AstraZeneca CEO Soriot on Pharmaceuticals in China

Obviously, the pharmaceutical business has benefited greatly from China's rise. You have a number of different deals in this market, but again, also the flags of protectionism and national security are rising in the United States, targeting China. How are you navigating this very tenuous situation with the bifurcation, not only of the tech world, but biotech and other areas? Thanks, Steve. It's really a pleasure to be here with you today. You know, we focus simply on science and helping patients get access to medicines they need. In the last number of years, we have brought our medicines to China to help patients, but in the last four or five years, innovation has boomed in China and it has given many opportunities for us, but also other global pharma companies to partner with Chinese biotech companies, take these products and bring them to patients around the world, in Europe, in the U.S., in Japan, everywhere. So, you know, we really focus on making sure we bring patients new medicines. Before we get into some of the geopolitical issues, how fundamental has China become in the global pharmaceutical industry? Well, actually, it's not yet tremendously fundamental, if you want to say it that way, but it is becoming rapidly very important. Certainly, the U.S. will continue to dominate innovation in our sector, there's no question, for quite some time. But I think in the world, the second biggest provider or innovator in pharmaceuticals will be China, especially with new technologies, cell therapy, gene therapy, what we call antibody drug conjugates, oligonucleotides. In the old days, we were bringing small molecules, antibodies, and that's what we did for many, many years. In the last few years, a large number of new technologies have emerged, and that's where the biotech companies here in China have focused. What is going to be the ramification, the biggest ramification of the Biosecure Act in the United States, if it does become law? And essentially, this legislation that's going through Congress would essentially ban Chinese pharmaceuticals from getting federal contracts if they are deemed to be of concern on national security grounds. Does this benefit you, or is this bad for the global pharmaceutical industry? Because it essentially, at the end of the day, will limit access for patients who need particular drugs. Well, you know, I think it is always important to try and facilitate collaboration in science and the exchange of information and the sharing of new data and the sharing of, you know, new inventions. So, I don't think it will necessarily affect us because we are sourcing those products. We are basically developing them. We're going to manufacture them, and so we will manufacture them in China for China and in some countries, but we'll also manufacture them in the U.S. or in Europe for the Western world. So, those will be very, very, you know, segmented activities. The fact that the product was invented here doesn't mean the product is necessarily sourced from China for the entire world. So, that's an important delineation, essentially, because this law could prevent Chinese pharmaceuticals that are developed here from going into the world's largest market, and that is the United States. Yeah, we have very large supply chains, and we are organizing ourselves so that we can actually supply the United States and Europe independently, and that's what we do. And we also are building our presence here in China so we can actually supply Chinese patients independently. So, I think the fact that, again, the fact that a product is invented here doesn't mean it will be manufactured and supplied out of China. What kind of further acquisitions or partnerships do you see in this market? Obviously, you have Gray Cell Biotechnologies, $1.2 billion in CAR-T technologies and therapies for cancer, but also you have some of the weight loss partnership with EcoGene. You have another vaccine partnership, I believe. What was that with the MRNA? Not the MRNA, but the partnership with, I can't remember the name of the company, CanSino as well. You have the MRNA. We have a partnership with CanSino, with CMRNA. Yeah, so what kind of future deals do you have? Well, we have a number of future deals, but before I do that, let me just take your first example, Gray Cell. It's a good example. Gray Cell is involved in cell therapy, and they have tremendous technologies that will help us, and they will play an important role in how we invent and develop new products in cell therapy. Well, we've just announced a large, several hundred million dollars investment in cell therapy manufacturing in Maryland. We will manufacture our cell therapy products in the United States, in Maryland. That really is a good example of what I was saying a bit earlier, the two issues of invention versus development and manufacturing are disconnected in that instance. In the last few months, 12 months or so, we have invested up to $6 billion in seven transactions with various companies. Gray Cell is, of course, an important one, but we're also licensed in an oral glip one for obesity and cardiovascular disease. We have licensed in antibody drug conjugates for cancer, and those products are being developed already. There will be more to come. I'm not saying we're going to spend that much every year. For sure not. There's been a period of time when we could do many of those deals, but certainly we will continue looking at potential partnerships. Minhai was the other company that I was searching for that you announced, obviously, in vaccine partnership. You also had the CanSino one. That was a year and a half or so ago, I believe, for the mRNA for COVID, but that seems to be a back burner issue. How do you see development of vaccines with Chinese partnerships like Minhai, but also CanSino for mRNA beyond just COVID? Minhai is 100% owned subsidiary of BKT, Baokantai, which is a large manufacturer of vaccines in China. Vaccines are really, in our industry, the flow of medicines is usually not impacted by sanctions, except vaccines are a very special place. We saw it during the COVID period. Every region, every country was trying to prioritize their citizens, which you would expect them to do, of course. China is focused on making sure that vaccines manufactured in China are manufactured in China for their people. The partnership we have with Baokantai and Minhai is really targeted at developing vaccines and manufacturing them for the Chinese population. We're also looking at a couple of vaccines they have that we could help them market in some of the developing countries around the world. There had been speculation in the past that perhaps you would think about, or there was speculation that you would think about, spinning off the China business. Is that something you're even thinking about now? Well, we never comment on these kind of issues, as you can imagine. And companies study all sorts of things, and people pick up on all sorts of rumors, but for now, we are very happy with the way we are organized in China, and our focus is, as I said earlier, developing and bringing new medicines to patients here in China and around the world.