News Summary
AstraZeneca is planning to directly list its shares on the New York Stock Exchange, shifting away from Nasdaq’s American depositary receipts. This decision aims to attract a larger global investor base amid concerns about the UK market and the company’s future direction. With US revenue reaching 43% of the total in 2022, AstraZeneca seeks to enhance accessibility for US investors. While this does not immediately indicate a full relocation of its primary listing, analysts are speculating about the company’s long-term plans.
Cambridge, England – AstraZeneca, the UK’s largest drugmaker, is set to take a significant step by directly listing its shares on the New York Stock Exchange (NYSE). This strategic move is a response to ongoing challenges faced by the UK market, including company departures, and is perceived as a setback for London’s financial reputation.
Replacing the current trading of American depositary receipts (ADRs) that are held on Nasdaq, this direct listing is expected to align US shares with those listed in London. The shift aims to expand access to a broader pool of global investors, a goal highlighted by company chair Michel Demaré.
The decision to transition to the NYSE will require the approval of AstraZeneca’s shareholders. Company representatives believe that this move could facilitate greater accessibility for US pension funds, which are crucial for investment.
In 2022, AstraZeneca reported a remarkable $23.2 billion (£17.25 billion) in revenue generated from the US market, which constituted approximately 43% of its overall revenue. Looking ahead, the pharmaceutical giant anticipates that its US revenue could rise to 50% by the end of the decade, underscoring its expanding focus on the American market.
Financial analysts observe that while this decision does not imply an immediate relocation of the company’s primary listing to the US, it does raise questions regarding AstraZeneca’s long-term listing intentions. As evidence of its shifting focus, the company has paused a planned £200 million expansion of its research site in Cambridge, which was expected to create around 1,000 jobs. Earlier this year, the firm also canceled a £450 million renovation of its vaccine site located in Speke, Liverpool, citing diminished governmental support.
There is mounting speculation about the potential interest of CEO Sir Pascal Soriot in relocating both the stock market listing and the company’s headquarters to the United States. Soriot has expressed dissatisfaction with the UK’s rejection of its breast cancer drug, Enhertu, and has criticized the pace of research advancements in the UK compared to the US and China.
Recent assessments indicate that the UK is lagging in international rankings related to investment and research, which could further incentivize AstraZeneca’s shift in focus. This potential move could signify a considerable loss for the London Stock Exchange, which has already witnessed a number of firms relocating for better valuations elsewhere.
The UK government views life sciences as a key growth area and may contemplate intervention as AstraZeneca progresses towards its new market strategy. With AstraZeneca’s CEO amongst the highest earners in the FTSE 100, his reported pay packages of £14.7 million for 2024 and £16.85 million for the previous year have also drawn attention, further complicating the public narrative surrounding the firm’s strategies and intentions.
As AstraZeneca embarks on this new direction, the company remains committed to maintaining its headquarters in Cambridge, England. While shareholder approval remains a critical step in the upcoming listing initiative, the broader implications of this decision are already creating waves in the city’s financial landscape.
The UK government has been approached for comments to provide clarity on AstraZeneca’s evolving market strategy as the company takes steps toward a deeper engagement with American investors and markets.
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- The Guardian
- Wikipedia: AstraZeneca
- Reuters
- Google Search: AstraZeneca
- Financial Times
- Google Scholar: AstraZeneca stock listing
- Bloomberg
- Encyclopedia Britannica: AstraZeneca
- Sky News
- Google News: AstraZeneca NYSE
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