REG - AstraZeneca PLC - YTD and Q3 2022 Results
10/11/2022 07:00
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RNS Number : 9054F AstraZeneca PLC 10 November 2022
AstraZeneca PLC
10 November 2022 07:00 GMT
YTD and Q3 2022 results
Record number of regulatory approvals and guidance uplift underpinned by
strong business performance
Revenue and EPS summary
YTD 2022 Q3 2022
% Change % Change
$m Actual CER 1 (#_ftn1) $m Actual CER
- Product Sales 32,200 29 35 10,590 9 16
- Collaboration Revenue 944 >2x >2x 392 >3x >3x
Total Revenue 33,144 30 37 10,982 11 19
Reported 2 (#_ftn2) EPS 3 (#_ftn3) $1.54 >4x >4x $1.06 n/m n/m
Core 4 (#_ftn4) EPS $5.28 47 52 $1.67 55 70
YTD 2022 Financial performance (growth numbers and commentary at CER
5 (#_ftn5)
)
‒ Total Revenue increased 37% to $33,144m, with growth coming from all
disease areas, and from the addition of Alexion, which was incorporated into
the Group's results from 21 July 2021
‒ Oncology Total Revenue increased 24%, inclusive of milestone
payments from MSD 6 (#_ftn6) for Lynparza. Oncology Product Sales increased
20%. Total Revenue from R&I 7 (#_ftn7) increased 4%, CVRM 8 (#_ftn8)
increased 19% 9 (#_ftn9) and Rare Disease increased 10%(9)( )
‒ Core Gross Margin of 81%, up six percentage points at CER,
reflecting the lower revenue from initial Vaxzevria contracts and the
increased share of specialty care medicines
‒ Core Total Operating Expense increased 26%, reflecting the addition
of Alexion, continued investment in new launches and the pipeline, to deliver
sustainable long-term growth
‒ Core Operating Margin of 32%, up six percentage points at CER,
benefitting from favourable phasing and product mix
‒ Core EPS increased 52% to $5.28
‒ FY 2022 Core EPS at constant exchange rates now expected to increase
by a high twenties to low thirties percentage, vs previous guidance of a
mid-to-high twenties increase. At actual exchange rates, FY 2022 Core EPS
growth is anticipated to be impacted by a currency headwind 10 (#_ftn10) of a
mid-to-high single-digit percentage, versus previous guidance of a mid
single-digit headwind
Key milestones achieved since the prior results
‒ Key data: Positive Phase III read-outs for danicopan in PNH-EVH 11
(#_ftn11) (ALPHA) and for capivasertib in 2nd-line HR-positive, metastatic
breast cancer (CAPItello-291)
‒ Key regulatory approvals: 19 approvals in major markets since H1
2022 results, including US approvals for Enhertu in HER2 12 (#_ftn12) -low
breast cancer (DESTINY-Breast04) and advanced NSCLC 13 (#_ftn13)
(DESTINY-Lung02), Imjudo and Imfinzi in advanced liver cancer (HIMALAYA),
Imfinzi in advanced biliary tract cancer (TOPAZ‑1); EU approval for
Beyfortus for the prevention of RSV 14 (#_ftn14) lower respiratory tract
disease (MELODY/MEDLEY); EU and Japan approvals for Ultomiris in gMG 15
(#_ftn15) (CHAMPION-MG), Tezspire in severe asthma (NAVIGATOR) and Lynparza in
early breast cancer (OlympiA)
‒ Other regulatory milestones: US Priority Review for Lynparza for
1st-line metastatic castration-resistant prostate cancer (PROpel)
Pascal Soriot, Chief Executive Officer, AstraZeneca, said:
"AstraZeneca continues to see the benefit of our sustained investment in
R&D, with 19 major regulatory approvals since our last earnings call.
After a strong performance in the year to date, we have increased our Core EPS
guidance for the full year 2022. Additionally, recent encouraging data for
several of our pipeline programmes have given us the confidence to proceed
with additional late-stage clinical trials as we maintain our focus on
delivery of our growth ambitions.
I would also like to highlight the announcement at COP27 to accelerate the
delivery of our net zero strategy. Our company intends to lead by example on
this increasingly important objective for the world."
Guidance
The Company updates its FY 2022 guidance at CER, due to the strong performance
in the year to date. The guided range for FY 2022 Core EPS has been increased
to a high twenties to low thirties percentage; the final outcome within that
range will depend on the timing of Evusheld deliveries and collaboration
milestones linked to regulatory events.
At actual exchange rates, it is anticipated that FY 2022 Total Revenue growth
will also be impacted by a currency headwind of a mid single-digit percentage,
and that FY 2022 Core EPS growth will be impacted by a currency headwind of a
mid-to-high single-digit percentage (see 'Currency impact', below).
Total Revenue is expected to increase by a low twenties percentage (unchanged)
Core EPS is expected to increase by a high twenties to low thirties percentage
(previously mid-to-high twenties percentage)
Other elements of the Income Statement are expected to be broadly in line with
the indications issued in the Company's H1 2022 results announcement (29 July
2022).
AstraZeneca continues to recognise 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
The growth numbers in the guidance above are provided at CER, based on the
average exchange rates through 2021.
If foreign-exchange rates for November to December 2022 were to remain at the
spot rates seen on 31 October 2022, it is anticipated that FY 2022 Total
Revenue would incur a mid single-digit adverse impact versus the performance
at CER, and FY 2022 Core EPS would incur a mid-to-high single-digit adverse
impact (previously a mid single-digit adverse impact).
The Company's foreign-exchange rate sensitivity analysis is provided in Table
17.
Table 1: Key elements of Total Revenue performance in Q3 2022
% Change
Revenue type $m Actual CER
Product Sales 10,590 9 16 Strong Oncology and BioPharmaceuticals sales
$1,734m from medicines acquired with Alexion
Collaboration Revenue 392 >3x >3x $160m for Enhertu (Q3 2021: $52m)
$26m for Tezspire (Q3 2021: $nil)
Milestones of $75m for Lynparza, $62m for Nexium and $40m for tralokinumab
Total Revenue 10,982 11 19
Disease areas $m Actual CER
Oncology 4,039 20 27 Good performance across key medicines and regions
CVRM(9)( ) 2,351 11 18 Farxiga achieved its third consecutive blockbuster quarter with $1,103m in
revenues
R&I 1,499 1 5 Growth across Breztri and Fasenra offsetting a decline in Pulmicort of 33%
(31% at CER) primarily due to the impact of VBP 16 (#_ftn16)
implementation and COVID-19 lockdowns in China
V&I 17 (#_ftn17) 878 (29) (24) $180m from Vaxzevria 18 (#_ftn18) (Q3 2021: $1,050m)
$536m from Evusheld (Q3 2021: $nil)
Rare Disease(9)( ) 1,741 4 11 $518m from Ultomiris which was up 37% (47% at CER)
Other Medicines 474 34 50 Includes a Collaboration Revenue milestone of $62m for Nexium. Nexium revenue
in Q3 2021 was negatively impacted by a transition in distribution partners
Total Revenue 10,982 11 19
Regions inc. Vaxzevria $m Actual CER
Emerging Markets 2,856 (10) (4) Decline due to lower sales of Vaxzevria (growth rates excluding Vaxzevria
shown below)
- China 1,541 3 8 Q3 2021 was negatively impacted by Tagrisso inventory phasing and stock
compensation following NRDL 19 (#_ftn19) changes
- Ex-China Emerging Markets 1,316 (21) (15) Decline due to lower sales of Vaxzevria
US 4,650 34 34
Europe 2,065 8 23
Established RoW 1,412 7 26
Total Revenue inc. Vaxzevria 10,982 11 19
Regions exc. Vaxzevria $m Actual CER Contribution of medicines acquired with Alexion
Emerging Markets 2,826 13 20 $102m
- China 1,541 3 8
- Ex-China Emerging Markets 1,285 26 37 $102m
US 4,650 34 34 $1,069m
Europe 2,002 14 30 $351m
Established RoW 1,325 22 45 $212m
Total Revenue exc. Vaxzevria 10,803 23 31 $1,734m
Table 2: Key elements of financial performance in Q3 2022
Metric Reported Reported change Core Core Comments 20 (#_ftn20)
change
Total Revenue $10,982m 11% Actual 19% CER $10,982m 11% Actual 19% CER See Table 1 and the Total Revenue section of this document for further details
Gross Margin 21 (#_ftn21) 72% 10pp Actual 11pp CER 81% 6pp Actual 7pp CER + Addition of Alexion
+ Increasing mix of Oncology sales
‒ Impact from profit-sharing arrangements
(e.g. Lynparza)
‒ Reported Gross Margin impacted by unwind of Alexion inventory fair
value adjustment
R&D Expense $2,458m -32% Actual -28% CER $2,357m 10% Actual 16% CER + Addition of Alexion
+ Increased investment in the pipeline following ungating of additional
late-stage trials
Reported R&D Expense in Q3 2021 included a $1,172m impairment charge
Core R&D-to-Total Revenue ratio of 21%
(Q3 2021: 22%)
SG&A Expense $4,277m 5% Actual 9% CER $3,160m 10% Actual 16% CER + Addition of Alexion
+ Market development activities for recent launches, including Evusheld
+ Core SG&A-to-Total Revenue ratio of 29%
(Q3 2021: 29%)
Other Operating Income 22 (#_ftn22) $106m >2x Actual >2x CER $107m >2x Actual >3x CER Includes income from royalties and prior transactions
Operating Margin 11% 28pp Actual 30pp CER 31% 8pp Actual 9pp CER See Gross Margin and Expenses
commentary above
Net Finance Expense $324m 1% Actual 2% CER $254m 16% Actual 14% CER + Foreign exchange movements
+ Interest rate increase on floating rate liabilities
Reported impacted by discount unwind on acquisition-related liabilities
Tax Rate -78% n/m 18% -3pp Actual -3pp CER 18% Core Tax Rate in the quarter reflected geographical mix of profits and
favourable adjustments to prior year tax liabilities in a number of major
jurisdictions
Reported affected by a $883m deferred tax credit arising from a legal entity
reorganisation to integrate Alexion
Variations in the tax rate can be expected to continue quarter to quarter
EPS $1.06 n/m $1.67 55% Actual 70% CER Further details of differences between Reported and Core are shown in Table 12
Table 3: Pipeline highlights since prior results announcement
Event Medicine Indication / Trial Event
Regulatory approvals and other regulatory actions Tagrisso NSCLC (adjuvant) (ADAURA) Regulatory approval (JP)
Imfinzi Biliary tract cancer (TOPAZ-1) Regulatory approval (US)
Imfinzi Liver cancer (1st-line) (HIMALAYA) Regulatory approval (US)
Lynparza gBRCA 23 (#_ftn23) breast cancer (adjuvant) (OlympiA) Regulatory approval (EU, JP)
Lynparza HRD 24 (#_ftn24) -positive advanced ovarian cancer (1st-line maint.) Regulatory approval (CN)
(PAOLA-1)
Enhertu HER2-low breast cancer (3rd-line) (DESTINY-Breast04) Regulatory approval (US)
Enhertu HER2m 25 (#_ftn25) NSCLC (2nd-line+) (DESTINY-Lung02) Regulatory approval (US)
Calquence Maleate tablet formulation Regulatory approval (US)
Forxiga CKD 26 (#_ftn26) (DAPA-CKD) Regulatory approval (CN)
Tezspire Severe asthma (NAVIGATOR) Regulatory approval (EU, JP)
Beyfortus RSV (MELODY/MEDLEY) Regulatory approval (EU)
Evusheld COVID-19 (PROVENT/TACKLE) Regulatory approval (JP)
Evusheld COVID-19 (TACKLE) Regulatory approval (EU)
Soliris PNH and aHUS 27 (#_ftn27) Regulatory approval (CN)
Ultomiris gMG (CHAMPION-MG) Regulatory approval (EU, JP)
Koselugo NF1-PN 28 (#_ftn28) (SPRINT) Regulatory approval (JP)
Regulatory submissions Lynparza Prostate cancer (1st-line) (PROpel) Priority Review (US)
or acceptances
Enhertu HER2-low breast cancer (3rd-line) (DESTINY-Breast04) Regulatory submission (CN)
Farxiga/Forxiga HFpEF 29 (#_ftn29) (DELIVER) Regulatory submission (US, EU, JP, CN)
Ultomiris NMOSD 30 (#_ftn30) (CHAMPION-NMOSD) Regulatory submission (US, EU, JP)
Major Phase III data readouts and other developments capivasertib HR+/HER2-neg breast cancer (1st-line) Primary endpoint met
(CAPItello-291)
monalizumab Recurrent or metastatic HNSCC 31 (#_ftn31) Efficacy threshold not met
(2nd-line) (INTERLINK-1)
Fasenra EoE 32 (#_ftn32) (MESSINA) One of two dual-primary endpoints not met
Soliris Guillain-Barré syndrome Primary endpoint not met
danicopan PNH with extravascular haemolysis Primary endpoint met
Corporate and business development
In October 2022, AstraZeneca entered a definitive agreement to acquire
LogicBio Therapeutics, Inc. (NASDAQ: LOGC), a pioneering genomic medicine
company. The proposed acquisition aims to rapidly accelerate Alexion's growth
in genomic medicines through LogicBio's unique technology, experienced rare
disease R&D team, and expertise in pre-clinical development.
Sustainability summary
AstraZeneca attended COP27, where the Sustainable Markets Initiative Health
Systems Task Force collectively made significant commitments to tackle the
climate crisis, setting a benchmark for others to drive action at scale. Some
commitment highlights include supply chain emissions, which drive
approximately 50% of healthcare emissions: the Task Force members have
committed to align on a set of common supplier standards and jointly explore
green transportation corridors. The patient care pathway drives approximately
45% of healthcare emissions, and the Task Force has committed to build an
end-to-end care pathway emissions standard to measure emissions across the
care pathway, as well as align and publish product-level lifecycle management
assessment data to increase transparency on emissions. The Task Force has also
committed to leverage digital health solutions to decarbonise clinical trials.
Conference call
A conference call and webcast for investors and analysts will begin today, 10
November 2022, at 11:45 GMT. Details can be accessed via astrazeneca.com
(https://www.astrazeneca.com/) .
Reporting calendar
The Company intends to publish its full year and fourth quarter results on
Thursday 9 February 2022.
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. Unless stated otherwise, the performance shown in this announcement
covers the nine-month period to 30 September 2022 ('the year to date' or 'YTD
2022') compared to the nine-month period to 30 September 2021 (YTD 2021), or
the three-month period to 30 September 2022 ('the quarter' or 'Q3 2022')
compared to the three-month period to 30 September 2021 (Q3 2021).
Core financial measures, EBITDA, Net Debt, CER, 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, legal
settlements and the one off deferred tax credit arising from the internal
reorganisation to integrate Alexion
‒ The tax effects of the adjustments above are excluded from the Core
Tax charge
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 'Net
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 in this
announcement may not agree to totals.
Total Revenue
Table 4: Disease area and medicine performance
YTD 2022 Q3 2022
% Change % Change
Product Sales $m % Total Actual CER $m % Total Actual CER
Oncology 10,885 33 14 20 3,797 35 15 22
- Tagrisso 4,102 12 11 16 1,398 13 12 20
- Imfinzi 2,031 6 14 19 737 7 19 26
- Lynparza 1,949 6 13 19 659 6 12 19
- Calquence 1,469 4 74 77 566 5 60 63
- Enhertu 52 - >5x >5x 23 - >4x >4x
- Orpathys 34 - >3x >3x 11 - 11 16
- Zoladex 717 2 - 6 240 2 (4) 5
- Faslodex 259 1 (21) (14) 81 1 (21) (10)
- Iressa 90 - (39) (37) 27 - (35) (31)
- Arimidex 85 - (20) (16) 24 - (28) (23)
- Casodex 63 - (48) (45) 21 - (46) (40)
- Others 34 - (9) (1) 10 - (18) (10)
BioPharmaceuticals: CVRM(9)( ) 6,907 21 13 18 2,348 21 11 19
- Farxiga 3,204 10 49 58 1,101 10 38 50
- Brilinta 1,013 3 (10) (7) 338 3 (10) (7)
- Lokelma 208 1 71 80 79 1 59 69
- Roxadustat 148 - 2 4 57 1 4 9
- Andexxa(9)( ) 111 - 7 14 41 - 5 17
- Crestor 824 2 (2) 4 277 3 (7) -
- Seloken/Toprol-XL 705 2 (6) (2) 238 2 2 10
- Bydureon 207 1 (29) (28) 66 1 (30) (29)
- Onglyza 205 1 (28) (25) 66 1 (21) (17)
- Others 282 1 (9) (7) 85 1 (11) (8)
BioPharmaceuticals: R&I 4,318 13 (3) - 1,427 13 (4) 1
- Symbicort 1,919 6 (6) (2) 630 6 (7) (1)
- Fasenra 1,015 3 13 17 353 3 10 15
- Breztri 282 1 >2x >2x 103 1 >2x >2x
- Saphnelo 69 - >10x >10x 33 - >10x >10x
- Pulmicort 479 1 (33) (31) 145 1 (33) (31)
- Daliresp 161 - (5) (4) 52 - (4) (3)
- Bevespi 43 - 11 13 14 - 6 8
- Others 350 1 (21) (20) 97 1 (36) (33)
BioPharmaceuticals: V&I 3,607 11 51 59 873 8 (27) (21)
- Vaxzevria 1,713 5 (20) (16) 173 2 (83) (81)
- Evusheld 1,451 4 n/m n/m 537 5 n/m n/m
- Synagis 384 1 >2x >2x 104 1 (15) (1)
- FluMist 59 - (22) (13) 59 1 (19) (10)
Rare Disease(9)( ) 5,236 16 4 10 1,741 16 4 11
- Soliris(9)( ) 2,918 9 (7) (2) 901 8 (13) (6)
- Ultomiris(9)( ) 1,371 4 27 35 518 5 37 47
- Strensiq(9)( ) 687 2 13 15 237 2 17 20
- Koselugo 149 - >2x >2x 48 - 82 81
- Kanuma(9)( ) 111 - 6 11 37 - 1 5
Other Medicines 1,247 4 (4) 4 404 4 17 30
- Nexium 986 3 (1) 8 311 3 20 36
- Others 261 1 (12) (10) 93 1 9 13
Product Sales 32,200 97 29 35 10,590 96 9 16
Collaboration Revenue 944 3 >2x >2x 392 4 >3x >3x
Total Revenue 33,144 100 30 37 10,982 100 11 19
Table 5: Collaboration Revenue
YTD 2022 Q3 2022
% Change % Change
$m % Total Actual CER $m % Total Actual CER
Enhertu: alliance revenue 33 (#_ftn33) 332 35 >2x >2x 159 41 >3x >3x
Tezspire: alliance revenue 42 4 n/m n/m 26 7 n/m n/m
Lynparza: regulatory milestones 250 26 n/m n/m 75 19 n/m n/m
Tralokinumab: sales milestone 110 12 n/m n/m 40 10 n/m n/m
Vaxzevria: royalties 67 7 (19) (22) 6 2 (87) (87)
Other royalty income 54 6 - - 18 5 (4) (3)
Other Collaboration Revenue 89 9 (4) 12 68 17 >10x >10x
Total 944 100 >2x >2x 392 100 >3x >3x
Table 6: Total Revenue by disease area
YTD 2022 Q3 2022
% Change % Change
$m % Total Actual CER $m % Total Actual CER
Oncology 11,493 35 19 24 4,039 37 20 27
BioPharmaceuticals(9) 15,078 45 16 21 4,728 43 (2) 4
- CVRM(9) 6,927 21 13 19 2,351 21 11 18
- R&I 4,478 14 - 4 1,499 14 1 5
- V&I 3,673 11 49 56 878 8 (29) (24)
Rare Disease(9) 5,236 16 4 10 1,741 16 4 11
Other Medicines 1,337 4 (5) 3 474 4 34 50
Total 33,144 100 30 37 10,982 100 11 19
Table 7: Total Revenue by region
YTD 2022 Q3 2022
% Change % Change
$m % Total Actual CER $m % Total Actual CER
Emerging Markets 9,013 27 5 8 2,856 26 (10) (4)
- China 4,597 14 (2) (1) 1,541 14 3 8
- Ex-China 4,415 13 13 20 1,316 12 (21) (15)
US 13,132 40 58 58 4,650 42 34 34
Europe 6,429 19 24 37 2,065 19 8 23
Established RoW 4,570 14 38 55 1,412 13 7 26
Total 33,144 100 30 37 10,982 100 11 19
Table 8: Total Revenue by region - excluding Vaxzevria
YTD 2022 Q3 2022
% Change % Change
$m % Total Actual CER $m % Total Actual CER
Emerging Markets 8,262 25 10 15 2,826 26 13 20
- China 4,551 14 (3) (2) 1,541 14 3 8
- Ex-China 3,711 11 33 44 1,285 12 26 37
US 13,053 39 57 57 4,650 42 34 34
Europe 6,104 18 37 52 2,002 18 14 30
Established RoW 3,945 12 33 50 1,325 12 22 45
Total 31,364 95 35 42 10,803 98 23 31
Oncology
Oncology Total Revenue increased by 19% (24% at CER) in YTD 2022 to $11,493m
and represented 35% of overall Total Revenue (YTD 2021: 38%). This included
Lynparza Collaboration Revenue of $250m (YTD 2021: $nil) and Enhertu
Collaboration Revenue of $335m (YTD 2021: $137m). Product Sales increased by
14% (20% at CER) in YTD 2022 to $10,885m, reflecting new launches and
increased patient access for Tagrisso, Imfinzi, Lynparza and Calquence
partially offset by declines in some older medicines. Oncology Total Revenue
grew 20% (27% at CER) in Q3 benefiting from new launches for Imfinzi,
Calquence and Enhertu and improvement in rates of lung cancer diagnosis and
treatment.
Tagrisso
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 4,102 1,211 1,472 777 642
Actual change 11% 20% 14% 7% (4%)
CER change 16% 22% 14% 19% 10%
Region Drivers and commentary
Worldwide Increased use of Tagrisso in adjuvant and 1st-line setting
Emerging Markets Increased 1st-line use in China and continued growth in other Emerging Markets
Rising demand from increased patient access in China continues to offset the
impact of the March 2021 NRDL price reduction
Q3 2022 growth of 29% (35% at CER) benefited from the comparison to Q3 2021,
which was negatively impacted by inventory phasing and stock compensation
relating to NRDL changes in March 2021
In China, COVID-19 related lockdowns continued to have an adverse impact in
Q3, though at a lower level than Q2
US Increased EGFR 34 (#_ftn34) testing rates
Greater use in 1st-line with longer duration of treatment and increasing
adjuvant penetration, partially offset by lower 2nd-line use
Europe Greater use in 1st-line and adjuvant settings, with longer duration of
treatment, partially offset by lower 2nd-line use
Established RoW Increased use in 1st-line setting and launch progress in adjuvant including
Japan
Q3 Total Revenue decline of 12% (growth of 5% at CER) impacted by a COVID-19
wave in Japan
Imfinzi
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 2,031 224 1,102 402 303
Actual change 14% 6% 20% 16% -
CER change 19% 9% 20% 29% 14%
Region Drivers and commentary
Worldwide Increased use of Imfinzi to treat patients with ES-SCLC 35 (#_ftn35)
Recovery in rates of diagnosis and treatment following the COVID-19 pandemic
Q3 Worldwide Total Revenue growth of 19% (26% at CER)
Emerging Markets Growth in ex-China, offset by an adverse impact in CRT 36 (#_ftn36) rates and
hospital use of infused oncology medicines due to COVID-19 lockdowns in
several major cities in China
US New patient starts across Stage III NSCLC and ES-SCLC
A strong launch in biliary tract cancer after approval by the US FDA in
September based on the TOPAZ-1 Phase III trial
Europe Increased market penetration in ES-SCLC, growth in the number of reimbursed
markets, an ongoing recovery in rates of diagnosis and treatment
Established RoW New reimbursements
Lynparza
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 2,199 358 896 743 202
Actual change 28% 27% 13% 63% 8%
CER change 33% 30% 13% 75% 22%
Product Sales Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 1,949 358 896 493 202
Actual change 13% 27% 13% 8% 8%
CER change 19% 30% 13% 20% 22%
Region Drivers and commentary
Worldwide Lynparza remains the leading medicine in the PARP 37 (#_ftn37) -inhibitor
class globally across four tumour types, as measured by total prescription
volume
Total Revenue includes $250m in regulatory milestones received from MSD and
recognised in Europe, in respect of the approval in the US and EU for the
adjuvant treatment of patients with gBRCAm 38 (#_ftn38) breast cancer, based
on the data from the OlympiA Phase III trial
Q3 Product Sales growth of 12% (19% at CER)
Emerging Markets Increased patient access following admission to China's NRDL as a 1st-line
maintenance treatment for BRCAm 39 (#_ftn39) ovarian cancer patients, with
effect from March 2021; also launches in other markets
US US launch in early breast cancer following US FDA 40 (#_ftn40) approval in
March based on data from the OlympiA Phase III trial
Growth in use in breast, ovarian and prostate cancers
Europe Increasing HRD testing rates and use in 1st-line HRD-positive ovarian cancer,
increased Lynparza uptake in BRCAm mCRPC 41 (#_ftn41) and gBRCAm
HER2-negative advanced breast cancer and the EU launch in gBRCAm early breast
cancer following EMA 42 (#_ftn42) approval in August based on data from the
OlympiA Phase III trial
Established RoW New product launches and high levels of HRD testing in Japan
Enhertu
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 387 51 254 77 4
Actual change >2x >6x >2x >4x >10x
CER change >2x >6x >2x >4x >10x
Region Drivers and commentary
Worldwide Excluding Japan, Enhertu global in-market sales recorded by Daiichi Sankyo
Company Limited (Daiichi Sankyo) and AstraZeneca, amounted to $750m in the
year to date (YTD 2021: $293m)
AstraZeneca's Total Revenue of $387m includes $335m of Collaboration Revenue
from its share of gross profit in territories where Daiichi Sankyo records
product sales and royalties on sales in Japan
Q3 Worldwide Total Revenue growth of >3x
Emerging Markets Strong uptake in early launch markets
US US in-market sales, recorded by Daiichi Sankyo, amounted to $532m in the year
to date (YTD 2021: $253m)
US launches in 2nd-line HER2-positive metastatic breast cancer after US FDA
approval in May based on data from the DESTINY-Breast03 Phase III trial; and
in 3rd-line+ HER2-low metastatic breast cancer after US FDA approval in August
based on the DESTINY-Breast04 Phase III trial
Europe Growth in 3rd-line+ HER2-positive metastatic breast and launch in 2nd-line
HER2-positive metastatic breast cancer after EMA approval in July based on
data from the DESTINY-Breast03 Phase III trial
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
YTD 2022 $m 1,469 28 1,192 200 49
Actual change 74% >2x 58% >2x >4x
CER change 77% >2x 58% >3x >5x
Region
Worldwide Q3 Worldwide Total Revenue growth of 60% (63% at CER)
US Increased new patient market share led to a strong performance, despite
continued COVID‑19 impacts on CLL 43 (#_ftn43) diagnosis rates
Maleate tablet formulation launch in August resulted in uptake by patients
taking proton pump inhibitors and demand due to channel inventory build
Europe Increased market share in new patient starts after launches in the region
Orpathys
Orpathys Total Revenue of $35m in the year to date (YTD 2021: $10m), growth
was driven by the 2021 launch in China, where it is approved for patients with
lung cancer and MET 44 (#_ftn44) gene alterations.
Other Oncology medicines
YTD 2022 % Change
Total Revenue $m Actual CER
Zoladex 738 1% 7% Increased use in ex-China Emerging Markets, offsetting a price cut in Japan
Faslodex 259 (21%) (14%) Generic competition
Iressa 90 (39%) (37%) Continued share loss to next generation TKIs 45 (#_ftn45)
Arimidex 85 (20%) (16%)
Casodex 63 (48%) (45%) Ongoing impact from VBP implementation
Other Oncology 34 (9%) (1%)
BioPharmaceuticals
Including Vaccines & Immune Therapies medicines, BioPharmaceuticals Total
Revenue increased by 16% (21% at CER) in YTD 2022 to $15,078m, representing
45% of overall Total Revenue (YTD 2021: 51%). Growth was driven by strong
Farxiga performance and growth in Evusheld.
Cardiovascular, Renal & Metabolism
CVRM Total Revenue increased by 13% (19% at CER) to $6,927m in YTD 2022,
driven by a strong Farxiga performance, and represented 21% of overall Total
Revenue (YTD 2021: 24%).
Farxiga
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 3,208 1,224 748 955 281
Actual change 49% 40% 48% 64% 48%
CER change 58% 46% 48% 82% 64%
Region
Worldwide Farxiga volume is growing faster than the overall SGLT2 46 (#_ftn46) market
in all major regions
Additional benefit from growth in the overall SGLT2 inhibitor class
Further HF 47 (#_ftn47) and CKD launches and updated treatment guidelines
including from ESC 48 (#_ftn48) and AHA 49 (#_ftn49) /ACC 50 (#_ftn50)
/HFSA 51 (#_ftn51) . HF and CKD indications now launched in >100 markets
Emerging Markets Growth despite generic competition in some markets. Solid growth in ex-China
Emerging Markets, particularly Latin America
In China, Forxiga's NRDL status was renewed in the fourth quarter of 2021.
Benefit from uACR 52 (#_ftn52) and MRF 53 (#_ftn53) screening programs
US Regulatory approval for HEFrEF 54 (#_ftn54) in May 2020, treatment of CKD in
May 2021
Both approvals included patients with and without T2D 55 (#_ftn55)
Farxiga continued to gain in-class brand share, driven by HF and CKD launches
Europe 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
Forxiga continued gaining in-class market share in the period
Established RoW In Japan, AstraZeneca sells to collaborator Ono Pharmaceutical Co., Ltd, which
records in-market sales. Continued volume growth driven by HF and CKD launches
Brilinta
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 1,013 222 538 215 38
Actual change (10%) (13%) (4%) (18%) (20%)
CER change (7%) (11%) (4%) (9%) (16%)
Region
Emerging Markets Adverse impact from Brilinta's inclusion in China's VBP programme
Strong growth in ex-China Emerging Markets
US, Europe Slower market recovery of oral antiplatelet therapies following the pandemic
Lokelma
Lokelma Total Revenue increased 71% (80% at CER) to $208m in YTD 2022, driven
by Lokelma extending its branded market share lead in the US and also
achieving total potassium binder market share leadership in the period.
Continued progress in Europe from recent launches across the region where
Lokelma extended its market share in the period. In China, Lokelma admitted to
the NRDL with effect from 1 January 2022.
Andexxa
On a pro forma basis, Andexxa Total Revenue increased 17% (24% at CER) to
$121m.
Roxadustat
Total Revenue increased 2% (4% at CER) to $151m. Total Revenue also increased
quarter-on-quarter, with roxadustat benefitting from increased volumes in
China following NRDL price cuts.
Other CVRM medicines
YTD 2022 % Change
Total Revenue $m Actual CER
Crestor 825 (2%) 4% Sales growth at CER driven by Emerging Markets, offset by declines in the US
and Europe
Seloken 706 (6%) (2%) Emerging Markets sales impacted by China VBP implementation of Betaloc 56
(#_ftn56) oral in H2 2021. Betaloc ZOK VBP to be implemented in Q4 2022
Onglyza 205 (28%) (25%) Ongoing impact from VBP implementation
Bydureon 207 (29%) (28%) Continued competitive pressures
Other CVRM 282 (9%) (7%)
Respiratory & Immunology
Total Revenue from R&I medicines was stable in YTD 2022 (increased 4% at
CER) at $4,478m and represented 14% of overall Total Revenue (YTD 2021: 18%).
In the third quarter, R&I Total Revenue grew 5% at CER primarily driven by
the performance of recent launch brands, including Fasenra, Tezspire, Breztri
and Saphnelo, and revenue milestones; this growth more than offset the
sustained erosion of Pulmicort revenue following its inclusion in VBP in China
in Q4 2021, and a marginal decline in Symbicort revenue.
Symbicort
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 1,919 476 718 445 280
Actual change (6%) 4% (11%) (11%) (3%)
CER change (2%) 8% (11%) (1%) 3%
Region
Worldwide Symbicort remains the global market leader within stable ICS 57 (#_ftn57)
/LABA 58 (#_ftn58) class
Emerging Markets Growth in Emerging Markets driven primarily by market share growth in China,
Latin America and Asia Area
US Strong market share performance, consolidating leadership in a declining
ICS/LABA market, offset by pricing pressure
Europe Resilient market share in growing ICS/LABA market, offset by pricing pressure
Established RoW Double digit growth in Canada and Australia/New Zealand, driven by market
share gain
Sales in Japan declined due to generic erosion and the annual mandatory price
reduction in April 2022
Fasenra
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 1,015 30 649 229 107
Actual change 13% 99% 17% 9% (10%)
CER change 17% 95% 17% 21% -
Region
Worldwide Fasenra continues to be market leader in severe eosinophilic asthma in major
markets, and leading in the IL-5 class
Emerging Markets Strong volume growth driven by launch acceleration in Brazil and other markets
US Maintained a strong new-to-brand share in the severe uncontrolled asthma
market
Europe Market leader in new-to-brand share of the severe uncontrolled asthma market
Established RoW Maintained market leadership in Japan, partially offset by price erosion and
impact in the dynamic market related to surge in COVID-19 cases
Breztri
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 282 71 164 22 25
Actual change >2x 76% >2x >5x 43%
CER change >2x 78% >2x >6x 66%
Region
Worldwide Breztri continued to gain market share within growing fixed-dose triple class
across major markets
Emerging Markets In China, the FDC triple class continued to penetrate the inhaled maintenance
market whose growth has been impacted by COVID-19
Breztri continued its market share leadership within the fixed-dose triple
class
US Consistent new-to-brand and total market share growth within the fixed-dose
triple class
Europe Sustained growth across markets as new launches continue to progress
Established RoW Strong new-to-brand market share performance in Japan within COPD 59
(#_ftn59) , with the market impacted by access restrictions related to surge
in COVID-19 cases
Saphnelo
Total Revenue of $69m in the year to date (YTD 2021: $1m) was driven by sales
acceleration in the US, where Saphnelo achieved NBRx leadership in the
i.v. 60 (#_ftn60) segment for SLE 61 (#_ftn61) and received a permanent
J-code facilitating reimbursement. Growth was further supported by a strong
launch in Germany and steady growth in Japan.
Tezspire
Tezspire is approved in the US, EU and Japan for the treatment of severe
asthma without biomarker or phenotypic limitation. Total Revenue of $42m in
the year to date (YTD 2021: $nil) was comprised entirely of Collaboration
Revenue, and reflected the strong early launch performance in the US. Amgen
records sales in the US and AstraZeneca records its share of gross profits in
the US as Collaboration Revenue.
Other R&I medicines
YTD 2022 % Change
Total Revenue $m Actual CER
Pulmicort 479 (33%) (31%) Revenue from Emerging Markets decreased 41% to $339m, impacted by VBP
implementation in China and lower rates of elective surgery and limited access
to nebulisation centres due to COVID-19 lockdowns
Daliresp 161 (5%) (4%)
Bevespi 43 11% 13%
Other R&I 469 3% 4% Collaboration Revenue of $118m (YTD 2021: $12m), including $111m of milestones
relating to tralokinumab (YTD 2021: nil)
Product Sales of $350m decreased 21% (20% at CER)
Vaccines & Immune Therapies
Total Revenue from V&I medicines increased to $3,673m (YTD 2021: $2,465m)
and represented 11% of overall Total Revenue (YTD 2021: 10%).
Vaxzevria
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 1,780 751 79 325 625
Actual change (20%) (34%) n/m (56%) 82%
CER change (16%) (35%) n/m (51%) 96%
Region
Worldwide Revenue in the third quarter decreased by 83% (82% at CER) due to the
conclusion of many of the initial Vaxzevria contracts
Emerging Markets $46m of Collaboration Revenue came from a Chinese sub-licensee producing
vaccines for export
Revenue in the third quarter decreased by 95% (96% at CER)
US Purchases by the US government for donation overseas
No revenue recorded in the second and third quarters
Europe Revenue in the third quarter decreased by 62% (56% at CER) vs Q3 2021
Established RoW Sales in Japan, Canada and Australia
Revenue in the third quarter decreased by 63% (59% at CER)
Evusheld
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 1,450 167 850 198 235
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 Evusheld received Emergency Use Authorisation for the prevention of COVID-19
in December 2021
AstraZeneca continued to fulfil the US Government's order for 1.7m units
Emerging Markets Multiple government contracts in Central and Eastern Europe, Latin America and
South East Asia
Europe Approved in the EU for prevention of COVID-19 in March 2022 and treatment in
September 2022
Established RoW Approved in Japan for prevention and treatment of COVID-19 in August 2022
Other V&I medicines
YTD 2022 % Change
Total Revenue $m Actual CER
Synagis 384 >2x >2x Strong RSV season
Ex-US rights reverted to AstraZeneca after 30 June 2021, from AbbVie Inc.
In Q3 2022, Synagis sales decreased by 15% (1% CER)
FluMist 59 (22%) (13%)
Rare Disease
On a pro forma basis, Total Revenue from Rare Disease medicines increased by
4% (10% at CER) in YTD 2022 to $5,236m, representing 16% of overall Total
Revenue.
Performance was driven by the durability of the C5 franchise, Soliris and
Ultomiris, following Ultomiris gMG launch and expansion into new markets, and
continued Soliris NMOSD growth.
Strensiq and Koselugo performances were driven by continued patient demand and
market expansion efforts, respectively.
These tables show pro forma growth rates for each of the medicines acquired
with Alexion, calculated by comparing YTD 2022 revenues with the medicine's
revenues from 1 January 2021 to 30 September 2021.
Soliris
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 2,918 218 1,688 627 385
Actual change(9) (7%) (29%) (3%) (20%) 20%
CER change(9) (2%) (9%) (3%) (10%) 34%
Region
US Performance impacted by successful conversion to Ultomiris in PNH, aHUS and
gMG, partially offset by Soliris growth in NMOSD
Ex-US Growth driven by continued expansion of neurology indications, gMG and NMOSD,
in new markets
Ultomiris
Total Revenue Worldwide Emerging Markets US Europe Established RoW
YTD 2022 $m 1,371 34 771 347 219
Actual change(9) 27% >2x 23% 55% -
CER change(9) 35% >3x 23% 74% 18%
Region
Worldwide Performance driven by gMG launch in the US and expansion into new markets
Quarter-on-quarter variability in revenue growth can be expected due to
Ultomiris every eight week dosing schedule and lower average annual treatment
cost per patient compared to Soliris
US Performance driven by successful conversion from Soliris across PNH, aHUS and
gMG with increased utilisation from complement-naïve patients in gMG
Ex-US Rapid conversion in new launch markets
Other Rare Disease medicines
YTD 2022 % Change
Total Revenue $m Actual CER Commentary
Strensiq(9) 687 13% 15% Performance driven by strong patient demand
Koselugo 149 >2x >2x Growth driven by expansion in new markets and tender market order timing
Kanuma(9) 111 6% 11% Continued demand growth in ex-US markets
Other medicines (outside the main disease areas)
YTD 2022 % Change
Total Revenue $m Actual CER Commentary
Nexium 1,063 (3%) 7% Collaboration Revenue of $78m (YTD 2021: $92m)
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 273 (12%) (10%)
Financial performance
Table 9: Reported Profit and Loss
YTD 2022 YTD 2021 % Change Q3 2022 Q3 2021 % Change
$m $m Actual CER $m $m Actual CER
Total Revenue 33,144 25,406 30 37 10,982 9,866 11 19
- Product Sales 32,200 25,043 29 35 10,590 9,741 9 16
- Collaboration Revenue 944 363 >2x >2x 392 125 >3x >3x
Cost of Sales (9,491) (7,812) 21 28 (2,982) (3,757) (21) (18)
Gross Profit 23,653 17,594 34 40 8,000 6,109 31 41
Gross Margin 70.5% 68.8% +2pp +2pp 71.8% 61.4% +10pp +11pp
Distribution Expense (380) (322) 18 25 (126) (120) 5 13
% Total Revenue 1.1% 1.3% - - 1.1% 1.2% - -
R&D Expense (7,137) (7,152) - 4 (2,458) (3,610) (32) (28)
% Total Revenue 21.5% 28.2% +7pp +7pp 22.4% 36.6% +14pp +14pp
SG&A Expense (13,798) (10,117) 36 41 (4,277) (4,090) 5 9
% Total Revenue 41.6% 39.8% -2pp -1pp 38.9% 41.5% +3pp +3pp
OOI 62 (#_ftn62) & Expense 325 1,345 (76) (75) 106 37 >2x >2x
% Total Revenue 1.0% 5.3% -4pp -4pp 1.0% 0.4% +1pp +1pp
Operating Profit/(Loss) 2,663 1,348 98 >2x 1,245 (1,674) n/m n/m
Operating Margin 8.0% 5.3% +3pp +3pp 11.3% -17.0% +28pp +30pp
Net Finance Expense (936) (922) 1 6 (324) (320) 1 2
Joint Ventures and Associates (4) (55) (93) (91) 1 (7) n/m n/m
Profit/(Loss) before tax 1,723 371 >4x >4x 922 (2,001) n/m n/m
Taxation 668 90 >7x >7x 720 350 >2x >2x
Tax rate -39% -24% -78% -18%
Profit/(Loss) after tax 2,391 461 >5x >5x 1,642 (1,651) n/m n/m
Earnings per share $1.54 $0.33 >4x >4x $1.06 $(1.10) n/m n/m
Table 10: Reconciliation of Reported Profit before tax to EBITDA
YTD 2022 YTD 2021 % Change Q3 2022 Q3 2021 % Change
$m $m Actual CER $m $m Actual CER
Reported Profit/(Loss) before tax 1,723 371 >4x >4x 922 (2,001) n/m n/m
Net Finance Expense 936 922 1 6 324 320 1 2
Joint Ventures and Associates 4 55 (93) (91) (1) 7 n/m n/m
Depreciation, Amortisation and Impairment 4,000 4,338 (8) (4) 1,334 2,788 (52) (49)
EBITDA 6,663 5,686 17 26 2,579 1,114 >2x >2x
EBITDA of $6,663m in the year to date (YTD 2021: $5,686m) has been negatively
impacted by the $3,175m (YTD 2021: $1,044m) unwind of inventory fair value
uplift recognised on the acquisition of Alexion. EBITDA of $2,579m in the
quarter (Q3 2021: $1,114m) has been negatively impacted by the $857m (Q3 2021:
$1,044m) 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, and by a smaller amount in
2023.
Table 11: Reconciliation of Reported to Core financial measures: YTD 2022
YTD 2022 Reported Restructuring Intangible Asset Amortisation & Impairments Acquisition Other Core Core
of Alexion
% Change
$m $m $m $m $m $m Actual CER
Gross Profit 23,653 156 24 3,186 (1) 27,018 43 48
Gross Margin 70.5% 81.0% +7pp +6pp
Distribution Expense (380) 2 - - - (378) 17 24
R&D Expense (7,137) 57 83 23 - (6,974) 25 29
SG&A Expense (13,798) 263 3,060 35 1,197 63 (#_ftn63) (9,243) 20 24
Total Operating Expense (21,315) 322 3,143 58 1,197 (16,595) 22 26
Other Operating Income & Expense 325 (8) - - - 317 (76) (76)
Operating Profit 2,663 470 3,167 3,244 1,196 10,740 63 69
Operating Margin 8.0% 32.4% +6pp +6pp
Net Finance Expense (936) - - 207 (729) 16 21
Taxation 668 (93) (581) (748) (1,078) 64 (#_ftn64) (1,832) 84 90
EPS $1.54 $0.25 $1.67 $1.61 $0.21 $5.28 47 52
Table 12: Reconciliation of Reported to Core financial measures: Q3 2022
Q3 2022 Reported Restructuring Intangible Asset Amortisation & Impairments Acquisition Other Core Core
of Alexion
% Change
$m $m $m $m $m $m Actual CER
Gross Profit 8,000 75 8 866 (1) 8,948 21 30
Gross Margin 71.8% 80.8% +6pp +7pp
Distribution Expense (126) 1 - - - (125) 5 12
R&D Expense (2,458) 19 77 5 - (2,357) 10 16
SG&A Expense (4,277) 65 979 5 68 (3,160) 10 16
Total Operating Expense (6,861) 85 1,056 10 68 (5,642) 10 16
Other Operating Income & Expense 106 1 - - - 107 >2x >3x
Operating Profit 1,245 161 1,064 876 67 3,413 50 63
Operating Margin 11.3% 31.1% +8pp +9pp
Net Finance Expense (324) - - - 70 (254) 16 14
Taxation 720 (32) (194) (202) (871) (579) 31 43
EPS $1.06 $0.08 $0.56 $0.44 ($0.47) $1.67 55 70
Profit and Loss drivers
Gross Profit
‒ The Gross Margin (Reported and Core) in the year to date was
impacted by:
‒ Positive mix effects: the increased contribution from Rare
Disease and Oncology medicines had a positive impact on the Gross Margin
‒ Negative mix effects: sales of Vaxzevria and medicines with
profit-sharing arrangements (primarily Lynparza) had a dilutive impact on the
Gross Margin
‒ Pricing pressure relating to 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 in line with
associated revenues, and in YTD 2022, the impact of the fair value uplift
unwind on Cost of Sales was $3,175m (YTD 2021: $1,044m)
‒ Currency fluctuations had a small positive impact on Gross Margin in
the year to date. Currency fluctuations may have a positive or negative impact
on Gross Margin in future quarters
‒ Variations in Gross Margin performance between periods can be
expected to continue
R&D Expense
‒ Reported and Core R&D Expense was impacted by:
‒ The acquisition of Alexion in July 2021
‒ Recent positive data read outs for several high priority
medicines that ungated late-stage Oncology trials
‒ The advancement of a number of mid-stage clinical development
programmes in BioPharmaceuticals
‒ Investment in platforms, new technology and capabilities to
enhance R&D productivity
‒ The decrease in Reported R&D Expense is primarily due to the
prior year including an impairment charge of $1,172m, recognised in Q3 2021 on
an intangible asset related to the acquisition of Ardea Biosciences, Inc.
SG&A Expense
‒ The increase in Reported and Core SG&A Expense was driven by:
‒ The acquisition of Alexion
‒ Market development activities for recent launches
‒ Reported SG&A Expense was also impacted by amortisation of
intangible assets related to the Alexion acquisition and other acquisitions
and collaborations, and a $775m legal settlement with Chugai
Other Operating Income
‒ Reported Other Operating Income of $325m consisted primarily of
royalties and disposal proceeds on small divestments, including the divestment
of rights to Plendil in the second quarter
‒ In YTD 2021, Reported Other Operating Income of $1,345m included
$776m of divestment gains from AstraZeneca's share of Viela Bio, Inc. and
$309m from the commercial rights to Crestor in over 30 countries in Europe
(excluding UK and Spain)
Net Finance Expense
‒ The increase in Reported and Core Net Finance Expense in the year to
date was driven by financing costs on debt for the Alexion transaction , with
a reduction in the discount unwind on acquisition-related liabilities,
including the Diabetes Alliance which impacted Reported Net Finance Expense
‒ In Q3 2022, the Net Finance Expense was also impacted by rising
interest rates
Taxation
‒ The effective Reported Tax Rate for the nine months to 30 September
2022 was (39%) and the Core tax rate was 18%, and (24%) and 17% respectively
in the nine months to 30 September 2021
‒ The Reported Tax Rate for the nine months included a one-time
favourable net adjustment of $883m to deferred taxes arising from an internal
reorganisation to integrate the Alexion organisation which took place in the
quarter. The legal entity reorganisation did not result in any corporate
income tax payable however did result in an estimated one-off deferred tax
adjustment of $883m at Q3 to reflect the substantively enacted tax effects
which would arise in impacted jurisdictions going forwards. A further $47m
credit movement is included in OCI. This adjustment is based upon full-year
forecast estimates and therefore may change for the full year results. This
adjustment was excluded from the Core tax charge
‒ 2021 Reported and Core Tax Rates were impacted by 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 year to date was $1,335m (YTD 2021:
$1,198m) representing 77% of Reported Profit before tax (YTD 2021: 323%). The
cash tax amount increased due to the increase in profits and the impact of
Non-core charges on the level of Reported Profit before tax and effects of US
rules around deferral of tax relief on R&D costs. The cash tax rate
decreased compared to 2021 due to the impact in YTD 2021 of low Reported
Profit before tax
‒ The Reported Tax rate of (39%) was lower than the Core Tax Rate of
18% primarily due to the impact of the aforementioned internal restructuring.
YTD 2022 Reported and Core Tax rates also benefited from the geographical mix
of profits and favourable adjustments to prior year tax liabilities in a
number of major jurisdictions
‒ On 20 July 2022, the UK Government issued draft legislation in
relation to the new global minimum tax framework, expected to be brought into
effect in the UK from 2024. The UK corporation tax rate continues to be
expected to increase to 25%, effective April 2023. The Company is currently
assessing potential impact of these draft rules upon its financial statements
Table 13: Cash Flow summary
YTD 2022 YTD 2021 Change
$m $m $m
Reported Operating Profit 2,663 1,348 1,315
Depreciation, Amortisation and Impairment 4,000 4,338 (338)
Decrease in Working Capital and Short-term Provisions 3,458 2,063 1,395
Gains on Disposal of Intangible Assets (88) (371) 283
Gains on Disposal of Investments in Associates and Joint Ventures - (776) 776
Fair value movements on contingent consideration arising from business 293 33 260
combinations
Non-Cash and Other Movements (973) (370) (603)
Interest Paid (608) (522) (86)
Taxation Paid (1,335) (1,198) (137)
Net Cash Inflow from Operating Activities 7,410 4,545 2,865
Net Cash Inflow/(Outflow) before Financing Activities 4,699 (5,600) 10,299
Net Cash (Outflow)/Inflow from Financing Activities (6,465) 4,700 (11,165)
The increase in Net Cash Inflow from Operating Activities of $2,865m primarily
reflected an underlying
improvement in business performance, including the contribution from Alexion.
The Reported Operating Profit of $2,663m in the period includes a negative
impact of $3,175m 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 $3,175m) 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 $1,395m, 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 $719m in the year to date (YTD 2021: $768m)
including expenditure relating to Alexion. The Company anticipates stable
Capital Expenditure in FY 2022 relative to FY 2021.
Table 14: Net Debt summary
At 30 At 31 At 30
Sep 2022 Dec 2021 Sep 2021
$m $m $m
Cash and cash equivalents 4,458 6,329 7,067
Other investments 440 69 82
Cash and investments 4,898 6,398 7,149
Overdrafts and short-term borrowings (743) (387) (605)
Lease liabilities (878) (987) (962)
Current instalments of loans (4,665) (1,273) (2,139)
Non-current instalments of loans (23,013) (28,134) (28,206)
Interest-bearing loans and borrowings (Gross Debt) (29,299) (30,781) (31,912)
Net derivatives (141) 61 90
Net Debt (24,542) (24,322) (24,673)
Net Debt increased by $220m in the year to date to $24,542m. 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 65 (#_ftn65) 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 15: Obligor group summarised Statement of comprehensive income
YTD 2022 YTD 2021
$m $m
Total Revenue - -
Gross Profit - -
Operating loss (3) (131)
Loss for the period (404) (553)
Transactions with subsidiaries that are not issuers or guarantors 502 5,731
Table 16: Obligor group summarised Statement of financial position
At 30 Sep 2022 At 30 Sep 2021
$m $m
Current assets 5 12
Non-current assets - -
Current liabilities (3,067) (2,347)
Non-current liabilities (22,556) (25,721)
Amounts due from subsidiaries that are not issuers or guarantors 7,349 12,137
Amounts due to subsidiaries that are not issuers or guarantors (301) (299)
Foreign exchange
The Company's transactional currency exposures on working-capital balances,
which typically extend for up to three months, are hedged where practicable
using forward foreign-exchange contracts against the individual companies'
reporting currency. Foreign-exchange gains and losses on forward contracts for
transactional hedging are taken to profit or loss. In addition, the Company's
external dividend payments, paid principally in pounds sterling and Swedish
krona, are fully hedged from announcement to payment date.
Table 17: Currency sensitivities
The Company provides the following currency-sensitivity information:
Average spot Annual impact of 5% strengthening in
FY average rate vs USD ($m) (( 66 (#_ftn66) ))
rates vs USD Spot rate vs USD
Currency Primary Relevance FY YTD Change 31 Oct 2022 Change 69 (#_ftn69) Total Revenue Core Operating Profit
2021 67 (#_ftn67)
2022 68 (#_ftn68)
(%) (%)
CNY Total Revenue 6.43 6.62 (3) 7.31 (12) 277 158
EUR Total Revenue 0.85 0.94 (10) 1.01 (16) 317 160
JPY Total Revenue 109.83 128.34 (14) 148.02 (26) 229 158
Other(( 70 (#_ftn70) )) 420 196
GBP Operating Expense 0.73 0.80 (9) 0.86 (16) 61 (93)
SEK Operating Expense 8.58 9.92 (13) 10.98 (22) 6 (82)
Sustainability
Since the last quarterly report, AstraZeneca:
Access to healthcare
‒ CEO Pascal Soriot spoke at the UN General Assembly (UNGA) alongside
heads of state and global leaders, including UN Secretary General António
Guterres and World Health Organization (WHO) Director-General Dr Tedros, on
"Ending the COVID-19 Pandemic through Equitable Access to Vaccines, Tests and
Treatments"
‒ Progressed, with the Partnership for Health System Sustainability
and Resilience (PHSSR), research in 13 Phase 2 countries, with key findings to
be presented at the Global PHSSR Summit on 22-23 November. PHSSR launch
events were held in Saudi Arabia and Brazil. Vietnam signed a
three-year MoU with the Ministry of Health,
including implementation projects furthering PHSSR recommendations
‒ Expanded the Healthy Heart Africa (HHA) programme into Nigeria in
collaboration with the Nigeria Ministry of Health and the National Primary
Healthcare Development Agency, and its implementing partner PSI. HHA also
expanded into Zanzibar in collaboration with the Zanzibar Ministry of Health
and its implementing partner HIPZ. Over 29 million blood pressure screenings
have been conducted since launch in 2015
‒ Supported the largest delegation at the One Young World Summit in
Manchester, with over 80 Young Health Programme (YHP) scholars and young
AstraZeneca employees attending, together with senior executives who also
hosted a site visit and workshops at the AstraZeneca Macclesfield site. The
Company also announced a US $50,000 Lead2030 grant with One Young World, to
support youth-led non-profits tackling air pollution for healthy people and a
healthy planet
Environmental protection
‒ AstraZeneca attended COP27, where through the Sustainable Markets
Initiative Health Systems Task Force made significant commitments to tackle
the climate crisis, setting a benchmark for others to drive action at scale.
This is the first time the global health sector has taken collective action to
decarbonise, across our supply chains, patient care pathways, and clinical
trials.
‒ Participated in the launch of the Sustainable Markets Initiative
China Council, endorsed by President Xi Jinping and HM King Charles III, in
his former role as HRH Prince of Wales.
‒ Attended the inaugural meeting of the SMI China Council at the CEO
and Senior Executive Team level, which provides an important forum for
cross-sector collaboration on sustainability. The Company was the only
healthcare company invited to attend, offering the opportunity for a
leadership role in accelerating action on climate change and supporting
sustainability goals for a healthy society and planet
‒ Engaged at the World Economic Forum Sustainable Development Impact
Meetings in New York during Climate Week, driving thought leadership on a
range of topics including the interconnection of health and climate,
accelerating the delivery of net-zero health systems, the circular economy and
health equity. The Company's integrated approach to sustainability also
included engagements on inclusion and diversity and health systems resilience
‒ Marked the fifth anniversary of Climate Group's global electric
transport initiative, EV100, by participating in a Climate Week panel event on
"Steering the global market towards EV100," sharing the experience of working
towards its goal of a fully electric vehicle fleet by end of 2025 as a key
part of the Ambition Zero Carbon programme
‒ Participated in a World Water Week event in Stockholm, Sweden, to
share its water stewardship strategy and how it is improving circularity at
its sites to reduce reliance on natural resources and improve water quality,
increasing water efficiency at a local level and building climate resilience
‒ Spoke at a Reuters panel discussion "Drive environmental
sustainability across biopharma to create meaningful system-wide change" on
the connection between climate and health, and the industry's role in
accelerating the delivery of net-zero health systems
‒ Published a concept letter in collaboration with regulators,
academics, and industry as part of PREMIER, a European Innovative Health
Initiative project led by the Company to find solutions to managing
pharmaceutical pollution. The paper discusses how greener design could help
minimise the impact on the environment of active pharmaceutical ingredients
excreted from patients
‒ Received the prestigious Indiana Department of Environmental
Management Governor's Award for Environmental Excellence in the category of
'Five-Year Continuous Improvement' for its manufacturing site in Mount Vernon,
Indiana
Ethics and transparency
‒ Marked International Day of the Girl with its #GirlsBelongHere2022
initiative in collaboration with Plan International, welcoming more than 350
young women across 35 countries to step into leadership positions, join
boardroom conversations and participate in roundtables and masterclasses. All
of the Senior Executive Team participated, including country and regional
leadership teams. Regions and functions also drove their own initiatives
‒ Furthered its commitment to gender and health equity through YHP
awarding 80% of "Step Up" grants totalling $160,000 to women-led non-profit
organisations working to improve the health of young people in their
communities
‒ Launched a #ScienceCan sustainability campaign to shine a spotlight
on the Company's work to drive sustainability across its interconnected
strategic priorities through pioneering science. The campaign outlines the
efforts to build a sustainable future for people, society, and the planet. All
employees are being asked to crowdsource ideas in teams and identify ways to
support the delivery of the Company's sustainability goals and identify
objectives for 2023, to effect change from the grassroots level
‒ Celebrated its annual Power of Diversity day with the launch of a
refreshed Global Inclusion and diversity strategy setting out priorities
across three focus areas - Inclusion, Diversity and External Impact
‒ Marked Global Ethics Day with the launch of its annual Code of
Ethics training for all employees, and with the launch of its Supplier
Diversity Programme in Sweden, progressing the target to launch supplier
diversity programmes in 10 countries by 2025 to accelerate inclusion and
growth of local small and diverse businesses
Research and development
This section covers R&D events and milestones that have occurred since the
prior results announcement on 29 July 2022, up to and including events
announced on 9 November 2022.
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
AstraZeneca presented new data across its diverse portfolio of cancer
medicines at two major medical congresses during the quarter: the IASLC 2022
World Conference on Lung Cancer (WCLC) in August, and the European Society for
Medical Oncology (ESMO) in September. At ESMO, 75 abstracts featured 15
approved and potential new medicines from AstraZeneca across 13 different
tumour types.
Significant new trials in Oncology initiated during the period included
TROPION-Lung07 a Phase III trial of datopotamab deruxtecan in 1st-line
PDL1 71 (#_ftn71) -low NSCLC patients with PD-L1 TPS 72 (#_ftn72) <50%
and LATIFY, a Phase III trial of ceralasertib in combination with Imfinzi in
NSCLC patients whose disease has progressed on or after prior anti-PD-L1
therapy and platinum-based chemotherapy.
Tagrisso
At WCLC in August, preliminary results from the SAVANNAH Phase II trial showed
that Tagrisso plus Orpathys demonstrated an ORR 73 (#_ftn73) of 49% (95%
CI 74 (#_ftn74) 39-59%) in patients with EGFRm NSCLC with high levels of MET
overexpression and/or amplification, defined as IHC90+ 75 (#_ftn75) and/or
FISH10+ 76 (#_ftn76) , whose disease progressed on treatment with Tagrisso.
This combination is being further evaluated in the SAFFRON Phase III trial.
During the period, Tagrisso was approved in Japan for the adjuvant treatment
of patients with EGFRm NSCLC after surgery based on the results from the
global ADAURA Phase III trial.
Updated results from follow-up of the ADAURA Phase III trial presented at ESMO
in September demonstrated a sustained, clinically meaningful improvement in
disease free survival compared to placebo in the adjuvant treatment of
patients with early-stage (IB, II and IIIA) EGFRm NSCLC after complete tumour
resection, with nearly three in four patients treated with adjuvant Tagrisso
alive and disease-free at four years.
Imfinzi and Imjudo
During the period, Imfinzi was approved in the US for the treatment of
patients with locally advanced or metastatic biliary tract cancer, in
combination with chemotherapy, based on the results from the TOPAZ-1 Phase III
trial. In October, Imfinzi in combination with a single priming dose of Imjudo
(tremelimumab) was approved in the US for the 1st-line treatment of patients
with unresectable HCC based on the results from the HIMALAYA Phase III trial.
At ESMO, updated TOPAZ-1 results for Imfinzi plus chemotherapy (gemcitabine
plus cisplatin) in biliary tract cancer showed enhanced clinical efficacy
after an additional 6.5 months of follow-up, demonstrating a 24% reduction in
the risk of death versus chemotherapy alone (based on a hazard ratio of 0.76;
95% CI, 0.64-0.91). Updated median OS 77 (#_ftn77) was 12.9 months versus
11.3 with chemotherapy. More than two times as many patients were estimated to
be alive at two years versus chemotherapy alone (23.6% versus 11.5%).
Lynparza
In August, Lynparza was approved in the European Union for the adjuvant
treatment of patients with gBRCAm high-risk early breast cancer and in Japan
for BRCAm patients in the same setting based on the results from the OlympiA
Phase III trial.
During the period, the Company and MSD received US regulatory submission
acceptance with Priority Review for Lynparza in combination with abiraterone
and prednisone or prednisolone for the treatment of adult patients with mCRPC
based on the PROpel Phase III trial.
At ESMO, AstraZeneca presented positive long-term follow-up results from the
PAOLA-1 Phase III trial in the pre-specified descriptive analysis of the
HRD-positive subgroup, and from the SOLO-1 Phase III trial in patients with
BRCA mutations of Lynparza with or without bevacizumab. Both trials showed
clinically meaningful improvements in OS. Further results showed PFS 78
(#_ftn78) in combination with bevacizumab for HRD-positive patients, versus
active comparator, bevacizumab, and as monotherapy for patients with BRCA
mutations, versus placebo, respectively. Five-year follow-up of the PAOLA-1
Phase III trial demonstrated that 65% of HRD-positive patients treated with
Lynparza plus bevacizumab were alive at five years versus 48.4% treated with
bevacizumab and placebo. Data from the SOLO-1 Phase III trial demonstrated 67%
of advanced ovarian cancer patients with BRCA mutations treated with Lynparza
were alive at seven years versus 47% on placebo.
In September, Lynparza was approved in China for the maintenance treatment of
HRD-positive patients with advanced ovarian cancer who are in complete or
partial response to 1st-line platinum-based chemotherapy in combination with
bevacizumab, based on the PAOLA-1 Phase III trial.
During the period, AstraZeneca and MSD announced the voluntary withdrawal of
the Lynparza indication for patients with gBRCAm advanced ovarian cancer who
have been treated with three or more lines of chemotherapy. The decision to
withdraw was made in consultation with the US FDA and based on a recent
subgroup analysis that indicated a potential detrimental effect on OS for
Lynparza compared to the chemotherapy control arm in the subgroup of patients
who had received three or more lines of chemotherapy.
Calquence
In August, AstraZeneca's new maleate tablet formulation of Calquence was
approved in the US for all current indications, including adult patients with
CLL, SLL 79 (#_ftn79) and for patients with relapsed or refractory MCL 80
(#_ftn80) , under accelerated approval based on results from the ELEVATE-PLUS
trials. The tablet can be taken with gastric acid-reducing agents, including
proton pump inhibitors, antacids and H2-receptor antagonists.
Enhertu
In August, AstraZeneca and Daiichi Sankyo's Enhertu was approved in the US for
the treatment of patients with unresectable or metastatic HER2-low (IHC 1+ or
IHC 2+/ISH-) breast cancer who have received a prior chemotherapy in the
metastatic setting or developed disease recurrence during or within six months
of completing adjuvant chemotherapy. The approval by the US FDA was based on
positive results from the DESTINY-Breast04 Phase III trial.
During the period, Enhertu was also approved in the US for the treatment of
adult patients with unresectable or metastatic NSCLC whose tumours have
activating HER2 mutations and who have received a prior systemic therapy. The
accelerated approval by the US FDA was based on the results of the
DESTINY-Lung02 Phase II trial.
In August, positive high-level results from the DESTINY-Breast02 Phase III
trial of Enhertu versus physician's choice of treatment showed the trial met
the primary endpoint, demonstrating a statistically significant and clinically
meaningful improvement in PFS in patients with HER2-positive unresectable
and/or metastatic breast cancer previously treated with trastuzumab emtansine.
The trial also met the key secondary endpoint of improved OS.
Datopotamab deruxtecan (Dato-DXd)
At WCLC in August, initial results from the TROPION-Lung02 Phase Ib trial
demonstrated promising clinical activity and a tolerable safety profile for
Dato-DXd in combination with pembrolizumab with or without platinum
chemotherapy in patients with previously untreated or pre-treated, advanced or
metastatic NSCLC.
The data showed an ORR in the overall population of 37% (median follow-up of
6.5 months) in patients treated with Dato-DXd and pembrolizumab (doublet
therapy) and an ORR of 41% (median follow-up of 4.4 months) in patients
receiving Dato-DXd, pembrolizumab and platinum chemotherapy (triplet therapy).
A DCR 81 (#_ftn81) of 84% was seen with both the doublet and triplet
combination therapy in the overall population that comprised both 1st-line and
2nd-line settings.
In previously untreated patients, ORRs of 62% (eight of the 13 patients
receiving doublet therapy) and 50% (10 of 20 patients receiving triplet
therapy) were observed. Eight partial responses were seen in patients
receiving doublet therapy and 10 partial responses (three pending
confirmation) were seen in patients receiving triplet therapy. A DCR of 100%
was observed with doublet therapy and a DCR of 90% was observed with triplet
therapy.
Camizestrant
In October, positive high-level results from the SERENA-2 Phase II trial
showed that AstraZeneca's next-generation oral selective estrogen receptor
degrader camizestrant met the primary endpoint of demonstrating a
statistically significant and clinically meaningful PFS benefit at both 75mg
and 150mg dose levels versus Faslodex (fulvestrant) 500mg in post-menopausal
patients with estrogen receptor-positive locally advanced or metastatic breast
cancer, previously treated with endocrine therapy.
Capivasertib
In October, positive high-level results from the CAPItello-291 Phase III trial
showed that AstraZeneca's AKT 82 (#_ftn82) inhibitor capivasertib in
combination with Faslodex (fulvestrant) demonstrated a statistically
significant and clinically meaningful improvement in PFS versus placebo plus
Faslodex in patients with HR-positive, HER2-low or HER2-negative locally
advanced or metastatic breast cancer, following recurrence or progression on
or after endocrine therapy (with or without a CDK4/6 83 (#_ftn83) inhibitor).
Monalizumab
During the quarter, AstraZeneca informed Innate Pharma SA that the INTERLINK-1
Phase III trial will be discontinued, as a result of the trial not meeting a
pre-defined threshold for efficacy at a planned futility interim analysis,
with the decision being recommended by an Independent Data Monitoring
Committee. INTERLINK-1 evaluated monalizumab in combination with cetuximab
versus cetuximab in patients with recurrent or metastatic squamous cell
carcinoma of the head and neck who have been previously treated with
platinum-based chemotherapy and PD-L1 inhibitors.
BioPharmaceuticals - CVRM
Farxiga
Full data from the DELIVER Phase III trial was presented at the European
Society of Cardiology Congress in August 2022. In the trial, which evaluated
Farxiga in patients with heart failure with preserved ejection fraction,
Farxiga reduced the composite outcome of cardiovascular death or worsening of
heart failure by 18% with all individual components contributing to the
superiority of the primary endpoint. The findings were consistent across key
subgroups examined and extend the benefits of Farxiga to the full spectrum of
patients with heart failure irrespective of left ventricular ejection
fraction status. The trial also showed a symptom benefit in patient-reported
outcomes measured by the Kansas City Cardiomyopathy Questionnaire total
symptom score. In a separate pre-specified pooled analysis from the Phase III
DAPA-HF and DELIVER trials, Farxiga demonstrated reduction in cardiovascular
death by 14% and reduction in death from any cause by 10% in patients with
heart failure irrespective of ejection fraction.
In September 2022, Forxiga was approved for the treatment of chronic kidney
disease in China based on the data from the DAPA-CKD trial.
Eplontersen
In the period, AstraZeneca and Ionis Pharmaceuticals, Inc. presented data from
the NEURO-TTransform Phase III trial in patients with hereditary
transthyretin-mediated amyloid polyneuropathy (ATTRv-PN) at the International
Symposium on Amyloidosis. In the trial, eplontersen demonstrated a significant
and clinically meaningful change from baseline for co-primary and secondary
endpoints at 35 weeks compared to external placebo group. On the co-primary
endpoint of serum transthyretin concentration from baseline, eplontersen
showed an 81.2% reduction.
BioPharmaceuticals - R&I
AstraZeneca presented new data across the R&I portfolio at the European
Respiratory Society (ERS) International Congress 2022, with a total of 78
accepted abstracts, including 14 late breakers and 21 oral presentations.
Tezspire
In September, Tezspire was approved in the EU as an add-on maintenance
treatment in patients 12 years and older with severe asthma who are
inadequately controlled with high dose inhaled corticosteroids plus another
medicinal product. Also in September, Tezspire was approved in Japan for the
treatment of bronchial asthma in patients with severe or refractory disease in
whom asthma symptoms cannot be controlled with mid- or high-dose inhaled
corticosteroids and other long-term maintenance therapies.
Results from the DESTINATION Phase III extension trial were presented at ERS
2022. Tezspire demonstrated an overall long-term safety and efficacy profile
consistent with the PATHWAY Phase II and NAVIGATOR Phase III trials, sustained
over 104 weeks in a broad population of severe asthma patients regardless of
biomarker status.
Additional analyses of the CASCADE Phase II and NAVIGATOR Phase III trials
were also presented at the ERS International Congress 2022. The CASCADE Phase
II mechanistic trial showed Tezspire as the first biologic to reduce mucus
plugging compared to placebo. Reduction in mucus score with Tezspire was
correlated with improvements in lung function. Mucus plugging as a clinical
feature may predict the risk of future exacerbations and lung function decline
in severe asthma.
Fasenra
During the period, AstraZeneca discontinued the Phase III MAHALE trial for the
treatment of non-cystic fibrosis bronchiectasis, due to strategic portfolio
prioritisation; this discontinuation was not related to any safety or efficacy
findings.
In October 2022, AstraZeneca disclosed results from the MESSINA Phase III
trial, evaluating Fasenra for the treatment of eosinophilic esophagitis. In
the trial, Fasenra did not meet one of the two dual-primary endpoints,
demonstrating a statistically significant improvement in histological disease
remission but not in dysphagia symptoms compared to placebo. No new safety
concerns were identified. The company will continue to analyse the complete
data set and results will be shared at an upcoming medical meeting.
Tozorakimab
Data from the ACCORD-2 Phase II trial examined tozorakimab, in patients
hospitalised with COVID-19. Results showed that patients receiving tozorakimab
on top of standard of care had a 32 percent relative risk reduction in
respiratory failure and death, this increased to 57% in IL-33 high patients
(IL-33 high was defined as a baseline IL-33 level of >30.15 U/ml). This
data suggests tozorakimab may be a novel therapy for patients with acute
respiratory failure.
BioPharmaceuticals - V&I
Beyfortus (nirsevimab)
In November 2022, Beyfortus was approved in the EU for the prevention of RSV
lower respiratory tract disease in newborns and infants during their first RSV
season. The European Commission is the first regulatory body to grant approval
to Beyfortus. The approval was based on results from the Beyfortus clinical
development programme, including the MELODY Phase III, MEDLEY Phase II/III and
Phase IIb trials.
Evusheld
In August 2022, Evusheld was granted Special Approval for Emergency in Japan
for adults and adolescents for both prevention (pre-exposure prophylaxis) and
treatment of symptomatic disease caused by SARS-CoV-2 infection. In
prevention, Evusheld is approved for use in those whom SARS-CoV-2 vaccination
is not recommended and who may have an inadequate response to a COVID-19
vaccine due to immunodeficiencies. Recipients of Evusheld for prevention
should not be currently infected with or have had recent known exposure to a
person infected with SARS-CoV-2. In treatment, Evusheld is approved for those
with risk factors for severe SARS-CoV-2 infection who do not require
supplemental oxygen. The decision marked the first global marketing approval
for Evusheld as a treatment for COVID-19.
In September 2022, Evusheld was approved in the EU for the treatment of adults
and adolescents with COVID-19 who do not require supplemental oxygen and who
are at increased risk of progressing to severe COVID-19. Both the Japan and EU
treatment approvals were based on results from the TACKLE Phase III treatment
trial.
In October 2022, the FDA updated the authorised Fact Sheets for Evusheld to
inform health care providers and individuals that Evusheld may not be
effective at preventing COVID-19 caused by SARSCoV-2 viral variants that
Evusheld does not neutralise.
Vaxzevria
In October 2022, Vaxzevria had its conditional marketing authorisation in the
EU converted into a standard marketing authorisation by the EMA. The standard
marketing authorisation covers the use of Vaxzevria in both a primary
vaccination series, and as a third dose booster.
As the primary vaccination needs of the US are being met already, AstraZeneca
has decided that it will not submit a Biologics Licence Application for
Vaxzevria in the US. The Company will continue to focus its efforts on
ensuring availability of Vaxzevria elsewhere around the world, including
submissions for its use as a booster.
Rare Disease
Soliris
During the period, AstraZeneca received results from the GBS-301 Phase III
trial, conducted in Japan, evaluating Soliris on top of standard-of-care
IVIg 84 (#_ftn84) as a treatment for Guillain-Barré Syndrome. Soliris, on
top of IVIg, did not achieve statistical significance on the primary endpoint
of time to first reaching a Hughes FG score ≤ 1.
During the period, Soliris received full approval in China for the treatment
of PNH and aHUS.
Ultomiris
In August 2022, Ultomiris was approved in Japan for the treatment of adult
patients with gMG who are anti-acetylcholine receptor antibody-positive and
whose symptoms are difficult to control with high-dose intravenous
immunoglobulin therapy or plasmapheresis.
In September 2022, Ultomiris was approved in Europe as an add-on to standard
therapy for the treatment of adult patients with gMG who are
anti-acetylcholine receptor antibody-positive.
Approvals by the Japanese Ministry of Health, Labour and Welfare and the
European Commission, were based on positive results from the CHAMPION-MG Phase
III trial which showed that 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.
During the period, AstraZeneca discontinued the Phase III trial for Ultomiris
in complement-mediated thrombotic microangiopathy, due to strategic portfolio
prioritisation. This discontinuation was not related to any safety or efficacy
findings.
In October 2022, AstraZeneca presented new data showing significant advances
for the treatment of anti-aquaporin-4 antibody-positive NMOSD at the European
Committee for Treatment and Research in Multiple Sclerosis Congress based on
results from the Ultomiris CHAMPION-NMOSD Phase III trial. These new data and
insights underscored the critical role of C5 inhibition in treating AQP4
antibody-positive NMOSD which, when treated with Ultomiris, the first and only
long-acting C5 inhibitor, demonstrated zero relapses with a median treatment
duration of 73 weeks.
Koselugo
In September, Koselugo was approved in Japan for paediatric patients with
NF1-PN.
Danicopan (ALXN2040)
During the period, the Company announced that danicopan, an add-on to
Ultomiris or Soliris, met the primary endpoint in Phase III ALPHA trial for
patients with paroxysmal nocturnal haemoglobinuria who experience clinically
significant extravascular haemolysis. Interim results demonstrated
statistically significant improvement compared to placebo in haemoglobin
levels from baseline to week 12. AstraZeneca will present these data at a
forthcoming medical meeting and intends to proceed with regulatory submissions
in the coming months.
Interim financial statements
Table 18: Condensed consolidated statement of comprehensive income: YTD 2022
For the nine months ended 30 September 2022 2021
$m $m
Total Revenue 33,144 25,406
Product Sales 32,200 25,043
Collaboration Revenue 944 363
Cost of Sales (9,491) (7,812)
Gross profit 23,653 17,594
Distribution expense (380) (322)
Research and development expense (7,137) (7,152)
Selling, general and administrative expense (13,798) (10,117)
Other operating income and expense 325 1,345
Operating profit 2,663 1,348
Finance income 50 42
Finance expense (986) (964)
Share of after tax losses in associates and joint ventures (4) (55)
Profit before tax 1,723 371
Taxation 668 90
Profit for the period 2,391 461
Other comprehensive (loss)/income
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit pension liability 1,283 592
Net (losses)/gains on equity investments measured at fair value through other (21) 144
comprehensive income
Fair value movements related to own credit risk on bonds designated as fair 1 4
value through profit or loss
Tax on items that will not be reclassified to profit or loss (291) 71
972 811
Items that may be reclassified subsequently to profit or loss
Foreign exchange arising on consolidation (2,493) (368)
Foreign exchange arising on designated borrowings in net investment hedges (321) (275)
Fair value movements on cash flow hedges (214) (103)
Fair value movements on cash flow hedges transferred to profit or loss 250 137
Fair value movements on derivatives designated in net investment hedges 33 22
Costs of hedging (11) (6)
Tax on items that may be reclassified subsequently to profit or loss 95 37
(2,661) (556)
Other comprehensive (loss)/income, net of tax (1,689) 255
Total comprehensive income for the period 702 716
Profit attributable to:
Owners of the Parent 2,387 459
Non-controlling interests 4 2
2,391 461
Total comprehensive income attributable to:
Owners of the Parent 701 714
Non-controlling interests 1 2
702 716
Basic earnings per $0.25 Ordinary Share $1.54 $0.33
Diluted earnings per $0.25 Ordinary Share $1.53 $0.33
Weighted average number of Ordinary Shares in issue (m) 1,548 1,374
Diluted weighted average number of Ordinary Shares in issue (m) 1,560 1,382
Table 19: Condensed consolidated statement of comprehensive income: Q3 2022
For the quarter ended 30 September 2022 2021
$m $m
Total Revenue 10,982 9,866
Product Sales 10,590 9,741
Collaboration Revenue 392 125
Cost of Sales (2,982) (3,757)
Gross profit 8,000 6,109
Distribution expense (126) (120)
Research and development expense (2,458) (3,610)
Selling, general and administrative expense (4,277) (4,090)
Other operating income and expense 106 37
Operating profit/(loss) 1,245 (1,674)
Finance income 15 15
Finance expense (339) (335)
Share of after tax profits/(losses) in associates and joint ventures 1 (7)
Profit/(Loss) before tax 922 (2,001)
Taxation 720 350
Profit/(Loss) for the period 1,642 (1,651)
Other comprehensive loss
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit pension liability 252 (100)
Net (losses)/gains on equity investments measured at fair value through other (9) 171
comprehensive income
Fair value movements related to own credit risk on bonds designated as fair (1) 2
value through profit or loss
Tax on items that will not be reclassified to profit or loss (16) 19
226 92
Items that may be reclassified subsequently to profit or loss
Foreign exchange arising on consolidation (1,167) (427)
Foreign exchange arising on designated borrowings in net investment hedges (126) (45)
Fair value movements on cash flow hedges (76) (44)
Fair value movements on cash flow hedges transferred to profit or loss 119 64
Fair value movements on derivatives designated in net investment hedges (1) 15
Costs of hedging 2 (4)
Tax on items that may be reclassified subsequently to profit or loss 49 19
(1,200) (422)
Other comprehensive loss, net of tax (974) (330)
Total comprehensive income/(loss) for the period 668 (1,981)
Profit/(Loss) attributable to:
Owners of the Parent 1,640 (1,652)
Non-controlling interests 2 1
1,642 (1,651)
Total comprehensive income/(loss) attributable to:
Owners of the Parent 667 (1,982)
Non-controlling interests 1 1
668 (1,981)
Basic earnings per $0.25 Ordinary Share $1.06 $(1.10)
Diluted earnings per $0.25 Ordinary Share $1.05 $(1.10)
Weighted average number of Ordinary Shares in issue (m) 1,548 1,496
Diluted weighted average number of Ordinary Shares in issue (m) 1,559 1,496
Table 20: Condensed consolidated statement of financial position
At 30 Sep 2022 At 31 Dec 2021 At 30 Sep 2021
$m $m $m
Assets
Non-current assets
Property, plant and equipment 8,352 9,183 9,214
Right-of-use assets 875 988 948
Goodwill 19,707 19,997 20,081
Intangible assets 39,585 42,387 44,104
Investments in associates and joint ventures 53 69 39
Other investments 1,049 1,168 1,546
Derivative financial instruments 112 102 90
Other receivables 792 895 811
Deferred tax assets 3,436 4,330 3,697
73,961 79,119 80,530
Current assets
Inventories 5,078 8,983 10,528
Trade and other receivables 9,336 9,644 8,258
Other investments 440 69 82
Derivative financial instruments 105 83 60
Intangible assets 82 105 100
Income tax receivable 725 663 596
Cash and cash equivalents 4,458 6,329 7,067
Assets held for sale - 368 -
20,224 26,244 26,691
Total assets 94,185 105,363 107,221
Liabilities
Current liabilities
Interest-bearing loans and borrowings (5,408) (1,660) (2,744)
Lease liabilities (210) (233) (229)
Trade and other payables (17,694) (18,938) (18,663)
Derivative financial instruments (68) (79) (54)
Provisions (377) (768) (972)
Income tax payable (1,093) (916) (987)
(24,850) (22,594) (23,649)
Non-current liabilities
Interest-bearing loans and borrowings (23,013) (28,134) (28,206)
Lease liabilities (668) (754) (733)
Derivative financial instruments (290) (45) (6)
Deferred tax liabilities (3,479) (6,206) (6,400)
Retirement benefit obligations (919) (2,454) (2,449)
Provisions (930) (956) (726)
Other payables (4,882) (4,933) (5,140)
(34,181) (43,482) (43,660)
Total liabilities (59,031) (66,076) (67,309)
Net assets 35,154 39,287 39,912
Equity
Capital and reserves attributable to equity holders of the Parent
Share capital 387 387 387
Share premium account 35,137 35,126 35,118
Other reserves 2,081 2,045 2,039
Retained earnings (2,471) 1,710 2,200
35,134 39,268 39,744
Non-controlling interests 20 19 168
Total equity 35,154 39,287 39,912
Table 21: 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 - - - 459 459 2 461
Other comprehensive income - - - 255 255 - 255
Transfer to other reserves - - 15 (15) - - -
Transactions with owners:
Dividends - - - (3,884) (3,884) - (3,884)
Issue of Ordinary Shares 59 27,147 - - 27,206 - 27,206
Changes in non-controlling interest - - - - - 150 150
Share-based payments charge for the period - - - 384 384 - 384
Settlement of share plan awards - - - (811) (811) - (811)
Issue of replacement share awards upon acquisition - - - 513 513 - 513
Net movement 59 27,147 15 (3,099) 24,122 152 24,274
At 30 Sep 2021 387 35,118 2,039 2,200 39,744 168 39,912
At 1 Jan 2022 387 35,126 2,045 1,710 39,268 19 39,287
Profit for the period - - - 2,387 2,387 4 2,391
Other comprehensive loss - - - (1,686) (1,686) (3) (1,689)
Transfer to other reserves - - 36 (36) - - -
Transactions with owners:
Dividends - - - (4,486) (4,486) - (4,486)
Issue of Ordinary Shares - 11 - - 11 - 11
Share-based payments charge for the period - - - 471 471 - 471
Settlement of share plan awards - - - (831) (831) - (831)
Net movement - 11 36 (4,181) (4,134) 1 (4,133)
At 30 Sep 2022 387 35,137 2,081 (2,471) 35,134 20 35,154
Table 22: Condensed consolidated statement of cash flows
For the nine months ended 30 September 2022 2021
$m $m
Cash flows from operating activities
Profit before tax 1,723 371
Finance income and expense 936 922
Share of after tax losses of associates and joint ventures 4 55
Depreciation, amortisation and impairment 4,000 4,338
Decrease in working capital and short-term provisions 3,458 2,063
Gains on disposal of intangible assets (88) (371)
Gains on disposal of investments in associates and joint ventures - (776)
Fair value movements on contingent consideration arising from business 293 33
combinations
Non-cash and other movements (973) (370)
Cash generated from operations 9,353 6,265
Interest paid (608) (522)
Tax paid (1,335) (1,198)
Net cash inflow from operating activities 7,410 4,545
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired - (9,263)
Payments upon vesting of employee share awards attributable to business (297) (203)
combinations
Payment of contingent consideration from business combinations (570) (470)
Purchase of property, plant and equipment (719) (768)
Disposal of property, plant and equipment 17 10
Purchase of intangible assets (1,298) (714)
Disposal of intangible assets and assets held for sale 442 584
Purchase of non-current asset investments (28) (190)
Disposal of non-current asset investments 42 -
Movement in short-term investments, fixed deposits and other investing (321) 120
instruments
Payments to associates and joint ventures (5) (55)
Disposal of investments in associates and joint ventures - 776
Interest received 26 28
Net cash outflow from investing activities (2,711) (10,145)
Net cash inflow/(outflow) before financing activities 4,699 (5,600)
Cash flows from financing activities
Proceeds from issue of share capital 11 10
Repayment of loans and borrowings (1,261) (2,934)
Issue of loans - 11,942
Dividends paid (4,364) (3,856)
Hedge contracts relating to dividend payments (127) (28)
Repayment of obligations under leases (182) (173)
Movement in short-term borrowings 378 (261)
Payment of Acerta Pharma share purchase liability (920) -
Net cash (outflow)/inflow from financing activities (6,465) 4,700
Net decrease in cash and cash equivalents in the period (1,766) (900)
Cash and cash equivalents at the beginning of the period 6,038 7,546
Exchange rate effects (86) (73)
Cash and cash equivalents at the end of the period 4,186 6,573
Cash and cash equivalents consist of:
Cash and cash equivalents 4,458 7,067
Overdrafts (272) (494)
4,186 6,573
Notes to the Interim financial statements
Note 1: Basis of preparation and accounting policies
These unaudited condensed consolidated Interim financial statements for the
nine months ended 30 September 2022 have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial Reporting' (IAS 34),
as issued by the International Accounting Standards Board (IASB), IAS 34 as
adopted by the European Union, UK-adopted IAS 34 and the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority and with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards.
The unaudited Interim financial statements for the nine months ended 30
September 2022 include Alexion's results for the period. Alexion's
post-acquisition results were consolidated into the Group's results from 21
July 2021 therefore the respective comparative periods shown are not entirely
comparable with the current period.
The unaudited Interim financial statements for the nine months ended 30
September 2022 were approved by the Board of Directors for publication on 10
November 2022.
This results announcement does not constitute statutory accounts of the Group
within the meaning of sections 434(3) and 435(3) of the Companies Act 2006.
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 have been delivered to the
registrar of companies; their report was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
Global and/or geopolitical events
There were no material accounting impacts identified relating to COVID-19
during the nine months ended 30 September 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 YTD 2022 reporting. The situation is
dynamic and any future impact on our business is uncertain.
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 30 September
2022, the Group had $9.3bn in financial resources (Cash and cash-equivalent
balances of $4.5bn and undrawn committed bank facilities of $4.9bn available,
with only $5.6bn of borrowings due within one year). These facilities contain
no financial covenants, were undrawn at 30 September 2022 and are now
available until April 2026.
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 6 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 'Impairment of Assets', reviews for triggers of
impairment or impairment reversals 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 charges of
$44m have been recorded against intangible assets during the nine months ended
30 September 2022 (YTD 2021: $1,492m net charge). Net impairment charges in
respect of medicines in development and launched medicines were $61m (YTD
2021: $1,371m) and $nil (YTD 2021: $121m 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 23: Net Debt
At 1 Jan 2022 Cash flow Non-cash Exchange movements At 30 Sep 2022
& other
$m $m $m $m $m
Non-current instalments of loans (28,134) - 4,662 459 (23,013)
Non-current instalments of leases (754) - 28 58 (668)
Total long-term debt (28,888) - 4,690 517 (23,681)
Current instalments of loans (1,273) 1,261 (4,653) - (4,665)
Current instalments of leases (233) 186 (181) 18 (210)
Commercial paper - (249) - - (249)
Bank collateral received (93) (66) - - (159)
Other short-term borrowings excluding overdrafts (3) (63) - 3 (63)
Overdrafts (291) (8) - 27 (272)
Total current debt (1,893) 1,061 (4,834) 48 (5,618)
Gross borrowings (30,781) 1,061 (144) 565 (29,299)
Net derivative financial instruments 61 73 (275) - (141)
Net borrowings (30,720) 1,134 (419) 565 (29,440)
Cash and cash equivalents 6,329 (1,758) - (113) 4,458
Other investments - current 69 375 - (4) 440
Cash and investments 6,398 (1,383) - (117) 4,898
Net Debt (24,322) (249) (419) 448 (24,542)
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 at 30 September 2022 was $159m (31 December 2021: $93m) and the
carrying value of such cash collateral posted by the Group at 30 September
2022 was $376m (31 December 2021: $47m). Cash collateral posted by the Group
is presented within Other investments - current as at 30 September 2022.
Restricted cash and cash equivalents as at 30 September 2022 totalled $94m (31
December 2021: $47m).
The equivalent GAAP measure to Net Debt is 'liabilities arising from financing
activities', which excludes the amounts for cash and overdrafts, other
investments and non-financing derivatives shown above and includes the Acerta
Pharma share purchase liability of $1,618m (31 December 2021: $2,458m), $852m
of which is shown in current other payables and $766m is shown in non-current
other payables.
Net Debt increased by $220m in the year to date to $24,542m. Details of the
committed undrawn bank facilities are disclosed within the going concern
section of Note 1.
During the nine months ended 30 September 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.
The Group has certain equity investments held at $175m at 30 September 2022
(31 December 2021: $104m) that are categorised as Level 3 in the fair value
hierarchy and for which fair value gains of $50m (FY 2021: $nil) have been
recognised in the nine months ended 30 September 2022. In the absence of
specific market data, these unlisted investments are held at fair value based
on the cost of investment and adjusting as necessary for impairments and
revaluations on new funding rounds, which are seen to approximate the fair
value. All other fair value gains and/or losses that are presented in Net
losses on equity investments measured at fair value through other
comprehensive income in the Condensed consolidated statement of comprehensive
income for the nine months ended 30 September 2022 are Level 1 fair value
measurements, valued based on quoted prices in active markets.
Financial instruments measured at fair value include $1,489m of other
investments, $2,816m held in money-market funds, $295m of loans designated at
fair value through profit or loss and ($141m) of derivatives as at 30
September 2022. With the exception of derivatives being Level 2 fair valued,
the aforementioned balances are Level 1 fair valued. The total fair value of
interest-bearing loans and borrowings at 30 September 2022, which have a
carrying value of $29,299m in the Condensed consolidated statement of
financial position, was $27,664m.
Table 24: Financial instruments - contingent consideration
2022 2021 85 (#_ftn85)
Diabetes alliance Other Total Total
$m $m $m $m
At 1 January 2,544 321 2,865 3,323
Settlements (561) (9) (570) (470)
Disposals - (121) (121) -
Revaluations 320 (27) 293 60
Discount unwind 121 5 126 169
At 30 September 2,424 169 2,593 3,082
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 $2,424m (31 December 2021: $2,544m) would
increase/decrease by $242m with an increase/decline in sales of 10%, as
compared with the current estimates.
Note 5: Pensions and other post-retirement benefit obligations
The net pensions and other post-retirement benefit obligations position, as
recorded under IAS 19, at 30 September 2022 was a liability of $821m (31
December 2021: $2,454m liability). Pension schemes in a net surplus position
at 30 September 2022 totalled $98m (31 December 2021: $nil) and are recorded
within Other receivables in non-current assets. Pension schemes in a net
deficit position at 30 September 2022 totalled $919m (31 December 2021:
$2,454m) and are recorded within Retirement benefit obligations in non-current
liabilities.
The decrease in the net liability of $1,633m is driven by actuarial gains of
$1,283m that have been reflected within the Condensed consolidated statement
of comprehensive income.
Changes in actuarial assumptions, primarily movements in discount rates, led
to a decrease in the net liability in the year to date of $3,541m (a decrease
in UK, Sweden, US and RoW liabilities of $2,271m, $776m, $301m and $193m
respectively), which reflected increases in corporate bond yields. These
movements were partially offset by decreases in the pension fund asset values
in the year to date of $2,258m (a decrease in UK, Sweden and US assets of
$1,802m, $172m and $294m respectively and an increase in RoW of $10m).
Note 6: Legal proceedings and contingent liabilities
AstraZeneca is involved in various legal proceedings considered typical to its
business, including litigation and investigations, including Government
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 and the Interim Financial Statements for the
six months ended 30 June 2022 (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 third quarter of 2022 and to 10 November
2022
Patent litigation
Enhertu
US patent proceedings
As previously disclosed, in October 2020, Seagen Inc. (Seagen) filed a
complaint against Daiichi Sankyo Company, Limited in the US District Court for
the Eastern District of Texas (the District Court) alleging that Enhertu
infringes a Seagen patent. AstraZeneca co-commercialises Enhertu with Daiichi
Sankyo, Inc. in the US. After trial in April 2022, the jury found that the
patent was infringed and awarded Seagen $41.82m in past damages. In July 2022,
the District Court entered final judgment and declined to enhance damages on
the basis of wilfulness. The parties await consideration of post-trial
motions.
As previously disclosed, in December 2020 and January 2021, AstraZeneca and
Daiichi Sankyo, Inc. filed post-grant review (PGR) petitions with the US
Patent and Trademark Office (USPTO) alleging, inter alia, that the Seagen
patent is invalid for lack of written description and enablement. The USPTO
initially declined to institute the PGRs, but in April 2022, the USPTO granted
the rehearing requests, instituting both PGR petitions. Seagen subsequently
disclaimed all patent claims at issue in one of the PGR proceedings. In July
2022, the USPTO reversed its institution decision and declined to institute
the other PGR petition. AstraZeneca and Daiichi Sankyo, Inc. have requested
reconsideration of the decision not to institute review of the patent.
Farxiga
US patent proceedings
As previously disclosed, in 2018, in response to Paragraph IV notices,
AstraZeneca initiated ANDA litigation against Zydus Pharmaceuticals (USA) Inc.
(Zydus) in the US District Court for the District of Delaware (the District
Court). In May 2021, the trial against Zydus proceeded and in October 2021,
the District Court issued a decision finding the asserted claims of
AstraZeneca's patent as valid and infringed by Zydus's ANDA product. In August
2022, Zydus appealed the District Court's decision.
Patent proceedings outside the US
As previously disclosed, in Canada, since January 2021, AstraZeneca has been
defending against invalidity and/or non-infringement allegations advanced by
Teva and Sandoz against all three Forxiga-related patents listed on the
Canadian Patent Register. The parties have resolved these matters and these
proceedings are now concluded.
Faslodex
Patent Proceedings outside the US
As previously disclosed, in Japan, Sandoz K.K. and Sun Pharma Japan Ltd (Sun)
sought to invalidate the Faslodex formulation patent at the Japan Patent
Office (JPO) and AstraZeneca is defending the challenged patent. Sun has
withdrawn from the JPO patent challenge. In May 2022, the JPO held the hearing
in the matter and issued its preliminary decision in September 2022 upholding
various claims of the challenged patent and determining that other patent
claims were invalid. A final JPO decision is forthcoming.
Lokelma
US patent proceedings
In August 2022, in response to Paragraph IV notices, AstraZeneca initiated
ANDA litigation against multiple generic filers in the US District Court for
the District of Delaware. 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). A trial in the matter was held in May 2022
and closing arguments were held in June 2022. A decision is awaited.
As previously disclosed, in April 2022, AstraZeneca filed a separate ANDA
action against Mylan and Kindeva in the District Court asserting infringement
of a patent covering Symbicort. In June 2022, Mylan and Kindeva responded and
claimed noninfringement of the asserted patent and that the asserted patent is
invalid. A trial in the matter is scheduled for December 2022.
Product liability litigation
Onglyza and Kombiglyze
US proceedings
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. The
District Court granted AstraZeneca's motion for summary judgment in August
2022. Plaintiffs are in the process of appealing both decisions.
Nexium and Losec/Prilosec
US proceedings
As previously disclosed, in the US, AstraZeneca is defending various lawsuits
brought in federal and state courts involving multiple plaintiffs claiming
that they have been diagnosed with various injuries following treatment with
proton pump inhibitors (PPIs), including Nexium and Prilosec. The vast
majority of those lawsuits relate to allegations of kidney injuries. In
particular, in May 2017, counsel for a group of such plaintiffs claiming that
they have been diagnosed with kidney injuries filed a motion with the Judicial
Panel on Multidistrict Litigation (JPML) seeking the transfer of any currently
pending federal court cases as well as any similar, subsequently filed cases
to a coordinated and consolidated pre-trial multidistrict litigation (MDL)
proceeding. In August 2017, the JPML granted the motion and consolidated the
pending federal court cases in an MDL proceeding in federal court in New
Jersey for pre-trial purposes. A trial in the MDL previously scheduled for
November 2022 has been rescheduled to March 2023. In addition to the MDL
cases, there are cases filed in several state courts around the US; a case
that was previously set to go to trial in Delaware state court was dismissed
in October 2022.
In addition, AstraZeneca has been defending lawsuits involving allegations of
gastric cancer following treatment with PPIs. One such claim is filed in the
US District Court for the Middle District of Louisiana and was scheduled to go
to trial in January 2023. That case has been postponed and a new trial date
has not yet been set.
Commercial litigation
AZD1222 Securities Litigation
US proceedings
As previously disclosed, in January 2021, putative securities class action
lawsuits were filed in the US District Court for the Southern District of New
York against AstraZeneca PLC and certain officers, on behalf of purchasers of
AstraZeneca publicly traded securities during a period later amended to cover
15 June 2020 through 29 January 2021. The Amended Complaint alleges that
defendants made materially false and misleading statements in connection with
the development of AZD1222, AstraZeneca's vaccine for the prevention of
COVID-19. In September 2022, the court granted AstraZeneca's motion to dismiss
the Amended Complaint with prejudice, disallowing any further amendments.
Plaintiffs have appealed this decision.
US 340B Litigations and Proceedings
US proceedings
As previously disclosed, in September 2021, AstraZeneca was served with a
class-action antitrust complaint filed in federal court in New York by Mosaic
Health alleging a conspiracy to restrict access to 340B discounts in the
diabetes market through contract pharmacies. In September 2022, the court
granted Defendants' motion to dismiss the Complaint. Plaintiffs are now
seeking leave to amend their complaint.
Table 25: YTD 2022 - Product Sales year-on-year analysis
86 (#_ftn86)
World Emerging Markets US Europe Established RoW
$m Act % chg CER % chg $m Act % chg CER % chg $m % chg $m Act % chg CER % chg $m Act % chg CER % chg
Oncology 10,885 14 20 2,723 12 15 4,695 24 2,037 12 24 1,430 (2) 11
Tagrisso 4,102 11 16 1,211 20 22 1,472 14 777 7 19 642 (4) 10
Imfinzi 2,031 14 19 224 6 9 1,102 20 402 16 29 303 - 14
Lynparza 1,949 13 19 358 27 30 896 13 493 8 20 202 8 22
Calquence 1,469 74 77 28 n/m n/m 1,192 58 200 n/m n/m 49 n/m n/m
Enhertu 52 n/m n/m 34 n/m n/m - - 14 n/m n/m 4 n/m n/m
Orpathys 34 n/m n/m 34 n/m n/m - - - - - - - -
Zoladex 717 - 6 507 9 13 11 2 100 (11) (2) 99 (23) (12)
Faslodex 259 (21) (14) 121 (1) 5 15 (37) 44 (53) (48) 79 (12) 2
Iressa 90 (39) (37) 75 (39) (37) 6 (33) 2 (53) (48) 7 (41) (33)
Arimidex 85 (20) (16) 66 (19) (16) - 25 1 (79) (85) 18 (19) (7)
Casodex 63 (48) (45) 44 (53) (52) - (99) - (87) (85) 19 (28) (18)
Others 34 (9) (1) 21 (2) 4 1 n/m 4 (3) 8 8 (34) (25)
BioPharmaceuticals: CVRM* 6,907 13 18 3,181 9 14 1,783 9 1,413 25 39 530 18 32
Farxiga 3,204 49 58 1,224 40 46 748 48 955 64 82 277 49 65
Brilinta 1,013 (10) (7) 222 (13) (11) 538 (4) 215 (18) (9) 38 (20) (16)
Lokelma 208 71 80 15 n/m n/m 122 50 21 n/m n/m 50 74 n/m
Roxadustat 148 2 4 148 2 4 - - - - - - - -
Andexxa* 111 7 14 - - - 62 (25) 29 43 55 20 n/m n/m
Crestor 824 (2) 4 630 6 10 50 (15) 30 (31) (24) 114 (17) (7)
Seloken/Toprol-XL 705 (6) (2) 689 (6) (2) - n/m 9 6 8 7 (13) (6)
Bydureon 207 (29) (28) 2 - 2 177 (27) 28 (34) (27) - (97) (94)
Onglyza 205 (28) (25) 98 (35) (31) 60 (3) 30 (37) (30) 17 (31) (29)
Others 282 (9) (7) 153 1 4 26 (32) 96 (13) (11) 7 (37) (30)
BioPharmaceuticals: R&I 4,318 (3) - 1,102 (16) (14) 1,963 12 795 (13) (3) 458 (3) 5
Symbicort 1,919 (6) (2) 476 4 8 718 (11) 445 (11) (1) 280 (3) 3
Fasenra 1,015 13 17 30 99 95 649 17 229 9 21 107 (10) -
Breztri 282 n/m n/m 71 76 78 164 n/m 22 n/m n/m 25 43 66
Saphnelo 69 n/m n/m - - - 66 n/m 1 n/m n/m 2 n/m n/m
Pulmicort 479 (33) (31) 339 (41) (41) 53 1 50 1 12 37 8 16
Daliresp 161 (5) (4) 2 (16) (11) 151 (2) 7 (39) (33) 1 (20) (18)
Bevespi 43 11 13 4 32 35 31 10 7 5 16 1 17 37
Others 350 (21) (20) 180 (14) (13) 131 40 34 (74) (71) 5 (52) (47)
BioPharmaceuticals: V&I 3,607 51 59 995 (7) (6) 942 n/m 693 (20) (12) 977 n/m n/m
Vaxzevria 1,713 (20) (16) 684 (35) (36) 79 n/m 325 (56) (51) 625 82 96
Evusheld 1,451 n/m n/m 167 n/m n/m 850 n/m 199 n/m n/m 235 n/m n/m
Synagis 384 n/m n/m 144 n/m n/m 2 (91) 123 51 63 115 n/m n/m
FluMist 59 (22) (13) - (74) (74) 11 (52) 46 (10) 3 2 n/m n/m
Rare Disease* 5,236 4 10 315 (10) 8 3,175 7 1,079 (2) 10 667 11 26
Soliris* 2,918 (7) (2) 218 (29) (9) 1,688 (3) 627 (20) (10) 385 20 34
Ultomiris* 1,371 27 35 34 n/m n/m 771 23 347 55 74 219 - 18
Strensiq* 687 13 15 25 35 25 546 16 59 (4) 8 57 - 16
Koselugo 149 n/m n/m 22 n/m n/m 114 57 13 n/m n/m - - -
Kanuma* 111 6 11 16 9 7 56 10 33 (1) 12 6 11 20
Other medicines 1,247 (4) 4 608 (18) (14) 112 (17) 95 (29) (25) 432 50 72
Nexium 986 (1) 8 437 (24) (19) 94 (4) 37 (22) (13) 418 51 73
Others 261 (12) (10) 171 5 7 18 (52) 58 (33) (31) 14 39 48
Total Product Sales 32,200 29 35 8,924 5 8 12,670 56 6,112 19 32 4,494 39 56
Table 26: Q3 2022 - Product Sales year-on-year analysis
87 (#_ftn87)
World Emerging Markets US Europe Established RoW
$m Act % chg CER % chg $m Act % chg CER % chg $m % chg $m Act % chg CER % chg $m Act % chg CER % chg
Oncology 3,797 15 22 931 15 21 1,716 27 696 9 25 454 (9) 9
Tagrisso 1,398 12 20 406 29 35 521 18 268 4 19 203 (12) 5
Imfinzi 737 19 26 90 15 19 413 30 135 12 29 99 (1) 18
Lynparza 659 12 19 117 22 26 314 16 164 6 22 64 (5) 12
Calquence 566 60 63 12 n/m n/m 457 48 79 n/m n/m 18 n/m n/m
Enhertu 23 n/m n/m 15 n/m n/m - - 6 n/m n/m 2 n/m n/m
Orpathys 11 11 16 11 11 16 - - - - - - - -
Zoladex 240 (4) 5 176 4 11 4 43 31 (17) (5) 29 (28) (13)
Faslodex 81 (21) (10) 40 (4) 5 5 (39) 12 (49) (41) 24 (19) -
Iressa 27 (35) (31) 22 (33) (29) 2 (47) 1 (49) (56) 2 (30) (19)
Arimidex 24 (28) (23) 18 (25) (21) - n/m - (93) n/m 6 (29) (17)
Casodex 21 (46) (40) 17 (40) (37) - n/m (1) n/m n/m 5 (46) (33)
Others 10 (18) (10) 7 (13) (6) - - 1 (20) (8) 2 (38) (25)
BioPharmaceuticals: CVRM* 2,348 11 19 1,081 9 16 632 9 469 20 37 166 11 30
Farxiga 1,101 38 50 410 28 38 279 38 329 55 78 83 35 57
Brilinta 338 (10) (7) 76 (1) - 187 (6) 65 (23) (12) 10 (36) (34)
Lokelma 79 59 69 9 n/m n/m 45 37 8 n/m n/m 17 31 59
Roxadustat 57 4 9 57 4 8 - - - - - - - -
Andexxa* 41 5 17 - - - 20 (29) 11 2 17 10 n/m n/m
Crestor 277 (7) - 216 (4) 2 15 (16) 9 (17) (4) 37 (16) -
Seloken/Toprol-XL 238 2 10 233 2 10 - n/m 3 9 22 2 (18) (18)
Bydureon 66 (30) (29) - (4) (1) 58 (28) 8 (40) (31) - n/m n/m
Onglyza 66 (21) (17) 32 (24) (19) 20 12 9 (45) (37) 5 (34) (32)
Others 85 (11) (8) 48 9 15 8 (24) 27 (27) (25) 2 (52) (45)
BioPharmaceuticals: R&I 1,427 (4) 1 371 (12) (8) 663 9 244 (17) (5) 149 (6) 4
Symbicort 630 (7) (1) 169 13 18 237 (13) 133 (14) (2) 91 (6) 2
Fasenra 353 10 15 12 87 78 229 15 77 2 16 35 (15) (2)
Breztri 103 n/m n/m 28 n/m n/m 58 n/m 8 n/m n/m 9 38 68
Saphnelo 33 n/m n/m - - - 32 n/m - - - 1 n/m n/m
Pulmicort 145 (33) (31) 103 (40) (40) 16 (6) 14 (4) 9 12 - 10
Daliresp 52 (4) (3) 1 74 87 49 (1) 2 (43) (35) - (55) (54)
Bevespi 14 6 8 2 12 22 10 11 2 (22) (11) - 95 25
Others 97 (36) (33) 56 (25) (21) 32 (5) 8 (81) (77) 1 (55) (44)
BioPharmaceuticals: V&I 873 (27) (21) 134 (78) (78) 305 670 182 (28) (16) 252 (12) 2
Vaxzevria 173 (83) (81) 24 (96) (97) - - 62 (62) (56) 87 (63) (59)
Evusheld 537 n/m n/m 73 n/m n/m 294 n/m 57 n/m n/m 113 n/m n/m
Synagis 104 (15) (1) 37 n/m n/m - n/m 17 (55) (48) 50 (4) 17
FluMist 59 (19) (10) - n/m n/m 11 (53) 46 (7) 6 2 n/m n/m
Rare Disease* 1,741 4 11 110 36 61 1,084 7 345 (10) 6 202 (1) 18
Soliris* 901 (13) (6) 84 32 69 523 (13) 190 (27) (15) 104 (5) 10
Ultomiris* 518 37 47 4 (40) (37) 315 49 122 40 63 77 7 32
Strensiq* 237 17 20 8 73 53 192 22 18 (10) 4 19 (8) 12
Koselugo 48 82 81 7 n/m n/m 36 42 5 n/m n/m - - -
Kanuma* 37 1 5 7 15 (1) 18 7 10 (15) - 2 2 21
Other medicines 404 17 30 213 5 12 37 (9) 28 (21) (15) 126 93 n/m
Nexium 311 20 36 148 (5) 3 31 (3) 10 (7) 8 122 n/m n/m
Others 93 9 13 65 37 44 6 (28) 18 (27) (25) 4 (22) (19)
Total Product Sales 10,590 9 16 2,840 (9) (3) 4,437 30 1,964 3 18 1,349 2 20
Table 27: Collaboration Revenue
YTD 2022 YTD 2021
$m $m
Enhertu: alliance revenue 332 134
Tezspire: alliance revenue 42 -
Lynparza: regulatory milestones 250 -
Tralokinumab: sales milestones 110 -
Vaxzevria: royalties 67 83
Other royalty income 54 54
Other Collaboration Revenue 89 92
Total 944 363
Table 28: Other Operating Income and Expense
YTD 2022 YTD 2021
$m $m
Brazikumab licence termination funding 104 77
Divestment of rights to Plendil 61 -
Divestment of Viela Bio, Inc. shareholding - 776
Crestor (Europe ex-UK and Spain) - 309
Other 160 183
Total 325 1,345
Other shareholder information
Financial calendar
Announcement of full year and fourth quarter
results 9 February 2023
Announcement of first quarter 2023 results
27 April 2023
Dividends are normally paid as follows:
First interim: Announced with the half year results and paid
in September
Second interim: Announced with full year results and paid in March
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
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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 Juvisé (depending on
geography); Beyfortus, a trademark of Sanofi Pasteur Inc.; Enhertu, a
trademark of Daiichi Sankyo; Losec, owned by AstraZeneca or Cheplapharm
(depending upon geography); Seloken, owned by AstraZeneca or Taiyo Pharma Co.,
Ltd (depending on geography); Synagis, owned by AstraZeneca or Sobi aka
Swedish Orphan Biovitrum AB (publ). (depending on geography); and Tezspire, a
trademark of Amgen, Inc.
Information on or accessible through AstraZeneca's websites, including
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
'the 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 -
1 (#_ftnref1) 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 (#_ftnref2) 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.
3 (#_ftnref3) Earnings per share.
4 (#_ftnref4) Core financial measures are adjusted to exclude certain items.
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
(Chugai) that led to a payment of $775m in Q2 2022. A full reconciliation
between Reported EPS and Core EPS is provided in Tables 12 and 13 in the
Financial performance section of this document.
5 (#_ftnref5) 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 shown for
each disease area has been calculated as though these changes had been
implemented in FY 2021.
6 (#_ftnref6) AstraZeneca is collaborating with MSD (Merck & Co., Inc.
in the US and Canada) to develop and commercialise Lynparza.
7 (#_ftnref7) Respiratory & Immunology.
8 (#_ftnref8) Cardiovascular, Renal and Metabolism.
9 (#_ftnref9) YTD 2022 growth rates on medicines acquired with Alexion have
been calculated on a pro forma basis comparing to the corresponding period in
the prior year; Q3 2022 growth rates have been calculated comparing to the
corresponding 92‑day period in the prior year, which covers both
pre-acquisition and post-acquisition performance. The growth rates shown for
the Rare Disease and CVRM disease areas include these pro forma adjustments.
10 (#_ftnref10) The anticipated impact of foreign exchange movements on FY
2022 results assumes that exchange rates through November to December 2022
remain at the spot rates seen on 31 October 2022.
11 (#_ftnref11) Paroxysmal nocturnal haemoglobinuria
with extravascular haemolysis.
12 (#_ftnref12) Human epidermal growth factor
receptor 2.
13 (#_ftnref13) Non-small cell lung cancer.
14 (#_ftnref14) Respiratory syncytial virus.
15 (#_ftnref15) Generalised myasthenia gravis.
16 (#_ftnref16) Volume-based procurement.
17 (#_ftnref17) Vaccines & Immune Therapies.
18 (#_ftnref18) 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.
19 (#_ftnref19) National reimbursement drug list.
20 (#_ftnref20) In Table 2, the plus and minus
symbols denote the directional impact of the item being discussed, e.g. a '+'
symbol next to a R&D Expense comment indicates that the item increased the
R&D Expense relative to the prior year.
21 (#_ftnref21) 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.
22 (#_ftnref22) 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.
23 (#_ftnref23) Germline (hereditary) breast cancer
gene.
24 (#_ftnref24) Homologous recombination deficiency.
25 (#_ftnref25) Human epidermal growth factor
receptor mutant.
26 (#_ftnref26) Chronic kidney disease.
27 (#_ftnref27) Atypical haemolytic uraemic syndrome.
28 (#_ftnref28) Neurofibromatosis type 1 plexiform
neurofibromas.
29 (#_ftnref29) Heart failure with preserved ejection
fraction.
30 (#_ftnref30) Neuromyelitis optica spectrum
disorder.
31 (#_ftnref31) Head and neck squamous cell
carcinoma.
32 (#_ftnref32) Eosinophilic esophagitis.
33 (#_ftnref33) Alliance revenue (previously referred to as share of gross
profits) comprises income arising from collaborative arrangements, where
AstraZeneca is entitled to a profit share, but does not include product sales
where AstraZeneca is leading commercialisation in a territory. Alliance
revenue is included within Collaboration Revenue.
34 (#_ftnref34) Epidermal growth factor receptor.
35 (#_ftnref35) Extensive-stage small cell lung cancer.
36 (#_ftnref36) Chemoradiation therapy.
37 (#_ftnref37) Poly ADP ribose polymerase.
38 (#_ftnref38) Germline (hereditary) breast cancer gene mutation.
39 (#_ftnref39) Breast cancer gene mutation.
40 (#_ftnref40) US Food and Drug Administration.
41 (#_ftnref41) Metastatic castration resistant prostate cancer.
42 (#_ftnref42) European Medicines Agency.
43 (#_ftnref43) Chronic lymphocytic leukaemia.
44 (#_ftnref44) Mesenchymal-epithelial transition.
45 (#_ftnref45) Tyrosine kinase inhibitor.
46 (#_ftnref46) Sodium-glucose cotransporter 2.
47 (#_ftnref47) Heart failure.
48 (#_ftnref48) European Society of Cardiology.
49 (#_ftnref49) American Heart Association.
50 (#_ftnref50) American College of Cardiology.
51 (#_ftnref51) Heart Failure Society of America.
52 (#_ftnref52) Urine albumin creatine ratio.
53 (#_ftnref53) Measured renal function.
54 (#_ftnref54) Heart failure with reserved ejection fraction.
55 (#_ftnref55) Type-2 diabetes.
56 (#_ftnref56) Betaloc is the brand name for Seloken in China.
57 (#_ftnref57) Inhaled corticosteroid.
58 (#_ftnref58) Long-acting beta-agonist.
59 (#_ftnref59) Chronic obstructive pulmonary disease.
60 (#_ftnref60) Intravenous injection.
61 (#_ftnref61) Systemic lupus erythematosus.
62 (#_ftnref62) Other Operating Income.
63 (#_ftnref63) Other SG&A Expense of $1,197m predominantly includes the
$775m charge to provisions relating to the legal settlement with Chugai and
$293m of fair value movements on contingent consideration arising from
business combinations.
64 (#_ftnref64) Other Taxation of ($1,078m) includes an estimated one-off
favourable net adjustment of ($883m) to deferred taxes arising from an
internal reorganisation to integrate the Alexion organisation.
65 (#_ftnref65) Securities Exchange Commission.
66 (#_ftnref66) Based on best prevailing assumptions around currency
profiles.
67 (#_ftnref67) Based on average daily spot rates in FY 2021.
68 (#_ftnref68) Based on average daily spot rates 1 Jan 2022 to 30 Sep 2022.
69 (#_ftnref69) Change vs the average spot rate for the previous year
70 (#_ftnref70) Other currencies include AUD, BRL, CAD, KRW and RUB.
71 (#_ftnref71) Programmed death ligand 1.
72 (#_ftnref72) Tumour Proportion Score.
73 (#_ftnref73) Overall response rate.
74 (#_ftnref74) Confidence interval.
75 (#_ftnref75) An ImmunoHistoChemistry score of greater than 90.
76 (#_ftnref76) A Fluorescence In Situ Hybridization score of greater than
10.
77 (#_ftnref77) Overall survival.
78 (#_ftnref78) Progression free survival.
79 (#_ftnref79) Small lymphocytic lymphoma.
80 (#_ftnref80) Mantle cell lymphoma.
81 (#_ftnref81) Disease Control Rate.
82 (#_ftnref82) Serine/threonine protein kinase.
83 (#_ftnref83) Cycline-dependent kinase 4/6.
84 (#_ftnref84) Intravenous immunoglobulin.
85 (#_ftnref85) As at 30 September 2021, Alexion's contingent liabilities of
$300m had been recognised in Contingent consideration. After the acquisition
date IFRSs permit the acquirer to retrospectively adjust the provisional
amounts recognised for a business combination during the measurement period to
reflect new information obtained about facts and circumstances that existed as
of the acquisition date and, if known, would have affected the measurement of
the amounts recognised as of that date. During the measurement period these
liabilities were reclassed and reported within Other payables as at 31
December 2021. The comparative 2021 column therefore excludes these
liabilities.
86 (#_ftnref86) 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. *YTD 2022 growth rates on medicines acquired with Alexion have been
calculated on a pro forma basis comparing to the corresponding period in the
prior year. The growth rates shown for Rare Disease and CVRM disease area
totals include these pro forma adjustments.
87 (#_ftnref87) 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. *Q3 2022 growth rates have been calculated comparing to the
corresponding 92-day period in the prior year, which covers both
pre-acquisition and post-acquisition performance. The growth rates shown for
Rare Disease and CVRM disease area totals include these pro forma adjustments.
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