REG - AstraZeneca PLC - First quarter 2022 results
29/04/2022 07:00
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RNS Number : 7840J AstraZeneca PLC 29 April 2022
AstraZeneca PLC
29 April 2022 07:00 GMT
First quarter 2022 results
Strong start to the year. Continued investment in the pipeline to drive
sustainable long-term growth.
Revenue and EPS summary
Q1 2022
% Change
$m Actual CER(1)
- Product Sales 10,980 51 56
- Collaboration Revenue 410 n/m (2) n/m
Total Revenue 11,390 56 60
Reported(3) EPS(4) $0.25 (79) (73)
Core(5) EPS (6) $1.89 16 20
Financial performance (growth numbers at CER)
‒ Total Revenue increased 60% to $11,390m, reflecting growth across
the Company, the contribution of the Alexion medicines and several Vaxzevria
contracts that are expected to complete delivery by half year 2022
‒ Total Revenue from Oncology increased 25%(7), including a milestone
payment; Product Sales from Oncology increased 18%. Total Revenue from CVRM(8)
increased 18%, R&I(9) increased 4% and Rare Disease increased 7%(10)
‒ Operating Margin in the quarter benefitted from phasing of costs
‒ Core EPS increased 20% to $1.89
‒ FY 2022 guidance at CER reiterated
Key milestones achieved since the prior results
‒ Key data: Enhertu(11) in HER2(12)-low breast cancer
(DESTINY-Breast04), AZD8233 in hypercholesterolaemia (ETESIAN, Phase IIb) and
publication of data for Lynparza in prostate cancer (PROpel) and nirsevimab in
RSV(13) (MELODY/MEDLEY)
‒ Key approvals: Saphnelo and Evusheld in the EU, Ondexxya in Japan,
and in the US, approvals of Ultomiris for gMG(14) and Lynparza(15) for early
breast cancer (OlympiA)
‒ Other key milestones: US FDA(16) Breakthrough Therapy Designation
for Enhertu in HER2-low breast cancer (DESTINY-Breast04), Priority Reviews for
Enhertu in HER2-mutant metastatic non-small cell lung cancer (DESTINY-Lung01),
and Imfinzi and tremelimumab in advanced liver cancer (HIMALAYA), and EMA(17)
accelerated assessment for nirsevimab in RSV (MELODY/MEDLEY)
Pascal Soriot, Chief Executive Officer, AstraZeneca, said:
"2022 has started strongly for AstraZeneca. Farxiga achieved $1bn revenue in
the quarter and our Oncology medicines delivered Product Sales growth of 18%,
despite COVID-19 continuing to impact cancer diagnosis and treatment.
High-level results from the DESTINY-Breast04 trial pointed to Enhertu's
potential to redefine treatment of HER2‑low metastatic breast cancer, and
Ultomiris became the first and only long-acting C5 inhibitor approved for
generalised myasthenia gravis in the US.
Today we have unveiled plans for a new strategic research and development
centre in the heart of Cambridge, Massachusetts' scientific hub. In line with
our sustainability commitments, it will be designed to the highest
environmental standards. Our investments in pioneering science give us
confidence of further advances in the years to come."
Guidance
The Company reiterates FY 2022 guidance at CER.
Total Revenue is expected to increase by a high teens percentage
Core EPS is expected to increase by a mid-to-high twenties percentage
‒ The CER growth rates include the full-year contribution of Vaxzevria
in both FY 2021 and FY 2022
‒ Total Revenue from COVID-19 medicines is anticipated to decline by a
low-to-mid twenties percentage, with an expected decline in sales of Vaxzevria
being partially offset by growth in Evusheld sales. The majority of Vaxzevria
revenue in 2022 is expected to come from initial contracts. The Gross Margin
from the COVID-19 medicines is expected to be lower than the Company average
‒ Core Operating Expenses are expected to increase by a low-to-mid
teens percentage, driven in substantial part by the full year integration of
Alexion expenses
‒ Emerging Markets Total Revenue, including China, is expected to grow
mid-single-digits in FY 2022. China Total Revenue is expected to decline by a
mid-single-digit percentage in FY 2022, primarily due to continued NRDL and
VBP programme impacting various medicines. The Company remains confident in
the longer term outlook for Emerging Markets, driven by a large market
opportunity, broader patient access and an increased mix of new medicines
‒ A Core Tax Rate between 18-22%
AstraZeneca continues to recognise and actively manage the heightened risks
from COVID-19 and geopolitical and supply chain uncertainties on overall
business performance. Variations in performance between quarters can be
expected to continue.
The Company is unable to provide guidance on a Reported basis because
AstraZeneca cannot reliably forecast material elements of the Reported result,
including any fair value adjustments arising on acquisition-related
liabilities, intangible asset impairment charges and legal-settlement
provisions. Please refer to the cautionary statements section regarding
forward-looking statements at the end of this announcement.
Currency impact
If foreign-exchange rates for April to December 2022 were to remain at the
average of rates seen in Q1 2022, it is anticipated that there would be a low
single-digit adverse impact on Total Revenue and a mid single-digit adverse
impact on Core EPS versus the financials at CER. The Company's
foreign-exchange rate sensitivity analysis is contained in Table 15.
Table 1: Key elements of Total Revenue performance
% Change
Revenue type $m Actual CER
Product Sales 10,980 51 56 $1,688m from medicines acquired with Alexion
Collaboration Revenue 410 n/m n/m $76m for Enhertu (Q1 2021: $39m), and milestone payments of $175m for Lynparza
and $70m for tralokinumab (Q1 2021: $nil)
Total Revenue 11,390 56 60
Disease areas $m Actual CER
Oncology 3,644 21 25 Product Sales up 14% (18% CER). Strong performance despite a continuing
COVID-19 impact on cancer diagnoses and treatment rates
CVRM 2,219 14 18 Farxiga grew 60% (67% at CER) to $1,001m
R&I 1,584 2 4 Pulmicort declined 34% primarily due to inclusion in China's VBP(18)
programme, implemented in October 2021
V&I(19) 1,814 (20) >6x >6x $1,145m from Vaxzevria(21) and $469m from Evusheld
Majority of Vaxzevria revenue from initial contracts, several of which
completed during the quarter. In-line with guidance, Vaxzevria revenue is
expected to decline in later quarters
Rare Disease 1,694 3 7 Durable C5 franchise growth, including continued conversion from Soliris to
Ultomiris in PNH(22) and aHUS(23), and Soliris growth in gMG and NMOSD(24)
Other Medicines 435 (18) (15)
Total Revenue 11,390 56 60
Regions exc. Vaxzevria $m Actual CER
Emerging Markets 2,833 11 14
- China 1,575 (6) (8) Pricing pressure associated with the NRDL(25) and VBP programmes
- Ex-China Emerging Markets 1,258 45 57 $110m from medicines acquired with Alexion
US 4,055 76 76 $1,014m from medicines acquired with Alexion
Europe 2,150 63 73 $366m from medicines acquired with Alexion
Established RoW 1,207 40 51 $208m from medicines acquired with Alexion
Total Revenue exc. Vaxzevria 10,245 45 50 $1,698m from medicines acquired with Alexion
Regions inc. Vaxzevria $m Actual CER
Emerging Markets 3,364 30 32 Impacted by quarterly phasing of Vaxzevria
- China 1,622 (3) (6) In line with FY 2022 guidance
- Ex-China Emerging Markets 1,742 91 >2x
US 4,134 79 79
Europe 2,284 48 57
Established RoW 1,608 85 98
Total Revenue 11,390 56 60
Table 2: Key elements of financial performance
Q1 2022
Metric Reported Reported change Core Core Comments(26)
($m or %)
change
Total Revenue 11,390 56% Actual 60% CER 11,390 56% Actual 60% CER See Table 1
Gross Margin(27) 68% -6pp Actual 79% +5pp Actual + Contribution of Alexion
-7pp CER
+4pp CER + Increasing mix of Oncology sales
‒ Increasing mix of COVID-19 therapies
‒ China impact of NRDL and VBP
‒ Increasing impact from profit-sharing arrangements including the Lynparza
collaboration with MSD
‒ Reported impacted by unwind of Alexion inventory fair value adjustment
R&D Expense 2,133 24% Actual 26% CER 2,186 33% Actual 36% CER + Increased investment in pipeline
+ Addition of Alexion R&D
‒ Beneficial phasing of costs resulted in a Core R&D-to-Total Revenue
ratio of 19% (FY 2021: 21%)
SG&A Expense 4,840 65% Actual 68% CER 2,946 23% Actual 25% CER + Addition of Alexion
+ Reported impacted by $775m legal settlement with Chugai Pharmaceutical Co.
Ltd and amortisation related to Alexion acquisition
‒ Beneficial phasing of costs resulted in a Core SG&A-to-Total Revenue
ratio of 26% (FY 2021: 30%)
Other Operating Income(28) 97 (92%) Actual 98 (92%) Actual (92%) CER Limited divestments in quarter, majority of income coming from royalties and
prior transactions
(92%) CER
Operating Margin 8% -18pp Actual 35% Stable Actual See Gross Margin and Expenses
-18pp CER
and CER
commentary above
Net Finance Expense 319 13% Actual 7% CER 252 35% Actual 23% CER + Alexion debt financing costs
‒ Reported impacted by lower discount unwind on acquisition-related
liabilities
Tax Rate 30% +27pp 21% +13pp In-line with full year expectation of 18-22%
+ The Tax Rate in the comparable period of Q1 2021 was favourably impacted by
the disposal of Viela and settlements with tax authorities
EPS $0.25 (79%) Actual $1.89 16% Actual 20% CER Further details of differences between Reported and Core are shown in Table 10
(73%) CER
Corporate and business development
In April 2022, AstraZeneca and Harbour BioMed (HBM) committed to a global
out-license agreement for HBM7022, a pre-clinical bispecific antibody
targeting Claudin18.2 and CD3. AstraZeneca will be granted an exclusive global
license for research, development, registration, manufacturing, and
commercialisation of HBM7022.
HBM shall receive an upfront payment of $25m with the potential for additional
payments up to $325m pending achievement of certain development, regulatory
and commercial milestones. HBM is also eligible to receive tiered royalties on
net sales.
Sustainability summary
AstraZeneca published its eighth annual Sustainability Report
(https://www.astrazeneca.com/content/dam/az/Sustainability/2022/pdf/Sustainability_Report_2021.pdf)
and Sustainability Data summary, released in conjunction with the 2021 Annual
Report. The report outlines progress on strategic priorities, material focus
areas, challenges and aims for the future.
AstraZeneca continues to provide urgent humanitarian support in Ukraine and
neighbouring countries. To date, AstraZeneca has committed over $7m to
response efforts, including donations of:
‒ Medicines to the Company's humanitarian relief partner Direct
Relief, which is working directly with the Ukrainian Ministry of Health
‒ Medicines via The Red Cross affiliates in neighbouring countries
‒ $2m to support relief agencies working in Ukraine, Poland and
surrounding areas with a focus on providing healthcare and humanitarian
assistance. Funding is being provided to Project HOPE, working with and
through the World Health Organization, and International Medical Corps
‒ More than $1m to UNICEF and The Red Cross
Reporting changes for Q1 2022
AstraZeneca's Total Revenue and Product Sales tables in FY 2022 include a new
disease area: BioPharmaceuticals: Vaccines & Immune Therapies (V&I).
This incorporates revenues from Vaxzevria, Evusheld, FluMist, Synagis and
nirsevimab. In the FY 2021 quarterly and annual reports, Vaxzevria and
Evusheld revenues were shown under COVID‑19, and FluMist, Synagis and
nirsevimab revenues were shown under Other Medicines. In addition, revenue
from Koselugo have moved from Oncology to Rare Disease, and revenue from
Andexxa has moved from Rare Disease to BioPharmaceuticals: CVRM.
The growth rate for each disease area has been calculated as though these
changes had been implemented in FY 2021.
Conference call
A conference call and webcast for investors and analysts will begin today (29
April 2022) at 11:45 BST. Details can be accessed via astrazeneca.com.
Reporting calendar
The Company intends to publish its half-year and second-quarter results on
Friday 29 July 2022.
Notes
The following notes refer to pages one to five.
1. Constant exchange rates. The differences between Actual Change and
CER Change are due to foreign exchange movements between periods in 2022 vs
2021. CER financial measures are not accounted for according to generally
accepted accounting principles (GAAP) because they remove the effects of
currency movements from Reported results.
2. Not meaningful
3. Reported financial measures are the financial results presented in
accordance with UK-adopted International Accounting Standards and
International Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board (IASB) and International Accounting
Standards as adopted by the European Union.
4. Earnings per share.
5. Core financial measures. These are non-GAAP financial measures
because, unlike Reported performance, they cannot be derived directly from the
information in the Group's Financial Statements. See the Operating and
financial review for a definition of Core financial measures and a
reconciliation of Core to Reported financial measures.
6. The differences between Reported and Core measures are primarily due
to items related to the acquisition of Alexion, amortisation of intangibles,
impairments, restructuring charges, and, as previously disclosed, a charge to
provisions relating to a legal settlement with Chugai Pharmaceutical Co. Ltd
that will lead to a payment of $775m in the Q2 2022. A full reconciliation
between Reported EPS and Core EPS is provided in Table 10 in the Financial
performance section of this document.
7. In FY 2022, Total Revenue from Koselugo is included in Rare Disease
(FY 2021: Oncology), and Total Revenue from Andexxa is included in
BioPharmaceuticals: CVRM (FY 2021: Rare Disease). The growth rate for each
disease area has been calculated as though these changes had been implemented
in FY 2021.
8. Cardiovascular, Renal & Metabolism.
9. Respiratory & Immunology.
10. FY 2022 Q1 growth rates on medicines acquired with Alexion have been
calculated on a pro forma basis comparing to the corresponding period in the
prior year, pre-acquisition as previously published by Alexion. The growth
rates shown for the Rare Disease and CVRM disease areas include these pro
forma adjustments.
11. AstraZeneca is collaborating with Daiichi Sankyo to develop and
commercialise Enhertu.
12. Human epidermal growth factor receptor 2.
13. Respiratory syncytial virus.
14. Generalised myasthenia gravis.
15. AstraZeneca is collaborating with MSD (Merck & Co., Inc. in the US
and Canada) to develop and commercialise Lynparza.
16. US Food and Drug Administration.
17. European Medicines Agency.
18. Volume based procurement.
19. Vaccines & Immune Therapies.
20. Growth rates greater than 100% are displayed as a multiple, for example
Ô>2x' signifies that the value is more than double that of the comparable
period
21. Vaxzevria is AstraZeneca's trademark for the Company's supply of the
AstraZeneca COVID-19 Vaccine. In the financial tables in this report,
'Vaxzevria Total Revenue' includes Collaboration Revenue from sub-licensees
that produce and supply the AstraZeneca COVID‑19 Vaccine under their own
trademarks.
22. Paroxysmal nocturnal haemoglobinuria.
23. Atypical haemolytic uraemic syndrome.
24. Neuromyelitis optica spectrum disorder.
25. National Reimbursement Drug List.
26. The plus and minus signs in Table 2 indicate the directional impact of
the item being discussed, e.g. a plus sign in R&D Expenses signifies that
the comment refers to an item that increased the R&D Expense relative to
the prior year.
27. Gross Profit is defined as Total Revenue minus Cost of Sales. The
calculation of Reported and Core Gross Margin excludes the impact of
Collaboration Revenue and any associated costs, thereby reflecting the
underlying performance of Product Sales.
28. Where AstraZeneca does not retain a significant ongoing interest in
medicines or potential new medicines, income from divestments is reported
within Reported and Core Other Operating Income and Expense in the Company's
financial statements.
Pipeline
Table 3: Pipeline highlights since prior results announcement
Event Medicine Indication / Trial Event
Lynparza gBRCA 29 (#_ftn1) breast cancer (adjuvant) (OlympiA) Regulatory approval (US)
Regulatory approvals and other regulatory actions Saphnelo SLE 30 (#_ftn2) Regulatory approval (EU)
Ondexxya Acute major bleed Regulatory approval (JP)
Evusheld COVID-19 pre-exposure prophylaxis (PROVENT) Regulatory approval (EU)
Ultomiris gMG (CHAMPION-MG) Regulatory approval (US)
Imfinzi Biliary tract cancer (TOPAZ-1) Regulatory submission (JP)
Imfinzi + tremelimumab Advanced liver cancer (1st-line) (HIMALAYA) Priority review (US), regulatory submission (EU, JP)
Lynparza Prostate cancer (1st-line) (PROpel) Regulatory submission (JP)
Regulatory submissions or acceptances Enhertu HER2m NSCLC 31 (#_ftn3) (2nd-line+) (DESTINY-Lung01) Priority review (US)
Calquence CLL 32 (#_ftn4) (ELEVATE-TN) Regulatory submission (JP)
nirsevimab RSV (MELODY/MEDLEY) Regulatory submission and EMA accelerated assessment (EU)
Evusheld COVID-19 outpatient treatment (TACKLE) Regulatory submission (US, EU)
Ultomiris Subcutaneous, PNH and aHUS Regulatory submission (EU)
Imfinzi Cervical cancer (CALLA) Primary endpoint not met
Major Phase III data readouts and other developments Imfinzi Biliary tract cancer (TOPAZ-1) Orphan Drug Designation (JP)
Enhertu HER2+ breast cancer (2nd-line) (DESTINY-Breast03) Breakthrough Drug Designation (CN)
Enhertu HER2-low breast cancer Primary endpoint met, Breakthrough Drug Designation, RTOR 33 (#_ftn5) (US)
(DESTINY-Breast04)
Fasenra Nasal polyps (OSTRO) Complete response letter (US)
Brilinta Paediatric exclusivity (US)
Table 4: Pipeline anticipated major news flow
Timing Medicine Indication / Trial Event
H1 2022 Imfinzi Biliary tract cancer (TOPAZ-1) Regulatory submission (US, EU)
Lynparza Prostate cancer (1st-line) (PROpel) Regulatory submission (US)
Enhertu HER2+ breast cancer (2nd-line) (DESTINY-Breast03) Regulatory decision (US), regulatory submission (CN)
Enhertu HER2-low breast cancer (3rd-line) (DESTINY-Breast04) Regulatory submission
Forxiga CKD 34 (#_ftn6) (DAPA-CKD) Regulatory decision (CN)
Farxiga HFpEF 35 (#_ftn7) (DELIVER) Data readout
eplontersen hATTR-PN 36 (#_ftn8) (NEURO-TTRansform) Data readout 37 (#_ftn9)
Brilinta Stroke (THALES) Regulatory decision (CN)
Tezspire Severe asthma (NAVIGATOR) Regulatory decision (EU, JP)
PT027 Asthma Regulatory submission (US)
Evusheld COVID-19 outpatient treatment (EU) Regulatory decision (EU)
Vaxzevria COVID-19 Regulatory submission (US)
Ultomiris NMOSD Data readout
H2 2022 Tagrisso EGFRm NSCLC (adjuvant) (ADAURA) Regulatory decision (JP)
Imfinzi Biliary tract cancer (TOPAZ-1) Regulatory decision
Imfinzi Liver cancer (locoregional) Data readout, regulatory submission
(EMERALD-1)
Imfinzi NSCLC (1st-line) (PEARL) Data readout
Imfinzi NSCLC (unresectable, Stg. III) (PACIFIC-2) Data readout
Imfinzi Limited-stage SCLC (ADRIATIC) Data readout
Imfinzi +/- tremelimumab NSCLC (1st-line) (POSEIDON) Regulatory decision
Imfinzi +/- tremelimumab Liver cancer (1L) (HIMALAYA) Regulatory decision
Lynparza gBRCA breast cancer (adjuvant) (OlympiA) Regulatory decision (EU, JP)
Lynparza Ovarian cancer (1st-line) (PAOLA-1) Regulatory decision (CN)
Lynparza Prostate cancer (1st-line) (PROpel) Regulatory decision
Enhertu HER2+ breast cancer (3rd-line) (DESTINY-Breast02) Data readout, regulatory submission
Enhertu HER2+ breast cancer (2nd-line) (DESTINY-Breast03) Regulatory decision (EU, JP)
Enhertu HER2+ gastric cancer (2nd-line) (DESTINY-Gastric01) Regulatory decision (EU)
Enhertu HER2m NSCLC (2nd-line+) Regulatory decision
(DESTINY-Lung01)
capivasertib HR+/HER2-neg breast cancer (1st-line) (CAPItello-291) Data readout
Farxiga HFpEF (DELIVER) Regulatory submission
eplontersen hATTR-PN Regulatory submission (US)
Fasenra EOE 38 (#_ftn10) (MESSINA) Data readout
nirsevimab RSV (MELODY/MEDLEY) Regulatory submission (US) and regulatory decision
Evusheld COVID-19 (TACKLE/PROVENT) Regulatory submission (JP, CN)
Evusheld COVID-19 outpatient treatment (TACKLE) Regulatory decision
Utomiris gMG (CHAMPION-MG) Regulatory decision (EU, JP)
Ultomiris Subcutaneous, PNH and aHUS Regulatory decision
Ultomiris NMOSD Regulatory submission
Koselugo NF1-PN (SPRINT) Regulatory submission (CN), regulatory decision (JP)
2023 Tagrisso EGFRm 39 (#_ftn11) NSCLC (1st-line) (FLAURA2) Data readout, regulatory submission
Tagrisso EGFRm NSCLC (unresectable Stg. III) (LAURA) Data readout, regulatory submission
Imfinzi Bladder cancer (muscle invasive) (NIAGARA) Data readout, regulatory submission
Imfinzi Bladder cancer (1st-line) (NILE) Data readout, regulatory submission
Imfinzi NSCLC (neoadjuvant) (AEGEAN) Data readout, regulatory submission
Imfinzi Liver cancer (adjuvant) (EMERALD-2) Data readout, regulatory submission
Imfinzi NSCLC (unresectable, Stg. III) (PACIFIC-2) Regulatory submission
Imfinzi NSCLC (1st-line) (PEARL) Regulatory submission
Imfinzi Limited-stage SCLC (ADRIATIC) Regulatory submission
Lynparza gBRCA breast cancer (adjuvant) (OlympiA) Regulatory submission (CN)
Lynparza + Imfinzi Endometrial cancer (1st-line) (DUO-E) Data readout
Lynparza + Imfinzi Ovarian cancer (1st-line) (DUO-O) Data readout
Enhertu HER2-low breast cancer (2nd-line) (DESTINY-Breast06) Data readout
Calquence CLL (ELEVATE-TN) Regulatory decision (JP)
Calquence CLL (ACE-CL-311) Data readout
Calquence MCL 40 (#_ftn12) (1st-line) (ECHO) Data readout
capivasertib TNBC 41 (#_ftn13) (locally adv./met.) Data readout, regulatory submission
(CAPItello-290)
capivasertib HR+/HER2-neg breast cancer (1st-line) (CAPItello-291) Regulatory submission
camizestrant HR+/HER2-neg breast cancer (SERENA-6) Data readout
Dato-DXd NSCLC (3rd-line) (TROPION-Lung01) Data readout, regulatory submission
Farxiga Myocardial infarction (DAPA-MI) Data readout
roxadustat Anaemia of myelodysplastic syndrome Data readout
Fasenra Bullous pemphigoid (FJORD) Data readout
Fasenra CRwNP 42 (#_ftn14) (ORCHID) Data readout
Fasenra EGPA 43 (#_ftn15) (MANDARA) Data readout
Fasenra EOE (MESSINA) Regulatory submission
Fasenra HES (NATRON) Data readout
Fasenra Severe asthma (MIRACLE) Data readout
nirsevimab RSV (MELODY/MEDLEY) Regulatory submission (JP, CN)
Soliris Guillain-Barre syndrome Data readout
ALXN1840 Wilson disease Regulatory submission
danicopan PNH with extravascular haemolysis Data readout, regulatory submission
Operating and financial review
All narrative on growth and results in this section is based on actual
exchange rates, and financial figures are in US$ millions ($m), unless stated
otherwise. The performance shown in this announcement covers the three-month
period to 31 March 2022 (Ôthe quarter' or ÔQ1 2022') compared to the
three-month period to 31 March 2021 (Q1 2021), unless stated otherwise.
Core financial measures, EBITDA, Net Debt, Initial Collaboration Revenue and
Ongoing Collaboration Revenue are non-GAAP financial measures because they
cannot be derived directly from the Group's Interim Financial Statements.
Management believes that these non-GAAP financial measures, when provided in
combination with Reported results, provide investors and analysts with helpful
supplementary information to understand better the financial performance and
position of the Group on a comparable basis from period to period. These
non-GAAP financial measures are not a substitute for, or superior to,
financial measures prepared in accordance with GAAP.
Core financial measures are adjusted to exclude certain significant items,
such as:
‒ Amortisation and impairment of intangible assets, including
impairment reversals but excluding any charges relating to IT assets
‒ Charges and provisions related to restructuring programmes, which
includes charges that relate to the impact of restructuring programmes on
capitalised IT assets as well as Post Alexion Acquisition Group Review items
‒ Alexion acquisition-related items, primarily fair-value adjustments
on acquired inventories and fair-value impact of replacement employee share
awards
‒ Other specified items, principally the imputed finance charge
relating to contingent consideration on business combinations and legal
settlements
Details on the nature of Core financial measures are provided on page 54 of
the Annual Report and Form 20-F Information 2021
(https://www.astrazeneca.com/content/dam/az/Investor_Relations/annual-report-2021/pdf/AstraZeneca_AR_2021.pdf)
.
Reference should be made to the Reconciliation of Reported to Core financial
measures table included in the financial performance section in this
announcement.
Gross Margin, previously termed Gross Profit Margin, is the percentage by
which Product Sales exceeds the Cost of sales, calculated by dividing the
difference between the two by the sales figure. The calculation of Reported
and Core Gross Margin excludes the impact of Collaboration Revenue and any
associated costs, thereby reflecting the underlying performance of Product
Sales.
EBITDA is defined as Reported Profit Before Tax after adding back Net Finance
Expense, results from Joint Ventures and Associates and charges for
Depreciation, Amortisation and Impairment. Reference should be made to the
Reconciliation of Reported Profit Before Tax to EBITDA included in the
financial performance section in this announcement.
Net Debt is defined as Interest-bearing loans and borrowings and Lease
liabilities, net of Cash and cash equivalents, Other investments, and net
derivative financial instruments. Reference should be made to Note 3 ÔNet
Debt' included in the Notes to the Interim Financial Statements in this
announcement.
Ongoing Collaboration Revenue is defined as Collaboration Revenue excluding
Initial Collaboration Revenue (which is defined as Collaboration Revenue that
is recognised at the date of completion of an agreement or transaction, in
respect of upfront consideration). Ongoing Collaboration Revenue comprises,
among other items, royalties, milestone revenue and profit-sharing income.
Reference should be made to the Collaboration Revenue table in this Operating
and financial review.
The Company strongly encourages investors and analysts not to rely on any
single financial measure, but to review AstraZeneca's financial statements,
including the Notes thereto, and other available Company reports, carefully
and in their entirety.
Due to rounding, the sum of a number of dollar values and percentages may not
agree to totals.
Total Revenue
Table 5: Disease area and medicine performance
Q1 2022
% Change
Product Sales $m % Total Actual CER
Oncology 3,388 30 14 18
- Tagrisso 1,304 11 14 17
- Imfinzi 599 5 8 11
- Lynparza 617 5 14 17
- Calquence 414 4 98 100
- Enhertu 11 - >9x >9x
- Orpathys 13 - n/m n/m
- Zoladex 240 2 9 12
- Faslodex 93 1 (24) (20)
- Iressa 32 - (47) (47)
- Arimidex 32 - (27) (25)
- Casodex 21 - (48) (47)
- Others 12 - 1 6
BioPharmaceuticals: CVRM 2,207 19 14 17
- Farxiga 1,000 9 60 67
- Brilinta 325 3 (13) (10)
- Lokelma 63 1 92 97
- Roxadustat 41 - 6 4
- Andexxa(10) 33 - 13 14
- Crestor 267 2 (2) -
- Seloken/Toprol-XL 244 2 (2) (1)
- Bydureon 68 1 (34) (33)
- Onglyza 68 1 (33) (31)
- Others 98 1 (15) (13)
BioPharmaceuticals: R&I 1,509 13 (2) -
- Symbicort 674 6 (2) -
- Fasenra 308 3 18 22
- Breztri 87 1 >3x >3x
- Saphnelo 11 - n/m n/m
- Pulmicort 217 2 (34) (34)
- Daliresp 51 - (16) (16)
- Bevespi 15 - 15 14
- Others 146 1 (9) (9)
BioPharmaceuticals: V&I 1,757 15 >5x >6x
- Vaxzevria 1,089 10 >3x >4x
- Evusheld 469 4 n/m n/m
- Synagis 200 2 >8x >8x
- FluMist (1) - n/m n/m
Rare Disease(10 ) 1,694 15 3 7
- Soliris(10 ) 990 9 (5) -
- Ultomiris(10 ) 419 4 20 25
- Strensiq(10 ) 208 2 5 7
- Koselugo 39 - 82 85
- Kanuma(10 ) 38 - 9 15
Other Medicines 425 4 (19) (15)
- Nexium 332 3 (18) (13)
- Others 93 1 (22) (22)
Product Sales 10,980 96 51 56
Collaboration Revenue 410 4 n/m n/m
Total Revenue 11,390 100 56 60
Table 6: Collaboration Revenue
Q1 2022
% Change
$m % Total Actual CER
Lynparza: milestone revenue 175 43 n/m n/m
Enhertu: share of gross profits 75 18 96 96
Royalty income 73 18 n/m n/m
Tralokinumab: sales milestones 70 17 n/m n/m
Other Collaboration Revenue 17 4 n/m n/m
Total 410 100 n/m n/m
Table 7: Total Revenue by region
Q1 2022
% of % Change
$m Total Actual CER
Emerging Markets 3,364 30 30 32
- China 1,622 14 (3) (6)
- Ex-China 1,742 15 91 >2x
US 4,134 36 79 79
Europe 2,284 20 48 57
Established RoW 1,608 14 85 98
Total 11,390 100 56 60
Oncology
Total Revenue increased by 21% (25% at CER) in Q1 2022 to $3,644m and
represented 32% of overall Total Revenue (Q1 2021: 41%). This included
Lynparza Collaboration Revenue of $175m and Enhertu Collaboration Revenue of
$76m. Product Sales increased by 14% (18% at CER) in Q1 2022 to $3,388m,
reflecting new launches and increased patient access for Tagrisso, Imfinzi,
Lynparza, Calquence and Enhertu partially offset by declines in legacy
medicines and an adverse gross-to-net 44 (#_ftn16) movement from the seasonal
increase in Part-D related deductions typically seen in the first quarter.
Tagrisso
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 1,304 406 439 252 207
Actual change 14% 32% 6% 12% 2%
CER change 17% 33% 6% 21% 11%
Region
Worldwide Increased adjuvant and 1st-line use offset by a continued adverse COVID-19
impact on diagnosis, testing and treatment
Emerging Markets Increased 1st-line use in China and continued growth in other Emerging Markets
Tagrisso was admitted to the China NRDL in March 2021 for the 1st-line setting
and renewed in the 2nd-line setting, resulting in an adverse effect on the
comparator period from lower sales to distributors prior to the change and
stock compensation payments
Rising demand from increased patient access in China has now offset the impact
of the March 2021 NRDL price reduction
US Greater 1st-line and adjuvant use, with longer duration of treatment,
partially offset by lower 2nd-line use and a continued adverse COVID-19 impact
At the end of Q1 rates of diagnosis, testing and treatment in lung cancer are
showing some signs of recovery, but remained around 5-15% below baseline
Established RoW Increased use in 1st-line and adjuvant settings
Imfinzi
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 599 58 315 125 101
Actual change 8% 2% 8% 15% 4%
CER change 11% 3% 8% 23% 12%
Region
Worldwide Increased use of Imfinzi to treat patients with ES-SCLC 45 (#_ftn17) was
offset by impact from lower rates of diagnosis and treatment due to the
current COVID-19 wave
Emerging Markets Growth in ex-China continued, offset in China by reduction in inventory held
by distributors and hospitals
US Growth driven new patient starts across Stage III NSCLC and ES‑SCLC, despite
the impact of COVID-19 on lung cancer diagnoses in recent months, offset by
unfavourable seasonal inventory and gross-to-net movements
Europe ES-SCLC market penetration increased, as did the number of reimbursed markets,
offsetting the COVID-19 impact on rates of diagnosis and treatment
Established RoW Growth driven by new reimbursements
Lynparza
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 792 121 270 335 66
Actual change 46% 39% 7% >2x 22%
CER change 50% 43% 7% >2x 32%
Product Sales Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 617 121 270 160 66
Actual change 14% 39% 7% 8% 22%
CER change 17% 43% 7% 16% 32%
Region
Worldwide Total Revenue includes a $175m regulatory milestone received from MSD and
recognised in the Europe geographic segment, in respect of the approval in the
US for the adjuvant treatment of patients with breast cancer, based on the
data from the OlympiA Phase III trial
Product sales growth was driven by further launches across multiple cancer
types globally. Lynparza remains the leading medicine in the PARP 46
(#_ftn18) -inhibitor class globally across four tumour types, as measured by
total prescription volume
Emerging Markets Patient access to Lynparza increased following admission to China's NRDL as a
1st-line treatment for ovarian cancer patients with effect from March 2021 and
launches in other markets
US Growth in use in ovarian, breast and prostate cancers, offset by an adverse
gross-to-net movement related to seasonal increase in Part-D related
deductions typically seen in the first quarter, and reductions in inventory
held by distributors
Europe Reimbursements introduced in additional countries, increasing BRCAm-testing
rates, and successful 1st-line BRCAm ovarian, 2nd-line HRRm 47 (#_ftn19)
prostate and gBRCAm HER2-negative advanced breast cancer launches
Established RoW Strong year on year growth driven by new product launches and high levels of
HRD testing in Japan
Enhertu
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 86 9 57 20 1
Actual change >2x >7x 61% >5x n/m
CER change >2x >7x 61% >5x n/m
Region
Worldwide Excluding Japan, global in-market sales recorded by Daiichi Sankyo Company
Limited (Daiichi Sankyo) and AstraZeneca, amounted to $166m in the quarter (Q1
2021: $81m)
US US in-market sales, recorded by Daiichi Sankyo, amounted to $119m in the
quarter (Q1 2021: $73m)
Established RoW In Japan, AstraZeneca receives a mid-single-digit percentage royalty on sales
made by Daiichi Sankyo
Calquence
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 414 7 339 55 13
Actual change 98% >3x 74% >5x >4x
CER change 100% >3x 74% >6x >4x
Region
US Strong performance despite COVID-19 impacts on CLL diagnosis rates,
benefitting from increased new patient market share
Europe Increased market share in new patient starts after launches in the region
Orpathys
Total Revenue of $11m in the quarter (2021: $nil) was driven by the 2021
launch in China, where Orpathys has been approved for patients with lung
cancer and MET 48 (#_ftn20) gene alterations.
Other Oncology medicines
Q1 2022 % Change
Total Revenue $m Actual CER Commentary
Zoladex 247 10 13 Increase driven by usage in emerging markets
Faslodex 93 (24) (20)
Iressa 32 (47) (47)
Arimidex 32 (27) (25)
Casodex 21 (48) (47)
Others 12 1 6
BioPharmaceuticals
Including Vaccines & Immune Therapies medicines, BioPharmaceuticals Total
Revenue increased by 49% (53% at CER) in Q1 2022 to $5,617m, representing 49%
of overall Total Revenue (Q1 2021: 51%). Growth was driven by strong Farxiga
performance and growth in the COVID-19 medicines.
Cardiovascular, Renal & Metabolism
CVRM Total Revenue increased by 14% (18% at CER) in Q1 2022, driven by strong
Farxiga performance, to $2,219m and represented 19% of overall Total Revenue
(Q1 2021: 26%).
Farxiga
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 1,001 391 193 318 99
Actual change 60% 50% 48% 83% 64%
CER change 67% 54% 48% 97% 76%
Region
Worldwide The SGLT2 49 (#_ftn21) inhibitor class saw growth in many regions, with
Farxiga volume growing faster than the overall SGLT2 market in most major
regions. Performance also reflecting further HF and CKD launches and updated
treatment guidelines including from ESC 50 (#_ftn22) , AHA 51 (#_ftn23) and
ACC 52 (#_ftn24) , and beneficial impact from gross-to-net adjustments in the
US versus Q1 2021
Emerging Markets China performance was enhanced by uACR 53 (#_ftn25) and MRF 54 (#_ftn26)
testing program, and solid growth in ex-China Emerging Markets. Forxiga's NRDL
status in China was renewed in the fourth quarter of 2021
US Continued strong growth, following the regulatory approval for HFrEF in May
2020, the approval for the treatment of CKD in May 2021, and the
aforementioned gross-to-net adjustments. Both approvals included patients with
and without T2D 55 (#_ftn27) . Farxiga continued to gain in-class brand share
driven by HF and CKD launches.
Europe SGLT2 inhibitor class growth, the beneficial addition of cardiovascular
outcomes trial data to the label, the HFrEF regulatory approval in November
2020, and CKD regulatory approval in August 2021
Established RoW In Japan, sales to collaborator Ono Pharmaceutical Co., Ltd, which records
in-market sales, more than doubled to $69m
Brilinta
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 325 69 166 76 14
Actual change (13%) (35%) - (13%) (5%)
CER change (10%) (32%) - (6%) (1%)
Region
Worldwide Continued adverse China VBP impact and fewer elective procedures in the EU and
US due to the effects of the pandemic
Lokelma
Total Revenue increased 92% (97% at CER) to $63m in the quarter, driven by
Lokelma extending its branded market share lead in the US and continued
progress from recent launches across Europe. In China, Lokelma was included on
the NRDL from 1 January 2022.
Andexxa
On a pro forma basis, Total Revenue increased 48% (49% at CER) to $43m.
Roxadustat
Total Revenue increased 1% (2% decrease at CER) to $41m. Total Revenue also
increased sequentially, benefitting from increased volumes in China following
NRDL price cuts.
Other CVRM medicines
Total Revenue Q1 2022 % Change
$m Actual CER
Crestor 268 (2) - Sales decline in the US and Europe offset by growth in Emerging Markets
Seloken/Toprol-XL 245 (2) (1) Emerging Markets sales impacted by China VBP implementation of Betaloc 56
(#_ftn28) oral in H2 2021. Betaloc ZOK VBP to be implemented later in 2022
Bydureon 68 (34) (33) Continued competitive pressures
Onglyza 68 (33) (31) Continued declines in DPP-4 57 (#_ftn29) inhibitor class
Others 98 (15) (13)
Respiratory & Immunology
R&I Total Revenue, which included Collaboration Revenue of $75m, increased
by 2% in Q1 2022 (4% at CER) to $1,584m and represented 14% of overall Total
Revenue (Q1 2021: 21%). COVID-19 continued to have a material impact across
markets and the portfolio.
Symbicort
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 674 167 259 157 91
Actual change (2%) 1% (2%) (7%) (1%)
CER change - 3% (2%) - 3%
Region
Worldwide Symbicort remains the global market-volume and value leader within the
ICS/LABA class.
Market share performance was driven by Established RoW and Emerging Markets,
and growth in anti-inflammatory reliever launch markets
The global ICS/LABA market continues to be eroded as fixed-dose triple
therapies (LAMA/LABA/ICS) continue to launch
Emerging Markets Driven by growth outside China. China continues to be impacted by fixed-dose
triple therapy launches
US Maintained total prescription market share in a declining ICS/LABA market as
fixed-dose triple therapy launches continue. Continued growth in the
authorised generic
Established RoW Sales in Japan declined due to continued generic erosion
Fasenra
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 308 7 189 75 37
Actual change 18% >2x 22% 20% (5%)
CER change 22% >2x 22% 29% 2%
Region
Worldwide Expanded total market leadership in eosinophilic asthma, Fasenra is the
leading IL-5 class biologic, in major markets (US, Japan and some EU
countries). COVID-19 continues to impact total severe asthma market growth
with most regions experiencing a slower growth
US Sustained growth driven by volume
Europe Increased volume from sustained leadership in new to brand prescriptions, in
most EU markets
Established RoW In Japan, revenues declined by 13% (5% at CER) to $23m, with rising demand and
sustained leadership in new to brand prescriptions, offset by reduced demand
from distributors ahead of expected mandatory price reduction in April
Breztri
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 87 22 53 5 7
Actual change >3x >2x >4x >7x 46%
CER change >3x >2x >4x >8x 59%
Region
Worldwide Continued to gain market share within the fixed-dose triple markets; in US,
China and Japan.
Emerging Markets Continued its market share leadership within the fixed-dose triple market in
China, which continues to gain share from the ICS/LABA class
US Progress made in new to brand market share growth in the fixed-dose triple
market
Europe Launches continued in Europe
Established RoW Sales in Japan were impacted by COVID-19 restrictions
Saphnelo
Total Revenue of $11m in the quarter (Q1 2021: $nil) was driven by the 2021
launch in the US, where Saphnelo has been approved for SLE.
Tezspire
Tezspire is being developed in collaboration with Amgen, and was approved in
the US for severe asthma in December 2021. Amgen will record sales in the US
and AstraZeneca's share of gross profits in the US will be recognised as
Collaboration Revenue. Outside of the US, AstraZeneca will record Product
Sales. In Q1 2022, AstraZeneca recognised $3m of Collaboration Revenue from
$7m of in-market sales recorded by Amgen (Q1 2021: $nil).
Other R&I Medicines
Q1 2022 % Change
Total Revenue $m Actual CER
Pulmicort 217 (34) (34) Revenue from Emerging Markets decreased 43% to $164m
Pulmicort Respules was included in the latest round of VBP in China,
implemented in October 2021, resulted in significantly lower market access and
a mandatory price reduction.
Daliresp 51 (16) (16)
Bevespi 15 15 14
Others 218 32 32
Vaccines & Immune Therapies
Total Revenue from Vaccines and Immune Therapies medicines increased from
$301m in Q1 2021 to $1,814m in Q1 2022 and represented 16% of overall Total
Revenue (Q1 2021: 4%).
Vaxzevria
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 1,145 530 79 135 400
Actual change >4x >10x n/m (40%) >10x
CER change >4x >10x n/m (37%) >10x
Region
Worldwide The majority of revenue in Q1 2022 came from initial, not-for-profit contracts
Emerging Markets Growth was driven by initial and commercial contracts in Latin America and
Asia
$46m of Collaboration Revenue came from a Chinese sub-licensee
US Purchases by the US government for donation overseas
Europe Sales were down versus Q1 2021, when Europe accounted for 82% of Vaxzevria
revenue as vaccination programmes were rolled out in the UK and the EU
Established RoW Sales in Japan, Canada and Australia
Evusheld
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 469 89 307 66 8
Actual change n/m n/m n/m n/m n/m
CER change n/m n/m n/m n/m n/m
Region
US Emergency Use Authorisation was granted in December 2021, and in Q1 2022
AstraZeneca fulfilled a proportion of the US government order for 1.7m units
of Evusheld (a unit consists of one 150mg vial of cilgavimab and one 150mg
vial of tixagevimab). The remainder of that order will be fulfilled before the
end of 2022
Emerging Markets Multiple government contracts
Europe Evusheld was approved in the EU in the quarter
Other V&I Medicines
Q1 2022 % Change
Total Revenue $m Actual CER
Synagis 200 >8x >8x Q1 2022 captures all global revenues from Synagis by destination. In the
comparable period, revenues reflected AstraZeneca's ex-US collaboration
agreement with AbbVie, which expired on 30 June 2021 in which all ex-US
revenue was reported in Europe. The regional growth rates shown in Table 22
have also been impacted by the change
FluMist (1) n/m n/m Normal seasonality of FluMist sales
Rare Disease
Rare Disease Total Revenue increased by 3% (7% at CER) pro forma in Q1 2022 to
$1,694m, representing 15% of overall Total Revenue (Q1 2021: 0%).
Performance was driven by continued durability of the C5 franchise, including
continued conversion from Soliris to Ultomiris in PNH and aHUS as well as
Soliris growth in Neurology indications, gMG and NMOSD.
The pro forma growth rates on medicines acquired with Alexion shown in these
tables have been calculated by comparing Q1 revenues with the corresponding
prior year pre-acquisition revenues previously published by Alexion.
Soliris
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 990 71 591 221 107
Actual change (5%) (41%) 7% (15%) 4%
CER change - (28%) 7% (8%) 11%
Region
US Performance driven by Soliris growth in neurology indications, gMG and NMOSD,
offset by continued conversion to Ultomiris in PNH and aHUS
Ex-US Strong underlying demand growth in EU and ERoW, EM growth impacted by prior
year tender market order timing
Ultomiris
Total Revenue Worldwide Emerging Markets US Europe Established RoW
Q1 2022 $m 419 24 220 105 70
Actual change 20% n/m 6% 54% (4%)
CER change 25% n/m 6% 65% 7%
Region
Worldwide Continued conversion and launches in new markets outside the US
Quarter-on-quarter revenue growth variability can be expected due to Ultomiris
every eight-week dosing schedule and lower average annual treatment cost per
patient compared to Soliris
US Continued COVID-19 impact on rate of aHUS diagnoses and treatment coupled with
hospital reimbursement dynamics favouring Soliris
Ex-US Performance driven by new market approvals for PNH
Other Rare Disease medicines
Q1 2022 % Change
Total Revenue $m Actual CER Commentary
Strensiq 208 5 7 Performance impacted by inventory and payer dynamics
Koselugo 39 82 85 Reimbursed in 14 markets with ambition to continue expansion
Kanuma 38 9 15 Performance driven by markets outside the US
Other medicines (outside the main disease areas)
Q1 2022 % Change
Total Revenue $m Actual CER Commentary
Nexium 338 (17) (13) Nexium (oral) was included in China's VBP programme implemented in February
2021 and Nexium (i.v.) was implemented in the fifth round of VBP in October
2021.
Others 97 (22) (21)
Financial performance
Table 8: Reported Profit and Loss
Q1 2022 Q1 2021 % Change
$m $m Actual CER
Total Revenue 11,390 7,320 56 60
- Product Sales 10,980 7,257 51 56
- Collaboration Revenue 410 63 n/m n/m
Cost of Sales (3,511) (1,864) 88 98
Gross Profit 7,879 5,456 44 48
Gross Margin 68.0% 74.3% -6 -7
Distribution Expense (125) (99) 26 32
% Total Revenue 1.1% 1.4% - -
R&D Expense (2,133) (1,713) 24 26
% Total Revenue 18.7% 23.4% +5 +5
SG&A Expense (4,840) (2,929) 65 68
% Total Revenue 42.5% 40.0% -2 -2
OOI 58 (#_ftn30) & Expense 97 1,180 (92) (92)
% Total Revenue 0.9% 16.1% -15 -15
Operating Profit 878 1,895 (54) (46)
Operating Margin 7.7% 25.9% -18 -18
Net Finance Expense (319) (283) 13 7
Joint Ventures and Associates (6) (4) 38 53
Profit before tax 553 1,608 (66) (56)
Taxation (165) (46) n/m n/m
Tax rate 30% 3%
Profit after tax 388 1,562 (75) (68)
Earnings per share $0.25 $1.19 (79) (73)
Table 9: Reconciliation of Reported Profit before tax to EBITDA
Q1 2022 Q1 2021 % Change
$m $m Actual CER
Reported Profit before tax 553 1,608 (66) (56)
Net Finance Expense 319 283 13 7
Joint Venture and Associates 6 4 38 53
Depreciation, Amortisation and Impairment 1,309 797 64 56
EBITDA 2,187 2,692 (19) (16)
EBITDA of $2,187m in the quarter (Q1 2021: $2,692m) has been negatively
impacted by the $1,180m (Q1 2021: $nil) unwind of inventory fair value uplift
recognised on the acquisition of Alexion. The unwind of inventory fair value
is expected to depress EBITDA over the year in line with associated revenues.
Table 10: Reconciliation of Reported to Core financial measures
Q1 2022 Reported Restructuring Intangible Asset Amortisation & Impairments Acquisition of Alexion Other Core 59 (#_ftn31) Core
% Change
$m $m $m $m $m $m Actual CER
Gross Profit 7,879 51 8 1,181 - 9,119 66 70
Gross Margin 68.0% 79.3% +5 +4
Distribution Expense (125) 1 - - - (124) 25 30
R&D Expense (2,133) 5 (69) 11 - (2,186) 33 36
SG&A Expense (4,840) 17 1,098 17 762 (2,946) 23 25
Total Operating Expense (7,098) 23 1,029 28 762 (5,256) 27 29
OOI & Expense 97 1 - - - 98 (92) (92)
Operating Profit 878 75 1,037 1,209 762 3,961 57 60
Operating Margin 7.7% 34.8% - -
Net Finance Expense (319) - - - 67 (252) 35 23
Taxation (165) (15) (191) (280) (121) (772) n/m n/m
EPS $0.25 $0.04 $0.55 $0.60 $0.45 $1.89 16 20
Profit and Loss drivers
Gross Profit
‒ The Gross Profit Margin (Reported and Core) in the quarter was
impacted by:
‒ Mix effects. The increased sales of Vaxzevria, and medicines
with profit-sharing arrangements (primarily Lynparza) have a dilutive impact
on the Gross Margin. The increased contribution from Rare Disease and Oncology
medicines have a positive impact on the Gross Margin
‒ Pricing pressure relating to the VBP and NRDL procurement
programmes in China
‒ Reported Gross Profit was also impacted by the unwind of the fair
value adjustment to Alexion inventories at the date of acquisition. The fair
value uplift is expected to unwind through Reported Cost of Sales over 2022 in
line with associated revenues, and in Q1 2022, the impact of the fair value
uplift unwind on Cost of Sales was $1,180m
‒ Variations in Gross Margin performance between periods can be
expected to continue
R&D Expense
‒ The increased Reported and Core R&D Expense was driven by:
‒ Increased investment in several late-stage Oncology trials and
the advancement of a number of Phase II clinical development programmes in
BioPharmaceuticals
‒ The acquisition of Alexion in July 2021
‒ Reported R&D Expense in Q1 was also impacted by intangible asset
impairment reversals
SG&A Expense
‒ The increased Reported and Core SG&A Expense was driven
primarily by the acquisition of Alexion in July 2021
‒ Reported SG&A Expense was also impacted by amortisation of
intangible assets related to the Alexion acquisition and a $775m legal
settlement with Chugai Pharmaceutical Co. Ltd
Other Operating Income
‒ Other Operating Income of $97m consisted primarily of royalties and
disposal proceeds on small divestments
‒ In Q1 2021, Other Operating Income of $1,180m included $776m of
divestment gains from AstraZeneca's share of Viela and $309m from the
commercial rights to Crestor in over 30 countries in Europe (excluding UK and
Spain)
Net Finance Expense
‒ The increase in Net Finance Expense in the quarter was driven by
financing costs on debt for the Alexion transaction, increased interest on
tax, and exchange movements
Taxation
‒ Both Reported and Core Tax rates are higher than the prior period
due to one-off items in 2021, including the non-taxable gain on the divestment
of Viela and updates to estimates of prior period tax liabilities following
settlements with tax authorities
‒ The net cash paid for the quarter was $228m (Q1 2021: $332m)
representing 41% of Reported Profit Before Tax (Q1 2021: 21%)
‒ The Reported Tax rate of 30% was higher than Core Tax rate of 21%
due to the impact of Non-Core charges on the level of Reported Profit Before
Tax
Table 11: Cash Flow summary
Q1 2022 Q1 2021 Change
$m $m $m
Reported Operating Profit 878 1,895 (1,017)
Depreciation, Amortisation and Impairment 1,309 797 512
Decrease in Working Capital and Short-term Provisions 1,804 1,210 594
Gains on Disposal of Intangible Assets (10) (310) 300
Gains on Disposal of Investments in Associates and Joint Ventures - (776) 776
Non-Cash and Other Movements (327) (363) 36
Interest Paid (194) (187) (7)
Taxation Paid (228) (332) 104
Net Cash Inflow from Operating Activities 3,232 1,934 1,298
Net Cash Inflow before Financing Activities 3,064 2,489 575
Net Cash Outflow from Financing Activities (3,740) (2,731) (1,009)
The increase in Net Cash Inflow from Operating Activities of $1,298m primarily
reflected an underlying improvement in business performance, including the
contribution from Alexion.
The Reported Operating Profit of $878m in the quarter includes a negative
impact of $1,180m relating to the unwind of the inventory fair value uplift
recognised on the acquisition of Alexion. This is offset by a corresponding
item (positive impact of $1,180m) in Decrease in Working Capital and
Short-term Provisions. Overall, the unwind of the fair value uplift has no
impact on Net Cash Inflow from Operating Activities.
The change in Working Capital and Short-term Provisions of $594m, whilst being
positively impacted by the aforementioned inventory fair value uplift unwind,
has been adversely impacted by the reduction of Vaxzevria working capital
balances predominantly within Trade and other payables.
Capital Expenditure
Capital Expenditure amounted to $219m in the quarter (Q1 2021: $220m). The
Company anticipates an increase in Capital Expenditure relative to FY 2021,
partly driven by an expansion in its capacity for growth and the acquisition
of Alexion.
Table 12: Net Debt summary
At 31 Mar 2022 At 31 Dec 2021 At 31 Mar 2021
$m $m $m
Cash and cash equivalents 5,762 6,329 7,636
Other investments 61 69 129
Cash and investments 5,823 6,398 7,765
Overdrafts and short-term borrowings (805) (387) (581)
Lease liabilities (949) (987) (680)
Current instalments of loans (1,264) (1,273) (1,461)
Non-current instalments of loans (28,081) (28,134) (17,410)
Interest-bearing loans and borrowings (31,099) (30,781) (20,132)
(Gross Debt)
Net derivatives 59 61 162
Net Debt (25,217) (24,322) (12,205)
Net Debt increased by $895m in the year to date to $25,217m. Details of the
committed undrawn bank facilities are disclosed within the going concern
section of Note 1. Details of the Company's solicited credit ratings are
disclosed in Note 3.
Capital allocation
The Board's aim is to continue to strike a balance between the interests of
the business, financial creditors and the Company's shareholders. The
Company's capital allocation priorities include investing in the business and
pipeline, maintaining a strong, investment-grade credit rating, potential
value-enhancing business development opportunities, and supporting the
progressive dividend policy.
In approving the declaration of dividends, the Board considers both the
liquidity of the company and the level of reserves legally available for
distribution. Dividends are paid to shareholders from AstraZeneca PLC, a Group
holding company with no direct operations. The ability of AstraZeneca PLC to
make shareholder distributions is dependent on the creation of profits for
distribution and the receipt of funds from subsidiary companies. The
consolidated Group reserves set out in the Condensed consolidated statement of
financial position do not reflect the profit available for distribution to the
shareholders of AstraZeneca PLC.
Summarised financial information for guarantee of securities of subsidiaries
AstraZeneca Finance LLC ("AstraZeneca Finance") is the issuer of 0.700% Notes
due 2024, 1.200% Notes due 2026, 1.750% Notes due 2028 and 2.250% Notes due
2031 (the "AstraZeneca Finance Notes"). Each series of AstraZeneca Finance
Notes has been fully and unconditionally guaranteed by AstraZeneca PLC.
AstraZeneca Finance is 100% owned by AstraZeneca PLC and each of the
guarantees by AstraZeneca PLC is full and unconditional and joint and several.
The AstraZeneca Finance Notes are senior unsecured obligations of AstraZeneca
Finance and rank equally with all of AstraZeneca Finance's existing and future
senior unsecured and unsubordinated indebtedness. The guarantee by AstraZeneca
PLC of the AstraZeneca Finance Notes is the senior unsecured obligation of
AstraZeneca PLC and ranks equally with all of AstraZeneca PLC's existing and
future senior unsecured and unsubordinated indebtedness. Each guarantee by
AstraZeneca PLC is effectively subordinated to any secured indebtedness of
AstraZeneca PLC to the extent of the value of the assets securing such
indebtedness. The AstraZeneca Finance Notes are structurally subordinated to
indebtedness and other liabilities of the subsidiaries of AstraZeneca PLC,
none of which guarantee the AstraZeneca Finance Notes.
AstraZeneca PLC manages substantially all of its operations through divisions,
branches and/or investments in subsidiaries and affiliates. Accordingly, the
ability of AstraZeneca PLC to service its debt and guarantee obligations is
also dependent upon the earnings of its subsidiaries, affiliates, branches and
divisions, whether by dividends, distributions, loans or otherwise.
Please refer to the consolidated financial statements of AstraZeneca PLC in
our Annual Report on Form 20-F and reports on Form 6-K with our quarterly
financial results as filed or furnished with the SEC for further financial
information regarding AstraZeneca PLC and its consolidated subsidiaries. For
further details, terms and conditions of the AstraZeneca Finance Notes please
refer to AstraZeneca PLC's Form 6-K furnished to the SEC on 28 May 2021.
Pursuant to Rule 13-01 and Rule 3-10 of Regulation S-X under the Securities
Act of 1933, as amended (the "Securities Act"), we present below the summary
financial information for AstraZeneca PLC, as Guarantor, excluding its
consolidated subsidiaries, and AstraZeneca Finance, as the issuer, excluding
its consolidated subsidiaries. The following summary financial information of
AstraZeneca PLC and AstraZeneca Finance is presented on a combined basis and
transactions between the combining entities have been eliminated. Financial
information for non-guarantor entities has been excluded. Intercompany
balances and transactions between the obligor group and the non-obligor
subsidiaries are presented on separate lines.
Table 13: Obligor group summarised Statement of comprehensive income
Q1 2022 Q1 2021
$m $m
Total revenue - -
Gross profit - -
Operating loss (1) (20)
Loss for the period (155) (166)
Transactions with subsidiaries that are not issuers or guarantors 164 2,148
Table 14: Obligor group summarised Statement of financial position information
At 31 Mar 2022 At 31 Mar 2021
$m $m
Current assets 19 28
Non-current assets - -
Current liabilities (1,682) (1,656)
Non-current liabilities (25,605) (17,072)
Amounts due from subsidiaries that are not issuers or guarantors 8,652 6,243
Amounts due to subsidiaries that are not issuers or guarantors (297) (295)
Foreign exchange
The Company's transactional currency exposures on working-capital balances,
which typically extend for up to three months, are hedged where practicable
using forward foreign-exchange contracts against the individual companies'
reporting currency. Foreign-exchange gains and losses on forward contracts for
transactional hedging are taken to profit or loss. In addition, the Company's
external dividend payments, paid principally in pounds sterling and Swedish
krona, are fully hedged from announcement to payment date.
Table 15: Currency sensitivities
The Company provides the following currency-sensitivity information:
Average exchange Annual impact of 5% strengthening in exchange rate versus USD ($m)(( 60
(#_ftn32) ))
rates versus USD
Currency Primary Relevance FY 2021 61 (#_ftn33) Q1 2022(( 62 (#_ftn34) )) % Change Total Revenue Core Operating Profit
CNY Total Revenue 6.43 6.35 1 277 158
EUR Total Revenue 0.85 0.89 (5) 317 160
JPY Total Revenue 109.83 116.32 (6) 229 158
Other(( 63 (#_ftn35) )) 420 196
GBP Operating Expense 0.73 0.75 (2) 61 (93)
SEK Operating Expense 8.58 9.33 (8) 6 (82)
Sustainability
Since the last quarterly report, AstraZeneca:
‒ Published its eighth annual Sustainability Report
(https://www.astrazeneca.com/content/dam/az/Sustainability/2022/pdf/Sustainability_Report_2021.pdf)
and Sustainability Data summary
(https://www.astrazeneca.com/content/dam/az/Sustainability/2022/pdf/Sustainability_Data_Summary_2021.pdf)
via its website and social media, released in conjunction with the Annual
Report. Two fireside discussions from the accompanying investor roadshow are
available on the AstraZeneca IR website
‒ Facilitated a Climate and Health Policy Roundtable at Expo 2020
Dubai with global experts from the World Health Organisation, UNFCCC,
Sustainability Healthcare Coalition, and health and environmental authorities
from Sweden, Egypt, and the UAE to discuss the health of people and the planet
‒ Convened a hybrid summit on health system sustainability and
resilience, culminating in a global call to action to rebuild health system
integrity following the COVID-19 pandemic
Access to healthcare
‒ Released, along with its sub-licensees, more than 2.8 billion
vaccine doses, for supply in over 180 countries. Approximately two-thirds of
the doses have gone to low and middle-income countries
‒ The Company's Healthy Heart Africa (HHA) programme expanded into
Nigeria, its ninth country of operation, with the signing of a Memorandum of
Understanding with the Federal Government of Nigeria. Launched the second
phase in Tanzania with the Ministry of Health and our local partner PATH. The
two-year project aims to reach over 500,000 people, providing services and
support at 35 primary health care facilities. Since the programme launched in
2015, HHA has conducted over 25 million blood pressure screenings, identified
over 4.8 million elevated readings, activated over 950 sites and trained more
than 9,000 healthcare workers and volunteers
‒ Expanded its Young Health Programme (YHP) into Italy and Israel,
bringing the number of countries to 34
‒ Awards to two youth-led organisations tackling air pollution,
through the Lead2030 Challenge in partnership with One Young World (OYW)
(https://www.astrazeneca.com/content/astraz/media-centre/articles/2022/accelerating-sustainable-healthcare-for-a-healthier-tomorrow.html)
, in line with the Company's commitment to SDG3. Winners receive mentorship
from AstraZeneca, and a Scholarship to attend the OYW Summit
Environmental protection
‒ Announced a collaboration with Honeywell
(https://www.astrazeneca.com/media-centre/articles/2022/progressing-ambition-zero-carbon-through-collaboration.html)
to develop next-generation respiratory inhalers (pMDI) with a near-zero Global
Warming Potential propellant. The innovation, using the propellant HFO-1234ze,
is a key element supporting the delivery of AstraZeneca's Ambition Zero Carbon
goals. AstraZeneca also announced that by the end of 2025, 95% of its key
suppliers will have targets to limit global warming to <1.5C
‒ Announced two new forestry commitments in Ghana (three million
trees) and the US
(https://www.astrazeneca.com/media-centre/articles/2022/AZ-Forest-New-Partnership-Commitments.html)
(one million trees) at the Global Forest Summit, building on existing AZ
Forest projects in Australia, Indonesia, the UK
‒ Marked World Water Day with an updated Position Paper on Water
Stewardship
(https://www.astrazeneca.com/sustainability/environmental-protection/water-stewardship.html)
. The Company has championed a water risk assessment of the global
pharmaceutical supply chain in collaboration with WWF Sweden. AstraZeneca also
joined the Alliance for Water Stewardship (AWS (https://a4ws.org/) )
‒ Featured in the Financial Times' list of Europe's Climate Leaders
(https://www.ft.com/climate-leaders-europe-2022) , for the second year
running. This recognises companies with the highest reduction in Scope 1 and
2 emissions from 2015 to 2020
Ethics and transparency
‒ Revised its Global Standard for Bioethics
(https://www.astrazeneca.com/content/dam/az/Sustainability/Bioethics_Policy.pdf)
, which ensures its ethical principles cover evolving R&D activities
‒ Marked International Day of Women and Girls in Science and
International Women's Day with external and internal communications campaigns
featuring members of the Senior Executive team and other Company scientists.
AstraZeneca also signed the Wellbeing of Women Menopause Workplace Pledge
(https://www.wellbeingofwomen.org.uk/campaigns/menopausepledge)
‒ Observed Black History Month, with events hosted by the AstraZeneca
African Heritage Business Resource Group, Alexion Black Professionals Network,
AZ Inspire and the Inclusion and Diversity (I&D) team
‒ Became a founding member of Neurodiversity in Business and
celebrated Neurodiversity Week with the Company's TH!NK ERG programme of
events
Research and development
This section covers R&D events and milestones in the period since the
prior results announcement.
A comprehensive view of AstraZeneca's pipeline of medicines in human trials
can be found in the latest clinical trials appendix, available on
www.astrazeneca.com/investor-relations
(https://www.astrazeneca.com/investor-relations.html) . The clinical trials
appendix includes tables with details of the ongoing clinical trials for
AstraZeneca medicines and new molecular entities in the pipeline.
Oncology
Significant new trials in Oncology included, EMERALD-3, a Phase III trial of
Imfinzi plus tremelimumab, with and without lenvatinib, in combination with
transarterial chemoembolisation in patients with locoregional HCC, PACIFIC-9,
a Phase III trial of Imfinzi plus oleclumab and Imfinzi plus monalizumab in
patients with locally advanced, Stage III, unresectable non-small cell lung
cancer who have not progressed following platinum-based cCRT, and SAFFRON - a
Phase III trial of Tagrisso in combination with AstraZeneca and HUTCHMED's
Orpathys in patients EGFR-mutated NSCLC patients with MET-driven tumours
following progression after treatment with Tagrisso.
AstraZeneca presented new data across its diverse portfolio of cancer
medicines at the American Society of Clinical Oncology Genitourinary Cancers
Symposium (ASCO GU) in February 2022. Presentations included a late-breaking
presentation by AstraZeneca and MSD from the PROpel Phase III trial of
Lynparza plus abiraterone, which showed the combination significantly delayed
disease progression in 1st-line metastatic castration-resistant prostate
cancer regardless of biomarker status. Lynparza is the first PARP inhibitor to
demonstrate clinical benefit in combination with a new hormonal agent in this
setting.
At the American Association for Cancer Research General Meeting 2022, new
preclinical and early clinical data was presented across its pipeline. Data
from 60 presentations, including five oral and three mini-oral presentations,
featured the Company's next wave of potential cancer medicines spanning its
immuno-oncology, DNA Damage Response and Antibody Drug Conjugate scientific
platforms. This includes key data shared from three potential new medicines
that illustrate the Company's innovative approach to designing molecules that
address key challenges in treating cancer, including the ability to target
different, complementary mechanisms.
Imfinzi
During the period, the Company announced that the CALLA Phase III trial for
Imfinzi given concurrently with CRT did not achieve statistical significance
for the primary endpoint of improving progression-free survival versus CRT
alone in the treatment of patients with locally advanced cervical cancer.
In April 2022 the Company announced the regulatory submission acceptance for
tremelimumab with Priority Review in the US, by the US FDA. The submission is
supported by data from the HIMALAYA trial, in which a single priming dose of
the anti-CTLA4 64 (#_ftn36) antibody added to Imfinzi for the treatment of
patients with unresectable hepatocellular carcinoma significantly improved
overall survival. A supplemental Biologics Licence Application has also been
submitted for Imfinzi in this indication. The Prescription Drug User Fee Act
date, the US FDA action date for their regulatory decision, is during the
fourth quarter of 2022, following the use of a priority review voucher.
During the period, AstraZeneca completed regulatory submissions for
tremelimumab and Imfinzi in Japan. The submissions were based on data from the
aforementioned HIMALAYA trial, as well as the TOPAZ-1 trial in which Imfinzi,
in combination with standard-of-care chemotherapy, demonstrated a
statistically significant and clinically meaningful overall survival benefit
versus chemotherapy alone as a 1st-line treatment for patients with advanced
biliary tract cancer.
Lynparza
In February 2022, AstraZeneca presented results from the PROpel Phase III
trial at the aforementioned 2022 ASCO GU meeting. AstraZeneca and MSD's
Lynparza in combination with abiraterone demonstrated a statistically
significant and clinically meaningful improvement in rPFS 65 (#_ftn37) versus
abiraterone as a 1st-line treatment for patients with mCRPC 66 (#_ftn38) with
or without HRR 67 (#_ftn39) gene mutations.
Lynparza in combination with abiraterone reduced the risk of disease
progression or death by 34% versus abiraterone alone (HR 68 (#_ftn40) 0.66;
95% CI 0.54-0.81; p<0.0001). Median rPFS was 24.8 months for Lynparza plus
abiraterone versus 16.6 for abiraterone alone.
Results also showed a favourable trend towards improved OS 69 (#_ftn41) with
Lynparza plus abiraterone versus abiraterone alone, however the difference did
not reach statistical significance at the time of this data cut-off (analysis
at 29% data maturity). The trial will continue to assess OS as a key secondary
endpoint.
During the period, Lynparza was also approved in the US for the adjuvant
treatment of patients with germline BRCA-mutated HER2-negative high-risk early
breast cancer who have already been treated with chemotherapy either before or
after surgery. The approval by the US FDA was based on results from the
OlympiA Phase III trial, in which Lynparza demonstrated a statistically
significant and clinically meaningful improvement in invasive disease-free
survival, reducing the risk of invasive breast cancer recurrences, second
cancers or death, by 42% versus placebo (based on a HR of 0.58; 95% CI
0.46-0.74; p<0.0001).
In March, new updated results from the OlympiA trial presented at the European
Society for Medical Oncology virtual plenary showed Lynparza demonstrated a
statistically significant and clinically meaningful improvement in the key
secondary endpoint of OS, reducing the risk of death by 32% versus placebo
(based on a HR of 0.68; 95% CI 0.50-0.91; p=0.0091).
Enhertu
In February 2022, AstraZeneca announced positive high-level results from the
DESTINY-Breast04 Phase III trial. Enhertu demonstrated a statistically
significant and clinically meaningful improvement in both PFS 70 (#_ftn42)
and OS in patients with HER2-low unresectable and/or metastatic breast cancer
previously treated with one or two prior lines of chemotherapy, regardless of
hormone receptor (HR) status, versus physician's choice of chemotherapy.
The US FDA has subsequently notified AstraZeneca and Daiichi Sankyo that the
sBLA 71 (#_ftn43) for Enhertu has been accepted and granted Breakthrough
Therapy Designation for the treatment of HER2-low unresectable and/or
metastatic breast cancer in patients previously treated with one or two prior
lines of chemotherapy.
The sBLA is being reviewed under the Real-Time Oncology Review (RTOR)
programme. RTOR allows the FDA to review components of an application before
submission of the complete application.
In April 2022, AstraZeneca and Daiichi Sankyo were notified by the US FDA that
the sBLA for Enhertu has been accepted and granted Priority Review for the
treatment of adult patients with previously treated HER2-mutant metastatic
non-small cell lung cancer based on the results of the DESTINY-Lung01 Phase II
trial.
Primary results from previously-treated patients with HER2-mutations (cohort
2) of DESTINY-Lung01 demonstrated a confirmed objective response rate (ORR) of
54.9% (95% CI: 44.2-65.4) in patients treated with Enhertu (6.4mg/kg).
During the period, the China Center for Drug Evaluation granted Breakthrough
Therapy Designation for Enhertu for the 2nd-line treatment of patients with
HER2+ metastatic breast cancer based on the results of the DESTINY-Breast03
Phase III trial.
BioPharmaceuticals - CVRM
Brilinta
During the period, the US FDA granted AstraZeneca six months paediatric
exclusivity for Brilinta.
Andexxa
During the period, Ondexxya was approved in Japan for patients treated with
Factor Xa inhibitors apixaban, rivaroxaban or edoxaban when reversal of
anticoagulation is needed due to life-threatening or uncontrolled bleedings.
Ondexxya is approved in the EU, and in the US under the trade name Andexxa.
AZD8233
At the American College of Cardiology's 71st Annual Scientific Session,
AstraZeneca and Ionis Pharmaceuticals, Inc. presented Phase IIb data for
AZD8233, an antisense oligonucleotide, in development for the treatment of
hypercholesterolemia. In the ETESIAN Phase IIb trial, AZD8233 showed reduction
in LDL-C 72 (#_ftn44) levels of 73% and PCSK9 reduction of 89%.
BioPharmaceuticals Ð R&I
As disclosed in the Sustainability section, AstraZeneca announced a
collaboration with Honeywell, to develop next-generation respiratory inhalers
(pMDI) using the propellant HFO-1234ze, which has up to 99.9% less Global
Warming Potential (GWP) than propellants currently used in respiratory
medicines. Recent results from the first in-human Phase I trial of the
near-zero GWP propellant HFO-1234ze in a pMDI containing budesonide,
glycopyrronium, formoterol fumarate in healthy adults were positive,
demonstrating similar safety, tolerability and systemic exposure of the active
ingredients when compared to Breztri Aerosphere
(budesonide/glycopyrronium/formoterol fumarate). AstraZeneca expects Breztri
to be the first medicine to transition to this new pMDI platform, subject to
regulatory approval.
As of 29 April 2022, significant new trials in Respiratory & Immunology in
which the first patient was dosed included; HUDSON, a Phase III trial of
Fasenra in eosinophilic gastritis and eosinophilic gastroenteritis and,
OBERON and TITANIA, Phase III trials of tozorakimab in COPD.
Fasenra
During the period, the US FDA issued a CRL 73 (#_ftn45) regarding the sBLA
for Fasenra for patients with inadequately controlled CRwNP
The sBLA included data from the OSTRO Phase III trial, which met both
co-primary endpoints with a safety profile consistent with the known profile
of the medicine. The CRL requested additional clinical data and AstraZeneca is
working closely with the US FDA regarding next steps. AstraZeneca remains
committed to bringing Fasenra to patients with CRSwNP and a second Phase III
trial, ORCHID, in this indication is ongoing.
Saphnelo
During the period, Saphnelo received approval in the EU as an add-on therapy
for the treatment of adult patients with moderate to severe, active
autoantibody-positive SLE, despite receiving standard therapy, making it the
first biologic for SLE approved in Europe with an indication that is not
restricted to patients with a high degree of disease activity. The approval is
based on results from the Saphnelo clinical development programme, which
included the TULIP 1 and TULIP 2 Phase III trials and the MUSE Phase II trial.
In these trials, more patients treated with Saphnelo experienced a reduction
in overall disease activity across all affected organ systems from baseline
and achieved sustained reduction in oral corticosteroid use compared to
placebo, with both groups receiving standard therapy.
BioPharmaceuticals Ð Vaccines and Immune Therapies
Evusheld
During the period, Evusheld was granted marketing authorisation in the EU for
the pre-exposure prophylaxis (prevention) of COVID-19 in a broad population of
adults and adolescents aged 12 years and older weighing at least 40kg.
Preclinical authentic Ôlive' virus data from Washington University School of
Medicine demonstrated that Evusheld retains neutralising activity against the
highly transmissible Omicron BA.2 subvariant. This study also showed that
Evusheld reduced viral burden and limited inflammation in the lungs (in vivo)
across all tested Omicron variants.
Detailed results from the PROVENT Phase III pre-exposure prophylaxis
(prevention) trial, published in The New England Journal of Medicine, showed
that AstraZeneca's Evusheld reduced the risk of developing symptomatic
COVID-19 by 77% in the primary analysis and by 83% in the six-month follow-up
analysis, compared to placebo. There were no cases of severe disease or
COVID‑19 related deaths in the Evusheld group through the six-month follow
up.
Nirsevimab
Nirsevimab was accepted under an accelerated assessment procedure by the EMA,
for the prevention of medically attended LRTI 74 (#_ftn46) in all infants
from birth entering their first RSV season.
Detailed results from the MELODY Phase III trial were published in the New
England Journal of Medicine and demonstrated that nirsevimab showed 74.5%
efficacy against medically attended LRTI caused by RSV in healthy infants
compared to placebo. Additionally, results from the MEDLEY Phase II/III trial
were also published in the journal. The results demonstrated nirsevimab had a
similar safety and tolerability profile compared to Synagis, and that serum
levels of nirsevimab following dosing (on day 151) in this trial were
comparable with those observed in the MELODY Phase III trial.
Rare Disease
Ultomiris
Ultomiris was approved in the US for the treatment of adult patients with gMG
who are anti-acetylcholine receptor antibody-positive, which represents 80% of
people living with the disease. The approval by the US FDA was based on
positive results from the CHAMPION-MG Phase III trial, in
which Ultomiris was superior to placebo in the primary endpoint of change
from baseline in the Myasthenia Gravis-Activities of Daily Living Profile
(MG-ADL) total score at Week 26, a patient-reported scale that assesses
patients' abilities to perform daily activities.
Interim Financial Statements
Table 16: Q1 2022 - Condensed consolidated statement of comprehensive income
For the quarter ended 31 March 2022 2021
$m $m
Total Revenue 11,390 7,320
Product Sales 10,980 7,257
Collaboration Revenue 410 63
Cost of Sales (3,511) (1,864)
Gross profit 7,879 5,456
Distribution expense (125) (99)
Research and development expense (2,133) (1,713)
Selling, general and administrative expense (4,840) (2,929)
Other operating income and expense 97 1,180
Operating profit 878 1,895
Finance income 17 20
Finance expense (336) (303)
Share of after tax losses in associates and joint ventures (6) (4)
Profit before tax 553 1,608
Taxation (165) (46)
Profit for the period 388 1,562
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit pension liability 335 481
Net gains/(losses) on equity investments measured at fair value through other 18 (108)
comprehensive income
Fair value movements related to own credit risk on bonds designated as fair - 1
value through profit or loss
Tax on items that will not be reclassified to profit or loss (94) (94)
259 280
Items that may be reclassified subsequently to profit or loss
Foreign exchange arising on consolidation (219) (107)
Foreign exchange arising on designated borrowings in net investment hedges (32) (302)
Fair value movements on cash flow hedges 5 (86)
Fair value movements on cash flow hedges transferred to profit or loss 11 121
Fair value movements on derivatives designated in net investment hedges (8) 13
Costs of hedging - (1)
Tax on items that may be reclassified subsequently to profit or loss 1 26
(242) (336)
Other comprehensive income/(loss) for the period, net of tax 17 (56)
Total comprehensive income for the period 405 1,506
Profit attributable to:
Owners of the Parent 386 1,561
Non-controlling interests 2 1
388 1,562
Total comprehensive income attributable to:
Owners of the Parent 405 1,506
Non-controlling interests - -
405 1,506
Basic earnings per $0.25 Ordinary Share $0.25 $1.19
Diluted earnings per $0.25 Ordinary Share $0.25 $1.18
Weighted average number of Ordinary Shares in issue (millions) 1,548 1,312
Diluted weighted average number of Ordinary Shares in issue (millions) 1,561 1,319
Table 17: Condensed consolidated statement of financial position
At 31 Mar 2022 At 31 Dec 2021 At 31 Mar 2021
$m $m $m
Assets
Non-current assets
Property, plant and equipment 9,061 9,183 8,189
Right-of-use assets 954 988 660
Goodwill 19,963 19,997 11,765
Intangible assets 41,265 42,387 20,347
Investments in associates and joint ventures 63 69 88
Other investments 1,174 1,168 972
Derivative financial instruments 87 102 115
Other receivables 864 895 549
Deferred tax assets 4,195 4,330 3,506
77,626 79,119 46,191
Current assets
Inventories 7,624 8,983 4,278
Trade and other receivables 8,683 9,644 6,281
Other investments 61 69 129
Derivative financial instruments 54 83 64
Intangible assets 96 105 -
Income tax receivable 367 663 347
Cash and cash equivalents 5,762 6,329 7,636
Assets held for sale - 368 -
22,647 26,244 18,735
Total assets 100,273 105,363 64,926
Liabilities
Current liabilities
Interest-bearing loans and borrowings (2,069) (1,660) (2,042)
Lease liabilities (225) (233) (216)
Trade and other payables (17,864) (18,938) (17,370)
Derivative financial instruments (35) (79) (16)
Provisions (1,423) (768) (875)
Income tax payable (1,124) (916) (994)
(22,740) (22,594) (21,513)
Non-current liabilities
Interest-bearing loans and borrowings (28,081) (28,134) (17,410)
Lease liabilities (724) (754) (464)
Derivative financial instruments (47) (45) (1)
Deferred tax liabilities (5,626) (6,206) (2,823)
Retirement benefit obligations (1,991) (2,454) (2,545)
Provisions (949) (956) (576)
Other payables (3,756) (4,933) (5,148)
(41,174) (43,482) (28,967)
Total liabilities (63,914) (66,076) (50,480)
Net assets 36,359 39,287 14,446
Equity
Capital and reserves attributable to equity holders of the Parent
Share capital 387 387 328
Share premium account 35,131 35,126 7,976
Other reserves 2,050 2,045 2,037
Retained earnings (1,228) 1,710 4,089
36,340 39,268 14,430
Non-controlling interests 19 19 16
Total equity 36,359 39,287 14,446
Table 18: Condensed consolidated statement of changes in equity
Share capital Share premium account Other reserves Retained earnings Total attributable to owners of the parent Non-controlling interests Total equity
$m $m $m $m $m $m $m
At 1 Jan 2021 328 7,971 2,024 5,299 15,622 16 15,638
Profit for the period - - - 1,561 1,561 1 1,562
Other comprehensive loss - - - (55) (55) (1) (56)
Transfer to other reserves - - 13 (13) - - -
Transactions with owners:
Dividends - - - (2,490) (2,490) - (2,490)
Issue of Ordinary Shares - 5 - - 5 - 5
Share-based payments charge for the period - - - 82 82 - 82
Settlement of share plan awards - - - (295) (295) - (295)
Net movement - 5 13 (1,210) (1,192) - (1,192)
At 31 Mar 2021 328 7,976 2,037 4,089 14,430 16 14,446
At 1 Jan 2022 387 35,126 2,045 1,710 39,268 19 39,287
Profit for the period - - - 386 386 2 388
Other comprehensive income - - - 19 19 (2) 17
Transfer to other reserves - - 5 (5) - - -
Transactions with owners:
Dividends - - - (3,046) (3,046) - (3,046)
Issue of Ordinary Shares - 5 - - 5 - 5
Share-based payments charge for the period - - - 182 182 - 182
Settlement of share plan awards - - - (474) (474) - (474)
Net movement - 5 5 (2,938) (2,928) - (2,928)
At 31 Mar 2022 387 35,131 2,050 (1,228) 36,340 19 36,359
Table 19: Condensed consolidated statement of cash flows
For the quarter ended 31 March 2022 2021
$m $m
Cash flows from operating activities
Profit before tax 553 1,608
Finance income and expense 319 283
Share of after tax losses of associates and joint ventures 6 4
Depreciation, amortisation and impairment 1,309 797
Decrease in working capital and short-term provisions 1,804 1,210
Gains on disposal of intangible assets (10) (310)
Gains on disposal of investments in associates and joint ventures - (776)
Non-cash and other movements (327) (363)
Cash generated from operations 3,654 2,453
Interest paid (194) (187)
Tax paid (228) (332)
Net cash inflow from operating activities 3,232 1,934
Cash flows from investing activities
Payments upon vesting of employee share awards attributable to business (55) -
combinations
Payment of contingent consideration from business combinations (182) (171)
Purchase of property, plant and equipment (219) (220)
Disposal of property, plant and equipment - 4
Purchase of intangible assets (144) (249)
Disposal of intangible assets and assets held for sale 385 418
Purchase of non-current asset investments (4) -
Disposal of non-current asset investments 32 -
Movement in short-term investments, fixed deposits and other investing 21 28
instruments
Payments to associates and joint ventures (5) (55)
Disposal of investments in associates and joint ventures - 776
Interest received 3 24
Net cash (outflow)/inflow from investing activities (168) 555
Net cash inflow before financing activities 3,064 2,489
Cash flows from financing activities
Proceeds from issue of share capital 5 5
Repayment of loans and borrowings (4) (4)
Dividends paid (2,971) (2,469)
Hedge contracts relating to dividend payments (77) (23)
Repayment of obligations under leases (74) (50)
Movement in short-term borrowings 301 (190)
Payment of Acerta Pharma share purchase liability (920) -
Net cash outflow from financing activities (3,740) (2,731)
Net decrease in cash and cash equivalents in the period (676) (242)
Cash and cash equivalents at the beginning of the period 6,038 7,546
Exchange rate effects (9) (67)
Cash and cash equivalents at the end of the period 5,353 7,237
Cash and cash equivalents consist of:
Cash and cash equivalents 5,762 7,636
Overdrafts (409) (399)
5,353 7,237
Notes to the Interim Financial Statements
Note 1: Basis of preparation and accounting policies
These unaudited Interim Financial Statements for the three months ended 31
March 2022 have been prepared in accordance with UK-adopted International
Accounting Standards and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards. The Interim Financial
Statements also comply fully with International Financial Reporting Standards
(IFRSs) as issued by the International Accounting Standards Board (IASB) and
International Accounting Standards as adopted by the European Union.
The unaudited Interim Financial Statements for the three months ended 31 March
2022 include Alexion's results for the period. Alexion was consolidated into
the Group's results from 21 July 2021, hence Alexion's results are not
included in the comparative periods shown.
The unaudited Interim Financial Statements for the three months ended 31 March
2022 were approved by the Board of Directors for publication on 29 April 2022.
The annual financial statements of the Group for the year ended 31 December
2021 were prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006. The annual
financial statements also comply fully with IFRSs as issued by the IASB and
International Accounting Standards as adopted by the European Union. Except
for the estimation of the interim income tax charge, the Interim Financial
Statements have been prepared applying the accounting policies that were
applied in the preparation of the Group's published consolidated financial
statements for the year ended 31 December 2021.
The comparative figures for the financial year ended 31 December 2021 are not
the Group's statutory accounts for that financial year. Those accounts have
been reported on by the Group's auditors and will be delivered to the
registrar of companies; their report was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
Global and/or geopolitical events
There were no material accounting impacts identified relating to COVID-19
during the three months ended 31 March 2022.
The Group's current focus is to continue compliant business operations in
Russia and Ukraine, focussing on safeguarding our employees, ensuring
continuity of supply of essential and life-saving medicines and contributing
to humanitarian relief efforts. There are no material accounting impacts
arising from the conflict impacting our Q1 2022 reporting. The situation is
dynamic and any future impact on our business is uncertain. We continue to
closely monitor the situation.
The Group will continue to monitor these areas of increased judgement,
estimation and risk for material changes.
Going concern
The Group has considerable financial resources available. As at 31 March 2022,
the Group had $10.7bn in financial resources (cash and cash-equivalent
balances of $5.8bn and undrawn committed bank facilities of $4.9bn available
until April 2025, with only $2.3bn of borrowings due within one year). All
facilities contain no financial covenants and were undrawn at 31 March 2022.
The Group's revenues are largely derived from sales of medicines covered by
patents which provide a relatively high level of resilience and predictability
to cash inflows, although government price interventions in response to
budgetary constraints are expected to continue to affect adversely revenues in
some of our significant markets. The Group, however, anticipates new revenue
streams from both recently launched medicines and those 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.
Accordingly, the going concern basis has been adopted in these Interim
Financial Statements.
Legal proceedings
The information contained in Note 5 updates the disclosures concerning legal
proceedings and contingent liabilities in the Group's Annual Report and Form
20-F Information 2021
(https://www.astrazeneca.com/content/dam/az/Investor_Relations/annual-report-2021/pdf/AstraZeneca_AR_2021.pdf)
.
Note 2: Intangible assets
In accordance with IAS 36 ÔImpairment of Assets', reviews for triggers at an
individual asset or cash-generating-unit level were conducted, and impairment
tests carried out where triggers were identified. As a result, total net
impairment reversals of $94m have been recorded against intangible assets
during the three months ended 31 March 2022 (Q1 2021: $55m charge). Net
impairment reversals in respect of medicines in development and launched
medicines were $77m (Q1 2021: $nil) and $nil (Q1 2021: $55m charge)
respectively.
Note 3: Net Debt
The table below provides an analysis of Net Debt and a reconciliation of Net
Cash Flow to the movement in Net Debt. The Group monitors Net Debt as part of
its capital-management policy as described in Note 28 of the Annual Report and
Form 20-F Information 2021
(https://www.astrazeneca.com/content/dam/az/Investor_Relations/annual-report-2021/pdf/AstraZeneca_AR_2021.pdf)
. Net Debt is a non-GAAP financial measure.
Table 20: Net Debt
At 1 Jan 2022 Cash flow Non-cash Exchange movements At 31 Mar 2022
& other
$m $m $m $m $m
Non-current instalments of loans (28,134) - 6 47 (28,081)
Non-current instalments of leases (754) - 21 9 (724)
Total long-term debt (28,888) - 27 56 (28,805)
Current instalments of loans (1,273) 4 5 - (1,264)
Current instalments of leases (233) 70 (66) 4 (225)
Commercial paper - (256) - - (256)
Bank collateral (93) 12 - - (81)
Other short-term borrowings excluding overdrafts (3) (57) - 1 (59)
Overdrafts (291) (123) - 5 (409)
Total current debt (1,893) (350) (61) 10 (2,294)
Gross borrowings (30,781) (350) (34) 66 (31,099)
Net derivative financial instruments 61 66 (68) - 59
Net borrowings (30,720) (284) (102) 66 (31,040)
Cash and cash equivalents 6,329 (553) - (14) 5,762
Other investments - current 69 (10) - 2 61
Cash and investments 6,398 (563) - (12) 5,823
Net Debt (24,322) (847) (102) 54 (25,217)
Non-cash movements in the period include fair-value adjustments under IFRS 9.
The Group has agreements with some bank counterparties whereby the parties
agree to post cash collateral on financial derivatives, for the benefit of the
other, equivalent to the market valuation of the derivative positions above a
predetermined threshold. The carrying value of such cash collateral held by
the Group was $81m (31 December 2021: $93m) and the carrying value of such
cash collateral posted by the Group was $64m (31 December 2021: $47m). Cash
collateral posted by the Group is presented within Cash and cash equivalents.
The equivalent GAAP measure to Net Debt is Ôliabilities arising from
financing activities', which excludes the amounts for cash and overdrafts,
other investments and non-financing derivatives shown above and includes the
Acerta Pharma share purchase liability of $1,564m (31 December 2021: $2,458m),
$824m of which is shown in current other payables and $740m is shown in
non-current other payables.
Net Debt increased by $895m in the year to date to $25,217m. Details of the
committed undrawn bank facilities are disclosed within the going concern
section of Note 1.
During the three months to 31 March 2022, there were no changes to the
Company's solicited credit ratings issued by Standard and Poor's (long term:
A-; short term: A-2) and from Moody's (long term: A3; short term: P‑2).
Note 4: Financial Instruments
As detailed in the Group's most recent annual financial statements, the
principal financial instruments consist of derivative financial instruments,
other investments, trade and other receivables, cash and cash equivalents,
trade and other payables, lease liabilities and interest-bearing loans and
borrowings.
All fair value gains and/or losses that are presented in Net gains/(losses) on
equity investments measured at fair value through other comprehensive income
in the Condensed consolidated statement of comprehensive income for the three
months ending 31 March 2022 are Level 1 fair value measurements.
Financial instruments measured at fair value include $1,235m of other
investments, $4,175m held in money-market funds, $308m of loans designated at
fair value through profit or loss and $59m of derivatives as at 31 March 2022.
The total fair value of interest-bearing loans and borrowings at 31 March
2022, which have a carrying value of $31,099m in the Condensed consolidated
statement of financial position, was $31,902m.
Table 21: Financial instruments - contingent consideration
2022 2021
Diabetes alliance Other Total Total
$m $m $m $m
At 1 January 2,544 321 2,865 3,323
Settlements (173) (9) (182) (171)
Disposals - (121) (121) -
Discount unwind 41 1 42 55
At 31 March 2,412 192 2,604 3,207
Contingent consideration arising from business combinations is fair-valued
using decision-tree analysis, with key inputs including the probability of
success, consideration of potential delays and the expected levels of future
revenues.
The contingent consideration balance relating to BMS's share of the global
diabetes alliance of $2,412m (31 December 2021: $2,544m) would
increase/decrease by $241m with an increase/decline in sales of 10%, as
compared with the current estimates.
Note 5: Legal proceedings and contingent liabilities
AstraZeneca is involved in various legal proceedings considered typical to its
business, including litigation and investigations relating to product
liability, commercial disputes, infringement of intellectual property (IP)
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 2021 (the
Disclosures). Unless noted otherwise below or in the Disclosures, no
provisions have been established in respect of the claims discussed below.
As discussed in the Disclosures, the majority of claims involve highly complex
issues. Often these issues are subject to substantial uncertainties and,
therefore, the probability of a loss, if any, being sustained and/or an
estimate of the amount of any loss is difficult to ascertain.
Unless specifically identified below that a provision has been taken,
AstraZeneca considers each of the claims to represent a contingent liability
and discloses information with respect to the nature and facts of the cases in
accordance with IAS 37.
There is one matter concerning legal proceedings in the Disclosures, which is
considered probable that an outflow will be required, but for which we are
unable to make an estimate of the possible loss or range of possible losses at
this stage.
In cases that have been settled or adjudicated, or where quantifiable fines
and penalties have been assessed and which are not subject to appeal, or where
a loss is probable and we are able to make a reasonable estimate of the loss,
AstraZeneca records the loss absorbed or makes a provision for its best
estimate of the expected loss. The position could change over time and the
estimates that the Company made, and upon which the Company have relied in
calculating these provisions are inherently imprecise. There can, therefore,
be no assurance that any losses that result from the outcome of any legal
proceedings will not exceed the amount of the provisions that have been booked
in the accounts. The major factors causing this uncertainty are described more
fully in the Disclosures and herein.
AstraZeneca has full confidence in, and will vigorously defend and enforce,
its IP.
Matters disclosed in respect of the fourth quarter of 2021 and to 29 April
2022
Patent litigation
Enhertu
US patent proceedings
As previously disclosed, in October 2020, Seagen Inc. (Seagen) filed a
complaint against Daiichi Sankyo Company, Limited (Daiichi Sankyo) in the US
District Court for the Eastern District of Texas alleging that Enhertu
infringes US Patent No. 10,808,039 (the Ô039 patent). AstraZeneca
co-commercialises Enhertu with Daiichi Sankyo, Inc. in the US. The trial took
place in April 2022. The jury found that the Ô039 patent was infringed and
awarded Seagen $41.82m in past damages. The parties await the schedules for a
bench trial on equitable issues and for consideration of post-trial motions.
As previously disclosed, in December 2020 and January 2021, AstraZeneca and
Daiichi Sankyo filed post-grant review petitions with the US Patent and
Trademark Office (USPTO) alleging, inter alia, that the Ô039 patent is
invalid for lack of written description and enablement. The USPTO initially
declined to institute the post-grant reviews, but in April 2022, the USPTO
granted the rehearing requests, instituting both post-grant review petitions.
An oral hearing is scheduled for January 2023 and a decision is expected by
April 2023.
Imfinzi
US patent proceedings
In March 2022, Bristol-Myers Squibb Co. and E.R. Squibb & Sons, LLC filed
a lawsuit in US District Court for the District of Delaware against
AstraZeneca alleging that AstraZeneca's marketing of Imfinzi infringes several
of their patents. No trial date has been scheduled.
Patent proceedings outside the US
In February 2022, Ono Pharmaceuticals filed a lawsuit in Tokyo District Court,
Civil Division against AstraZeneca alleging that AstraZeneca's marketing of
Imfinzi in Japan infringes several of their patents. No trial date has been
scheduled.
Symbicort
US patent proceedings
As previously disclosed, AstraZeneca is involved in ongoing ANDA patent
litigation with Mylan Pharmaceuticals Inc. (Mylan) and Kindeva Drug Delivery
L.P. (Kindeva) brought in the US District Court for the Northern District of
West Virginia (the District Court). In March 2022, the US Court of Appeals for
the Federal Circuit (the Federal Circuit) denied AstraZeneca's Combined
Petition for Panel Rehearing and Rehearing En Banc of the Federal Circuit's
December 2021 decision and the case was remanded back to the District Court
for further proceedings. In April 2022, the District Court entered a
Stipulation and Order dismissing patent infringement claims related to various
asserted patents and otherwise narrowing the issues for trial. A trial in the
matter is scheduled to commence in May 2022.
In April 2022, AstraZeneca filed another ANDA action against Mylan and Kindeva
in the District Court asserting patent infringement.
Tagrisso
US patent proceedings
In February 2020, in response to Paragraph IV notices from multiple ANDA
filers, AstraZeneca filed patent infringement lawsuits in the US District
Court for the District of Delaware. In its complaint, AstraZeneca alleged that
a generic version of Tagrisso, if approved and marketed, would infringe a US
Orange Book-listed Tagrisso patent. In the fourth quarter of 2021, AstraZeneca
entered into settlement agreements with Zydus Pharmaceuticals (USA) Inc.,
Cadila Healthcare Limited, MSN Laboratories Pvt. Ltd., and MSN Pharmaceuticals
Inc. In April 2022, AstraZeneca entered into a settlement agreement with
Alembic Pharmaceuticals Limited. These settlements resolve all US patent
litigation between the parties relating to Tagrisso.
Patent proceedings outside the US
In Russia, in October 2021, AstraZeneca filed a lawsuit in the Arbitration
Court of the Moscow Region against Axelpharm, LLC to prevent it from obtaining
authorisation to market a generic version of Tagrisso prior to the expiration
of AstraZeneca's patents covering Tagrisso. The lawsuit also names the
Ministry of Health of the Russian Federation as a third party. In March 2022,
the court dismissed the lawsuit, and AstraZeneca has filed an appeal.
Ultomiris
As previously disclosed, Chugai Pharmaceutical Co., Ltd. (Chugai) filed
lawsuits against Alexion in the Delaware District Court as well as in Tokyo
District Court, alleging that Ultomiris infringed US and Japanese patents held
by Chugai.
In March 2022, Alexion entered into a settlement agreement with Chugai that
resolves all patent disputes between the two companies related to Ultomiris.
In accordance with the settlement agreement, Alexion and Chugai have taken
steps to withdraw patent infringement proceedings filed with US District Court
for the District of Delaware and Tokyo District Court. Under the terms of the
agreement, Alexion will make a single payment of $775m in the second quarter
of 2022, for which a related charge was recognised through the non-core
P&L in the first quarter of 2022. No further amounts are payable by either
party.
Product liability litigation
Onglyza and Kombiglyze
In the US, AstraZeneca is defending various lawsuits alleging heart failure,
cardiac injuries, and/or death from treatment with Onglyza or Kombiglyze. In
February 2018, the Judicial Panel on Multidistrict Litigation ordered the
transfer of various pending federal actions to the US District Court for the
Eastern District of Kentucky (the District Court) for consolidated pre-trial
proceedings with the federal actions pending in the District Court. In the
previously disclosed California State Court coordinated proceeding,
AstraZeneca's motion for summary judgment was granted in March 2022. A motion
for summary judgment is pending in the District Court.
Commercial litigation
Pay Equity Litigation (US)
AstraZeneca is defending a putative class and collective action matter in the
US District Court for the Northern District of Illinois brought by three named
plaintiffs, who are former AstraZeneca pharmaceutical sales representatives.
The case involves claims under the federal and Illinois Equal Pay Acts, with
the plaintiffs alleging they were paid less than male employees who performed
substantially similar and/or equal work. The plaintiffs seek various damages
on behalf of themselves and the putative class and/or collective, including
without limitation backpay, liquidated damages, compensatory and punitive
damages, attorneys' fees, and interest.
The Court has not set a trial date and no class or collective certification
has been sought or granted as of this time.
Government investigations/proceedings
COVID-19 Vaccine Supply and Manufacturing Inquiries
As previously disclosed, in June 2021, Argentina's Federal Criminal
Prosecutor's Office (the Prosecutor) contacted AstraZeneca Argentina seeking
documents and electronic records in connection with a local criminal
investigation relating to the public procurement and supply of Vaxzevria in
that country. In October 2021, the Prosecutor filed a submission with the
presiding court requesting dismissal of the criminal investigation, and that
request was granted by the court in February 2022. This matter is now closed.
In February 2022, a Brazilian Public Prosecutor filed a lawsuit against
several defendants including the Brazilian Federal Government, AstraZeneca,
and other COVID-19 vaccine manufacturers. In April 2022, a Brazilian Court
issued an order dismissing the lawsuit.
US 340B Litigations and Proceedings
As previously disclosed, AstraZeneca is involved in several matters relating
to its contract pharmacy recognition policy under the 340B Drug Pricing
Program in the US. AstraZeneca has sought to intervene in three lawsuits
against several US government agencies and their officials relating to the
appropriate interpretation of the governing statute for the 340B Drug Pricing
Program. Two of the three cases are currently stayed pending further
proceedings and the third case has been dismissed. Administrative Dispute
Resolution proceedings have also been initiated against AstraZeneca before the
US Health Resources and Services Administration.
As previously disclosed, in January 2021, AstraZeneca filed a separate lawsuit
in federal court in Delaware alleging that an Advisory Opinion issued by the
Department of Health and Human Services violates the Administrative Procedure
Act. In June 2021, the Court found in favour of AstraZeneca, invalidating the
Advisory Opinion. Prior to the Court's ruling, however, in May 2021, the US
government issued new and separate letters to AstraZeneca (and other
companies) asserting that our contract pharmacy policy violates the 340B
statute. AstraZeneca amended the complaint to include allegations challenging
the letter sent in May, and in February 2022, the Court ruled in favour of
AstraZeneca invalidating those letters sent by the US Government. The US
government has appealed the decision.
Table 22: Q1 2022 - Product Sales year-on-year analysis
75 (#_ftn47)
World Emerging Markets US Europe Established RoW
$m Act % chg CER % chg $m Act % chg CER % chg $m % Change $m Act % chg CER % chg $m Act % chg CER % chg
Oncology 3,388 14 18 895 17 19 1,374 17 650 13 21 469 4 12
Tagrisso 1,304 14 17 406 32 33 439 6 252 12 21 207 2 11
Imfinzi 599 8 11 58 2 3 315 8 125 15 23 101 4 12
Lynparza 617 14 17 121 39 43 270 7 160 8 16 66 22 32
Calquence 414 98 n/m 7 n/m n/m 339 74 55 n/m n/m 13 n/m n/m
Enhertu 11 n/m n/m 6 n/m n/m - - 4 n/m n/m 1 n/m n/m
Orpathys 13 n/m n/m 13 n/m n/m - - - - - - - -
Zoladex 240 9 12 167 22 23 4 (19) 34 (9) (3) 35 (18) (9)
Faslodex 93 (24) (20) 44 3 6 5 (41) 17 (59) (56) 27 (8) -
Iressa 32 (47) (47) 27 (50) (50) 2 (16) 1 (48) (44) 2 (35) (30)
Arimidex 32 (27) (25) 25 (30) (29) - 51 1 (56) (56) 6 (7) 1
Casodex 21 (48) (47) 13 (59) (59) - n/m - (24) (24) 8 (10) (1)
Others 12 1 6 8 3 7 - n/m 1 49 61 3 (29) (24)
BioPharmaceuticals: CVRM* 2,207 14 17 1,025 8 11 522 7 482 31 40 178 28 37
Farxiga 1,000 60 67 391 50 54 193 48 318 83 97 98 66 78
Brilinta 325 (13) (10) 69 (35) (32) 166 - 76 (13) (6) 14 (5) (1)
Lokelma 63 92 97 3 n/m n/m 39 62 6 n/m n/m 15 n/m n/m
Roxadustat 41 6 4 41 6 4 - - - - - - - -
Andexxa* 33 13 14 - - - 24 (7) 9 n/m n/m - - -
Crestor 267 (2) - 197 4 6 18 (16) 11 (48) (44) 41 (2) 6
Seloken/Toprol-XL 244 (2) (1) 238 (2) (1) - n/m 4 13 7 2 (7) -
Bydureon 68 (34) (33) 1 60 63 57 (34) 10 (28) (23) - (92) (91)
Onglyza 68 (33) (31) 34 (42) (40) 18 (2) 11 (31) (26) 5 (45) (44)
Others 98 (15) (13) 51 5 7 7 (58) 37 (20) (19) 3 (27) (20)
BioPharmaceuticals: R&I 1,509 (2) - 437 (19) (19) 645 17 277 (7) (1) 150 - 5
Symbicort 674 (2) - 167 1 3 259 (2) 157 (7) - 91 (1) 3
Fasenra 308 18 22 7 n/m n/m 189 22 75 20 29 37 (5) 2
Pulmicort 217 (34) (34) 164 (43) (43) 22 26 18 11 20 13 24 28
Breztri 87 n/m n/m 22 n/m n/m 53 n/m 5 n/m n/m 7 46 59
Saphnelo 11 n/m n/m - - - 11 n/m - - - - - -
Daliresp 51 (16) (16) 1 (28) (25) 47 (13) 3 (45) (41) - 6 7
Bevespi 15 15 14 2 51 30 11 10 2 16 24 - 24 35
Others 146 (9) (9) 74 (3) (4) 53 47 17 (62) (60) 2 (53) (51)
BioPharmaceuticals: V&I 1,757 n/m n/m 630 n/m n/m 386 n/m 286 15 22 455 n/m n/m
Vaxzevria 1,089 n/m n/m 475 n/m n/m 79 n/m 135 (40) (37) 400 n/m n/m
Evusheld 469 n/m n/m 89 n/m n/m 307 n/m 65 n/m n/m 8 n/m n/m
Synagis 200 n/m n/m 66 n/m n/m - (97) 87 n/m n/m 47 - -
FluMist (1) n/m n/m - (98) (98) - n/m (1) n/m n/m - (4) (2)
Rare Disease* 1,694 3 7 115 (12) 3 1,020 7 361 - 8 198 1 10
Soliris* 990 (5) - 71 (41) (28) 591 7 221 (15) (8) 107 4 11
Ultomiris* 419 20 25 24 n/m n/m 220 6 105 54 65 70 (4) 7
Strensiq* 208 5 7 9 65 68 161 3 19 (1) 6 19 7 19
Koselugo 39 82 85 5 n/m n/m 30 43 4 n/m n/m - - -
Kanuma* 38 9 15 6 42 59 18 8 12 (1) 7 2 10 15
Other medicines 425 (19) (15) 204 (31) (29) 39 (24) 36 (31) (28) 146 19 30
Nexium 332 (18) (13) 144 (38) (36) 33 4 15 (17) (11) 140 17 28
Others 93 (22) (22) 60 (4) (4) 6 (71) 21 (39) (37) 6 n/m n/m
Total Product Sales 10,980 51 56 3,306 28 30 3,986 76 2,092 36 46 1,596 83 97
Table 23: Collaboration Revenue
Q1 2022 Q1 2021
$m $m
Lynparza: regulatory milestones 175 -
Enhertu: share of gross profits 75 38
Royalty income 73 18
Tralokinumab: sales milestones 70 -
Other Ongoing Collaboration Revenue 17 7
Total 410 63
Table 24: Other Operating Income and Expense
Q1 2022 Q1 2021
$m $m
Brazikumab licence termination funding 35 26
Divestment of Viela Bio, Inc. shareholding - 776
Crestor (Europe ex-UK and Spain) - 309
Other 62 69
Total 97 1,180
Other shareholder information
Financial calendar
Announcement of half year and second quarter results 29
July 2022
Announcement of year to date and third quarter results 10
November 2022
Announcement of full year and fourth quarter
results 9 February 2023 (tentative)
Dividends are normally be paid as follows:
First interim: Announced with the half-year and
second-quarter results and paid in September
Second interim: Announced with full-year and fourth-quarter results and
paid in March
The record date for the first interim dividend for 2022, payable on 12
September 2022, will be 12 August 2022. The ex-dividend date will be 11 August
2022.
Contacts
For details on how to contact the Investor Relations Team, please click here
(https://www.astrazeneca.com/investor-relations.html#Contacts) . For Media
contacts, click here (https://www.astrazeneca.com/media-centre/contacts.html)
Addresses for correspondence
Registered office Registrar and transfer office Swedish Central Securities Depository US depositary
Deutsche Bank Trust Company Americas
1 Francis Crick Avenue Equiniti Limited Euroclear Sweden AB PO Box 191 American Stock Transfer
Cambridge Biomedical Campus Aspect House SE-101 23 Stockholm 6201 15th Avenue
Cambridge Spencer Road Brooklyn
CB2 0AA Lancing NY 11219
West Sussex
BN99 6DA
United Kingdom United Kingdom Sweden United States
+44 (20 3749 5000 0800 389 1580 +46 (8 402 9000 +1 (88697 8018
+44 (121 415 7033 +1 (71921 8137
db@astfinancial.com
Trademarks
Trademarks of the AstraZeneca group of companies appear throughout this
document in italics. Medical publications also appear throughout the document
in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol
are all trademarks of the AstraZeneca group of companies. Trademarks of
companies other than AstraZeneca that appear in this document
include Arimidex and Casodex, owned by AstraZeneca or JuvisŽ (depending on
geography); Duaklir and Eklira, trademarks of Almirall, S.A.; Enhertu, a
trademark of Daiichi Sankyo; Seloken, owned by AstraZeneca or Taiyo Pharma
Co., Ltd (depending on geography); Synagis, owned by AstraZeneca or AbbVie
Inc. (depending on geography); and Tezspire, a trademark of Amgen, Inc.
Information on or accessible through AstraZeneca's websites, including
www.astrazeneca.com astrazeneca.com (https://www.astrazeneca.com/) , does not
form part of and is not incorporated into this announcement.
AstraZeneca
AstraZeneca (LSE/STO/Nasdaq: AZN) is a global, science-led biopharmaceutical
company that focuses on the discovery, development, and commercialisation of
prescription medicines in Oncology, Rare Disease, and BioPharmaceuticals,
including Cardiovascular, Renal & Metabolism, and Respiratory &
Immunology. Based in Cambridge, UK, AstraZeneca operates in over 100 countries
and its innovative medicines are used by millions of patients worldwide.
Please visit astrazeneca.com (http://www.astrazeneca.com/) and follow the
Company on Twitter @AstraZeneca (http://www.twitter.com/AstraZeneca) .
Cautionary statements regarding forward-looking statements
In order, among other things, to utilise the 'safe harbour' provisions of the
US Private Securities Litigation Reform Act of 1995, AstraZeneca (hereafter
Ôthe Group') provides the following cautionary statement:
This document contains certain forward-looking statements with respect to the
operations, performance and financial condition of the Group, including, among
other things, statements about expected revenues, margins, earnings per share
or other financial or other measures. Although the Group believes its
expectations are based on reasonable assumptions, any forward-looking
statements, by their very nature, involve risks and uncertainties and may be
influenced by factors that could cause actual outcomes and results to be
materially different from those predicted. The forward-looking statements
reflect knowledge and information available at the date of preparation of this
document and the Group undertakes no obligation to update these
forward-looking statements. The Group identifies 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 the Group's control, include, among
other things:
‒ the risk of failure or delay in delivery of pipeline or launch of
new medicines
‒ the risk of failure to meet regulatory or ethical requirements for
medicine development or approval
‒ the risk of failures or delays in the quality or execution of the
Group's commercial strategies
‒ the risk of pricing, affordability, access and competitive pressures
‒ the risk of failure to maintain supply of compliant, quality
medicines
‒ the risk of illegal trade in the Group's medicines
‒ the impact of reliance on third-party goods and services
‒ the risk of failure in information technology or cybersecurity
‒ the risk of failure of critical processes
‒ the risk of failure to collect and manage data in line with legal
and regulatory requirements and strategic objectives
‒ the risk of failure to attract, develop, engage and retain a
diverse, talented and capable workforce
‒ the risk of failure to meet regulatory or ethical expectations on
environmental impact, including climate change
‒ the risk of the safety and efficacy of marketed medicines being
questioned
‒ the risk of adverse outcome of litigation and/or governmental
investigations
‒ intellectual property-related risks to our products
‒ the risk of failure to achieve strategic plans or meet targets or
expectations
‒ the risk of failure in financial control or the occurrence of fraud
‒ the risk of unexpected deterioration in the Group's financial
position
‒ the impact that global and/or geopolitical events such as the
COVID-19 pandemic and the Russia-Ukraine war, may have or continue to have on
these risks, on the Group's ability to continue to mitigate these risks, and
on the Group's operations, financial results or financial condition
Nothing in this document, or any related presentation/webcast, should be
construed as a profit forecast.
- End of document -
29 (#_ftnref1) A breast cancer gene mutation.
30 (#_ftnref2) Systemic lupus erythematosus.
31 (#_ftnref3) Non-small cell lung cancer.
32 (#_ftnref4) Chronic lymphocytic leukaemia.
33 (#_ftnref5) Real-Time Oncology Review.
34 (#_ftnref6) Chronic kidney disease.
35 (#_ftnref7) Heart failure with preserved ejection fraction.
36 (#_ftnref8) Hereditary amyloid transthyretin polyneuropathy.
37 (#_ftnref9) Interim analysis, as disclosed by Ionis Pharmaceuticals, Inc.
38 (#_ftnref10) Eosinophilic oesophagitis.
39 (#_ftnref11) Epidermal growth factor receptor mutation.
40 (#_ftnref12) Mantle cell lymphoma.
41 (#_ftnref13) Triple negative breast cancer.
42 (#_ftnref14) Chronic rhinosinusitis with nasal polyps.
43 (#_ftnref15) Eosinophilic granulomatosis with polyangiitis.
44 (#_ftnref16) Sales of medicines through managed care and other channels
are subject to rebates, discounts, return fees, etc. An estimate of the
likely levels of these items is subtracted from the gross (or total) sales of
a medicine in order to establish the net product sales. A gross‑to‑net
adjustment corrects any divergence between the actual and prior estimated
level of rebate, discount or fee, once those items are known.
45 (#_ftnref17) Extensive stage non-small cell lung cancer.
46 (#_ftnref18) Poly ADP ribose polymerase.
47 (#_ftnref19) Homologous recombination repair gene mutation.
48 (#_ftnref20) MesenchymalÐepithelial transition.
49 (#_ftnref21) Sodium-glucose co-transporter-2.
50 (#_ftnref22) European Society of Cardiology.
51 (#_ftnref23) American Heart Association.
52 (#_ftnref24) American College of Cardiology.
53 (#_ftnref25) Urine albumin creatine ratio.
54 (#_ftnref26) Meaured renal function.
55 (#_ftnref27) Type-2 diabetes.
56 (#_ftnref28) Betaloc is the brand name for Seloken in China.
57 (#_ftnref29) Dipeptidyl peptidase IV.
58 (#_ftnref30) Other Operating Income.
59 (#_ftnref31) Core financial measures are adjusted to exclude certain
items. For more information on the Reported to Core financial adjustments,
please refer to the Operating and financial review.
60 (#_ftnref32) Based on best prevailing assumptions around currency
profiles.
61 (#_ftnref33) Based on average daily spot rates in FY 2021.
62 (#_ftnref34) Based on average daily spot rates from 1 January 2022 to 31
March 2022.
63 (#_ftnref35) Other currencies include AUD, BRL, CAD, KRW and RUB.
64 (#_ftnref36) An immune checkpoint receptor.
65 (#_ftnref37) Radiographic progression-free survival.
66 (#_ftnref38) Metastatic castration-resistant prostate cancer.
67 (#_ftnref39) Homologous recombination repair.
68 (#_ftnref40) Hazard ratio.
69 (#_ftnref41) Overall survival.
70 (#_ftnref42) Progression-free survival.
71 (#_ftnref43) Supplemental Biologics License Application.
72 (#_ftnref44) Low-density lipoprotein cholesterol.
73 (#_ftnref45) Complete response letter.
74 (#_ftnref46) Lower respiratory tract infections.
75 (#_ftnref47) The table provides an analysis of year-on-year Product
Sales, with Actual and CER growth rates reflecting year-on-year growth. Due to
rounding, the sum of a number of dollar values and percentages may not agree
to totals. * FY 2022 Q1 growth rates on medicines acquired with Alexion have
been calculated on a pro forma basis comparing to the corresponding period in
the prior year, pre-acquisition as previously published by Alexion. The growth
rates shown for Rare Disease and CVRM disease area totals include these pro
forma adjustments.
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