AstraZeneca boosts U.S. investment on confidence in economy

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AstraZeneca said it’s doubling down on its investment in its U.S. business, a move that comes only one week after Donald Trump’s election win. 

AstraZeneca announced plans for $2 billion in latest spending on research and development, bringing its total capital investment within the country to $3.5 billion by the top of 2026. The money can be used to spice up the corporate’s research and development, in addition to its manufacturing footprint within the U.S.

The British-Swedish pharmaceutical giant expects the brand new investment to create greater than 1,000 jobs, “contributing to the expansion of the U.S. economy,” based on a release. The corporate said it currently has 17,800 U.S. employees working across 17 sites in 12 states. 

AstraZeneca said the expanded footprint will include a research and development center in Cambridge, Mass., manufacturing plants in Maryland and Texas and other sites at unspecified locations across the West and East coasts.

AstraZeneca called the investment the primary in a series of steps toward hitting its revenue goal of $80 billion by 2030 – a goal set earlier this yr. 

The drugmaker is now one among the primary major foreign firms to announce plans to take a position within the U.S. after Trump’s victory. 

Several firms similarly announced major U.S. investments during Trump’s first term. Trump would often try to take credit for those investments, even when it was hard to prove a connection to his administration.

But AstraZeneca declined to explicitly say whether there was a link between Trump winning a second term and its increased spending within the U.S.

During a media call after the corporate’s earnings release Tuesday, AstraZeneca CEO Pascal Soriot said the investment is a “testimony of our confidence within the U.S. economy – of the U.S. marketplace over the following few years.”

Soriot, during a separate event in Recent York City on Tuesday, also told reporters that the drugmaker has been the expanded investment “for a lot of months.” 

A previous version of a Tuesday report from the Wall Street Journal suggested the corporate was motivated by other aspects: A source conversant in the matter told the outlet that AstraZeneca’s latest investment got here in response to the election results and is a bet that a second Trump administration would amend certain elements of President Joe Biden’s signature Inflation Reduction Act, or IRA. The present version of the report now not mentions the IRA.

That laws, signed into law in 2022, includes provisions that aim to lower prescription drug costs for seniors, akin to allowing Medicare to barter medication prices with manufacturers. AstraZeneca and other drugmakers have acknowledged that the IRA, particularly its Medicare price talks, is a headwind to their businesses. AstraZeneca’s diabetes treatment Farxiga was among the many 10 drugs targeted in the primary round of negotiations, which set latest prices for 2026. 

But Soriot on Tuesday pushed back on the concept that the corporate’s decision was based around potential changes to the IRA. In the course of the media event, he joked that “I form of dream sometimes” of the IRA being repealed, “but to not that extent.” 

He also said among the IRA’s provisions are “good things,” akin to a $2,000 cap on out-of-pocket spending for Medicare Part D enrollees starting in 2025. 

Soriot said the corporate believes that the IRA is “here to remain,” adding the choice to spice up its investment within the U.S. is “not a lot” based on “policies specific to our industry.” 

“It’s more a general belief that the economy will remain strong. And if you’ve got a powerful economy, hopefully, that drives investments in innovation, sure, in our industry, but additionally many other industries,” he told reporters. “We would like to tap into this innovation within the U.S.” 

When asked about Trump’s tariff policies, Soriot said it’s “probably more relevant to other industries and definitely other firms.” 

Trump has threatened to slap a tariff of as much as 60% on all goods imported to the U.S. from China. But Soriot called his tariff policy “irrelevant” to AstraZeneca because the corporate doesn’t source products from China for the U.S. 

The products AstraZeneca commercializes within the U.S. are manufactured in its several plants across the country, “and we’re investing in much more now,” he told reporters. 

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A subsidiary of the enterprise capital firm General Catalyst has agreed to buy Summa Health, an integrated health system in Ohio, for $485 million, based on a release on Thursday.

The 2 organizations first announced the acquisition plans in January, however the terms were previously undisclosed. Summa said Thursday that the deal will help it eliminate $850 million in existing debt when combined with its current money. The health system had about $859 million in debt as of Sept. 30, based on financial filings. 

Summa operates across five counties in northeast Ohio, and it supports greater than 1,000 inpatient beds across its network of hospitals, community-based health centers and its multi-specialty group practice. General Catalyst laid the groundwork for the acquisition last yr when it announced a latest company called the Health Assurance Transformation Company, or HATCo, which it said operates on “decades-long” timelines.  

Buying a hospital is an unprecedented move within the enterprise industry, however the fund’s goal just isn’t to chop costs at Summa, HATCo executives told CNBC this winter. As a substitute, the corporate will work to generate latest revenue streams for Summa by bringing in latest technology and models of care.

“This just isn’t like a turnaround, this just isn’t a distressed system,” HATCo CEO Dr. Marc Harrison said in a January interview.

The corporate has committed $350 million in capital funding to Summa over the primary five years, which can be used to take a position in tech and make sure the health system has the resources it needs for routine workflows, based on Thursday’s release. HATCo has also committed a further $200 million over the primary seven years, which is meant “for strategic and transformative investments.”

HATCo will evaluate tech solutions from a spread of various firms, not only those inside General Catalyst’s portfolio. The tech firms HATCo taps to make use of inside Summa can be on the mature side, not early-stage startups, Harrison added. 

As a part of the acquisition, Summa will switch from a non-profit to a for-profit organization. The health system said that when the deal closes, the remaining funds can be used to support a latest health-focused community foundation for the greater Akron area.  

“We are going to give you the chance to take a position in and grow our team in ways we couldn’t achieve as an independent organization,” Summa executives said in the discharge. “And while the structure and model of Summa Health will shift once we develop into a part of HATCo, our priorities is not going to change and our providers, employees and leadership team will transition to the brand new entity.” 

The deal remains to be subject to regulatory approval. Representatives for General Catalyst and Summa didn’t immediately reply to requests for comment. 

Read more about why HATCo is acquiring Summa here.

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