TIDMAZN
RNS Number : 2394L
AstraZeneca PLC
29 April 2020
AstraZeneca PLC
29 April 2020 07:00 BST
First-quarter 2020 results
Robust results in unprecedented times; leveraging scientific
expertise in the fight against COVID-19
AstraZeneca delivered a quarter of strong revenue and profit
growth, reflecting the immense efforts of supply-chain, commercial
and other colleagues around the world to get vital medicines to
patients. As part of the fight, the Company has rapidly responded
to the pandemic, firstly in China and then globally.
Pascal Soriot, Chief Executive Officer, commented:
"Our focus ensured another quarter of strong growth across every
therapy area and region. The new medicines performed extremely
well, and our pipeline continued to deliver. Standouts included
landmark news for Tagrisso, Farxiga and Koselugo, our latest
oncology medicine. The progress made on all fronts provides
confidence that we will, once again, meet our full-year
commitments.
I could not be prouder of how the AstraZeneca team has responded
to the challenges of COVID-19. We moved quickly to maintain
continuity of care, contribute to society, and use our scientific
expertise to fight the pandemic. We hope our efforts to protect
organs from damage, mitigate the cytokine storm and the associated
hyperinflammatory state, and target the virus prove to be
successful."
COVID-19
The Company donated nine million face masks to support
healthcare workers around the world, delivered in collaboration
with the World Economic Forum's COVID Action Platform. AstraZeneca
also contributed to the UK Government's testing effort with a
dedicated site in Cambridge operated in collaboration with the
University of Cambridge and GlaxoSmithKline plc (GSK), with a goal
to deliver 30,000 tests a day in May 2020.
The Company has mobilised research efforts to find new ways to
help target the virus, reduce the cytokine storm, arising from an
overactive immune response, and potentially protect organs. As part
of the effort to target the virus, the Company is identifying novel
SARS-CoV-2-neutralising monoclonal antibodies that can be used for
treatment, as well as a prophylaxis against viral infection.
AstraZeneca is evaluating the use of Calquence, approved in a
number of countries for the treatment of chronic lymphocytic
leukaemia, in the Phase II CALAVI trial, which is assessing the
suppression of the cytokine storm that inflames the lungs and other
organs of some COVID-19 patients. The Company is also looking at
protecting organs in the Phase III DARE-19 trial, assessing whether
Farxiga, an oral medicine that has demonstrated benefits in heart
failure and kidney disease, can potentially reduce organ failure.
The Company has also joined the UK Government's ACCORD-2
proof-of-concept clinical-trial platform, to speed the development
of medicines for patients with COVID-19.
Q1 2020 financial performance
Table 1: Financial summary
Q1 2020
--------------------------------------------- ------------------------
$m % change
------
Actual CER(1)
--------------------------------------------- ------ ------- -------
Total Revenue 6,354 16 17
---------------------------------------------
Product Sales 6,311 15 17
------ ------- -------
Collaboration Revenue 43 69 70
Reported(2) EPS(3) $0.59 27 33
Core(4) EPS $1.05 17 21
------ ------- -------
Of the growth at CER in Total Revenue, AstraZeneca estimates a
low-to-mid single-digit percentage benefit of short-term inventory
increases in the distribution channel, longer prescriptions and
improved treatment-regimen adherence by patients, as indirect
effects of the ongoing COVID-19 pandemic. This benefit is
anticipated to reverse in the coming months.
The new medicines(5) continued to perform especially well and
there was excellent progress from the pipeline, with several
regulatory approvals and particularly significant news regarding
the potential use of Tagrisso in the adjuvant treatment of EGFRm(6)
lung cancer, as well as Farxiga in chronic kidney disease.
Total Revenue growth of 16% (17% at CER) to $6,354m; this
included Product Sales of $6,311m (+15%, +17% at CER). Total
Revenue increased in the quarter across all three therapy areas(7)
and in every region. Highlights included:
- The performance of the new medicines, improving by 47% (49% at
CER) to $2,986m, included new-medicine growth in Emerging Markets
of 82% (87% at CER) to $658m. These medicines represented 47% of
Total Revenue (Q1 2019: 37%)
- Total Revenue growth across all therapy areas: Oncology +33%
(+34% at CER) to $2,518m, New CVRM(8) +7% (+8% at CER) to $1,102m
and Respiratory & Immunology +21% (+22% at CER) to $1,555m
- Total Revenue growth in every region: an increase in Emerging
Markets of 13% (16% at CER) to $2,273m, with China Total Revenue
growth of 14% (17% at CER) to $1,416m. Total Revenue in the US
increased by 16% in the quarter to $2,091m and in Europe by 22%
(25% at CER) to $1,204m; Japan Total Revenue increased by 10% (8%
at CER) to $553m
Broad Company response to COVID-19
AstraZeneca's priority during the COVID-19 global pandemic is to
continue to safely supply all of the Company's medicines to
millions of patients. A description of the specific impact on and
the actions by the Company regarding the pandemic is shown below;
for the latest AstraZeneca communications regarding COVID-19,
please click here.
a) Colleagues
Office-based colleagues are typically working from home; in a
growing number of countries that are potentially past the
pandemic's peak, however, colleagues have returned to the office,
in line with government guidelines. For supply-chain and research
and development (R&D) roles that cannot be performed from home,
AstraZeneca has put clear processes in place relating to social
distancing. In April 2020, the Company implemented voluntary
assessments of critical supply-chain and manufacturing colleagues
at three sites, using the Company's own laboratories, to rapidly
identify and isolate COVID-19 cases.
b) Supply chain
The Company did not see any material disruptions to its supply
chain in the period. AstraZeneca's manufacturing sites in China
returned to full capacity within weeks of the declared outbreak,
with little intervening impact on supply. The Company's supply
chain includes an effective inventory management policy for each
medicine, as well as robust business continuity plans (BCPs). These
plans seek to ensure that there are appropriate inventory levels of
active pharmaceutical ingredients and critical materials to ensure
manufacturing and supply continuity. AstraZeneca's approach to BCP
utilises various strategic measures, for example, inventory,
dual-supply processes, and operational agility.
Some medicines experienced particular growth in global demand in
the quarter, partly reflecting short-term inventory increases in
the distribution channel, as well as prescription-lengthening and
improved treatment-regimen adherence by patients. This growth in
the quarter was within the Company's fulfilment capability;
AstraZeneca is, however, closely monitoring fulfilment risks,
particularly within Respiratory & Immunology.
c) Sales and marketing
Interactions with healthcare professionals and organisations
have been significantly impacted and virtual meetings today,
especially in the US, Europe and Japan, remain predominant. As part
of the early response to the pandemic, AstraZeneca quickly expanded
its levels of digital activities, including:
- remote detailing to healthcare professionals
- collaborating with telemedicine providers and e-pharmacies
- investing in new platforms designed for communication with healthcare professionals
In a growing number of countries that are potentially past the
pandemic's peak, face-to-face meetings with healthcare
professionals have been increasingly reinitiated.
d) Clinical trials
AstraZeneca has focused on ensuring the continued safety of
patients in all of its ongoing clinical trials, while activating
continuity plans in order to minimise trial disruption from the
pandemic. Mitigation strategies included home-based treatment and
monitoring options, moving patient recruitment to less-affected
regions, and planning for accelerated recruitment once the pandemic
has receded. Having assessed the COVID-19 impact across the
pipeline, the Company does not expect material delays to
anticipated dates of late-stage and lifecycle-management news flow
in 2020 and 2021.
Impact on operations, performance and the Condensed Consolidated
Interim Financial Statements
The impact of COVID-19 on the Company's operations is highly
uncertain and cannot be predicted with confidence and the extent of
any adverse impact on AstraZeneca's operations will depend on the
global duration, extent and severity of the pandemic. To the extent
the pandemic adversely affects AstraZeneca operations and/or
performance, the Company expects it to have the effect of
heightening many of the risks described beginning on page 246 in
the Risk section of the Annual Report and Form 20-F Information
2019, such as those relating to the delivery of the pipeline or
launch of new medicines, the execution of the Company's commercial
strategy, the manufacturing and supply of medicines and reliance on
third-party goods and services.
In the current environment, the Directors have considered the
impact of a range of possible future COVID-19 related scenarios and
believe the Group retains sufficient liquidity to continue to
operate. As detailed in Note 1 of the Notes to the Interim
Financial Statements, the going-concern basis has been adopted in
these Condensed Consolidated Interim Financial Statements (Interim
Financial Statements). For an impact assessment on the Interim
Financial Statements, also see Note 1.
Guidance
The Company provides guidance for FY 2020 at CER on:
- Total Revenue, comprising Product Sales and Collaboration Revenue
- Core EPS
Guidance on Total Revenue and Core EPS reflects the changing
nature and growing strategic impact of Collaboration Revenue which,
over time, will primarily comprise potential income from existing
collaborations as follows:
- A share of gross profits derived from sales of Enhertu in
several markets, where those sales are recorded by Daiichi Sankyo
Company, Limited (Daiichi Sankyo)
- A share of gross profits derived from sales of roxadustat in
China, recorded by FibroGen Inc. (FibroGen)(9)
- Milestone revenue from the MSD(10) collaboration on Lynparza
- Smaller amounts of milestone and royalty revenue from other marketed and pipeline medicines
The guidance below is subject to the assumption that the global
impact of the COVID-19 pandemic lasts for several more months and
is based on recent trends in the business. The Company will monitor
closely the development of the pandemic and anticipates providing
an update at the H1 2020 results. Variations in performance between
quarters can be expected to continue.
Financial guidance for FY 2020 is unchanged. Total Revenue is
expected to increase by a high single-digit to a low double-digit
percentage and Core EPS is expected to increase by a mid- to
high-teens percentage. AstraZeneca recognises the heightened risks
and uncertainties from the impact of COVID-19 referred to
above.
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 any 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.
Indications
The Company provides indications for FY 2020 at CER:
- The Company is focused on improving operating leverage
- A Core Tax Rate of 18-22%. Variations in the Core Tax Rate
between quarters are anticipated to continue
- Capital Expenditure is expected to be broadly stable versus the prior year
Currency impact
If foreign-exchange rates for April to December 2020 were to
remain at the average of rates seen in the quarter, it is
anticipated that there would be a low single-digit adverse impact
on Total Revenue and Core EPS. In addition, the Company's
foreign-exchange rate sensitivity analysis is contained within the
operating and financial review.
Financial summary
- Total Revenue, comprising Product Sales and Collaboration
Revenue, increased by 16% in the quarter (17% at CER) to $6,354m.
Product Sales increased by 15% (17% at CER) to $6,311m, primarily
driven by the performance of the new medicines, as well as
Symbicort's double-digit growth at CER in every region
- The Reported and Core Gross Profit Margin(11) declined by two
percentage points in the quarter to 77% and 78% respectively. The
falls reflected the impact of one-off adjustments related to Group
inventory, the growth in profit share from the collaboration with
MSD in respect of Lynparza and an element of foreign-exchange
impact
- Reported Total Operating Expense increased by 9% in the
quarter (10% at CER) to $4,194m and represented 66% of Total
Revenue (Q1 2019: 70%); part of the rise, also reflected in Core
R&D Expense, was driven by the investment related to Enhertu.
Core Total Operating Expense increased by 7% (8% at CER) to $3,600m
and represented 57% of Total Revenue (Q1 2019: 61%); the increase
was also driven by SG&A Expense related to investment in
Oncology-medicine launches and AstraZeneca's further expansion in
China. In addition, Reported SG&A Expense was adversely
impacted by intangible asset impairments, including a $102m charge
relating to Bydureon
- The Reported Operating Profit Margin declined in the quarter
by one percentage point (stable at CER) to 19%; the Core Operating
Profit Margin also declined by one percentage point (stable at CER)
to 29%
- Reported EPS of $0.59 in the quarter, represented an increase
of 27% (33% at CER); this was despite an increase in the
weighted-average number of shares to 1,312m (Q1 2019: 1,267m). Core
EPS increased by 17% (21% at CER) to $1.05
Commercial summary
Oncology
Total Revenue increased by 33% in the quarter (34% at CER) to
$2,518m.
Table 2: Select Oncology medicine performances
Q1 2020
$m % change
----
Actual CER
---- -------- ----
Tagrisso : Product Sales 982 56 58
Imfinzi : Product Sales 462 57 57
Lynparza : Product Sales 397 67 69
Calquence : Product Sales 88 n/m(12) n/m
Enhertu : Collaboration Revenue 14 n/m n/m
---- -------- ----
Oncology Total Revenue increased in Emerging Markets by 45% (49%
at CER) to $711m.
New CVRM
Total Revenue increased by 7% in the quarter (8% at CER) to
$1,102m.
Table 3: Select New CVRM medicine performances
Q1 2020
$m % change
----
Actual CER
---- ------- -----
Farxiga : Total Revenue 407 16 19
Brilinta : Product Sales 408 17 19
Bydureon : Product Sales 100 (30) (29)
Lokelma : Product Sales 11 n/m n/m
Roxadustat: Collaboration Revenue 3 n/m n/m
---- ------- -----
New CVRM Total Revenue increased in Emerging Markets by 39% in
the quarter (43% at CER) to $332m.
Respiratory & Immunology
Total Revenue increased by 21% in the quarter (22% at CER) to
$1,555m.
Table 4: Select Respiratory & Immunology medicine
performances
Q1 2020
$m % change
----
Actual CER
---- ------- ----
Symbicort : Product Sales 790 35 36
Pulmicort : Product Sales 380 (1) -
Fasenra : Product Sales 199 54 55
---- ------- ----
Respiratory & Immunology Total Revenue increased in Emerging
Markets by 4% (6% at CER) to $540m.
Following the launch of an authorised-generic version of
Symbicort in the US in collaboration with Prasco, LLC (Prasco), US
sales of Symbicort grew by 76% in the quarter to $310m. The
performance partly reflected an element of inventory build by
Prasco.
Emerging Markets
As the Company's largest region, at 36% of Total Revenue,
Emerging Markets' Total Revenue increased by 13% in the quarter
(16% at CER) to $2,273m, including:
- A China Total Revenue increase of 14% (17% at CER) to $1,416m
- An ex-China Total Revenue increase of 12% (15% at CER) to $857m
Sustainability summary
Recent developments and progress against the Company's
sustainability priorities are reported below:
- Access to healthcare: during the period, AstraZeneca announced
a donation of nine million face masks to support healthcare workers
around the world as they respond to the COVID-19 global pandemic;
more than eight million masks have already been delivered. In
addition, AstraZeneca, GSK and the University of Cambridge
announced a collaboration to support the UK Government's
five-pillar plan to boost testing
- Environmental protection: to coincide with Earth Day on 22
April 2020, the Company announced a new one-year collaboration
focusing on water stewardship with World Wide Fund for Nature
Sweden, to identify opportunities to improve the Company's approach
and strategy towards water stewardship. AstraZeneca's longer-term
ambition is to implement Science-Based Targets for Water, once a
global methodology is available, to lead the way on water
stewardship for the pharmaceutical industry; including the
development of industry-specific tools to assess water risk in the
context of Pharmaceuticals in the Environment
- Ethics and transparency: since committing to providing greater
transparency around payments to healthcare professionals and
healthcare organisations at the 2018 Annual General Meeting, the
Company has further progressed this work during the period across
Canada, the Philippines and New Zealand, while continuing to
monitor the regulatory landscape in Argentina, Chile, India and
Morocco
A more extensive sustainability update is provided later in this
announcement.
Notes
The following notes refer to pages one to six.
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. Reported financial measures are the financial results
presented in accordance with International Financial Reporting
Standards (IFRS), as issued by the International Accounting
Standards Board and adopted by the EU. The UK is yet to announce
its IFRS endorsement authority and is anticipated to continue to
follow the EU endorsement process for the foreseeable future.
3. Earnings per share.
4. Core financial measures. These are non-GAAP financial
measures because, unlike Reported performance, they cannot be
derived directly from the information in the Group's Interim
Financial Statements. See the operating and financial review for a
definition of Core financial measures and a reconciliation of Core
to Reported financial measures.
5. Tagrisso, Imfinzi, Lynparza, Calquence, Enhertu, Farxiga,
Brilinta, Lokelma, roxadustat, Fasenra, Bevespi and Breztri. The
new medicines are pillars in the three therapy areas and are
important platforms for future growth. The Total Revenue of Enhertu
and roxadustat in the quarter entirely reflected Ongoing
Collaboration Revenue.
6. Epidermal growth factor receptor mutation.
7. Defined here as Oncology, New CVRM and Respiratory & Immunology.
8. New Cardiovascular (CV), Renal & Metabolism comprises Brilinta and Renal & Diabetes medicines.
9. FibroGen and AstraZeneca are collaborating on the development
and commercialisation of roxadustat in the US, China, and other
global markets. FibroGen and Astellas Pharma Inc. (Astellas) are
collaborating on the development and commercialisation of
roxadustat in territories including Japan, Europe, the Commonwealth
of Independent States, the Middle East and South Africa.
10. Merck & Co., Inc., Kenilworth, NJ, US, known as MSD
outside the US and Canada.
11. Gross Profit is defined as Total Revenue minus Cost of
Sales. The calculation of Reported and Core Gross Margin excludes
the impact of Collaboration Revenue and any associated costs,
thereby reflecting the underlying performance of Product Sales.
12. Not meaningful.
Table 5: Pipeline highlights
The following table highlights significant developments in the
late-stage pipeline since the prior results announcement:
Regulatory approvals
* Imfinzi - ES[11]-SCLC[12] (US)
* Enhertu - breast cancer (3rd line[13], HER2+[14])
(JP)
* Koselugo (selumetinib) - NF1[15] (US)
* Lokelma - hyperkalaemia (JP)
Regulatory submission acceptances and/or
submissions * Lynparza - prostate cancer (2nd line): regulatory
submission (JP)
* Koselugo - NF1: regulatory submission acceptance (EU)
Major Phase III data readouts or other significant
developments * Tagrisso - adjuvant NSCLC[16] (EGFRm): unblinded for
overwhelming efficacy
* Imfinzi - ES-SCLC: OS[17] confirmed
* Imfinzi + treme - ES-SCLC: primary endpoint not met
* Imfinzi +/- treme - bladder cancer (1st line[18]):
primary endpoints not met
* Lynparza - prostate cancer: secondary OS endpoint met
* Lynparza - pancreatic cancer: orphan designation (JP)
* cediranib - ovarian cancer (2nd line[19]): primary
endpoint not met
* Farxiga - CKD[20]: primary endpoint met early
-----------------------------------------------------------------
Table 6: 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
Q2 2020
* Imfinzi - ES-SCLC: regulatory submission (CN)
* Lynparza - ovarian cancer (1st line) (PAOLA-1):
regulatory decision (US)
* Lynparza - breast cancer (BRCAm[21]): regulatory
decision (CN)
* Lynparza - prostate cancer (2nd line): regulatory
decision (US)
* Enhertu - gastric cancer (3rd line, HER2+):
regulatory submission
* Forxiga - T2D[22] CVOT[23]: regulatory decision (CN)
* Farxiga - HF[24] CVOT: regulatory decision (US)
* Symbicort - mild asthma: regulatory submission (EU)
* Bevespi - COPD[25]: regulatory decision (CN)
-------------------------------------------------------------------
H2 2020
* Tagrisso - adjuvant NSCLC (EGFRm): regulatory
submission
* Imfinzi - unresectable[26], Stage III NSCLC
(PACIFIC-2): data readout
* Imfinzi - ES-SCLC: regulatory decision (EU, JP)
* Imfinzi +/- treme - liver cancer (1st line): data
readout
* Lynparza - ovarian cancer (1st line) (PAOLA-1):
regulatory decision (EU)
* Lynparza - ovarian cancer (3rd line, BRCAm):
regulatory submission (US)
* Lynparza - pancreatic cancer (1st line, BRCAm):
regulatory decision (EU)
* Lynparza - prostate cancer (2nd line): regulatory
decision (EU)
* Enhertu - breast cancer (3rd line, HER2+): regulatory
submission (EU)
* Calquence - CLL[27]: regulatory decision (EU)
* Forxiga - HF CVOT: regulatory decision (EU, JP, CN)
* Farxiga - CKD: regulatory submission
* Brilinta/Brilique - CAD[28]/T2D CVOT: regulatory
decision (US, EU)
* roxadustat - anaemia in CKD: regulatory decision (US)
* Symbicort - mild asthma: regulatory decision (CN)
* Fasenra - nasal polyposis[29]: data readout
* PT010 - COPD: regulatory decision (US, EU)
* PT027 - asthma: data readout
* tezepelumab - severe asthma: data readout
* anifrolumab - lupus (SLE[30]): regulatory submission
-------------------------------------------------------------------
2021
* Imfinzi - unresectable, Stage III NSCLC (PACIFIC-2):
regulatory submission
* Imfinzi - adjuvant NSCLC: data readout, regulatory
submission
* Imfinzi - liver cancer (locoregional): data readout,
regulatory submission
* Imfinzi +/- treme - NSCLC (1st line) (POSEIDON): data
readout (OS), regulatory submission
* Imfinzi +/- treme - liver cancer (1st line):
regulatory submission
* Imfinzi +/- treme - head & neck cancer (1st line):
data readout, regulatory submission
* Lynparza - adjuvant breast cancer: data readout,
regulatory submission
* Lynparza - prostate cancer (2nd line): regulatory
decision (JP)
* Lynparza - prostate cancer (1st line,
castration-resistant): data readout, regulatory
submission
* Enhertu - breast cancer (2nd line, HER2+): data
readout, regulatory submission
* Enhertu - breast cancer (3rd line, HER2+) (Phase
III): data readout
* Enhertu - breast cancer (HER2-low[31]): data readout
* Calquence - CLL: regulatory decision (JP)
* Koselugo - NF1: regulatory decision (EU)
* roxadustat - anaemia in myelodysplastic syndrome[32]:
data readout
* 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 11:45am UK time today. Details can be accessed via
astrazeneca.com.
Report calendar
The Company intends to publish its first-half and second-quarter
financial results on 30 July 2020.
AstraZeneca
AstraZeneca (LSE/STO/NYSE: AZN) 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 & Immunology. Based in
Cambridge, UK, 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.
Contacts
For details on how to contact the Investor Relations Team,
please click here. For Media contacts, click here.
Operating and financial review
All narrative on growth and results in this section is based on
actual exchange rates, and financial figures are in US$ millions
($m), unless stated otherwise. The performance shown in this
announcement covers the three-month period to 31 March 2020 (the
quarter or Q1 2020) compared to the three-month period to 31 March
2019 (Q1 2019) 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 Group's
Interim 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 Group 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 80 of the Annual Report and Form 20-F Information 2019.
Reference should be made to 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 in 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 7: Total Revenue by therapy area
Q1 2020
------------------------------------------------------- ----------------------------------
$m % change
-------------------------------------------------------
% of total Actual CER
-------------------------------------------------------
Oncology 2,518 40 33 34
BioPharmaceuticals 2,657 42 15 16
New CVRM 1,102 17 7 8
Respiratory & Immunology 1,555 24 21 22
Other medicines 1,179 19 (8) (6)
Total 6,354 100 16 17
------ ----------- ------- ----
Specialty-care medicines comprise all Oncology medicines,
Brilinta, Lokelma, roxadustat and Fasenra. At 49% of Total Revenue
(Q1 2019: 43%), specialty-care medicine Total Revenue increased by
32% in the quarter (34% at CER) to $3,139m.
Table 8: Top-ten medicines by Total Revenue
Medicine Therapy Area Q1 2020
$m % of total % change
------ -----------
Actual CER
------ ----------- ------- ----
Tagrisso Oncology 982 15 56 58
Symbicort Respiratory 790 12 35 36
Imfinzi Oncology 462 7 57 57
Brilinta CVRM 408 6 17 19
Farxiga CVRM 407 6 16 19
Lynparza Oncology 397 6 67 69
Pulmicort Respiratory 380 6 (1) -
Nexium Other medicines 348 5 (6) (5)
Crestor CVRM 302 5 (10) (8)
Zoladex Oncology 228 4 16 19
Total 4,704 74 26 28
------ ----------- ------- ----
Table 9: Collaboration Revenue
Q1 2020
$m % of total % change
--- -----------
Actual CER
--- ----------- ------- ----
Enhertu : profit share 14 33 n/m n/m
Roxadustat: profit share 3 7 n/m n/m
Other Ongoing Collaboration Revenue 26 60 4 5
Total 43 100 69 70
--- ----------- ------- ----
Other Ongoing Collaboration Revenue included Zoladex, Farxiga,
Nexium OTC and other royalties. No Initial Collaboration Revenue
was recorded in the quarter.
Total Revenue
The performance of the Company's medicines is shown below, with
a geographical split of Product Sales shown in Note 7.
Table 10: Therapy area and medicine performance
Therapy area Medicine Q1 2020
$m % of total % change
------ -----------
Actual CER
------ ----------- ------- -----
Product Sales: Oncology Tagrisso 982 16 56 58
Imfinzi 462 7 57 57
Lynparza 397 6 67 69
Calquence 88 1 n/m n/m
Zoladex 225 4 16 19
Faslodex 166 3 (35) (34)
Iressa 77 1 (42) (41)
Arimidex 50 1 (1) 1
Casodex 42 1 (12) (10)
Others 13 - (37) (36)
-------------------------------------------------------------------------------- ------ ----------- ------- -----
Total Oncology 2,502 40 32 34
-------------------------------------------------------------------------------- ------ ----------- ------- -----
Product Sales: BioPharmaceuticals -
CVRM Farxiga 405 6 16 19
---------------------------------------
Brilinta 408 6 17 19
Bydureon 100 2 (30) (29)
Onglyza 141 2 (8) (6)
Byetta 20 - (32) (31)
Other diabetes 13 - 16 18
Lokelma 11 - n/m n/m
Crestor 301 5 (10) (9)
Seloken /Toprol-XL 177 3 (21) (18)
Atacand 66 1 33 36
Others 59 1 (18) (17)
-------------------------------------------------------------------------------- ------ ----------- ------- -----
BioPharmaceuticals: total CVRM 1,701 27 (1) 1
-------------------------------------------------------------------------------- ------ ----------- ------- -----
Product Sales: BioPharmaceuticals -
Respiratory & Immunology Symbicort 790 13 35 36
Pulmicort 380 6 (1) -
Fasenra 199 3 54 55
Daliresp /Daxas 53 1 11 12
Bevespi 12 - 22 22
Breztri 4 - n/m n/m
Others 113 2 (11) (10)
-------------------------------------------------------------------------------- ------ ----------- ------- -----
BioPharmaceuticals: total Respiratory & Immunology 1,551 25 21 22
-------------------------------------------------------------------------------- ------ ----------- ------- -----
Product Sales: other medicines Nexium 338 5 (7) (6)
Synagis 85 1 61 61
Losec /Prilosec 54 1 (30) (28)
Seroquel XR /IR 36 1 (4) (3)
Others 44 1 (8) (7)
Total other medicines 557 9 (4) (3)
-------------------------------------------------------------------------------- ------ ----------- ------- -----
Total Product Sales 6,311 100 15 17
-------------------------------------------------------------------------------- ------ ----------- ------- -----
Total Collaboration Revenue 43 69 70
Total Revenue 6,354 16 17
-------------------------------------------------------------------------------- ------ ----------- ------- -----
Total Revenue summary
Oncology
Total Revenue of $2,518m in the quarter; an increase of 33% (34%
at CER). No Lynparza Collaboration Revenue was recorded in this
quarter. The performance of Enhertu was reflected in Collaboration
Revenue; no Product Sales of Enhertu were recorded in the
quarter.
Oncology Total Revenue represented 40% of overall Total Revenue
(Q1 2019: 35%).
Tagrisso
Tagrisso has received regulatory approval in 81 countries,
including the US, China, in the EU and Japan for the 1st-line
treatment of patients with EGFRm NSCLC. To date, reimbursement has
been granted in 20 countries, with further reimbursement decisions
anticipated throughout 2020, as well as additional regulatory
decisions in many countries. This followed Tagrisso's approval and
launch in 88 countries, including the US, China, in the EU and
Japan for the treatment of patients with EGFR T790M[33]-mutated
NSCLC.
Total Revenue, entirely comprising Product Sales, amounted to
$982m in the quarter and represented growth of 56% (58% at CER).
This was partly driven by the aforementioned regulatory approvals
and reimbursements in the 1st-line setting. Continued growth was
also delivered in the 2nd-line setting, for example, within Europe
and Emerging Markets. Sequentially, Total Revenue increased by $98m
from Q4 2019 to Q1 2020, including sequential growth in the US.
Total Revenue in the US increased by 43% year-on-year in the
quarter to $371m. Demand growth continued, with Tagrisso
established as the standard of care (SoC) in the 1st-line setting,
following regulatory approval in 2018.
In Emerging Markets, Tagrisso Total Revenue increased by 103% in
the quarter (109% at CER) to $280m, with notable growth in China,
following the admission in 2019 to the China National Drug
Reimbursement List (NRDL) in the 2nd-line setting. Tagrisso Total
Revenue in Japan increased by 25% (23% at CER) to $153m. In Europe,
Total Revenue of $162m in the quarter represented an increase of
62% (66% at CER), driven by its emerging use in the 1st-line
setting, as more reimbursements were granted, as well as continued
strong levels of demand in the 2nd-line setting.
Imfinzi
Imfinzi has received regulatory approval in 62 countries,
including the US, China, in the EU and Japan for the treatment of
patients with unresectable, Stage III NSCLC whose disease has not
progressed following platinum-based chemoradiation therapy (CRT).
The number of reimbursement agreements increased to 27 in the
quarter. During the period, Imfinzi was also approved for the
treatment of ES-SCLC patients in the US and Singapore. It is also
approved for the 2nd-line treatment of patients with locally
advanced or metastatic urothelial carcinoma (bladder cancer) in 16
countries, including in the US.
Total Revenue, entirely comprising Product Sales, amounted to
$462m in the quarter and represented growth of 57%, almost
exclusively for the treatment of unresectable, Stage III NSCLC.
Total Revenue in the US increased by 24% to $286m. In Japan, growth
of 66% (64% at CER) represented sales of $56m. Sales in Europe of
$75m followed recent regulatory approvals and launches. Imfinzi was
also launched in the quarter in China for the treatment of
unresectable, Stage III NSCLC.
Lynparza
Lynparza has received regulatory approval in 73 countries for
the treatment of ovarian cancer. Launches for the treatment of
metastatic breast cancer took place in the US and Japan in 2018 in
the EU in April 2019. Lynparza has now been approved in 64
countries for the treatment of metastatic breast cancer and, in
four countries, including the US, for the treatment of pancreatic
cancer.
Total Revenue amounted to $397m in the quarter and represented
growth of 67% (69% at CER); no Lynparza Collaboration Revenue was
recorded in the period. The strong performance was geographically
spread, with launches continuing in Emerging Markets and the
Established Rest of World region (RoW).
US sales amounted to $197m and increased by 66%, driven by the
launch in the 1st-line BRCAm ovarian cancer setting at the end of
2018. Lynparza continued to be the leading medicine in the poly ADP
ribose polymerase-inhibitor class, as measured by total
prescription volumes in both ovarian and breast cancer. Sales in
Europe increased by 57% (61% at CER) to $102m, driven by increasing
levels of reimbursement and BRCAm-testing rates, as well as
successful recent 1st-line ovarian cancer launches, including in
the UK and Germany.
Japan sales of Lynparza amounted to $34m, representing growth of
55% (53% at CER). Emerging Markets sales of $56m, up by 113% (120%
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). Lynparza
was admitted to the China NRDL for the same indication, with effect
from January 2020.
Calquence
Total Revenue, entirely comprising Product Sales, amounted to
$88m in the quarter and represented growth of 202%, with the
overwhelming majority of sales in the US. Calquence was approved by
the US Food and Drug Administration (FDA) for the treatment of CLL
and small lymphocytic lymphoma (SLL) in November 2019. Calquence
has received 13 regulatory approvals for the treatment of patients
with mantle-cell lymphoma, and six in CLL.
Enhertu
Product Sales, recorded by Daiichi Sankyo, amounted to $30m.
This reflected sales in the US, where Enhertu has been launched and
where Daiichi Sankyo is the principal. Total Revenue, entirely
comprising resulting Collaboration Revenue recorded by AstraZeneca,
amounted to $14m in the quarter, following the recent launch in the
US at the beginning of the year. Enhertu was approved by the US FDA
for the treatment of 3rd-line HER2+ breast cancer in December
2019.
Legacy: Iressa
Total Revenue, entirely comprising Product Sales, amounted to
$77m in the quarter and represented a decline of 42% (41% at CER).
Sales in Emerging Markets declined by 28% (26% at CER) to $62m,
reflecting Iressa's inclusion on the China volume-based procurement
programme.
Legacy: Faslodex
Total Revenue, entirely comprising Product Sales, amounted to
$166m in the quarter and represented a decline of 35% (34% at
CER).
Emerging Markets sales of Faslodex increased by 7% (10% at CER)
to $48m. US sales declined by 83% to $23m, reflecting the launch of
multiple generic Faslodex medicines. In Europe, where generic
competitor medicines are established, sales increased by 19% (22%
at CER) to $64m, while in Japan, sales increased by 4% (3% at CER)
to $29m.
Legacy: Zoladex
Total Revenue, predominantly comprising Product Sales, amounted
to $228m in the quarter and represented growth of 16% (19% at
CER).
Emerging Markets sales of Zoladex increased by 30% (35% at CER)
to $149m. Sales in Europe increased by 1% (3% at CER) to $35m. In
the Established RoW region, sales declined by 10% (9% at CER) to
$39m, driven by the effects of increased competition.
BioPharmaceuticals: CVRM
Total Revenue, which included roxadustat Ongoing Collaboration
Revenue of $3m and sales of Crestor and other legacy medicines,
were stable in the quarter (increase of 1% at CER) to $1,707m and
represented 27% of Total Revenue (Q1 2019: 31%).
New CVRM Total Revenue, which excluded sales of Crestor and
other legacy medicines, increased by 7% in the quarter (8% at CER)
to $1,102m, reflecting strong performances from Farxiga and
Brilinta. New CVRM Total Revenue represented 17% of overall Total
Revenue in the quarter (Q1 2019: 19%); this change partly reflected
the particular growth of Oncology.
Farxiga
Total Revenue, predominantly comprising Product Sales, amounted
to $407m in the quarter and represented growth of 16% (19% at
CER).
Emerging Markets sales increased by 49% (55% at CER) to $141m.
In China, Farxiga was admitted to the NRDL with effect from the
start of 2020; as expected, this adversely impacted the price of
the medicine. This impact, however, was offset by the volume
benefit derived from the launch within the NRDL listing. The
performance also reflected growth in the sodium-glucose layer
transport protein 2 (SGLT2) inhibitor class at the expense of the
dipeptidyl-peptidase 4 (DPP-4) inhibitor class.
US sales declined by 14% to $113m. Growth in the quarter was
adversely affected by the impact on price from increased levels of
competition, the mix of sales and managed markets. There were,
however, favourable movements in the share of new-to-brand
prescriptions, a result of a label update in Q3 2019 to reflect
results from the DECLARE CVOT.
Sales in Europe increased by 30% (34% at CER) to $116m, partly
reflecting growth in the SGLT2 inhibitor class and an acceleration
of new-to-brand prescriptions following a similar DECLARE label
update. In Japan, sales to the collaborator, Ono Pharmaceutical
Co., Ltd, which records in-market sales, declined by 24% (25% at
CER) to $13m.
Brilinta
Total Revenue, entirely comprising Product Sales, amounted to
$408m in the quarter and represented growth of 17% (19% at CER).
Patient uptake continued in the treatment of acute coronary
syndrome and high-risk post-myocardial infarction (MI); the
performance also reflected aforementioned short-term inventory
increases, given the hospital-dispensation setting.
Emerging Markets sales of Brilinta increased by 38% (42% at CER)
to $134m. US sales of Brilinta, at $165m, represented an increase
of 8%, 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 12% in the quarter (15% at CER) to $93m, reflecting
performances in Spain, Germany and the UK.
Onglyza
Total Revenue, entirely comprising Product Sales, amounted to
$141m in the quarter and represented a decline of 8% (6% at
CER).
Sales in Emerging Markets increased by 10% (13% at CER) to $47m,
driven by the performance in China. US sales of Onglyza declined by
14% in the quarter to $67m; given the significant future potential
of Farxiga, the Company continues to prioritise commercial support
over Onglyza. Europe sales declined by 19% (17% at CER) to $15m,
also highlighting the broader trend of a shift away from the DPP-4
inhibitor class.
Bydureon
Total Revenue, entirely comprising Product Sales, amounted to
$100m in the quarter and represented a decline of 30% (29% at
CER).
US sales of $84m reflected a decline of 28% in the quarter,
resulting from competitive pressures and the impact of managed
markets. Patients continue to transition from the dual-chamber pen
to the BCise device. Bydureon sales in Europe fell by 34% (32% at
CER) to $12m. Reflecting the recent and potential performance of
Bydureon, a $102m intangible asset impairment charge was recorded
in the quarter.
Lokelma
Total Revenue, entirely comprising Product Sales, amounted to
$11m in the quarter and reflected sequential growth of 42% over Q4
2019.
The US represented the overwhelming majority of sales, following
the recent launch of the medicine. Lokelma led new-to-brand
prescription market share during the quarter. The medicine has
received regulatory approval in the EU, China and Japan and for the
treatment of hyperkalaemia, with further launches in several
markets anticipated soon.
Roxadustat
Total Revenue, entirely comprising Ongoing Collaboration
Revenue, amounted to $3m in the quarter. The period saw a focus on
achieving hospital listings across the country. Roxadustat was
approved by the China NMPA for the treatment of anaemia in CKD in
dialysis-dependent and non-dialysis dependent patients in December
2018 and August 2019, respectively. Roxadustat was admitted to the
China NRDL with effect from January 2020.
Legacy: Crestor
Total Revenue, predominantly comprising Product Sales, amounted
to $302m in the quarter and represented a decline of 10% (8% at
CER).
Sales in Emerging Markets declined by 15% (13% at CER) to $192m.
The performance was adversely impacted by the effect of
volume-based procurement in China. US sales increased by 9% to
$28m. In Europe, sales declined by 12% (10% at CER) to $34m. In
Japan, where AstraZeneca collaborates with Shionogi Co. Ltd, sales
increased by 5% (3% at CER) to $34m.
BioPharmaceuticals: Respiratory & Immunology
Total Revenue, which included Ongoing Collaboration Revenue of
$3m from Duaklir and Eklira, increased by 21% in the quarter (22%
at CER) to $1,555m and represented 24% of Total Revenue (Q1 2019:
23%).
Symbicort
Total Revenue, entirely comprising Product Sales, amounted to
$790m in the quarter and represented growth of 35% (36% at
CER).
An authorised-generic version of Symbicort was launched in the
US by the Company's collaborator, Prasco. US sales grew by 76% to
$310m; this partly reflected an element of inventory build by
Prasco. Symbicort also continued its global market-volume and value
leadership within the inhaled corticosteroid / long-acting beta
agonist (LABA) class. Emerging Markets sales increased by 17% in
the quarter (20% at CER) to $156m, reflecting particularly strong
performances in China and the Middle East & Africa.
In Europe, sales increased by 7% in the quarter (10% at CER) to
$195m. In Japan, sales grew by 40% (38% at CER) to $56m, supported
by the continued effect of AstraZeneca regaining full rights,
following termination in 2019 of the Astellas co-promotion
agreement. In Japan, Symbicort pricing was, however, adversely
impacted by the recent market entry of a generic medicine.
Pulmicort
Total Revenue, entirely comprising Product Sales, amounted to
$380m in the quarter and represented a decline of 1% (stable at
CER).
Emerging Markets, where sales were stable in the quarter (+1% at
CER) at $313m, represented 82% of global Total Revenue of
Pulmicort. The performance in China was impacted by local COVID-19
pandemic restrictions, resulting in a disruption of hospital
dispensation and significantly reduced access and attendance to
outpatient nebulisation rooms. It also reflected a particularly
benign influenza season in China, resulting in a significantly
reduced number of asthma exacerbations. Sales in the US declined by
3% to $23m and sales in Europe increased by 3% (6% at CER) to
$26m.
Fasenra
Fasenra has received regulatory approval in 56 countries,
including in the US, the EU and Japan for the treatment of patients
with severe, uncontrolled eosinophilic asthma. With further
regulatory reviews ongoing, Fasenra has already achieved
reimbursement in 39 countries. Total Revenue, entirely comprising
Product Sales, amounted to $199m in the quarter and represented
growth of 54% (55% at CER).
Sales in the US increased by 29% in the quarter to $120m. For
the aforementioned treatment of patients, Fasenra ended the quarter
as the leading novel biologic medicine in the US, as measured by
new-to-brand prescriptions. In Europe, sales of $46m in the quarter
represented an increase of 154% (161% at CER), reflecting a number
of successful launches. Sales in Japan increased by 32% (30% at
CER) to $21m. In its approved indication and among new patients,
Fasenra obtained the leading market share of all biologic medicines
in the 'top-five' European countries and in Japan. In Emerging
Markets, sales amounted to $6m in the quarter (Q1 2019: $nil).
Daliresp/Daxas
Total Revenue, entirely comprising Product Sales, amounted to
$53m in the quarter and represented growth of 11% (12% at CER).
US sales, representing 85% of the global total, increased by 10%
to $45m, driven by higher demand, partially offset by adverse
inventory movements.
Bevespi
Total Revenue, entirely comprising Product Sales, amounted to
$12m in the quarter and represented growth of 22%.
Bevespi has been launched in the US, in a number of European
countries and in Japan. The global LABA / long acting muscarinic
antagonist class continued to grow more slowly than expected.
Breztri
Total Revenue, entirely comprising Product Sales, amounted to
$4m in the quarter (Q1 2019: $nil).
Following regulatory approvals for the treatment of COPD,
Breztri was launched in Japan and China.
Other medicines (outside the three main therapy areas)
Total Revenue, primarily comprising Product Sales, amounted to
$557m in the quarter; a decline of 4% (3% at CER). Other Total
Revenue represented 9% of overall Total Revenue (Q1 2019: 10%).
Nexium
Total Revenue, predominantly comprising Product Sales, amounted
to $348m in the quarter; a decline of 6% (5% at CER). Emerging
Markets sales of Nexium declined by 2% (an increase of 1% at CER)
to $187m. In Japan, where AstraZeneca collaborates with Daiichi
Sankyo, sales were stable at $79m.
Regional Total Revenue
Table 11: Regional Total Revenue
Q1 2020
$m % of total % change
------ -----------
Actual CER
------ ----------- ------- ----
Emerging Markets 2,273 36 13 16
China 1,416 22 14 17
Ex-China 857 14 12 15
US 2,091 33 16 16
Europe 1,204 19 22 25
Established RoW 786 12 13 13
Japan 553 9 10 8
Canada 156 2 37 36
Other Established RoW 77 1 (1) 5
Total 6,354 100 16 17
------ ----------- ------- ----
Table 12 : Emerging Markets therapy-area performance
Q1 2020
$m % of total % change
-----------
Actual CER
----------- ------- ----
Oncology 711 31 45 49
BioPharmaceuticals 872 38 15 18
New CVRM 332 15 39 43
Respiratory & Immunology 540 24 4 6
Other medicines 690 30 (9) (7)
Total 2,273 100 13 16
------ ----------- ------- ----
Table 13 : Notable new-medicine performances in Emerging Markets
- Total Revenue
Q1 2020
$m % change
----
Actual CER
---- ------- ----
Tagrisso 280 n/m n/m
Forxiga 142 49 55
Brilinta 134 38 42
Lynparza 55 n/m n/m
Imfinzi 33 n/m n/m
---- ------- ----
The new medicines represented 29% of Emerging Markets Total
Revenue (Q1 2019: 18%). Total Revenue from specialty-care medicines
increased by 45% (50% at CER) to $854m and comprised 38% of
Emerging Markets sales in the quarter (Q1 2019: 29%).
China Total Revenue, which included $3m of roxadustat Ongoing
Collaboration Revenue, comprised 62% of Emerging Markets Total
Revenue in the quarter and increased by 14% (17% at CER) to
$1,416m.
New-medicine Total Revenue in China, primarily driven by
Tagrisso and Lynparza in Oncology and Brilinta and Farxiga in New
CVRM, delivered particularly encouraging growth and represented 27%
of China Total Revenue (Q1 2019: 13%). This performance was
augmented by strong sales of Zoladex, Symbicort and a resilient
performance from Pulmicort.
Ex-China Emerging Markets, comprising entirely of Product Sales,
increased by 12% in the quarter (15% at CER) to $857m. The new
medicines represented 32% of ex-China Emerging Markets Total
Revenue in the quarter (Q1 2019: 26%), increasing by 41% (45% at
CER) to $277m. The performance was underpinned by strong levels of
growth across the following:
Table 14 : Ex-China Emerging Markets: Total Revenue
Q1 2020
$m % change
----
Actual CER
---- ------- ----
Russia 84 72 66
Brazil 89 (5) 6
Ex-Brazil Latin America 108 7 18
Ex-China Asia Pacific 311 11 12
Middle East and Africa 265 11 12
---- ------- ----
Financial performance
Table 15 : Reported Profit and Loss
Q1 2020 Q1 2019 % change
-----------------------------------
$m $m Actual CER
---------------------------------- -------- -------- ------- -----
Total Revenue 6,354 5,491 16 17
Product Sales 6,311 5,465 15 17
Collaboration Revenue 43 26 69 70
Cost of Sales (1,420) (1,129) 26 26
Gross Profit 4,934 4,362 13 15
Gross Margin 77.5% 79.3% (2) (2)
Distribution Expense (87) (78) 11 13
% Total Revenue 1.4% 1.4% - -
R&D Expense (1,388) (1,266) 10 10
% Total Revenue 21.8% 23.1% 1 2
SG&A Expense (2,719) (2,514) 8 9
% Total Revenue 42.8% 45.8% 3 3
Other Operating Income & Expense 480 593 (19) (19)
% Total Revenue 7.6% 10.8% (3) (3)
Operating Profit 1,220 1,097 11 16
Operating Profit Margin 19.2% 20.0% (1) -
Net Finance Expense (281) (312) (10) (9)
Joint Ventures and Associates (4) (27) (85) (85)
Profit Before Tax 935 758 23 29
Taxation (185) (195) (5) (1)
Tax Rate 20% 26%
Profit After Tax 750 563 33 40
EPS 0.59 0.47 27 33
-------- -------- ------- -----
Table 16 : Reconciliation of Reported Profit Before Tax to
EBITDA
Q1 2020 Q1 2019 % change
-------------------------------------------
$m $m Actual CER
------------------------------------------- -------- -------- ------- -----
Reported Profit Before Tax 935 758 23 29
Net Finance Expense 281 312 (10) (9)
Joint Ventures and Associates 4 27 (85) (85)
Depreciation, Amortisation and Impairment 841 676 24 26
EBITDA 2,061 1,773 16 20
------------------------------------------- -------- ------- -----
Table 17 : Reconciliation of Reported to Core financial
measures
Q1 2020 Reported Restructuring Intangible Diabetes Other Core Core % change
Asset Amortisation Alliance
& Impairments
-----------------
$m $m $m $m $m $m Actual CER
----------------- --------- -------------- ---------- ------ -------- --------- -----
Gross Profit 4,934 19 17 - 5 4,975 12 14
Gross Profit
Margin 77.5% 78.1% -2 -2
Distribution
Expense (87) - - - - (87) 11 13
R&D Expense (1,388) 11 42 - (1) (1,336) 9 9
SG&A Expense (2,719) 25 449 67 1 (2,177) 5 7
Total Operating
Expense (4,194) 36 491 67 - (3,600) 7 8
Other Operating
Income
& Expense 480 (2) 1 - - 479 (19) (19)
Operating
Profit 1,220 53 509 67 5 1,854 12 16
Operating
Profit
Margin 19.2% 29.2% -1 -
Net Finance
Expense (281) - - 57 55 (169) (11) (11)
Taxation (185) (11) (107) (31) - (334) 1 5
EPS $0.59 $0.03 $0.31 $0.07 $0.05 $1.05 17 21
----------------- -------------- -------------------- ---------- ------ -------- --------- -----
Profit and Loss summary
a) Gross Profit
The increases in Reported and Core Gross Profit in the quarter
reflected the growth in Product Sales. The declines in the Reported
and Core Gross Margin partly reflected the impact of one-off
adjustments related to Group inventory, the growth in profit share
from the collaboration with MSD in respect of Lynparza and an
element of foreign-exchange impact.
b) Total Operating Expense
Reported Total Operating Expense in the quarter represented 66%
of Total Revenue (Q1 2019: 70%), Core Total Operating Expense
represented 57% of Total Revenue (Q1 2019: 61%).
Reported and Core R&D Expense increased partly as a result
of investment in the development of Enhertu. Reported and Core
SG&A Expense grew primarily due to additional select investment
in Oncology-medicine launches and AstraZeneca's further expansion
in China. In addition, Reported SG&A Expense was adversely
impacted by an increased level of intangible asset impairments,
including a $102m charge relating to Bydureon.
c) Other Operating Income and Expense[34]
Reported and Core Other Operating Income and Expense in the
quarter included $350m of income that reflected an agreement to
divest commercial rights to a number of legacy hypertension
medicines.
d) Net Finance Expense
The declines in Reported and Core Net Finance Expense partly
reflected a favourable movement in loan interest following the
repayment of a $1bn bond in 2019.
e) Taxation
The Reported and Core Tax Rates for the quarter were both 20%
(Q1 2019: 26% and 23% respectively). Taxation Paid for the quarter
was $477m, representing 51% of Reported Profit Before Tax (Q1 2019:
$334m, 44%).
f) EPS
Reported EPS of $0.59 in the quarter, represented an increase of
27% (33% at CER). This was despite an increase in the
weighted-average number of shares to 1,312m (Q1 2019: 1,267m). Core
EPS increased by 17% (21% at CER) to $1.05.
Table 18 : Cash Flow
Q1 2020 Q1 2019 Change
-------------------------------------------------------
$m $m $m
------------------------------------------------------- -------- -------- --------
Reported Operating Profit 1,220 1,097 123
Depreciation, Amortisation and Impairment 841 676 165
Increase in Working Capital and Short-Term Provisions (445) (710) 265
Gains on Disposal of Intangible Assets (358) (512) 154
Non-Cash and Other Movements (462) (396) (66)
Interest Paid (180) (208) 28
Taxation Paid (477) (334) (143)
Net Cash Inflow/(Outflow) from Operating Activities 139 (387) 526
Net Cash Inflow/(Outflow) before Financing Activities 148 (59) 207
Net Cash Outflow from Financing Activities (2,362) (698) (1,664)
-------- -------- --------
The increase in Net Cash Inflows from Operating Activities in
the quarter primarily reflected an underlying improvement in
business performance, combined with favourable working-capital
movements. The positive cash performance was partly offset by the
aforementioned increase in Taxation Paid.
The increase in Net Cash Inflows before Financing Activities
primarily reflected the aforementioned improvement in Net Cash
Inflows from Operating Activities, as well as a reduction in the
Purchase of Intangible Assets, partially offset by a reduction in
cash flows from the Disposal of Intangible Assets. The cash payment
of contingent consideration, in respect of the former Bristol-Myers
Squibb Company (BMS) share of the global diabetes alliance,
amounted to $124m in the quarter.
Capital Expenditure
Capital expenditure amounted to $186m in the quarter, compared
to $174m in Q1 2019. This included investment in the new
AstraZeneca R&D centre on the Biomedical Campus in Cambridge,
UK.
The Company anticipates a broadly stable level of total capital
expenditure in FY 2020 (FY 2019: $979m).
Table 19 : Net Debt summary
At 31 At 31 At 31
Mar 2020 Dec 2019 Mar 2019
----------------------------------------------------
$m $m $m
---------------------------------------------------- ---------- ---------- ----------
Cash and Cash Equivalents 3,413 5,369 4,136
Other Investments 804 911 876
Cash and Investments 4,217 6,280 5,012
Overdrafts and Short-Term Borrowings (691) (225) (2,044)
Lease Liabilities (653) (675) (714)
Current Instalments of Loans (1,598) (1,597) (1,500)
Loans Due After One Year (15,634) (15,730) (17,320)
Interest-Bearing Loans and Borrowings (Gross Debt) (18,576) (18,227) (21,578)
Net Derivatives (54) 43 295
Net Debt (14,413) (11,904) (16,271)
---------- ---------- ----------
Capital allocation
The Board's aim is to continue to strike a balance between the
interests of the business, financial creditors and the Company's
shareholders. After providing for investment in the business,
supporting the progressive dividend policy and maintaining a
strong, investment-grade credit rating, the Board will keep under
review potential investment in immediately earnings-accretive,
value-enhancing opportunities.
Foreign exchange
The Company's transactional currency exposures on
working-capital balances, which typically extend for up to three
months, are hedged where practicable using forward foreign-exchange
contracts against the individual companies' reporting currency.
Foreign-exchange gains and losses on forward contracts for
transactional hedging are taken to profit or loss. In addition, the
Company's external dividend payments, paid principally in pounds
sterling and Swedish krona, are fully hedged from announcement to
payment date.
Table 20 : Currency sensitivities
The Company provides the following currency-sensitivity
information:
Average Exchange Annual Impact of 5% Strengthening in
Rates versus USD Exchange Rate versus USD ($m) ([35])
Currency Primary Relevance FY 2019[36] Q1 2020 ([37]) % change Product Sales Core Operating Profit
------------------ ----------- -------------- -------- --------------------- ---------------------
CNY Product Sales 6.92 6.99 (1) 288 190
EUR Product Sales 0.89 0.91 (1) 171 68
JPY Product Sales 108.98 108.91 - 139 98
Other ([38]) 231 123
GBP Operating Expense 0.78 0.78 - 27 (93)
SEK Operating Expense 9.46 9.67 (2) 5 (51)
------------------ ----------- -------------- -------- --------------------- ---------------------
Sustainability
AstraZeneca's sustainability approach has three priority
areas[39], 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, AstraZeneca announced a donation of nine
million face masks to support healthcare workers around the world
as they respond to the COVID-19 global pandemic. The Company has
also collaborated with the World Economic Forum's COVID Action
Platform, created with the support of the World Health
Organization, to identify countries in greatest need; more than
eight million masks have already been delivered.
During the period, AstraZeneca proactively communicated with its
healthcare and community partners, who are working to support
healthcare systems, patients and caregivers around the world, to
reinforce the Company's support of their efforts during the
COVID-19 pandemic. AstraZeneca will continue to meet funding
commitments and support community partner decisions to postpone or
cancel programmes or reallocate funding towards relief and response
efforts. For example, Healthy Heart Africa (HHA) collaborators who
support the delivery of the Company's programme in local
communities in Kenya, Ethiopia, Tanzania and Ghana, have repurposed
local facilities and diverted resources towards providing
protective clothing to healthcare workers. AstraZeneca's Young
Health Programme partners have stopped all community-based outreach
and are delivering disease prevention messaging over virtual
networks. In addition, the Company is ensuring that its
collaborators are safe and supported and is encouraging them to
follow the appropriate governmental guidance.
In March 2020, the manuscript 'Burden of prehypertension among
adults in Kenya: a retrospective analysis of findings from the HHA
programme' was published in the BMC Public Health journal; this was
the third HHA manuscript published in the last twelve months. The
publication outlined the high prevalence of hypertension (HTN) and
pre-HTN in Kenya, with more than 50% of the six million screening
records analysed found to have pre-HTN, in addition to 20% with
HTN, among an average screening age of 45 years.
b) Environmental protection
To coincide with Earth Day on 22 April 2020, AstraZeneca
announced a new one-year collaboration focusing on water
stewardship with World Wide Fund for Nature Sweden, to identify
opportunities to improve the Company's approach and strategy
towards water stewardship. Responsible management of water,
particularly where sites are situated in water-stressed areas, is
critical to the development and manufacture of the Company's
medicines. AstraZeneca's longer-term ambition is to implement
Science-Based Targets for Water, once a global methodology is
available, to lead the way on water stewardship for the
pharmaceutical industry; including the development of
industry-specific tools to assess water risk in the context of
Pharmaceuticals in the Environment.
This approach will ensure that AstraZeneca is more meaningfully
contributing to the sustainable management of water resources
within river basins. The Company's water target is to maintain
absolute water use at the 2015 level through 2025. Since 2015, the
Company has developed a standard methodology to assess water risk
and stress at its global sites, which has enabled the Company to
broaden its understanding of water-related risks and opportunities
for priority investment. AstraZeneca has prioritised implementing
water-efficiency projects, identified through water audits at 11
sites, including Yelahanka, Bangalore, India; Shanghai, China; and
Canóvanas, Puerto Rico; and implemented rainwater harvesting at
five sites: Wuxi, China; Cambridge, UK; Macclesfield, UK;
Canóvanas, Puerto Rico and Frederick, US.
During the period, the AstraZeneca Green Labs initiative
received two 'My Green Lab ' certifications, reflecting the
Company's commitment to laboratory sustainability. AstraZeneca's
R&D site in Boston, US achieved Gold Level Certification for
implementing over 60% of recommended sustainable lab practices; and
the Company's R&D site in South San Francisco, US achieved
Green Level Certification, awarded for implementing over 80% of
recommended-sustainability practices. This is the highest level of
certification provided by My Green Lab, placing the Company's South
San Francisco site as one of only 10 laboratories certified at this
level, out of more than 400 worldwide. The programme is the first
of its scope in the industry, bringing together scientists,
facilities management, engineering and safety health and
environment to improve the environmental sustainability of research
laboratories. AstraZeneca's major sites in the UK and Sweden are in
scope and aim to become My Green Lab certified in the coming
months.
c) Ethics and transparency
Since committing to providing greater transparency around
payments to healthcare professionals and healthcare organisations
at the 2018 Annual General Meeting, AstraZeneca successfully
progressed in 2019 the disclosure programme into an additional five
markets covering Brazil, Colombia, Korea, Mexico and Saudi Arabia.
In 2020, the Company is intending to further progress this work
across Canada, the Philippines (where enhanced legislation has been
recently passed, superseding the existing Administrative Order) and
New Zealand, while continuing to monitor the regulatory landscape
in Argentina, Chile, India and Morocco.
d) Other developments
In March 2020, the Company released its sixth annual
Sustainability Report via its website and social media. The report
was released in conjunction with the Annual Report and Form 20-F
Information 2019. The report outlined progress and challenges and
aims for the future. Many of the new sustainability initiatives and
programmes launched in 2019 were a result of engagement and
activism from AstraZeneca colleagues around the world,
demonstrating how sustainability is being embedded across the
organisation.
For more details on AstraZeneca's sustainability ambition,
approach and targets, please refer to the latest Sustainability
Report 2019 and Sustainability Data Summary 2019. Additional
information is available at astrazeneca.com/sustainability.
Research and development
As the COVID-19 pandemic develops, the Company will evaluate the
impact on the initiation of clinical trials, ongoing recruitment
and follow-ups. It is prudent to assume that some delays will arise
as a consequence of the pandemic. AstraZeneca does not expect
significant delays to anticipated late-stage and
lifecycle-management 2020 and 2021 news-flow dates.
A comprehensive data pack comprising AstraZeneca's pipeline of
medicines in human trials can be found in the latest
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
New molecular entities and major lifecycle events for 17 Oncology
medicines in Phase III trials or under
regulatory review * Tagrisso - NSCLC
* Imfinzi - multiple cancers
* Lynparza - multiple cancers
* Enhertu - breast and other cancers
* capivasertib - breast cancer
* Calquence - blood cancers
* tremelimumab - multiple cancers
* savolitinib - NSCLC[40]
CVRM
* Farxiga - multiple indications
* roxadustat - anaemia in CKD
Respiratory & Immunology
* Fasenra - multiple indications
* Breztri - asthma
* PT027 - asthma
* tezepelumab - severe asthma
* nirsevimab - respiratory syncytial virus
* anifrolumab - lupus (SLE)
* brazikumab[41] - inflammatory bowel disease
Total projects
in clinical pipeline 167
---- -------------------------------------------------------
Oncology
Oncology: lung cancer
a) Tagrisso
In April 2020, the Company announced that the ADAURA Phase III
trial for Tagrisso in the adjuvant treatment of patients with Stage
IB, II and IIIA EGFRm NSCLC with complete tumour resection was to
be unblinded early following a recommendation from an Independent
Data Monitoring Committee (IDMC), based on its determination of
overwhelming efficacy. The primary endpoint of the trial is
disease-free survival. Tagrisso was assessed against placebo for a
treatment duration of up to three years. The trial will continue to
assess the secondary endpoint of OS. In its communication to
AstraZeneca, the IDMC did not raise any new safety concerns. The
data will be presented at a forthcoming medical meeting.
Table 22 : Key Tagrisso trials in lung cancer
Trial Population Design Timeline Status
Phase III Adjuvant EGFRm NSCLC Placebo or Tagrisso FPCD[42] Trial unblinded early
ADAURA Q4 2015 due to overwhelming
LPCD ([43]) efficacy
Q1 2019
-------------------------- ------------------------- ------------------------ -------------------------
Phase III Locally advanced, Placebo or Tagrisso FPCD Recruitment
LAURA unresectable EGFRm NSCLC Q4 2018 ongoing
First data anticipated
2021+
-------------------------- ------------------------- ------------------------ -------------------------
Phase III 1st-line EGFRm NSCLC Tagrisso or Tagrisso + FPCD Recruitment ongoing
FLAURA2 platinum-based Q4 2019
chemotherapy doublet First data anticipated
2021+
-------------------------- ------------------------- ------------------------ -------------------------
b) Imfinzi
In March 2020, the Company announced that Imfinzi had been
approved in the US as a 1st-line treatment for adult patients with
ES-SCLC in combination with SoC chemotherapies, etoposide plus
either carboplatin or cisplatin (platinum-etoposide) utilising the
fixed dose of Imfinzi 1,500mg every three weeks, for four cycles
with chemotherapy, then every four weeks until progression. This
followed the regulatory approval in Singapore earlier in the
period.
Prior to this, AstraZeneca announced high-level results from the
final analysis of the Phase III CASPIAN trial, which showed that
Imfinzi, in combination with a choice of SoC chemotherapies,
confirmed a sustained, clinically meaningful OS benefit for
patients with ES-SCLC treated in the 1st-line setting. The second
experimental arm, testing tremelimumab, an anti-CTLA4 monoclonal
antibody, added to Imfinzi and SoC, did not meet its primary
endpoint of demonstrating a statistically significant improvement
in OS. In June 2019, it was announced that the CASPIAN trial met
one primary endpoint for Imfinzi plus SoC by demonstrating a
statistically significant and clinically meaningful improvement in
OS versus SoC alone at a planned interim analysis.
During the period, AstraZeneca announced that the Phase III
DANUBE trial for Imfinzi and Imfinzi plus tremelimumab in
unresectable, Stage IV (metastatic) bladder cancer did not meet the
primary endpoints of improving OS versus SoC chemotherapy for
Imfinzi monotherapy in patients whose tumour cells and/or
tumour-infiltrating immune cells express high levels (>=25%) of
PD-L1[44], or for Imfinzi plus tremelimumab in patients regardless
of their PD-L1 expression. The safety and tolerability profiles for
Imfinzi and the combination with tremelimumab were consistent with
previous trials. The data will be presented at a forthcoming
medical meeting.
Table 23 : Key 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 First data anticipated
surgery, followed by 2021+
placebo or Imfinzi
----------------------- ---------------------- ----------------------- ----------------------
Phase III Stage Ib-IIIa NSCLC Placebo or FPCD Recruitment
ADJUVANT BR.31[45] Imfinzi Q1 2015 completed
LPCD
Q1 2020
First data anticipated
2021
----------------------- ---------------------- ----------------------- ----------------------
Phase III Stage III unresected Placebo or FPCD Recruitment
PACIFIC-2 locally advanced NSCLC Imfinzi Q2 2018 completed
(concurrent CRT) LPCD
Q3 2019
First data anticipated
H2 2020
----------------------- ---------------------- ----------------------- ----------------------
Phase III Limited- Concurrent CRT, FPCD Recruitment
ADRIATIC stage SCLC followed by Q4 2018 ongoing
placebo or First data anticipated
Imfinzi or Imfinzi + 2021+
treme
----------------------- ---------------------- ----------------------- ----------------------
Phase III Stage IV, 1st-line SoC chemotherapy or FPCD PFS[46] primary
POSEIDON NSCLC SoC + Imfinzi or SoC Q2 2017 endpoint met
+ Imfinzi + treme LPCD
Q4 2018
OS data anticipated
2021
----------------------- ---------------------- ----------------------- ----------------------
Phase III ES-SCLC SoC chemotherapy or FPCD OS primary endpoint
CASPIAN SoC + Imfinzi or SoC Q1 2017 met for Imfinzi
+ Imfinzi + treme LPCD monotherapy arm
Q2 2018 OS primary endpoint
not met for Imfinzi +
treme
----------------------- ---------------------- ----------------------- ----------------------
During the period, the AEGEAN trial in neo-adjuvant NSCLC was
expanded to include 800 patients and the primary endpoints
optimised to include event-free survival, as well as major
pathological response. The first data are now anticipated beyond
2021.
As previously announced, the POSEIDON trial of Imfinzi and
chemotherapy trial with and without tremelimumab in 1st-line NSCLC
will continue to assess the additional primary endpoint of OS,
following the positive PFS readout in 2019, with data anticipated
in 2021. The Company anticipates presenting the trial outcomes at a
forthcoming medical meeting when the overall trial outcomes are
obtained.
Table 24 : Key Imfinzi trials in tumour types other than lung
cancer
Trial Population Design Timeline Status
Phase III Non-muscle invasive SoC BCG[47] or SoC BCG + FPCD Recruitment ongoing
POTOMAC bladder cancer Imfinzi Q4 2018
First data
anticipated
2021+
------------------------- ------------------------- ------------------------ -------------------------
Phase III Muscle-invasive bladder Neo-adjuvant cisplatin FPCD Recruitment ongoing
NIAGARA cancer and gemcitabine SoC Q4 2018
chemotherapy or SoC + First data
Imfinzi, followed by anticipated
adjuvant 2021+
placebo or Imfinzi
------------------------- ------------------------- ------------------------ -------------------------
Phase III Locoregional HCC[48] TACE[49] followed by FPCD Recruitment ongoing
EMERALD-1 placebo or TACE + Q1 2019
Imfinzi, followed by First data
Imfinzi + anticipated
bevacizumab or 2021
TACE + Imfinzi
followed by Imfinzi
------------------------- ------------------------- ------------------------ -------------------------
Phase III Locoregional HCC at high Adjuvant Imfinzi or FPCD Recruitment ongoing
EMERALD-2 risk of recurrence after Imfinzi + bevacizumab Q2 2019
surgery or First data anticipated
radiofrequency ablation 2021+
------------------------- ------------------------- ------------------------ -------------------------
Phase III Locally advanced CRT or CRT + Imfinzi, FPCD Recruitment ongoing
CALLA cervical cancer followed by placebo or Q1 2019
Imfinzi First data anticipated
2021+
------------------------- ------------------------- ------------------------ -------------------------
Phase III Stage IV, 1st-line SoC chemotherapy or FPCD Primary endpoints not
DANUBE cisplatin chemotherapy- Imfinzi or Imfinzi + Q4 2015 met
eligible/ineligible treme LPCD
bladder cancer Q1 2017
------------------------- ------------------------- ------------------------ -------------------------
Phase III Stage IV, 1st-line SoC chemotherapy or SoC FPCD Recruitment
NILE cisplatin chemotherapy- + Imfinzi or SoC + Q4 2018 Ongoing
eligible bladder cancer Imfinzi + treme First data anticipated
2021+
------------------------- ------------------------- ------------------------ -------------------------
Phase III Stage IV, 1st-line SoC or Imfinzi or FPCD Recruitment completed
KESTREL HNSCC[50] Imfinzi + treme Q4 2015
LPCD
Q1 2017
First data
anticipated
2021
------------------------- ------------------------- ------------------------ -------------------------
Phase III Stage IV, 1st-line Sorafenib or Imfinzi or FPCD Recruitment
HIMALAYA unresectable HCC Imfinzi + treme Q4 2017 completed
LPCD Orphan Drug Designation
Q4 2019 (US)[51]
First data
anticipated
H2 2020
------------------------- ------------------------- ------------------------ -------------------------
Phase III Stage IV, 1st-line Gemcitabine and FPCD Recruitment ongoing
TOPAZ-1 biliary-tract cancer cisplatin SoC Q2 2019
chemotherapy or SoC + First data anticipated
Imfinzi 2021+
------------------------- ------------------------- ------------------------ -------------------------
The Phase III KESTREL trial's final analysis plan for Imfinzi
with and without tremelimumab in 1st-line HNSCC is being optimised
following learnings from the EAGLE trial in the 2nd-line HNSCC
setting and learned regulatory insights; as such the data readout
is now expected in 2021.
c) Lynparza (multiple cancers)
During the period, Lynparza was added to the US National
Comprehensive Cancer Network's guidelines, in combination with
bevacizumab in ovarian cancer patients who had previously been
treated with bevacizumab.
In March 2020, the Company announced that Lynparza had been
granted orphan designation in Japan for the maintenance treatment
of germline BRCAm curatively unresectable pancreatic cancer. The
Japan Ministry of Health, Labour and Welfare (MHLW) grants the
designation to medicines intended for the treatment of diseases
that affect fewer than 50,000 patients in Japan and for which there
is a high unmet medical need. During the period, the Company made a
regulatory submission in Japan for Lynparza in prostate cancer,
based on data from the Phase III PROfound trial.
In April 2020, AstraZeneca announced further positive results
from the Phase III PROfound trial of Lynparza in men with
metastatic castration-resistant prostate cancer who have a
homologous recombination repair gene mutation (HRRm) and have
progressed on prior treatment with new hormonal-agent treatments,
such as enzalutamide and abiraterone.
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 Priority Review (US)
2nd-line+ HRRm Lynparza LPCD
prostate cancer Q4 2018
------------------------------ ---------------------- ----------------------- ----------------------
Phase III Advanced 1st-line Bevacizumab FPCD Primary endpoint met
PAOLA-1[52] ovarian cancer maintenance or Q2 2015 Priority Review (US)
bevacizumab + LPCD
Lynparza maintenance Q2 2018
------------------------------ ---------------------- ----------------------- ----------------------
Phase III Recurrent platinum-sensitive SoC chemotherapy or FPCD Primary endpoint not
GY004[53] ovarian cancer Lynparza or cediranib Q1 2016 met
+ Lynparza LPCD
Q4 2017
------------------------------ ---------------------- ----------------------- ----------------------
Phase II/III Recurrent SoC chemotherapy or FPCD Recruitment ongoing
GY005(53) 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 Advanced 1st-line Chemotherapy + FPCD Recruitment
DuO-O ovarian cancer bevacizumab or Q1 2019 ongoing
chemotherapy + First data
bevacizumab + anticipated
Imfinzi +/- 2021+
Lynparza maintenance
------------------------------ ---------------------- ----------------------- ----------------------
Phase III Stage IV, advanced, Abiraterone or FPCD Recruitment ongoing
PROpel castration-resistant prostate abiraterone + Q4 2018
cancer Lynparza First data
anticipated
2021
------------------------------ ---------------------- ----------------------- ----------------------
Enhertu (breast and other cancers)
During the period, Daiichi Sankyo announced that Enhertu had
been approved by Japan's MHLW for the treatment of patients with
HER2+ unresectable or metastatic breast cancer, following
chemotherapy. Approval of Enhertu was based on the results of the
pivotal Phase II DESTINY-Breast01 trial of Enhertu monotherapy in
HER2+ metastatic breast cancer patients.
Table 26 : Key Enhertu trials
Trial Population Design Timeline Status
Phase II Stage IV, HER2+ Enhertu FPCD Primary objective met
DESTINY-Breast01 (IHC[54] 3+ and IHC (single arm) Q4 2017 Breakthrough Therapy
2+/ISH[55]+) breast LPCD Designation (US)
cancer post Q4 2018 Approval (JP),
trastuzumab emtansine accelerated approval
(US)
---------------------- ----------------------- ----------------------- -----------------------
Phase III Stage IV, HER2+ (IHC SoC chemotherapy or FPCD Recruitment ongoing
DESTINY-Breast02 3+ and IHC 2+/ISH+) Enhertu Q4 2018
breast cancer post First data anticipated
trastuzumab emtansine 2021
---------------------- ----------------------- ----------------------- -----------------------
Phase III Stage IV, HER2+ (IHC Trastuzumab emtansine FPCD Recruitment ongoing
DESTINY-Breast03 3+ and IHC 2+/ISH+) or Enhertu Q4 2018
breast cancer First data anticipated
2021
---------------------- ----------------------- ----------------------- -----------------------
Phase III Stage IV, HER2-low SoC chemotherapy or FPCD Recruitment ongoing
DESTINY-Breast04 (IHC 1+/2+) breast Enhertu Q4 2018
cancer First data anticipated
2021
---------------------- ----------------------- ----------------------- -----------------------
Phase II Stage IV, HER2+ (IHC SoC chemotherapy or FPCD Primary endpoint met
DESTINY-Gastric01 3+ and IHC 2+/ISH+) Enhertu Q4 2017
gastric cancer LPCD
Q2 2019
---------------------- ----------------------- ----------------------- -----------------------
Koselugo (NF1)
During the period, the Company announced that the US FDA has
approved the MEK 1/2 inhibitor, Koselugo (formerly selumetinib) for
the treatment of paediatric patients aged two years and older who
suffer from NF1 and symptomatic, inoperable plexiform neurofibromas
(PNs). The approval was based on positive results from the National
Cancer Institute (NCI) Cancer Therapy Evaluation Program-sponsored
Phase II SPRINT Stratum 1 trial, coordinated by the NCI's Center
for Cancer Research, Pediatric Oncology Branch. This was the first
regulatory approval anywhere in the world of a medicine for the
treatment of NF1 PNs.
During the period, Koselugo received a regulatory submission
acceptance in the EU for the treatment of NF1.
Cediranib
In March 2020, the Company announced high-level results from the
Phase III GY004 trial, led by NRG Oncology and sponsored by the US
NCI, that examined the efficacy and safety of the potential new
medicine cediranib when added to Lynparza versus platinum-based
chemotherapy in patients with platinum-sensitive relapsed ovarian
cancer. The trial did not meet the primary endpoint, in the
intention-to-treat population, of a statistically significant
improvement in PFS. Cediranib is an oral vascular endothelial
growth factor receptor inhibitor, which blocks the growth of blood
vessels supporting tumour growth.
CVRM
a) Farxiga (heart failure)
In March 2020, the Company announced that the DAPA-CKD Phase III
trial for Farxiga in patients with CKD would be stopped early,
following a recommendation from an IDMC, based on its determination
of overwhelming efficacy. The decision followed a routine
assessment of efficacy and safety. The Company anticipates
presentation of the data at a forthcoming medical meeting.
During the period, the Company decided not to pursue the
application for Farxiga in type-1 diabetes in the US. This followed
a complete response letter received in 2019. Forxiga is currently
approved for the treatment of type-1 diabetes in the EU and
Japan.
Table 27 : Key large CVRM outcomes trials
Trial Population Design Primary Timeline Status
endpoint(s)
----------------- ----------------- --------------------- ----------------- ------------------ ------------------
Farxiga
----------------- ---------------------------------------------------------------------------------------------------
Phase III c.4,500 patients Arm 1: Farxiga 10mg Time to first FPCD Primary endpoint
DAPA-HF with HF and or 5 mg QD[56] + SoC occurrence of CV Q1 2017 met
reduced ejection Arm 2: placebo + SoC death or LPCD Fast Track
fraction, with hospitalisation Q4 2018 designation (US)
and without T2D due to HF or an
urgent HF visit
----------------- ----------------- --------------------- ----------------- ------------------ ------------------
Phase III c.4,700 patients Arm 1: Farxiga 10mg Time to first FPCD Recruitment
DELIVER with HF and QD occurrence of CV Q4 2018 ongoing
preserved death or First data Fast Track
ejection Arm 2: placebo worsening HF anticipated 2021+ designation (US)
fraction, with
and without T2D
----------------- ----------------- --------------------- ----------------- ------------------ ------------------
Phase III c.4,000 patients Arm 1: Farxiga 10mg Time to first FPCD Trial stopped
DAPA-CKD with CKD, with or 5mg QD occurrence of >= Q1 2017 early based on
and without T2D Arm 2: placebo 50% sustained LPCD recommendation
decline in Q1 2020 from an IDMC
eGFR[57] or Fast Track
reaching designation (US)
ESRD[58] or CV
death or renal
death
----------------- ----------------- --------------------- ----------------- ------------------ ------------------
Brilinta
----------------- ---------------------------------------------------------------------------------------------------
Phase III THEMIS c.19,000 Arm 1: Brilinta 60mg Composite of CV FPCD Primary endpoint
patients with BID[59] death, non-fatal Q1 2014 met
T2D and CAD Arm 2: placebo BID MI and non-fatal LPCD
without a on a background of stroke Q2 2016
history of MI or aspirin if not
stroke contra-indicated[60]
or not tolerated
----------------- ----------------- --------------------- ----------------- ------------------ ------------------
Phase III c.11,000 Arm 1: Brilinta 90mg Prevention of FPCD Primary endpoint
THALES patients with BID the composite of Q1 2018 met
acute ischaemic Arm 2: placebo BID subsequent LPCD
stroke or on a background of stroke and death Q4 2019
transient aspirin if not at 30 days
ischaemic attack contra-indicated or
not tolerated
----------------- ----------------- --------------------- ----------------- ------------------ ------------------
b) Lokelma (hyperkalaemia)
In April 2020, the US FDA approved a label update for Lokelma to
include a dosing regimen specifically to treat hyperkalaemia
(elevated levels of potassium in the blood) in patients with
end-stage renal disease on chronic haemodialysis. The approval by
the agency was based on positive results from the Phase IIIb
DIALIZE trial.
Similarly, during the period, the Committee for Medicinal
Products for Human Use of the European Medicines Agency adopted a
positive opinion on a dosing and administration label update for
Lokelma to include patients with hyperkalaemia on stable
haemodialysis. The recommendation was also based on data from the
Phase IIIb DIALIZE trial, which showed that 41% of patients
receiving Lokelma maintained pre-dialysis potassium levels on at
least three out of four dialysis treatments after the long
interdialytic interval and did not require urgent rescue therapy.
This compared with 1.0% of patients receiving placebo, making it a
statistically significant and clinically meaningful improvement.
The safety profile of Lokelma observed in DIALIZE was consistent
with previous trials.
In March 2020, Lokelma was approved in Japan for the treatment
of patients with hyperkalaemia. The approval by the MHLW was based
on positive results from stand-alone trials in Japan and the global
clinical-trial programme. Lokelma is approved for the treatment of
hyperkalaemia in the US, EU, Canada, Hong Kong, China, Russia and
most recently, Japan.
c) Roxadustat (anaemia)
During the period, AstraZeneca accomplished a number of
regulatory submissions for roxadustat in rest-of-world countries,
including Brazil, Chile, India, Mexico, Philippines, South Korea
and Taiwan. In addition, a regulatory submission was made to the
ACSS consortium for Australia, Canada and Singapore. FibroGen and
Astellas are responsible for European regulatory submissions,
including Switzerland.
Respiratory & Immunology
AstraZeneca has taken the opportunity to rename its Respiratory
therapy area Respiratory & Immunology. With common pathways and
underlying disease drivers across respiratory and immunology,
AstraZeneca is following the science from chronic lung diseases to
immunology-driven disease areas.
Fasenra (eosinophil-driven diseases)
During the period, the Company announced three new trials for
Fasenra in skin diseases, adding to the five trials already
underway for the medicine in eosinophil-driven diseases (EDDs)
beyond severe asthma. In EDD, immune-system dysfunction causes
eosinophil recruitment and activation of eosinophils (a type of
white blood cell), leading to chronic local and/or systemic
inflammation. The three new trials for Fasenra in skin diseases
include two Phase II trials to assess the potential of the medicine
as a treatment for atopic dermatitis and chronic spontaneous
urticaria, as well as a Phase III trial in bullous pemphigoid
(BP).
Table 28 : Key Fasenra lifecycle management trials
Trial Population Design Primary Timeline Status
endpoint(s)
Phase III OSTRO Patients (aged Placebo or Nasal-polyposis FPCD Recruitment
18-75 years) with Fasenra 30mg Q8W burden and Q1 2018 completed
severe bilateral SC reported nasal LPCD
nasal polyposis; blockage Q2 2019
symptomatic, Data anticipated
despite SoC H2 2020
------------------- ----------------- ------------------- ------------------ -----------------
Phase III Patients with Placebo or Annualised rate of FPCD Recruitment
RESOLUTE moderate to very Fasenra 100mg moderate or severe Q4 2019 ongoing
severe COPD with a Q8W SC COPD exacerbations Data anticipated
history of 2021+
frequent COPD
exacerbations and
elevated
peripheral blood
eosinophils
------------------- ----------------- ------------------- ------------------ -----------------
Phase III Eosinophilic Fasenra 30mg or Proportion of FPCD Recruitment
MANDARA granulomatosis mepolizumab patients who Q4 2019 ongoing
with polyangiitis 3x100mg Q4W achieve remission, Data anticipated Orphan Drug
defined as a 2021+ Designation (US)
score[61] =0 and
an OCS dose <=4
mg/day at weeks 36
and 48
------------------- ----------------- ------------------- ------------------ -----------------
Phase III HES[62] Placebo or Time to HES FPCD Recruitment
NATRON Fasenra 30mg Q4W worsening flare or Q4 2019 ongoing
SC any cytotoxic Data anticipated Orphan Drug
and/or 2021+ Designation (US)
immuno-suppressive
therapy increase
or
hospitalisation
------------------- ----------------- ------------------- ------------------ -----------------
Phase III Eosinophilic Placebo or Proportion of Data anticipated Recruitment
MESSINA oesophagitis Fasenra 30mg Q4W patients with a 2021+ ongoing
SC histologic Orphan Drug
response Designation (US)
Changes from
baseline in
dysphagia PRO[63]
------------------- ----------------- ------------------- ------------------ -----------------
Phase III BP Placebo or Proportion of Data anticipated Initiating
FJORD Fasenra 30mg Q4W patients with 2021+
SC partial or
complete remission
of BP whilst off
OCS for >=2 months
at Week 36
------------------- ----------------- ------------------- ------------------ -----------------
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.
Interim Financial Statements
Table 29: Condensed consolidated statement of comprehensive
income - Q1 2020
For the quarter ended 31 March 2020 2019
-------------------------------------------------------------------------------------------
$m $m
------------------------------------------------------------------------------------------- -------- --------
Total Revenue 6,354 5,491
Product Sales 6,311 5,465
Collaboration Revenue 43 26
Cost of Sales (1,420) (1,129)
Gross Profit 4,934 4,362
Distribution costs (87) (78)
Research and development expense (1,388) (1,266)
Selling, general and administrative costs (2,719) (2,514)
Other operating income and expense 480 593
Operating Profit 1,220 1,097
Finance income 51 55
Finance expense (332) (367)
Share of after-tax losses in associates and joint ventures (4) (27)
Profit Before Tax 935 758
Taxation (185) (195)
Profit for the period 750 563
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit pension liability 440 10
Net gains on equity investments measured at fair value through other comprehensive income 171 120
Fair value movements related to own credit risk on bonds designated as fair value through
profit or loss 21 (1)
Tax on items that will not be reclassified to profit or loss (66) (43)
566 86
Items that may be reclassified subsequently to profit or loss
Foreign exchange arising on consolidation (608) 53
Foreign exchange arising on designating borrowings in net investment hedges (380) (180)
Fair value movements on cash flow hedges (187) (54)
Fair value movements on cash flow hedges transferred to profit or loss 45 47
Fair value movements on derivatives designated in net investment hedges 60 3
Costs of hedging (5) (6)
Tax on items that may be reclassified subsequently to profit or loss 73 23
(1,002) (114)
Other comprehensive loss for the period, net of tax (436) (28)
Total comprehensive income for the period 314 535
Profit attributable to:
Owners of the Parent 780 593
Non-controlling interests (30) (30)
750 563
Total comprehensive income attributable to:
Owners of the Parent 345 565
Non-controlling interests (31) (30)
314 535
Basic earnings per $0.25 Ordinary Share $0.59 $0.47
Diluted earnings per $0.25 Ordinary Share $0.59 $0.47
Weighted average number of Ordinary Shares in issue (millions) 1,312 1,267
Diluted weighted average number of Ordinary Shares in issue (millions) 1,313 1,268
-------- --------
Table 30 : Condensed consolidated statement of financial
position
At 31 Mar 2020 At 31 Dec 2019 At 31 Mar 2019
-------------------------------------------------------------------
$m $m $m
------------------------------------------------------------------- --------------- --------------- ---------------
Assets
Non-current assets
Property, plant and equipment 7,347 7,688 7,446
Right-of-use assets 644 647 707
Goodwill 11,569 11,668 11,674
Intangible assets 19,718 20,833 22,852
Investments in associates and joint ventures 44 58 76
Other investments 1,476 1,401 1,530
Derivative financial instruments 104 61 94
Other receivables 527 740 496
Deferred tax assets 2,960 2,718 2,531
44,389 45,814 47,406
Current assets
Inventories 3,123 3,193 3,050
Trade and other receivables 5,080 5,761 5,289
Other investments 752 849 822
Derivative financial instruments 61 36 234
Income tax receivable 262 285 118
Cash and cash equivalents 3,413 5,369 4,136
Assets held for sale 131 70 -
12,822 15,563 13,649
Total assets 57,211 61,377 61,055
Liabilities
Current liabilities
Interest-bearing loans and borrowings (2,289) (1,822) (3,544)
Lease liabilities (181) (188) (175)
Trade and other payables (12,633) (13,987) (13,102)
Derivative financial instruments (31) (36) (28)
Provisions (649) (723) (397)
Income tax payable (1,260) (1,361) (1,010)
(17,043) (18,117) (18,256)
Non-current liabilities
Interest-bearing loans and borrowings (15,634) (15,730) (17,320)
Lease liabilities (472) (487) (539)
Derivative financial instruments (188) (18) (5)
Deferred tax liabilities (2,501) (2,490) (3,267)
Retirement benefit obligations (2,129) (2,807) (2,385)
Provisions (807) (841) (379)
Other payables (6,221) (6,291) (6,875)
(27,952) (28,664) (30,770)
Total liabilities (44,995) (46,781) (49,026)
Net assets 12,216 14,596 12,029
Equity
Capital and reserves attributable to equity holders of the Parent
Share capital 328 328 317
Share premium account 7,946 7,941 4,438
Other reserves 2,056 2,046 2,046
Retained earnings 448 2,812 3,682
10,778 13,127 10,483
Non-controlling interests 1,438 1,469 1,546
Total equity 12,216 14,596 12,029
--------------- --------------- ---------------
Table 31 : 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 2019 317 4,427 2,041 5,683 12,468 1,576 14,044
Adoption of
new accounting
standards - - - 54 54 - 54
Profit for
the period - - - 593 593 (30) 563
Other comprehensive
loss - - - (28) (28) - (28)
Transfer to
other reserves - - 5 (5) - - -
Transactions
with owners:
Dividends - - - (2,403) (2,403) - (2,403)
Issue of Ordinary
Shares - 11 - - 11 - 11
Share-based
payments charge
for the period - - - 53 53 - 53
Settlement
of share plan
awards - - - (265) (265) - (265)
Net movement - 11 5 (2,001) (1,985) (30) (2,015)
At 31 Mar 2019 317 4,438 2,046 3,682 10,483 1,546 12,029
At 1 Jan 2020 328 7,941 2,046 2,812 13,127 1,469 14,596
Profit for
the period - - - 780 780 (30) 750
Other comprehensive
loss - - - (435) (435) (1) (436)
Transfer to
other reserves - - 10 (10) - - -
Transactions -
with owners:
Dividends - - - (2,489) (2,489) - (2,489)
Issue of Ordinary
Shares - 5 - - 5 - 5
Share-based
payments charge
for the period - - - 53 53 - 53
Settlement
of share plan
awards - - - (263) (263) - (263)
Net movement - 5 10 (2,364) (2,349) (31) (2,380)
At 31 Mar 2020 328 7,946 2,056 448 10,778 1,438 12,216
--------- --------- ---------- ---------- ------------------- ---------------- --------
Table 32 : Condensed consolidated statement of cash flows
For the quarter ended 31 March 2020 2019
$m $m
Cash flows from operating activities
Profit Before Tax 935 758
Finance income and expense 281 312
Share of after-tax losses of associates and joint
ventures 4 27
Depreciation, amortisation and impairment 841 676
Increase in working capital and short-term provisions (445) (710)
Gains on disposal of intangible assets (358) (512)
Fair value movements on contingent consideration arising
from business combinations (33) 8
Non-cash and other movements (429) (404)
Cash generated from operations 796 155
Interest paid (180) (208)
Tax paid (477) (334)
Net cash inflow/(outflow) from operating activities 139 (387)
Cash flows from investing activities
Payment of contingent consideration from business
combinations (167) (219)
Purchase of property, plant and equipment (186) (174)
Disposal of property, plant and equipment - 28
Purchase of intangible assets (190) (586)
Disposal of intangible assets 365 1,071
Movement in profit-participation liability - 150
Purchase of non-current asset investments (115) (3)
Disposal of non-current asset investments 184 17
Movement in short-term investments, fixed deposits
and other investing instruments 98 20
Payments to associates and joint ventures (8) (12)
Interest received 28 36
Net cash inflow from investing activities 9 328
Net cash inflow/(outflow) before financing activities 148 (59)
Cash flows from financing activities
Proceeds from issue of share capital 6 11
Issue of loans - 500
Dividends paid (2,398) (2,432)
Hedge contracts relating to dividend payments (93) 26
Repayment of obligations under leases (53) (42)
Movement in short-term borrowings 176 1,239
Net cash outflow from financing activities (2,362) (698)
Net decrease in cash and cash equivalents in the period (2,214) (757)
Cash and cash equivalents at the beginning of the
period 5,223 4,671
Exchange rate effects (32) 12
Cash and cash equivalents at the end of the period 2,977 3,926
Cash and cash equivalents consist of:
Cash and cash equivalents 3,413 4,136
Overdrafts (436) (210)
2,977 3,926
-------- --------
Notes to the Interim Financial Statements
1) Basis of preparation and accounting policies
These unaudited Interim Financial Statements for the three
months ended 31 March 2020 have been prepared in accordance with
IAS 34 'Interim Financial Reporting' as issued by the International
Accounting Standards Board (IASB) and as adopted by the EU. The UK
has yet to announce its post-Brexit IFRS-adoption authority and,
for the current time, will follow the EU approval process.
The unaudited Interim Financial Statements for the three months
ended 31 March 2020 were approved by the Board of Directors for
release on 29 April 2020.
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 that were applied in the
preparation of the Group's published consolidated financial
statements for the year ended 31 December 2019.
IFRS 3
An amendment to IFRS 3 'Business Combinations' relating to the
definition of a business was endorsed by the EU in April 2020 with
an effective date of 1 January 2020. The change in definition of a
business within IFRS 3 introduces an 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. This change is expected to provide more reliable
and comparable information about certain transactions as it
provides more consistency in accounting in the pharmaceutical
industry for substantially similar transactions for which, under
the previous definition, may have been accounted in different ways,
despite limited differences in substance. The Group has adopted
this amendment from the effective date.
IFRS 9, IAS 39 and IFRS 7
Amendments to IFRS 9 'Financial Instruments', IAS 39 'Financial
Instruments: Recognition and Measurement' and IFRS 7 'Financial
Instruments: Disclosures' relating to interbank offered rate (IBOR)
reform were endorsed by the EU in January 2020. The Group adopted
the amendments in the year ended 31 December 2019. The replacement
of benchmark interest rates such as the London Inter-bank Offered
Rate (IBOR) and other IBORs is a priority for global regulators.
The amendments provide relief from applying specific
hedge-accounting requirements to hedge relationships directly
affected by IBOR reform and have the effect that IBOR reform should
generally not cause hedge accounting to terminate. There is no
financial impact from the early adoption of these amendments.
The Group has one IFRS 9 designated hedge relationship that is
potentially impacted by IBOR reform, namely a EUR300m
cross-currency interest-rate swap in a fair-value hedge
relationship with EUR300m of a EUR750m 0.875% 2021 non-callable
bond. This swap references three-month USD LIBOR and uncertainty
arising from the Group's exposure to IBOR reform will cease when
the swap matures in 2021. The implications on the wider business of
IBOR reform will be assessed this year.
COVID-19
AstraZeneca has assessed the impact of the uncertainty presented
by the COVID-19 pandemic on the Interim Financial Statements
comprising the financial results to 31 March 2020 and the financial
position as at 31 March 2020, specifically considering the impact
on key judgements and significant estimates as detailed on page 173
of the Annual Report and 20-F Information 2019 along with a several
other areas of increased risk.
A detailed assessment has been performed, focussing on the
following areas:
- recoverable value of goodwill, intangible assets and property, plant and equipment
- impact on key assumptions used to estimate contingent consideration liabilities
- key assumptions used in estimating the Group's defined-benefit pension obligations;
- basis for estimating clinical-trial accruals
- key assumptions used in estimating rebates, chargebacks and returns for US Product Sales
- valuations of unlisted equity investments
- expected credit losses associated with changes in credit risk
relating to trade and other receivables
- net realisable value of inventories
- fair value of certain financial instruments
- recoverability of deferred tax assets
Given the significant volatility experienced in the financial
markets, the assumptions used to estimate the Group's material
defined-benefit pension obligations were updated and resulted in a
$678m reduction in the Group's overall defined-benefit pension
deficit. This reduction primarily reflected declines in liability
valuations from lower-inflation expectations and higher discount
rates (due to rising long term AA corporate bond yields) and more
than offset declines in asset values, which held up relatively well
in difficult market conditions. In the UK, GBP79m of
deficit-recovery contributions were also paid. The sensitivity of
the Group's main defined-benefit liability valuations to changes in
assumptions is set out on page 207 of the Annual Report and Form
20-F Information 2019.
No further material accounting impacts relating to the areas
assessed above were recognised during the three-month period ending
31 March 2020.
The Group will continue to monitor these areas of increased
judgement and risk for material changes.
Going concern
The Group has considerable financial resources available. As at
31 March 2020, the Group had $8.3bn in financial resources (cash
and cash-equivalent balances of $3.4bn, $0.8bn of liquid fixed
income securities 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 2020, with only $2.5bn of borrowings due
within one year). The Group's revenues are largely derived from
sales of medicines 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 those 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. In the
current environment, the Directors have also considered the impact
of a range of possible future COVID-19 related scenarios and
believe the Group retains sufficient liquidity to continue to
operate.
Based on the above paragraph, the going-concern basis has been
adopted in these Interim Financial Statements.
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 2019.
Financial information
The comparative figures for the financial year ended 31 December
2019 are not the Group's statutory accounts for that financial
year. Those accounts have been reported on by the Group's auditors
and will be 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) Intangible assets
In accordance with IAS 36 'Impairment of Assets', reviews for
triggers at an individual asset or cash-generating-unit level have
been conducted. This has resulted in a total impairment charge of
$117m being recorded during the three months ended 31 March 2020,
of which $102m is in relation to Bydureon (revised carrying amount
of $627m). The impairment was driven by an overall reduction in
forecast Total Revenue over the remaining asset life, reflecting
expectations of returns from promotional activities, including a
level of anticipated impact resulting from the restrictions in
place due to the COVID-19 pandemic. If Total Revenue projections
for Bydureon were to decline by a further 5% over the forecast
period, it would result in a further impairment charge of
c.$50m.
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
2019. Net Debt is a non-GAAP financial measure.
Table 33 : Net Debt
At 1 Jan 2020 Cash flow Non-cash & other Exchange movements At 31 Mar 2020
$m $m $m $m $m
-------------- ---------- ----------------- ------------------- ---------------
Non-current instalments of loans (15,730) - 7 89 (15,634)
Non-current instalments of
leases (487) - - 15 (472)
Total long-term debt (16,217) - 7 104 (16,106)
Current instalments of loans (1,597) - (1) - (1,598)
Current instalments of leases (188) 58 (56) 5 (181)
Commercial paper - (85) - - (85)
Bank collateral (71) (93) - - (164)
Other short-term borrowings
excluding overdrafts (8) 2 - - (6)
Overdraft (146) (297) - 7 (436)
Total current debt (2,010) (415) (57) 12 (2,470)
Gross borrowings (18,227) (415) (50) 116 (18,576)
Net derivative financial
instruments 43 93 (190) - (54)
Net borrowings (18,184) (322) (240) 116 (18,630)
Cash and cash equivalents 5,369 (1,917) - (39) 3,413
Other investments - current 849 (98) 6 (5) 752
Other investments - non-current 62 - (10) - 52
Cash and investments 6,280 (2,015) (4) (44) 4,217
Net Debt (11,904) (2,337) (244) 72 (14,413)
-------------- ---------- ----------------- ------------------- ---------------
Non-cash movements in the period include fair-value adjustments
under IFRS 9.
Other investments - non-current are included within the balance
of $1,476m (31 December 2019: $1,401m) in the Condensed
consolidated 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 $2,182m (31
December 2019: $2,146m) 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 Annual Report and Form 20-F Information 2019.
The Group holds certain equity investments that are categorised
as Level 3 in the fair-value hierarchy and for which fair-value
gains of $6m have been recognised in the quarter ended 31 March
2020. 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 $2,228m of
other investments, $2,035m held in money market funds, $327m of
loans designated at fair value through profit or loss, $332m of
loans designated in a fair value hedge relationship and ($54m) of
derivatives as at 31 March 2020. The total fair value of
interest-bearing loans and borrowings at 31 March 2020, which have
a carrying value of $18,576m in the Condensed consolidated
statement of financial position, was $20,929m. 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:
Table 34 : Financial instruments
2020 2019
Diabetes alliance Other Total Total
$m $m $m $m
------------------ ------ ------ ------
At 1 January 3,300 839 4,139 5,106
Settlements (124) (43) (167) (219)
Revaluations (22) (11) (33) 8
Discount unwind 57 16 73 90
At 31 March 3,211 801 4,012 4,985
------------------ ------ ------ ------
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
the global diabetes alliance of $3,211m (31 December 2019: $3,300m)
would increase/decline by $321m with an increase/decline in sales
of 10%, as compared with the current estimates.
Included within the BMS contingent consideration liability
includes estimates of royalties payable in relation to Bydureon.
The revised Total Revenue projections for Bydureon have also
resulted in a $22m reduction in the contingent consideration
balance as at 31 March 2020. A further 5% reduction in Bydureon
Total Revenue would result in an additional $11m reduction.
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 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 we are able
to make a reasonable estimate of the loss, AstraZeneca records the
loss absorbed or makes a provision for its best estimate of the
expected loss. The position could change over time and the
estimates that the Company made, and upon which the Company have
relied in calculating these provisions are inherently imprecise.
There can, therefore, be no assurance that any losses that result
from the outcome of any legal proceedings will not exceed the
amount of the provisions that have been booked in the accounts. The
major factors causing this uncertainty are described more fully in
the Disclosures and herein.
AstraZeneca has full confidence in, and will vigorously defend
and enforce, its intellectual property.
Matters disclosed in respect of the first quarter of 2020 and to
29 April 2020
Patent litigation
a) Tagrisso
US patent proceedings
As disclosed in February 2020, in response to Paragraph IV
notices from multiple abbreviated new drug application (ANDA)
filers, AstraZeneca filed patent-infringement lawsuits in the US
District Court for the District of Delaware. In its complaint,
AstraZeneca alleged that a generic version of Tagrisso, if approved
and marketed, would infringe a US Orange Book-listed Tagrisso
patent. No trial date has been set.
b) Symbicort
US patent proceedings
As previously disclosed, AstraZeneca has ANDA litigation against
Mylan Pharmaceuticals Inc. (Mylan) and 3M Company (3M) in the US
District Court for the Northern District of West Virginia. In the
action, AstraZeneca alleges that the defendants' generic versions
of Symbicort, if approved and marketed, would infringe various
AstraZeneca patents. Mylan and 3M allege that their proposed
generic medicines do not infringe the asserted patents and/or that
the asserted patents are invalid and/or unenforceable. The trial of
the Mylan and 3M matter is scheduled for October 2020.
c) Movantik
US patent proceedings
In March 2020, Aether Therapeutics, Inc. filed a patent
infringement lawsuit in the US District Court for the District of
Delaware against AstraZeneca, Nektar Therapeutics and Daiichi
Sankyo relating to Movantik.
Commercial litigation
Amplimmune
As disclosed in the US in June 2017, AstraZeneca was served with
a lawsuit filed by the stockholders' agents for Amplimmune, Inc.
(Amplimmune) in Delaware State Court that alleged, among other
things, breaches of contractual obligations relating to a 2013
merger agreement between AstraZeneca and Amplimmune. Trial of the
matter was held in February 2020 and post-trial oral argument is
scheduled for June 2020.
Government investigations/proceedings
a) Synagis
Litigation in New York
As disclosed in the US in June 2011, MedImmune received a demand
from the US Attorney's Office for the Southern District of New York
requesting certain documents related to the sales and marketing
activities of Synagis. In July 2011, MedImmune received a similar
court order to produce documents from the Office of the Attorney
General for the State of New York Medicaid and Fraud Control Unit
pursuant to what the government attorneys advised was a joint
investigation. MedImmune has co-operated with these inquiries. In
March 2017, MedImmune was served with a lawsuit filed in US
District Court for the Southern District of New York by the
Attorney General for the State of New York, alleging that MedImmune
inappropriately provided assistance to a single specialty-care
pharmacy. In September 2018, the US District Court in New York
denied MedImmune's motion to dismiss the lawsuit brought by the
Attorney General for the State of New York.
In June 2017, MedImmune was served with a lawsuit in US District
Court for the Southern District of New York by a relator under the
qui tam (whistle-blower) provisions of the federal and certain
state False Claims Acts. The lawsuit was originally filed under
seal in April 2009 and alleged that MedImmune made false claims
about Synagis. In November 2017, MedImmune was served with an
amended complaint in which relator set forth additional false
claims' allegations relating to Synagis. In September 2018, the US
District Court in New York dismissed the relator's lawsuit. In
January 2019, relator appealed the decision of the US District
Court in New York. In March 2020, the United States Court of
Appeals for the Second Circuit affirmed the US District Court's
decision dismissing the relator's lawsuit.
b) Crestor
Qui tam litigation
As previously disclosed, in the US, in January and February
2014, AstraZeneca was served with lawsuits filed in the US District
Court for the District of Delaware under the qui tam provisions of
the federal False Claims Act and related state statutes, alleging
that AstraZeneca directed certain employees to promote Crestor
off-label and provided unlawful remuneration to physicians in
connection with the promotion of Crestor. The Department of Justice
and all US states declined to intervene in the lawsuits. In March
2019, AstraZeneca filed a motion to dismiss the complaint. In
February 2020, the District Court partially granted AstraZeneca's
motion to dismiss.
Vermont US Attorney investigation
In April 2020, AstraZeneca received a Civil Investigative Demand
from the US Attorney's Office in Vermont and the Department of
Justice, Civil Division, seeking documents and information relating
to AstraZeneca's relationships with electronic health-record
vendors. AstraZeneca intends to co-operate with this enquiry.
6) Subsequent events
In April 2020, AstraZeneca completed an agreement to sublicense
its global rights to Movantik, excluding Europe, Canada and Israel,
to RedHill Biopharma (RedHill) for $67.5m. A related intangible was
classified as a current asset held for sale at 31 March 2020.
In April 2020, AstraZeneca and Circassia agreed to terminate the
development and commercialisation agreement relating to Tudorza and
Duaklir in the US. The agreement is expected to close in Q2 2020.
Upon completion, the rights to the assets will revert to
AstraZeneca in consideration for the release of amounts outstanding
under a loan agreement that arose from transactions relating to the
agreement. The loan was previously classified as a non-current
asset and has been reclassified as a current asset at 31 March
2020.
In April 2020, the Company signed and closed an agreement with
Taiyo Pharma Co. Ltd to divest the rights to Inderal, Tenormin,
Seloken and Omepral in Japan for Yen5,900m.
7) Product Sales year-on-year analysis[64]
Table 35 : Product Sales year-on-year analysis - Q1 2020
World Emerging Markets US Europe Established RoW
--------------------- ---------------------- ---------------------- ----------------- ---------------------- --------------------
$m % change $m % change $m % change $m % change $m % change
--------------------- ------ ------ ------ ------ ----
Actual CER Actual CER Actual Actual CER Actual CER
--------------------- ------ ------- ----- ------ ------- ----- ------ --------- ------ ------- ----- ---- ------- -----
Oncology
Tagrisso 982 56 58 280 n/m n/m 371 43 162 62 66 169 27 26
Imfinzi 462 57 57 33 n/m n/m 286 24 75 n/m n/m 68 94 93
Lynparza 397 67 69 56 n/m n/m 197 66 102 57 61 42 57 56
Calquence 88 n/m n/m 1 n/m n/m 86 n/m - - - 1 n/m n/m
Zoladex* 225 16 19 149 30 35 2 24 35 1 3 39 (10) (9)
Faslodex* 166 (35) (34) 48 7 10 23 (83) 64 19 22 31 7 5
Iressa* 77 (42) (41) 62 (28) (26) 4 (2) 5 (79) (78) 6 (69) (69)
Arimidex* 50 (1) 1 41 16 20 - - 1 (85) (85) 8 (14) (15)
Casodex* 42 (12) (10) 33 8 11 - - 1 (84) (84) 8 (37) (37)
Others 13 (37) (36) 8 (11) (9) 1 - 1 19 23 3 (60) (61)
Total Oncology 2,502 32 34 711 45 49 970 26 446 42 46 375 18 17
--------------------- ------ ------- ----- ------ ------- ----- ------ --------- ------ ------- ----- ---- ------- -----
BioPharmaceuticals:
CVRM
Farxiga 405 16 19 141 49 55 113 (14) 116 30 34 35 2 3
Brilinta 408 17 19 134 38 42 165 8 93 12 15 16 8 10
Bydureon 100 (30) (29) 1 (41) (39) 84 (28) 12 (34) (32) 3 (46) (44)
Onglyza 141 (8) (6) 47 10 13 67 (14) 15 (19) (17) 12 (10) (10)
Byetta 20 (32) (31) 3 n/m n/m 11 (42) 4 (37) (35) 2 (17) (13)
Other diabetes 13 16 18 2 n/m n/m 7 (9) 3 50 56 1 - -
Lokelma 11 n/m n/m - - - 10 n/m 1 n/m n/m - - -
Roxadustat - - - - - - - - - - - - - -
Crestor* 301 (10) (9) 192 (15) (13) 28 9 34 (12) (10) 47 4 4
Seloken /Toprol-XL* 177 (21) (18) 166 (14) (11) 4 (82) 4 (29) (29) 3 (2) 2
Atacand* 66 33 36 49 25 29 3 33 8 n/m n/m 6 32 36
Others 59 (18) (17) 37 (28) (27) - - 19 7 9 3 22 22
BioPharmaceuticals:
total CVRM 1,701 (1) 1 772 3 6 492 (12) 309 9 12 128 2 3
--------------------- ------ ------- ----- ------ ------- ----- ------ --------- ------ ------- ----- ---- ------- -----
BioPharmaceuticals:
Respiratory &
Immunology
Symbicort 790 35 36 156 17 20 310 76 195 7 10 129 37 37
Pulmicort 380 (1) - 313 - 1 23 (3) 26 3 6 18 (8) (8)
Fasenra 199 54 55 6 - - 120 29 46 n/m n/m 27 53 53
Daliresp /Daxas 53 11 12 1 (8) (4) 45 10 7 17 21 - - -
Bevespi 12 22 22 - - - 12 15 - - - - - -
Breztri 4 n/m n/m 4 n/m n/m - - - - - - - -
Others 113 (11) (10) 59 (14) (12) 2 38 46 (15) (13) 6 n/m n/m
BioPharmaceuticals:
total Respiratory &
Immunology 1,551 21 22 539 4 6 512 48 320 12 15 180 34 34
--------------------- ------ ------- ----- ------ ------- ----- ------ --------- ------ ------- ----- ---- ------- -----
Other medicines
Nexium 338 (7) (6) 187 (2) 1 40 (39) 22 36 41 89 (3) (3)
Synagis 85 61 61 5 n/m n/m 7 (72) 73 n/m n/m - - -
Losec /Prilosec 54 (30) (28) 44 (14) (12) 2 96 5 (74) (74) 3 (47) (48)
Seroquel XR /IR 36 (4) (3) 12 (17) (15) 13 n/m 8 (67) (67) 3 (47) (48)
Others 44 (8) (7) 1 n/m n/m 25 (9) 15 6 9 3 (82) (82)
Total other
medicines 557 (4) (3) 249 - 2 87 (23) 123 23 25 98 (15) (16)
--------------------- ------ ------- ----- ------ ------- ----- ------ --------- ------ ------- ----- ---- ------- -----
Total Product Sales 6,311 15 17 2,271 13 16 2,061 15 1,198 22 25 781 13 12
--------------------- ------ ------- ----- ------ ------- ----- ------ --------- ------ ------- ----- ---- ------- -----
8) Product Sales quarterly sequential analysis[65]
Table 36: Product Sales quarterly sequential analysis - Q1
2020
Q1 2020
----------------------------------------------------
$m % change
---------------------------------------------------- ------
Actual CER
---------------------------------------------------- ------ ------- -----
Oncology
Tagrisso 982 11 11
Imfinzi 462 9 9
Lynparza 397 13 13
Calquence 88 58 58
Zoladex* 225 15 15
Faslodex* 166 - -
Iressa* 77 (3) (4)
Arimidex* 50 (1) (2)
Casodex* 42 (2) (3)
Others 13 (52) (52)
Total Oncology 2,502 10 10
---------------------------------------------------- ------- -----
BioPharmaceuticals: CVRM
Farxiga 405 (3) (3)
Brilinta 408 (5) (5)
Bydureon 100 (28) (28)
Onglyza 141 8 8
Byetta 20 (24) (24)
Other diabetes 13 (22) (22)
Lokelma 11 42 42
Roxadustat - - -
Crestor* 301 2 1
Seloken /Toprol-XL* 177 (6) (6)
Atacand* 66 11 12
Others 59 (21) (22)
BioPharmaceuticals: total CVRM 1,701 (5) (5)
---------------------------------------------------- ------- -----
BioPharmaceuticals: Respiratory & Immunology
Symbicort 790 11 11
Pulmicort 380 (8) (9)
Fasenra 199 (3) (3)
Daliresp /Daxas 53 (8) (8)
Bevespi 12 9 9
Breztri 4 n/m n/m
Others 113 (16) (17)
BioPharmaceuticals: total Respiratory & Immunology 1,551 1 1
---------------------------------------------------- ------- -----
Other medicines
Nexium 338 (4) (4)
Synagis 85 35 35
Losec /Prilosec 54 18 17
Seroquel XR /IR 36 (12) (12)
Others 44 (71) (70)
Total other medicines 557 (15) (15)
---------------------------------------------------- ------- -----
Total Product Sales 6,311 1 1
---------------------------------------------------- ------- -----
9) Product Sales quarterly sequential analysis - FY 2019[66]
Table 37: Product Sales quarterly sequential analysis - FY
2019
Q1 2019 Q2 2019 Q3 2019 Q4 2019
$m % change $m % change $m % change $m % change
------ ------ ------ ------
Actual CER Actual CER Actual CER Actual CER
------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
Oncology
Tagrisso 630 6 6 784 24 25 891 14 13 884 (1) -
Imfinzi 295 13 13 338 15 15 412 22 22 424 3 4
Lynparza 237 13 13 283 19 20 327 16 15 351 7 8
Calquence 29 21 23 35 21 19 44 27 27 56 25 25
Faslodex* 254 (6) (6) 267 5 6 205 (23) (23) 166 (20) (19)
Zoladex* 194 7 6 197 2 1 226 15 16 196 (14) (12)
Iressa* 134 20 18 118 (12) (11) 91 (23) (22) 80 (13) (12)
Arimidex* 51 11 10 60 18 17 63 5 5 51 (20) (18)
Casodex* 48 4 3 57 19 18 52 (8) (6) 43 (18) (17)
Others 20 (13) (14) 28 40 29 20 (27) (22) 26 30 26
Total Oncology 1,892 7 6 2,167 15 15 2,334 8 8 2,274 (3) (2)
---------------------- ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
BioPharmaceuticals:
CVRM
Farxiga 349 (12) (12) 377 8 9 398 5 5 419 5 6
Brilinta 348 (7) (8) 389 12 12 416 7 8 428 3 3
Bydureon 142 3 3 141 (1) - 127 (10) (10) 139 9 10
Onglyza 153 3 3 116 (24) (24) 127 9 11 131 3 4
Byetta 30 (6) (5) 25 (17) (16) 28 10 13 27 (2) (4)
Other diabetes 11 (8) (17) 11 - 8 14 26 22 16 17 17
Lokelma - n/m n/m 2 n/m n/m 4 n/m n/m 8 87 74
Roxadustat - - - - - - - - - - - -
Crestor* 335 (5) (6) 310 (7) (7) 337 9 9 296 (12) (11)
Seloken /Toprol-XL* 225 41 38 168 (25) (25) 177 6 8 190 7 8
Atacand* 50 (14) (15) 56 12 14 55 (1) (1) 60 8 9
Others 71 (3) (5) 63 (11) (8) 65 4 2 72 13 16
BioPharmaceuticals:
total CVRM 1,714 (2) (3) 1,658 (3) (3) 1,749 5 6 1,785 2 3
---------------------- ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
BioPharmaceuticals:
Respiratory &
Immunology
Symbicort 585 (8) (8) 585 - 1 613 5 4 712 16 17
Pulmicort 383 (2) (2) 333 (13) (13) 337 1 3 413 22 23
Fasenra 129 3 4 167 29 30 202 21 21 206 2 2
Daliresp /Daxas 48 (11) (12) 56 17 18 53 (6) (7) 58 10 10
Bevespi 10 - (5) 10 - 2 10 4 8 12 8 5
Breztri - - - - - - 1 - - 1 (74) (73)
Others 128 (14) (12) 101 (21) (23) 102 1 (1) 135 33 38
BioPharmaceuticals:
total Respiratory &
Immunology 1,283 (6) (6) 1,252 (2) (2) 1,319 5 6 1,537 17 17
---------------------- ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
Other medicines
Nexium 363 (7) (8) 393 8 8 374 (5) (4) 353 (6) (6)
Synagis 53 (79) (79) 96 81 81 146 52 53 63 (57) (57)
Losec /Prilosec 76 27 26 68 (11) (10) 73 8 9 46 (38) (38)
Seroquel XR /IR 37 (34) (33) 32 (14) (10) 82 n/m n/m 40 (50) (49)
Others 47 (65) (64) 52 11 11 56 8 - 151 n/m n/m
Total other medicines 576 (35) (36) 641 11 12 731 14 14 653 (11) (10)
---------------------- ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
Total Product Sales 5,465 (5) (6) 5,718 5 5 6,132 7 8 6,250 2 3
---------------------- ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
Table 38 : Historic Collaboration Revenue
Q1 2020 Q1 2019 FY 2019 FY 2018
------------------------------- ----------------------------------------
$m $m $m $m
------------------------------- ---------------------------------------- -------- -------- -------- --------
Initial Collaboration Revenue Crestor (Spain) - - - 61
---------------------------------------- -------- -------- -------- --------
Ongoing Collaboration Revenue Lynparza : regulatory milestones - - 60 140
Lynparza : sales milestones - - 450 250
Lynparza /selumetinib: option payments - - 100 400
Crestor (Spain) - - 39
Enhertu: profit share 14 - - -
Roxadustat : profit share 3 - - -
Royalty income 17 16 62 49
------------------------------------------------------------------------ -------- -------- -------- --------
Other Collaboration Revenue 9 10 108 141
------------------------------------------------------------------------ -------- -------- -------- --------
Total 43 26 819 1,041
------------------------------------------------------------------------ -------- -------- -------- --------
Table 39 : Other Operating Income and Expense
The table below provides an analysis of Reported Other Operating
Income and Expense.
Divestment/other Q1 2020 Q1 2019 FY 2019 FY 2018
----------------------------------------------------------
$m $m $m $m
---------------------------------------------------------- -------- -------- -------- --------
Hypertension medicines (ex-US, India and Japan) 350 - - -
Synagis (US) - 515 515 -
Losec (ex-China, Japan, US and Mexico) - - 243 -
Seroquel and Seroquel XR (US, Canada, Europe and Russia) - - 213 -
Arimidex and Casodex (various countries) - - 181 -
Nexium ( Europe) and Vimovo (ex-US) - - - 728
Seroquel - - - 527
Legal settlement[67] - - - 346
Atacand - - - 210
Anaesthetics - - - 172
Alvesco , Omnaris and Zetonna - - - 139
Other 130 78 389 405
---------------------------------------------------------- -------- -------- --------
Total 480 593 1,541 2,527
---------------------------------------------------------- -------- -------- --------
Shareholder information
Announcement of first half and second quarter 30 July 2020
results
Announcement of year to date and third quarter 5 November 2020
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 first interim dividend for 2020, payable
on 14 September 2020, will be 14 August 2020. The ex-dividend date
will be 13 August 2020.
Trademarks 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 trademarks
of the AstraZeneca group of companies. Trademarks of companies
other than AstraZeneca that appear in this document include
Alvesco, Omnaris and Zetonna, trademarks of Covis Pharma; Atacand,
owned by AstraZeneca or Cheplapharm (depending on geography);
Duaklir, Eklira and Tudorza, trademarks of Almirall, S.A.; Enhertu,
a trade mark of Daiichi Sankyo; Inderal and Tenormin, owned by
AstraZeneca, Atnahs Pharma or Taiyo Pharma Co. Ltd (depending on
geography); Losec and Omepral, owned by AstraZeneca, Cheplapharm or
Taiyo Pharma Co. Ltd (depending on geography); Seloken, owned by
AstraZeneca or Taiyo Pharma Co. Ltd (depending on geography);
Synagis, owned by Arexis AB or AbbVie Inc. (depending on
geography); Vimovo, owned by AstraZeneca or Grünenthal GmbH
(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 Deutsche Bank
Trust Company
Americas
1 Francis Crick Equiniti Limited Euroclear Sweden American Stock
Avenue Aspect House AB PO Box 191 Transfer
Cambridge Biomedical Spencer Road SE-101 23 Stockholm 6201 15th Avenue
Campus Lancing Brooklyn
Cambridge West Sussex NY 11219
CB2 0AA BN99 6DA
United Kingdom United Kingdom Sweden United States
+44 (0) 20 3749 +46 (0) 8 402
5000 0800 389 1580 9000 +1 (888) 697 8018
+44 (0) 121 415
7033 +1 (718) 921 8137
db@astfinancial.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,
the Group provides 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 the Group believes its 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 risk of failure or delay in delivery of pipeline or launch of new medicines
- the risk of failure to meet regulatory or ethical requirements
for medicine development or approval
- the risk of failure to obtain, defend and enforce effective
intellectual-property (IP) protection and IP challenges by third
parties
- the impact of competitive pressures including expiry or loss
of IP rights, and generic competition
- the impact of price controls and reductions
- the impact of economic, regulatory and political pressures
- the impact of uncertainty and volatility in relation to the UK's exit from the EU
- the risk of failures or delays in the quality or execution of
the Group's commercial strategies
- the risk of failure to maintain supply of compliant, quality medicines
- the risk of illegal trade in our products
- the impact of reliance on third-party goods and services
- the risk of failure in information technology, data protection or cybercrime
- the risk of failure of critical processes
- any expected gains from productivity initiatives are uncertain
- the risk of failure to attract, develop, engage and retain a
diverse, talented and capable workforce
- the risk of failure to adhere to applicable laws, rules and regulations
- the risk of the safety and efficacy of marketed medicines being questioned
- the risk of adverse outcome of litigation and/or governmental investigations
- the risk of failure to adhere to increasingly stringent
anti-bribery and anti-corruption legislation
- the risk of failure to achieve strategic plans or meet targets or expectations
- the risk of failure in financial control or the occurrence of fraud
- the risk of unexpected deterioration in the Group's financial position
- the impact that the COVID-19 global pandemic may have or
continue to have on these risks, on the Group's ability to continue
to mitigate these risks, and on the Group's operations, financial
results or financial condition
Nothing in this document, or any related presentation/webcast,
should be construed as a profit forecast.
[11] Extensive stage.
([12]) Small cell lung cancer.
[13] The treatment of a cancer in the advanced, metastatic
setting after 2nd-line treatment (see below).
[14] Human epidermal growth factor receptor 2 positive.
[15] Neurofibromatosis type 1.
[16] Non-small cell lung cancer.
[17] Overall survival.
[18] The initial treatment of a cancer in the advanced,
metastatic setting.
[19] The treatment of a cancer in the advanced, metastatic
setting after the initial treatment.
[20] Chronic kidney disease.
[21] Breast cancer susceptibility genes 1/2 mutation.
[22] Type-2 diabetes.
[23] CV outcomes trial.
[24] Heart failure.
[25] Chronic obstructive pulmonary disease.
[26] Cannot be removed completely through surgery.
[27] Chronic lymphocytic leukaemia.
[28] Coronary artery disease.
[29] Painless, benign soft growths inside the nose.
[30] Systemic lupus erythematosus.
[31] HER2 immunohistochemistry 1+ or 2+ with fluorescence in
situ hybridisation test result negative.
[32] A group of disorders in which the bone marrow fails to
produce healthy blood cells.
[33] Substitution of threonine (T) with methionine (M) at
position 790 of exon 20 mutation.
[34] 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.
[35] As per the FY 2019 results announcement.
[36] Based on average daily spot rates in FY 2019.
[37] Based on average daily spot rates from 1 January 2020 to 31
March 2020.
[38] Other currencies include AUD, BRL, CAD, KRW and RUB.
[39] These priorities were determined through a materiality
assessment conducted in 2018 with a broad range of 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 align with
the United Nations Sustainable Development Goals (SDG), and, in
particular, SDG three for 'Good Health'.
[40] Phase II trial data, with potential for registration.
[41] Subject to regulatory approvals associated with AbbVie
Inc.'s (AbbVie) proposed acquisition of Allergan plc
(Allergan).
[42] First patient commenced dosing.
[43] Last patient commenced dosing.
[44] Programmed death-ligand 1, a protein that assists in the
body's immune responses.
[45] Conducted by the Canadian Cancer Trials Group.
[46] Progression-free survival.
[47] Bacillus Calmette-Guerin.
[48] Hepatocellular carcinoma (liver cancer).
[49] Transarterial chemoembolisation.
[50] Head and neck squamous cell carcinoma.
[51] The US Orphan Drug Act grants special status to a medicine
or potential medicine to treat a rare disease or condition upon
request of a sponsor. Designation qualifies the sponsor of the
medicine for various development incentives.
[52] Conducted by the ARCAGY/Groupe d'Investigateurs national
des Etudes des Cancers Ovariens et du sein.
[53] Conducted by the National Cancer Institute (US).
[54] Immunohistochemistry.
[55] In situ hybridisation.
[56] Quaque die, or once a day.
[57] Estimated glomerular filtration rate.
[58] End-stage renal disease.
[59] Bis in die, or twice a day.
[60] A specific situation in which a medicine should not be used
as a treatment as it may be harmful to the patient.
[61] Birmingham Vasculitis Activity Score.
[62] Hypereosinophilic syndrome.
[63] Patient-reported outcomes.
[64] The table 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. *Denotes a legacy
medicine.
[65] 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.
*Denotes a legacy medicine.
[66] 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.
*Denotes a legacy medicine.
[67] Not recorded within Core Other Operating Income and
Expense.
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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