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Investors have warned that if AstraZeneca leaves London to list in New York, it will be a loss for the entire market and potentially the UK economy.
Aberdeen fund manager Iain Pyle said it would be “unfortunate” if the biggest FTSE companies leave the UK market. AstraZeneca CEO Ir Pascal Soliott has expressed his dissatisfaction with the UK environment, according to two people familiar with the issue.
“It’s the biggest name in the market and has a ‘hello’ effect as a successful, innovative pharmaceutical company,” he said.
AstraZeneca stock rose 2.9% to 10,446p after a Times report on Tuesday said it had a private discussion about the US list. AstraZeneca declined to comment.
Some Astrazeneca shareholders may have hoped that the US list could increase the company’s valuation, as there are more specialized investors who spend time understanding medicines early in the pipeline.
The US list would also facilitate payments for executives, including Soriot and his successors. “Pascal was the best CEO of FTSE in 2023, but even so, US executives are paying more,” says Pyle.
Soriot received £16.9 million in 2023 after hitting most long-term targets. The median CEOs of FTSE 100 companies is $6.5 million compared to the $16 million for headline companies listed on the S&P 500.
The move by AstraZeneca could also be seen as a political victory for the Trump administration. The Trump administration is putting pressure on the pharmaceutical industry, with the threat of tariffs and price cuts.
In the UK, news of the potential moves has driven concerns among investors about a decline in the UK stock market’s appeal and the impact on the broader financial services sector.
“If it’s not in the background of the work equity market, it’s definitely an alarm signal,” said Sonja Laud, chief investment officer of Law & General’s Fund Management Arm, highlighting the importance of the city of London to the UK economy. She encourages changes to improve changes and other measures, and “to prevent them from becoming structural (in the listing).”
The UK market is struggling with a steady trend of listed companies moving privately and moving their main lists to the US. Wise, £11 billion FinTech, listed in 2021, said last month it plans to switch its main list from London to New York, citing deeper liquidity in the US market.
The threat of movement to the US could be a wake-up call for the UK government. The UK government is only in long-term negotiations with the pharmaceutical industry over drug pricing. Companies warn that if the country doesn’t spend more on drugs, investment in the UK is at risk.
A government insider said the Soliot was “just in a bad mood” and had not made any specific decisions regarding the setting of a listing or timeline.
Soriot complains about the process of determining which drugs are right for money after Astrazeneca’s breast cancer drugs were not approved for use in the NHS. AstraZeneca also elicited investments in Spaques factory in Merseyside after the government cut subsidies to the site from previous government proposals.
One of AstraZeneca’s top 20 shareholders said the sector has “a period of tension” with the UK government. He said the government had previously responded to these “types of threats.”
“From a UK economy perspective, this loss of listings and residence would risk the UK losing highly valuable jobs across science, manufacturing and research and development,” he said.
