AstraZeneca boosts US investment thanks to confidence in the economy

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AstraZeneca said it is doubling its investment in its US business, a move that comes just a week after Donald Trump's election victory.

AstraZeneca announced plans for $2 billion in new spending on research and development, bringing its total capital investment in the country to $3.5 billion by the end of 2026. The cash will be used to boost research and development of the company, as well as its manufacturing footprint. in the united states

The British-Swedish pharmaceutical giant expects the new investment to create more than 1,000 jobs, “contributing to the growth of the US economy,” according to a statement. The company said it currently has 17,800 U.S. employees working at 17 sites in 12 states.

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

AstraZeneca called the investment the first in a series of steps to reach its revenue target of $80 billion by 2030, a target set earlier this year.

The pharmaceutical company is now one of the first large foreign companies to announce investment plans in the United States after Trump's victory.

Several companies similarly announced major US investments during Trump's first term. Trump often tried to take credit for those investments, even if it was difficult to prove a connection to his administration.

But AstraZeneca declined to say explicitly whether there was a link between Trump's victory for a second term and his increased US spending.

During a media call after the company's earnings release on Tuesday, AstraZeneca CEO Pascal Soriot said the investment is a “testament to our confidence in the U.S. economy and the U.S. market.” for the next few years.”

Soriot, during a separate event in New York City on Tuesday, also told reporters that the drugmaker has been discussing expanding the investment “for several months.”

An earlier version of a Tuesday Wall Street Journal report suggested the company was motivated by other factors: A source familiar with the matter told the outlet that AstraZeneca's new investment came in response to the election results and is a gamble. that a second Trump administration would modify certain elements of the Inflation Reduction Act (IRA) signed by President Joe Biden. The current version of the report no longer mentions the IRA.

That legislation, signed into law in 2022, includes provisions aimed at reducing prescription drug costs for seniors, such as allowing Medicare to negotiate drug prices with manufacturers. AstraZeneca and other drugmakers have acknowledged that the IRA, particularly their negotiations over Medicare pricing, is a drag on their businesses. Farxiga, AstraZeneca's diabetes treatment, was among the 10 medicines subject to the first round of negotiations, which set new prices for 2026.

But Soriot on Tuesday rejected the idea that the company's decision was based on possible changes to the IRA. During the media event, he joked that he “sometimes dream” of the IRA being repealed, “but not to that extent.”

He also said some of the IRA's provisions are “good things,” such as a $2,000 limit on out-of-pocket spending for Medicare Part D enrollees starting in 2025.

Soriot said the company believes the IRA is “here to stay,” adding that the decision to boost its investment in the United States is “not so much based” on “specific policies in our industry.”

“It's more of a general belief that the economy will continue to be strong. And if you have a strong economy, hopefully that will drive investments in innovation, of course, in our industry, but also in many other industries,” he told reporters . “We want to take advantage of this innovation in the United States”

When asked about Trump's tariff policies, Soriot said they are “probably more relevant to other industries and certainly to other companies.”

Trump has threatened to impose a tariff of up to 60% on all goods imported into the United States from China. But Soriot called its tariff policy “irrelevant” to AstraZeneca because the company does not source products from China for the US.

The products AstraZeneca markets in the United States are manufactured at its various plants across the country, “and now we are investing in even more,” he told reporters.

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An affiliate of private equity firm General Catalyst agreed to buy Summa Health, an integrated health system in Ohio, for $485 million, according to a statement Thursday.

The two organizations first announced acquisition plans in January, but terms had not previously been disclosed. Summa said Thursday that the deal will help it eliminate $850 million in existing debt when combined with its existing cash. The health system had about $859 million in debt as of Sept. 30, according to financial documents.

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

Buying a hospital is an unprecedented move in the venture industry, but the fund's goal is not to cut costs at Summa, HATCo executives told CNBC this winter. Instead, the company will work to generate new revenue streams for Summa by incorporating new technologies and care models.

“This is not a radical change, this is not a distressed system,” Dr. Marc Harrison, HATCo's chief executive, said in an interview in January.

The company has committed $350 million in equity financing to Summa over the first five years, which will be used to invest in technology and ensure the health system has the resources it needs for routine workflows, according to the statement. on Thursday. HATCo has also committed an additional $200 million over the first seven years, which is earmarked “for strategic and transformative investments.”

HATCo will evaluate technology solutions from a variety of different companies, not just those within General Catalyst's portfolio. The technology companies HATCo uses within Summa will be on the mature side, not early-stage startups, Harrison added.

As part of the acquisition, Summa will transition from a nonprofit to a for-profit organization. The health system said that once the deal closes, the remaining funds will be used to support a new health-focused community foundation for the greater Akron area.

“We will be able to invest and grow our team in ways we could not achieve as an independent organization,” Summa executives said in the statement. “And while Summa Health's structure and model will change when we become part of HATCo, our priorities will not change and our providers, employees and leadership team will transition to the new entity.”

The deal is still subject to regulatory approval. Representatives for General Catalyst and Summa did not immediately respond to requests for comment.

Read more about why HATCo is acquiring Summa here.

Please feel free to send any tips, suggestions, story ideas, or information to Ashley at [email protected].