REG - AstraZeneca PLC - AZN: Full-year and Q4 2019 results
14/02/2020 07:00
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RNS Number : 9829C AstraZeneca PLC 14 February 2020
AstraZeneca PLC
14 February 2020 7:00 GMT
Full-year and Q4 2019 results
A year of significant innovation for patients; accelerating the strategic
transition
AstraZeneca delivered a year of strong revenue growth, supported by the launch
of new medicines(1) and further good progress on its pipeline, with several
approvals and data readouts. These trends are set to continue in 2020,
accompanied by growth in earnings and cash. In maintaining its focus on
patients and science, the Company remains on track to deliver its strategic
ambitions.
Full-year Product Sales growth of 12% (15% at CER(2)) to $23,565m included
fourth-quarter Product Sales of $6,250m (+8%, +9% at CER). All three therapy
areas and every sales region grew at CER in the quarter and over the full
year. Highlights for the year included:
- Sales of new medicines increased by 59% (62% at CER) to $9,906m,
including new-medicine growth in Emerging Markets of 75% (84% at CER) to
$1,865m. New medicines represented 42% of total Product Sales (FY 2018: 30%)
- Sales growth across the therapy areas: Oncology +44% (+47% at CER) to
$8,667m, New CVRM(3) +9% (+12% at CER) to $4,376m and Respiratory +10% (+13%
at CER) to $5,391m
- For the first time, around half of Product Sales in the year were
within the specialty-care(4) setting
- Sales growth across regions: total Emerging Markets sales increased by
18% (24% at CER) to $8,165m, with China sales growth of 29% (35% at CER);
China sales in the quarter increased by 25% (28% at CER) to $1,189m. US sales
increased by 13% in the year to $7,747m; Europe sales declined by 2% in the
year (up by 2% at CER) to $4,350m; Japan sales increased by 27% (26% at CER)
to $2,548m
FY 2019 Q4 2019
$m % change $m % change
Actual CER Actual CER
Product Sales 23,565 12 15 6,250 8 9
Collaboration Revenue 819 (21) (20) 414 (36) (36)
Total Revenue 24,384 10 13 6,664 4 5
Reported(5) Operating Profit 2,924 (14) (16) 577 (46) (56)
Core(6) Operating Profit 6,436 13 13 1,545 (29) (33)
Reported EPS(7) $1.03 (40) (44) $0.24 (71) (78)
Core EPS $3.50 1 - $0.89 (44) (46)
Pascal Soriot, Chief Executive Officer, commenting on the results said:
"In the first full year of our return to growth, we made good progress in line
with our strategy. Results from our new medicines and Emerging Markets
accompanied positive news for patients, most recently including regulatory
approvals of Enhertu in breast cancer and Calquence in leukaemia. Our
collaborations also progressed at pace, including that with Daiichi Sankyo,
while there were several regulatory approvals for new medicines in China at
the end of the year, such as Lynparza in first-line ovarian cancer.
Driven by a strong team, 2020 is anticipated to be another year of progress
for AstraZeneca. We are becoming a better-balanced business, both regionally
and through our medicines. This transition is a further step towards improving
operating leverage and cash generation. As we accelerate our commitments to
achieving our long-term climate-change and decarbonisation targets, we will
maintain our focus on executing a strategy centred on science and patients."
Guidance
The Company provides guidance for FY 2020 at CER; Company guidance is on:
- Total Revenue, comprising Product Sales and Collaboration Revenue
- Core EPS
Prior guidance was on Product Sales and Core EPS. The change to guiding on
Total Revenue and Core EPS reflects the changing nature and growing strategic
impact of Collaboration Revenue, which will primarily comprise potential
income from existing collaborations as follows:
- A share of gross profits derived from sales of Enhertu (trastuzumab
deruxtecan) in several markets, where those sales are recorded by Daiichi
Sankyo Company, Limited (Daiichi Sankyo)
- A share of gross profits derived from sales of roxadustat in China,
recorded by FibroGen Inc. (FibroGen)(8)
- Milestone revenue from the MSD(9) collaboration on Lynparza and
selumetinib
- Smaller amounts of milestone and royalty revenue from other marketed
and pipeline medicines
All guidance assumes an unfavourable impact from China lasting up to a few
months as a result of the recent novel coronavirus (Covid-19) outbreak. The
Company will monitor closely the development of the epidemic and anticipates
providing an update at the time of the Q1 2020 results.
Depending on the impact of the Covid-19 epidemic, Total Revenue is expected to
increase by a high single-digit to a low double-digit percentage and Core EPS
is expected to increase by a mid- to high-teens percentage.
Variations in performance between quarters can be expected to continue. The
Company is unable to provide guidance and indications on a Reported basis
because the Company cannot reliably forecast material elements of the Reported
result, including any fair-value adjustments arising on acquisition-related
liabilities, intangible asset impairment charges and legal-settlement
provisions. Please refer to the section Cautionary Statements Regarding
Forward-Looking Statements at the end of this announcement.
Indications
The Company provides indications for FY 2020 at CER:
- The Company is focused on improving operating leverage
- A Core Tax Rate of 18-22%. Variations in the Core Tax Rate between
quarters are anticipated to continue
- Capital Expenditure is expected to be broadly stable versus the
prior year
Currency impact
If foreign-exchange rates for February to December 2020 were to remain at the
average of rates seen in January 2020, it is anticipated that there would be a
neutral impact on Total Revenue and a low single-digit adverse impact on Core
EPS, versus the prior year. In addition, the Company's foreign-exchange rate
sensitivity analysis is contained within the operating and financial review.
Financial summary
- Product Sales increased by 12% in the year (15% at CER) to $23,565m,
driven by the performances of new medicines and Emerging Markets
- The Reported Gross Profit Margin increased by three percentage
points in the year (two at CER) to 79%, partly reflecting the mix of sales;
the Core Gross Profit Margin was stable at 80%. The performance came despite
the impact of a provision regarding Epanova for inventory and supply-related
costs of $115m, recorded in Reported and Core Cost of Sales
- Reported Operating Expense increased by 11% in the year (14% at CER)
to $18,080m and represented 74% of Total Revenue (FY 2018: 74%); part of the
rise reflected an increased level of intangible asset impairments. Core
Operating Expense increased by 4% (7% at CER) to $14,748m and represented 60%
of Total Revenue (FY 2018: 64%); the increase was driven by investment in the
launches of new medicines and in Emerging Markets
- The Reported Operating Profit Margin declined in the year by three
percentage points (four at CER) to 12%; the Core Operating Profit Margin
increased by one percentage point (stable at CER) to 26%
- Reported EPS of $1.03 in the year, based on a weighted-average
number of shares of 1,301m, represented a decline of 40% (44% at CER); Core
EPS increased by 1% (stable at CER) to $3.50
- The Board has reaffirmed its commitment to the progressive dividend
policy; a second interim dividend of $1.90 per share has been declared, taking
the unchanged full-year dividend per share to $2.80
Commercial summary
Oncology
Sales increased by 44% in the year (47% at CER) to $8,667m, including:
Table 1: Select Oncology sales
FY 2019 Q4 2019
$m % change $m % change
Actual CER Actual CER
Tagrisso 3,189 71 74 884 49 49
Imfinzi 1,469 n/m n/m 424 62 62
Lynparza 1,198 85 89 351 68 69
Calquence 164 n/m n/m 56 n/m n/m
The strong Oncology performance continued to benefit from new medicines such
as Tagrisso, Lynparza and Imfinzi. The full impact of recent regulatory
approvals for Calquence and Enhertu is anticipated to favourably affect Total
Revenue growth in 2020.
The performance from legacy Oncology medicines in the year included a decline
in Faslodex sales of 13% (11% at CER) to $892m; the fall in the fourth quarter
of 39% (38% at CER) led to sales of Faslodex of $166m. These declines
reflected the 2019 launch of multiple generic Faslodex medicines in the US.
Iressa sales also declined in the year by 18% (15% at CER) to $423m and in the
quarter by 29% (28% at CER) to $80m; Iressa continued to be included on the
China volume-based procurement programme in the year. The Company anticipates
continued declines for both medicines.
Oncology sales increased in Emerging Markets by 45% (52% at CER) to $2,211m.
New CVRM
Sales increased by 9% in the year (12% at CER) to $4,376m, including:
Table 2: Select New CVRM sales
FY 2019 Q4 2019
$m % change $m % change
Actual CER Actual CER
Farxiga 1,543 11 14 419 6 7
Brilinta 1,581 20 23 428 14 15
Bydureon 549 (6) (5) 139 1 1
The Company anticipates reporting on roxadustat sales within Total Revenue in
due course.
New CVRM sales increased in Emerging Markets by 33% in the year (41% at CER)
to $1,133m.
Respiratory
Sales increased by 10% in the year (13% at CER) to $5,391m, including:
Table 3: Select Respiratory sales
FY 2019 Q4 2019
$m % change $m % change
Actual CER Actual CER
Symbicort 2,495 (3) - 712 12 13
Pulmicort 1,466 14 18 413 6 7
Fasenra 704 n/m n/m 206 65 65
Respiratory sales increased in Emerging Markets by 21% (27% at CER) to
$1,987m.
Emerging Markets
As the Company's largest region, at 35% of total Product Sales, Emerging
Markets sales increased by 18% in the year (24% at CER) to $8,165m, including:
- A China sales increase of 29% (35% at CER) to $4,880m
- An ex-China sales increase of 6% (12% at CER) to $3,285m
Sustainability summary
Recent developments and progress against the Company's sustainability
priorities are reported below:
- Access to healthcare: the Company announced that the Young Health
Programme (YHP) will partner with UNICEF(10) to prevent non-communicable
diseases among young people. AstraZeneca and UNICEF will collaborate on
initiatives that will reach more than five million young people, train c.1,000
youth advocates, and potentially help to shape public policy around the world
over the next six years
- Environmental protection: AstraZeneca recently unveiled an ambitious
programme for zero-carbon emissions from its global operations by 2025 and a
carbon-negative value chain by 2030. The strategy brings forward
decarbonisation plans by more than a decade. In 2019, the Company was ranked
56th overall, as one of the world's one hundred most sustainable companies by
environmental research and media group, Corporate Knights, and second for
biopharmaceutical companies
- Ethics and transparency: the Hampton-Alexander independent review
body, which works to support improvements in women's representation at board
level and in leadership roles two layers below the board, recently published
its latest review. In the reviews FTSE 100 ranking, AstraZeneca moved up from
seventh place in 2018 to sixth in 2019 for women represented in the top-three
layers of management
A more extensive sustainability update is provided later in this announcement.
Notes
These notes refer to pages one to five.
1. Tagrisso, Imfinzi, Lynparza, Calquence, Farxiga, Brilinta, Lokelma,
Fasenra, Bevespi and Breztri. These new medicines are pillars in the main
therapy areas and are important platforms for future growth. Over time,
Enhertu and roxadustat will be added to this list.
2. Constant exchange rates. These are financial measures that are not
accounted for according to generally-accepted accounting principles (GAAP)
because they remove the effects of currency movements from Reported results.
3. New Cardiovascular (CV), Renal & Metabolism comprises Diabetes
medicines, Brilinta and Lokelma. Over time, roxadustat will be added to this
list.
4. Specialty-care medicines comprise all Oncology medicines, Brilinta,
Lokelma and Fasenra.
5. Reported financial measures are the financial results presented in
accordance with International Financial Reporting Standards, as issued by the
International Accounting Standards Board and adopted by the EU. The UK is yet
to announce its IFRS endorsement process and is anticipated to continue to
follow the EU endorsement process for the foreseeable future.
6. Core financial measures. These are non-GAAP financial measures because,
unlike Reported performance, they cannot be derived directly from the
information in the Group's Financial Statements. See the operating and
financial review for a definition of Core financial measures and a
reconciliation of Core to Reported financial measures.
7. Earnings per share.
8. FibroGen and AstraZeneca are collaborating on the development and
commercialisation of roxadustat in the US, China, and other global markets.
FibroGen and Astellas Pharma Inc. (Astellas) are collaborating on the
development and commercialisation of roxadustat in territories including
Japan, Europe, the Commonwealth of Independent States, the Middle East, and
South Africa.
9. Merck & Co., Inc., Kenilworth, NJ, US, known as MSD outside the US
and Canada.
10. United Nations International Children's Emergency Fund.
Table 4: pipeline highlights
The following table highlights significant developments in the late-stage
pipeline since the prior results announcement:
Regulatory approvals - Imfinzi - unresectable 10 (#_ftn1) , Stage III NSCLC 11 (#_ftn2)
(CN)
- Lynparza - ovarian cancer (1st line 12 (#_ftn3) , BRCAm 13
(#_ftn4) ) (SOLO-1) (CN)
- Lynparza - pancreatic cancer (1st line, BRCAm) (US)
- Enhertu - breast cancer (3rd line, HER2+ 14 (#_ftn5) ) (US)
- Calquence - CLL 15 (#_ftn6) (US)
- Qtrilmet - T2D 16 (#_ftn7) (EU)
- Lokelma - hyperkalaemia (CN)
- Breztri - COPD 17 (#_ftn8) (CN)
Regulatory submission acceptances and/or submissions - Imfinzi - SCLC 18 (#_ftn9) (ED 19 (#_ftn10) ): regulatory
submission (JP), acceptance (EU), Priority Review (US)
- Lynparza - ovarian cancer (1st line) (PAOLA-1): regulatory
submission (JP), acceptance (EU), Priority Review (US)
- Lynparza - prostate cancer (2nd line): regulatory submission
acceptance (EU), Priority Review (US)
- Calquence - CLL: regulatory submission (JP), acceptance (EU)
- selumetinib - NF1 20 (#_ftn11) : regulatory submission acceptance,
Priority Review (US)
- Farxiga - HF 21 (#_ftn12) CVOT 22 (#_ftn13) : regulatory
submission (JP, CN), acceptance (EU), Priority Review (US)
- Brilinta - CAD 23 (#_ftn14) /T2D CVOT: regulatory submission (JP,
CN)
- roxadustat - anaemia from CKD 24 (#_ftn15) : regulatory submission
acceptance (US)(8)
- Symbicort - mild asthma: regulatory submission (CN)
Major - Imfinzi +/- treme - NSCLC (1st line) (POSEIDON): met Phase III
primary endpoint (PFS 25 (#_ftn16) )
Phase III data readouts or other significant developments
- Imfinzi, tremelimumab - HCC 26 (#_ftn17) : Orphan Drug Designation
(US)
- Enhertu - gastric cancer (3rd line, HER2+): met Phase II primary and
key secondary (OS 27 (#_ftn18) ) endpoints
- Brilinta - stroke: met Phase III primary endpoint
- Epanova - mixed dyslipidaemia: Phase III terminated as unlikely to
meet primary endpoint
- roxadustat - anaemia from CKD: met Phase III pooled safety objective
- cotadutide - NASH 28 (#_ftn19) : Fast Track designation (US)
Table 5: pipeline - anticipated major news flow
Innovation is critical to addressing unmet patient needs and is at the heart
of the Company's growth strategy. The focus on research and development is
designed to yield strong and sustainable results from the pipeline.
Timing News flow
H1 2020 - Imfinzi - SCLC (ED): regulatory decision (US)
- Imfinzi +/- treme - bladder cancer (1st line) (DANUBE): data
readout, regulatory submission
- Imfinzi +/- treme - head & neck cancer (1st line): data
readout, regulatory submission
- Lynparza - ovarian cancer (1st line) (PAOLA-1): regulatory
decision (US)
- Lynparza - breast cancer (BRCAm): regulatory decision (CN)
- Lynparza - prostate cancer (2nd line): regulatory decision (US)
- Lynparza + cediranib - ovarian cancer (2nd line): data readout
- Enhertu - breast cancer (3rd line, HER2+): regulatory decision
(JP)
- Enhertu - gastric cancer (3rd line, HER2+): regulatory submission
- selumetinib - NF1: regulatory decision (US)
- selumetinib - NF1: regulatory submission (EU)
- Forxiga - T2D CVOT: regulatory decision (CN)
- Farxiga - HF CVOT: regulatory decision (US)
- Brilinta - stroke (THALES): regulatory submission
- Lokelma - hyperkalaemia: regulatory decision (JP)
- Symbicort - mild asthma: regulatory submission (EU)
- Bevespi - COPD: regulatory decision (CN)
H2 2020 - Imfinzi - unresectable, Stage III NSCLC (PACIFIC-2): data readout
- Imfinzi - SCLC (ED): regulatory decision (EU, JP)
- Imfinzi - SCLC (ED): regulatory submission (CN)
- Imfinzi +/- treme - HCC (1st line): data readout
- Lynparza - ovarian cancer (1st line) (PAOLA-1): regulatory
decision (EU)
- Lynparza - ovarian cancer (3rd line, BRCAm): regulatory submission
(US)
- Lynparza - pancreatic cancer (1st line, BRCAm): regulatory
decision (EU)
- Lynparza - prostate cancer (2nd line): regulatory decision (EU)
- Enhertu - breast cancer (3rd line, HER2+): regulatory submission
(EU)
- Calquence - CLL: regulatory decision (EU)
- Forxiga - HF CVOT: regulatory decision (EU, JP, CN)
- Brilinta/Brilique - CAD/T2D CVOT: regulatory decision (US, EU)
- roxadustat - anaemia from CKD: regulatory decision (US)
- Symbicort - mild asthma: regulatory decision (CN)
- Fasenra - nasal polyposis: data readout
- PT010 - COPD: regulatory decision (US, EU)
- PT027 - asthma: data readout
- tezepelumab - severe asthma: data readout
- anifrolumab - lupus (SLE 29 (#_ftn20) ): regulatory submission
2021 - Imfinzi - adjuvant NSCLC: data readout, regulatory submission
- Imfinzi - unresectable, Stage III NSCLC (PACIFIC-2): regulatory
submission
- Imfinzi +/- treme - NSCLC (1st line) (POSEIDON): data readout
(OS), regulatory submission
- Imfinzi +/- treme - SCLC (LD 30 (#_ftn21) ): data readout
- Imfinzi +/- treme - HCC (1st line): regulatory submission
- Imfinzi - HCC (locoregional): data readout, regulatory submission
- Lynparza - adjuvant breast cancer: data readout, regulatory
submission
- Lynparza - prostate cancer (1st line, castration-resistant): data
readout, regulatory submission
- Lynparza + cediranib - ovarian cancer (2nd line): regulatory
submission
- Enhertu - breast cancer (3rd line, HER2+) (Phase III): data
readout, regulatory submission
- Enhertu - breast cancer (2nd line, HER2+): data readout
- Enhertu - breast cancer (HER2-low): data readout
- Calquence - CLL: regulatory decision (JP)
- Farxiga - chronic kidney disease: data readout, regulatory
submission
- roxadustat - anaemia from myelodysplastic syndrome 31 (#_ftn22) :
data readout
- Fasenra - nasal polyposis: regulatory submission
- PT027 - asthma: regulatory submission
- tezepelumab - severe asthma: regulatory submission
Conference call
A conference call and webcast for investors and analysts will begin at 12pm UK
time today. Details can be accessed via astrazeneca.com
(https://www.astrazeneca.com/investor-relations.html) .
Reporting calendar
The Company intends to publish its first quarter financial results on 29 April
2020.
AstraZeneca
AstraZeneca (LSE/STO/NYSE: AZN) is a global, science-led biopharmaceutical
company that focuses on the discovery, development and commercialisation of
prescription medicines, primarily for the treatment of diseases in three
therapy areas - Oncology, CVRM and Respiratory. Based in Cambridge, UK,
AstraZeneca operates in over 100 countries and its innovative medicines are
used by millions of patients worldwide. For more information, please visit
astrazeneca.com
(https://www.astrazeneca.com/investor-relations/results-and-presentations.html)
and follow the Company on Twitter @AstraZeneca
(https://twitter.com/AstraZeneca) .
Contacts
For details on how to contact the Investor Relations Team, please click here
(https://www.astrazeneca.com/investor-relations.html#Contacts) . For Media
contacts, click here (https://www.astrazeneca.com/media-centre.html) .
Operating and financial review
All narrative on growth and results in this section is based on actual
exchange rates, and financial figures are in US$ millions ($m), unless stated
otherwise. The performance shown in this announcement covers the year to 31
December 2019 (the year or FY 2019) and three-month period to 31 December 2019
(the quarter or Q4 2019) compared to the year to 31 December 2018 (FY 2018)
and three-month period to 31 December 2018 (Q4 2018) respectively, unless
stated otherwise.
Core financial measures, EBITDA, Net Debt, Initial Collaboration Revenue and
Ongoing Collaboration Revenue are non-GAAP financial measures because they
cannot be derived directly from the Group Condensed Consolidated Financial
Statements. Management believes that these non-GAAP financial measures, when
provided in combination with Reported results, will provide investors and
analysts with helpful supplementary information to understand better the
financial performance and position of the Group on a comparable basis from
period to period. These non-GAAP financial measures are not a substitute for,
or superior to, financial measures prepared in accordance with GAAP. Core
financial measures are adjusted to exclude certain significant items, such as:
- Amortisation and impairment of intangible assets, including
impairment reversals but excluding any charges relating to IT assets
- Charges and provisions related to restructuring programmes, which
includes charges that relate to the impact of restructuring programmes on
capitalised IT assets
- Other specified items, principally comprising acquisition-related
costs, which include fair-value adjustments and the imputed finance charge
relating to contingent consideration on business combinations and legal
settlements
Details on the nature of Core financial measures are provided on page 76 of
the Annual Report
(https://www.astrazeneca.com/content/dam/az/Investor_Relations/annual-report-2018/PDF/AstraZeneca_AR_2018.pdf)
and Form 20-F Information 2018. Reference should be made to the
reconciliation of Core to Reported financial information and the
Reconciliation of Reported to Core financial measures table included in the
financial performance section of this announcement.
EBITDA is defined as Reported Profit Before Tax after adding back Net Finance
Expense, results from Joint Ventures and Associates and charges for
Depreciation, Amortisation and Impairment. Reference should be made to the
Reconciliation of Reported Profit Before Tax to EBITDA included in the
Financial Performance section of this announcement.
Net Debt is defined as interest-bearing loans and borrowings and lease
liabilities, net of cash and cash equivalents, other investments, and net
derivative financial instruments. Reference should be made to Note 3 'Net
Debt' included in the Notes to the Consolidated Financial Information section
of this announcement.
Ongoing Collaboration Revenue is defined as Collaboration Revenue excluding
Initial Collaboration Revenue (which is defined as Collaboration Revenue that
is recognised at the date of completion of an agreement or transaction, in
respect of upfront consideration). Ongoing Collaboration Revenue comprises,
among other items, royalties, milestone revenue and profit-sharing income.
Reference should be made to the Collaboration Revenue table in this operating
and financial review.
The Company strongly encourages investors and analysts not to rely on any
single financial measure, but to review AstraZeneca's financial statements,
including the Notes thereto and other available Company reports, carefully and
in their entirety.
Due to rounding, the sum of a number of dollar values and percentages may not
agree to totals.
Table 6: Total Revenue
FY 2019 Q4 2019
$m % change $m % change
Actual CER Actual CER
Product Sales 23,565 12 15 6,250 8 9
Collaboration Revenue 819 (21) (20) 414 (36) (36)
Total Revenue 24,384 10 13 6,664 4 5
Table 7: Product Sales
FY 2019 Q4 2019
$m % change $m % change
% of total Actual CER % of total Actual CER
Oncology 8,667 37 44 47 2,274 36 29 29
BioPharmaceuticals 9,767 41 10 13 2,705 43 10 11
New CVRM 4,376 19 9 12 1,168 19 6 7
Respiratory 5,391 23 10 13 1,537 25 13 14
Other medicines 5,131 22 (16) (13) 1,271 20 (17) (16)
Total 23,565 100 12 15 6,250 100 8 9
Specialty-care medicines comprise all Oncology medicines, Brilinta, Lokelma
and Fasenra. At 47% of Product Sales (FY 2018: 36%), specialty-care medicine
sales increased by 43% in the year (47% at CER) to $10,966m.
Table 8: Top-ten medicines by Product Sales
Medicine Therapy Area FY 2019 Q4 2019
$m % of total % change $m % change
Actual CER Actual CER
Tagrisso Oncology 3,189 14 71 74 884 49 49
Symbicort Respiratory 2,495 11 (3) - 712 12 13
Brilinta CVRM 1,581 7 20 23 428 14 15
Farxiga CVRM 1,543 7 11 14 419 6 7
Nexium Other medicines 1,483 6 (13) (11) 353 (10) (10)
Imfinzi Oncology 1,469 6 n/m n/m 424 62 62
Pulmicort Respiratory 1,466 6 14 18 413 6 7
Crestor CVRM 1,278 5 (11) (8) 296 (16) (15)
Lynparza Oncology 1,198 5 85 89 351 68 69
Faslodex Oncology 892 4 (13) (11) 166 (39) (38)
Total 16,594 70 20 23 4,446 15 16
Table 9: Collaboration Revenue
FY 2019 Q4 2019
$m % of total % change $m % change
Actual CER Actual CER
Initial Collaboration Revenue - - - - - - -
Ongoing Collaboration Revenue 819 100 (21) (20) 414 (36) (36)
Royalties 62 8 29 34 18 59 63
Milestones/other: Lynparza 610 74 (23) (20) 350 (44) (43)
Milestones/other: nirsevimab 32 (#_ftn23) 34 4 n/m n/m - n/m n/m
Other Milestones/other 113 14 (19) (18) 46 n/m n/m
Total 819 100 (21) (20) 414 (36) (36)
Royalties included those associated with Nexium (over-the-counter format),
Zoladex, Tudorza/Eklira and Duaklir. Lynparza milestone and other receipts in
Q4 2019, as part of a collaboration with MSD, comprised sales-milestone income
of $250m and a final option-based receipt of $100m.
Product Sales
The performance of the Company's medicines is shown below, with a geographical
split shown in Notes 7 & 8.
Table 10: Therapy area and medicine performance
Therapy area Medicine FY 2019 Q4 2019
$m % of total % change $m % change
Actual CER Actual CER
Oncology Tagrisso 3,189 14 71 74 884 49 49
Imfinzi 1,469 6 n/m n/m 424 62 62
Lynparza 1,198 5 85 89 351 68 69
Calquence 164 1 n/m n/m 56 n/m n/m
Faslodex 892 4 (13) (11) 166 (39) (38)
(file:///C:/Users/kmbs432/AppData/Local/Microsoft/Windows/INetCache/Content.MSO/BA7D1BA7.xlsx#RANGE!_ftn1)
33 (#_ftn24)
Zoladex 813 3 8 13 196 8 9
(file:///C:/Users/kmbs432/AppData/Local/Microsoft/Windows/INetCache/Content.MSO/BA7D1BA7.xlsx#RANGE!B52)
(33)
Iressa33 423 2 (18) (15) 80 (29) (28)
Arimidex33 225 1 6 11 51 10 11
Casodex33 200 1 - 3 43 (6) (5)
Others 94 - (18) (17) 26 15 12
Total Oncology 8,667 37 44 47 2,274 29 29
BioPharmaceuticals: CVRM Farxiga 1,543 7 11 14 419 6 7
Brilinta 1,581 7 20 23 428 14 15
Bydureon 549 2 (6) (5) 139 1 1
Onglyza 527 2 (3) - 131 (11) (10)
Byetta 110 - (13) (11) 27 (16) (15)
Other diabetes 52 - 33 35 16 35 36
Lokelma 14 - n/m n/m 8 n/m n/m
Crestor33 1,278 5 (11) (8) 296 (16) (15)
Seloken/Toprol-XL33 760 3 7 12 190 18 20
Atacand33 221 1 (15) (11) 60 3 5
Others 271 1 (9) (6) 72 1 4
BioPharmaceuticals: total CVRM 6,906 29 3 6 1,785 2 4
BioPharmaceuticals: Respiratory Symbicort 2,495 11 (3) - 712 12 13
Pulmicort 1,466 6 14 18 413 6 7
Fasenra 704 3 n/m n/m 206 65 65
Daliresp/Daxas 215 1 14 15 58 8 8
Duaklir 77 - (19) (15) 22 (2) -
Bevespi 42 - 26 26 12 12 12
Breztri 2 - n/m n/m 1 n/m n/m
Others 390 2 (13) (9) 114 (9) (7)
BioPharmaceuticals: total Respiratory 5,391 23 10 13 1,537 13 14
Other medicines Nexium 1,483 6 (13) (11) 353 (10) (10)
Synagis 358 2 (46) (46) 63 (75) (75)
Losec/Prilosec 263 1 (3) 1 46 (24) (23)
Seroquel XR/IR 191 1 (47) (46) 40 (27) (27)
Others 306 1 (23) (20) 151 12 14
Total other medicines 2,601 11 (24) (21) 653 (27) (27)
Total Product Sales 23,565 100 12 15 6,250 8 9
Product Sales summary
Oncology
Product Sales of $8,667m in the year; an increase of 44% (47% at CER).
Oncology Product Sales represented 37% of total Product Sales, up from 29% in
2018.
Tagrisso
Tagrisso has been approved in 80 countries, including the US, China, in Europe
and Japan for the 1st-line treatment of patients with epidermal growth factor
receptor (EGFR)-mutated (EGFRm) NSCLC; to date, reimbursement has been granted
in 18 countries, with further reimbursement decisions anticipated throughout
2020, as well as additional regulatory decisions in new countries. The
regulatory decisions regarding the 1st-line setting followed Tagrisso's
approval and launch in 87 countries, including the US, China, in Europe and
Japan for the 2nd-line treatment of patients with Stage IV EGFR T790M 34
(#_ftn25) -mutated NSCLC.
Product Sales in the year of $3,189m represented growth of 71% (74% at CER),
partly driven by the aforementioned regulatory approvals and reimbursements in
the 1st-line setting; continued growth was also delivered in the 2nd-line
setting, for example, within Europe and Emerging Markets. Sales in the US
increased by 46% in the year to $1,268m. Q4 2019 sales in the US, however,
grew sequentially by only 2% reflecting an increase in inventory movements in
Q3 2019 and adverse gross-to-net adjustments 35 (#_ftn26) in the fourth
quarter. Demand continued and Tagrisso is established as the standard of care
(SoC) in the 1st-line setting, following regulatory approval in 2018.
In Emerging Markets, Tagrisso sales increased by 120% in the year (130% at
CER) to $762m, with notable growth in China, following the admission to the
China National Drug Reimbursement List (NRDL) in the 2nd line setting, which
took place at the start of the year. Sales of Tagrisso in Japan increased by
100% in the year (97% at CER) to $633m; in the final quarter, however, sales
were adversely impacted by a 15% mandated price reduction that took effect
from 1 November 2019. In Europe, sales of $474m in the year represented an
increase of 51% (59% at CER), driven by emerging use in the 1st-line setting
as more countries granted reimbursement, as well as continued strong levels of
demand in the 2nd-line setting.
Imfinzi
Imfinzi is approved in 61 countries, including the US, China, in Europe and
Japan for the treatment of patients with unresectable, Stage III NSCLC whose
disease has not progressed following platinum-based chemoradiation therapy
(CRT). It is also approved for the 2nd-line treatment of patients with locally
advanced or metastatic urothelial carcinoma (bladder cancer) in 15 countries,
including the US.
Global Product Sales of Imfinzi increased by 132% in the year (133% at CER) to
$1,469m, of which $1,041m were in the US, almost entirely for the treatment of
unresectable, Stage III NSCLC; sales in the US increased by 85% in the year.
In Japan, sales of $211m (FY 2018: $35m) reflected encouraging levels of
demand, supported by higher CRT and treatment rates. Sales in Europe of $179m
(FY 2018: $27m) followed recent regulatory approvals and launches.
Lynparza
By the end of the year, Lynparza was approved in 73 countries for the
treatment of ovarian cancer. Launches for the treatment of metastatic breast
cancer took place in the US and Japan in 2018 and regulatory approval was
granted in the EU in April 2019. Lynparza has now been approved in 58
countries for the treatment of metastatic breast cancer and, in the US, for
the treatment of pancreatic cancer.
Product Sales of Lynparza amounted to $1,198m in the year, an increase of 85%
(89% at CER). The strong performance was geographically spread, with launches
continuing in Emerging Markets and the Established Rest of World region (RoW).
Ongoing MSD co-promotion efforts also contributed to sales.
US sales increased by 81% to $626m, driven by the launch in the 1st-line BRCAm
ovarian cancer setting at the end of 2018. Lynparza remained the leading
medicine in the US in the PARP-inhibitor class, as measured by total
prescription volumes in both ovarian and breast cancer. Sales in Europe
increased by 51% (59% at CER) to $287m, driven by increasing levels of
reimbursement and BRCA-testing rates, as well as the recent 1st-line ovarian-
and breast-indication launches.
Japan sales of Lynparza amounted to $130m in the year, representing growth of
170% (167% at CER). Emerging Markets sales of $133m, up by 161% (177% at CER),
reflected the regulatory approval of Lynparza as a 2nd-line maintenance
treatment of patients with ovarian cancer by the China National Medical
Products Administration (NMPA); Lynparza was recently admitted to the China
NRDL for the same indication, with effect from January 2020.
Calquence
Product Sales in the year of $164m; an increase of 164%, with most sales in
the US. Calquence was recently approved by the US FDA for the treatment of CLL
and small lymphocytic lymphoma (SLL) in November 2019.
Legacy: Iressa
Product Sales in the year of $423m; a decline of 18% (15% at CER).
Emerging Markets sales were stable in the year (up by 4% at CER) at $286m;
Iressa continued to be included on the China volume-based procurement
programme. Given the growing use of Tagrisso, sales of Iressa in the US
declined by 33% to $17m and by 36% (32% at CER) to $70m in Europe. Japan sales
amounted to $44m, reflecting a decline of 50%.
Legacy: Faslodex
Product Sales in the year of $892m; a decline of 13% (11% at CER).
Emerging Markets sales of Faslodex increased by 29% in the year (36% at CER)
to $198m. US sales declined by 39% to $328m, reflecting the launch of multiple
generic Faslodex medicines; in Q4 2019, Faslodex sales in the US declined by
88% to $17m. In Europe, where generic competitor medicines are established,
sales in the year increased by 3% (9% at CER) to $229m, while in Japan, sales
increased by 20% (19% at CER) to $131m.
Legacy: Zoladex
Product Sales in the year of $813m; an increase of 8% (13% at CER).
Emerging Markets sales of Zoladex increased by 20% (28% at CER) in the year to
$492m. Sales in Europe increased by 2% (7% at CER) to $135m. In the
Established RoW region, sales declined by 11% (10% at CER) to $179m, driven by
the effects of increased competition.
Further in prostate cancer, the agreement between AstraZeneca and Janssen
Pharmaceutical K. K. in Japan for the co-promotion of abiraterone acetate,
announced in 2013
(https://www.astrazeneca.com/media-centre/press-releases/2013/astrazeneca-janssen-japan-prostate-cancer-treatment-11102013.html)
, recently ceased; sales of abiraterone acetate recorded by AstraZeneca
amounted to $36m in the year.
BioPharmaceuticals: CVRM
Total CVRM sales, which include Crestor and other legacy medicines, increased
by 3% in the year (6% at CER) to $6,906m and represented 29% of total Product
Sales (FY 2018: 32%).
New CVRM sales increased by 9% in the year (12% at CER) to $4,376m, reflecting
strong performances from Farxiga and Brilinta. New CVRM sales represented 19%
of Product Sales in the year (FY 2018: 19%).
Farxiga
Product Sales of $1,543m in the year; an increase of 11% (14% at CER).
Emerging Markets sales increased by 40% (48% at CER) to $471m, reflecting
growth in the sodium-glucose transport protein 2 (SGLT-2) class at the expense
of the dipeptidyl-peptidase 4 class; there was also a further improvement in
levels of access. Farxiga was admitted to the China NRDL with effect from the
start of 2020.
US sales declined by 9% to $537m, impacted by changes in formulary access for
competitor medicines at the beginning of the year. The level of sales growth
in the US in the year was also adversely affected by the impact on price from
increased levels of competition, the mix of sales and managed markets. There
were favourable movements in the share of new-to-brand prescriptions in the
second half, however, a result of a label update in the US to reflect results
from the DECLARE CVOT. US sales increased sequentially by 12% from Q3 2019 to
Q4 2019.
Sales in Europe increased by 18% (25% at CER) to $373m, partly reflecting
growth in the SGLT-2 class and an acceleration on new-to-brand prescriptions
following the aforementioned DECLARE label update. In Japan, sales to the
collaborator, Ono Pharmaceutical Co., Ltd, which records in-market sales,
increased by 16% (14% at CER) to $87m.
Onglyza
Product Sales of $527m in the year; a decline of 3% (stable at CER).
Sales in Emerging Markets increased by 3% (9% at CER) to $176m, driven by the
performance in China. Growth in the US was supported by improved pricing; US
sales of Onglyza increased by 3% in the year to $230m. The US performance in
FY 2018 was adversely impacted by the effect of gross-to-net adjustments,
resulting in a favourable comparison for FY 2019. There was also a benefit
from the mix of sales and managed markets, offsetting declining class-driven
volumes. Europe sales declined by 22% (17% at CER) to $70m, highlighting the
broader trend of a shift away from the dipeptidyl peptidase-4 inhibitor class.
Given the significant future potential of Farxiga, the Company continues to
prioritise commercial support over Onglyza.
Bydureon
Product Sales of $549m in the year; a decline of 6% (5% at CER).
Sales were impacted by production constraints in the first half of the year
for the new Bydureon BCise device and declining volumes for the dual-chamber
pen; these constraints were resolved in the second half of the year. US sales
of $459m represented a decline of 3% in the year, resulting from the pricing
impact of managed markets and the transition to the BCise device. Bydureon
sales in Europe fell by 19% (14% at CER) to $66m.
Brilinta
Product Sales of $1,581m in the year; an increase of 20% (23% at CER).
Patient uptake continued in the treatment of acute coronary syndrome and
high-risk post-myocardial infarction. Emerging Markets sales of Brilinta
increased by 42% (49% at CER) to $462m. US sales of Brilinta, at $710m,
represented an increase of 21%, driven primarily by increasing levels of
demand in both hospital and retail settings, as well as a lengthening in the
average-weighted duration of treatment, reflecting the growing impact of
90-day prescriptions. Sales of Brilique in Europe increased by 1% in the year
(7% at CER) to $351m, driven by performances in Spain, Italy and the UK.
Lokelma
Product Sales of $14m in the year (FY 2018: $nil), predominantly in the US,
reflecting the recent launch of the medicine. Lokelma represented strong
levels of new-to-brand prescriptions by market share at the end of the period
in the US. It is also approved in China and in the EU for the treatment of
hyperkalaemia; launches in several markets are expected soon.
Legacy: Crestor
Product Sales of $1,278m in the year; a decline of 11% (8% at CER).
Sales in Emerging Markets declined by 4% (stable at CER) to $806m. The
performance was adversely impacted in the final quarter by the effect of
volume-based procurement in China; sales of Crestor in Emerging Markets
declined by 12% in the quarter (10% at CER) to $185m. US sales declined by 39%
to $104m, reflecting the ongoing effect of competition from generic Crestor
medicines. In Europe, sales declined by 27% (23% at CER) to $148m, reflecting
a similar impact. In Japan, where AstraZeneca collaborates with Shionogi Co.
Ltd, sales increased by 3% (2% at CER) to $171m. This followed a period of
decline resulting from the entry of multiple generic Crestor medicines in the
Japan market at the end of 2017.
BioPharmaceuticals: Respiratory
Product Sales of $5,391m in the year; an increase of 10% (13% at CER).
Respiratory represented 23% of total Product Sales (FY 2018: 23%).
Symbicort
Product Sales in the year of $2,495m; a decline of 3% (stable at CER).
Symbicort continued its global market-volume leadership within the inhaled
corticosteroid (ICS) / long-acting beta agonist (LABA) class and became
market-value leader. Emerging Markets sales increased by 11% in the year (17%
at CER) to $547m, reflecting particularly strong performances in China, Latin
America and Asia Pacific. In contrast, however, volume growth in the US was
offset by the impact of continued pricing pressure and managed-market rebates;
US sales declined by 4% to $829m. This contrasted with US sales of Symbicort
in Q4 2019, where sales increased by 18% to $244m, partly driven by a
comparison with one-off unfavourable adjustments in Q4 2018. Building on this
performance, AstraZeneca entered an agreement in January 2020 with Prasco, LLC
to distribute an authorised-generic version of Symbicort in the US.
In Europe, sales declined by 12% in the year (7% at CER) to $678m, driven by
price competition and government pricing interventions. In Japan, sales
increased by 9% in the year (7% at CER) to $226m, supported by the impact of
AstraZeneca regaining full rights, following termination earlier in the year
of the Astellas co-promotion agreement.
Pulmicort
Product Sales in the year of $1,466m; an increase of 14% (18% at CER).
Emerging Markets, where sales increased by 20% in the year (24% at CER) to
$1,190m, represented 81% of global sales of Pulmicort. The performance in
China was strengthened by higher levels of demand and was underpinned by the
impact of AstraZeneca's support in China for over 17,500 nebulisation centres.
Sales in the US declined by 5% to $110m and sales in Europe declined by 10%
(4% at CER) to $81m reflecting the legacy status of the medicine.
Fasenra
Fasenra has been approved in 53 countries, including the US, in the EU and
Japan for the treatment of severe, uncontrolled eosinophilic asthma, with
further regulatory reviews ongoing; Fasenra has achieved reimbursement in 36
countries.
Product Sales in the year of $704m, an increase of 137% (139% at CER).
Sales in the US increased by 121% in the year to $482m. In patients with
severe, uncontrolled asthma, Fasenra ended the year as the leading novel
biologic medicine, as measured by new-to-brand prescriptions.
In Europe, sales of $118m in the year represented an increase of 268% (287% at
CER). Sales in Japan increased by 91% (89% at CER) to $86m in the year,
following the medicine's launch in 2018. In its approved indication and among
new patients, Fasenra obtained the leading market share of all biologics in
the top-five European countries and in Japan.
Daliresp/Daxas
Product Sales in the year of $215m; an increase of 14% (15% at CER).
US sales, representing 86% of the global total, increased by 19% to $184m in
the year, driven by favourable affordability-programme changes and inventory
movements.
Duaklir
Product Sales in the year of $77m; a decline of 19% (15% at CER).
In 2019, the overwhelming majority of sales were in Europe, where sales
declined by 22% (17% at CER) to $71m, mainly a result of an adverse
performance in Germany. As part of the collaboration agreement announced in
March 2017, Circassia Pharmaceuticals plc (Circassia) became responsible for
the commercialisation of Duaklir in the US, with AstraZeneca continuing to
manufacture and supply the medicine.
Bevespi
Product Sales in the year of $42m; an increase of 26%.
Bevespi saw prescriptions in the period track in line with other long-acting
muscarinic antagonists / LABA launches; the class in the US, however,
continued to grow more slowly than anticipated.
Breztri
Product Sales in the year of $2m (FY 2018: $nil), entirely in Japan.
In December 2019, Breztri received regulatory approval in China as a
triple-combination therapy for the treatment of COPD. It also received
regulatory approval in Japan earlier in the year.
Other medicines (outside the three main therapy areas)
Product Sales of $2,601m in the year; a decline of 24% (21% at CER). Other Product Sales represented 11% of total Product Sales, down from 16% in FY 2018 and 21% in FY 2017.
Nexium
Product Sales in the year of $1,483m; a decline of 13% (11% at CER).
Emerging Markets sales of Nexium increased by 8% (14% at CER) to $748m. In
Europe, sales declined by 73% (72% at CER) to $63m, following divestment of
prescription medicine rights in 2018. Sales in the US declined by 29% to
$218m, reflecting its 2015 loss of exclusivity and, in Japan, where
AstraZeneca collaborates with Daiichi Sankyo, sales declined by 1% (2% at CER)
to $401m.
Regional Product Sales
Table 11: Regional Product Sales
FY 2019 Q4 2019
$m % of total % change $m % change
Actual CER Actual CER
Emerging Markets 8,165 35 18 24 2,091 18 20
China 4,880 21 29 35 1,189 25 28
Ex-China 3,285 14 6 12 902 10 11
US 7,747 33 13 13 2,059 1 1
Europe 4,350 18 (2) 2 1,182 1 4
Established RoW 3,303 14 17 18 918 16 13
Japan 2,548 11 27 26 719 22 17
Canada 470 2 (4) (1) 126 (4) (3)
Other Established RoW 285 1 (13) (4) 73 5 10
Total 23,565 100 12 15 6,250 8 9
Table 12: Emerging Markets Product Sales
FY 2019 Q4 2019
$m % of total % change $m % change
Actual CER Actual CER
Oncology 2,211 27 45 52 546 54 57
BioPharmaceuticals 3,120 38 25 31 865 18 20
New CVRM 1,133 14 33 41 297 25 27
Respiratory 1,987 24 21 27 568 14 16
Other medicines 2,834 35 (1) 4 680 1 2
Total 8,165 100 18 24 2,091 18 20
Table 13: Notable new-medicine performances in Emerging Markets
Product Sales FY 2019 % change
$m
Actual CER
Tagrisso 762 n/m n/m
Lynparza 133 n/m n/m
Farxiga 471 40 48
Brilinta 462 42 49
New medicines represented 23% of Emerging Markets sales (FY 2018: 15%). Sales
of specialty-care medicines increased by 44% (52% at CER) to $2,678m and
comprised 33% of Emerging Markets sales in the year (FY 2018: 27%).
Table 14: Notable other performances in Emerging Markets
Product Sales FY 2019 % change
$m
Actual CER
Zoladex 492 20 28
Pulmicort 1,190 20 24
Symbicort 547 11 17
China sales comprised 60% of Emerging Markets sales in the year, increasing by
29% (35% at CER) to $4,880m. China sales in the quarter increased by 25% (28%
at CER) to $1,189m, when the performance was adversely impacted by the effect
of volume-based procurement in China. New-medicine sales, primarily driven by
Tagrisso and Lynparza in Oncology and Brilinta and Farxiga in New CVRM,
delivered particularly encouraging growth and represented 19% of China sales
(FY 2018: 11%). This performance was augmented by strong sales of Zoladex,
Pulmicort, Nexium and Symbicort.
In early 2019, Tagrisso benefitted from being added to the 2018 NRDL by the
China National Healthcare Security Administration (NHSA) as a treatment for
patients with Stage IV EGFR T790M-mutated NSCLC. Furthermore, the NHSA
published the preliminary 2019 NRDL in the second half of 2019, which included
one additional AstraZeneca medicine, namely Kombiglyze for Diabetes.
Respiratory medicines Symbicort for asthma and COPD and Nexium for acid reflux
also benefitted as reimbursement restrictions were removed. In December 2019,
the NHSA published the final 2019 NRDL, which was updated to include a further
three AstraZeneca medicines: Lynparza in ovarian cancer, Forxiga in T2D and
roxadustat in anaemia from CKD; Faslodex, however, was removed from the list.
Since 2012, 15 of the Company's medicines have also been admitted to China's
Essential Drugs List 36 (#_ftn27) .
Ex-China Emerging Markets sales increased by 6% in the year (12% at CER) to
$3,284m. New medicines represented 29% of Product Sales in the year (FY 2018:
21%), increasing by 45% (53% at CER). The performance was underpinned by
strong levels of growth at CER in the following regions:
Table 15: Ex-China Emerging Markets
Product Sales FY 2019
%
ch
an
ge
Actual CER
Russia 35 40
Brazil (2) 7
Ex-Brazil Latin America 3 16
Ex-China Asia Pacific 8 10
Middle East and Africa 3 8
Financial performance
Table 16: Reported Profit and Loss
FY 2019 FY 2018 % change Q4 2019 Q4 2018 % change
$m $m Actual CER $m $m Actual CER
Product Sales 23,565 21,049 12 15 6,250 5,768 8 9
Collaboration Revenue 819 1,041 (21) (20) 414 649 (36) (36)
Total Revenue 24,384 22,090 10 13 6,664 6,417 4 5
Cost of Sales (4,921) (4,936) - 5 (1,378) (1,637) (16) (10)
Gross Profit 19,463 17,154 13 16 5,286 4,780 11 10
Gross Profit Margin 37 (#_ftn28) 79.1% 76.6% 3 2 78.0% 71.6% 6 5
Distribution Expense (339) (331) 2 7 (92) (93) (2) -
% Total Revenue 1.4% 1.5% - - 1.4% 1.5% - -
R&D Expense (6,059) (5,932) 2 5 (2,091) (2,012) 4 5
% Total Revenue 24.8% 26.9% 2 2 31.4% 31.4% - -
SG&A Expense (11,682) (10,031) 16 20 (3,026) (2,600) 16 18
% Total Revenue 47.9% 45.4% (2) (3) 45.4% 40.5% (5) (5)
Total Operating Expenses (18,080) (16,294) 11 14 (5,209) (4,705) 11 12
% Total Revenue 74.1% 73.8% - - 78.2% 73.3% (5) (5)
Other Operating Income & Expense 1,541 2,527 (39) (38) 500 1,002 (50) (50)
% Total Revenue 6.3% 11.4% (5) (5) 7.5% 15.6% (8) (8)
Operating Profit 2,924 3,387 (14) (16) 577 1,077 (46) (56)
Operating Profit Margin 12.0% 15.3% (3) (4) 8.7% 16.8% (8) (10)
Net Finance Expense (1,260) (1,281) (2) 4 (312) (311) - (1)
Joint Ventures and Associates (116) (113) 3 5 (25) (36) (30) (30)
Profit Before Tax 1,548 1,993 (22) (29) 240 730 (67) (79)
Taxation (321) 57 n/m n/m 37 279 (87) (81)
Tax Rate 21% -3% -15% -38%
Profit After Tax 1,227 2,050 (40) (45) 277 1,009 (72) (80)
EPS 1.03 1.70 (40) (44) 0.24 0.82 (71) (78)
Table 17: Reconciliation of Reported Profit Before Tax to EBITDA(( 38
(#_ftn29) ))
FY 2019 FY 2018 % change Q4 2019 Q4 2018 % change
$m $m Actual CER $m $m Actual CER
Reported Profit Before Tax 1,548 1,993 (22) (29) 240 730 (67) (79)
Net Finance Expense 1,260 1,281 (2) 4 312 311 - (1)
Joint Ventures and Associates 116 113 3 5 25 36 (30) (30)
Depreciation, Amortisation and Impairment 3,762 3,753 - 3 1,643 1,662 (1) -
EBITDA 6,686 7,140 (6) (6) 2,220 2,739 (19) (22)
Table 18: FY 2019 reconciliation of Reported to Core financial measures
Reported Restructuring Intangible Asset Amortisation & Impairments Diabetes Alliance Other 39 (#_ftn30) Core 40 (#_ftn31) Core % change
$m $m $m $m $m $m Actual CER
Gross Profit 19,463 73 87 - - 19,623 10 13
Gross Profit Margin 79.1% 79.8% - -
Distribution Expense (339) - - - - (339) 2 7
R&D Expense (6,059) 101 638 - - (5,320) 1 4
SG&A Expense (11,682) 173 1,771 (126) 775 (9,089) 5 8
Total Operating Expenses (18,080) 274 2,409 (126) 775 (14,748) 4 7
Other Operating Income & Expense 1,541 - 1 - 19 1,561 (27) (26)
Operating Profit 2,924 347 2,497 (126) 794 6,436 13 13
Operating Profit Margin 12.0% 26.4% +1 -
Net Finance Expense (1,260) - - 287 208 (765) 4 10
Taxation (321) (66) (519) (54) (149) (1,109) n/m n/m
EPS $1.03 $0.22 $1.52 $0.08 $0.65 $3.50 1 -
Table 19: Q4 2019 reconciliation of Reported to Core financial measures
Reported Restructuring Intangible Asset Diabetes Alliance Other(41) Core(42) Core
Amortisation & Impairments % change
$m $m $m $m $m $m Actual CER
Gross Profit 5,286 (49) 18 - - 5,255 1 1
Gross Profit Margin 78.0% 77.5% -1 -2
Distribution Expense (92) - - - - (92) (2) -
R&D Expense (2,091) 19 578 - - (1,494) 2 4
SG&A Expense (3,026) 26 762 (420) 33 (2,625) 8 9
Total Operating Expenses (5,209) 45 1,340 (420) 33 (4,211) 5 7
Other Operating Income & Expense 500 - (2) - 3 501 (50) (50)
Operating Profit 577 (4) 1,356 (420) 36 1,545 (29) (33)
Operating Profit Margin 8.7% 23.2% -11 -12
Net Finance Expense (312) - - 71 55 (186) 6 -
Taxation 37 8 (279) 52 (13) (195) n/m n/m
EPS $0.24 - $0.83 ($0.23) $0.05 $0.89 (44) (46)
Profit and Loss summary
a) Gross Profit
The increase in Reported and Core Gross Profit for the year was a reflection
of the growth in Product Sales. Reported Gross Profit was adversely impacted
in the prior year by the recognition of costs associated with the closure of
two biologic-medicine manufacturing sites in Colorado, US. A partial reversal
of these costs was recorded in the quarter.
Following the recommendation from an independent Data Monitoring Committee,
AstraZeneca recently decided to terminate the Phase III STRENGTH trial for
Epanova (omega-3 carboxylic acids), due to its low likelihood of demonstrating
a benefit to patients with mixed dyslipidaemia who are at increased risk of CV
disease. This was considered to be an adjusting event after the reporting
period, resulting in a provision for inventory and supply-related costs of
$115m, recorded in Reported and Core Cost of Sales in FY 2019.
b) Operating Expense
Reported Operating Expense in the year represented 74% of Total Revenue (FY
2018: 74%), Core Operating Expense represented 60% of Total Revenue (FY 2018:
64%).
Reported and Core R&D Expense increased partly a result of investment in
the development of Enhertu. Reported and Core SG&A Expense grew primarily
because of investment in additional colleagues to support the China expansion
strategy, as well as further support for new medicines. The difference between
the growth of Reported and Core SG&A Expense partly reflected fair-value
adjustments arising on acquisition-related liabilities recognised in 2019, as
well as an increase in legal provisions and intangible asset impairments; the
latter included impairments of Bydureon, Qtern and Tudorza/Eklira.
The aforementioned STRENGTH-trial termination also resulted in a full
impairment of the Epanova intangible asset of $533m, recorded in Reported
R&D Expense in FY 2019.
c) Other Operating Income and Expense
41 (#_ftn32)
Reported and Core Other Operating Income and Expense in the year included:
- $515m, reflecting an agreement
(https://www.astrazeneca.com/content/astraz/media-centre/press-releases/2018/astrazeneca-to-divest-us-synagis-rights-to-sobi131120180.html)
to sell US rights to Synagis to Swedish Orphan Biovitrum AB (publ) (Sobi)
- $243m, reflecting an agreement
(https://www.astrazeneca.com/media-centre/press-releases/2019/astrazeneca-divests-rights-for-losec-to-cheplapharm-01102019.html)
to divest the global commercial rights, excluding China, Japan, the US and
Mexico, for Losec and associated brands to Cheplapharm Arzneimittel GmbH
(Cheplapharm)
- $213m, reflecting agreements
(https://www.astrazeneca.com/media-centre/press-releases/2019/agreement-with-cheplapharm-for-rights-to-seroquel-and-seroquel-xr-in-europe-and-russia-completed-16122019.html)
to sell its commercial rights to Seroquel and Seroquel XR in the US, Canada,
Europe and Russia to Cheplapharm
- $181m, reflecting an agreement
(https://www.astrazeneca.com/media-centre/press-releases/2019/astrazeneca-divests-rights-to-arimidex-and-casodex-in-europe-and-certain-additional-countries-20122019.html)
to sell the commercial rights to Arimidex and Casodex in a number of European,
African and other countries to Juvisé Pharmaceuticals
In January 2020, the Company announced
(https://www.astrazeneca.com/media-centre/press-releases/2020/astrazeneca-divests-rights-to-established-hypertension-medicines-27012020.html)
that it had agreed to divest the global commercial rights to a number of
established hypertension medicines, including Inderal, Tenormin and Zestril to
Atnahs Pharma. Atnahs Pharma will make an upfront payment of $350m to
AstraZeneca. AstraZeneca may also receive future sales-contingent payments of
up to $40m between 2020 and 2022. Income arising from the upfront and future
payments will be reported in AstraZeneca's financial statements within Other
Operating Income and Expense. The divestment is expected to complete in the
first quarter of 2020.
d) Net Finance Expense
Reported and Core Net Finance Expense increased at CER in the year, partly
reflecting an adverse movement in loan interest, as well as the effect of the
adoption of IFRS 16 (see Note 1). There was also a discount unwind in respect
of the profit-participation financial liability in relation to the
aforementioned FY 2019 divestment of the US rights to participate in the
future cash flows from the US profits or losses for nirsevimab, impacting
Reported and Core Finance Expense.
e) Taxation
The Reported Tax Rate for the year was 21% and the Core Tax Rate was 20% (FY
2018: (3)% and 11% respectively). These tax rates were higher than the UK
Corporation Tax Rate due to the impact of the geographical mix of profits.
f) EPS
Reported EPS of $1.03 in the year, based on a weighted-average number of
shares of 1,301m, represented a decline of 40% (44% at CER); Core EPS
increased by 1% (stable at CER) to $3.50. The difference between the Reported
and Core performance partly reflected the impact of a favourable $346m legal
settlement in FY 2018 that was recognised as income in Reported Other
Operating Income and Expense. It was also a result of an increase in legal
provisions and revaluation movements on acquisition-related liabilities in
2019, as well as an increase in intangible asset impairments.
In April 2019, the Company completed an issue of 44,386,214 new ordinary
shares of $0.25 each at a price of £60.50 per share, resulting in an increase
in share capital of $11m and an increase in share premium of $3.5bn, net of
transaction costs of $22m.
g) Dividend per share
The Board reaffirms its commitment to the progressive dividend policy; a
second interim dividend of $1.90 per share (146.4 pence, 18.32 SEK) has been
declared, taking the unchanged full-year dividend per share to $2.80 (218.3
pence, 26.81 SEK). Dividend payments are normally paid as follows:
- First interim dividend - announced with half-year and second-quarter
results and paid in September
- Second interim dividend - announced with full-year and
fourth-quarter results and paid in March
The record date for the second interim dividend for 2019, payable on 30 March
2020, will be 28 February 2020. The ex-dividend date will be 27 February 2020.
The record date for the first interim dividend for 2020, payable on 14
September 2020, will be 14 August 2020. The ex-dividend date will be 13 August
2020.
Table 20: Cash Flow
FY 2019 FY 2018 Change
$m $m $m
Reported Operating Profit 2,924 3,387 (463)
Depreciation, Amortisation and Impairment 3,762 3,753 9
Increase in Working Capital and Short-Term Provisions (346) (639) 293
Gains on Disposal of Intangible Assets (1,243) (1,885) 642
Non-Cash and Other Movements (236) (785) 549
Interest Paid (774) (676) (98)
Taxation Paid (1,118) (537) (581)
Net Cash Inflow from Operating Activities 2,969 2,618 351
Net Cash Inflow before Financing Activities 2,312 3,581 (1,269)
Net Cash Outflow from Financing Activities (1,765) (2,044) 279
The increase in Net Cash Inflows from Operating Activities in the year
primarily reflected an underlying improvement in business performance,
combined with favourable working-capital movements and the impact of the
adoption of IFRS 16 (Leases) on 1 January 2019. The positive cash performance
was partly offset by an increase in Taxation Paid, which represented 72% of
Reported Profit Before Tax (FY 2018: 27%); the increase in the amount paid
primarily reflected the phasing of tax payments between periods and the impact
of refunds in FY 2018, following agreement of prior-period liabilities. The
adoption of IFRS 16 resulted in a presentational change within the cash-flow
statement, whereby cash outflows of $186m are now presented as financing,
instead of operating.
The decline in Net Cash Inflows before Financing Activities primarily
reflected the Purchase of Intangible Assets, which included:
- The first of two $675m upfront payments to Daiichi Sankyo as part of
the agreement
(https://www.astrazeneca.com/media-centre/press-releases/2019/astrazeneca-and-daiichi-sankyo-enter-collaboration-for-novel-her-2-targeting-antibody-drug-conjugate.html)
on Enhertu
- The impact of a final true-up net payment of $413m to MSD, based on
sales of Nexium and Prilosec from 2014 to 2018; this was accrued over the same
period
Payments from Pfizer, Inc. totalling $250m were received in the year, recorded
within Disposal of Intangible Assets, as part of a prior agreement
(https://www.astrazeneca.com/investor-relations/stock-exchange-announcements/2016/AstraZeneca-to-sell-small-molecule-antibiotics-business-to-Pfizer-24082016.html)
to sell the commercialisation and development rights to AstraZeneca's
late-stage small-molecule antibiotics business in most markets globally
outside the US.
Reflecting an agreement with Luye Pharma Group Ltd, relating to the rights to
Seroquel and Seroquel XR in the UK, China and other international markets,
announced
(https://www.astrazeneca.com/media-centre/press-releases/2018/astrazeneca-and-luye-pharma-group-enter-agreement-for-rights-to-seroquel-and-seroquel-xr-in-the-uk-china-and-other-international-markets.html)
in June 2018, AstraZeneca received a deferred consideration payment of $240m
in the quarter, also recorded within Disposal of Intangible Assets. Other
business-development transactions are referred to in the section Other
Operating Income and Expense above.
The cash payment of contingent consideration, in respect of the former
Bristol-Myers Squibb Company share of the global diabetes alliance, amounted
to $454m in the year (FY 2018: $349m).
As part of the total consideration received in respect of the aforementioned
agreement to sell US rights to Synagis, $821m was received and included in
Disposal of Intangible Assets and $150m was related to the rights to
participate in the future cash flows from the US profits or losses for
nirsevimab. This was recognised as a financial liability as the Company did
not fully transfer the risks and rewards of the underlying cash flows arising
from nirsevimab to Sobi; this was recorded in Other Payables, within
Non-current Liabilities. The associated cash flow was presented within
Investing Activities as AstraZeneca received the payment in exchange for
agreeing to transfer future cashflows relating to an intangible asset.
In October 2019, Circassia announced the launch of Duaklir in the US, upon
which the Company made a $91m milestone payment to Almirall, S.A. (Almirall).
Following the announcement
(https://www.astrazeneca.com/media-centre/press-releases/2019/enhertu-trastuzumab-deruxtecan-approved-in-the-us-for-her2-positive-unresectable-or-metastatic-breast-cancer-following-2-or-more-prior-anti-her2-based-regimens.html)
in December 2019 that Enhertu had been approved in the US for patients with
unresectable or metastatic HER2-positive breast cancer who have received two
or more prior anti-HER2 based regimens in the metastatic setting, AstraZeneca
accrued a first milestone payment to Daiichi Sankyo for $125m; this amount was
capitalised upon approval.
In April 2019, the Company completed a placing of new Ordinary Shares of
$3.5bn, in conjunction with the recent strategic collaboration with Daiichi
Sankyo. The purpose of the placing was to fund the initial upfront and
near-term milestone commitments arising from the collaboration, as well as to
strengthen AstraZeneca's balance sheet. The proceeds from the placing were
recorded in the second quarter, supporting a reduced level of Net Debt.
h) Capital expenditure
Capital expenditure amounted to $979m in the year, compared to $1,043m in FY
2018. This included investment in the new AstraZeneca R&D centre on the
Biomedical Campus in Cambridge, UK. The Company continues to expect total
associated capital expenditure for the project of c.$1.3bn (c.£1bn,
translated at average exchange rates for the year).
The Company anticipates a broadly stable level of total capital expenditure in
FY 2020 (FY 2019: $979m).
Table 21: Debt and capital structure
At At
31 Dec 2019 31 Dec 2018
$m $m
Cash and Cash Equivalents 5,369 4,831
Other Investments 911 895
Cash and Investments 6,280 5,726
Overdrafts and Short-Term Borrowings (225) (755)
Lease Liabilities 42 (#_ftn33) (675) -
Current Instalments of Loans (1,597) (999)
Loans Due After One Year (15,730) (17,359)
Interest-Bearing Loans and Borrowings (Gross Debt) (18,227) (19,113)
Net Derivatives 43 384
Net Debt (11,904) (13,003)
Capital allocation
The Board's aim is to continue to strike a balance between the interests of
the business, financial creditors and the Company's shareholders. After
providing for investment in the business, supporting the progressive dividend
policy and maintaining a strong, investment-grade credit rating, the Board
will keep under review potential investment in immediately earnings-accretive,
value-enhancing opportunities.
Foreign exchange
The Company's transactional currency exposures on working-capital balances,
which typically extend for up to three months, are hedged where practicable
using forward foreign-exchange contracts against the individual companies'
reporting currency. In addition, the Company's external dividend payments,
paid principally in pounds sterling and Swedish krona, are fully hedged from
announcement to payment date. Foreign-exchange gains and losses on forward
contracts for transactional hedging are taken to profit or loss.
Table 22: Currency sensitivities
The Company provides the following currency-sensitivity information:
Average Exchange Annual Impact of 5% Strengthening in Exchange Rate versus USD ($m)(( 43
(#_ftn34) ))
Rates versus USD
Currency Primary Relevance FY 2019 44 (#_ftn35) YTD 2020(( 45 (#_ftn36) )) % change Product Sales Core Operating Profit
CNY Product Sales 6.92 6.93 - 288 190
EUR Product Sales 0.89 0.90 (1) 171 68
JPY Product Sales 108.98 109.38 - 139 98
Other(( 46 (#_ftn37) )) 231 123
GBP Operating Expense 0.78 0.77 2 27 (93)
SEK Operating Expense 9.46 9.47 - 5 (51)
Sustainability
AstraZeneca's sustainability ambition has three priority areas 47 (#_ftn38) ,
aligned with the Company's purpose and business strategy:
- Access to healthcare
- Environmental protection
- Ethics and transparency
Recent developments and progress against the Company's priorities are reported
below:
a) Access to healthcare
By the end of December 2019, AstraZeneca's Healthy Heart Africa (HHA)
programme, working with collaborators across Kenya, Ethiopia, Tanzania and
Ghana, had conducted over 13.5 million blood-pressure screenings and
identified over 2.4 million elevated readings since its launch in 2015. In
November 2019, the Company extended the programme and launched Healthy Heart
Asia in India. The launch was conducted in collaboration with the Ganga
Godavari Cancer Screening Programme, AstraZeneca India's sustainability
partner.
In January 2020, AstraZeneca announced that the YHP would partner with UNICEF
to prevent non-communicable diseases among young people. The Company will
support UNICEF with a $12.5m grant to support programming which will reach
more than five million young people, train approximately 1,000 youth
advocates, and potentially help to shape public policy around the world over
the next six years. In October 2019, AstraZeneca announced plans to extend the
funding for the YHP for a further five years, with a pledge of $35m to help to
educate young people on the steps that they can take to reduce the risk of
non-communicable diseases.
b) Environmental protection
In January 2020, during the World Economic Forum Annual Meeting in Davos,
Switzerland, AstraZeneca announced an ambitious programme for zero-carbon
emissions from its global operations by 2025. The Company also announced its
commitment to ensuring that its entire value chain is carbon-negative by 2030,
bringing forward decarbonisation plans by more than a decade. The 'Ambition
Zero Carbon' strategy will accelerate the Company's existing science-based
targets, doubling energy productivity and using renewable energy for both
power and heat, as well as switching to 100% electric-vehicle fleet five years
ahead of schedule.
In addition, the Company also announced plans to invest up to $1bn to help
achieve these goals and to develop the next-generation respiratory inhalers
with near-zero Global Warming Potential propellants. Also included in the plan
is 'AZ Forest', a 50-million tree-reforestation initiative that will be rolled
out over the next five years.
The Company was recently commended by the global environmental impact
non-profit organisation, CDP, achieving a place on both the 'A List' for
Climate Change and the 'A List' for Water Security, based on data submitted by
the Company in 2019. A double 'A List' status was achieved for the fourth
consecutive year. AstraZeneca is one of a small number of high-performing
companies out of thousands that were scored, and fewer than ten companies
worldwide appeared on both 'A Lists' in the last four years.
c) Ethics and transparency
During the period, the Workforce Disclosure Initiative 48 (#_ftn39) released
its 2019 scorecard, underpinned by 138 institutional-investor signatories. The
Company participated for the second year, indicating its willingness to work
towards increasing the amount of workforce data disclosed.
In January 2020, the Company was included, for the second consecutive year, in
the Bloomberg 2020 Gender-Equality Index. This year, the index recognised 325
companies which work to advance women in the workplace through measurement and
transparency.
During the period, the Hampton-Alexander independent review body, which works
to increase the number of women on FTSE 350 boards on a voluntary business-led
basis, published its latest review. It has a dual focus on improving women's
representation at board level and in leadership roles two layers below board
level and covers 23,000 leadership roles across all sectors of British
business.
In the FTSE 100 ranking, AstraZeneca moved up from seventh place in 2018 to
sixth in 2019 for women represented in the top three layers of leadership.
With women representing 40% of leaders at this level, the Company was the
highest-ranked pharmaceutical company. Having moved from five to four women
Board members since 2018, however, AstraZeneca dropped from 12th place to 39th
place in 2019, as this particular metric is sensitive to individual
appointments.
d) Other developments
During the period, AstraZeneca was ranked 56th overall by Corporate
Knights 49 (#_ftn40) , out of more than 7,000 companies, as one of the
world's one hundred most sustainable companies, and second among
biopharmaceutical companies.
For more details on AstraZeneca's sustainability ambition, approach and
targets, please refer to the latest Sustainability Report 2018
(https://www.astrazeneca.com/content/dam/az/Sustainability/2019/Sustainability_Report_2018.pdf)
and Sustainability Data Summary 2018
(https://www.astrazeneca.com/content/dam/az/Sustainability/2019/Sustainability_Data_Summary_2018.pdf)
, available at astrazeneca.com/sustainability
(https://www.astrazeneca.com/sustainability.html) . The 2019 Sustainability
Report will be availability in due course.
Research and development
A comprehensive data pack comprising AstraZeneca's pipeline of medicines in
human trials can be found in the clinical-trials appendix, available on
astrazeneca.com
(https://www.astrazeneca.com/investor-relations/results-and-presentations.html)
. Highlights of developments in the Company's late-stage pipeline since the
prior results announcement are shown below:
Table 23: Update from the late-stage pipeline
New molecular 17 Oncology
entities and major lifecycle events for medicines in Phase III trials or under - Tagrisso - NSCLC
regulatory review
- Imfinzi - multiple cancers
- Lynparza - multiple cancers
- Enhertu - breast and other cancers
- capivasertib - breast cancer
- Calquence - blood cancers
- tremelimumab - multiple cancers
- selumetinib - NF1 50 (#_ftn41)
- savolitinib - NSCLC(53)
CV, Renal & Metabolism
- roxadustat - anaemia from CKD
Respiratory (and immunology)
- Fasenra - multiple indications
- Breztri - COPD
- PT027 - asthma
- tezepelumab - severe asthma
- nirsevimab - lower respiratory tract infection
- anifrolumab - lupus
- brazikumab 51 (#_ftn42) - inflammatory bowel disease
Total projects 144
in clinical pipeline
Oncology
At the 2019 American Society of Hematology (ASH) Annual Meeting and Exposition
in Orlando, US, the Company presented over 30 abstracts including seven oral
presentations. Highlights included the first presentation of data from the
pivotal Phase III ELEVATE TN trial, evaluating the long-term efficacy and
safety of Calquence in combination with obinutuzumab and Calquence monotherapy
versus obinutuzumab combined with chlorambucil chemotherapy in previously
untreated CLL.
At the 2019 San Antonio Breast Cancer Symposium (SABCS), US, AstraZeneca
presented over 30 abstracts, including three oral presentations and two
spotlight poster discussions. Highlights included the Enhertu DESTINY-Breast01
Phase II trial data in HER2-positive breast cancer.
Oncology: lung cancer
a) Tagrisso
Table 24: Key Tagrisso trials in lung cancer
Trial Population Design Timeline Status
Phase III Adjuvant EGFRm NSCLC Placebo or Tagrisso FPCD 52 (#_ftn43) Recruitment
ADAURA Q4 2015 completed
LPCD 53 (#_ftn44)
Q1 2019
First data anticipated
2021+ 54 (#_ftn45)
Phase III Locally advanced, unresectable EGFRm NSCLC Placebo or Tagrisso FPCD Recruitment
LAURA Q4 2018 ongoing
First data anticipated
2021+
Phase III 1st-line EGFRm NSCLC Tagrisso or Tagrisso + platinum-based chemotherapy doublet FPCD Recruitment ongoing
FLAURA2 Q4 2019
First data anticipated
2021+
b) Imfinzi
In December 2019, AstraZeneca announced that it has received marketing
authorisation from the China NMPA for Imfinzi for the treatment of patients
with unresectable, Stage III NSCLC whose disease has not progressed following
concurrent CRT. The approval of Imfinzi was based on results from the primary
analysis of PFS, supported by OS data from the Phase III PACIFIC trial.
In November 2019, the Company announced that the US Food and Drug
Administration (FDA) had accepted a supplemental Biologics License Application
and awarded Priority Review status for Imfinzi for the treatment of patients
with previously untreated ED SCLC, based on results from the Phase III CASPIAN
trial. A Prescription Drug User Fee Act (PDUFA) date is set for the first
quarter of 2020. The Company also recently made regulatory submissions for
Imfinzi in Japan and received a regulatory submission acceptance in the EU for
previously untreated ED SCLC. The submissions were based on the flat dose of
1,500mg of Imfinzi, with four cycles of chemotherapy once every three weeks.
During the period, Imfinzi was assigned Category 1 status for the treatment of
ED SCLC patients within the US National Comprehensive Cancer Network
guidelines.
During the period, the Company announced positive PFS results for Imfinzi and
tremelimumab, an anti-CTLA4 antibody, when added to chemotherapy, from the
Phase III POSEIDON trial in previously-untreated Stage IV (metastatic) NSCLC.
The trial met a primary endpoint by showing a statistically significant and
clinically meaningful improvement in the final PFS analysis for Imfinzi and
chemotherapy, and a key secondary endpoint for PFS of Imfinzi plus
tremelimumab and chemotherapy. The safety and tolerability of Imfinzi was
consistent with its known safety profile; the triple combination of Imfinzi
plus tremelimumab and chemotherapy delivered a broadly similar safety profile.
The trial will continue to assess the additional primary endpoint of OS, with
data anticipated in 2021.
Table 25: Key Imfinzi trials in lung cancer
Trial Population Design Timeline Status
Phase III Neo-adjuvant (before surgery) NSCLC SoC chemotherapy +/- Imfinzi, FPCD Recruitment
AEGEAN followed by Q1 2019 ongoing
surgery, followed by placebo or Imfinzi
First data anticipated
H2 2020
Phase III Stage Ib-IIIa NSCLC Placebo or FPCD Recruitment
ADJUVANT BR.31 55 (#_ftn46) Imfinzi Q1 2015 completed
LPCD
Q4 2019
First data anticipated
2021
Phase III Stage III unresected locally advanced NSCLC Placebo or FPCD Recruitment
PACIFIC-2 (concurrent CRT) Imfinzi Q2 2018 completed
LPCD
Q3 2019
First data anticipated
H2 2020
Phase III Limited-disease stage SCLC Concurrent CRT, FPCD Recruitment
ADRIATIC followed by Q4 2018 ongoing
placebo or
Imfinzi or Imfinzi + treme First data anticipated
2021
Phase III Stage IV, 1st-line NSCLC SoC chemotherapy or SoC + Imfinzi or SoC + Imfinzi + treme FPCD PFS primary endpoint met
POSEIDON Q2 2017
LPCD
Q4 2018
Phase III Extensive-disease stage SCLC SoC chemotherapy or SoC + Imfinzi or SoC + Imfinzi + treme FPCD OS primary endpoint met for Imfinzi monotherapy arm
CASPIAN Q1 2017
LPCD
Q2 2018
Imfinzi as a potential new medicine in other tumour types
The Company continues to advance multiple monotherapy trials of Imfinzi and
combination trials of Imfinzi with tremelimumab and other potential new
medicines in tumour types other than lung cancer.
During the period, the Company announced that Imfinzi and tremelimumab had
both been granted Orphan Drug Designation in the US for the treatment of HCC.
Imfinzi has now received regulatory approval for the 2nd-line treatment of
patients with locally advanced or metastatic urothelial carcinoma (bladder
cancer) in 15 countries.
Table 26: Key Imfinzi trials in tumour types other than lung cancer
Trial Population Design Timeline Status
Phase III Non-muscle invasive bladder cancer SoC BCG 56 (#_ftn47) or SoC BCG + Imfinzi FPCD Recruitment ongoing
POTOMAC Q4 2018
First data
anticipated
2021+
Phase III Muscle-invasive bladder cancer Neo-adjuvant cisplatin and gemcitabine SoC chemotherapy or SoC + Imfinzi, FPCD Recruitment ongoing
followed by adjuvant placebo or Imfinzi
NIAGARA Q4 2018
First data
anticipated
2021+
Phase III Locoregional HCC TACE 57 (#_ftn48) followed by placebo or TACE + Imfinzi, followed by Imfinzi FPCD Recruitment ongoing
+
EMERALD-1
Q1 2019
bevacizumab or
TACE + Imfinzi
First data
followed by Imfinzi
anticipated
2021
Phase III Locoregional HCC at high risk of recurrence after surgery or radiofrequency Adjuvant Imfinzi or Imfinzi + bevacizumab FPCD Recruitment ongoing
ablation
EMERALD-2 Q2 2019
First data anticipated
2021+
Phase III Locally advanced cervical cancer CRT or CRT + Imfinzi, followed by placebo or Imfinzi FPCD Recruitment ongoing
CALLA Q1 2019
First data anticipated
2021+
Phase III Stage IV, 1st-line cisplatin chemotherapy- eligible/ineligible bladder cancer SoC chemotherapy or Imfinzi or Imfinzi + treme FPCD Recruitment completed
DANUBE Q4 2015
LPCD
Q1 2017
First data
anticipated
H1 2020
Phase III Stage IV, 1st-line cisplatin chemotherapy- eligible bladder cancer SoC chemotherapy or SoC + Imfinzi or SoC + Imfinzi + treme FPCD Recruitment
NILE Q4 2018 ongoing
First data anticipated
2021+
Phase III Stage IV, 1st-line head and neck squamous cell carcinoma SoC or Imfinzi or Imfinzi + treme FPCD Recruitment completed
KESTREL Q4 2015
LPCD
Q1 2017
First data
anticipated
H1 2020
Phase III Stage IV, 1st-line unresectable HCC Sorafenib or Imfinzi or Imfinzi + treme FPCD Recruitment
HIMALAYA Q4 2017 Completed
LPCD Orphan Drug Designation (US)
Q4 2019
First data
anticipated
H2 2020
Phase III Stage IV, 1st-line biliary-tract cancer Gemcitabine and cisplatin SoC chemotherapy or SoC + Imfinzi FPCD Recruitment ongoing
TOPAZ-1 Q2 2019
First data anticipated
2021+
Oncology: Lynparza (multiple cancers)
In December 2019, AstraZeneca announced that it had received marketing
authorisation from the China NMPA for Lynparza as a 1st-line maintenance
treatment of adult patients with newly-diagnosed advanced BRCAm epithelial
ovarian, fallopian tube or primary peritoneal cancer who are in complete or
partial response to 1st-line platinum-based chemotherapy. The approval in
China was based on results from the Phase III SOLO-1 trial.
During the period, the Company announced that Lynparza had been approved in
the US for the maintenance treatment of adult patients with germline
(inherited) BRCAm metastatic pancreatic adenocarcinoma (pancreatic cancer)
whose disease has not progressed for at least 16 weeks of a 1st-line
platinum-based chemotherapy regimen. Patients will be selected for therapy
based on a US FDA-approved companion diagnostic for Lynparza.
The approval followed the recommendation from the US FDA Oncologic Drugs
Advisory Committee in December 2019 for Lynparza in this indication and was
based on results from the pivotal Phase III POLO trial, published in The New
England Journal of Medicine
(https://www.nejm.org/doi/full/10.1056/NEJMoa1903387) and presented at the
2019 American Society of Clinical Oncology Annual Meeting.
In January 2020, the Company announced that a supplemental New Drug
Application (sNDA) for Lynparza in combination with bevacizumab has been
accepted and granted Priority Review status in the US for the maintenance
treatment of patients with advanced ovarian cancer who are in complete or
partial response to 1st-line platinum-based chemotherapy with bevacizumab. The
Company also made a regulatory submission for the same indication in Japan and
achieved regulatory submission acceptance in the EU. During the same period,
AstraZeneca also announced that an sNDA for Lynparza had been accepted and
granted Priority Review status in the US for patients with metastatic
castration-resistant prostate cancer and homologous recombination repair (HRR)
gene mutations, who have progressed following prior treatment with a new
hormonal agent.
At the 21st European Society of Gynaecological Oncology Congress in Athens,
Greece, the Company presented further details from the Phase III PAOLA-1 trial
of maintenance Lynparza with bevacizumab in patients with newly diagnosed,
advanced ovarian cancer treated with platinum-based chemotherapy and
bevacizumab as SoC. The updated data demonstrated that, in Stage III patients
with primary debulking surgery and residual disease, patients who had received
neoadjuvant chemotherapy and Stage IV patients, PFS was 22.0 months versus
16.6 months, with a hazard ratio of 0.65 (95% CI 0.51 - 0.82).
The Company continues to pursue the joint-venture agreement entered into in
2015 with Fujifilm Kyowa Kirin Biologics Co., Ltd. to develop biosimilar
bevacizumab to enable the continued strategy of novel combinations with
vascular endothelial growth factor inhibitors within the pipeline, commencing
with Lynparza and other new medicines. The Phase III AVANA trial, which
evaluated FKB238 (biosimilar bevacizumab) vs. Avastin (bevacizumab) in
patients with advanced/recurrent non-squamous NSCLC, met the primary objective
of efficacy equivalence on key clinical parameters.
Table 27: Key Lynparza trials
Trial Population Design Timeline Status
Phase III Adjuvant BRCAm breast cancer SoC placebo or Lynparza FPCD Recruitment completed
OlympiA Q2 2014
LPCD
Q2 2019
First data anticipated
2021
Phase III Metastatic castration-resistant 2nd-line+ HRRm 58 (#_ftn49) prostate cancer SoC (abiraterone or enzalutamide) or Lynparza FPCD Primary endpoint met
PROfound Q2 2017
Priority Review (US)
LPCD
Q4 2018
Phase III Advanced 1st-line Bevacizumab maintenance or FPCD Primary endpoint met
PAOLA-1 59 (#_ftn50) ovarian cancer bevacizumab + Q2 2015
Lynparza maintenance Priority Review (US)
LPCD
Q2 2018
Phase III Recurrent platinum-sensitive ovarian cancer SoC chemotherapy or Lynparza or cediranib + Lynparza FPCD Recruitment ongoing
GY004 60 (#_ftn51) Q1 2016
First data
anticipated
H1 2020
Phase II/III Recurrent platinum-resistant/refractory ovarian cancer SoC chemotherapy or cediranib or cediranib + Lynparza FPCD Recruitment ongoing
GY005(63) Q2 2016 (Phase III component)
(Phase II)
FPCD
Q1 2019
(Phase III)
First data
anticipated
2021+
Phase III Advanced 1st-line Chemotherapy + FPCD Recruitment
DuO-O ovarian cancer bevacizumab or Q1 2019 ongoing
chemotherapy +
bevacizumab + First data
Imfinzi +/- anticipated
Lynparza maintenance 2021+
Phase III Stage IV, advanced, castration-resistant prostate cancer Abiraterone or FPCD Recruitment ongoing
PROpel abiraterone + Q4 2018
Lynparza
First data
anticipated
2021
Enhertu (breast and other cancers)
In December 2019, AstraZeneca announced that the US FDA had approved Enhertu
(fam-trastuzumab deruxtecan-nxki) for the treatment of adult patients with
unresectable or metastatic HER2-positive breast cancer who have received two
or more prior anti-HER2 based regimens in the metastatic setting. This came
under the Accelerated Approval programme, based on tumour-response rate and
duration of response. Continued approval for this indication may be contingent
upon verification and description of clinical benefit in a confirmatory trial.
High-level results from the positive registrational Phase II trial
DESTINY-Gastric01 also showed that Enhertu had achieved a statistically
significant and clinically meaningful improvement in the primary endpoint of
objective response rate (ORR) and a key secondary endpoint of OS in patients
with HER2-positive unresectable or metastatic gastric or gastroesophageal
junction cancer that had progressed following two or more treatment regimens,
including trastuzumab and chemotherapy. In addition to the planned discussion
with the Japan Ministry of Health, Labour and Welfare, AstraZeneca and Daiichi
Sankyo plan to discuss the data with other health authorities.
During the period, the Company presented detailed positive data from the
global pivotal Phase II single-arm DESTINY-Breast01 trial at the
aforementioned SABCS symposium; an accompanying article
(https://www.nejm.org/doi/10.1056/NEJMoa1914510) appeared in The New England
Journal of Medicine. In the trial, Enhertu was investigated in patients with
HER2-positive metastatic breast cancer who received two or more prior
HER2-targeted regimens. The primary endpoint of ORR, confirmed by independent
central review, was 60.9% with Enhertu monotherapy (5.4mg/kg). Patients had a
median of six prior therapies for metastatic disease (a range of 2-27);
patients achieved a disease control rate of 97.3%, with a median duration of
response of 14.8 months and median PFS of 16.4 months. The median OS has not
yet been reached, with an estimated survival rate of 86% at one year. The
results were consistent across subgroups of patients.
Table 28: Key Enhertu trials
Trial Population Design Timeline Status
Phase II Stage IV, HER2+ (IHC 61 (#_ftn52) 3+ and IHC 2+/ISH 62 (#_ftn53) +) breast Enhertu (single arm) FPCD Primary objective met
cancer post trastuzumab emtansine
DESTINY-Breast01 Q4 2017
Breakthrough Therapy Designation (US)
LPCD
Q4 2018 Accelerated approval (US)
Phase III Stage IV, HER2+ (IHC 3+ and IHC 2+/ISH+) breast cancer post trastuzumab SoC chemotherapy or Enhertu FPCD Recruitment ongoing
emtansine
DESTINY-Breast02 Q4 2018
First data anticipated
2021
Phase III Stage IV, HER2+ (IHC 3+ and IHC 2+/ISH+) breast cancer Trastuzumab emtansine or Enhertu FPCD Recruitment ongoing
DESTINY-Breast03 Q4 2018
First data anticipated
2021
Phase III Stage IV, HER2-low (IHC 1+/2+) breast cancer SoC chemotherapy or Enhertu FPCD Recruitment ongoing
DESTINY-Breast04 Q4 2018
First data anticipated
2021
Phase II Stage IV, HER2+ (IHC 3+ and IHC 2+/ISH+) gastric cancer SoC chemotherapy or Enhertu FPCD Primary endpoint met
DESTINY-Gastric01 Q4 2017
LPCD
Q2 2019
Calquence (blood cancers)
In November 2019, AstraZeneca announced that the US FDA had approved Calquence
for the treatment of adult patients with CLL or SLL. The approval was granted
under the administration's Real-Time Oncology Review programme. Reflecting the
newly established joint Project Orbis programme, approvals in Australia and
Canada followed thereafter and, during the period, the Company also received
regulatory submission acceptance in the EU for CLL and made a regulatory
submission in Japan, for relapsed/refractory CLL.
The approvals were based on positive results from the interim analyses of
two-Phase III clinical trials, namely ELEVATE TN in patients with previously
untreated CLL, and ASCEND in patients with relapsed or refractory CLL.
Together, the trials showed that Calquence, in combination with obinutuzumab
or as a monotherapy, significantly reduced the relative risk of disease
progression or death versus the comparator arms in both front-line and
relapsed or refractory CLL. Across both trials, the safety and tolerability of
Calquence were consistent with its established profile.
During the period, AstraZeneca presented results from the interim analysis of
the ELEVATE TN trial at the aforementioned 2019 ASH meeting. The trial results
demonstrated that Calquence, combined with obinutuzumab or as monotherapy,
significantly improved PFS compared to chlorambucil plus obinutuzumab, a
standard chemo-immunotherapy treatment, in patients with previously untreated
CLL. At a median follow-up of 28.3 months, Calquence, in combination with
obinutuzumab or as a monotherapy, significantly reduced the risk of disease
progression or death by 90% and 80%, respectively, versus chlorambucil plus
obinutuzumab.
Adverse events (AEs) led to treatment discontinuation in 11.2% of patients
treated with Calquence in combination with obinutuzumab and 8.9% of patients
treated with Calquence monotherapy versus 14.1% of patients treated with
chlorambucil plus obinutuzumab. With over two years of follow-up, 79% of
patients in both the Calquence-containing arms remain on Calquence as a
monotherapy. In the Calquence combination arm (n=178), the most common AEs of
any grade (≥30%) included headache (39.9%), diarrhoea (38.8%) and
neutropenia (31.5%). In the Calquence monotherapy arm (n=179), the most common
AEs of any grade (≥30%) included headache (36.9%) and diarrhoea (34.6%). In
the chlorambucil plus obinutuzumab arm (n=169), the most common AEs of any
grade (≥30%) included neutropenia (45.0%), infusion-related reaction (39.6%)
and nausea.
Selumetinib (NF1)
In November 2019, the Company announced that the US FDA had accepted a New
Drug Application (NDA) and granted Priority Review status for selumetinib as a
potential new medicine for paediatric patients aged three years and older with
NF1 and symptomatic, inoperable plexiform neurofibromas. This was the first
acceptance of a regulatory submission for an oral monotherapy for the
treatment of NF1, a rare and incurable genetic condition. A PDUFA date is set
for the second quarter of 2020.
CVRM
a) Farxiga (heart failure)
In January 2020, the Company announced the US FDA had accepted an sNDA and
granted Priority Review status for Farxiga to reduce the risk of CV death or
the worsening of heart failure in adults with heart failure with reduced
ejection fraction, with and without T2D; the PDUFA date is set for the second
quarter of 2020. During the period, the Company also received regulatory
submission acceptance from the European Medicines Agency (EMA). Regulatory
submissions were also achieved in Japan and China during the period.
b) Qtrilmet (T2D)
During the period, the Company announced that the European Commission had
approved Qtrilmet (metformin hydrochloride, saxagliptin and dapagliflozin)
modified-release tablets intended to improve glycaemic control in adults with
T2D.
c) Brilinta (stroke)
High-level results from the Phase III THALES trial showed that 90mg Brilinta,
used twice daily and taken with aspirin for 30 days, reached a statistically
significant and clinically meaningful reduction in the risk of the primary
composite endpoint of stroke and death, compared to aspirin alone.
d) Epanova (mixed dyslipidaemia)
Following the recommendation from an independent Data Monitoring Committee,
AstraZeneca decided to terminate the Phase III STRENGTH trial for Epanova,
due to its low likelihood of demonstrating a benefit to patients with MDL who
are at increased risk of CV disease. STRENGTH was a large-scale, global CVOT
designed to evaluate the safety and efficacy of Epanova compared to placebo,
both in combination with SoC statin medicines.
d) Cotadutide (NASH)
During the period, the US FDA granted Fast Track designation for cotadutide as
a treatment for NASH.
Table 29: Key large CVRM outcomes trials
Trial Population Design Primary endpoint(s) Timeline Status
Farxiga
Phase III c.4,500 patients with HF and reduced ejection fraction, with and without T2D Arm 1: Farxiga 10mg or 5 mg QD 63 (#_ftn54) + SoC Time to first occurrence of CV death or hHF or an urgent HF visit FPCD Primary endpoint met
DAPA-HF Q1 2017
Arm 2: placebo + SoC Fast Track designation (US)
LPCD
Q4 2018
Phase III c.4,700 patients with HF and preserved ejection fraction, with and without T2D Arm 1: Farxiga 10mg QD Time to first occurrence of CV death or worsening HF FPCD
DELIVER Q4 2018 Recruitment ongoing
Arm 2: placebo
First data anticipated 2021+ Fast Track designation (US)
Phase III c.4,000 patients with CKD, with and without T2D Arm 1: Farxiga 10mg or 5mg QD Time to first occurrence of ≥ 50% sustained decline in eGFR or reaching FPCD Fast Track designation (US)
ESRD 64 (#_ftn55) or CV death or renal death
DAPA-CKD Q1 2017
Arm 2: placebo
First data anticipated 2021
Brilinta
Phase III THEMIS c.19,000 patients with T2D and CAD without a history of MI 65 (#_ftn56) or Arm 1: Brilinta 60mg BID 66 (#_ftn57) Composite of CV death, non-fatal MI and non-fatal stroke FPCD Primary endpoint met
stroke
Q1 2014
Arm 2: placebo BID on a background of acetylsalicylic acid if not
contra-indicated or not tolerated
LPCD
Q2 2016
Phase III c.11,000 patients with acute ischaemic stroke or transient ischaemic attack Arm 1: Brilinta 90mg BID Prevention of the composite of subsequent stroke and death at 30 days FPCD Primary endpoint met
THALES Q1 2018
Arm 2: placebo BID on a background of acetylsalicylic acid if not
contra-indicated or not tolerated
LPCD
Q4 2019
e) Roxadustat (anaemia)
In November 2019, AstraZeneca and FibroGen presented, during two oral
sessions, detailed results from the Phase III OLYMPUS and ROCKIES trials at
the American Society of Nephrology (ASN) Kidney Week 2019 in Washington, DC.
The results showed that roxadustat significantly increased haemoglobin levels
in non-dialysis dependent (NDD) patients with anaemia from CKD compared to
placebo, and dialysis-dependent (DD) patients with anaemia from CKD compared
to epoetin alfa, respectively.
The companies presented pooled efficacy and CV safety analyses from the
pivotal Phase III programme during an oral late-breaking abstract session. The
primary efficacy endpoint was achieved in the pooled analyses for NDD and DD
patients, and in all individual Phase III trials. The pooled analyses showed
that roxadustat did not increase the risk of MACE 67 (#_ftn58) , MACE+ 68
(#_ftn59) and all-cause mortality in NDD patients compared to placebo and DD
patients compared to epoetin alfa. In a clinically important predefined
subgroup of incident dialysis 69 (#_ftn60) patients, roxadustat reduced the
risk of MACE and MACE+ and showed a trend towards lower risk of all-cause
mortality relative to epoetin alfa.
In December 2019, FibroGen announced the regulatory submission of an NDA to
the US FDA for roxadustat as a potential new medicine for the treatment of
anaemia from CKD, in both NDD and DD CKD patients. Data from the pooled
analyses, together with other statistical analyses, formed part of the
submission. The regulatory submission was subsequently accepted by the US FDA
in February 2020 with a PDUFA date set for the fourth quarter of 2020.
Roxadustat is approved in China for the treatment of patients with anaemia
from CKD, regardless of whether they require dialysis, and in Japan for the
treatment of DD patients with anaemia from CKD. In January 2020, FibroGen's
collaborator, Astellas, submitted in Japan an sNDA for the approval of
roxadustat as a potential treatment of anaemia from CKD in NDD patients.
f) Lokelma (hyperkalaemia)
In January 2020, Lokelma was approved in China for the treatment of adult
patients with hyperkalaemia, (elevated levels of potassium in the blood). The
approval by the NMPA was based on positive results from the extensive Lokelma
clinical-trial programme and a pharmacodynamic trial in China which showed
that patients receiving Lokelma experienced a significant, rapid and sustained
reduction of potassium levels in the blood. In 2019, the NMPA included Lokelma
on the Accelerated Approval list of 'Overseas New Drugs in Clinical Urgent
Needs for China', recognising the significant unmet need for effective
medicines treating hyperkalaemia. In Japan, a regulatory decision is expected
in the first half of the year.
Respiratory (and immunology)
a) Symbicort (mild asthma)
In December 2019, AstraZeneca made a regulatory submission in China for
Symbicort for the treatment of mild asthma which contained data from the Phase
III SYGMA programme, looking at the use of Symbicort use as an
anti-inflammatory reliever 'as needed'.
b) Breztri (COPD)
In December 2019, AstraZeneca announced that Breztri
(budesonide/glycopyrronium/formoterol fumarate) had been approved in China for
the maintenance treatment of COPD, becoming the first approval by the NMPA for
a triple-combination therapy in a pressurised metered-dose inhaler. The
approval followed designation of priority-review status and was based on
results from the Phase III KRONOS trial, in which Breztri demonstrated a
statistically significant improvement in trough forced expiratory volume in
one second (FEV1), the regulatory endpoint for China, compared with
dual-combination therapies Bevespi (glycopyrronium/formoterol fumarate) and
PT009 (budesonide/formoterol fumarate).
Breztri was approved and launched in Japan in the third quarter of 2019.
c) Fasenra (eosinophilic diseases)
In the Phase IIIb ANDHI trial, Fasenra, when added to SoC, demonstrated a
statistically significant reduction in the annual rate of asthma exacerbations
when compared to placebo in patients with baseline blood eosinophil counts
greater than or equal to 150 cells per microlitre. Safety and tolerability
data were consistent with the known profile of the medicine and full results
are expected to be presented at a forthcoming medical meeting.
Table 30: Key Fasenra trials
Trial Population Design Primary endpoint(s) Timeline Status
Phase III MELTEMI Asthmatic adults (aged Fasenra 30mg Q4W SC Safety and tolerability FPCD Recruitment completed
18-75 years) on ICS plus LABA2 agonist Q2 2016
Fasenra 30mg Q8W SC
LPCD
Q1 2017
Data anticipated
H2 2020
Phase IIIb PONENTE Asthmatics (aged 18 years or older) receiving high-dose ICS plus LABA and Fasenra 30mg Q8W SC Reduction of OCS dose FPCD Recruitment completed
chronic OCS 70 (#_ftn61) with or without additional asthma controller(s)
Q3 2018
38-week trial
LPCD
Q3 2019
Data anticipated
H2 2020
Phase III OSTRO Patients (aged 18-75 years) with severe bilateral nasal polyposis; Placebo or Fasenra 30mg Q8W SC Nasal-polyposis burden and reported nasal blockage FPCD Recruitment completed
symptomatic, despite SoC
Q1 2018
LPCD
Q2 2019
Data anticipated
H2 2020
Phase III Severe eosinophilic asthma (aged 12-75 years) despite background controller Placebo or Fasenra 30mg Q8W SC Annual asthma-exacerbation rate FPCD Recruitment ongoing
medication, medium dose and high dose ICS plus LABA ± chronic oral
MIRACLE corticosteroids (CN) Q4 2017
Data anticipated 2021+
Phase III RESOLUTE Patients with moderate to very severe COPD with a history of frequent COPD Placebo or Fasenra 100mg Q8W SC Annualised rate of moderate or severe COPD exacerbations FPCD Recruitment ongoing
exacerbations and elevated peripheral blood eosinophils
Q4 2019
Data anticipated 2021+
Phase III Eosinophilic granulomatosis with polyangiitis Fasenra 30mg or Proportion of patients who achieve remission, defined as a score 71 (#_ftn62) FPCD Recruitment ongoing
=0 and an OCS dose ≤4 mg/day at weeks 36 and 48
MANDARA mepolizumab 3x100mg Q4W Q4 2019
Orphan Drug Designation (US)
Data anticipated
2021+
Phase III HES 72 (#_ftn63) Placebo or Fasenra 30mg Q4W SC Time to HES worsening flare or any cytotoxic and/or immuno-suppressive therapy FPCD Recruitment ongoing
increase or hospitalisation
NATRON Q4 2019
Orphan Drug Designation (US)
Data anticipated 2021+
Phase III Eosinophilic oesophagitis Placebo or Fasenra 30mg Q4W SC Proportion of patients with a histologic response Data anticipated 2021+ Initiating
MESSINA
Changes from baseline in dysphagia PRO 73 (#_ftn64) Orphan Drug Designation (US)
e) Anifrolumab (lupus)
In November 2019, at the American College of Rheumatology Annual Meeting in
Atlanta, US, detailed results were presented from the positive Phase III TULIP
2 trial for anifrolumab, a potential new medicine for the treatment of
moderate to severe SLE. The data demonstrated superiority across multiple
efficacy endpoints versus placebo, with both arms receiving SoC as background
treatment. TULIP 2 data were subsequently published in The New England Journal
of Medicine (https://www.nejm.org/doi/full/10.1056/NEJMoa1912196) ; data from
the TULIP 1 trial were also presented and published simultaneously in The
Lancet Rheumatology
(https://www.thelancet.com/journals/lanrhe/article/PIIS2665-9913(19)30076-1/fulltext)
.
The TULIP 1 trial did not meet its primary endpoint, based on the SLE
Responder Index 4 composite measure 74 (#_ftn65) . The analyses of secondary
endpoints showed, however, efficacy consistent with TULIP 2 on BICLA 75
(#_ftn66) response, reductions in OCS use, and improvements in skin disease
activity. Regulatory submissions for anifrolumab are expected in the second
half of 2020.
Table 31: Key anifrolumab trials
Trial Population Design Primary endpoint(s) Timeline Status
Phase III Moderate to severely-active SLE patients on background SoC Placebo or anifrolumab 150mg or 300mg i.v. Response in SLE FPCD Primary endpoint not met
TULIP 1 Q4W responder index at week 52 Q4 2015
Fast Track designation (US)
LPCD
Q4 2017
Phase III Moderate to severely-active SLE patients on background SoC Placebo or anifrolumab 300mg i.v. Response in BICLA at week 52 FPCD Primary endpoint met
TULIP 2 Q4W Q4 2015
Fast Track designation (US)
LPCD
Q4 2017
Phase III Moderate to severely active SLE patients on background SoC who have completed Placebo or anifrolumab 300mg i.v. Long-term safety over 152 weeks FPCD Recruitment completed
a Phase III anifrolumab trial
TULIP LTE(( 76 (#_ftn67) )) ( )Q4W Q2 2016
Fast Track designation (US)
LPCD
Q4 2018
Data anticipated
2021+
f) Brazikumab (Crohn's disease and ulcerative colitis)
In January 2020, it was announced
(https://www.astrazeneca.com/media-centre/press-releases/2020/astrazeneca-to-recover-the-global-rights-to-brazikumab-medi2070-from-allergan-27012020.html)
that AstraZeneca will recover the global rights to brazikumab (formerly
MEDI2070), a monoclonal antibody targeting IL-23, from Allergan. Brazikumab is
currently in a Phase IIb/III programme in Crohn's disease and a Phase IIb
trial in ulcerative colitis. AstraZeneca and Allergan will terminate their
existing license agreement
(https://www.astrazeneca.com/investor-relations/stock-exchange-announcements/2016/medimmune-out-licenses-potential-medicine-for-inflammatory-diseases-to-allergan-03102016.html)
and all rights to brazikumab will revert to AstraZeneca. The transaction is
expected to complete in the first quarter of 2020, subject to regulatory
approvals associated with AbbVie Inc.'s proposed acquisition of Allergan and
its timely completion. Under the termination agreement, Allergan will fund up
to an agreed amount, estimated to be the total costs expected to be incurred
by AstraZeneca until completion of development for brazikumab in Crohn's
disease and ulcerative colitis, including the development of a companion
diagnostic.
Pursuant to the 2012 collaboration between Amgen Inc (Amgen) and AstraZeneca
to jointly develop and commercialise a clinical-stage inflammation portfolio,
Amgen is entitled to receive a high single-digit to low double-digit royalty
on sales of brazikumab if approved and launched. This includes the original
inventor royalty. Other than this, AstraZeneca will own all rights and
benefits arising from the medicine with no other payments due to Amgen.
For more details on the development pipeline, including anticipated timelines
for regulatory submission/acceptances, please refer to the latest Clinical
Trials Appendix
(https://www.astrazeneca.com/investor-relations/results-and-presentations.html)
available on astrazeneca.com
(https://www.astrazeneca.com/investor-relations.html) .
Condensed consolidated statement of comprehensive income - FY 2019
2019 2018
For the year ended 31 December $m $m
Product Sales 23,565 21,049
Collaboration Revenue 819 1,041
Total Revenue 24,384 22,090
Cost of sales (4,921) (4,936)
Gross Profit 19,463 17,154
Distribution costs (339) (331)
Research and development expense (6,059) (5,932)
Selling, general and administrative costs (11,682) (10,031)
Other operating income and expense 1,541 2,527
Operating Profit 2,924 3,387
Finance income 172 138
Finance expense (1,432) (1,419)
Share of after-tax losses in associates and joint ventures (116) (113)
Profit Before Tax 1,548 1,993
Taxation (321) 57
Profit for the period 1,227 2,050
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit pension liability (364) (46)
Net losses on equity investments measured at fair value through other (28) (171)
comprehensive income
Fair-value movements related to own credit risk on bonds designated as (5) 8
fair-value through profit or loss
Tax on items that will not be reclassified to profit or loss 21 56
(376) (153)
Items that may be reclassified subsequently to profit or loss
Foreign exchange arising on consolidation 40 (450)
Foreign exchange arising on designating borrowings in net investment hedges (252) (520)
Fair-value movements on cash flow hedges (101) (37)
Fair-value movements on cash flow hedges transferred to profit or loss 52 111
Fair-value movements on derivatives designated in net investment hedges 35 (8)
Costs of hedging (47) (54)
Amortisation of loss on cash flow hedge - 1
Tax on items that may be reclassified subsequently to profit or loss 38 51
(235) (906)
Other comprehensive loss for the period, net of tax (611) (1,059)
Total comprehensive income for the period 616 991
Profit attributable to:
Owners of the Parent 1,335 2,155
Non-controlling interests (108) (105)
1,227 2,050
Total comprehensive income attributable to:
Owners of the Parent 723 1,097
Non-controlling interests (107) (106)
616 991
Basic earnings per $0.25 Ordinary Share $1.03 $1.70
Diluted earnings per $0.25 Ordinary Share $1.03 $1.70
Weighted average number of Ordinary Shares in issue (millions) 1,301 1,267
Diluted weighted average number of Ordinary Shares in issue (millions) 1,301 1,267
Condensed consolidated statement of comprehensive income - Q4 2019
77 (#_ftn68)
2019 2018
For the quarter ended 31 December $m $m
Product Sales 6,250 5,768
Collaboration Revenue 414 649
Total Revenue 6,664 6,417
Cost of sales (1,378) (1,637)
Gross Profit 5,286 4,780
Distribution costs (92) (93)
Research and development expense (2,091) (2,012)
Selling, general and administrative costs (3,026) (2,600)
Other operating income and expense 500 1,002
Operating Profit 577 1,077
Finance income 39 26
Finance expense (351) (337)
Share of after-tax losses in associates and joint ventures (25) (36)
Profit Before Tax 240 730
Taxation 37 279
Profit for the period 277 1,009
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit pension liability (213) (184)
Net gains/(losses) on equity investments measured at fair value through other 108 (330)
comprehensive income
Fair-value movements related to own credit risk on bonds designated as fair (4) 5
value through profit or loss
Tax on items that will not be reclassified to profit or loss - 121
(109) (388)
Items that may be reclassified subsequently to profit or loss
Foreign exchange arising on consolidation 425 (99)
Foreign exchange arising on designating borrowings in net investment hedges 239 (71)
Fair-value movements on cash flow hedges 55 (42)
Fair-value movements on cash flow hedges transferred to profit or loss (57) 39
Fair-value movements on derivatives designated in net investment hedges - (14)
Costs of hedging (12) (19)
Amortisation of loss on cash flow hedge - 1
Tax on items that may be reclassified subsequently to profit or loss (24) 12
626 (193)
Other comprehensive income/(loss) for the period, net of tax 517 (581)
Total comprehensive income for the period 794 428
Profit attributable to:
Owners of the Parent 313 1,034
Non-controlling interests (36) (25)
277 1,009
Total comprehensive income attributable to:
Owners of the Parent 830 453
Non-controlling interests (36) (25)
794 428
Basic earnings per $0.25 Ordinary Share $0.24 $0.82
Diluted earnings per $0.25 Ordinary Share $0.24 $0.82
Weighted average number of Ordinary Shares in issue (millions) 1,312 1,267
Diluted weighted average number of Ordinary Shares in issue (millions) 1,312 1,267
Condensed consolidated statement of financial position
At 31 Dec 2019 At 31 Dec 2018
$m $m
Assets
Non-current assets
Property, plant and equipment 7,688 7,421
Right-of-use assets 647 -
Goodwill 11,668 11,707
Intangible assets 20,833 21,959
Investments in associates and joint ventures 58 89
Other investments 1,401 833
Derivative financial instruments 61 157
Other receivables 740 515
Deferred tax assets 2,718 2,379
45,814 45,060
Current assets
Inventories 3,193 2,890
Trade and other receivables 5,761 5,574
Other investments 849 849
Derivative financial instruments 36 258
Income tax receivable 285 207
Cash and cash equivalents 5,369 4,831
Assets held for sale 70 982
15,563 15,591
Total assets 61,377 60,651
Liabilities
Current liabilities
Interest-bearing loans and borrowings (1,822) (1,754)
Lease liabilities (188) -
Trade and other payables (13,987) (12,841)
Derivative financial instruments (36) (27)
Provisions (723) (506)
Income tax payable (1,361) (1,164)
(18,117) (16,292)
Non-current liabilities
Interest-bearing loans and borrowings (15,730) (17,359)
Lease liabilities (487) -
Derivative financial instruments (18) (4)
Deferred tax liabilities (2,490) (3,286)
Retirement benefit obligations (2,807) (2,511)
Provisions (841) (385)
Other payables (6,291) (6,770)
(28,664) (30,315)
Total liabilities (46,781) (46,607)
Net assets 14,596 14,044
Equity
Capital and reserves attributable to equity holders of the Parent
Share capital 328 317
Share premium account 7,941 4,427
Other reserves 2,046 2,041
Retained earnings 2,812 5,683
13,127 12,468
Non-controlling interests 1,469 1,576
Total equity 14,596 14,044
Condensed consolidated statement of changes in equity
Share capital Share premium account Other reserves Retained earnings Total attributable to owners of the parent Non-controlling interests Total equity
$m $m $m $m $m $m $m
At 1 Jan 2018 317 4,393 2,029 8,221 14,960 1,682 16,642
Adoption of new accounting standards - - - (91) (91) - (91)
Profit for the period - - - 2,155 2,155 (105) 2,050
Other comprehensive loss - - - (1,058) (1,058) (1) (1,059)
Transfer to other reserves - - 12 (12) - - -
Transactions with owners:
Dividends - - - (3,539) (3,539) - (3,539)
Issue of Ordinary Shares - 34 - - 34 - 34
Share-based payments charge for the period - - - 219 219 - 219
Settlement of share plan awards - - - (212) (212) - (212)
Net movement - 34 12 (2,538) (2,492) (106) (2,598)
At 31 Dec 2018 317 4,427 2,041 5,683 12,468 1,576 14,044
At 1 Jan 2019 317 4,427 2,041 5,683 12,468 1,576 14,044
Adoption of new accounting standards 78 (#_ftn69) - - - 54 54 - 54
Profit for the period - - - 1,335 1,335 (108) 1,227
Other comprehensive loss - - - (612) (612) 1 (611)
Transfer to other reserves - - 5 (5) - - -
Transactions with owners:
Dividends - - - (3,579) (3,579) - (3,579)
Issue of Ordinary Shares 79 (#_ftn70) 11 3,514 - - 3,525 - 3,525
Share-based payments charge for the period - - - 259 259 - 259
Settlement of share plan awards - - - (323) (323) - (323)
Net movements 11 3,514 5 (2,871) 659 (107) 552
At 31 Dec 2019 328 7,941 2,046 2,812 13,127 1,469 14,596
Condensed consolidated statement of cash flows
2019 2018
For the year ended 31 December $m $m
Cash flows from operating activities
Profit before tax 1,548 1,993
Finance income and expense 1,260 1,281
Share of after-tax losses of associates and joint ventures 116 113
Depreciation, amortisation and impairment 3,762 3,753
Increase in working capital and short-term provisions (346) (639)
Gains on disposal of intangible assets (1,243) (1,885)
Fair value movements on contingent consideration arising from business (614) (495)
combinations
Non-cash and other movements 378 (290)
Cash generated from operations 4,861 3,831
Interest paid (774) (676)
Tax paid (1,118) (537)
Net cash inflow from operating activities 2,969 2,618
Cash flows from investing activities
Payment of contingent consideration from business combinations (709) (349)
Purchase of property, plant and equipment (979) (1,043)
Disposal of property, plant and equipment 37 12
Purchase of intangible assets (1,481) (328)
Disposal of intangible assets 2,076 2,338
Movement in profit-participation liability 80 (#_ftn71) 150 -
Purchase of non-current asset investments (13) (102)
Disposal of non-current asset investments 18 24
Movement in short-term investments, fixed deposits and other investing 194 405
instruments
Payments to associates and joint ventures (74) (187)
Interest received 124 193
Net cash (outflow)/inflow from investing activities (657) 963
Net cash inflow before financing activities 2,312 3,581
Cash flows from financing activities
Proceeds from issue of share capital 3,525 34
Issue of loans 500 2,971
Repayment of loans (1,500) (1,400)
Dividends paid (3,592) (3,484)
Hedge contracts relating to dividend payments 4 (67)
Repayment of obligations under leases (186) -
Movement in short-term borrowings (516) (98)
Net cash outflow from financing activities (1,765) (2,044)
Net increase in cash and cash equivalents in the period 547 1,537
Cash and cash equivalents at the beginning of the period 4,671 3,172
Exchange rate effects 5 (38)
Cash and cash equivalents at the end of the period 5,223 4,671
Cash and cash equivalents consist of:
Cash and cash equivalents 5,369 4,831
Overdrafts (146) (160)
5,223 4,671
Notes to the Condensed Financial Information
1 Basis of preparation and accounting policies
The Condensed Consolidated Financial Statements for the year ended 31 December
2019 have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as issued by the International Accounting Standards Board
(IASB) and as adopted by the EU. The UK has yet to announce its post-Brexit
IFRS-adoption process and, for the current time, will follow the EU approval
process.
These Condensed Consolidated Financial Statements comprise the financial
results of AstraZeneca plc for the years to 31 December 2019 and 2018 together
with the Statement of financial position as at 31 December 2019 and 2018. The
results for the year to 31 December 2019 have been extracted from the 31
December 2019 audited Consolidated Financial Statements which have been
approved by the Board of Directors. These have not yet been delivered to the
Registrar of Companies but are expected to be published on 3 March 2020 within
the Annual Report and Form 20-F Information 2019.
The financial information set out above does not constitute the Company's
statutory accounts for the years to 31 December 2019 or 2018 but is derived
from those accounts. The auditors have reported on those accounts; their
reports (i) were 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 in respect of the accounts for the year to 31
December 2019 or 31 December 2018. Statutory accounts for the year to 31
December 2019 were approved by the Board of Directors for release on 14
February 2020.
The annual financial statements of the Group are prepared in accordance with
IFRSs as issued by the IASB and adopted by the EU. Except as noted below, the
Condensed Consolidated Financial Statements have been prepared applying the
accounting policies that were applied in the preparation of the Group's
published consolidated financial statements for the year ended 31 December
2018.
IFRS 3
AstraZeneca had proposed to adopt the October 2018 update to IFRS 3, which
changed the definition of a business, from 1 January 2019, and has previously
published interim financial statements on this basis. This was done on the
basis that it was considered highly probable that the amendment would be
endorsed by the European Commission during 2019 before its effective date of 1
January 2020 with early adoption permitted, following a recommendation from
the European Financial Reporting Advisory Group (EFRAG), the association set
up to provide advice to the European Commission on whether newly issued or
revised IFRS Standards meet the criteria for endorsement for use in the EU.
The change in definition of a business within IFRS 3 introduces an optional
concentration test to perform a simplified assessment of whether an acquired
set of activities and assets is or is not a business on a transaction by
transaction basis. This change is expected to provide more reliable and
comparable information about certain transactions as it provides more
consistency in accounting in the pharmaceutical industry for substantially
similar transactions that under the previous definition may have been
accounted for in different ways despite limited differences in substance.
During the year, the EFRAG amended its guidance on the expected date of
endorsement, and the European Commission is expected to endorse the change
during 2020, with application required for accounting periods beginning on or
after 1 January 2020. Accordingly, this amendment has not been applied in this
preliminary announcement; this has, however, not resulted in a different
accounting treatment for any transactions undertaken during the year, when
compared with the amended version of IFRS 3, pending endorsement.
IFRS 16
IFRS 16 'Leases' is effective for accounting periods beginning on or after 1
January 2019 and replaces IAS 17 'Leases'. It eliminates the classification of
leases as either operating leases or finance leases and, instead, introduces a
single lessee accounting model. The adoption of IFRS 16 resulted in the Group
recognising lease liabilities, and corresponding 'right-of-use' assets for
arrangements that were previously classified as operating leases.
The Group's principal lease arrangements are for property, most notably a
portfolio of office premises, and for a global car fleet, utilised primarily
by our sales and marketing teams. The Group has adopted IFRS 16 using a
modified retrospective approach with the cumulative effect of initially
applying the standard as an adjustment to the opening balance of retained
earnings at 1 January 2019. The standard permits a choice on initial adoption,
on a lease-by-lease basis, to measure the right-of-use asset at either its
carrying amount as if IFRS 16 had been applied since the commencement of the
lease, or an amount equal to the lease liability, adjusted for accruals or
prepayments. The Group has elected to measure the right-of-use asset equal to
the lease liability, with the result of no net impact on opening retained
earnings and no restatement of prior period comparatives.
Initial adoption resulted in the recognition of right-of-use assets of $722m
and lease liabilities of $720m. The weighted average incremental borrowing
rate applied to the lease liabilities on 1 January 2019 was 3%.
The Group is using one or more practical expedients on transition to leases
previously classified as operating leases, including electing to not apply the
retrospective treatment to leases for which the term ends within 12 months of
initial application, electing to apply a single discount rate to portfolios of
leases with similar characteristics, reliance on previous assessments on
whether arrangements contain a lease and whether leases are onerous, excluding
initial direct costs from the initial measurement of the right-of-use asset,
and using hindsight in determining the lease term where the contract contains
options to extend or terminate the lease.
Judgements made in calculating the initial impact of adoption include
determining the lease term where extension or termination options exist. In
such instances, all facts and circumstances that may create an economic
incentive to exercise an extension option, or not exercise a termination
option, have been considered to determine the lease term. Extension periods
(or periods after termination options) are only included in the lease term if
the lease is reasonably certain to be extended (or not terminated). Estimates
include calculating the discount rate which is based on the incremental
borrowing rate.
The Group is applying IFRS 16's low-value and short-term exemptions. While the
IFRS 16 opening lease liability is calculated differently from the previous
operating lease commitment calculated under the previous standard, there are
no material differences between the positions. The adoption of IFRS 16 has had
no impact on the Group's net cash flows, although a presentation change has
been reflected whereby cash outflows of $186m are now presented as financing,
instead of operating. There is an immaterial benefit to Operating profit and a
corresponding increase in Finance expense from the presentation of a portion
of lease costs as interest costs. Profit before tax, taxation and EPS have not
been materially impacted.
IFRIC 23
IFRIC 23 'Uncertainty Over Income Tax Treatments' is effective for accounting
periods beginning on or after 1 January 2019 and provides further
clarification on how to apply the recognition and measurement requirements in
IAS 12 'Income Taxes'. It is applicable where there is uncertainty over income
tax treatments. The EU endorsed IFRIC 23 on 24 October 2018. The adoption of
IFRIC 23 has principally resulted in an adjustment in the value of tax
liabilities because IFRIC 23 requires the Group to measure the effect of
uncertainty on income tax positions using either the most likely amount or the
expected value amount depending on which method is expected to better reflect
the resolution of the uncertainty.
The Group has retrospectively applied IFRIC 23 from 1 January 2019 recognising
the cumulative effect of initially applying the interpretation as decreases to
income tax payable of $51m and to trade and other payables of $3m, and a
corresponding adjustment to the opening balance of retained earnings of $54m.
There is no restatement of the comparative information as permitted in the
interpretation.
IFRS 9, IAS 39 and IFRS 7
The Group has early adopted the amendments to IFRS 9 'Financial Instruments',
IAS 39 'Financial Instruments: Recognition and Measurement' and IFRS 7
'Financial Instruments: Disclosures'. These relate to IBOR reform and were
endorsed by the EU on 6 January 2020. The replacement of benchmark interest
rates such as LIBOR and other interbank offered rates ('IBORs') is a priority
for global regulators. The amendments provide relief from applying specific
hedge accounting requirements to hedge relationships directly affected by IBOR
reform and have the effect that IBOR reform should generally not cause hedge
accounting to terminate. There is no financial impact from the early adoption
of these amendments.
The Group has one IFRS 9 designated hedge relationship that is potentially
impacted by IBOR reform: our euro 300m cross currency interest rate swap in a
fair value hedge relationship with euro 300m of our euro 750m 0.875% 2021
non-callable bond. This swap references three-month USD LIBOR and uncertainty
arising from the Group's exposure to IBOR reform will cease when the swap
matures in 2021. The implications on the wider business of IBOR reform will be
assessed during 2020.
Collaboration Revenue
Effective from 1 January 2019, the Group updated the presentation of an
element of Total Revenue within the Statement of Comprehensive Income and
changed the classification of some income to reflect the increasing importance
of collaborations to AstraZeneca. Historically, Externalisation Revenue formed
part of Total Revenue and only included income arising from collaborative
transactions involving AstraZeneca's medicines, whether internally developed
or previously acquired. Such income included upfront consideration, milestones
receipts, profit share income and royalties, as well as other income from
collaborations. The updated category of Collaboration Revenue includes all
income previously included within Externalisation Revenue, as well as income
of a similar nature arising from transactions where AstraZeneca has acquired
an interest in a medicine and as part of the acquisition entered into an
active collaboration with the seller. This change is a result of the growing
importance of collaborations to AstraZeneca. Income arising from all
collaborations, other than Product Sales, will be recognised within the
Collaboration Revenue element of Total Revenue. Historically, there has been
no collaboration income arising from such acquisitions, and therefore no
prior-year restatement of financial results is required as a result of this
change.
Income from royalties and disposals of assets and businesses, where the Group
does not retain a significant element of continued interest, continue to be
recorded in Other Operating Income and Expense.
Legal proceedings
The information contained in Note 5 updates the disclosures concerning legal
proceedings and contingent liabilities in the Group's Annual Report and Form
20-F Information 2018.
Going concern
The Group has considerable financial resources available. As at 31 December
2019 the Group has $10.4bn in financial resources (cash and cash-equivalent
balances of $5.4bn, $0.9bn of liquid fixed income securities and undrawn
committed bank facilities of $4.1bn, of which $3.4bn is available until April
2022, $0.5bn is available until November 2020 (extendable to November 2021)
and $0.2bn is available until December 2020, with only $2.0bn of borrowings
due within one year). The Group's revenues are largely derived from sales of
medicines which are covered by patents which provide a relatively high level
of resilience and predictability to cash inflows, although government price
interventions in response to budgetary constraints are expected to continue to
adversely affect revenues in many of the mature markets. The Group, however,
anticipates new revenue streams from both recently launched medicines in
development, and the Group has a wide diversity of customers and suppliers
across different geographic areas. Consequently, the Directors believe that,
overall, the Group is well placed to manage its business risks successfully.
On the basis of the above paragraph, the going-concern basis has been adopted
in these Condensed Financial Statements.
Financial information
The comparative figures for the financial year ended 31 December 2018 are not
the Group's statutory accounts for that financial year. Those accounts have
been reported on by the Group's auditors and have been delivered to the
registrar of companies; their report was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
2 Restructuring costs
Profit before tax for the year ended 31 December 2019 is stated after charging
restructuring costs of $347m ($697m for the year ended 31 December 2018).
These have been charged to profit as follows:
FY 2019 FY 2018 Q4 2019(79) Q4 2018(79)
$m $m $m $m
Cost of sales 73 81 (#_ftn72) 432 (49) 355
Research and development expense 101 94 19 (1)
Selling, general and administrative costs 173 181 26 71
Other operating income and expense - (10) - 1
Total 347 697 (4) 426
3 Net Debt
The table below provides an analysis of net debt and a reconciliation of net
cash flow to the movement in net debt. The Group monitors net debt as part of
its capital management policy as described in Note 27 of the Annual Report and
Form 20-F Information 2018. Net debt is a non-GAAP financial measure.
At 1 Jan 2019 Adoption of new accounting standards 82 (#_ftn73) Cash flow Non-cash & other Exchange movements At 31 Dec 2019
$m $m $m $m $m $m
Non-current instalments of loans (17,359) - - 1,578 51 (15,730)
Non-current instalments of leases - (557) - 70 - (487)
Total long-term debt (17,359) (557) - 1,648 51 (16,217)
Current instalments of loans (999) - 1,000 (1,598) - (1,597)
Current instalments of leases - (163) 206 (231) - (188)
Commercial paper (211) - 211 - - -
Bank collateral (384) - 313 - - (71)
Other short-term borrowings excluding overdrafts - - (8) - - (8)
Overdraft (160) - 13 - 1 (146)
Total current debt (1,754) (163) 1,735 (1,829) 1 (2,010)
Gross borrowings (19,113) (720) 1,735 (181) 52 (18,227)
Net derivative financial instruments 384 - (214) (127) - 43
Net borrowings (18,729) (720) 1,521 (308) 52 (18,184)
Cash and cash equivalents 4,831 - 534 - 4 5,369
Other investments - current 849 - 16 (14) (2) 849
Other investments - non-current 46 - - 16 - 62
Cash and investments 5,726 - 550 2 2 6,280
Net debt (13,003) (720) 2,071 (306) 54 (11,904)
Non-cash movements in the period include fair-value adjustments under IFRS 9.
Other investments - non-current are included within the balance of $1,401m (31
December 2018: $833m) in the Statement of Financial Position. The equivalent
GAAP measure to net debt is 'liabilities arising from financing activities'
which excludes the amounts for cash and overdrafts, other investments and
non-financing derivatives shown above and includes the Acerta Pharma
put-option liability of $2,146m (31 December 2018: $1,838m) shown in
non-current other payables.
4 Financial instruments
As detailed in the Group's most recent annual financial statements, the
principal financial instruments consist of derivative financial instruments,
other investments, trade and other receivables, cash and cash equivalents,
trade and other payables, leases and interest-bearing loans and borrowings.
There have been no changes of significance to the categorisation or fair-value
hierarchy classification of our financial instruments from those detailed in
the Notes to the Group Financial Statements in the Group's Annual Report and
Form 20-F Information 2018.
The Group holds certain equity investments that are categorised as Level 3 in
the fair-value hierarchy and for which fair-value gains of $56m have been
recognised in the year ended 31 December 2019. These are presented in Net
losses on equity investments measured at fair value through other
comprehensive income in the Condensed Consolidated Statement of Comprehensive
Income.
Financial instruments measured at fair value include $2,250m of other
investments, $4,109m held in money market funds, $336m of loans designated at
fair value through profit or loss, $339m of loans designated in a fair value
hedge relationship and $43m of derivatives as at 31 December 2019. The total
fair value of interest-bearing loans and borrowings at 31 December 2019, which
have a carrying value of $18,227m in the Condensed Consolidated Statement of
Financial Position, was $20,549m. 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 Other Total Total
2019
2019 2019 2018
$m $m $m $m
At 1 January 3,983 1,123 5,106 5,534
Settlements (454) (255) (709) (349)
Revaluations (516) (98) (614) (495)
Discount unwind 287 69 356 416
At 31 December 3,300 839 4,139 5,106
Contingent consideration arising from business combinations is fair-valued
using decision-tree analysis, with key inputs including the probability of
success, consideration of potential delays and the expected levels of future
revenues.
The contingent consideration balance relating to BMS's share of the global
diabetes alliance of $3,300m (31 December 2018: $3,983m) would
increase/decrease by $330m with an increase/decrease in sales of 10%, as
compared with the current estimates.
5 Legal proceedings and contingent liabilities
AstraZeneca is involved in various legal proceedings considered typical to its
business, including litigation and investigations relating to product
liability, commercial disputes, infringement of intellectual property rights,
the validity of certain patents, anti-trust law and sales and marketing
practices. The matters discussed below constitute the more significant
developments since publication of the disclosures concerning legal proceedings
in the Company's Annual Report and Form 20-F Information 2018 and the interim
financial statements for the six months ended 30 June 2019 and the interim
financial statements for the three months ended 30 September 2019 (the
Disclosures). Unless noted otherwise below or in the Disclosures, no
provisions have been established in respect of the claims discussed below.
As discussed in the Disclosures, for the majority of claims in which
AstraZeneca is involved, it is not possible to make a reasonable estimate of
the expected financial effect, if any, that will result from ultimate
resolution of the proceedings. In these cases, AstraZeneca discloses
information with respect only to the nature and facts of the cases, but no
provision is made.
In cases that have been settled or adjudicated, or where quantifiable fines
and penalties have been assessed and which are not subject to appeal, or where
a loss is probable and we are able to make a reasonable estimate of the loss,
AstraZeneca records the loss absorbed or makes a provision for its best
estimate of the expected loss. The position could change over time and the
estimates that the Company made, and upon which the Company have relied in
calculating these provisions are inherently imprecise. There can, therefore,
be no assurance that any losses that result from the outcome of any legal
proceedings will not exceed the amount of the provisions that have been booked
in the accounts. The major factors causing this uncertainty are described more
fully in the Disclosures and herein.
AstraZeneca has full confidence in, and will vigorously defend and enforce,
its intellectual property.
Matters disclosed in respect of the fourth quarter of 2019 and to 14 February
2020
Patent litigation
Tagrisso: US patent proceedings
In February of 2020, in response to Paragraph IV notices from multiple ANDA
filers, AstraZeneca filed patent infringement lawsuits in the US District
Court for the District of Delaware. In its complaint, AstraZeneca alleged that
a generic version of Tagrisso, if approved and marketed, would infringe
AstraZeneca's US Patent No. 10,183,020. No trial date has been set.
Calquence: US patent proceedings
In November 2017, Pharmacyclics LLC (Pharmacyclics, a company in the AbbVie
group) filed a patent infringement lawsuit in the US District Court for the
District of Delaware (the District Court) against Acerta Pharma and
AstraZeneca relating to Calquence.
In April 2018, AstraZeneca and Acerta Pharma filed a complaint in the District
Court against Pharmacyclics and AbbVie alleging that their medicine,
Imbruvica, infringes a US patent owned by Acerta Pharma. In November 2018,
Janssen Biotech, Inc. (Janssen) intervened as a defendant.
In October 2019, AstraZeneca entered into settlement agreements with
Pharmacyclics and Janssen, resolving all patent litigation between the parties
relating to Calquence and Imbruvica. A provision was taken.
In October 2019, an amendment to the share purchase and option agreement
(SPOA) with the sellers of Acerta Pharma (originally entered into in December
2015) came into effect, changing certain terms of the SPOA on both the timing
and also reducing the maximum consideration that would be required to be made
to acquire the remaining outstanding shares of Acerta Pharma if the options
are exercised. The payments would be made in similar annual instalments
commencing at the earliest from 2022 through to 2024, subject to the options
being exercised. The changes to the terms have been reflected in the
assumptions used to calculate the amortised cost of the option liability as at
31 December 2019 of $2,146m (FY 2018: $1,838m, 2017: FY $1,823m).
Faslodex: US patent proceedings
As previously disclosed, AstraZeneca had filed and then resolved a series of
patent infringement lawsuits in the US District Court for the District of New
Jersey (the District Court) relating to four patents listed in the US FDA
Orange Book with reference to Faslodex after receiving a Paragraph IV notices
from several companies relating to Abbreviated New Drug Applications (ANDA)
seeking US FDA approval to market a generic version of Faslodex prior to the
expiration of AstraZeneca's patents, and the District Court entered consent
judgments ending all of those lawsuits. In October 2019, AstraZeneca filed a
new patent infringement lawsuit in the District Court after receiving a
Paragraph IV letter, relating to the same four listed patents, from another
company that submitted an ANDA seeking US FDA approval to market a generic
version of Faslodex prior to the expiration of AstraZeneca's patents.
Onglyza: patent proceedings outside the US
In Canada, in November 2019, Sandoz Canada Inc. sent a Notice of Allegation to
AstraZeneca challenging the validity of Canadian substance patent no. 2402894
(expiry March 2021) and formulation patent no. 2568391 (expiry May 2025)
related to Onglyza. AstraZeneca commenced an action in response in January
2020.
Symbicort: US patent proceedings
As previously disclosed, AstraZeneca brought ANDA litigations against Mylan
Pharmaceuticals Inc. (Mylan) and 3M Company (3M) in the US District Court for
the Northern District of West Virginia and against Teva Pharmaceuticals USA,
Inc. (Teva) and Catalent Pharma Solutions, LLC (Catalent) in the US District
Court for the District of Delaware. In November 2019, AstraZeneca filed an
Amended Complaint in the US District Court for the Northern District of West
Virginia against Mylan and 3M adding allegations that their proposed generic
version of Symbicort, if approved and marketed, would infringe AstraZeneca's
US Patent No. 10,166,247 (the '247 patent) and removing allegations of
infringement of US Patent No. 7,967,011. In November 2019, Mylan and 3M
responded to the Amended Complaint and alleged that their proposed generic
product does not infringe the asserted patents and/or that the asserted
patents are invalid and/or unenforceable. In December 2019, AstraZeneca
settled its ANDA action with Teva and Catalent and that matter is now closed.
The trial of the Mylan and 3M matter has been scheduled for July 2020.
Movantik: US patent proceedings
As previously disclosed, in December 2018, AstraZeneca initiated ANDA
litigation against Apotex, Inc. and Apotex Corp. and against MSN Laboratories
in the US District Court for the District of Delaware. In its complaint,
AstraZeneca alleges that the generic companies' versions of Movantik, if
approved and marketed, would infringe US Patent No. 9,012,469. A trial has
been scheduled for March 2021.
In November 2019, AstraZeneca initiated ANDA litigation against Aurobindo
Pharma U.S.A. in the US District Court for the District of Delaware. In its
complaint, AstraZeneca alleges that the generic company's versions of
Movantik, if approved and marketed, would infringe US Patent No. 9,012,469.
Product liability litigation
Farxiga and Xigduo XR
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 of 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. A majority of these claims have
been resolved or dismissed, and the MDL has been administratively closed.
Nexium and Losec/Prilosec: US proceedings
As previously disclosed, in the US, AstraZeneca is defending various lawsuits
brought in federal and state courts involving multiple plaintiffs claiming
that they have been diagnosed with various injuries following treatment with
proton pump inhibitors, including Nexium and Prilosec. In May 2017, counsel
for a group of such plaintiffs claiming that they have been diagnosed with
kidney injuries filed a motion with the Judicial Panel on Multidistrict
Litigation (JPML) seeking the 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 (MDL) proceeding. In August
2017, the JPML granted the motion and consolidated the pending federal court
cases in an MDL proceeding in federal court in New Jersey for pre-trial
purposes. A trial in the MDL has been scheduled for November 2021.
In July 2019, counsel for a similarly defined group of plaintiffs with claims
pending in New Jersey state courts petitioned the New Jersey State
Administrative Director of the Courts to centralise judicial management of all
plaintiffs' claims alleging kidney injuries pending in that state in a
coordinated multicounty litigation (MCL) proceeding. The MCL has been
centralised in Atlantic County.
Commercial litigation
Amplimmune
As previously disclosed, in June 2017, AstraZeneca was served with a lawsuit
filed by the stockholders' agents for Amplimmune, Inc (Amplimmune) in Delaware
State Court that alleges, among other things, breaches of contractual
obligations relating to a 2013 merger agreement between AstraZeneca and
Amplimmune. Trial is scheduled for February 2020.
Ocimum lawsuit
As previously disclosed, in December 2015, AstraZeneca was served with a
complaint filed by Ocimum Biosciences, Ltd. (Ocimum) in the Superior Court for
the State of Delaware that alleges, among other things, breaches of
contractual obligations and misappropriation of trade secrets, relating to a
now terminated 2001 licensing agreement between AstraZeneca and Gene Logic,
Inc. (Gene Logic), the rights to which Ocimum purports to have acquired from
Gene Logic. In December 2019, the court granted AstraZeneca's motion for
summary judgment and dismissed the case.
Government investigations/proceedings
Crestor
Qui tam litigation
As previously disclosed, in the US, in January and February 2014, AstraZeneca
was served with lawsuits filed in the US District Court for the District of
Delaware under the qui tam (whistle-blower) provisions of the federal False
Claims Act and related state statutes, alleging that AstraZeneca directed
certain employees to promote Crestor off-label and provided unlawful
remuneration to physicians in connection with the promotion of Crestor. The
DOJ and all US states have declined to intervene in the lawsuits. In March
2019, AstraZeneca filed a motion to dismiss the complaint. Oral argument on
the motion to dismiss is scheduled for February 2020.
Multi-product litigation
Litigation in Washington state
As previously disclosed, in September 2018, a lawsuit against AstraZeneca and
several other defendants was unsealed in the US District Court for the Western
District of Washington (the District Court). The complaint alleged that the
defendants violated various laws, including state and federal false claims
acts, by offering clinical educator and reimbursement support programmes. In
September 2018, the government moved to dismiss the lawsuit against
AstraZeneca and similar lawsuits filed against other companies by relator,
Health Choice Alliance. In November 2019, the District Court granted the
government's motion and dismissed the case.
6 Subsequent events
Following the recommendation from an independent Data Monitoring Committee,
AstraZeneca decided in January 2020 to terminate the Phase III STRENGTH trial
for Epanova, due to its low likelihood of demonstrating a benefit to patients
with MDS who are at increased risk of CV disease. This was considered to be an
adjusting event after the reporting period, resulting in a full impairment of
the Epanova intangible asset of $533m recorded in Reported R&D Expense in
FY 2019, and a provision for inventory and supply-related costs of $115m
recorded in Reported and Core Cost of Sales, also in FY 2019.
In January 2020, the Company announced
(https://www.astrazeneca.com/media-centre/press-releases/2020/astrazeneca-divests-rights-to-established-hypertension-medicines-27012020.html)
that it had agreed to divest the global commercial rights to a number of
established hypertension medicines, including Inderal, Tenormin and Zestril to
Atnahs Pharma. Atnahs Pharma will make an upfront payment of $350m to
AstraZeneca. AstraZeneca may also receive future sales-contingent payments of
up to $40m between 2020 and 2022. Income arising from the upfront and future
payments will be reported in AstraZeneca's financial statements within Other
Operating Income and Expense. The divestment is expected to complete in the
first quarter of 2020.
In January 2020, the Company announced
(https://www.astrazeneca.com/media-centre/press-releases/2020/astrazeneca-to-recover-the-global-rights-to-brazikumab-medi2070-from-allergan-27012020.html)
that it will recover the global rights to brazikumab (formerly MEDI2070), a
monoclonal antibody targeting IL-23, from Allergan. Brazikumab is currently in
a Phase IIb/III programme in Crohn's disease and a Phase IIb trial in
ulcerative colitis. AstraZeneca and Allergan will terminate their existing
license agreement
(https://www.astrazeneca.com/investor-relations/stock-exchange-announcements/2016/medimmune-out-licenses-potential-medicine-for-inflammatory-diseases-to-allergan-03102016.html)
and all rights to brazikumab will revert to AstraZeneca. The transaction is
expected to complete in the first quarter of 2020, subject to regulatory
approvals associated with AbbVie's proposed acquisition of Allergan and its
timely completion. Under the termination agreement, Allergan will fund up to
an agreed amount, estimated to be the total costs expected to be incurred by
AstraZeneca until completion of development for brazikumab in Crohn's disease
and ulcerative colitis, including the development of a companion diagnostic.
Pursuant to the 2012 collaboration between Amgen and AstraZeneca to jointly
develop and commercialise a clinical-stage inflammation portfolio, Amgen is
entitled to receive a high single-digit to low double-digit royalty on sales
of brazikumab if approved and launched. This includes the original inventor
royalty. Other than this, AstraZeneca will own all rights and benefits arising
from the medicine with no other payments due to Amgen.
In January 2020, AstraZeneca sold a proportion of its equity portfolio,
receiving consideration of $184m.
7 Product Sales analysis - FY 2019
The table below provides an analysis of year-on-year Product Sales, with
Actual and CER growth rates reflecting year-on-year growth. Due to rounding,
the sum of a number of dollar values and percentages may not agree to totals.
The CER information in respect of FY 2019 included in the Consolidated
Financial Information has not been audited by PricewaterhouseCoopers LLP.
*Denotes a legacy medicine.
World Emerging Markets US Europe Established RoW
FY 2019 Actual CER FY 2019 Actual CER FY 2019 Actual FY 2019 Actual CER FY 2019 Actual CER
$m % % $m % % $m % $m % % $m % %
Oncology
Tagrisso 3,189 71 74 762 n/m n/m 1,268 46 474 51 59 685 n/m n/m
Imfinzi 1,469 n/m n/m 30 n/m n/m 1,041 85 179 n/m n/m 219 n/m n/m
Lynparza 1,198 85 89 133 n/m n/m 626 81 287 51 59 152 n/m n/m
Calquence 164 n/m n/m 2 n/m n/m 162 n/m - n/m n/m - n/m n/m
Faslodex 892 (13) (11) 198 29 36 328 (39) 229 3 9 137 19 17
Zoladex* 813 8 13 492 20 28 7 (17) 135 2 7 179 (11) (10)
Iressa* 423 (18) (15) 286 - 4 17 (33) 70 (36) (32) 50 (49) (49)
Arimidex* 225 6 11 152 15 21 - n/m 28 (8) (3) 45 (9) (9)
Casodex* 200 - 3 127 13 19 - (88) 16 (20) (15) 57 (15) (15)
Others 94 (18) (17) 29 (6) (3) - n/m 5 (24) (19) 60 (21) (22)
Total Oncology 8,667 44 47 2,211 45 52 3,449 43 1,423 35 42 1,584 53 52
BioPharmaceuticals: CVRM
Farxiga 1,543 11 14 471 40 48 537 (9) 373 18 25 162 9 10
Brilinta 1,581 20 23 462 42 49 710 21 351 1 7 58 (1) 3
Bydureon 549 (6) (5) 11 34 39 459 (3) 66 (19) (14) 13 (32) (28)
Onglyza 527 (3) - 176 3 9 230 3 70 (22) (17) 51 (14) (12)
Byetta 110 (13) (11) 12 47 60 68 (9) 19 (35) (31) 11 (24) (20)
Other diabetes 52 33 35 1 n/m n/m 40 18 9 88 n/m 2 23 33
Lokelma 14 n/m n/m - - - 13 n/m 1 n/m n/m - - -
Crestor* 1,278 (11) (8) 806 (4) - 104 (39) 148 (27) (23) 220 - 1
Seloken/Toprol-XL* 760 7 12 686 7 13 37 (5) 25 31 31 12 (11) (8)
Atacand* 221 (15) (11) 160 2 7 12 (11) 30 (57) (57) 19 1 7
Others 271 (9) (6) 193 (6) (3) (1) (91) 59 (16) (12) 20 (16) (16)
BioPharmaceuticals: total CVRM 6,906 3 6 2,978 10 16 2,209 n/m 1,151 (6) (1) 568 (2) n/m
BioPharmaceuticals: Respiratory
Symbicort 2,495 (3) - 547 11 17 829 (4) 678 (12) (7) 441 2 3
Pulmicort 1,466 14 18 1,190 20 24 110 (5) 81 (10) (4) 85 1 1
Fasenra 704 n/m n/m 5 n/m n/m 482 n/m 118 n/m n/m 99 n/m n/m
Daliresp/Daxas 215 14 15 4 (18) (13) 184 19 26 (8) (3) 1 32 35
Duaklir 77 (19) (15) 1 44 49 3 - 71 (22) (17) 2 (65) (64)
Bevespi 42 26 26 - n/m n/m 42 25 - n/m n/m - n/m n/m
Breztri 2 n/m n/m - - - - - - - - 2 n/m n/m
Others 390 (13) (9) 240 62 70 3 (88) 133 (38) (35) 14 (74) (73)
BioPharmaceuticals: total Respiratory 5,391 10 13 1,987 21 27 1,653 17 1,107 (10) (5) 644 4 4
Other medicines
Nexium 1,483 (13) (11) 748 8 14 218 (29) 63 (73) (72) 454 (4) (4)
Synagis 358 (46) (46) - (100) (100) 46 (84) 312 (17) (17) - n/m n/m
Losec/Prilosec 263 (3) 1 179 11 17 10 43 49 (30) (26) 25 (27) (26)
Seroquel XR/IR 191 (47) (46) 50 (58) (57) 34 (69) 88 (18) (14) 19 (30) (30)
Others 306 (23) (20) 12 (77) (81) 128 (4) 157 (1) 2 9 (84) (67)
Total other medicines 2,601 (24) (21) 989 (3) 1 436 (48) 669 (29) (28) 507 (14) (12)
Total Product Sales 23,565 12 15 8,165 18 24 7,747 13 4,350 (2) 2 3,303 17 18
8 Product Sales analysis - Q4 2019
The table below provides an analysis of year-on-year Product Sales, with
Actual and CER growth rates reflecting year-on-year growth. Due to rounding,
the sum of a number of dollar values and percentages may not agree to totals.
The Q4 2019 information in respect of the three months ended 31 December 2019
included in the Consolidated Financial Information has not been audited by
PricewaterhouseCoopers LLP. *Denotes a legacy medicine.
World Emerging Markets US Europe Established RoW
Q4 2019 Actual CER Q4 2019 Actual CER Q4 2019 Actual Q4 2019 Actual CER Q4 2019 Actual CER
$m % % $m % % $m % $m % % $m % %
Oncology
Tagrisso 884 49 49 209 n/m n/m 359 24 137 48 54 179 36 32
Imfinzi 424 62 62 12 n/m n/m 282 31 64 n/m n/m 66 n/m n/m
Lynparza 351 68 69 32 81 86 194 73 79 48 54 46 75 69
Calquence 56 n/m n/m 1 n/m n/m 54 n/m - n/m n/m - n/m n/m
Faslodex 166 (39) (38) 53 24 25 17 (88) 61 20 25 35 8 4
Zoladex* 196 8 9 112 17 20 2 (20) 35 4 8 46 (6) (8)
Iressa* 80 (29) (28) 59 (1) - 3 (40) 9 (63) (62) 8 (64) (65)
Arimidex* 51 10 11 34 28 31 - n/m 7 (12) (9) 11 (15) (18)
Casodex* 43 (6) (5) 28 22 25 - n/m 4 (23) (20) 11 (38) (40)
Others 26 15 12 7 4 4 - n/m - (56) (54) 18 34 29
Total Oncology 2,274 29 29 546 54 57 911 15 396 38 43 421 27 22
BioPharmaceuticals: CVRM
Farxiga 419 6 7 132 40 42 141 (18) 100 18 23 47 (2) (3)
Brilinta 428 14 15 114 21 23 210 18 89 (3) 1 15 7 11
Bydureon 139 1 1 2 n/m n/m 119 3 16 (19) (15) 2 (40) (38)
Onglyza 131 (11) (10) 45 (11) (8) 56 (8) 17 (22) (19) 13 (13) (12)
Byetta 27 (16) (15) 4 90 92 16 (15) 5 (38) (35) 2 (32) (30)
Other diabetes 16 35 36 - n/m n/m 12 13 2 42 49 1 (63) (61)
Lokelma 8 n/m n/m - - - 7 n/m 1 n/m n/m - - -
Crestor* 296 (16) (15) 185 (12) (10) 16 (63) 36 (16) (13) 58 2 (1)
Seloken/Toprol-XL* 190 18 20 173 17 19 7 13 7 n/m n/m 4 2 4
Atacand* 60 3 5 43 (1) - 4 85 8 (1) (1) 5 15 19
Others 72 1 4 54 6 8 (1) - 13 (14) (11) 5 7 5
BioPharmaceuticals: total CVRM 1,785 2 4 753 9 11 587 (3) 293 (1) 3 152 (2) (3)
BioPharmaceuticals: Respiratory
Symbicort 712 12 13 146 12 14 244 18 170 (8) (5) 152 34 32
Pulmicort 413 6 7 345 12 14 21 (40) 21 (2) 2 25 3 -
Fasenra 206 65 65 1 82 88 139 56 37 n/m n/m 29 45 41
Daliresp/Daxas 58 8 8 1 1 3 50 12 7 (19) (16) - n/m n/m
Duaklir 22 (2) - - n/m n/m 3 - 18 (12) (11) 1 (119) (120)
Bevespi 12 12 12 - n/m n/m 12 11 - n/m n/m - n/m n/m
Breztri 1 n/m n/m - - - - - - - - 1 n/m n/m
Others 114 (9) (7) 75 29 32 - n/m 35 (37) (36) 4 (69) (68)
BioPharmaceuticals: total Respiratory 1,537 13 14 568 14 16 470 22 288 (6) (3) 211 22 20
Other medicines
Nexium 353 (10) (10) 174 5 6 43 (25) 14 (74) (73) 122 10 6
Synagis 63 (75) (75) - (100) (100) 10 (94) 54 (44) (44) - n/m n/m
Losec/Prilosec 46 (24) (23) 34 12 14 3 55 4 (78) (78) 5 (49) (51)
Seroquel XR/IR 40 (27) (27) 9 (27) (27) 7 (49) 21 (20) (17) 4 (13) (15)
Others 151 12 14 8 (42) (47) 29 1 111 27 30 4 (31) (30)
Total other medicines 653 (27) (27) 224 n/m 2 91 (64) 204 (28) (27) 134 3 n/m
Total Product Sales 6,250 8 9 2,091 18 20 2,059 1 1,182 1 4 918 16 13
9 Sequential quarterly Product Sales - 2019
The table below provides an analysis of sequential quarterly Product Sales,
with Actual and CER growth rates reflecting quarter-on-quarter growth. Due to
rounding, the sum of a number of dollar values and percentages may not agree
to totals. The sequential quarterly Product Sales information included in the
Consolidated Financial Information has not been audited by
PricewaterhouseCoopers LLP. *Denotes a legacy medicine.
Q1 2019 Actual CER Q2 2019 Actual CER Q3 2019 Actual CER Q4 2019 Actual CER
Oncology
Tagrisso 630 6 6 784 24 25 891 14 13 884 (1) -
Imfinzi 295 13 13 338 15 15 412 22 22 424 3 4
Lynparza 237 13 13 283 19 20 327 16 15 351 7 8
Calquence 29 21 23 35 21 19 44 27 27 56 25 25
Faslodex 254 (6) (6) 267 5 6 205 (23) (23) 166 (20) (19)
Zoladex* 194 7 6 197 2 1 226 15 16 196 (14) (12)
Iressa* 134 20 18 118 (12) (11) 91 (23) (22) 80 (13) (12)
Arimidex* 51 11 10 60 18 17 63 5 5 51 (20) (18)
Casodex* 48 4 3 57 19 18 52 (8) (6) 43 (18) (17)
Others 20 (13) (14) 28 40 29 20 (27) (22) 26 30 26
Total Oncology 1,892 7 6 2,167 15 15 2,334 8 8 2,274 (3) (2)
BioPharmaceuticals: CVRM
Farxiga 349 (12) (12) 377 8 9 398 5 5 419 5 6
Brilinta 348 (7) (8) 389 12 12 416 7 8 428 3 3
Bydureon 142 3 3 141 (1) - 127 (10) (10) 139 9 10
Onglyza 153 3 3 116 (24) (24) 127 9 11 131 3 4
Byetta 30 (6) (5) 25 (17) (16) 28 10 13 27 (2) (4)
Other diabetes 11 (8) (17) 11 - 8 14 26 22 16 17 17
Lokelma - n/m n/m 2 n/m n/m 4 m/n n/m 8 87 74
Crestor* 335 (5) (6) 310 (7) (7) 337 9 9 296 (12) (11)
Seloken/Toprol-XL* 225 41 38 168 (25) (25) 177 6 8 190 7 8
Atacand* 50 (14) (15) 56 12 14 55 (1) (1) 60 8 9
Others 71 (3) (5) 63 (11) (8) 65 4 2 72 13 16
BioPharmaceuticals: total CVRM 1,714 (2) (3) 1,658 (3) (3) 1,749 5 6 1,785 2 3
BioPharmaceuticals: Respiratory
Symbicort 585 (8) (8) 585 - 1 613 5 4 712 16 17
Pulmicort 383 (2) (2) 333 (13) (13) 337 1 3 413 22 23
Fasenra 129 3 4 167 29 30 202 21 21 206 2 2
Daliresp/Daxas 48 (11) (12) 56 17 18 53 (6) (7) 58 10 10
Duaklir 20 (9) (6) 17 (15) (16) 18 7 5 22 19 20
Bevespi 10 - (5) 10 - 2 10 4 8 12 8 5
Breztri - - - - - - 1 - - 1 (74) (73)
Others 108 (14) (16) 84 (22) (23) 84 - 4 114 36 35
BioPharmaceuticals: total Respiratory 1,283 (6) (6) 1,252 (2) (2) 1,319 5 6 1,537 17 17
Other medicines
Nexium 363 (7) (8) 393 8 8 374 (5) (4) 353 (6) (6)
Synagis 53 (79) (79) 96 81 81 146 52 53 63 (57) (57)
Losec/Prilosec 76 27 26 68 (11) (10) 73 8 9 46 (38) (38)
Seroquel XR/IR 37 (34) (33) 32 (14) (10) 82 n/m n/m 40 (50) (49)
Others 47 (65) (64) 52 11 11 56 8 - 151 n/m n/m
Total other medicines 576 (35) (36) 641 11 12 731 14 14 653 (11) (10)
Total Product Sales 5,465 (5) (6) 5,718 5 5 6,132 7 8 6,250 2 3
Shareholder information
Announcement first quarter 2019 results and Annual General Meeting: 29 April 2020
Announcement of first half and second quarter results 30 July 2020
Announcement of year to date and third quarter results 5 November 2020
Future dividends will normally be paid as follows:
First interim: announced with half-year and second-quarter results and paid in September
Second interim: announced with full-year and fourth-quarter results and paid in March
The record date for the second interim dividend for 2019, payable on 30 March
2020, will be 28 February 2020. The ex-dividend date will be 27 February 2020.
The record date for the first interim dividend for 2020, payable on 14
September 2020, will be 14 August 2020. The ex-dividend date will be 13 August
2020.
Trademarks of the AstraZeneca group of companies appear throughout this
document in italics. Medical publications also appear throughout the document
in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol
are all trademarks of the AstraZeneca group of companies. Trademarks of
companies other than AstraZeneca that appear in this document include Atacand,
owned by AstraZeneca or Cheplapharm (depending on geography); Avastin, a
trademark of Genentech, Inc.; Duaklir, Eklira and Tudorza, trademarks of
Almirall; Enhertu, a trademark of Daiichi Sankyo; Epanova, a trademark of
Chrysalis Pharma AG.; Losec, owned by AstraZeneca or Cheplapharm (depending on
geography); Synagis, owned by Arexis AB or AbbVie (depending on geography).
Information on or accessible through AstraZeneca's websites, including
astrazeneca.com (http://www.astrazeneca.com) , does not form part of and is
not incorporated into this announcement.
Addresses for correspondence
Registered office Registrar and transfer office Swedish Central Securities Depository US depositary
Deutsche Bank Trust Company Americas
1 Francis Crick Avenue Equiniti Limited Euroclear Sweden AB PO Box 191 American Stock Transfer
Cambridge Biomedical Campus Aspect House SE-101 23 Stockholm 6201 15th Avenue
Cambridge Spencer Road Brooklyn
CB2 0AA Lancing NY 11219
West Sussex
BN99 6DA
United Kingdom United Kingdom Sweden United States
+44 (0) 20 3749 5000 0800 389 1580 +46 (0) 8 402 9000 +1 (888) 697 8018
+44 (0) 121 415 7033 +1 (718) 921 8137
db@astfinancial.com (mailto:db@astfinancial.com)
Cautionary statements regarding forward-looking statements
In order, among other things, to utilise the 'safe harbour' provisions of the
US Private Securities Litigation Reform Act 1995, we are providing the
following cautionary statement:
This document contains certain forward-looking statements with respect to the
operations, performance and financial condition of the Group, including, among
other things, statements about expected revenues, margins, earnings per share
or other financial or other measures. Although we believe our expectations are
based on reasonable assumptions, any forward-looking statements, by their very
nature, involve risks and uncertainties and may be influenced by factors that
could cause actual outcomes and results to be materially different from those
predicted. The forward-looking statements reflect knowledge and information
available at the date of preparation of this document and AstraZeneca
undertakes no obligation to update these forward-looking statements. We
identify the forward-looking statements by using the words 'anticipates',
'believes', 'expects', 'intends' and similar expressions in such statements.
Important factors that could cause actual results to differ materially from
those contained in forward-looking statements, certain of which are beyond our
control, include, among other things: the loss or expiration of, or
limitations to, patents, marketing exclusivity or trademarks, or the risk of
failure to obtain and enforce patent protection; effects of patent litigation
in respect of IP rights; the impact of any delays in the manufacturing,
distribution and sale of any of our medicines; the impact of any failure by
third parties to supply materials or services; the risk of failure of
outsourcing; the risks associated with manufacturing biologics; the risk that
R&D will not yield new medicines that achieve commercial success; the risk
of delay to new product launches; the risk that new medicines do not perform
as we expect; the risk that strategic alliances and acquisitions, including
licensing and collaborations, will be unsuccessful; the risks from pressures
resulting from generic competition; the impact of competition, price controls
and price reductions; the risks associated with developing our business in
Emerging Markets; the risk of illegal trade in our medicines; the difficulties
of obtaining and maintaining regulatory approvals for medicines; the risk that
regulatory approval processes for biosimilars could have an adverse effect on
future commercial prospects; the risk of failure to successfully implement
planned cost reduction measures through productivity initiatives and
restructuring programmes; the risk of failure of critical processes affecting
business continuity; economic, regulatory and political pressures to limit or
reduce the cost of our medicines; failure to achieve strategic priorities or
to meet targets, expectations, guidance or indications; the risk of
substantial adverse litigation/government investigation claims and
insufficient insurance coverage; the risk of substantial product liability
claims; the risk of failure to adhere to applicable laws, rules and
regulations; the risk of failure to adhere to applicable laws, rules and
regulations relating to anti-competitive behaviour; the impact of increasing
implementation and enforcement of more stringent anti-bribery and
anti-corruption legislation; taxation risks; exchange rate fluctuations; the
risk of an adverse impact of a sustained economic downturn; political and
socio-economic conditions; the risk of environmental liabilities; the risk of
occupational health and safety liabilities; the risk associated with pensions
liabilities; the impact of failing to attract and retain key personnel and to
successfully engage with our employees; the risk of misuse of social media
platforms and new technology; and the risk of failure of information
technology and cybercrime. Nothing in this document, or any related
presentation / webcast, should be construed as a profit forecast.
10 (#_ftnref1) An unresectable tumour is one that cannot be removed
completely through surgery.
11 (#_ftnref2) Non-small cell lung cancer.
12 (#_ftnref3) The initial treatment of a cancer in the advanced, metastatic
setting.
(( 13 (#_ftnref4) ))( )Breast cancer susceptibility genes 1/2 mutation.
14 (#_ftnref5) Human epidermal growth factor receptor 2 positive.
(( 15 (#_ftnref6) ))( )Chronic lymphocytic leukaemia.
16 (#_ftnref7) Type-2 diabetes.
17 (#_ftnref8) Chronic obstructive pulmonary disease.
(( 18 (#_ftnref9) ))( )Small cell lung cancer.
19 (#_ftnref10) Extensive-disease stage.
20 (#_ftnref11) Neurofibromatosis type 1.
21 (#_ftnref12) Heart failure.
22 (#_ftnref13) CV outcomes trial.
23 (#_ftnref14) Coronary artery disease.
24 (#_ftnref15) Chronic kidney disease.
25 (#_ftnref16) Progression-free survival.
26 (#_ftnref17) Hepatocellular carcinoma (liver cancer).
27 (#_ftnref18) Overall survival.
28 (#_ftnref19) Non-alcoholic steatohepatitis (non-alcoholic fatty liver
disease).
29 (#_ftnref20) Systemic lupus erythematosus.
30 (#_ftnref21) Limited-disease stage.
31 (#_ftnref22) A group of disorders in which the bone marrow fails to
produce healthy blood cells.
32 (#_ftnref23) Formerly MEDI8897.
33 (#_ftnref24) Legacy medicine.
34 (#_ftnref25) Substitution of threonine (T) with methionine (M) at
position 790 of exon 20 mutation.
35 (#_ftnref26) Gross-to-net adjustments reflect the timing difference
between forecast net Product Sales, based on accrued rebates, discounts and
other adjustments, and recognised net Product Sales.
36 (#_ftnref27) Used to decide which medicines to stock at hospitals and
clinics and also to define reimbursement under China's public healthcare
system.
37 (#_ftnref28) The calculation of Reported and Core Gross Profit Margin
excludes the impact of Collaboration Revenue and any associated costs, thereby
reflecting the underlying performance of Product Sales.
38 (#_ftnref29) EBITDA is a non-GAAP financial measure and is defined in the
operating and financial review.
39 (#_ftnref30) Other adjustments include fair-value adjustments relating
to contingent consideration on business combinations and other
acquisition-related liabilities, discount unwind on acquisition-related
liabilities (see Note 4) and provision movements related to certain legal
matters (see Note 5).
40 (#_ftnref31) Each of the measures in the Core column in the above table
are non-GAAP financial measures. See the operating and financial review for
related definitions.
41 (#_ftnref32) Where AstraZeneca does not retain a significant ongoing
interest in medicines or potential new medicines, income from divestments is
reported within Other Operating Income and Expense in the Company's financial
statements.
42 (#_ftnref33) Reflects the adoption of IFRS 16 (see Note 1).
43 (#_ftnref34) Based on best prevailing assumptions around currency
profiles.
44 (#_ftnref35) Based on average daily spot rates in FY 2019.
45 (#_ftnref36) Based on average daily spot rates from 1 January 2020 to 31
January 2020.
46 (#_ftnref37) Other currencies include AUD, BRL, CAD, KRW and RUB.
47 (#_ftnref38) These priorities were determined, along with a set of nine
foundational areas, through a materiality assessment with external and
internal stakeholders, respectively. Combined, they ensure the maximum
possible benefit to patients, the Company, broader society and the planet.
AstraZeneca's sustainability priorities, foundations and commitments align
with the United Nations Sustainable Development Goals (SDG), and, in
particular, SDG three for 'Good Health'.
48 (#_ftnref39) An investor effort designed to help companies enhance their
workforce reporting.
49 (#_ftnref40) Corporate Knights Inc. includes the sustainable-business
magazine Corporate Knights and a research division that produces rankings and
financial-product ratings based on corporate-sustainability performance.
50 (#_ftnref41) Phase II trial data, with potential for registration.
51 (#_ftnref42) Subject to regulatory approvals associated with AbbVie
Inc.'s (AbbVie) proposed acquisition of Allergan plc (Allergan).
52 (#_ftnref43) First patient commenced dosing.
53 (#_ftnref44) Last patient commenced dosing.
54 (#_ftnref45) Based on current expectations and event rates, data from the
ADAURA trial can be expected in 2022.
55 (#_ftnref46) Conducted by the Canadian Cancer Trials Group.
56 (#_ftnref47) Bacillus Calmette-Guerin.
57 (#_ftnref48) Transarterial chemoembolisation.
58 (#_ftnref49) HRR mutated.
59 (#_ftnref50) Conducted by the ARCAGY/Groupe d'Investigateurs National des
Etudes des Cancers Ovariens et du sein.
60 (#_ftnref51) Conducted by the National Cancer Institute (US).
61 (#_ftnref52) Immunohistochemistry.
62 (#_ftnref53) In situ hybridisation.
63 (#_ftnref54) Quaque die, or once a day.
64 (#_ftnref55) End-stage renal disease.
65 (#_ftnref56) Myocardial infarction.
66 (#_ftnref57) Bis in die, or twice a day.
67 (#_ftnref58) MACE is defined as all-cause mortality, stroke and
myocardial infarction.
68 (#_ftnref59) MACE+ is defined as MACE, unstable angina requiring
hospitalisation and congestive heart failure requiring hospitalisation.
69 (#_ftnref60) Patients who have been on dialysis for four months or
fewer.
70 (#_ftnref61) Oral corticosteroid.
71 (#_ftnref62) Birmingham Vasculitis Activity Score.
72 (#_ftnref63) Hypereosinophilic syndrome.
73 (#_ftnref64) Patient-reported outcomes.
74 (#_ftnref65) The Systemic Lupus Erythematosus Responder Index, a
primary outcome measure assessing changes in SLE disease activity without
associated worsening symptoms in other diseases.
75 (#_ftnref66) The BILAG-Based Composite Lupus Assessment, a composite
index measuring disease activity.
76 (#_ftnref67) Long-term extension.
77 (#_ftnref68) The Q4 2019 and Q4 2018 information in respect of the three
months ended 31 December 2019 and 31 December 2018 respectively included in
the Condensed Financial Statements has not been audited by
PricewaterhouseCoopers LLP.
78 (#_ftnref69) The Company adopted IFRIC 23 'Uncertainty over Income Tax
Treatments' from 1 January 2019. See Note 1.
79 (#_ftnref70) On 2 April 2019, the Company completed an issue of
44,386,214 new ordinary shares of $0.25 each at a price of £60.50 per share,
resulting in an increase in share capital of $11m and an increase in share
premium of $3,479m, net of transaction costs of $22m.
80 (#_ftnref71) The profit-participation liability relates to the rights to
participate in the future cashflows from the US profits or losses for
nirsevimab and forms part of the consideration for the disposal of the US
rights to Synagis to Sobi. This has been recognised as a financial liability
and is presented in Other Payables within Non-Current Liabilities.
81 (#_ftnref72) Includes impairment reversals totaling $93m in relation to
biologic-medicine manufacturing sites in Colorado, US.
82 (#_ftnref73) The Company adopted IFRS 16 'Leases' from 1 January 2019.
See Note 1.
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