AstraZeneca PLC AstraZeneca year-to-date and Q3 2019 results

Date : 10/24/2019 @ 6:00AM
Source : UK Regulatory (RNS & others)
Stock : Astrazeneca Plc (AZN)
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AstraZeneca PLC AstraZeneca year-to-date and Q3 2019 results

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RNS Number : 9384Q

AstraZeneca PLC

24 October 2019

AstraZeneca PLC

24 October 2019 07:00 BST

Year-to-date and Q3 2019 results

Patients to benefit from further pipeline progress; sales-growth momentum driving operating leverage

Year-to-date Product Sales growth of 13% (17% at CER(1) ) to $17,315m included third-quarter Product Sales of $6,132m (+16%, +18% at CER). The third quarter again saw all three therapy areas and every sales region produce encouraging performances, including:

- The continued performance of new medicines(2) , with sales growth in the quarter of 62% (+64% at CER) to $2,707m, including new-medicine growth in Emerging Markets of 85% (90% at CER) to $539m

- Sales growth by therapy area in the quarter: Oncology +46% (+48% at CER) to $2,334m, New CVRM(3) +8% (+11% at CER) to $1,113m and Respiratory +15% (+18% at CER) to $1,319m

- Sales growth by region in the quarter: total Emerging Markets sales grew by 25% (29% at CER) to $2,123m, with China sales growth of 35% (40% at CER) to $1,283m, ahead of longer-term trends. US sales increased by 17% to $2,025m; Europe sales continued their return to growth, increasing by 1% (4% at CER) to $1,139m; Japan sales increased by 31% (27% at CER) to $657m

The Company today upgrades its Product Sales guidance at CER for the year.

 
                                      YTD 2019                    Q3 2019 
                                                         ------------------------- 
                               $m         % change         $m         % change 
                            -------                      ------ 
                                      Actual     CER              Actual     CER 
                            -------  -------  ---------  ------  -------  -------- 
       Product Sales         17,315     13        17      6,132     16       18 
   Collaboration Revenue      405       3         6        274     n/m       n/m 
       Total Revenue         17,720     13        17      6,406     20       22 
--------------------------  -------  -------  ---------  ------  -------  -------- 
 
   Reported(4) Operating 
           Profit            2,347      2         3        757     (11)     (13) 
 Core(5) Operating Profit    4,891      41        42      1,880     43       41 
 
      Reported EPS(6)        $0.79     (11)      (15)     $0.23    (33)     (38) 
         Core EPS            $2.61      39        38      $0.99     40       36 
                            -------  -------  ---------  ------  -------  -------- 
 
 

Pascal Soriot, Chief Executive Officer, commenting on the results said:

"With AstraZeneca growing at pace, our sales guidance has been upgraded for the second consecutive quarter. Another strong performance from our new medicines accompanied impressive results in our key markets, most notably in China, the US and Japan. The performance reinforces our confidence in delivering sustainable earnings growth.

We delivered further positive news for patients. Lynparza demonstrated its potential as a treatment for prostate cancer and as an expanded treatment for ovarian cancer. Tagrisso, Imfinzi and PT010 also had positive data, and we delivered breakthrough data in heart failure for Farxiga.

We are continuing to ensure that we capture the benefits of our growth by balancing reinvesting in our business, delivering on our sustainability commitments, continuing to improve our operating leverage and cash generation."

Financial summary

- Product Sales increased by 13% in the year to date (17% at CER) to $17,315m. The performance in the quarter was supported by favourable inventory and gross-to-net movements which are not expected in the final quarter of the year

- The Reported Gross Profit Margin increased by one percentage point in the year to date to 80%, partly reflecting the mix of sales; the Core Gross Profit Margin increased by one percentage point in the year to date to 81%

- Reported Operating Expense increased by 11% in the year to date (15% at CER) to $12,871m and represented 73% of Total Revenue (YTD 2018: 74%). Core Operating Expense increased by 3% (6% at CER) to $10,537m and represented 59% of Total Revenue (YTD 2018: 65%), demonstrating a significant improvement in operating leverage

- Reported R&D Expense increased by 1% in the year to date (5% at CER) to $3,968m. Core R&D Expense increased by 1% (4% at CER) to $3,826m, partly a result of investment in the development of the potential new oncology medicine, trastuzumab deruxtecan

- Reported SG&A Expense increased by 16% (20% at CER) in the year to date to $8,656m, due to an increase in legal provisions and revaluation movements on acquisition-related liabilities in the year to date; Core SG&A Expense increased by 4% (8% at CER) to $6,464m, primarily reflecting growth in China, as well as ongoing additional support for new medicines. An update on legal matters and subsequent events is disclosed in Note 5 and Note 6

- Reported Other Operating Income and Expense declined by 32% in the year to date (31% at CER) to $1,041m; Core Other Operating Income and Expense declined by 7% (6% at CER) to $1,060m

- The Reported Operating Profit Margin declined in the year to date by one percentage point (two at CER) to 13%; the Core Operating Profit Margin increased by five percentage points to 28%

- The Reported Tax Rate in the year to date was 27% (YTD 2018: 18%); the Core Tax Rate was 22% (YTD 2018: 19%). The tax rates in the year to date reflected the geographical mix of profits and the impact of collaboration and divestment activity

- Reported EPS of $0.79 in the year to date, based on a weighted-average number of shares of 1,297m, represented a decline of 11% (15% at CER); Core EPS increased by 39% (38% at CER) to $2.61. In April 2019, the Company completed an issue of 44,386,214 new ordinary shares of $0.25 each at a price of GBP60.50 per share, resulting in an increase in share capital of $11m and an increase in share premium of $3,479m, net of transaction costs of $22m

- The difference between the Reported and Core EPS year-on-year performance partly reflected the impact of a favourable $346m legal settlement in YTD 2018 that was recognised as income in Reported Other Operating Income and Expense. It was also a result of the aforementioned increase in legal provisions and revaluation movements on acquisition-related liabilities in 2019

- The Company today upgrades its Product Sales guidance at CER for the year. Product Sales are now expected to increase by a low to mid-teens percentage; the prior guidance was for a low double-digit percentage increase

Commercial summary

Oncology

Sales growth of 50% in the year to date (54% at CER) to $6,393m, including:

- Tagrisso sales of $2,305m, representing growth of 82% in the year to date (86% at CER). The performance included growth in Emerging Markets of 108% (120% at CER) to $553m that partly reflected the early-2019 inclusion of Tagrisso as a 2nd-line treatment for EGFR(7) -mutated (EGFRm) NSCLC(8) on the China National Reimbursement List (NRDL). Tagrisso is now approved as a 1st-line treatment in most major markets

- Imfinzi sales of $1,045m, representing growth of 182% (184% at CER). Commercial execution and favourable reimbursement decisions supported sales growth outside of the US. Europe sales increased significantly to $115m (YTD 2018: $9m), accompanying encouraging Japan sales of $149m (YTD 2018: $9m)

- Lynparza sales of $847m, representing growth of 93% (98% at CER). The performance included growth in the US of 86% to $432m and Emerging Markets of 205% (227% at CER) to $101m as the medicine consolidated its leadership position in the poly ADP ribose polymerase (PARP)-inhibitor class

- The performance from more-mature Oncology medicines in the year to date included a decline in Faslodex sales of 4% (1% at CER) to $726m and a 16% decline in Iressa sales (11% at CER) to $343m. The Company anticipates continued declines for both medicines, partly reflecting generic Faslodex competition in the US and the pricing impact on Iressa from centralised procurement in China and the success of Tagrisso; both medicines saw significant declines in the third quarter

   -    Oncology sales growth in Emerging Markets of 42% (51% at CER) to $1,665m 

New CVRM

Sales growth of 11% in the year to date (14% at CER) to $3,207m, including:

- Brilinta sales of $1,153m, representing growth of 22% (26% at CER). The performance was bolstered by results in Emerging Markets, where sales grew by 50% in the year to date (59% at CER) to $348m. Patient uptake continued in the treatment of acute coronary syndrome and high-risk post-myocardial infarction

- Farxiga sales of $1,124m, with growth of 13% (17% at CER), ahead of the impact of label updates to reflect results from the DECLARE CV outcomes trial (CVOT). The level of sales growth in the US was adversely impacted by gross-to-net adjustments; underlying demand remained strong

- Bydureon sales of $410m, a decline of 8% (7% at CER), partly driven by the impact of production constraints in the first half for the new Bydureon BCise device and declining volumes for the dual-chamber pen

   -    New CVRM sales growth in Emerging Markets of 37% (46% at CER) to $835m 

Respiratory

Sales growth of 9% in the year to date (13% at CER) to $3,854m, including:

- A Symbicort sales decline of 7% (4% at CER) to $1,783m, reflecting continued pricing pressure and the impact of managed-market rebates in the US. This was partially offset by Emerging Markets growth of 10% (18% at CER) to $401m

- Pulmicort sales growth of 17% (23% at CER) to $1,053m; the majority of Pulmicort sales were in Emerging Markets. Q3 2019 global sales increased by 28% (31% at CER) to $337m

- Fasenra sales of $498m, representing growth of 189% (193% at CER). Fasenra leads the medicine class for the treatment of severe eosinophilic asthma by new patient share in a number of key markets

   -    Respiratory sales growth in Emerging Markets of 24% (31% at CER) to $1,419m 

Emerging Markets

As the Company's largest region, at 35% of total Product Sales, Emerging Markets sales increased by 19% in the year to date (26% at CER) to $6,074m, including:

   -    A China sales increase of 30% (37% at CER) to $3,691m. Highlights included: 
   -     Oncology sales growth of 58% (67% at CER) to $1,023m 
   -     New CVRM growth of 78% (88% at CER) to $359m 

- An ex-China sales increase of 5% (12% at CER) to $2,382m (Q3 2019: $839m, +12%, +15% at CER). All regions were in CER sales growth in the year to date, including: (ex-China) Asia-Pacific, Middle East and Africa, Brazil and Russia

Sustainability summary

In the year to date, AstraZeneca was recognised as a global sustainability leader:

- The Company achieved fourth position overall in the pharmaceutical industry in the 2019 Dow Jones Sustainability Indices (DJSI). AstraZeneca maintained its 2018 overall score and achieved a perfect score of 100 in the areas of environmental reporting, labour-practice indicators, social reporting and health-outcome contribution. This marked the 18th time that AstraZeneca was included in the indices

- The Company was again named as a member of the FTSE4Good Index Series, ranking in the 94th percentile of the healthcare industry, with perfect scores in climate change, anti-corruption, corporate governance and customer responsibility

Recent developments and progress against the Company's sustainability priorities are reported below:

- Access to healthcare: the Company celebrated the fifth anniversary of its Healthy Heart Africa (HHA) programme, conducting over 12 million blood-pressure screenings and identifying over two million elevated readings since its launch in 2014, working with collaborators across Kenya, Ethiopia, Tanzania and Ghana

- Environmental protection: AstraZeneca participated in Climate Week, taking part in events such as The Climate Group's 'Step Up: The Business Case for Greater Government Ambition' panel, as the first pharmaceutical-company member of the global EV100 initiative

- Ethics and transparency: the Company launched an employee campaign, 'Speak Up - Your Voice Matters' using internal social-media channels. The campaign encouraged honest and open dialogue in support of a healthy business culture, where people feel able to make their voices heard

A more extensive Sustainability update is provided later in this announcement.

Pipeline highlights

The following table highlights significant developments in the late-stage pipeline since the prior results announcement:

 
                  Regulatory approvals 
                                                             *    Tagrisso - NSCLC (1st line, EGFRm): regulatory 
                                                                  approval (CN) 
 
 
                                                             *    Farxiga/Forxiga - T2D(10) CVOT: regulatory approval 
                                                                  (US, EU) 
 
 
                                                             *    roxadustat - anaemia of CKD(11) , NDD(12) : 
                                                                  regulatory approval (CN) 
 
 
                                                             *    Fasenra Pen - severe eosinophilic asthma; 
                                                                  auto-injector and self-administration: regulatory 
                                                                  approval (US) 
        Regulatory submissions and/or acceptances 
                                                             *    Lynparza - pancreatic cancer (1st line, BRCAm): 
                                                                  regulatory submission acceptance (US, EU) 
 
 
                                                             *    Calquence - CLL(13) : regulatory submission under 
                                                                  review (US) 
 
 
                                                             *    trastuzumab deruxtecan - advanced/refractory, 
                                                                  metastatic breast cancer (HER2(14) -positive): 
                                                                  regulatory submission acceptance (US, JP); Priority 
                                                                  Review designation (US) 
 
 
                                                             *    Brilinta/Brilique - CAD(15) /T2D CVOT: regulatory 
                                                                  submission acceptance (US, EU) 
                          Major 
      Phase III data readouts or other significant          *    Tagrisso - NSCLC (1st line, EGFRm): met Phase III key 
                      developments                               secondary endpoint (OS(16) ) 
 
 
                                                            *    Imfinzi + treme - NSCLC (1st line) (NEPTUNE): did not 
                                                                 meet Phase III primary endpoint 
 
 
                                                            *    Lynparza - ovarian cancer (1st line) (PAOLA-1): met 
                                                                 Phase III primary endpoint 
 
 
                                                            *    Lynparza - prostate cancer (2nd line, 
                                                                 castration-resistant): met Phase III primary endpoint 
 
 
                                                            *    Calquence - CLL: Breakthrough Therapy Designation 
                                                                 (US) 
 
 
                                                            *    Farxiga - HF(17) CVOT: met Phase III primary 
                                                                 endpoint; Fast Track designation (US) 
 
 
                                                            *    Farxiga - CKD: Fast Track designation (US) 
 
 
                                                            *    Qtrilmet - T2D: positive opinion (EU) 
 
 
                                                            *    PT010 - COPD(18) (ETHOS): met Phase III primary 
                                                                 endpoint 
 
 
                                                            *    PT010 - COPD: complete response letter (US) 
 
 
                                                            *    Fasenra - eosinophilic oesophagitis: Orphan Drug 
                                                                 Designation (US) 
 
 
                                                            *    anifrolumab - lupus (SLE(19) ) (TULIP 2): met Phase 
                                                                 III primary endpoint 
                                                          ------------------------------------------------------------ 
 

Guidance and financial priorities

All measures in this section are at CER and Company guidance is on Product Sales and Core EPS only.

All guidance and indications provided assume that the UK's anticipated exit from the EU, even in the event of a no-deal exit, proceeds in an orderly manner such that the impact is within the range expected, following the Company's extensive preparations for such an eventuality.

AstraZeneca anticipates strong and sustainable long-term Product Sales growth to be accompanied by operating leverage, leading to an improvement in profitability and cash generation.

Guidance: Product Sales

Reflecting the performance over the year to date, guidance for Product Sales in FY 2019 has been upgraded. Product Sales are now expected to increase by a low to mid-teens percentage; the prior guidance was for a low double-digit percentage increase.

Guidance: Core EPS

As a key part of its long-term growth strategy, the Company is committed to focusing on appropriate cash-generating and value-accretive collaboration activities that reflect the ongoing productivity of the pipeline. Separately, AstraZeneca will, from time to time, also focus its medicine portfolio through divestments.

AstraZeneca reiterates its Core EPS guidance of $3.50 to $3.70 over the full year. This guidance includes the anticipation of a significantly lower sum of Collaboration Revenue and Core Other Operating Income and Expense versus the prior year. It also reflects the opportunities being taken to reinvest in the business, particularly in China and in the Company's new medicines, in order to strengthen AstraZeneca's long-term growth profile.

Variations in performance between quarters can be expected to continue. The Company is unable to provide guidance and indications on a Reported basis because the Company cannot reliably forecast material elements of the Reported result, including the fair-value adjustments arising on acquisition-related liabilities, intangible-asset impairment charges and legal-settlement provisions. Please refer to the section Cautionary Statements Regarding Forward-Looking Statements at the end of this announcement.

Operating leverage

The Company expects to deliver significant operating leverage over the long term; encouraging progress was made in the year to date. The Reported Operating Profit Margin declined in the year to date by one percentage point (two at CER) to 13%; the Core Operating Profit Margin, however, increased by five percentage points to 28%. Core Operating Profit in FY 2019 is anticipated to increase ahead of Product Sales.

Cash generation

In FY 2019, the cash performance is expected to include a number of payments relating to prior business-development transactions; the majority of the value of these payments in the year was settled in the first half. AstraZeneca generated a Net Cash Inflow from Operating Activities of $1,594m in the year to date, compared to an inflow of $394m in YTD 2018.

Other indications

The Company also provides other indications for FY 2019:

- Capital expenditure is expected to be broadly stable and restructuring expenses are targeted to reduce versus the prior year

- The Core Tax Rate range has been narrowed to 20-22% for FY 2019 from the previously anticipated range of 18-22% (FY 2018: 11%). Variations in the Core Tax Rate between quarters can be expected to continue

Currency impact

If foreign-exchange rates were to remain at the average of rates seen in the nine months to 30 September 2019, it is anticipated that there would be a low single-digit percentage adverse impact on Product Sales and Core EPS. In addition, the Company's foreign-exchange rate sensitivity analysis is contained within the operating and financial review.

Footnotes

The following notes refer to pages 1-6:

   1.   Constant exchange rates. These are financial measures that are not accounted for according to generally-accepted accounting principles (GAAP) because they remove the effects of currency movements from Reported results. 

2. Tagrisso, Imfinzi, Lynparza, Calquence, Farxiga, Brilinta, Lokelma, roxadustat, Fasenra, Bevespi and Breztri. These new medicines are pillars in the main therapy areas and are important platforms for future growth.

3. New Cardiovascular (CV), Renal and Metabolism, incorporating Diabetes medicines, Brilinta, Lokelma and roxadustat.

4. Reported financial measures are the financial results presented in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board and adopted by the EU.

5. Core financial measures. These are non-GAAP financial measures because, unlike Reported performance, they cannot be derived directly from the information in the Company Financial Statements. See the operating and financial review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.

   6.   Earnings per share. 
   7.   Epidermal growth factor receptor. 
   8.   Non-small cell lung cancer. 
   9.   Breast cancer susceptibility genes 1/2. 

10. Type-2 diabetes.

11. Chronic kidney disease.

12. Non-dialysis dependent.

13. Chronic lymphocytic leukaemia.

14. Human epidermal growth factor receptor 2.

15. Coronary artery disease.

16. Overall survival.

17. Heart failure.

18. Chronic obstructive pulmonary disease.

19. Systemic lupus erythematosus.

Pipeline: anticipated major news flow

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 and sustainable results from the pipeline.

 
 Timing         News flow 
   Q4 
  2019                                                                                                        *    Imfinzi - unresectable, Stage III NSCLC (PACIFIC): 
                                                                                                                   regulatory decision (CN) 
 
 
                                                                                                              *    Imfinzi +/- treme - NSCLC (1st line) (POSEIDON): data 
                                                                                                                   readout, regulatory submission 
 
 
                                                                                                              *    Imfinzi +/- treme - SCLC[20]: regulatory submission 
 
 
                                                                                                              *    Lynparza - ovarian cancer (1st line, BRCAm) (SOLO-1): 
                                                                                                                   regulatory decision (CN) 
 
 
                                                                                                              *    Lynparza - pancreatic cancer (1st line, BRCAm): 
                                                                                                                   regulatory decision (US) 
 
 
                                                                                                              *    selumetinib - NF1[21]: regulatory submission (US) 
 
 
 
                                                                                                              *    roxadustat - anaemia of CKD: regulatory submission 
                                                                                                                   (US) 
 
 
 
                                                                                                              *    Symbicort - mild asthma: regulatory submission (CN) 
 
 
                                                                                                              *    PT010 - COPD: regulatory decision (CN) 
         --------------------------------------------------------------------------------------------------------------------------------------------------------------- 
   H1 
  2020                                                                                                        *    Imfinzi +/- treme - head & neck cancer (1st line): 
                                                                                                                   data readout, regulatory submission 
 
 
                                                                                                              *    Imfinzi +/- treme - bladder cancer (1st line) 
                                                                                                                   (DANUBE): data readout, regulatory submission 
 
 
                                                                                                              *    Lynparza - breast cancer (BRCAm): regulatory decision 
                                                                                                                   (CN) 
 
 
                                                                                                              *    Lynparza - ovarian cancer (1st line) (PAOLA-1): 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    Lynparza - prostate cancer (2nd line, 
                                                                                                                   castration-resistant): regulatory submission 
 
 
                                                                                                              *    Lynparza + cediranib - ovarian cancer (2nd line): 
                                                                                                                   data readout 
 
 
                                                                                                              *    trastuzumab deruxtecan - advanced/refractory, 
                                                                                                                   metastatic breast cancer (HER2-positive): regulatory 
                                                                                                                   decision (US, JP) 
 
 
                                                                                                              *    trastuzumab deruxtecan - advanced/refractory, 
                                                                                                                   metastatic gastric cancer (HER2-positive): data 
                                                                                                                   readout, regulatory submission (JP) 
 
 
                                                                                                              *    Calquence - CLL: regulatory decision (US) 
 
 
                                                                                                              *    Calquence - CLL: regulatory submission (EU, JP) 
 
 
                                                                                                              *    selumetinib - NF1: regulatory submission (EU) 
 
 
 
                                                                                                              *    Forxiga - T2D CVOT: regulatory decision (CN) 
 
 
                                                                                                              *    Farxiga - HF CVOT: regulatory submission 
 
 
                                                                                                              *    Brilinta - stroke (THALES): data readout 
 
 
                                                                                                              *    Lokelma - hyperkalaemia: regulatory decision (JP, CN) 
 
 
 
                                                                                                              *    Symbicort - mild asthma: regulatory submission (EU) 
 
 
                                                                                                              *    Bevespi - COPD: regulatory decision (CN) 
 
 
                                                                                                              *    PT010 - COPD: regulatory decision (US, EU) 
         --------------------------------------------------------------------------------------------------------------------------------------------------------------- 
   H2 
  2020                                                                                                         *    Imfinzi - neo-adjuvant NSCLC: data readout 
 
 
                                                                                                               *    Imfinzi - unresectable, Stage III NSCLC (PACIFIC-2): 
                                                                                                                    data readout 
 
 
                                                                                                               *    Imfinzi +/- treme - liver cancer (1st line): data 
                                                                                                                    readout 
 
 
                                                                                                               *    Lynparza - ovarian cancer (3rd line, BRCAm): 
                                                                                                                    regulatory submission (US) 
 
 
                                                                                                               *    Lynparza - pancreatic cancer (1st line, BRCAm): 
                                                                                                                    regulatory decision (EU) 
 
 
 
                                                                                                               *    Brilinta - stroke (THALES): regulatory submission 
 
 
                                                                                                               *    Epanova - hypertriglyceridaemia CVOT: data readout 
 
 
                                                                                                               *    roxadustat - anaemia of myelodysplastic syndrome: 
                                                                                                                    data readout 
 
 
 
                                                                                                               *    Fasenra - nasal polyposis: data readout 
 
 
                                                                                                               *    PT027 - asthma: data readout 
 
 
                                                                                                               *    tezepelumab - severe asthma: data readout 
 
 
                                                                                                               *    anifrolumab - lupus (SLE): regulatory submission 
         --------------------------------------------------------------------------------------------------------------------------------------------------------------- 
  2021 
                                                                                                              *    Imfinzi - neo-adjuvant NSCLC: regulatory submission 
 
 
                                                                                                              *    Imfinzi - adjuvant NSCLC: data readout, regulatory 
                                                                                                                   submission 
 
 
                                                                                                              *    Imfinzi - unresectable, Stage III NSCLC (PACIFIC-2): 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    Imfinzi - unresectable, Stage III NSCLC (PACIFIC-5): 
                                                                                                                   data readout 
 
 
                                                                                                              *    Imfinzi - NSCLC (1st line) (PEARL): data readout, 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    Imfinzi +/- treme - limited-disease stage SCLC: data 
                                                                                                                   readout 
 
 
                                                                                                              *    Imfinzi +/- treme - bladder cancer (1st line) (NILE): 
                                                                                                                   data readout, regulatory submission 
 
 
                                                                                                              *    Imfinzi +/- treme - liver cancer (1st line): 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    Imfinzi - liver cancer (locoregional): data readout, 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    Imfinzi - biliary tract cancer: data readout 
 
 
                                                                                                              *    Lynparza - adjuvant breast cancer: data readout, 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    Lynparza - prostate cancer (1st line, 
                                                                                                                   castration-resistant): data readout, regulatory 
                                                                                                                   submission 
 
 
                                                                                                              *    Lynparza + cediranib - ovarian cancer (2nd line): 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    trastuzumab deruxtecan - advanced/refractory, 
                                                                                                                   metastatic breast cancer (HER2-positive, 3rd line+): 
                                                                                                                   data readout, regulatory submission 
 
 
                                                                                                              *    trastuzumab deruxtecan - advanced/refractory, 
                                                                                                                   metastatic breast cancer (HER2-positive, 2nd line): 
                                                                                                                   data readout 
 
 
                                                                                                              *    trastuzumab deruxtecan - advanced/refractory, 
                                                                                                                   metastatic breast cancer (HER2-low): data readout 
 
 
 
                                                                                                              *    Farxiga - chronic kidney disease: data readout, 
                                                                                                                   regulatory submission 
 
 
                                                                                                              *    Epanova - hypertriglyceridaemia CVOT: regulatory 
                                                                                                                   submission 
 
 
                                                                                                              *    roxadustat - anaemia of myelodysplastic syndrome: 
                                                                                                                   regulatory submission 
 
 
 
                                                                                                              *    Fasenra - nasal polyposis: regulatory submission 
 
 
                                                                                                              *    PT027 - asthma: regulatory submission 
 
 
                                                                                                              *    tezepelumab - severe asthma: regulatory submission 
         --------------------------------------------------------------------------------------------------------------------------------------------------------------- 
 

Conference call

A conference call and webcast for investors and analysts will begin at 12pm UK time today. Details can be accessed via astrazeneca.com.

Reporting calendar

The Company intends to publish its full year and fourth quarter financial results on 14 February 2020.

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 - Oncology, CVRM and Respiratory. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information, please visit astrazeneca.com and follow the Company on Twitter @AstraZeneca.

 
 Investor Relations 
 Thomas Kudsk Larsen                                                                            +44 203 749 5712 
 Henry Wheeler                          Oncology                                                +44 203 749 5797 
 Christer Gruvris                       BioPharmaceuticals (CV, Metabolism)                     +44 203 749 5711 
 Nick Stone                             BioPharmaceuticals (Renal), ESG                         +44 203 749 5716 
 Josie Afolabi                          BioPharmaceuticals (Respiratory), other medicines       +44 203 749 5631 
 Craig Marks                            Finance, fixed income                                   +44 7881 615 764 
 Jennifer Kretzmann                     Corporate access, retail investors                      +44 203 749 5824 
 US toll-free                                                                                   +1 866 381 7277 
 Media Relations 
 Gonzalo Viña                                                                              +44 203 749 5916 
 Rob Skelding                           Oncology                                                +44 203 749 5821 
 Rebecca Einhorn                        Oncology                                                +1 301 518 4122 
 Matt Kent                              BioPharmaceuticals                                      +44 203 749 5906 
 Jennifer Hursit                        Other                                                   +44 7384 799 726 
 Christina Malmberg Hägerstrand    Sweden                                                  +46 8 552 53 106 
 Michele Meixell                        US                                                      +1 302 885 2677 
 
 

Operating and financial review

All narrative on growth and results in this section is based on actual exchange rates, unless stated otherwise. Financial figures are in US$ millions ($m), unless stated otherwise. The performance shown in this announcement covers the nine-month period to 30 September 2019 (the year to date or YTD 2019) and three-month period to 30 September 2019 (the quarter or Q3 2019) compared to the nine-month period to 30 September 2018 (YTD 2018) and three-month period to 30 September 2018 (Q3 2018) respectively, unless stated otherwise.

Core financial measures, EBITDA, Net Debt, Initial Collaboration Revenue and Ongoing Collaboration Revenue are non-GAAP financial measures because they cannot be derived directly from the Company Condensed Consolidated Financial Statements. Management believes that these non-GAAP financial measures, when provided in combination with Reported results, will provide investors and analysts with helpful supplementary information to understand better the financial performance and position of the Company on a comparable basis from period to period. These non-GAAP financial measures are not a substitute for, or superior to, financial measures prepared in accordance with GAAP. 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 restructuring programmes, which includes charges that relate to the impact of restructuring programmes on capitalised IT assets

- Other specified items, principally comprising acquisition-related costs, which include fair-value adjustments and the imputed finance charge relating to contingent consideration on business combinations and legal settlements

Details on the nature of Core financial measures are provided on page 76 of the Annual Report and Form 20-F Information 2018. Reference should be made to the reconciliation of Core to Reported financial information and the Reconciliation of Reported to Core financial measures table included in the financial performance section of this announcement.

EBITDA is defined as Reported Profit Before Tax after adding back Net Finance Expense, results from Joint Ventures and Associates and charges for Depreciation, Amortisation and Impairment. Reference should be made to the Reconciliation of Reported Profit Before Tax to EBITDA included in the Financial Performance section of this announcement.

Net Debt is defined as interest-bearing loans and borrowings and lease liabilities, net of cash and cash equivalents, other investments, and net derivative financial instruments. Reference should be made to Note 3 'Net Debt' included in the Notes to the Interim Financial Statements section of this announcement.

Ongoing Collaboration Revenue is defined as Collaboration Revenue excluding Initial Collaboration Revenue (which is defined as Collaboration Revenue that is recognised at the date of completion of an agreement or transaction, in respect of upfront consideration). Ongoing Collaboration Revenue comprises, among other items, royalties, milestone revenue and profit-sharing income. Reference should be made to the Collaboration Revenue table in this operating and financial review.

The Company strongly encourages investors and analysts not to rely on any single financial measure, but to review AstraZeneca's financial statements, including the Notes thereto and other available Company reports, carefully and in their entirety.

Due to rounding, the sum of a number of dollar values and percentages may not agree to totals.

Table 1: Total Revenue

 
                                   YTD 2019                      Q3 2019 
                         ---------------------------- 
                            $m          % change         $m          % change 
                         -------                       ------ 
                                   Actual      CER              Actual      CER 
                         -------                       ------ 
     Product Sales        17,315     13        17       6,132     16        18 
 Collaboration Revenue     405       3          6        274     n/m        n/m 
 
     Total Revenue        17,720     13        17       6,406     20        22 
                         -------  -------  ----------  ------  -------  ---------- 
 
 

Table 2: Product Sales

 
                                    YTD 2019                              Q3 2019 
                      ------------------------------------  ---------------------------------- 
                         $m      % of        % change         $m      % of        % change 
                                 total                                total 
                                         Actual     CER                       Actual     CER 
      Oncology         6,393      37       50        54      2,334     38       46       48 
 
 BioPharmaceuticals    7,061      41       9         13      2,432     40       12       14 
      New CVRM         3,207      19       11        14      1,113     18       8        11 
     Respiratory       3,854      22       9         13      1,319     22       15       18 
 
   Other medicines     3,861      22      (16)      (12)     1,366     22      (9)       (7) 
 
        Total          17,315    100       13        17      6,132    100       16       18 
                      -------  -------  -------  ---------          -------  -------  -------- 
 
 

Specialty-care medicines comprise all Oncology medicines, Brilinta and Fasenra. At 46% of Product Sales (YTD 2018: 35%), specialty-care medicine sales increased by 50% in the year to date (54% at CER) to $8,054m.

Table 3: Top-ten medicines by Product Sales

 
  Medicine        Therapy                   YTD 2019                          Q3 2019 
                    area 
                                   $m      % of      % change       $m      % of      % change 
                                           total                            total 
                                         -------                          ------- 
                                                   Actual   CER                     Actual   CER 
                                         -------  -------  -----          -------  -------  ----- 
  Tagrisso        Oncology       2,305      13       82      86     891      15       76      78 
 Symbicort      Respiratory      1,783      10      (7)     (4)     613      10      (1)      1 
  Brilinta          CVRM         1,153      7        22      26     416      7        24      27 
   Nexium     Other medicines    1,130      7       (14)    (11)    374      6       (11)    (10) 
  Farxiga           CVRM         1,124      6        13      17     398      6        12      14 
 Pulmicort      Respiratory      1,053      6        17      23     337      6        28      31 
  Imfinzi         Oncology       1,045      6       n/m     n/m     412      7       n/m     n/m 
  Crestor           CVRM          982       6       (9)     (5)     337      6       (4)     (2) 
  Lynparza        Oncology        847       5        93      98     327      5        94      96 
  Faslodex        Oncology        726       4       (4)     (1)     205      3       (20)    (19) 
 
             Total               12,149     70       22      26    4,311     70       24      26 
                                -------  -------  -------  -----  ------  -------  -------  ----- 
 

Table 4: Collaboration Revenue

 
                                      YTD 2019                            Q3 2019 
                         ----------------------------------  --------------------------------- 
                                              % change                            % change 
                           $m     % of    Actual     CER       $m     % of    Actual     CER 
                                  total                               total 
                         -----  -------  -------  ---------  -----  -------  -------  -------- 
 Initial Collaboration     -       -        -         -        -       -        -         - 
         Revenue 
 
 Ongoing Collaboration 
         Revenue          405     100       45        49      274     100      n/m       n/m 
       Royalties           45      11       17        23       13      5       (27)     (25) 
    Milestones/other      360      89       49        53      261      95      n/m       n/m 
 
         Total            405     100       3         6       274     100      n/m       n/m 
                         -----  -------  -------  ---------  -----  -------  -------  -------- 
 
 

YTD 2019 Ongoing Collaboration Revenue included $260m of Lynparza milestone receipts as part of a collaboration with MSD[22]. Of this, $200m was received in the quarter.

Product Sales

The performance of new and legacy medicines is shown below, with a geographical split shown in Notes 7 & 8.

Table 5: YTD 2019 therapy area and medicine performance

 
           Therapy area                            Medicine                             YTD 2019 
---------------------------------  ---------------------------------------  -------------------------------- 
                                                                               $m      % of      % change 
                                                                                       total 
---------------------------------  ---------------------------------------  -------  ------- 
                                                                                               Actual   CER 
---------------------------------  ---------------------------------------  -------  -------  -------  ----- 
             Oncology                              Tagrisso                  2,305      13       82      86 
                                  Imfinzi                                    1,045      6       n/m     n/m 
                                  Lynparza                                    847       5        93      98 
                                   Iressa                                     343       2       (16)    (11) 
                                 Calquence                                    108       1       n/m     n/m 
                                                   Legacy: 
                                  Faslodex                                    726       4       (4)     (1) 
                                  Zoladex                                     617       4        8       15 
                                  Arimidex                                    174       1        5       10 
                                  Casodex                                     157       1        2       6 
                                   Others                                      68       -       (26)    (24) 
                               Total Oncology                                6,393      37       50      54 
                                                                                     ------- 
     BioPharmaceuticals: CVRM                      Farxiga                   1,124      6        13      17 
--------------------------------- 
                                  Brilinta                                   1,153      7        22      26 
 
                                  Bydureon                                    410       2       (8)     (7) 
                                  Onglyza                                     396       2        -       4 
                                   Byetta                                      83       -       (12)    (10) 
                               Other diabetes                                  36       -        33      35 
                                                   Lokelma                     6        -       n/m     n/m 
                                                   Legacy: 
                                  Crestor                                     982       6       (9)     (5) 
                             Seloken/Toprol-XL                                570       3        3       10 
                                  Atacand                                     161       1       (20)    (16) 
                                   Others                                     199       1       (13)    (9) 
                       BioPharmaceuticals: total CVRM                        5,121      30       3       7 
                                                                                     ------- 
 BioPharmaceuticals: Respiratory                  Symbicort                  1,783      10      (7)     (4) 
--------------------------------- 
                                 Pulmicort                                   1,053      6        17      23 
 
                                  Fasenra                                     498       3       n/m     n/m 
                               Daliresp/Daxas                                 157       1        16      17 
                                  Duaklir                                      55       -       (24)    (20) 
                               Tudorza/Eklira                                  50       -       (45)    (42) 
                                  Bevespi                                      30       -        32      32 
                                                   Breztri                     1        -       n/m     n/m 
                                   Others                                     226       1       (3)      2 
                   BioPharmaceuticals: total Respiratory                     3,854      22       9       13 
                                                                                     ------- 
         Other medicines                            Nexium                   1,130      7       (14)    (11) 
--------------------------------- 
                                  Synagis                                     295       2       (29)    (29) 
 
                               Losec/Prilosec                                 217       1        3       8 
                               Seroquel XR/IR                                 151       1       (51)    (49) 
                             Movantik/Moventig                                 72       -       (15)    (15) 
                                   Others                                      83       -       (54)    (48) 
                           Total other medicines                             1,948      11      (22)    (20) 
                                                                                     ------- 
                            Total Product Sales                              17,315    100       13      17 
                                                                            -------  -------           ----- 
 

Table 6: Q3 2019 therapy area and medicine performance

 
     Therapy area                      Medicine                             Q3 2019 
---------------------  ---------------------------------------  ------------------------------- 
                                                                  $m      % of      % change 
                                                                          total 
---------------------  ---------------------------------------  ------  ------- 
                                                                                  Actual   CER 
---------------------  ---------------------------------------  ------  -------  -------  ----- 
       Oncology                        Tagrisso                   891      15       76      78 
                            Imfinzi                               412      7       n/m     n/m 
                            Lynparza                              327      5        94      96 
                             Iressa                               91       1       (31)    (29) 
                           Calquence                              44       1       n/m     n/m 
                                       Legacy: 
                            Faslodex                              205      3       (20)    (19) 
                            Zoladex                               226      4        17      21 
                            Arimidex                              63       1        15      17 
                            Casodex                               52       1        3       5 
                             Others                               20       -       (27)    (26) 
                         Total Oncology                          2,334     38       46      48 
                                                                        ------- 
 BioPharmaceuticals: 
         CVRM                          Farxiga                    398      6        12      14 
--------------------- 
                            Brilinta                              416      7        24      27 
 
                            Onglyza                               127      2       (9)     (7) 
                            Bydureon                              127      2       (16)    (16) 
                             Byetta                               28       -       (19)    (18) 
                         Other diabetes                           14       -        38      44 
                                       Lokelma                     4       -       n/m     n/m 
                                       Legacy: 
                            Crestor                               337      6       (4)     (2) 
                       Seloken/Toprol-XL                          177      3       (1)      3 
                            Atacand                               55       1       (15)    (11) 
                             Others                               65       1       (8)     (6) 
                   BioPharmaceuticals: total 
                              CVRM                               1,749     29       3       6 
                                                                        ------- 
 BioPharmaceuticals: 
      Respiratory                     Symbicort                   613      10      (1)      1 
--------------------- 
                           Pulmicort                              337      6        28      31 
 
                            Fasenra                               202      3       n/m     n/m 
                         Daliresp/Daxas                           53       1        2       3 
                            Duaklir                               18       -       (21)    (19) 
                         Tudorza/Eklira                           17       -       (4)      - 
                            Bevespi                               10       -        4       4 
                                       Breztri                     1       -       n/m     n/m 
                             Others                               67       1       (5)      - 
             BioPharmaceuticals: total Respiratory               1,319     22       15      18 
                                                                        ------- 
   Other medicines                      Nexium                    374      6       (11)    (10) 
--------------------- 
                            Synagis                               146      2       (11)    (11) 
 
                         Losec/Prilosec                           73       1        10      13 
                         Seroquel XR/IR                           82       1        5       6 
                       Movantik/Moventig                          25       -       (22)    (23) 
                             Others                               31       1       (55)    (59) 
                     Total other medicines                        731      12      (12)    (11) 
                                                                        ------- 
                      Total Product Sales                        6,132    100       16      18 
                                                                ------  -------           ----- 
 

Product Sales summary

Oncology

Product Sales of $6,393m in the year to date; an increase of 50% (54% at CER). Oncology Product Sales represented 37% of total Product Sales, up from 28% in the first nine months of 2018.

Oncology: lung cancer

Tagrisso

Tagrisso has been approved and launched in 87 countries, including the US, China, in Europe and Japan for the 2nd-line treatment of patients with Stage IV EGFR T790M[23]-mutated NSCLC. Tagrisso has also been approved in 78 countries, including the US, China, in Europe and Japan for the 1st-line treatment of patients with EGFRm NSCLC; a number of additional regulatory reviews are underway.

Product Sales in the year to date of $2,305m represented growth of 82% (86% at CER), partly driven by regulatory approvals and reimbursements in the 1st-line setting. Continued growth was also delivered in the 2nd-line indication in other countries, including in Europe and Emerging Markets.

Sales in the US increased by 57% in the year to date to $909m. With a high penetration rate, Tagrisso is now established as the standard of care (SoC) in the 1st-line setting, following regulatory approval in 2018. There was a 17% sequential quarterly increase in US sales of Tagrisso in Q3 2019, reflecting continued underlying demand growth; sales were, however, flattered in the quarter by the impact of gross-to-net and stocking adjustments.

In Emerging Markets, Tagrisso sales increased by 108% in the year to date (120% at CER) to $553m, with notable growth in China, after the medicine was added to the NRDL with effect from January 2019 in the 2nd-line setting; it also received 1st-line regulatory approval in China during the period.

Sales of Tagrisso in Japan increased by 145% in the year to date to $468m, reflecting the increasing use of Tagrisso as a 1st-line treatment; the medicine has reached a very high penetration rate in Japan. The Asia-Pacific region has a relatively high prevalence of lung-cancer patients with an EGFR mutation; at c.30-40% of the total, this contrasts with c.10-15% in the Western Hemisphere.

In Europe, sales of $337m in the year to date represented an increase of 52% (61% at CER), driven by emerging use in the 1st-line setting as more countries granted reimbursement, as well as continued strong levels of demand in the 2nd-line setting.

Imfinzi

Imfinzi is approved in 53 countries, including the US, in Europe and Japan for the treatment of patients with unresectable, Stage III NSCLC whose disease has not progressed following platinum-based chemoradiation therapy (CRT). It is also approved for the 2nd-line treatment of patients with locally-advanced or metastatic urothelial carcinoma (bladder cancer) in 11 countries, including the US.

Global Product Sales of Imfinzi increased by 182% in the year to date (184% at CER) to $1,045m, of which $759m were in the US, almost entirely for the treatment of unresectable, Stage III NSCLC; sales in the US increased by 118% in the year to date.

In Japan, sales of $149m (YTD 2018: $9m) reflected encouraging levels of demand, supported by higher CRT and treatment rates. Sales in Europe of $115m (YTD 2018: $9m) followed recent regulatory approvals and launches; additional regulatory and reimbursement decisions are expected in due course.

Iressa

Product Sales in the year to date of $343m; a decline of 16% (11% at CER).

Emerging Markets sales were stable in the year to date (up by 6% at CER) to $227m; Iressa entered the NRDL in China in 2017 and remains within the China centralised-procurement programme. Given the growing use of Tagrisso, sales of Iressa declined by 31% to $14m in the US and by 29% (24% at CER) to $61m in Europe. Japan sales amounted to $37m, reflecting a decline of 45%.

Oncology: Lynparza

By the end of the period, Lynparza was approved in 65 countries for the treatment of ovarian cancer. Launches for the treatment of metastatic breast cancer took place in the US and Japan in 2018 and regulatory approval was granted in the EU in April 2019. Lynparza has now been approved in 44 countries for the treatment of metastatic breast cancer.

Product Sales of Lynparza amounted to $847m in the year to date, an increase of 93% (98% at CER). The strong performance was geographically spread, with launches continuing in Emerging Markets and the Established Rest of World region (RoW). Ongoing MSD co-promotion efforts also contributed to sales.

US sales increased by 86% to $432m, driven by the launch in the 1st-line BRCAm ovarian cancer indication at the end of 2018 and increased demand that reflected continued growth in the treatment with Lynparza of patients suffering from ovarian or breast cancer. Lynparza remained the leading medicine in the US in the PARP-inhibitor class, as measured by total prescription volumes in both ovarian and breast cancer.

Sales in Europe increased by 52% (61% at CER) to $208m, driven by increasing levels of reimbursement and BRCA-testing rates, as well as the recent 1st-line ovarian- and breast-indication launches. The Company continues to implement a number of launches in the broad, 2nd-line, maintenance ovarian-cancer indication, regardless of BRCAm status.

Following the initial launch in April 2018, and the subsequent breast- and 1st-line ovarian-cancer launches in 2019, Japan sales of Lynparza amounted to $91m in the year to date, representing growth of 262% (263% at CER). Emerging Markets sales of $101m, up by 205% (227% at CER), reflected the regulatory approval of Lynparza as a 2nd-line maintenance treatment of patients with ovarian cancer by the China National Medical Products Administration (NMPA), resulting in the subsequent launch of Lynparza in China, the first PARP inhibitor to be approved in the country.

Oncology: haematology and other medicines

Calquence

Product Sales in the year to date of $108m; an increase of 185%. The overwhelming majority of sales were in the US.

Calquence was approved and launched in the US in October 2017. The medicine delivered a promising performance in the year to date, with an increasing number of CLL patients now treated, following compendia inclusion in the National Comprehensive Cancer Network guidelines as Category 1 for relapsed/refractory CLL.

Legacy: Faslodex

Product Sales in the year to date of $726m; a decline of 4% (1% at CER).

Emerging Markets sales of Faslodex increased by 31% in the year to date (41% at CER) to $145m. US sales declined by 21% to $311m, reflecting the recent launch of multiple generic Faslodex medicines; in Q3 2019, Faslodex sales in the US declined by 55% to $60m. In Europe, where generic competitor medicines are also available, sales in the year to date declined by 2% (up by 4% at CER) to $168m, while in Japan, sales increased by 24% to $97m.

Legacy: Zoladex

Product Sales in the year to date of $617m; an increase of 8% (15% at CER).

Emerging Markets sales of Zoladex increased by 21% (30% at CER) year to date to $380m. Sales in Europe increased by 1% (7% at CER) to $100m. In the Established RoW region, sales declined by 13% (11% at CER) to $133m, driven by the effects of increased competition.

BioPharmaceuticals: CVRM

Total CVRM sales, which include Crestor and other legacy medicines, increased by 3% in the year to date (7% at CER) to $5,121m and represented 30% of total Product Sales (YTD 2018: 32%).

New CVRM sales increased by 11% in the year to date (14% at CER) to $3,207m, reflecting strong performances from Farxiga and Brilinta. New CVRM sales represented 19% of Product Sales in the year to date (YTD 2018: 19%).

CVRM: Diabetes

Farxiga

Product Sales of $1,124m in the year to date; an increase of 13% (17% at CER).

Emerging Markets sales increased by 40% (50% at CER) to $339m, fuelled by growth in ex-China Emerging Markets. US sales declined by 6% to $396m, impacted by changes in formulary access for competitor medicines. AstraZeneca was granted a label update in the US in Q4 2019 to reflect results from the DECLARE CVOT. The level of sales growth in the US in the year to date was, however, adversely impacted by gross-to-net adjustments; underlying demand remained strong.

Sales in Europe increased by 18% (26% at CER) to $273m. In Japan, sales to the collaborator, Ono Pharmaceutical Co., Ltd, which records in-market sales, increased by 32% (31% at CER) to $61m.

Onglyza

Product Sales of $396m in the year to date; a stable performance (growth of 4% at CER).

Sales in Emerging Markets increased by 8% (17% at CER) to $131m, driven by the performance in China. The performance was also supported in the US by favourable prior-year gross-to-net adjustments and improved realised price across the business mix; US sales of Onglyza increased by 7% in the year to date to $174m.

Europe sales declined by 22% (17% at CER) to $53m, highlighting the broader trend of a shift away from the dipeptidyl peptidase-4 inhibitor class. Given the significant future potential of Farxiga, the Company continues to prioritise commercial support over Onglyza.

Bydureon

Product Sales of $410m in the year to date; a decline of 8% (7% at CER).

Sales were partly driven by the impact of production constraints in the first half for the new Bydureon BCise device and declining volumes for the dual-chamber pen. US sales of $340m declined by 5% in the year to date, while Bydureon sales in Europe declined by 19% (14% at CER) to $50m.

CVRM: other medicines

Brilinta

Product Sales of $1,153m in the year to date; an increase of 22% (26% at CER).

Patient uptake continued in the treatment of acute coronary syndrome and high-risk post-myocardial infarction. Emerging Markets sales of Brilinta increased by 50% (59% at CER) to $348m. US sales of Brilinta, at $500m, represented an increase of 22%, driven primarily by increasing levels of demand in both hospital and retail settings, as well as a lengthening in the average-weighted duration of treatment, reflecting the growing impact of 90-day prescriptions. Sales of Brilique in Europe increased by 2% in the year to date (9% at CER) to $262m.

Lokelma

Product Sales of $6m in the year to date, predominantly in the US, where Lokelma was recently launched.

Lokelma is approved in the US and in the EU for the treatment of hyperkalaemia, a serious condition characterised by elevated potassium levels in the blood associated with CV, renal and metabolic diseases. Launches in a number of other markets are expected soon.

Legacy: Crestor

Product Sales of $982m in the year to date; a decline of 9% (5% at CER).

Sales in Emerging Markets declined by 2% (up by 4% at CER) to $621m; the CER growth came despite the impact from the aforementioned '4+7' pilot tender scheme in China. US sales declined by 31% to $88m, underlining the ongoing effect of generic Crestor medicines. In Europe, sales declined by 30% (25% at CER) to $112m, reflecting a similar impact that began in Europe in 2017.

In Japan, where AstraZeneca collaborates with Shionogi Co. Ltd, sales increased by 3% to $126m. This followed a period of decline resulting from the entry of multiple generic Crestor medicines in the Japan market at the end of 2017.

BioPharmaceuticals: Respiratory

Product Sales of $3,854m in the year to date; an increase of 9% (13% at CER). Respiratory represented 22% of total Product Sales (YTD 2018: 23%).

Symbicort

Product Sales in the year to date of $1,783m; a decline of 7% (4% at CER).

Symbicort continued to lead the global market by volume within the inhaled corticosteroid (ICS) / long-acting beta agonist (LABA) class. Emerging Markets sales of Symbicort increased by 10% (18% at CER) to $401m in the year to date. In contrast, US sales declined by 11% to $585m, reflecting continued pricing pressure and the impact of managed-market rebates. This was partially offset by positive volumes from government-buying patterns.

In Europe, sales declined by 14% in the year to date (8% at CER) to $508m, reflecting price competition from other branded and Symbicort-analogue medicines, plus government pricing interventions. Symbicort, however, continued to retain its class-leadership position, with volume growth achieved in a number of markets.

In Japan, sales declined by 13% in the year to date (14% at CER) to $131m (Q3 2019: $64m, +26%, +22% at CER); partly reflecting the destocking by Astellas Pharma Co. Ltd (Astellas) following the termination of the co-promotion agreement earlier in the year. In January 2019, AstraZeneca and Astellas announced that the sale and distribution of Symbicort, conducted by Astellas in Japan, was to be transferred back to AstraZeneca and that the co-promotion conducted by Astellas and AstraZeneca was to be terminated on 30 July 2019. Since the termination, the Company has solely distributed and promoted the medicine in Japan.

Pulmicort

Product Sales in the year to date of $1,053m; an increase of 17% (23% at CER).

Emerging Markets, where sales increased by 23% in the year to date (29% at CER) to $845m, represented 80% of global sales of Pulmicort. China, comprising the overwhelming majority of Pulmicort sales in Emerging Markets, delivered a particularly strong double-digit performance, strengthened by higher levels of demand and underpinned by the impact of AstraZeneca's support in China for over 17,000 nebulisation centres.

Sales in the US increased by 10% to $89m due to favourable managed-market rebates and sales in Europe declined by 12% (6% at CER) to $60m reflecting the legacy status of the medicine.

Fasenra

Fasenra has been approved in 50 countries, including the US, in the EU and Japan as an add-on maintenance treatment for patients with severe asthma and with an eosinophilic phenotype. The medicine is currently reimbursed in 32 countries, with early-access programmes in an additional 11 countries. At the end of the period, Fasenra led the medicine class for the treatment of severe eosinophilic asthma by new-patient share in a number of key markets. Product Sales of $498m in the year to date represented an increase of 189% (193% at CER).

Sales in the US increased by 166% in the year to date to $343m. In Europe and Japan, AstraZeneca was granted regulatory approval in 2018 on a similar basis to that in the US. In Europe, sales of $81m in the year to date represented an increase of 378% (406% at CER). Sales in Japan increased by 138% to $62m in the year to date, following the medicine's launch in 2018.

Daliresp/Daxas

Product Sales in the year to date of $157m; an increase of 16% (17% at CER).

US sales, representing 85% of the global total, increased by 21% to $134m in the year to date, driven by favourable affordability-programme changes and inventory movements. It is the only oral, selective, long-acting inhibitor of phosphodiesterase-4, an inflammatory enzyme associated with COPD.

Duaklir

Product Sales in the year to date of $55m; a decline of 24% (20% at CER).

In the first nine months of the year, the overwhelming majority of sales were in Europe, where sales declined by 24% (20% at CER) to $53m; the decline was predominately a result of an adverse performance in Germany. In Q1 2019, the medicine received US regulatory approval. As part of the collaboration agreement announced in March 2017, Circassia Pharmaceuticals plc (Circassia) became responsible for the commercialisation of Duaklir in the US, with AstraZeneca continuing to manufacture and supply the medicine. Circassia communicated making the medicine available to patients in the US in due course.

Bevespi

Product Sales in the year to date of $30m; an increase of 32%.

Bevespi saw prescriptions in the period track in line with other long-acting muscarinic antagonists / LABA launches; the class in the US, however, continued to grow more slowly than anticipated. Bevespi was the first medicine launched using the Company's proprietary Aerosphere delivery technology.

In June 2019, Bevespi received the first approval by the Japanese Ministry of Health, Labour and Welfare as a fixed-dose, long-acting dual bronchodilator in a pressurised metered-dose inhaler (pMDI) to relieve symptoms in patients with COPD.

Breztri

Product Sales in the year to date of $1m.

In June 2019, Breztri, formerly PT010, was approved in Japan as a triple-combination therapy to relieve symptoms of COPD. This was the first global regulatory approval for Breztri and was the first approval by the Japanese Ministry of Health, Labour and Welfare of a triple-combination therapy in a pressurised metered-dose inhaler (pMDI).

Other medicines (outside the main therapy areas)

Product Sales of $1,948m in the year to date; a decline of 22% (20% at CER), partly reflecting the H1 2019 divestment of US rights to Synagis and the H2 2018 divestment of the prescription medicine rights to Nexium in Europe.

Other Product Sales represented 11% of total Product Sales, down from 16% in the first nine months of 2018.

Nexium

Product Sales in the year to date of $1,130m; a decline of 14% (11% at CER).

Emerging Markets sales of Nexium increased by 10% (16% at CER) to $574m. In Europe, sales declined by 73% (71% at CER) to $49m, reflecting the aforementioned divestment. Sales in the US declined by 30% to $175m, reflecting its 2015 loss of exclusivity and, in Japan, where AstraZeneca collaborates with Daiichi Sankyo Company, Limited (Daiichi Sankyo), sales declined by 6% (5% at CER) to $291m.

Regional Product Sales

Table 7: Regional Product Sales

 
    Global Sales                 YTD 2019                          Q3 2019 
-------------------  --------------------------------  ------------------------------- 
                        $m      % of      % change       $m      % of      % change 
                                total                            total 
-------------------  -------  -------                  ------  ------- 
                                        Actual   CER                     Actual   CER 
-------------------  -------  -------  -------  -----  ------  -------  -------  ----- 
  Emerging Markets    6,074      35       19      26    2,123     35       25      29 
       China          3,691      21       30      37    1,283     21       35      40 
      Ex-China        2,382      14       5       12     839      14       12      15 
 
         US           5,688      33       18      18    2,025     33       17      17 
 
       Europe         3,168      18      (4)      2     1,139     19       1       4 
 
  Established RoW     2,385      14       17      19     845      14       21      19 
       Japan          1,830      11       29      29     657      11       31      27 
       Canada          345       2       (4)     (1)     120      2        5       5 
 Other Established 
         RoW           211       1       (18)    (12)    69       1       (16)    (11) 
 
       Total          17,315    100       13      17    6,132    100       16      18 
-------------------           -------  -------  -----  ------  -------  -------  ----- 
 

Table 8: Regional Product Sales, Emerging Markets

Product Sales of $6,074m in the year to date; an increase of 19% (26% at CER).

 
    Emerging Markets                 YTD 2019                         Q3 2019 
------------------------  ------------------------------  ------------------------------ 
                            $m      % of      % change      $m      % of      % change 
                                    total                           total 
------------------------  ------  -------                 ------  ------- 
                                            Actual   CER                    Actual   CER 
------------------------  ------  -------  -------  ----  ------  -------  -------  ---- 
        Oncology           1,665     27       42     51     617      29       45     49 
 
   BioPharmaceuticals      3,644     60       16     23    1,240     58       20     24 
          CVRM             2,225     37       11     18     777      37       16     19 
       Respiratory         1,419     23       24     31     463      22       28     32 
 
     Other medicines        765      13      (4)      1     266      13       10     19 
 
 Total Emerging Markets    6,074    100       19     26    2,123    100       25     29 
                          ------  -------  -------  ----  ------  -------  -------  ---- 
 

New medicines represented 22% of Emerging Markets sales (YTD 2018: 15%). Notable performances included:

   -    Tagrisso ($553m, +108%, +120% at CER) 
   -    Lynparza ($101m, +205%, +227% at CER) 
   -    Brilinta ($348m, +50%, +59% at CER) 
   -    Farxiga ($339m, +40%, +50% at CER) 

The performance was also underpinned by the strong sales of a number of other medicines, including:

   -    Zoladex ($380m, +21%, +30% at CER) 
   -    Pulmicort ($845m, +23%, +29% at CER) 
   -    Symbicort ($401m, +10%, +18% at CER) 

Ex-China Emerging Markets sales increased by 5% in the year to date (12% at CER) to $2,382m and new medicines represented 28% of sales (YTD 2018: 21%). In Q3 2019, ex-China Emerging Markets sales delivered impressive growth, increasing by 12% (15% at CER) to $839m, with new medicines representing 31% of sales (Q3 2018: 22%). The performance was supported by encouraging levels of growth in (ex-China) Asia Pacific, Middle East and Africa, Brazil and Russia.

China sales comprised 61% of Emerging Markets sales, increasing by 30% in the year to date (37% at CER) to $3,691m. New medicines, primarily driven by Tagrisso and Lynparza in Oncology and Brilinta and Farxiga in New CVRM, delivered particularly encouraging sales growth. New medicines represented 19% of China sales (YTD 2018: 9%). This performance was augmented by strong sales from Pulmicort, Nexium and Symbicort.

During the period, the Chinese National Healthcare Security Administration published the preliminary 2019 NRDL update. The list included one additional AstraZeneca medicine, namely Kombiglyze for Diabetes. As a further result of the update, respiratory medicines, including Symbicort for asthma and COPD and Nexium for acid reflux, had reimbursement restrictions removed. The updated final list is anticipated to be published in Q4 2019, after the conclusion of reimbursement discussions. Since the year 2000, AstraZeneca has had more than 40 medicines added to the NRDL and, from 2012, 15 of the Company's medicines have been admitted to the National Essential Drug List.

Table 9: Regional Product Sales, US

Product Sales of $5,688m; an increase of 18% in the year to date.

 
         US                      YTD 2019                         Q3 2019 
--------------------  ------------------------------ 
                        $m     % of total   % change    $m     % of total   % change 
--------------------  ------  -----------  ---------          -----------  --------- 
      Oncology         2,538       45          57       917        45          40 
 
 BioPharmaceuticals    2,805       49          7        964        48          4 
        CVRM           1,622       29          1        537        27         (6) 
     Respiratory       1,183       21          15       427        21          20 
 
   Other medicines      345        6          (41)      144        7          (6) 
 
      Total US         5,688      100          18      2,025      100          17 
                      ------  -----------  ---------          -----------  --------- 
 

New medicines represented 61% of US Product Sales (YTD 2018: 45%). The performance reflected, in particular, the success of the new Oncology medicines ($2,208m, +84%), including Tagrisso, Imfinzi and Lynparza in Oncology, Brilinta in New CVRM, plus the compelling performance of Fasenra in Respiratory.

Table 10: Regional Product Sales, Europe

Product Sales in the year to date of $3,168m; a decline of 4% (up by 2% at CER).

 
       Europe                     YTD 2019                         Q3 2019 
--------------------  -------------------------------  ------------------------------- 
                        $m      % of      % change       $m      % of      % change 
                                total                            total 
--------------------  ------  -------                  ------  ------- 
                                        Actual   CER                     Actual   CER 
--------------------  ------  -------  -------  -----  ------  -------  -------  ----- 
      Oncology         1,027     32       34      42     377      33       44      51 
 
 BioPharmaceuticals    1,677     53      (10)    (4)     550      49      (6)     (0) 
        CVRM            858      27      (8)     (3)     292      26      (3)      2 
     Respiratory        819      26      (11)    (6)     258      23      (8)     (3) 
 
   Other medicines      465      15      (30)    (28)    213      19      (26)    (29) 
 
    Total Europe       3,168    100      (4)      2     1,139    100       1       4 
                      ------  -------  -------  -----  ------  -------  -------  ----- 
 

The performance in Europe partly reflected adverse continued pricing pressures, the impact of the aforementioned divestment of the prescription medicine rights to Nexium in H2 2018 and declining sales of Crestor. New medicines, however, represented 40% of Product Sales (YTD 2018: 27%) and the Europe sales performance continued to improve through 2019. Oncology delivered particularly compelling growth in the year to date, with the following medicines representing 64% of Oncology sales in Europe:

   -    Tagrisso ($337m, +52% +61% at CER) 
   -    Lynparza ($208m, +52%, +61% at CER) 
   -    Imfinzi ($115m, YTD 2018: $9m) 

This strong performance was also supported by the successes of Brilinta and Forxiga in New CVRM and Fasenra in Respiratory.

Table 11: Regional Product Sales, Established RoW

Product Sales in the year to date of $2,385m; an increase of 17% (19% at CER).

 
   Established RoW                YTD 2019                        Q3 2019 
--------------------  -------------------------------  ----------------------------- 
                        $m      % of      % change      $m     % of      % change 
                                total                          total 
--------------------  ------  -------                  ----  ------- 
                                        Actual   CER                   Actual   CER 
--------------------  ------  -------  -------  -----  ----  -------  -------  ----- 
      Oncology         1,163     49       66      67    423     50       67      63 
 
 BioPharmaceuticals     849      36      (3)     (1)    314     37       6       6 
        CVRM            416      17      (2)      1     143     17      (4)     (3) 
     Respiratory        433      18      (4)     (2)    171     20       17      16 
 
   Other medicines      373      16      (19)    (16)   108     13      (27)    (31) 
 
  Total Established 
         RoW           2,385    100       17      19    845    100       21      19 
                      ------  -------  -------  -----  ----  -------  -------  ----- 
 

New medicines represented 42% of Established RoW sales (YTD 2018: 20%). The performance during the year to date reflected, in particular, the successes of Tagrisso and Imfinzi in Oncology, Forxiga in New CVRM and Fasenra in Respiratory.

Japan sales, comprising 77% of total Established RoW sales, increased by 29% in the year to date to $1,830m. New medicines represented 45% of Japan sales (YTD 2018: 21%), particularly reflecting the strong performance of Tagrisso as a 1st-line treatment for patients with EGFRm NSCLC, following regulatory approval in this setting in the third quarter of 2018. Overall, in the year to date, Oncology sales in Japan increased by 69% to $1,057m and represented 58% of Japan sales. This performance was also supported a number of other ongoing successes, including:

   -    Farxiga ($61m, +32%, +31% at CER) 
   -    Fasenra ($62m, +138%, +138% at CER) 

Financial performance

Table 12: YTD 2019 Reported Profit and Loss

 
                                         Reported 
-------------------------  ------------------------------------ 
                            YTD 2019   YTD 2018     % change 
------------------------- 
                               $m         $m      Actual   CER 
-------------------------  ---------  ---------  -------  ----- 
      Product Sales          17,315     15,281      13      17 
  Collaboration Revenue       405        392        3       6 
      Total Revenue          17,720     15,673      13      17 
 
      Cost of Sales         (3,543)    (3,299)      7       12 
 
       Gross Profit          14,177     12,374      15      18 
 Gross Profit Margin[24]     79.5%      78.4%       +1      +1 
 
   Distribution Expense      (247)      (238)       4       10 
     % Total Revenue          1.4%       1.5%       -       - 
       R&D Expense          (3,968)    (3,920)      1       5 
     % Total Revenue         22.4%      25.0%       +3      +3 
       SG&A Expense         (8,656)    (7,431)      16      20 
     % Total Revenue         48.9%      47.4%       -1      -1 
  Other Operating Income 
         & Expense           1,041      1,525      (32)    (31) 
     % Total Revenue          5.9%       9.7%       -4      -4 
 
     Operating Profit        2,347      2,310       2       3 
     Operating Profit 
          Margin             13.2%      14.7%       -1      -2 
   Net Finance Expense       (948)      (970)      (2)      6 
    Joint Ventures and 
        Associates            (91)       (77)       18      21 
    Profit Before Tax        1,308      1,263       4      (1) 
         Taxation            (358)      (222)       61      54 
         Tax Rate             27%        18% 
     Profit After Tax         950       1,041      (9)     (13) 
 
           EPS               $0.79      $0.88      (11)    (15) 
                           ---------  ---------  -------  ----- 
 

Table 13: Q3 2019 Reported Profit and Loss

 
                                       Reported 
                           Q3 2019   Q3 2018     % change 
                             $m        $m      Actual   CER 
                          --------  --------  -------  ----- 
      Product Sales         6,132     5,266      16      18 
  Collaboration Revenue      274       74       n/m     n/m 
      Total Revenue         6,406     5,340      20      22 
 
      Cost of Sales        (1,351)   (1,153)     17      23 
 
      Gross Profit          5,055     4,187      21      22 
   Gross Profit Margin      78.0%     78.1%      -       -1 
 
  Distribution Expense      (88)      (73)       20      25 
     % Total Revenue        1.4%      1.4%       -       - 
       R&D Expense         (1,346)   (1,279)     5       8 
     % Total Revenue        21.0%     24.0%      +3      +3 
      SG&A Expense         (3,199)   (2,423)     32      34 
     % Total Revenue        49.9%     45.4%      -5      -4 
 Other Operating Income 
        & Expense            335       439      (24)    (23) 
     % Total Revenue        5.2%      8.2%       -3      -3 
 
    Operating Profit         757       851      (11)    (13) 
    Operating Profit 
          Margin            11.8%     15.9%      -4      -5 
   Net Finance Expense      (316)     (330)     (4)      2 
   Joint Ventures and 
        Associates          (32)      (44)      (27)    (21) 
    Profit Before Tax        409       477      (14)    (21) 
        Taxation            (129)     (71)       81      65 
        Tax Rate             32%       15% 
    Profit After Tax         280       406      (31)    (36) 
 
           EPS              $0.23     $0.34     (33)    (38) 
                          --------  --------  -------  ----- 
 

Table 14: YTD 2019 reconciliation of Reported Profit Before Tax to EBITDA[25]

 
                               YTD 2019   YTD 2018     % change 
                                  $m         $m      Actual   CER 
----------------------------             ---------  -------  ---- 
   Reported Profit Before 
             Tax                1,308      1,263       4      (1) 
     Net Finance Expense         948        970       (2)      6 
     Joint Ventures and 
          Associates              91         77        18     21 
 Depreciation, Amortisation 
        and Impairment          2,119      2,091       1       5 
 
           EBITDA               4,466      4,401       1       4 
----------------------------             ---------  -------  ---- 
 

Table 15: Q3 2019 reconciliation of Reported Profit Before Tax to EBITDA

 
                               Q3 2019   Q3 2018     % change 
                                 $m        $m      Actual   CER 
----------------------------            --------  -------  ----- 
   Reported Profit Before 
             Tax                 409       477      (14)    (21) 
     Net Finance Expense         316       330      (4)      2 
     Joint Ventures and 
          Associates             32        44       (27)    (21) 
 Depreciation, Amortisation 
        and Impairment           716       698       2       5 
 
           EBITDA               1,473     1,549     (5)     (5) 
----------------------------            --------  -------  ----- 
 

Table 16: YTD 2019 reconciliation of Reported to Core financial measures

 
                  Reported  Restructuring    Intangible    Diabetes   Other([26])  Core([27])     Core 
                                                Asset       Alliance                             % change 
                                            Amortisation 
                                            & Impairments 
                     $m          $m              $m           $m          $m           $m      Actual  CER 
                  --------  -------------  --------------  ---------  -----------  ----------  ------  --- 
  Gross Profit     14,177        122             69            -           -         14,368      14    18 
  Gross Profit 
   Margin[28]      79.5%                                                             80.6%       +1    +1 
 
  Distribution 
     Expense       (247)          -              -             -           -         (247)       4     10 
  R&D Expense     (3,968)        82              60            -           -        (3,826)      1      4 
  SG&A Expense    (8,656)        147           1,009          294         742       (6,464)      4      8 
Other Operating 
    Income & 
     Expense       1,041          -              3             -          16         1,060      (7)    (6) 
 
   Operating 
     Profit        2,347         351           1,141          294         758        4,891       41    42 
   Operating 
  Profit Margin    13.2%                                                             27.6%       +5    +5 
 
  Net Finance 
     Expense       (948)          -              -            216         153        (579)       3     13 
    Taxation       (358)        (74)           (240)         (106)       (136)       (914)       68    68 
 
      EPS           $0.79       $0.22           $0.69        $0.31       $0.60        $2.61      39    38 
                  --------  -------------  --------------  ---------  -----------  ----------  ------  --- 
 

Table 17: Q3 2019 reconciliation of Reported to Core financial measures

 
                  Reported  Restructuring    Intangible    Diabetes   Other26  Core27       Core 
                                                Asset       Alliance                      % change 
                                            Amortisation 
                                            & Impairments 
                     $m          $m              $m           $m        $m       $m     Actual  CER 
                  --------  -------------  --------------  ---------  -------  -------  ------  ---- 
  Gross Profit     5,055         70              18            -         -      5,143     21     22 
  Gross Profit 
    Margin28       78.0%                                                        79.4%     -      -1 
 
  Distribution 
     Expense        (88)          -              -             -         -      (88)      20     25 
  R&D Expense     (1,346)        18              7             -         -     (1,321)    6      9 
  SG&A Expense    (3,199)        37             327           96        533    (2,206)    7      9 
Other Operating 
    Income & 
     Expense        335           -              1             -        16       352     (20)   (19) 
 
   Operating 
     Profit         757          125            353           96        549     1,880     43     41 
   Operating 
  Profit Margin    11.8%                                                        29.3%     +5     +4 
 
  Net Finance 
     Expense       (316)          -              -            72        52      (192)    (1)     5 
    Taxation       (129)        (27)            (75)         (35)      (116)    (382)     80     75 
 
      EPS           $0.23       $0.08           $0.20        $0.10     $0.38    $0.99     40     36 
                  --------  -------------  --------------  ---------  -------  -------  ------  ---- 
 

Profit and loss summary

   a)   Gross Profit 

Reported Gross Profit increased by 15% in the year to date (18% at CER) to $14,177m; Core Gross Profit increased by 14% (18% at CER) to $14,368m, reflecting the growth in Product Sales. The calculation of Reported and Core Gross Profit Margin excludes the impact of Collaboration Revenue and any associated costs, thereby reflecting the underlying performance of Product Sales. The Reported Gross Profit Margin increased by one percentage point in the year to date to 80%, partly reflecting the mix of Product Sales; the Core Gross Profit Margin increased by one percentage point to 81%.

   b)   Operating Expense 

Reported Operating Expense increased by 11% in the year to date (15% at CER) to $12,871m and represented 73% of Total Revenue (YTD 2018: 74%). Core Operating Expense increased by 3% (6% at CER) to $10,537m and represented 59% of Total Revenue (YTD 2018: 65%), demonstrating a significant improvement in operating leverage.

Reported R&D Expense increased by 1% in the year to date (5% at CER) to $3,968m. Core R&D Expense increased by 1% (4% at CER) to $3,826m, partly a result of investment in the development of the potential new oncology medicine, trastuzumab deruxtecan.

Reported SG&A Expense increased by 16% in the year to date (20% at CER) to $8,656m; Core SG&A Expense increased by 4% (8% at CER) to $6,464m, primarily a result of investment in additional colleagues to support the China expansion strategy, as well as further support for new medicines. The difference between the growth of Reported and Core SG&A Expense partly reflected fair-value adjustments arising on acquisition-related liabilities recognised in 2019, as well as an increase in legal provisions.

   c)   Other Operating Income and Expense 

Where AstraZeneca does not retain a significant ongoing interest in medicines or potential new medicines, income from divestments is reported within Other Operating Income and Expense in the Company's financial statements. Reported Other Operating Income and Expense declined by 32% in the year to date (31% at CER) to $1,041m and included:

- $515m, reflecting an agreement to sell US rights to Synagis to Swedish Orphan Biovitrum AB (publ) (Sobi)

- $243m, as part of an agreement to divest the global commercial rights, excluding China, Japan, the US and Mexico, for Losec and associated brands to Cheplapharm Arzneimittel GmbH (Cheplapharm)

Core Other Operating Income and Expense declined by 7% in the year to date (6% at CER) to $1,060m.

   d)   Operating Profit 

Reported Operating Profit increased by 2% in the year to date (3% at CER) to $2,347m, with the growth in Product Sales offset by the aforementioned increase in Reported SG&A Expense and the decline in Other Operating Income & Expense; the Reported Operating Profit Margin declined by one percentage point (two at CER) to 13%. Core Operating Profit increased by 41% (42% at CER) to $4,891m; the Core Operating Profit Margin increased by five percentage points to 28%, demonstrating a significant improvement in operating leverage.

   e)   Net Finance Expense 

Reported Net Finance Expense declined by 2% in the year to date (up by 6% at CER) to $948m. The charge partly reflected higher Net Debt, as well as the effect of the adoption of IFRS 16 (see Note 1). There was also an adverse impact from a higher cost of debt, plus a higher level of discount unwind in respect of the Bristol-Myers Squibb global Diabetes alliance profit-participation liability. Excluding the discount unwind on acquisition-related liabilities, Core Net Finance Expense increased by 3% (13% at CER) to $579m.

   f)    Profit Before Tax 

Reported Profit Before Tax increased by 4% in the year to date (a decline of 1% at CER) to $1,308m, reflecting the growth in Product Sales offset by the aforementioned increase in Reported SG&A Expense and the decline in Other Operating Income & Expense. Core Profit Before Tax increased by 49% (48% at CER) to $4,221m, partly a result of the growth in Product Sales ahead of the growth of Core Operating Expense.

   g)   Taxation 

The Reported Tax Rate for the year to date was 27% and the Core Tax Rate was 22% (YTD 2018: 18% and 19%, respectively). These tax rates were higher than the UK Corporation Tax Rate due to the impact of the geographical mix of profits and the impact of collaboration and divestment activity. Taxation paid for the year to date was $965m, representing 74% of Reported Profit Before Tax (YTD 2018: $406m, 32%); the increase primarily reflected the phasing of tax payments between periods and included refunds in FY 2018, following agreement of prior-year liabilities.

   h)   EPS 

Reported EPS of $0.79 in the year to date, based on a weighted-average number of shares of 1,297m, represented a decline of 11% (15% at CER); Core EPS increased by 39% (38% at CER) to $2.61. The difference between the Reported and Core year-on-year performance partly reflected the impact of a favourable $346m legal settlement in YTD 2018 that was recognised as income in Reported Other Operating Income and Expense. It was also a result of an increase in legal provisions and revaluation movements on acquisition-related liabilities in 2019.

In April 2019, the Company completed an issue of 44,386,214 new ordinary shares of $0.25 each at a price of GBP60.50 per share, resulting in an increase in share capital of $11m and an increase in share premium of $3,479m, net of transaction costs of $22m.

Table 18: Cash Flow

 
                                                YTD 2019   YTD 2018   Change 
                                                   $m         $m        $m 
                                               ---------  ---------  -------- 
          Reported Operating Profit              2,347      2,310       37 
  Depreciation, Amortisation and Impairment      2,119      2,091       28 
 
  Increase in Working Capital and Short-Term 
                  Provisions                     (812)     (1,741)      929 
    Gains on Disposal of Intangible Assets       (833)      (975)       142 
         Non-Cash and Other Movements             313       (428)       741 
                Interest Paid                    (575)      (457)      (118) 
                Taxation Paid                    (965)      (406)      (559) 
 
  Net Cash Inflow from Operating Activities      1,594       394       1,200 
 Net Cash Inflow before Financing Activities      879        430        449 
  Net Cash Outflow from Financing Activities    (1,771)     (312)     (1,459) 
                                               ---------  ---------  -------- 
 

A Net Cash Inflow from Operating Activities of $1,594m in the year to date compared to an inflow of $394m in YTD 2018, reflecting an underlying improvement in business performance combined with favourable working-capital movements. The improvement in the movement of Working Capital and Short-Term Provisions centred on the release of various provisions and accruals within Trade and Other Payables, including the impact of a number of legal settlements. The favourable performance was partly offset by an increase in Taxation Paid, at $965m (YTD 2018: $406m); the increase reflected the aforementioned phasing of tax payments between periods and included refunds in FY 2018, following agreement of prior-year liabilities.

Net Cash Inflows before Financing Activities of $879m compared with an inflow of $430m in YTD 2018. The movement in Net Cash Inflow from Operating Activities was more than offset by changes in the Purchase of Intangible Assets, namely:

- The first of two $675m upfront payments to Daiichi Sankyo as part of the agreement on trastuzumab deruxtecan

- The impact of a final true-up net payment of $413m to MSD, based on sales of Nexium and Prilosec from 2014 to 2018; this was accrued over the same period

A payment from Pfizer, Inc. of $175m was received in the period, recorded within Disposal of Intangible Assets, as part of a prior agreement to sell the commercialisation and development rights to AstraZeneca's late-stage small-molecule antibiotics business in most markets globally outside the US. Reflecting strong sales growth and a pre-defined increase in royalty rates, the cash payment of contingent consideration, in respect of the Bristol-Myers Squibb share of the global Diabetes alliance, amounted to $337m in the year to date (YTD 2018: $247m).

As part of the total consideration of $821m included in Disposal of Intangible Assets received in respect of the aforementioned agreement to sell US rights to Synagis, $150m related to the rights to participate in the future cash flows from the US profits or losses for nirsevimab (MEDI8897). This was recognised as financial liability and is presented in Other Payables within Non-current Liabilities. The associated cash flow is presented within Investing Activities.

In April 2019, the Company completed an equity placing of $3.5bn, in conjunction with the recent strategic collaboration with Daiichi Sankyo. The purpose of the placing was to fund the initial upfront and near-term milestone commitments arising from the collaboration, as well to strengthen AstraZeneca's balance sheet. The placing was recorded in the second quarter.

   i)    Capital expenditure 

Capital expenditure amounted to $659m in the year to date, compared to $728m in YTD 2018. This included investment in the new AstraZeneca R&D centre on the Biomedical Campus in Cambridge, UK. AstraZeneca is targeting an initial occupation date of late 2020, with an overall full completion of the building expected in late 2021. The Company expects associated capital expenditure of c.$1,270m (c.GBP980m, translated at average exchange rates in the first half of the year), the majority of which was paid in prior periods. The Company has made significant progress on its transition to Cambridge; as of the end of September 2019, c.3,000 colleagues were based in the city.

The Company anticipates of a broadly stable level of total capital expenditure in FY 2019 (FY 2018: $1,043m).

Table 19: Debt and capital structure

 
                                               At             At             At 
                                           30 Sep 2019    31 Dec 2018    30 Sep 2018 
                                               $m             $m             $m 
                                         -------------  -------------  ------------- 
       Cash and Cash Equivalents             3,967          4,831          3,420 
           Other Investments                  909            895            860 
 
          Cash and Investments               4,876          5,726          4,280 
 
  Overdrafts and Short-Term Borrowings       (228)          (755)         (1,092) 
               Leases[29]                    (712)            -              - 
      Current Instalments of Loans             -            (999)         (1,399) 
        Loans Due After One Year            (17,218)       (17,359)       (18,422) 
 
 Interest-Bearing Loans and Borrowings 
              (Gross Debt)                  (18,158)       (19,113)       (20,913) 
 
            Net Derivatives                   (16)           384            448 
                Net Debt                    (13,298)       (13,003)       (16,185) 
                                         -------------  -------------  ------------- 
 

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.

Foreign exchange

The Company's transactional currency exposures on working-capital balances, which typically extend for up to three months, are hedged where practicable using forward foreign-exchange contracts against the individual companies' reporting currency. In addition, the Company's external dividend payments, paid principally in pounds sterling and Swedish krona, are fully hedged from announcement to payment date. Foreign-exchange gains and losses on forward contracts for transactional hedging are taken to profit or loss.

Table 20: Currency sensitivities

The Company provides the following currency-sensitivity information:

 
                                       Average Exchange                  Annual Impact of 5% Strengthening in Exchange 
                                        Rates versus USD                          Rate versus USD ($m)([30]) 
  Currency    Primary Relevance   FY 2018[31]  YTD 2019([32])  % change      Product Sales       Core Operating Profit 
              ------------------  -----------  --------------  --------  ----------------------  --------------------- 
    CNY         Product Sales        6.62           6.87         (4)              221                     126 
    EUR         Product Sales        0.85           0.89         (5)              145                     66 
    JPY         Product Sales       110.45         109.07         1               114                     74 
          Other([33])                                                             216                     105 
 
    GBP       Operating Expense      0.75           0.79         (5)               26                    (72) 
    SEK       Operating Expense      8.69           9.40         (8)               4                     (73) 
              ------------------  -----------  --------------  --------  ----------------------  --------------------- 
 

Corporate and business development

   a)   Divestment of rights for Losec 

In September 2019, the Company agreed to sell the global commercial rights, excluding China, Japan, the US and Mexico, for Losec (omeprazole) and associated medicines to Cheplapharm. The divestment included medicines containing omeprazole marketed by AstraZeneca or its collaborators under the brand names Acimax, Antra, Mepral, Mopral, Omepral and Zoltum.

Losec is a proton pump inhibitor discovered and developed by AstraZeneca, which helps to reduce the amount of acid produced by the stomach in patients with gastrointestinal reflux conditions and ulcers. It has a number of approved indications and is commonly prescribed for patients with gastro oesophageal reflux disease.

Cheplapharm paid AstraZeneca $243m on completion of the agreement in the quarter and will also pay sales-contingent milestones of up to $33m across 2021 and 2022. Income arising from the upfront payment was reported in the Company's financial statements within Other Operating Income and Expense. In 2018, Losec sales in the countries covered by the agreement were $98m.

   b)   Amended collaboration agreement with Ironwood for Linzess in China 

In September 2019, AstraZeneca amended its collaboration agreement with Ironwood Pharmaceuticals, Inc. (Ironwood) in mainland China, China Hong Kong and China Macau for Linzess (linaclotide), a first-in-class new treatment for patients with irritable bowel syndrome with constipation. The amended agreement gave AstraZeneca sole responsibility for developing, manufacturing and commercialising Linzess in the above markets.

AstraZeneca will pay Ironwood three non-contingent payments, totalling $35m, between 2021 and 2024. In addition, Ironwood could receive up to $90m in milestone payments, contingent on the achievement of certain sales targets. Ironwood will also be eligible for royalties beginning in the mid-single-digit percent, based on the annual net sales of Linzess in the above markets, where Ironwood will no longer jointly funds the development and commercialisation of Linzess or share in the profit from sales.

Sustainability

AstraZeneca's sustainability ambition has three priority areas[34], aligned with the Company's purpose and business strategy:

   -    Access to healthcare 
   -    Environmental protection 
   -    Ethics and transparency 

Recent developments and progress against the Company's priorities are reported below:

   a)   Access to healthcare 

During the period, the Company celebrated the fifth anniversary of its HHA programme. HHA is committed to tackling hypertension and the increasing burden of CV disease, with a presence across East and West Africa. By the end of August 2019, HHA had conducted over 12 million blood-pressure screenings and identified over two million elevated readings since launch in 2014, working with collaborators across Kenya, Ethiopia, Tanzania and Ghana.

In September 2019, the Company launched its Young Health Programme (YHP) in the Republic of the Union of Myanmar with global collaborator, Plan International UK, a children's charity that strives to advance children's rights and equality for girls. In the US, the Company enhanced its existing country-wide programme by announcing a charitable collaboration with Learning Undefeated, a non-profit organisation that provides life-changing science, technology, engineering and mathematics (STEM) education opportunities for underserved communities. The US programme introduces a new model for YHP, combining a focus on STEM with elements of disease-prevention education. The intention is to make STEM education engaging, accessible and exciting for middle-school students while, at the same time, incorporating important disease prevention and health-promotion lessons and experiments. The addition of the two new programmes brought the total number of active global plans to 19.

The YHP selected and provided sponsorships to 25 young people to attend the One Young World 2019 Summit in London, UK in October 2019. The summit brought together delegates from more than 190 countries to highlight and discuss some of the most severe issues facing the next generation and build connections that work towards solutions. The YHP delegation consisted of young leaders in their own right, actively leading efforts to improve the health and wellbeing of young people in their home countries.

During the period, the YHP and Plan International UK held a series of workshops with young people in three countries on three continents: Kenya, India and Brazil, to solicit their ideas and opinions on adolescent health and universal health coverage. Their feedback informed the development of a Manifesto on Adolescent Health that AstraZeneca and Plan International UK shared with the UN General Assembly and the first high-level meeting on universal health coverage in September 2019. This vital work formed part of the Company's advocacy work within the YHP and was an important way to include young voices in global-health discourse.

   b)   Environmental protection 

During the period, the Company held a stakeholder workshop in Nairobi, Kenya to discuss policy, education and research needs to address concerns relating to pharmaceuticals in the environment, arising from increasing patient access to medicines in emerging economies where there is inadequate environmental infrastructure and different water use and re-use patterns. The workshop brought together key international experts and opinion leaders.

In Emerging Markets, AstraZeneca goes above and beyond local guidelines and conducts research to ensure adherence to the same high standards of behaviour as in more tightly-regulated locations.

In September 2019, the Company participated in side-meetings alongside the United Nations General Assembly focused on climate action and access to healthcare. Since June 2018, AstraZeneca has been contributing to the UN Global Compact's Health Is Everyone's Business initiative. In September 2019, Pam Cheng, AstraZeneca Executive Vice President Operations & IT, spoke at the launch event for their Business Leadership Brief for Healthy Planet, Healthy People, linking health and the environment and the need to act on climate change. The brief included AstraZeneca's best-practice examples taken from United Nations Global Compact, Health Case Study.

In September 2019, the Company also participated in Climate Week, taking part in events such as The Climate Group's 'Step Up: The Business Case for Greater Government Ambition' panel, as the first pharmaceutical-company member of the global EV100 initiative([35]) . The Company is also a member of The Climate Group's RE100 initiative, in collaboration with CDP (formerly the Carbon Disclosure Project), where it has committed to sourcing 100% renewable electricity by 2020 in Europe and the US, and by 2025 for its global operations.

   c)   Ethics and transparency 

During the period, the Company expanded the Bioethics information available on its website. Bioethics refers in the broadest sense to the range of ethical issues that arise from the study and practice of biological and medical science. The Global Standard: Bioethics sets out the fundamental policy principles and practices that apply to each of the subject-matter areas. The Company worked with the Slave-Free Alliance (SFA) on a risk-gap analysis which showed positive management engagement and drive, significant global efforts to drive risk awareness amongst employees, as well as robust third-party risk management and whistleblowing platforms. The SFA also identified opportunities to provide further public information, and to action site audits focused on this risk area. Ongoing external benchmarking is planned in due course.

During the period, the Company launched an employee campaign, 'Speak Up - Your Voice Matters' using internal social-media channels. The campaign encouraged honest and open dialogue, and included interactive scenario videos, senior-leader reflections and guides for manager in support of a healthy business culture, where people feel able to make their voices heard.

In September 2019, recognising transparency as a foundation of trust with AstraZeneca stakeholders, the Company launched a 'Transparency Map'. This is an interactive tool designed to increase transparency around data on sourcing and suppliers, site environmental and wellbeing programmes, intellectual property and healthcare-professional payment-disclosure practices, and access to healthcare programmes. At present, no other pharmaceutical company has disclosed this level of information in this easily accessible way.

   d)   Other developments 

In September 2019, the Company was recognised for its sustainability efforts in the DJSI, achieving fourth position overall in the pharmaceutical industry. The DJSI is the longest-running, global sustainability-benchmark system and is an in-depth analysis of companies' economic, social and environmental performance. AstraZeneca maintained its 2018 overall score and achieved a perfect score of 100 in the areas of environmental reporting, labour-practice indicators, social reporting and health-outcome contribution. This marked the 18th time the Company has been included in the DJSI.

In September 2019, the Company was again named as a member of the FTSE4Good Index Series, ranking in the 94th percentile of the healthcare industry, with perfect scores in climate change, anti-corruption, corporate governance and customer responsibility. Since its inception in 2001, the FTSE4Good Index Series has only included companies that reflect strong Environmental, Social and Governance (ESG) risk-management practices, as measured by an overall ESG rating.

For more details on AstraZeneca's sustainability ambition, approach and targets, please refer to the latest Sustainability Report 2018 and Sustainability Data Summary 2018, available at astrazeneca.com/sustainability.

Research and development

A comprehensive data pack comprising AstraZeneca's pipeline of medicines in human trials can be found in the clinical-trials appendix, available on astrazeneca.com. Highlights of developments in the Company's late-stage pipeline since the prior results announcement are shown below:

Table 21: Update from the late-stage pipeline

 
      Regulatory         5 
       approvals                *    Tagrisso - NSCLC (1st line, EGFRm): regulatory 
                                     approval (CN) 
 
 
                                *    Farxiga/Forxiga - T2D CVOT: regulatory approval (US, 
                                     EU) 
 
 
                                *    roxadustat - anaemia of CKD, NDD: regulatory approval 
                                     (CN) 
 
 
                                *    Fasenra Pen - severe eosinophilic asthma; 
                                     auto-injector and self-administration: regulatory 
                                     approval (US) 
      Regulatory         6 
      submissions               *    Lynparza - pancreatic cancer (BRCAm): regulatory 
  and/or acceptances                 submission acceptance (US, EU) 
 
 
                                *    Calquence - CLL: regulatory submission under review 
                                     (US) 
 
 
                                *    trastuzumab deruxtecan - advanced/refractory, 
                                     metastatic breast cancer (HER2-positive): regulatory 
                                     submission acceptance (US, JP); Priority Review 
                                     designation (US) 
 
 
                                *    Brilinta/Brilique - CAD/T2D CVOT: regulatory 
                                     submission acceptance (US, EU) 
                       ----  ------------------------------------------------------------- 
     Major Phase        13 
       III data                 *    Tagrisso - NSCLC (1st line, EGFRm): met Phase III key 
       readouts                      secondary endpoint (OS) 
       or other 
  major developments 
                                *    Imfinzi + treme - NSCLC (1st line) (NEPTUNE trial): 
                                     did not meet Phase III primary endpoint 
 
 
                                *    Lynparza - ovarian cancer (1st line) (PAOLA-1): met 
                                     Phase III primary endpoint 
 
 
                                *    Lynparza - prostate cancer (2nd line, 
                                     castration-resistant): met Phase III primary endpoint 
 
 
                                *    Calquence - CLL: Breakthrough Therapy Designation 
                                     (US) 
 
 
                                *    Farxiga - HF CVOT: met Phase III primary endpoint; 
                                     Fast Track designation (US) 
 
 
                                *    Farxiga - CKD: Fast Track designation (US) 
 
 
                                *    Qtrilmet - T2D: positive opinion (EU) 
 
 
                                *    PT010 - COPD (ETHOS): met Phase III primary endpoint 
 
 
                                *    PT010 - COPD: complete response letter (US) 
 
 
                                *    Fasenra - eosinophilic oesophagitis: Orphan Drug 
                                     Designation (US) 
 
 
                                *    anifrolumab - SLE (TULIP 2): met Phase III primary 
                                     endpoint 
                       ----  ------------------------------------------------------------- 
    New molecular       16    Oncology 
       entities                 *    Tagrisso - NSCLC 
       and major 
       lifecycle 
       medicines               (-) Imfinzi - multiple cancers 
       in Phase                 *    Lynparza - multiple cancers 
      III trials 
       or under 
      regulatory                *    trastuzumab deruxtecan - breast and other cancers 
        review 
 
                                *    capivasertib - breast cancer 
 
 
                                *    Calquence - blood cancers 
 
 
                                *    tremelimumab - multiple cancers 
 
 
                                *    selumetinib - NF1[36] 
 
 
                                *    savolitinib - NSCLC(36) 
 
 
                               CVRM 
                                *    roxadustat - anaemia of CKD 
 
 
                               Respiratory (and immunology) 
                                *    Fasenra - multiple indications 
 
 
                                *    Breztri - COPD 
 
 
                                *    PT027 - asthma 
 
 
                                *    tezepelumab - severe asthma 
 
 
                                *    nirsevimab - lower respiratory tract infection 
 
 
                                *    anifrolumab - lupus 
                       ----  ------------------------------------------------------------- 
    Total projects 
      in clinical 
       pipeline         144 
                       ----  ------------------------------------------------------------- 
 

Oncology

AstraZeneca has a deep-rooted heritage in Oncology and offers a new generation of medicines that have the potential to transform patients' lives and the Company's future. At least six Oncology medicines are expected to be launched between 2014 and 2020, of which Tagrisso, Imfinzi, Lynparza, Calquence and Lumoxiti[37] are already benefitting patients. An extensive pipeline of medicines is in development, and the Company is committed to advancing Oncology medicines, primarily focused on the treatment of patients with lung, ovarian, breast and blood cancers.

At the 2019 European Society of Medical Oncology congress (ESMO 2019), the Company presented over 60 abstracts spanning multiple tumour types, including seven oral presentations, with five Presidential presentations and five late-breaking abstracts. Highlights included late-breaking results from the Phase III Lynparza PAOLA-1 trial in 1st-line advanced ovarian cancer, and results of the Phase III Lynparza PROfound trial in metastatic, castrate-resistant prostate cancer (mCRPC), where both trials met their primary endpoint. Positive OS data from the Tagrisso Phase III FLAURA trial in 1st-line EGFRm NSCLC were also presented.

The Company presented further evidence of its progress at the 2019 International Association for the Study of Lung Cancer World Congress on Lung Cancer (WCLC) in Barcelona, Spain where Phase III Imfinzi CASPIAN SCLC data were presented in the Presidential Symposium.

Oncology: lung cancer

   a)   Tagrisso 

Tagrisso has now received approval in 78 countries, including in the US, Japan, China and in the EU, for the 1st-line treatment of patients with Stage IV EGFRm NSCLC. Regulatory approvals have been achieved in 87 countries, including the US, in the EU, Japan and in China for the 2nd-line treatment of patients with EGFR T790M-mutated NSCLC.

In September 2019, AstraZeneca announced that it had received marketing authorisation from the China NMPA for Tagrisso as a 1st-line treatment for adults with locally-advanced or metastatic NSCLC whose tumours have the genetic mutations of EGFR exon 19 deletions or exon 21 (L858R) substitutions. The approval followed the priority-review pathway and was based on results from the Phase III FLAURA trial.

During the period, AstraZeneca announced positive OS results from the Phase III FLAURA trial, a randomised, double-blind, multi-centre trial of Tagrisso in previously-untreated patients with locally-advanced or metastatic NSCLC whose tumours have EGFR mutations. Tagrisso showed a statistically significant and clinically meaningful improvement in OS, a key secondary endpoint for Tagrisso versus gefitinib or erlotinib, both of which were previous SoC treatments in this setting (HR[38] 0.799 [95% CI[39], 0.641-0.997], p=0.0462). Tagrisso delivered a median OS of 38.6 months, versus 31.8 months for the comparator arm. At three years, 28% of patients in the Tagrisso arm and only 9% of patients in the comparator arm remained on treatment. Tagrisso also showed a statistically significant and clinically meaningful 52% reduction in the risk of central nervous system (CNS) disease progression, increasing the time patients with CNS metastases lived without CNS-disease progression or death (HR 0.48 [95% CI, 0.26-0.86], p=0.014).

Table 22: Key ongoing Tagrisso trials in lung cancer

 
   Trial             Population                      Design                     Timeline                 Status 
 Phase III      Adjuvant EGFRm NSCLC           Placebo or Tagrisso              FPCD[40]               Recruitment 
   ADAURA                                                                        Q4 2015                completed 
 
                                                                                 LPCD[41] 
                                                                                 Q1 2019 
 
                                                                          First data anticipated 
                                                                                2021+[42] 
            ----------------------------  ----------------------------  ------------------------  -------------------- 
 Phase III        Locally-advanced,            Placebo or Tagrisso                FPCD                 Recruitment 
   LAURA      unresectable EGFRm NSCLC                                           Q3 2018                 ongoing 
 
                                                                          First data anticipated 
                                                                                  2021+ 
            ----------------------------  ----------------------------  ------------------------  -------------------- 
 Phase III      1st-line EGFRm NSCLC         Tagrisso or Tagrisso +               FPCD             Recruitment ongoing 
  FLAURA2                                  platinum-based chemotherapy           Q3 2019 
                                                     doublet 
                                                                          First data anticipated 
                                                                                  2021+ 
            ----------------------------  ----------------------------  ------------------------  -------------------- 
 Phase II            EGFRm, MET+             Tagrisso + savolitinib               FPCD                 Recruitment 
  SAVANNAH       locally-advanced or                                             Q1 2019                 ongoing 
              metastatic NSCLC patients 
               who have progressed on                                     First data anticipated 
                      Tagrisso                                                    2021+ 
            ----------------------------  ----------------------------  ------------------------  -------------------- 
 Phase II     1st-line EGFRm NSCLC post        SoC chemotherapy or                FPCD                 Recruitment 
  ORCHARD             Tagrisso              Tagrisso + savolitinib or            Q2 2019                 ongoing 
                                              Tagrisso + Iressa or 
                                             Tagrisso + necitumumab       First data anticipated 
                                            or Imfinzi + chemotherapy             2021+ 
            ----------------------------  ----------------------------  ------------------------  -------------------- 
 
   b)   Imfinzi 

During the period, the Company presented detailed results from the Phase III CASPIAN trial of Imfinzi in patients with previously-untreated extensive-stage SCLC at the aforementioned Presidential Symposium of the International Association for the Study of Lung Cancer WCLC 2019 in Barcelona, Spain. Imfinzi, in combination with four cycles of SoC chemotherapy (etoposide, with either cisplatin or carboplatin), demonstrated a statistically significant and clinically meaningful improvement in OS versus SoC consisting of up to six cycles of chemotherapy and optional prophylactic cranial irradiation. The risk of death was reduced by 27% (equal to a HR of 0.73), with median OS of 13.0 months for Imfinzi plus chemotherapy, versus 10.3 months for SoC.

Results showed a prolonged OS benefit, with an estimated 33.9% of patients alive at 18 months following treatment with Imfinzi plus chemotherapy, versus 24.7% of patients following SoC. Across all efficacy endpoints, benefits were observed in patients treated with Imfinzi plus chemotherapy versus SoC. Results showed a significantly higher PFS rate at 12 months (17.5% versus 4.7%), a 10.3% increase in confirmed objective response rate (ORR) (67.9% versus 57.6%), and improved duration of response at 12 months (22.7% versus 6.3%).

This trial also includes a third arm containing tremelimumab, an anti-CTLA4 antibody and potential new medicine, with Imfinzi and chemotherapy. The trial will continue to the final analysis of OS for the combination of dual immune checkpoint blockade with chemotherapy.

During the period, AstraZeneca announced final OS results from the Phase III NEPTUNE trial, a randomised, open-label, multi-centre, global trial of Imfinzi in combination with tremelimumab versus SoC platinum-based chemotherapy in previously-untreated Stage IV (metastatic) NSCLC patients. The trial was performed in an 'all-comers' population, and the primary-analysis population was patients with a high tumour mutational burden (TMB). TMB is a measurement of the number of mutations within the genome (DNA) of a tumour, and tumours with high levels of TMB may be more visible to the immune system. In the primary analysis population of patients whose blood TMB was 20 or more mutations per megabase (mut/Mb), the combination of Imfinzi and tremelimumab did not meet the primary endpoint of improving OS, compared to SoC chemotherapy. The safety and tolerability profile for the combination of Imfinzi and tremelimumab was consistent with previous trials.

Trial timelines throughout the Imfinzi programme have been updated and optimised to reflect event rates and an effort to optimise the trials to focus on Imfinzi as a monotherapy based on learnings from previous trials.

Table 23: Key ongoing Imfinzi trials in lung cancer

 
        Trial                Population                Design                  Timeline                 Status 
      Phase III         Neo-adjuvant (before    SoC chemotherapy +/-             FPCD                 Recruitment 
        AEGEAN             surgery) NSCLC             Imfinzi,                 Q1 2019                  ongoing 
                                                     followed by 
                                                surgery, followed by    First data anticipated 
                                                 placebo or Imfinzi            H2 2020 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III         Stage Ib-IIIa NSCLC          Placebo or                  FPCD                 Recruitment 
  ADJUVANT BR.31[43]                                   Imfinzi                 Q1 2015                  ongoing 
 
                                                                        First data anticipated 
                                                                                 2021 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III         Unresectable, Stage        Concurrent CRT                FPCD                 Recruitment 
      PACIFIC-2              III NSCLC             concurrent with             Q2 2018                  ongoing 
                                                     placebo or 
                                                  Imfinzi, followed     First data anticipated 
                                                    by placebo or              H2 2020 
                                                       Imfinzi 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III         Unresectable, Stage         Stereotactic                 FPCD                 Recruitment 
      PACIFIC-4              I-II NSCLC             body radiation             Q2 2019                  ongoing 
                                                   therapy followed 
                                                    by placebo or       First data anticipated 
                                                       Imfinzi                  2021+ 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III         Unresectable, Stage         Concurrent or                FPCD                 Recruitment 
      PACIFIC-5              III NSCLC             sequential CRT,             Q1 2019                  ongoing 
                        (predominantly Asia)         followed by 
                                                     placebo or         First data anticipated 
                                                       Imfinzi                   2021 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III        Limited-disease stage       Concurrent CRT,               FPCD                 Recruitment 
       ADRIATIC                 SCLC                 followed by               Q4 2018                  ongoing 
                                                     placebo or 
                                                Imfinzi or Imfinzi +    First data anticipated 
                                                        treme                    2021 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III          Stage IV, 1st-line      SoC chemotherapy or             FPCD                 Recruitment 
        PEARL               NSCLC (Asia)               Imfinzi                 Q1 2017                 completed 
 
                                                                                 LPCD 
                                                                               Q1 2019 
 
                                                                        First data anticipated 
                                                                                 2021 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III          Stage IV, 1st-line      SoC chemotherapy or             FPCD            Recruitment completed 
       POSEIDON                NSCLC            SoC + Imfinzi or SoC           Q2 2017 
                                                  + Imfinzi + treme 
                                                                                 LPCD 
                                                                               Q3 2018 
 
                                                                        First data anticipated 
                                                                               Q4 2019 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
      Phase III          Extensive-disease       SoC chemotherapy or             FPCD             OS primary endpoint 
       CASPIAN               stage SCLC         SoC + Imfinzi or SoC            Q1 2017             met for Imfinzi 
                                                  + Imfinzi + treme                                 monotherapy arm 
                                                                                 LPCD 
                                                                                Q2 2018 
                      -----------------------  ----------------------  -----------------------  ---------------------- 
 

Imfinzi as a potential new medicine in other tumour types

The Company continues to advance multiple monotherapy trials of Imfinzi and combination trials of Imfinzi with tremelimumab and other potential new medicines in tumour types other than lung cancer.

Imfinzi has received regulatory approval for the 2nd-line treatment of patients with locally-advanced or metastatic urothelial carcinoma (bladder cancer) in 11 countries.

Table 24: Key Imfinzi trials in tumour types other than lung cancer

 
   Trial             Population                     Design                    Timeline                  Status 
 Phase III       Non-muscle invasive       SoC BCG[44] or SoC BCG +             FPCD              Recruitment ongoing 
   POTOMAC         bladder cancer                  Imfinzi                     Q3 2018 
 
                                                                              First data 
                                                                             anticipated 
                                                                                2021+ 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III     Muscle-invasive bladder    Neo-adjuvant cisplatin and            FPCD              Recruitment ongoing 
   NIAGARA             cancer                  gemcitabine SoC                 Q4 2018 
                                            chemotherapy or SoC + 
                                             Imfinzi, followed by             First data 
                                                   adjuvant                  anticipated 
                                              placebo or Imfinzi                2021+ 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III          Locoregional             TACE[45] followed by               FPCD              Recruitment ongoing 
  EMERALD-1   hepatocellular carcinoma    placebo or TACE + Imfinzi,           Q1 2019 
                   (liver cancer)           followed by Imfinzi + 
                                                bevacizumab or                First data 
                                                TACE + Imfinzi               anticipated 
                                             followed by Imfinzi                 2021 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III          Locoregional             Adjuvant Imfinzi or                FPCD              Recruitment ongoing 
  EMERALD-2   hepatocellular carcinoma      Imfinzi + bevacizumab              Q2 2019 
                   at high risk of 
              recurrence after surgery                                  First data anticipated 
                  or radiofrequency                                             2021+ 
                      ablation 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III    Locally-advanced cervical     CRT or CRT + Imfinzi,               FPCD              Recruitment ongoing 
    CALLA              cancer               followed by placebo or             Q1 2019 
                                                   Imfinzi 
                                                                        First data anticipated 
                                                                                2021+ 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III       Stage IV, 1st-line          SoC chemotherapy or                FPCD             Recruitment completed 
   DANUBE      cisplatin chemotherapy-    Imfinzi or Imfinzi + treme           Q4 2015 
                 eligible/ineligible 
                   bladder cancer                                                LPCD 
                                                                               Q1 2017 
 
                                                                              First data 
                                                                             anticipated 
                                                                               H1 2020 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III       Stage IV, 1st-line       SoC chemotherapy or SoC +             FPCD                  Recruitment 
    NILE       cisplatin chemotherapy-    Imfinzi or SoC + Imfinzi +           Q4 2018                  ongoing 
               eligible bladder cancer              treme 
                                                                        First data anticipated 
                                                                                 2021 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III    Stage IV, 1st-line HNSCC    SoC or Imfinzi or Imfinzi             FPCD             Recruitment completed 
   KESTREL                                         + treme                     Q4 2015 
 
                                                                                 LPCD 
                                                                               Q1 2017 
 
                                                                              First data 
                                                                             anticipated 
                                                                               H1 2020 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III       Stage IV, 1st-line        Sorafenib or Imfinzi or              FPCD                  Recruitment 
  HIMALAYA          unresectable               Imfinzi + treme                 Q4 2017                 completed 
              hepatocellular carcinoma 
                                                                                 LPCD 
                                                                               Q3 2019 
 
                                                                              First data 
                                                                             anticipated 
                                                                               H2 2020 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 Phase III       Stage IV, 1st-line       Gemcitabine and cisplatin             FPCD              Recruitment ongoing 
   TOPAZ-1      biliary-tract cancer      SoC chemotherapy or SoC +            Q2 2019 
                                                   Imfinzi 
                                                                        First data anticipated 
                                                                                 2021 
             --------------------------  ---------------------------  ------------------------  ---------------------- 
 

Oncology: Lynparza (multiple cancers)

During the period, the Company announced positive data and presented the detailed positive results at the aforementioned ESMO 2019 meeting from the Phase III PAOLA-1 trial in patients with advanced ovarian cancer. The trial, in the 1st-line maintenance setting, compared Lynparza added to SoC bevacizumab versus bevacizumab alone, in women with or without BRCA-gene mutations.

Investigator-assessed results showed that Lynparza added to bevacizumab reduced the risk of disease progression or death by 41% (equal to a HR of 0.59) and improved PFS to a median of 22.1 months, versus 16.6 months for those treated with bevacizumab alone. At two years since trial initiation, 46% of patients treated with Lynparza added to bevacizumab showed no disease progression, versus 28% of patients receiving bevacizumab alone.

The sensitivity analysis of blinded independent central review (BICR) of PFS was consistent and showed a similar improvement, with a median of 26.1 months for Lynparza added to bevacizumab, versus 18.3 months for bevacizumab alone. The safety and tolerability profiles of Lynparza and bevacizumab were consistent with that known from previous trials for each medicine, and with no detriment to quality of life.

AstraZeneca also announced and presented detailed positive results at ESMO 2019 from the Phase III PROfound trial of Lynparza in men with mCRPC who have a homologous recombination repair (HRR) gene mutation and have progressed on prior treatment with new hormonal anticancer treatments, e.g. enzalutamide and abiraterone. Results showed a statistically significant and clinically meaningful improvement with Lynparza in the primary endpoint of radiographic progression-free survival (rPFS), improving the time men with BRCA1/2- or ATM-mutated mCRPC lived without disease progression or death to a median of 7.4 months versus 3.6 months for those treated with abiraterone or enzalutamide. Lynparza reduced the risk of disease progression or death by 66% (equal to a HR of 0.34) for these patients.

The trial also met the key secondary endpoint of rPFS in the overall HRR-mutated (HRRm) population, where Lynparza reduced the risk of disease progression or death by 51% (equal to a HR of 0.49) and improved rPFS to a median of 5.8 months, versus 3.5 months for abiraterone or enzalutamide.

During the period, the Company received submission acceptances from the US FDA and the European Medicines Agency (EMA) for supplemental New Drug Applications (sNDA) for the use of Lynparza tablets in BRCAm pancreatic cancer. A regulatory decision in the US is anticipated in Q4 2019, while the Company anticipates an EMA decision in H2 2020.

Table 25: Key Lynparza trials

 
    Trial                Population                    Design                  Timeline                 Status 
  Phase III     Adjuvant BRCAm breast cancer       SoC placebo or                FPCD            Recruitment completed 
    OlympiA                                           Lynparza                 Q2 2014 
 
                                                                                 LPCD 
                                                                               Q2 2019 
 
                                                                        First data anticipated 
                                                                                 2021 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
  Phase III              Metastatic              SoC (abiraterone or             FPCD            Primary endpoint met 
   PROfound         castration-resistant          enzalutamide) or              Q2 2017 
                   2nd-line+ HRRm prostate            Lynparza 
                           cancer                                                LPCD 
                                                                                Q4 2018 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
  Phase III          Stage IV, 1st-line              Bevacizumab                 FPCD            Primary endpoint met 
  PAOLA-1[46]           ovarian cancer             maintenance or               Q2 2015 
                                                    bevacizumab + 
                                                Lynparza maintenance         LPCD Q2 2018 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
  Phase III     Recurrent platinum-sensitive     SoC chemotherapy or             FPCD             Recruitment ongoing 
   GY004[47]           ovarian cancer               cediranib or                Q1 2016 
                                                cediranib + Lynparza 
                                                                              First data 
                                                                              anticipated 
                                                                                H1 2020 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
 Phase II/III             Recurrent              SoC chemotherapy or             FPCD             Recruitment ongoing 
   GY005(47)    platinum-resistant/refractory       cediranib or                Q2 2016          (Phase III component) 
                       ovarian cancer           cediranib + Lynparza          (Phase II) 
 
                                                                                 FPCD 
                                                                                Q1 2019 
                                                                              (Phase III) 
 
                                                                              First data 
                                                                              anticipated 
                                                                                 2021+ 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
  Phase III          Stage IV, 1st-line            Chemotherapy +                FPCD                 Recruitment 
     DuO-O              ovarian cancer              bevacizumab or              Q1 2019                 ongoing 
                                                    chemotherapy + 
                                                    bevacizumab +             First data 
                                                     Imfinzi +/-              anticipated 
                                                 Lynparza maintenance            2021+ 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
   Phase II          Advanced, 2nd-line          Lynparza + Imfinzi              FPCD                 Recruitment 
    MEDIOLA           gBRCAm[48] ovarian                                       Q2 2016              ongoing in one 
                            cancer                                                                 expansion cohort 
                                                                                 LPCD 
                  Stage IV, 1st to 3rd-line                                    Q1 2019             Initial data from 
                        gBRCAm, HER2-                                      (all except one           lung, breast, 
                    negative breast cancer                                     cohort)               prostate and 
                                                                                                    ovarian-cancer 
                   Stage IV, 2nd-line SCLC                                                       cohorts presented in 
                                                                                                       2017 and 
                      Stage IV, 2nd-line                                                                 2018 
                        gastric cancer 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
   Phase II      HRRm advanced solid tumours          Lynparza                   FPCD                 Recruitment 
   LYNK-002                                                                     Q1 2019                 ongoing 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
   Phase II          Stage IV, advanced,              Lynparza                   FPCD                 Recruitment 
   VIOLETTE        triple-negative breast                                       Q2 2018                 ongoing 
                           cancer:                  Lynparza + ATR 
                                                      (AZD6738)               First data 
                      -HRRm[49] (BRCA)                                        anticipated 
                      -HRRm (non-BRCA)                                           2021 
                          -Non-HRRm 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
  Phase III          Stage IV, advanced,           Abiraterone or                FPCD             Recruitment ongoing 
    PROpel      castration-resistant prostate       abiraterone +               Q4 2018 
                           cancer                      Lynparza 
                                                                              First data 
                                                                              anticipated 
                                                                                 2021 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
   Phase II          Stage IV, 1st-line              Imfinzi or                  FPCD             Recruitment ongoing 
     BAYOU              cis-platinum              Imfinzi + Lynparza            Q1 2018 
                   chemotherapy-ineligible 
                         urothelial                                           First data 
                       bladder cancer                                         anticipated 
                                                                                H1 2020 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
   Phase II          Stage IV, 1st-line          SoC chemotherapy +              FPCD             Recruitment ongoing 
     ORION                  NSCLC               Imfinzi, followed by           Q1 2019 
                                                Imfinzi or Imfinzi + 
                                                      Lynparza          First data anticipated 
                                                     maintenance                2021+ 
               ------------------------------  ----------------------  -----------------------  ---------------------- 
 

Trastuzumab deruxtecan (breast and other cancers)

During the period, the Company announced that the US FDA had accepted for review the Biologics License Application for [fam-] trastuzumab deruxtecan and granted Priority Review designation, with a Prescription Drug User Fee Act (PDUFA) date set for the second quarter of 2020.

Table 26: Key trastuzumab deruxtecan trials

 
       Trial               Population                 Design                  Timeline                  Status 
      Phase II              Stage IV,         Trastuzumab deruxtecan            FPCD                Data read out 
  DESTINY-Breast01     HER2-positive (IHC                                      Q3 2017                 Q2 2019 
                        3+) breast cancer 
                        post trastuzumab                                        LPCD             Breakthrough Therapy 
                            emtansine                                          Q3 2018             Designation (US) 
                                                                                                    status awarded 
                     ----------------------  -----------------------  -----------------------  ----------------------- 
     Phase III              Stage IV,           SoC or trastuzumab              FPCD             Recruitment ongoing 
  DESTINY-Breast02     HER2-positive (IHC           deruxtecan                Q3 2018 
                        3+) breast cancer 
                        post trastuzumab                               First data anticipated 
                            emtansine                                           2021 
                     ----------------------  -----------------------  -----------------------  ----------------------- 
     Phase III              Stage IV,         Trastuzumab emtansine         FPCD Q3 2018         Recruitment ongoing 
  DESTINY-Breast03     HER2-positive (IHC         or trastuzumab 
                        3+) breast cancer           deruxtecan         First data anticipated 
                                                                                2021 
                     ----------------------  -----------------------  -----------------------  ----------------------- 
     Phase III         Stage IV, HER2-low       SoC or trastuzumab              FPCD             Recruitment ongoing 
  DESTINY-Breast04     (IHC 1+/2+) breast           deruxtecan                Q4 2018 
                             cancer 
                                                                       First data anticipated 
                                                                                2021 
                     ----------------------  -----------------------  -----------------------  ----------------------- 
      Phase II              Stage IV,           SoC or trastuzumab          FPCD Q4 2017        Recruitment completed 
  DESTINY-Gastric01    HER2-positive (IHC           deruxtecan 
                       3+) gastric cancer                                   LPCD Q2 2019 
 
                                                                       First data anticipated 
                                                                              H1 2020 
                     ----------------------  -----------------------  -----------------------  ----------------------- 
 

Calquence (blood cancers)

During the period, AstraZeneca received regulatory approval for Calquence in relapsed/refractory MCL in Chile, Singapore, Canada and India and announced that the US FDA had granted Breakthrough Therapy Designation for Calquence as a monotherapy treatment for adult patients with CLL, one of the most common types of leukaemia in adults. The agency granted the designation based on positive results from the interim analyses of the ELEVATE-TN and ASC Phase III clinical trials. Together, the trials showed that Calquence, alone or in combination, significantly increased the time patients lived without disease progression or death, with safety and tolerability that was consistent with its established profile. The Company also submitted for review to the US FDA the sNDA for the use of Calquence in 1st-line and relapsed/refractory CLL.

During the period, Calquence was also assigned Category 1 status as a preferred regimen in the treatment of relapsed/refractory CLL within the US NCCN guidelines.

CVRM

CVRM forms one of AstraZeneca's main therapy areas and a key growth driver for the Company. By following the science to understand more clearly the underlying links between the heart, kidneys and pancreas, AstraZeneca is investing in a portfolio of medicines to protect organs and improve outcomes by slowing disease progression, reducing risks and tackling co-morbidities. The Company's ambition is to modify or halt the natural course of CVRM diseases and potentially regenerate organs and restore function, by continuing to deliver transformative science that improves treatment practices and CV health for millions of patients.

   a)   Farxiga (diabetes) 

During the period, the US FDA granted approval for Farxiga to include positive CV outcomes and renal data from the Phase III DECLARE-TIMI 58 trial in adults with T2D. The trial enrolled a majority of patients with no existing CV disease. In this trial, Farxiga achieved a statistically significant reduction in the composite endpoint of hospitalisation for HF or CV death versus placebo, one of the two primary efficacy endpoints. There were also fewer major adverse CV events observed with Farxiga for the other primary efficacy endpoint; this did not, however, reach statistical significance. Similarly, the European Commission (EC) approved a similar update to the marketing authorisation for Forxiga.

The Company also announced positive results from the landmark Phase III DAPA-HF trial, which showed that Farxiga met the primary composite endpoint with a statistically significant and clinically meaningful reduction of CV death or worsening of HF (defined as hospitalisation or an urgent HF visit), compared to placebo. The trial was conducted in patients with reduced ejection fraction on SoC treatment, including those with and without T2D. The safety profile of Farxiga in the DAPA-HF trial was consistent with the well-established safety profile of the medicine.

Detailed results of the DAPA-HF trial were presented at the recent European Society of Cardiology (ESC) Congress in Paris, France, showing that Farxiga reduced the composite of CV death or worsening of HF by 26% (p<0.0001). Each of the individual components of the composite endpoint was statistically significant, with a 30% decline (p<0.0001) in the risk of experiencing a first episode of worsening HF and an 18% decline (p=0.0294) in the risk of dying from CV causes. The effect of Farxiga on the primary composite endpoint was generally consistent across the key subgroups examined.

In September 2019, the Company announced that the US FDA had granted Fast Track designation for the development of Farxiga to reduce the risk of CV death, or the worsening of HF, in adults with HF with reduced ejection fraction or preserved ejection fraction. This followed the announcement in August 2019 that the US FDA had granted Fast Track designation for Farxiga to delay the progression of renal failure and prevent CV and renal deaths in patients with CKD.

   b)   Qtrilmet (T2D) 

During the period, the Company announced that it had received a positive Committee for Medicinal Products for Human Use (CHMP) opinion for Qtrilmet (metformin, Forxiga and Onglyza) modified-release tablets for marketing authorisation in the European Union for the treatment of adults with T2D. The CHMP is the EMA committee responsible for human medicines. The committee recommended the marketing authorisation for Qtrilmet to improve glycaemic control when metformin with or without sulphonyl urea and either Onglyza and Forxiga does not provide adequate glycaemic control, or when T2D patients are already being treated with metformin, Onglyza and Forxiga. Qtrilmet is approved in the US under the name Qternmet XR as an adjunct to diet and exercise to improve glycaemic control in adults with T2D.

   c)   Brilinta (CV disease) 

At the aforementioned ESC meeting, AstraZeneca also presented detailed data from the positive Phase III THEMIS trial, which showed that Brilinta reduced the risk of CV events in patients with CAD and T2D. In the trial, Brilinta plus aspirin reduced the relative risk for the composite of CV death, heart attack or stroke by 10%, compared with aspirin alone; this was a statistically significant reduction. The overall THEMIS trial population consisted of patients with CAD and T2D with no prior heart attack or stroke. Additionally, in a clinically meaningful and prespecified sub-analysis of patients who had previously undergone a percutaneous coronary intervention (PCI), a procedure to open a blocked or narrowed coronary artery, a 15% relative-risk reduction was observed for Brilinta plus aspirin for the composite of CV death, heart attack, or stroke, compared with aspirin alone. The safety profile for Brilinta was consistent with the known profile of the medicine, with an increased risk of bleeding events observed in both THEMIS and the THEMIS-PCI sub-analysis.

During the period, the Company received submission acceptances from both the US FDA (PDUFA date in Q2 2019) and the EMA to include THEMIS data in the label for Brilinta.

Table 27: Key large CVRM trials

Major CVRM outcomes trials are highlighted in the following table:

 
      Trial               Population              Design            Primary            Timeline            Status 
                                                                  endpoint(s) 
     Farxiga 
-----------------  --------------------------------------------------------------------------------------------------- 
    Phase III       c.17,000[50] patients     Arm 1: Farxiga    Superiority for          FPCD          Primary safety 
      DECLARE              with T2D           10mg QD[51] +       MACE[52] or           Q2 2013         endpoint met 
                                                  SoC QD        superiority for 
                                                                 the composite                           One of two 
                                             Arm 2: placebo +    endpoint of CV                       primary efficacy 
                                               SoC for T2D      death or hHF[53]                       endpoints met 
                   -----------------------  -----------------  -----------------  -----------------  ----------------- 
    Phase III       c.4,500 patients with     Arm 1: Farxiga     Time to first           FPCD         Data read out Q3 
      DAPA-HF           HF and reduced       10mg or 5 mg QD    occurrence of CV        Q1 2017             2019 
                      ejection fraction,          + SoC         death or hHF or 
                     with and without T2D                         an urgent HF           LPCD             Primary 
                                             Arm 2: placebo +        visit              Q3 2018         endpoint met 
                                                   SoC 
                                                                                                         Fast Track 
                                                                                                      designation (US) 
                   -----------------------  -----------------  -----------------  -----------------  ----------------- 
    Phase III       c.4,700 patients with     Arm 1: Farxiga     Time to first           FPCD 
      DELIVER          HF and preserved          10mg QD        occurrence of CV       Q3 2018           Recruitment 
                      ejection fraction,                            death or                               ongoing 
                     with and without T2D     Arm 2: placebo      worsening HF        First data 
                                                                                     anticipated         Fast Track 
                                                                                        2021+            designation 
                                                                                                            (US) 
                   -----------------------  -----------------  -----------------  -----------------  ----------------- 
    Phase III       c.4,000 patients with     Arm 1: Farxiga     Time to first           FPCD           Recruitment 
     DAPA-CKD       CKD, with and without     10mg or 5mg QD    occurrence of >=       Q1 2017           completed 
                             T2D                                 50% sustained 
                                              Arm 2: placebo    decline in eGFR          LPCD            Fast Track 
                                                                  or reaching          Q1 2019        designation (US) 
                                                                 ESRD[54] or CV 
                                                                     death            First data 
                                                                 or renal death    anticipated 2021 
                   -----------------------  -----------------  -----------------  -----------------  ----------------- 
     Brilinta 
-----------------  --------------------------------------------------------------------------------------------------- 
 Phase III THEMIS   c.19,000 patients with   Arm 1: Brilinta    Composite of CV          FPCD         Primary endpoint 
                    T2D and CAD without a      60mg BID[56]     death, non-fatal        Q1 2014             met 
                     history of MI[55] or                       MI and non-fatal 
                            stroke            Arm 2: placebo         stroke              LPCD 
                                                 BID on a                               Q2 2016 
                                              background of 
                                             acetylsalicylic 
                                               acid if not 
                                             contra-indicated 
                                                  or not 
                                                tolerated 
                   -----------------------  -----------------  -----------------  -----------------  ----------------- 
    Phase III       c.11,000 patients with   Arm 1: Brilinta     Prevention of           FPCD           Recruitment 
      THALES        acute ischaemic stroke       90mg BID       the composite of       Q1 2018            ongoing 
                    or transient ischaemic                         subsequent 
                            attack            Arm 2: placebo    stroke and death      First data 
                                                 BID on a          at 30 days        anticipated 
                                              background of                            H1 2020 
                                             acetylsalicylic 
                                               acid if not 
                                             contra-indicated 
                                                  or not 
                                                tolerated 
                   -----------------------  -----------------  -----------------  -----------------  ----------------- 
     Epanova 
-----------------  --------------------------------------------------------------------------------------------------- 
    Phase III       c.13,000 patients with    Arm 1: Epanova     Time to first       FPCD Q4 2014       Recruitment 
     STRENGTH        mixed dyslipidaemia/     4g QD + statin    occurrence of CV                         completed 
                    hypertriglycerid-aemia                      death, non-fatal     LPCD Q2 2017 
                                              Arm 2: placebo    MI or non-fatal 
                                               (corn oil) +          stroke           First data 
                                                  statin                             anticipated 
                                                                                       H2 2020 
                   -----------------------  -----------------  -----------------  -----------------  ----------------- 
 
   d)   Roxadustat (anaemia) 

In August 2019, AstraZeneca announced that its partner FibroGen (China) Medical Technology Development Co., Ltd. (FibroGen China) received marketing authorisation for roxadustat in China for the treatment of anaemia caused by CKD in NDD patients. The approval, granted by the China NMPA, was primarily supported by a Phase III trial in NDD-CKD patients with anaemia, in which roxadustat demonstrated a statistically significant improvement in haemoglobin levels from baseline, averaged over weeks seven to nine of treatment, with a mean change of 1.9g/dL, compared to 0.4g/dL with placebo. These data were published in The New England Journal of Medicine in July 2019.

This followed the approval of roxadustat in China in December 2018 for anaemia caused by CKD in patients on dialysis. AstraZeneca and FibroGen China expect to launch roxadustat in China in due course; the Company and FibroGen, Inc. (FibroGen) anticipate a US FDA regulatory submission in the final quarter of 2019.

In September 2019, FibroGen and Astellas announced the Japanese approval of roxadustat for the treatment of dialysis patients with anaemia caused by CKD. The medicine will be marketed in Japan as Evrenzo by FibroGen and Astellas. AstraZeneca does not participate in the agreement between FibroGen and Astellas.

In October 2019, FibroGen announced that the results from the AstraZeneca-sponsored Phase III trials, OLYMPUS and ROCKIES, will be presented at the American Society of Nephrology Kidney Week in November 2019 in Washington D.C., US. In addition, FibroGen also confirmed that the pooled efficacy and safety results from the global Phase III programme will be presented at a late-breaker session at the meeting. The accepted abstracts on the individual Phase III roxadustat trials are available here.

Respiratory (and immunology)

AstraZeneca's Respiratory focus is aimed at transforming the treatment of patients with asthma and COPD through:

- Combined inhaled therapies and biologic medicines for the unmet medical needs of specific populations

   -    An early pipeline focused on disease modification 

The growing range of medicines includes a number of anticipated launches between 2017 and 2020; of these, Bevespi, Fasenra and Breztri are already benefitting patients, with regulatory reviews for Symbicort as an anti-inflammatory reliever in mild asthma, and additional reviews for Breztri in COPD underway. The capability in inhalation technology spans both pMDI and dry-powder inhalers to serve patient needs.

During the period, AstraZeneca attended the European Respiratory Society International Congress in Madrid, Spain. The breadth and depth of the Company's science was reflected in the 65 abstracts accepted, including 17 oral presentations. The data presented at the congress primarily focused on Symbicort in mild to moderate asthma, and Breztri and Fasenra in COPD.

   a)   Symbicort (asthma) 

During the period, Symbicort Turbuhaler was approved in Canada, Chile and Singapore as an anti-inflammatory reliever in mild, persistent asthma. The expanded indication in mild asthma was approved in Australia, New Zealand, Brazil and Russia earlier this year. In July 2019, the regulatory submission in the EU for Symbicort Turbuhaler in mild asthma was withdrawn and a new submission is anticipated during H1 2020.

   b)   PT010 (COPD) 

During the period, AstraZeneca announced positive results from the Phase III ETHOS trial for triple-combination therapy PT010, in patients with moderate to very severe COPD. At the standard, and at half of the budesonide dose, PT010 (budesonide/glycopyrronium/formoterol fumarate 320/14.4/9.6mcg and 160/14.4/9.6mcg, respectively) met its primary endpoint, demonstrating a statistically significant reduction in the rate of moderate or severe exacerbations, compared with dual-combination therapies Bevespi Aerosphere (glycopyrronium/formoterol fumarate 14.4/9.6mcg) and PT009 (budesonide/formoterol fumarate 320/9.6mcg).

In the trial, all combination therapies were administered in a pMDI using the innovative Aerosphere delivery technology. The safety and tolerability of PT010 were consistent with the known profiles of the dual comparators. The ETHOS trial results will be presented at a forthcoming medical meeting.

In October 2019, AstraZeneca announced that the US FDA had issued a complete response letter regarding the New Drug Application (NDA) for PT010. The application previously submitted to the US FDA by the Company included data from only one Phase III trial, KRONOS. AstraZeneca will work closely with the agency regarding next steps, including submitting for review the aforementioned ETHOS trial, which was not completed at the time the NDA was submitted.

PT010 is under regulatory review in the EU and in China, where it has been granted priority-review status by the China NMPA. PT010 has received regulatory approval in Japan, under the name Breztri Aerosphere.

   c)   Fasenra (severe eosinophilic asthma and eosinophilic oesophagitis) 

During the period, AstraZeneca announced that the US FDA had approved the self-administration of Fasenra in a pre-filled, single-use auto-injector (the Fasenra Pen). Fasenra self-administration and the Fasenra Pen were also approved in the EU.

In August 2019, the US FDA granted Orphan Drug Designation to Fasenra for the treatment of eosinophilic oesophagitis (EoE), a rare, chronic, inflammatory disease that occurs when eosinophils, a type of white blood cell, accumulate in the oesophagus, causing injury and inflammation. The US FDA grants Orphan Drug Designation status to medicines and potential new medicines intended for the treatment, diagnosis or prevention of rare diseases or disorders that affect fewer than 200,000 patients in the US.

Table 28: Key Fasenra trials

 
      Trial             Population            Design        Primary endpoint(s)        Timeline            Status 
 Phase IIIb ANDHI         Severe           Fasenra 30mg        Annual asthma             FPCD           Recruitment 
                       eosinophilic       Q8W[57] SC[58]     exacerbation rate         Q3 2017           completed 
                      asthma on SoC 
                                            Placebo SC                                   LPCD 
                                                                                       Q1 2019 
                                          24-week trial 
                                                                                   Data anticipated 
                                                                                       Q4 2019 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
    Phase IIIb       Asthmatics (aged    Fasenra 30mg Q8W     Reduction of OCS           FPCD           Recruitment 
     PONENTE        18 years or older)          SC                  dose               Q3 2018           completed 
                        receiving 
                    high-dose ICS plus    38-week trial                                  LPCD 
                     LABA and chronic                                                  Q3 2019 
                         OCS[59] 
                     with or without                                               Data anticipated 
                    additional asthma                                                  H2 2020 
                      controller(s) 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
    Phase III        Asthmatic adults    Fasenra 30mg Q4W        Safety and              FPCD           Recruitment 
     MELTEMI        (aged 18-75 years)          SC              tolerability           Q2 2016           completed 
                    on ICS plus LABA2 
                         agonist         Fasenra 30mg Q8W                                LPCD 
                                                SC                                     Q1 2017 
 
                                                                                   Data anticipated 
                                                                                       H2 2020 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
 Phase III OSTRO      Patients (aged     Fasenra 30mg Q8W     Nasal-polyposis            FPCD           Recruitment 
                    18-75 years) with           SC          burden and reported        Q1 2018           completed 
                     severe bilateral                          nasal blockage 
                     nasal polyposis;       Placebo SC                                   LPCD 
                       symptomatic,                                                    Q2 2019 
                       despite SoC        56-week trial 
                                                                                   Data anticipated 
                                                                                       H2 2020 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
    Phase III             Severe         Fasenra 30mg Q8W          Annual                FPCD           Recruitment 
     MIRACLE           eosinophilic             SC           asthma-exacerbation       Q3 2017            ongoing 
                    asthma (aged 12-75                              rate 
                      years) despite        Placebo SC                             Data anticipated 
                        background                                                      2021+ 
                        controller        56-week trial 
                    medication, medium 
                    dose and high dose 
                    ICS plus LABA +/- 
                     chronic OCS (CN) 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
    Phase III          Patients with      Fasenra 100mg      Annualised rate of          FPCD           Recruitment 
     RESOLUTE        moderate to very         Q8W SC         moderate or severe        Q4 2019            ongoing 
                     severe COPD with                        COPD exacerbations 
                       a history of         Placebo SC                             Data anticipated 
                       frequent COPD                                                    2021+ 
                       exacerbations      56-week trial 
                       and elevated 
                     peripheral blood 
                        eosinophils 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
    Phase III              EGPA          Fasenra 30mg Q4W      Proportion of             FPCD           Recruitment 
      MANDARA                                               patients who achieve       Q4 2019            ongoing 
                                           Mepolizumab       remission, defined 
                                           3x100mg Q4W       as a score[60] =0     Data anticipated     Orphan Drug 
                                                            and an OCS dose <=4         2021+         Designation (US) 
                                          52-week trial      mg/day at weeks 36 
                                         with open-label           and 48 
                                            extension 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
    Phase III              HES           Fasenra 30mg Q4W       Time to HES              FPCD           Recruitment 
      NATRON                                                 worsening flare or        Q4 2019            ongoing 
                                            Placebo SC      any cytotoxic and/or 
                                                             immuno-suppressive    Data anticipated     Orphan Drug 
                                          24-week trial     therapy increase or         2021+         Designation (US) 
                                         with open-label      hospitalisation 
                                            extension 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
    Phase III          Eosinophilic      Fasenra 30mg SC       Proportion of       Data anticipated      Initiating 
      MESSINA          oesophagitis            Q4W            patients with a           2021+ 
                                                            histologic response                         Orphan Drug 
                                            Placebo SC                                                Designation (US) 
                                                                Changes from 
                                          24-week trial         baseline in 
                                         with open-label     dysphagia PRO[61] 
                                            extension 
                   -------------------  -----------------  ---------------------  -----------------  ----------------- 
 
   d)   Anifrolumab (lupus) 

In August 2019, AstraZeneca announced that the Phase III TULIP 2 trial for anifrolumab, a potential new medicine for the treatment of SLE, met its primary endpoint, achieving a statistically significant and clinically meaningful reduction in disease activity versus placebo, with both arms receiving SoC. The reduction was measured using the British Isles Lupus Assessment Group based Composite Lupus Assessment (BICLA) at week 52. The BICLA requires improvement in all organs with disease activity at baseline, with no new flares.

TULIP 2 was the second Phase III trial designed to assess the efficacy and safety of anifrolumab as a treatment for adults with moderate-to-severe SLE. The positive BICLA response in TULIP 2 was consistent with a positive pre-specified analysis of the previous Phase III TULIP 1 trial, which did not meet its primary endpoint of SLE Responder Index 4 (SRI4). Data from TULIP 1 and TULIP 2 will be presented in November 2019 at the American College of Rheumatology Annual Meeting in Atlanta, US.

Table 29: Key anifrolumab trials

 
      Trial            Population            Design              Primary            Timeline              Status 
                                                               endpoint(s) 
     Phase II          Moderate to       300mg i.v.[62]      Response in SLE          FPCD           Data read out Q2 
       MUSE          severely-active     anifrolumab Q4W    responder index,         Q1 2012               2015 
                     SLE patients on                         with sustained 
                     background SoC       1,000mg i.v.      reduction of OCSs          LPCD          Primary endpoint 
                                         anifrolumab Q4W      at six months          Q1 2014               met 
 
                                        Placebo i.v. Q4W                                                Fast Track 
                                                                                                     designation (US) 
                                          52-week trial 
                   ------------------  ------------------  ------------------  ------------------  ------------------- 
    Phase III          Moderate to         300mg i.v.        Response in SLE          FPCD           Data read out Q3 
      TULIP 1        severely-active     anifrolumab Q4W     responder index         Q3 2015               2018 
                     SLE patients on                           at week 52 
                     background SoC        150mg i.v.                                  LPCD          Primary endpoint 
                                         anifrolumab Q4W                             Q3 2017             not met 
 
                                        Placebo i.v. Q4W                                                Fast Track 
                                                                                                     designation (US) 
                                          52-week trial 
                   ------------------  ------------------  ------------------  ------------------  ------------------- 
    Phase III          Moderate to         300mg i.v.       Response in BICLA         FPCD           Data read out Q3 
      TULIP 2        severely-active     anifrolumab Q4W       at week 52            Q3 2015               2019 
                     SLE patients on 
                     background SoC     Placebo i.v. Q4W                               LPCD          Primary endpoint 
                                                                                     Q3 2017               met 
                                          52-week trial 
                                                                                                        Fast Track 
                                                                                                     designation (US) 
                   ------------------  ------------------  ------------------  ------------------  ------------------- 
    Phase III          Moderate to         300mg i.v.       Long-term safety          FPCD             Recruitment 
  TULIP LTE([63])    severely active     anifrolumab Q4W                             Q2 2016            completed 
                     SLE patients on 
                     background SoC     Placebo i.v. Q4W                               LPCD             Fast Track 
                        who have                                                     Q4 2018         designation (US) 
                    completed a Phase    152-week trial 
                           III                                                   Data anticipated 
                    anifrolumab trial                                                 2021+ 
                   ------------------  ------------------  ------------------  ------------------  ------------------- 
     Phase II       SLE patients with    150mg SC every         PK([64])              FPCD 
    NCT02962960      high interferon       other week          /PD([65]) ,           Q1 2017          Trial completed 
                    type I status and                            safety, 
                       active skin       300mg SC every       tolerability             LPCD          Data read out Q1 
                     manifestations        other week                                Q4 2017               2018 
 
                                        Placebo SC every 
                                           other week 
 
                                          52-week trial 
                   ------------------  ------------------  ------------------  ------------------  ------------------- 
     Phase II         Patients with      900 mg i.v. Q4W       Response in            FPCD             Recruitment 
     TULIP-LN1           active,          for 12 weeks,      proteinuria at          Q4 2015            completed 
                      proliferative      then 300mg i.v.         week 52 
                        LN([66])         anifrolumab Q4W                               LPCD 
                                          for 36 weeks                               Q4 2018 
 
                                           300mg i.v.                            Data anticipated 
                                         anifrolumab Q4W                               2021 
 
                                        Placebo i.v. Q4W 
 
                                          52-week trial 
                   ------------------  ------------------  ------------------  ------------------  ------------------- 
 

For more details on the development pipeline, including anticipated timelines for regulatory submission/acceptances, please refer to the latest Clinical Trials Appendix available on astrazeneca.com.

Condensed consolidated statement of comprehensive income - YTD 2019

 
                                                            2019      2018 
 For the nine months ended 30 September                      $m        $m 
                                                                    -------- 
 Product Sales                                             17,315    15,281 
 Collaboration Revenue                                       405       392 
 
 Total Revenue                                             17,720    15,673 
 Cost of sales                                             (3,543)   (3,299) 
 
 Gross Profit                                              14,177    12,374 
 Distribution costs                                         (247)     (238) 
 Research and development expense                          (3,968)   (3,920) 
 Selling, general and administrative costs                 (8,656)   (7,431) 
 Other operating income and expense                         1,041     1,525 
 
 Operating profit                                           2,347     2,310 
 Finance income                                              133       112 
 Finance expense                                           (1,081)   (1,082) 
 Share of after-tax losses in associates and joint 
  ventures                                                  (91)      (77) 
 
 Profit before tax                                          1,308     1,263 
 Taxation                                                   (358)     (222) 
 
 Profit for the period                                       950      1,041 
 
 Other comprehensive income 
 Items that will not be reclassified to profit or 
  loss 
 Remeasurement of the defined benefit pension liability     (151)      138 
 Net (losses)/gains on equity investments measured 
  at fair value through other comprehensive income          (136)      159 
 Fair-value movements related to own credit risk on 
  bonds designated as fair-value through profit or 
  loss                                                       (1)        3 
 Tax on items that will not be reclassified to profit 
  or loss                                                    21       (65) 
                                                            (267)      235 
 
 Items that may be reclassified subsequently to profit 
  or loss 
 Foreign exchange arising on consolidation                  (385)     (351) 
 Foreign exchange arising on designating borrowings 
  in net investment hedges                                  (491)     (449) 
 Fair-value movements on cash flow hedges                   (156)       5 
 Fair-value movements on cash flow hedges transferred 
  to profit or loss                                          109       72 
 Fair-value movements on derivatives designated in 
  net investment hedges                                      35         7 
 Costs of hedging                                           (35)      (36) 
 Tax on items that may be reclassified subsequently 
  to profit or loss                                          62        39 
                                                            (861)     (713) 
 
 Other comprehensive loss for the period, net of tax       (1,128)    (478) 
 Total comprehensive (loss)/income for the period           (178)      563 
 
 Profit attributable to: 
 Owners of the Parent                                       1,022     1,121 
 Non-controlling interests                                  (72)      (80) 
                                                             950      1,041 
 
 Total comprehensive income attributable to: 
 Owners of the Parent                                       (107)      644 
 Non-controlling interests                                  (71)      (81) 
                                                            (178)      563 
 
 Basic earnings per $0.25 Ordinary Share                    $0.79     $0.88 
 Diluted earnings per $0.25 Ordinary Share                  $0.79     $0.88 
 
 Weighted average number of Ordinary Shares in issue 
  (millions)                                                1,297     1,267 
 Diluted weighted average number of Ordinary Shares 
  in issue (millions)                                       1,297     1,267 
                                                          --------  -------- 
 

Condensed consolidated statement of comprehensive income - Q3 2019

 
                                                            2019      2018 
 For the quarter ended 30 September                          $m        $m 
                                                                    -------- 
 Product Sales                                              6,132     5,266 
 Collaboration Revenue                                       274       74 
 
 Total Revenue                                              6,406     5,340 
 Cost of sales                                             (1,351)   (1,153) 
 
 Gross Profit                                               5,055     4,187 
 Distribution costs                                         (88)      (73) 
 Research and development expense                          (1,346)   (1,279) 
 Selling, general and administrative costs                 (3,199)   (2,423) 
 Other operating income and expense                          335       439 
 
 Operating profit                                            757       851 
 Finance income                                              37        34 
 Finance expense                                            (353)     (364) 
 Share of after-tax losses in associates and joint 
  ventures                                                  (32)      (44) 
 
 Profit before tax                                           409       477 
 Taxation                                                   (129)     (71) 
 
 Profit for the period                                       280       406 
 
 Other comprehensive income 
 Items that will not be reclassified to profit 
  or loss 
 Remeasurement of the defined benefit pension liability      96       (49) 
 Net (losses)/gains on equity investments measured 
  at fair value through other comprehensive income          (82)        3 
 Fair-value movements related to own credit risk 
  on bonds designated as fair value through profit 
  or loss                                                     1         5 
 Tax on items that will not be reclassified to 
  profit or loss                                              4         2 
                                                             19       (39) 
 
 Items that may be reclassified subsequently to 
  profit or loss 
 Foreign exchange arising on consolidation                  (299)     (67) 
 Foreign exchange arising on designating borrowings 
  in net investment hedges                                  (305)      67 
 Fair-value movements on cash flow hedges                   (113)     (14) 
 Fair-value movements on cash flow hedges transferred 
  to profit or loss                                          95         3 
 Fair-value movements on derivatives designated 
  in net investment hedges                                   44        11 
 Costs of hedging                                           (38)       (3) 
 Tax on items that may be reclassified subsequently 
  to profit or loss                                          42       (16) 
                                                            (574)     (19) 
 
 Other comprehensive loss for the period, net of 
  tax                                                       (555)     (58) 
 Total comprehensive (loss)/income for the period           (275)      348 
 
 Profit attributable to: 
 Owners of the Parent                                        299       431 
 Non-controlling interests                                  (19)      (25) 
                                                             280       406 
 
 Total comprehensive income attributable to: 
 Owners of the Parent                                       (257)      374 
 Non-controlling interests                                  (18)      (26) 
                                                            (275)      348 
 
 Basic earnings per $0.25 Ordinary Share                    $0.23     $0.34 
 Diluted earnings per $0.25 Ordinary Share                  $0.23     $0.34 
 
 Weighted average number of Ordinary Shares in 
  issue (millions)                                          1,312     1,267 
 Diluted weighted average number of Ordinary Shares 
  in issue (millions)                                       1,312     1,267 
                                                          --------  -------- 
 

Condensed consolidated statement of financial position

 
                                                   At 30       At 31       At 30 
                                                  Sep 2019    Dec 2018    Sep 2018 
                                                    $m          $m          $m 
                                                ----------  ----------  ---------- 
 Assets 
 Non-current assets 
 Property, plant and equipment                     7,317       7,421       7,591 
 Right-of-use assets                                690          -           - 
 Goodwill                                         11,595      11,707      11,729 
 Intangible assets                                21,454      21,959      24,418 
 Investments in associates and joint ventures       43          89          110 
 Other investments                                 1,293        833        1,124 
 Derivative financial instruments                   56          157         449 
 Other receivables                                  384         515         708 
 Deferred tax assets                               2,554       2,379       2,206 
==============================================  ==========  ==========  ========== 
                                                  45,386      45,060      48,335 
==============================================  ==========  ==========  ========== 
 Current assets 
 Inventories                                       3,129       2,890       3,027 
 Trade and other receivables                       5,279       5,574       5,509 
 Other investments                                  813         849         808 
 Derivative financial instruments                    9          258         34 
 Intangible assets                                  95           -           - 
 Income tax receivable                              228         207         310 
 Cash and cash equivalents                         3,967       4,831       3,420 
 Assets held for sale                                -          982          - 
==============================================  ==========  ==========  ========== 
                                                  13,520      15,591      13,108 
==============================================  ==========  ==========  ========== 
 Total assets                                     58,906      60,651      61,443 
==============================================  ==========  ==========  ========== 
 
 Liabilities 
 Current liabilities 
 Interest-bearing loans and borrowings             (228)      (1,754)     (2,491) 
 Lease liabilities                                 (349)         -           - 
 Trade and other payables                        (12,538)    (12,841)    (10,992) 
 Derivative financial instruments                  (26)        (27)        (33) 
 Provisions                                        (401)       (506)       (508) 
 Income tax payable                               (1,234)     (1,164)     (1,224) 
==============================================  ==========  ==========  ========== 
                                                 (14,776)    (16,292)    (15,248) 
==============================================  ==========  ==========  ========== 
 Non-current liabilities 
 Interest-bearing loans and borrowings           (17,218)    (17,359)    (18,422) 
 Lease liabilities                                 (363)         -           - 
 Derivative financial instruments                  (55)         (4)         (2) 
 Deferred tax liabilities                         (2,595)     (3,286)     (3,685) 
 Retirement benefit obligations                   (2,392)     (2,511)     (2,267) 
 Provisions                                        (990)       (385)       (393) 
 Other payables                                   (6,848)     (6,770)     (7,889) 
==============================================  ==========  ==========  ========== 
                                                 (30,461)    (30,315)    (32,658) 
==============================================  ==========  ==========  ========== 
 Total liabilities                               (45,237)    (46,607)    (47,906) 
==============================================  ==========  ==========  ========== 
 Net assets                                       13,669      14,044      13,537 
==============================================  ==========  ==========  ========== 
 Equity 
 Capital and reserves attributable to equity 
  holders of the Parent 
 Share capital                                      328         317         317 
 Share premium account                             7,919       4,427       4,417 
 Other reserves                                    2,052       2,041       2,040 
 Retained earnings                                 1,865       5,683       5,162 
==============================================  ==========  ==========  ========== 
                                                  12,164      12,468      11,936 
==============================================  ==========  ==========  ========== 
 Non-controlling interests                         1,505       1,576       1,601 
==============================================  ==========  ==========  ========== 
 Total equity                                     13,669      14,044      13,537 
                                                ----------  ----------  ---------- 
 

Condensed consolidated statement of changes in equity

 
                           Share      Share       Other     Retained    Total attributable   Non-controlling    Total 
                           capital    premium    reserves    earnings        to owners          interests       equity 
                                      account                              of the parent 
                             $m         $m         $m          $m               $m                 $m            $m 
                         ---------  ---------  ----------  ----------  -------------------  ----------------  -------- 
 At 1 Jan 2018              317       4,393       2,029       8,221           14,960              1,682        16,642 
 
 Adoption of new 
  accounting standards       -          -           -         (91)             (91)                 -           (91) 
 Profit for the 
  period                     -          -           -         1,121           1,121               (80)          1,041 
 Other comprehensive 
  loss                       -          -           -         (477)           (477)                (1)          (478) 
 Transfer to other 
  reserves                   -          -          11         (11)              -                   -             - 
 Transactions with 
  owners: 
 Dividends                   -          -           -        (3,542)         (3,542)                -          (3,542) 
 Issue of Ordinary 
  Shares                     -          24          -           -               24                  -            24 
 Share-based payments 
  change for the 
  period                     -          -           -          151             151                  -            151 
 Settlement of 
  share plan awards          -          -           -         (210)           (210)                 -           (210) 
 
 Net movement                -          24         11        (3,059)         (3,024)              (81)         (3,105) 
 
 At 30 Sep 2018             317       4,417       2,040       5,162           11,936              1,601        13,537 
 
 At 1 Jan 2019              317       4,427       2,041       5,683           12,468              1,576        14,044 
 
 Adoption of new 
  accounting 
  standards[67]              -          -           -          54               54                  -            54 
 Profit for the 
  period                     -          -           -         1,022           1,022               (72)           950 
 Other comprehensive 
  loss                       -          -           -        (1,129)         (1,129)                1          (1,128) 
 Transfer to other 
  reserves                   -          -          11         (11)              -                   -             - 
 Transactions with 
  owners: 
 Dividends                   -          -           -        (3,583)         (3,583)                -          (3,583) 
 Issue of Ordinary 
  Shares[68]                 11       3,492         -           -             3,503                 -           3,503 
 Share-based payments 
  for the period             -          -           -          154             154                  -            154 
 Settlement of 
  share awards               -          -           -         (325)           (325)                 -           (325) 
 
 Net movements               11       3,492        11        (3,818)          (304)               (71)          (375) 
 
 At 30 Sep 2019             328       7,919       2,052       1,865           12,164              1,505        13,669 
                         ---------  ---------  ----------  ----------  -------------------  ----------------  -------- 
 

Condensed consolidated statement of cash flows - YTD 2019

 
                                                          2019      2018 
 For the nine months ended 30 September                    $m        $m 
                                                        --------  -------- 
 Cash flows from operating activities 
 Profit before tax                                        1,308     1,263 
 Finance income and expense                                948       970 
 Share of after-tax losses of associates and 
  joint ventures                                           91        77 
 Depreciation, amortisation and impairment                2,119     2,091 
 Increase in working capital and short-term 
  provisions                                              (812)    (1,741) 
 Gains on disposal of intangible assets                   (833)     (975) 
 Fair value movements on contingent consideration 
  arising from business combinations                      (13)      (88) 
 Non-cash and other movements                              326      (340) 
 
 Cash generated from operations                           3,134     1,257 
 Interest paid                                            (575)     (457) 
 Tax paid                                                 (965)     (406) 
 
 Net cash inflow from operating activities                1,594      394 
 
 Cash flows from investing activities 
 Payment of contingent consideration from business 
  combinations                                            (487)     (247) 
 Purchase of property, plant and equipment                (659)     (728) 
 Disposal of property, plant and equipment                 31        12 
 Purchase of intangible assets                           (1,416)    (234) 
 Disposal of intangible assets                            1,400      842 
 Movement in profit-participation liability[69]            150        - 
 Purchase of non-current asset investments                 (6)      (46) 
 Disposal of non-current asset investments                 18        24 
 Movement in short-term investments and fixed 
  deposits                                                 196       434 
 Payments to associates and joint ventures                (49)      (172) 
 Interest received                                         107       151 
 
 Net cash (outflow)/inflow from investing activities      (715)      36 
 
 Net cash inflow before financing activities               879       430 
 
 Cash flows from financing activities 
 Proceeds from issue of share capital                     3,503      24 
 Issue of loans                                            500      2,974 
 Repayment of loans                                      (1,500)      - 
 Dividends paid                                          (3,592)   (3,484) 
 Hedge contracts relating to dividend payments              4       (67) 
 Repayment of obligations under leases                    (131)       - 
 Movement in short-term borrowings                        (555)      241 
 
 Net cash outflow from financing activities              (1,771)    (312) 
 
 Net (decrease)/increase in cash and cash equivalents 
  in the period                                           (892)      118 
 Cash and cash equivalents at the beginning 
  of the period                                           4,671     3,172 
 Exchange rate effects                                      -       (28) 
 
 Cash and cash equivalents at the end of the 
  period                                                  3,779     3,262 
 
 Cash and cash equivalents consist of: 
 Cash and cash equivalents                                3,967     3,420 
 Overdrafts                                               (188)     (158) 
 
                                                          3,779     3,262 
                                                        --------  -------- 
 

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 nine months ended 30 September 2019 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB) and adopted by the EU.

The unaudited condensed consolidated Interim Financial Statements for the nine months ended 30 September 2019 were approved by the Board of directors on 24 October 2019.

The annual financial statements of the Group are prepared in accordance with IFRSs as issued by the IASB and adopted by the EU. Except as noted below, 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 2018. In addition, from 1 January 2019, AstraZeneca elected to early adopt the October 2018 update to IFRS 3, which changed the definition of a business. The EU has not yet endorsed this update to IFRS 3, but it is considered highly probable that the amendment will be endorsed during 2019 before its effective date of 1 January 2020 with early adoption permitted. The change in definition of a business within IFRS 3 allowed the Group to apply the optional concentration test to perform a simplified assessment of whether an acquired set of activities and assets is or is not a business on a transaction by transaction basis. It is considered that adopting this amendment will provide more reliable and comparable information about certain transactions as it provides more consistency in accounting for substantially similar transactions that under the previous definition may have been accounted for in different ways despite limited differences in substance.

IFRS 16

IFRS 16 'Leases' is effective for accounting periods beginning on or after 1 January 2019 and replaces IAS 17 'Leases'. It eliminates the classification of leases as either operating leases or finance leases and, instead, introduces a single lessee accounting model. The adoption of IFRS 16 resulted in the Group recognising lease liabilities, and corresponding 'right-of-use' assets for arrangements that were previously classified as operating leases.

The Group's principal lease arrangements are for property, most notably a portfolio of office premises, and for a global car fleet, utilised primarily by our sales and marketing teams. The Group has adopted IFRS 16 using a modified retrospective approach with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings at 1 January 2019. The standard permits a choice on initial adoption, on a lease-by-lease basis, to measure the right-of-use asset at either its carrying amount as if IFRS 16 had been applied since the commencement of the lease, or an amount equal to the lease liability, adjusted for accruals or prepayments. The Group has elected to measure the right-of-use asset equal to the lease liability, with the result of no net impact on opening retained earnings and no restatement of prior period comparatives.

Initial adoption resulted in the recognition of right-of-use assets of $722m and lease liabilities of $720m. The weighted average incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 3%.

The Group is using one or more practical expedients on transition to leases previously classified as operating leases, including electing to not apply the retrospective treatment to leases for which the term ends within 12 months of initial application, electing to apply a single discount rate to portfolios of leases with similar characteristics, reliance on previous assessments on whether arrangements contain a lease and whether leases are onerous, excluding initial direct costs from the initial measurement of the right-of-use asset, and using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

Key judgements made in calculating the initial impact of adoption include determining the lease term where extension or termination options exist. In such instances, all facts and circumstances that may create an economic incentive to exercise an extension option, or not exercise a termination option, have been considered to determine the lease term. Extension periods (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Estimates include calculating the discount rate which is based on the incremental borrowing rate.

The Group is applying IFRS 16's low-value and short-term exemptions. While the IFRS 16 opening lease liability is calculated differently from the previous operating lease commitment calculated under the previous standard, there are no material differences between the positions. The adoption of IFRS 16 has had no impact on the Group's net cash flows, although a presentation change has been reflected whereby cash outflows of $131m are now presented as financing, instead of operating. There is an immaterial benefit to Operating profit and a corresponding increase in Finance expense from the presentation of a portion of lease costs as interest costs. Profit before tax, taxation and EPS have not been significantly impacted.

IFRIC 23

IFRIC 23 'Uncertainty Over Income Tax Treatments' is effective for accounting periods beginning on or after 1 January 2019 and provides further clarification on how to apply the recognition and measurement requirements in IAS 12 'Income Taxes'. It is applicable where there is uncertainty over income tax treatments. The EU endorsed IFRIC 23 on 24 October 2018. The adoption of IFRIC 23 has principally resulted in an adjustment in the value of tax liabilities because IFRIC 23 requires the Group to measure the effect of uncertainty on income tax positions using either the most likely amount or the expected value amount depending on which method is expected to better reflect the resolution of the uncertainty.

The Group has retrospectively applied IFRIC 23 from 1 January 2019 recognising the cumulative effect of initially applying the interpretation as decreases to income tax payable of $51m and to trade and other payables of $3m, and a corresponding adjustment to the opening balance of retained earnings of $54m. There is no restatement of the comparative information as permitted in the interpretation.

Collaboration Revenue

Effective from 1 January 2019, the Group updated the presentation of an element of Total Revenue within the Statement of Comprehensive Income and changed the classification of some income to reflect the increasing importance of collaborations to AstraZeneca. Historically, Externalisation Revenue formed part of Total Revenue and only included income arising from collaborative transactions involving AstraZeneca's medicines, whether internally developed or previously acquired. Such income included upfront consideration, milestones receipts, profit share income and royalties, as well as other income from collaborations. The updated category of Collaboration Revenue includes all income previously included within Externalisation Revenue, as well as income of a similar nature arising from transactions where AstraZeneca has acquired an interest in a medicine and as part of the acquisition entered into an active collaboration with the seller. This change is a result of the growing importance of collaborations to AstraZeneca. Income arising from all collaborations, other than product sales, will be recognised within the Collaboration Revenue element of Total Revenue. Historically there has been no collaboration income arising from such acquisitions, and therefore no prior year restatement of financial results is required as a result of this change.

Income from royalties and disposals of assets and businesses, where the Group does not retain a significant element of continued interest, continue to be recorded in Other Operating Income and Expense.

Legal proceedings

The information contained in Note 5 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2018.

Going concern

The Group has considerable financial resources available. As at 30 September 2019 the Group has $8.1bn in financial resources (cash balances of $4.0bn and undrawn committed bank facilities of $4.1bn, of which $3.4bn is available until April 2022, $0.5bn is available until November 2020 (extendable to November 2021) and $0.2bn is available until December 2019 (extendable to December 2020), with only $0.6bn 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 government price interventions in response to budgetary constraints are expected to continue to adversely affect revenues in many of the mature markets. The Group, however, anticipates 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, the going concern basis has been adopted in these Interim Financial Statements.

Financial information

The comparative figures for the financial year ended 31 December 2018 are not the Group'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; their report 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 nine months ended 30 September 2019 is stated after charging restructuring costs of $351m ($271m for the nine months ended 30 September 2018). These have been charged to profit as follows:

 
                                        YTD 2019   YTD 2018   Q3 2019   Q3 2018 
                                           $m         $m        $m        $m 
                                       ---------  ---------  --------  -------- 
 Cost of sales                            122         77        70        22 
 Research and development 
  expense                                  82         95        18        37 
 Selling, general and administrative 
  costs                                   147        110        37        26 
 Other operating income and 
  expense                                  -         (11)        -        (1) 
 
 Total                                    351        271        125       84 
-------------------------------------             ---------  --------  -------- 
 
   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. The Group monitors net debt as part of its capital management policy as described in Note 27 of the Annual Report and Form 20-F Information 2018. Net debt is a non-GAAP financial measure.

 
                              At 1 Jan      Adoption      Cash    Non-cash    Exchange      At 30 
                                2019         of new        Flow    & Other    Movements    Sep 2019 
                                           accounting 
                                          standards[70] 
                                 $m            $m          $m        $m          $m          $m 
                             ---------  ---------------  ------  ---------  -----------  ---------- 
 Non-current instalments 
  of loans                    (17,359)         -            -       (15)        156       (17,218) 
 Non-current instalments 
  of leases                      -           (557)          -       189          5          (363) 
 
 Total long-term debt         (17,359)       (557)          -       174         161       (17,581) 
 
 Current instalments 
  of loans                     (999)           -          1,000     (1)          -            - 
 Current instalments 
  of leases                      -           (163)         149     (338)         3          (349) 
 Commercial paper              (211)           -           211       -           -            - 
 Bank collateral               (384)           -           347       -           -          (37) 
 Other short-term 
  borrowings excluding 
  overdrafts                     -             -           (3)       -           -           (3) 
 Overdraft                     (160)           -          (34)       -           6          (188) 
 
 Total current debt           (1,754)        (163)        1,670    (339)         9          (577) 
 
 Gross borrowings             (19,113)       (720)        1,670    (165)        170       (18,158) 
 
 Net derivative financial 
  instruments                   384            -          (214)    (186)         -          (16) 
 
 Net borrowings               (18,729)       (720)        1,456    (351)        170       (18,174) 
 
 Cash and cash equivalents     4,831           -          (858)      -          (6)         3,967 
 Other investments 
  - current                     849            -           14       (47)        (3)          813 
 Other investments 
  - non-current                  46            -            -        50          -           96 
 Cash and investments          5,726           -          (844)      3          (9)         4,876 
 
 Net debt                     (13,003)       (720)         612     (348)        161       (13,298) 
---------------------------             ---------------  ------             -----------  ---------- 
 

Non-cash movements in the period include fair-value adjustments under IFRS 9.

Other investments - non-current are included within the balance of $1,293m (31 December 2018: $833m) in the Statement of Financial Position. The equivalent GAAP measure to net debt is 'liabilities arising from financing activities' which excludes the amounts for cash and overdrafts, other investments and non-financing derivatives shown above and includes the Acerta Pharma put-option liability of $2,072m (31 December 2018: $1,838m) shown in non-current other payables.

   4   Financial instruments 

As detailed in the Group's most recent annual financial statements, the principal financial instruments consist of derivative financial instruments, other investments, trade and other receivables, cash and cash equivalents, trade and other payables, leases and interest-bearing loans and borrowings.

There have been no changes of significance to the categorisation or fair-value hierarchy classification of our financial instruments from those detailed in the Notes to the Group Financial Statements in the Group's Annual Report and Form 20-F Information 2018.

The Group holds certain equity investments that are categorised as Level 3 in the fair-value hierarchy and for which fair-value gains of $63m have been recognised in the nine months to 30 September 2019. These are presented in Net gains on equity investments measured at fair value through other comprehensive income in the Condensed Consolidated Statement of Comprehensive Income.

Financial instruments measured at fair value include $2,106m of other investments, $2,635m held in money market funds, $336m of loans designated at fair value through profit or loss, $329m of loans designated in a fair value hedge relationship and ($16m) of derivatives as at 30 September 2019. The total fair value of interest-bearing loans and borrowings at 30 September 2019, which have a carrying value of $18,158m in the Condensed Consolidated Statement of Financial Position, was $20,614m. 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 
                       2019      2019    2019    2018 
                       $m        $m      $m      $m 
                   ----------  ------  ------  ------ 
 At 1 January         3,983     1,123   5,106   5,534 
 Settlements          (337)     (150)   (487)   (247) 
 Revaluations           -       (13)    (13)     38 
 Discount unwind       216       53      269     313 
 
 At 30 September      3,862     1,013   4,875   5,638 
-----------------              ------  ------  ------ 
 

Contingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability of success, consideration of potential delays and the expected levels of future revenues.

The contingent consideration balance relating to BMS's share of Global Diabetes Alliance of $3,862m (31 December 2018: $3,983m) would increase/decrease by $386m with an increase/decrease in sales of 10% as compared with the current estimates.

   5   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 2018 and the Interim Financial Statements for the six months ended 30 June 2019 (the Disclosures). Unless noted otherwise below or in the Disclosures, no provisions have been established in respect of the claims discussed below.

As discussed in the 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 the Company is able to make a reasonable estimate of the loss, AstraZeneca records the loss absorbed or makes a provision for the best estimate of the expected loss.

The position could change over time and the estimates that AstraZeneca has made, and upon which the Company has 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 Disclosures and herein.

AstraZeneca has full confidence in, and will vigorously defend and enforce, its intellectual property.

Matters disclosed in respect of the third quarter of 2019 and to 24 October 2019

Patent litigation

Calquence

As previously disclosed, in November 2017, Pharmacyclics LLC (Pharmacyclics, a company in the AbbVie group) filed a patent infringement lawsuit in the US District Court for the District of Delaware (the District Court) against Acerta Pharma and AstraZeneca relating to Calquence. In April 2018, AstraZeneca and Acerta Pharma filed a complaint in the District Court against Pharmacyclics and AbbVie, Inc. alleging that their medicine, ibrutinib, infringes a US patent owned by Acerta Pharma. In November 2018, Janssen Biotech, Inc. intervened as a defendant. In October 2019, the parties agreed to settle these proceedings. A provision has been taken.

Brilinta

Patent proceedings outside the US

As previously reported, in Canada, in October 2018, Taro Pharmaceuticals Inc. (Taro) challenged the patents listed on the Canadian Patent Register with reference to Brilinta. AstraZeneca commenced an infringement action against Taro in November 2018. The action was discontinued in September 2019 after Taro withdrew its challenge.

Symbicort

US patent proceedings

As previously disclosed in May 2019, AstraZeneca filed a Second Amended Complaint in the Abbreviated NDA (ANDA) litigation pending in the US District Court for the District of Delaware against Mylan Pharmaceuticals Inc. (Mylan) and 3M Company alleging infringement of US Patent No. 10,166,247 (the '247 patent). In October 2019, Mylan sent AstraZeneca a Paragraph IV notice relating to its ANDA in which Mylan asserts that its proposed generic product does not infringe the '247 patent and/or that the '247 patent is invalid and/or unenforceable.

In October 2019, the US District Court for the District of Delaware transferred the Delaware action with Mylan and 3M Company to the US District Court for the Northern District of West Virginia.

Product-liability litigation

Farxiga and Xigduo XR

AstraZeneca has been named as a defendant in individual plaintiff lawsuits claiming physical injury, including Fournier's Gangrene and necrotising fasciitis, from treatment with Farxiga and/or Xigduo XR.

Nexium and Losec/Prilosec

Canada proceedings

As previously disclosed, in Canada, in July and August 2017, AstraZeneca was served with three putative class action lawsuits. Two of the lawsuits seek authorisation to represent individual residents in Canada who allegedly suffered kidney injuries from the use of proton pump inhibitors, including Nexium and Losec. In August 2019, the third lawsuit, filed in Quebec, was dismissed.

Commercial litigation

Amplimmune

As previously disclosed, in June 2017, AstraZeneca was served with a lawsuit filed by the stockholders' agents for Amplimmune, Inc (Amplimmune) in Delaware State Court that alleges, among other things, breaches of contractual obligations relating to a 2013 merger agreement between AstraZeneca and Amplimmune. The court will hold a summary judgment hearing on 13 November 2019, and trial is scheduled for February 2020.

Seroquel XR Antitrust Litigation

In the US, in August and September 2019, AstraZeneca was named in several related, putative class-action lawsuits brought in federal court in the Southern District of New York that were purportedly brought on behalf of classes of direct purchasers or end payors of Seroquel XR and that allege AstraZeneca and generic-medicine manufacturers violated antitrust laws when settling patent litigation related to Seroquel XR.

Taxation

As previously disclosed, on 25 April 2019, the EC issued its decision on the State aid review of UK Controlled Foreign Company Group Financing Exemption. The EC concluded that part of the UK measures was unlawful and incompatible State aid and have instructed recovery of the State aid. The UK Government and the Company have appealed the decision. Given the complexities of the ruling, tax legislation and the ongoing appeal, the Company has been unable to estimate reliably any additional liability at this time; this is not, however, expected to be material.

   6   Subsequent events 

In October 2019, an amendment to the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect, changing certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire the remaining outstanding shares of Acerta Pharma if the options are exercised. The payments would be made in similar annual instalments commencing at the earliest from 2022 through to 2024, subject to the options being exercised. The changes to the terms have been reflected in the assumptions used to calculate the amortised cost of the option liability as at 30 September 2019 of $2,072m (30 June 2019: $2,057m, 31 December 2018: $1,838m).

In October 2019, AstraZeneca entered into settlement agreements with Pharmacyclics LLC (a company in the AbbVie Group) and Janssen Biotech, Inc resolving all patent litigation between the parties relating to Calquence and ibrutinib. A provision was established as at 30 September 2019.

   7   Product Sales analysis - YTD 2019 

The table below provides an analysis of year-on-year Product Sales, with Actual and CER growth rates reflecting year-on-year growth. Due to rounding, the sum of a number of dollar values and percentages may not agree to totals.

 
                                World              Emerging Markets            US                Europe              Established RoW 
                       -----------------------  ----------------------  ---------------  ----------------------  ---------------------- 
                         YTD     Actual   CER     YTD    Actual   CER     YTD    Actual    YTD    Actual   CER     YTD    Actual   CER 
                         2019                     2019                    2019             2019                    2019 
                          $m       %       %      $m       %       %      $m       %       $m       %       %      $m       %       % 
                       -------  -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 Oncology 
 Tagrisso               2,305      82      86     553     n/m     n/m     909      57      337      52      61     506     n/m     n/m 
 Imfinzi                1,045     n/m     n/m     18      n/m     n/m     759     n/m      115     n/m     n/m     153     n/m     n/m 
 Lynparza                847       93      98     101     n/m     n/m     432      86      208      52      61     106     n/m     n/m 
 Iressa                  343      (16)    (11)    227      -       6      14      (31)     61      (29)    (24)    42      (45)    (44) 
 Calquence               108      n/m     n/m      1       -       -      108     n/m       -       -       -       -       -       - 
---------------------  -------  -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 Faslodex*               726      (4)     (1)     145      31      41     311     (21)     168     (2)      4      102      23      23 
 Zoladex*                617       8       15     380      21      30      5      (16)     100      1       7      133     (13)    (11) 
 Arimidex*               174       5       10     118      12      19      -       -       21      (7)     (1)     34      (7)     (6) 
 Casodex*                157       2       6      99       10      17      -      (89)     12      (19)    (13)    46      (7)     (6) 
 Others                   68      (26)    (24)    22      (9)     (5)      -       -        5      (4)      2      42      (34)    (34) 
 Total Oncology         6,393      50      54    1,665     42      51    2,538     57     1,027     34      42    1,163     66      67 
---------------------           -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 BioPharmaceuticals: 
 CVRM 
 Farxiga                1,124      13      17     339      40      50     396     (6)      273      18      26     115      14      16 
 Brilinta               1,153      22      26     348      50      59     500      22      262      2       9      43      (4)      1 
 Bydureon                410      (8)     (7)      9      (2)      2      340     (5)      50      (19)    (14)    11      (29)    (25) 
 Onglyza                 396       -       4      131      8       17     174      7       53      (22)    (17)    38      (15)    (12) 
 Byetta                   83      (12)    (10)     8       33      49     52      (6)      14      (35)    (30)     9      (21)    (17) 
 Other diabetes           36       33      35      1      (36)    (34)    28       21       7      n/m     n/m      1       -       - 
 Lokelma                  6        -       -       -       -       -       6       -        -       -       -       -       -       - 
---------------------  -------  -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 Crestor*                982      (9)     (5)     621     (2)      4      88      (31)     112     (30)    (25)    162      -       1 
 Seloken/Toprol-XL*      570       3       10     513      4       12     30      (9)      18       16      16      8      (15)    (11) 
 Atacand*                161      (20)    (16)    117      3       10      8      (28)     22      (65)    (65)    14      (4)      2 
 Others                  199      (13)    (9)     139     (11)    (7)      -      (96)     46      (16)    (12)    15      (23)    (21) 
 BioPharmaceuticals: 
  total 
  CVRM                  5,121      3       7     2,225     11      18    1,622     1       858     (8)     (3)     416     (2)      1 
---------------------           -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 BioPharmaceuticals: 
 Respiratory 
 Symbicort              1,783     (7)     (4)     401      10      18     585     (11)     508     (14)    (8)     289     (9)     (7) 
 Pulmicort              1,053      17      23     845      23      29     89       10      60      (12)    (6)     60       -       1 
 Fasenra                 498      n/m     n/m      4       -       -      343     n/m      81      n/m     n/m     70      n/m     n/m 
 Daliresp/Daxas          157       16      17      3      (22)    (17)    134      21      19      (4)      2       1       -       3 
 Duaklir                  55      (24)    (20)     1      (4)      -       -       -       53      (24)    (20)     1      (38)    (36) 
 Tudorza/Eklira           50      (45)    (42)     1      (5)     (3)      1      (98)     44      (18)    (13)     4      (44)    (42) 
 Bevespi                  30       32      32      -       -       -      30       31       -       -       -       -       -       - 
 Breztri                  1        -       -       -       -       -       -       -        -       -       -       1       -       - 
 Others                  226      (3)      2      164      85      96      2      (58)     54      (49)    (47)     6      (82)    (81) 
 BioPharmaceuticals: 
  total 
  Respiratory           3,854      9       13    1,419     24      31    1,183     15      819     (11)    (6)     433     (4)     (2) 
---------------------           -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 Other medicines 
 Nexium                 1,130     (14)    (11)    574      10      16     175     (30)     49      (73)    (71)    332     (8)     (7) 
 Synagis                 295      (29)    (29)     -       -       -      36      (73)     258     (8)     (8)      -       -       - 
 Losec/Prilosec          217       3       8      145      11      17      7       38      45      (12)    (7)     20      (19)    (17) 
 Seroquel XR/IR          151      (51)    (49)    41      (61)    (60)    27      (71)     67      (17)    (13)    15      (34)    (33) 
 Movantik/Moventig        72      (15)    (15)     -       -       -      70      (14)      2      (11)    (12)     -      n/m     n/m 
 Others                   83      (54)    (48)     4      (89)    (93)    29       23      44      (36)    (33)     5      (89)    (70) 
 Total other 
  medicines             1,948     (22)    (20)    765     (4)      1      345     (41)     465     (30)    (28)    373     (19)    (16) 
---------------------           -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 Total Product Sales    17,315     13      17    6,074     19      26    5,688     18     3,168    (4)      2     2,385     17      19 
---------------------           -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  ------  -------  ----- 
 

*Legacy medicines.

   8   Product Sales analysis - Q3 2019 

The table below provides an analysis of year-on-year Product Sales, with Actual and CER growth rates reflecting year-on-year growth. Due to rounding, the sum of a number of dollar values and percentages may not agree to totals.

 
                                World             Emerging Markets            US                Europe             Established RoW 
                       ----------------------  ----------------------  ---------------  ----------------------  --------------------- 
                         Q3     Actual   CER     Q3     Actual   CER     Q3     Actual    Q3     Actual   CER     Q3    Actual   CER 
                         2019                    2019                    2019             2019                   2019 
                         $m       %       %      $m       %       %      $m       %       $m       %       %      $m      %       % 
                       ------  -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 Oncology 
 Tagrisso                891      76      78     224     n/m     n/m     350      47      125      51      56    192     n/m     n/m 
 Imfinzi                 412     n/m     n/m      6      n/m     n/m     286      68      55      n/m     n/m     65     n/m     n/m 
 Lynparza                327      94      96     42      n/m     n/m     170     n/m      77       54      60     38      92      92 
 Iressa                  91      (31)    (29)    63      (19)    (17)     6      (4)      15      (39)    (34)    8      (67)    (69) 
 Calquence               44      n/m     n/m      1       -       -      44      (89)      -       -       -      -       -       - 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 Faslodex                205     (20)    (19)    49       23      25     60      (55)     58       9       14     38      27      24 
 Zoladex                 226      17      21     145      31      36      1      (65)     35       11      19     46     (7)     (7) 
 Arimidex                63       15      17     46       32      32      -       -        6      (20)    (4)     10     (13)    (12) 
 Casodex                 52       3       5      34       11      14      -      n/m       4       5       24     14     (8)     (13) 
 Others                  20      (27)    (26)     6      (27)    (28)     -       -        2      (11)     4      13     (30)    (29) 
 Total Oncology         2,334     46      48     617      45      49     917      40      377      44      51    423      67      63 
---------------------          -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 BioPharmaceuticals: 
 CVRM 
 Farxiga                 398      12      14     133      56      59     126     (18)     95       21      26     43      17      18 
 Brilinta                416      24      27     131      56      61     179      18      91       7       12     15      2       3 
 Bydureon                127     (16)    (16)     2      (7)     (90)    106     (16)     16      (15)    (3)     3      (48)    (34) 
 Onglyza                 127     (9)     (7)     44       10      18     54      (16)     17      (18)    (16)    12     (23)    (22) 
 Byetta                  28      (19)    (18)     4       98      48     17      (28)      4      (27)    (11)    3      (10)     5 
 Other diabetes          14       38      44      1      (36)    (34)    11       34       3      n/m     n/m     -       -       - 
 Lokelma                  4       -       -       -       -       -       4       -        -       -       -      -       -       - 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 Crestor                 337     (4)     (2)     214      3       7      34      (11)     37      (23)    (22)    53     (12)    (15) 
 Seloken/Toprol-XL       177     (1)      3      164      -       3       4      (41)      5       37      38     3       16      29 
 Atacand                 55      (15)    (11)    41       8       12      2       88       7      (67)    (67)    5       9       27 
 Others                  65      (8)     (6)     44      (5)     (8)      -       -       16      (16)    (2)     6      (5)      - 
 BioPharmaceuticals: 
  total 
  CVRM                  1,749     3       6      777      16      19     537     (6)      292     (3)      2     143     (4)     (3) 
---------------------          -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 BioPharmaceuticals: 
 Respiratory 
 Symbicort               613     (1)      1      138      12      18     203     (6)      154     (13)    (10)   118      15      14 
 Pulmicort               337      28      31     269      31      35     33       50      16      (13)    (6)     20      10      8 
 Fasenra                 202     n/m     n/m      3       -       -      135     n/m      36      n/m     n/m     28      84      80 
 Daliresp/Daxas          53       2       3       1      (63)    (57)    45       4        7       20      25     -       -       - 
 Duaklir                 18      (21)    (19)     1       -       -       -       -       17      (26)    (20)    -       -       - 
 Tudorza/Eklira          17      (4)      -       2       95      97      1      n/m      13      (17)    (13)    1      (27)    (19) 
 Bevespi                 10       4       4       -       -       -      10       1        -       -       -      -       -       - 
 Breztri                  1       -       -       -       -       -       -       -        -       -       -      1       -       - 
 Others                  67      (5)      -      49       76      80      1      (77)     15      (52)    (46)    2      (75)    (72) 
 BioPharmaceuticals: 
  total 
  Respiratory           1,319     15      18     463      28      32     427      20      258     (8)     (3)    171      17      16 
---------------------          -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 Other medicines 
 Nexium                  374     (11)    (10)    205      13      18     56      (10)     17      (71)    (65)    96     (21)    (24) 
 Synagis                 146     (11)    (11)     -       -       -       1      (83)     144     (7)     (7)     -       -       - 
 Losec/Prilosec          73       10      13     49       15      18      3      n/m      14      (9)     (3)     7      (8)     (2) 
 Seroquel XR/IR          82       5       6      17       32      27     40       15      20      (21)    (14)    4      (15)    (13) 
 Movantik/Moventig       25      (22)    (23)     -      n/m     n/m     25      (17)      -      n/m     n/m     -      n/m     n/m 
 Others                  31      (55)    (59)    (6)     n/m      12     18       9       18      (46)    (81)    -      (99)    n/m 
 Total other 
  medicines              731     (12)    (11)    266      10      19     144     (6)      213     (26)    (29)   108     (27)    (31) 
---------------------          -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 Total Product Sales    6,132     16      18    2,123     25      29    2,025     17     1,139     1       4     845      21      19 
---------------------          -------  -----  ------  -------  -----  ------  -------  ------  -------  -----  -----  -------  ----- 
 
   9   Sequential quarterly Product Sales - 2019 

The table below provides an analysis of sequential quarterly Product Sales, with Actual and CER growth rates reflecting quarter-on-quarter growth. Due to rounding, the sum of a number of dollar values and percentages may not agree to totals.

 
                         Q1     Actual   CER     Q2     Actual   CER      Q3     Actual   CER      Q4     Actual   CER 
                        2019                    2019                     2019                     2019 
                         $m       %       %      $m       %       %       $m       %       %       $m       %       % 
                       ------  -------  -----  ------  -------  -----  -------  -------  -----  -------  -------  ---- 
 Oncology 
 Tagrisso                630      6       5      784      24      25     891       14      13 
 Imfinzi                 295      13      13     338      15      15     412       22      22 
 Lynparza                237      13      13     283      19      20     327       16      15 
 Iressa                  134      20      19     118     (12)    (13)     91      (23)    (22) 
 Calquence               29       21      21     35       21      21      44       27      27 
---------------------  ------  -------  -----  ------  -------  -----  -------  -------  -----  -------  -------  ---- 
 Faslodex                254     (6)     (6)     267      5       5      205      (23)    (23) 
 Zoladex                 194      7       5      197      2       2      226       15      16 
 Arimidex                51       11      9      60       18      20      63       5       5 
 Casodex                 48       4       4      57       19      17      52      (8)     (6) 
 Others                  20      (13)    (17)    28       40      42      20      (27)    (22) 
 Total Oncology         1,892     7       6     2,167     15      15    2,334      8       8 
---------------------          -------  -----  ------  -------  -----  -------  -------  -----  -------  -------  ---- 
 BioPharmaceuticals: 
 CVRM 
 Farxiga                 349     (12)    (12)    377      8       9      398       5       5 
 Brilinta                348     (7)     (8)     389      12      12     416       7       8 
 Onglyza                 153      3       3      116     (24)    (24)    127       9       11 
 Bydureon                142      3       3      141     (1)     (1)     127      (10)    (10) 
 Byetta                  30      (6)     (6)     25      (17)    (17)     28       10      13 
 Other diabetes          11      (8)     (17)    11       -       8       14       26      22 
 Lokelma                  -       -       -       2       -       -       4       n/m     n/m 
 Crestor                 335     (5)     (6)     310     (7)     (7)     337       9       9 
 Seloken/Toprol-XL       225      41      39     168     (25)    (25)    177       6       8 
 Atacand                 50      (14)    (15)    56       12      14      55      (1)     (1) 
 Others                  71      (3)     (5)     63      (11)    (8)      65       4       2 
 BioPharmaceuticals: 
  total 
  CVRM                  1,714    (2)     (3)    1,658    (3)     (3)    1,749      5       6 
---------------------          -------  -----  ------  -------  -----  -------  -------  -----  -------  -------  ---- 
 BioPharmaceuticals: 
 Respiratory 
 Symbicort               585     (8)     (8)     585      -       1      613       5       4 
 Pulmicort               383     (2)     (2)     333     (13)    (13)    337       1       3 
 Fasenra                 129      3       2      167      29      30     202       21      21 
 Daliresp/Daxas          48      (11)    (13)    56       17      19      53      (6)     (7) 
 Tudorza/Eklira          20       5       -      13      (35)    (30)     17       33      37 
 Duaklir                 20      (9)     (9)     17      (15)    (14)     18       7       5 
 Bevespi                 10       -       -      10       -       -       10       4       8 
 Breztri                  -       -       -       -       -       -       1       n/m     n/m 
 Others                  88      (20)    (19)    71      (19)    (23)     67      (6)     (2) 
 BioPharmaceuticals: 
  total 
  Respiratory           1,283    (6)     (6)    1,252    (2)     (2)    1,319      5       6 
---------------------          -------  -----  ------  -------  -----  -------  -------  -----  -------  -------  ---- 
 Other medicines 
 Nexium                  363     (7)      3      393      8       9      374      (5)     (4) 
 Losec/Prilosec          76       27      27     68      (11)    (11)     73       8       9 
 Synagis                 53      (79)    (90)    96       81      81     146       52      53 
 Seroquel XR/IR          37      (34)    (32)    32      (14)    (13)     82      n/m     n/m 
 Movantik/Moventig       25       -       -      22      (12)    (12)     25       13      13 
 Others                  22      (29)    (54)    30       36      50      31       4      (8) 
 Total other 
  medicines              576     (35)    (41)    641      11      13     731       14      14 
 Total Product Sales    5,465    (5)     (7)    5,718     5       5     6,132      7       8 
 

10 Sequential quarterly Product Sales - 2018

The table below provides an analysis of sequential quarterly Product Sales, with Actual and CER growth rates reflecting quarter-on-quarter growth.

 
                         Q1     Actual   CER     Q2     Actual   CER     Q3     Actual   CER      Q4     Actual   CER 
                        2018                    2018                    2018                     2018 
                         $m       %       %      $m       %       %      $m       %       %       $m       %       % 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Oncology 
 Tagrisso                338      11      10     422      25      25     506      20      23     594       17      19 
 Iressa                  132      2      (1)     143      8       8      131     (8)     (5)     112      (15)    (13) 
 Lynparza                119      19      18     150      26      26     169      13      15     209       24      25 
 Imfinzi                 62      n/m     n/m     122      98      98     187      53      52     262       40      41 
 Calquence                8      n/m     n/m     12       51      50     18       50      50      24       33      33 
 Faslodex                254      7       5      247     (3)     (2)     258      4       7      269       4       5 
 Zoladex                 184     (2)     (4)     192      4       5      194      1       6      182      (6)     (2) 
 Arimidex                54      (5)     (7)     57       6       6      55      (4)      -       46      (16)    (13) 
 Casodex                 52      (4)     (6)     52       -      (2)     51      (2)      4       46      (10)    (8) 
 Others                  27      (7)     (20)    37       37      50     28      (24)    (22)     23      (18)     13 
 Total Oncology         1,230     10      8     1,434     17      17    1,597     11      14    1,767      11      13 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 BioPharmaceuticals: 
 CVRM 
 Farxiga                 299     (10)    (11)    340      14      15     355      4       7      397       12      13 
 Brilinta                293     (2)     (4)     316      8       9      336      6       9      376       12      13 
 Onglyza                 129     (28)    (29)    126     (2)     (2)     140      11      14     148       6       8 
 Bydureon                139     (5)     (5)     155      12      11     152     (2)     (1)     138      (9)     (9) 
 Byetta                  31      (35)    (38)    29      (7)     (3)     34       17      17      32      (6)     (6) 
 Symlin                   9      (31)    (31)     7      (22)    (22)     8       14      14      10       25      25 
 Crestor                 389     (35)    (36)    338     (13)    (12)    353      4       8      353       -       2 
 Seloken/Toprol-XL       200      19      18     173     (14)    (13)    179      3       10     160      (11)    (8) 
 Atacand                 71      (3)     (3)     66      (8)     (8)     65      (2)      5       58      (11)    (9) 
 Others                  85       6       4      73      (13)    (11)    73      (3)      -       75       3       3 
 BioPharmaceuticals: 
  total CVRM            1,645    (15)    (17)   1,623    (1)      -     1,695     4       8     1,747      3       5 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 BioPharmaceuticals: 
 Respiratory 
 Symbicort               634     (16)    (17)    672      6       6      619     (8)     (5)     636       3       4 
 Pulmicort               346     (7)     (8)     287     (17)    (17)    264     (8)     (4)     389       47      51 
 Daliresp/Daxas          38      (28)    (30)    45       19      22     52       16      18      54       4       4 
 Tudorza/Eklira          34      (19)    (21)    39       15      15     18      (54)    (59)     19       6       11 
 Duaklir                 28       22      17     22      (22)    (19)    23       5       5       22      (4)      - 
 Fasenra                 21      n/m     n/m     65      n/m     n/m     86       32      34     125       45      46 
 Bevespi                  5      (38)    (38)     8       61      60     10       25      25      10       -       - 
 Others                  75      (12)    (20)    88       17      16     70      (20)    (13)    107       53      57 
 BioPharmaceuticals: 
  total Respiratory     1,181    (11)    (13)   1,226     4       4     1,142    (7)     (4)    1,362      19      21 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Other medicines 
 Nexium                  448      5       3      442     (1)     (1)     422     (5)      97     390      (8)     (7) 
 Synagis                 224     (4)     (4)     26      (89)    (88)    164     n/m     n/m     251       53     n/m 
 Seroquel XR/IR          97      n/m      40     131      35      37     77      (41)     6       56      (27)    (31) 
 Losec/Prilosec          69       -      (4)     76       10      11     67      (12)     85      60      (10)    (8) 
 Movantik/Moventig       28      (7)     (7)     24      (14)    (14)    32       33     n/m      25      (22)    (22) 
 FluMist/Fluenz           -      n/m     n/m      -      n/m     n/m     35      n/m     n/m      75      n/m     n/m 
 Others                  63      (62)    (45)    48      (25)    (26)    35      (27)    n/m      35       -       31 
 Total other 
  medicines              929     (15)    (16)    747     (20)    (20)    832      12      15     892       7       22 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Total Product Sales    4,985    (9)     (11)   5,030     1       1     5,266     5       8     5,768      10      13 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 

11 Sequential quarterly Product Sales - 2017

The table below provides an analysis of sequential quarterly Product Sales, with Actual and CER growth rates reflecting quarter-on-quarter growth.

 
                         Q1     Actual   CER     Q2     Actual   CER     Q3     Actual   CER      Q4     Actual   CER 
                        2017                    2017                    2017                     2017 
                         $m       %       %      $m       %       %      $m       %       %       $m       %       % 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Oncology 
 Tagrisso                171      16      19     232      36      34     248      7       5      304       23      22 
 Iressa                  124      5       8      137      10      9      137      -      (1)     130      (5)     (6) 
 Lynparza                57      (8)     (6)     59       4       2      81       37      33     100       23      22 
 Imfinzi                  -       -       -       1      n/m     n/m      -       -       -       18      n/m     n/m 
 Calquence                -       -       -       -       -       -       -       -       -       3       n/m     n/m 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Faslodex                214     (4)     (3)     248      16      15     241     (3)     (5)     238      (1)     (1) 
 Zoladex                 185     (21)    (12)    178     (4)     (5)     185      4       2      187       1       1 
 Casodex                 56      (7)     (2)     54      (4)     (3)     51      (6)     (9)      54       6       6 
 Arimidex                52      (9)     (7)     54       4       4      54       -      (2)      57       6       6 
 Others                  26      (10)    (3)     30       15      7      29      (3)     (3)      29       -       3 
 Total Oncology          885     (5)      -      993      12      11    1,026     3       1     1,120      9       9 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 BioPharmaceuticals: 
 total CVRM 
 Brilinta                224     (5)     (4)     272      21      20     284      4       3      299       5       5 
 Farxiga                 207     (13)    (13)    250      21      20     285      14      11     332       16      16 
 Onglyza                 154      3       3      150     (3)     (3)     127     (15)    (17)    180       42      42 
 Bydureon                153      8       8      146     (5)     (5)     128     (12)    (14)    147       15      15 
 Byetta                  46      (16)    (16)    43      (7)     (7)     39      (9)     (9)      48       23      23 
 Symlin                  14       -       -      11      (21)    (21)    10      (9)     (9)      13       30      30 
 Qtern                    -       -       -       -       -       -       -       -       -       5       n/m     n/m 
---------------------  ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Crestor                 631      -       3      560     (11)    (12)    580      4       2      594       2       2 
 Seloken/Toprol-XL       186      4       6      181     (3)     (4)     160     (12)    (14)    168       5       4 
 Atacand                 75      (7)     (6)     72      (4)     (5)     80       11      8       73      (9)     (6) 
 Others                  89       3       12     90       1      (3)     80      (11)    (12)     80       -      (4) 
 BioPharmaceuticals: 
  total CVRM            1,779    (2)      -     1,775     -      (1)    1,773     -      (2)    1,939      9       9 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 BioPharmaceuticals: 
 Respiratory 
 Symbicort               677     (9)     (7)     706      4       3      668     (5)     (7)     752       13      12 
 Pulmicort               337      17      19     226     (33)    (33)    242      7       5      371       53      51 
 Daliresp/Daxas          44       7       10     48       9       9      53       10      8       53       -      (2) 
 Tudorza/Eklira          37       3       6      34      (8)     (8)     37       9       6       42       14      14 
 Duaklir                 19       -       -      16      (16)    (15)    21       31      18      23       10      10 
 Bevespi                  1      (67)    (50)     3      n/m     n/m      4       33      33      8       100     100 
 Others                  66      (20)    (19)    66       -      (4)     67       2       4       85       27      30 
 BioPharmaceuticals: 
  total Respiratory     1,181    (2)     (1)    1,099    (7)     (8)    1,092    (1)     (3)    1,334      22      21 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Other medicines 
 Nexium                  461     (6)     (4)     595      29      28     469     (21)    (22)    427      (9)     (9) 
 Synagis                 230     (24)    (24)    70      (70)    (70)    153     n/m     n/m     234       53      53 
 Seroquel XR/IR          104     (36)    (35)    135      30      30     113     (16)    (16)    156       38      36 
 Losec/Prilosec          68       15      18     68       -      (3)     66      (3)     (6)      69       5       5 
 Movantik/Moventig       30       15      15     32       7       7      30      (6)     (6)      30       -       - 
 FluMist/Fluenz           -      n/m     n/m      -       -       -      20      n/m     n/m      58      190     175 
 Others                  105     (48)     44     173      65     n/m     140     (19)    (21)    120      (14)    (15) 
 Total other 
  medicines              998     (24)    (22)   1,073     8       7      991     (8)     (9)    1,094      10      10 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 Total Product Sales    4,843    (8)     (6)    4,940     2       1     4,882    (1)     (3)    5,487      12      12 
                       ------  -------  -----  ------  -------  -----  ------  -------  -----  -------  -------  ----- 
 
 
Shareholder information 
Announcement of full year and fourth       14 February 2020 
 quarter 2019 results: 
 
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 second interim dividend for 2019, payable on 30 March 2020, will be 28 February 2020. The ex-dividend date will be 27 February 2020. The record date for the first interim dividend for 2020, payable on 14 September 2020, will be 14 August 2020. The ex-dividend date will be 13 August 2020.

Trade marks of the AstraZeneca group of companies appear throughout this document in italics. Medical publications also appear throughout the document in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol are all trade marks of the AstraZeneca group of companies. Trade marks of companies other than AstraZeneca that appear in this document include Atacand, owned by AstraZeneca or Cheplapharm (depending on geography); Duaklir, Eklira and Tudorza, trade marks of Almirall, S.A.; Epanova, a trade mark of Chrysalis Pharma AG.; Linzess, owned by Ironwood Pharmaceuticals, Inc.; Lumoxiti, owned by Innate Pharma S.A.; Synagis, owned by Arexis AB or AbbVie Inc. (depending on geography).

Information on or accessible through AstraZeneca's websites, including astrazeneca.com, does not form part of and is not incorporated into this announcement.

 
Addresses for correspondence 
 
Registered office      Registrar and     Swedish Central         US depositary 
                        transfer office   Securities Depository   Citibank Shareholder 
                                                                  Services 
1 Francis Crick        Equiniti Limited  Euroclear Sweden        PO Box 43077 
 Avenue                 Aspect House      AB PO Box 191           Providence 
 Cambridge Biomedical   Spencer Road      SE-101 23 Stockholm     RI 02940-3077 
 Campus                 Lancing 
 Cambridge              West Sussex 
 CB2 0AA                BN99 6DA 
United Kingdom         United Kingdom    Sweden                  United States 
 
+44 (0) 20 3749                          +46 (0) 8 402           +1 (888) 697 
 5000                  0800 389 1580      9000                    8018 
                       +44 (0) 121 415                           +1 (781) 575 
                        7033                                      4555 
                                                                 citibank@shareholders-online.com 
 

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; effects of patent litigation in respect of IP rights; 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 that R&D will not yield new products that achieve commercial success; the risk of delay to new product launches; the risk that new products do not perform as we expect; the risk that strategic alliances and acquisitions, including licensing and collaborations, will be unsuccessful; the risks from pressures resulting from generic competition; the impact of competition, price controls and price reductions; the risks associated with developing our business in emerging markets; the risk of illegal trade in our products; the difficulties of obtaining and maintaining regulatory approvals for products; the risk that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects; the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring programmes; the risk of failure of critical processes affecting business continuity; economic, regulatory and political pressures to limit or reduce the cost of our products; failure to achieve strategic priorities or to meet targets, expectations, guidance or indications; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage; the risk of substantial product liability claims; 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 impact of increasing implementation and enforcement of more stringent anti-bribery and anti-corruption legislation; taxation risks; exchange rate fluctuations; 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 impact of failing to attract and retain key personnel and to successfully engage with our employees; the risk of misuse of social medial platforms and new technology; and the risk of failure of information technology and cybercrime. Nothing in this document, or any related presentation / webcast, should be construed as a profit forecast.

[20] Small cell lung cancer.

[21] Neurofibromatosis type 1.

[22] Merck & Co., Inc., Kenilworth, NJ, US, known as MSD outside the US and Canada.

[23] Substitution of threonine (T) with methionine (M) at position 790 of exon 20 mutation.

[24] Gross Profit Margin, as a percentage of Product Sales, reflects Gross Profit derived from Product Sales, divided by Product Sales.

[25] EBITDA is a non-GAAP financial measure and is defined in the operating and financial review.

[26] Other adjustments include fair-value adjustments relating to contingent consideration on business combinations and other acquisition-related liabilities, discount unwind on acquisition-related liabilities (see Note 4) and provision movements related to certain legal matters (see Note 5).

[27] Each of the measures in the Core column in the above table are non-GAAP financial measures. See the operating and financial review for related definitions.

[28] Movements in Gross Profit Margin are expressed in percentage points.

[29] Reflects the adoption of IFRS 16 (see Note 1).

[30] As per the Q4 2018 results announcement.

[31] Based on average daily spot rates in FY 2018.

[32] Based on average daily spot rates from 1 January 2019 to 30 September 2019.

[33] Other currencies include AUD, BRL, CAD, KRW and RUB.

[34] These priorities were determined, along with a set of nine foundational areas, through a materiality assessment with external and internal stakeholders, respectively. Combined, they ensure the maximum possible benefit to patients, the Company, broader society and the planet. AstraZeneca's sustainability priorities, foundations and commitments align with the United Nations Sustainable Development Goals (SDG), and, in particular, SDG three for 'Good Health'.

[35] EV100 is a global initiative bringing together forward-looking companies committed to accelerating the transition to electric vehicles and making electric transport the new normal by 2030.

[36] Phase II trial data, with potential for registration.

[37] Licensed to Innate Pharma in the US and EU for hairy cell leukaemia.

[38] Hazard ratio.

[39] Confidence interval.

[40] First patient commenced dosing.

[41] Last patient commenced dosing.

[42] Based on current expectations and event rates, data from the ADAURA trial can be expected in 2022.

[43] Conducted by the Canadian Cancer Trials Group.

[44] Bacillus Calmette-Guerin.

[45] Transarterial chemoembolisation.

[46] Conducted by the ARCAGY/Groupe d'Investigateurs National des Etudes des Cancers Ovariens et du sein.

[47] Conducted by the National Cancer Institute (US).

[48] Germline BRCAm.

[49] Homologous recombination repair mutated.

([50]) Included c.10,000 patients who had no prior index event and c.7,000 patients who had suffered an index event.

([51]) Quaque die, or once a day.

([52]) Major adverse cardiac events.

[53] Hospitalisation for heart failure.

[54] End-stage renal disease.

[55] Myocardial infarction.

[56] Bis in die, or twice a day.

[57] Quaque eight weeks, or every eight weeks.

[58] Subcutaneous.

[59] Oral corticosteroid.

[60] Birmingham Vasculitis Activity Score.

[61] Patient-reported outcomes.

[62] Intravenous.

[63] Long-term extension.

[64] Pharmacokinetics (the movement of medicines through the body).

[65] Pharmacodynamics (the body's biological response to medicines).

[66] Lupus nephritis.

[67] The Company adopted IFRIC 23 'Uncertainty over Income Tax Treatments' from 1 January 2019. See Note 1.

[68] On 2 April 2019, the Company completed an issue of 44,386,214 new ordinary shares of $0.25 each at a price of GBP60.50 per share, resulting in an increase in share capital of $11m and an increase in share premium of $3,479m, net of transaction costs of $22m.

[69] The profit-participation liability relates to the rights to participate in the future cashflows from the US profits or losses for nirsevimab and forms part of the consideration for the disposal of the US rights to Synagis to Sobi. This has been recognised as a financial liability and is presented in Other Payables within Non-Current Liabilities.

[70] The Company adopted IFRS 16 'Leases' from 1 January 2019. See Note 1.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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