AstraZeneca PLC (LSE:AZN) could face a fine of up to £4.5 million as the Chinese authorities investigate allegedly illegal imports of cancer drugs Imfinzi and Imjudo.
The Shenzhen City Customs suspects $0.9 million in unpaid import taxes, with AstraZeneca estimating fines could be one to five times that amount.
Analysts at UBS suggested the scale of the liability is manageable, stating: "While this is the first time that AstraZeneca has been directly implicated in an investigation (versus individual employees), we expect investor relief on the scale of the liability highlighted today. We see this as largely resolving one part of AZN's known potential China risk."
The note follows the Anglo-Swedish giant's full-year results, released earlier on Thursday, which were well received by the market.
UBS highlighted AZ's strong earnings, with profits slightly above expectations due to higher-than-anticipated collaboration income, which was reinvested in research and development.
It has made a strategic shift in how it reports drug trial results, now only announcing high-impact clinical developments.
Recent pipeline updates include positive phase III trial results for Tagrisso, while several lower-priority drugs, including treatments for cancer, opioid use disorder, and heart disease, were dropped from development.
UBS believes 2025 will be a pivotal year for AstraZeneca, with seven new drug candidates and key lifecycle updates expected.
The shares were up 5% at 11,704p.