- Move will be a boost for Donald Trump’s incoming administration
- But it will be seen as a setback for the Labour Government
- The US is already by far Astra’s largest market
Pharmaceuticals giant AstraZeneca is accelerating the shift in its centre of gravity to the US.
The move, under chief executive Pascal Soriot, will be a boost for Donald Trump’s incoming administration. But it will be seen as a setback for the Labour Government, which is looking to life science firms such as Astra to turbo-charge growth in the UK.
The US is already by far Astra’s largest market, accounting for 44 per cent of global revenues. Soriot’s aim is to lift that to half of the total by 2030, by which time he has pledged to be making $80 billion (£63 billion) a year.
He is pouring $3.5 billion into new research and development and manufacturing sites in the US that will create more than a thousand jobs.
The buoyant picture across the Atlantic is in stark contrast with the UK, where the firm is stuck in talks with the Government over whether or not it will go ahead with a £450 million vaccine factory in Liverpool.
American dream: Boss Pascal Soriot (pictured) is pouring $3.5 billion into new research and development and manufacturing sites in the US that will create more than a thousand jobs
Under the previous Tory administration, Astra had expected £90 million of support for the project. Labour is believed to be trying to reduce this to as little as £40 million.
Soriot sent out a strong signal last week of the growing importance of the US by presenting the company’s results for the first nine months of this year in New York instead of in the City. The choreography was a clear message to Labour that Britain risks falling further down the pecking order for investment. ‘The reason we invest very substantially in the US is we know it is a very important market in terms of providing our medicines to patients and also in terms of innovation,’ Soriot said.
‘We think the economy should continue to grow strongly in the US next year and the year after… it will support the delivery of medicines. All this makes us enthusiastic about the US.’
Dan Coatsworth, an investment analyst at broker AJ Bell, said: ‘Astra is an international business and it has many options where to expand operations. If the maths for the UK investment no longer add up, it might simply shift focus to a different region.’
Astra headquarters and its main share listing are in the UK, where it vies with oil company Shell for the status of most valuable company in the FTSE 100 share index.
Despite this, its UK revenues are estimated at less than five per cent of the total, a proportion considered so small that the company does not even break out the figures separately.
Soriot believes the rewards for innovation are superior in the US because there is a greater openness to new treatments compared with in the UK.
The NHS recently denied women in England with advanced breast cancer access to Astra drug Enhertu on the grounds that it is too expensive.
Expansion in the US will include a state-of-the-art R&D centre in Cambridge, Massachusetts, a manufacturing facility for biologics in Maryland, manufacturing in Texas and cell therapy facilities on both coasts.
Experts believe the announcement of plans to invest billions in the US will put Astra in a favourable light with Trump and could also help the firm to avoid import tariffs if they are imposed on medicines.
One wild card for Astra and its US ambitions is Trump’s appointment of anti-vaccine activist Robert F Kennedy Junior (RFK) to run the department of health.
Coatsworth said Astra’s shift in focus ‘could stir up speculation that it will be the next FTSE 100 company to think about switching its primary stock market listing to the US’. He added: ‘Losing AstraZeneca from the FTSE 100 would be a blow for the stock exchange – but realistically this looks unlikely in the near-term.’
Soriot respects the UK’s prowess in life sciences and the company has no intention of moving its share listing to the US.
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