AZ builds in China, as J&J ramps up its US investments

China has been a challenging market for AstraZeneca in the last few months but, undeterred, it has just announced a $2.5 billion investment programme in what is the world's second-largest pharma market.

The headline of the programme is the establishment of an R&D centre in Beijing – the sixth for the company worldwide and second in China after Shanghai – in partnership with the city's municipal government and development agency. It will focus on "cutting-edge biology and AI science," according to AZ, which said the programme will grow its headcount in Beijing to 1,700 employees.

Some of the investment is also earmarked for research and manufacturing agreements, which include three new alliances with Chinese biotechs Harbour BioMed, Syneron Bio, and BioKangtai.

Those come shortly after AZ reached a deal to buy the Chinese subsidiary of FibroGen for around $160 million, in a move that will give it ownership of Evrenzo (roxadustat), the company's treatment for anaemia associated with chronic kidney disease (CKD), which AZ has been helping to sell in China.

AZ is already a major overseas player in the Chinese pharma market, but has been under the spotlight of late as a result of an investigation into unpaid taxes on drug imports and suspected data privacy breaches.

Chief executive Pascal Soriot said the new investment reflects their "belief in the world-class life sciences ecosystem in Beijing, the extensive opportunities that exist for collaboration and access to talent" and "continued commitment to China."

The new alliances include the formation of a joint venture with BioKangtai to create AZ's first vaccine manufacturing facility in China, which will be located in the Beijing BioPark near the new R&D centre and will provide products for China, as well as international markets.

It is also partnering with Harbour BioMed on the discovery of multi-specific antibody treatments, with Syneron Bio to develop macrocyclic peptide drugs, and with Beijing Cancer Hospital for translational research, data science, and clinical development.

The announcement comes after AZ pulled back from plans to build a new $558 million vaccine manufacturing facility in the UK after failing to agree a satisfactory support package from the government.

J&J pledges $55 billion in four years to "support American jobs"

While AZ is eyeing overseas expansion with its new investment, J&J has embarked on a reshoring drive with a pledge to invest $55 billion in the next four years within the US, with four new manufacturing facilities at the heart of the plan.

The announcement follows a similar programme announced by Eli Lilly in February, and appear to come in response to threats by President Donald Trump to impose tariffs on the pharma industry if they don't relocate their manufacturing operations to the US.

"Today's announcements accelerate our nearly 140-year legacy as an American innovation engine tackling the world's toughest healthcare challenges," said Joaquin Duato, J&J's chairman and CEO, who said the programme has started with groundbreaking on a $2 billion-plus facility in North Carolina "that will not only add US-based jobs, but manufacture cutting-edge medicines to treat patients in America and around the world."

The company said the North Carolina facility – which will focus on medicines for cancer, immune-mediated, and neurological diseases – will support approximately 5,000 jobs during construction and create over 500 positions when complete. The locations of the other three facilities have not yet been disclosed.

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