The boss of Britain’s biggest drugmaker has said that the UK and the rest of Europe are falling behind China and the US in the creation of biotech firms and clinical trials of new medicines.
Pascal Soriot, chief executive of AstraZeneca, said that while China had seen an “explosion of biotech companies”, and a “rapid expansion of clinical trials” that puts it ahead of the US, the UK and EU had posted declines.
Although the UK is great for science research at universities and in commercial laboratories, he argued that “if you want to build a thriving life sciences sector … you need more than research and discovery science”.
“You need an environment that provides the right incentives: the right tax environment and the right environment to conduct clinical trials, which has been more difficult recently – for good reasons: doctors and nurses are working very hard to deal with the flow of patients,” Soriot said, referring to the growing waiting lists for treatment since the pandemic.
The AstraZeneca boss said its conversations with the UK government had been constructive and urged ministers “to keep an eye on the long term”. The industry is locked in negotiations with the government over the soaring rebates that it pays to the NHS on medicine sales.
“We have some of the lowest prices in Europe and the UK,” he said. “When you add the 26.5% rebate, it becomes rapidly unattractive for companies to operate in this environment and certainly very unattractive to invest. We are hoping to achieve a more favourable environment from a pricing and investment viewpoint.”
Soriot was also critical of the EU’s policies and its overhaul of pharmaceutical legislation, saying that if Europe was aiming to catch up, it would not do so “with the kind of economic policies the European Commission is thinking about”.
His remarks came as AstraZeneca reported a jump in quarterly profits after a revaluation of acquired medicines and a surge in revenues from cancer, cardio-vascular and diabetes medicines, while sales of Covid treatments fell sharply.
Shares in the company rose by 2.3% in early trading and are up by 22% over the past six months, after recent positive clinical results for its cancer treatments. They include a combination of Lynparza and Imfinzi to treat ovarian cancer, Imfinzi for lung cancer and Enhertu across several cancers.
AstraZeneca, which was the target of a hostile takeover bid from US rival Pfizer in 2014, recently overtook the Viagra maker in terms of market value. It is worth £187bn and is the largest company listed in London; Pfizer is valued at $218bn (£174m). Soriot has completely rebuilt AstraZeneca’s pipeline of new drugs in recent years.
Revenues fell by 4% year-on-year to $10.9bn between January and March because of a $1.5bn decline from Covid treatments. AstraZeneca expects “minimal revenue” from its Covid jab this year. Excluding currency moves, revenues were flat.
Total revenues excluding Covid treatments rose by 10%, with cancer sales up by 19% and revenues for cardio-vascular, diabetes and kidney drugs rising by 22%.
Like several rival Covid treatments, the firm’s antibody drug Evusheld lost its emergency authorisation in the US in January because it does not work against the now-dominant strain of the virus. AstraZeneca is working on a second-generation treatment that is in late-stage trials, and hopes to have it ready by the end of the year.
Pretax profits quadrupled to $2.3bn in the quarter after an inventory revaluation of rare diseases treatments acquired through the 2021 purchase of Alexion. Core earnings a share rose by 1% to $1.92.
AstraZeneca highlighted a strong performance in China, and forecasts big commercial opportunities in the country, where it is the biggest pharmaceutical company. It has invested more than $1bn in R&D in China.
