TIDMAZN
RNS Number : 4551F
AstraZeneca PLC
28 July 2016
AstraZeneca PLC
28 July 2016 07:00
This announcement contains inside information.
H1 2016 Results
Financial Summary
H1 2016 Q2 2016
------------------------- ------------------------
$m % change $m % change
------- ---------------- ------ ----------------
CER(1) Actual CER(1) Actual
----------------------------------- ------- ------- ------- ------ ------- -------
Total Revenue 11,718 (3) (5) 5,603 (10) (11)
Product Sales 11,034 (2) (5) 5,469 (5) (6)
Externalisation Revenue 684 (12) (12) 134 (72) (72)
----------------------------------- ------- ------- ------- ------ ------- -------
Reported Operating Profit 1,341 (24) (28) 303 (64) (67)
Core Operating Profit(2) 2,999 (14) (17) 1,406 (21) (22)
----------------------------------- ------- ------- ------- ------ ------- -------
Reported Earnings Per Share (EPS) $0.51 (45) (48) $0.00 (99) (100)
Core EPS $1.78 (20) (22) $0.83 (31) (31)
----------------------------------- ------- ------- ------- ------ ------- -------
-- Total Revenue down by 3% as expected, reflecting a 2% decline
in Product Sales that was driven by patent expiries, in particular
Crestor in the US. The phasing of Externalisation Revenue is
towards H2 2016
-- Reported and Core R&D costs increased by 6% and 9%
respectively; Reported SG&A costs were stable, with Core
SG&A costs declining by 5%, supporting full-year
commitments
-- Reported EPS declined 45%, negatively impacted by
restructuring charges related to the recently-announced cost
reduction programme. Core EPS declined 20%, reflecting the phasing
of Externalisation Revenue to the second half of the year
-- An unchanged first interim dividend per share of $0.90
-- FY 2016 guidance unchanged
Commercial Highlights
The Growth Platforms grew by 7% in the half. Of the six
platforms, the performance included:
-- Emerging Markets: +7%. Encouraging China growth of 11%
-- Diabetes: +18%. A good performance underpinned by the success of Farxiga
-- Respiratory: +1%. Strong Emerging Markets sales of Symbicort,
pricing compression in the US and Europe
-- New Oncology: Sales of $251m reflected the successful ongoing launch of Tagrisso
Achieving Scientific Leadership: Progress since the last results
announcement
Regulatory - Qtern (saxagliptin/dapagliflozin)
Approvals / - type-2 diabetes (EU)
Conditional - Zavicefta (previously CAZ AVI) -
Marketing Authorisation* serious infections (EU)
- Pandemic Live Attenuated Influenza
Vaccine - pandemic influenza (EU)*
-------------------------- ------------------------------------------
Regulatory - saxagliptin/dapagliflozin, resubmission
Submission (US)
Acceptances
-------------------------- ------------------------------------------
Positive Phase - benralizumab - severe asthma
III Data Readouts - Faslodex - breast cancer (1st line)
- Tagrisso - lung cancer (2nd line)
-------------------------- ------------------------------------------
Other Key Developments - Orphan Drug Designation: selumetinib
- thyroid cancer (US)
- Fast Track Designation: Lynparza
- ovarian cancer (2nd line) (US)
-------------------------- ------------------------------------------
Pascal Soriot, Chief Executive Officer, commenting on the
results said:
"Our performance in the first half was in line with
expectations, reflecting the anticipated near-term patent expiry
challenges and the phasing of Externalisation Revenue in 2016. Our
Growth Platforms continued to advance and made up over 60% of Total
Revenue. Importantly, our transformed pipeline is advancing quickly
and delivering a rich flow of differentiated medicines, boding well
for our return to growth.
Alongside positive results for our first potential Respiratory
biologic medicine, benralizumab, and for Tagrisso in second-line
lung cancer, we are encouraged by the rapid patient recruitment in
our Immuno-Oncology durva/treme combination programmes. This strong
scientific momentum is set to continue, in particular where we
anticipate key Immuno-Oncology data."
FY 2016 Guidance
Guidance for FY 2016 is unchanged and is shown at CER(1) .
Total Revenue A low to mid single-digit percentage decline
-------------- ---------------------------------------------
Core EPS A low to mid single-digit percentage decline
-------------- ---------------------------------------------
The above guidance incorporates the dilutive effects arising
from the Acerta Pharma B.V. (Acerta Pharma) and ZS Pharma, Inc. (ZS
Pharma) transactions announced in FY 2015.
Externalisation Revenue is expected to be ahead of that in FY
2015, including an element of recurring income arising from prior
agreements. This is in line with the Company's long-term business
model, which includes externalisation as part of the
portfolio-management strategy.
Externalisation activities, a result of increasing R&D
productivity and the focus on three therapy areas, relate to
specific risk and reward-sharing strategic collaborations. They
broaden, accelerate and maximise the development and
commercialisation potential for a number of the Company's
medicines. Initial and milestone revenue, together with
sales-related revenue, is included in the Company's financial
statements as Externalisation Revenue. Receipts will be defined as
Externalisation Revenue where AstraZeneca retains a significant
ongoing interest in the potential or on-market medicine.
Core R&D costs are expected to be at a similar level to FY
2015. The Company is committed to materially reducing Core SG&A
costs in FY 2016 versus the prior year. These measures are based on
constant exchange rates.
The Company presents Core EPS guidance. It is unable to provide
guidance on a Reported/GAAP basis because the Company cannot
reliably forecast material elements of the Reported/GAAP result,
including the fair value adjustments arising on acquisition-related
liabilities, intangible asset impairment charges and legal
settlement provisions.
FY 2016 Currency Impact
Based on average exchange rates in the first half and the
Company's published currency sensitivities, there is now expected
to be only a minimal adverse impact from currency movements on
Total Revenue in FY 2016. Core EPS is now expected to benefit from
currency movements by a low to mid single-digit percentage versus
the prior year. Further details on currency sensitivities are
contained within the Operating and Financial Review.
Pipeline: Forthcoming Major Newsflow
Innovation is critical to addressing unmet patient needs and is
at the heart of the Company's growth strategy. The focus on
research and development is designed to yield strong results for
the pipeline.
H2
2016 benralizumab - severe asthma: Regulatory submission
(US, EU)
brodalumab - psoriasis: Regulatory decision
(US)
Brilinta - peripheral arterial disease (PAD):
Data readout
ZS-9 - hyperkalaemia: Regulatory re-submission
(US)
roxadustat - anaemia: Rolling regulatory submission
(CN)
Lynparza - breast cancer: Data readout
Lynparza - ovarian cancer (2nd line): Data
readout
Tagrisso - lung cancer: Regulatory submission
(CN)
cediranib - ovarian cancer: Regulatory decision
(EU)
selumetinib - lung cancer: Data readout
durvalumab - head and neck cancer (HAWK): Data
readout (Phase II)*
acalabrutinib - blood cancer: Data readout,
regulatory submission (US) (Phase II)*
------ ------------------------------------------------------------
H1
2017 brodalumab: Regulatory decision (EU)
Brilinta - PAD: Regulatory submission
saxagliptin/dapagliflozin - type-2 diabetes:
Regulatory decision (US)
ZS-9 - hyperkalaemia: Regulatory decision (EU)
Lynparza - breast cancer: Regulatory submission
Lynparza - ovarian cancer (2nd line): Regulatory
submission
selumetinib - lung cancer: Regulatory submission
durvalumab - head and neck cancer (HAWK): Regulatory
submission (US) (Phase II)*
durva + treme - head and neck cancer (CONDOR):
Data readout, regulatory submission (US) (Phase
II)*
durva + treme - lung cancer (MYSTIC): Data
readout
durva + treme - lung cancer (ARCTIC): Data
readout
------ ------------------------------------------------------------
H2
2017 tralokinumab - severe asthma: Data readout
roxadustat - anaemia: Data readout (AstraZeneca-sponsored
trial)
Lynparza - ovarian cancer (1st line): Data
readout, regulatory submission
Tagrisso - lung cancer (1st line): Data readout
durvalumab - lung cancer (PACIFIC): Data readout,
regulatory submission (US)
durva + treme - lung cancer (MYSTIC): Regulatory
submission
durva + treme - lung cancer (ARCTIC): Regulatory
submission
durva + treme - head and neck cancer (KESTREL):
Data readout
moxetumumab - leukaemia: Data readout
------ ------------------------------------------------------------
The term 'data readout' in this section refers to Phase III data
readouts, unless specified otherwise.
*Potential fast-to-market opportunity ahead of randomised,
controlled trials.
Notes
1. All growth rates and guidance are shown at constant exchange
rates (CER) unless otherwise specified.
2. See the Operating and Financial Review for a definition of
Core financial measures and a reconciliation of Core to Reported
financial measures.
Results Presentation
A conference call for investors and analysts, hosted by
management, will begin at midday UK time today. Details can be
accessed via www.astrazeneca.com/investors.
Reporting Calendar
The Company intends to publish its nine-month financial results
on 10 November 2016.
About AstraZeneca
AstraZeneca is a global, science-led biopharmaceutical company
that focuses on the discovery, development and commercialisation of
prescription medicines, primarily for the treatment of diseases in
three therapy areas - Respiratory & Autoimmunity,
Cardiovascular & Metabolic Diseases and Oncology. The Company
is also active in inflammation, infection and neuroscience through
numerous collaborations. AstraZeneca operates in over 100 countries
and its innovative medicines are used by millions of patients
worldwide. For more information please visit:
www.astrazeneca.com.
Media Enquiries
Neil Burrows UK/Global +44 203 749 5637
Vanessa Rhodes UK/Global +44 203 749 5736
Karen Birmingham UK/Global +44 203 749 5634
Rob Skelding UK/Global +44 203 749 5821
Jacob Lund Sweden +46 8 553 260 20
Michele Meixell US +1 302 885 2677
Investor Relations
UK
Thomas Kudsk Larsen +44 203 749 5712
Craig Marks Finance, Fixed Income, M&A +44 7881 615 764
Nick Stone Respiratory & Autoimmunity +44 203 749 5716
Henry Wheeler Oncology +44 203 749 5797
Christer Gruvris Infection & Neuroscience +44 203 749 5711
US
Lindsey Trickett Cardiovascular & Metabolic Diseases +1 240 543 7970
Mitchell Chan Oncology +1 240 477 3771
Toll free +1 866 381 7277
Adrian Kemp
Company Secretary
AstraZeneca PLC
Operating and Financial Review
_______________________________________________________________________________________
All narrative on growth and results in this section is based on
CER unless stated otherwise. Financial figures are in US$ millions
($m). The performance shown in this announcement covers the six and
three-month periods to 30 June 2016 (the half and the quarter,
respectively) compared to the six and three-month periods to 30
June 2015.
Core measures, which are presented in addition to Reported
financial information, are non-GAAP measures provided to enhance
understanding of the Company's underlying financial performance.
Core financial measures are adjusted to exclude certain significant
items, such as:
- amortisation and impairment of intangible assets, including
impairment reversals but excluding any charges relating to IT
assets
- charges and provisions related to global restructuring
programmes (this will include such charges that relate to the
impact of global restructuring programmes on capitalised IT
assets)
- other specified items, principally comprising legal
settlements and acquisition-related costs, which include fair value
adjustments and the imputed finance charge relating to contingent
consideration on business combinations
Details on the nature of these measures are provided on page 64
of the Annual Report and Form 20-F Information 2015.
Total Revenue
H1 2016 Q2 2016
------------------------- ---------------------- ---------------------
$m % CER change $m % CER change
------------------------- ------- ------------- ------ -------------
Product Sales 11,034 (2) 5,469 (5)
------------------------- ------- ------------- ------ -------------
Externalisation Revenue 684 (12) 134 (72)
------------------------- ------- ------------- ------ -------------
Total Revenue 11,718 (3) 5,603 (10)
------------------------- ------- ------------- ------ -------------
Based on actual exchange rates, Total Revenue fell by 5% in the
half, reflecting the strength of the US dollar.
Product Sales
The level of decline in Product Sales was driven by the US
market entry of a Crestor generic medicine in the second quarter,
as well as the ongoing impact of Nexium generic medicines in the
US. Overall US Product Sales declined by 7% in the half, with
Product Sales in Europe down by 3%.
Within Product Sales, Growth Platform sales grew by 7% in the
half and represented 61% of Total Revenue:
H1 2016 Q2 2016
------------------ ---------------------------------- ----------------------------------
Growth Platforms Product Sales ($m) % CER change Product Sales ($m) % CER change
------------------ ------------------- ------------- ------------------- -------------
Emerging Markets 2,913 7 1,448 9
------------------ ------------------- ------------- ------------------- -------------
Respiratory 2,433 1 1,226 1
------------------ ------------------- ------------- ------------------- -------------
Diabetes 1,223 18 645 13
------------------ ------------------- ------------- ------------------- -------------
Japan 998 (3) 569 1
------------------ ------------------- ------------- ------------------- -------------
Brilinta 395 48 214 51
------------------ ------------------- ------------- ------------------- -------------
New Oncology(1) 251 n/m 152 n/m
------------------ ------------------- ------------- ------------------- -------------
Total(2) 7,179 7 3,744 8
------------------ ------------------- ------------- ------------------- -------------
(1) New Oncology comprises Lynparza, Iressa (US) and
Tagrisso
(2) Total Product Sales for Growth Platforms adjusted to remove
duplication on a medicine and regional basis
Externalisation Revenue
Externalisation Revenue recognised in the half amounted to
$684m. Highlights included:
Medicine Partner Region $m
----------------- ----------------------------------- -------- ----
China Medical System Holdings
Ltd (CMS) -commercialisation
Plendil rights - initial revenue China 298
----------------- ----------------------------------- -------- ----
Eli Lilly and Company (Lilly)
AZD3293 - milestone revenue Global 100
----------------- ----------------------------------- -------- ----
Nexium OTC 20mg Pfizer Inc. - milestone revenue Global 93
----------------- ----------------------------------- -------- ----
ProStrakan Group plc (ProStrakan)
- commercialisation rights
Moventig - initial revenue EU 70
----------------- ----------------------------------- -------- ----
Examples of sustainable future Externalisation Revenue are shown
below:
Announcement Medicine Partner Region Externalisation Revenue
Date
------------- ------------- ------------ ------------ ------------------------------------------------------------
1 July 2016 Tralokinumab LEO Pharma* Global
- atopic * Initial $115m milestone
dermatitis
* $1bn in commercially-related milestones
* Up to mid-teen tiered percentage royalties on Product
Sales
------------- ------------- ------------ ------------ ------------------------------------------------------------
9 June 2016 Anaesthetics Aspen* Global
(excl. US) * Initial $520m milestone
* $250m in sales-related revenue
* Double-digit percentage trademark royalties on
Product Sales
------------- ------------- ------------ ------------ ------------------------------------------------------------
2 September FluMist Daiichi Japan
2015 Sankyo * Initial (undisclosed) milestone
* Sales-related revenue (undisclosed)
------------- ------------- ------------ ------------ ------------------------------------------------------------
19 March Movantik Daiichi US
2015 Sankyo * Initial $200m milestone
* Up to $625m in sales-related payments
------------- ------------- ------------ ------------ ------------------------------------------------------------
29 October Nexium Daiichi Japan
2010 Sankyo * Initial $100m milestone
* Sales-related revenue (undisclosed)
------------- ------------- ------------ ------------ ------------------------------------------------------------
*For further details, please see the Corporate & Business
Development section
Product Sales
_______________________________________________________________________________________
The performance of key medicines is shown below, with a
geographical split shown in Notes 8 and 9.
H1 2016 Q2 2016
--------------------- ----------------------
$m % Change $m % Change
------ ------------- ------ --------------
CER Actual CER Actual
---------------------------- ------ ---- ------- ------ ----- -------
Respiratory & Autoimmunity
Symbicort 1,552 (6) (8) 803 (4) (5)
Pulmicort 549 10 6 239 6 3
Tudorza/Eklira 87 4 2 48 (13) (13)
Daliresp/Daxas 71 n/m n/m 40 25 25
Duaklir 30 n/m n/m 17 n/m n/m
Others 144 13 9 79 34 34
---------------------------- ------ ---- ------- ------ ----- -------
Total 2,433 1 (1) 1,226 1 -
---------------------------- ------ ---- ------- ------ ----- -------
H1 2016 Q2 2016
----------------------- ----------------------
$m % Change $m % Change
------- -------------- ------ --------------
CER Actual CER Actual
------------------------------------- ------- ----- ------- ------ ----- -------
Cardiovascular & Metabolic Diseases
Onglyza 402 6 3 191 (7) (8)
Brilinta 395 48 44 214 51 49
Farxiga 376 88 83 211 65 64
Bydureon 291 11 11 156 11 11
Byetta 138 (19) (20) 76 (6) (7)
Legacy:
Crestor 2,082 (15) (16) 926 (29) (29)
Seloken/Toprol-XL 374 7 (3) 189 8 2
Atacand 160 (11) (18) 89 (5) (10)
Others 242 (23) (23) 116 (25) (26)
------------------------------------- ------- ----- ------- ------ ----- -------
Total 4,460 (2) (5) 2,168 (11) (12)
------------------------------------- ------- ----- ------- ------ ----- -------
Oncology
Iressa 270 2 (1) 135 5 5
Tagrisso 143 n/m n/m 92 n/m n/m
Lynparza 98 n/m n/m 54 n/m n/m
Legacy:
Faslodex 401 23 20 211 23 23
Zoladex 382 (3) (7) 204 (4) (5)
Casodex 125 (9) (10) 63 (10) (9)
Arimidex 119 (2) (6) 62 (2) (3)
Others 48 (33) (33) 27 (30) (27)
------------------------------------- ------- ----- ------- ------ ----- -------
Total 1,586 18 15 848 20 20
------------------------------------- ------- ----- ------- ------ ----- -------
Infection & Neuroscience
Nexium 1,025 (18) (21) 562 (13) (13)
Seroquel XR 427 (17) (19) 225 (14) (15)
Synagis 271 - - 27 (59) (59)
Losec/Prilosec 145 (17) (20) 70 (16) (18)
Movantik/Moventig 40 n/m n/m 23 n/m n/m
FluMist/Fluenz 11 (48) (48) 6 (57) (57)
Others 636 (11) (16) 314 (12) (17)
------------------------------------- ------- ----- ------- ------ ----- -------
Total 2,555 (13) (16) 1,227 (14) (16)
------------------------------------- ------- ----- ------- ------ ----- -------
Total Product Sales 11,034 (2) (5) 5,469 (5) (6)
------------------------------------- ------- ----- ------- ------ ----- -------
Product Sales Summary
_______________________________________________________________________________________
Respiratory & Autoimmunity
Symbicort
Symbicort sales declined by 6% to $1,552m in the half. The
decline was driven primarily by continuing price erosion, partially
offset by volume growth. Symbicort became, however, the global
market leader by volume in the period.
In the US, sales of $681m represented a decline of 5%. This
reflected the impact of competitive intensity in the half that was
partly offset by encouraging volume growth and market-share
gains.
In Europe, sales declined by 18% to $466m, a result of declining
market demand in the class, as well as increased competition from
analogue medicines. In contrast, Emerging Markets sales grew by 25%
to $209m; China sales grew by 33% to $80m.
Pulmicort
Pulmicort sales were $549m in the half, an increase of 10%.
Growth reflected the performance of Pulmicort Respules in Emerging
Markets, where Pulmicort sales grew by 23% to $349m. China sales
increased by 26% to $288m, partly reflecting the increasing
prevalence of acute chronic obstructive pulmonary disease (COPD)
and paediatric asthma. To address this growing prevalence,
AstraZeneca continued its expansion of treatment centres, as well
as provided increased access to home-based patient care
systems.
Tudorza/Eklira
Sales in the half were up by 4% to $87m, driven by Europe sales
growth of 17% to $41m. US sales declined by 9% to $41m, partly
reflecting lower market demand and a loss of Medicare Part D
access, which was partially mitigated by the effect of inventory
stocking.
Daliresp/Daxas
Rights were acquired in March 2015 from Actavis plc (Actavis)
for Daliresp in the US and Canada. Sales in the half were $71m,
driven by higher volume demand and inventory stocking. In the US,
sales grew to $66m and represented 93% of global sales.
On 3 May 2016, AstraZeneca announced that it had completed the
acquisition of the core respiratory business of Takeda
Pharmaceutical Company Limited (Takeda). The agreement, initially
announced in December 2015, included the expansion of rights to
Daliresp in the US (marketed as Daxas in other countries). Since
completion, Daxas sales in Europe amounted to $4m.
Duaklir
Duaklir has been launched successfully in more than 25
countries, with sales of $30m during the half reflecting
encouraging levels of market share achieved in major European
markets. Further launches are anticipated in due course.
Cardiovascular & Metabolic Diseases
Onglyza
Sales increased by 6% to $402m as DPP-4 class volumes continued
to grow.
Sales in the US were stable at $212m. A higher net price,
restocking levels and good federal-business sales offset the
continued competitive pressures in the DPP-4 class.
Sales in Europe increased by 4% to $73m, a comparable rate to
the overall DPP-4 class. Emerging Markets sales increased by 16% to
$80m, with strong perfomance in Brazil (up by 67% to $8m) and Latin
America ex-Brazil (up by 27% to $11m).
Brilinta
Sales in the half increased by 48% to $395m.
US sales of Brilinta were $159m, an increase of 57%. Updated
preferred guidelines regarding acute coronary syndrome treatment
from the American College of Cardiology and the American Heart
Association in March 2016 helped to expand the use of Brilinta,
illustrated by a new-to-brand prescription market share of 12%.
Brilinta became the branded oral anti-platelet market leader in the
US in the half.
Sales of Brilique in Europe grew by 17% to $125m, reflecting
indication leadership across a number of markets. In the second
quarter, the German Institute for Quality and Efficiency in
Healthcare gave its assessment of the additional benefit from
Brilique at the 60mg dose. This assessment referred to the new
indication (high-risk, post- myocardial infarction) which emanated
from the PEGASUS trial.
Emerging Markets sales grew by 106% to $91m, with China
representing 47% of Emerging Markets sales at $43m, despite the
medicine not being included on the National Drug Reimbursement
List.
Farxiga
During the half, sales increased by 88% to $376m.
Sales of Farxiga in the US increased by 82% to $209m, reflecting
higher market volumes, extended market share and net pricing.
Encouraging levels of patient access and greater promotional
activity drove volumes and total prescription share growth during
the period.
Sales of Forxiga in Europe were up 72% to $89m in the half as
the medicine continued to lead the SGLT2 class. Emerging Markets
sales increased by 135% to $53m, with strong performances in Asia
Pacific (up by 167% to $22m), Brazil (up by 78% to $12m), and Latin
America ex-Brazil (up by 80% to $8m).
Bydureon/Byetta
Combined sales for Bydureon/Byetta were $429m with Bydureon
sales up by 11%, representing around 68% of total Bydureon/Byetta
sales. With the Company's focus on Bydureon, Byetta sales declined
by 19% to $138m.
In the US, Bydureon sales were $234m, an increase of 5%, despite
increased competition from new market entrants. Sales in Europe
increased by 43% to $50m, reflecting the Company's ongoing effort
to expand its Diabetes presence.
Legacy: Crestor
Sales of Crestor declined in the half by 15% to $2,082m.
In the US, Crestor sales declined by 27% to $1,004m as the first
Crestor generic competitor entered the market on 2 May 2016. The
impact of destocking offset the favourable effects from a higher
net price. Crestor continued to maintain both total and
new-to-brand prescription levels of market share; multiple generic
Crestor medicines, however, entered the US market in July 2016.
In Europe, sales declined by 4% to $438m, reflecting the
increasing prevalence of generic-medicine competition. Crestor
consolidated its position as the leading statin in Japan, with
sales growth in the half of 5% to $250m. Sales in China grew by 16%
to $156m.
Oncology
Iressa
Sales of Iressa in the half increased by 2% to $270m.
Following the US launch in July 2015, first-half sales were $10m
as the Company prioritised the launch of Tagrisso.
In Europe, sales declined by 8% to $61m, reflected in falling
market-volume share in France and Italy. Emerging Markets sales
increased by 3% to $134m. The growth was limited by a decline in
China sales of 3% to $71m, reflecting the competitive environment.
In June 2016, however, Iressa received national reimbursement
listing in China.
Tagrisso
Sales of Tagrisso were $143m, with the US representing 72% of
global sales; the first regulatory approval for Tagrisso was in the
US in November 2015.
After regulatory approval in the EU and Japan in the first
quarter, Tagrisso sales amounted to $25m in Europe and $15m in
Japan. Regulatory approvals have been granted in a number of
further markets, including Korea, Switzerland and Canada; the
Company anticipates additional regulatory approvals in due
course.
Lynparza
Sales of Lynparza reached $98m in the half. Sales in the US
increased to $62m, primarily driven by higher demand, an increased
net price and changes in inventory-stocking levels. Sales in Europe
were $32m following several successful launches. Lynparza is now
available for patients in 29 countries, with regulatory reviews
underway in nine additional countries including Singapore, Brazil,
and Russia.
Legacy: Faslodex
Faslodex sales increased by 23% to $401m. US sales grew by 28%
to $211m, driven by higher levels of demand following an expanded
label for 2nd-line treatment for advanced or metastatic breast
cancer.
Europe sales increased by 13% to $113m. Emerging Markets sales
were up in the half by 36% to $47m, with China sales growth of 125%
to $9m.
Legacy: Zoladex
Sales declined by 3% to $382m, primarily driven by a decline in
Europe sales of 3% to $80m and an Emerging Market sales decline of
5% to $153m. China sales grew by 5% to $60m. US sales increased by
36% to $19m, reflecting higher volume demand and a higher net
price.
Infection & Neuroscience
Nexium
Sales of Nexium declined by 18% to $1,025m in the half, due
primarily to the impact of generic-medicine competition in the US
and Europe.
Sales in the US declined by 39% to $294m following the loss of
exclusivity in 2015 and changes in managed-care contracts. Sales in
Europe declined by 10% to $127m, with Emerging Markets sales
increasing by 1% to $367m. Japan sales decreased by 11% to $184m,
reflecting the competitive environment.
Seroquel XR
Sales declined by 17% to $427m. Sales in the US were $306m,
representing a decline of 13%. Sales in Europe declined by 32% to
$76m, due primarily to the impact of generic-medicine
competition.
Synagis
Sales of Synagis remained stable at $271m. Sales in US increased
by 2% to $163m, driven primarily by higher net pricing, which was
partly mitigated by lower demand. This was a consequence of the
more-restrictive guidelines from the American Academy of Pediatrics
Committee on Infectious Disease, which reduced the number of
patients eligible for preventative therapy with Synagis.
FluMist/Fluenz
Sales in the half declined by 48% to $11m, reflecting lower
volumes. The Company confirmed on 23 June 2016 that the Advisory
Committee on Immunization Practices (ACIP) of the Centers for
Disease Control and Prevention had provided its interim
recommendation not to use FluMist Quadrivalent Live Attenuated
Influenza Vaccine (FluMist Quadrivalent) in the US for the
2016-2017 influenza season. The ACIP's updated recommendation is
expected to result in very limited US demand in the second half of
the year. The Company consequently wrote down the value of its
inventory of FluMist by $47m in the second quarter, which was
reflected within the Cost of Sales.
Regional Product Sales
_______________________________________________________________________________________
H1 2016 Q2 2016
---------------------- ----------------------
$m % Change $m % Change
------- ------------- ------ --------------
CER Actual CER Actual
------------------------- ------- ---- ------- ------ ----- -------
US 4,209 (7) (7) 1,963 (17) (17)
Europe 2,467 (3) (5) 1,249 (2) (1)
Established ROW(1) 1,445 (4) (3) 809 (1) 3
Japan 998 (3) 2 569 1 9
Canada 245 (1) (10) 129 (1) (7)
Other Established ROW 202 (9) (16) 111 (6) (10)
Emerging Markets(2) 2,913 7 (2) 1,448 9 1
China 1,384 11 6 610 10 5
Ex. China 1,529 4 (8) 838 8 (2)
Total 11,034 (2) (5) 5,469 (5) (6)
------------------------- ------- ---- ------- ------ ----- -------
(1) Established ROW comprises Japan, Canada, Australia and New
Zealand.
(2) Emerging Markets comprises all remaining Rest of World
markets, including Brazil, China, India, Mexico, Russia and
Turkey.
US
US sales declined by 7% in the half to $4,209m, driven primarily
by the loss of exclusivity of Crestor on 2 May 2016. Crestor sales
were $1,004m, a 27% decrease versus the comparative period. The
decline was partially offset by favourable performances from
Growth-Platform medicines Farxiga (up by 82% to $209m), Brilinta
(up by 57% to $159m) and Lynparza (up to $62m).
Europe
Sales in Europe declined by 3% to $2,467m, driven primarily by
ongoing price pressures. The strong growth of Forxiga sales (up by
72% to $89m) and Brilique sales (increasing by 17% to $125m) was
more than offset by an 18% decline in Symbicort sales to $466m,
which reflected adverse pricing and lower volumes, driven by
competition from analogue medicines. Lynparza sales increased to
$32m following its launch in 2015, reflecting a strong performance
in Germany.
Established ROW
Sales in the Established Rest Of World (ROW) declined by 4% to
$1,445m. Japan sales for the half declined by 3% to $998m,
reflecting the biennual price cut in April 2016. Sales of Forxiga
increased by 127% to $25m. Nexium sales declined by 15% to $237m,
despite retaining position as the number one medicine in the class
by market-share volume and new-to-brand prescription share.
Emerging Markets
Emerging Markets sales increased by 7% to $2,913m, despite
continued downward pressure from macro-economic conditions in Latin
America. China sales grew by 11% to $1,384m; China represented 48%
of Emerging Markets sales in the half.
Sales in Brazil grew by 13% to $177m due to the strong
performances of Forxiga (up by 78% to $12m), Oncology (up by 13% to
$40m) and Seloken (up by 16% to $32m). Russia sales were up by 12%
to $104m, led by strong performances in Cardiovascular &
Metabolic Diseases medicine sales (up by 32% to $32m).
Financial Performance
______________________________________________________________________________________
H1 2016 Reported Restructuring Intangible Diabetes Other(1) Core % Change
Asset Alliance
Amortisation &
Impairments
---------------- -------- ---------------- ------------
H1 2016 H1 2015 CER Actual
---------------- -------- ------- ------- ---- ------
Product
Sales 11,034 - - - - 11,034 11,584 (2) (5)
Externalisation
Revenue 684 - - - - 684 780 (12) (12)
Total
Revenue 11,718 - - - - 11,718 12,364 (3) (5)
Cost of
Sales (2,066) 28 58 - - (1,980) (1,918) 5 3
Gross
Profit 9,652 28 58 - - 9,738 10,446 (4) (7)
Gross
Margin(2) 81.5% 82.3% 83.4% -1.1 -1.1
Distribution
Expense (167) - - - - (167) (161) 9 4
% Total
Revenue 1.4% 1.4% 1.3% -0.2 -0.1
R&D Expense (2,945) 107 25 - - (2,813) (2,636) 9 7
% Total
Revenue 25.1% 24.0% 21.3% -2.5 -2.7
SG&A Expense (5,624) 328 504 218 347 (4,227) (4,584) (5) (8)
% Total
Revenue 48.0% 36.1% 37.1% +0.8 +1.0
Other
Operating
Income 425 - 43 - - 468 553 (14) (15)
% Total
Revenue 3.6% 4.0% 4.5% -0.5 -0.5
Operating
Profit 1,341 463 630 218 347 2,999 3,618 (14) (17)
% Total
Revenue 11.4% 25.6% 29.3% -3.5 -3.7
Net Finance
Expense (636) - - 195 126 (315) (250)
Joint
Ventures (12) - - - - (12) (7)
Profit
Before
Tax 693 463 630 413 473 2,672 3,361 (18) (21)
Taxation (99) (97) (140) (95) (30) (461) (472)
Tax Rate 14% 17% 14%
Profit
After
Tax 594 366 490 318 443 2,211 2,889 (21) (23)
Non-controlling
Interests 49 (5) - - - 44 (1)
Net Profit 643 361 490 318 443 2,255 2,888 (20) (22)
Weighted
Average
Shares 1,264 1,264 1,264 1,264 1,264 1,264 1,263
Earnings
Per Share
($) 0.51 0.29 0.39 0.25 0.34 1.78 2.29 (20) (22)
---------------- -------- ------------- --------------- ---------------- -------- ------- ------- ---- ------
(1) Other adjustments include provision charges related
to certain legal matters (see Note 7) and fair value
adjustments arising on acquisition-related liabilities
(see Note 6).
(2) Gross Margin reflects Gross Profit derived from
Product Sales, divided by Product Sales
(3) All financial figures, except Earnings Per Share,
are in $ millions ($m). Weighted Average Shares are
in millions.
Q2 2016 Reported Restructuring Intangible Diabetes Other(1) Core % Change
Asset Alliance
Amortisation &
Impairments
---------------- -------- ---------------- ------------
Q2 2016 Q2 2015 CER Actual
---------------- -------- ------- ------- ---- ------
Product
Sales 5,469 - - - - 5,469 5,836 (5) (6)
Externalisation
Revenue 134 - - - - 134 471 (72) (72)
Total
Revenue 5,603 - - - - 5,603 6,307 (10) (11)
Cost of
Sales (1,062) 19 29 - - (1,014) (965) 3 5
Gross
Profit 4,541 19 29 - - 4,589 5,342 (13) (14)
Gross
Margin(2) 80.6% 81.5% 83.5% -1.5 -2.0
Distribution
Expense (91) - - - - (91) (84) 11 8
% Total
Revenue 1.6% 1.6% 1.3% -0.3 -0.3
R&D Expense (1,465) 69 12 - - (1,384) (1,356) 3 2
% Total
Revenue 26.1% 24.7% 21.5% -3.2 -3.2
SG&A Expense (3,052) 220 275 110 347 (2,100) (2,216) (3) (5)
% Total
Revenue 54.5% 37.5% 35.1% -2.7 -2.4
Other
Operating
Income 370 - 22 - - 392 127 n/m n/m
% Total
Revenue 6.6% 7.0% 2.0% +4.9 +5.0
Operating
Profit 303 308 338 110 347 1,406 1,813 (21) (22)
% Total
Revenue 5.4% 25.1% 28.7% -3.5 -3.6
Net Finance
Expense (325) - - 98 69 (158) (132)
Joint
Ventures (8) - - - - (8) (2)
(Loss)/Profit
Before
Tax (30) 308 338 208 416 1,240 1,679 (27) (26)
Taxation (1) (64) (74) (48) (25) (212) (160)
Tax Rate (3)% 17% 10%
(Loss)/Profit
After
Tax (31) 244 264 160 391 1,028 1,519 (33) (32)
Non-controlling
Interests 28 - - - - 28 1
Net (Loss)/
Profit (3) 244 264 160 391 1,056 1,520 (31) (31)
Weighted
Average
Shares 1,265 1,265 1,265 1,265 1,265 1,265 1,264
Earnings
Per Share
($) 0.00 0.20 0.21 0.12 0.30 0.83 1.21 (31) (31)
---------------- -------- ------------- --------------- ---------------- -------- ------- ------- ---- ------
(1) Other adjustments include provision charges related
to certain legal matters (see Note 7) and fair value
adjustments arising on acquisition-related liabilities
(see Note 6).
(2) Gross Margin reflects Gross Profit derived from
Product Sales, divided by Product Sales
(3) All financial figures, except Earnings Per Share,
are in $ millions ($m). Weighted Average Shares are
in millions.
Profit and Loss
Gross Profit
Reported Gross Profit declined by 1% in the half to $9,652m and,
excluding the impact of externalisation, the Reported Gross Profit
Margin was 81.5%, an increase of two percentage points. An adverse
impact from the mix of sales, the market entry of a Crestor generic
medicine in the US, as well as a write-down of inventory levels of
FluMist in the US were more than offset by lower restructuring and
amortisation charges. Excluding these charges, Core Gross Profit
declined by 4% to $9,738m and, excluding the impact of
externalisation, the Core Gross Profit margin declined by one
percentage point to 82.3%.
Operating Expenses: R&D
Reported R&D costs increased by 6% in the half to $2,945m.
This reflected the number of potential medicines in pivotal trials
as well as the absorption of the R&D costs of ZS Pharma and
Acerta Pharma. These costs were partially offset by lower
restructuring costs and impairment charges. Without the impact of
ZS Pharma and Acerta Pharma, Reported R&D costs would have
increased by 1%.
Excluding the impact of lower restructuring and impairment
charges, Core R&D costs increased by 9% to $2,813m (Q2 2016:
Growth of 3%). Without the impact of the aforementioned investments
in ZS Pharma and Acerta Pharma, Core R&D costs in the half
would have increased by 3%.
Operating Expenses: SG&A
Reported SG&A costs were stable in the half at $5,624m, with
efficiency savings in sales and marketing operations and further
reductions in IT costs offset by higher restructuring costs,
amortisation charges and fair value adjustments, which are excluded
from the Core measurement. Core SG&A costs declined by 5% in
the half to $4,227m, in line with full-year expectations of a
material reduction.
Other Operating Income
Reported Other Operating Income of $425m included:
-- $183m of income related to the disposal of the ex-US rights to Imdur
-- $89m of royalty income related to the entry of the first US
Crestor generic medicine from the period between 2 May 2016 and 8
July 2016
-- Other royalty income of $117m, including that related to HPV
and the antibiotic medicine, ertapenem
Operating Profit
Reported Operating Profit declined by 24% to $1,341m. The
Reported Operating Margin declined by three percentage points to
11% of Total Revenue.
Core Operating Profit declined by 14% to $2,999m in the half.
The Core Operating Margin declined by three percentage points to
26% of Total Revenue.
Net Finance Expense
Reported Net Finance Expense of $636m compared to $513m in the
prior half, and included $321m for the discount unwind on
acquisition-related liabilities. The Core Net Finance Expense,
which excludes the aforementioned discount unwind, was $315m in the
half, compared to $250m in the comparative period. The increase
reflected higher loan interest arising from an increase in net
debt, driven by the acquisition of ZS Pharma and the investment in
Acerta Pharma.
Taxation
The Reported and Core tax rates for the half were 14% and 17%
respectively. These tax rates were lower than the UK Corporation
Tax Rate of 20%, mainly due to the impact of the geographical mix
of profits, tax settlements and the UK patent box. The cash tax
paid for the half was $262m, which was 38% of Reported Profit
Before Tax and 10% of Core Profit Before Tax. The Reported and Core
tax rates for H1 2015 were 7% and 14% respectively.
Earnings Per Share (EPS)
Reported EPS of $0.51 in the half represented a 45% decline,
with Core EPS in the half declining by 20% to $1.78. The declines
were driven by the first market entry of a Crestor generic medicine
in the US, as well as the ongoing impact of US Nexium generic
medicines. The reduction also reflected the phasing of
Externalisation Revenue over the year.
Productivity
AstraZeneca continues to enhance productivity through the
implementation of its restructuring initiatives, including those
announced on 29 April 2016. Restructuring charges of $463m were
incurred in the half. The Company remains on track to realise
savings and incur expenses in line with prior announcements.
Cash Flow and Balance Sheet
Cash Flow
The Company generated a net cash inflow from operations of
$1,374m, compared with $1,008m in the comparative period. Improved
working capital and lower net tax payments more than offset the
lower profit.
Net cash outflows from investing activities were $3,948m
compared with $1,234m in the comparative period. The increase
primarily reflected the net cash outflow of $2,383m on the
investment in Acerta Pharma.
Net cash outflows from financing activities were $6m,
incorporating $2,483m of new long-term loans, net of a dividend
payment in the period of $2,409m. This compared to an outflow of
$2,388m in the comparative period.
The cash payment of contingent consideration in respect of the
Bristol-Myers Squibb Company share of the global Diabetes alliance
amounted to $141m in the half. The consideration is based on a
tiered structure, whereby a higher royalty rate is applied until a
specified level of sales is achieved in the year; thereafter a
lower rate is applied to the remaining sales in the year and
settled in the quarter following the application of the charge.
Debt and Capital Structure
At 30 June 2016, outstanding gross debt (interest-bearing loans
and borrowings) was $17,579m (30 June 2015: $11,008m). Of the gross
debt outstanding at 30 June 2016, $1,060m was due within one year
(30 June 2015: $2,705m). The Company's net debt position at 30 June
2016 was $12,734m (30 June 2015: $5,994m).
On 9 May 2016, the Company announced the successful pricing of
euro medium-term notes in an aggregate principal amount of
EUR2.2bn, consisting of three tranches:
EUR500m of five-year, fixed-rate notes with a coupon of
0.25%
EUR900m of eight-year, fixed-rate notes with a coupon of
0.75%
EUR800m of 12-year, fixed-rate notes with a coupon of 1.25%
Shares in Issue
During the half, 0.5 million shares were issued in respect of
share option exercises for a consideration of $22m. The total
number of shares in issue as at 30 June 2016 was 1,265 million.
Dividends
The Board has recommended an unchanged first interim dividend of
$0.90 (68.7 pence, 7.81 SEK) per Ordinary Share.
Capital Allocation
The Board's aim is to continue to strike a balance between the
interests of the business, financial creditors and the Company's
shareholders. After providing for investment in the business,
supporting the progressive dividend policy and maintaining a
strong, investment-grade credit rating, the Board will keep under
review potential investment in immediately earnings-accretive,
value-enhancing opportunities.
Sensitivity: Foreign-Exchange Rates
The Company provides the following currency sensitivity
information:
Average Impact Of 5% Weakening In
Exchange Exchange Rate Versus USD
Rates Versus ($m)(2)
USD
------------ ------------ ---------------------------
Currency Primary FY 2015 H1 2016(1) Change % Total Revenue Core
Relevance Operating
Profit
------------ -------------- ------------ ---------- -------- ------------- ------------
EUR Product Sales 0.90 0.90 1 (178) (103)
JPY Product Sales 121.04 111.74 8 (102) (66)
CNY Product Sales 6.28 6.54 (4) (133) (62)
SEK Costs 8.43 8.33 1 (8) 71
GBP Costs 0.65 0.70 (6) (34) 96
Other(3) (201) (122)
------------------------------- ------------ ---------- -------- ------------- ------------
(1) Based on average daily spot rates in the six months to the end of June 2016
(2) Based on 2015 actual results at 2015 actual exchange rates
(3) Other important currencies include AUD, BRL, CAD, KRW and RUB
Currency Hedging
AstraZeneca monitors the impact of adverse currency movements on
a portfolio basis, recognising correlation effects. The Company may
hedge to protect against adverse impacts on cash flow over the
short to medium term. As at 30 June 2016, AstraZeneca had hedged
90% of forecast short-term currency exposure that arises between
the booking and settlement dates on non-local currency purchases
and Product Sales.
Related-Party Transactions
There have been no significant related-party transactions in the
period.
Principal Risks and Uncertainties
It is not anticipated that the nature of the principal risks and
uncertainties that affect the business, and which are set out on
pages 212 to 226 of the Annual Report and Form 20-F Information
2015, will change in respect of the second six months of the
financial year.
In summary, the principal risks and uncertainties listed in the
Annual Report and 20-F Information 2015 are:
a) Medicine pipeline and intellectual property risks
Failure to meet development targets; delay to new product
launches; acquisitions and strategic alliances, including licensing
and collaborations, may be unsuccessful; difficulties obtaining and
maintaining regulatory approvals for new products; failure to
obtain and enforce effective intellectual property (IP)
protection.
b) Commercialisation risks
Expiry or loss of, or limitations to, IP rights and
consequential pressure from generic competition; abbreviated
approval processes for biosimilars; political and socio-economic
conditions; developing our business in Emerging Markets; challenges
to achieving commercial success of new products; effects of patent
litigation in respect of IP rights; price controls and reductions;
economic, regulatory and political pressures; illegal trade in
medicines; increasing implementation and enforcement of more
stringent anti-bribery and anti-corruption legislation; failure to
adhere to applicable laws, rules and regulations; failure of
information technology and cybercrime; any expected gains from
productivity initiatives are uncertain; failure of outsourcing;
failure to attract and retain key personnel and failure to
successfully engage with employees.
c) Supply chain and business execution risks
Difficulties and delays in the manufacturing, distribution and
sale of products; reliance on third-party goods and services;
manufacturing biologic products.
d) Legal, regulatory and compliance risks
Adverse outcome of litigation and/or governmental
investigations; failure to adhere to applicable laws, rules and
regulations relating to anti-competitive behaviour; substantial
product-liability claims; failure to adhere to applicable laws,
rules and regulations relating to environment, health and safety;
environmental and occupational health and safety liabilities;
misuse of social media platforms and new technology.
e) Economic and financial risks
Failure to achieve strategic priorities or to meet targets or
expectations; adverse impact from sustained economic downturn;
fluctuations in exchange rates; limited third-party insurance
coverage; taxation; pensions.
Corporate and Business Development Update
______________________________________________________________________________________
The highlights of the Company's corporate and business
development activities since the prior results announcement are
shown below.
a) Licensing Agreements In Skin Diseases
On 1 July 2016, the Company announced that it had entered into
an agreement with LEO Pharma A/S (LEO Pharma), a specialist in
dermatological care, for the global licence to tralokinumab in skin
diseases. Tralokinumab is a potential new medicine (an IL-13
monoclonal antibody) that has completed a Phase IIb trial for the
treatment of patients with atopic dermatitis, an inflammatory skin
disease resulting in itchy, red, swollen and cracked skin.
Under the terms of the agreement, LEO Pharma will make an
upfront payment to AstraZeneca of $115m, up to $1bn in
commercially-related milestones and up to mid-teen tiered
percentage royalties on Product Sales. AstraZeneca will manufacture
and supply tralokinumab to LEO Pharma. AstraZeneca will retain all
rights to tralokinumab in respiratory disease and any other
indications outside of dermatology. The Company anticipates
completion of the transaction in the third quarter.
On the same date, AstraZeneca and an affiliate of Valeant
Pharmaceuticals International, Inc. (Valeant) agreed to terminate
the licence for Valeant's right to develop and commercialise
brodalumab in Europe. Simultaneously, AstraZeneca has entered into
an agreement with LEO Pharma for the exclusive licence to
brodalumab in Europe. Brodalumab is an IL-17 receptor monoclonal
antibody under regulatory review for patients with
moderate-to-severe plaque psoriasis (a skin disease that causes red
patches of skin covered with silvery scales) and in development for
psoriatic arthritis (inflammation of the joints associated with
psoriasis).
In September 2015, AstraZeneca and Valeant entered an agreement
granting Valeant an exclusive licence to develop and commercialise
brodalumab globally, outside Japan and certain other Asian
countries where the rights are held by Kyowa Hakko Kirin Co., Ltd.
Valeant will continue to lead development and commercialisation of
brodalumab in the US and all other markets included in the original
agreement.
LEO Pharma will gain the European rights to brodalumab under
similar terms to those agreed with Valeant. Additionally, Amgen
Inc. will continue to receive a low single-digit percentage
inventor royalty.
b) Rights To Global Anaesthetics Portfolio
On 9 June 2016, the Company announced that it had entered into a
commercialisation agreement with Aspen Global Incorporated (AGI),
part of Aspen Pharmacare Holdings Limited, for rights to its global
anaesthetics portfolio outside the US.
Under the terms of the agreement, AGI will acquire the
commercialisation rights for an upfront consideration of $520m.
Additionally, AGI will pay AstraZeneca up to $250m in a Product
Sales-related payment, as well as double-digit percentage trademark
royalties on Product Sales. AstraZeneca will manufacture and supply
the medicines on a cost-plus basis to AGI for an initial period of
10 years. Upon completion, anticipated in the third quarter of
2016, AGI will assume responsibility for all activities relating to
the sale of the portfolio in all relevant markets.
AstraZeneca will retain a significant ongoing interest in the
anaesthetics portfolio, including a long-term manufacturing and
supply agreement and participation in commercial strategy. The
upfront and milestone payments, as well as royalty receipts, which
are open-ended, will therefore be reported as Externalisation
Revenue in the Company's financial statements.
c) Zurampic In Europe And Latin America
On 2 June 2016, AstraZeneca announced that it had entered into a
licensing agreement with Grünenthal GmbH (Grünenthal) for the
exclusive rights to Zurampic (lesinurad) in Europe and Latin
America. Zurampic was approved by the European Medicines Agency
(EMA) in February 2016, in combination with a xanthine oxidase
inhibitor, for the adjunctive treatment of hyperuricemia (excess of
uric acid in the blood) in adult patients with uncontrolled
gout.
Under the terms of the agreement, Grünenthal will submit a
fixed-dose combination programme for regulatory review and will pay
AstraZeneca up to $230m in sales and other related milestones over
the lifetime of the contract. Grünenthal will also pay tiered, low
double-digit percentage royalties on annual Product Sales. Revenue
from the licensing agreement will provide AstraZeneca with future
recurring Externalisation Revenue from expected milestone payments
and tiered, low double-digit percent royalty payments on Product
Sales. The Company anticipates completion of the transaction in the
third quarter.
d) Acquisition Of Takeda's Respiratory Business
On 3 May 2016 AstraZeneca announced that it had completed the
acquisition of the main respiratory business of Takeda. The
agreement, announced in December 2015, included the expansion of
rights to roflumilast (marketed as Daliresp in the US and Daxas in
other countries), the only approved oral phosphodiesterase 4 (PDE4)
inhibitor for the treatment of COPD. PDE4 is an enzyme involved in
modulating production of inflammatory mediators by immune cells.
AstraZeneca has marketed Daliresp in the US since the acquisition
of the rights from Actavis in the first quarter of 2015.
e) Agreement with China Medical System Holdings (CMS) - Imdur
outside the US
On 29 February 2016, AstraZeneca announced that it had entered
into an agreement with CMS and its associated company, Tibet
Rhodiola Pharmaceutical Holding Co., for the divestment of the
global rights to Imdur outside the US. Imdur is a mature medicine
for the prevention of angina in patients with heart disease; its
global sales outside the US were $57m in FY 2015. The transaction
completed in the second quarter.
Under the terms of this agreement, AstraZeneca recognised income
of $183m for the rights to Imdur in all markets outside the US.
Income from the agreement was reported within Other Operating
Income.
Research and Development Update
______________________________________________________________________________________
A comprehensive table with AstraZeneca's pipeline of medicines
in human trials can be found later in this document.
Since the results announcement on 28 April 2016 (the
period):
Regulatory Approvals 3
* Qtern (saxagliptin/dapagliflozin) - type-2 diabetes
(EU)
* Zavicefta (previously CAZ AVI) - serious infections
(EU)
* Pandemic Live Attenuated Influenza Vaccine - pandemic
influenza (EU)(1)
------------------------ ---- -------------------------------------------------------------
Regulatory Submission 1
Acceptances * saxagliptin/dapagliflozin, resubmission (US)
Positive Phase 3
III Data Readouts * benralizumab - severe asthma
* Faslodex - breast cancer (1st line)
* Tagrisso - lung cancer (2nd line)
Other Key Developments 2
* Orphan Drug Designation: selumetinib - thyroid cancer
(US)
* Fast Track Designation: Lynparza - ovarian cancer
(2nd line) (US)
New Molecular 14 Respiratory & Autoimmunity
Entities (NMEs) * brodalumab - psoriasis*
in Pivotal Trials
or under Regulatory
Review* * benralizumab - severe asthma
* tralokinumab - severe asthma
* PT010 - COPD
* anifrolumab - lupus
Cardiovascular & Metabolic Diseases
* ZS-9* - hyperkalaemia
* roxadustat - anaemia
Oncology
* cediranib* - ovarian cancer
* selumetinib - lung cancer
* durvalumab - multiple cancers
* durva + treme - multiple cancers
* acalabrutinib - blood cancers
* moxetumomab pasudotox - leukaemia
Neuroscience
* AZD3293 - early Alzheimers' disease
------------------------ ---- -------------------------------------------------------------
Projects in
clinical pipeline 145
------------------------ ---- -------------------------------------------------------------
(1) Conditional Marketing Authorisation
1. Respiratory & Autoimmunity
AstraZeneca's Respiratory portfolio includes a range of
differentiated potential medicines such as novel combinations,
biologics and devices for the treatment of asthma and COPD. The
pipeline also includes a number of potential medicines designed to
treat autoimmune diseases, with a lead programme in systemic lupus
erythematosus.
AstraZeneca highlighted the breadth of its Respiratory portfolio
at the American Thoracic Society international conference in May
2016, involving more than 60 posters and abstracts that illustrated
progress in asthma and COPD medicines.
The following shows the progress in the Respiratory &
Autoimmunity portfolio since the last results announcement:
a) Benralizumab (severe asthma)
On 17 May 2016, the Company announced positive top-line results
from the benralizumab Phase III programme, an encouraging milestone
for AstraZeneca and for millions of patients suffering from severe
asthma. Two pivotal Phase III trials (SIROCCO and CALIMA) achieved
statistical significance in reducing exacerbations among patients
with severe uncontrolled asthma with eosinophilic inflammation.
These trials evaluated treatment with benralizumab versus placebo
added to high-dose inhaled corticosteroid (ICS) plus long-acting
beta agonist (LABA) for the prevention of asthma exacerbations in
patients with uncontrolled severe asthma.
Benralizumab is an eosinophil-depleting monoclonal antibody and
AstraZeneca's first respiratory biologic medicine. Upon anticipated
regulatory approval, benralizumab will potentially be used in
addition to inhaled combination medicines. Benralizumab has the
potential to deliver rapid and sustained improvement in lung
function, symptoms and quality of life, together with significant
reductions in exacerbations, hospitalisations and oral
corticosteroids use; and simple, convenient dosing and
administration.
b) Brodalumab (psoriasis)
On 19 July 2016, the Dermatologic and Ophthalmic Drugs Advisory
Committee appointed by the US FDA voted unanimously to recommend
approval for brodalumab for adult patients with moderate-to-severe
plaque psoriasis. 14 of the panelists voted for approval with
conditions related to product labelling and post-marketing
obligations based on observations related to suicidal ideation and
behaviour. Patient safety is the highest priority and as such the
Company is committed to supporting the partner Valeant in
addressing any concerns raised by the Committee as the FDA
continues its review of brodalumab. Valeant is the Biologics
License Application (BLA) holder for brodalumab and is responsible
for all development and commercialisation activities in the US.
Valeant has communicated that the FDA assigned a Prescription Drug
User Fee Act (PDUFA) date of 16 November 2016 for the BLA.
2. Cardiovascular & Metabolic Diseases
This therapy area includes a broad type-2 diabetes portfolio,
differentiated devices and unique small and large-molecule
programmes to reduce morbidity, mortality and organ damage across
cardiovascular (CV) disease, diabetes and chronic kidney disease
(CKD) indications.
a) Brilinta (CV disease)
In May 2016, the Brilinta THEMIS trial completed its
recruitment, with more than 19,000 patients now randomised within
the trial. THEMIS is part of PARTHENON, AstraZeneca's largest
clinical-trial programme, evaluating Brilinta in more than 80,000
high-risk CV patients. THEMIS is an event-driven, randomised,
double-blind, placebo-controlled trial, designed to evaluate the
effect of Brilinta versus placebo for prevention of major CV events
in patients with established coronary artery disease and type-2
diabetes, but without a previous myocardial infarction (MI) or
stroke. Results are expected in 2018.
The Ministry of Health, Labour and Welfare Drug Committee
assessment of Brilinta's application for approval is ongoing in
Japan and a regulatory decision is now anticipated in the second
half of 2016.
There were three new treatment guidelines updated in China in
the first half of the year. The ACS Emergency Room Rapid Guideline,
Chinese PCI Guideline and the Coronary Artery Bypass Graft
Consensus (2016) guideline. These recommended Brilinta as
'first-choice treatment' over any other platelet inhibitor.
b) Qtern (saxagliptin/dapagliflozin) (type-2 diabetes)
On 19 July 2016 AstraZeneca announced that the European
Commission had approved Qtern tablets for the treatment of type-2
diabetes in the European Union (EU) plus Iceland, Liechtenstein and
Norway. The fixed-dose combination of saxagliptin and dapagliflozin
was the first DPP-4/SGLT2 combination medicine to be approved.
After receiving a Complete Response Letter (CRL) from the US FDA
in October 2015, the Company submitted a regulatory filing with new
clinical data, which was accepted by the FDA. The submission was
based on discussions with regulators and was a first step towards
regulatory approval in the US. The PDUFA date is scheduled for the
first quarter of 2017.
c) Type-2 diabetes CV outcomes trials
As the field of type-2 diabetes medicines continues to evolve,
with multiple outcomes trials producing data, AstraZeneca continues
to assess both the SGLT2 and GLP-1 classes for potential long-term
benefits. Two significant type-2 diabetes outcomes trials are
underway and are fully recruited. Details and updates on those two
trials are listed below:
Medicine Trial Mode of Number Primary Endpoint Timeline
Action of Patients
--------- -------- ---------------- ------------- ----------------- ------------------
Bydureon EXSCEL GLP-1 agonist 15,000 Time to first 2018
occurrence
of CV death,
non-fatal MI
or non-fatal
stroke
(final analysis)
--------- -------- ---------------- ------------- ----------------- ------------------
Farxiga DECLARE SGLT2 inhibitor 17,000* Time to first 2019
occurrence (final analysis)
of CV death, 2017
non-fatal MI (anticipated
or non-fatal interim
stroke analysis)
--------- -------- ---------------- ------------- ----------------- ------------------
*Includes 10,000 patients who have had no prior index event
(primary prevention) and 7,000 patients who have suffered an index
event (secondary prevention).
d) ZS-9 (hyperkalaemia)
On 27 May 2016, AstraZeneca announced that the US FDA had issued
a CRL regarding the new drug application (NDA) for ZS-9 (sodium
zirconium cyclosilicate), the potential new medicine being
developed for the treatment of hyperkalaemia (a high potassium
level in the blood serum) by ZS Pharma, a wholly-owned subsidiary
of AstraZeneca. The CRL referred to observations arising from a
pre-approval manufacturing inspection. The FDA also acknowledged
receipt of recently-submitted data which it had yet to review. The
CRL did not require the generation of new clinical data.
AstraZeneca and ZS Pharma have made important progress in
addressing the findings of the CRL and are in dialogue with the FDA
regarding the timing of the resubmission of the NDA. From the time
of the resubmission, anticipated to be in the second half of the
year, the Company assumes a maximum of a six-month period for the
FDA review.
In the EU, the EMA has accepted a request to extend the
submission timeline in order for the Company to provide a
comprehensive and complete package. The Company continues to
anticipate EU approval in the first half of 2017.
e) Roxadustat (anaemia)
In the period, the Company approved Phase III investment for
roxadustat in an additional type of anaemia, Myelodysplastic
Syndrome (MDS), with AstraZeneca's partner, Fibrogen, Inc. MDS is a
condition in which the bone marrow produces insufficient levels of
healthy blood cells and there are abnormal (blast) cells in the
blood and/or bone marrow. Anaemia is observed in approximately
60-80% of MDS patients, producing symptoms of fatigue, angina,
dizziness, cognitive impairment or altered sense of well-being and
all too often requiring transfusions. Transfused patients with MDS
experience higher rates of cardiac events, diabetes, infections,
and transformation to acute myeloid leukaemia and have a decreased
overall survival rate when compared with non-transfused
patients.
The Phase III trial will seek to demonstrate the efficacy and
safety of roxadustat, which acts on both the production of red
blood cells and management of iron, in achieving transfusion
independence in patients with lower-risk MDS and a low transfusion
burden.
Roxadustat is already in late Phase III development against
anaemia arising from CKD, with a rolling regulatory submission
expected to initiate in China before the end of the year. The first
Phase III data from an AstraZeneca-sponsored registrational trial
are expected to be available during the second half of 2017, with a
potential regulatory submission in the US anticipated in 2018.
3. Oncology
AstraZeneca has a deep-rooted heritage in Oncology and offers a
rapidly-growing portfolio of new medicines that has the potential
to transform patients' lives and the Company's future. With at
least six new medicines to be launched between 2014 and 2020 and a
broad pipeline of small molecules and biologics in development, the
Company is committed to advancing New Oncology as one of
AstraZeneca's six Growth Platforms focused on lung, ovarian, breast
and blood cancers.
In addition to core capabilities, the Company is actively
pursuing innovative collaborations and investments that accelerate
the delivery of AstraZeneca's strategy, as illustrated by the
Company's investment in Acerta Pharma in haematology.
AstraZeneca highlighted its pipeline of Oncology medicines at
the American Society of Clinical Oncology meeting on 6 June 2016.
At the meeting, AstraZeneca's Oncology management team presented
both pipeline programmes and lifecycle management trials in
Immuno-Oncology (IO), DNA Damage Response (DDR), tumour drivers
& resistance and haematology. The Company presented 73
abstracts and oral presentations, including updates on the Lynparza
Study 19, Tagrisso in leptomeningeal disease and durvalumab in
2nd-line, PDL1-positive urothelial bladder cancer. In addition to
the breadth and depth of the data shared at the meeting,
AstraZeneca announced a number of encouraging updates in the
period.
a) Faslodex (breast cancer)
On 27 May 2016, the Company announced that Faslodex had met its
primary endpoint in the FALCON trial. Top-line data showed that
1st-line treatment with Faslodex extends progression-free survival
(PFS) in postmenopausal women with locally-advanced or metastatic
hormone receptor-positive breast cancer, compared to the current
standard of care. Full evaluation of the data is ongoing and
results are expected to be presented at a forthcoming medical
meeting.
b) Lynparza (ovarian and other cancers)
The Phase III SOLO-2 trial for Lynparza was granted Fast Track
Designation by the FDA in the period. SOLO-2 is designed to
evaluate Lynparza as a potential maintenance treatment for
platinum-sensitive, relapsed germline BRCA-mutated, ovarian-cancer
patients who are in complete or partial response following
platinum-based chemotherapy. The FDA's Fast Track programme is
designed to expedite the development and review of medicines to
treat serious conditions and fill an unmet medical need. SOLO-2
high-level results are expected to be available later this
year.
On 18 May 2016, the top-line results from the Phase III Lynparza
GOLD trial in advanced gastric-cancer patients were announced.
Lynparza, in combination with paclitaxel chemotherapy and compared
with paclitaxel chemotherapy alone, did not meet the primary
endpoint of overall survival (OS) in either the overall population
or patients whose tumour tested negative for Ataxia-Telangectasia
Mutated (ATM) protein. While there was a numerical survival trend
in the Lynparza plus paclitaxel arm, it did not meet statistical
significance. The particular regimen in the GOLD trial, at a low
dose and in combination with chemotherapy, differed from other
Phase III trials in the Lynparza programme. The Lynparza GOLD data
will be analysed and submitted for presentation at a forthcoming
medical meeting.
c) Tagrisso (lung cancer)
On 18 July 2016 the Company announced that Tagrisso's
confirmatory Phase III AURA3 trial had met its primary endpoint,
demonstrating superior PFS data compared to standard platinum-based
doublet chemotherapy in 2nd-line patients with EGFR T790M
mutation-positive, locally-advanced or metastatic non-small cell
lung cancer (NSCLC) whose disease had progressed following 1st-line
EGFR tyrosine kinase inhibitor therapy.
Tagrisso also demonstrated a safety profile consistent with
previous trials and, in addition to PFS, the objective response
rate, disease control rate and duration of response also achieved
clinically-meaningful improvements versus chemotherapy. A full
evaluation of the AURA3 data, including an analysis of OS data is
ongoing and the results will be presented at a forthcoming medical
meeting.
d) Selumetinib (lung and other cancers)
On 12 May 2016, selumetinib was granted Orphan Drug Designation
by the FDA for the treatment of patients with differentiated
thyroid cancer (DTC). DTC, diagnosed in approximately 60,000
patients in the US each year, is usually treated with surgery.
High-risk patients, however, need additional radioactive iodine
(RAI) to kill cancer cells. Up to one in seven patients do not
respond to RAI because they lack a key substance, sodium/iodine
importer, that is needed to move RAI into cancer cells.
Selumetinib is a MEK 1/2 inhibitor that has already demonstrated
clinically-meaningful increases in iodine uptake and retention in
patients with thyroid cancer who did not previously respond to RAI.
A MEK inhibitor inhibits the mitogen-activated protein kinase
enzymes (MEK1 and/or MEK2).
e) Durvalumab (multiple cancers)
The Company continues to advance multiple monotherapy trials of
durvalumab and combination trials of durvalumab with tremelimumab
in IO. An update on key AstraZeneca-sponsored ongoing trials with
durvalumab is provided over the page:
LUNG CANCER
Name Phase Line of Population Design Timelines Status
treatment
------------ ------ ---------- ------------- ------------- ---------- ------------
Early disease
Monotherapy
----------------------------------------------------------------------------------------
ADJUVANT(1) III N/A Stage durvalumab FPD(2) Q1 Recruiting
Ib-IIIa vs placebo 2015
NSCLC
Data
expected
2020
------------ ------ ---------- ------------- ------------- ---------- ------------
PACIFIC III N/A Stage III durvalumab FPD Q2 Recruitment
unresectable vs placebo 2014 completed
NSCLC
LPCD(3)
Q2 2016
Data
expected
H2 2017
------------ ------ ---------- ------------- ------------- ---------- ------------
Advanced/metastatic disease
Combination therapy
----------------------------------------------------------------------------------------
MYSTIC III 1st line NSCLC durvalumab FPD Q3 Recruitment
vs durva + 2015 completed
treme vs
SoC(4) LPCD Q3
2016
Data
expected
H1 2017
------------ ------ ---------- ------------- ------------- ---------- ------------
NEPTUNE III 1st line NSCLC durva + FPD Q4 Recruiting
treme vs SoC 2015
Data
expected
2018
------------ ------ ---------- ------------- ------------- ---------- ------------
- III 1st line NSCLC durvalumab + - Recruiting
chemotherapy in safety
+/- lead-in
tremelimumab Phase I/II
trial
------------ ------ ---------- ------------- ------------- ---------- ------------
ARCTIC III 3rd line PD-L1 durvalumab FPD Q2 Recruitment
neg.(5) vs 2015 completed
NSCLC tremelimumab
vs durva + LPCD Q3
treme vs SoC 2016
Data
expected
H1 2017
------------ ------ ---------- ------------- ------------- ---------- ------------
- III 1st line SCLC(6) durva + - Awaiting
treme + first
chemotherapy patient
vs SoC dosed
------------ ------ ---------- ------------- ------------- ---------- ------------
(1) Conducted by the National Cancer Institute of Canada (2) FPD = First Patient Dosed (3)
LPCD = Last Patient Commenced Dosing
(4) SoC = Standard of Care (5) PD-L1 negativity cut-off measured at <25% of tumour-cell staining
(6) SCLC = Small Cell Lung Cancer
METASTATIC OR RECURRENT HEAD AND NECK CANCER
Name Phase Line of Population Design Timelines Status
treatment
-------- ------ ------------- ------------ ------------- ------------ ------------
Monotherapy
----------------------------------------------------------------------------------------
HAWK II 2nd line PD-L1 pos. durvalumab FPD Q1 2015 Recruitment
SCCHN(1) (single arm) completed
LPCD Q2
2016
Data
expected
H2 2016
-------- ------ ------------- ------------ ------------- ------------ ------------
Combination therapy
----------------------------------------------------------------------------------------
CONDOR II 2nd line PD-L1 neg. durvalumab FPD Q2 2015 Recruitment
SCCHN vs completed
tremelimumab LPCD Q2
vs durva + 2016
treme
Data
expected H1
2017
-------- ------ ------------- ------------ ------------- ------------ ------------
KESTREL III 1st line SCCHN durvalumab FPD Q4 2015 Recruiting
vs durva +
treme vs SoC Data
expected H2
2017
-------- ------ ------------- ------------ ------------- ------------ ------------
EAGLE III 2nd line SCCHN durvalumab FPD Q4 2015 Recruiting
vs durva +
treme vs SoC Data
expected
2018
-------- ------ ------------- ------------ ------------- ------------ ------------
(1) SCCHN = Squamous Cell Carcinoma of the Head and Neck
METASTATIC UROTHELIAL BLADDER CANCER
Name Phase Line of treatment Population Design Timelines Status
------- ------ ------------------ ---------------------- ---------------------- -------------------- -----------
Combination therapy
----------------------------------------------------------------------------------------------------------------------
DANUBE III 1st line Cisplatin chemo- durvalumab vs durva + FPD Q4 2015 Recruiting
therapy- eligible/ treme vs SoC
ineligible bladder
cancer Data expected 2018
------- ------ ------------------ ---------------------- ---------------------- -------------------- -----------
OTHER METASTATIC CANCERs/EARLY TRIALs
Name Phase Line of treatment Population Design Timelines Status
----- ------ ------------------ ---------------------- ---------------------- ---------------------- -----------
Combination therapy
----------------------------------------------------------------------------------------------------------------------
ALPS II 2nd line Pancreatic ductal durva + treme (single FPD Q4 2015 Recruiting
carcinoma arm)
Data expected H2 2017
----- ------ ------------------ ---------------------- ---------------------- ---------------------- -----------
- II 2nd line Unresectable liver durvalumab vs FPD Q1 2016 Recruiting
cancer tremelimumab vs durva
+ treme Data expected 2017
----- ------ ------------------ ---------------------- ---------------------- ---------------------- -----------
- II 2nd/3rd line Metastatic gastric durvalumab vs FPD Q2 2016 Recruiting
cancer tremelimumab vs durva
+ treme Data expected 2017
----- ------ ------------------ ---------------------- ---------------------- ---------------------- -----------
f) MEDI0562 (cancer)
During the period, AstraZeneca made a final selection of the
OX40 agonist to take forward to mid- and late-stage development.
The fully-humanised OX40 monoclonal antibody, MEDI562 is advancing
in Phase I as a monotherapy and in combination with durvalumab or
tremelimumab. Data compiled from the murine OX40 (MEDI6469) and
fusion-protein OX40 (MEDI6383) programmes have informed and
directed the ongoing development of MEDI0562.
Infection & Neuroscience
a) Zavicefta (serious infections)
On 28 June 2016, the EMA granted marketing authorisation to
Zavicefta (ceftazidime and avibactam, previously known as CAZ AVI)
for a broad label of indications covering complicated
intra-abdominal infections, complicated urinary tract infections
including pyelonephritis (infection of the kidney), and
hospital-acquired pneumonia, including ventilator-associated
pneumonia. The approval also included using Zavicefta to treat
infections caused by aerobic Gram-negative organisms in adult
patients who have limited treatment options, an indication which,
to date, has not been awarded to any other novel antibiotic
medicine.
On 21 July 2016, the Company announced positive results from the
Phase III REPROVE trial, which assessed the efficacy of Zavicefta
compared with meropenem in the treatment of adult patients with
hospital-acquired pneumonia, including ventilator-associated
pneumonia. Zavicefta met the primary objective of statistical
non-inferiority compared to meropenem at the test of cure visit
(day 21 from randomisation). The trial showed an adverse event
profile consistent with current knowledge of the safety profile of
the medicines.
b) Pandemic Live Attenuated Influenza Vaccine (P/LAIV) (pandemic
influenza)
On 1 April 2016, the Committee for Medicinal Products for Human
Use of the EMA issued a positive opinion recommending the
conditional approval of P/LAIV. P/LAIV is indicated for the
prevention of influenza in a pandemic setting in children and
adolescents. In the event that the World Health Organization
declares a pandemic, a dossier can be submitted for conversion to
full approval, providing an expedient public-health tool to protect
European children.
ASTRAZENECA DEVELOPMENT PIPELINE 30 JUNE 2016
AstraZeneca-sponsored or -directed studies
Phase III / Pivotal Phase II / Registration
New Molecular Entities (NMEs) and significant additional
indications
Regulatory submission dates shown for assets in Phase III and
beyond. As disclosure of compound information is balanced by the
business need to maintain confidentiality, information in relation
to some compounds listed here has not been disclosed at this
time.
US and EU dates correspond to anticipated acceptance of the
regulatory submission.
# Collaboration.
Compound Mechanism Area Under Investigation Date Estimated Regulatory Submission / Submission Acceptance
Commenced
Phase
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ---------------------------------------------------------------------
US EU Japan China
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Respiratory & Autoimmunity
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Zurampic(#1) (lesinurad) selective uric acid reabsorption chronic treatment of hyperuricemia in patients with gout Q4 2011 Approved Approved N/A N/A
CLEAR 1,2 inhibitor (URAT-1)
CRYSTAL
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Bevespi Aerosphere (PT003) LABA/LAMA COPD Q2 2013 Approved 2017 2017 2017
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
brodalumab(#2) IL-17R mAb psoriasis Q3 2012 Accepted Accepted N/A N/A
AMAGINE-1,2,3
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
benralizumab(#) IL-5R mAb severe asthma Q4 2013 H2 2016 H2 2016 N/A N/A
CALIMA SIROCCO ZONDA BISE
BORA
GREGALE
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
benralizumab(#) IL-5R mAb COPD Q3 2014 2018 2018 N/A N/A
TERRANOVA GALATHEA
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
PT010 LABA/LAMA/ICS COPD Q3 2015 2018 2018 2018 2019
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
tralokinumab IL-13 mAb severe asthma Q3 2014 2018 2018 2018
STRATOS 1,2
TROPOS
MESOS
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
anifrolumab(#) TULIP IFN-alphaR mAb systemic lupus erythematosus Q3 2015 2019 2019 2019
(Fast Track)
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Cardiovascular & Metabolic Diseases
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Brilinta(3) P2Y12 receptor antagonist arterial thrombosis Launched Launched Accepted Launched
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Farxiga(4) SGLT2 inhibitor type-2 diabetes Launched Launched Launched Accepted
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Epanova(#) omega-3 carboxylic acids severe hypertrigly-ceridemia Approved 2018
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
ZS-9 (sodium zirconium potassium binder hyperkalaemia H2 2016 Accepted
cyclosilicate)
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
roxadustat(#) OLYMPUS (US) hypoxia-inducible factor prolyl anaemia in CKD/ESRD Q3 2014 2018 N/A N/A H2 2016(5)
ROCKIES (US) hydroxylase inhibitor
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Oncology
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Tagrisso EGFR tyrosine kinase inhibitor >=2nd-line advanced EGFRm T790M NSCLC Q2 2014 Launched Launched (Accelerated Approved H2 2016
AURA, AURA 2, (AURA17 Asia (Breakthrough assessment)
regional) Therapy, Priority
Review, Orphan
drug)
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Tagrisso EGFR tyrosine kinase inhibitor >=2nd-line advanced EGFRm T790M NSCLC Q3 2014 2017 2017 2017 2018
AURA 3
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
cediranib VEGFR tyrosine kinase inhibitor PSR ovarian cancer Q2 2007 Accepted (Orphan drug)
ICON 6
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
acalabrutinib(#) (ACP-196) Bruton's tyrosine kinase (BTK) inhibitor B-cell blood cancers Q1 2015 H2 2016
(Orphan drug)
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
selumetinib(#) MEK inhibitor 2nd-line KRASm NSCLC Q4 2013 2017 2017
SELECT-1
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
selumetinib(#) MEK inhibitor differentiated thyroid cancer Q3 2013 2018 2018
ASTRA (Orphan drug)(6)
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
moxetumomab pasudotox(#) anti-CD22 recombinant hairy cell leukaemia Q2 2013 2017 2018
PLAIT immunotoxin (Orphan drug)
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) PACIFIC PD-L1 mAb stage III NSCLC Q2 2014 2017 2020 2020
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb 3rd-line NSCLC Q2 2015 2017 2017 2017
tremelimumab
ARCTIC
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb 1st-line NSCLC Q3 2015 2017 2017 2017 2020
tremelimumab
MYSTIC
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb 1st-line NSCLC Q4 2015 2019 2019 2019
tremelimumab
NEPTUNE
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) PD-L1 mAb 2nd-line SCCHN (PD-L1 positive) Q1 2015 2017 2019 2019
HAWK (Fast Track)
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb 2nd-line SCCHN (PD-L1 negative) Q2 2015 2017 2019 2019
tremelimumab
CONDOR
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb 1st-line SCCHN Q4 2015 2018 2018 2018
tremelimumab
KESTREL
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb 2nd-line SCCHN Q4 2015 2019 2019 2019
tremelimumab
EAGLE
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb metastatic pancreatic ductal carcinoma Q4 2015 2017 2017 2017
tremelimumab
ALPS
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb 1st-line bladder cancer Q4 2015 2018 2018 2018
tremelimumab
DANUBE
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Infection & Neuroscience
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Zinforo(#) extended spectrum cephalosporin with pneumonia/skin infections N/A Launched N/A Submitted
affinity to penicillin-binding proteins
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Zavicefta(#) cephalosporin/ beta lactamase inhibitor hospital-acquired pneumonia/ ventilator-associated pneumonia Q2 2013 N/A Approved(7) N/A 2017
(CAZ AVI(#) )
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Zavicefta(#) cephalosporin/ serious infections, complicated intra-abdominal infection, Q1 2012 N/A Approved(7) N/A 2017
beta lactamase inhibitor complicated urinary tract infection
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
MEDI-550 pandemic influenza virus vaccine pandemic influenza prophylaxis N/A Approved(8) N/A N/A
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
AZD3293(#) beta-secretase inhibitor Early Alzheimer's disease Q2 2016 2020 2020 2020
AMARANTH
--------------------------- ----------------------------------------- ------------------------------------------------------------- ---------- ------------------ ------------------------- --------- -----------
Registrational Phase II trial
1 AstraZeneca announced it has granted Ironwood exclusive US
rights (26 April 2016) and Grünenthal exclusive rights in Europe
and Latin America (2 June 2016)
2 AstraZeneca and Valeant agreed to terminate the licence for
Valeant's right to develop and commercialise brodalumab in Europe.
AstraZeneca entered into an agreement with LEO Pharma for the
exclusive licence to brodalumab in Europe (1 July 2016)
3 Brilinta in the US; Brilique in rest of world
4 Farxiga in the US; Forxiga in rest of world
5 Rolling NDA submission to be initiated in H2 2016
6 FDA granted Orphan Drug Designation 10 May 2016
7 EU approval received 24 June 2016
8 EU approval received 20 May 2016
Phases I and II
NMEs and significant additional indications
Compound Mechanism Area Under Investigation Phase Date Commenced Phase
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
Respiratory & Autoimmunity
----------------------------------------------------------------------------------------------------------------------------------------
PT010 LABA/LAMA/ICS asthma II Q2 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
tralokinumab(#1) IL-13 mAb atopic dermatitis II Q1 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
anifrolumab(#) IFN-alphaR mAb lupus nephritis II Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
anifrolumab(#) IFN-alphaR mAb systemic lupus erythematosus (subcutaneous) I Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
verinurad selective uric acid chronic treatment of hyperuricemia in patients II Q3 2013
reabsorption inhibitor with gout
(URAT-1)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
abediterol LABA asthma/COPD II Q4 2007
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD7594 inhaled SGRM asthma/COPD II Q3 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD7624 inhaled P38 inhibitor COPD II Q4 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD9412(#) inhaled interferon beta asthma/COPD II Q3 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
mavrilimumab(#) GM-CSFR mAb rheumatoid arthritis II Q1 2010
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
inebilizumab(#) CD19 mAb neuromyelitis optica II Q1 2015
(Orphan drug)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI2070(#) IL-23 mAb Crohn's disease II Q1 2013
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
tezepelumab(#) TSLP mAb asthma / atopic dermatitis II Q2 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
lesinurad + allopurinol selective uric acid chronic treatment of hyperuricemia in patients I Q4 2015
FDC(#2) reabsorption inhibitor with gout
(URAT-1)+xanthine oxidase
inhibitor FDC
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD1419(#) TLR9 agonist Asthma I Q3 2013
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD5634 inhaled ENaC cystic fibrosis I Q1 2016
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD7986 DPP1 COPD I Q4 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD8871 MABA COPD I Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD9567 oral SGRM rheumatoid arthritis I Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI0700(#) BAFF/B7RP1 bispecific mAb systemic lupus erythematosus I Q1 2016
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI4920 anti-CD40L-Tn3 fusion primary Sjögren's syndrome I Q2 2014
protein
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI5872(#) B7RP1 mAb systemic lupus erythematosus I Q4 2008
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI9314 IL-4R mAb atopic dermatitis I Q1 2016
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
Cardiovascular & Metabolic Diseases
----------------------------------------------------------------------------------------------------------------------------------------
MEDI4166 PCSK9/GLP-1 mAb + peptide diabetes / cardiovascular II Q1 2016
fusion
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI6012 LCAT ACS II Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD4076 anti-miR103/107 non-alcoholic fatty liver I Q4 2015
oligonucleotide disease/non-alcoholic steatohepatitis (NASH)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD5718 FLAP CAD I Q1 2016
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI0382 GLP-1/ diabetes / obesity I Q1 2015
glucagon dual agonist
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI8111 Rh-factor II trauma / bleeding I Q1 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
Oncology
----------------------------------------------------------------------------------------------------------------------------------------
durvalumab(#) PD-L1 mAb bladder cancer II Q1 2016
(Breakthrough Therapy)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) PD-L1 mAb solid tumours II Q3 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb gastric cancer II Q2 2015
tremelimumab
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + AZD5069 PD-L1 mAb + CXCR2 SCCHN II Q3 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + PD-L1 mAb + STAT3
AZD9150(#) inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) PD-L1 mAb solid tumours I Q3 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + PD-L1 mAb + NKG2a mAb solid tumours I Q1 2016
monalizumab
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + MEDI9447 PD-L1 mAb + CD73 mAb solid tumours I Q1 2016
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + Iressa PD-L1 mAb+ EGFR tyrosine NSCLC I Q2 2014
kinase inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + MEDI0680 PD-L1 mAb + PD-1 mAb solid tumours I Q2 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + PD-L1 mAb+ BRAF inhibitor melanoma I Q1 2014
dabrafenib + trametinib + MEK inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
durvalumab(#) + PD-L1 mAb + CTLA-4 mAb solid tumours I Q4 2013
tremelimumab
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
Tagrisso + EGFR tyrosine kinase advanced EGFRm NSCLC II Q2 2016
(durvalumab(#) or inhibitor + (PD-L1 mAb or
selumetinib(#) or MEK inhibitor or MET
savolitinib(#) ) tyrosine kinase
TATTON inhibitor)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
selumetinib + MEK inhibitor + PD-L1 mAb solid tumours I Q4 2015
durvalumab(#)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
savolitinib/volitinib(#) MET tyrosine kinase papillary renal cell carcinoma II Q2 2014
inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD1775(#) + Wee1 inhibitor + ovarian cancer II Q4 2012
chemotherapy chemotherapy
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD1775(#) Wee1 inhibitor solid tumours I Q3 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD1775(#) + Lynparza Wee1 inhibitor + PARP solid tumours I Q3 2015
inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD1775(#) + Wee1 inhibitor + solid tumours I Q4 2015
durvalumab(#) PD-L1 mAb
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
vistusertib (AZD2014) mTOR serine/ threonine solid tumours II Q1 2013
kinase inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD3759 BLOOM EGFR tyrosine kinase brain metastases in advanced EGFRm NSCLC II Q4 2015
inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
Tagrisso BLOOM EGFR tyrosine kinase
inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD5363(#) AKT kinase inhibitor breast cancer II Q1 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD4547 FGFR tyrosine kinase solid tumours II Q4 2011
inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
inebilizumab(#) CD19 mAb diffuse B-cell lymphoma II Q1 2012
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI-573(#) IGF mAb metastatic breast cancer II Q2 2012
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD0156 ATM serine/threonine solid tumours I Q4 2015
kinase inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD2811(#) Aurora B kinase inhibitor solid tumours I Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD6738 ATR serine/threonine solid tumours I Q4 2013
kinase inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD8186 PI3 kinase beta inhibitor solid tumours I Q2 2013
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD9150(#) STAT3 inhibitor haematological malignancies I Q1 2012
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD9496 selective oestrogen ER+ breast cancer I Q4 2014
receptor downregulator
(SERD)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD4635 A2aR inhibitor solid tumours I Q2 2016
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI0562(#) humanised OX40 agonist solid tumours I Q1 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI0562(#) + humanised OX40 agonist + solid tumours I Q2 2016
tremelimumab CTLA-4 mAb
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI0562(#) + humanised OX40 agonist + solid tumours I Q2 2016
durvalumab(#) PD-L1 mAb
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI-565(#) CEA BiTE mAb solid tumours I Q1 2011
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI0680 PD-1 mAb solid tumours I Q4 2013
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI1873 GITR agonist fusion solid tumours I Q4 2015
protein
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI3617(#) ANG-2 mAb solid tumours I Q4 2010
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI4276 HER2 bispecific ADC mAb solid tumours I Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI9197(#) TLR 7/8 agonist solid tumours I Q4 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI9447 CD73 mAb solid tumours I Q3 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
Infection & Neuroscience
----------------------------------------------------------------------------------------------------------------------------------------
CXL(#) beta lactamase inhibitor methicillin-resistant S. aureus II Q4 2010
/ cephalosporin
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD3241 myeloperoxidase inhibitor multiple system atrophy II Q2 2015
(Orphan drug)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI3902 Psl/PcrV bispecific mAb prevention of nosocomial pseudomonas pneumonia II Q2 2016
(Fast Track, US)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI4893 mAb binding to S. aureus hospital-acquired pneumonia / serious S. aureu II Q4 2014
toxin s infection
(Fast Track, US)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI7510 RSV sF+GLA-SE prevention of RSV disease in older adults II Q3 2015
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI8852 influenza A mAb influenza A treatment II Q4 2015
(Fast Track, US)
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI8897(#) RSV mAb-YTE passive RSV prophylaxis II Q1 2015
(Fast Track, US
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
ATM AVI(#) monobactam/ beta targeted serious bacterial infections II Q2 2016
lactamase inhibitor
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
AZD8108 NMDA antagonist suicidal ideation I Q4 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI1814 amyloid beta mAb Alzheimer's disease I Q2 2014
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
MEDI7352 NGF/TNF bispecific mAb osteoarthritis pain I Q1 2016
------------------------- -------------------------- ----------------------------------------------- ------ ------------------------
1 AstraZeneca entered licensing agreement with LEO Pharma (1 July 2016)
2 AstraZeneca announced it granted Ironwood exclusive US rights
(26 April 2016) and Grünenthal exclusive rights in Europe and Latin
America (2 June 2016)
Significant Lifecycle Management (LCM)
Compound Mechanism Area Under Investigation Date Estimated Regulatory Submission Acceptance
Commenced
Phase
----------------- --------------- ---------------------------------------------- ---------- ---------------------------------------------------------
US EU Japan China
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Respiratory & Autoimmunity
---------------------------------------------------------------------------------------------------------------------------------------------------------
Symbicort ICS/LABA as-needed use in mild asthma Q4 2014 N/A 2018 2019
SYGMA
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Symbicort ICS/LABA breath actuated Inhaler asthma/COPD 2018
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Duaklir LAMA/LABA COPD 2018 Launched 2018 2018
Genuair(#)
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Cardiovascular & Metabolic Diseases
---------------------------------------------------------------------------------------------------------------------------------------------------------
Brilinta(1) P2Y12 receptor outcomes trial in patients with prior Q4 2010 Launched Launched Accepted Accepted
PEGASUS- antagonist myocardial infarction (Priority Review)
TIMI 54
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Brilinta(1) P2Y12 receptor outcomes trial in patients with peripheral Q4 2012 2017 2017 2017 2018
EUCLID antagonist artery disease
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Brilinta(1) P2Y12 receptor outcomes trial in patients with type-2 Q1 2014 2018 2018 2018 2019
THEMIS antagonist diabetes and CAD, but without a previous
history of
MI or stroke
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Brilinta(1) P2Y12 receptor prevention of vaso-occlusive crises in Q1 2014 2020 2020
HESTIA antagonist paediatric patients with sickle cell disease
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Onglyza DPP-4 type-2 diabetes outcomes trial Q2 2010 Launched Launched Accepted(2)
SAVOR-TIMI 53 inhibitor
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Kombiglyze DPP-4 type-2 diabetes Launched Launched Submitted
XR/Komboglyze(3) inhibitor/
metformin FDC
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Farxiga(4) SGLT2 type-2 diabetes outcomes trial Q2 2013 2020 2020
DECLARE- inhibitor
TIMI 58
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Farxiga(4) SGLT2 type-1 diabetes Q4 2014 2018 2017 2018
inhibitor
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Xigduo XR/ SGLT2 type-2 diabetes Launched Launched
Xigduo(5) inhibitor/
metformin FDC
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Qtern DPP-4 type-2 diabetes Q2 2012 Accepted Approved(6)
(saxagliptin/ inhibitor/
dapagliflozin SGLT2
FDC) inhibitor FDC
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Bydureon weekly GLP-1 receptor type-2 diabetes Q1 2013 2017 2017
suspension agonist
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Bydureon EXSCEL GLP-1 receptor type-2 diabetes outcomes trial Q2 2010 2018 2018 2018
agonist
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Epanova omega-3 outcomes trial in statin-treated patients at Q4 2014 2020 2020 2020 2020
STRENGTH carboxylic high CV risk, with persistent
acids hypertriglyceridemia
plus low HDL-cholesterol
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Oncology
---------------------------------------------------------------------------------------------------------------------------------------------------------
Faslodex oestrogen 1st-line hormone receptor +ve advanced breast Q4 2012 H2 2016 H2 2016 H2 2016 2020
FALCON receptor cancer
antagonist
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Lynparza PARP inhibitor gBRCA metastatic breast cancer Q2 2014 2017 2017 2017
OlympiAD
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Lynparza SOLO-2 PARP inhibitor 2nd-line or greater BRCAm PSR ovarian cancer, Q3 2013 2017 2017 2017
maintenance monotherapy
(Fast Track)
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Lynparza SOLO-1 PARP inhibitor 1st-line BRCAm ovarian cancer Q3 2013 2018 2018 2018
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Lynparza SOLO-3 PARP inhibitor gBRCA PSR ovarian cancer Q1 2015 2018
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Lynparza POLO PARP inhibitor pancreatic cancer Q1 2015 2018 2018 2018
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Lynparza PARP inhibitor prostate cancer Q3 2014 (Breakthrough
Therapy)
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Lynparza PARP inhibitor gBRCA adjuvant breast cancer Q2 2014 2020 2020 2020
OlympiA
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Tagrisso EGFR tyrosine 1st-line advanced EGFRm NSCLC Q1 2015 2017 2017 2017 2017
FLAURA kinase
inhibitor
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Tagrisso EGFR tyrosine adjuvant EGFRm NSCLC Q4 2015 2022 2022 2022 2022
ADAURA kinase
inhibitor
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Infection & Neuroscience
---------------------------------------------------------------------------------------------------------------------------------------------------------
Nexium proton pump stress ulcer prophylaxis H2 2016
inhibitor
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
Nexium proton pump paediatrics Launched Launched H2 2016 Accepted
inhibitor
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
linaclotide# GC-C receptor irritable bowel syndrome with constipation N/A N/A N/A Accepted
peptide (IBS-C)
agonist
----------------- --------------- ---------------------------------------------- ---------- ------------------ ------------ --------- ------------
1 Brilinta in the US; Brilique in rest of world
2 Submission filed and accepted July 2016
3 Kombiglyze XR in the US; Komboglyze in the EU
4 Farxiga in the US; Forxiga in rest of world
5 Xigduo XR in the US; Xigduo in the EU
6 EU approval 19 July 2016
Terminations (discontinued projects between 1 April and 30 June
2016)
NME / Line Extension Compound Reason for Area Under Investigation
Discontinuation
--------------------- ---------------------------- ----------------- -------------------------
NME MEDI7836 Safety/Efficacy asthma
--------------------- ---------------------------- ----------------- -------------------------
NME MEDI6383(#) Strategic solid tumours
--------------------- ---------------------------- ----------------- -------------------------
NME durvalumab(#) + MEDI6383(#) Strategic solid tumours
--------------------- ---------------------------- ----------------- -------------------------
NME MEDI0639 Safety/Efficacy solid tumours
--------------------- ---------------------------- ----------------- -------------------------
LCM Epanova/Farxiga Safety/Efficacy non-alcoholic
fatty liver
disease/non-alcoholic
steatohepatitis
(NASH)
--------------------- ---------------------------- ----------------- -------------------------
LCM Lynparza GOLD Safety/Efficacy 2nd-line gastric
cancer
--------------------- ---------------------------- ----------------- -------------------------
Completed Projects / Divestitures
Compound Mechanism Area Under Completed/ Estimated Regulatory Submission Acceptance
Investigation Divested
------------- ------------------ ------------------- ----------- -------------------------------------------------
US EU Japan China
------------- ------------------ ------------------- ----------- ------ ------------- ------------ ------------
Diprivan(#1) sedative and conscious sedation Divested N/A Launched Accepted Launched
anaesthetic
------------- ------------------ ------------------- ----------- ------ ------------- ------------ ------------
1 AstraZeneca announced it entered into a commercialisation
agreement with Aspen Global Incorporated (AGI), part of the Aspen
Group, for its global anaethetics portfolio outside of the US on 9
June 2016.
Condensed Consolidated Statement of Comprehensive Income
For the half year ended 30 June 2016 2015
$m $m
-------------------------------------------- -------- --------
Product sales 11,034 11,584
Externalisation revenue 684 780
------------------------------------------------- -------- --------
Total revenue 11,718 12,364
Cost of sales (2,066) (2,336)
------------------------------------------------- -------- --------
Gross profit 9,652 10,028
Distribution costs (167) (161)
Research and development expense (2,945) (2,822)
Selling, general and administrative
costs (5,624) (5,765)
Other operating income and expense 425 576
--------
Operating profit 1,341 1,856
Finance income 31 24
Finance expense (667) (537)
Share of after tax losses in associates
and joint ventures (12) (7)
------------------------------------------------- -------- --------
Profit before tax 693 1,336
Taxation (99) (88)
------------------------------------------------- -------- --------
Profit for the period 594 1,248
------------------------------------------------- -------- --------
Other comprehensive income
Items that will not be reclassified
to profit or loss
Remeasurement of the defined benefit
pension liability (842) 242
Tax on items that will not be reclassified
to profit or loss 235 (57)
------------------------------------------------- -------- --------
(607) 185
-------- --------
Items that may be reclassified
subsequently to profit or loss
Foreign exchange arising on consolidation (523) (11)
Foreign exchange arising on designating
borrowings in net investment hedges (67) (217)
Cash flow hedge losses (103) -
Cash flow hedge gains transferred 60 -
to the income statement
Fair value movements on derivatives
designated in net investment hedges (79) 20
Amortisation of loss on cash flow
hedge 1 1
Net available for sale losses taken
to equity (36) (29)
Tax on items that may be reclassified
subsequently to profit or loss 75 43
------------------------------------------------- -------- --------
(672) (193)
-------- --------
Other comprehensive income for
the period, net of tax (1,279) (8)
------------------------------------------------- -------- --------
Total comprehensive income for
the period (685) 1,240
------------------------------------------------- -------- --------
Profit attributable to:
Owners of the Parent 643 1,247
Non-controlling interests (49) 1
------------------------------------------------- -------- --------
594 1,248
Total comprehensive income attributable
to:
Owners of the Parent (636) 1,239
Non-controlling interests (49) 1
------------------------------------------------- -------- --------
(685) 1,240
-------- --------
Basic earnings per $0.25 Ordinary
Share $0.51 $0.99
Diluted earnings per $0.25 Ordinary
Share $0.51 $0.99
------------------------------------------------- -------- --------
Weighted average number of Ordinary
Shares in issue (millions) 1,264 1,263
Diluted weighted average number
of Ordinary Shares in issue (millions) 1,265 1,265
------------------------------------------------- -------- --------
Condensed Consolidated Statement of Comprehensive Income
For the quarter ended 30 June 2016 2015
$m $m
--------------------------------------------- -------- --------
Product sales 5,469 5,836
Externalisation revenue 134 471
-------------------------------------------------- -------- --------
Total revenue 5,603 6,307
Cost of sales (1,062) (1,067)
-------------------------------------------------- -------- --------
Gross profit 4,541 5,240
Distribution costs (91) (84)
Research and development expense (1,465) (1,466)
Selling, general and administrative
costs (3,052) (2,966)
Other operating income and expense 370 199
--------
Operating profit 303 923
Finance income 17 13
Finance expense (342) (276)
Share of after tax losses in associates
and joint ventures (8) (2)
-------------------------------------------------- -------- --------
(Loss)/Profit before tax (30) 658
Taxation (1) 38
-------------------------------------------------- -------- --------
(Loss)/Profit for the period (31) 696
-------------------------------------------------- -------- --------
Other comprehensive income
Items that will not be reclassified
to profit or loss
Remeasurement of the defined benefit
pension liability (651) 259
Tax on items that will not be reclassified
to profit or loss 194 (61)
-------------------------------------------------- -------- --------
(457) 198
-------- --------
Items that may be reclassified subsequently
to profit or loss
Foreign exchange arising on consolidation (356) 438
Foreign exchange arising on designating
borrowings in net investment hedges (274) 191
Cash flow hedge losses (103) -
Cash flow hedge gains transferred 60 -
to the income statement
Fair value movements on derivatives
designated in net investment hedges (47) (1)
Amortisation of loss on cash flow
hedge 1 1
Net available for sale losses taken
to equity (7) (48)
Tax on items that may be reclassified
subsequently to profit or loss 65 (57)
-------------------------------------------------- -------- --------
(661) 524
-------- --------
Other comprehensive income for the
period, net of tax (1,118) 722
-------------------------------------------------- -------- --------
Total comprehensive income for the
period (1,149) 1,418
-------------------------------------------------- -------- --------
(Loss)/Profit attributable to:
Owners of the Parent (3) 697
Non-controlling interests (28) (1)
-------------------------------------------------- -------- --------
(31) 696
Total comprehensive income attributable
to:
Owners of the Parent (1,121) 1,418
Non-controlling interests (28) -
--------------------------------------------- -------- --------
(1,149) 1,418
-------- --------
Basic earnings per $0.25 Ordinary
Share $0.00 $0.55
Diluted earnings per $0.25 Ordinary
Share $0.00 $0.55
-------------------------------------------------- -------- --------
Weighted average number of Ordinary
Shares in issue (millions) 1,265 1,264
Diluted weighted average number
of Ordinary Shares in issue (millions) 1,265 1,265
-------------------------------------------------- -------- --------
Condensed Consolidated Statement of Financial Position
At 30 Jun 2016 At 31 Dec 2015 At 30 Jun 2015
$m $m $m
------------------------------------------------ ---------------- ---------------- ----------------
ASSETS Non-current assets
Property, plant and equipment 6,613 6,413 6,134
Goodwill 11,848 11,868 11,467
Intangible assets 29,438 22,646 20,486
Derivative financial instruments 337 446 471
Investments in associates and joint ventures 105 85 52
Other investments 470 458 448
Other receivables 764 907 957
Deferred tax assets 1,524 1,294 1,342
------------------------------------------------------ ---------------- ---------------- ----------------
51,099 44,117 41,357
---------------- ---------------- ----------------
Current assets
Inventories 2,422 2,143 2,198
Trade and other receivables 5,619 6,622 6,615
Other investments 731 613 531
Derivative financial instruments 5 2 51
Income tax receivable 628 387 450
Cash and cash equivalents 3,915 6,240 3,967
------------------------------------------------------ ---------------- ---------------- ----------------
13,320 16,007 13,812
---------------- ---------------- ----------------
Total assets 64,419 60,124 55,169
------------------------------------------------------ ---------------- ---------------- ----------------
LIABILITIES Current liabilities
Interest-bearing loans and borrowings (1,060) (916) (2,705)
Trade and other payables (10,259) (11,663) (10,659)
Derivative financial instruments (57) (9) (6)
Provisions (999) (798) (731)
Income tax payable (1,960) (1,483) (2,049)
------------------------------------------------------ ---------------- ---------------- ----------------
(14,335) (14,869) (16,150)
---------------- ---------------- ----------------
Non-current liabilities
Interest-bearing loans and borrowings (16,519) (14,137) (8,303)
Derivative financial instruments (103) (1) -
Deferred tax liabilities (4,076) (2,733) (1,582)
Retirement benefit obligations (2,628) (1,974) (2,377)
Provisions (426) (444) (479)
Other payables (10,942) (7,457) (7,979)
------------------------------------------------------ ---------------- ---------------- ----------------
(34,694) (26,746) (20,720)
---------------- ---------------- ----------------
Total liabilities (49,029) (41,615) (36,870)
------------------------------------------------------ ---------------- ---------------- ----------------
Net assets 15,390 18,509 18,299
------------------------------------------------------ ---------------- ---------------- ----------------
EQUITY
Capital and reserves attributable to equity
holders of the Company
Share capital 316 316 316
Share premium account 4,326 4,304 4,281
Other reserves 2,030 2,036 2,033
Retained earnings 6,858 11,834 11,649
------------------------------------------------------ ---------------- ---------------- ----------------
13,530 18,490 18,279
Non-controlling interests 1,860 19 20
------------------------------------------------------ ---------------- ---------------- ----------------
Total equity 15,390 18,509 18,299
------------------------------------------------------ ---------------- ---------------- ----------------
Condensed Consolidated Statement of Cash Flows
For the half year ended 30 June 2016 2015
$m $m
--------------------------------------------------------------- --------- --------
Cash flows from operating activities
Profit before tax 693 1,336
Finance income and expense 636 513
Share of after tax losses in associates and joint ventures 12 7
Depreciation, amortisation and impairment 1,156 1,565
Increase in working capital and short-term provisions (183) (767)
Non-cash and other movements (380) (612)
--------------------------------------------------------------------- --------- --------
Cash generated from operations 1,934 2,042
Interest paid (298) (252)
Tax paid (262) (782)
--------------------------------------------------------------------- --------- --------
Net cash inflow from operating activities 1,374 1,008
--------------------------------------------------------------------- --------- --------
Cash flows from investing activities
Movement in short-term investments and fixed deposits (15) 273
Purchase of property, plant and equipment (584) (497)
Disposal of property, plant and equipment 8 16
Purchase of intangible assets (723) (1,222)
Disposal of intangible assets 102 350
Purchase of non-current asset investments (66) (30)
Disposal of non-current asset investments - 56
Payments to joint ventures (15) -
Upfront payments on business acquisitions (2,564) -
Payment of contingent consideration on business acquisitions (141) (239)
Interest received 63 59
Payments made by subsidiaries to non-controlling interests (13) -
Net cash outflow from investing activities (3,948) (1,234)
--------------------------------------------------------------------- --------- --------
Net cash outflow before financing activities (2,574) (226)
--------------------------------------------------------------------- --------- --------
Cash flows from financing activities
Proceeds from issue of share capital 22 20
New long-term loans 2,483 -
Repayment of loans - (884)
Dividends paid (2,409) (2,357)
Hedge contracts relating to dividend payments 5 (43)
Repayment of obligations under finance leases (8) (34)
Movement in short-term borrowings (99) 910
Net cash outflow from financing activities (6) (2,388)
--------------------------------------------------------------------- --------- --------
Net decrease in cash and cash equivalents in the period (2,580) (2,614)
Cash and cash equivalents at the beginning of the period 6,051 6,164
Exchange rate effects 34 (29)
--------------------------------------------------------------------- --------- --------
Cash and cash equivalents at the end of the period 3,505 3,521
--------------------------------------------------------------------- --------- --------
Cash and cash equivalents consists of:
Cash and cash equivalents 3,915 3,967
Overdrafts (410) (446)
--------------------------------------------------------------------- --------- --------
3,505 3,521
--------- --------
Condensed Consolidated Statement of Changes in Equity
Share Non-
Share premium Other Retained controlling Total
capital account reserves* earnings Total interests equity
$m $m $m $m $m $m $m
----------------- --------- --------- ----------- ---------- -------- ------------- ---------
At 1 Jan 2015 316 4,261 2,021 13,029 19,627 19 19,646
Profit for the
period - - - 1,247 1,247 1 1,248
Other
comprehensive
income - - - (8) (8) - (8)
Transfer to other
reserves - - 12 (12) - - -
Transactions
with owners:
Dividends - - - (2,400) (2,400) - (2,400)
Issue of Ordinary
Shares - 20 - - 20 - 20
Share-based
payments - - - (207) (207) - (207)
Net movement - 20 12 (1,380) (1,348) 1 (1,347)
------------------ --------- --------- ----------- ---------- -------- ------------- ----------
At 30 Jun 2015 316 4,281 2,033 11,649 18,279 20 18,299
------------------ --------- --------- ----------- ---------- -------- ------------- ----------
Share Non-
Share premium Other Retained controlling Total
capital account reserves* earnings Total interests equity
$m $m $m $m $m $m $m
----------------- --------- --------- ----------- ---------- -------- ------------- ----------
At 1 Jan 2016 316 4,304 2,036 11,834 18,490 19 18,509
Profit for the
period - - - 643 643 (49) 594
Other
comprehensive
income - - - (1,279) (1,279) - (1,279)
Transfer to other
reserves - - (6) 6 - - -
Transactions
with owners:
Dividends - - - (2,402) (2,402) - (2,402)
Dividend paid by
subsidiary to
non-controlling
interest - - - - - (13) (13)
Acerta put option - - - (1,825) (1,825) - (1,825)
Changes in
non-controlling
interest - - - - - 1,903 1,903
Issue of Ordinary
Shares - 22 - - 22 - 22
Share-based
payments - - - (119) (119) - (119)
------------------ --------- --------- ----------- ---------- -------- ------------- ----------
Net movement - 22 (6) (4,976) (4,960) 1,841 (3,119)
------------------ --------- --------- ----------- ---------- -------- ------------- ----------
At 30 Jun 2016 316 4,326 2,030 6,858 13,530 1,860 15,390
------------------ --------- --------- ----------- ---------- -------- ------------- ----------
* Other reserves include the capital redemption reserve and the merger reserve.
Responsibility Statement of the Directors in Respect of the
Half-Yearly Financial Report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the European Union and as issued by the International Accounting
Standards Board;
-- the half-yearly management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency
Rules, being an indication of important events
that have occurred during the first six months
of the financial year and their impact on the
condensed set of financial statements; and a
description of the principal risks and uncertainties
for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency
Rules, being related party transactions that
have taken place in the first six months of the
current financial year and that have materially
affected the financial position or performance
of the enterprise during that period; and any
changes in the related party transactions described
in the last annual report that could do so.
The Board
The Board of Directors that served during all or part of the
six-month period to 30 June 2016 and their respective
responsibilities can be found on pages 86 and 87 of the AstraZeneca
Annual Report and Form 20-F Information 2015.
Approved by the Board and signed on its behalf by
Pascal Soriot
Chief Executive Officer
28 July 2016
Independent Review Report to AstraZeneca PLC
Introduction
We have been engaged by the Company to review the condensed set
of Financial Statements in the half-yearly financial report for the
six months ended 30 June 2016 (but not for the quarter ended 30
June 2016 as presented in the Condensed Consolidated Statement of
Comprehensive Income for the quarter ended 30 June 2016) which
comprises Condensed Consolidated Statement of Comprehensive Income,
Condensed Consolidated Statement of Financial Position, Condensed
Consolidated Statement of Cash Flows, Condensed Consolidated
Statement of Changes in Equity and Notes 1 to 8. We have read the
other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Disclosure and Transparency Rules (the DTR) of
the UK's Financial Conduct Authority (the UK FCA). Our review has
been undertaken so that we might state to the Company those matters
we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company for our
review work, for this report, or for the conclusions we have
reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the EU.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2016 is not prepared, in all material respects, in accordance
with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Antony Cates
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London E14 5GL
28 July 2016
Notes to the Interim Financial Statements
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
These unaudited condensed consolidated interim financial
statements (interim financial statements) for the six months ended
30 June 2016 have been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the European Union (EU) and as
issued by the International Accounting Standards Board (IASB).
The annual financial statements of the Group are prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the EU and as issued by the IASB. The interim
financial statements have been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the
year ended 31 December 2015. There have been no significant new or
revised accounting standards applied in the six months ended 30
June 2016.
Legal proceedings
The information contained in Note 7 updates the disclosures
concerning legal proceedings and contingent liabilities in the
Group's Annual Report and Form 20-F Information 2015.
Going concern
The Group has considerable financial resources available. As at
30 June 2016 the Group has $5.8bn in financial resources (cash
balances of $3.9bn and undrawn committed bank facilities of $3bn
which are available until April 2021, with only $1.1bn of debt due
within one year). The Group's revenues are largely derived from
sales of products which are covered by patents which provide a
relatively high level of resilience and predictability to cash
inflows, although our revenue is expected to continue to be
significantly impacted by the expiry of patents over the medium
term. In addition, government price interventions in response to
budgetary constraints are expected to continue to adversely affect
revenues in many of our mature markets. However, we anticipate new
revenue streams from both recently launched medicines and products
in development, and the Group has a wide diversity of customers and
suppliers across different geographic areas. Consequently, the
Directors believe that, overall, the Group is well placed to manage
its business risks successfully.
On the basis of the above paragraph and after making enquiries,
the Directors have a reasonable expectation that the Company and
the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the interim
financial statements have been prepared on a going concern
basis.
Financial information
The comparative figures for the financial year ended 31 December
2015 are not the Company's statutory accounts for that financial
year. Those accounts have been reported on by the Group's auditors
and have been delivered to the registrar of companies. The report
of the auditors was (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
2 RESTRUCTURING COSTS
Profit before tax for the quarter ended 30 June 2016 is stated
after charging restructuring costs of $463m ($308m for the second
quarter of 2016). These have been charged to profit as follows:
H1 2016 H1 2015 Q2 2016 Q2 2015
$m $m $m $m
-------------------------------------------- --------- --------- --------- ---------
Cost of sales 28 101 19 58
Research and development expense 107 124 69 62
Selling, general and administrative costs 328 223 220 115
Total 463 448 308 235
-------------------------------------------------- --------- --------- --------- ---------
3 NET DEBT
The table below provides an analysis of net debt and a
reconciliation of net cash flow to the movement in net debt.
At 1 Jan Cash Flow Acquisitions Non-cash Exchange Movements At 30 Jun
2016 $m & Other $m 2016
$m $m $m $m
Loans due after
one year (14,109) (2,483) - (12) 94 (16,510)
Finance leases due
after one year (28) - - 19 - (9)
-------------------- --------- ---------- ------------- --------- ------------------- ----------
Total long-term
debt (14,137) (2,483) - 7 94 (16,519)
-------------------- --------- ----------
Current
instalments of
finance leases (67) 8 - (31) - (90)
Total current debt (67) 8 - (31) - (90)
-------------------- --------- ----------
Other Investments 613 17 140 15 (37) 748
Net derivative
financial
instruments 438 10 - (266) - 182
Cash and cash
equivalents 6,240 (2,355) - - 30 3,915
Overdrafts (189) (225) - - 4 (410)
Short-term
borrowings (660) 99 - 1 - (560)
-------------------- --------- ----------
6,442 (2,454) 140 (250) (3) 3,875
--------- ----------
Net debt (7,762) (4,929) 140 (274) 91 (12,734)
-------------------- --------- ----------
Non-cash movements in the period include fair value adjustments
under IAS 39.
4 MAJORITY EQUITY INVESTMENT IN ACERTA PHARMA
On 2 February 2016, AstraZeneca completed an agreement to invest
in a majority equity stake in Acerta Pharma, a privately-owned
biopharmaceutical company based in the Netherlands and US. The
transaction provides AstraZeneca with a potential best-in-class
irreversible oral Bruton's tyrosine kinase (BTK) inhibitor,
acalabrutinib (ACP-196), currently in Phase III development for
B-cell blood cancers and in Phase I/II clinical trials in multiple
solid tumours.
Under the terms of the agreement, AstraZeneca has acquired 55%
of the issued share capital of Acerta for an upfront payment of
$2.5bn. A further payment of $1.5bn will be paid either on receipt
of the first regulatory approval for acalabrutinib for any
indication in the US, or the end of 2018, depending on which is
first. The agreement also includes options which, if exercised,
provide the opportunity for Acerta shareholders to sell, and
AstraZeneca to buy, the remaining 45% of shares in Acerta. The
options can be exercised at various points in time, conditional on
the first approval of acalabrutinib in both the US and Europe and
when the extent of the commercial opportunity has been fully
established, at a price of approximately $3bn net of certain costs
and payments incurred by AstraZeneca and net of agreed future
adjusting items, using a pre-agreed pricing mechanism. Acerta has
approximately 150 employees.
AstraZeneca's 55% holding is a controlling interest and Acerta's
combination of intangible product rights with an established
workforce and their operating processes requires that the
transaction is accounted for as a business combination in
accordance with IFRS 3.
Goodwill is principally attributable to the value of the
specialist knowhow inherent in the acquired workforce and the
accounting for deferred taxes. Goodwill is not expected to be
deductible for tax purposes. Acerta Pharma's results have been
consolidated into the Group's results from 2 February 2016. From
the period from acquisition to 30 June 2016, Acerta Pharma had no
revenues and its loss after tax was $112 million.
Fair value
$m
Intangible assets 7,307
Other assets including cash and cash equivalents 238
Deferred tax liabilities (1,827)
Other liabilities (90)
Total net assets acquired 5,628
Non-controlling interests (1,903)
Goodwill 84
Fair value of total consideration 3,809
Less: fair value of deferred consideration (1,332)
Total upfront consideration 2,477
Less: cash and cash equivalents acquired (94)
Net cash outflow 2,383
5 ACQUISITION OF ZS PHARMA
On 17 December 2015, AstraZeneca completed the acquisition of ZS
Pharma, a biopharmaceutical company based in San Mateo, California.
ZS Pharma uses its proprietary ion-trap technology to develop novel
treatments for hyperkalaemia, a serious condition of elevated
potassium in the bloodstream, typically associated with CKD and
Chronic Heart Failure.
During 2016, we have revised our assessment of the fair values
of the assets and liabilities acquired as a result of new
information obtained about facts and circumstances that existed at
the date of acquisition that impact the value of deferred tax. This
has resulted in a reduction to both deferred tax liabilities and
goodwill of $68m.
Fair value
$m
Non-current assets
Intangible assets 3,162
Property, plant and equipment 21
3,183
Current assets 169
Current liabilities (50)
Non-current liabilities
Deferred tax liabilities (977)
Other liabilities (13)
(990)
Total net assets acquired 2,312
Goodwill 388
Total upfront consideration 2,700
Less: cash and cash equivalents acquired (73)
Less: deferred upfront consideration (181)
Net cash outflow 2,446
6 FINANCIAL INSTRUMENTS
As detailed in the Group's most recent annual financial
statements, our principal financial instruments consist of
derivative financial instruments, other investments, trade and
other receivables, cash and cash equivalents, trade and other
payables, and interest-bearing loans and borrowings. As indicated
in Note 1, there have been no changes to the accounting policies
for financial instruments, including fair value measurement, from
those disclosed on pages 146 and 147 of the Company's Annual Report
and Form 20-F Information 2015. In addition, there have been no
changes of significance to the categorisation or fair value
hierarchy of our financial instruments. Financial instruments
measured at fair value include $1,201m of other investments,
$1,760m of loans, and $182m of derivatives as at 30 June 2016. The
total fair value of interest-bearing loans and borrowings at 30
June 2016, which have a carrying value of $17,579m in the Condensed
Consolidated Statement of Financial Position, was $19,385m.
Contingent consideration liabilities arising on business
combinations have been classified under Level 3 in the fair value
hierarchy and movements in fair value are shown below:
Diabetes Other Total Total
Alliance
2016 2016 2016 2015
$m $m $m $m
At 1 January 5,092 1,319 6,411 6,899
Settlements (141) - (141) (239)
Revaluations 32 128 160 82
Discount unwind 195 53 248 263
At 30 June 5,178 1,500 6,678 7,005
7 LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES
AstraZeneca is involved in various legal proceedings considered
typical to its business, including litigation and investigations
relating to product liability, commercial disputes, infringement of
intellectual property rights, the validity of certain patents,
anti-trust law and sales and marketing practices. The matters
discussed below constitute the more significant developments since
publication of the disclosures concerning legal proceedings in the
Company's Annual Report and Form 20-F Information 2015 (the 2015
Disclosures). Unless noted otherwise below or in the 2015
Disclosures, no provisions have been established in respect of the
claims discussed below.
As discussed in the 2015 Disclosures, for the majority of claims
in which AstraZeneca is involved it is not possible to make a
reasonable estimate of the expected financial effect, if any, that
will result from ultimate resolution of the proceedings. In these
cases, AstraZeneca discloses information with respect only to the
nature and facts of the cases but no provision is made.
In cases that have been settled or adjudicated, or where
quantifiable fines and penalties have been assessed and which are
not subject to appeal, or where a loss is probable and we are able
to make a reasonable estimate of the loss, we record the loss
absorbed or make a provision for our best estimate of the expected
loss.
The position could change over time and the estimates that we
have made and upon which we have relied in calculating these
provisions are inherently imprecise. There can, therefore, be no
assurance that any losses that result from the outcome of any legal
proceedings will not exceed the amount of the provisions that have
been booked in the accounts. The major factors causing this
uncertainty are described more fully in the 2015 Disclosures and
herein.
AstraZeneca has full confidence in, and will vigorously defend
and enforce, its intellectual property.
Matters disclosed in respect of the first quarter of 2016 and to
29 April 2016.
Patent litigation
Crestor (rosuvastatin)
US patent proceedings
As previously disclosed, AstraZeneca is defending three patent
infringement lawsuits in the US District Court for the District of
South Carolina (the District Court) which, among other things,
claim that AstraZeneca's Crestor sales induce infringement of the
plaintiffs' patents. In December 2015, the District Court issued an
order dismissing the first of these cases, filed by Palmetto
Pharmaceuticals, LLC (Palmetto), and entered judgment in
AstraZeneca's favour, which Palmetto is appealing. In February
2016, the District Court granted AstraZeneca's motions for summary
judgment and dismissed the remaining two, consolidated cases filed
by co-plaintiffs Medical University of South Carolina Foundation
for Research Development and Charleston Medical Therapeutics
(together CMT) and entered judgment in AstraZeneca's favour, which
CMT has appealed.
Patent proceedings outside the US
As previously disclosed, in Australia, AstraZeneca was
unsuccessful in defending the validity of certain Crestor patents,
at trial and on appeal. This patent litigation concluded in
September 2015. A provision has been taken in respect of claims
from generic entities which were prevented by court order from
launching their products in Australia before AstraZeneca's patents
were subsequently found invalid. In April 2016, AstraZeneca was
notified that the Commonwealth of Australia also intends to pursue
a claim against AstraZeneca in relation to alleged losses it
suffered in connection with this patent litigation. AstraZeneca
will respond appropriately in due course.
As previously disclosed, in the Netherlands, in April 2014,
AstraZeneca received a writ of summons from Resolution Chemicals
Ltd. (Resolution) alleging partial invalidity and non-infringement
of the supplementary protection certificate (SPC) related to the
Crestor substance patent. In July 2015, the District Court of the
Hague determined that the SPC does not extend to zinc salts of
rosuvastatin and that Resolution's rosuvastatin zinc product does
not infringe the SPC. AstraZeneca appealed. In February 2016, the
Court of Appeal of the Hague overturned the decision and found that
Resolution's product does infringe the SPC. Resolution may seek to
appeal.
Faslodex (fulvestrant)
US patent proceedings
As previously disclosed, AstraZeneca has filed patent
infringement lawsuits in the US District Court in New Jersey
relating to four patents listed in the FDA Orange Book with
reference to Faslodex, after AstraZeneca received seven Paragraph
IV notices relating to six Abbreviated New Drug Applications
(ANDAs) seeking FDA approval to market generic versions of Faslodex
prior to the expiration of AstraZeneca's patents. The first trial,
against the first three ANDA filers, is scheduled to commence on 27
June 2016.
Patent proceedings outside the US
As previously disclosed, in September 2015, AstraZeneca filed a
request for a provisional injunction against Hexal AG (Hexal) in
the Regional Court of Düsseldorf after Hexal threatened to launch a
generic Faslodex product in Germany. The request was denied in
November 2015 and AstraZeneca appealed. In February 2016, the
Higher Regional Court of Düsseldorf ruled in AstraZeneca's favour
and ordered the provisional injunction against Hexal.
Movantik/Moventig (naloxegol)
US patent proceedings
As previously disclosed, in 2015, Neptune Generics LLC, filed a
petition seeking inter partes review (IPR) with the US Patent
Office challenging the validity of an FDA Orange Book listed patent
relating to Movantik (US Patent No. 7,786,133). In April 2016, the
US Patent Trial and Appeal Board denied the petition.
Patent proceedings outside the US
As previously disclosed, in Europe, Generics UK Ltd. (trading as
Mylan) filed an opposition to the grant of European Patent No.
1,694,363 with the European Patent Office (EPO). In February 2016,
the Opposition Division of the EPO upheld the patent as granted and
dismissed the opposition.
Onglyza (saxagliptin) and Kombiglyze (saxagliptin and
metformin)
US patent proceedings
As previously disclosed, following the denial of Mylan
Pharmaceuticals, Inc.'s (Mylan) motion to dismiss for lack of
jurisdiction by the US District Court for the District of Delaware
(the District Court), Mylan appealed that decision. In March 2016,
the US Court of Appeals for the Federal Circuit affirmed the
District Court's decision (the March Decision). In April 2016,
Mylan filed a petition for rehearing en banc of the March
Decision.
Nexium (esomeprazole magnesium)
US patent proceedings
In February 2016, AstraZeneca received a Paragraph IV notice
from MacLeods Pharmaceuticals Ltd. (MacLeods) challenging certain
patents listed in the FDA Orange Book with reference to Nexium.
MacLeods submitted an ANDA seeking to market esomeprazole
magnesium. In March 2016, in response to MacLeods' notice,
AstraZeneca filed a patent infringement lawsuit against MacLeods in
the US District Court for the District of New Jersey. The
litigation is at an early stage and no trial date has been set.
In March 2016, AstraZeneca received a Paragraph IV notice from
Hetero USA Inc. (Hetero) challenging certain patents listed in the
FDA Orange Book with reference to Nexium 24HR (OTC). Hetero
submitted an ANDA seeking to market OTC esomeprazole magnesium.
AstraZeneca is reviewing Hetero's notice.
Patent Proceedings outside the US
As previously disclosed, in Canada, in July 2014, the Federal
Court found Canadian Patent No. 2,139,653 invalid and not infringed
by Apotex Inc. In July 2015, AstraZeneca's appeal was dismissed. On
10 March 2016, the Supreme Court of Canada granted AstraZeneca
leave to appeal. A tentative hearing date is set for 8 November
2016.
Product liability litigation
Onglyza (saxagliptin)
As previously disclosed, Amylin Pharmaceuticals, LLC, a wholly
owned subsidiary of AstraZeneca, and/or AstraZeneca are among
multiple defendants in various lawsuits filed in state and federal
courts in the US involving multiple plaintiffs claiming physical
injury from treatment with Onglyza. The lawsuits allege injuries
including pancreatic cancer. AstraZeneca has been served with
lawsuits filed in California state court on behalf of approximately
35 plaintiffs alleging heart failure, congestive heart failure,
cardiac failure and/or death resulting from treatment with
Onglyza/Kombiglyze.
Commercial litigation
Nexium/Prilosec trademark litigation
As previously disclosed, AstraZeneca filed separate complaints
in the US District Court for the District of Delaware against
Camber Pharmaceuticals, Inc. (Camber) and Dr. Reddy's Laboratories,
Inc. (Dr. Reddy's) to enforce certain AstraZeneca trademark rights
related to Nexium and Prilosec. The Delaware District Court issued
preliminary injunctions against Camber's and Dr. Reddy's sales of
generic esomeprazole magnesium in purple capsules. The Camber
action has been settled through negotiation and as part of the
settlement, the Delaware District Court entered a Consented
Judgment of Permanent Injunction and Other Relief on 31 March 2016
in favour of AstraZeneca. Dr. Reddy's filed its own separate claims
against AstraZeneca in both the Delaware District Court and the US
District Court for the District of New Jersey. Dr. Reddy's also
appealed the preliminary injunction decision of the Delaware
District Court to the US Court of Appeals for the Third Circuit and
in April 2016, voluntarily withdrew its appeal. All District Court
cases involving Dr. Reddy's related to this matter had been stayed
pending the appeal, and have now resumed.
Nexium Consumer litigation
As previously disclosed, in July 2015, the Delaware Superior
Court granted AstraZeneca's motion to dismiss and entered judgment
in a putative class action alleging that AstraZeneca's promotion,
advertising and pricing of Nexium to physicians, consumers and
third party payers was unfair, unlawful and deceptive. In April
2016, the Delaware Supreme Court affirmed the dismissal.
Toprol-XL (metoprolol succinate)
As previously disclosed, in March 2015, AstraZeneca was served
with a state court complaint filed by the Attorney General for the
State of Louisiana alleging that, in connection with enforcement of
its patents for Toprol-XL, it had engaged in unlawful
monopolisation and unfair trade practices, causing the state
government to pay increased prices for Toprol-XL. In February 2016,
the Louisiana state court heard oral argument on AstraZeneca's
motion to dismiss and ordered the dismissal of the complaint with
prejudice and judgment in AstraZeneca's favour.
Matters disclosed in respect of the second quarter of 2016 and
to 28 July 2016.
Patent litigation
Byetta (exenatide)
US patent proceedings
As previously disclosed, AstraZeneca filed a patent infringement
lawsuit against Teva Pharmaceuticals USA, Inc. (Teva) in the US
District Court for the District of Delaware (the District Court)
relating to patents listed in the FDA Orange Book with reference to
Byetta. In June 2016, AstraZeneca settled the patent litigation
against Teva. The District Court entered a consent judgment which
will enjoin Teva from launching its proposed exenatide product
until 15 October 2017, subject to regulatory approval. Patent
infringement proceedings against Amneal Pharmaceuticals LLC are
ongoing, with trial scheduled for December 2017.
Crestor (rosuvastatin)
US patent proceedings
As previously disclosed, in February 2016, the US District Court
for the District of South Carolina granted AstraZeneca's motions
for summary judgment and dismissed two consolidated patent
infringement lawsuits filed by co-plaintiffs Medical University of
South Carolina Foundation for Research Development and Charleston
Medical Therapeutics (together, CMT) relating to the sale of
Crestor, which CMT appealed. In July 2016, AstraZeneca and CMT
jointly filed a stipulation requesting the appellate court to
dismiss CMT's appeal.
Patent proceedings outside the US
As previously disclosed, in Australia, AstraZeneca was
unsuccessful in defending the validity of certain Crestor patents,
at trial and on appeal. The patent litigation concluded in
September 2015. A provision was taken in Q4 2015 in respect of
claims from generic entities which were prevented by court order
from launching their products in Australia before AstraZeneca's
patents were subsequently found to be invalid. In April 2016,
AstraZeneca was notified that the Commonwealth of Australia also
intends to pursue a claim against AstraZeneca in relation to
alleged losses it suffered in connection with the same patent
litigation and AstraZeneca has updated its provisions
accordingly.
As previously disclosed, in the Netherlands, in April 2014,
AstraZeneca received a writ of summons from Resolution Chemicals
Ltd. (Resolution) alleging partial invalidity and non-infringement
of the supplementary protection certificate (SPC) related to the
Crestor substance patent. In July 2015, the District Court of the
Hague determined that the SPC does not extend to zinc salts of
rosuvastatin and that Resolution's rosuvastatin zinc product does
not infringe the SPC. In February 2016, the Court of Appeal of the
Hague overturned the decision and found that Resolution's product
does infringe the SPC. Resolution has appealed. The hearing has
been scheduled for 16 December 2016.
In France, in February 2016, Biogaran S.A.S. (Biogaran) obtained
a marketing authorisation for its rosuvastatin zinc product. In
April 2016, AstraZeneca and Shionogi Seiyaku Kabushiki Kaisha
(Shionogi) sought a preliminary injunction to prevent Biogaran from
launching its product. On 4 July 2016, the Paris Court of First
Instance declined to issue a preliminary injunction. AstraZeneca
and Shionogi have appealed.
As previously disclosed, in Japan, in March 2015, an individual
filed a patent invalidation request with the Japanese Patent Office
(JPO) in relation to the Crestor substance patent. On 13 July 2016,
the JPO dismissed the request.
Faslodex (fulvestrant)
US patent proceedings
As previously disclosed, AstraZeneca has filed patent
infringement lawsuits in the US District Court in New Jersey (the
District Court) relating to four patents listed in the FDA Orange
Book with reference to Faslodex after AstraZeneca received seven
Paragraph IV notices relating to six ANDAs seeking FDA approval to
market generic versions of Faslodex prior to the expiration of
AstraZeneca's patents. In July 2016, AstraZeneca settled one of
these, the lawsuit brought against Sandoz, Inc (Sandoz), and the
District Court entered a consent judgment, which includes an
injunction preventing Sandoz from launching a generic fulvestrant
product until 25 March 2019, or earlier in some circumstances.
Trial against two other defendants commenced on 11 July 2016 and is
scheduled to reconvene on 1 August 2016.
In July 2016, AstraZeneca was served with four petitions for
inter parties review by the Patent Trial and Appeal Board relating
to each of the four Orange Book-listed patents.
Onglyza (saxagliptin) and Kombiglyze (saxagliptin and
metformin)
US patent proceedings
In May 2016, Apotex Inc. and Apotex Corp. (collectively Apotex)
sent a notice that it had submitted an ANDA for saxagliptin
hydrochloride 2.5mg and 5mg tablets containing a Paragraph IV
Certification alleging that US Patent No. RE44,186 (the '186
Patent), listed in the FDA Orange Book with reference to Onglyza
and Kombiglyze XR, is invalid and/or will not be infringed by the
products as described in its ANDA. In July 2016, AstraZeneca
initiated patent infringement proceedings asserting the '186 Patent
in the US District Court for the District of Delaware against
Apotex.
In June 2016, Teva Pharmaceuticals USA, Inc., Amneal
Pharmaceuticals, LLC, Actavis Laboratories FL, Inc., and Sun Pharma
Global FZE each sent notices that they had submitted ANDAs for
saxagliptin hydrochloride and metformin hydrochloride 2.5mg/1000mg,
5mg/1000mg, and 5mg/500mg tablets containing a Paragraph IV
Certification alleging that US Patent No. 9,339,472 (the '472
Patent) listed in the FDA Orange Book with reference to Kombiglyze
XR, is invalid, unenforceable and/or will not be infringed by the
products as described in their ANDAs.
As previously disclosed, in April 2016, Mylan Pharmaceuticals,
Inc. (Mylan) filed a petition for rehearing en banc (the Petition)
of a March 2016 decision by the US Court of Appeals for the Federal
Circuit (the Federal Circuit) affirming a decision by the US
District Court for the District of Delaware that denied Mylan's
motion to dismiss for lack of jurisdiction. In June 2016, the
Federal Circuit denied the Petition.
As previously disclosed, in January 2016, Mylan filed a Request
for Rehearing with the US Patent and Trademark Office (USPTO)
seeking reconsideration of a December 2015 decision by the USPTO
denying institution of an inter partes review challenging the
validity of the '186 Patent (the Mylan IPR). In May 2016, the USPTO
instituted the Mylan IPR. Following institution of the Mylan IPR,
Wockhardt Bio AG, Amneal Pharmaceuticals LLC, Sun Pharmaceuticals
Industries Ltd., Sun Pharma Global FZE, Teva Pharmaceuticals USA,
Inc., and Aurobindo Pharma Ltd. also filed petitions for inter
partes review challenging the validity of the '186 Patent and have
sought to join the Mylan IPR.
Seroquel XR (quetiapine fumarate)
Patent proceedings outside the US
In Spain, in May 2016, the Supreme Court affirmed a decision
from October 2013 which found the Seroquel XR formulation patent
invalid. The generic challengers were Accord Healthcare S.L.U. and
Sandoz Farmaceutica S.A.
In Sweden, in May 2016, following a challenge to the validity of
the formulation patent covering Seroquel XR by Sandoz A/S, the
Stockholm District Court found the Seroquel XR formulation patent
invalid.
In Denmark, in June 2016, following a challenge to the validity
of the formulation patent covering Seroquel XR by Teva Denmark A/S
and Accord Healthcare Ltd., the Danish Maritime and Commercial High
Court found the Seroquel XR formulation patent invalid.
As previously disclosed, in France, in April 2015, Mylan SAS
(Mylan) brought a patent invalidation action against AstraZeneca's
French designation of the Seroquel XR formulation patent. In July
2016, the tribunal de grande instance de Paris found the Seroquel
XR formulation patent invalid.
In various countries in Europe generic entities have claimed, or
could claim, damages relating to preliminary injunctions issued in
those countries that prevented generic Seroquel XR sales by those
entities. A provision has been taken.
Product liability litigation
Byetta/Bydureon (exenatide)
As previously disclosed, Amylin Pharmaceuticals, LLC, a wholly
owned subsidiary of AstraZeneca, and/or AstraZeneca are among
multiple defendants in various lawsuits filed in federal and state
courts in the US involving claims of physical injury from treatment
with Byetta and/or Bydureon. The lawsuits allege several types of
injuries including pancreatitis, pancreatic cancer, thyroid cancer,
and kidney cancer. A multi-district litigation has been established
in the US District Court for the Southern District of California
(the District Court) in regard to the alleged pancreatic cancer
cases in federal courts. Further, a co-ordinated proceeding has
been established in Los Angeles, California in regard to the
various lawsuits in California state courts.
In November 2015, the District Court granted the defendants'
motion for summary judgment and dismissed all claims alleging
pancreatic cancer that accrued prior to 11 September 2015. A
similar motion was granted in favour of the defendants in the
California state co-ordinated proceeding, and judgment was entered
in May 2016. The plaintiffs have appealed both rulings.
As previously disclosed, a single case was pending in Alabama
state court and is now resolved.
Crestor (rosuvastatin calcium)
AstraZeneca is defending a number of lawsuits alleging multiple
types of injuries caused by the use of Crestor, including diabetes
mellitus, various cardiac injuries, rhabdomyolysis, and/or liver
and kidney injuries. The claims of approximately 600 plaintiffs,
comprising approximately 100 California residents and approximately
500 non-California residents, were aggregated in one co-ordinated
proceeding in Los Angeles, California. The claims of approximately
600 additional non-California plaintiffs were also pending in
California state court. In October 2014, the co-ordination judge
dismissed the claims of the non-California plaintiffs whose claims
were in the co-ordinated proceeding. The plaintiffs appealed the
October 2014 order dismissing the non-California plaintiffs from
the proceeding. In July 2016, the Court of Appeal in California
dismissed the plaintiffs' appeal, effectively dismissing the claims
of all of the non-California residents from California state court,
leaving the option of re-filing in the plaintiffs' home states. The
claims of approximately 80 plaintiffs remain pending in California
state court.
Farxiga (dapagliflozin)
As previously disclosed, AstraZeneca has been named as one of
multiple defendants in a lawsuit filed in the US District Court for
the Western District of Kentucky involving one plaintiff claiming
physical injury, including diabetic ketoacidosis and kidney
failure, from treatment with Farxiga. Since then, cases with
similar allegations have been filed in three additional
jurisdictions. Motions to dismiss are pending in the Western
District of Kentucky and one other jurisdiction.
Onglyza/Kombiglyze (saxagliptin)
AstraZeneca is defending various lawsuits filed in state and
federal courts in the US involving multiple plaintiffs claiming
injury from the treatment with either Onglyza or Kombiglyze. In May
2016, a federal judge in California granted AstraZeneca's motion
for summary judgment and dismissed the claims of 14 of these
plaintiffs who alleged injuries including pancreatic cancer. The
previously disclosed lawsuit, filed on behalf of approximately 50
plaintiffs alleging heart failure, cardiac failure and/or death
resulting from treatment with Onglyza/Kombiglyze remains
pending.
Synagis (palivizumab)
AstraZeneca and MedImmune have been named as defendants in a
lawsuit filed in the US District Court for the Middle District of
Louisiana involving two plaintiffs alleging wrongful death from
treatment with Synagis. A motion to dismiss is pending.
Commercial litigation
Nexium/Prilosec trademark litigation
As previously disclosed, AstraZeneca filed separate complaints
in the US District Court for the District of Delaware against
Camber Pharmaceuticals, Inc. (Camber) and Dr. Reddy's Laboratories,
Inc. (Dr. Reddy's) to enforce certain AstraZeneca trademark rights
related to Nexium and Prilosec. The Delaware District Court issued
preliminary injunctions against Camber's and Dr. Reddy's sales of
generic esomeprazole magnesium in purple capsules. The Camber
action has been settled through negotiation and, as part of the
settlement, the Delaware District Court entered a Consented
Judgment of Permanent Injunction and Other Relief on 31 March 2016
in favour of AstraZeneca. Dr. Reddy's filed its own separate claims
against AstraZeneca in both the Delaware District Court and the US
District Court for the District of New Jersey. The New Jersey
District Court has determined that the Delaware action should
proceed first.
Toprol-XL (metoprolol succinate)
As previously disclosed, in March 2015, AstraZeneca was served
with a state court complaint filed by the Attorney General for the
State of Louisiana alleging that, in connection with enforcement of
its patents for Toprol-XL, it had engaged in unlawful
monopolisation and unfair trade practices, causing the state
government to pay increased prices for Toprol-XL. In February 2016,
the Louisiana state court granted AstraZeneca's motion to dismiss
the complaint with prejudice and judgment in AstraZeneca's favour.
The State of Louisiana has appealed this decision.
Pearl Therapeutics
AstraZeneca has been served with a complaint filed in Delaware
State court by the former shareholders of Pearl Therapeutics, Inc.
(Pearl) that alleges, among other things, breaches of contractual
obligations relating to a 2013 merger agreement between AstraZeneca
and Pearl.
Crestor Citizen's Petition
On 31 May 2016, AstraZeneca filed a Citizen's Petition with the
FDA requesting that the Agency not approve any pending generic
ANDAs for rosuvastatin until the expiration of paediatric orphan
exclusivity for Crestor. On 27 June 2016, AstraZeneca filed its
Complaint for Declaratory and Injunctive Relief and an Application
for a Temporary Restraining Order (TRO) with the US District Court
for the District of Columbia requesting that the Court prohibit the
FDA from granting final approval to any pending ANDAs for generic
versions of Crestor until the expiration of paediatric orphan
exclusivity. On 19 July 2016, the Court denied AstraZeneca's
application for a TRO, but provided for FDA to produce to
AstraZeneca a copy of the administrative record.
8 product analysis - H1 2016
Emerging
World US Europe Established ROW Markets
H1 2016 CER H1 2016 CER H1 2016 CER H1 2016 CER H1 2016 CER
$m % $m % $m % $m % $m %
Respiratory &
Autoimmunity:
Symbicort 1,552 (6) 681 (5) 466 (18) 196 - 209 25
Pulmicort 549 10 106 (2) 54 (18) 40 (2) 349 23
Tudorza/Eklira 87 4 41 (9) 41 17 4 n/m 1 n/m
Daliresp/Daxas 71 n/m 66 n/m 4 n/m - - 1 n/m
Duaklir 30 n/m - - 28 n/m 1 n/m 1 n/m
Others 144 13 7 (30) 51 13 17 55 69 12
Total Respiratory &
Autoimmunity 2,433 1 901 (2) 644 (11) 258 2 630 23
Cardiovascular &
Metabolic
Diseases:
Onglyza 402 6 212 - 73 4 37 22 80 16
Brilinta 395 48 159 57 125 17 20 29 91 106
Farxiga 376 88 209 82 89 72 25 127 53 135
Bydureon 291 11 234 5 50 43 5 67 2 -
Byetta 138 (19) 89 (26) 25 (17) 10 - 14 45
Legacy:
Crestor 2,082 (15) 1,004 (27) 438 (4) 286 (2) 354 9
Seloken/Toprol-XL 374 7 53 10 44 (6) 5 (29) 272 9
Atacand 160 (11) 21 17 49 (6) 10 (29) 80 (16)
Others 242 (23) 16 (54) 64 (11) 25 (20) 137 (22)
Total Cardiovascular &
Metabolic Diseases 4,460 (2) 1,997 (11) 957 4 423 2 1,083 9
Oncology:
Iressa 270 2 10 n/m 61 (8) 65 (6) 134 3
Tagrisso 143 n/m 103 n/m 25 n/m 15 n/m - -
Lynparza 98 n/m 62 n/m 32 n/m - - 4 n/m
Legacy:
Faslodex 401 23 211 28 113 13 30 16 47 36
Zoladex 382 (3) 19 36 80 (3) 130 (3) 153 (5)
Casodex 125 (9) 2 n/m 13 (13) 56 (20) 54 2
Arimidex 119 (2) 10 43 18 (28) 35 (18) 56 15
Others 48 (33) - - 3 (77) 32 3 13 (12)
Total Oncology 1,586 18 417 85 345 12 363 (3) 461 5
Infection &
Neuroscience:
Nexium 1,025 (18) 294 (39) 127 (10) 237 (15) 367 1
Seroquel XR 427 (17) 306 (13) 76 (32) 10 (29) 35 (9)
Synagis 271 - 163 2 108 (2) - - - -
Losec/Prilosec 145 (17) 5 (58) 41 (16) 27 (32) 72 (5)
Movantik/Moventig 40 n/m 40 n/m - - - - - -
FluMist/Fluenz 11 (48) 11 (48) - - - - - -
Others 636 (11) 75 (29) 169 (6) 127 (3) 265 (11)
Total Infection &
Neuroscience 2,555 (13) 894 (21) 521 (12) 401 (13) 739 (5)
Total Product Sales 11,034 (2) 4,209 (7) 2,467 (3) 1,445 (4) 2,913 7
9 product analysis - Q2 2016
World US Europe Established ROW Emerging Markets
Q2 2016 CER Q2 2016 CER Q2 2016 CER Q2 2016 CER Q2 2016 CER
$m % $m % $m % $m % $m %
Respiratory &
Autoimmunity:
Symbicort 803 (4) 359 (4) 235 (17) 105 2 104 33
Pulmicort 239 6 50 (11) 25 (17) 22 - 142 21
Tudorza/Eklira 48 (13) 24 (33) 20 18 3 50 1 n/m
Daliresp/Daxas 40 25 35 9 4 n/m - - 1 n/m
Duaklir 17 n/m - - 16 n/m 1 - - -
Others 79 34 3 40 32 33 14 n/m 30 25
Total Respiratory &
Autoimmunity 1,226 1 471 (7) 332 (7) 145 8 278 26
Cardiovascular &
Metabolic
Diseases:
Onglyza 191 (7) 88 (22) 40 14 19 6 44 12
Brilinta 214 51 89 62 65 16 10 38 50 104
Farxiga 211 65 115 47 48 71 16 100 32 127
Bydureon 156 11 126 9 27 42 3 50 - (133)
Byetta 76 (6) 47 (11) 15 7 5 (17) 9 11
Legacy:
Crestor 926 (29) 368 (52) 226 (1) 161 1 171 5
Seloken/Toprol-XL 189 8 32 52 22 (4) 3 (25) 132 4
Atacand 89 (5) 12 71 25 9 6 (14) 46 (18)
Others 116 (25) 11 (27) 34 - 16 - 55 (38)
Total Cardiovascular &
Metabolic Disease 2,168 (11) 888 (27) 502 9 239 5 539 3
Oncology:
Iressa 135 5 6 n/m 27 (19) 35 (6) 67 15
Tagrisso 92 n/m 58 n/m 19 n/m 15 n/m - -
Lynparza 54 n/m 34 89 18 n/m - - 2 n/m
Legacy:
Faslodex 211 23 112 37 57 8 16 15 26 15
Zoladex 204 (4) 9 13 41 2 68 (6) 86 (7)
Casodex 63 (10) 2 100 6 (14) 30 (18) 25 (4)
Arimidex 62 (2) 6 50 10 (17) 19 (19) 27 11
Others 27 (30) - n/m 1 (60) 19 6 7 (22)
Total Oncology 848 20 227 89 179 16 202 1 240 4
Infection &
Neuroscience:
Nexium 562 (13) 163 (36) 67 (3) 142 (8) 190 13
Seroquel XR 225 (14) 162 (12) 41 (20) 5 (29) 17 (13)
Synagis 27 (59) 3 n/m 24 (66) - - - -
Losec/Prilosec 70 (16) 3 (40) 20 (17) 14 (32) 33 (5)
Movantik/Moventig 23 n/m 23 n/m - - - - - -
FluMist/Fluenz 6 (57) 6 (57) - - - - - -
Others 314 (12) 17 (71) 84 (13) 62 (13) 151 12
Total Infection &
Neuroscience 1,227 (14) 377 (27) 236 (24) 223 (12) 391 9
Total Product Sales 5,469 (5) 1,963 (17) 1,249 (2) 809 (1) 1,448 9
Shareholder Information
Announcements
Announcement of nine months and third quarter 2016 results 10 November 2016
Announcement of full year and fourth quarter 2016 results 2 February 2017
Future dividends will normally be paid as follows:
First interim Announced with half year and second quarter results and paid in September
Second interim Announced with full year and fourth quarter results and paid in March
The record date for the first interim dividend for 2016, payable
on 12 September 2016, will be 12 August 2016. Ordinary Shares
listed in London and Stockholm will trade ex-dividend from 11
August 2016. American Depositary Shares listed in New York will
trade ex-dividend from 10 August 2016.
Trademarks
Trademarks of the AstraZeneca group of companies and of
companies other than AstraZeneca appear throughout this document in
italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca
symbol are all trademarks of the AstraZeneca group of companies.
Trademarks of companies other than AstraZeneca that appear in this
document include Duaklir Genuair, Duaklir, Eklira, and Tudorza,
trademarks of Almirall, S.A.; Epanova, a trademark of Chrysalis
Pharma AG; and Zinforo, a trademark of Forest Laboratories.
Addresses for Correspondence
Registrar and US Depositary Registered Office Swedish Central Securities
Transfer Office Citibank Shareholder Services 1 Francis Crick Avenue Depository
Equiniti Limited PO Box 43077 Cambridge Biomedical Campus, Euroclear Sweden AB
Aspect House Providence Cambridge PO Box 191
Spencer Road RI 02940-3077 CB2 0AA SE-101 23 Stockholm
Lancing USA UK Sweden
West Sussex
BN99 6DA
UK
Tel (freephone in UK): Tel: (toll free in the US) Tel: +44 (0)20 3749 5000 Tel: +46 (0)8 402 9000
0800 389 1580 +1 (888) 697 8018
Tel (outside UK): Tel: (outside the US)
+44 (0)121 415 7033 +1 (781) 575 4555
citibank@shareholders-online.c
om
Cautionary Statements Regarding Forward-Looking Statements
In order, among other things, to utilise the 'safe harbour'
provisions of the US Private Securities Litigation Reform Act 1995,
we are providing the following cautionary statement: This document
contains certain forward-looking statements with respect to the
operations, performance and financial condition of the Group,
including, among other things, statements about expected revenues,
margins, earnings per share or other financial or other measures.
Although we believe our expectations are based on reasonable
assumptions, any forward-looking statements, by their very nature,
involve risks and uncertainties and may be influenced by factors
that could cause actual outcomes and results to be materially
different from those predicted. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this document and AstraZeneca undertakes no
obligation to update these forward-looking statements. We identify
the forward-looking statements by using the words 'anticipates',
'believes', 'expects', 'intends' and similar expressions in such
statements. Important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, certain of which are beyond our control, include, among
other things: the loss or expiration of, or limitations to,
patents, marketing exclusivity or trademarks, or the risk of
failure to obtain and enforce patent protection; the risk of
substantial adverse litigation/government investigation claims and
insufficient insurance coverage; effects of patent litigation in
respect of IP rights; exchange rate fluctuations; the risk that
R&D will not yield new products that achieve commercial
success; the risk that strategic alliances and acquisitions,
including licensing and collaborations, will be unsuccessful; the
impact of competition, price controls and price reductions;
taxation risks; the risk of substantial product liability claims;
the impact of any delays in the manufacturing, distribution and
sale of any of our products; the impact of any failure by third
parties to supply materials or services; the risk of failure of
outsourcing; the risks associated with manufacturing biologics; the
risk of delay to new product launches; the difficulties of
obtaining and maintaining regulatory approvals for products; the
risk of failure to adhere to applicable laws, rules and
regulations; the risk of failure to adhere to applicable laws,
rules and regulations relating to anti-competitive behaviour; the
risk that new products do not perform as we expect; failure to
achieve strategic priorities or to meet targets or expectations;
the risk of an adverse impact of a sustained economic downturn;
political and socio-economic conditions; the risk of environmental
liabilities; the risk of occupational health and safety
liabilities; the risk associated with pensions liabilities; the
risk of misuse of social medial platforms and new technology; the
risks associated with developing our business in emerging markets;
the risk of illegal trade in our products; the risks from pressures
resulting from generic competition; the risk of failure to
successfully implement planned cost reduction measures through
productivity initiatives and restructuring programmes; economic,
regulatory and political pressures to limit or reduce the cost of
our products; the risk that regulatory approval processes for
biosimilars could have an adverse effect on future commercial
prospects; the impact of failing to attract and retain key
personnel and to successfully engage with our employees; the impact
of increasing implementation and enforcement of more stringent
anti-bribery and anti-corruption legislation; and the risk of
failure of information technology and cybercrime. Nothing in this
document/presentation/webcast should be construed as a profit
forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KDLFLQDFLBBD
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July 28, 2016 02:02 ET (06:02 GMT)
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