REG - AstraZeneca PLC - 3rd Quarter Results <Origin Href="QuoteRef">AZN.L</Origin> - Part 2
06/11/2014 08:42
- Part 2: For the preceding part double click ID:nRSF2925Wa
Respiratory, Inflammation and Autoimmunity
Symbicort 967 839 15 2,823 2,507 12
Pulmicort 205 176 17 677 622 10
Infection, Neuroscience and Gastrointestinal
Nexium 922 918 1 2,823 2,881 -
Synagis 121 130 (7) 496 545 (9)
Seroquel XR 319 339 (6) 915 1,000 (9)
Seroquel IR 51 84 (37) 206 310 (32)
Cardiovascular and Metabolic disease
· In the US, Crestor sales in the third quarter were $682 million, down 5 percent. Crestor total prescriptions decreased 5 percent, consistent with the revenue decline. Crestor sales in the first nine months were up 1 percent, as net price realisation and
prior year rebate adjustments more than offset volume declines.
· Crestor sales in the ROW were up 4 percent to $660 million, reflecting the annualisation of the impact of generic competition in Australia. Emerging Markets were up 13 percent, with China growing by 37 percent. Crestor sales in the ROW in the first nine
months were down 2 percent to $1,966 million.
· US sales of the Toprol-XL product range, which includes sales of the authorised generic, were down 8 percent in the quarter to $23 million, largely the result of market share loss following additional generic entrants. Seloken sales in other markets were
up 18 percent to $175 million. Global Seloken sales in the first nine months (excluding the authorised generic) were up 6 percent to $549 million.
· Onglyza revenue was up 139 percent in the third quarter to $220 million, of which $130 million was in the US and $90 million in other markets. AstraZeneca completed the acquisition of BMS's share of the global diabetes alliance on 1 February 2014 and began
reflecting 100 percent ownership at that point. Total prescriptions for the Onglyza franchise in the US were flat compared with the third quarter last year; share of total prescriptions was 14.7 percent in the US in September 2014, down 0.6 percentage
points since June 2014. The revenue decline in the US was primarily driven by lower net price. Revenue in the first nine months was $620 million, up 118 percent.
· US sales of Atacand were up 18 percent in the quarter to $13 million. Generic competition for the diuretic combination product followed the loss of exclusivity in December 2012. Atacand sales in other markets were down 16 percent to $110 million,
reflecting loss of exclusivity in many markets. Sales in the first nine months were down 19 percent to $384 million.
· Sales of Brilinta/Brilique were $127 million in the third quarter. Nearly half of the sales were in Europe, where third quarter sales have increased by 36 percent compared with the third quarter of 2013. Performance in Canada, Australia and Emerging
Markets is also contributing to brand revenue growth.
· Brilinta sales in the US in the third quarter were $40 million. Total prescriptions for Brilinta in the US in the third quarter of 2014 were 10 percent higher than the second quarter of 2014. New to brand share increased by 0.6 percentage points to 7.5
percent in the third quarter.
· Byetta and Bydureon revenues in the US were $162 million, and $55 million in ROW in the third quarter. Bydureon share of total prescriptions in the US returned to growth in September 2014 assisted by the launch of the Bydureon Pen in that month. Nine month
revenue is $575 million, up 126 percent.
Oncology
· Zoladex sales were $240 million in the third quarter. Sales in Europe were down 10 percent and down 9 percent in Japan. On a nine month basis, sales were down 4 percent to $697 million.
· Iressa sales in the third quarter were down 4 percent to $157 million, as a decline in Japan, more than offset growth in China. Worldwide sales of Iressa in the first nine months were down 1 percent at $473 million.
· Arimidex sales in the first nine months were $230 million worldwide, down 11 percent as sales continue to decline as a result of loss of exclusivity.
· Sales of Casodex in the first nine months were $246 million, down 9 percent. All but $5 million of these sales were in markets outside the US. Sales in Japan, which account for 50 percent of global revenue, were down 18 percent in the first nine months due to generic competition.
Respiratory, Inflammation and Autoimmunity
· Symbicort sales in the US were $395 million in the third quarter, a 29 percent increase over last year. Total prescriptions for Symbicort were also up 29 percent in the third quarter. Symbicort share of total prescriptions for fixed combination products reached 31.6 percent in September 2014. Symbicort sales in the US in the first nine months were up 26 percent to $1,116 million. Price was flat for both the quarter and nine months.
· Symbicort sales in other markets in the third quarter were $572 million, up 7 percent. Sales in Europe were down 1 percent as price pressure was offsetting a 6 percent volume growth. Sales in Established ROW were up 18 percent. Sales in Emerging Markets were up 28 percent. Symbicort sales in the ROW in the first nine months were up 5 percent to $1,707 million.
· US sales of Pulmicort were down 6 percent to $155 million in the first nine months. Pulmicort sales in the ROW were up 15 percent to $522 million, with China comprising approximately half.
Infection, Neuroscience and Gastrointestinal
· In the US, Nexium sales in the third quarter were $468 million, down 7 percent compared with the third quarter last year. Nexium sales in the first nine months were down 11 percent to $1,407 million primarily driven by volume erosion.
· Nexium sales in other markets in the third quarter were up 10 percent to $454 million. Much of the growth came from Japan and China, up 55 percent and 25 percent respectively. Nexium sales in other markets were up 13 percent in the first nine months to
$1,416 million.
· In the US, sales of Synagis in the third quarter were $6 million with the third quarter being out of season for the US. Outside the US, sales in the third quarter were $115 million, down 7 percent, which reflects the quarterly phasing of revenues related
to shipments to AbbVie, our international distributor. Recently, the American Academy of Pediatrics - Committee on Infectious Disease issued new guidelines further restricting patients eligible for preventive therapy with Synagis. While these guideline
changes are inconsistent with our approved label we expect to see a significant impact on Synagis sales in the fourth quarter of 2014 and further impact in 2015 onwards.
· Sales of Seroquel XR in the US were $195 million in the third quarter, up 1 percent. US sales for the first nine months were down 1 percent to $542 million.
· Sales of Seroquel XR in the ROW were down 15 percent to $124 million in the third quarter, as a result of generic competition (including some "at risk" launches) in Europe where sales were down 22 percent. Sales in Emerging Markets were up 8 percent.
· Sales of Seroquel IR were down 32 percent in the first nine months to $206 million. The majority of this decline is attributable to Japan, as the partner built inventory in 2013 in anticipation of a manufacturing site change.
Regional Revenue
Third Quarter Nine Months
2014 2013 % Change 2014 2013 % Change
$m $m Actual CER $m $m Actual CER
US 2,528 2,360 7 7 7,479 7,057 6 6
Europe 1,648 1,630 1 (1) 4,925 4,836 2 (2)
Established ROW1 898 941 (5) (2) 2,659 2,950 (10) (3)
Japan 568 611 (7) (3) 1,684 1,817 (7) -
Canada 147 144 2 6 433 476 (9) (3)
Other Established ROW 183 186 (2) (4) 542 657 (18) (11)
Emerging Markets2 1,468 1,319 11 13 4,349 4,024 8 12
China 558 467 19 21 1,666 1,363 22 22
Total 6,542 6,250 5 5 19,412 18,867 3 4
1Established ROW comprises Canada, Japan, Australia and New Zealand.2Emerging Markets comprises all remaining ROW markets, including Brazil, China, India, Mexico, Russia, and Turkey.
· In the US, revenue was up 7 percent in the third quarter, with declines in revenue from brands such as Nexium and timing of Flumist shipments offset by the growth platforms and the impact of completing the acquisition of BMS's share of the global diabetes alliance. The diabetes products provided $205 million of incremental revenue, with growth from Symbicort and Brilinta also contributing.
· In the third quarter, revenue in Europe was down 1 percent as the favourable impact from the acquisition of BMS's share of the global diabetes alliance and continued growth for Brilinta were offset by continuing impact from loss of exclusivity on Seroquel XR in some markets and Atacand.
· Revenue in Established ROW was down 2 percent in the quarter, as growth of Nexium and Symbicort in Japan were more than offset by generic competition on generic competition to oncology products and Seroquel IR inventory depletion in Japan which was due to planned manufacturing site change.
· Revenue in Emerging Markets was up 13 percent in the quarter, growth was seen across the Emerging Markets business with China growing 21 percent. Ex-China emerging markets grew by 9 percent in the third quarter. Brand growth drivers were Crestor, Nexium, Symbicort, Pulmicort and the diabetes products.
Condensed Consolidated Statement of Comprehensive Income
For the nine months ended 30 September 2014 $m 2013 $m
Revenue 19,412 18,867
Cost of sales (4,175) (3,821)
Gross profit 15,237 15,046
Distribution costs (236) (234)
Research and development expense (4,080) (3,392)
Selling, general and administrative costs (8,916) (7,564)
Other operating income and expense 481 447
Operating profit 2,486 4,303
Finance income 45 37
Finance expense (703) (358)
Share of after tax losses of joint ventures (2) -
Profit before tax 1,826 3,982
Taxation (270) (891)
Profit for the period 1,556 3,091
Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurement of the defined benefit liability (498) (239)
Tax on items that will not be reclassified to profit or loss 127 (38)
(371) (277)
Items that may be reclassified subsequently to profit or loss:
Foreign exchange arising on consolidation (412) (140)
Foreign exchange arising on designating borrowings in net investment hedges (292) (23)
Fair value movements on derivatives designated in net investment hedges 36 60
Amortisation of loss on cash flow hedge 1 1
Net available for sale gains taken to equity 73 59
Tax on items that may be reclassified subsequently to profit or loss 30 1
(564) (42)
Other comprehensive income for the period, net of tax (935) (319)
Total comprehensive income for the period 621 2,772
Profit attributable to:
Owners of the Parent 1,554 3,080
Non-controlling interests 2 11
1,556 3,091
Total comprehensive income attributable to:
Owners of the Parent 626 2,785
Non-controlling interests (5) (13)
621 2,772
Basic earnings per $0.25 Ordinary Share $1.23 $2.46
Diluted earnings per $0.25 Ordinary Share $1.23 $2.46
Weighted average number of Ordinary Shares in issue (millions) 1,262 1,251
Diluted weighted average number of Ordinary Shares in issue (millions) 1,264 1,253
Basic earnings per $0.25 Ordinary Share
$1.23
$2.46
Diluted earnings per $0.25 Ordinary Share
$1.23
$2.46
Weighted average number of Ordinary Shares in issue (millions)
1,262
1,251
Diluted weighted average number of Ordinary Shares in issue (millions)
1,264
1,253
Condensed Consolidated Statement of Comprehensive Income
For the quarter ended 30 September 2014 $m 2013$m
Revenue 6,542 6,250
Cost of sales (1,415) (1,238)
Gross profit 5,127 5,012
Distribution costs (87) (81)
Research and development expense (1,552) (858)
Selling, general and administrative costs (3,132) (2,503)
Other operating income and expense 185 136
Operating profit 541 1,706
Finance income 19 14
Finance expense (236) (128)
Share of after tax losses of joint ventures (2) -
Profit before tax 322 1,592
Taxation (69) (344)
Profit for the period 253 1,248
Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurement of the defined benefit liability (210) (212)
Tax on items that will not be reclassified to profit or loss 42 (48)
(168) (260)
Items that may be reclassified subsequently to profit or loss:
Foreign exchange arising on consolidation (476) 212
Foreign exchange arising on designating borrowings in net investment hedges (170) (68)
Fair value movements on derivatives designated in net investment hedges 47 1
Net available for sale gains/(losses) taken to equity 24 (24)
Tax on items that may be reclassified subsequently to profit or loss 25 8
(550) 129
Other comprehensive income for the period, net of tax (718) (131)
Total comprehensive income for the period (465) 1,117
Profit attributable to:
Owners of the parent 254 1,246
Non-controlling interests (1) 2
253 1,248
Total comprehensive income attributable to:
Owners of the parent (463) 1,112
Non-controlling interests (2) 5
(465) 1,117
Basic earnings per $0.25 Ordinary Share $0.20 $0.99
Diluted earnings per $0.25 Ordinary Share $0.20 $0.99
Weighted average number of Ordinary Shares in issue (millions) 1,263 1,252
Diluted weighted average number of Ordinary Shares in issue (millions) 1,264 1,254
$0.20
$0.99
Diluted earnings per $0.25 Ordinary Share
$0.20
$0.99
Weighted average number of Ordinary Shares in issue (millions)
1,263
1,252
Diluted weighted average number of Ordinary Shares in issue (millions)
1,264
1,254
Condensed Consolidated Statement of Financial Position
At 30 Sep 2014$m At 31 Dec 2013$m At 30 Sep 2013$m
ASSETS Non-current assets
Property, plant and equipment 5,989 5,818 5,728
Goodwill 11,368 9,981 9,943
Intangible assets 20,351 16,047 17,256
Derivative financial instruments 390 365 328
Investments in joint ventures 66 - -
Other investments 281 281 236
Other receivables 1,239 1,867 539
Deferred tax assets 1,408 1,205 1,299
41,092 35,564 35,329
Current assets
Inventories 1,957 1,909 2,075
Trade and other receivables 6,809 7,879 7,294
Other investments 804 796 864
Derivative financial instruments 7 40 25
Income tax receivable 349 494 1,081
Cash and cash equivalents 5,146 9,217 7,453
15,072 20,335 18,792
Total assets 56,164 55,899 54,121
LIABILITIES Current liabilities
Interest-bearing loans and borrowings (2,399) (1,788) (1,709)
Trade and other payables (10,149) (10,362) (9,242)
Derivative financial instruments (17) (2) (1)
Provisions (564) (823) (579)
Income tax payable (2,695) (3,076) (3,144)
(15,824) (16,051) (14,675)
Non-current liabilities
Interest-bearing loans and borrowings (7,527) (8,588) (8,566)
Derivative financial instruments - (1) -
Deferred tax liabilities (2,151) (2,827) (3,143)
Retirement benefit obligations (2,733) (2,261) (2,588)
Provisions (557) (566) (781)
Other payables (6,906) (2,352) (921)
(19,874) (16,595) (15,999)
Total liabilities (35,698) (32,646) (30,674)
Net assets 20,466 23,253 23,447
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital 316 315 314
Share premium account 4,245 3,983 3,770
Other reserves 1,991 1,966 1,964
Retained earnings 13,893 16,960 17,200
20,445 23,224 23,248
Non-controlling interests 21 29 199
Total equity 20,466 23,253 23,447
21
29
199
Total equity
20,466
23,253
23,447
Condensed Consolidated Statement of Cash Flows
For the nine months ended30 September 2014 $m 2013 $m
Cash flows from operating activities
Profit before tax 1,826 3,982
Finance income and expense 658 321
Share of after tax losses of joint ventures 2 -
Depreciation, amortisation and impairment 2,261 1,978
Decrease/(increase) in working capital and short-term provisions 1,752 (257)
Non-cash and other movements 208 409
Cash generated from operations 6,707 6,433
Interest paid (446) (416)
Tax paid (1,045) (1,095)
Net cash inflow from operating activities 5,216 4,922
Cash flows from investing activities
Movement in short-term investments and fixed deposits (25) 20
Purchase of property, plant and equipment (621) (359)
Disposal of property, plant and equipment 143 55
Purchase of intangible assets (1,662) (913)
Purchase of non-current asset investments (9) (14)
Disposal of non-current asset investments - 31
Payments to joint ventures (70) -
Upfront payments on acquisitions (2,778) (825)
Payment of contingent consideration on acquisitions (572) -
Interest received 88 88
Payments made by subsidiaries to non-controlling interests (10) (10)
Payments received by subsidiaries from non-controlling interests - 42
Net cash outflow from investing activities (5,516) (1,885)
Net cash (outflow)/inflow before financing activities (300) 3,037
Cash flows from financing activities
Proceeds from issue of share capital 263 268
Repayment of loans (750) -
Dividends paid (3,521) (3,461)
Hedge contracts relating to dividend payments (14) (36)
Repayment of obligations under finance leases (27) (19)
Payments to acquire non-controlling interest (102) -
Movement in short-term borrowings 295 -
Net cash outflow from financing activities (3,856) (3,248)
Net decrease in cash and cash equivalents in the period (4,156) (211)
Cash and cash equivalents at the beginning of the period 8,995 7,596
Exchange rate effects (30) (62)
Cash and cash equivalents at the end of the period 4,809 7,323
Cash and cash equivalents consists of:
Cash and cash equivalents 5,146 7,453
Overdrafts (337) (130)
4,809 7,323
(130)
4,809
7,323
Condensed Consolidated Statement of Changes in Equity
Share Share Other Retained Total Non- Total
capital premium reserves* earnings $m controlling equity
$m account $m $m interests $m
$m $m
At 1 Jan 2013 312 3,504 1,960 17,955 23,731 215 23,946
Profit for the period - - - 3,080 3,080 11 3,091
Other comprehensive income - - - (295) (295) (24) (319)
Transfer to other reserves - - 4 (4) - - -
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