Final Results - Part 2 of 3

RNS Number : 6675W

AstraZeneca PLC

02 February 2012

 



Condensed Consolidated Statement of Comprehensive Income        

For the year ended 31 December		2011 $m		2010 $m
Revenue		33,591		33,269
Cost of sales		(6,026)		(6,389)
Gross profit		27,565		26,880
Distribution costs		(346)		(335)
Research and development1		(5,523)		(5,318)
Selling, general and administrative costs2		(11,161)		(10,445)
Profit on disposal of subsidiary		1,483		-
Other operating income and expense		777		712
Operating profit		12,795		11,494
Finance income		552		516
Finance expense		(980)		(1,033)
Profit before tax		12,367		10,977
Taxation		(2,351)		(2,896)
Profit for the period		10,016		8,081
Other comprehensive income:
Foreign exchange arising on consolidation		(60)		26
Foreign exchange differences on borrowings forming net investment hedges		24		101
Amortisation of loss on cash flow hedge		2		1
Net available for sale gains taken to equity		31		4
Actuarial loss for the period		(741)		(46)
Income tax relating to components of other comprehensive income		198		(61)
Other comprehensive income for the period, net of tax		(546)		25
Total comprehensive income for the period		9,470		8,106
Profit attributable to:
Owners of the parent		9,983		8,053
Non-controlling interests		33		28
		10,016		8,081
Total comprehensive income attributable to:
Owners of the parent		9,428		8,058
Non-controlling interests		42		48
		9,470		8,106
Basic earnings per $0.25 Ordinary Share		$7.33		$5.60
Diluted earnings per $0.25 Ordinary Share		$7.30		$5.57
Weighted average number of Ordinary Shares in issue (millions)		1,361		1,438
Diluted weighted average number of Ordinary Shares in issue (millions)		1,367		1,446

¹   In 2011, research and development includes a total of $553 million of intangible asset impairments relating to olaparib, TC-5214 and other projects in development. In 2010, research and development includes a $445 million impairment of intangible assets related specifically to motavizumab.

²   In 2010, selling, general and administrative costs includes a provision of $592 million with respect to Seroquel legal matters and gains of $791 million arising from changes made to benefits under certain of the Group's post-retirement benefit plans, chiefly the Group's UK pension plan.

Condensed Consolidated Statement of Comprehensive Income        

For the quarter ended 31 December		2011 $m		2010 $m
Revenue		8,656		8,617
Cost of sales		(1,612)		(1,759)
Gross profit		7,044		6,858
Distribution costs		(85)		(87)
Research and development1		(1,867)		(1,930)
Selling, general and administrative costs2		(3,141)		(2,522)
Other operating income and expense		216		92
Operating profit		2,167		2,411
Finance income		126		140
Finance expense		(241)		(268)
Profit before tax		2,052		2,283
Taxation		(559)		(651)
Profit for the period		1,493		1,632
Other comprehensive income:
Foreign exchange arising on consolidation		(81)		13
Foreign exchange differences on borrowings forming net investment hedges		49		38
Amortisation of loss on cash flow hedge		-		-
Net available for sale gains taken to equity		36		4
Actuarial (loss)/gain for the period		(688)		338
Income tax relating to components of other comprehensive income		194		(145)
Other comprehensive income for the period, net of tax		(490)		248
Total comprehensive income for the period		1,003		1,880
Profit attributable to:
Owners of the parent		1,486		1,621
Non-controlling interests		7		11
		1,493		1,632
Total comprehensive income attributable to:
Owners of the parent		999		1,865
Non-controlling interests		4		15
		1,003		1,880
Basic earnings per $0.25 Ordinary Share		$1.16		$1.15
Diluted earnings per $0.25 Ordinary Share		$1.16		$1.14
Weighted average number of Ordinary Shares in issue (millions)		1,312		1,418
Diluted weighted average number of Ordinary Shares in issue (millions)		1,317		1,426

¹ In 2011, research and development includes a total of $471 million of intangible asset impairments relating to olaparib, TC-5214 and other projects in development. In 2010, research and development includes a $445 million impairment of intangible assets related specifically to motavizumab.

² In 2010, selling, general and administrative costs includes gains of $791 million arising from changes made to benefits under certain of the Group's post-retirement benefit plans, chiefly the Group's UK pension plan.

Condensed Consolidated Statement of Financial Position

				At 31 Dec 2011 $m		At 31 Dec 2010 $m
ASSETS Non-current assets
Property, plant and equipment				6,425		6,957
Goodwill				9,862		9,871
Intangible assets				10,980		12,158
Derivative financial instruments				342		324
Other investments				201		211
Deferred tax assets				1,514		1,475
				29,324		30,996
Current assets
Inventories				1,852		1,682
Trade and other receivables				8,754		7,847
Other investments				4,248		1,482
Derivative financial instruments				25		9
Income tax receivable				1,056		3,043
Cash and cash equivalents				7,571		11,068
				23,506		25,131
Total assets				52,830		56,127
LIABILITIES Current liabilities
Interest-bearing loans and borrowings				(1,990)		(125)
Trade and other payables				(8,975)		(8,661)
Derivative financial instruments				(9)		(8)
Provisions				(1,388)		(1,095)
Income tax payable				(3,390)		(6,898)
				(15,752)		(16,787)
Non-current liabilities
Interest-bearing loans and borrowings				(7,338)		(9,097)
Deferred tax liabilities				(2,735)		(3,145)
Retirement benefit obligations				(2,674)		(2,472)
Provisions				(474)		(843)
Other payables				(385)		(373)
				(13,606)		(15,930)
Total liabilities				(29,358)		(32,717)
Net assets				23,472		23,410
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital				323		352
Share premium account				3,078		2,672
Other reserves				1,951		1,917
Retained earnings				17,894		18,272
				23,246		23,213
Non-controlling interests				226		197
Total equity				23,472		23,410

Condensed Consolidated Statement of Cash Flows

For the year ended 31 December		2011 $m		Restated 2010 $m
Cash flows from operating activities
Profit before taxation		12,367		10,977
Finance income and expense		428		517
Depreciation, amortisation and impairment		2,550		2,741
(Increase)/decrease in working capital and short-term provisions		(897)		82
Profit on sale of subsidiary		(1,483)		-
Other non-cash movements		(597)		(463)
Cash generated from operations		12,368		13,854
Interest paid		(548)		(641)
Tax paid		(3,999)		(2,533)
Net cash inflow from operating activities		7,821		10,680
Cash flows from investing activities
Movement in short-term investments and fixed deposits1		(2,743)		(125)
Purchase of property, plant and equipment		(839)		(791)
Disposal of property, plant and equipment		102		83
Purchase of intangible assets		(458)		(1,390)
Disposal of intangible assets		-		210
Purchase of non-current asset investments		(11)		(34)
Disposal of non-current asset investments		-		5
Acquisitions of business operations		-		(348)
Net cash received on disposal of subsidiary		1,772		-
Interest received		171		174
Payments made by subsidiaries to non-controlling interests		(16)		(10)
Net cash outflow from investing activities		(2,022)		(2,226)
Net cash inflow before financing activities		5,799		8,454
Cash flows from financing activities
Proceeds from issue of share capital		409		494
Repurchase of shares for cancellation		(6,015)		(2,604)
Repayment of loans		-		(1,741)
Dividends paid		(3,764)		(3,361)
Hedge contracts relating to dividend payments1		3		(114)
Movement in short-term borrowings		46		(8)
Net cash outflow from financing activities		(9,321)		(7,334)
Net (decrease)/increase in cash and cash equivalents in the period		(3,522)		1,120
Cash and cash equivalents at the beginning of the period		10,981		9,828
Exchange rate effects		(25)		33
Cash and cash equivalents at the end of the period		7,434		10,981
Cash and cash equivalents consists of:
Cash and cash equivalents		7,571		11,068
Overdrafts		(137)		(87)
		7,434		10,981

¹ 2010 restated to reclassify $114m cash paid in hedge contracts relating to dividend payments to cash flows from financing activities.

Condensed Consolidated Statement of Changes in Equity

		Share capital $m		Share premium account $m		Other reserves* $m		Retained earnings $m		Total $m		Non- controlling interests $m		Total equity $m
At 1 January 2010		363		2,180		1,919		16,198		20,660		161		20,821
Profit for the period		-		-		-		8,053		8,053		28		8,081
Other comprehensive income		-		-		-		5		5		20		25
Transfer to other reserve		-		-		(15)		15		-		-		-
Transactions with owners:
Dividends		-		-		-		(3,494)		(3,494)		-		(3,494)
Issue of Ordinary Shares		2		492		-		-		494		-		494
Repurchase of Ordinary Shares		(13)		-		13		(2,604)		(2,604)		-		(2,604)
Share-based payments		-		-		-		99		99		-		99
Transfer from non-controlling interests to payables		-		-		-		-		-		(11)		(11)
Dividend paid to non-controlling interest		-		-		-		-		-		(1)		(1)
Net movement		(11)		492		(2)		2,074		2,553		36		2,589
At 31 December 2010		352		2,672		1,917		18,272		23,213		197		23,410
		Share capital $m		Share premium account $m		Other reserves* $m		Retained earnings $m		Total $m		Non- controlling interests $m		Total equity $m
At 1 January 2011		352		2,672		1,917		18,272		23,213		197		23,410
Profit for the period		-		-		-		9,983		9,983		33		10,016
Other comprehensive income		-		-		-		(555)		(555)		9		(546)
Transfer to other reserve		-		-		2		(2)		-		-		-
Transactions with owners:
Dividends		-		-		-		(3,752)		(3,752)		-		(3,752)
Issue of Ordinary Shares		3		406		-		-		409		-		409
Repurchase of Ordinary Shares		(32)		-		32		(6,015)		(6,015)		-		(6,015)
Share-based payments		-		-		-		(37)		(37)		-		(37)
Transfer from non-controlling interests to payables		-		-		-		-		-		(9)		(9)
Dividend paid to non-controlling interests		-		-		-		-		-		(4)		(4)
Net movement		(29)		406		34		(378)		33		29		62
At 31 December 2011		323		3,078		1,951		17,894		23,246		226		23,472

* Other reserves includes the capital redemption reserve and the merger reserve.

Notes to the Interim Financial Statements

1      BASIS OF PREPARATION AND ACCOUNTING POLICIES

The preliminary announcement for the year ended 31 December 2011 has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and as issued by the International Accounting Standards Board. There have been no significant changes in accounting policies from those set out in AstraZeneca PLC's Annual Report and Form 20-F Information 2010.  

The information contained in Note 5 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2010 and the Third Quarter and Nine Months Results 2011.

The Group has considerable financial resources available.  The Group's revenues are largely derived from sales of products which are covered by patents and for which, historically at least, demand has been relatively unaffected by changes in the general economy.  As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook and as such, the preliminary announcement has been prepared on a Going Concern basis.

The financial information included in the preliminary announcement does not constitute statutory accounts of the Group for the years ended 31 December 2011 and 2010 but is derived from those accounts.  Statutory accounts for 2010 have been delivered to the registrar of companies and those for 2011 will be delivered in due course. The auditors have reported on those accounts; their reports were (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.

2      Net FUNDS

The table below provides an analysis of net funds and a reconciliation of net cash flow to the movement in net funds.

		At 1 Jan  2011  $m		Cash  flow  $m		Non-cash  mvmts  $m		Exchange  mvmts  $m		At 31 Dec  2011  $m
Loans due after one year		(9,097)		-		1,736		23		(7,338)
Current instalments of loan		-		-		(1,769)		-		(1,769)
Total loans		(9,097)		-		(33)		23		(9,107)
Other investments - current		1,482		2,743		29		(6)		4,248
Net derivative financial instruments		325		(3)		36		-		358
Cash and cash equivalents		11,068		(3,473)		-		(24)		7,571
Overdrafts		(87)		(49)		-		(1)		(137)
Short-term borrowings		(38)		(46)		-		-		(84)
		12,750		(828)		65		(31)		11,956
Net funds		3,653		(828)		32		(8)		2,849

Non-cash movements in the period include fair value adjustments under IAS 39.

3      restructuring costs

Profit before tax for the year ended 31 December 2011 is stated after charging restructuring costs of $1,161 million ($1,202million in 2010).  These have been charged to profit as follows:

		4th Quarter 2011 $m		4th Quarter 2010 $m		Full Year 2011 $m		Full Year 2010 $m
Cost of sales		36		34		54		144
Research and development		175		191		468		654
Selling, general and administrative costs		448		200		639		404
Total		659		425		1,161		1,202

4      DISPOSAL OF ASTRA TECH

In August 2011, the Group announced the sale of the Astra Tech business to Dentsply International for approximately $1.8 billion in cash. At 31 December 2011, the Group has reported a profit on disposal of $1,483 million and a total cash inflow of $1,772 million as a result of this transaction.

			$m
Consideration			1,795
Net assets			(279)
Fees and other disposal costs			(59)
Exchange recycled on disposal			26
Profit on disposal			1,483

			$m
Consideration			1,795
Cash held in Astra Tech on disposal			(23)
Cash inflow on disposal			1,772

 

5      LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES

AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation and investigations relating to product liability, commercial disputes, infringement of intellectual property 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 2010 and the Interim Management Statement 2011 as part of the Company's Half-Yearly Financial Report for the six-month period to 30 June 2011 and the Third Quarter and Nine Month results 2011 (together "2011 Disclosures"). Unless noted otherwise below or in the 2011 Disclosures, no provisions have been established in respect of the claims discussed below.

As discussed in the Company's Annual Report and Form 20-F Information 2010, for the majority of claims in which AstraZeneca is involved it is not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of the proceedings. In these cases, AstraZeneca discloses information with respect only to the nature and facts of the cases but no provision is made.

In cases that have been settled or adjudicated, or where quantifiable fines and penalties have been assessed and which are not subject to appeal, or where a loss is probable and we are able to make a reasonable estimate of the loss, we record the loss absorbed or make a provision for our best estimate of the expected loss.

The position could change over time and the estimates that we have made and upon which we have relied in calculating these provisions are inherently imprecise. There can, therefore, be no assurance that any losses that result from the outcome of any legal proceedings will not exceed the amount of the provisions that have been booked in the accounts. The major factors causing this uncertainty are described more fully in the Annual Report and Form 20-F Information 2010 and herein.

AstraZeneca has full confidence in, and will vigorously defend and enforce, its intellectual property.

Matters disclosed in respect of the fourth quarter of 2011 and January 2012

Crestor (rosuvastatin calcium)

Patent litigation - US

Teva Pharmaceutical Industries LTD. (Teva LTD) Infringement suit in the Eastern District of Pennsylvania

In December 2011, the US Court of Appeals for the Federal Circuit affirmed the decision by the US District Court for the Eastern District of Pennsylvania granting AstraZeneca's motion for summary judgment and invalidating Teva LTD's formulation patent. 

Regulatory Related Matters - US 

In November 2011, AstraZeneca filed a Citizen Petition with the FDA for Crestor asking the FDA to withhold approval of any generic rosuvastatin drug product which omits from its labelling the diabetes-related warning and adverse reaction information which AstraZeneca was required to include in Crestor's labelling when the FDA approved Crestor's primary prevention of cardiovascular disease indication. The FDA is required to issue a decision on this petition by 12 May 2012. 

Regulatory litigation - Brazil

The court denied AstraZeneca's request for data exclusivity for Crestor. AstraZeneca requested an interlocutory appeal of the decision, which was denied. AstraZeneca filed a motion for reconsideration in September 2011, which was denied in November 2011.

Patent litigation - Australia 

Apotex Pty Ltd. (Apotex) challenged the validity of AstraZeneca's Australian patent no. 769897 regarding the use of starting dosages of 5mg and 10mg dose of rosuvastatin (dosage patent) in May 2011. In November 2011, AstraZeneca was informed that Apotex was intending to start commercialising its generic rosuvastatin product. AstraZeneca sought a preliminary injunction based on the dosage patent, a formulation patent and the patent claiming the use of Crestor for heterozygous familial hypercholesterolemia (HeFH). In December 2011, the Court granted the preliminary injunction until further order. Apotex's motion to vacate the injunction was heard on 31 January 2012.  A decision is pending.

In January 2012, AstraZeneca instituted proceedings against Watson Pharm Pty Ltd. (Watson) and Actavis Australia Pty Ltd. (Actavis) asserting infringement of the dosage patent, formulation patent and HeFH patent for Crestor. AstraZeneca has applied for interlocutory relief against both Watson and Actavis, pending resolution of the infringement actions.  Sandoz has agreed to an undertaking to refrain from launching a product pending decisions on the Apotex, Watson and Actavis injunctions.

Patent litigation - Mexico 

In November 2011, AstraZeneca filed a lawsuit against the Mexican Health Authority, contesting the Sandoz rosuvastatin health registration claiming that it is in violation of the linkage regulation.  As part of the lawsuit, AstraZeneca also requested a preliminary injunction to stay the Sandoz health registration. The preliminary injunction was first granted and then lifted by the court in December 2011. AstraZeneca has appealed the decision to lift the preliminary injunction. Sandoz' product is on the market.

Patent litigation - Canada

In Canada, in January 2012, the Federal Court of Canada held a hearing in the patent proceeding involving Pharmascience Inc. The parties await the Court's decision. In 2011, AstraZeneca reached settlements with, Mylan Pharmaceuticals Inc., (Mylan) and Ranbaxy Pharmaceuticals Canada Inc. resolving the litigation regarding AstraZeneca's Crestor substance patent, and, as part of the agreements, those companies may enter the Canadian market on 2 April 2012, or earlier, in certain circumstances.

Iressa (gefitinib)

Product liability - Japan

AstraZeneca and the Japanese Ministry of Health, Labour and Welfare (MHLW) appealed the decision of the Tokyo District Court ordering AstraZeneca and the MHLW to pay approximately $192,000, plus interest.  In November 2011, the Tokyo High Court reversed the Tokyo District Court decision and ruled that neither AstraZeneca, nor the MHLW, had any liability for any of the claims. The plaintiffs have appealed the Tokyo High Court decision to the Japanese Supreme Court.

Losec/Prilosec (omeprazole)

European Commission omeprazole case

AstraZeneca is awaiting a ruling on the cross-appeals from the General Court of the European Union's judgment regarding the European Commission's 2005 decision fining AstraZeneca €60 million (reduced to €52.5 million by the General Court) for abuse of a dominant position regarding omeprazole. An oral hearing took place on 12 January 2012.

Nexium (esomeprazole magnesium)

Patent litigation - US

In January 2012, AstraZeneca entered into a settlement agreement with Lupin Ltd. (Lupin) to settle AstraZeneca's previously disclosed patent infringement suit against Lupin in the US District Court for the District of New Jersey in respect of Lupin's ANDA for esomeprazole magnesium delayed-release capsules.  As part of the settlement agreement, AstraZeneca has granted Lupin a licence to enter the US market with its generic esomeprazole magnesium product on 27 May 2014, subject to regulatory approval, or earlier in certain circumstances. 

In January 2012, AstraZeneca commenced a patent infringement action against Torrent Pharmaceuticals Ltd. (Torrent) in the US District Court for the District of New Jersey based on Torrent's  December 2011 Paragraph IV notice letter stating that it had submitted an ANDA for approval to market esomeprazole magnesium capsules. Torrent alleges non-infringement and/or invalidity of 11 patents listed in the Orange Book in reference to Nexium. 

In January 2012, AstraZeneca received a Paragraph IV Certification notice letter from Mylan Laboratories Limited (Mylan) stating that it had submitted an ANDA for approval to market esomeprazole magnesium capsules. Mylan alleges non-infringement and/or invalidity of three patents listed in the Orange Book in reference to Nexium.  AstraZeneca is evaluating Mylan's notice.

Patent litigation - EU: 10-year countries

In July 2010, Consilient Health Limited (Consilient) was granted marketing approval in the UK for a generic esomeprazole product manufactured by Krka, d.d., Novo Mesto (Krka). AstraZeneca initiated infringement proceedings against Consilient and Krka in September 2010. In December 2011, the parties agreed to settle these cases.

In October 2011, the Court stayed the infringement case against Krka in Sweden pending the outcome of the proceedings at the European Patent Office (EPO) regarding EP 1020461 (the '461 patent). In January 2011, AstraZeneca was served with a lawsuit filed by ratiopharm GmbH and ratiopharm AB (both ratiopharm) claiming that the Nexium esomeprazole magnesium patent (the '461 patent) is invalid in Sweden. In November 2011, the Court stayed the invalidity case initiated by ratiopharm pending the outcome of the proceedings at the EPO regarding the '461 patent.

Patent litigation - Finland

In July 2008, AstraZeneca initiated a declaratory action against Sandoz AS and Sandoz A/S and in September 2008 Hexal AG, Sandoz Oy Ab and Sandoz A/S initiated an invalidity case regarding the esomeprazole enantiomer patent. On 22 December 2011, the Helsinki District Court found the patent invalid and also dismissed AstraZeneca's claims in the declaratory action. AstraZeneca has the opportunity to appeal.

Patent litigation - Turkey

In July 2011, AstraZeneca initiated patent infringement proceedings against Logus Ilac, Integri Ilac, Vem Ilac, Biofarma Ilac and Sandoz Ilac San. ve Tic. AS based on esomeprazole related patents. In September 2011, the Court dismissed the case against Integri Ilac. In October 2011, the Court dismissed the case against Biofarma Ilac and Logus Ilac due to the fact that these companies had transferred their applications for marketing authorisations to third parties.

Government investigations/proceedings

The Dutch National Competition Authority (NMa) investigation into alleged practices regarding Nexium and alleged breaches of both Dutch and EU competition laws is ongoing. On 23 December 2011, the investigation team issued a report alleging foreclosure of generic versions of certain Proton Pump Inhibitors. The file has now been passed to the Legal Department of the NMa.

Seroquel (quetiapine fumarate)

Product liability

With regard to Seroquel product liability litigation in the US, which primarily relates to diabetes and/or other related injuries, as of 31 January 2012, AstraZeneca was aware of approximately 25 claims that have not been settled in principle. As of 31 January 2012, pursuant to court-ordered mediation, AstraZeneca has reached agreements in principle on monetary terms, subject to various subsequent conditions, approvals and agreement on non-monetary terms, with the attorneys representing 28,575 claimants. The mediation process is ongoing with regard to other currently unsettled claims.

With regard to insurance coverage for the substantial legal defence costs and settlements that have been incurred in connection with Seroquel-related product liability claims, disputes continue with insurers about the availability of coverage under insurance policies. These policies have aggregate coverage limits of $300 million. In September 2011, AstraZeneca Insurance Company Limited commenced formal legal proceedings in the High Court, in London, against two of these insurers for recovery of money which AstraZeneca believes is due under two of these policies. No insurance receivable can be recognised under applicable accounting standards at this time.

State Attorney General Matters

Various states have sued AstraZeneca generally alleging that AstraZeneca made false and/or misleading statements in marketing and promoting Seroquel. AstraZeneca reached settlement agreements in principle with the Attorneys General of Arkansas in November 2011 and Alaska in December 2011 and provisions have been taken.

Patent litigation - Portugal

In the cases against Generis Farmacêutica, S.A., KRKA - Farmacêutica, Sociedade Unipessoal, Lda., Mer Medicamentos, Lda. and Wynn Industrial Pharma, S.A. preliminary injunctions were granted by the Court of Appeal in November 2011.

In October 2011, the Court of Appeal granted preliminary injunctions against Cinfa Portugal, Lda. and Bluescience Lda., S.A. and ordered suspension of their retail price until 27 March 2012.

Seroquel XR (quetiapine fumarate)

Patent Litigation - Canada 

In November 2011, Sandoz Canada Inc. (Sandoz) filed a Statement of Claim against AstraZeneca in respect of the Canadian patent no. 2,251,944 (the '944 patent).  Sandoz seeks a declaration that its generic copies of Seroquel XR do not infringe the '944 patent.  

Patent Litigation - the Netherlands

In January 2012, the District Court in the Hague heard the revocation action filed by Sandoz BV, Hexal AG, Accord Healthcare Ltd and Accord Healthcare BV against AstraZeneca AB. A decision is expected in March 2012.

Synagis (palivizumab)

In September 2011, AstraZeneca's biologics unit, MedImmune, filed an action against Abbott International, LLC (Abbott) in the Circuit Court for Montgomery County, Maryland.  Abbott moved to dismiss the action and MedImmune filed its opposition.  A hearing on the motions has been set for 9 February 2012.

In September 2011, Abbott filed a parallel action in the Illinois State Court. MedImmune filed a motion to dismiss the action and Abbott filed a motion seeking to deposit the 'disputed funds' in escrow.  Both MedImmune's motion to dismiss and Abbott's motion for escrow were heard on 19 January 2012.  A ruling on those motions is expected by mid-February.

Symbicort (budesonide/formoterol)

Patent litigation - US 

In December 2011, Accuhale LLC (Accuhale) filed a patent infringement action against AstraZeneca in the US District Court for the Eastern District of Texas. Accuhale alleges sales of Symbicort infringe its US Patent No. 5,718,355.

Vimovo(fixed-dose combination of naproxen and esomeprazole)

Patent litigation - US

In October 2011, AstraZeneca and Pozen Inc. sued Anchen Pharmaceuticals, Inc. (Anchen) in the US District Court for the District of New Jersey for patent infringement based on Anchen's September 2011 Paragraph IV notice letter to AstraZeneca stating that Anchen had submitted an ANDA for approval to market generic versions of Vimovo tablets before expiration of patents listed in the Orange Book referencing Vimovo.   

Other Commercial Litigation

Toprol XL (metoprolol succinate)

AstraZeneca is defending anti-trust claims regarding the listing and enforcement of patents protecting Toprol XL, brought by both direct purchasers and end-payers. In December 2011, AstraZeneca paid $15 million to settle the claims of those plaintiffs who have opted-out of the putative class of direct purchasers and took a corresponding provision. AstraZeneca continues to defend against the remaining claims alleged by end-payers.

Other Government Investigations

Serbia

In August 2011, AstraZeneca UK Limited's Representative Office in Belgrade, Serbia was served with a criminal indictment alleging that local employees of AstraZeneca, and several other pharmaceutical companies who are also named defendants in the indictment, made allegedly improper payments to physicians at the Institute of Oncology and Radiology of Serbia. AstraZeneca filed a number of preliminary procedural objections asking the Serbian criminal court to dismiss the indictment against the Representative Office and those objections were granted in November 2011. The Serbian prosecutor then amended and re-served the indictment, and in December 2011 AstraZeneca asked the Court again to dismiss the indictment.

Advance PCS

In November 2006, AstraZeneca was notified of an inquiry by the US Attorney's Office for the Eastern District of Pennsylvania regarding whether a payment made by AstraZeneca to Advance PCS was taken into account when calculating best price.  In December 2011, the matter was resolved in principle with Centers for Medicare and Medicaid Services  and the Department of Justice.

Korea - KFTC Investigation

In September 2011, the Korean Fair Trade Commission (KFTC) announced administrative fines against AstraZeneca and five other pharmaceutical companies as a result of the third and final wave of its investigation into alleged unfair trade practices related to interactions between the local pharmaceutical industry and Korean healthcare providers. AstraZeneca was fined KRW 1,512 million (approximately US$ 1.24 million), but was not referred to the public prosecutor for criminal proceedings. The KFTC's final investigation report was provided to AstraZeneca in November and alleges that AstraZeneca Korea induced prescriptions through improper marketing to physicians in 2006 and 2007, but recognises that such alleged unfair conduct stopped in 2007 after AstraZeneca voluntarily implemented an improved and effective compliance programme across its business in Korea.

6      FULL YEAR territorial REVENUE analysis  

						% Growth
		Full Year 2011 $m		Full Year 2010 $m		Actual		Constant Currency
US		13,426		13,727		(2)		(2)
Western Europe1		8,501		9,168		(7)		(11)
Canada		1,604		1,510		6		1
Japan		3,064		2,617		17		6
Other Established ROW		1,233		1,049		18		4
Established ROW2		5,901		5,176		14		4
Emerging Europe		1,244		1,165		7		7
China		1,261		1,047		20		15
Emerging Asia Pacific		968		890		9		5
Other Emerging ROW		2,290		2,096		9		12
Emerging ROW3		5,763		5,198		11		10
Total Revenue		33,591		33,269		1		(2)

¹ Western Europe comprises France, Germany, Italy, Sweden, UK and others.

²Established ROW comprises Australia, Canada, Japan and New Zealand.

³ Emerging ROW comprises Brazil, China, India, Mexico, Russia, Turkey and all other ROW countries.

 

7      FOURTH QUARTER territorial REVENUE analysis    

						% Growth
		4th Quarter 2011 $m		4th Quarter 2010 $m		Actual		Constant Currency
US		3,643		3,454		5		5
Western Europe1		2,005		2,347		(15)		(15)
Canada		363		408		(11)		(11)
Japan		926		763		21		12
Other Established ROW		311		304		2		-
Established ROW2		1,600		1,475		8		3
Emerging Europe		318		306		4		11
China		314		267		18		12
Emerging Asia Pacific		236		239		(1)		-
Other Emerging ROW		540		529		2		13
Emerging ROW3		1,408		1,341		5		10
Total Revenue		8,656		8,617		-		-

¹ Western Europe comprises France, Germany, Italy, Sweden, UK and others.

²Established ROW comprises Australia, Canada, Japan and New Zealand.

³ Emerging ROW comprises Brazil, China, India, Mexico, Russia, Turkey and all other ROW countries.

8      FULL YEAR product REVENUE analysis        

		World						US				Western Europe						Established ROW						Emerging ROW
		Full Year 2011 $m		Actual Growth %		Constant  Currency Growth %		Full Year 2011 $m		Actual Growth %		Full Year 2011 $m		Actual Growth %		Constant  Currency Growth %		Full Year 2011 $m		Actual Growth %		Constant  Currency Growth %		Full Year 2011 $m		Actual Growth %		Constant  Currency Growth %
Gastrointestinal:
Nexium		4,429		(11)		(12)		2,397		(11)		762		(37)		(39)		540		19		10		730		18		20
Losec/Prilosec		946		(4)		(11)		38		(21)		242		(4)		(10)		447		2		(7)		219		(12)		(15)
Others		161		21		19		101		33		46		2		(2)		7		17		17		7		17		-
Total Gastrointestinal		5,536		(9)		(11)		2,536		(10)		1,050		(30)		(33)		994		11		2		956		9		10
Cardiovascular:
Crestor		6,622		16		13		3,074		16		1,225		10		5		1,662		25		15		661		9		8
Atacand		1,450		(2)		(6)		182		(16)		731		(1)		(6)		213		(5)		(13)		324		6		7
Seloken/Toprol-XL		986		(19)		(20)		404		(41)		85		(7)		(12)		38		(3)		(13)		459		17		15
Plendil		256		-		(4)		8		(47)		23		(15)		(19)		14		-		(7)		211		6		2
Tenormin		270		(2)		(8)		11		(15)		59		(3)		(8)		125		(2)		(10)		75		-		(1)
Zestril		144		(8)		(11)		10		-		71		(12)		(16)		14		(18)		(24)		49		-		(2)
OnglyzaTM		211		206		206		156		189		34		240		240		7		250		250		14		367		367
Brilinta/Brilique		21		n/m		n/m		11		n/m		9		n/m		n/m		-		-		-		1		n/m		n/m
Others		252		(4)		(7)		-		(100)		119		5		-		25		(4)		(15)		108		-		-
Total Cardiovascular		10,212		9		5		3,856		6		2,356		6		1		2,098		18		9		1,902		9		8
Respiratory:
Symbicort		3,148		15		11		846		17		1,434		5		-		418		46		35		450		21		19
Pulmicort		892		2		-		279		(9)		189		(12)		(16)		126		11		2		298		25		23
Rhinocort		212		(7)		(9)		74		(20)		37		(5)		(10)		20		25		13		81		3		-
Others		216		(15)		(19)		8		(80)		109		(8)		(13)		23		5		-		76		4		1
Total Respiratory		4,468		9		6		1,207		4		1,769		2		(3)		587		34		24		905		19		17
Oncology:
Arimidex		756		(50)		(53)		42		(91)		260		(55)		(56)		308		7		(2)		146		(3)		(6)
Zoladex		1,179		6		3		39		(15)		262		(5)		(9)		494		10		-		384		12		18
Casodex		550		(5)		(12)		(6)		(138)		80		(29)		(33)		364		5		(5)		112		9		7
Iressa		554		41		32		2		(50)		127		159		147		204		12		2		221		40		34
Others		666		49		46		276		71		206		53		46		70		15		5		114		28		26
Total Oncology		3,705		(8)		(12)		353		(51)		935		(19)		(22)		1,440		8		(1)		977		16		16
Neuroscience:
Seroquel IR		4,338		5		3		3,344		8		546		(3)		(8)		228		2		(8)		220		(15)		(17)
Seroquel XR		1,490		29		27		779		22		490		36		30		89		46		34		132		40		41
Local Anaesthetics		602		-		(6)		10		(66)		242		(9)		(13)		205		10		-		145		16		13
Zomig		413		(4)		(7)		158		(10)		174		1		(4)		68		(1)		(9)		13		18		9
Diprivan		294		(9)		(13)		12		(73)		42		(16)		(20)		83		9		1		157		4		(1)
Vimovo		34		n/m		n/m		21		n/m		6		n/m		n/m		6		n/m		n/m		1		n/m		n/m
Others		33		(21)		(24)		1		-		17		(37)		(41)		3		-		-		12		9		9
Total Neuroscience		7,204		7		5		4,325		8		1,517		6		1		682		10		1		680		5		2
Infection & Other:
Synagis		975		(6)		(6)		570		(12)		404		3		3		-		-		-		1		-		-
Merrem		583		(29)		(30)		41		(68)		179		(45)		(48)		53		(7)		(14)		310		2		-
FluMist		161		(7)		(7)		160		(8)		-		-		-		-		-		-		1		-		-
Others		137		(8)		(8)		77		(28)		10		n/m		n/m		20		-		(25)		30		55		90
Total Infection & Other		1,856		(15)		(15)		848		(19)		593		(18)		(19)		73		(5)		(17)		342		5		6
Aptium Oncology		224		2		2		224		2		-		-		-		-		-		-		-		-		-
Astra Tech		386		(28)		(32)		77		(24)		281		(28)		(33)		27		(29)		(39)		1		(67)		(67)
Total		33,591		1		(2)		13,426		(2)		8,501		(7)		(11)		5,901		14		4		5,763		11		10

9      fourth QUARTER product REVENUE analysis          

		World						US				Western Europe						Established ROW						Emerging ROW
		4th Quarter 2011 $m		Actual Growth %		Constant  Currency Growth %		4th Quarter 2011 $m		Actual Growth %		4th Quarter 2011 $m		Actual Growth %		Constant  Currency Growth %		4th Quarter 2011 $m		Actual Growth %		Constant  Currency Growth %		4th Quarter 2011 $m		Actual Growth %		Constant  Currency Growth %
Gastrointestinal:
Nexium		1,067		(13)		(13)		614		(8)		145		(50)		(50)		132		7		5		176		15		24
Losec/Prilosec		248		2		(2)		8		(11)		57		4		2		132		6		(2)		51		(6)		(6)
Others		49		88		88		34		209		11		(8)		(8)		1		-		-		3		50		50
Total Gastrointestinal		1,364		(9)		(9)		656		(4)		213		(40)		(41)		265		6		2		230		10		16
Cardiovascular:
Crestor		1,771		12		11		843		12		305		6		5		465		19		15		158		2		8
Atacand		346		(8)		(6)		43		(14)		183		(4)		(4)		40		(33)		(35)		80		7		16
Seloken/Toprol-XL		236		(7)		(5)		89		(25)		22		(8)		(8)		10		-		(10)		115		14		19
Plendil		60		(5)		(8)		1		(67)		5		(17)		(17)		4		-		-		50		-		(4)
Tenormin		68		(3)		(4)		2		(33)		14		(7)		(7)		34		(3)		(9)		18		6		12
Zestril		35		(13)		(13)		2		-		17		(15)		(15)		2		(50)		(50)		14		-		-
OnglyzaTM		71		122		122		53		121		10		100		100		3		200		200		5		150		150
Brilinta/Brilique		5		n/m		n/m		-		-		5		n/m		n/m		-		-		-		-		-		-
Others		62		(7)		(6)		-		-		28		4		4		7		(13)		(25)		27		(16)		(9)
Total Cardiovascular		2,654		7		7		1,033		9		589		2		2		565		10		6		467		5		10
Respiratory:
Symbicort		839		13		13		242		26		359		1		1		123		31		26		115		14		19
Pulmicort		223		(4)		(4)		61		(10)		46		(19)		(19)		40		11		6		76		6		8
Rhinocort		50		(4)		(2)		16		(16)		8		(11)		(11)		5		-		-		21		11		16
Others		54		(10)		(8)		2		(50)		26		(13)		(13)		4		-		-		22		-		5
Total Respiratory		1,166		7		7		321		13		439		(2)		(3)		172		24		19		234		9		14
Oncology:
Arimidex		166		(40)		(42)		5		(77)		45		(68)		(68)		84		5		(1)		32		(11)		(11)
Zoladex		298		(1)		(1)		8		(33)		63		(6)		(6)		137		8		1		90		(6)		3
Casodex		142		(4)		(9)		(5)		(350)		17		(35)		(35)		102		7		(1)		28		12		12
Iressa		149		30		25		-		(100)		34		70		70		60		11		2		55		38		38
Others		184		32		32		76		31		55		41		41		23		21		16		30		30		30
Total Oncology		939		(4)		(6)		84		(12)		214		(27)		(27)		406		8		1		235		7		11
Neuroscience:
Seroquel IR		1,148		12		12		910		18		128		(9)		(9)		63		31		21		47		(29)		(24)
Seroquel XR		398		26		27		214		31		127		19		19		23		21		16		34		26		37
Local Anaesthetics		148		(9)		(10)		-		(100)		57		(20)		(20)		54		-		(6)		37		16		19
Zomig		101		(8)		(9)		41		(11)		43		-		-		16		(16)		(21)		1		(50)		(50)
Diprivan		67		(17)		(19)		-		(100)		9		(18)		(18)		20		(13)		(17)		38		(5)		(5)
Vimovo		14		n/m		n/m		7		n/m		4		n/m		n/m		3		n/m		n/m		-		-		-
Others		7		(46)		(46)		-		-		3		(57)		(57)		-		-		-		4		(40)		(40)
Total Neuroscience		1,883		10		10		1,172		18		371		(2)		(2)		179		9		2		161		(6)		(2)
Infection & Other:
Synagis		411		4		4		261		(5)		150		24		24		-		-		-		-		-		-
Merrem		114		(38)		(35)		8		(60)		28		(58)		(58)		7		(56)		(56)		71		(11)		(5)
FluMist		34		(33)		(33)		34		(34)		-		-		-		-		-		-		-		-		-
Others		36		44		44		19		(9)		1		n/m		n/m		6		(40)		(40)		10		n/m		n/m
Total Infection & Other		595		(9)		(9)		322		(13)		179		(3)		(4)		13		(50)		(50)		81		4		13
Aptium Oncology		55		2		2		55		2		-		-		-		-		-		-		-		-		-
Astra Tech		-		(100)		(100)		-		(100)		-		(100)		(100)		-		(100)		(100)		-		(100)		(100)
Total		8,656		-		-		3,643		5		2,005		(15)		(15)		1,600		8		3		1,408		5		10

Convenience Translation of Key Financial Information

For the quarter ended 31 December		2011  $m		2010  $m		2011  £m		2010  £m		2011  SEKm		2010  SEKm
Revenue		8,656		8,617		5,605		5,580		59,770		59,500
Reported
Operating profit		2,167		2,411		1,403		1,561		14,963		16,648
Profit before tax		2,052		2,283		1,329		1,478		14,169		15,764
Earnings per share		$1.16		$1.15		£0.75		£0.74		SEK8.01		SEK7.94
Core
Operating profit		2,990		2,865		1,936		1,855		20,646		19,783
Profit before tax		2,875		2,737		1,862		1,772		19,852		18,899
Earnings per share		$1.61		$1.39		£1.04		£0.90		SEK11.12		SEK9.60

For the year ended 31 December		2011  $m		2010  $m		2011  £m		2010  £m		2011  SEKm		2010  SEKm
Revenue		33,591		33,269		21,751		21,542		231,946		229,722
Reported
Operating profit		12,795		11,494		8,285		7,443		88,349		79,366
Profit before tax		12,367		10,977		8,008		7,108		85,394		75,796
Earnings per share		$7.33		$5.60		£4.75		£3.63		SEK50.61		SEK38.67
Core
Operating profit		13,167		13,603		8,526		8,808		90,918		93,929
Profit before tax		12,739		13,086		8,249		8,473		87,963		90,359
Earnings per share		$7.28		$6.71		£4.71		£4.34		SEK50.27		SEK46.33
Dividend per Ordinary Share		$2.80		$2.55		£1.76		£1.62		SEK18.54		SEK17.11
Net cash inflow from operating activities		7,821		10,680		5,064		6,916		54,004		73,745
(Decrease)/increase in cash & cash equivalents		(3,522)		1,120		(2,281)		725		(24,319)		7,734
Capital and Reserves Attributable to Equity Holders		23,246		23,213		15,052		15,031		160,514		160,286

All Sterling (£) and Swedish krona (SEK) equivalents are shown for convenience and have been calculated using the current period end rates of $1= £0.64752 and $1= SEK6.905 respectively.  Dividend per Ordinary Share is shown as the actual amount payable using the rates at the date of declaration of the dividend.

 

Shareholder Information

ANNOUNCEMENTS AND MEETINGS

Announcement of first quarter 2012 results	26 April 2012
Annual General Meeting	26 April 2012
Announcement of second quarter and half year 2012 results	26 July 2012
Announcement of third quarter and nine months 2012 results	25 October 2012

DIVIDENDS

The record date for the first interim dividend payable on 12 September 2011 was 5 August 2011. Shares traded ex-dividend from 3 August 2011.

The record date for the second interim dividend for 2011, payable on 19 March 2012 will be 17 February 2012. Shares will trade ex-dividend from 15 February 2012.

Future dividends will normally be paid as follows:

First interim	Announced in July and paid in September
Second interim	Announced in January and paid in March

TRADEMARKS

Trademarks of the AstraZeneca group of companies appear throughout this document in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol are all trademarks of the AstraZeneca group of companies. Trademarks of companies other than AstraZeneca appear with a ® or ™ sign and include: ONGLYZA™, KOMBOGLYZE™ and KOMBIGLYZE XR™, trademarks of Bristol-Myers Squibb Company.

ADDRESSES FOR CORRESPONDENCE

Registrar and Transfer Office Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA UK	US Depositary JP Morgan Chase & Co PO Box 64504 St Paul MN 55164-0504 US	Registered Office 2 Kingdom Street London W2 6BD UK	Swedish Central Securities Depository Euroclear Sweden AB PO Box 7822 SE-103 97 Stockholm Sweden
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995, we are providing the following cautionary statement: The preliminary announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. Although we believe our expectations are based on reasonable assumptions, any forward-looking statements, by their very nature, involve risks and uncertainties and may be influenced by factors that could cause actual outcomes and results to be materially different from those predicted. The forward-looking statements reflect knowledge and information available at the date of preparation of the preliminary announcement and AstraZeneca undertakes no obligation to update these forward-looking statements. We identify the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in such statements. Important factors that could cause actual results to differ materially from those contained in forward-looking statements, certain of which are beyond our control, include, among other things: the loss or expiration of patents, marketing exclusivity or trademarks; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage; exchange rate fluctuations; the risk that R&D will not yield new products that achieve commercial success; the risk that strategic alliances and acquisitions will be unsuccessful; the impact of competition, price controls and price reductions; taxation risks; the risk of substantial product liability claims; the impact of any failure by third parties to supply materials or services; the risk of failure to manage a crisis; the risk of delay to new product launches; the difficulties of obtaining and maintaining regulatory approvals for products; the risk of failure to observe ongoing regulatory oversight; the risk that new products do not perform as we expect; the risk of environmental liabilities; the risks associated with conducting business in emerging markets; the risk of reputational damage; the risk of product counterfeiting; the risk that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects; and the impact of increasing implementation and enforcement of more stringent anti-bribery and anti-corruption legislation.

 

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