AstraZeneca says does not comment on media reports as shares slump

(Sharecast News) - AstraZeneca said on Tuesday that it does not comment on speculative media reports, in response to a sharp drop in its share price.

"As a matter of policy, we do not comment on speculative media reports including those related to ongoing investigations in China," the pharmaceuticals firm said in a brief statement just after the close of London markets.

"If requested, we will fully cooperate with the Chinese authorities," it said. "We continue to deliver our life changing medicines to patients in China and our operations are ongoing."

The statement came after the shares closed down 8.4% following a Yicai report that dozens of senior executives at the company in China have been implicated in an ongoing insurance fraud case as of last week.

Yicai cited a person familiar with the matter as saying that Leon Wang, president of AstraZeneca China, is cooperating with the investigation by Chinese authorities, which has now expanded to include the public security bureau, supervisory commission, and other relevant bodies.

The key figure who should have cooperated with the inquiry was another senior executive at AstraZeneca China, the source added.

Yicai noted that over the past three years, insurance fraud cases involving AstraZeneca have surfaced in Shenzhen as well as the provinces of Fujian and Jiangxi. Employees implicated in these have pointed the finger at regional managers, district managers, and even senior executives.

These cases amount to the largest insurance fraud in the nation's pharmaceutical sector for years, a person familiar with the matter said. So far, dozens of AstraZeneca staff have been convicted of fraud, with the main offenders receiving prison sentences of over 10 years.

Yicai said an insider at a drugmaker noted that AstraZeneca's high sales targets put extreme pressure on medical reps, which has been a major factor in the firm's compliance issues.

AstraZeneca announced at the end of last month that Wang was under investigation and cooperating with Chinese authorities.