ASTRAZENECA SHARES TUMBLE – Company’s China unit is reported to be linked to insurance fraud
AstraZeneca shares tumbled, wiping £14bn off the value of the drug maker, after a report that dozens of the company’s senior executives at its China unit could be implicated in an insurance fraud case in the country’s pharmaceutical sector.
Also putting pressure on the share price, early data on AstraZeneca’s experimental weight loss pill released earlier this week was described as “somewhat underwhelming” by analysts at Deutsche Bank, who reiterated their “sell” rating on the stock. Shares in the FTSE 100 company fell by over 8%, taking the market value down to about £156bn.
Last week, AstraZeneca announced that its China president, Leon Wang, was standing back because he is under investigation by Chinese authorities. Wang, who was also the company’s executive Vice President for international markets is said to be cooperating with an ongoing investigation by Chinese authorities. Due to this, its China business is now being run by Michael Lai, the general manager.
Dozens of AstraZeneca executives in China are also being investigated by Chinese authorities, and the inquiry has expanded to include the public security bureau, the Supervisory Commission, and other organisations.
In September, five current and former AstraZeneca employees were detained by Chinese police as part of an investigation into possible breaches related to data privacy and importing unlicensed medications. It is now understood that eight to nine current or former staff were detained.
The detentions took place earlier this summer and targeted Chinese citizens who marketed cancer drugs for the oncology division of the drugmaker.
