3rd Quarter Results - Part 1 of 2

RNS Number : 9360Q
AstraZeneca PLC
27 October 2011
 



 

 

AstraZeneca PLC

Third Quarter and nine Months Results 2011

London, 27 October 2011

 

Revenue for the third quarter declined by 2 percent at constant exchange rates (CER) to $8,213 million.

-Strong revenue growth for Crestor, Seroquel XR and Symbicort.

-Revenue performance reflects the loss of more than $350 million of revenue from generic competition, as well as the impact of government price interventions.   

-Emerging Markets revenue increased by 7 percent at CER in the third quarter; revenue was up 10 percent for the nine months.

Core operating profit in the third quarter was $3,177 million, down 2 percent at CER, in line with the decline in revenue.

   -Core operating margin of 38.7 percent of revenue was down 0.3 percentage points at CER, as increased investment in Research and Development was largely offset by higher gross margin and lower SG&A expense as a percentage of revenue.  

Core EPS in the third quarter was up 12 percent at CER to $1.71.

 -Core EPS benefited from the lower number of shares outstanding resulting from net share repurchases and a lower tax rate compared with the third quarter last year.  

Reported EPS in the third quarter was up 140 percent at CER to $2.56.   

-Gain on the sale of Astra Tech, which was excluded from Core EPS, amounted to $1.08 in the third quarter 2011.  Third quarter 2010 included legal provisions of $0.24, which also benefited the growth rate for Reported EPS in the third quarter 2011.   

Net cash distributions to shareholders for the nine months increased by 64 percent to $7,642 million.

 

Core EPS target for the full year increased to the range of $7.20 to $7.40, largely on currency movements.

 

 Financial Summary

 Group

 

3rd Quarter

2011

$m

3rd Quarter

2010

$m

Actual

%

CER

%

 

9 Months

2011

$m

9 Months

2010

$m

Actual

%

CER

%

 Revenue

8,213

7,898

+4

-2

 

24,935

24,652

+1

-3

Reported

 

 

 

 

 

 

 

 

 

 Operating Profit

4,262

2,406

+77

+78

 

10,628

9,083

+17

+16

 Profit before Tax

4,169

2,258

+85

+86

 

10,315

8,694

+19

+18

 Earnings per Share

$2.56

$1.08

+137

+140

 

$6.17

$4.45

+39

+38

Core*

 

 

 

 

 

 

 

 

 

 Operating Profit

3,177

3,231

-2

-2

 

10,177

10,738

-5

-6

 Profit before Tax

3,084

3,083

-

-1

 

9,864

10,349

-5

-5

 Earnings per Share

$1.71

$1.50

+14

+12

 

$5.67

$5.32

+7

+6

 

 

 

 

 

 

 

 

 

 

 

*

Core financial measures are supplemental non-GAAP measures which management believe enhance understanding of the Company's performance; it is upon these measures that financial guidance for 2011 is based.  See Operating and Financial Review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.

 

David Brennan, Chief Executive Officer, said

 

Business Highlights All narrative in this section refers to growth rates at constant exchange rates (CER) unless otherwise indicated

 

Third Quarter

 

Revenue in the third quarter was down 2 percent at CER, but was up 4 percent on an actual basis as a result of the positive impact of exchange rate movements. Revenue performance was impacted by government price interventions and the loss of more than $350 million in revenue to generic competition.  US revenue was unchanged compared to last year after absorbing approximately 3.5 percent of adverse impact from the implementation of US healthcare reform measures.  Revenue in the Rest of World was down 3 percent.  Revenue in Western Europe was down 15 percent, resulting from volume declines due to generic competition combined with a mid-single digit decline in realised prices.  Revenue in Established Rest of World markets was up 7 percent.  Revenue in Emerging Markets was up 7 percent in the quarter, reflecting the impact of the loss of exclusivity for Crestor and Seroquel IR in Brazil and some delays in government tender orders in the Middle East region, which are now expected to be shipped in the fourth quarter.

 

Core operating profit in the third quarter was $3,177 million, a 2 percent decline that is in line with the decline in revenue.  Core gross margin was higher than last year, which included an intangible asset impairment related to lesogaberan.  Expenditures in SG&A were down 2 percent, as efficiency gains more than offset investment in Emerging Markets and launch products and the excise tax related to US healthcare reform measures.  Core R&D expense was up 10 percent on increased spending on late stage clinical trials and biologics partially offset by efficiency gains.  Reported operating profit increased by 78 percent, which includes $1,483 million of other income from the sale of Astra Tech, which was excluded from Core earnings.  Lower legal provisions compared with the third quarter last year also benefited the growth rate in reported operating profit in the quarter.

 

Core earnings per share in the third quarter were $1.71 compared with $1.50 in the third quarter 2010, a 12 percent increase.  Core earnings per share benefited from the lower number of shares outstanding as a result of net share repurchases, a lower tax rate and lower net finance expense compared with last year.  Reported earnings per share in the third quarter were $2.56, up 140 percent, as a result of the non-taxable profit on the sale of Astra Tech and lower legal provisions compared with the third quarter 2010.

 

Nine Months

 

Revenue for the nine months was down 3 percent at CER, but was up 1 percent on an actual basis as a result of the positive impact of exchange rate movements.  Revenue in the US was down 5 percent.  Revenue in the Rest of World was down 1 percent.  Revenue in Western Europe was down 10 percent.  In Established Rest of World markets, revenue increased by 5 percent.  Revenue in Emerging Markets was up 10 percent for the nine months.

 

Core operating profit for the nine months was down 6 percent to $10,177 million, as increases in R&D and SG&A expenditures were partially offset by higher gross margin, which includes the benefit in the first quarter from the settlement of patent disputes with PDL Biopharma Inc.  Reported operating profit was up 16 percent, including the Astra Tech gain.

 

Core earnings per share for the nine months were $5.67, an increase of 6 percent, which reflects the net adjustments to tax provisions previously disclosed, and the benefit from share repurchases.  Reported earnings per share for the nine months were $6.17, a 38 percent increase.

 

Enhancing Productivity

 

Good progress continues on the previously announced business reshaping programmes.  In the third quarter, $221 million in restructuring costs were charged, bringing the total for the nine months to $502 million.  The programmes remain on track for costs incurred and benefits achieved.

 

Dividends and Share Repurchases

 

Research and Development Update

 

A comprehensive update of the AstraZeneca R&D pipeline was presented in conjunction with the Half Year 2011 results announcement, and remains available on the Company's website, www.astrazeneca.com, under information for investors.

 

 

On 26 October 2011, The National Institute for Health and Clinical Excellence (NICE) published final guidance to the NHS in England and Wales recommending ticagrelor in combination with aspirin and for up to 12 months, as an option to treat adults with ACS.

 

Brilique has received price approvals in 20 countries and reimbursement authorisations in nine. The product is approved in 47 countries, including in the European Union under the trade name Brilique and in the US, Brazil, Canada, and Australia, under the trade name Brilinta.

 

 

On 26

 

In response to an FDA request for additional data on dapagliflozin, Bristol-Myers Squibb and AstraZeneca are submitting data from recently completed and ongoing Phase III clinical trials.  This data submission constitutes a major amendment to the original new drug application (NDA) for dapagliflozin.

 

 

On 23 September 2011, AstraZeneca and Bristol-Myers Squibb Company announced that the Marketing Authorisation Application for KOMBOGLYZE™ (saxagliptin and metformin HCl immediate-release fixed dose combination) received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP), as an adjunct to diet and exercise, for the treatment of type 2 diabetes in adults who are not adequately controlled on metformin or those already being treated with the combination of saxagliptin and metformin as separate tablets.

 

The positive opinion was reached after the CHMP reviewed data from a Phase III clinical programme that involved 4,326 patients with type 2 diabetes, including 2,158 individuals receiving saxagliptin plus metformin.

 

KOMBOGLYZE™ combines saxagliptin (also known as ONGLYZA™), a DPP-4 inhibitor, and metformin immediate-release (metformin IR), a biguanide, in one tablet for the treatment of type 2 diabetes.

 

The CHMP's positive opinion on KOMBOGLYZE™ will now be reviewed by the European Commission, which has the authority to approve medicines for the European Union.

On 18 October 2011, AstraZeneca and Forest Laboratories, Inc. announced that ceftazidime/avibactam (CAZ-AVI) will enter Phase III trials to investigate efficacy in treating hospitalised patients with serious Gram-negative bacterial infections including Complicated Intra-Abdominal Infections (cIAI) and Complicated Urinary Tract Infections (cUTI). CAZ-AVI combines a broad-spectrum cephalosporin (ceftazidime) and a novel beta-lactamase inhibitor (avibactam, formerly NXL104) to overcome antibiotic-resistance and treat the increasing number of infections resistant to existing therapies.

 

This study programme is designed to support global regulatory filings planned for 2014, and will include five Phase III trials designed to demonstrate that CAZ-AVI is an effective and well tolerated treatment for patients with cIAI and cUTI including those patients with infections that may be resistant to currently available antibiotics.

 

As part of the collaboration, development costs of the treatment will be shared between AstraZeneca and Forest. Forest will have the rights to commercialise CAZ-AVI in North America while AstraZeneca will have rights to commercialise CAZ-AVI in the rest of the world.

 

On 2 September 2011, AstraZeneca announced top-line results from SATURN (Study of Coronary Atheroma by InTravascular Ultrasound: Effect of Rosuvastatin Versus AtorvastatiN). SATURN was designed to measure the impact of Crestor (rosuvastatin) 40 mg and atorvastatin 80 mg on the progression of atherosclerosis in high risk patients.

 

The results for the primary efficacy measure, which was change from baseline in percent atheroma volume (PAV) in a ≥40 mm segment of the targeted coronary artery as assessed by intravascular ultrasound (IVUS), demonstrated a numerically greater reduction in favour of Crestor versus atorvastatin but did not reach statistical significance.

 

For the secondary IVUS measure, which was change from baseline in total atheroma volume (TAV) within the targeted coronary artery, Crestor demonstrated a statistically significant reduction compared with atorvastatin.

 

Tolerability and efficacy of Crestor seen in SATURN were in line with previous studies and approved product labelling.

 

Further data and analyses will be presented by the study's academic investigators at the American Heart Association Scientific Sessions on 15 November 2011.

 

On 2 August 2011, AstraZeneca announced that Axanum, a fixed dose combination of 81 mg low-dose ASA (acetylsalicylic acid) and 20 mg esomeprazole, has received positive agreement for approval in 23 European Union member countries and in Norway. Axanum is indicated for prevention of cardiovascular (CV) events such as heart attack or stroke, in high-risk CV patients in need of daily low-dose ASA treatment and who are at risk of gastric ulcers.

 

Axanum is the only medicine that ensures every single pill of low-dose ASA comes with built-in protection against gastric ulcers. That means Axanum has the potential to provide continuous CV protection in this patient population.

 

The EU decision took place under the decentralised procedure, with Germany acting as reference member state. This process is now followed by national approvals and local pricing and reimbursement discussions.

Future Prospects

 

Revenue performance in the first nine months was in line with our expectations, and the Company continues to anticipate that revenue for the full year could range from flat to a low single-digit decline compared with 2010 on a constant currency basis.

 

Currency movements benefited Core EPS in the third quarter by a further 3 cents compared with the January 2011 average exchange rates upon which our financial guidance is based, which, rounded to the nearest five cents, forms the basis for increasing our target for full year Core EPS. The new target range, which has also been narrowed, is between $7.20 and $7.40 per share. 

 

Revenue

All narrative in this section refers to growth rates at constant exchange rates (CER) unless otherwise indicated

Gastrointestinal

 

Third Quarter

CER %

Nine Months

CER %

 

2011

$m

2010

$m

 

2011

$m

2010

$m

 

Nexium 

1,089

1,242

-16

3,362

3,738

-12

Losec/Prilosec

224

233

-13

698

743

-13

Total

1,350

1,512

-15

4,172

4,588

-12

 

·   

In the US, Nexium sales in the third quarter were $570 million, down 16 percent compared with the third quarter last year.  Dispensed retail tablet volume declined by around 8 percent.  Average realised selling prices for Nexium were around 10 percent lower than the third quarter last year, reflecting the impact of US healthcare reform and an adverse mix effect in the quarter arising from the timing of a large order at below average prices.

 

·   

Nexium sales in the US for the nine months were down 12 percent to $1,783 million.

 

·   

Nexium sales in other markets in the third quarter were down 14 percent to $519 million.  Sales in Western Europe were down 50 percent, largely the result of generic launches.  Sales in Established Rest of World were up 35 percent, as launch sales in Japan more than offset the decline in Canada.  Sales in Emerging Markets increased by 12 percent, including 24 percent growth in China.

 

·   

Nexium sales in other markets were down 12 percent for the nine months to $1,579 million.

 

·   

Prilosec sales in the US were down 24 percent for the nine months to $30 million.    

 

·   

Sales of Losec in the Rest of World were down 14 percent in the third quarter to $215 million.  For the nine months, sales in the Rest of World were down 13 percent to $668 million.

 

 

Cardiovascular

 

Third Quarter

CER %

Nine Months

CER %

 

2011

$m

2010

$m

 

2011

$m

2010

$m

 

Crestor

1,659

1,374

+14

4,851

4,104

+14

Atacand

364

359

-8

1,104

1,108

-5

Seloken /Toprol-XL

273

273

-4

750

957

-24

Plendil

66

63

-

196

192

-2

Zestril

37

35

-3

109

117

-11

ONGLYZATM

59

19

+211

140

37

+278

Brilinta/Brilique

13

-

n/m

16

-

n/m

Total

2,600

2,249

+9

7,558

6,916

+5

 

·   

In the US, Crestor sales in the third quarter were up 20 percent to $753 million.  Crestor total prescriptions increased by 3 percent compared to 0.5 percent growth for the overall statin market in the US, with market share of total prescriptions up 40 basis points since June, to 12.4 percent, fuelled by the label changes to simvastatin.  Crestor dynamic share (new and switch patients) is now around 15 percent.

 

·   

US sales for Crestor for the nine months increased by 18 percent to $2,231 million.

 

·   

Crestor sales in Rest of World were up 9 percent to $906 million in the third quarter. Sales in Established ROW were up 17 percent as double digit growth continued in Japan, Canada and Australia.  Sales in Emerging Markets were up 7 percent, reflecting generic competition in Brazil.  Sales in Western Europe were up 2 percent.

 

·   

Crestor sales in the Rest of World were up 10 percent to $2,620 million for the nine months.

 

·   

US sales of the Toprol-XL product range, which includes sales of the authorised generic, declined by 17 percent in the third quarter to $123 million.  Total prescriptions for the franchise were down 23 percent compared with the third quarter last year: there was some price erosion due to the launch of a third generic product in August. Reported revenue was also favourably impacted by some adjustments to provisions for returns and rebates.

 

·   

Toprol-XL franchise sales in the US for the nine months were down 45 percent to $315 million.

 

·   

Sales of Seloken in other markets were up 12 percent in the third quarter and increased 7 percent for the nine months.  Sales in Emerging Markets increased by 20 percent in the third quarter, and were up 14 percent for the nine months. 

 

·   

US sales for Atacand were down 15 percent in the third quarter to $44 million, and were down 16 percent for the nine months to $139 million. 

 

·   

Atacand sales in Rest of World were down 6 percent in the third quarter to $320 million.  For the year to date, those sales were down 4 percent, although sales in Emerging Markets were up 4 percent.    

 

·   

Alliance revenue from the ONGLYZATM collaboration with Bristol-Myers Squibb totalled $59 million in the third quarter and $140 million for the nine months.  Alliance revenue in the US was $44 million in the third quarter and $103 million for the nine months.  ONGLYZATM share of total prescriptions in the US DPP-4 market reached 15.5 percent in September 2011 (including 3.7 percent share for KOMBIGLYZE XRTM).  ONGLYZATM franchise share of patients newly starting DPP-4 treatment was 25.5 percent in the week ending 14 October.

 

·   

Brilinta/Brilique sales in the third quarter were $13 million, reflecting $11 million in launch stocking in the US.

 

 

Respiratory and Inflammation

 

 

Third Quarter

CER %

Nine Months

CER %

 

2011

$m

2010

$m

 

2011

$m

2010

$m

 

Symbicort

755

640

+9

2,309

2,005

+10

Pulmicort

185

180

-3

669

639

+1

Rhinocort

52

55

-13

162

175

-11

Oxis

14

15

-13

42

48

-19

Accolate

5

17

-76

17

50

-68

Total

1,044

936

+4

3,302

3,013

+5

 

·   

Symbicort sales in the US were $201 million in the third quarter, a 15 percent increase over last year.  Total prescriptions for Symbicort were up 9 percent over the third quarter last year, compared with a 2.5 percent decline for the fixed combination product class.  As a result, Symbicort share of total prescriptions increased to 19.7 percent in September 2011, up 2.1 percentage points compared with September 2010, despite the launch of a new entrant to the market.  Market share of patients new to combination therapy is 26.6 percent.

 

·   

US sales of Symbicort for the nine months were $604 million, an increase of 14 percent.

 

·   

Symbicort sales in other markets in the third quarter were $554 million, 7 percent ahead of the third quarter last year.  Sales in Established Rest of World were up 23 percent, reflecting continued strong growth in Japan as well as double-digit growth in Canada and Australia.  Sales in Emerging Markets increased by 9 percent, largely on growth in Emerging Europe.  Sales in Western Europe were up 3 percent.

 

·   

US sales for Pulmicort in the third quarter were down 15 percent to $52 million. Sales for the nine months were down 8 percent to $218 million.

 

·   

Sales of Pulmicort in the Rest of World in the third quarter were up 3 percent to $133 million, as a 28 percent increase in Emerging Markets more than offset declines in other regions.  Sales in Rest of World for the nine months were up 6 percent to $451 million.

 

Oncology

 

 

Third Quarter

CER %

Nine Months

CER %

 

2011

$m

2010

$m

 

2011

$m

2010

$m

 

Arimidex

176

284

-44

590

1,234

-55

Zoladex

304

268

+8

881

813

+4

Casodex

137

137

-9

408

431

-13

Iressa

145

102

+29

405

278

+35

Faslodex

139

84

+57

397

234

+65

Nolvadex

25

21

+10

72

64

+5

Caprelsa

2

-

n/m

4

-

n/m

Total

930

899

-4

2,766

3,063

-14

 

·   

In the US, sales of Arimidex were down 81 percent in the third quarter to $8 million as a result of generic competition which commenced in June 2010.  Generics now account for 96 percent of total prescriptions for anastrozole.

 

·   

US sales for Arimidex for the nine months were down 92 percent to $37 million.

 

·   

 

·   

·   

Sales for Casodex in the third quarter were down 9 percent to $137 million.  There were no sales in the US, where generics now account for 98 percent of the prescriptions for bicalutamide.  

 

·   

Casodex sales in the Rest of World in the third quarter were down 7 percent to $137 million, largely due to the 42 percent decline in Western Europe as a result of generic competition. Sales in Japan, which account for more than 60 percent of product sales worldwide, were down 5 percent.  Sales for the nine months in Rest of World were down 10 percent to $409 million.

 

·   

Iressa sales increased by 29 percent to $145 million in the third quarter, including $34 million of sales in Western Europe, which accounted for just over half of the increase in the quarter.  Sales in Emerging Markets were up 30 percent, including a 30 percent increase in China.  Sales in Japan were unchanged.      

 

·   

Iressa sales for the nine months reached $405 million, a 35 percent increase.

 

·   

Increased usage of the 500mg dose of Faslodex resulted in strong growth in the third quarter.  Sales increased by 97 percent in the US to $65 million and grew by 31 percent in the Rest of World to $74 million. 

 

·   

Faslodex sales for the nine months in the US were up 96 percent to $192 million.  Sales in the Rest of World reached $205 million, an increase of 43 percent.

 

 

Neuroscience

 

 

Third Quarter

CER %

Nine Months

CER %

 

2011

$m

2010

$m

 

2011

$m

2010

$m

 

Seroquel

1,400

1,303

+4

4,282

3,962

+6

  Seroquel IR

1,034

1,024

-2

3,190

3,124

-

  Seroquel XR

366

279

+24

1,092

838

+26

Zomig

108

103

-3

312

318

-6

Vimovo

10

5

+80

20

5

+280

Total

1,745

1,644

+2

5,321

4,998

+4

 

·   

In the US, Seroquel franchise sales were up 4 percent to $975 million in the third quarter.  Total prescriptions for the Seroquel franchise were down 2 percent in the third quarter.  Total prescriptions for Seroquel XR increased by 12 percent, accounting for 17.3 percent of prescriptions for the franchise in the US and 19 percent of franchise revenue.  Market share for the Seroquel franchise was a market-leading 29.7 percent in September 2011 (down 20 basis points from June 2011).   

 

·   

US sales for Seroquel for the nine months were $2,999 million, 7 percent ahead of last year.  US sales for Seroquel XR were up 18 percent to $565 million.

 

·   

Seroquel franchise sales in the Rest of World were $425 million in the third quarter, a 4 percent increase.  Sales of Seroquel XR increased by 33 percent, and now account for 43 percent of franchise sales outside the US. Franchise sales were up 6 percent in Western Europe on a 25 percent increase for Seroquel XR.  Seroquel franchise sales were up 1 percent in Established ROW.  Seroquel franchise sales were down 1 percent in Emerging Markets, where strong growth for Seroquel XR was offset by declines for Seroquel IR in Brazil following loss of exclusivity.

 

·   

For the nine months, Seroquel sales in the Rest of World increased by 4 percent to $1,283 million.  Sales of Seroquel XR were up 37 percent to $527 million.

 

·   

Vimovo sales in the US were $14 million for the nine months; sales in Rest of World were $6 million. 

 

Infection and Other

 

 

Third Quarter

CER %

Nine Months

CER %

 

2011

$m

2010

$m

 

2011

$m

2010

$m

 

Synagis

108

139

-22

564

641

-12

Merrem

139

204

-37

469

634

-29

FluMist

124

120

+3

127

123

+3

Non seasonal flu vaccine

-

-

-

7

39

-82

Total

400

493

-21

1,261

1,520

-18

 

 

·   

Sales of Synagis in the third quarter, which is prior to the RSV season in the US, reflect a 22 percent decline in sales in Rest of World, on timing of shipments to Abbott, our international distributor.   

 

·   

Sales of FluMist were $124 million, a 3 percent increase over the third quarter last year. 

 

·   

Sales of Merrem were down 37 percent in the third quarter as a result of generic competition in the US and Western Europe.

 

Geographic Sales

 

 

Third Quarter

CER %

Nine Months

CER %

 

2011

$m

2010

$m

 

2011

$m

2010

$m

 

US

3,187

3,179

-

9,783

10,273

-5

Western Europe

2,067

2,150

-15

6,496

6,821

-10

Established ROW*

1,504

1,262

+7

4,301

3,701

+5

Emerging ROW

1,455

1,307

+7

4,355

3,857

+10

 

*

Established ROW comprises Canada, Japan, Australia and New Zealand. 

 

·   

In the US, revenue was unchanged in the third quarter.  The pricing impact from US healthcare reform measures lowered revenue by around 3.5 percent.  The steep declines in sales for Arimidex have begun to attenuate now that generics have been on the market for over one year.  Good growth for Crestor, Seroquel XR, ONGLYZATM and Symbicort more than offset declines for Nexium, Merrem and Toprol-XL.    

 

·   

Revenue in Western Europe was down 15 percent in the third quarter, despite growth for Seroquel XR, Iressa, Faslodex and Crestor.  Volume declines for three products recently subject to generic competition-Nexium, Arimidex and Merrem-accounted for more than two-thirds of the revenue decline in the quarter.  Realised selling prices continued to experience declines in the mid-single-digit range in the region. 

 

·   

Revenue in Established Rest of World was up 7 percent in the third quarter, largely on growth in Japan, where launch stocking for Nexium and continued strong growth for Crestor and Symbicort led to a 10 percent increase in revenue.  Revenue in Canada was down 1 percent, as growth for Crestor was more than offset by the impact of generic competition for Nexium and Atacand.  Revenue in Other Established ROW was up 11 percent, with Crestor growth accounting for nearly half the increase.

 

·   

Revenue in Emerging Markets was up 7 percent in the third quarter.  This slower growth compared with recent quarters is, in large part, due to slower growth in Other Emerging ROW, which was affected by generic competition for Crestor and Seroquel IR in Brazil and delays in some government tender offers in the Middle East, which are now expected to be shipped in the fourth quarter.  Revenue in China was up 13 percent.  

 

Operating and Financial Review

All narrative in this section refers to growth rates at constant exchange rates (CER) and on a Core basis unless otherwise indicated.  These measures, which are presented in addition to our Reported financial information, are non-GAAP measures which management believe useful to enhance understanding of the Group's underlying financial performance of our ongoing businesses and the key business drivers thereto.  Core financial measures are adjusted to exclude certain items, such as charges and provisions related to our global restructuring  programmes, amortisation and  impairment of the significant intangibles relating to our acquisition of MedImmune Inc. in 2007, our current and future exit arrangements with Merck in the US, and other specified items.  More detail on the nature of these measures is given on page 80 of our Annual Report and Form 20-F Information 2010.  

Third Quarter 

 

All financial figures, except earnings per share, are in $ millions.  Weighted average shares in millions.

 

 

 

 

Reported
2011

Restructuring

Merck &

MedImmune

Amortisation

Intangible

Impairments

Legal

Provisions/

Other**

 

Core
2011

 

Core
2010

 

Actual

%

 

CER
%

Revenue

8,213 

-  

-  

- 

-  

8,213 

7,898 

4 

(2)

Cost of Sales

(1,593)

(14)

-  

- 

-  

(1,607)

(1,505)



Gross Profit

6,620 

(14)

-  

- 

-  

6,606 

6,393 

3 

- 

% sales

80.6%





80.4%

80.9%

-0.5 

+1.2 

Distribution

(93)

-  

-  

- 

-  

(93)

(82)

13 

5 

% sales

1.1%





1.1%

1.0%

-0.1 

-0.1 

R&D

(1,296)

124 

-  

22 

-  

(1,150)

(986)

17 

10 

% sales

15.8%





14.0%

12.5%

-1.5 

-1.5 

SG&A

(2,644)

111 

117 

- 

21 

(2,395)

(2,316)

3 

(2)

% sales

32.2%





29.1%

29.3%

+0.2 

+0.2 

Other Income

1,675 

-  

17 

- 

(1,483)**

209 

222 

(6)

(5)

% sales

20.4%





2.5%

2.8%

-0.3 

-0.1 

Operating Profit

4,262 

221 

134*

22 

(1,462)

3,177 

3,231 

(2)

(2)

% sales

51.9%





38.7%

40.9%

-2.2 

-0.3 

Net Finance Expense

(93)

-  

- 

- 

-  

(93)

(148)



Profit before Tax

4,169 

221 

134 

22 

(1,462)

3,084 

3,083 

- 

(1)

Taxation

(684)

(58)

(23)*

(6)

(6)**

(777)

(922)



Profit after Tax

3,485 

163 

111 

16 

(1,468)

2,307 

2,161 

7 

6 

Non-controlling  Interests

(8)

-  

-  

- 

-  

(8)

(6)



Net Profit

3,477 

163 

111 

16 

(1,468)

2,299 

2,155 

7 

6 

Weighted Average Shares

1,354 

1,354 

1,354 

1,354 

1,354 

1,354 

1,437 



Earnings per Share

2.56 

0.12 

0.08 

0.01 

(1.06)**

1.71 

1.50 

14 

12 

 

*

Of the $134 million amortisation adjustment, $93 million is related to MedImmune, with a corresponding tax adjustment of $23 million; Merck related amortisation was $41 million, which carries no tax adjustment.

 

**

Gain on the sale of Astra Tech was $1,483 million, and carries no tax adjustment.

 

 

Nine Months

 

All financial figures in table, except earnings per share, are in $ millions.  Weighted average shares in millions.

 

 

 

 

Reported
2011

Restructuring

Merck &

MedImmune

Amortisation

Intangible

Impairments

Legal

Provisions/

Other**

 

Core
2011

 

Core
2010

 

Actual

%

 

CER
%

Revenue

24,935 

-  

-   

- 

-  

24,935 

24,652 

1 

(3)

Cost of Sales

(4,414)

18 

-   

- 

-  

(4,396)

(4,520)



Gross Profit

20,521 

18 

-   

- 

-  

20,539 

20,132 

2 

(1)

% sales

82.3%





82.4%

81.7%

+0.7

+1.4

Distribution

(261)

-  

-   

- 

-  

(261)

(248)

5 

(1)

% sales

1.0%





1.0%

1.0%

- 

- 

R&D

(3,656)

293 

-   

22 

-  

(3,341)

(2,925)

14

8 

% sales

14.7%





13.4%

11.9%

-1.5

-1.3

SG&A

(8,020)

191 

352 

- 

105 

(7,372)

(6,899)

7 

3 

% sales

32.2%





29.6%

28.0%

-1.6

-1.5

Other Income

2,044 

-  

51 

- 

(1,483)**

612 

678 

(10)

(11)

% sales

8.2%





2.4%

2.8%

-0.4

-0.2

Operating Profit

10,628 

502 

403*

22 

(1,378)

10,177 

10,738 

(5)

(6)

% sales

42.6%





40.8%

43.6%

-2.8 

-1.6

Net Finance Expense

(313)

-  

-  

- 

- 

(313)

(389)



Profit before Tax

10,315 

502 

403 

22 

(1,378)

9,864 

10,349 

(5)

(5)

Taxation

(1,792)

(132)

(73)

(6)

(28)

(2,031)

(2,647)



Profit after Tax

8,523 

370 

330 

16 

(1,406)

7,833 

7,702 

2 

1 

Non-controlling Interests

(26)

-  

-  

- 

- 

(26)

(17)



Net Profit

8,497 

370 

330 

16 

(1,406)

7,807 

7,685 

2 

1 

Weighted Average Shares

1,377 

1,377 

1,377 

1,377 

1,377 

1,377 

1,445 



Earnings per Share

6.17 

0.27 

0.24 

0.01 

(1.02)

5.67 

5.32 

7 

6 

 

*

Of the $403 million amortisation adjustment, $280 million is related to MedImmune, with a corresponding tax adjustment of $73 million; Merck related amortisation was $123 million, which carries no tax adjustment.

 

**

Gain on the sale of Astra Tech was $1,483 million, and carries no tax adjustment.

Finance Income and Expense

 

Taxation

 

Cash Flow

 

Debt and Capital Structure

 

As at 30 September 2011, outstanding gross debt (including loans, short-term borrowings and overdrafts) was $9,449 million (31 December 2010 $9,222 million). Of the gross debt outstanding at 30 September 2011 $2,055 million is due within one year (31 December 2010: $125 million). Net funds of $1,719 million have decreased by $1,934 million during the year as a result of the net cash outflow during the nine months to September 2011 as described above.

 

Calendar

2 February 2012

Announcement of fourth quarter and full year 2011 results

26 April 2012

Announcement of first quarter 2012 results

26 April 2012

Annual General Meeting

26 July 2012

Announcement of second quarter and half year 2012 results

25 October 2012

Announcement of third quarter and nine months 2012 results


David Brennan

Chief Executive Officer

 

 

Media Enquiries:

Esra Erkal-Paler (London)

+44 20 7604 8030


Abigail Baron (London)

+44 20 7604 8034


Tony Jewell (Wilmington)

+1 302 885 4594


Ann-Leena Mikiver (Södertälje)

+46 8 553 260 20/+46 707 428836




Analyst/Investor Enquiries:

Karl Hård (London)

+44 20 7604 8123


Nicklas Westerholm (London)

+44 20 7604 8124


Ed Seage/Jörgen Winroth (US)

+1 302 886 4065/+1 212 579 0506

 


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