AstraZeneca Aims to Restore Trust With New Leadership in China Amid Scandal and Sales Decline

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  • AstraZeneca has promoted Mary Guan, previously from its general medicines unit, to head the oncology division in China
  • AstraZeneca has acknowledged cooperating fully with Chinese authorities but has not received formal explanations for the investigation
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AstraZeneca Plc AZN has restructured its leadership in China following a high-profile scandal involving its former country president, Leon Wang, and other employees.

In September, Chinese authorities detained five current and former employees of AstraZeneca as part of a broader investigation into alleged illegal activities in the pharmaceutical sector.

The investigation focused on potential breaches of data privacy laws and the importation of unlicensed cancer medications.

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A report said that senior executives at AstraZeneca China are embroiled in an insurance fraud case, marking one of the most extensive scandals in China's pharmaceutical industry in recent years.

The pharmaceutical giant aims to restore its reputation and revitalize sales in its critical Chinese market, which has faced challenges from investigations into alleged illegal sales practices.

The overhaul includes new appointments in the oncology division, a key area under scrutiny.

The company has replaced Michael Lai with Alex Lin as country general manager, the Financial Times noted citing sources familiar with the matter.

Lai, a senior manager under Wang, has transitioned to the U.S., where he now oversees a major cancer drug and reports directly to the head of oncology.

Meanwhile, AstraZeneca has promoted Mary Guan, previously from its general medicines unit, to head the oncology division in China. These changes are part of a broader effort to signal a departure from the past leadership.

AstraZeneca has acknowledged cooperating fully with Chinese authorities but has not received formal explanations for the investigation. Reports suggest the probe centers on the alleged illegal importation of the cancer drug Imjudo from Hong Kong to China, where the drug remains unapproved.

The company's former oncology head, Yin Min, who led the department during the alleged infractions, was also detained.

The Financial Times writes that the company has faced reduced engagement from Chinese hospitals and a dip in sales, which are attributed partly to concerns about regulatory scrutiny.

AstraZeneca is banking on new leadership and innovative drugs like the breast cancer treatment Enhertu to regain trust and momentum. Recently added to the Chinese state health insurance scheme, Enhertu is seen as a crucial component of the company's strategy to stabilize its position in the market.

Observers suggest further changes in the leadership team may be forthcoming as the company works to demonstrate a clean break from its troubled past.

Price Action: AZN stock is down 0.15% at $66.81 at the last check on Friday.

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Image by Robert Way via Shutterstock

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