AstraZeneca has unveiled plans to invest $2.5 billion (£2.1 billion) in Beijing over the next five years, establishing the pharmaceutical giant's sixth global strategic research and development center. The announcement comes amid ongoing Chinese investigations into the company's operations in the country.
The substantial investment, representing approximately 4.6 percent of AstraZeneca's global revenue last year, is part of a strategic partnership with the Beijing Municipal Government and the Beijing Economic-Technological Development Area Administrative Office.
New R&D Center to Leverage AI and Data Science
The new global R&D center in Beijing will be AstraZeneca's second in China, following its existing facility in Shanghai. Located in the Beijing International Pharmaceutical Innovation Park, the center will focus on advancing early-stage research and clinical development, supported by artificial intelligence and data science laboratories.
"Our sixth strategic R&D center 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," said Pascal Soriot, CEO of AstraZeneca.
The investment is expected to significantly expand AstraZeneca's presence in Beijing, with the workforce projected to grow from approximately 600 to 1,700 employees. This expansion reinforces the company's position as the largest pharmaceutical company in China, where it generated around $6.41 billion in revenue last year—approximately 12 percent of its global revenue.
Strategic Partnerships with Chinese Institutions
As part of the investment, AstraZeneca has announced several key partnerships with Chinese organizations:
- A strategic research partnership with Beijing Cancer Hospital focusing on translational research, data science, and clinical development
- A collaboration and licensing agreement with Harbour BioMed to discover multi-specific antibodies
- A partnership with Syneron Bio to develop macro-cyclic peptides
- A new joint venture with BioKangtai to develop, manufacture, and commercialize innovative vaccines for respiratory and other infectious diseases
The BioKangtai joint venture will establish AstraZeneca's first and only vaccine manufacturing facility in China, expanding the company's capabilities in the region.
Investment Amid Ongoing Investigations
The significant investment comes at a challenging time for AstraZeneca's operations in China. Leon Wang, the president of AstraZeneca's China division, was detained last year along with several other employees as part of an investigation into alleged illegal drug imports. Chinese authorities are specifically examining imports of AstraZeneca's cancer drug Imjudo, which is not approved for sale in China.
Additionally, more than 100 former sales staff in China have been imprisoned over alleged medical insurance fraud. The National Healthcare Security Administration has claimed that AstraZeneca staff were involved in scamming medical insurance companies.
These issues have negatively impacted the company's share price, initially wiping more than £15 billion off its market value, though some of these losses have been recovered in recent weeks.
Contrasting Investment Decisions
The substantial investment in China stands in contrast to AstraZeneca's recent decision to abandon plans for a £450 million vaccine factory in Liverpool, UK. The company cited reduced government financial support as the reason for canceling the project.
Sir Keir Starmer's Government had reportedly offered almost £80 million of public money to help fund the new vaccine factory, less than the £90 million promised by the previous Conservative administration.
"It was not possible for the Government to justify it, which we totally understand. And on our side, we cannot justify it either. So we were all very disappointed, but that's business life. It happens to us all the time," Soriot explained regarding the Liverpool decision.
Strengthening Ties with Beijing
In recognition of AstraZeneca's commitment to China, CEO Pascal Soriot has been invited to join the Beijing International Business Leaders Advisory Council (IBLAC), a prominent business steering group.
"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 stated.
The investment underscores AstraZeneca's long-term strategy in China despite the ongoing regulatory challenges, highlighting the importance of the Chinese market to the company's global operations and its confidence in the country's scientific capabilities.
