring innovative medicines to patients worldwide,” Soriot said.
The centre in Beijing will be the company’s second R&D site in China – a centre in Shanghai opened in 2024 – to match two such centres each that AstraZeneca has in the U.S. and Europe, respectively, a company spokesperson said.
The Chinese government has launched several investigations into AstraZeneca’s executives and activities in the country, where the drugmaker has invested billions of dollars to build factories and license experimental drug candidates from Chinese biotech firms.
China accounted for about 12% of group revenue last year. The company, the UK’s largest listed company worth 183 billion pounds ($236 billion) on the blue-chip FTSE 100 index, is the largest foreign drugmaker in China.
Soriot has often visited the country in recent years and praised the value of doing business there even when other multinationals complained of challenges or cited geopolitical tensions between China and Western countries as a risk for the pharma industry.
He is due to attend a flagship development conference in Beijing over the coming days where some are expected to meet Chinese President Xi Jinping.
The company put its former China head Leon Wang, who also led its international business as an executive vice president, on administrative leave following his detention by Chinese authorities in October, and overhauled its local management in China.
Soriot said at quarterly results last month that the company still does not know Wang’s whereabouts. Its stock was hit hard by news of the probes in October 2024, but shares have since recovered as investors hope the impact could be minor.
A company spokesperson declined on Friday to comment on the status of the investigations.
The licensing agreements announced on Friday were with Chinese firms Harbour BioMed and Syneron Bio, for early-stage experimental medicines. The financial terms were not disclosed.
The deals were the latest of about a dozen AstraZeneca has signed with Chinese firms in the past several years – including on obesity drugs – worth a total of at least $9 billion, according to the company.
It is also launching a joint venture with another firm, BioKangtai, to develop, manufacture and commercialize vaccines for respiratory and other infectious diseases for patients in China and elsewhere. The site, in Beijing, will be the company’s first vaccine manufacturing facility in the country.
The company on Friday also announced a partnership with state-run Beijing Cancer Hospital focused on data science and clinical development.
($1 = 0.7730 pounds)
(Reporting by Maggie Fick; Editing by Kim Coghill and Susan Fenton)
