Three years ago Pascal Soriot received the ultimate accolade for turning aroundAstraZeneca– a knighthood for services to UK life sciences and leadership in the global response to the Covid pandemic.
Soriot, who fended off atakeover from the US predator Pfizer in 2014, has grown AstraZeneca into Britain’s most valuable company, thanks to an astute eye for promising medicines and developing one of the first Covid vaccines.
Now the 66-year-oldtrained equine vetis looking at his own US adventure. He hasreportedlydiscussedmoving AstraZeneca’s stock market listing, and perhaps even its corporate base, to the US.
The company declined to comment on the bombshell report, but it sent shockwaves through Britain’s scientific community. It also threatens to topple a key pillar of the government’s fledgling industrial strategy and deprive the London market of its biggest star.
The FTSE 100 company’s share price rose by 2.8% on Tuesday, with most of the gains coming after the news, but dipped by 0.1% on Wednesday, giving the company a value of nearly £161bn, ahead of Shell at £154bn.
Soriot,the UK’s best-paid chief executiveof a listed company, has made no secret of his growing frustration with the UK authorities in recent months. AstraZeneca’s breast cancer drug Enhertu has not been approved for use on the NHS in England and Wales even thoughthe company offered a low price, he claimed. The medication is available in Scotland and most other European countries.
Another flashpoint came in late January, when the pharma group ditched its planned£450m investment to turn its factory in Spekenear Liverpool into a major vaccine hub after failing to to agree with ministers on the size of state support.
But Soriot’s – and other pharma bosses’ – biggest gripes are with the wider regulatory and commercial environment in the UK and the rest of Europe. They have called for more healthcare spending and a single list price for medicines across Europe, similar to the US, plus discounts for specific countries linked to their GDP and wealth.
The UK’s spending on new medicines does not compare well internationally, as Soriot has noted – amounting to 7% of healthcare costs versus 10 to 11% in many other European countries and 13 to 15% in the US. It also takes much longer to run a clinical trial.
“Companies will go where they feel welcome because access to our medicines is good, innovation is rewarded. And of course, tax policies also play a role in all those decisions,” he has said. Otherwise,well-paid advanced manufacturing and research jobs could move to the USin the long run, he said in April.
Soriot, who grew up in the Parisian banlieues, has reiterated the company’s commitment to the UK. It has poured more than £1bn into a new global headquarters and research centre in Cambridge in recent years.
This was dwarfed, however, by its recent$3.5bn (£2.5bn) investment in US research and manufacturing, including turning its Kendall Square labs in Cambridge, Massachusetts, into a state-of-the art research hub – a wise move before Donald Trump’s threatened tariffs on the pharmaceutical sector.
The suggestion that AstraZeneca could up sticks comes at difficult time for Keir Starmer’s government, which is on the back foot on many fronts. Just this week, it had to postpone publication of its long-awaited life sciences strategy because negotiations between ministers and the pharmaceutical industry about drug pricing have stalled.
The 10-year plan will be coming shortly, according to the Department for Science, Innovation andTechnology.
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Whether Soriot is seriously considering a move stateside, and manages to win over the board and shareholders, is unclear. But “the mere talk of the biggest listed company leaving London will get ministers sitting up and listening”, said the Hargreaves Lansdown analyst Susannah Streeter.
The chancellor’s Mansion House speech later this month, when Rachel Reeves is expected to outline ways to revitalise London as a financial hub, will be closely watched for evidence of concrete plans to increase liquidity and make it easier for firms to list.
“At a time when the government and regulators are laying out plans to make the City more attractive, if this move being mulled by AstraZeneca were to become a reality, it would be another big setback for London,” said Streeter.
“The more company boards are reported to be discussing such a strategy, the more likely it will be that other firms will embark on similar discussions to assess whether moving main listings could help boost valuations.”
It would be the biggest blow yet to theLondon Stock Exchange, which has lost a string of big names in recent months.
Streeter said losing such a big player on the London market would make it even harder to lure more firms to list on the LSE.
For Labour’s creaking government, it is a headache ministers could do without.