With major projects spanning both manufacturing and R&D now on hold in the U.K., AstraZeneca is once again putting distance between itself and its home country.
In a bid to “harmonize its share listing structure,” AstraZeneca aims to list its shares directly on the New York Stock Exchange (NYSE). The move would replace AZ’s existing U.S. listing of AstraZeneca American Depositary Receipts (ADRs) on the Nasdaq, the company said in a Sept. 29 press release.
ADRs essentially allow investors to gain exposure to foreign stocks without having to navigate ex-U.S. stock markets.
With the move, AstraZeneca says it will continue to post its ordinary shares on the London Stock Exchange (LSE) and Nasdaq Stockholm (STO) as well. Once the U.S. listing upgrade is complete, shareholders will be able to trade AZ stock across the LSE, the STO and the NYSE, the company explained.
Speculation around a potential U.S. listing for AstraZeneca has been swirling for some time, coupled with concerns that the drugmaker has been increasingly pulling away from its native Britain as industry criticism of the country’s biopharma scene intensifies.
However, Monday, AZ clarified that its new listing structure “will not change AstraZeneca’s current status as a U.K. listed, headquartered and tax resident company which will continue to be included in the FTSE 100 index and the OMX Stockholm 30 index.”
“Today we set out our proposed harmonized listing structure which will support our long-term strategy for sustainable growth, while remaining headquartered in the UK and listed in London, Stockholm and New York,” Michel Demaré, chair of AZ’s board of directors, said in a statement.
“Enabling a global listing structure will allow us to reach a broader mix of global investors and will make it even more attractive for all our shareholders to have the opportunity to participate in AstraZeneca’s exciting future.”
Given the U.S.’ massive pool of biopharma companies and investors, AZ figures the new stock exchange strategy will allow it to tap into “the broadest available pool of capital, including in the U.S.,” the company said in its announcement.
While AZ isn’t uprooting itself from the U.K. with the move, the company’s NYSE listing proposal signals an increasing focus on other markets at a time when the U.K. desperately needs to prove its allure to the pharmaceutical industry.
In the past few weeks, AstraZeneca, Merck & Co. and Eli Lilly have each withdrawn or paused major investment projects in the U.K. as criticism of Britain’s investment environment, drug pricing policies and other long-held industry bugbears come to the fore.
Earlier this month, AZ paused a 200 million pound sterling ($269 million) investment at its Cambridge, England, research site, although a company spokesperson declined to provide much of an explanation for the decision, instead suggesting that the move came from a regular review of AZ’s investment needs.
Prior to that, the Cambridge-headquartered company in January pulled the plug on a 450 million-pound-sterling investment at its vaccine production site in Liverpool, citing a reduction in a planned financial contribution from the U.K.’s newly installed Labour government.
“Following protracted discussions with the Government, we are no longer pursuing our planned investment at Speke,” an AZ spokesperson said at the time. “Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous government’s proposal.”
Elsewhere, Merck recently abandoned a roughly $1.31 billion R&D center build-out and future U.K. headquarters in London, noting that it would further discontinue all research operations in the country. Merck blamed the decision on the “challenges of the U.K. not making meaningful progress towards addressing the lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines by successive U.K. governments.”
Lilly’s rationale was much the same when it pushed pause on a Lilly Gateway Labs site in the U.K. in early August. The company’s Gateway labs function as biotech accelerators offering lab space and support for researchers.
"Lilly is not yet in a position to finalize our investment in a Lilly Gateway Labs site, as we are awaiting more clarity around the U.K. life sciences environment," a spokesperson told Fierce Biotech earlier this month.
Separately, several U.S. drugmakers, including Lilly, Bristol Myers Squibb and AbbVie, are attempting to impose U.S. list prices on their U.K. drug launches, in a move seemingly designed to appease President Donald Trump’s “Most Favored Nation” drug pricing proposal for the U.S. In justifying the moves, the trio of companies has generally argued that the U.K. needs to step up and pay its fair share for innovative medicines.
The U.K., like many other countries, pays far less on average for prescription medicines than the U.S. does, and it uses a health technology assessment system to negotiate drug prices for the taxpayer-funded NHS.