AstraZeneca is set to invest $3.5 billion in its US operations by the end of 2026, fueled by robust demand for its oncology portfolio, including blockbuster drugs Tagrisso and Enhertu. The British drugmaker's strategic move aims to bolster its research and development (R&D) and manufacturing capabilities within the United States, where it currently generates twice as much revenue as in Europe.
Expansion Plans and Strategic Investments
The $3.5 billion investment encompasses several key initiatives, including the previously announced R&D facility in Cambridge, Massachusetts, a biologics facility in Maryland, cell therapy manufacturing capacity on both the East and West coasts, and specialty manufacturing in Texas. This expansion signifies AstraZeneca's commitment to strengthening its presence in the US market, which is the largest driver of its sales globally. The US investment surpasses recent investments in Singapore ($1.2 billion) and the UK (£650 million, or $833 million).
Oncology Drug Performance and Dato-DXd Setback
Tagrisso, a leading cancer medicine, has exceeded sales expectations, contributing significantly to AstraZeneca's revenue growth. Enhertu, another key oncology drug, has also demonstrated strong performance. However, AstraZeneca and its partner Daiichi Sankyo Co Ltd faced a setback with their experimental cancer medicine, Dato-DXd. A previously submitted application to the US Food and Drug Administration (FDA) was withdrawn and resubmitted for a more targeted patient population. According to Bloomberg Intelligence’s John Murphy, this could lead to further reductions in long-term sales estimates for the drug. Jefferies analyst Peter Welford noted that the withdrawal and resubmission were "a setback but not entirely unanticipated."
China Probe and Impact on Sales
AstraZeneca is also navigating challenges in China, where authorities are investigating alleged illegal importation of cancer drugs via Hong Kong. The company's China president, Leon Wang, has been detained, and several other current and former senior executives are under investigation. CEO Pascal Soriot stated that the company is taking the matter "very seriously" and will fully cooperate with Chinese officials. Despite these issues, China generated approximately $1.7 billion in sales during the third quarter, representing a 15% increase at a constant exchange rate. However, this growth rate was the weakest among AstraZeneca's key regions, with Europe experiencing a 22% increase and emerging markets (excluding China) growing by 31%. US revenue increased by 23%.
Future Outlook and Obesity Drug Development
AstraZeneca is aiming to nearly double its sales to $80 billion and launch 20 new medicines by the end of the decade. Cancer drugs are expected to be crucial in achieving this ambitious revenue target. The company is also advancing its pipeline of obesity drugs, with three new potential treatments showing promising safety profiles and progressing to mid-stage trials. These include an experimental obesity pill, marking AstraZeneca's expansion into new therapeutic areas.
