AstraZeneca has struck a £13billion deal with a Chinese drug giant, days before shares in the British group start trading on the stock market in New York.
Having outlined an £11billion investment programme in China on Thursday, AstraZeneca yesterday announced a tie-up with CSPC Pharmaceutical Group to ramp up development of weight-loss and diabetes drugs.
Under the deal, the FTSE 100 group will have the exclusive global rights, outside China, to CSPC’s once-a-month jab that is about to start early-stage clinical trials.
The agreement covers three further weight-loss drugs currently in development.
The deal is a boost for AstraZeneca as it seeks to muscle into the fast-growing market for fat jabs and diabetes drugs, until now dominated by Eli Lilly’s blockbuster brand Mounjaro and Novo Nordisk’s Ozempic and Wegovy.
AstraZeneca is preparing for its shares to start trading in New York on Monday on an equal footing with those in London.
Exclusive: Under the deal, AstraZeneca will have the global rights, outside China, to CSPC’s once-a-month jab that is about to start early-stage clinical trials
Until now, US investors have only been able to trade so-called American depositary receipts (ADRs) on the Nasdaq.
The move onto the New York Stock Exchange comes as analysts at Wall Street bank Citi named AstraZeneca their ‘top pick’ among European pharmaceutical firms, slapping a ‘buy’ rating on the stock and setting a target price of £170 per share.
AstraZeneca shares last night closed up 1 per cent, or 140p, at 13,600p – suggesting Citi expects the stock to gain a further 25 per cent to give the firm a value of more than £260billion. It is valued at £211billion.
The beefed-up listing in New York and investments in China come after AstraZeneca last year put plans to invest £200m at a research site in Cambridge on hold and scrapped a £450m expansion of a vaccine plant in Liverpool.
Under the deal with CSPC, AstraZeneca will pay the Chinese firm £870m upfront, with up to a further £12.6billion if development and sales milestones are met.
Dan Coatsworth, head of markets at AJ Bell, said: ‘Many people have called weight-loss drugs the biggest opportunity in the healthcare sector for decades.
‘AstraZeneca is a giant in the world of medicines, and it makes sense for it to turn up the dial on weight-loss drug developments.’
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