AstraZeneca has confirmed that Leon Wang, its top executive in China, has been detained by Chinese authorities as part of an expanding investigation that has also placed four other executives – two current and two former employees – under scrutiny. The pharmaceutical giant emphasized that the company itself is not directly under investigation.
The announcement comes as AstraZeneca attempts to stabilize its market position after news of the investigation triggered a significant 15% decline in share price, erasing approximately £15 billion from its market value. The company's stock has shown signs of recovery in recent trading sessions.
Multiple Compliance Issues Under Investigation
The Chinese authorities are investigating several potential violations. One key focus involves allegations that genetic test results were falsified to qualify patients for treatment with Tagrisso, AstraZeneca's EGFR inhibitor, potentially defrauding insurance companies. This investigation has already resulted in serious consequences, with some AstraZeneca staff members receiving prison sentences exceeding 10 years.
Another significant aspect of the probe centers on data privacy breaches and the importation of unlicensed medicines. Market analysts suggest that the unauthorized imports may have involved several cancer treatments, including Enhertu, Imfinzi, and Imjudo. While Imfinzi received Chinese approval in 2019 and Enhertu in 2023, Imjudo has yet to receive regulatory clearance in the Chinese market.
Impact on AstraZeneca's China Operations
The investigation has particular significance given AstraZeneca's substantial presence in China, where it leads foreign pharmaceutical companies with sales reaching $5.9 billion in 2023. The company has pledged full cooperation with Chinese authorities while maintaining discretion about the specific nature of the investigations.
The scrutiny of AstraZeneca appears to be part of a broader examination of the healthcare sector by Chinese authorities, with speculation that other international pharmaceutical companies might also face increased regulatory attention.
Positive Development in Respiratory Portfolio
Amid these challenges, AstraZeneca reported encouraging news from its respiratory drug development program. Tezspire, developed in partnership with Amgen, demonstrated significant efficacy in a Phase 3 trial for chronic rhinosinusitis with nasal polyps. The TSLP inhibitor achieved meaningful reductions in nasal polyp size and congestion compared to placebo, adding to its recent positive results in chronic obstructive pulmonary disease trials.
