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Europe is “lagging” behind the US and China in life sciences innovation, AstraZeneca’s chief executive said, warning that one of the continent’s leading industries needs to spend more on research and pay staff better.
“Innovation in our industry is driven by the US and China; “Unfortunately, Europe is falling behind,” said Pascal Soriot, who himself pushed through a controversial pay rise earlier this month. “There is investment in life sciences in the US and as a result a lot of talent is based in the US.”
The U.S. lead in the pharmaceutical industry means European companies are competing for talent with rivals that pay much higher salaries.
The warning came as UK-listed AstraZeneca reported a 19 percent rise in sales in the first quarter of 2024 and Soriot secured a potential £1.8 million pay rise earlier this month to take him up to a maximum of £18.7 million this year .
While the salary package is high by European standards, Soriot said the aim is to make the AstraZeneca chief’s position attractive on a global level to attract candidates in the US once he steps down from the position he has held since 2012.
“I plan to stay here for a while, but there will be a successor. “Our internal candidates, but also external candidates, must be offered an attractive role,” he said. “This industry is a global industry and a lot of the talent is based in the US.”
Soriot’s comments come amid an ongoing debate over Europe’s competitiveness, with politicians and business leaders across the continent stressing the need for European industries to more effectively challenge the United States and China.
Nicolai Tangen, chief executive of Norway’s $1.6 trillion oil fund, said Wednesday that Europeans are “less diligent” than Americans, causing U.S. companies to outpace their European rivals in innovation.
According to a European Commission analysis published in 2023 of the top 2,500 companies spending on research and development worldwide, 12 percent of the leading companies investing in health research are based in Europe, compared to 55 percent in the United States and 17 percent in China .
AstraZeneca has invested heavily in research and development under Soriot’s tenure and launched a number of blockbuster products, including top-selling cancer drugs Tagrisso and Imfinzi, which posted first-quarter sales of $1.6 billion and $1.1 billion, respectively brought in.
The company has also made several small acquisitions in the past year, acquiring biotech companies active in new areas, including cell therapies, anti-obesity drugs and radiopharmaceuticals. Soriot said Thursday that AstraZeneca’s deal activity would continue, but “at a slower pace.”
“In the last 12 to 18 months we have made numerous acquisitions; We thought there was a window of opportunity for these acquisitions,” he said. “We now have the technology and the platforms and we have to implement and integrate it all.”
The U.K.-based drugmaker reported first-quarter 2024 revenue of $12.7 billion, up 19 percent, well above consensus estimates of $11.9 billion.
Sales were driven by a 26 percent increase in oncology sales and a 45 percent increase in sales of diabetes and heart failure drug Farxiga, which sold $1.9 billion in the quarter. For the current year, the company reiterated its forecast of sales and earnings growth in the low to mid double-digit percentage range.