REG - AstraZeneca PLC - AstraZeneca: Q1 2017 Results <Origin Href="QuoteRef">AZN.L</Origin> - Part 3
27/04/2017 07:08
- Part 3: For the preceding part double click ID:nRSa4739Db
LynparzaPROfound PARP inhibitor prostate cancer Q1 2017 (Breakthrough Therapy)
LynparzaOlympiA PARP inhibitor gBRCA adjuvant breast cancer Q2 2014 2020 2020 2020
Tagrisso FLAURA EGFR inhibitor 1st-line advanced EGFRm NSCLC Q1 2015 H2 2017 H2 2017 H2 2017 H2 2017
Tagrisso ADAURA EGFR inhibitor adjuvant EGFRm NSCLC Q4 2015 2022 2022 2022 2022
Cardiovascular & Metabolic Diseases
Brilinta1THEMIS P2Y12 receptor antagonist outcomes trial in patients with type-2 diabetes and CAD, but without a previous history ofmyocardial infarction or stroke Q1 2014 2019 2019 2019 2020
Brilinta1HESTIA P2Y12 receptor antagonist prevention of vaso-occlusive crises in paediatric patients with sickle cell disease Q1 2014 2020 2020
Kombiglyze XR/Komboglyze2 DPP-4 inhibitor/ metformin FDC type-2 diabetes Launched Launched Accepted
Farxiga3 SGLT2 inhibitor type-2 diabetes outcomes trial Q2 2013 2020 2020
DECLARE-
TIMI 58
Farxiga3 SGLT2 inhibitor type-1 diabetes Q4 2014 2018 2018 2018
Farxiga3 SGLT2 inhibitor effect of dapagliflozin on the incidence of worsening HF or cardiovascular death in patients with chronic HF Q1 2017 2020 2020 2020 2020
Farxiga3 SGLT2 inhibitor renal outcomes and cardiovascularmortality in patients with CKD Q1 2017 2021 2021 N/A 2021
Xigduo XR/Xigduo4 SGLT2 inhibitor/ metformin FDC type-2 diabetes Launched Launched
Qtern (saxagliptin/dapagliflozin FDC) DPP-4 inhibitor/ SGLT2 inhibitor FDC type-2 diabetes Approved Launched
Bydureon weekly GLP-1 receptor agonist type-2 diabetes Q1 2013 Accepted H2 2017
autoinjector
Bydureon EXSCEL GLP-1 receptor agonist type-2 diabetes outcomes trial Q2 2010 H2 2017 H2 2017 2018
EpanovaSTRENGTH 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
SymbicortSYGMA ICS/LABA as-needed use in mild asthma Q4 2014 2018 2019
Duaklir Genuair# LAMA/LABA COPD 2018 Launched 2019
Other
Nexium proton pump inhibitor stress ulcer prophylaxis Submitted
Nexium proton pump inhibitor paediatrics Launched Launched Accepted
linaclotide# GC-C receptor peptide agonist irritable bowel syndrome with constipation Accepted
(IBS-C)
Launched
Launched
Accepted
linaclotide#
GC-C receptor peptide agonist
irritable bowel syndrome with constipation
(IBS-C)
Accepted
# Collaboration
1 Brilinta in the US and Japan; Brilique in ROW
2 Kombiglyze XR in the US; Komboglyze in the EU
3 Farxiga in the US; Forxiga in ROW
4 Xigduo XR in the US; Xigduo in the EU
Terminations (discontinued projects: 1 January 2017 to 31 March 2017)
NME / Line Extension Compound Reason for Discontinuation Area Under Investigation
Symbicort - breath actuated inhaler ICS/LABA Strategic asthma/COPD
AZD3241 myeloperoxidase inhibitor Safety/Efficacy multiple system atrophy
AZD9412# inhaled interferon beta Strategic asthma/COPD
Completed Projects / Divestitures (1 January 2017 to 31 March 2017)
Compound Mechanism Area Under Investigation Completed/Divested Estimated Regulatory Submission Acceptance†
US EU Japan China
TagrissoAURA, AURA2, (AURA17 Asia regional) EGFR inhibitor ≥2nd-line advanced EGFRm T790M NSCLC Completed Launched(Breakthrough Therapy, Priority Review, Orphan drug) Launched (Accelerated assessment) Launched Launched
TagrissoAURA3 EGFR inhibitor ≥2nd-line advanced EGFRm T790M NSCLC Completed Launched Launched
Brilinta1 P2Y12 receptor antagonist arterial thrombosis Completed Launched Launched Launched Launched
OnglyzaSAVOR-TIMI 53 DPP-4 inhibitor type-2 diabetes outcomes trial Completed Launched Launched Launched
Condensed Consolidated Statement of Comprehensive Income
Product sales 4,843 5,565
Externalisation revenue 562 550
Total revenue 5,405 6,115
Cost of sales (894) (1,004)
Gross profit 4,511 5,111
Distribution costs (77) (76)
Research and development expense (1,453) (1,480)
Selling, general and administrative costs (2,300) (2,572)
Other operating income and expense 236 55
Operating profit 917 1,038
Finance income 18 14
Finance expense (340) (325)
Share of after tax losses in associates and joint ventures (13) (4)
Profit before tax 582 723
Taxation (70) (98)
Profit for the period 512 625
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit pension liability 1 (191)
Tax on items that will not be reclassified to profit or loss (1) 41
- (150)
Items that may be reclassified subsequently to profit or loss
Foreign exchange arising on consolidation 154 (167)
Foreign exchange arising on designating borrowings in net investment hedges 100 207
Fair value movements on cash flow hedges 7 -
Fair value movements on cash flow hedges transferred to profit or loss (39) -
Fair value movements on derivatives designated in net investment hedges (30) (32)
Net available for sale losses taken to equity (150) (29)
Tax on items that may be reclassified subsequently to profit or loss 24 10
66 (11)
Other comprehensive income for the period, net of tax 66 (161)
Total comprehensive income for the period 578 464
Profit attributable to:
Owners of the Parent 537 646
Non-controlling interests (25) (21)
512 625
Total comprehensive income attributable to:
Owners of the Parent 603 485
Non-controlling interests (25) (21)
578 464
Basic earnings per $0.25 Ordinary Share $0.42 $0.51
Diluted earnings per $0.25 Ordinary Share $0.42 $0.51
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
464
Basic earnings per $0.25 Ordinary Share
$0.42
$0.51
Diluted earnings per $0.25 Ordinary Share
$0.42
$0.51
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
ASSETS Non-current assets
Property, plant and equipment 6,954 6,848 6,560
Goodwill 11,688 11,658 11,855
Intangible assets 27,386 27,586 29,627
Derivative financial instruments 310 343 419
Investments in associates and joint ventures 88 99 104
Other investments 739 727 500
Other receivables 891 901 874
Deferred tax assets 1,266 1,102 1,482
49,322 49,264 51,421
Current assets
Inventories 2,652 2,334 2,344
Trade and other receivables 4,686 4,573 5,881
Other investments 530 884 671
Derivative financial instruments 13 27 8
Income tax receivable 627 426 452
Cash and cash equivalents 3,129 5,018 3,428
11,637 13,262 12,784
Total assets 60,959 62,526 64,205
LIABILITIES Current liabilities
Interest-bearing loans and borrowings (2,839) (2,307) (2,168)
Trade and other payables (9,899) (10,486) (11,174)
Derivative financial instruments (1) (18) (4)
Provisions (1,044) (1,065) (790)
Income tax payable (1,646) (1,380) (1,796)
(15,429) (15,256) (15,932)
Non-current liabilities
Interest-bearing loans and borrowings (14,563) (14,501) (14,144)
Derivative financial instruments (107) (117) -
Deferred tax liabilities (4,036) (3,956) (4,302)
Retirement benefit obligations (2,171) (2,186) (2,099)
Provisions (378) (353) (461)
Other payables (9,496) (9,488) (10,625)
(30,751) (30,601) (31,631)
Total liabilities (46,180) (45,857) (47,563)
Net assets 14,779 16,669 16,642
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital 316 316 316
Share premium account 4,368 4,351 4,322
Other reserves 2,042 2,047 2,028
Retained earnings 6,263 8,140 8,075
12,989 14,854 14,741
Non-controlling interests 1,790 1,815 1,901
Total equity 14,779 16,669 16,642
*31 March comparatives have been restated to reflect an adjustment to the acquisition-accounting for ZS Pharma (as detailed in Note 25 of the AstraZeneca Annual Report and Form 20-F Information 2016, page 174) and an adjustment to the acquisition-accounting for Acerta Pharma (as detailed in Note 4 of the Full Year and Fourth Quarter 2016 Results Announcement).
14,741
Non-controlling interests
1,790
1,815
1,901
Total equity
14,779
16,669
16,642
*31 March comparatives have been restated to reflect an adjustment to the acquisition-accounting for ZS Pharma (as detailed
in Note 25 of the AstraZeneca Annual Report and Form 20-F Information 2016, page 174) and an adjustment to the
acquisition-accounting for Acerta Pharma (as detailed in Note 4 of the Full Year and Fourth Quarter 2016 Results
Announcement).
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
Profit before tax 582 723
Finance income and expense 322 311
Share of after tax losses in associates and joint ventures 13 4
Depreciation, amortisation and impairment 658 569
(Increase)/decrease in working capital and short-term provisions (887) 64
Non-cash and other movements (349) (88)
Cash generated from operations 339 1,583
Interest paid (189) (185)
Tax paid (62) (205)
Net cash inflow from operating activities 88 1,193
Cash flows from investing activities
Movement in short-term investments and fixed deposits 357 33
Purchase of property, plant and equipment (286) (267)
Disposal of property, plant and equipment 9 2
Purchase of intangible assets (99) (39)
Disposal of intangible assets 51 -
Purchase of non-current asset investments (18) (68)
Disposal of non-current asset investments 8 -
Upfront payments on business combinations - (2,564)
Payment of contingent consideration on business combinations (213) (26)
Interest received 45 42
Net cash outflow from investing activities (146) (2,887)
Net cash outflow before financing activities (58) (1,694)
Cash flows from financing activities
Proceeds from issue of share capital 17 18
New long term loans 3 -
Dividends paid (2,368) (2,409)
Hedge contracts relating to dividend payments (32) 5
Repayment of obligations under finance leases (14) (3)
Movement in short-term borrowings 352 1,028
Net cash outflow from financing activities (2,042) (1,361)
Net decrease in cash and cash equivalents in the period (2,100) (3,055)
Cash and cash equivalents at the beginning of the period 4,924 6,051
Exchange rate effects 14 43
Cash and cash equivalents at the end of the period 2,838 3,039
Cash and cash equivalents consists of:
Cash and cash equivalents 3,129 3,428
Overdrafts (291) (389)
2,838 3,039
(291)
(389)
2,838
3,039
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 2016 316 4,304 2,036 11,834 18,490 19 18,509
Profit for the period - - - 646 646 (21) 625
Other comprehensive income - - - (161) (161) - (161)
Transfer to other reserves - - (8) 8 - - -
Transactions with owners:
Dividends - - - (2,402) (2,402) - (2,402)
Acerta put option - - - (1,825) (1,825) - (1,825)
Changes in non-controlling interest - - - - - 1,903 1,903
Issue of Ordinary Shares - 18 - - 18 - 18
Share-based payments - - - (25) (25) - (25)
Net movement - 18 (8) (3,759) (3,749) 1,882 (1,867)
At 31 Mar 2016 316 4,322 2,028 8,075 14,741 1,901 16,642
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 2017 316 4,351 2,047 8,140 14,854 1,815 16,669
Profit for the period - - - 537 537 (25) 512
Other comprehensive income - - - 66 66 - 66
Transfer to other reserves - - (5) 5 - - -
Transactions with owners:
Dividends - - - (2,404) (2,404) - (2,404)
Issue of Ordinary Shares - 17 - - 17 - 17
Share-based payments - - - (81) (81) - (81)
Net movement - 17 (5) (1,877) (1,865) (25) (1,890)
At 31 Mar 2017 316 4,368 2,042 6,263 12,989 1,790 14,779
* 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 three months
ended 31 March 2017 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 2016. There have been no significant new or revised accounting standards applied
in the three months ended 31 March 2017.
Legal proceedings
The information contained in Note 5 updates the disclosures concerning legal proceedings and contingent liabilities in the
Group's Annual Report and Form 20-F Information 2016.
Going concern
The Group has considerable financial resources available. As at 31 March 2017, the Group has $3.3bn in financial resources
(cash balances of $3.1bn and undrawn committed bank facilities of $3.0bn which are available until April 2022, with only
$2.8bn of debt due within one year). The Group's revenues are largely derived from sales of products which are covered by
patents which provide a relatively high level of resilience and predictability to cash inflows, although our revenue is
expected to continue to be significantly impacted by the expiry of patents over the medium term. In addition, government
price interventions in response to budgetary constraints are expected to continue to adversely affect revenues in many of
our mature markets. However, we anticipate new revenue streams from both recently launched medicines and products in
development, and the Group has a wide diversity of customers and suppliers across different geographic areas. Consequently,
the Directors believe that, overall, the Group is well placed to manage its business risks successfully.
On the basis of the above paragraph and after making enquiries, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly,
the interim financial statements have been prepared on a going concern basis.
Financial information
The comparative figures for the financial year ended 31 December 2016 are not the Company's statutory accounts for that
financial year. Those accounts have been reported on by the Group's auditors and will be delivered to the registrar of
companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
2 RESTRUCTURING COSTS
Profit before tax for the quarter ended 31 March 2017 is stated after charging restructuring costs of $312m ($155m for the
first quarter of 2016). These have been charged to profit as follows:
Q1 2017 Q1 2016
$m $m
Cost of sales 38 9
Research and development expense 104 38
Selling, general and administrative costs 94 108
Other operating income and expense 76 -
Total 312 155
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 2017 $m Cash Flow $m Non-cash& Other$m Exchange Movements$m At 31 Mar 2017 $m
Loans due after one year (14,495) (3) (2) (60) (14,560)
Finance leases due after one year (6) - 3 - (3)
Total long-term debt (14,501) (3) 1 (60) (14,563)
Current instalments of loans (1,769) - 7 - (1,762)
Current instalments of finance leases (87) 14 (4) - (77)
Total current debt (1,856) 14 3 - (1,839)
Other investments 898 (353) - 3 548
Net derivative financial instruments 235 32 (52) - 215
Cash and cash equivalents 5,018 (1,903) - 14 3,129
Overdrafts (94) (197) - - (291)
Short-term borrowings (357) (352) - - (709)
5,700 (2,773) (52) 17 2,892
Net debt (10,657) (2,762) (48) (43) (13,510)
Non-cash movements in the period include fair value adjustments under IAS 39.
4 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 of
significance to the accounting policies for financial instruments, including fair value measurement, from those disclosed
on pages 144 and 145 of the Company's Annual Report and Form 20-F Information 2016. 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 $1,269m of other investments, $1,712m of loans, and $215m of derivatives as at 31 March 2017. The
total fair value of interest-bearing loans and borrowings at 31 March 2017, which have a carrying value of $17,402m in the
Condensed Consolidated Statement of Financial Position, was $16,338m. 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:
DiabetesAlliance2017 Other 2017 Total 2017 Total 2016
$m $m $m $m
At 1 January 4,240 1,217 5,457 6,411
Settlements (138) (75) (213) (26)
Discount unwind 82 22 104 124
At 31 March 4,184 1,164 5,348 6,509
5 LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES
AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation and
investigations relating to product liability, commercial disputes, infringement of intellectual property rights, the
validity of certain patents, anti-trust law and sales and marketing practices. The matters discussed below constitute the
more significant developments since publication of the disclosures concerning legal proceedings in the Company's Annual
Report and Form 20-F Information 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, AstraZeneca
records the loss absorbed or makes 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 recorded. The major factors causing this
uncertainty are described more fully in the Disclosures and herein.
AstraZeneca has full confidence in, and will vigorously defend and enforce, its intellectual property.
Matters disclosed in respect of the first quarter of 2017 and to 27 April 2017.
Patent litigation
Faslodex (fulvestrant)
US patent proceedings
As previously disclosed, AstraZeneca has filed patent infringement lawsuits in the US District Court in New Jersey (the
District Court) relating to patents listed in the FDA Orange Book with reference to Faslodex after AstraZeneca received
notice of ANDAs seeking FDA approval to market generic versions of Faslodex prior to the expiration of AstraZeneca's
patents. AstraZeneca settled the lawsuits with four of the ANDA filers. In April 2017, AstraZeneca settled the lawsuit with
a fifth ANDA filer. In February and March 2017, AstraZeneca received notice of three additional ANDAs and filed patent
infringement lawsuits against all three in the District Court.
In March 2017, AstraZeneca received a Paragraph IV notice regarding an NDA submitted pursuant to 21 U.S.C. § 355(b)(2) by
Teva Pharmaceuticals USA, Inc. (Teva) relating to the same Orange Book-listed patents and, in April 2017, filed a lawsuit
against Teva in the District Court.
In February 2017, AstraZeneca was served with three petitions for inter partes review by the Patent Trial and Appeal Board
of the United States Patent and Trademark Office relating to Orange Book-listed patents with reference to Faslodex.
Patent proceedings outside the US
As previously disclosed, in Germany, the Federal Patent Court declared European Patent No. EP 1250138 (the '138 patent)
invalid. AstraZeneca intends to appeal. In February 2017, the Regional Court of Mannheim lifted a provisional injunction
based on a divisional patent of the '138 patent, European Patent No. EP 2266573, which had been in place against Hexal AG
since February 2016.
Onglyza (saxagliptin) and Kombiglyze (saxagliptin and metformin)
US patent proceedings
As previously disclosed, AstraZeneca initiated patent infringement proceedings in the US District Court for the District of
Delaware (the District Court) after various entities had submitted ANDAs containing a Paragraph IV Certification which
alleged 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 February 2017, the
District Court issued a decision upholding the validity of the '186 Patent which has since been appealed to the US Court of
Appeals for the Federal Circuit.
Crestor (rosuvastatin calcium)
Patent proceedings outside the US
In Spain, in February 2017, in response to a marketing declaration from ratiopharm España, S.A. (ratiopharm) regarding its
version of rosuvastatin zinc, AstraZeneca requested and received an interim injunction against the launch of ratiopharm's
product from the Commercial Courts of Barcelona. In March 2017, AstraZeneca filed an infringement action in relation to
ratiopharm's product.
Synagis (palivizumab)
US patent proceedings
In March 2017, MedImmune LLC was served with a complaint filed by UCB BioPharma SPRL in the US District Court for the
District of Delaware alleging that Synagis infringed US Patent No. 7,566,771. AstraZeneca will respond in due course.
Vimovo (naproxen/esomeprazole magnesium)
Patent proceedings outside the US
As previously disclosed, in Canada, in January 2015, AstraZeneca received two notices of allegation from Mylan
Pharmaceuticals ULC (Mylan). In response, AstraZeneca and Pozen Inc. (now Aralez Pharmaceuticals Inc.), the licensee and
patent holder respectively, commenced proceedings in relation to the Vimovo formulation patent (Canadian Patent No.
2,449,098). On 7 February 2017, the Federal Court of Canada dismissed AstraZeneca's application. The Minister of Health has
issued a marketing authorisation to Mylan.
Product liability litigation
Farxiga (dapagliflozin) and XigduoXR (dapagliflozin/metformin HCl)
As previously disclosed, in several jurisdictions in the US, AstraZeneca has been named as a defendant in lawsuits
involving plaintiffs claiming physical injury, including diabetic ketoacidosis and kidney failure, from treatment with
Farxiga and/or Xigduo XR.
In April 2017, the Judicial Panel on Multidistrict Litigation ordered transfer of any currently pending cases as well as
any similar, subsequently filed cases to a coordinated and consolidated pre-trial multidistrict litigation proceeding in
the US District Court for the Southern District of New York.
Onglyza (saxagliptin) and Kombiglyze(saxagliptin and metformin)
AstraZeneca is defending claims in the US brought by plaintiffs alleging HF, cardiac failure and/or death from treatment
with either Onglyza or Kombiglyze. In February 2017, the California Superior Court granted certain California plaintiffs'
Petition for Coordination with the Judicial Council of California, requesting that all similar, currently pending or
subsequently filed cases in California state court be coordinated for pre-trial purposes.
Nexium (esomeprazole)
As previously disclosed, AstraZeneca was defending product liability lawsuits brought in US federal and state courts by
approximately 1,900 plaintiffs who alleged that Nexium caused osteoporotic injuries, such as bone deterioration, loss of
bone density and/or bone fractures, but all such claims have now been dismissed with judgment entered in AstraZeneca's
favour. In January 2017, the California Second Appellate Division affirmed the dismissal of the fewer than 40 cases in
California state court and no further appeal was taken. There are currently no claims pending in the US that allege that
Nexium caused osteoporotic or other bone-related injuries.
Nexium (esomeprazole) and Prilosec (omeprazole)
As previously disclosed, AstraZeneca is defending various lawsuits 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 some of these plaintiffs filed a motion with the Judicial Panel on Multidistrict
Litigation (JPML) seeking transfer of any currently pending federal court cases as well as any similar, subsequently filed
cases to a coordinated and consolidated pre-trial multidistrict litigation proceeding. In February 2017, the JPML denied
this motion.
Commercial litigation
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 (the District Court)
commenced in October 2014 and, in December 2014, a jury returned a verdict in favour of AstraZeneca and entered judgment in
favour of AstraZeneca in September 2015. The plaintiffs appealed that judgment and, in November 2016, the US Court of
Appeals for the First Circuit affirmed the District Court's decision. The plaintiffs did not file a petition for writ of
certiorari with the US Supreme Court, and the federal appeals for this verdict are accordingly concluded.
As previously disclosed, two lawsuits filed in Pennsylvania state court by various indirect purchasers of Nexium for
similar matters are pending.
Government investigations/proceedings
Synagis (palivizumab)
As previously disclosed, in June 2011, MedImmune received a demand from the US Attorney's Office for the Southern District
of New York requesting certain documents related to the sales and marketing activities of Synagis. In July 2011, MedImmune
received a similar court order to produce documents from the Office of the Attorney General for the State of New York
Medicaid and Fraud Control Unit pursuant to a joint investigation between the previously mentioned government attorneys.
MedImmune has cooperated with these inquiries.
In March 2017, MedImmune was served with a lawsuit filed in US Federal Court in New York, primarily under the qui tam
(whistleblower) provisions of the New York State False Claims Act and anti-kickback statutes. The lawsuit alleges that
MedImmune inappropriately provided assistance to a single specialty care pharmacy.
Seroquel IR (quetiapine fumarate) and SeroquelXR (quetiapine fumarate)
Qui tam litigation in New York
In the US, in September 2015, AstraZeneca was served with a lawsuit filed in US Federal Court in New York under the qui tam
(whistleblower) provisions of the federal and certain state False Claims Acts. The lawsuit alleges
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