ICYMI: AstraZeneca Profit, Revenue Lifted by Cancer Drugs

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1:15Next week on Leaders with me, Francine Lacqua. I speak with Harvard Business School professor Linda Hill about what CEOs need to know to be successful. It really is not about them. It is about the organization. about how to lead in the age of AI. That requires a lot of confidence. And why great leaders embrace conflict. You need to amplify difference. Listen and watch Leaders, the podcast with me, Francine Lacroix, on Bloomberg TV or wherever you get your podcasts. Bloomberg Audio Studios. Podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek. on Bloomberg Radio.

2:00Carol Massar:Well, as you know, tariff talks continuing, as do presidential statements about more manufacturing back here in the United States. The pharmaceutical industry among the latest to be targeted by President Trump, who made comments Monday from Scotland. We'll be announcing our pharmaceuticals sometime in the very near future. We have a very big plan on pharmaceuticals. We want to bring a lot of the pharmaceuticals back to America, you know, the way they should be. We're going to want to be making a lot of them ourselves, all of them in a sense, but you also have a good pharmaceutical business. We'll be dealing with you on pharmaceuticals.

2:35All right.

2:36Carol Massar:That, of course, was President Trump on Monday from Scotland. We've got a great voice on this and really the overall pharma industry, big pharma, a company that reported earnings earlier today. We're talking about AstraZeneca. ADRs of the company, by the way, are rallying more than 4 % in today's session. Great to have with us in studio Pascal Sourio, he is AstraZeneca's chief executive officer, also with us. A member of our editorial team here at Bloomberg knows this company and industry so well as Bloomberg News health reporter Madison Muller. Pascal, by the way, also former CEO of Genentech.

3:06Carol Massar:Thank you. Thank you for joining us. Welcome. Thank you for having me. It's really a pleasure. Thank you. It's a pleasure for us. Big space, a space that's certainly garnered the attention of President Trump. I am curious, you know, in terms of the president talking about more manufacturing in the United States. and I know you guys are making some further investments here. Talk to us about how presidential policy is impacting maybe your business. Yeah, I mean, I think first of all it's, I mean, it's a great question, but first of all it's important to really think about what every country would want to do.

3:36Every country would want to make sure they can secure the health of their citizens. It's a question of national security. So nobody should be surprised that the president wants to reshore manufacturing of pharmaceutical products. I personally have seen this happen since several years, and we decided several years ago to increase our manufacturing footprint in the U.S. So we can actually manufacture medicines for American patients in America. Every country would want to do that, and a big country like America, of course, can afford to do it. You said that you made that decision several years ago.

4:11How much of the$50 billion pledge was planned before the president threatened these tariffs? Well, we've been pursuing this strategy of manufacturing in China for China, in the U.S., for the U.S. since five, six years. And quite frankly, COVID actually showed us we were on the right track because we all saw what happened during COVID. And so we accelerated this movement. And so our$50 billion commitment is a commitment to R &D, but also a commitment to manufacturing. We announced together with the governor of Virginia a multibillion-dollar investment in manufacturing in Virginia. and the governor of Virginia has been incredibly fast with this team, 33 days to reach an agreement.

4:49It's incredible. So we are very happy to be there. We are building a new R &D site in Kendall Square, Cambridge, Massachusetts with 2 ,500 scientists that will be working there. And there's more to come. We are just finishing the build of a cell therapy manufacturing site in Rockville, Maryland. We've expanded in California. So it's a sort of multi-prange effort across many states across the U.S. You know, you've said that Virginia obviously has made it easy to make manufacturing investments there. And North Carolina is pretty similar. Are there other states in the U.S. where you're having these types of good conversations that are, you know, incentivizing businesses like yours to invest?

5:31Well, you know, it's hard for me to point at any state that is better than another. Let me just say that working with you.

5:39Carol Massar:We have no problem. You can tell that. Which states are better than others? You can tell that. We're all from different states. What do you like for New York or New Jersey? Let me just say that a company like ours follows the science. So science is key. And so you need to be able to recruit the right scientists, the right engineers. And in Virginia, you can do this because you have some of the best universities. The other part is dealing with partners in the public sector that understand us, that we trust each other. We can move fast. You know, I always tell people in our company, I talk about AstraZeneca speed, because there's a lot of competition.

6:15We need to move fast. I've learned Virginia speed. The governor has moved so quickly. So this is the kind of thing we want to see, whether it's in America, in a state or in a country. We want speed and we want people to understand how we think. You want speed. You want people to understand how you think. You want to, you said you want to follow the science. There's been criticism that Robert F. Kennedy Jr., the Secretary of Health and Human Services, has not necessarily always followed the science with his comments when it comes to medicine, when it comes to drugs, when it comes to vaccines. How do you look at that and his role there?

6:46Well, you know, I'm not here to actually get involved in political discourses. Let me just say that as a company, science is at the heart of everything we do. The reason we have such a large oncology pipeline in particular and beyond this is because we focused on science for the last 10, 12 years. And America is where science in our industry is happening. And that's why it's so critical to preserve this biosciences leadership the U.S. has globally. China is also becoming a very big source of innovation in our industry. Europe, unfortunately, is falling behind for a variety of reasons. So innovation is happening here.

7:27We need to keep this going. We need to actually continue supporting the leadership. And that's why we invest$50 billion in this country, not only in manufacturing, but also in R &D. What about China?

7:38Carol Massar:I'd love for you to kind of explore that a little bit. What are you investing in and building out in China? And what might surprise our audience about the innovation that's happening in China, especially when it comes to pharmaceuticals? Yeah, I think my great question, I think we need to start with the hypothesis, the assumption that basically the more products or the more innovation exists in the world, the better it is for everybody, for every patient. Because if you're a patient with cancer, the only thing that you care about is to be cured, if you can be cured, right? And so innovation in China has really ramped up very rapidly in the last few years.

8:14China's gone from making generics to Me2s to Me2 +, what we call Me2 +, in our industry, to truly innovate these days. And innovate in new technologies, in cell therapy, in sRNA, in many, many technologies. And so China has become the second engine of innovation, not as big as the U.S. The U.S. remains the leader in that field. But China is ramping up very quickly.

8:40Carol Massar:Is the administration with some of its, some would say, questionable, disruptive policies, there's been a lot of reporting about scientists kind of leaving the United States and going elsewhere. Are you seeing signs of that, whether it's to Europe, to China, to elsewhere? because of not supporting academia and academic universities. Some of that seems to be coming back, but we're curious. It's always difficult to discern what is anecdotal versus what is systemic. What we have seen in China is really a substantial return of scientists from the U.S., but also from the U.K. and elsewhere, but not because of policy, simply because they could see opportunities in China.

9:21There is money, there is capital that can be invested. The Chinese are willing to take risks. The government has facilitated the return of the scientists, and they've come back. But I can tell you that a lot of the scientists we work with in China, in biotech companies that we partner with, many of these people are American. They're American-Chinese. I mean, they go back and forth, back and forth. They are a bridge between the U.S. and China. But they've gone to China because of the opportunities to create a company, be funded, take risks, and hopefully be successful. And by and large, they've been quite successful.

9:57I want to say though that the leadership remains with the US and we need to maintain this, of course, I mean, the country needs to maintain this. There's been some concern though that companies like yours, you know, not necessarily Astra, but big pharmaceutical companies are going to China for most of their biotech deals now. You know, what would you say to that? and what would U.S. biotech companies need to do to sort of attract investments from you all? Well, I mean, the first thing I would say is that if you're a patient, you don't care. What you want is a drug that will help you, right? So when we do a deal with a Chinese company, typically it's because they've discovered a product and they need help to globalize it because discovering something in the lab is one thing.

10:44It doesn't require a huge amount of money. It requires very talented people, but the capital requirement is limited. When you want to develop globally, then you need the scale. You need billions of dollars of investment in phase two, phase three. And you need the scale. You need the people, the expertise. So what we do is we license in the product, and then we develop them globally, and then bring them to patients. So the innovation started in China, but becomes a global medicine for everybody. So it really benefits everybody around the world. I want to go back to sort of a global domestic question, the idea of your listing.

11:22And the Times of London has said that AstraZeneca is looking to move its listing to the U.S. Are you going to do that?

11:29Carol Massar:You just share it with us. Yeah, we don't comment on rumors. And, you know, as a company over the last 10 years, we've had so many rumors. We don't comment on rumors. The other thing I would say really is the United States is really core to our company. By 2030, we expect 50 % of our revenue to come out of the United States. Today, it's 44%, 45%. We grew tremendously in the U.S. in the first half. The U.S. is the country that innovates, I just told you, but also the country that uptake the innovation faster. Patients benefit much faster. So we want to invest here and we want to grow here. And that is a very critical part of our company globally.

12:14Carol Massar:Just curious in terms of growth. You know, we've talked about earnings and your cancer drugs are certainly important in terms of growth. Where do you see kind of the most significant growth trends when it comes to pharmaceuticals? We've spent the last, what is it, Madison, last couple of years talking about the obesity drugs and weight loss drugs. But where do you see it? We talk often about genes and genetic and immunotherapy. where do you see the real growth coming in the next, I don't know, five to ten years? It's a good question, but it's almost all of the above. I mean, of course, managing what I would call central abdominal fat, because everybody talks about obesity.

12:51What really matters is how much fat do you have in your abdomen that surrounds your liver, your pancreas, your heart, and creates inflammation and insulin resistance and all the consequences we can think about, hypertension and all this. So this is really a big epidemic globally. We need to address that and that's what companies like Lilly and Novo are doing today and we want to do this with all agents. But then you know we have development in antibody drug conjugates, we have developments in by specific antibodies for cancer. One of the most exciting new technology is cell therapy because cell therapy will apply to hematology cancers, but also potentially solid tumors and immune diseases.

13:39We have now cases, small numbers, early days, but small cases that young women who suffer from lupus, which is a terrible disease, can be cured. I have a family member who has lupus. Can be cured. I mean, these patients, their life is about taking drugs, steroids, with all the consequences you can imagine their organs are destroyed over time by the disease, they can be cured. You have people with myeloma that can be cured. And so as we progress this technology and make it more usable, more easily usable and more affordable, it can really transform many fields of medicine from oncology to immunology.

14:22I know you've had an amazing tenure at Astra and there's sort of an obsession in the UK with your succession plans and what comes next, you know, not to say that you're leaving anytime soon. We don't want you to go. We don't want you to go. What do you want to accomplish before you end your tenure at Astra? Well, one of the things is that I wanted to do is have a great team and I have a great team. That's it. I have really a fantastic team and that's why nobody should worry about my succession. We have a great team and people who can succeed me. So that's, I think one thing and we need to come we constantly try to improve the team not only my direct reports but their direct reports and the company as a whole two is the second piece is almost unachievable because science is never going to be stopping and the more I progress they get the older I gets the more the more science get exciting and the more excited you I mean there's no better time to be in our industry than now.

15:24There's so much innovation, so much hope to cure diseases that cannot be cured today. And the last thing was really to finish our site in Cambridge, because I keep joking internally. I want to have the two Cambridges, one in Cambridge, UK, one in Cambridge and Boston, but that's for the joke. But the most exciting really is the science and the pursuit of new technologies and new products that will make a difference and and change the future of medicine. So those are the things I want to address, but I have to accept that some point, biology is gonna catch up with me.

16:00Carol Massar:Unless you create a pill that keeps us going. I'm kind of keeping my fingers crossed. Exactly, GLP-1s, right? We think it's gonna be cure-all. Pascal, we really enjoyed this. Thank you so much. Thanks for having me. For all the time, Pascal Sorio, he is AstraZeneca's chief executive officer, and of course, Bloomberg News' own health reporter, Madison Muller. Always a must read on the Bloomberg and at Bloomberg.com.

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