AstraZeneca says potential US tariffs manageable, faces another China fine

AstraZeneca expects only limited impact from potential U.S. tariffs on pharmaceutical imports, the drugmaker said on Tuesday, asserting it would maintain its 2025 forecasts if the levies end up being in line with other sectors.
The tariffs and their erratic rollout by President Donald Trump have heightened fears of global supply chain disruptions, roiling industries that are heavily focused on the United States, the world's biggest consumer market.
However, AstraZeneca Chief Executive Pascal Soriot said in a call with journalists that their shock would be something the company could absorb.
'If tariffs were implemented in the range we have seen recently in other industries on medicines imported from Europe to the U.S., we would remain within the guidance range we indicated for 2025,' he said.
Most of the Anglo-Swedish drugmaker's sales come from drugs manufactured either domestically or in Europe, and the company was already shifting some additional manufacturing to U.S. sites, he added.
'It's really something that we are going to manage,' he added, noting that only minor volumes of U.S.-made drugs are exported to China, shielding the impact of tariffs in the country's second-biggest market after the United States.
Shares in AstraZeneca fell as much as 5.4% before paring losses to trade down 3.2% at about 102 pounds by 0929 GMT, underperforming London's blue-chip FTSE 100, which rose 0.2%.
AstraZeneca investing $2.5bn in China as drugmaker seeks to recover from scandals
Soriot spoke after the company reported total revenue of $13.6 billion for the first quarter, below company-compiled analysts' expectations of $13.8 billion.
Sales of key oncology drugs missed forecasts, impacted partly by changes in U.S. Medicare price negotiations and the transition of rare disease patients from Soliris to newer drug Ultomiris, analysts said.
The company also said it could face a new fine in China of up to $8 million over suspected unpaid taxes related to imports of breast cancer drug Enhertu.
The update on investigations in China comes after it announced in February that it could face a fine of up to $4.5 million over imports of cancer drugs Imfinzi and Imjudo.
Still, core earnings per share of $2.49 beat consensus estimates of $2.27. China accounted for about 12% of overall sales in 2024, while the United States made up 43%.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Business Recorder

44 minutes ago

• Business Recorder

Sterling at five-week low against dollar as markets mull Middle East risk

LONDON: The pound fell against the dollar on Monday with the greenback benefiting from safe-haven demand as investors assessed the risk of an Iranian response to U.S. attacks on its nuclear sites. By 1054 GMT the pound was down 0.5% versus the dollar at $1.33795, its lowest level since May 20. British Prime Minister Keir Starmer spoke to U.S. President Donald Trump on Sunday, his office said. Starmer also urged Iran to return to the negotiating table. Market focus is firmly on the price of oil, which earlier spiked as much as 5.7% and was last up 0.5%. 'Ultimately the pound is exposed…Pro-cyclical currencies have a negative sensitivity to oil prices,' said Francesco Pesole, FX strategist at ING. Elsewhere, UK flash PMIs hit screens showing business activity expanded modestly in June, but the data barely moved the needle on the pound. The S&P Global UK Composite Purchasing Managers' Index rose to 50.7 from 50.3 in May - edging further above the 50.0 growth threshold. Sterling gain slightly against dollar 'Overall, the PMIs suggest that the biggest hit to the economy was in April and things are now starting to recover. That said, the subdued level of the PMIs is still pointing to near stagnation,' Thomas Pugh, chief economist at RSM UK, wrote in a note. The Bank of England held interest rates at 4.25% last Thursday as expected but flagged a weaker labour market and the risk of higher energy prices as conflict in the Middle East escalated. Despite the hold, market watchers took a doveish hint from the 6-3 vote split in favour of keeping rates on hold, with three MPC members in favour of a cut, a factor that is still playing a role according to ING's Pesole. 'Markets are still tending towards the doveish side for the pound curve,' he said. As of Monday, 58% of traders were betting on a 25-bps rate cut at the BoE's next session in August, with 42% betting on no change.

Business Recorder

2 hours ago

• Business Recorder

Amazon's premium beauty push may be a buffer against Trump's tariffs

NEW YORK: Amazon's defense against tariffs for its coming Prime Day? Luxury goods. President Donald Trump's tariffs have spurred some Amazon sellers who source products from China and other heavily tariffed countries to bow out of the company's Prime Day, one of its biggest sales events of the year, to protect their margins. The Seattle-based e-commerce company is hoping that recent sales growth in high-margin cosmetics in its Amazon Premium Beauty category will cushion the impact of tariffs on Prime Day sales revenue and consumer sentiment. 'Beauty has become, in the past few years, more of an essential item in consumers' minds,' even in hard financial times, said Anna Mayo, vice president of NielsenIQ's Beauty Vertical unit. Amazon Premium Beauty was initially shunned by luxury cosmetic players who feared the platform would harm their image when it was launched in 2013. But those days are gone. Now, the online retailer is promoting products from top beauty and haircare brands including Estee Lauder's Clinique, Olaplex and L'Oreal's Urban Decay. During last year's Prime Day event, U.S. shoppers spent $14.2 billion, up 11% year-over-year, according to Adobe Analytics. Top cosmetics brands can charge high prices and often do not offer steep discounts on Prime Day compared with electronics, apparel and home goods. This year, Adobe Analytics expects beauty product discounts to have 'milder' discounts of 10% to 17%, whereas electronics deals are expected to range from 14% to 22% off, said Vivek Pandya, lead analyst at Adobe Digital Insights. That, coupled with the ease of shipping small packages of most products, means that Amazon Premium Beauty merchandise has higher margins than other products sold on Prime Day. Amazon 'doesn't make a huge margin in most of the categories of stuff that it sells online,' said Renee Parker, co-founder of consultancy firm Invinci and a former Amazon executive. 'They are making a lot of money on premium beauty products because … (they're) small and expensive, and you can ship a ton of them.' Vitamins and supplements are successful for similar reasons. Amazon Premium Beauty sales gathered steam after the e-commerce giant began clamping down on counterfeits and top beauty companies needed new ways to reach customers, said Alfonso Emanuele de Leon, a beauty industry veteran and partner at FA Hong Kong Consultancy. Amazon was previously viewed as a pariah by luxury beauty brands because of the cheap merchandise on the website, but is no longer perceived that way, said Emanuele de Leon. 'Huge acceleration' Sales at Amazon Premium Beauty rose by nearly 20% to $15 billion between April 2024 and April 2025, outpacing the 14% growth for beauty products outside the specialized e-commerce store, according to NielsenIQ. It also outpaced the year-over-year growth of 5% for online store sales in the first quarter, NielsenIQ said. L'Oreal Chief Executive Nicolas Hieronimus said during the company's annual meeting in April that having products on Amazon led to a 'huge acceleration' in expanding its U.S. market share. Estee Lauder has launched 11 brands on Amazon's U.S. site since March 2024. More than 75% of Estee's finished goods sold in the U.S. originate from the U.S. or Canada and are therefore protected by existing trade agreements, Roberto Canevari, Estee Lauder's global supply chain executive vice president, said at a conference in June. Lauren Gordon, vice president of Amazon at Estee Lauder, said that Prime Day and Amazon's other 'high-traffic shopping moments' give the company a chance to 'attract both new and existing customers.' Melis del Rey, general manager for health and beauty for Amazon U.S. stores, said her team has been 'very proactive' in working with premium brands to determine tariff impacts. 'At a high level, most of the premium brands' sourcing strategies are local, and therefore, the (tariff) impact is less imminent,' del Rey said. Amazon Premium Beauty is an invite-only program for brands shipped and sold by Amazon and third-party sellers. The department has grown to more than 10,000 products, and brands' eligibility is determined on a case-by-case basis. Brands like Dyson and Estee Lauder's Aveda pay an extra 15% commission to Amazon for every website sale, and the third-party seller approach allows major brands to control pricing and inventory. Adding prestige brands including Unilever's Dermalogica has helped the company compete with beauty retailers Ulta Beauty and Sephora, which is owned by LVMH and also attract older, higher-income shoppers at a time when TikTok Shop is scooping up younger customers.

Business Recorder

3 hours ago

• Business Recorder

Oil prices stable as investors await Iranian response to US strikes

LONDON: Oil prices jumped on Monday to their highest since January as the United States' weekend move to join Israel in attacking Iran's nuclear facilities stoked supply concerns. Brent crude futures were up just 8 cents to $77.09 a barrel as of 0904 GMT. US West Texas Intermediate crude rose by 3 cents to $73.87. Price volatility continued in Monday's session. Both contracts touched fresh five-month highs earlier in the session of $81.40 and $78.40 respectively, before giving up their gains and even turning negative during the European morning session. Brent has risen around 11% since the conflict began on June 13, while WTI has gained approximately 9%. Prices flattened out on Monday as investors weighed the geopolitical risk premium in oil markets without any impact on supply yet from the Middle Eastern crisis. 'The geopolitical risk premium is fading, as so far there has been no supply disruptions. But as it's unclear how the conflict might evolve, market participants are likely to maintain a risk premium for now. So prices are set to stay volatile in the near term,' UBS analyst Giovanni Staunovo said. Prices rose at the open after US President Donald Trump said he had 'obliterated' Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Iran is OPEC's third-largest crude producer. Iran said on Monday that the US attack on its nuclear sites expanded the range of legitimate targets for its armed forces and called US President Donald Trump a 'gambler' for joining Israel's military campaign against the Islamic Republic. Oil prices settle lower The geopolitical risk premium includes fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows. 'All eyes remain on the Strait of Hormuz … and whether Iran will seek to disrupt tanker traffic,' Saxo Bank analyst Ole Hansen said. Prices could spike in the short term even without full-scale disruption, if the threat of interference alone is enough to delay shipments through the Strait, Hansen added. Goldman Sachs said in a Sunday report that Brent could briefly peak at $110 per barrel if oil flows through the critical waterway were halved for a month, and remain down by 10% for the following 11 months. The bank still assumed no significant disruption to oil and natural gas supply, citing global incentives to try to prevent a sustained and very large disruption. Given the Strait of Hormuz is indispensable for Iran's own oil exports, which are a vital source of its national revenues, a sustained closure would inflict severe economic damage on Iran itself, making it a double-edged sword, said Sugandha Sachdeva, from research firm SS WealthStreet.