AstraZeneca announced that it could face a fine of up to $4.5 million in China over suspected unpaid import taxes, a figure significantly lower than some investors had feared. The update led to a 5% rise in the company’s shares, signaling renewed confidence in its business outlook.
China remains a key market for AstraZeneca, contributing 12% of total sales in 2024. Last year, the company’s stock was affected by concerns over multiple investigations involving its executives and operations in the country. However, the latest disclosure suggests the financial impact of these probes may be less severe than anticipated.
The pharmaceutical company clarified that, based on current information, the investigation pertains to import taxes related to cancer treatments Imfinzi and Imjudo. If found liable, AstraZeneca could be fined between one and five times the unpaid tax amount of $900,000. CEO Pascal Soriot noted that the probe could potentially extend to another cancer drug, Enhertu.
Following the announcement, AstraZeneca’s shares became one of the top gainers on Britain’s FTSE-100 index. The company also provided an optimistic sales forecast for 2025, exceeding analyst expectations, and announced an increase in its dividend.
Simon Baker, an analyst at Redburn Atlantic, described the update as reassuring, noting that the projected penalties represent only a small fraction of what had been feared last year.
Investor confidence was further boosted by AstraZeneca’s fourth-quarter results, which exceeded sales and profit expectations. The company forecasted a high single-digit percentage increase in revenue for 2025, with core earnings projected to grow by a low double-digit percentage at constant currency rates.
Despite the positive outlook, AstraZeneca cautioned that challenges remain, including potential pricing pressures in the United States due to changes in Medicare drug price negotiations.
Source: Reuters
