(Bloomberg) — AstraZeneca Plc shares plunged in London, erasing about £14 billion ($18 billion) of market value, amid escalating concerns over a Chinese probe into the UK drugmaker.
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Traders cited a report from the Yicai news service released earlier in the day, with the stock’s losses snowballing during afternoon trading. AstraZeneca said it doesn’t comment on “speculative media reports including those related to ongoing investigations in China.” The company said it will “fully cooperate with Chinese authorities” if requested, in a statement.
The shares closed down 8.4%, the steepest one-day decline since March 2020. That took the stock to its lowest since March.
The probe has created an overhang on the stock, but the selloff “seems overdone” and a case of sell first, ask questions later, BMO Capital Markets’ Etzer Darout said in a note.
Astra’s local president Leon Wang is under investigation and is cooperating with authorities, the drugmaker has said. Bloomberg has previously reported that the investigation is focused on aggressive sales tactics used for at least two of its oncology drugs, the lung cancer treatment Tagrisso and the immunotherapy Imjudo.
The inclusion of Wang in the probe was seen as a significant escalation of the investigation and as a sign that Beijing is widening its scrutiny of Astra’s operations in mainland China. The Yicai report suggests that the investigation has broadened further.
Astra generated about 13% of its sales in China in 2023.
Drugmakers, including Astra, have in the past been hit by anti-corruption crackdowns in China. In 2014, GSK Plc was fined £297 million and imposed a suspended prison sentence on an executive for bribing doctors.
–With assistance from Lisa Pham.
(Updates with AstraZeneca comment in paragraph two)
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