REG - AstraZeneca PLC - Final Results <Origin Href="QuoteRef">AZN.L</Origin> - Part 1

AstraZenecaAnnouncement

05/02/2015 07:11

RNS Number : 1189E
AstraZeneca PLC
05 February 2015
AstraZeneca PLC
Fourth Quarter AND Full Year Results 2014
London, 5 February 2015
Financial results for 2014 in line with upgraded Company guidance given with third quarter 2014 results. 
 Full year revenue up 3% at constant exchange rates (CER)1 to $26,095m. 
o A change in accounting for the US Branded Pharmaceutical Fee reduced revenue by $113m; 
excluding this effect growth was 4%.
 Core EPS for the full year was $4.28, down 8%, following investment in the growth platforms and accelerated pipeline.
 Fourth quarter revenue up 2% to $6,683m: fourth consecutive quarter of revenue growth.
 Core EPS for the quarter was $0.76, down 28%.
Growth platforms up 15% in 2014, contributing 53% of total revenue.
 Brilinta:+70%, continued global progress.
 Diabetes: +139%, successful integration of BMS assets, strong Farxiga/Forxiga launch and good uptake of new Bydureon Pen in the US.
 Respiratory: +10%, with Emerging Markets growth of 27% and decelerating US growth of 15%.
 Emerging Markets: +12%, with China growth of 22%, making China AstraZeneca's second largest national market.
 Japan: -3%, due to mandated price cuts, increased use of generics and Nexium recall in the fourth quarter.
A record six product approvals in 2014.
Pipeline progress since Q3 2014 results:
 Duaklir Genuair:EU approval for COPD. Brodalumab2: superior to ustekinumab in second and third pivotal Phase III studies in psoriasis. Lesinurad: submission for gout treatment accepted in the EU.
 Brilinta: PEGASUS study met its primary endpoints. Saxagliptin/dapagliflozin FDC: filed in the US.
 Lynparza:US and EU approvals for advanced BRCA-mutated ovarian cancer. Iressa: NDAaccepted.
 Moventig: EU approval for opioid-induced constipation. Movantik: descheduled by the US DEA.
The Board has declared a second interim dividend of $1.90 per share, bringing the dividend for the full year to $2.80. The Board reaffirms its commitment to the Company's progressive dividend policy.
2015 Guidance: Sales revenue is expected to decline by mid single-digit percent at CER3. Consistent with its business model, the Company will continue to seek externalisation revenue from partnerships and licensing select products and technologies. Core EPS is expected to increase by low single-digit percent at CER.
2015 Newsflow:
 Pivotal data: MEDI4736 3L NSCLC; tremelimumab mesothelioma; selumetinib uveal melanoma; PT003 COPD.
 Filings: AZD9291 2L NSCLC; cediranib ovarian cancer (EU); brodalumab psoriasis.
 Potential approval decisions: saxagliptin/dapagliflozin FDC; Iressa; lesinurad.
1All growth rates are shown at CER unless specified otherwise. 
2Brodalumab developed in collaboration with Amgen.
3Assumes imminent launch of a Nexium generic in the US market.
Financial Summary
 Group
Q4 2014
$m
Actual
%
CER
%

FY 2014
$m
Actual
%
CER
%
 Revenue
6,683
(2)
2

26,095
1
3
 Core*







 Operating Profit
1,184
(40)
(33)

6,937
(17)
(13)
 Earnings per Share
$0.76
(38)
(28)

$4.28
(15)
(8)
Reported







 Operating (Loss)/Profit
(349)
(41)
(59)

2,137
(42)
(31)
 (Loss)/Earnings per Share
($0.25)
(40)
(69)

$0.98
(52)
(34)
* See Operating and Financial Review below for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.
Pascal Soriot, Chief Executive Officer, commenting on the results, said:
"2014 was a remarkable year for AstraZeneca. We achieved a record six product approvals as we accelerated our pipeline across all main therapy areas. Alongside this, we delivered four quarters of revenue growth, with growth platforms now contributing over half of our revenues. Our strong performance in Emerging Markets is a particular highlight, with China becoming our second largest national market, while the delay in the introduction of Nexium generics in the US helped to direct additional investment towards our launch brands and our rapidly advancing pipeline.
"Our guidance for 2015 reflects our focus on creating value by investing in our new brands and exciting pipeline while we continue improving productivity to protect our profitability in the face of patent expiries. With the depth of our science and the momentum we have built across our organisation, we are on track to return to growth by 2017 and are well positioned to deliver our long-term goals."
Research and Development Update
____________________________________________________________________________________________________________________________________________________
A comprehensive update of the AstraZeneca R&D pipeline is presented in conjunction with this fourth quarter and full year results announcement and can be found at the end of this release.
As at 31 December 2014, the AstraZeneca pipeline included 133 projects, of which 118 are in the clinical phase of development. There are 13 NME projects currently in late stage development, either in pivotal studies or under regulatory review. During 2014, across the portfolio, 50 projects successfully progressed to their next phase. This includes two first launches and four first approvals in a major market, and 14 NME progressions. In addition, 21 projects entered first human testing. Nine projects were withdrawn.
There has been notable progress in the following areas since the third quarter 2014 results announcement:
Symbicort SYGMA trial start
During the fourth quarter of 2014, AstraZeneca randomised the first patients into the Symbicort SYGMA clinical programme. 
Between 50% and 75% of asthma patients have mild asthma, yet, despite the availability of conventional treatment regimens, the disease remains uncontrolled. For many patients with mild asthma, an over-reliance on short-acting beta2-agonist (SABA) reliever or 'rescue' medications, and failure to adhere to prescribed daily maintenance doses of an anti-inflammatory drug, lead to an under-treatment of the underlying inflammation. This increases the risk of exacerbations and progression of the disease.
The SYGMA programme will test the hypothesis that, as compared to a short-acting beta2-agonist rescue inhaler administered 'as needed', better asthma control could be achieved with Symbicort (budesonide/formoterol) Turbuhaler administered 'as needed'. In addition, SYGMA will also evaluate the relative efficacy of a more flexible dosing regimen with Symbicort Turbuhaler administered 'as needed', and a 'fixed-dose' regular inhaled corticosteroid plus SABA 'as needed'.
Duaklir Genuair approval
On 24 November 2014, AstraZeneca announced that Duaklir Genuair (aclidinium bromide/formoterol fumarate 340/12mcg) had been granted Marketing Authorisation by the European Commission (EC) to be used as a maintenance bronchodilator treatment to relieve symptoms in adult patients with chronic obstructive pulmonary disease (COPD).
Approximately 300 million people around the world live with COPD, a progressive and chronic disease where people find breathing difficult due to limited airflow. Improving the lung function and reducing daily symptoms such as breathlessness are important to the management of COPD.
Duaklir is a fixed-dose combination of already-approved Eklira (aclidinium bromide), a long-acting muscarinic-antagonist (LAMA), with the long-acting beta-agonist (LABA) formoterol. The twice-daily therapy is the only LAMA/LABA combination to show statistically significant improvement in breathlessness compared to individual therapies and is administered by the Genuair dry powder inhaler device.
AstraZeneca owns the rights to develop and commercialise Duaklir Genuair in the EU following the strategic transaction with Almirall S.A. (Almirall) in respiratory disease, which was completed in October 2014. The EU approval of Duaklir Genuair marks an important further step in AstraZeneca's inhaled therapy strategy of providing physicians and patients with a choice of products uniquely available in both dry powder and pressurised metered dose devices.
Lesinurad
On 22January 2015,AstraZeneca announced that the European Medicines Agency had accepted the marketing authorisation application (MAA) for lesinurad 200mg tablets. Lesinurad is a selective uric acid reabsorption inhibitor developed for the chronic treatment of hyperuricaemia in combination with xanthine oxidase inhibitors allopurinol or febuxostat in gout patients when additional therapy is warranted.
The MAA filing was based on data from the CLEAR1, CLEAR2 and CRYSTAL pivotal Phase III combination therapy studies. CLEAR1 and CLEAR2 were 12-month, multicentre, randomised, placebo-controlled studies that evaluated the efficacy and safety of a once-daily dose of lesinurad in combination with allopurinol versus allopurinol alone, in symptomatic gout patients not achieving target serum uric acid levels on their current allopurinol therapy. CRYSTAL was a 12-month, multicentre, randomised, placebo-controlled study that evaluated the efficacy and safety of a once-daily dose of lesinurad in combination with febuxostat compared to febuxostat alone in gout patients with tophi (deposits of uric acid crystals in joints and skin).
Brodalumab
On 11 November 2014, AstraZeneca and Amgen announced that AMAGINE-3, a study with an identical design to AMAGINE-2, met its primary endpoints when compared with both ustekinumab and placebo at week 12. Brodalumab was shown to be superior to ustekinumab on the primary endpoint of achieving total clearance of skin disease, as measured by the Psoriasis Area Severity Index (PASI 100). When compared with placebo, a significantly greater proportion of patients treated with brodalumab achieved at least a 75% improvement from baseline in disease severity at week 12, as measured by the PASI 75. A significantly greater proportion of patients treated with brodalumab also achieved clear, or almost clear, skin at week 12 compared with placebo, according to the static Physician Global Assessment (sPGA 0 or 1). 
Results showed that 36.7% of patients in the brodalumab 210mg group, 27% of patients in the brodalumab 140mg group, 18.5% of patients in the ustekinumab group and 0.3% of patients in the placebo group achieved total clearance of skin disease (PASI 100). In addition, 85.1% of patients in the brodalumab 210mg group, 69.2% of patients in the brodalumab 140mg group, 69.3% of patients in the ustekinumab group and 6% of patients in the placebo group achieved PASI 75.
On 25 November 2014, AstraZeneca and Amgen announced that AMAGINE-2, a pivotal, multi-arm Phase III trial evaluating two doses of brodalumab in more than 1,800 patients with moderate-to-severe plaque psoriasis, met its primary endpoints when compared with both ustekinumab and placebo at week 12. Brodalumab 210mg given every two weeks and the brodalumab weight-based analysis group were each shown to be superior to ustekinumab on the primary endpoint of achieving total clearance of skin disease, as measured by the PASI 100. When compared with placebo, a significantly greater proportion of patients treated with brodalumab achieved at least a 75% improvement from baseline in disease severity at week 12, as measured by the PASI 75. A significantly greater proportion of patients treated with brodalumab also achieved clear, or almost clear, skin at week 12 compared with placebo, according to the sPGA 0 or 1.
Results showed that 44.4% of patients in the brodalumab 210mg group, 33.6% of patients in the brodalumab weight-based group, 25.7% of patients in the brodalumab 140mg group, 21.7% of patients in the ustekinumab group and 0.6% of patients in the placebo group achieved total clearance of skin disease (PASI 100). In addition, 86.3% of patients in the brodalumab 210mg group, 77.0% of patients in the brodalumab weight-based group, 66.6% of patients in the brodalumab 140mg group, 70.0% of patients in the ustekinumab group and 8.1% of patients in the placebo group achieved PASI 75.
Brodalumab is being developed in collaboration with Amgen.
American College of Rheumatology 2014 Annual Meeting
AstraZeneca and MedImmune presented new data from the Company's growing inflammation and autoimmunity portfolio at the American College of Rheumatology (ACR) 2014 Annual Meeting in Boston, Massachusetts, held between 14 and 19 November 2014.
More than 15 abstracts were featured at the ACR meeting, providing evidence of the depth and continued progress of AstraZeneca's inflammation and autoimmunity pipeline. Positive Phase III data was presented on lesinurad in gout, as well as earlier stage data around a number of innovative investigational medicines including sifalimumab and anifrolumab in systemic lupus erythematosus (lupus), mavrilimumab in rheumatoid arthritis, and brodalumab in psoriatic arthritis.
MEDI4736 (PD-L1) 
During the first quarter of 2015 AstraZeneca dosed the first patients in the MEDI4736 (anti-PD-L1 monoclonal antibody) ARCTIC Phase III third line non-small cell lung cancer (NSCLC) trial's monotherapy substudy as well as to the ADJUVANT Phase III adjuvant NSCLC trial.
Lynparza
On 18 December 2014, AstraZeneca announced that the European Commission (EC) had granted Marketing Authorisation for Lynparza (olaparib) capsules (400mg twice-daily) as the first therapy for the maintenance treatment of adult patients with platinum-sensitive relapsed BRCA-mutated (germline and/or somatic) high grade serous epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in complete response or partial response to platinum-based chemotherapy.
On 19 December 2014, AstraZeneca announced that the FDA had approved Lynparza capsules (400mg twice- daily) as the first monotherapy for patients with deleterious or suspected deleterious germline BRCA-mutated (gBRCAm) advanced ovarian cancer, who have been treated with three or more prior lines of chemotherapy. Lynparza was approved under the FDA's Accelerated Approval programme, based on existing objective response rate and duration of response data. Continued approval for this indication is contingent upon verification of clinical benefit in ongoing confirmatory Phase III trials.
Iressa
On 2 December 2014, AstraZeneca announced that the FDA had accepted for filing the NDA for Iressa (gefitinib) as a targeted monotherapy for the first line treatment of patients with advanced or metastatic epidermal growth factor receptor mutation positive (EGFRm) NSCLC, as identified through a companion diagnostic test. The Prescription Drug User Fee Act goal date for Iressa will be in the third quarter of 2015.
Iressa is an epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor that acts by blocking the transmission of signals involved in the growth and spread of tumours. AstraZeneca's NDA submission for Iressa was based on data from the Phase IV IFUM clinical trial, providing evidence of Iressa's efficacy in Caucasian patients. This was supported by results from the IPASS clinical trial, as well as other collaborative group studies.
Iressa is already approved in 90 countries for the treatment of adult patients with locally advanced or metastatic NSCLC with activating mutations of the EGFR tyrosine kinase.
Epanova STRENGTH trial start
During the fourth quarter of 2014, AstraZeneca initiated a long-term outcomes study to assess statin residual risk reduction with Epanova in high cardiovascular risk patients with hypertriglyceridaemia. This trial, denoted STRENGTH, is a randomised, double-blind, well-controlled (corn oil), parallel group design that will enroll approximately 13,000 patients with hypertriglyceridaemia and high risk for cardiovascular disease. Patients are randomised one to one to either corn oil plus statin or Epanova plus statin, once-daily, for approximately three to five years as determined when the number of major adverse cardiac events (MACE) outcomes is reached.
Brilinta
On 14 January 2015, AstraZeneca announced that the PEGASUS-TIMI 54 study, a large scale outcomes trial involving over 21,000 patients, had successfully met its primary efficacy endpoint. The study assessed Brilinta (ticagrelor) tablets at either 60mg twice-daily or 90mg twice-daily plus low-dose aspirin for the secondary prevention of atherothrombotic events in patients who had experienced a heart attack one to three years prior to the study start. The primary efficacy endpoint was a composite of cardiovascular death, myocardial infarction or stroke.
Preliminary analysis did not reveal any unexpected safety issues. Full evaluation of the data is ongoing.
Complete results from the PEGASUS-TIMI 54 study will be presented at the American College of Cardiology Annual Scientific Sessions in San Diego, California, in March 2015. Pending further analysis, AstraZeneca plans to file this data with regulatory health authorities.
Moventig
On 9 December 2014, AstraZeneca announced that Moventig (naloxegol) had been granted Marketing Authorisation by the EC for the treatment of opioid-induced constipation in adult patients who have had an inadequate response to laxative(s). Moventig is the first once-daily oral peripherally-acting mu-opioid receptor antagonist to be approved in the EU. 
The approval of Moventig was based on data from the KODIAC clinical programme, which comprised four studies: KODIAC-4, -5, -7 and -8. KODIAC-4 and -5 were both placebo controlled, double-blind, 12-week studies assessing safety and efficacy, while KODIAC-7 was a 12-week safety extension to KODIAC-4, and KODIAC-8 was a 52-week open label, long-term safety study.
Movantik/Moventig is part of an exclusive worldwide licence agreement between AstraZeneca and Nektar Therapeutics.
Start of pivotal trial for BACE inhibitor AZD3293
On 1 December 2014, AstraZeneca and Eli Lilly & Company announced enrolment of the first patient into AMARANTH, a Phase II/III study of AZD3293, an oral beta-site amyloid precursor protein cleaving enzyme (BACE) inhibitor currently in development as a potential treatment for Alzheimer's disease.
AZD3293, also known as LY3314814, has been shown in Phase I studies to reduce levels of amyloid-beta in the cerebro-spinal fluid of Alzheimer's patients and healthy volunteers. The progression of Alzheimer's disease is characterised by the accumulation of amyloid plaque in the brain. BACE is an enzyme associated with the development of beta-amyloid. Inhibiting BACE is expected to prevent the formation of amyloid plaque and eventually slow the progression of the disease.
The pivotal study will investigate the safety and efficacy of AZD3293 compared with placebo in the treatment of early Alzheimer's disease.
Business Development
__________________________________________________________________________________________________________________________________________________________________________________
Licensing agreement with Omnis Pharmaceuticals for oncolytic viruses in immuno-oncology
On 12 January 2015, AstraZeneca announced that MedImmune had entered into a licensing agreement with Omnis Pharmaceuticals (Omnis), a privately-held biotechnology company focused on the development of oncolytic viruses. This agreement will allow MedImmune to combine key agents from its investigational immunotherapy portfolio with Omnis' lead investigational oncolytic virus programme, a genetically engineered strain of vesicular stomatitis virus. The programme is currently being studied in a Phase I clinical trial as a monotherapy for the treatment of hepatocellular carcinoma and other cancers that have metastasised to the liver.
Collaborations to use CRISPR technology for genome editing in drug discovery
On 29 January 2015, AstraZeneca announced four research collaborations aimed at harnessing the power of CRISPR, a pioneering genome-editing technique, across its entire discovery platform in the Company's key therapeutic areas. The technology will allow AstraZeneca to identify and validate new drug targets in preclinical models that closely resemble human disease. AstraZeneca will share cell lines and compounds with its partners and work with them to publish findings of its application of CRISPR technology in peer-reviewed journals, contributing to broader scientific progress in the field. The collaborations complement AstraZeneca's in-house CRISPR programme and will build on the Company's 'open innovation' approach to research and development.
AstraZeneca's CRISPR research collaborations are with the following institutions: The Wellcome Trust Sanger Institute, Cambridge, UK; The Innovative Genomics Initiative, University of California, Berkley and San Francisco; Thermo Fisher Scientific, Waltham, Massachusetts; The Broad Institute/ The Whitehead Institute, Cambridge, Massachusetts.
Operating and Financial Review
All narrative in this section refers to growth rates at constant exchange rates (CER) and on a Core basis unless otherwise indicated. Core measures, which are presented in addition to our Reported financial information, are non-GAAP measures which management believes useful to enhance understanding of the Group's underlying financial performance of our ongoing business and the key business drivers thereto. Core financial measures are adjusted to exclude certain significant items, such as:
 amortisation and impairment of intangibles, including impairment reversals but excluding any charges relating to IT assets
 charges and provisions related to our global restructuring programmes (this will include such charges that relate to the impact of our global restructuring programmes on our capitalised IT assets)
 other specified items, principally comprising legal settlements and transaction-related costs, which include fair value adjustments and the imputed finance charge relating to contingent consideration on business combinations
More detail on the nature of these measures is given on page 76 of our Annual Report and Form 20-F Information 2013.
Fourth Quarter
All financial figures, except earnings per share, are in $ millions ($m). Weighted average shares in millions. The performance shown below covers the three months to 31 December 2014 (the quarter) compared to the three months to 31 December 2013 (the prior period).
Reported
Q4 2014
Restructuring
Intangible
Amortisation & Impairments
Acquisition of the BMS share of diabetes alliance
Other
Core
Q4 2014
Core Q4 2013
Actual%
CER
%
Revenue
6,683
-
-
-
-
6,683
6,844
(2)
2
Cost of Sales
(1,667)
35
273
-
-
(1,359)
(1,289)


Gross Profit
5,016
35
273
-
-
5,324
5,555
(4)
1
% sales
75.1%




79.7%
81.2%
-1.5
-0.6
Distribution
(88)
-
-
-
-
(88)
(72)
22
28
% sales
1.3%




1.3%
1.1%
-0.2
-0.3
R&D
(1,499)
97
42
-
-
(1,360)
(1,205)
13
17
% sales
22.5%




20.4%
17.6%
-2.8
-2.6
SG&A
(4,084)
259
211
636
25
(2,953)
(2,483)
19
23
% sales
61.1%




44.2%
36.3%
-7.9
-7.6
Other Income
306
-
53
-
(98)
261
188
39
47
% sales
4.6%




3.9%
2.8%
+1.1
+1.2
Operating (Loss)/ Profit
(349)
391
579
636
(73)
1,184
1,983
(40)
(33)
% sales
(5.2%)




17.7%
29.0%
-11.3
-9.9
Net Finance Expense
(227)
-
-
96
19
(112)
(124)


Joint Ventures
(4)
-
-
-
-
(4)
-


(Loss)/ Profit before Tax
(580)
391
579
732
(54)
1,068
1,859
(43)
(34)
Taxation
259
(65)
(116)
(203)
6
(119)
(315)


(Loss)/ Profit after Tax
(321)
326
463
529
(48)
949
1,544
(39)
(28)
Non-controlling Interests
-
-
-
-
-
-
(4)


Net (Loss)/ Profit
(321)
326
463
529
(48)
949
1,540
(38)
(27)
Weighted Average Shares
1,263
1,263
1,263
1,263
1,263
1,263
1,254


(Loss)/ Earnings per Share
(0.25)
0.26
0.37
0.42
(0.04)
0.76
1.23
(38)
(28)
Revenue in the quarter was up 2% at CER to $6,683m. Based on actual exchange rates revenue declined by 2% reflecting the strengthening of the US dollar against key currencies. Major patent expiries to date have now largely annualised. Excluding both the additional revenue from the acquisition of BMS's share of the global diabetes alliance and the $113m impact of the Branded Pharmaceutical Fee restatement (see below), revenue in the quarter was stable versus the prior period.
In July 2014, the US Internal Revenue Service issued final regulations that affected how the annual Branded Pharmaceutical Fee (the Fee), imposed by the health care reform legislation in 2010, is recognised. As a result, entities covered by the legislation will now accrue for the obligation as each sale occurs. AstraZeneca recorded a catch-up charge to SG&A, reflecting this new basis, as part of its third quarter results. Under the new regulations the Fee will be based on actual sales in the current year. It is therefore more appropriate to account for the Fee as a deduction from revenue rather than a charge to SG&A. From the fourth quarter, AstraZeneca has changed its income statement categorisation accordingly, and reclassified the charge of $113m relating to the second half from SG&A to revenue in the fourth quarter. The Company has not restated its third quarter 2014 performance. This income statement reclassification has no impact on earnings.
Core gross margin as a percentage of revenue was 79.7% in the quarter, down by 0.6 percentage points. Excluding the impact of the Fee restatement, the Core gross margin was 80.0%.
Core R&D costs were up 17% to $1,360m, primarily reflecting the acceleration in the late-stage pipeline and additional costs incurred on assets acquired through business development activities. 
Core SG&A costs were up 23% to $2,953m. A decline in G&A costs was more than offset by significant investments in Sales and Marketing costs that have increased from the prior period with the acquisition of BMS's share of the global diabetes alliance. Additional costs were incurred in the fourth quarter to support on-going launches, including Farxiga/Forxiga and Lynparza, as well as for pre-launch activities for Movantik/Moventig and the late-stage pipeline, including the oncology portfolio. 
Core other income of $261m was up 47% in the quarter reflecting gains on disposals, as well as development income relating to blinatumomab and Duaklir. 
Core operating profit was down 33% to $1,184m. Core operating margin was down 9.9 percentage points to 17.7% of revenue as the Company continued to invest in the pipeline and the growth platforms. 
Core earnings per share were down 28% to $0.76, broadly in line with the decrease in Core operating profit, as the impact of a higher number of shares was outweighed by a lower tax rate versus the prior quarter.
The Reported operating loss was $349m, 59% lower than the loss last year. Reported loss per share was similarly down by 69% at $0.25. The lower Core operating profit detailed above was more than offset by lower Core adjustments, as the prior period included a one-off intangible impairment charge relating to Bydureon.
Full year
All financial figures, except earnings per share, are in $ millions ($m). Weighted average shares in millions. The performance shown below covers the twelve months to 31 December 2014 (the year) compared to the twelve months to 31 December 2013 (the prior year).
Reported
FY 2014
Restructuring
Intangible
Amortisation & Impairments
Acquisition of the BMS share of diabetes alliance
Other
Core
FY 2014
Core
FY 2013
Actual
%
CER
%
Revenue
26,095
-
-
-
-
26,095
25,711
1
3
Cost of Sales
(5,842)
107
701
146
-
(4,888)
(4,633)


Gross Profit
20,253
107
701
146
-
21,207
21,078
1
3
% sales
77.6%




81.3%
82.0%
-0.7
-0.4
Distribution
(324)
-
-
-
-
(324)
(306)
6
7
% sales
1.3%




1.3%
1.2%
-0.1
-
R&D
(5,579)
497
141
-
-
(4,941)
(4,269)
16
15
% sales
21.3%




18.9%
16.6%
-2.3
-1.9
SG&A
(13,000)
662
811
932
379
(10,216)
(8,865)
15
16
% sales
49.8%




39.1%
34.5%
-4.6
-4.4
Other Income
787
292
230
-
(98)
1,211
752
61
64
% sales
3.0%




4.6%
2.9%
+1.7
+1.7
Operating Profit
2,137
1,558
1,883
1,078
281
6,937
8,390
(17)
(13)
% sales
8.2%




26.6%
32.6%
-6.0
-5.0
Net Finance Expense
(885)
-
-
345
47
(493)
(445)


Joint Ventures
(6)
-
-
-
-
(6)
-


Profit before Tax
1,246
1,558
1,883
1,423
328
6,438
7,945
(19)
(13)
Taxation
(11)
(255)
(376)
(356)
(42)
(1,040)
(1,611)


Profit after Tax
1,235
1,303
1,507
1,067
286
5,398
6,334
(15)
(8)
Non-controlling Interests
(2)
-
-
-
-
(2)
(15)


Net Profit
1,233
1,303
1,507
1,067
286
5,396
6,319
(15)
(8)
Weighted Average Shares
1,262
1,262
1,262
1,262
1,262
1,262
1,252


Earnings per Share
0.98
1.03
1.19
0.85
0.23
4.28
5.05
(15)
(8)
Revenue in the year was up 3% at CER to $26,095m, in line with upgraded Company guidance, and up 1% on an actual basis as a result of the negative impact of exchange rate movements. Accelerating performance of the Company's growth platforms more than offset the impact of loss of exclusivity. US revenue was up 4% to $10,120m, with Europe down 1% at $6,638m, Established Rest of World (ROW) was down 4% at $3,510m and Emerging Markets were up 12% to $5,827m, the latter, driven by growth in China of 22%, to $2,242m. China became the Company's second largest national market in 2014. Global revenue in the year was stable, excluding the additional revenue from the acquisition of BMS's share of the global diabetes alliance and the impact of the Fee restatement.
Core gross margin as a percentage of revenue was 81.3% in the year, down by 0.4 percentage points. 
Core R&D expense in the year was up 15% to $4,941m, reflecting the expansion of the late-stage pipeline. 
Expenditures in Core SG&A were up 16% to $10,216m, driven by the investment in sales and marketing dedicated to the growth platforms. The selective investment in the growth platforms is partially funded by the decline in G&A costs during the year. 
Core other income in the year was up 64% at $1,211m, with milestone income related to the launch of Nexium OTC being the largest driver of the increase. 
Core operating profit in the year was down 13% to $6,937m. Core operating margin was 26.6% of revenue, down 5.0 percentage points. The Company continues to focus on delivering the flexibility needed to underpin the progressive dividend, strong pipeline progress and the return to growth.
Core earnings per share were $4.28, down 8% versus the prior year and in line with upgraded Company guidance. The smaller decline compared with Core operating profit is largely due to a lower tax rate. This favourable comparison arising from the tax rate was partially offset by an increase in the number of shares outstanding and a marginally higher Core finance expense in the year compared with the prior year. 
Core operating profit adjustments totalled $4,800m this year, marginally higher than the $4,678m in the prior year. The deduction of these broadly similar Core adjustments naturally leads to a larger percentage decline in Reported operating profit than Core operating profit. Accordingly, Reported operating profit is down 31% to $2,137m; and, as a consequence, Reported EPS is down to 34%.
Enhancing Productivity
Restructuring charges of $391m were taken in the quarter, bringing the full-year total to $1,558m. The Company is making good progress in implementing the fourth phase of restructuring announced in the first quarter of 2013 and the expansion of this programme announced in the first half of 2014. In addition to costs of this programme the restructuring charge for the year includes $261m incurred on integration of businesses acquired in the year and as a consequence of our decision to exit the Westborough site. 
Finance Income and Expense
Core net finance expense was $493m versus $445m in the prior year. Reported net finance expense includes a charge of $391m relating to the discount unwind on contingent consideration creditors recognised on business combinations, principally relating to the acquisition of BMS's share of the global diabetes alliance.
Taxation
The tax paid for the year was $1,201m which is 96% of reported profit and 19% of Core profit.
Both the underlying Reported and underlying Core tax rates for the year were around 18%. 
Taking into account the one-off benefits totalling $309m in respect of a transfer pricing matter, non-Core revaluations of contingent consideration arising on business combinations, and the benefit of the UK Patent Box, the Reported and Core tax rates fall to 1% and 16% respectively. 
The Reported and Core tax rates for the year ended 31 December 2013 were 21% and 20% respectively.
Cash Flow 
Cash generated from operating activities in the year was $7,058m, compared with $7,400m in the prior year, with improvements in working capital negating the lower operating profit and higher tax payments.
Net cash outflows from investing activities were $7,032m compared with $2,889m in the prior year. The increase is primarily due to upfront and contingent consideration payments of $4,461m made in respect of acquisitions including BMS's share of the global diabetes alliance and the strategic transaction with Almirall in respiratory disease.
Net cash distributions to shareholders were $3,242m through dividends of $3,521m offset by proceeds from the issue of shares of $279m due to the exercise of stock options.
Debt and Capital Structure
At 31 December 2014, outstanding gross debt (interest-bearing loans and borrowings) was $10,843m (31 December 2013: $10,376m). Of the gross debt outstanding at 31 December 2014, $2,446m was due within one year (31 December 2013: $1,788m). 
The Company's net debt position at 31 December 2014 was $3,223m.
Shares in Issue
During 2014, 6.0 million shares were issued in respect of share option exercises for a consideration of $279m.
The total number of shares in issue at 31 December 2014 was 1,263 million.
Dividends and share repurchases
The Board has recommended a second interim dividend of $1.90 (125.0 pence, 15.62 SEK) to be paid on 23 March 2015. This brings the full year dividend to $2.80 (178.1 pence, 21.82 SEK). This dividend is consistent with the progressive dividend policy, by which the Board intends to maintain or grow the dividend each year.
The Board regularly reviews its distribution policy and its overall financial strategy to continue to strike a balance between the interests of the business, financial creditors and shareholders. The Board continues to target a strong, investment grade credit rating. Having regard for business investment, funding the progressive dividend policy and meeting debt service obligations, the Board currently has no intention to resume the share buyback programme.
Future Prospects
 Sales revenue is expected to decline by mid single-digit percent at CER1. Consistent with its business model, the Company will continue to seek externalisation revenue from partnerships and licensing select products and technologies. Core EPS is expected to increase by low single-digit percent at CER.
 The Company also provides the following non-guidance information related to currency sensitivity: Based on current exchange rates2, sales revenue is expected to decline by low double-digit percent with Core EPS expected to be broadly in line with 2014. For additional currency sensitivity information, please see below.




Average exchange rates versus USD



Impact of 5% weakening in exchange rate versus USD ($m) 3
Currency

Primary relevance

2014

January 20152

Change
%

Sales revenue

Core operating profit
EUR

Sales revenue

0.75

0.86

(12)

(196)

(120)
JPY

Sales revenue

105.87

118.44

(11)

(105)

(75)
SEK

Costs

6.86

8.09

(15)

(5)

96
GBP

Costs

0.61

0.66

(8)

(34)

104
Other4









(214)

(123)













1Assumes imminent launch of a Nexium generic in the US market.
2Based on average daily spot rates in January 2015.
3Based on 2014 actual group currency exposures.
4Other important currencies include AUD, BRL, CAD, KRW, RUB.
Revenue
All narrative in this section refers to growth rates at constant exchange rates (CER) unless otherwise indicated. Financial figures are in $ millions ($m). A full analysis of the Group's revenue by product and geographic areas is shown in Notes 9 and 10. 
Fourth Quarter


Full Year


2014
2013
% Change
2014
2013
% Change

$m
$m
 Actual
CER
$m
$m
 Actual
CER
Cardiovascular and Metabolic disease








 Crestor
1,388
1,463
(5)
(2)
5,512
5,622
(2)
(1)
 Seloken/Toprol-XL
174
170
2
8
758
750
1
4
 Onglyza 
200
93
115
122
820
378
117
119
 Atacand
117
134
(13)
(7)
501
611
(18)
(16)
 Brilinta/Brilique
133
92
45
52
476
283
68
70
 Byetta
69
54
28
31
327
206
59
59
 Bydureon
123
49
151
153
440
151
191
191









Oncology








 Zoladex
227
247
(8)
(2)
924
996
(7)
(4)
 Iressa
150
158
(5) 
2 
623
647
(4)
(1)
 Faslodex
182
182
-
4
720
681
6
7
 Arimidex
68
86
(21)
(15)
298
351
(15)
(12)
 Casodex
74
95
(22)
(16)
320
376
(15)
(10)









Respiratory, Inflammation and Autoimmunity








 Symbicort
978
976
- 
5
3,801
3,483
9
10
 Pulmicort
269
245
10
15
946
867
9
11









Infection, Neuroscience and Gastrointestinal








 Nexium 
832
991
(16)
(13)
3,655
3,872
(6)
(4)
 Synagis
404
515
(22)
(22)
900
1,060
(15)
(15)
 Seroquel XR
309
337
(9)
(6)
1,224
1,337
(9)
(8)
 Seroquel IR
(28)
35
n/m
n/m
178
345
(48)
(46)
Cardiovascular and Metabolic disease
 
In the US, Crestor sales in the fourth quarter were $760m, down 2% due primarily to the impact of the accounting changes for the Branded Pharmaceutical Fee (the Fee). Crestor total prescriptions decreased by 4%, but were fully offset by higher stocking in the fourth quarter. Crestor sales for 2014 were stable, as net price realisation including prior year rebate adjustments offset the Fee impact and volume declines. 
 
Crestor sales in the ROW in the fourth quarter were down 1% to $628m. This reflected the annualisation of the impact of generic competition in Australia and price pressure in Japan, partially offset by growth in Emerging Markets, driven by 36% growth in China. Crestor sales in the ROW for 2014 were down 2% to $2,594m. 
 
US sales of the Toprol-XL product range, which includes sales of the authorised generic, were down 21% in the quarter to $15m due to additional generic entrants. Seloken sales in the ROW were up 12% to $159m driven by Emerging Markets which were up 19% in the quarter. Global Seloken sales in 2014 (excluding the authorised generic) were up 7% to $715m.
 
Onglyza franchise revenue was up 122% in the fourth quarter to $200m. In the US, Onglyza franchise sales were up 60% in fourth quarter as the benefit from the change in ownership was partially offset by 7% lower prescription volume and lower net price driven primarily by more competition. Onglyza fourth quarter revenue in the ROW was up 250% with strength across all regions. Global revenue in 2014 was $820m, up 119%.
 
Sales of Atacand were down 7% in the quarter to $117m as generic competition in Europe and Established ROW overshadowed 18% growth in Emerging Markets. Sales for 2014 were down 16% to $501m. 
 
Sales of Brilinta/Brilique were $133m in the fourth quarter, up 52%. Excluding the US, growth in revenue terms was driven primarily by Europe which grew by 25% and the smaller, but faster growing, Emerging Markets which were up 118%. Sales for 2014 were up 70% to $476m.
 
Brilinta sales in the US in the fourth quarter were $43m, up 79%. Total prescriptions for Brilinta in the US in the fourth quarter of 2014 were 13% higher than the third quarter of 2014. New to brand share increased by 0.7 percentage points to 8.2% in December and Brilinta achieved US branded leadership for the first time during the fourth quarter and in December weekly exit share. The impact of the accounting changes for the Fee reduced revenue in the fourth quarter by 4%. 2014 Brilinta sales in the US doubled to $146m. 
 
Byetta and Bydureon fourth quarter revenues in the US were $142m, up 87%. Bydureon total prescriptions grew 40% in the quarter and grew 9% over the prior quarter, driven by the launch of the Bydureon Pen in September. ROW revenue was $50m, up 96% driven by European Bydureon revenue. Global 2014 revenue was $767m, up 115%. 
Oncology
 
Zoladex sales were $227m in the fourth quarter down 2% as 50% growth in China was offset by overall declines. 2014 revenue was $924m, down 4%.
 
Iressa sales in the fourth quarter were up 2% to $150m, driven by 13% growth in Emerging Markets. 2014 sales of Iressa were down 1% at $623m.
 
Arimidex sales were down 15% in the fourth quarter at $68m and 12% for the year, as growth in the Emerging Markets was more than offset by the ongoing impact of loss of exclusivity. 
 
Sales of Casodex in 2014 were $320m, down 10%. Generic competition drove the reduction, most significantly in Japan which was down 19%. These losses were only partially offset by 14% growth in Emerging Markets. 
Respiratory, Inflammation and Autoimmunity
 
Symbicort sales in the US were $395m in the fourth quarter, a 13% increase over last year but decelerating. Total prescriptions for Symbicort were up 32% in the fourth quarter. Symbicort share of total prescriptions for fixed combination products reached 33.1% in December 2014, increasing 6.8 percentage points over 2014. Higher retail demand was partially offset by lower non-retail demand and lower price due to the Fee and higher fourth quarter co-pay assistance costs beginning in advance of expected unfavourable formulary changes in 2015. 2014 Symbicort sales in the US were up 23% to $1,511m.
 
Symbicort sales in the ROW in the fourth quarter were stable at $583m. Sales in Europe were down 7% due to price pressure driven by increasing competition from recently-launched competitive analogues. European declines were partially offset by 25% growth in Emerging Markets and 2% growth in Established ROW. Symbicort sales in the ROW in 2014 were up 4% to $2,290m.
 
Sales of Pulmicort were up 15% to $269m in the fourth quarter driven by 39% growth in Emerging Markets. Excluding Emerging Markets, Pulmicort sales were down 4% to $125m. 2014 sales were up 11% to $946m driven by 35% growth in Emerging Markets. 
Infection, Neuroscience and Gastrointestinal
 
In the US, Nexium sales in the fourth quarter were $469m, down 14% driven by volume erosion and the impact of the accounting changes for the Fee. 2014 Nexium sales were down 12% to $1,876m with lower volume also the driver.
 
Nexium sales in the ROW in the fourth quarter were down 13% to $363m. The decline was driven by generic competition in many markets as well as year-end destocking in China and a recall related to packaging in Japan. For 2014 ROW Nexium sales were up 6% to $1,779m, driven by 38% growth in Japan and 21% growth in China. 
 
In the US, sales of Synagis in the fourth quarter were $234m, down 22%. The decline was driven by approximately 50% lower volume related to the American Academy of Pediatrics - Committee on Infectious Disease guidelines issued in mid-2014. These new guidelines further restrict patients' eligibility for preventive therapy with Synagis. While these guideline changes are inconsistent with the approved label, there has been a significant impact to volumes which is expected to extend into 2015. Partially offsetting the lower volume was a favourable adjustment to Medicaid provisions.Outside the US, sales in the fourth quarter were $170m, down 21%, which mostly reflects the lower price and quarterly phasing of revenues related to shipments to AbbVie, the distributor outside the US. 2014 sales were down 15% at $900m, driven by a 9% decline outside the US and 19% decline in the US, where a 29% reduction in volume was offset by favourable price adjustments.
 
Sales of Seroquel XR in the US were $196m in the fourth quarter, up 1% due primarily to underlying net price, partially offset by the impact related to the change in accounting for the Fee. 2014 US sales were $738m, down 1%.
 
Sales of Seroquel XR in the ROW were down 15% to $113m in the fourth quarter, as a result of generic competition (including some "at risk" launches) in Europe where sales were down 18%. 
 
Sales of Seroquel IR in the US were negative $92m in the fourth quarter driven by refinements to our returns provision to incorporate a higher rate of product returns experienced in the second half of 2014. The increase in returns coincides with the shelf-life expiration of product in the channel at the date of loss of exclusivity. For 2014 sales were negative $72m for the same reason. 
 
Sales of Seroquel IR in the ROW were $64m in the fourth quarter and $250m for 2014, down 28% for the year largely due to generic competition.
Regional Revenue

Fourth Quarter

Full Year



2014
2013
% Change
2014
2013
% Change


$m
$m
Actual
CER
$m
$m
Actual
CER
US
2,641
2,634
-
-
10,120
9,691
4
4

Europe
1,713
1,822
(6)
-
6,638
6,658
- 
(1)

Established ROW1
851
1,023
(17)
(8)
3,510
3,973
(12)
(4)

Japan
543
668
(19)
(9)
2,227
2,485
(10)
(3)

Canada
157
161
(2)
4
590
637
(7)
(1)

Other Established ROW
151
194
(22)
(16)
693
851
(19)
(13)

Emerging Markets2
1,478
1,365
8
14
5,827
5,389
8
12

China
566
477
18
19
2,242
1,840
22
22

Total
6,683
6,844
(2)
2
26,095
25,711
1
3







1Established ROW comprises Canada, Japan, Australia and New Zealand.
2Emerging Markets comprises all remaining ROW markets, including Brazil, China, India, Mexico, Russia, and Turkey.

 
Revenue in the US was stable in the fourth quarter at $2,641m. Growth platforms were strong, aided in part by the impact of completing the acquisition of BMS's share of the global diabetes alliance. Diabetes products provided $157m of incremental revenue, with growth from Symbicort and Brilinta also helping to offset declines in revenue from brands such as Nexium, Seroquel IR, and Synagis, in addition to the $113m reduction in fourth quarter revenue taken against product brands related to the change in accounting for the Branded Pharmaceutical Fee. 
 
In the fourth quarter, revenue in Europe was also stable as the favourable impact from the acquisition of BMS's share of the global diabetes alliance and continued growth for Brilinta were offset by impact of Symbicort analogues in Europe, continuing impact from loss of exclusivity on brands including Seroquel and Atacand, and lower net pricing on Synagis. 
 
Revenue in Established ROW was down 8% in the quarter due to generic pressure, only partially moderated by performance of growth platforms. Revenue in Japan declined by 9% in the fourth quarter, impacted by a recall of Nexium in December due to a packaging defect, de-stocking, and the mandated April 2014 biennial price cut.
 
Revenue in Emerging Markets was up 14% in the quarter. Strong growth was seen across the Emerging Markets business with China growing 19%, despite higher destocking in the quarter. Excluding China, the Emerging Markets grew by 12% in the fourth quarter. Primary drivers of growth were Respiratory and Cardiovascular products. 
Condensed Consolidated Statement of Comprehensive Income
For the year ended 31 December

2014
$m

2013
$m
Revenue

26,095

25,711
Cost of sales

(5,842)

(5,261)
Gross profit

20,253

20,450
Distribution costs

(324)

(306)
Research and development expense

(5,579)

(4,821)
Selling, general and administrative costs

(13,000)

(12,206)
Other operating income and expense

787

595
Operating profit

2,137

3,712
Finance income

78

50
Finance expense

(963)

(495)
Share of after tax losses of joint ventures

(6)

-
Profit before tax

1,246

3,267
Taxation 

(11)

(696)
Profit for the period

1,235

2,571




Other comprehensive income




Items that will not be reclassified to profit or loss




Remeasurement of the defined benefit pension liability

(766)

8
Tax on items that will not be reclassified to profit or loss

216

(82)

(550)

(74)
Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation

(823)

(166)
Foreign exchange arising on designating borrowings in net investment hedges

(529)

(58)
Fair value movements on derivatives designated in net investment hedges

100

111
Amortisation of loss on cash flow hedge

1

1
Net available for sale gains taken to equity

245

69
Tax on items that may be reclassified subsequently to profit or loss 

50

4

(956)

(39)
Other comprehensive income for the period, net of tax

(1,506)

(113)
Total comprehensive income for the period

(271)

2,458




Profit attributable to:




Owners of the Parent

1,233

2,556
Non-controlling interests

2

15

1,235

2,571




Total comprehensive income attributable to:




Owners of the Parent

(266)

2,470
Non-controlling interests

(5)

(12)

(271)

2,458




Basic earnings per $0.25 Ordinary Share

$0.98

$2.04
Diluted earnings per $0.25 Ordinary Share

$0.98

$2.04
Weighted average number of Ordinary Shares in issue (millions)

1,262

1,252
Diluted weighted average number of Ordinary Shares in issue (millions)

1,264

1,254
Condensed Consolidated Statement of Comprehensive Income
For the quarter ended 31 December

2014
$m

2013
$m
Revenue

6,683

6,844
Cost of sales

(1,667)

(1,440)
Gross profit

5,016

5,404
Distribution costs

(88)

(72)
Research and development expense 

(1,499)

(1,429)
Selling, general and administrative costs

(4,084)

(4,642)
Other operating income and expense

306

148
Operating loss

(349)

(591)
Finance income

33

13
Finance expense

(260)

(137)
Share of after tax losses of joint ventures

(4)

-
Loss before tax

(580)

(715)
Taxation 

259

195
Loss for the period

(321)

(520)




Other comprehensive income




Items that will not be reclassified to profit or loss




Remeasurement of the defined benefit pension liability

(268)

247
Tax on items that will not be reclassified to profit or loss

89

(44)

(179)

203
Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation

(411)

(26)
Foreign exchange arising on designating borrowings in net investment hedges

(237)

(35)
Fair value movements on derivatives designated in net investment hedges

64

51
Net available for sale gains taken to equity

172

10
Tax on items that may be reclassified subsequently to profit or loss

20

3

(392)

3
Other comprehensive income for the period, net of tax

(571)

206
Total comprehensive income for the period

(892)

(314)




Loss attributable to:




Owners of the Parent

(321)

(524)
Non-controlling interests

-

4

(321)

(520)




Total comprehensive income attributable to:




Owners of the Parent

(892)

(315)
Non-controlling interests

-

1

(892)

(314)




Basic (loss)/earnings per $0.25 Ordinary Share

($0.25)

($0.42)
Diluted (loss)/earnings per $0.25 Ordinary Share

($0.25)

($0.42)
Weighted average number of Ordinary Shares in issue (millions)

1,263

1,254
Diluted weighted average number of Ordinary Shares in issue (millions)

1,265

1,256
Condensed Consolidated Statement of Financial Position



At 31 Dec 2014
$m

At 31 Dec 2013
$m
ASSETS
Non-current assets






Property, plant and equipment



6,010

5,818
Goodwill



11,550

9,981
Intangible assets



20,981

16,047
Derivative financial instruments



465

365
Investments in joint ventures



59

-
Other investments



502

281
Other receivables



1,112

1,867
Deferred tax assets



1,219

1,205



41,898

35,564
Current assets






Inventories



1,960

1,909
Trade and other receivables



7,232

7,879
Other investments



795

796
Derivative financial instruments



21

40
Income tax receivable



329

494
Cash and cash equivalents



6,360

9,217




16,697

20,335
Total assets



58,595

55,899
LIABILITIES
Current liabilities






Interest-bearing loans and borrowings



(2,446)

(1,788)
Trade and other payables



(11,886)

(10,362)
Derivative financial instruments



(21)

(2)
Provisions



(623)

(823)
Income tax payable



(2,354)

(3,076)




(17,330)

(16,051)
Non-current liabilities






Interest-bearing loans and borrowings



(8,397)

(8,588)
Derivative financial instruments



-

(1)
Deferred tax liabilities



(1,796)

(2,827)
Retirement benefit obligations 



(2,951)

(2,261)
Provisions



(484)

(566)
Other payables



(7,991)

(2,352)




(21,619)

(16,595)
Total liabilities



(38,949)

(32,646)
Net assets



19,646

23,253
EQUITY






Capital and reserves attributable to equity holders of the Company






Share capital



316

315
Share premium account



4,261

3,983
Other reserves



2,021

1,966
Retained earnings



13,029

16,960



19,627

23,224
Non-controlling interests



19

29
Total equity



19,646

23,253
Condensed Consolidated Statement of Cash Flows 
For the year ended31 December

2014
$m

2013
$m
Cash flows from operating activities




Profit before tax

1,246

3,267
Finance income and expense

885

445
Share of after tax losses of joint ventures

6

-
Depreciation, amortisation and impairment

3,282

4,583
Decrease in working capital and short-term provisions

2,508

166
Non-cash and other movements

865

258
Cash generated from operations

8,792

8,719
Interest paid

(533)

(475)
Tax paid

(1,201)

(844)
Net cash inflow from operating activities

7,058

7,400
Cash flows from investing activities




Movement in short-term investments and fixed deposits

34

130
Purchase of property, plant and equipment

(1,012)

(742)
Disposal of property, plant and equipment

158

69
Purchase of intangible assets

(1,740)

(1,316)
Disposal of intangible assets

-

35
Purchase of non-current asset investments

(130)

(91)
Disposal of non-current asset investments

59

38
Payments to joint ventures

(70)

-
Upfront payments on business acquisitions

(3,804)

(1,158)
Payment of contingent consideration on acquisitions

(657)

-
Interest received

140

114
Payments made by subsidiaries to non-controlling interests

(10)

(10)
Payments received by subsidiaries from non-controlling interests

-

42
Net cash outflow from investing activities

(7,032)

(2,889)
Net cash inflow before financing activities

26

4,511
Cash flows from financing activities




Proceeds from issue of share capital

279

482
Issue of loans

919

-
Repayment of loans

(750)

-
Dividends paid

(3,521)

(3,461)
Hedge contracts relating to dividend payments

(14)

(36)
Repayment of obligations under finance leases

(36)

(27)
Payments to acquire non-controlling interest

(102)

-
Movement in short-term borrowings

520

(5)
Net cash outflow from financing activities

(2,705)

(3,047)
Net (decrease)/increase in cash and cash equivalents in the period

(2,679)

1,464
Cash and cash equivalents at the beginning of the period

8,995

7,596
Exchange rate effects

(152)

(65)
Cash and cash equivalents at the end of the period

6,164

8,995
Cash and cash equivalents consists of:




Cash and cash equivalents

6,360

9,217
Overdrafts

(196)

(222)


6,164

8,995
Condensed Consolidated Statement of Changes in Equity 


Share
capital
$m

Share
premium
account
$m

Other
reserves*
$m

Retained
earnings
$m

Total
$m

Non-
controlling
interests
$m

Total
equity
$m
At 1 Jan 2013

312

3,504

1,960

17,955

23,731

215

23,946
Profit for the period

-

-

-

2,556

2,556

15

2,571
Other comprehensive income

-

-

-

(86)

(86)

(27)

(113)
Transfer to other reserves

-

-

6

(6)

-

-

-
Transactions with owners:














Dividends

-

-

-

(3,499)

(3,499)

-

(3,499)
Issue of Ordinary Shares

3

479

-

-

482

-

482
Share-based payments

-

-

-

(57)

(57)

-

(57)
Transfer from non-controlling interests to payables

-

-

-

-

-

(6)

(6)
Dividend paid to non-controlling interests

-

-

-

-

-

(3)

(3)
Net acquisition of non-controlling interests

-

-

-

97

97

(165)

(68)
Net movement

3

479

6

(995)

(507)

(186)

(693)
At 31 Dec 2013

315

3,983

1,966

16,960

23,224

29

23,253

















Share
capital
$m

Share
premium
account
$m

Other
reserves*
$m

Retained
earnings
$m

Total
$m

Non-
controlling
interests
$m

Total
equity
$m
At 1 Jan 2014

315

3,983

1,966

16,960

23,224

29

23,253
Profit for the period

-

-

-

1,233

1,233

2

1,235
Other comprehensive income

-

-

-

(1,499)

(1,499)

(7)

(1,506)
Transfer to other reserves

-

-

40

(40)

-

-

-
Transactions with owners:














Dividends

-

-

-

(3,532)

(3,532)

-

(3,532)
Issue of Ordinary Shares

1

278

-

-

279

-

279
Share-based payments

-

-

-

(93)

(93)

-

(93)
Transfer from non-controlling interests to payables

-

-

-

-

-

(5)

(5)
True-up to Astra AB non-controlling interest buy out

-

-

15

-

15

-

15
Net movement

1

278

55

(3,931)

(3,597)

(10)

(3,607)
At 31 Dec 2014

316

4,261

2,021

13,029

19,627

19

19,646
* Other reserves includes the capital redemption reserve and the merger reserve.
Notes to the Interim Financial Statements
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The preliminary announcement for the year ended 31 December 2014 has been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and as issued by the International Accounting Standards Board (IASB). There have been no significant changes in accounting policies from those set out in AstraZeneca PLC's Annual Report and Form 20-F Information 2013.
The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and as issued by the IASB. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the interim financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2013. There have been no significant new or revised accounting standards applied in the year ended 31 December 2014.
The information contained in Note 8 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2013.
The Group has considerable financial resources available. As at 31 December 2014, the Group has $7.0bn in financial resources (cash balances of $6.4bn and undrawn committed bank facilities of $3.0bn which are available until April 2019, with only $2.4bn of debt due within one year).
The Group's revenues are largely derived from sales of products which are covered by patents which provide a relatively high level of resilience and predictability to cash inflows, although our revenue is expected to continue to be significantly impacted by the expiry of patents over the medium term. In addition, government price interventions in response to budgetary constraints are expected to continue to adversely affect revenues in many of our mature markets. However, we anticipate new revenue streams from both recently launched medicines and products in development, and the Group has a wide diversity of customers and suppliers across different geographic areas. Consequently, the Directors believe that, overall, the Group is well placed to manage its business risks successfully.
On the basis of the above paragraph and after making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the preliminary announcement has been prepared on a going concern basis.
The financial information included in the preliminary announcement does not constitute statutory accounts of the Group for the years ended 31 December 2014 and 2013 but is derived from those accounts. Statutory accounts for 2013 have been delivered to the registrar of companies and those for 2014 will be delivered in due course. Those accounts have been reported on by the Group's auditor; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor 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 Net FUNDS
The table below provides an analysis of net funds and a reconciliation of net cash flow to the movement in net funds.


At 1 Jan
2014
$m

Cash
Flow
$m

Non-cash
Movements
$m

Exchange
Movements
$m

At 31 Dec
2014
$m
Loans due after one year

(8,516)

(919)

1,049

49

(8,337)
Finance leases due after one year

(72)

-

8

4

(60)
Total long term debt

(8,588)

(919)

1,057

53

(8,397)











Current instalments of loans

(766)

750

(1,019)

123

(912)
Current instalments of finance leases

(30)

36

(57)

3

(48)
Total current debt

(796)

786

(1,076)

126

(960)











Other investments - current

796

(38)

85

(48)

795
Net derivative financial instruments

402

18

45

-

465
Cash and cash equivalents

9,217

(2,702)

-

(155)

6,360
Overdrafts

(222)

23

-

3

(196)
Short-term borrowings

(770)

(520)

-

-

(1,290)


9,423

(3,219)

130

(200)

6,134
Net funds/(debt)

39

(3,352)

111

(21)

(3,223)
Non-cash movements in the period include fair value adjustments under IAS 39.
3 restructuring costs
Profit before tax for the year ended 31 December 2014 is stated after charging restructuring costs of $1,558m ($391m for the fourth quarter 2014). These have been charged to profit as follows:


4th Quarter
2014
$m

4th Quarter
2013
$m

Full Year
2014
$m

Full Year
2013
$m
Cost of sales

35

22

107

126
Research and development expense

97

84

497

490
Selling, general and administrative costs

259

279

662

805
Other income

-

-

292

-
Total

391

385

1,558

1,421
4 ACQUISITION OF BMS SHARE OF GLOBAL DIABETES ALLIANCE ASSETS
On 1 February 2014, AstraZeneca completed the acquisition of Bristol-Myers Squibb's (BMS) interests in the companies' diabetes alliance. The acquisition provides AstraZeneca with 100% ownership of the intellectual property and global rights for the development, manufacture and commercialisation of the diabetes business, which includes Onglyza (saxagliptin), Kombiglyze XR (saxagliptin and metformin HCl extended release), Komboglyze (saxagliptin and metformin HCl), Farxiga (dapagliflozin, marketed as Forxiga outside the US), Byetta (exenatide), Bydureon (exenatide extended release for injectable suspension), Myalept (metreleptin) and Symlin (pramlintide acetate).
The transaction consolidates worldwide ownership of the diabetes business within AstraZeneca, leveraging its primary and specialty care capabilities and its geographical reach, especially in emerging markets. The transaction included the acquisition of 100% of the share capital of Amylin Pharmaceuticals, LLC, and the asset purchase of the additional intellectual property and global rights not already owned by AstraZeneca, for the development, manufacture and commercialisation of Onglyza, Kombiglyze XR, Komboglyze and Farxiga, including associated BMS employees. This combination of intangible product rights and manufacturing assets with an established work force and their associated operating processes, principally those related to the global manufacturing and selling and marketing operations, requires that the acquisition is accounted for as a business combination in accordance with IFRS 3 Business Combinations.
Upfront consideration for the acquisition of $2.7bn was paid on 1 February 2014, with further payments of up to $1.4bn being payable for future regulatory, launch and sales-related milestones. AstraZeneca has also agreed to pay various sales-related royalty payments up until 2025. The amount of royalties payable under the agreement is inherently uncertain and difficult to predict, given the direct link to future sales and the range of outcomes cannot be reliably estimated. The maximum amount payable in each year is with reference to net sales. AstraZeneca also agreed to make payments up to $225m upon the transfer of certain additional assets. Contingent consideration has been fair valued using decision tree analysis, with key inputs including the probability of success, consideration of potential delays and the expected level of future revenues. In accordance with IFRS 3, the fair value of contingent consideration, including future royalties, is recognised immediately as a liability.
In addition to the acquired interests, AstraZeneca has entered into certain agreements with BMS to maintain the manufacturing and supply chain of the full portfolio of diabetes products. BMS will also continue to deliver specified clinical trials in line with the ongoing clinical trial plan, with an agreed number of R&D and manufacturing employees dedicated to diabetes remaining with BMS to progress the diabetes portfolio and support the transition for these areas. These arrangements will continue to be carried out over future periods and future payments by AstraZeneca to BMS in relation to these arrangements will be expensed as incurred. No amounts have been recognised in the initial acquisition accounting in relation to these arrangements but have been separated, at fair value, from the business combination accounting in accordance with IFRS 3.
The terms of the agreement partially reflect settlement of the launch and sales-related milestones under the pre-existing Onglyza and Farxiga collaboration agreements, which have been terminated in relation to the acquisition. The expected value of those pre-existing milestones is $0.3bn and has been recognised as a separate component of consideration and excluded from the business combination accounting in accordance with IFRS 3. Subsequently, these separate intangible assets have been recognised.
Goodwill of $1.5bn arising on the transaction is underpinned by a number of elements, which individually cannot be quantified. Most significant among these are the synergies AstraZeneca expect to be able to generate through more efficient manufacturing processes and the incremental value accessible through strategic and operational independence upon taking full control of the alliance.
The fair value of receivables acquired as part of the acquisition approximates the gross contractual amounts receivable. There are no significant amounts which are not expected to be collected.
The results from the additional acquired interests in the diabetes alliance have been consolidated into the Company's results from 1 February 2014, which have added revenue of $895m in the period to 31 December 2014. Due to the highly integrated nature of the diabetes alliance, and the fact that it is not operated through a separate legal entity, the incremental direct costs associated with the additional acquired interest are not separately identifiable and it is impracticable therefore to disclose the profit or loss recognised in the period since acquisition. 



Fair value
$m
Non-current assets



Intangible assets


5,746
Property, plant and equipment


478



6,224
Current assets


480
Current liabilities


(278)
Non-current liabilities


(84)
Total net assets acquired


6,342
Goodwill


1,530
Fair value of total consideration 


7,872
Less: fair value of contingent consideration


(5,169)
Total upfront consideration 


2,703
Less: cash and cash equivalents acquired


-
Net cash outflow 


2,703
As detailed above, future contingent consideration has been recognised initially at fair value and is revalued to fair value at each balance sheet date. Changes in fair value can arise as a result of a number of factors, including external news flow and internal re-forecasts, which may affect the likelihood of specific milestones becoming payable or the expected quantum of future royalty payments. These changes, which are potentially volatile and material, are included within selling, general and administrative costs. They are excluded from the Group's Core results.
The fair value of contingent consideration is also affected over time by the unwinding effect of discounting. This effect gives a charge to finance income and expense which reduces over time as the liability reduces. As a direct result of a material business acquisition, this effect is excluded from the Group's Core results.
In the period between acquisition and 31 December 2014, the effect of discounting increased the contingent consideration liability by $345m and revaluations increased fair value by $529m. Cash payments in the period since acquisition totaled $657m.
In addition, inventory acquired at completion has been recorded at fair value, which is higher than manufacturing cost. The adjustment to increase the inventory to fair value is held in inventory until product is sold, at which time it is released to profit as a cost of sale. This results in a lower gross margin in the first turn of inventory and, since this arises as a direct result of a material business acquisition, this effect is excluded from the Group's Core results. The charge to cost of sales in the period since acquisition was $146m and represents the entirety of the total adjustment to the fair value of inventory.
5 STRATEGIC TRANSACTION WITH ALMIRALL IN RESPIRATORY DISEASE
On 31 October 2014, AstraZeneca completed the agreement with Almirall to transfer the rights to Almirall's respiratory franchise to AstraZeneca. The transaction provides AstraZeneca with 100% of the rights for the development and commercialisation of Almirall's existing proprietary respiratory business, including rights to revenues from Almirall's existing partnerships, as well as its pipeline of investigational novel therapies. The franchise includes Eklira (aclidinium); Duaklir Genuair, the combination of aclidinium with formoterol has been approved in the EU and is being developed in the US; LAS100977 (abediterol), a once-daily long-acting beta2-agonist (LABA) in Phase II; an M3 antagonist beta2-agonist (MABA) platform in pre-clinical development (LAS191351, LAS194871) and Phase I (LAS190792); and multiple pre-clinical programmes. Almirall Sofotec, an Almirall subsidiary focused on the development of innovative proprietary devices, has also transferred to AstraZeneca. In addition, Almirall employees dedicated to the respiratory business, including Almirall Sofotec employees, have transferred to AstraZeneca. 
Upfront consideration for the acquisition of $878m was paid in November, with further payments of up to $1.22bn being payable for future development, launch, and sales-related milestones. AstraZeneca has also agreed to make various sales-related payments. The amount of royalties payable under the agreement is inherently uncertain and difficult to predict, given the direct link to future sales and the range of outcomes cannot be reliably estimated. The maximum amount payable in each year is with reference to net sales. Contingent consideration has been 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.
Almirall's pipeline of novel respiratory assets and its device capabilities further strengthen AstraZeneca's respiratory portfolio, which includes Symbicort and Pulmicort, as well as the Company's investigational medicines in development. The addition of aclidinium and the combination of aclidinium with formoterol, both in proprietary Genuair device, will allow AstraZeneca to offer patients a choice between dry powder inhaler and metered dose inhaler devices across a range of molecules and combinations.
The combination of intangible product rights with an established work force and their associated operating processes, principally those related to the selling and marketing operations, requires that the transaction is accounted for as a business combination in accordance with IFRS 3 Business Combinations.
Goodwill of $311m is underpinned by a number of elements, which individually cannot be quantified. Most significant among these is the premium attributable to the significant competitive advantage associated with AstraZeneca's complimentary portfolio and that attributable to a highly skilled workforce.
Almirall's respiratory franchise results have been consolidated into the Company's results from 31 October 2014, which have added revenue of $13m in the period to 31 December 2014. Due to the highly integrated nature of the respiratory franchise, and the fact that it is not operated through a separate legal entity, the incremental direct costs associated with the additional acquired interest are not separately identifiable and it is impracticable therefore to disclose the profit or loss recognised in the period since acquisition.



Fair value
$m
Non-current assets



Intangible assets


1,400
Property, plant and equipment


37



1,437
Current assets


24
Current liabilities


(2)
Non-current liabilities


(11)
Total net assets acquired


1,448
Goodwill


311
Fair value of total consideration 


1,759
Less: fair value of contingent consideration


(881)
Total upfront consideration 


878
Less: cash and cash equivalents acquired


(2)
Net cash outflow 


876
6  ACQUISITION OF DEFINIENS
On 25 November 2014, AstraZeneca completed the acquisition of Definiens, a privately-held company that has pioneered a world-leading imaging and data analysis technology, known as Tissue Phenomics, which dramatically improves the identification of biomarkers in tumour tissue.
Definiens' proprietary Cognition Network Technology was developed by Professor Gerd Binnig, the 1986 Nobel Laureate in Physics, and unlocks information from cancer tissue samples by measuring the identity, locations and, most importantly, the relationships between the many and varied components of the complex tumour microenvironment.
Under the terms of the agreement, AstraZeneca acquired 100 percent of Definiens' shares for an initial consideration of $150m and may make additional predetermined milestone payments of up to a further $150m. Definiens will continue to operate its business with third-party customers.
The acquisition will strengthen AstraZeneca's focus on the discovery of novel predictive biomarkers in immuno-oncology. It is believed that using biomarkers to select patients for clinical trials could potentially shorten clinical timelines and increase response rates. As a result, the technology will serve as an important tool in the advancement of the most promising combination therapies across AstraZeneca's combined small molecule and biologics pipeline, around 80 percent of which currently has a personalised healthcare approach.
The combination of intangible product rights with an established work force and their associated operating processes requires that the transaction is accounted for as a business combination in accordance with IFRS 3 Business Combinations.
No goodwill has been recognised.
The results of Definiens have been consolidated into the Company's results from 25 November 2014. For the period from acquisition to 31 December 2014, Definiens' revenues and loss was immaterial.



Fair value
$m
Non-current assets



Intangible assets


355



355
Non-current liabilities


(117)
Total net assets acquired


238
Goodwill


-
Fair value of total consideration 


238
Less: fair value of contingent consideration


(88)
Total upfront consideration 


150
7  FINANCIAL INSTRUMENTS
As detailed in our most recent annual financial statements, our principal financial instruments consist of derivative financial instruments, other investments, trade and other receivables, cash and cash equivalents, trade and other payables, and interest-bearing loans and borrowings. As indicated in Note 1, there have been no changes to the accounting policies, including fair value measurement, for financial instruments from those disclosed on pages 139 and 140 of the Company's Annual Report and Form 20-F Information 2013. In addition, there have been no changes of significance to the categorisation or fair value hierarchy of our financial instruments. Financial instruments measured at fair value include $1,297m of other investments, $1,198m of loans, and $465m of derivatives as at 31 December 2014. The total fair value of interest-bearing loans and borrowings at 31 December 2014, which have a carrying value of $10,843m in the Condensed Consolidated Statement of Financial Position, was $12,168m. Contingent consideration liabilities arising on the Company's acquisitions of business combinations have been classified under Level 3 in the fair value hierarchy and movements in fair value are shown below:


Acquisition 
of the BMS share of diabetes alliance

Other

2014


$m

$m

$m
At 1 January 

-

514

514 
Acquisitions 

5,169

969

6,138
Settlements 

(657)

-

(657)
Revaluations 

529

(17)

512
Discounting 

345

46

391
Foreign exchange 

-

1

1
At 31 December

5,386

1,513

6,899
8  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 2013 and Interim Management Statement 2014 as part of the Company's Half-Yearly Financial Report for the six-month period to 30 June 2014 and the Third Quarter and Nine Months Results 2014 (together 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 Company's Annual Report and Form 20-F Information 2013, for the majority of claims in which AstraZeneca is involved it is not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of the proceedings. In these cases, AstraZeneca discloses information with respect only to the nature and facts of the cases but no provision is made.
In cases that have been settled or adjudicated, or where quantifiable fines and penalties have been assessed and which are not subject to appeal, or where a loss is probable and we are able to make a reasonable estimate of the loss, we record the loss absorbed or make a provision for our best estimate of the expected loss.
The position could change over time and the estimates that we have made and upon which we have relied in calculating these provisions are inherently imprecise. There can, therefore, be no assurance that any losses that result from the outcome of any legal proceedings will not exceed the amount of the provisions that have been booked in the accounts. The major factors causing this uncertainty are described more fully in the Company's Annual Report and Form 20-F Information 2013 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 2014 and to 5 February 2015
Patent litigation
Byetta (exenatide)
Patent proceedings in the US
As previously disclosed, in October 2014, AstraZeneca received a Paragraph IV notice from Teva Pharmaceuticals USA, Inc. (Teva). Teva is seeking FDA approval to market a generic version of Byetta prior to the expiration of certain AstraZeneca patents listed in the FDA Orange Book with reference to Byetta. In December 2014, AstraZeneca commenced patent litigation against Teva in the US District Court for the District of Delaware. AstraZeneca is asserting several patents. In January 2015, Teva filed a complaint in the same court for a declaratory judgment that its proposed generic version of Byetta would not infringe US Patent Nos. 7,297,761 and 7,741,269. 
Epanova (omega-3-carboxylic acids)
Patent proceedings in the US
As previously disclosed, in March 2014 and subsequently, AstraZeneca received complaints from Amarin Pharmaceuticals Ireland Ltd (Amarin) alleging that AstraZeneca's Epanova product infringes Amarin's US Patent No. 8,663,662. In November 2014, the US District Court for the District of Delaware dismissed Amarin's complaint. Amarin may file a complaint again at a later date. 
Faslodex (fulvestrant) 
Patent proceedings in the US
As previously disclosed, in June and September 2014, AstraZeneca filed patent infringement lawsuits against Sandoz Inc. and Sandoz International GmbH (together, Sandoz) and Sagent Pharmaceuticals, Inc. in the US District Court in New Jersey relating to four patents listed in the FDA Orange Book with reference to Faslodex, after those companies sent Paragraph IV notices that they are seeking FDA approval to market generic versions of Faslodex prior to the expiration of AstraZeneca's patents. In January 2015, AstraZeneca received a Paragraph IV notice from Glenmark Generics, Inc. USA (Glenmark), which is also seeking FDA approval to market a generic version of Faslodex prior to the expiration of the same four patents, and AstraZeneca filed a patent infringement lawsuit against Glenmark in the US District Court in New Jersey. The lawsuits remain pending.
Nexium (esomeprazole magnesium)
Patent proceedings in the US
As previously disclosed, in October 2014 AstraZeneca received a Paragraph IV notice from Actavis Laboratories FL, Inc. (Actavis). Subsequently, AstraZeneca has received Paragraph IV notices from Andrx Labs, LLC (Andrx) and Perrigo Company PLC (Perrigo). Actavis, Andrx and Perrigo are seeking FDA approval to market generic versions of Nexium 24HR (OTC) prior to the expiration of AstraZeneca's patents listed in the FDA Orange Book with reference to Nexium 24HR. In November 2014, AstraZeneca commenced patent litigation against Actavis in the US District Court for the District of New Jersey. In December 2014 and in February 2015, AstraZeneca commenced patent litigation against Andrx and Perrigo, respectively, in the same court.
Seroquel XR (quetiapine fumarate)
Patent proceedings in the US
In October 2014, AstraZeneca received a Paragraph IV Notice from Pharmadax, Inc. and Pharmadax USA, Inc. (together, Pharmadax) alleging that the patent listed in the FDA Orange Book with reference to Seroquel XR is invalid, unenforceable and/or is not infringed by the Pharmadax proposed generic product. Pharmadax has submitted an Abbreviated New Drug Application (ANDA) seeking to market quetiapine fumarate 50mg tablets. In November 2014, AstraZeneca filed a patent infringement lawsuit against Pharmadax in the US District Court for the District of New Jersey.
Patent proceedings outside the US
As previously disclosed, in Germany, in November 2012, the Federal Patent Court (the Federal Court) determined that the Seroquel XR patent was invalid. In January 2015, the Federal Court of Justice denied AstraZeneca's appeal of the November 2012 Federal Court decision.
Zestril(lisinopril dihydrate)
Patent proceedings outside the US
As previously disclosed, in Canada, in 1996, AstraZeneca and Merck & Co., Inc., Merck Frosst Canada & Co., Merck Frosst Canada Ltd., (together, Merck) sued Apotex Inc. for infringement of Merck's US Patent No. 1,275,350. In 2006, Apotex was found to infringe the patent. AstraZeneca and Merck commenced a reference to determine the quantum of damages. In December 2014, the parties settled the reference.
Product liability litigation
Crestor (rosuvastatin calcium)
As previously disclosed, AstraZeneca is defending a number of lawsuits alleging multiple types of injuries caused by the use of Crestor, including diabetes mellitus, various cardiac injuries, rhabdomyolysis, and/or liver and kidney injuries. The claims of 594 plaintiffs, comprising 102 California residents and 492 non-California residents, were aggregated in one coordinated proceeding in Los Angeles, California. The claims of additional plaintiffs are waiting to be added to the coordination. In October 2014, the coordination judge dismissed the claims of the 492 non-California plaintiffs whose claims werein the coordinated proceeding. Plaintiffs have appealed the October 2014 order dismissing the non-California plaintiffs from the proceeding. There are now a total of 707 plaintiffs remaining with claims pending in California state court, and 2 plaintiffs with claims pending in the Eastern District of Kentucky.
Commercial litigation
Crestor Texas Attorney General litigation 
In January 2015, following a previously disclosed investigation by the State of Texas into AstraZeneca's sales and marketing activities involving Crestor, AstraZeneca was served with a lawsuit in which the Texas Attorney General's Office intervened in a state whistleblower action pending in Travis County Court, Texas. The lawsuit alleges that AstraZeneca engaged in inappropriate promotion of Crestor and improperly influenced the formulary status of Crestor.
Nexium settlement anti-trust litigation 
As previously disclosed, AstraZeneca is a defendant in a Multi-District Litigation class action and individual lawsuits alleging that AstraZeneca's settlements of certain patent litigation in the US relating to Nexium violated US anti-trust law and various state laws. A trial in the US District Court for the District of Massachusetts commenced on 20 October 2014 on certain liability issues for claims that remain in the case. On 5 December 2014, a jury returned a verdict in favour of AstraZeneca. On 31 December, 2014, the Plaintiffs filed motions for a new trial. On 7 January 2015, Plaintiffs filed motions for a permanent injunction. AstraZeneca opposed those motions. A hearing on the Plaintiffs' motions for a permanent injunction is scheduled for 6 February 2015. 
On 10 December 2014, following the favourable jury verdict, AstraZeneca filed a motion requesting dismissal of its appeal of the District Court's procedural decision to certify a class of end payers. On 21 January 2015, the Court of Appeals denied AstraZeneca's request to dismiss the appeal and issued a decision affirming the District Court's class certification ruling.
The two lawsuits filed in Pennsylvania state court by various indirect purchasers of Nexium are pending. The cases are in their initial stages.
Government investigations
Dutch National Competition Authority investigation
As previously disclosed, in December 2011 the Dutch competition authority, the ACM, issued a report alleging that AstraZeneca had abused a dominant position in the Netherlands by foreclosing generics of other proton pump inhibitors.In December 2014, the ACM issued its decision dismissing the allegations against AstraZeneca and closed its file.
Medco 
As previously disclosed, the US Attorney's Office for the District of Delaware, Criminal Division, conducted an investigation relating to AstraZeneca's relationship with Medco and sales of Nexium, Plendil, Prilosec and Toprol-XL. In addition, the US Attorney's Office for the District of Delaware and the US Department of Justice investigated potential civil claims relating to the same conduct. This matter has been resolved and a provision was previously taken.

9 FULL YEAR PRODUCT REVENUE ANALYSIS


World

US

Europe

Established ROW

Emerging Markets


FY 2014
$m

CER
%

FY 2014
$m

CER
%

FY 2014
$m

CER
%

FY 2014
$m

CER
%

FY 2014
$m

CER
%
Cardiovascular and Metabolic disease:




















Crestor 

5,512

(1)

2,918

-

1,200

(3)

667

(10)

727

11
Seloken/Toprol-XL

758

4

91

(31)

124

(4)

19

(13)

524

17
Onglyza

820

119

481

82

155

175

59

210

125

251
Atacand

501

(16)

44

(39)

169

(26)

43

(35)

245

5
Brilinta/Brilique

476

70

146

100

231

40

33

106

66

133
Byetta

327

59

199

31

81

119

27

164

20

200
Bydureon

440

191

374

185

57

235

5

n/m

4

100
Plendil

249

(4)

-

-

19

(10)

9

(10)

221

(3)
Tenormin

161

(15)

8

(47)

48

(6)

54

(23)

51

(4)
Others

558

52

190

280

199

14

35

48

134

12
Total Cardiovascular and Metabolic disease 

9,802

12

4,451

17

2,283

8

951

(3)

2,117

17
Oncology:




















Zoladex 

924

(4)

26

13

226

(12)

322

(6)

350

4
Iressa

623

(1)

-

-

166

(7)

177

(4)

280

6
Faslodex

720

7

340

5

245

10

59

3

76

14
Arimidex

298

(12)

15

150

76

(19)

108

(24)

99

5
Casodex

320

(10)

5

-

42

(21)

169

(18)

104

14
Others

142

4

25

-

33

14

48

(13)

36

36
Total Oncology

3,027

(2)

411

7

788

(6)

883

(11)

945

8
Respiratory, Inflammation and Autoimmunity:




















Symbicort 

3,801

10

1,511

23

1,462

(4)

458

17

370

22
Pulmicort 

946

11

211

(6)

162

(6)

97

(6)

476

35
Others

316

(2)

26

(55)

123

7

27

(15)

140

19
Total Respiratory, Inflammation and Autoimmunity

5,063

10

1,748

15

1,747

(4)

582

11

986

27
Infection, Neuroscience and Gastrointestinal:




















Nexium

3,655

(4)

1,876

(12)

368

2

606

9

805

5
Synagis

900

(15)

499

(19)

401

(9)

-

-

-

-
Seroquel XR

1,224

(8)

738

(1)

343

(18)

44

(35)

99

-
Seroquel IR

178

(46)

(72)

n/m

89

(16)

36

(63)

125

(13)
Local Anaesthetics

488

-

-

-

197

(5)

168

(1)

123

9
Losec/Prilosec

422

(11)

28

(7)

129

(2)

106

(30)

159

1
Merrem

253

(10)

6

(45)

32

(35)

4

(20)

211

(3)
FluMist/Fluenz 

295

20

218

10

70

64

7

100

-

-
Others

788

(6)

217

(24)

191

(3)

123

(1)

257

9
Total Infection, Neuroscience and Gastrointestinal

8,203

(7)

3,510

(12)

1,820

(7)

1,094

(7)

1,779

3
Total

26,095

3

10,120

4

6,638

(1)

3,510

(4)

5,827

12
10 FOURTH QUARTER PRODUCT REVENUE ANALYSIS


World

US

Europe

Established ROW

Emerging Markets


Q4 2014
$m

CER
%

Q4 2014
$m

CER
%

Q4 2014
$m

CER
%

Q4 2014
$m

CER
%

Q4 2014
$m

CER
%
Cardiovascular and Metabolic disease:




















Crestor 

1,388

(2)

760

(2)

286

(1)

164

(10)

178

9
Seloken/Toprol-XL

174

8

15

(21)

30

-

4

(43)

125

19
Onglyza

200

122

101

60

44

n/m

17

n/m

38

n/m
Atacand

117

(7)

11

10

36

(30)

9

(31)

61

18
Brilinta/Brilique

133

52

43

79

60

25

9

50

21

118
Byetta

69

31

39

8

20

91

7

100

3

-
Bydureon

123

153

103

158

18

233

1

-

1

n/m
Plendil

59

(9)

-

-

5

(17)

1

(67)

53

(5)
Tenormin

40

(7)

2

(33)

11

(8)

12

(26)

15

36
Others

171

89

66

n/m

55

40

13

150

37

23
Total Cardiovascular and Metabolic disease 

2,474

13

1,140

15

565

12

237

(3)

532

21
Oncology:




















Zoladex 

227

(2)

8

60

52

(8)

83

(3)

84

1
Iressa

150

2

-

-

42

-

43

(9)

65

13
Faslodex

182

4

90

3

58

7

15

-

19

5
Arimidex

68

(15)

3

(25)

16

(23)

27

(21)

22

5
Casodex

74

(16)

-

n/m

10

(15)

40

(23)

24

9
Others

39

5

5

(29)

8

-

16

-

10

67
Total Oncology

740

(2)

106

1

186

(4)

224

(10)

224

8
Respiratory, Inflammation and Autoimmunity:




















Symbicort 

978

5

395

13

347

(7)

121

2

115

25
Pulmicort 

269

15

56

(5)

41

-

28

(9)

144

39
Others

89

11

4

(75)

39

46

6

(22)

40

32
Total Respiratory, Inflammation and Autoimmunity

1,336

7

455

7

427

(3)

155

(1)

299

32
Infection, Neuroscience and Gastrointestinal:




















Nexium

832

(13)

469

(14)

89

4

105

(30)

169

(6)
Synagis

404

(22)

234

(22)

170

(21)

-

-

-

-
Seroquel XR

309

(6)

196

1

79

(18)

10

(9)

24

(7)
Seroquel IR

(28)

n/m

(92)

n/m

20

(8)

13

n/m

31

-
Local Anaesthetics

117

(3)

-

-

45

(8)

43

(2)

29

3
Losec/Prilosec

110

(5)

8

14

30

(9)

26

(29)

46

21
Merrem

63

(13)

(1)

n/m

7

(27)

1

n/m

56

(8)
FluMist/Fluenz 

134

170

75

241

54

108

5

n/m

-

-
Others

192

(4)

51

(22)

41

(7)

32

(11)

68

21
Total Infection, Neuroscience and Gastrointestinal

2,133

(11)

940

(16)

535

(8)

235

(15)

423

1
Total

6,683

2

2,641

-

1,713

-

851

(8)

1,478

14

ASTRAZENECA DEVELOPMENT PIPELINE, 31 DECEMBER 2014
Phase III / Pivotal Phase II / Registration
NMEs and significant additional indications
Submission dates shown for assets in Phase III and beyond. As disclosure of compound information is balanced by the business need to maintain confidentiality, information in relation to some compounds listed here has not been disclosed at this time.
Compound
Mechanism
Area Under Investigation
Date Commenced Phase
Estimated Filing
US
EU
Japan
China
Cardiovascular and Metabolism
Brilinta / Brilique1
ADP receptor antagonist
arterial thrombosis

Launched
Launched
Filed
Launched
Epanova#
omega-3 free fatty acids
hypertriglyceridaemia

Approved

2017
2019
Farxiga / Forxiga2
SGLT-2 inhibitor
type 2 diabetes

Launched
Launched
Launched
Filed
Myalept3
leptin analogue
lipodystrophy

Launched
Q4 2015
N/A

roxadustat#
hypoxia-inducible factor inhibitor
anaemia in CKD / ESRD
Q3 2014
2018
N/A
N/A
H2 2016
Oncology
AZD9291
EGFR tyrosine kinase inhibitor
advanced EGFRm T790M NSCLC
Q2 2014
Q2 2015
Q2 2015
Q3 2015
2017
Caprelsa
VEGFR / EGFR tyrosine kinase inhibitor with RET kinase activity
medullary thyroid cancer 

Launched
Launched
Filed
Filed
MEDI4736#
PACIFIC
anti-PD-L1 MAb
stage III NSCLC
Q2 2014
2017
2020
2020

MEDI4736#
ATLANTIC
anti-PD-L1 MAb
3rd line NSCLC
Q1 2014
H1 2016
2017
2017

moxetumomab pasudotox#
anti-CD22 recombinant
immunotoxin
hairy cell leukaemia
Q2 2013
2018
2018


Lynparza (olaparib)
PARP inhibitor
BRCAm PSR ovarian cancer

Launched4
Approved


Lynparza (olaparib) SOLO-1
PARP inhibitor
1st line BRCAm ovarian cancer
Q3 2013
2017
2017
2017
2018
Lynparza (olaparib) SOLO-2
PARP inhibitor
BRCAm PSR ovarian cancer
Q3 2013
H1 2016
H1 2016
H2 2016
2018
Lynparza (olaparib) GOLD
PARP inhibitor
2nd line gastric cancer
Q3 2013


2017
2018
Lynparza (olaparib) OlympiA
PARP inhibitor
adjuvant breast cancer
Q2 2014
2020
2020
2020
2021
Lynparza (olaparib) OlympiAD
PARP inhibitor
metastatic breast cancer
Q2 2014
2016
2016
2016
2018
selumetinib#
SELECT-1
MEK inhibitor
2nd line KRAS+ NSCLC
Q4 2013
2017
2017


selumetinib#
ASTRA
MEK inhibitor
differentiated thyroid cancer
Q3 2013
2017
2017


selumetinib#
SUMIT
MEK inhibitor
uveal melanoma
Q2 2014
Q4 2015
Q4 2015


tremelimumab
anti-CTLA-4 MAb
mesothelioma
Q2 2014
H1 2016
H2 2016


Phase III / Pivotal Phase II / Registration (continued)
Compound
Mechanism
Area Under Investigation
Date Commenced Phase
Estimated Filing
US
EU
Japan
China
Respiratory, Inflammation and Autoimmunity
benralizumab#
CALIMA SIROCCO ZONDA
BORA
anti-IL-5R MAb
severe asthma
Q4 2013
H2 2016
H2 2016


benralizumab#
TERRANOVA GALATHEA
anti-IL-5R MAb
COPD
Q3 2014
2018
2018


brodalumab#
AMAGINE-1,2,3
anti-IL-17R MAb
psoriasis
Q3 2012
2015++
2015++


brodalumab# AMVISION-1,2
anti-IL-17R MAb
psoriatic arthritis
Q1 2014
++
++


lesinurad
CLEAR 1,2
CRYSTAL
selective uric acid reabsorption inhibitor (SURI) 
chronic treatment of patients with gout
Q4 2011
Q1 20155
Filed6


PT003 GFF
LAMA / LABA
COPD
Q2 2013
Q3 2015
H1 2016
2017
2017
PT001 GP
LAMA
COPD
Q2 2013




tralokinumab
STRATOS 1,2
TROPOS
anti-IL-13 MAb
severe asthma
Q3 2014
2018
2018
2018

Infection
CAZ AVI#RECLAIM
cephalosporin / beta lactamase inhibitor 
serious infections
Q1 2012
N/A
Q1 2015

H2 2016
CAZ AVI# REPROVE
cephalosporin / beta lactamase inhibitor
hospital-acquired pneumonia / ventilator-associated pneumonia
Q2 2013
N/A
2017
2018
Zinforo#
extended spectrum cephalosporin with affinity to penicillin-binding proteins 
pneumonia / skin infections

N/A
Launched
N/A
Filed
Neuroscience
Movantik / Moventig7#
oral peripherally-acting mu-opioid receptor antagonist
opioid-induced constipation

Approved
Approved


# Partnered product.
Registrational Phase II / III study.
++ Filing is the responsibility of the partner.
1 Brilinta in the US; Brilique in rest of world.
2 Farxiga in the US; Forxiga in rest of world.
3Divestment to Aegerion Pharmaceuticals announced November 2014.
4 Launched simultaneously with US approval December 2014.
5 Submission made in US in December 2014, acceptance anticipated Q1 2015.
6 Filing accepted January 2015.
7 Movantik in the US; Moventig in EU.
Phases I and II
NMEs and significant additional indications
Compound
Mechanism
Area Under Investigation
Phase
Date Commenced Phase
Estimated Filing
US
EU
Japan
China
Cardiovascular and Metabolism
tenapanor (AZD1722)#
NHE3 inhibitor
ESRD-Pi / CKD with T2DM1
II
Q1 2013




AZD4901
hormone modulator
polycystic ovarian syndrome
II
Q2 2013




MEDI6012
LCAT
ACS
I
Q1 2012




MEDI8111 
Rh-factor II
trauma / bleeding
I
Q1 2014




Oncology
AZD1775#
WEE-1 inhibitor
ovarian cancer
II
Q4 2012




AZD2014
mTOR serine / threonine kinase inhibitor
solid tumours
II
Q1 2013




AZD4547
FGFR tyrosine kinase inhibitor
solid tumours
II
Q4 2011




MEDI-551#
anti-CD19 MAb
CLL / DLBCL
II
Q1 2012




MEDI-573#
anti-IGF MAb
metastatic breast cancer
II
Q2 2012




Lynparza (olaparib)
PARP inhibitor
prostate cancer
II
Q3 2014




selumetinib#
MEK inhibitor
2nd line KRAS- NSCLC
II
Q1 2013




AZD5363#
AKT kinase inhibitor
breast cancer
II
Q1 2014




MEDI4736#
anti-PD-L1 MAb
solid tumours
II
Q3 2014




moxetumomab
pasudotox#
anti-CD22 recombinant immunotoxin
pALL
II
Q3 2014




AZD6094 (volitinib)#
MET tyrosine kinase inhibitor
papillary renal cell carcinoma
II
Q2 2014




AZD9291
EGFR tyrosine kinase inhibitor
1st line advanced EGFRm NSCLC
II
Q4 2014




AZD3759
EGFR tyrosine kinase inhibitor
advanced EGFRm NSCLC
I
Q4 2014




AZD5312#
androgen receptor inhibitor
solid tumours
I
Q2 2014




AZD6738
ATR serine / threonine kinase inhibitor
solid tumours
I
Q4 2013




AZD8186
PI3 kinase beta inhibitor
solid tumours
I
Q2 2013




AZD8835
PI3 kinase alpha inhibitor
solid tumours
I
Q4 2014




AZD9150#
STAT3 inhibitor
haematological malignancies
I
Q1 2012




AZD9291 + (MEDI4736# or selumetinib# or volitinib#)
TATTON
EGFR tyrosine kinase inhibitor + (anti-PD-L1 or MEK inhibitor or MET tyrosine kinase inhibitor)
advanced EGFRm NSCLC
I
Q3 2014




Phases I and II (continued)
Compound
Mechanism
Area Under Investigation
Phase
Date Commenced Phase
Estimated Filing
US
EU
Japan
China
Oncology (continued)
AZD9496
selective oestrogen receptor downregulator (SERD)
ER+ breast cancer
I
Q4 2014




MEDI4736# after (AZD9291 or Iressa or (selumetinib# +docetaxel) or tremelimumab) 
anti-PD-L1 MAb
+ (EGFR tyrosine kinase inhibitor or MEK inhibitor or anti-CTLA-4 MAb)
NSCLC
I
Q3 2014




MEDI-565#
anti-CEA BiTE MAb
solid tumours
I
Q1 2011




MEDI0639#
anti-DLL-4 MAb
solid tumours
I
Q2 2012




MEDI0680 
anti-PD-1 MAb
solid tumours
I
Q4 2013




MEDI3617#
anti-ANG-2 MAb
solid tumours
I
Q4 2010




MEDI4736#
anti-PD-L1 MAb
various cancers
I
Q3 2014




MEDI4736# + MEDI0680
anti-PD-L1 MAb + anti-PD-1 MAb
solid tumours
I
Q2 2014




MEDI4736# + MEDI6469#
anti-PD-L1 MAb + murine OX40 agonist
solid tumours
I
Q3 2014




MEDI4736# + dabrafenib + trametinib2
anti-PD-L1 MAb + BRAF inhibitor + MEK inhibitor
melanoma
I
Q1 2014




MEDI4736# + Iressa
anti-PD-L1 MAb + EGFR tyrosine kinase inhibitor
NSCLC
I
Q2 2014




MEDI4736# + tremelimumab
anti-PD-L1 MAb + anti-CTLA-4 MAb
solid tumours
I
Q4 2013




MEDI-551# +
MEDI0680
anti-CD19 MAb + anti-PD-1 MAb
DLBCL
I
Q4 2014




MEDI-551# + rituximab3
anti-CD19 MAb + anti-CD20 MAb
haematological malignancies
I
Q2 2014




MEDI6383#
OX40 agonist
solid tumours
I
Q3 2014




MEDI6469#
murine OX40 agonist
solid tumours
I
Q1 2006




MEDI6469# +
tremelimumab
murine OX40 agonist + anti-CTLA-4 MAb
solid tumours
I
Q4 2014




Respiratory, Inflammation and Autoimmunity
AZD0548
LABA
asthma / COPD
II
Q4 2007




AZD21154#
MABA
COPD
II
Q2 2012




AZD7624
inhaled P38 inhibitor
COPD
II
Q4 2014




AZD9412#
inhaled interferon 
asthma / COPD
II
Q1 2010




anifrolumab#
anti-IFN-alphaR MAb
SLE
II
Q1 2012




brodalumab#
anti-IL-17R MAb
asthma
II
Q2 2013




mavrilimumab#
anti-GM-CSFR MAb
rheumatoid arthritis
II
Q1 2010




MEDI2070#
anti-IL-23 MAb
Crohn's disease
II
Q1 2013




MEDI7183#
anti-a4b7 MAb
Crohn's disease / ulcerative colitis
II
Q4 2012




MEDI9929#
anti-TSLP MAb
asthma
II
Q2 2014




PT010
LAMA / LABA / ICS
COPD
II
Q2 2014




RDEA3170
selective uric acid reabsorption inhibitor (SURI)
chronic management of hyperuricaemia in patients with gout
II
Q3 2013




sifalimumab#
anti-IFN-alpha MAb
SLE
II
Q3 2008




tralokinumab
anti-IL-13 MAb
IPF
II
Q4 2012




Phases I and II (continued)
Compound
Mechanism
Area Under Investigation
Phase
Date Commenced Phase
Estimated Filing
US
EU
Japan
China
Respiratory, Inflammation and Autoimmunity (continued)
AZD1419#
TLR9 agonist
asthma
I
Q3 2013




AZD7594
inhaled SGRM
asthma / COPD
I
Q3 2012




AZD8999
MABA
COPD
I
Q4 2013




MEDI-551#
anti-CD19 MAb
multiple sclerosis
I
Q3 2012




MEDI4920
anti-CD40L-Tn3 fusion protein
primary Sjgren's syndrome
I
Q2 2014




MEDI5872#
anti-B7RP1 MAb
SLE
I
Q4 2008




Infection
AZD0914
GyrAR
serious bacterial infections
II
Q4 2014




AZD5847
oxazolidinone anti-bacterial inhibitor
tuberculosis
II
Q4 2012




CXL#
beta lactamase inhibitor / cephalosporin
MRSA
II
Q4 2010




MEDI4893
MAb binding to S. aureus toxin
hospital-acquired pneumonia / serious S. aureus infection
II
Q4 2014




ATM AVI
monobactam / beta lactamase inhibitor
targeted serious bacterial infections
I
Q4 2012




MEDI-550
pandemic influenza virus vaccine
pandemic influenza prophylaxis
I
Q2 2006




MEDI-559 
paediatric RSV vaccine
RSV prophylaxis
I
Q4 2008




MEDI3902
anti-Psl/PcrV
pseudomonas
I
Q3 2014




MEDI7510
RSV sF+GLA-SE
prevention of RSV disease in older adults
I
Q2 2014




MEDI8897#
anti-RSV MAb-YTE
passive RSV prophylaxis
I
Q2 2014




Neuroscience
AZD3241
myeloperoxidase inhibitor
multiple system atrophy5
II
Q2 2012




AZD3293#
beta-secretase inhibitor
Alzheimer's disease
II
Q4 2014




AZD5213
histamine-3 receptor antagonist
Tourette's syndrome / neuropathic pain
II
Q4 2013




AZD8108
NMDA antagonist
suicidal ideation
I
Q4 2014




MEDI1814
anti-amyloid beta MAb
Alzheimer's disease
I
Q2 2014




# Partnered product.
1 Fluid retention indication for tenapanor terminated in Q2 2014.
2 MedImmune-sponsored study in collaboration with GSK.
3 MedImmune-sponsored study in collaboration with Genentech.
4 Development on hold pending further preclinical evaluation.
5 Multiple system atrophy is now the lead indication for this molecule.
Significant Life-Cycle Management
Compound
Mechanism
Area Under Investigation
Date Commenced Phase
Estimated Filing
US
EU
Japan
China
Cardiovascular and Metabolism
Brilinta / Brilique1 EUCLID
ADP receptor antagonist
outcomes study in patients with peripheral artery disease
Q4 2012
2017
2017
2017
2018 
Brilinta / Brilique1
PEGASUS-
TIMI 54
ADP receptor antagonist
outcomes study in patients with prior myocardial infarction
Q4 2010
Q2 2015
Q2 2015
Q4 2015
2017
Brilinta / Brilique1 SOCRATES
ADP receptor antagonist
outcomes study in patients with stroke or TIA
Q1 2014
H1 2016
H1 2016
H2 2016
2017
Brilinta / Brilique1 THEMIS
ADP receptor antagonist
outcomes study in patients with type 2 diabetes and CAD, but without a previous history of MI or stroke
Q1 2014
2017
2017
2018
2018
Brilinta / Brilique1 HESTIA
ADP receptor antagonist
prevention of vaso-occlusive crises in paediatric patients with sickle cell disease
Q4 2014
2020
2020


Bydureon Dual
Chamber Pen
GLP-1 receptor agonist
type 2 diabetes

Launched
Approved
Filed

Bydureon EXSCEL
GLP-1 receptor agonist
type 2 diabetes outcomes study 
Q2 2010
2018
2018
2018

Bydureon weekly
suspension
GLP-1 receptor agonist
type 2 diabetes
Q1 2013
Q4 2015
Q4 2015


Epanova
STRENGTH
omega-3 free fatty acids
outcomes study in statin-treated patients at high CV risk, with persistent hypertriglyceridemia plus low HDL-cholesterol
Q4 2014
2020
2020
2020
2020
Farxiga / Forxiga2
DECLARE-
TIMI 58
SGLT-2 inhibitor
type 2 diabetes outcomes study
Q2 2013
2020
2020


Farxiga / Forxiga2
SGLT-2 inhibitor
type 1 diabetes
Q4 2014
2018
2017
2018

KombiglyzeXR FDC / Komboglyze FDC3
DPP-4 inhibitor / metformin FDC
type 2 diabetes

Launched
Launched

Filed
Onglyza SAVOR-TIMI 53
DPP-4 inhibitor
type 2 diabetes outcomes study
Q2 2010
Filed
Launched

2015
saxagliptin / dapagliflozin FDC 
DPP-4 inhibitor / SGLT-2 inhibitor FDC
type 2 diabetes
Q2 2012
Q1 20156
Q2 2015


XigduoXR FDC / Xigduo FDC4
SGLT-2 inhibitor / metformin FDC
type 2 diabetes 

Launched
Launched 


Oncology
Caprelsa
VEGFR / EGFR tyrosine kinase inhibitor with RET kinase activity
differentiated thyroid cancer
Q2 2013
H1 2016
H1 2016
H1 2016

Faslodex
FALCON 
oestrogen receptor antagonist
1st line hormone receptor +ve advanced breast cancer
Q4 2012
H2 2016
H2 2016
H2 2016
H2 2016
Respiratory, Inflammation and Autoimmunity 
Duaklir Genuair
LAMA / LABA
COPD


Approved


Symbicort
SYGMA-1
ICS / LABA
as needed use in mild asthma
Q4 2014
N/A
2018


Symbicort5
ICS / LABA
Breath Actuated Inhaler asthma / COPD





Significant Life-Cycle Management (continued)
Compound
Mechanism
Area Under Investigation
Date Commenced Phase
Estimated Filing
US
EU
Japan
China
Neuroscience
Diprivan#
sedative and anaesthetic
conscious sedation

N/A
Launched
Filed
Launched
Gastrointestinal
Entocort
glucocorticoid steroid
Crohn's disease / ulcerative colitis

Launched
Launched
Q3 2015
N/A
linaclotide#
GC-C receptor peptide agonist
irritable bowel syndrome with constipation
(IBS-C)

N/A
N/A
N/A
Q4 2015
Nexium
proton pump inhibitor
refractory reflux esophagitis



Filed 

Nexium
proton pump inhibitor
stress ulcer prophylaxis




2017
Nexium 
proton pump inhibitor
paediatrics

Launched
Launched
H2 2016

# Partnered product.
1 Brilinta in the US; Brilique in rest of world.
2 Farxiga in the US; Forxiga in rest of world.
3 Kombiglyze XR in the US; Komboglyze FDC in the EU.
4 Xigduo XR FDC in the US; Xigduo FDC in the EU.
5 Development of a new BAI device is ongoing.
6 Submission made in US in December 2014, acceptance anticipated Q1 2015
Terminations (discontinued projects between 1 October and 31 December 2014)
NME / Line Extension
Compound
Reason for Discontinuation
Area Under Investigation
NME
AZD1979
Safety / efficacy
obesity
NME
AZD6423
Safety / efficacy
suicidal ideation
# Partnered product.
Shareholder Information
ANNOUNCEMENTS AND MEETINGS
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Announcement of first quarter 2015 results 24 April 2015
Annual General Meeting 24 April 2015
Announcement of second quarter and half year 2014 results 30 July 2015
Announcement of third quarter and nine months 2014 results 5 November 2015
DIVIDENDS
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The record date for the first interim dividend, paid on 15 September 2014, was 15 August 2014. Shares traded ex-dividend from 13 August 2014.
The record date for the second interim dividend for 2014, payable on 23 March 2015, will be20 February 2015. Ordinary Shares listed in London and Stockholm will trade ex-dividend from 19 February 2015. American Depositary Shares listed in New York will trade ex-dividend from 18 February 2015.
Future dividends will normally be paid as follows:
First interim
Announced with second quarter and half year results and paid in September
Second interim
Announced with fourth quarter and full year results and paid in March
The Company is in the process of transferring its US American Depositary Receipt (ADR) Programme to Citibank, N.A. The Company will implement a dividend fee of $0.03 per ADR annually to cover ADR Programme costs, commencing with a fee of $0.02 per ADR on the second interim dividend for 2014, payable on 23 March 2015.
TRADEMARKS
______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Trademarks of the AstraZeneca group of companies and of companies other than AstraZeneca appear throughout this 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 Duaklir Genuair, Duaklir and Eklira, trademarks of Almirall, S.A.; Tissue Phenomics and Cognition Network Technology, trademarks of Definiens AG; and Imbruvica, a trademark of Pharmacyclics, Inc.
ADDRESSES FOR CORRESPONDENCE
_______________________________________________________________________________________________________________________________________________________________________________________________________________________________
Registrar and
Transfer Office
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
UK
US Depositary
JP Morgan Chase & Co
PO Box 64504
St Paul
MN 55164-0504
US
Registered Office
2 Kingdom Street
London
W2 6BD
UK
Swedish Central Securities Depository
Euroclear Sweden AB
PO Box 191
SE-101 23 Stockholm
Sweden
Tel (freephone in UK):
0800 389 1580
Tel (outside UK):
+44 (0)121 415 7033
Tel (toll free in US): 
888 697 8018
Tel (outside US): 
+1 651 453 2128
Tel: +44 (0) 20 7604 8000
Tel: +46 (0)8 402 9000
CONTACT INFORMATION
_______________________________________________________________________________________________________________________________________________________________________________________________________________________________
Media Enquiries:   Esra Erkal-Paler (London)+44 (0) 20 7604 8030
Vanessa Rhodes (London)+44 (0) 20 7604 8037
Ayesha Bharmal (London)+44 (0) 20 7604 8034
Jacob Lund (Sdertlje)+46 (0) 8 553 260 20
Analyst/Investor Enquiries:  Thomas Kudsk Larsen (London)+44 (0) 20 7604 8199
Karl Hrd (London)  +44 (0) 20 7604 8123
Eugenia Litz (London) +44 (0) 20 7604 8233
Craig Marks (London) +44 (0) 20 7604 8591
Christer Gruvris (London) +44 (0) 20 7604 8126
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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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: The preliminary announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. 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 the preliminary announcement 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 patents, marketing exclusivity or trademarks, or the risk of failure to obtain patent protection; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage; exchange rate fluctuations; the risk that R&D will not yield new products that achieve commercial success; the risk that strategic alliances and acquisitions will be unsuccessful; the impact of competition, price controls and price reductions; taxation risks; the risk of substantial product liability claims; the impact of any delays in the manufacturing, distribution and sale of any of our products; the impact of any failure by third parties to supply materials or services; the risk of failure to manage a crisis; the risk of delay to new product launches; the difficulties of obtaining and maintaining regulatory approvals for products; the risk of failure to observe ongoing regulatory oversight; the risk that new products do not perform as we expect; the risk of environmental liabilities; the risks associated with conducting business in emerging markets; the risk of reputational damage; the risk of product counterfeiting; the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring programmes; the risk that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects; the impact of failing to attract and retain key personnel and to successfully engage with our employees; and the impact of increasing implementation and enforcement of more stringent anti-bribery and anti-corruption legislation.

This information is provided by RNS
The company news service from the London Stock Exchange
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