The drugmaker said its Chief Financial Officer Aradhana Sarin had briefed investors on the subject on Wednesday to quell concerns about the fraud probe expanding following a report by financial media company Yicai a day earlier that led its shares to plunge more than 8%.
The Anglo-Swedish drugmaker confirmed on Wednesday that Wang, its China president, was in Chinese custody. One week ago, AstraZeneca said that Wang was under investigation and that the drugmaker would cooperate with authorities.
AstraZeneca said on Wednesday it did not know what Wang, who grew up in China and has been with the company for more than a decade, was detained for.
The company has invested heavily in China, the world's No. 2 pharmaceuticals market, and positioned operations there as core to its annual revenue targets through the end of this decade.
The Yicai report on Tuesday said that dozens of the drugmaker's senior executives in China could be implicated in the largest insurance fraud case in the country's pharma sector in years. But AstraZeneca said on Wednesday that to its knowledge the insurance fraud case did not involve any current AstraZeneca executives.
AstraZeneca shares, which on Tuesday had their worst day since March 2020, were up 1% at 1442 GMT. Tuesday's drop wiped some $14 billion off of the company's market value.
It had previously been reported that Chinese authorities had summoned AstraZeneca officials over an investigation of suspected medical insurance fraud by its employees, and had ordered the drugmaker to tighten its marketing activities.
But on Wednesday the company said the ongoing probe had begun three years ago and initially involved a small number of employees. It later escalated and some 100 now former employees were sentenced to jail time, the company said.
That probe involves the company's sales of its blockbuster lung cancer medicine Tagrisso. Sales of the medicine have been strong in China, where lung cancer rates are high due to air pollution and the prevalence of smoking.
AstraZeneca says it has about 12,000 employees in the country. China sales make up 13% of the company's overall sales.
Barclays analysts said in a note that the share sell-off "feels far overdone" and current share levels represent a "very attractive entry point" ahead of 2025 when a number of highly anticipated clinical trial data readouts are expected.
