REG - AstraZeneca PLC - AZN: H1 2016 Results <Origin Href="QuoteRef">AZN.L</Origin> - Part 2
28/07/2016 07:07
- Part 2: For the preceding part double click ID:nRSb4551Fa
4,541 19 29 - - 4,589 5,342 (13) (14)
Gross Margin2 80.6% 81.5% 83.5% -1.5 -2.0
Distribution Expense (91) - - - - (91) (84) 11 8
% Total Revenue 1.6% 1.6% 1.3% -0.3 -0.3
R&D Expense (1,465) 69 12 - - (1,384) (1,356) 3 2
% Total Revenue 26.1% 24.7% 21.5% -3.2 -3.2
SG&A Expense (3,052) 220 275 110 347 (2,100) (2,216) (3) (5)
% Total Revenue 54.5% 37.5% 35.1% -2.7 -2.4
Other Operating Income 370 - 22 - - 392 127 n/m n/m
% Total Revenue 6.6% 7.0% 2.0% +4.9 +5.0
Operating Profit 303 308 338 110 347 1,406 1,813 (21) (22)
% Total Revenue 5.4% 25.1% 28.7% -3.5 -3.6
Net FinanceExpense (325) - - 98 69 (158) (132)
Joint Ventures (8) - - - - (8) (2)
(Loss)/Profit Before Tax (30) 308 338 208 416 1,240 1,679 (27) (26)
Taxation (1) (64) (74) (48) (25) (212) (160)
Tax Rate (3)% 17% 10%
(Loss)/Profit After Tax (31) 244 264 160 391 1,028 1,519 (33) (32)
Non-controlling Interests 28 - - - - 28 1
Net (Loss)/ Profit (3) 244 264 160 391 1,056 1,520 (31) (31)
Weighted Average Shares 1,265 1,265 1,265 1,265 1,265 1,265 1,264
Earnings Per Share ($) 0.00 0.20 0.21 0.12 0.30 0.83 1.21 (31) (31)
1 Other adjustments include provision charges related to certain legal matters (see Note 7) and fair value adjustments arising on acquisition-related liabilities (see Note 6). 2 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales3 All financial figures, except Earnings Per Share, are in $ millions ($m). Weighted Average Shares are in millions.
Profit and Loss
Gross Profit
Reported Gross Profit declined by 1% in the half to $9,652m and, excluding the impact of externalisation, the Reported
Gross Profit Margin was 81.5%, an increase of two percentage points. An adverse impact from the mix of sales, the market
entry of a Crestor generic medicine in the US, as well as a write-down of inventory levels of FluMist in the US were more
than offset by lower restructuring and amortisation charges. Excluding these charges, Core Gross Profit declined by 4% to
$9,738m and, excluding the impact of externalisation, the Core Gross Profit margin declined by one percentage point to
82.3%.
Operating Expenses: R&D
Reported R&D costs increased by 6% in the half to $2,945m. This reflected the number of potential medicines in pivotal
trials as well as the absorption of the R&D costs of ZS Pharma and Acerta Pharma. These costs were partially offset by
lower restructuring costs and impairment charges. Without the impact of ZS Pharma and Acerta Pharma, Reported R&D costs
would have increased by 1%.
Excluding the impact of lower restructuring and impairment charges, Core R&D costs increased by 9% to $2,813m (Q2 2016:
Growth of 3%). Without the impact of the aforementioned investments in ZS Pharma and Acerta Pharma, Core R&D costs in the
half would have increased by 3%.
Operating Expenses: SG&A
Reported SG&A costs were stable in the half at $5,624m, with efficiency savings in sales and marketing operations and
further reductions in IT costs offset by higher restructuring costs, amortisation charges and fair value adjustments, which
are excluded from the Core measurement. Core SG&A costs declined by 5% in the half to $4,227m, in line with full-year
expectations of a material reduction.
Other Operating Income
Reported Other Operating Income of $425m included:
· $183m of income related to the disposal of the ex-US rights to Imdur
· $89m of royalty income related to the entry of the first US Crestor generic medicine from the period between 2 May
2016 and 8 July 2016
· Other royalty income of $117m, including that related to HPV and the antibiotic medicine, ertapenem
Operating Profit
Reported Operating Profit declined by 24% to $1,341m. The Reported Operating Margin declined by three percentage points to
11% of Total Revenue.
Core Operating Profit declined by 14% to $2,999m in the half. The Core Operating Margin declined by three percentage points
to 26% of Total Revenue.
Net Finance Expense
Reported Net Finance Expense of $636m compared to $513m in the prior half, and included $321m for the discount unwind on
acquisition-related liabilities. The Core Net Finance Expense, which excludes the aforementioned discount unwind, was $315m
in the half, compared to $250m in the comparative period. The increase reflected higher loan interest arising from an
increase in net debt, driven by the acquisition of ZS Pharma and the investment in Acerta Pharma.
Taxation
The Reported and Core tax rates for the half were 14% and 17% respectively. These tax rates were lower than the UK
Corporation Tax Rate of 20%, mainly due to the impact of the geographical mix of profits, tax settlements and the UK patent
box. The cash tax paid for the half was $262m, which was 38% of Reported Profit Before Tax and 10% of Core Profit Before
Tax. The Reported and Core tax rates for H1 2015 were 7% and 14% respectively.
Earnings Per Share (EPS)
Reported EPS of $0.51 in the half represented a 45% decline, with Core EPS in the half declining by 20% to $1.78. The
declines were driven by the first market entry of a Crestor generic medicine in the US, as well as the ongoing impact of US
Nexium generic medicines. The reduction also reflected the phasing of Externalisation Revenue over the year.
Productivity
AstraZeneca continues to enhance productivity through the implementation of its restructuring initiatives, including those
announced on 29 April 2016. Restructuring charges of $463m were incurred in the half. The Company remains on track to
realise savings and incur expenses in line with prior announcements.
Cash Flow and Balance Sheet
Cash Flow
The Company generated a net cash inflow from operations of $1,374m, compared with $1,008m in the comparative period.
Improved working capital and lower net tax payments more than offset the lower profit.
Net cash outflows from investing activities were $3,948m compared with $1,234m in the comparative period. The increase
primarily reflected the net cash outflow of $2,383m on the investment in Acerta Pharma.
Net cash outflows from financing activities were $6m, incorporating $2,483m of new long-term loans, net of a dividend
payment in the period of $2,409m. This compared to an outflow of $2,388m in the comparative period.
The cash payment of contingent consideration in respect of the Bristol-Myers Squibb Company share of the global Diabetes
alliance amounted to $141m in the half. The consideration is based on a tiered structure, whereby a higher royalty rate is
applied until a specified level of sales is achieved in the year; thereafter a lower rate is applied to the remaining sales
in the year and settled in the quarter following the application of the charge.
Debt and Capital Structure
At 30 June 2016, outstanding gross debt (interest-bearing loans and borrowings) was $17,579m (30 June 2015: $11,008m). Of
the gross debt outstanding at 30 June 2016, $1,060m was due within one year (30 June 2015: $2,705m). The Company's net debt
position at 30 June 2016 was $12,734m (30 June 2015: $5,994m).
On 9 May 2016, the Company announced the successful pricing of euro medium-term notes in an aggregate principal amount of
E2.2bn, consisting of three tranches:
E500m of five-year, fixed-rate notes with a coupon of 0.25%
E900m of eight-year, fixed-rate notes with a coupon of 0.75%
E800m of 12-year, fixed-rate notes with a coupon of 1.25%
Shares in Issue
During the half, 0.5 million shares were issued in respect of share option exercises for a consideration of $22m. The total
number of shares in issue as at 30 June 2016 was 1,265 million.
Dividends
The Board has recommended an unchanged first interim dividend of $0.90 (68.7 pence, 7.81 SEK) per Ordinary Share.
Capital Allocation
The Board's aim is to continue to strike a balance between the interests of the business, financial creditors and the
Company's shareholders. After providing for investment in the business, supporting the progressive dividend policy and
maintaining a strong, investment-grade credit rating, the Board will keep under review potential investment in immediately
earnings-accretive, value-enhancing opportunities.
Sensitivity: Foreign-Exchange Rates
The Company provides the following currency sensitivity information:
Average Exchange Rates Versus USD Impact Of 5% Weakening In Exchange Rate Versus USD ($m)2
Currency Primary Relevance FY 2015 H1 20161 Change % Total Revenue Core Operating Profit
EUR Product Sales 0.90 0.90 1 (178) (103)
JPY Product Sales 121.04 111.74 8 (102) (66)
CNY Product Sales 6.28 6.54 (4) (133) (62)
SEK Costs 8.43 8.33 1 (8) 71
GBP Costs 0.65 0.70 (6) (34) 96
Other3 (201) (122)
1Based on average daily spot rates in the six months to the end of June 20162Based on 2015 actual results at 2015 actual exchange rates3Other important currencies include AUD, BRL, CAD, KRW and RUB
Currency Hedging
AstraZeneca monitors the impact of adverse currency movements on a portfolio basis, recognising correlation effects. The
Company may hedge to protect against adverse impacts on cash flow over the short to medium term. As at 30 June 2016,
AstraZeneca had hedged 90% of forecast short-term currency exposure that arises between the booking and settlement dates on
non-local currency purchases and Product Sales.
Related-Party Transactions
There have been no significant related-party transactions in the period.
Principal Risks and Uncertainties
It is not anticipated that the nature of the principal risks and uncertainties that affect the business, and which are set
out on pages 212 to 226 of the Annual Report and Form 20-F Information 2015, will change in respect of the second six
months of the financial year.
In summary, the principal risks and uncertainties listed in the Annual Report and 20-F Information 2015 are:
a) Medicine pipeline and intellectual property risks
Failure to meet development targets; delay to new product launches; acquisitions and strategic alliances, including
licensing and collaborations, may be unsuccessful; difficulties obtaining and maintaining regulatory approvals for new
products; failure to obtain and enforce effective intellectual property (IP) protection.
b) Commercialisation risks
Expiry or loss of, or limitations to, IP rights and consequential pressure from generic competition; abbreviated approval
processes for biosimilars; political and socio-economic conditions; developing our business in Emerging Markets; challenges
to achieving commercial success of new products; effects of patent litigation in respect of IP rights; price controls and
reductions; economic, regulatory and political pressures; illegal trade in medicines; increasing implementation and
enforcement of more stringent anti-bribery and anti-corruption legislation; failure to adhere to applicable laws, rules and
regulations; failure of information technology and cybercrime; any expected gains from productivity initiatives are
uncertain; failure of outsourcing; failure to attract and retain key personnel and failure to successfully engage with
employees.
c) Supply chain and business execution risks
Difficulties and delays in the manufacturing, distribution and sale of products; reliance on third-party goods and
services; manufacturing biologic products.
d) Legal, regulatory and compliance risks
Adverse outcome of litigation and/or governmental investigations; failure to adhere to applicable laws, rules and
regulations relating to anti-competitive behaviour; substantial product-liability claims; failure to adhere to applicable
laws, rules and regulations relating to environment, health and safety; environmental and occupational health and safety
liabilities; misuse of social media platforms and new technology.
e) Economic and financial risks
Failure to achieve strategic priorities or to meet targets or expectations; adverse impact from sustained economic
downturn; fluctuations in exchange rates; limited third-party insurance coverage; taxation; pensions.
Corporate and Business Development Update
______________________________________________________________________________________
The highlights of the Company's corporate and business development activities since the prior results announcement are
shown below.
a) Licensing Agreements In Skin Diseases
On 1 July 2016, the Company announced that it had entered into an agreement with LEO Pharma A/S (LEO Pharma), a specialist
in dermatological care, for the global licence to tralokinumab in skin diseases. Tralokinumab is a potential new medicine
(an IL-13 monoclonal antibody) that has completed a Phase IIb trial for the treatment of patients with atopic dermatitis,
an inflammatory skin disease resulting in itchy, red, swollen and cracked skin.
Under the terms of the agreement, LEO Pharma will make an upfront payment to AstraZeneca of $115m, up to $1bn in
commercially-related milestones and up to mid-teen tiered percentage royalties on Product Sales. AstraZeneca will
manufacture and supply tralokinumab to LEO Pharma. AstraZeneca will retain all rights to tralokinumab in respiratory
disease and any other indications outside of dermatology. The Company anticipates completion of the transaction in the
third quarter.
On the same date, AstraZeneca and an affiliate of Valeant Pharmaceuticals International, Inc. (Valeant) agreed to terminate
the licence for Valeant's right to develop and commercialise brodalumab in Europe. Simultaneously, AstraZeneca has entered
into an agreement with LEO Pharma for the exclusive licence to brodalumab in Europe. Brodalumab is an IL-17 receptor
monoclonal antibody under regulatory review for patients with moderate-to-severe plaque psoriasis (a skin disease that
causes red patches of skin covered with silvery scales) and in development for psoriatic arthritis (inflammation of the
joints associated with psoriasis).
In September 2015, AstraZeneca and Valeant entered an agreement granting Valeant an exclusive licence to develop and
commercialise brodalumab globally, outside Japan and certain other Asian countries where the rights are held by Kyowa Hakko
Kirin Co., Ltd. Valeant will continue to lead development and commercialisation of brodalumab in the US and all other
markets included in the original agreement.
LEO Pharma will gain the European rights to brodalumab under similar terms to those agreed with Valeant. Additionally,
Amgen Inc. will continue to receive a low single-digit percentage inventor royalty.
b) Rights To Global Anaesthetics Portfolio
On 9 June 2016, the Company announced that it had entered into a commercialisation agreement with Aspen Global Incorporated
(AGI), part of Aspen Pharmacare Holdings Limited, for rights to its global anaesthetics portfolio outside the US.
Under the terms of the agreement, AGI will acquire the commercialisation rights for an upfront consideration of $520m.
Additionally, AGI will pay AstraZeneca up to $250m in a Product Sales-related payment, as well as double-digit percentage
trademark royalties on Product Sales. AstraZeneca will manufacture and supply the medicines on a cost-plus basis to AGI for
an initial period of 10 years. Upon completion, anticipated in the third quarter of 2016, AGI will assume responsibility
for all activities relating to the sale of the portfolio in all relevant markets.
AstraZeneca will retain a significant ongoing interest in the anaesthetics portfolio, including a long-term manufacturing
and supply agreement and participation in commercial strategy. The upfront and milestone payments, as well as royalty
receipts, which are open-ended, will therefore be reported as Externalisation Revenue in the Company's financial
statements.
c) Zurampic In Europe And Latin America
On 2 June 2016, AstraZeneca announced that it had entered into a licensing agreement with Grünenthal GmbH (Grünenthal) for
the exclusive rights to Zurampic (lesinurad) in Europe and Latin America. Zurampic was approved by the European Medicines
Agency (EMA) in February 2016, in combination with a xanthine oxidase inhibitor, for the adjunctive treatment of
hyperuricemia (excess of uric acid in the blood) in adult patients with uncontrolled gout.
Under the terms of the agreement, Grünenthal will submit a fixed-dose combination programme for regulatory review and will
pay AstraZeneca up to $230m in sales and other related milestones over the lifetime of the contract. Grünenthal will also
pay tiered, low double-digit percentage royalties on annual Product Sales. Revenue from the licensing agreement will
provide AstraZeneca with future recurring Externalisation Revenue from expected milestone payments and tiered, low
double-digit percent royalty payments on Product Sales. The Company anticipates completion of the transaction in the third
quarter.
d) Acquisition Of Takeda's Respiratory Business
On 3 May 2016 AstraZeneca announced that it had completed the acquisition of the main respiratory business of Takeda. The
agreement, announced in December 2015, included the expansion of rights to roflumilast (marketed as Daliresp in the US and
Daxas in other countries), the only approved oral phosphodiesterase 4 (PDE4) inhibitor for the treatment of COPD. PDE4 is
an enzyme involved in modulating production of inflammatory mediators by immune cells. AstraZeneca has marketed Daliresp in
the US since the acquisition of the rights from Actavis in the first quarter of 2015.
e) Agreement with China Medical System Holdings (CMS) - Imdur outside the US
On 29 February 2016, AstraZeneca announced that it had entered into an agreement with CMS and its associated company, Tibet
Rhodiola Pharmaceutical Holding Co., for the divestment of the global rights to Imdur outside the US. Imdur is a mature
medicine for the prevention of angina in patients with heart disease; its global sales outside the US were $57m in FY 2015.
The transaction completed in the second quarter.
Under the terms of this agreement, AstraZeneca recognised income of $183m for the rights to Imdur in all markets outside
the US. Income from the agreement was reported within Other Operating Income.
Research and Development Update
______________________________________________________________________________________
A comprehensive table with AstraZeneca's pipeline of medicines in human trials can be found later in this document.
Since the results announcement on 28 April 2016 (the period):
Regulatory Approvals 3 - Qtern (saxagliptin/dapagliflozin) - type-2 diabetes (EU)- Zavicefta (previously CAZ AVI) - serious infections (EU)- Pandemic Live Attenuated Influenza
Vaccine - pandemic influenza (EU)1
Regulatory Submission Acceptances 1 - saxagliptin/dapagliflozin, resubmission (US)
Positive Phase III Data Readouts 3 - benralizumab - severe asthma- Faslodex - breast cancer (1st line)- Tagrisso - lung cancer (2nd line)
Other Key Developments 2 - Orphan Drug Designation: selumetinib - thyroid cancer (US)- Fast Track Designation: Lynparza - ovarian cancer (2nd line) (US)
New Molecular Entities (NMEs) in Pivotal Trials or under Regulatory Review* 14 Respiratory & Autoimmunity- brodalumab - psoriasis*- benralizumab - severe asthma- tralokinumab - severe asthma- PT010 - COPD- anifrolumab - lupus
Cardiovascular & Metabolic Diseases- ZS-9* - hyperkalaemia- roxadustat - anaemia Oncology- cediranib* - ovarian cancer- selumetinib - lung cancer-
durvalumab - multiple cancers- durva + treme - multiple cancers- acalabrutinib - blood cancers- moxetumomab pasudotox - leukaemia Neuroscience- AZD3293 -
early Alzheimers' disease
Projects in clinical pipeline 145
1Conditional Marketing Authorisation
1. Respiratory & Autoimmunity
AstraZeneca's Respiratory portfolio includes a range of differentiated potential medicines such as novel combinations,
biologics and devices for the treatment of asthma and COPD. The pipeline also includes a number of potential medicines
designed to treat autoimmune diseases, with a lead programme in systemic lupus erythematosus.
AstraZeneca highlighted the breadth of its Respiratory portfolio at the American Thoracic Society international conference
in May 2016, involving more than 60 posters and abstracts that illustrated progress in asthma and COPD medicines.
The following shows the progress in the Respiratory & Autoimmunity portfolio since the last results announcement:
a) Benralizumab (severe asthma)
On 17 May 2016, the Company announced positive top-line results from the benralizumab Phase III programme, an encouraging
milestone for AstraZeneca and for millions of patients suffering from severe asthma. Two pivotal Phase III trials (SIROCCO
and CALIMA) achieved statistical significance in reducing exacerbations among patients with severe uncontrolled asthma with
eosinophilic inflammation. These trials evaluated treatment with benralizumab versus placebo added to high-dose inhaled
corticosteroid (ICS) plus long-acting beta agonist (LABA) for the prevention of asthma exacerbations in patients with
uncontrolled severe asthma.
Benralizumab is an eosinophil-depleting monoclonal antibody and AstraZeneca's first respiratory biologic medicine. Upon
anticipated regulatory approval, benralizumab will potentially be used in addition to inhaled combination medicines.
Benralizumab has the potential to deliver rapid and sustained improvement in lung function, symptoms and quality of life,
together with significant reductions in exacerbations, hospitalisations and oral corticosteroids use; and simple,
convenient dosing and administration.
b) Brodalumab (psoriasis)
On 19 July 2016, the Dermatologic and Ophthalmic Drugs Advisory Committee appointed by the US FDA voted unanimously to
recommend approval for brodalumab for adult patients with moderate-to-severe plaque psoriasis. 14 of the panelists voted
for approval with conditions related to product labelling and post-marketing obligations based on observations related to
suicidal ideation and behaviour. Patient safety is the highest priority and as such the Company is committed to supporting
the partner Valeant in addressing any concerns raised by the Committee as the FDA continues its review of brodalumab.
Valeant is the Biologics License Application (BLA) holder for brodalumab and is responsible for all development and
commercialisation activities in the US. Valeant has communicated that the FDA assigned a Prescription Drug User Fee Act
(PDUFA) date of 16 November 2016 for the BLA.
2. Cardiovascular & Metabolic Diseases
This therapy area includes a broad type-2 diabetes portfolio, differentiated devices and unique small and large-molecule
programmes to reduce morbidity, mortality and organ damage across cardiovascular (CV) disease, diabetes and chronic kidney
disease (CKD) indications.
a) Brilinta (CV disease)
In May 2016, the
Brilinta
THEMIS trial
completed its recruitment, with more than 19,000 patients now randomised within the trial. THEMIS is part of PARTHENON,
AstraZeneca's largest clinical-trial programme, evaluating Brilinta in more than 80,000 high-risk CV patients. THEMIS is an
event-driven, randomised, double-blind, placebo-controlled trial, designed to evaluate the effect of Brilinta versus
placebo for prevention of major CV events in patients with
established coronary artery disease and type-2 diabetes
, but without a previous myocardial infarction (MI) or stroke. Results are expected in 2018.
The Ministry of Health, Labour and Welfare Drug Committee assessment of Brilinta's application for approval is ongoing in
Japan and a regulatory decision is now anticipated in the second half of 2016.
There were three new treatment guidelines updated in China in the first half of the year. The ACS Emergency Room Rapid
Guideline, Chinese PCI Guideline and the Coronary Artery Bypass Graft Consensus (2016) guideline. These recommended
Brilinta as 'first-choice treatment' over any other platelet inhibitor.
b) Qtern (saxagliptin/dapagliflozin) (type-2 diabetes)
On 19 July 2016 AstraZeneca announced that the European Commission had approved Qtern tablets for the treatment of type-2
diabetes in the European Union (EU) plus Iceland, Liechtenstein and Norway. The fixed-dose combination of saxagliptin and
dapagliflozin was the first DPP-4/SGLT2 combination medicine to be approved.
After receiving a Complete Response Letter (CRL) from the US FDA in October 2015, the Company submitted a regulatory filing
with new clinical data, which was accepted by the FDA. The submission was based on discussions with regulators and was a
first step towards regulatory approval in the US. The PDUFA date is scheduled for the first quarter of 2017.
c) Type-2 diabetes CV outcomes trials
As the field of type-2 diabetes medicines continues to evolve, with multiple outcomes trials producing data, AstraZeneca
continues to assess both the SGLT2 and GLP-1 classes for potential long-term benefits. Two significant type-2 diabetes
outcomes trials are underway and are fully recruited. Details and updates on those two trials are listed below:
Medicine Trial Mode of Action Number of Patients Primary Endpoint Timeline
Bydureon EXSCEL GLP-1 agonist ~15,000 Time to first occurrence of CV death, non-fatal MI or non-fatal stroke 2018(final analysis)
Farxiga DECLARE SGLT2 inhibitor ~17,000* Time to first occurrence of CV death, non-fatal MI or non-fatal stroke 2019(final analysis)2017(anticipated interim analysis)
*Includes ~10,000 patients who have had no prior index event (primary prevention) and ~7,000 patients who have suffered an
index event (secondary prevention).
d) ZS-9 (hyperkalaemia)
On 27 May 2016, AstraZeneca announced that the US FDA had issued a CRL regarding the new drug application (NDA) for
ZS-9 (sodium zirconium cyclosilicate),
the potential new medicine being developed for the treatment of
hyperkalaemia
(a high potassium level in the blood serum) by ZS Pharma, a wholly-owned subsidiary of AstraZeneca. The CRL referred to
observations arising from a pre-approval manufacturing inspection. The FDA also acknowledged receipt of recently-submitted
data which it had yet to review. The CRL did not require the generation of new clinical data. AstraZeneca and ZS Pharma
have made important progress in addressing the findings of the CRL and are in dialogue with the FDA regarding the timing of
the resubmission of the NDA. From the time of the resubmission, anticipated to be in the second half of the year, the
Company assumes a maximum of a six-month period for the FDA review.
In the EU, the EMA has accepted a request to extend the submission timeline in order for the Company to provide a
comprehensive and complete package. The Company continues to anticipate EU approval in the first half of 2017.
e) Roxadustat (anaemia)
In the period, the Company approved
Phase III investment for roxadustat
in an additional type of anaemia,
Myelodysplastic Syndrome (MDS),
with AstraZeneca's partner, Fibrogen, Inc. MDS is a condition in which the bone marrow produces insufficient levels of
healthy blood cells and there are abnormal (blast) cells in the blood and/or bone marrow. Anaemia is observed in
approximately 60-80% of MDS patients, producing symptoms of fatigue, angina, dizziness, cognitive impairment or altered
sense of well-being and all too often requiring transfusions. Transfused patients with MDS experience higher rates of
cardiac events, diabetes, infections, and transformation to acute myeloid leukaemia and have a decreased overall survival
rate when compared with non-transfused patients.
The Phase III trial will seek to demonstrate the efficacy and safety of roxadustat, which acts on both the production of
red blood cells and management of iron, in achieving transfusion independence in patients with lower-risk MDS and a low
transfusion burden.
Roxadustat is already in late Phase III development against anaemia arising from CKD, with a rolling regulatory submission
expected to initiate in China before the end of the year. The first Phase III data from an AstraZeneca-sponsored
registrational trial are expected to be available during the second half of 2017, with a potential regulatory submission in
the US anticipated in 2018.
3. Oncology
AstraZeneca has a deep-rooted heritage in Oncology and offers a rapidly-growing portfolio of new medicines that has the
potential to transform patients' lives and the Company's future. With at least six new medicines to be launched between
2014 and 2020 and a broad pipeline of small molecules and biologics in development, the Company is committed to advancing
New Oncology as one of AstraZeneca's six Growth Platforms focused on lung, ovarian, breast and blood cancers.
In addition to core capabilities, the Company is actively pursuing innovative collaborations and investments that
accelerate the delivery of AstraZeneca's strategy, as illustrated by the Company's investment in Acerta Pharma in
haematology.
AstraZeneca highlighted its pipeline of Oncology medicines at the American Society of Clinical Oncology meeting on 6 June
2016. At the meeting, AstraZeneca's Oncology management team presented both pipeline programmes and lifecycle management
trials in Immuno-Oncology (IO), DNA Damage Response (DDR), tumour drivers & resistance and haematology. The Company
presented 73 abstracts and oral presentations, including updates on the Lynparza Study 19, Tagrisso in leptomeningeal
disease and durvalumab in 2nd-line, PDL1-positive urothelial bladder cancer. In addition to the breadth and depth of the
data shared at the meeting, AstraZeneca announced a number of encouraging updates in the period.
a) Faslodex (breast cancer)
On 27 May 2016, the Company announced that
Faslodex
had
met its primary endpoint in the
FALCON trial
. Top-line data showed that 1st-line treatment with Faslodex extends progression-free survival (PFS) in postmenopausal
women with locally-advanced or metastatic hormone receptor-positive breast cancer, compared to the current standard of
care. Full evaluation of the data is ongoing and results are expected to be presented at a forthcoming medical meeting.
b) Lynparza (ovarian and other cancers)
The Phase III SOLO-2 trial for Lynparza was granted Fast Track Designation by the FDA in the period. SOLO-2 is designed to
evaluate Lynparza as a potential maintenance treatment for platinum-sensitive, relapsed germline BRCA-mutated,
ovarian-cancer patients who are in complete or partial response following platinum-based chemotherapy. The FDA's Fast Track
programme is designed to expedite the development and review of medicines to treat serious conditions and fill an unmet
medical need. SOLO-2 high-level results are expected to be available later this year.
On 18 May 2016, the top-line results from the
Phase III Lynparza GOLD trial
in
advanced gastric-cancer
patients were announced. Lynparza, in combination with paclitaxel chemotherapy and compared with paclitaxel chemotherapy
alone, did not meet the primary endpoint of overall survival (OS) in either the overall population or patients whose tumour
tested negative for Ataxia-Telangectasia Mutated (ATM) protein. While there was a numerical survival trend in the Lynparza
plus paclitaxel arm, it did not meet statistical significance. The particular regimen in the GOLD trial, at a low dose and
in combination with chemotherapy, differed from other Phase III trials in the Lynparza programme. The Lynparza GOLD data
will be analysed and submitted for presentation at a forthcoming medical meeting.
c) Tagrisso (lung cancer)
On 18 July 2016 the Company announced that Tagrisso's confirmatory Phase III AURA3 trial had met its primary endpoint,
demonstrating superior PFS data compared to standard platinum-based doublet chemotherapy in 2nd-line patients with EGFR
T790M mutation-positive, locally-advanced or metastatic non-small cell lung cancer (NSCLC) whose disease had progressed
following 1st-line EGFR tyrosine kinase inhibitor therapy.
Tagrisso also demonstrated a safety profile consistent with previous trials and, in addition to PFS, the objective response
rate, disease control rate and duration of response also achieved clinically-meaningful improvements versus chemotherapy. A
full evaluation of the AURA3 data, including an analysis of OS data is ongoing and the results will be presented at a
forthcoming medical meeting.
d) Selumetinib (lung and other cancers)
On 12 May 2016, selumetinib
was granted Orphan Drug Designation by the FDA for the treatment of patients with
differentiated thyroid cancer (DTC)
. DTC, diagnosed in approximately 60,000 patients in the US each year, is usually treated with surgery. High-risk patients,
however, need additional radioactive iodine (RAI) to kill cancer cells. Up to one in seven patients do not respond to RAI
because they lack a key substance, sodium/iodine importer, that is needed to move RAI into cancer cells.
Selumetinib is a MEK 1/2 inhibitor that has already demonstrated clinically-meaningful increases in iodine uptake and
retention in patients with thyroid cancer who did not previously respond to RAI. A MEK inhibitor inhibits the
mitogen-activated protein kinase enzymes (MEK1 and/or MEK2).
e) Durvalumab (multiple cancers)
The Company continues to advance multiple monotherapy trials of durvalumab and combination trials of durvalumab with
tremelimumab in IO. An update on key AstraZeneca-sponsored ongoing trials with durvalumab is provided over the page:
LUNG CANCER Name Phase Line of treatment Population Design Timelines Status Early disease Monotherapy ADJUVANT1 III N/A Stage Ib-IIIa NSCLC durvalumab vs placebo FPD2 Q1 2015 Data expected 2020 Recruiting PACIFIC III N/A Stage III unresectable NSCLC durvalumab vs placebo FPD Q2 2014 LPCD3 Q2 2016 Data expected H2 2017 Recruitment completed Advanced/metastatic disease Combination therapy MYSTIC III 1st line NSCLC durvalumab vs durva + treme vs SoC4 FPD Q3 2015
LPCD Q3 2016 Data expected H1 2017 Recruitment completed NEPTUNE III 1st line NSCLC durva + treme vs SoC FPD Q4 2015 Data expected 2018 Recruiting - III 1st line NSCLC durvalumab + chemotherapy +/- tremelimumab - Recruiting in safety lead-in Phase I/II trial ARCTIC III 3rd line PD-L1 neg.5 NSCLC durvalumab vs tremelimumab vs durva + treme vs SoC FPD Q2 2015 LPCD Q3 2016 Data expected H1 2017 Recruitment completed - III 1st line SCLC6 durva + treme + chemotherapy vs SoC - Awaiting first patient dosed 1
Conducted by the National Cancer Institute of Canada 2 FPD = First Patient Dosed 3LPCD = Last Patient Commenced Dosing4 SoC = Standard of Care 5 PD-L1 negativity cut-off measured at <25% of tumour-cell staining 6 SCLC = Small Cell Lung Cancer METASTATIC OR RECURRENT HEAD AND NECK CANCER Name Phase Line of treatment Population Design Timelines Status Monotherapy HAWK II 2nd line PD-L1 pos. SCCHN1 durvalumab (single arm) FPD Q1 2015 LPCD Q2 2016 Data expected H2 2016 Recruitment completed
Combination therapy CONDOR II 2nd line PD-L1 neg. SCCHN durvalumab vs tremelimumab vs durva + treme FPD Q2 2015 LPCD Q2 2016 Data expected H1 2017 Recruitment completed KESTREL III 1st line SCCHN durvalumab vs durva + treme vs SoC FPD Q4 2015 Data expected H2 2017 Recruiting EAGLE III 2nd line SCCHN durvalumab vs durva + treme vs SoC FPD Q4 2015 Data expected 2018 Recruiting
Early disease Monotherapy
ADJUVANT1 III N/A Stage Ib-IIIa NSCLC durvalumab vs placebo FPD2 Q1 2015 Data expected 2020 Recruiting
PACIFIC III N/A Stage III unresectable NSCLC durvalumab vs placebo FPD Q2 2014 LPCD3 Q2 2016 Data expected H2 2017 Recruitment completed
Advanced/metastatic disease Combination therapy
MYSTIC III 1st line NSCLC durvalumab vs durva + treme vs SoC4 FPD Q3 2015 Recruitment completed
LPCD Q3 2016 Data expected H1 2017
NEPTUNE III 1st line NSCLC durva + treme vs SoC FPD Q4 2015 Data expected 2018 Recruiting
- III 1st line NSCLC durvalumab + chemotherapy +/- tremelimumab - Recruiting in safety lead-in Phase I/II trial
ARCTIC III 3rd line PD-L1 neg.5 NSCLC durvalumab vs tremelimumab vs durva + treme vs SoC FPD Q2 2015 LPCD Q3 2016 Data expected H1 2017 Recruitment completed
- III 1st line SCLC6 durva + treme + chemotherapy vs SoC - Awaiting first patient dosed
-
III
1st line
SCLC6
durva + treme + chemotherapy vs SoC
-
Awaiting first patient dosed
1 Conducted by the National Cancer Institute of Canada 2 FPD = First Patient Dosed 3LPCD = Last Patient Commenced
Dosing4 SoC = Standard of Care 5 PD-L1 negativity cut-off measured at <25% of tumour-cell staining 6 SCLC = Small Cell
Lung Cancer METASTATIC OR RECURRENT HEAD AND NECK CANCER
Name Phase Line of treatment Population Design Timelines Status
Monotherapy
HAWK II 2nd line PD-L1 pos. SCCHN1 durvalumab (single arm) FPD Q1 2015 LPCD Q2 2016 Data expected H2 2016 Recruitment completed
Combination therapy
CONDOR II 2nd line PD-L1 neg. SCCHN durvalumab vs tremelimumab vs durva + treme FPD Q2 2015 LPCD Q2 2016 Data expected H1 2017 Recruitment completed
KESTREL III 1st line SCCHN durvalumab vs durva + treme vs SoC FPD Q4 2015 Data expected H2 2017 Recruiting
EAGLE III 2nd line SCCHN durvalumab vs durva + treme vs SoC FPD Q4 2015 Data expected 2018 Recruiting
1SCCHN = Squamous Cell Carcinoma of the Head and Neck
METASTATIC UROTHELIAL BLADDER CANCER
Name Phase Line of treatment Population Design Timelines Status
Combination therapy
DANUBE III 1st line Cisplatin chemo-therapy- eligible/ineligible bladder cancer durvalumab vs durva + treme vs SoC FPD Q4 2015 Data expected 2018 Recruiting
OTHER METASTATIC CANCERs/EARLY TRIALs
Name Phase Line of treatment Population Design Timelines
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