Year-To-Date and Q3 2016 Results

Released : 10.11.2016

RNS Number : 8325O
AstraZeneca PLC
10 November 2016
 

AstraZeneca PLC

10 November 2016 07:00

 

Year-To-Date and Q3 2016 Results

Performance in line with our expectations

 

Financial Summary


YTD 2016


Q3 2016


$m

% change

$m 

% change





CER1

Actual

CER

Actual

Total Revenue

17,417

(3)

(5)

5,699

(4)

(4)

Product Sales

16,059

(6)

(8)

5,025

(14)

(14)

Externalisation Revenue

1,358

56

55

674

n/m

n/m








Reported Operating Profit

2,369

(26)

(22)

1,028

(29)

(12)

Core Operating Profit2

4,695

(13)

(12)

1,696

(13)

(2)








Reported Earnings Per Share (EPS)

$1.31

(26)

(18)

$0.80

4

32

Core EPS

$3.10

(10)

(7)


$1.32

12

28

 

The Reported and Core EPS performance in Q3 2016 included a non-recurring tax benefit of $0.36, resulting from agreements on transfer pricing arrangements between various tax authorities.

 

·     Total Revenue declined by 3% in the year to date to $17,417m, reflecting a decline in Product Sales that was driven by the entry in the US of multiple Crestor generic medicines

·     Continued good progress on cost control:

-     Reported and Core R&D expenses grew by 4% to $1,402m and were stable at $1,337m in the third quarter, respectively

-     Reported and Core SG&A expenses reduced by 8% to $2,403m and by 12% to $1,892m in the third quarter, respectively

·      Reported EPS declined by 26% in the year to date, reflecting the fall in Product Sales. Core EPS declined by 10%, reflecting the phasing of Other Operating Income towards the final quarter of the year

·      Full-year financial guidance remains unchanged

 

Commercial Highlights

The Growth Platforms grew by 6% in the year to date (Q3 2016: Up by 3%):

·      Emerging Markets: 6% growth supported by China (up by 10%); Latin America sales declined by 11%, impacted by the reduction of activities in Venezuela

·      Diabetes: Growth of 13%. Farxiga became the Company's largest-selling Diabetes medicine. Slower Diabetes growth of 6% in the third quarter, reflecting an expected decline in the sales of Onglyza

·      Respiratory: A decline of 2%, with marked declines in the sale of Symbicort in the US and Europe, reflecting the competitive environment and a Q3 rebate true-up in the US

·      Brilinta: Growth of 39%. Deceleration in the third quarter, a function of wholesaler stocking in the comparative period

·      New Oncology: Strong sales of $197m in Q3 2016 (H1: $251m), driven by Tagrisso and Lynparza 

 

Achieving Scientific Leadership: Progress Since The Last Results Announcement

Regulatory Approvals

- Brilinta - cardiovascular (CV) disease (JP)

Regulatory Submissions*

/Acceptances

- Faslodex - breast cancer (1st line) (JP)*

- Tagrisso - lung cancer (CN)*

- ZS-9 - hyperkalaemia (US)

Positive Phase III Data Readouts

- Lynparza - ovarian cancer (2nd line)

- Farxiga + Bydureon - type-2 diabetes

- benralizumab - severe, uncontrolled asthma

Other Key Developments

- Priority Review Designation: Tagrisso (CN)

- Fast Track Designation: AZD3293 - Alzheimer's disease (US)

 

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

"The performance in the third quarter was in line with our expectations, reflecting the transitional impact from the first full quarter of generic competition to Crestor in the US. We sharpened significantly our focus on our three therapy areas, by prioritising our portfolio through externalisation and divestments. This focus, underpinned by our productivity initiatives, supported the rapid reduction in SG&A costs. This enabled our increased investment in Oncology, as well as in China and launched new medicines in key markets.

 

Our late-stage pipeline continued to advance at a pace we could not have anticipated three years ago, as we saw with recent positive results for Tagrisso in lung cancer, Lynparza in ovarian cancer and our first respiratory biologic medicine, benralizumab, in severe, uncontrolled asthma. 

 

Importantly, we are entering an intensive period of news flow over the next twelve months, in particular revealing the potential of our Immuno-Oncology and targeted medicines. Our focus on scientific excellence keeps us on track with our goals, as we approach an inflection point of a pipeline designed to transform our company and the lives of patients."

 

FY 2016 Guidance

Guidance for FY 2016 is unchanged and is shown at CER1:

 

Total Revenue

A low to mid single-digit percentage decline

Core EPS

A low to mid single-digit percentage decline

 

The above guidance incorporates the dilutive effects arising from the Acerta Pharma B.V. (Acerta Pharma) and ZS Pharma, Inc. (ZS Pharma) transactions announced in FY 2015.

 

Core R&D costs are now expected to be ahead of those in FY 2015. The Company will materially reduce Core SG&A costs in FY 2016 versus the prior year. These measures are based on constant exchange rates.

 

The Company presents Core EPS guidance. It is unable to provide guidance on a Reported/GAAP basis because the Company cannot reliably forecast material elements of the Reported/GAAP result, including the fair-value adjustments arising on acquisition-related liabilities, intangible-asset impairment charges and legal-settlement provisions.

 

FY 2016 Currency Impact

Based on average exchange rates in the year to date and the Company's published currency sensitivities, there is expected to be an immaterial impact from currency movements on Total Revenue in FY 2016. Core EPS is expected to benefit from currency movements by a low to mid single-digit percentage versus the prior year. Further details on currency sensitivities are contained within the Operating and Financial Review.

 

Notes

1.   All growth rates and guidance are shown at constant exchange rates (CER) unless otherwise specified.

2.   See the Operating and Financial Review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.

 

Pipeline: Forthcoming 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 results from the pipeline.

 

Q4 2016

 

Tagrisso - lung cancer: Regulatory submission (US, EU) (AURA3)

 

roxadustat - anaemia: Rolling regulatory submission (CN)

 

benralizumab - severe, uncontrolled asthma: Regulatory submission (US, EU)

 

H1 2017

 

Faslodex - breast cancer (1st line): Regulatory decision (JP); regulatory submission (US, EU)
Lynparza - breast cancer: Data readout

Lynparza - ovarian cancer (2nd line): Regulatory submission

 

durva + treme - lung cancer (MYSTIC): Data readout

durva + treme - lung cancer (ARCTIC): Data readout

durva + treme - HNSCC# (CONDOR): Data readout, regulatory submission (US) (Phase II)*

acalabrutinib - blood cancer: Data readout, regulatory submission (US) (Phase II)*

 

saxagliptin/dapagliflozin - type-2 diabetes: Regulatory decision (US)

Bydureon - autoinjector: Regulatory submission (US)

ZS-9 - hyperkalaemia: Regulatory decision (US, EU)

 

benralizumab - severe, uncontrolled asthma: Regulatory submission (JP)

 

brodalumab - psoriasis: Regulatory decision (US, EU)

 

H2 2017

 

Lynparza - ovarian cancer (1st line): Data readout

Lynparza - breast cancer: Regulatory submission

Tagrisso - lung cancer: Regulatory decision (CN)

Tagrisso - lung cancer (1st line): Data readout

 

durvalumab - lung cancer (PACIFIC): Data readout, regulatory submission (US)

durva + treme - lung cancer (MYSTIC): Regulatory submission

durva + treme - lung cancer (ARCTIC): Regulatory submission
durva + treme - HNSCC
# (KESTREL): Data readout

moxetumomab - leukaemia: Data readout

 

roxadustat - anaemia: Data readout (AstraZeneca-sponsored trial)

 

tralokinumab - severe, uncontrolled asthma: Data readout

 

The term 'data readout' in this section refers to Phase III data readouts, unless specified otherwise.

*Potential fast-to-market opportunity ahead of randomised, controlled trials.

#Head and Neck Squamous Cell Carcinoma

 

Results Presentation

A conference call and webcast for investors and analysts, hosted by management, will begin at midday UK time today. Click here to register for the webcast, with further details available via astrazeneca.com/investors.

 

Reporting Calendar

The Company intends to publish its full-year and fourth-quarter financial results on 2 February 2017.

 

About AstraZeneca

AstraZeneca is a global, science-led biopharmaceutical company that focuses on the discovery, development and commercialisation of prescription medicines, primarily for the treatment of diseases in three main therapy areas - Oncology, Cardiovascular & Metabolic Diseases and Respiratory. The Company also is selectively active in the areas of autoimmunity, neuroscience and infection. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information, please visit www.astrazeneca.com and follow us on Twitter @AstraZeneca.

 

Media Enquiries

Esra Erkal-Paler

UK/Global

+44 203 749 5638

Neil Burrows

UK/Global

+44 203 749 5637

Vanessa Rhodes

UK/Global

+44 203 749 5736

Karen Birmingham

UK/Global

+44 203 749 5634

Rob Skelding

UK/Global

+44 203 749 5821

Jacob Lund

Sweden

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Michele Meixell

US

+1 302 885 2677

Investor Relations



Thomas Kudsk Larsen


+44 203 749 5712

Craig Marks

Finance, Fixed Income, M&A

+44 7881 615 764

Henry Wheeler

Oncology

+44 203 749 5797

Mitchell Chan

Oncology

+1 240 477 3771

Lindsey Trickett

Cardiovascular & Metabolic Diseases

+1 240 543 7970

Nick Stone

Respiratory

+44 203 749 5716

Christer Gruvris

Autoimmunity, neuroscience & infection

+44 203 749 5711

US toll free


+1 866 381 7277

 

 

Operating and Financial Review

_______________________________________________________________________________________

All narrative on growth and results in this section is based on CER unless stated otherwise. Financial figures are in US$ millions ($m). The performance shown in this announcement covers the nine and three-month periods to 30 September 2016 (the year to date (YTD) and the third quarter, respectively) compared to the nine and three-month periods to 30 September 2015.

 

Core measures, which are presented in addition to Reported financial information, are non-GAAP measures provided to enhance understanding of the Company's underlying financial performance. Core financial measures are adjusted to exclude certain significant items, such as:

 

-     amortisation and impairment of intangible assets, including impairment reversals but excluding any charges relating to IT assets

-     charges and provisions related to global restructuring programmes (this will include such charges that relate to the impact of global restructuring programmes on capitalised IT assets)

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

 

Details on the nature of these measures are provided on page 64 of the Annual Report and Form 20-F Information 2015.

 

Total Revenue

 


YTD 2016

Q3 2016

$m

% CER change

$m

% CER change

Product Sales

16,059

(6)

5,025

(14)

Externalisation Revenue

1,358

56

674

n/m






Total Revenue

17,417

(3)

5,699

(4)

 

Based on actual exchange rates, Total Revenue declined by 5% in the year to date, reflecting the strength of the US dollar.

 

Product Sales

The level of decline in Product Sales was driven by the US market entry of multiple Crestor generic medicines in the third quarter, as well as the ongoing impact of Nexium generic medicines in the US. Q3 2016 sales of Crestor and Nexium in the US declined by 82% and 50%, respectively. Overall US Product Sales declined by 17% in the year to date (Q3 2016: Down by 35%), with Product Sales in Europe declining by 2% (Q3 2016: Down by 1%).

 

Within Product Sales, the Growth Platforms grew by 6% in the year to date, representing 62% of Total Revenue:

Growth Platforms

YTD 2016

Q3 2016

Product Sales ($m)

% CER change

Product Sales ($m)

% CER change

Emerging Markets

4,308

6

1,395

3

Respiratory

3,543

(2)

1,110

(8)

Diabetes

1,829

13

606

6

Japan

1,593

(2)

595

-

Brilinta

603

39

208

25

New Oncology1

448

n/m

197

n/m






Total2

10,763

6

3,584

3

1New Oncology comprises Lynparza, Iressa (US) and Tagrisso

2Total Product Sales for Growth Platforms adjusted to remove duplication on a medicine and regional basis 

 

Externalisation Revenue

Externalisation Revenue recognised in the year to date amounted to $1,358m. Highlights included:

 

Medicine

Partner

Region

$m

Anaesthetics

Aspen Global Incorporated (Aspen) - initial revenue

Global (excl. US)

520

Plendil

China Medical System Holdings Ltd -commercialisation rights - initial revenue

China

298

Tralokinumab - atopic dermatitis

LEO Pharma A/S (LEO Pharma) - initial revenue

Global

115

AZD3293

Eli Lilly and Company (Lilly) - milestone revenue

Global

100

Nexium OTC 20mg

Pfizer Inc. (Pfizer) - milestone revenue

Global

93

Moventig

ProStrakan Group plc (ProStrakan) - commercialisation rights - initial and milestone revenue

EU

78

 

Examples of sustainable future Externalisation Revenue streams are shown below:

 

Announcement Date

Medicine

Partner

Region

Externalisation Revenue

1 July 2016

Tralokinumab - atopic dermatitis

LEO Pharma

Global

·    Initial $115m milestone

·    Up to $1bn in commercially-related milestones

·    Up to mid-teen tiered percentage royalties on sales

9 June 2016

Anaesthetics

Aspen

Global (excl. US)

·    Initial $520m milestone

·    Up to $250m in sales-related revenue

·    Double-digit percentage trademark royalties on sales

2 September 2015

FluMist

Daiichi Sankyo Company, Ltd. (Daiichi Sankyo)

 

Japan

·    Initial (undisclosed) milestone

·    Sales-related revenue (undisclosed)

1 September 2015

Brodalumab

Valeant Pharmaceuticals International, Inc. (Valeant)

Global, later amended to US

·    Initial $100m milestone

·    Pre-launch milestone up to $170m

·    Sales-related royalties up to $175m

19 March 2015

Movantik

Daiichi Sankyo

US

·    Initial $200m milestone

·    Up to $625m in Product Sales-related revenue

 

 

Product Sales

_______________________________________________________________________________________

The performance of key medicines is shown below, with a geographical split shown in Notes 8 and 9.

 


YTD 2016

Q3 2016


$m

% of Total

% Change

$m

% Change


CER

Actual

CER

Actual

Oncology








Iressa

395

2

(3)

(5)

125

(13)

(11)

Tagrisso

276

2

n/m

n/m

133

n/m

n/m

Lynparza

156

1

n/m

n/m

58

111

107









Legacy:








Faslodex

608

4

19

17

207

11

11

Zoladex

581

4

(4)

(6)

199

(5)

(5)

Casodex

187

1

(9)

(8)

62

(8)

(5)

Arimidex

175

1

(6)

(8)

56

(14)

(13)

Others

75

-

(32)

(29)

27

(29)

(21)

Total Oncology

2,453

15

17

16

867

17

19

Cardiovascular & Metabolic Diseases








Brilinta

603

4

39

36

208

25

22

Farxiga

596

4

79

75

220

64

63

Onglyza

571

4

(2)

(4)

169

(16)

(17)

Bydureon

436

3

3

3

145

(10)

(10)

Byetta

199

1

(18)

(18)

61

(15)

(15)









Legacy:








Crestor

2,770

17

(24)

(25)

688

(44)

(44)

Seloken/Toprol-XL

559

3

8

2

185

12

8

Atacand

234

1

(9)

(15)

74

(3)

(6)

Others

337

2

(24)

(27)

95

(28)

(29)

Total Cardiovascular & Metabolic Diseases

6,305

39

(8)

(10)

1,845

(21)

(21)

Respiratory








Symbicort

2,249

14

(10)

(11)

697

(17)

(18)

Pulmicort

773

5

8

4

224

4

1

Tudorza/Eklira

134

1

(5)

(6)

47

(17)

(19)

Daliresp/Daxas

113

1

57

57

42

27

27

Duaklir

44

-

n/m

n/m

14

88

75

Others

230

1

23

19

86

46

41

Total Respiratory

3,543

22

(2)

(4)

1,110

(8)

(10)

Other








Nexium

1,541

10

(19)

(20)

516

(21)

(20)

Seroquel XR

617

4

(20)

(21)

190

(26)

(26)

Synagis

375

2

(3)

(3)

104

(11)

(11)

Losec/Prilosec

217

1

(15)

(17)

72

(11)

(12)

Movantik/Moventig

65

-

n/m

n/m

25

n/m

n/m

FluMist/Fluenz

37

-

(58)

(62)

26

(61)

(66)

Others

906

6

(15)

(19)

270

(25)

(25)

Total Other

3,758

23

(16)

(18)

1,203

(22)

(22)

Total Product Sales

16,059

100

(6)

(8)

5,025

(14)

(14)

 

 

Product Sales Summary

_______________________________________________________________________________________

 

ONCOLOGY

YTD sales of $2,453m; up by 17%. Oncology sales represented 15% of Total Product Sales.

 

Iressa (YTD sales of $395m; down by 3%)

Sales in the US were $16m as the Company prioritised the launch of Tagrisso.

 

In Europe, sales declined by 5% to $91m, reflected primarily in lower market shares.

 

Emerging Markets sales declined by 6% to $187m. China sales declined by 13% to $98m, as a result of the price re-set following national reimbursement listing in China that was obtained in June. The price adjustment was partially offset by an expected increase in volume demand.

 

Tagrisso (YTD sales of $276m)

In the third quarter, sales of Tagrisso were higher than Iressa sales for the first time. Tagrisso became the leading AstraZeneca medicine for the treatment of lung cancer. Regulatory approvals were granted in a number of additional markets, including Korea, Switzerland and Canada; the Company anticipates additional regulatory approvals and reimbursement decisions in due course. To date, Tagrisso has received regulatory approval in 41 markets worldwide.

 

Sales in the US increased by 33% in the third quarter as compared to the second quarter, taking year-to-date sales to $180m. Sales growth in the third quarter was driven by new patient starts and treatment duration.

 

On 29 September 2016, a third-party, blood-based companion-diagnostic test for Tagrisso was approved in the US, to confirm the presence of a T790M mutation in patients with locally-advanced or metastatic EGFR T790M mutation-positive non-small cell lung cancer (NSCLC), who have been previously treated with EGFR tyrosine kinase inhibitor (TKI) therapy.

 

After regulatory approval in the EU and Japan earlier in the year, sales in the year to date were $49m in Europe and $43m in Japan.

Lynparza (YTD sales of $156m)

Lynparza is now available to patients in 30 countries, with regulatory reviews underway in seven additional countries including Singapore, Brazil, and Russia. Almost 4,800 patients have been prescribed Lynparza since the US launch in December 2014.

 

Sales in the US increased by 109% in the year to date to $96m, primarily driven by longer duration of therapy, as patients stayed on treatment for longer due to efficacy benefits.

 

Sales in Europe increased to $56m, following several successful launches.

 

Legacy: Faslodex (YTD sales of $608m; up by 19%)

Sales in the US in the year to date increased by 23% to $321m, mainly driven by an expanded label in March 2016 for 2nd-line advanced or metastatic breast cancer, in combination with another recently-approved medicine.

 

Europe year-to-date sales increased by 11% to $169m.

 

An increase in demand in Brazil (sales up by 4% to $20m) and China (sales up by 114% to $14m) drove Emerging Markets sales to $70m, representing an increase of 26%.

 

Legacy: Zoladex (YTD sales of $581m; down by 4%)

The decline in global sales was attributed to Europe sales (down 5% to $117m) and Established Rest Of World (ROW) sales (down by 6% to $199m). This decline in demand was partially offset by favourable sales performances in the US (up by 23% to $27m) and China (up by 22% to $105m). Latin America sales, outside of Brazil, declined by 40% in the year to date, reflecting the reduction of AstraZeneca's activities in Venezuela.

 

 

CARDIOVASCULAR & METABOLIC DISEASES

YTD sales of $6,305m; down by 8%. Cardiovascular & Metabolic Diseases sales represented 39% of Total Product Sales.

 

Brilinta (YTD sales of $603m; up by 39%)

A slowdown in third-quarter sales growth of 25% to $208m reflected inventory built by US wholesalers in Q3 2015, during the launch of the 60mg dose; underlying growth remained strong in the period.

 

Sales in the US in the year to date were $243m, representing an increase of 43%. The overall performance reflected updated preferred guidelines from the American College of Cardiology and the American Heart Association in the first half of the year; Brilinta remained the branded oral anti-platelet market leader in the US. Brilinta's new-to-brand prescription market share was 12.8% at the end of the third quarter, representing an increase of four basis points.

 

Year-to-date sales of Brilique in Europe increased by 15% to $192m, reflecting indication leadership across a number of markets. In the first half of the year, the German Institute for Quality and Efficiency in Healthcare gave its assessment of the additional benefit from Brilique at the 60mg dose. This assessment referred to the new indication (high-risk, post-myocardial infarction), reflecting the PEGASUS trial.

 

Emerging Markets year-to-date sales grew by 88% to $136m, with China representing 48% of Emerging Markets sales at $65m, despite the medicine not being included on the National Reimbursement Drug List yet. The Company anticipates inclusion in due course. Growth in China was underpinned by strong levels of hospital-listing expansion. Year-to-date sales in the overall Asia-Pacific region increased by 52% to $30m.

 

Farxiga (YTD sales of $596m; up by 79%)

In the year to date, sales of Farxiga surpassed those of Onglyza and became the leading AstraZeneca medicine for type-2 diabetes.

 

Sales of Farxiga in the US increased by 78% to $327m in the year to date, primarily reflecting overall market growth and increased market share. Greater emphasis on promotional activity and improved levels of patient access resulted in higher market share. As a consequence, total prescription share grew against the backdrop of a US slowdown in SGLT2 market growth.

 

Year-to-date sales of Forxiga in Europe increased by 58% to $136m, as the medicine continued to lead the SGLT2 class.

 

Emerging Markets sales increased by 120% to $92m, driven by ongoing launches and improved access across all regions. In particular, strong performances were seen in the Asia-Pacific region (up by 124% to $36m), Brazil (up by 53% to $19m), and Middle East, Africa & Others (up to $22m).

 

Onglyza (YTD sales of $571m; down by 2%)

Year-to-date sales in the US declined by 6% to $304m, as the Company prioritised sales and marketing resources towards Farxiga. Continued competitive pressures in the DPP-4 class were partially offset by favourable restocking activity, encouraging federal-business sales and lower utilisation of patient-access programmes.

 

Year-to-date sales in Europe declined by 5% to $102m. In contrast, sales in Canada (up by 8% to $39m) and Emerging Markets sales (up by 3% to $110m) reflected encouraging volume demand.

 

Sales in Japan to Kyowa Hakko Kirin Co., Ltd (Kyowa), who are responsible for the sale and marketing of Onglyza, increased to $11m.

 

Bydureon/Byetta (YTD sales of $635m; down by 4%)

Combined year-to-date US sales for Bydureon/Byetta were $476m. Bydureon sales in the US declined by 3% to $349m, representing 73% of total Bydureon/Byetta US sales. Around 75% of sales came from the new dual-chamber pen compared to the previous tray presentation. The decline in Byetta sales of 23% to $127m was attributed to the Company's promotional focus on Bydureon. The decline in both Bydureon and Byetta US sales was attributed to lower market growth, increased competition from new market entrants and the lack of a competitive delivery device. A regulatory submission for the new Bydureon autoinjector is anticipated in the US in the first half of 2017.

 

Year-to-date sales in Europe increased by 12% to $112m, reflecting the Company's ongoing effort to expand its Diabetes presence. Year-to-date sales of Byetta and Bydureon in Emerging Markets increased by 31% to $19m and by 50% to $4m, respectively. On 10 October 2016, AstraZeneca entered into a strategic collaboration with 3SBio Inc. (3SBio), a leading Chinese biotechnology business, for the rights to commercialise Byetta and Bydureon in the Chinese market and drive greater access for patients.

 

Legacy: Crestor (YTD sales of $2,770m; down by 24%)

In the US, Crestor year-to-date sales declined by 45% to $1,128m, reflecting generic Crestor (rosuvastatin) penetration since May 2016. Third-quarter sales declined by 82% to $124m and reflected the multiple generic Crestor medicines that entered the US market from July 2016.

 

In Europe, year-to-date sales declined by 3% to $657m, reflecting the increasing prevalence of generic-medicine competition. Crestor consolidated its position as the leading statin in Japan, with year-to-date sales growth of 6% to $392m. Year-to-date sales in China grew by 24% to $238m, while Russia sales grew by 33% to $20m.

 

 

RESPIRATORY

YTD sales of $3,543m; down by 2%. Respiratory sales represented 22% of Total Product Sales.

 

Symbicort (YTD sales of $2,249m; down by 10%)

Year-to-date sales in the US declined by 14% to $958m. This reflected a Q3 rebate true-up in the US and the competitive environment. These influences were partially offset by volume and market-share growth.

 

In Europe, year-to-date sales declined by 15% to $679m, a result of reducing market demand in the class, as well as increased competition from analogue medicines.

 

In contrast to western markets, year-to-date Emerging Markets sales grew by 11% to $302m, reflecting sales growth in China of 33% to $120m, Latin America sales growth of 10% to $26m and Russia sales growth of 3% to $25m. Emerging Markets sales in the third quarter, down by 13% to $93m, were adversely impacted by significant healthcare spending cuts in Saudi Arabia.

 

Pulmicort (YTD sales of $773m; up by 8%)

Strong underlying growth in Emerging Markets drove a 20% sales increase to $501m in the year to date.

 

Emerging Markets represented 65% of Pulmicort sales, which more than offset sales declines in the US, Europe and Established ROW. China sales increased by 21% to $408m and represented 53% of sales of Pulmicort. Volume demand in China reflected the increasing prevalence of acute chronic obstructive pulmonary disease (COPD) and paediatric asthma. AstraZeneca continued its expansion of treatment centres and provided increased access to home-based patient-care systems.

 

Tudorza/Eklira (YTD sales of $134m; down by 5%)

Sales in the US declined by 22% to $61m in the year to date, reflecting adverse market demand and limited Medicare Part D access in the first half of the year. Sales in Europe increased by 14% to $65m.

 

Daliresp/Daxas (YTD sales of $113m; up by 57%)

Sales in the US increased by 40% to $101m in the year to date, driven primarily by favourable market penetration. US rights were acquired in March 2015 and US sales represented 89% of total global sales in the year to date; European rights were added in May 2016. Since completion, Daxas year-to-date sales in Europe amounted to $10m.

 

Duaklir (YTD sales of $44m)

Duaklir has been launched successfully in more than 25 countries and sales grew to $44m in the year to date.

 

 

OTHER

YTD sales of $3,758m; down by 16%. Other sales represented 23% of Total Product Sales.

 

Nexium (YTD sales of $1,541m; down by 19%)

Sales in the US declined by 42% to $419m in the year to date, reflecting lower demand and inventory destocking, which followed the loss of exclusivity in 2015.

 

Year-to-date sales in Europe declined by 7% to $190m, with Emerging Markets sales stable at $543m. Japan sales declined by 5% to $312m, reflecting a mandated biennial price reduction, effective from April 2016.

 

Seroquel XR (YTD sales of $617m; down by 20%)

Year-to-date sales of Seroquel XR in the US declined by 18% to $444m. Since 1 November 2016, two generic medicines have had the ability to launch in the US.

 

Year-to-date sales of Seroquel XR in Europe declined by 33% to $106m as a number of European markets continued to face generic competition.

 

Synagis (YTD sales of $375m; down by 3%)

Sales in the US increased by 9% to $171m in the year to date, despite more-restrictive guidelines from the American Academy of Pediatrics Committee on Infectious Disease which has reduced the number of patients eligible for preventative therapy with Synagis.

 

Sales in Europe to AbbVie Inc., who are responsible for the sale and marketing, declined by 11% to $204m.

 

FluMist/Fluenz (YTD sales of $37m; down by 58%)

The Company confirmed on 23 June 2016 that the Advisory Committee on Immunization Practices (ACIP) of the US Centers for Disease Control and Prevention had provided its interim recommendation not to use FluMist Quadrivalent Live Attenuated Influenza Vaccine (FluMist Quadrivalent) in the US for the 2016-2017 influenza season. The ACIP's updated recommendation is expected to result in very limited US demand in this influenza season.

 

The Company consequently wrote down the value of its inventory of FluMist by $47m in the first half of the year, which was reflected within the Cost of Sales. Year-to-date sales of FluMist in the US declined by 85% to $13m.

 

 

Regional Product Sales

_______________________________________________________________________________________

 


YTD 2016

Q3 2016


$m

% of Total

% Change

$m

% Change


CER

Actual

CER

Actual

US

5,747

36

(17)

(17)

1,538

(35)

(35)









Europe

3,732

23

(2)

(4)

1,265

(1)

(3)









Established ROW1

2,272

14

(3)

2

827

(1)

11


Japan

1,593

10

(2)

8

595

-

19


Canada

371

2

(1)

(7)

126

1

-


Other Established ROW

308

2

(10)

(14)

106

(11)

(10)









Emerging Markets2

4,308

27

6

(2)

1,395

3

(2)


China

2,027

13

10

5

643

10

3


Ex. China

2,281

14

2

(7)

752

(1)

(6)









Total

16,059

100

(6)

(8)

5,025

(14)

(14)

1 Established ROW comprises Japan, Canada, Australia and New Zealand.

2 Emerging Markets comprises all remaining Rest of World markets, including Brazil, China, India, Mexico, Russia and Turkey.

 

US (YTD sales of $5,747m; down by 17%)

The year-to-date decline in US sales reflected generic Crestor (rosuvastatin) competition since May 2016, and in particular, multiple generic Crestor medicines that entered the US market from July 2016. Unfavourable managed-care pricing and continued competitive intensity also impacted sales of Symbicort.

 

Europe (YTD sales of $3,732m; down by 2%)

Strong growth in sales of Forxiga (up by 58% to $136m) and Brilique (up by 15% to $192m) was more than offset by a 15% decline in Symbicort sales to $679m in the year to date. However, Symbicort maintained its position as the number one ICS/LABA medicine by volume despite competition from analogue medicines. Lynparza and Tagrisso sales increased to $56m and $49m respectively, following encouraging launches.

 

Established ROW (YTD sales of $2,272m; down by 3%)

Year-to-date sales of Forxiga in Established ROW increased by 82% to $41m. Nexium sales declined by 12% to $389m.

 

Japan sales declined by 2% to $1,593m, reflecting the biennial price reduction effective from April 2016 of around 6%. The decline was partly offset by sales of Crestor, up by 6% to $392m in the year to date. Since the launch of Tagrisso in Japan in May 2016, sales amounted to $43m. 

 

Emerging Markets (YTD sales of $4,308m; up by 6%)

Sales growth in the year to date in Emerging Markets was impacted by challenging macro-economic conditions in Latin America, where year-to-date sales declined by 11% to $364m. The effects of significant reductions in Saudi Arabian governmental healthcare spending, as well as the reduction of AstraZeneca's activities in Venezuela, also adversely impacted sales. China sales, however, grew by 10% to $2,027m, representing 47% of Emerging Markets sales in the year to date.

 

Sales in Brazil increased by 5% to $265m, reflecting the strong performances of Forxiga (up by 53% to $19m), Oncology medicines (up by 3% to $59m) and Seloken (up by 9% to $47m). Russia sales increased by 13% to $155m, led by strong performances in Cardiovascular & Metabolic Diseases medicine sales (up by 35% to $54m).

 

 

Financial Performance

______________________________________________________________________________________

 

Year To Date

Reported

% Change


Core

% Change

YTD 2016

YTD 2015

CER

Actual


YTD 2016

YTD 2015

CER

Actual

Product Sales

16,059

17,434

(6)

(8)


16,059

17,434

(6)

(8)

Externalisation Revenue

1,358

875

56

55


1,358

875

56

55

Total Revenue

17,417

18,309

(3)

(5)


17,417

18,309

(3)

(5)











Cost of Sales

(2,966)

(3,377)

(9)

(12)


(2,785)

(2,910)

(1)

(4)











Gross Profit

14,451

14,932

(2)

(3)


14,632

15,399

(3)

(5)

Gross Margin1

81.7%

80.6%

+0.6

+0.9


82.9%

83.3%

-0.9

-0.4











Distribution Expense

(243)

(240)

7

2


(243)

(240)

7

2

% Total Revenue

1.4%

1.3%

-0.1

-0.1


1.4%

1.3%

-0.1

-0.1

R&D Expense

(4,347)

(4,251)

5

2


(4,150)

(4,036)

6

3

% Total Revenue

25.0%

23.2%

-2.1

-1.8


23.8%

22.0%

-2.0

-1.8

SG&A Expense

(8,027)

(8,444)

(2)

(5)


(6,119)

(6,804)

(7)

(10)

% Total Revenue

46.1%

46.1%

-0.4

-


35.1%

37.2%

+1.7

+2.1

Other Operating Income

535

1,029

(47)

(48)


575

1,027

(43)

(44)

% Total Revenue

3.1%

5.6%

-2.5

-2.5


3.3%

5.6%

-2.3

-2.3











Operating Profit

2,369

3,026

(26)

(22)


4,695

5,346

(13)

(12)

% Total Revenue

13.6%

16.5%

-4.0

-2.9


27.0%

29.2%

-3.2

-2.2











Net Finance Expense

(978)

(750)

37

30


(489)

(355)

50

38

Joint Ventures

(22)

(9)




(22)

(9)













Profit Before Tax

1,369

2,267

(46)

(40)


4,184

4,982

(18)

(16)

Taxation

220

(249)




(325)

(790)



Tax Rate %

(16)%

11%




8%

16%



Profit After Tax

1,589

2,018

(30)

(21)


3,859

4,192

(11)

(8)











Non-controlling Interests

68

(1)




63

(1)



Net Profit

1,657

2,017

(26)

(18)


3,922

4,191

(10)

(6)











Weighted Average Shares

1,265

1,264




1,265

1,264













Earnings Per Share ($)

1.31

1.60

(26)

(18)


3.10

3.32

(10)

(7)

1 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales

2 All financial figures, except Earnings Per Share, are in $ millions ($m). Weighted Average Shares are in millions.

 

 

Quarter

Reported

% Change


Core

% Change

Q3 2016

Q3  2015

CER

Actual


Q3   2016

Q3 2015

CER

Actual

Product Sales

5,025

5,850

(14)

(14)


5,025

5,850

(14)

(14)

Externalisation Revenue

674

95

n/m

n/m


674

95

n/m

n/m

Total Revenue

5,699

5,945

(4)

(4)


5,699

5,945

(4)

(4)











Cost of Sales

(900)

(1,041)

(6)

(14)


(805)

(992)

(11)

(19)











Gross Profit

4,799

4,904

(4)

(2)


4,894

4,953

(2)

(1)

Gross Margin1

82.2%

82.2%

-1.6

-0.1


84.1%

83.0%

-0.5

+1.1











Distribution Expense

(76)

(79)

2

(3)


(76)

(79)

2

(3)

% Total Revenue

1.3%

1.3%

-0.1

-


1.3%

1.3%

-0.1

-

R&D Expense

(1,402)

(1,429)

4

(2)


(1,337)

(1,400)

-

(5)

% Total Revenue

24.6%

24.0%

-1.9

-0.6


23.5%

23.5%

-1.1

-

SG&A Expense

(2,403)

(2,679)

(8)

(10)


(1,892)

(2,220)

(12)

(15)

% Total Revenue

42.2%

45.1%

+1.9

+2.9


33.2%

37.3%

+3.1

+4.1

Other Operating Income

110

453

(75)

(76)


107

474

(76)

(77)

% Total Revenue

1.9%

7.6%

-5.6

-5.7


1.9%

8.0%

-6.0

-6.1











Operating Profit

1,028

1,170

(29)

(12)


1,696

1,728

(13)

(2)

% Total Revenue

18.0%

19.7%

-5.3

-1.7


29.8%

29.1%

-2.8

+0.7









-.


Net Finance Expense

(342)

(237)

45

44


(174)

(105)

62

64

Joint Ventures

(10)

(2)




(10)

(2)













Profit Before Tax

676

931

(49)

(27)


1,512

1,621

(18)

(7)

Taxation

319

(161)




136

(318)



Tax Rate %

(47)%

17%




(9)%

20%



Profit After Tax

995

770

1

29


1,648

1,303

11

26











Non-controlling Interests

19

-




19

-



Net Profit

1,014

770

4

32


1,667

1,303

12

28











Weighted Average Shares

1,265

1,264




1,265

1,264













Earnings Per Share ($)

0.80

0.61

4

32


1.32

1.03

12

28

1 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales

2 All financial figures, except Earnings Per Share, are in $ millions ($m). Weighted Average Shares are in millions.

 

 

Reconciliation of Reported to Core Performance 

 

YTD 2016

 

Reported

Restructuring

Intangible Asset

Amortisation & Impairments

Diabetes Alliance

Other1

Core

$m

$m

$m

$m

$m

$m

Cost of Sales

(2,966)

87

94

-

-

(2,785)

R&D Expense

(4,347)

146

51

-

-

(4,150)

SG&A Expense

(8,027)

504

754

311

339

(6,119)

Other Operating Income

535

(24)

64

-

-

575

Net Finance Expense

(978)

-

-

292

197

(489)

Taxation

220

(150)

(221)

(139)

(35)

(325)

Non-controlling Interests

68

(5)

-

-

-

63

Total


558

742

464

501


 

Q3 2016

 

Reported

Restructuring

Intangible Asset

Amortisation & Impairments

Diabetes Alliance

Other1

Core

$m

$m

$m

$m

$m

$m

Cost of Sales

(900)

59

36

-

-

(805)

R&D Expense

(1,402)

39

26

-

-

(1,337)

SG&A Expense

(2,403)

176

250

93

(8)

(1,892)

Other Operating Income

110

(24)

21

-

-

107

Net Finance Expense

(342)

-

-

97

71

(174)

Taxation

319

(53)

(81)

(44)

(5)

136

Non-controlling Interests

19

-

-

-

-

19

Total


197

252

146

58


1 Other adjustments include provision charges related to certain legal matters (see Note 7) and fair value adjustments arising on acquisition-related liabilities (see Note 6).

 

 

Profit and Loss Commentary

 

Gross Profit

Reported Gross Profit declined by 2% in the year to date to $14,451m reflecting the market entry of multiple Crestor generic medicines in the US. Excluding the impact of externalisation revenue, the Reported Gross Profit Margin was 81.7%, representing an increase of one percentage point driven by lower restructuring and amortisation charges, partially offset by an adverse impact from the mix of sales and a write-down of FluMist inventory in the US. Excluding these lower restructuring and amortisation charges, Core Gross Profit declined by 3% in the year to date to $14,632m and, excluding the impact of externalisation, the Core Gross Profit margin declined by one percentage point to 82.9%.

 

In the third quarter, Reported Gross Profit declined by 4% to $4,799m and Reported Gross Margin declined by two percentage points to 82.2%. Excluding restructuring and amortisation charges, Core Gross Profit declined by 2% to $4,894m and Core Gross Margin was stable, including the favourable impact of the growth in the sale of specialty-care medicines.

 

Operating Expenses: R&D

Reported R&D costs increased by 5% in the year to date to $4,347m (Q3 2016: $1,402m, growth of 4%). These increases reflected the number of potential medicines in pivotal trials as well as the absorption of the R&D costs of ZS Pharma and Acerta Pharma. These costs were partially offset by lower restructuring costs and impairment charges. Without the impact of ZS Pharma and Acerta Pharma, Reported R&D costs in the year to date would have increased by 1%.

 

Excluding the impact of lower restructuring and impairment charges, Core R&D costs increased by 6% in the year to date to $4,150m (Q3 2016: $1,337m, stable). Without the impact of the aforementioned investments in ZS Pharma and Acerta Pharma, Core R&D costs in the year to date would have increased by 1%.

 

Operating Expenses: SG&A

Reported SG&A costs declined by 2% in the year to date to $8,027m, with efficiency savings in sales and marketing operations and further reductions in IT costs partly offset by higher restructuring costs, amortisation charges and other adjustments, which are excluded from the Core measurement. Reported SG&A costs declined by 8% in the third quarter to $2,403m.

 

Core SG&A costs declined by 7% in the year to date to $6,119m, in line with full-year expectations of a material reduction. Core SG&A costs declined by 12% in the quarter to $1,892m.

 

Other Operating Income

Reported Other Operating Income of $535m in the year to date included:

Agreement

$m

Sale of ex-US rights to Imdur

183

Crestor royalties

165

HPV royalties

94

Ertapenem royalties

36

 

A number of transactions have closed or are expected to close in the fourth quarter of 2016, favourably impacting Other Operating Income. These include:

Agreement

 $m

Sale of the small-molecule antibiotics business to Pfizer. The total payment is to be recognised net of the carrying values disposed and other costs to sell

c.335 net

Sale of the ex-US rights to Rhinocort Aqua to Cilag GmbH International (Cilag)

330

Out-licensing of a potential medicine (MEDI2070) for inflammatory diseases to Allergan plc (Allergan)

167 net, reflecting an agreement with Amgen Inc. (Amgen)

Licensing agreement with Insmed Inc. for global exclusive rights to AZD7986, a novel oral inhibitor of dipeptidyl peptidase

30

 

Operating Profit

Reported Operating Profit declined by 26% in the year to date to $2,369m. The Reported Operating Margin declined by four percentage points to 14% of Total Revenue.

 

Core Operating Profit declined by 13% to $4,695m in the year to date. The Core Operating Margin declined by three percentage points to 27% of Total Revenue.

 

Net Finance Expense

Reported Net Finance Expense increased by 37% in the year to date to $978m reflecting an increase in Net Debt that was driven by the acquisition of ZS Pharma and the majority investment in Acerta Pharma. Excluding the discount unwind on acquisition-related liabilities, Core Net Finance Expense increased by 50% in the year to date to $489m.

 

Taxation

Excluding a one-off benefit of $453m following agreements between the Canadian tax authority and the UK and Swedish tax authorities in respect of transfer pricing arrangements for the 13-year period from 2004-2016, the Reported and Core tax rates for the year to date were 17% and 19% respectively. Including the impact of this benefit, the Reported and Core tax rates for the year to date were (16)% and 8% respectively. The cash tax paid for the year to date was $445m, which was 33% of Reported Profit Before Tax and 11% of Core Profit Before Tax.

 

The Reported and Core tax rates for the first nine months of 2015 were 24% and 22% respectively when excluding a one-off tax benefit of $186m following agreement of US federal tax liabilities of open years up to 2008, other provision releases and the benefit of the UK patent box. Including the impact of these benefits, the Reported and Core tax rates were 11% and 16% respectively.

 

Earnings Per Share (EPS)

Reported EPS of $1.31 in the year to date represented a 26% decline, with Core EPS in the year to date declining by 10% to $3.10. Both Reported and Core EPS in the year to date included a non-recurring benefit of $0.36 in the third quarter, resulting from the aforementioned agreement on transfer pricing.

 

The declines were driven by the market entry of multiple Crestor generic medicines in the US, as well as the ongoing impact of US Nexium generic medicines. The reductions reflected higher Other Operating Income in 2015. The anticipated phasing of Other Operating Income in 2016 is towards the final quarter of the year.

 

Productivity

AstraZeneca continues to enhance productivity through the implementation of its restructuring initiatives, including those announced on 29 April 2016. Restructuring charges of $713m were incurred in the year to date. The Company remains on track to realise benefits and incur costs in line with prior announcements.

 

To continue the focus on cost discipline, the Company disposed of its R&D facility in Bangalore, India in the period and announced plans to bring together five of its San Francisco Bay Area, US sites into one location. More than 350 employees in existing AstraZeneca, Acerta Pharma, MedImmune and Pearl facilities will move to the new location in 2017.

 

 

Cash Flow and Balance Sheet

 

Cash Flow

The Company generated a net cash inflow from operating activities of $2,185m, compared with $2,753m in the comparative period. This primarily reflected the material decline in Profit Before Tax in the year to date.

 

Net cash outflows from investing activities were $4,572m compared with $1,654m in the comparative period. The increase primarily reflected the net cash outflow of $2,383m in relation to the majority investment in Acerta Pharma. On 10 August 2016, the Company also announced that it had increased its equity interest in Moderna Therapeutics (Moderna) with a $140m investment, as part of Moderna's preferred-stock financing.

 

Net cash outflows from financing activities were $1,020m, incorporating $2,483m of new long-term loans, net of dividend payments in the year to date of $3,561m. This compared to an outflow of $3,406m in the comparative period.

 

The cash payment of contingent consideration in respect of the Bristol-Myers Squibb Company share of the global Diabetes alliance amounted to $197m in the year to date. The consideration is based on a tiered structure, whereby a higher royalty rate is applied until a specified level of sales is achieved in the year; thereafter a lower rate is applied to the remaining sales in the year and settled in the quarter following the application of the charge. From 2017 a single annual rate will be applied.

 

Debt and Capital Structure

At 30 September 2016, outstanding gross debt (interest-bearing loans and borrowings) was $17,683m (30 September 2015: $10,947m). Of the gross debt outstanding at 30 September 2016, $2,939m was due within one year (30 September 2015: $2,671m). The Company's net debt position at 30 September 2016 was $13,399m (30 September 2015: $5,886m).

 

Shares in Issue

During the year to date, 0.9 million shares were issued in respect of share option exercises for a consideration of $40m. The total number of shares in issue as at 30 September 2016 was 1,265 million.

 

Capital Allocation

The Board's aim is to continue to strike a balance between the interests of the business, financial creditors and the Company's shareholders. After providing for investment in the business, supporting the progressive dividend policy and maintaining a strong, investment-grade credit rating, the Board will keep under review potential investment in immediately earnings-accretive, value-enhancing opportunities.

 

Sensitivity: Foreign-Exchange Rates

The Company provides the following currency sensitivity information:

 





Average Exchange Rates Versus USD




Impact Of 5% Weakening In Exchange Rate Versus USD ($m)2

Currency


Primary Relevance


FY 2015


YTD 20161


Change %


Total Revenue


Core Operating Profit

EUR


Product Sales


0.90


0.90


1


(178)


(103)

JPY


Product Sales


121.04


108.64


11


(102)


(66)

CNY


Product Sales


6.28


6.59


(5)


(133)


(62)

SEK


Costs


8.43


8.40


-


(8)


71

GBP


Costs


0.65


0.72


(9)


(34)


96

Other3










(201)


(122)

1Based on average daily spot rates in the nine months to the end of September 2016.

2Based on 2015 actual results at 2015 actual exchange rates.

3Other important currencies include AUD, BRL, CAD, KRW and RUB.

 

 

Currency Hedging

AstraZeneca monitors the impact of adverse currency movements on a portfolio basis, recognising correlation effects. The Company may hedge to protect against adverse impacts on cash flow over the short to medium term. As at 30 September 2016, AstraZeneca had hedged 86% of forecast short-term currency exposure that arises between the booking and settlement dates on Product Sales and non-local currency purchases.

 

 

Corporate and Business Development Update

______________________________________________________________________________________

 

The highlights of the Company's corporate and business development activities since the prior results announcement are shown below.

 

a) Sale Of Small-Molecule Antibiotics Business

On 24 August 2016, the Company announced that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its small-molecule antibiotics business and late-stage pipeline in most markets outside the US. The agreement with Pfizer is expected to close in the fourth quarter of 2016, subject to customary closing conditions.

 

As AstraZeneca will de-recognise an intangible product asset and will not maintain a significant ongoing interest in the late-stage, small-molecule antibiotics business, all payments will be reported as Other Operating Income in the Company's financial statements. This includes the upfront payment of $550m and an unconditional payment of $175m in 2019 (both to be recognised net of the carrying value of assets disposed and other costs to sell in 2016), the milestones of up to $250m, sales-related payments of up to $600m and recurring double-digit royalties on sales of Zavicefta and ATM AVI.

 

b) Sale Of Rhinocort Aqua

On 7 October 2016, the Company announced that it had entered into an agreement with Cilag, an affiliate of Johnson & Johnson, for the divestment of the rights to Rhinocort Aqua outside the US. Rhinocort Aqua is a nasal spray indicated for allergic and non-allergic rhinitis (inflammation of the inside of the nose), and for the treatment of nasal polyps (swelling of the nasal lining). The active ingredient is the anti-inflammatory medicine budesonide.

 

The agreement is subject to customary closing conditions and is expected to complete in the fourth quarter of 2016. As AstraZeneca will not maintain a significant ongoing interest in Rhinocort Aqua, the $330m payment received from Cilag upon completion of the transaction will be recognised as Other Operating Income in the Company's financial statements.

 

c) Externalisation Of Beta-Blocker Medicine Toprol-XL

On 31 October 2016, the Company completed an agreement with Aralez Pharmaceuticals Trading DAC, a subsidiary of Aralez Pharmaceuticals Inc., for the rights to branded and authorised generic Toprol-XL (metoprolol succinate) in the US. Toprol-XL is a beta-blocker medicine for the control of hypertension (high blood pressure), angina (chest pain) and heart failure. It was first approved in the US in 1992.

 

AstraZeneca will retain a significant ongoing interest in Toprol-XL through retained ownership of the brand in Rest of World (ROW) markets and product supply to Aralez. Therefore the upfront payment of $175m, milestones and sales-related payments of up to $48m and mid-teen percentage royalties will be reported as Externalisation Revenue in the Company's financial statements.

 

d) Licensing Agreement: Monoclonal Antibody MEDI2070

On 3 October 2016, the Company announced that MedImmune, its global biologics research and development arm, had entered into a licensing agreement with Allergan for the global rights to MEDI2070. MEDI2070 is an IL-23 monoclonal antibody currently in a Phase IIb clinical trial for moderate-to-severe Crohn's disease (a chronic inflammatory disease of the intestines) and is ready for Phase II for ulcerative colitis (a chronic inflammatory condition of the colon and rectum). MedImmune will continue the ongoing Phase II trials until a mutually-agreed transition date.

 

The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart Scott Rodino Act. AstraZeneca is expected to retain approximately $167m of the upfront payment and up to approximately $847m in future potential milestones, as well as the tiered royalty payments of up to low double-digit percent, following payment to Amgen under the provisions of the original agreement. As AstraZeneca will not retain a significant ongoing interest in MEDI2070, all income will be reported as Other Operating Income in the Company's financial statements.

 

e) Benralizumab in Japan

On 28 October 2016, AstraZeneca exercised its exclusive option to commercialise benralizumab for the treatment of severe, uncontrolled asthma and COPD in Japan. This follows the option agreement entered into with Kyowa in July 2015. Previously, Kyowa held the exclusive development and commercialisation rights for benralizumab in Japan, as well as certain other countries in Asia, while AstraZeneca has exclusive rights in all other countries, including the US and Europe. On exercising the option, AstraZeneca is responsible for all sales and marketing activity for benralizumab in asthma and COPD in Japan.

 

f) Externalisation of Bydureon and Byetta in China

On 10 October 2016, AstraZeneca entered into a strategic collaboration with 3SBio for the rights to commercialise Bydureon and Byetta in the Chinese market. The agreement allows the Company to benefit from 3SBio's established expertise in injectable medicines and also focus resources on AstraZeneca's oral diabetes franchise, including Onglyza, which is already marketed in China, as well as Forxiga and Kombiglyze, which are anticipated to launch in China in 2017.

 

Under the terms of the collaboration agreement, 3SBio will make an upfront payment of $50m and will pay development milestones of up to a further $50m for the exclusive rights to commercialise Bydureon and Byetta in the Chinese market (excluding Hong Kong) for an initial period of 20 years. AstraZeneca will retain a significant ongoing interest in Bydureon and Byetta through retained ownership of the brands in other markets and will manufacture and supply these medicines to 3SBio for an agreed purchase price. Therefore the upfront payment and development milestones will be reported as Externalisation Revenue in the Company's financial statements.

 

 

Research and Development Update

______________________________________________________________________________________

 

A comprehensive table with AstraZeneca's pipeline of medicines in human trials can be found later in this document.

 

Since the results announcement on 28 July 2016 (the period):

 

Regulatory Approvals

1

-    Brilinta - CV disease (JP)

Regulatory Submissions* /Acceptances

3

 

-     Faslodex - breast cancer (1st line) (JP)*

-     Tagrisso - lung cancer (CN)*

-     ZS-9 - hyperkalaemia (US)

Positive Phase III Data Readouts

3

 

-     Lynparza - ovarian cancer (2nd line)  

-     Farxiga + Bydureon - type-2 diabetes                      

-     benralizumab - severe, uncontrolled asthma

Other Key Developments

2

 

-     Priority Review Designation: Tagrisso (CN)

-     Fast Track Designation: AZD3293 - Alzheimer's disease (US)

New Molecular Entities (NMEs) in Pivotal Trials or under Regulatory Review**#

13

 

 

Oncology

-     durvalumab - multiple cancers

-     durva + treme - multiple cancers

-     acalabrutinib - blood cancers

-     moxetumomab pasudotox - leukaemia

-     selumetinib - thyroid cancer

 

Cardiovascular & Metabolic Diseases

-     ZS-9** - hyperkalaemia

-     roxadustat - anaemia

 

Respiratory

-     benralizumab - severe, uncontrolled asthma

-     tralokinumab - severe, uncontrolled asthma

-     PT010 - COPD

 

Other

-     brodalumab - psoriasis**

-     anifrolumab - lupus

-     AZD3293 - Alzheimer's disease

 

Projects in clinical pipeline#

138


# As at 10 November 2016

 

ONCOLOGY

 

AstraZeneca has a deep-rooted heritage in Oncology and offers a growing portfolio of new medicines that has the potential to transform patients' lives and the Company's future. With at least six new medicines to be launched between 2014 and 2020 and a broad pipeline of small molecules and biologics in development, the Company is committed to advancing New Oncology as one of AstraZeneca's six Growth Platforms focused on lung, ovarian, breast and blood cancers.

 

In addition to core capabilities, the Company is actively pursuing innovative collaborations and investments that accelerate the delivery of AstraZeneca's strategy, as illustrated by the Company's recent investment in Acerta Pharma in haematology.

 

At the recent European Society for Medical Oncology meeting, AstraZeneca highlighted its progress in Oncology with 46 scientific presentations, including new 1st-line data that demonstrated the superiority of Faslodex over the current standard of care in postmenopausal women with HR-positive, locally-advanced or metastatic breast cancer. The Company also presented updated safety and efficacy data from two cohorts from Study 1108; durvalumab monotherapy in NSCLC and HNSCC, in addition to a comparative analysis of PD-L1 diagnostic assays in c.500 HNSCC-tumour samples.

a) Lynparza (ovarian and other cancers)

Lynparza continues to be the cornerstone of the AstraZeneca DNA Damage Response (DDR) line of medicines. An extensive lifecycle programme is underway, including in earlier lines of treatment in metastatic ovarian, breast and prostate cancers. For the potential treatment in metastatic BRCA-mutated breast cancer, the OLYMPIAD trial has seen fewer events than originally expected and, as a consequence, the data readout is now anticipated to be in the first half of 2017.

 

During the period, the Company reported positive results from the Phase III SOLO-2 trial designed to determine the efficacy of Lynparza tablets (300mg, twice daily) as a monotherapy for the maintenance treatment of platinum-sensitive relapsed, BRCA-mutated ovarian cancer. Results from the trial demonstrated a clinically-meaningful and statistically-significant improvement of progression-free survival (PFS) among patients treated with Lynparza, compared to placebo and provided additional evidence to support the use of Lynparza in this patient population.

 

b) Tagrisso (lung cancer)

During the period, Tagrisso was accepted for submission and granted Priority Review status by the China Food and Drug Administration agency as a potential treatment for patients with locally-advanced, or metastatic EGFR T790M mutation-positive NSCLC, who have been previously treated with EGFR TKI therapy. The designation has the potential to expedite more rapid access to Tagrisso for patients in China. The Chinese application was supported by three key trials - a China-led Asian regional trial (AURA17), a pharmaco-kinetic trial in the local population (AURA18) and the global AURA3 trial, which included Chinese patients.

c) Cediranib (ovarian cancer)

On 21 September 2016, AstraZeneca announced the decision to voluntarily withdraw the marketing authorisation application (MAA) submitted to the EMA's Committee for Medicinal Products for Human Use for cediranib in combination with platinum-based chemotherapy, followed by maintenance monotherapy for the treatment of adult patients with platinum-sensitive relapsed ovarian cancer (including fallopian tube or primary peritoneal). The decision to withdraw the MAA was based on questions raised by the EMA at the late stage of the review process. The MAA for cediranib was supported by data from ICON6, a Phase III trial led by investigators from University College, London and the Medical Research Council. The Company has not made additional regulatory submissions for cediranib in this indication in any other markets.

 

Cediranib remains an important part of AstraZeneca's ovarian cancer pipeline, and a number of Phase III trials are ongoing to test cediranib as a potential combination partner with Lynparza and other pipeline medicines; these trials are not affected by the aforementioned withdrawal.

 

d) Selumetinib (multiple cancers)

On 9 August 2016, the Company announced the high-level results from the Phase III SELECT-1 trial for selumetinib in patients with 2nd-line KRAS mutant (KRASm) NSCLC. The results showed that the trial did not meet its primary endpoint of PFS, and selumetinib did not have a significant effect on overall survival (OS). The adverse event profiles for selumetinib and docetaxel were consistent with those seen previously. This outcome did not impact the on-going selumetinib programme in differentiated thyroid cancer, in paediatric neurofibromatosis Type 1 (in collaboration with the US National Cancer Institute), and in combination with other potential medicines in a range of tumour types.

 

e) Savolitinib (multiple cancers)

Based on data from multiple Phase I/II trials, savolitinib has shown early clinical benefit as a highly selective c-Met inhibitor in a number of cancers. As a result, Chi-Med (part of CK Hutchison Holdings Limited) and AstraZeneca have expanded the joint development plan for savolitinib to cover multiple c-Met-driven, solid tumour indications including NSCLC, kidney, gastric and colorectal cancers.

f) Durvalumab (multiple cancers)

The Company continues to advance multiple monotherapy trials of durvalumab and combination trials of durvalumab with tremelimumab and other potential medicines in Immuno-Oncology (IO). An update on key AstraZeneca-sponsored ongoing trials with durvalumab is provided over the page:

 

LUNG CANCER

Name

Phase

Line of treatment

Population

Design

Timelines

Status

Early disease

 

Monotherapy

ADJUVANT1

III

N/A

Stage Ib-IIIa NSCLC

durvalumab vs placebo

FPD2 Q1 2015

 

Data expected 2020

Ongoing

PACIFIC

III

N/A

Stage III unresectable NSCLC

durvalumab vs placebo

FPD Q2 2014

 

LPCD3 Q2 2016

 

Data expected H2 2017

Recruitment completed

Advanced/metastatic disease

 

Combination therapy

MYSTIC

III

1st line

NSCLC

durvalumab vs durva + treme vs SoC4

FPD Q3 2015

LPCD Q3 2016

 

Data expected H1 2017

Recruitment completed

NEPTUNE

III

1st line

NSCLC

durva + treme vs SoC

FPD Q4 2015

 

Data expected 2018

Ongoing

 

-

III

1st line

NSCLC

durvalumab + chemotherapy +/- tremelimumab

-

Ongoing in safety lead-in Phase I/II trial

ARCTIC

III

3rd line

PD-L1 neg. NSCLC

durvalumab vs tremelimumab vs durva + treme vs SoC

FPD Q2 2015

 

LPCD Q3 2016

 

Data expected H1 2017

Recruitment completed

1 Conducted by the National Cancer Institute of Canada   2 FPD = First Patient Dosed   3LPCD = Last Patient Commenced Dosing

4 SoC = Standard of Care 5 SCLC = Small Cell Lung Cancer

 

 

METASTATIC OR RECURRENT HEAD AND NECK CANCER

Name

Phase

Line of treatment

Population

Design

Timelines

Status

Monotherapy

HAWK

II

2nd line

PD-L1 pos. HNSCC

Durvalumab (single arm)

FPD Q1 2015

LPCD Q2 2016

Data expected Q4 2016 (internal availability)

Recruitment completed

Combination therapy

CONDOR

II

2nd line

PD-L1 neg. HNSCC

durvalumab vs tremelimumab vs durva + treme

FPD Q2 2015

 

LPCD Q2 2016

 

Data expected H1 2017

Recruitment completed

 

KESTREL

 

III

1st line

HNSCC

durvalumab vs durva + treme vs SoC

FPD Q4 2015

 

Data expected H2 2017

Ongoing

EAGLE

III

2nd line

HNSCC

durvalumab vs durva + treme vs SoC

FPD Q4 2015

 

Data expected 2018

Ongoing

 

With recent changes in the HNSCC competitive landscape, including the approval in the US for PD-1 monotherapy for recurrent or metastatic HNSCC with disease progression on or after platinum-containing chemotherapy, the Company is unlikely to make a regulatory submission for this single-arm Phase II trial. This trial in PD-L1+ patients was originally designed as a potential fast-to-market opportunity in 2nd-line HNSCC. The HAWK trial results are anticipated to be available internally in due course, following trial conclusion and data analysis.

 

On 27 October 2016, AstraZeneca confirmed that the FDA had placed a partial clinical hold on the enrolment of new patients with HNSCC in clinical trials of durvalumab as monotherapy and in combination with tremelimumab or other potential medicines. All trials are continuing with existing patients. The partial clinical hold on new patient enrolment relates only to HNSCC. Trials for durvalumab in different cancer types, as monotherapy, or in combination with tremelimumab or other potential medicines, are progressing as planned with pivotal data in lung cancer anticipated in the first half of 2017.

 

METASTATIC UROTHELIAL BLADDER CANCER

Name

Phase

Line of treatment

Population

Design

Timelines

Status

Combination therapy

DANUBE

III

1st line

Cisplatin chemo-

therapy- eligible/

ineligible bladder cancer

durvalumab vs durva + treme vs SoC

FPD Q4 2015

 

 

Data expected 2018

Ongoing

 

 

 

g) Acalabrutinib (blood cancers)

Based on maturity of clinical data in an intended fast-to-market indication of unmet need in B-cell blood cancers, the Company rolled the potential data readout and regulatory submission for one blood cancer to the first half of 2017.

 

Acalabrutinib is a cornerstone of the AstraZeneca strategy in haematology and the Company continues to see important progress in the clinical-development programme for the potential medicine. With more than 2,000 patients now having been treated with acalabrutinib in clinical trials, the safety profile supports the potential for acalabrutinib to become a best-in-class BTK inhibitor for patients intolerant to a currently-approved BTK inhibitor with B-cell cancers.

 

 

CARDIOVASCULAR & METABOLIC DISEASES

 

This therapy area includes a broad type-2 diabetes portfolio, differentiated devices and unique small and large-molecule programmes to reduce morbidity, mortality and organ damage across CV disease, diabetes and chronic kidney disease (CKD) indications.

 

a) Brilinta (CV disease)

During the period, the EUCLID Phase III trial in Peripheral Artery Disease (PAD) readout, with the data demonstrating that the primary endpoint of superiority over clopidogrel was not met. Safety findings from the trial were in line with the known safety profile of Brilinta. Based on the current expectations, it is unlikely that the Company will seek regulatory submission of an indication in PAD.

 

During the period, the Japanese Ministry of Health, Labour and Welfare approved Brilinta 90mg for patients with acute coronary syndrome (ACS) for whom the use of other antiplatelet medicines in combination with aspirin is difficult. Brilinta 60mg was also approved for patients who have suffered a heart attack at least one year prior and are at high risk of developing a further atherothrombotic event.

 

b) Farxiga + Bydureon (type-2 diabetes)

With the increasing evidence suggesting the beneficial effect of SGLT2 inhibitors, such as Farxiga, on renal and CV outcomes in patients with type-2 diabetes, the decision was made to design two large Phase IIIb outcome trials to further investigate the potential role of Farxiga in the management of CKD and chronic heart failure (CHF), in patients with or without type-2 diabetes. This marked the first time that a major outcome trial will be conducted to evaluate an SGLT2 inhibitor in CKD, for which there are currently few treatment options and a significant unmet medical need.

 

During the period, the DURATION-8 combination trial of Farxiga and Bydureon showed reduced blood sugar, weight and systolic blood pressure. The Phase III trial demonstrated that the combination of these medicines provides benefits to patients above and beyond what is seen with the individual medicines. The Company is currently assessing the potential for a regulatory submission based on these data.

 

c) Type-2 diabetes medicines in CV outcomes trials

As the field of type-2 diabetes medicines consistently evolves, with multiple outcomes trials producing data, AstraZeneca continues to assess both Farxiga and Bydureon for potential long-term CV benefits. Two significant type-2 diabetes outcomes trials are underway and are ongoing:

 

Medicine

Trial

Mode of Action

Number of Patients

Primary Endpoint

Timeline

Bydureon

 

EXSCEL

 

GLP-1 agonist

 

~15,000

 

Time to first occurrence of CV death, non-fatal MI or non-fatal stroke

Latest 2018

(final analysis)

Farxiga

DECLARE

SGLT2 inhibitor

~17,000*

Time to first occurrence of CV death, non-fatal MI or non-fatal stroke

Latest 2019

(final analysis)

 

2017

(anticipated interim analysis)

*Includes ~10,000 patients who have had no prior index event (primary prevention) and ~7,000 patients who have suffered an index event (secondary prevention).

 

d) ZS-9 (hyperkalaemia)

In the beginning of the fourth quarter, the FDA accepted AstraZeneca's resubmission of the new drug application (NDA) for ZS-9 (sodium zirconium cyclosilicate), the medicine in development for the treatment of hyperkalaemia (high potassium level in blood serum) by ZS Pharma, a wholly owned subsidiary of AstraZeneca. The FDA indicated that this was a complete Class 2 response; the Agency is anticipated to act on the resubmission within 6 months of the date of receipt.

 

e) Roxadustat (anaemia)

Roxadustat is a potential first-in-class oral HIF-PH inhibitor in Phase III development for the treatment of anaemia in CKD patients, including those on dialysis and not on dialysis. AstraZeneca, FibroGen, Inc. (Fibrogen) and Astellas Pharma Inc. are jointly undertaking an extensive worldwide Phase III programme consisting of 15 trials enrolling more than 8,000 patients.

 

FibroGen, responsible for regulatory activities in China, recently announced that enrolment had completed in both Phase III clinical trials, intended for regulatory submission. These trials include both CKD patients on and not on dialysis. Further, FibroGen has confirmed that roxadustat is on track to initiate the rolling regulatory-submission process in 2016.

 

RESPIRATORY

 

AstraZeneca's Respiratory portfolio includes a range of differentiated potential medicines such as novel combinations, biologics and devices for the treatment of asthma and COPD.

Benralizumab (severe, uncontrolled asthma)

AstraZeneca shared positive benralizumab Phase III data from the SIROCCO and CALIMA trials at the recent European Respiratory Society meeting. These data were also published in The Lancet on 5 September 2016. These results demonstrated that adding benralizumab to the standard of care significantly reduced exacerbations and improved lung function and asthma symptoms in severe, uncontrolled asthma. The outcomes were demonstrated for the 8-week dosing regimen, with no additional benefit observed with 4-week dosing.

During the period, the Phase III ZONDA trial also met its primary endpoint. ZONDA is an efficacy and safety trial of benralizumab to reduce oral corticosteroid use in patients with uncontrolled asthma on high-dose, inhaled corticosteroid plus long-acting Beta2 agonist and chronic oral corticosteroid therapy. Full results will be presented at a forthcoming medical meeting. ZONDA is the fourth positive efficacy trial supporting benralizumab's unique efficacy and safety profile in severe, uncontrolled asthma.

 

 

OTHER

 

a) Anifrolumab (lupus)

During the period, the first patient completed the anifrolumab systemic lupus erythematosus (SLE) Phase III trial and rolled over to the long-term extension trial for another three years of treatment/follow-up. The Phase III programme consists of two double-blind placebo controlled trials (TULIP SLE1 and TULIP SLE2) as well as the long-term extension; the Company continues to anticipate regulatory submission in 2019.

 

Anifrolumab is a monoclonal antibody that blocks the type I interferon (IFN) receptor, thereby inhibiting the activity of all type I IFNs, which play a central role in lupus pathophysiology. Anifrolumab is currently in Phase III development for SLE and Phase II for Lupus Nephritis; a Phase I trial for expansion from current intravenous to subcutaneous administration was recently completed.

 

b) AZD3293 (Alzheimer's Disease) 

On 22 August 2016, AstraZeneca and Lilly announced the receipt of the FDA's Fast Track Designation for the development programme in Alzheimer's disease for AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in Phase III clinical trial. The FDA's Fast Track programme is designed to expedite the development and review of new therapies to treat serious conditions and tackle key unmet medical needs. Lilly leads clinical development, in collaboration with scientists from AstraZeneca who will be responsible for manufacturing.

 

AZD3293 has been shown in trials to reduce levels of amyloid beta in the cerebrospinal fluid of people with Alzheimer's and healthy volunteers. The progression of Alzheimer's disease is characterised by the accumulation of amyloid plaque in the brain. BACE is an enzyme associated with the development of amyloid beta. Inhibiting BACE is expected to prevent the formation of amyloid plaque and eventually slow the progression of the disease. In addition to the AMARANTH Phase III trial for AZD3293, AstraZeneca and Lilly have dosed patients in a second Phase III trial, DAYBREAK-ALZ, which studies the safety and efficacy of AZD3293 in patients with mild Alzheimer's disease.

 

 

ASTRAZENECA DEVELOPMENT PIPELINE 30 SEPTEMBER 2016

AstraZeneca-sponsored or -directed studies

Phase III / Pivotal Phase II / Registration

New Molecular Entities (NMEs) and significant additional indications

Regulatory submission dates shown for assets in Phase III and beyond. As disclosure of compound information is balanced by the business need to maintain confidentiality, information in relation to some compounds listed here has not been disclosed at this time.

 

Compound

Mechanism

Area Under Investigation

Date Commenced Phase

Estimated Regulatory Acceptance Date / Submission Status

US

EU

Japan

China

Oncology

Tagrisso

AURA, AURA2, (AURA17 Asia regional)

EGFR tyrosine kinase inhibitor

≥2nd-line advanced EGFRm T790M NSCLC

 

Q2 2014

Launched

(Breakthrough Therapy, Priority Review, Orphan drug)

Launched (Accelerated assessment)

Approved

Accepted1

Tagrisso

AURA3

EGFR tyrosine kinase inhibitor

≥2nd-line advanced EGFRm T790M NSCLC

Q3 2014

Q4 2016

 

Q4 2016

N/A2

N/A

acalabrutinib#

BTK inhibitor

B-cell malignancy

Q1 2015

2017

(Orphan drug)




acalabrutinib#

BTK inhibitor

1st-line CLL

Q3 2015

2020

(Orphan drug)

2020

(Orphan drug)



acalabrutinib#

BTK inhibitor

r/r CLL, high risk

Q4 2015

2020

(Orphan drug)

2020

(Orphan drug)



selumetinib#
ASTRA

MEK inhibitor

differentiated thyroid cancer

Q3 2013

2018

(Orphan drug)

2018



moxetumomab pasudotox#

PLAIT

anti-CD22 recombinant
immunotoxin

hairy cell leukaemia

Q2 2013

2017

(Orphan drug)

2018



durvalumab#
PACIFIC

PD-L1 mAb

stage III NSCLC

Q2 2014

2017

 

2017

2017


durvalumab#
HAWK

PD-L1 mAb

2nd-line HNSCC (PD-L1 positive)

Q1 2015

 

2017

(Fast Track)

2017



durvalumab# +

tremelimumab
ARCTIC

PD-L1 mAb + CTLA-4 mAb

3rd-line NSCLC

Q2 2015

2017

2017

2017


durvalumab# + tremelimumab

MYSTIC

PD-L1 mAb + CTLA-4 mAb

1st-line NSCLC

Q3 2015

2017

2017

2017

2020

durvalumab# + tremelimumab

NEPTUNE

PD-L1 mAb + CTLA-4 mAb

1st-line NSCLC

Q4 2015

2019

2019

2019


durvalumab# + tremelimumab
CONDOR

PD-L1 mAb + CTLA-4 mAb

2nd-line HNSCC (PD-L1 negative)

Q2 2015

2017

2017



durvalumab# + tremelimumab
KESTREL

PD-L1 mAb + CTLA-4 mAb

1st-line HNSCC

Q4 2015

2018

2018

2018


durvalumab# + tremelimumab
EAGLE

PD-L1 mAb + CTLA-4 mAb

2nd-line HNSCC

Q4 2015

2018

2018

2018


durvalumab# + tremelimumab

ALPS

PD-L1 mAb + CTLA-4 mAb

metastatic pancreatic ductal carcinoma

Q4 2015

2017

2017

2017


durvalumab# + tremelimumab

DANUBE

PD-L1 mAb + CTLA-4 mAb

1st-line bladder cancer

Q4 2015

2018

 

2018

2018


Cardiovascular & Metabolic Diseases

Brilinta3

P2Y12 receptor antagonist

arterial thrombosis


Launched

Launched

Approved3

Launched

Farxiga4

SGLT2 inhibitor

type-2 diabetes


Launched

Launched

Launched

Accepted

Epanova#

omega-3 carboxylic acids

severe hypertrigly-ceridemia


Approved


2018


ZS-9 (sodium zirconium cyclosilicate)

potassium binder

hyperkalaemia


Accepted5

Accepted



roxadustat# OLYMPUS (US) ROCKIES (US)

hypoxia-inducible factor prolyl hydroxylase inhibitor

anaemia in CKD/ESRD

Q3 2014

2018

N/A

N/A

Q4 20166

Respiratory

Bevespi Aerosphere (PT003)

LABA/LAMA

COPD

Q2 2013

Approved

 2017

2018

2018

benralizumab#

CALIMA SIROCCO ZONDA

BISE

BORA

GREGALE

IL-5R mAb

severe asthma

Q4 2013

Q4 2016

Q4 2016

N/A

N/A

benralizumab#

TERRANOVA GALATHEA

IL-5R mAb

COPD

Q3 2014

2018

2018

N/A

N/A

PT010

LABA/LAMA/ICS

COPD

Q3 2015

2018

2018

2018

2019

tralokinumab

STRATOS 1,2

TROPOS

MESOS

IL-13 mAb

severe asthma

Q3 2014

2018

2018

2018


Other

anifrolumab# TULIP

IFN-alphaR mAb

systemic lupus erythematosus

Q3 2015

2019

(Fast Track)

2019

2019


Zinforo#7

extended spectrum cephalosporin with affinity to penicillin-binding proteins

pneumonia/skin infections


N/A

Launched

N/A

Submitted

Zavicefta#7

(CAZ AVI#)

cephalosporin/ beta lactamase inhibitor

hospital-acquired pneumonia/ ventilator-associated pneumonia

Q2 2013

N/A

 Approved

N/A

2017

Zavicefta#7

cephalosporin/

beta lactamase inhibitor

serious infections, complicated intra-abdominal infection, complicated urinary tract infection

Q1 2012

N/A

 Approved

N/A

2017

AZD3293#

AMARANTH

DAYBREAK-ALZ

beta-secretase inhibitor

Alzheimer's disease

Q2 2016

20208

(Fast Track)

2020

2020


 

¶    Registrational Phase II trial

#    Collaboration

1    CN submission accepted 1 September 2016

2    Tagrisso has full approval in Japan.  A Japanese Patient Information update will include AURA3 data

3    Brilinta in the US; Brilique in rest of world. JP approval received 28 Sept 2016

4    Farxiga in the US; Forxiga in rest of world

5    US resubmission accepted on 13 October 2016

6    Rolling NDA submission to be initiated in Q4 2016

7   AstraZeneca announced on 24 August 2016 that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its late-stage, small-molecule antibiotics business in most markets globally outside the US. The transaction is expected to close during Q4 2016

8    Fast Track Designation, 22 August 2016

 

 

Phases I and II

NMEs and significant additional indications

Compound

Mechanism

Area Under Investigation

Phase

Date Commenced Phase

Oncology

 

durvalumab#

PD-L1 mAb

bladder cancer

II

Q1 2016

(Breakthrough Therapy)

 

durvalumab#

PD-L1 mAb

solid tumours

II

Q3 2014

 

durvalumab# + tremelimumab

PD-L1 mAb + CTLA-4 mAb

gastric cancer

II

Q2 2015

 

durvalumab# + AZD5069

PD-L1 mAb + CXCR2

HNSCC

II

Q3 2015

 

durvalumab# + AZD9150#

PD-L1 mAb + STAT3 inhibitor

 

durvalumab# + MEDI0680

PD-L1 mAb + PD-1 mAb

solid tumours

II

Q3 2016

 

durvalumab#

PD-L1 mAb

solid tumours

I

Q3 2014

durvalumab# + monalizumab

PD-L1 mAb + NKG2a mAb

solid tumours

I

Q1 2016

durvalumab# + MEDI9447

PD-L1 mAb + CD73 mAb

solid tumours

I

Q1 2016

durvalumab# + Iressa

PD-L1 mAb+ EGFR tyrosine kinase inhibitor

NSCLC

I

Q2 2014

 

durvalumab# + dabrafenib + trametinib

PD-L1 mAb+ BRAF inhibitor + MEK inhibitor

melanoma

I

Q1 2014

 

durvalumab# + tremelimumab

PD-L1 mAb + CTLA-4 mAb

solid tumours

I

Q4 2013

 

Tagrisso + (durvalumab# or selumetinib# or savolitinib#)

TATTON

EGFR tyrosine kinase inhibitor + (PD-L1 mAb or MEK inhibitor or MET tyrosine kinase inhibitor)

advanced EGFRm NSCLC

II

Q2 2016

 

Tagrisso

EGFRm

leptomeningeal disease

II

Q3 2016

 

selumetinib + durvalumab#

MEK inhibitor + PD-L1 mAb

solid tumours

I

Q4 2015

 

savolitinib/volitinib#

MET tyrosine kinase inhibitor

papillary renal cell carcinoma

II

Q2 2014

 

AZD1775# + chemotherapy

Wee1 inhibitor + chemotherapy

ovarian cancer

II

Q4 2012

 

AZD1775#

Wee1 inhibitor

solid tumours

I

Q3 2015

 

AZD1775# + Lynparza

Wee1 inhibitor + PARP inhibitor

solid tumours

I

Q3 2015

 

AZD1775# + durvalumab#

Wee1 inhibitor +

PD-L1 mAb

solid tumours

I

Q4 2015

 

AZD6738 + Lynparza

ATR inhibitor

gastric cancer

II

Q3 2016

 

vistusertib (AZD2014)

mTOR serine/ threonine kinase inhibitor

solid tumours

II

Q1 2013

 

AZD3759 BLOOM#

EGFR tyrosine kinase inhibitor

CNS metastases in advanced EGFRm NSCLC

 

II

Q4 2015

 

Tagrisso BLOOM

EGFR tyrosine kinase inhibitor

 

AZD5363#

AKT kinase inhibitor

breast cancer

II

Q1 2014

 

AZD4547

FGFR tyrosine kinase inhibitor

solid tumours

II

Q4 2011

 

MEDI-573#

IGF mAb

metastatic breast cancer

II

Q2 2012

 

AZD0156

ATM serine/threonine kinase inhibitor

solid tumours

I

Q4 2015

 

AZD2811#

Aurora B kinase inhibitor

solid tumours

I

Q4 2015

 

AZD6738

ATR serine/threonine kinase inhibitor

solid tumours

I

Q4 2013

 

AZD8186

PI3 kinase beta inhibitor

solid tumours

I

Q2 2013

 

AZD9150#

STAT3 inhibitor

haematological malignancies

I

Q1 2012

 

AZD9496

selective oestrogen receptor downregulator (SERD)

ER+ breast cancer

I

Q4 2014

 

AZD4635

A2aR inhibitor

solid tumours

I

Q2 2016

 

MEDI0562#

humanised OX40 agonist

solid tumours

I

Q1 2015

 

MEDI0562# + tremelimumab

humanised OX40 agonist + CTLA-4 mAb

solid tumours

I

Q2 2016

 

MEDI0562# + durvalumab#

humanised OX40 agonist + PD-L1 mAb

solid tumours

I

Q2 2016

 

MEDI-565#

CEA BiTE mAb

solid tumours

I

Q1 2011

 

MEDI0680

PD-1 mAb

solid tumours

I

Q4 2013

 

MEDI1873

GITR agonist fusion protein

solid tumours

I

Q4 2015

 

MEDI4276

HER2 bispecific ADC mAb

solid tumours

I

Q4 2015

 

MEDI9197#

TLR 7/8 agonist

solid tumours

I

Q4 2015

MEDI9447

CD73 mAb

solid tumours

I

Q3 2015

Cardiovascular & Metabolic Diseases

 

MEDI0382

GLP-1/

glucagon dual agonist

diabetes / obesity

II

Q3 2016

 

MEDI4166

PCSK9/GLP-1 mAb + peptide fusion

diabetes / cardiovascular

II

Q1 2016

 

MEDI6012

LCAT

ACS

II

Q4 2015

 

AZD4076

anti-miR103/107 oligonucleotide

non-alcoholic fatty liver disease/non-alcoholic steatohepatitis (NASH)

I

Q4 2015

 

AZD4831

Myeloperoxidase

Heart failure with a preserved ejection fraction

I

Q3 2016

 

AZD5718

FLAP

CAD

I

Q1 2016

 

MEDI8111

Rh-factor II

trauma / bleeding

I

Q1 2014

 

Respiratory

 

PT010

LABA/LAMA/ICS

asthma

II

Q2 2014

 

abediterol#

LABA

asthma/COPD

II

Q4 2007

 

AZD7594

inhaled SGRM

asthma/COPD

II

Q3 2015

 

AZD9412#

inhaled interferon beta

asthma/COPD

II

Q3 2015

 

tezepelumab#

TSLP mAb

asthma / atopic dermatitis

II

Q2 2014

 

AZD1419#

TLR9 agonist

asthma

II

Q3 2013

 

AZD5634

inhaled ENaC

cystic fibrosis

I

Q1 2016

 

AZD7986#

DPP1

COPD

I

Q4 2014

AZD8871#

MABA

COPD

I

Q4 2015

 

AZD9567

oral SGRM

rheumatoid arthritis

I

Q4 2015

 

MEDI9314

IL-4R mAb

atopic dermatitis

I

Q1 2016

 

Other

 

anifrolumab#

IFN-alphaR mAb

lupus nephritis

II

Q4 2015

 

anifrolumab#

IFN-alphaR mAb

systemic lupus erythematosus (subcutaneous)

I

Q4 2015

 

verinurad

selective uric acid reabsorption inhibitor (URAT-1)

chronic treatment of hyperuricemia in patients with gout

II

Q3 2013

 

mavrilimumab#

GM-CSFR mAb

rheumatoid arthritis

II

Q1 2010

 

inebilizumab#

CD19 mAb

neuromyelitis optica

II

Q1 2015

(Orphan drug)

 

MEDI2070#1

IL-23 mAb

Crohn's disease

II

Q1 2013

 

MEDI7734

ILT7 mAb

myositis

I

Q3 2016

 

MEDI0700#

BAFF/B7RP1 bispecific mAb

systemic lupus erythematosus

I

Q1 2016

 

MEDI4920

anti-CD40L-Tn3 fusion protein

primary Sjögren's syndrome

I

Q2 2014

 

MEDI5872#

B7RP1 mAb

primary Sjögren's syndrome

II

Q3 2016

 

CXL#2

beta lactamase inhibitor / cephalosporin

methicillin-resistant S. aureus

II

Q4 2010

 

AZD3241

myeloperoxidase inhibitor

multiple system atrophy

II

Q2 2015

(Orphan drug)

 

MEDI3902

Psl/PcrV bispecific mAb

prevention of nosocomial pseudomonas pneumonia

II

Q2 2016

(Fast Track, US)

 

MEDI4893

mAb binding to S. aureus toxin

hospital-acquired pneumonia / serious S. aureus infection

II

Q4 2014

(Fast Track, US)

 

MEDI7510

 

Respiratory syncytial virus (RSV) sF+GLA-SE

Prevention of RSV disease in older patients

II

Q3 2015

 

MEDI8852

influenza A mAb

influenza A treatment

II

Q4 2015

(Fast Track, US)

 

MEDI8897#

RSV mAb-YTE

passive RSV prophylaxis

II

Q1 2015

(Fast Track, US

 

ATM AVI#2

monobactam/ beta lactamase inhibitor

targeted serious bacterial infections

II

Q2 2016

 

AZD8108

NMDA antagonist

suicidal ideation

I

Q4 2014

 

MEDI1814

amyloid beta mAb

Alzheimer's disease

I

Q2 2014

 

MEDI7352

NGF/TNF bispecific mAb

osteoarthritis pain

I

Q1 2016

 

#  Collaboration

1  AstraZeneca entered into a licensing agreement with Allergan (3 October 2016)

2  AstraZeneca announced on 24 August 2016 that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its late-stage, small-molecule antibiotics business in most markets globally outside the US. The transaction is expected to close during Q4 2016

 

 

Significant Lifecycle Management (LCM)

Compound

Mechanism

Area Under Investigation

Date Commenced Phase

Estimated Regulatory Acceptance Date / Submission Status

US

EU

Japan

China

Oncology

Faslodex

FALCON

oestrogen receptor antagonist

1st-line hormone receptor +ve advanced breast cancer

Q4 2012

H1 2017

H1 2017

Accepted1

2017

Lynparza OlympiAD

PARP inhibitor

gBRCA metastatic breast cancer

Q2 2014

2017

2017

2017


Lynparza      SOLO-2

PARP inhibitor

2nd-line or greater BRCAm PSR ovarian cancer, maintenance monotherapy

Q3 2013

2017

(Fast Track)

2017

2017


Lynparza      SOLO-1

PARP inhibitor

1st-line BRCAm ovarian cancer

Q3 2013

2018

2018

2018


Lynparza      SOLO-3

PARP inhibitor

gBRCA PSR ovarian cancer

Q1 2015

2018




Lynparza       POLO

PARP inhibitor

pancreatic cancer

Q1 2015

2018

2018

N/A


Lynparza

PARP inhibitor

prostate cancer

Q3 2014

 

(Breakthrough Therapy)




Lynparza

OlympiA

PARP inhibitor

gBRCA adjuvant breast cancer

Q2 2014

2020

2020

2020


Tagrisso

FLAURA

EGFR tyrosine kinase inhibitor

1st-line advanced EGFRm NSCLC

Q1 2015

2017

2017

2017

2017

Tagrisso

ADAURA

EGFR tyrosine kinase inhibitor

adjuvant EGFRm NSCLC

Q4 2015

2022

2022

2022

2022

Cardiovascular & Metabolic Diseases

Brilinta2
PEGASUS-
TIMI 54

P2Y12 receptor antagonist

outcomes trial in patients with prior myocardial infarction

Q4 2010

Launched

(Priority Review)

Launched

Approved2

Accepted

Brilinta2

THEMIS

P2Y12 receptor antagonist

outcomes trial in patients with type-2 diabetes and CAD, but without a previous history of MI or stroke

Q1 2014

2018

2018

2018

2019

Brilinta2

HESTIA

P2Y12 receptor antagonist

prevention of vaso-occlusive crises in paediatric patients with sickle cell disease

Q1 2014

2020

2020



Onglyza

SAVOR-TIMI 53

DPP-4 inhibitor

type-2 diabetes outcomes trial

Q2 2010

Launched

Launched


Accepted

Kombiglyze XR/Komboglyze3

DPP-4 inhibitor/ metformin FDC

type-2 diabetes


Launched

Launched


Submitted

Farxiga4
DECLARE-
TIMI 58

SGLT2 inhibitor

type-2 diabetes outcomes trial

Q2 2013

2020

2020



Farxiga3

SGLT2 inhibitor

type-1 diabetes

Q4 2014

2018

2018

2018


Xigduo XR/

Xigduo5

SGLT2 inhibitor/ metformin FDC

type-2 diabetes


Launched

Launched



Qtern (saxagliptin/

dapagliflozin FDC)

DPP-4 inhibitor/ SGLT2 inhibitor FDC

type-2 diabetes

Q2 2012

Accepted

Approved



Bydureon weekly
suspension

GLP-1 receptor agonist

type-2 diabetes

Q1 2013

2017

2017



Bydureon EXSCEL

GLP-1 receptor agonist

type-2 diabetes outcomes trial

Q2 2010

2018

2018

2018


Epanova

STRENGTH

omega-3 carboxylic acids

outcomes trial in statin-treated patients at high CV risk, with persistent hypertriglyceridemia plus low HDL-cholesterol

Q4 2014

2020

2020

2020

2020

Respiratory

Symbicort

SYGMA

ICS/LABA

as-needed use in mild asthma

Q4 2014

N/A

2018


2019

Symbicort

ICS/LABA

breath actuated Inhaler asthma/COPD


2018




Duaklir Genuair#

LAMA/LABA

COPD

Q3 2016

2018

Launched


2019

Other

Nexium

proton pump inhibitor

stress ulcer prophylaxis


N/A

N/A

N/A

Q4 2016

Nexium

proton pump inhibitor

paediatrics


Launched

Launched

Q4 2016

Accepted

linaclotide#

GC-C receptor peptide agonist

irritable bowel syndrome with constipation
(IBS-C)


N/A

N/A

N/A

Accepted

#    Collaboration

1    JP submission accepted 19 August 016

2    Brilinta in the US; Brilique in rest of world. JP approval received 28 Sept 2016

3    Kombiglyze XR in the US; Komboglyze in the EU

4    Farxiga in the US; Forxiga in rest of world

5    Xigduo XR in the US; Xigduo in the EU

 

 

Terminations (discontinued projects between 1 July 2016 and 30 September 2016)

NME / Line Extension

Compound

Reason for Discontinuation

Area Under Investigation

NME

AZD7624

Safety/Efficacy

COPD

LCM

Brilinta EUCLID

Safety/Efficacy

Peripheral artery disease

NME

inebilizumab

Safety/Efficacy

Diffuse large B-cell lymphoma

NME

MEDI3617#

Safety/Efficacy

solid tumours

NME

cediranib ICON 6

Regulatory

PSR ovarian cancer

NME

selumetinib#
SELECT-1

Safety/Efficacy

2nd-line KRASm NSCLC

 

 

Completed Projects / Divestitures

Compound

Mechanism

Area Under Investigation

Completed/

Divested

Estimated Regulatory Submission Acceptance

US

EU

Japan

China

Zurampic1

selective uric acid reabsorption inhibitor (URAT-1)

chronic treatment of hyperuricemia in patients with gout

Completed / Divested

Launched

Approved

n/a

n/a

Zurampic + allopurinol FDC1

selective uric acid reabsorption inhibitor (URAT-1)+xanthine oxidase inhibitor FDC

chronic treatment of hyperuricemia in patients with gout

Divested





MEDI-550

pandemic influenza virus vaccine

pandemic influenza prophylaxis

Completed

n/a

Approved

n/a

n/a

tralokinumab2

IL-13 mAb

atopic dermatitis

Divested





brodalumab3
AMAGINE-1,2,3

IL-17R mAb

psoriasis

Divested













 

1    AstraZeneca has granted Ironwood Pharmaceuticals, Inc. exclusive US rights (26 April 2016) and Grünenthal GmbH exclusive rights in Europe and Latin America (2 June 2016). Zurampic launched in US on 3 Oct 2016 

2    AstraZeneca entered licensing agreement with LEO Pharma (1 July 2016, completed on 16 August 2016)

3    AstraZeneca and Valeant agreed to terminate the licence for Valeant's right to develop and commercialise brodalumab in Europe.  AstraZeneca entered into an agreement with LEO Pharma for the exclusive licence to brodalumab in Europe (1 July 2016)

 

 

Condensed Consolidated Statement of Comprehensive Income

For the nine months ended 30 September


2016 

$m 


2015 

$m 

Product sales


16,059 


17,434 

Externalisation revenue


1,358 


875 

Total revenue


17,417 


18,309 

Cost of sales


(2,966)


(3,377)

Gross profit


14,451 


14,932 

Distribution costs


(243)


(240)

Research and development expense


(4,347)


(4,251)

Selling, general and administrative costs


(8,027)


(8,444)

Other operating income and expense


535 


1,029 

Operating profit


2,369 


3,026 

Finance income


44 


33 

Finance expense


(1,022)


(783)

Share of after tax losses in associates and joint ventures


(22)


(9)

Profit before tax


1,369 


2,267 

Taxation


220 


(249)

Profit for the period


1,589 


2,018 

 





Other comprehensive income





Items that will not be reclassified to profit or loss





Remeasurement of the defined benefit pension liability


(1,127)


34 

Tax on items that will not be reclassified to profit or loss


256 


(12)

 


(871)


22 

Items that may be reclassified subsequently to profit or loss





Foreign exchange arising on consolidation


(690)


(359)

Foreign exchange arising on designating borrowings in net investment hedges


(194)


(322)

Fair value movements on cash flow hedges


(26)


Fair value movements on cash flow hedges transferred to profit or loss


41 


Fair value movements on derivatives designated in net investment hedges


(96)


24 

Amortisation of loss on cash flow hedge



Net available for sale gains/(losses) taken to equity


126 


(63)

Tax on items that may be reclassified subsequently to profit or loss


63 


84 

 


(775)


(635)

Other comprehensive income for the period, net of tax


(1,646)


(613)

Total comprehensive income for the period


(57)


1,405 

 





Profit attributable to:





Owners of the Parent


1,657 


2,017 

Non-controlling interests


(68)


 


1,589 


2,018 

 





Total comprehensive income attributable to:





Owners of the Parent


12 


1,405 

Non-controlling interests


(69)


 


(57)


1,405 

 





Basic earnings per $0.25 Ordinary Share


$1.31 


$1.60 

Diluted earnings per $0.25 Ordinary Share


$1.31 


$1.59 

Weighted average number of Ordinary Shares in issue (millions)


1,265 


1,264 

Diluted weighted average number of Ordinary Shares in issue (millions)


1,266 


1,265 

 

 

Condensed Consolidated Statement of Comprehensive Income

For the quarter ended 30 September


2016 

$m 


2015 

$m 

Product sales


5,025 


5,850 

Externalisation revenue


674 


95 

Total revenue


5,699 


5,945 

Cost of sales


(900)


(1,041)

Gross profit


4,799 


4,904 

Distribution costs


(76)


(79)

Research and development expense


(1,402)


(1,429)

Selling, general and administrative costs


(2,403)


(2,679)

Other operating income and expense


110 


453 

Operating profit


1,028 


1,170 

Finance income


13 


Finance expense


(355)


(246)

Share of after tax losses in associates and joint ventures


(10)


(2)

Profit before tax


676 


931 

Taxation


319 


(161)

Profit for the period


995 


770 

 





Other comprehensive income





Items that will not be reclassified to profit or loss





Remeasurement of the defined benefit pension liability


(285)


(208)

Tax on items that will not be reclassified to profit or loss


21 


45 

 


(264)


(163)

Items that may be reclassified subsequently to profit or loss





Foreign exchange arising on consolidation


(167)


(348)

Foreign exchange arising on designating borrowings in net investment hedges


(127)


(105)

Fair value movements on cash flow hedges


77 


Fair value movements on cash flow hedges transferred to profit or loss


(19)


Fair value movements on derivatives designated in net investment hedges


(17)


Net available for sale gains/(losses) taken to equity


162 


(34)

Tax on items that may be reclassified subsequently to profit or loss


(12)


41 

 


(103)


(442)

Other comprehensive income for the period, net of tax


(367)


(605)

Total comprehensive income for the period


628 


165 

 





Profit attributable to:





Owners of the Parent


1,014 


770 

Non-controlling interests


(19)


 


995 


770 

 





Total comprehensive income attributable to:





Owners of the Parent


648 


166 

Non-controlling interests


(20)


(1)

 


628 


165 

 





Basic earnings per $0.25 Ordinary Share


$0.80 


$0.61 

Diluted earnings per $0.25 Ordinary Share


$0.80 


$0.60 

Weighted average number of Ordinary Shares in issue (millions)


1,265 


1,264 

Diluted weighted average number of Ordinary Shares in issue (millions)


1,266 


1,265 

 

 

Condensed Consolidated Statement of Financial Position

 


At 30 Sep 2016

$m


At 31 Dec 2015

$m


At 30 Sep 2015

$m

ASSETS

Non-current assets







Property, plant and equipment


6,690 


6,413 


6,205 

Goodwill


11,806 


11,868 


11,430 

Intangible assets


28,507 


22,646 


19,997 

Derivative financial instruments


278 


446 


479 

Investments in associates and joint ventures


95 


85 


48 

Other investments


715 


458 


444 

Other receivables


681 


907 


925 

Deferred tax assets


1,584 


1,294 


1,391 

 


50,356 


44,117 


40,919 

Current assets







Inventories


2,420 


2,143 


2,193 

Assets held for sale


332 



Trade and other receivables


5,449 


6,622 


5,876 

Other investments


909 


613 


496 

Derivative financial instruments


26 



30 

Income tax receivable


640 


387 


523 

Cash and cash equivalents


3,090 


6,240 


4,081 



12,866 


16,007 


13,199 

Total assets


63,222 


60,124 


54,118 

LIABILITIES

Current liabilities







Interest-bearing loans and borrowings


(2,939)


(916)


(2,671)

Trade and other payables


(9,961)


(11,663)


(10,593)

Derivative financial instruments


(12)


(9)


(25)

Provisions


(936)


(798)


(682)

Income tax payable


(1,534)


(1,483)


(2,065)



(15,382)


(14,869)


(16,036)

Non-current liabilities







Interest-bearing loans and borrowings


(14,744)


(14,137)


(8,276)

Derivative financial instruments


(25)


(1)


Deferred tax liabilities


(4,051)


(2,733)


(1,559)

Retirement benefit obligations


(2,870)


(1,974)


(2,542)

Provisions


(396)


(444)


(381)

Other payables


(10,842)


(7,457)


(7,956)



(32,928)


(26,746)


(20,714)

Total liabilities


(48,310)


(41,615)


(36,750)

Net assets


14,912 


18,509 


17,368 

EQUITY







Capital and reserves attributable to equity holders of the Company







Share capital


316 


316 


316 

Share premium account


4,344 


4,304 


4,291 

Other reserves


2,031 


2,036 


2,035 

Retained earnings


6,381 


11,834 


10,707 

 


13,072 


18,490 


17,349 

Non-controlling interests


1,840 


19 


19 

Total equity


14,912 


18,509 


17,368 

 







 

 

Condensed Consolidated Statement of Cash Flows

 

For the nine months ended 30 September


2016

$m 


2015 

$m 

Cash flows from operating activities





Profit before tax


1,369 


2,267 

Finance income and expense


978 


750 

Share of after tax losses in associates and joint ventures


22 


Depreciation, amortisation and impairment


1,767 


2,136 

Increase in working capital and short-term provisions


(472)


(35)

Non-cash and other movements


(545)


(987)

Cash generated from operations


3,119 


4,140 

Interest paid


(489)


(433)

Tax paid


(445)


(954)

Net cash inflow from operating activities


2,185 


2,753 

Cash flows from investing activities





Movement in short-term investments and fixed deposits


(165)


285 

Purchase of property, plant and equipment


(912)


(874)

Disposal of property, plant and equipment


47 


16 

Purchase of intangible assets


(761)


(1,379)

Disposal of intangible assets


117 


737 

Purchase of non-current asset investments


(210)


(47)

Disposal of non-current asset investments


- 


59 

Payments to joint ventures


(19)


Upfront payments on business acquisitions


(2,564)


Payment of contingent consideration on business acquisitions


(197)


(553)

Interest received


105 


102 

Payments made by subsidiaries to non-controlling interests


(13)


Net cash outflow from investing activities


(4,572)


(1,654)

Net cash (outflow)/inflow before financing activities


(2,387)


1,099 

Cash flows from financing activities





Proceeds from issue of share capital


40 


30 

New long-term loans


2,483 


Repayment of loans



(884)

Dividends paid


(3,561)


(3,486)

Hedge contracts relating to dividend payments


18 


(51)

Repayment of obligations under finance leases


(12)


(40)

Movement in short-term borrowings


12 


1,025 

Net cash outflow from financing activities


(1,020)


(3,406)

Net decrease in cash and cash equivalents in the period


(3,407)


(2,307)

Cash and cash equivalents at the beginning of the period


6,051 


6,164 

Exchange rate effects


43 


(70)

Cash and cash equivalents at the end of the period


2,687 


3,787 

Cash and cash equivalents consists of:





Cash and cash equivalents


3,090 


4,081 

Overdrafts


(403)


(294)



2,687 


3,787 






 

 

Condensed Consolidated Statement of Changes in Equity



Share
capital
$m


Share
premium
account
$m


Other
reserves*
$m


Retained
earnings
$m


Total 
$m 


Non-
controlling
interests
$m


Total
equity
$m

At 1 Jan 2015


316


4,261


2,021


13,029 


19,627 


19 


19,646 

Profit for the period


-


-


-


2,017 


2,017 



2,018 

Other comprehensive income


-


-


-


(612)


(612)


(1)


(613)

Transfer to other reserves


-


-


14


(14)




Transactions with owners:















Dividends


-


-


-


(3,537)


(3,537)



(3,537)

Issue of Ordinary Shares


-


30


-



30 



30 

Share-based payments


-


-


-


(176)


(176)



(176)

Net movement


-


30


14


(2,322)


(2,278)



(2,278)

At 30 Sep 2015


316


4,291


2,035


10,707 


17,349 


19 


17,368 


















Share
capital
$m


Share
premium
account
$m


Other
reserves*
$m


Retained
earnings
$m


Total 
$m 


Non-
controlling
interests
$m


Total
equity
$m

At 1 Jan 2016


316


4,304


2,036 


11,834


18,490 


19 


18,509 

Profit for the period


-


-



1,657 


1,657 


(68)


1,589 

Other comprehensive income


-


-



(1,645)


(1,645)


(1)


(1,646)

Transfer to other reserves


-


-


(5)


5




Transactions with owners:















Dividends


-


-



(3,540)


(3,540)



(3,540)

Dividend paid by subsidiary to non-controlling interest


-


-





(13)


(13)

Acerta put option


-


-



(1,825)


(1,825)



(1,825)

Changes in non-controlling interest


-


-





1,903 


1,903 

Issue of Ordinary Shares


-


40




40 



40 

Share-based payments


-


-



(105)


(105)



(105)

Net movement


-


40


(5)


(5,453)


(5,418)


1,821 


(3,597)

At 30 Sep 2016


316


4,344


2,031 


6,381 


13,072 


1,840 


14,912 

* Other reserves include the capital redemption reserve and the merger reserve.

 

 

 

Notes to the Interim Financial Statements

1   BASIS OF PREPARATION AND ACCOUNTING POLICIES

These unaudited condensed consolidated interim financial statements (interim financial statements) for the nine months ended 30 September 2016 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union (EU) and as issued by the International Accounting Standards Board (IASB).

 

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and as issued by the IASB. The interim financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2015. There have been no significant new or revised accounting standards applied in the nine months ended 30 September 2016.

 

Legal proceedings

The information contained in Note 7 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2015 and Interim Financial Statements for the six months ended 30 June 2016.

 

Going concern

The Group has considerable financial resources available. As at 30 September 2016 the Group has $3.2bn in financial resources (cash balances of $3.1bn and undrawn committed bank facilities of $3bn which are available until April 2021, with only $2.9bn of debt due within one year). The Group's revenues are largely derived from sales of products which are covered by patents which provide a relatively high level of resilience and predictability to cash inflows, although our revenue is expected to continue to be significantly impacted by the expiry of patents over the medium term. In addition, government price interventions in response to budgetary constraints are expected to continue to adversely affect revenues in many of our mature markets. However, we anticipate new revenue streams from both recently launched medicines and products in development, and the Group has a wide diversity of customers and suppliers across different geographic areas. Consequently, the Directors believe that, overall, the Group is well placed to manage its business risks successfully.

 

On the basis of the above paragraph and after making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the interim financial statements have been prepared on a going concern basis.

 

Financial information

The comparative figures shown for the financial year ended 31 December 2015 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and have been delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

 

2   RESTRUCTURING COSTS

Profit before tax for the year ended 30 September 2016 is stated after charging restructuring costs of $713m ($250m for the third quarter of 2016). These have been charged to profit as follows:

 



YTD 2016
$m


YTD 2015
$m


Q3 2016
$m


Q3 2015
$m

Cost of sales


87 


124


59 


23

Research and development expense


146 


180


39 


56

Selling, general and administrative costs


504 


358


176 


135

Other operating income and expense


(24)


-


(24)


-

Total


713 


662


250 


214

 

 

3   NET DEBT

The table below provides an analysis of net debt and a reconciliation of net cash flow to the movement in net debt.



At 1 Jan 

2016 

$m 


Cash Flow

$m 


Acquisitions

 

$m


Non-cash

& Other

$m


Exchange Movements

$m


At 30 Sep

2016 

$m 

Loans due after one year


(14,109)


(2,483)


- 


1,772 


84 


(14,736)

Finance leases due after one year


(28)


- 


- 


20 



(8)

Total long-term debt


(14,137)


(2,483)


- 


1,792 


84 


(14,744)














Current instalments of loans


- 


- 


- 


(1,775)


- 


(1,775)

Current instalments of finance leases


(67)


12 



(34)



(89)

Total current debt


(67)


12 



(1,809)



(1,864)














Other Investments


613 


167 


140 


59 


(52)


927 

Net derivative financial instruments


438 


(2)


- 


(169)



267 

Cash and cash equivalents


6,240 


(3,183)


- 


- 


33 


3,090 

Overdrafts


(189)


(224)


- 


- 


10 


(403)

Short-term borrowings


(660)


(12)


- 


(1)



(672)



6,442 


(3,254)


140 


(111)


(8)


3,209 

Net debt


(7,762)


(5,725)


140 


(128)


76 


(13,399)

 

Non-cash movements in the period include fair value adjustments under IAS 39.

 

 

4   MAJORITY EQUITY INVESTMENT IN ACERTA PHARMA

On 2 February 2016, AstraZeneca completed an agreement to invest in a majority equity stake in Acerta Pharma, a privately-owned biopharmaceutical company based in the Netherlands and US. The transaction provides AstraZeneca with a potential best-in-class irreversible oral Bruton's tyrosine kinase (BTK) inhibitor, acalabrutinib (ACP-196), currently in Phase III development for B-cell blood cancers and in Phase I/II clinical trials in multiple solid tumours.

 

Under the terms of the agreement, AstraZeneca has acquired 55% of the issued share capital of Acerta for an upfront payment of $2.5bn. A further payment of $1.5bn will be paid either on receipt of the first regulatory approval for acalabrutinib for any indication in the US, or the end of 2018, depending on which is first. The agreement also includes options which, if exercised, provide the opportunity for Acerta shareholders to sell, and AstraZeneca to buy, the remaining 45% of shares in Acerta. The options can be exercised at various points in time, conditional on the first approval of acalabrutinib in both the US and Europe and when the extent of the commercial opportunity has been fully established, at a price of approximately $3bn net of certain costs and payments incurred by AstraZeneca and net of agreed future adjusting items, using a pre-agreed pricing mechanism. Acerta has approximately 150 employees.

 

AstraZeneca's 55% holding is a controlling interest and Acerta's combination of intangible product rights with an established workforce and their operating processes requires that the transaction is accounted for as a business combination in accordance with IFRS 3.

 

Goodwill is principally attributable to the value of the specialist knowhow inherent in the acquired workforce and the accounting for deferred taxes. Goodwill is not expected to be deductible for tax purposes. Acerta Pharma's results have been consolidated into the Group's results from 2 February 2016. From the period from acquisition to 30 September 2016, Acerta Pharma had no revenues and its loss after tax was $157m.

 

In the period since 2 February 2016, the acquisition accounting has been adjusted to reflect new information regarding the value of net assets acquired with Acerta. This has resulted in an increase in other assets and a decrease in goodwill of $15m.

 

 




 

Fair value

$m

Intangible assets



7,307 

Other assets including cash and cash equivalents



253 

Deferred tax liabilities



(1,827)

Other liabilities



(90)

Total net assets acquired



5,643 

Non-controlling interests



(1,903)

Goodwill



69 

Fair value of total consideration



3,809 

Less: fair value of deferred consideration



(1,332)

Total upfront consideration



2,477 

Less: cash and cash equivalents acquired



(94)

Net cash outflow



2,383 

 

 

 

5   ACQUISITION OF ZS PHARMA

On 17 December 2015, AstraZeneca completed the acquisition of ZS Pharma, a biopharmaceutical company based in San Mateo, California. ZS Pharma uses its proprietary ion-trap technology to develop novel treatments for hyperkalaemia, a serious condition of elevated potassium in the bloodstream, typically associated with CKD and Chronic Heart Failure.

 

During 2016, we have revised our assessment of the fair values of the assets and liabilities acquired as a result of new information obtained about facts and circumstances that existed at the date of acquisition that impact the value of deferred tax. This has resulted in a reduction to both deferred tax liabilities and goodwill of $68m.

 




Fair value

$m

Non-current assets




Intangible assets



3,162 

Property, plant and equipment



21 




3,183 

Current assets



169 

Current liabilities



(50)

Non-current liabilities




Deferred tax liabilities



(977)

Other liabilities



(13)




(990)

Total net assets acquired



2,312 

Goodwill



388 

Total upfront consideration



2,700 

Less: cash and cash equivalents acquired



(73)

Less: deferred upfront consideration



(181)

Net cash outflow



2,446 

 

6   FINANCIAL INSTRUMENTS

As detailed in the Group's most recent annual financial statements, our principal financial instruments consist of derivative financial instruments, other investments, trade and other receivables, cash and cash equivalents, trade and other payables, and interest-bearing loans and borrowings. As indicated in Note 1, there have been no changes to the accounting policies for financial instruments, including fair value measurement, from those disclosed on pages 146 and 147 of the Company's Annual Report and Form 20-F Information 2015. In addition, there have been no changes of significance to the categorisation or fair value hierarchy of our financial instruments. Financial instruments measured at fair value include $1,624m of other investments, $1,749m of loans, and $267m of derivatives as at 30 September 2016. The total fair value of interest-bearing loans and borrowings at 30 September 2016 which have a carrying value of $17,683m in the Condensed Consolidated Statement of Financial Position, was $19,559m. Contingent consideration liabilities arising on business combinations have been classified under Level 3 in the fair value hierarchy and movements in fair value are shown below:

 

 



Diabetes

Alliance

2016


Other

 

2016


Total

 

2016


Total

 

2015



$m


$m


$m


$m

 At 1 January


5,092 


1,319


6,411 


6,899 

 Settlements


(197)


-


(197)


(553)

 Revaluations


32 


100


132 


58 

 Discount unwind


292 


80


372 


395 

 Foreign exchange


-


2



 At 30 September


5,219 


1,501


6,720 


6,801 



 

7   LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES

 

AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation and investigations relating to product liability, commercial disputes, infringement of intellectual property rights, the validity of certain patents, anti-trust law and sales and marketing practices. The matters discussed below constitute the more significant developments since publication of the disclosures concerning legal proceedings in the Company's Annual Report and Form 20-F Information 2015 and as part of the Company's Half-Yearly Financial Report for the six-month period to 30 June 2016  (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, we record the loss absorbed or make a provision for our best estimate of the expected loss.

 

The position could change over time and the estimates that we have made and upon which we have relied in calculating these provisions are inherently imprecise. There can, therefore, be no assurance that any losses that result from the outcome of any legal proceedings will not exceed the amount of the provisions that have been booked in the accounts. The major factors causing this uncertainty are described more fully in the Disclosures and herein.

 

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

 

Matters disclosed in respect of the third quarter of 2016 and to 10 November 2016.

 

Patent litigation

 

Tagrisso (osimertinib)

Patent proceedings outside the US

In Europe, in October 2016, Stada Arzneimittel AG filed an opposition to the grant of European Patent No. 2,736,895.

 

Faslodex (fulvestrant)

US patent proceedings

As previously disclosed, AstraZeneca has filed patent infringement lawsuits in the US District Court in New Jersey relating to four patents listed in the FDA Orange Book with reference to Faslodex. A trial against two of the defendants commenced on 11 July 2016 and was scheduled to reconvene on 1 August 2016. AstraZeneca settled the lawsuits against both of these defendants prior to trial reconvening and consequently those cases have since been dismissed. AstraZeneca continues to litigate against several additional defendants with trial anticipated in 2017.

 

Patent proceedings outside the US

As previously disclosed, in Spain, in January 2016 the Barcelona Commercial Court ordered a preliminary injunction preventing Sandoz Farmacéutica, S. A. from launching its generic version of Faslodex. The preliminary injunction was maintained following an oral hearing in July 2016.

 

In Germany, in September 2016, a provisional injunction request based on European Patent No. 1,250,138 (the '138 Patent) was granted by the Regional Court of Düsseldorf against ratiopharm GmbH (ratiopharm). As previously disclosed, in July 2015, AstraZeneca was served with complaints filed by Hexal AG (Hexal) and ratiopharm requesting the revocation of the '138 patent. The German Federal Patent Court has scheduled a hearing on this matter for 22 November 2016.

 

Also in Germany, as previously disclosed, in December 2015 AstraZeneca filed a patent infringement suit relating to European Patent No. 2,255,573 against Hexal in the Regional Court of Mannheim referring to Hexal's threatened launch of a generic Faslodex product. These proceedings were stayed at an oral hearing in August 2016.

 

Onglyza (saxagliptin) and Kombiglyze (saxagliptin and metformin)

US patent proceedings

As previously disclosed, AstraZeneca initiated patent infringement proceedings against Wockhardt Bio AG and Wockhardt USA LLC, Sun Pharma Global FZE, Sun Pharmaceutical Industries Ltd. and Amneal Pharmaceuticals LLC (Wockhardt, Sun and Amneal) in the US District Court for the District of Delaware (the District Court) after those entities had submitted ANDAs containing a Paragraph IV Certification alleging that US Patent No. RE44,186 (the '186 Patent), listed in the FDA Orange Book with reference to Onglyza and Kombiglyze XR, is invalid and/or will not be infringed by the products as described in their ANDAs. In August and September 2016, AstraZeneca was informed that Wockhardt, Sun and Amneal had changed their Paragraph IV Certifications to Paragraph III Certifications, seeking approval to market the products described in their ANDAs following expiration of the '186 Patent. The patent infringement proceedings against these entities continues.

 

A trial was held in September 2016 against Wockhardt, Sun and Amneal, Mylan Pharmaceuticals Inc. (Mylan),  Aurobindo Pharma Ltd., Aurobindo Pharma U.S.A., Inc., Actavis Laboratories FL, Inc. and Watson Laboratories, Inc. in the District Court. A decision on the validity of the '186 Patent is awaited. In September 2016, Apotex Corp. and Apotex, Inc. agreed to be bound by the District Court's judgment. 

 

As previously disclosed, in June 2016, the US Court of Appeals for the Federal Circuit denied Mylan's petition for rehearing en banc of the decision affirming the denial of Mylan's motion to dismiss for lack of jurisdiction. In September 2016, Mylan filed a petition for writ of certiorari with the Supreme Court of the United States seeking an appeal of that decision. 

 

As previously disclosed, in May 2016, the US Patent and Trademark Office (USPTO) instituted an inter partes review brought by Mylan challenging the validity of the '186 Patent (the Mylan IPR) and a number of generics companies also filed petitions for inter partes review challenging the validity of the '186 Patent and sought to join the Mylan IPR. In August and September 2016 respectively, Wockhardt Bio AG and Teva Pharmaceuticals USA, Inc. were joined with the Mylan IPR. A decision as to whether the others will be permitted to join the Mylan IPR is awaited.

 

Crestor (rosuvastatin) 

Patent proceedings outside the US

As previously disclosed, in France, in February 2016, Biogaran S.A.S. (Biogaran) obtained a marketing authorisation for its rosuvastatin zinc product. In April 2016, AstraZeneca and Shionogi Seiyaku Kabushiki Kaisha (Shionogi) sought a preliminary injunction to prevent Biogaran from launching its product. On 4 July 2016, the Paris Court of First Instance declined to issue a preliminary injunction. AstraZeneca and Shionogi appealed; however, the parties settled the preliminary proceedings before the appeal hearing. AstraZeneca and Shionogi have commenced patent infringement proceedings against Biogaran.

 

As previously disclosed, in Japan, in March 2015, an individual filed a patent invalidation request with the Japanese Patent Office (JPO) in relation to the Crestor substance patent. On 13 July 2016, the JPO dismissed the request. The individual has appealed to the Intellectual Property High Court of Japan with the intervention of Nippon Chemiphar Co. Ltd (Nippon).  In addition, Nippon has commenced a separate patent invalidation request with the JPO in relation to the Crestor substance patent.  A hearing was held on 30 September 2016.

 

As previously disclosed, in the UK, in October 2015, Resolution Chemicals Ltd. commenced an action in the UK Patent Court alleging partial invalidity and non-infringement of the supplementary protection certificate related to the Crestor substance patent. The case has been stayed.

 

In Switzerland, in May 2016, Mepha Pharma AG challenged the validity of the supplementary protection certificate related to the Crestor substance patent. In September 2016, AstraZeneca responded.

 

Product liability litigation

 

Farxiga (dapagliflozin)

As previously disclosed, AstraZeneca has been named as a defendant in lawsuits filed in four jurisdictions involving plaintiffs claiming physical injury, including diabetic ketoacidosis and kidney failure, from treatment with Farxiga. Since then, additional cases with similar allegations have been filed in other jurisdictions. On 25 October 2016, one of these cases was dismissed with prejudice in favour of AstraZeneca. Motions to dismiss are pending in other jurisdictions. In October 2016, counsel for plaintiffs in a product liability action pertaining to Invokana (a product in the same class as Farxiga) filed a motion with the Judicial Panel on Multidistrict Litigation seeking transfer of any currently pending cases as well as any similar, subsequently filed cases to a coordinated and consolidated pre-trial Multidistrict Litigation proceeding on a class-wide basis. 

 

Onglyza/Kombiglyze (saxagliptin)

As previously disclosed, AstraZeneca is defending various lawsuits filed in state and federal courts in the US involving multiple plaintiffs claiming heart failure, cardiac failure and/or death injuries from treatment with either Onglyza or Kombiglyze. In October 2016, 14 of these claims were dismissed in response to motions filed by AstraZeneca. Approximately 80 plaintiffs claims currently remain in active litigation.

 

Synagis (palivizumab)

As previously disclosed, AstraZeneca and MedImmune were named as defendants in a lawsuit filed in the US District Court for the Middle District of Louisiana involving two plaintiffs alleging wrongful death from treatment with Synagis. In July 2016, the plaintiffs dismissed their claims voluntarily.

 

Nexium and Prilosec (esomeprazole and omeprazole)

As previously disclosed, all claims alleging that Nexium caused osteoporotic injuries, such as bone deterioration, loss of bone density and/or bone fractures, have now been dismissed with judgment entered in AstraZeneca's favour. Approximately 270 plaintiffs have appealed the dismissal of their claims to the US Court of Appeals for the Ninth Circuit, and fewer than 40 plaintiffs have appealed the dismissal of their claims to the California Second Appellate Division. On 27 October 2016, the US Court of Appeals for the Ninth Circuit affirmed the dismissal of the approximately 270 claims that were pending in federal court.

 

AstraZeneca is defending various lawsuits in federal courts in the US involving multiple plaintiffs claiming that they have been diagnosed with kidney injuries following treatment with proton pump inhibitors, including Nexium and Prilosec. In October 2016, counsel for these plaintiffs filed a motion with the Judicial Panel on Multidistrict Litigation seeking transfer of any currently pending cases as well as any similar, subsequently filed cases to a coordinated and consolidated pre-trial Multidistrict Litigation proceeding.

 

Commercial litigation

 

Pearl Therapeutics

As previously disclosed, AstraZeneca was served with a complaint filed in Delaware State court by the former shareholders of Pearl Therapeutics, Inc. (Pearl) that alleged, among other things, breaches of contractual obligations relating to a 2013 merger agreement between AstraZeneca and Pearl. This case has been resolved.

 

Crestor Citizen's Petition

As previously disclosed, in May 2016, AstraZeneca filed a Citizen's Petition with the FDA requesting that the FDA does not approve any pending generic ANDAs for rosuvastatin until the expiration of the paediatric orphan exclusivity for Crestor.  In June 2016, AstraZeneca filed its Complaint for Declaratory and Injunctive Relief and an Application for a Temporary Restraining Order (TRO) with the US District Court for the District of Columbia. The filings requested that the Court prohibit the FDA from granting final approval to any pending ANDAs for generic versions of Crestor until the expiration of paediatric orphan exclusivity. In July 2016, the Court denied AstraZeneca's application for a TRO. On 19 August 2016, the Court entered an order dismissing the case without prejudice.

 

Nexium settlement anti-trust litigation

As previously disclosed, AstraZeneca is a defendant in a multidistrict litigation class action and individual lawsuit alleging that AstraZeneca's settlements of certain patent litigation in the US relating to Nexium violated US anti-trust law and various state laws. A trial in the US District Court for the District of Massachusetts commenced in October 2014 and, in December 2014, a jury returned a verdict in favour of AstraZeneca. Following the Court's denial of the plaintiffs' motion for a new trial and preliminary injunction, the Court entered judgment in favour of AstraZeneca in September 2015.  The plaintiffs have appealed that judgment and oral argument on the appeal was heard on 5 October 2016.

 

Nexium/Prilosec trademark litigation

As previously disclosed, AstraZeneca filed separate complaints in the US District Court for the District of Delaware against Camber Pharmaceuticals, Inc. and Dr. Reddy's Laboratories, Inc. to enforce certain AstraZeneca trademark rights related to Nexium and Prilosec. This matter is now resolved. 

 

Government investigations/proceedings

 

Foreign Corrupt Practices Act

As previously disclosed, in connection with investigations into anti-bribery and corruption issues in the pharmaceutical industry, AstraZeneca received inquiries from enforcement agencies, including the Department of Justice (DOJ) and the Securities Exchange Commission (SEC), regarding, among other things, sales practices, internal controls, certain distributors and interactions with healthcare providers and other government officials in several countries. In August 2016, AstraZeneca entered into a civil settlement with the SEC to resolve these inquiries. The DOJ has informed AstraZeneca that it has closed its inquiry into this matter.

 

Seroquel IR (quetiapine fumarate) and Seroquel XR (quetiapine fumarate)

As previously disclosed, AstraZeneca was in litigation with the Attorney General of Mississippi in relation to the state law claims brought by state Attorneys General which alleged that AstraZeneca had made false and/or misleading statements in marketing and promoting Seroquel.  This litigation has been resolved and the matter has been dismissed.

 


8 product analysis - YTD 2016

 



World


US


Europe


Established ROW


Emerging Markets



YTD 2016

$m


CER

%


YTD 2016

$m


CER

%


YTD 2016

$m


CER

%


YTD 2016

$m


CER

%


YTD 2016

$m


CER

%

Oncology:





















 Iressa


395


(3)


16


n/m 


91


(5)


101


(9)


187


(6)

 Tagrisso


276


n/m 


180


n/m 


49


n/m 


43


n/m 


4


n/m 

 Lynparza


156


n/m 


96


109 


56


n/m 


-



4


n/m 

 Legacy:





















 Faslodex


608


19 


321


23 


169


11 


48


13 


70


26 

 Zoladex


581


(4)


27


23 


117


(5)


199


(6)


238


(3)

 Casodex


187


(9)


2


n/m 


19


(14)


84


(21)


82


 Arimidex


175


(6)


12


(20)


27


(27)


53


(16)


83


13 

 Others


75