Investors revolted and the first head to roll was CEO David Brennan, who resigned hours before a shareholders meeting in April 2012. Six months later, AstraZeneca hired Frenchman Pascal Soriot, formerly of Roche, to replace him. That turned out to be a consequential move.

In 2013, US pharma giant Pfizer, smelling blood, approached AstraZeneca about a £58 billion acquisition. AstraZeneca said no, but Pfizer kept trying. The rumor was that Pfizer wanted to avoid US taxes on its foreign earnings, and buying Astra would allow the company to do that while benefiting from the UK’s comparatively low corporate tax rate.

This set off alarm bells in the UK, where politicians threatened to block the merger. Soriot fueled the fire, asking MPs in a memorable hearing before the House of Commons, “What will we tell the person whose father died from lung cancer because one of our medicines was delayed because…our two companies were involved in saving taxes?”

Soriot believed he could turn AstraZeneca around if investors gave him some time. He even staked his personal credibility on it, promising to get to $45 billion in annual sales by 2023. In May 2014, his board rejected Pfizer’s final £69 billion offer. At £55 per share, it was roughly 18% more than Astra’s share price around the time the takeover bid was announced.

This marked a new chapter for AstraZeneca.

2015-2020: Riding on a high

By the mid-to-late 2010s, AstraZeneca still lagged behind its competitors. In 2017, the market got spooked by rumors that Soriot was jumping ship for Israeli drugmaker Teva and a few months later a promising (and expensive) lung cancer drug candidate failed in late-stage trials. Soriot has since called 2017 “the pivotal year” (link in French) for Astra.

Following an internal review, the company decided to concentrate on three key areas: respiratory, oncology, and cardiovascular medicine. In 2019, Soriot announced a major reorganization of AstraZeneca’s R&D and commercial units to focus on biopharmaceuticals and oncology, sparking a string of high-profile departures from the company. But some smart investments, plus the reorganization and a pivot to China started to pay off. In March of that year, Astrazeneca announced a major deal with Japanese firm Daiichi Sankyo, in which it will pay up to $6.9 billion to license a promising new cancer drug.

Then Covid-19 happened. On April 30, 2020, Oxford University announced it would partner with AstraZeneca to develop and distribute Oxford’s coronavirus vaccine candidate. While Astra has a small vaccine pipeline, Emma-Lou Montgomery, an investment analyst at Fidelity International, wasn’t alone in calling it “an interesting choice.” Rival firm GlaxoSmithKline, she writes, “the world’s biggest vaccine manufacturer by sales, would have probably been the more obvious partner.”

Early results showed an immune response and low adverse effects in adults. But the project was paused in September when a participant developed an inflammation of the spinal cord. Trials in the UK, Brazil, and South Africa restarted pretty quickly, but the US Food and Drug Administration suspended AstraZeneca’s US trial for six weeks pending an investigation. It gave it the green light to restart late last month, finding that the illness wasn’t related to the vaccine.

Success would certainly boost investor confidence and AstraZeneca’s profile, even though it has pledged not to make a profit from the vaccine “during the course of the pandemic” (take that with a grain of salt). After all, who wouldn’t want to invest in the company that saved the world?

All in on China

AstraZeneca opened its first office in China in 1993, and has since become one of the most active foreign pharma firms in the country, with three offices and two manufacturing plants employing more than 20,000 people. It has brought 40 products to market in China and invested $1 billion there.

China is a tough market for foreign firms to compete in, and that’s been especially true of the healthcare sector. But recently the government has made it easier for multinationals to sell their innovative molecules there—albeit at a discount. Last year, China’s national health body green-lit one of AstraZeneca’s drugs for reimbursement, but Bloomberg reported it was only after the company agreed to cut the price by 61% (not such a bad deal when measured against China’s potential market of 1.4 billion people.)

That’s why AstraZeneca is betting big—relative to its size—on China and its healthcare industry. In 2018 it partnered with Chinese tech giants Alibaba and Tencent to target counterfeit medicines and develop “smart health” services. The company is also looking to invest in local healthcare companies by partnering with China International Capital Corporation to launch a $1 billion fund. It recently committed to building a new artificial intelligence research facility in Shanghai. And it’s even dipping its toes in herbal supplements.

AstraZeneca now brings in as much profit from China as it does Europe, and it will soon be more, according to Soriot, who’s very bullish on the country—for good reason. China is the El Dorado of Pharma; it’s got a massive aging population and an emerging middle class demanding the best drugs money can buy. The company’s high-performing drugs there include cancer drugs Tagrisso, Lynparza, and Imfinzi; diabetes treatment Onglyza; and asthma inhaler Pulmicort.

But if it was that easy to strike gold in China, everyone would do it. Foreign firms still remember when Chinese authorities fined GlaxoSmithKline nearly $500 million in 2014 for bribing doctors and officials and laundering the money through travel agencies. Since then many firms have pared back their China operations. As David Zweig, emeritus professor at the Hong Kong University of Science and Technology, put it at the time, “everyone else pays bribes. Glaxo just got caught.”

AstraZeneca has already gotten into trouble because of its activities in China. In 2016 it paid the US a fine of $5.5 million for allegedly violating the Foreign Corrupt Practices Act (pdf), notably by bribing officials and writing off the kickbacks with shady accounting. (Nor is that AstraZeneca’s only brush with US authorities.)

But Soriot doesn’t seem worried about these hiccups, or the trade war between Washington and Beijing. In an interview with French outlet Les Echos (link in French), he said that “the positive aspect of the trade war with the United States is that China is opening up to the world.” And, by extension, to AstraZeneca.

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