AstraZeneca’s chief executive claims that Britain’s uncompetitive fiscal policies have forced it to change its plans to invest $360 million in a new manufacturing plant in the Republic of Ireland.
Sir Pascal Soriot stated that the drug group wanted to build a new, “state-of the-art” facility near its sites in the northwest of England. But instead they made an investment commitment to Ireland “because the Irish tax rate was discouraging.”
Soriot, 63 years old, stated that “you need an environment which gives you good returns and incentivizes you to invest.”
The company’s full-year results were strong and there are growing concerns about the UK’s life sciences sector. AstraZeneca’s UK president Tom Keith-Roach has warned that Britain is losing investment from AstraZeneca in more competitive countries. Keith-Roach stated that AstraZeneca has not made any new research and development capital investment in the UK since 2021, and that the country’s wider R&D spending could be at risk.
AstraZeneca, as well as the wider pharmaceutical industry, are concerned about a “wildly out-of-line” NHS-branded medicines sales levie.
Jeremy Hunt, chancellor, highlighted life sciences as one of the five most important sectors in Britain last month and called for more investment in the UK. This week saw a restructuring of government departments, which included the creation of a new department for science and innovation. AstraZeneca stated that the industry would not benefit from this alone.
Soriot stated that Britain’s research infrastructure was among the most advanced in the world. However, he said, “but if your goal is to have a life science sector, you need more than just research.” Soriot stated that green energy was essential to encourage investment in clinical research, statisticians, regulatory specialists, manufacturing, and support functions. However, the tax is “unfortunately going up”. The corporation tax rate will rise from 19% to 25% in April.
Soriot stated, “And you have to be sure that the products you’re creating are going to benefit patients.” You can do research, but not develop here. Instead, you go to countries where your patients have access and the price is affordable.
Industry lobbyists are pushing for a revision of the sales tax. This rate is expected to reach PS3.3 billion in this year. It is currently 26.5 percent, an increase from PS563million in 2021. Partly due to increased demand from the pandemic. This year, talks with the government are expected to start.
Soriot and Dame Emma Walmsley, chief executive of GSK (AstraZeneca’s London-listed rival), wrote to Rishi Sunak warning that government policies were affecting industry investment decisions.
AstraZeneca, a FTSE 100 company with a market capitalization of around PS174 billion, is a FTSE 100 company. It employs almost 83,000 people worldwide, with nearly 8,000 in the UK.
This warning was issued by the company after it released strong annual results and an optimistic outlook for the year. It sent its shares up 490p or 4.6% to PS112.42, bringing them back to their previous record highs.
The total revenue rose 25 percent to nearly $44.4 billion. This growth was attributed to all therapy areas. ‘s $39 billion acquisition in 2021 of Alexion, an American specialist in rare diseases, boosted the company’s overall performance. The revenue from oncology rose by 20% and that for rare diseases by 10%. Pre-tax profits increased to $2.5 billion, compared with a loss in revenue of $265 millions a year ago.
AstraZeneca said it expected revenue to increase by a “low-to-mid-single-digit percentage” this year, or by a “low double-digit percentage”, excluding Covid-19 medicines.
AstraZeneca was one of the first companies to develop a Covid vaccine and an antibody therapy. But Soriot stated that “as expected, and like all other companies experienced,” the decline in Covid-19 medicines is good news for the entire world. The pandemic’s impact has diminished.
“We intend to initiate more Phase III trials than 30 this year. Ten of these have the potential for peak-year sales exceeding a billion dollars. We are on track for industry-leading revenue growth through 2025, as evidenced by our R&D success in 2022. AstraZeneca has set itself on a path that will deliver at least 15 new drugs before the end the decade.