AstraZeneca (LON:AZN) could be hit with an extra $35.5 million a year in annual duties, The Times has revealed. The financial hit would come if the UK does not withdraw in an orderly manner from the European Union.
AstraZeneca’s share price has advanced in London this morning, having added 0.73 percent to 4,802.00p as of 10:30 GMT. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 0.81 percent higher at 7,359.45 points.
Potential hit for AstraZeneca
The Times reported this morning that AstraZeneca had warned that if the UK had to trade with the EU under World Trade Organisation rules it would be forced to pay $30.5 million a year in extra duties, as well as an extra $5 million duty on UK imports of pharmaceutical ingredients.
The newspaper notes that the Anglo-Swedish pharmco had made the observations in a wider written submission before a public evidence session tomorrow when the Commons business, energy and industrial strategy committee will be questioning witnesses from the industry on the impact of Brexit. AstraZeneca further called on the government to negotiate a free-trade agreement, remain part of the EU regulatory framework for medicines and ensure a Brexit transition period of at least three years to avoid interruption to the supply of medicines and to life sciences activities.
Analysts on blue-chip pharmco
Shore Capital reiterated its ‘hold’ rating on AstraZeneca today, without specifying a valuation on the shares. According to MarketBeat, the blue-chip pharmco currently has a consensus ‘hold’ rating and an average price target of 5,221.73p.
AstraZeneca updated investors on its quarterly performance last month, revealing receding impact from losses of exclusivity of some of its top-selling products, and forecasting that its full-year earnings will come in “towards the favourable end” of its guidance.