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AstraZeneca’s chief executive in China, Leon Wang, was arrested by Chinese authorities last week, the drugmaker told the Financial Times.
The FTSE 100 company confirmed that the head of its China operations is in custody, while two other current executives in the region and two former executives are under investigation.
The investigation concerns the alleged illegal import and sale of the cancer drug Imjudo, and Wang is among those arrested in connection with the investigation, a person familiar with the matter said.
A spokesperson for Wang could not be reached for comment.
Imjudo is approved in other parts of the world, but not in China.
A person familiar with the matter said authorities were investigating alleged illegal imports of the drug, including through neighboring Hong Kong into mainland China.
The drug is regularly prescribed alongside AstraZeneca’s other cancer therapy Imfinzi as a combination therapy for patients with advanced liver cancer.
AstraZeneca declined to comment on the nature of authorities’ investigation. A spokesperson said: “We will cooperate fully with the Chinese authorities.”
AstraZeneca held an investor call with chief financial officer Aradhana Sarin on Wednesday after losing £15 billion in market capitalization on Tuesday in response to a Chinese media report that dozens of executives were involved in an investigation into health insurance fraud.
The company told investors that the media report merged the current investigation with previous convictions of the company’s salespeople for insurance fraud related to the sale of its lung cancer drug Tagrisso.
About 100 AstraZeneca sellers in China were convicted of insurance fraud between 2020 and 2021 for falsifying genetic test results of patients who otherwise would not have qualified for state insurance for the drug, the company told investors on the call.
AstraZeneca announced last week that Wang was being investigated by Chinese authorities and that he was cooperating with the investigation.
Michael Lai, the company’s general manager in China appointed in 2019, has taken the helm of the Chinese operations in Wang’s absence.
Shares closed a further 1.9 percent lower at 9,919p in London trading on Wednesday.