HQ in Cambridge, quoted in New York. Heartbeat in China? The AstraZeneca conundrum!
Currently the most valuable company listed on London's FTSE 100 index, AstraZeneca is considering quitting the UK exchange according to global media sources, citing private remarks from CEO Pascal Soriot.
Certainly Nasdaq, the US tech and biotech market where AZ stock is listed, has been considerably kinder to shareholders of the business than the LSE where performances for the best stocks have been up and down like a clown's trousers in recent times.
Other major clues to a shift in corporate emphasis could be the recent arrival of Arm's US-based CEO Rene Haas on the AstraZeneca advisory board and the increased investment of billions of dollars in China.
Business Weekly understands that while AstraZeneca remains committed to the UK in terms of investing in its Cambridge headquarters, it is less enamoured with the way its withdrawal from major expansion in the North of England has been portrayed. Financial reasons were quoted when it withdrew from a multi-million pound project to produce vaccines from a new facility on Merseyside but a senior strategic source told me recently that money was not an issue.
The source told me that PM Rishi Sunak's knee-jerk decision to call an early General Election last summer gave AstraZeneca the real headache. Sunak's rush to the political gallows left AZ insufficient time to get the professional teams involved that could have handled planning of the Speke facility in a timely and efficient manner. Money didn't enter into it, I was assured.
There is also a perception among senior teams at the company that AstraZeneca is not properly appreciated and valued in the UK despite its fabulous collaboration programmes steered from Cambridge Biomedical Campus and AZ's clear value to the UK economy.
As The Guardian recently reported, Pascal Soriot has overseen the market value of AstraZeneca more than tripling since he took over in October 2012. The company has overtaken oil company Shell – also seen as a contender for a move to the US – and HSBC, a bank, with a market value of £157 billion, the medium reports.
Business Weekly can toss in yet another reason why pulling out of the London Stock Exchange would make sense for the business. Its share price in the US has fallen just over seven per cent in the last 12 months; it has dropped 14 per cent in London. More to the point, over the last five years its US stock has risen by $17.66 (almost 33 per cent) during which time it has lifted only 22.85 per cent in the UK. Financially it looks a no-brainer. Stockholm, where AZ is also quoted, has seen a more than 17 per cent fall in the company’s share price in the last 12 months but loyalty to the co-birthplace of the original businesss should just about preserve its quoted status in the Swedish capital.
Any AZ decision to shift stockmarket focus and domicile from Britain to America would be a shattering blow to the UK's growth ambitions. The impact of such a move on Cambridge's Europe-leading life science cluster could also be damaging. Certainly, the rejection of AstraZeneca’s breast cancer drug Enhertu for use in the NHS on cost grounds - reported intensively in better sections of the UK media - has hardly soothed any savage breasts within AZ.
Two moves by AstraZeneca recently look informative in the wider debate - the multibillion dollar investments in research facilities and new drug development in China and the appointment of an American CEO to what looks increasingly like a TechBio-biased AZ board.
On the positive side for the UK – maybe the only plus – Donald Trump's impending decision on whether to hammer pharmaceutical imports into the US with prohibitive tariffs may yet swing the pendulum back in favour to this side of the Pond if the President decides on lucre ahead of logic. Don't watch this space - watch activity and trends on the respective stockmarkets.
