Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
AstraZeneca has overhauled its local management in China in a bid to move on from recent scandals and revive sales after the arrest of its president in the country.
The FTSE 100 group has appointed new executives to lead its Chinese oncology business, which has come under intense scrutiny over two incidents including alleged illegal sales practices for cancer drugs.
The scandal ensnared the China president Leon Wang, who the company announced in November had been detained, along with several other employees. AstraZeneca shed more than £15bn off its market capitalisation after reports about an investigation by local authorities.
Alex Lin is replacing Michael Lai as country general manager, according to two people with direct knowledge of the matter. Lai was one of Wang’s senior managers. Lai has moved to the US to be in charge of a key cancer drug for AstraZeneca and report to the head of oncology, according to people close to the company. Lai did not respond to a request to comment.
The drugmaker has promoted Mary Guan, who was previously at its Chinese general medicines unit, to lead oncology in China as part of a move to deal with the department, according to one person familiar with the matter.
AstraZeneca declined to comment. It has previously said that it would fully co-operate with the Chinese authorities, and also that Wang was co-operating with the investigation.
The drugmaker — the largest foreign pharmaceutical group in China by revenues in 2023 — is trying reboot its business in China where insiders report they are expecting a dip in sales due to hospitals being unwilling to deal with the company. The new management will be pivotal to putting AstraZeneca back on course in what was once its most important growth market. China contributed 13 per cent of global sales in 2023.
The company wants to “show that there has been a clean cut with the old management,” said one person familiar with its position.
Another person said there are “a lot of changes expected in the China Leadership team but they have not yet been announced”.
AstraZeneca executive Iskra Reic was appointed in early December to take over from Wang, who also ran the international region that includes other emerging markets.
“AstraZeneca has distanced itself from Leon and the other affected employees,” said one person close to the company.
They added that Wang had been under “a lot of pressure to rejuvenate growth” after China revenues declined in 2022.
AstraZeneca leadership has received no formal explanation from Chinese authorities and has not been able to contact Wang, according to people familiar with the matter. The company has concluded that the probe is about the alleged illegal importation of cancer drug Imjudo through Hong Kong to China — where the drug is not approved — because authorities also detained AstraZeneca’s former head of oncology, Yin Min, who was in charge of the department during the alleged offences.
Separately, scores of salespeople were convicted over the past two years for medical insurance fraud after the courts found they tampered with genetic test results to ensure lung cancer patients qualified for their drug Tagrisso under a national reimbursement scheme.
The drugmaker is pinning much of its hopes in China on its breast cancer drug Enhertu, which authorities recently said would be included in the state health insurance scheme.
