AstraZeneca's chief executive Pascal Soriot has reportedly expressed interest in moving the pharmaceutical giant's stock market listing from London to New York, according to multiple sources cited by The Times. The potential shift would represent a significant blow to the London Stock Exchange and reflects growing frustrations with the UK's regulatory and business environment.
Market Response and Strategic Rationale
The FTSE 100 company's share price rose 2.8% on Tuesday following publication of the report, with most of the increase occurring after the story broke. AstraZeneca's American Depositary Shares also gained more than 2% in US trading, outperforming the S&P 500 which closed marginally lower.
According to The Times' reporting, Soriot is "known to be deeply frustrated with the U.K.'s operating environment" and has publicly expressed concerns about what he perceives as declining European competitiveness against the US and China - the company's two largest markets.
The CEO has also reportedly considered moving AstraZeneca's domicile alongside the listing change, though neither Soriot nor the company has officially commented on these reports.
Broader Context of UK Market Departures
A potential AstraZeneca listing move would continue a troubling trend for the London Stock Exchange, which has witnessed several high-profile departures from the FTSE 100 in recent years. Companies that have relocated their listings include equipment rental company Ashtead, Paddy Power bookmaker owner Flutter Entertainment, building materials supplier CRH, and packaging company Smurfit Westrock.
The Cambridge-headquartered pharmaceutical company has become Britain's most valuable listed company under Soriot's leadership, with its market value more than tripling since he took over in October 2012. AstraZeneca has now overtaken oil company Shell and HSBC bank, achieving a market value of £157 billion.
Regulatory Tensions and Government Relations
The potential move comes amid ongoing tensions between AstraZeneca and UK authorities. The government remains in negotiations with the drug industry, including AstraZeneca, over rebates that pharmaceutical companies must pay on sales of new medicines to the NHS under a voluntary agreement.
Soriot has publicly expressed frustration over the rejection of AstraZeneca's breast cancer drug Enhertu for NHS use on cost grounds. Earlier this year, the company caused government consternation by withdrawing from a £450 million project to produce vaccines in Speke, Liverpool, stating that the business case did not make sense without additional financial support from the government.
US Market Focus and Growth Strategy
The US represents the world's largest pharmaceutical market, with significantly higher per-person spending on medicines despite lower life expectancy compared to several other countries. UK executives have long complained that their companies receive lower valuations compared to American counterparts.
Soriot has emphasized AstraZeneca's US growth ambitions, telling investors in November that "we want to see even more growth in the US over the next few years as part of our 2030 ambition." He noted that the "US is, of course, a very important market and that supports innovation, and we will continue to invest to grow fast in this part of the world."
While any listing shift would likely face opposition from the UK government, authorities would not have formal power to block such a move. The Labour government has identified life sciences as one of its key growth sectors in its recently published industrial strategy, making AstraZeneca's potential departure particularly significant for UK policy objectives.
