Increases U.S. production intensity in response to potential tariffs from AstraZeneca
Rewritten Article:
AstraZeneca cranks up its US manufacturing muscle as Trump ponders fresh tariffs on drug imports. The Prez has repeatedly threatened to levy tariffs on European pharmaceutical imports, with reports suggesting they could match the 25% faced by steel, aluminum, and auto importers.
This sure sounds like a blow for European drug companies, eh? But not for AstraZeneca, who makes around 40% of its sales in the US. They're taking this as an opportunity to invest even more, speculating about $50% billion in capital expenditures (capex) over the next year - more than double what was shelled out last year!
What for, you ask? They're planning to enhance manufacturing capacity and invest further in tech. Currently, they have 11 manufacturing sites in the US, with one more due to open in Rockville, Maryland next month. This ain't all — they're also backing their ongoing commitment to growing in the US and expect a broad source of revenue and global manufacturing footprint to keep their game strong.
As for ol' Trump's tariffs, AstraZeneca boss, Pascal Soriot, claims they'll maintain their 2025 sales guidance, even if the US slaps a 25% tariff on pharma products made in the EU. Gutsy, huh?
Sheena Berry, healthcare analyst from Quilter Cheviot, acknowledges Trump's tariff threats are still looming large. Yet, she's unsure how much of a hit AstraZeneca might take. Perhaps the drugmaker's US investments and new jobs could win it some grace, though just how much, remains to be seen.
AstraZeneca shared a mixed bag of news. They reported a 10% revenue boost for the first three months of 2025, thanks to robust sales of their cancer drugs. But they're eyeing a whopping $80 billion in annual revenues from 2030 — a target Soriot claims they're progressing towards quite well. Still, the shares took a hit, dipping 2.7% to 10,244p by the afternoon, down almost 15% over the past 12 months.
Adam Vettese, market analyst at eToro, thinks sales may have missed estimates, despite some success in oncology with Enhertu and Tagrisso. He added that the revenue shortfall could have dampened investor enthusiasm. Despite the guidance remaining the same, some investors may have expected grander ambition, especially considering AstraZeneca's multiple upward adjustments in 2024.
Is AstraZeneca's U.S. expansion a strategic move to beef up its supply chain and stay competitive in the midst of trade tensions? Only time will tell. As for the investors, they'll continue to keep an eye on the stock, hoping for solid growth and breathtaking returns!
- AstraZeneca, despite potential tariffs on drug imports, is currently increasing its investments in the US, planning to allocate over $50% billion in capital expenditures (capex) within the next year.
- Given its significant sales in the US market, AstraZeneca views potential tariffs as an opportunity to further invest in technology and enhance its manufacturing capacity.
- In the US, AstraZeneca currently operates 11 manufacturing sites and is set to open another in Rockville, Maryland next month.
- Although Trump's tariffs continue to pose a threat, analyst Sheena Berry suggests that AstraZeneca's US investments and new jobs may provide some protection.
- AstraZeneca aims to achieve $80 billion in annual revenues by 2030, a goal that the company's CEO, Pascal Soriot, claims they are progressing towards quite well.
