First quarter 2022 results

RNS Number : 7840J
AstraZeneca PLC
29 April 2022
 

AstraZeneca PLC

29 April 2022 07:00 GMT

 

First quarter 2022 results

 

 Strong start to the year. Continued investment in the pipeline to drive sustainable long-term growth.

 

Revenue and EPS summary

 

 

 

 

Q1 2022 

 

 

 

 

  % Change

 

 

$m 

Actual 

CER1 

- Product Sales 

 

10,980

51 

56 

- Collaboration Revenue

 

410

n/m 2

n/m 

Total Revenue 

 

11,390

56 

60 

Reported3 EPS4

 

$0.25

(79)

(73)

Core5 EPS 6 

 

$1.89

16 

20 

 

Financial performance (growth numbers at CER)

 

Total Revenue increased 60% to $11,390m, reflecting growth across the Company, the contribution of the Alexion medicines and several Vaxzevria contracts that are expected to complete delivery by half year 2022

 

Total Revenue from Oncology increased 25%7, including a milestone payment; Product Sales from Oncology increased 18%. Total Revenue from CVRM8 increased 18%, R&I9 increased 4% and Rare Disease increased 7%10

 

Operating Margin in the quarter benefitted from phasing of costs

 

Core EPS increased 20% to $1.89

 

FY 2022 guidance at CER reiterated

 

Key milestones achieved since the prior results

 

Key data: Enhertu11 in HER212-low breast cancer (DESTINY-Breast04), AZD8233 in hypercholesterolaemia (ETESIAN, Phase IIb) and publication of data for Lynparza in prostate cancer (PROpel) and nirsevimab in RSV13 (MELODY/MEDLEY)

 

Key approvals: Saphnelo and Evusheld in the EU, Ondexxya in Japan, and in the US, approvals of Ultomiris for gMG14 and Lynparza15 for early breast cancer (OlympiA)

 

Other key milestones: US FDA16 Breakthrough Therapy Designation for Enhertu in HER2-low breast cancer (DESTINY-Breast04), Priority Reviews for Enhertu in HER2-mutant metastatic non-small cell lung cancer (DESTINY-Lung01), and Imfinzi and tremelimumab in advanced liver cancer (HIMALAYA), and EMA17 accelerated assessment for nirsevimab in RSV (MELODY/MEDLEY)

 

Pascal Soriot, Chief Executive Officer, AstraZeneca, said:

 

"2022 has started strongly for AstraZeneca. Farxiga achieved $1bn revenue in the quarter and our Oncology medicines delivered Product Sales growth of 18%, despite COVID-19 continuing to impact cancer diagnosis and treatment. High-level results from the DESTINY-Breast04 trial pointed to Enhertu's potential to redefine treatment of HER2‑low metastatic breast cancer, and Ultomiris became the first and only long-acting C5 inhibitor approved for generalised myasthenia gravis in the US.

 

Today we have unveiled plans for a new strategic research and development centre in the heart of Cambridge, Massachusetts' scientific hub. In line with our sustainability commitments, it will be designed to the highest environmental standards. Our investments in pioneering science give us confidence of further advances in the years to come."  

 

Guidance

 

The Company reiterates FY 2022 guidance at CER.

 

 

Total Revenue is expected to increase by a high teens percentage

Core EPS is expected to increase by a mid-to-high twenties percentage

 

 

The CER growth rates include the full-year contribution of Vaxzevria in both FY 2021 and FY 2022

 

Total Revenue from COVID-19 medicines is anticipated to decline by a low-to-mid twenties percentage, with an expected decline in sales of Vaxzevria being partially offset by growth in Evusheld sales. The majority of Vaxzevria revenue in 2022 is expected to come from initial contracts. The Gross Margin from the COVID-19 medicines is expected to be lower than the Company average

 

Core Operating Expenses are expected to increase by a low-to-mid teens percentage, driven in substantial part by the full year integration of Alexion expenses

 

Emerging Markets Total Revenue, including China, is expected to grow mid-single-digits in FY 2022. China Total Revenue is expected to decline by a mid-single-digit percentage in FY 2022, primarily due to continued NRDL and VBP programme impacting various medicines. The Company remains confident in the longer term outlook for Emerging Markets, driven by a large market opportunity, broader patient access and an increased mix of new medicines

 

A Core Tax Rate between 18-22%

 

AstraZeneca continues to recognise and actively manage the heightened risks from COVID-19 and geopolitical and supply chain uncertainties on overall business performance. Variations in performance between quarters can be expected to continue.

 

The Company is unable to provide guidance on a Reported basis because AstraZeneca cannot reliably forecast material elements of the Reported result, including any fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal-settlement provisions. Please refer to the cautionary statements section regarding forward-looking statements at the end of this announcement.

 

Currency impact

 

If foreign-exchange rates for April to December 2022 were to remain at the average of rates seen in Q1 2022, it is anticipated that there would be a low single-digit adverse impact on Total Revenue and a mid single-digit adverse impact on Core EPS versus the financials at CER. The Company's foreign-exchange rate sensitivity analysis is contained in Table 15.

 

Table 1 : Key elements of Total Revenue performance

 

 

 

 

% Change

 

 

Revenue type 

 

$m 

Actual 

CER 

 

 

Product Sales 

 

10,980 

51 

56 

 

$1,688m from medicines acquired with Alexion 

Collaboration Revenue 

 

410 

n/m 

n/m 

 

$76m for Enhertu (Q1 2021: $39m), and milestone payments of $175m for Lynparza and $70m for tralokinumab (Q1 2021: $nil)

Total Revenue

 

11,390 

56 

60 

 


Disease areas 

 

$m 

Actual 

CER 

 

 

Oncology 

 

3,644 

21 

25 

 

Product Sales up 14% (18% CER). Strong performance despite a continuing COVID-19 impact on cancer diagnoses and treatment rates

CVRM

 

2,219 

14 

18 

 

Farxiga grew 60% (67% at CER) to $1,001m 

R&I

 

1,584 

 

Pulmicort declined 34% primarily due to inclusion in China's VBP 18 programme, implemented in October 2021 

V&I19 

 

1,814 

20 >6x 

>6x 

 

$1,145m from Vaxzevria 21 and $469m from Evusheld 

Majority of Vaxzevria revenue from initial contracts, several of which completed during the quarter. In-line with guidance, Vaxzevria revenue is expected to decline in later quarters

Rare Disease 

 

1,694 

 

Durable C5 franchise growth, including continued conversion from Soliris to Ultomiris in PNH 22 and aHUS 23 , and Soliris growth in gMG and NMOSD 24

Other Medicines

 

435 

(18)

(15)

 

 

Total Revenue

 

11,390 

56 

60 

 

 

Regions exc. Vaxzevria 

 

$m 

Actual 

CER 

 

 

Emerging Markets 

 

2,833 

11 

14 

 

 

- China 

 

1,575 

(6)

(8)

 

Pricing pressure associated with the NRDL 25 and VBP programmes

- Ex-China Emerging Markets 

 

1,258 

45 

57 

 

$110m from medicines acquired with Alexion 

US 

 

4,055 

76 

76 

 

$1,014m from medicines acquired with Alexion 

Europe 

 

2,150 

63 

73 

 

$366m from medicines acquired with Alexion 

Established RoW 

 

1,207 

40 

51 

 

$208m from medicines acquired with Alexion 

Total Revenue exc. Vaxzevria

 

10,245 

45 

50 

 

$1,698m from medicines acquired with Alexion 

Regions inc. Vaxzevria

 

$m 

Actual 

CER 

 

 

Emerging Markets 

 

3,364 

30 

32 

 

Impacted by quarterly phasing of Vaxzevria

- China 

 

1,622 

(3)

(6)

 

In line with FY 2022 guidance

- Ex-China Emerging Markets 

 

1,742 

91 

>2x 

 

 

US 

 

4,134 

79 

79 

 

 

Europe 

 

2,284 

48 

57 

 

 

Established RoW 

 

1,608 

85 

98 

 

 

Total Revenue

 

11,390 

56 

60 

 

 

 

Table 2 : Key elements of financial performance

 

 

Q1 2022

 

 

Metric
($m or %)

Reported

Reported change

Core

Core
change

 

Comments26

Total Revenue

11,390

56% Actual 60% CER

11,390

56% Actual 60% CER

 

See Table 1

Gross Margin27

68%

-6pp Actual
-7pp CER

79%

+5pp Actual

+4pp CER

 

+ Contribution of Alexion

+ Increasing mix of Oncology sales

Increasing mix of COVID-19 therapies

China impact of NRDL and VBP

Increasing impact from profit-sharing arrangements including the Lynparza collaboration with MSD

Reported impacted by unwind of Alexion inventory fair value adjustment

R&D Expense

2,133

24% Actual 26% CER

2,186

33% Actual 36% CER

 

+ Increased investment in pipeline

+ Addition of Alexion R&D 

Beneficial phasing of costs resulted in a Core R&D-to-Total Revenue ratio of 19% (FY 2021: 21%)

SG&A Expense

4,840

65% Actual 68% CER

2,946

23% Actual 25% CER

 

+ Addition of Alexion

+ Reported impacted by $775m legal settlement with Chugai Pharmaceutical Co. Ltd and amortisation related to Alexion acquisition

Beneficial phasing of costs resulted in a Core SG&A-to-Total Revenue ratio of 26% (FY 2021: 30%)

Other Operating Income28

97

(92%) Actual

(92%) CER

98

(92%) Actual (92%) CER

 

Limited divestments in quarter, majority of income coming from royalties and prior transactions

Operating Margin

8%

-18pp Actual
-18pp CER

35%

Stable Actual
and CER

 

See Gross Margin and Expenses
commentary above

Net Finance Expense

319

13% Actual 7% CER

252

35% Actual 23% CER

 

+ Alexion debt financing costs

Reported impacted by lower discount unwind on acquisition-related liabilities

Tax Rate

30%

+27pp

21%

+13pp

 

In-line with full year expectation of 18-22%

+ The Tax Rate in the comparable period of Q1 2021 was favourably impacted by the disposal of Viela and settlements with tax authorities

EPS

$0.25

(79%) Actual
(73%) CER

$1.89

16% Actual 20% CER

 

Further details of differences between Reported and Core are shown in Table 10

 

Corporate and business development

 

In April 2022, AstraZeneca and Harbour BioMed (HBM) committed to a global out-license agreement for HBM7022, a pre-clinical bispecific antibody targeting Claudin18.2 and CD3. AstraZeneca will be granted an exclusive global license for research, development, registration, manufacturing, and commercialisation of HBM7022.

 

HBM shall receive an upfront payment of $25m with the potential for additional payments up to $325m pending achievement of certain development, regulatory and commercial milestones. HBM is also eligible to receive tiered royalties on net sales.

 

Sustainability summary

 

AstraZeneca published its eighth annual Sustainability Report and Sustainability Data summary, released in conjunction with the 2021 Annual Report. The report outlines progress on strategic priorities, material focus areas, challenges and aims for the future.

 

AstraZeneca continues to provide urgent humanitarian support in Ukraine and neighbouring countries. To date, AstraZeneca has committed over $7m to response efforts, including donations of:

 

Medicines to the Company's humanitarian relief partner Direct Relief, which is working directly with the Ukrainian Ministry of Health

 

Medicines via The Red Cross affiliates in neighbouring countries

 

$2m to support relief agencies working in Ukraine, Poland and surrounding areas with a focus on providing healthcare and humanitarian assistance. Funding is being provided to Project HOPE, working with and through the World Health Organization, and International Medical Corps

 

More than $1m to UNICEF and The Red Cross

 

Reporting changes for Q1 2022

 

AstraZeneca's Total Revenue and Product Sales tables in FY 2022 include a new disease area: BioPharmaceuticals: Vaccines & Immune Therapies (V&I). This incorporates revenues from Vaxzevria, Evusheld, FluMist, Synagis and nirsevimab. In the FY 2021 quarterly and annual reports, Vaxzevria and Evusheld revenues were shown under COVID‑19, and FluMist, Synagis and nirsevimab revenues were shown under Other Medicines. In addition, revenue from Koselugo have moved from Oncology to Rare Disease, and revenue from Andexxa has moved from Rare Disease to BioPharmaceuticals: CVRM.

 

The growth rate for each disease area has been calculated as though these changes had been implemented in FY 2021.

 

Conference call

 

A conference call and webcast for investors and analysts will begin today (29 April 2022) at 11:45 BST. Details can be accessed via astrazeneca.com.

 

Reporting calendar

 

The Company intends to publish its half-year and second-quarter results on Friday 29 July 2022.

 

Notes

 

The following notes refer to pages one to five.

 

1.  Constant exchange rates. The differences between Actual Change and CER Change are due to foreign exchange movements between periods in 2022 vs 2021. CER financial measures are not accounted for according to generally accepted accounting principles (GAAP) because they remove the effects of currency movements from Reported results.

2.  Not meaningful

3.  Reported financial measures are the financial results presented in accordance with UK-adopted International Accounting Standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) and International Accounting Standards as adopted by the European Union.

4.  Earnings per share.

5.  Core financial measures. These are non-GAAP financial measures because, unlike Reported performance, they cannot be derived directly from the information in the Group's Financial Statements. See the Operating and financial review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.

6.  The differences between Reported and Core measures are primarily due to items related to the acquisition of Alexion, amortisation of intangibles, impairments, restructuring charges, and, as previously disclosed, a charge to provisions relating to a legal settlement with Chugai Pharmaceutical Co. Ltd that will lead to a payment of $775m in the Q2 2022. A full reconciliation between Reported EPS and Core EPS is provided in Table 10 in the Financial performance section of this document.

7.  In FY 2022, Total Revenue from Koselugo is included in Rare Disease (FY 2021: Oncology), and Total Revenue from Andexxa is included in BioPharmaceuticals: CVRM (FY 2021: Rare Disease). The growth rate for each disease area has been calculated as though these changes had been implemented in FY 2021.

8.  Cardiovascular, Renal & Metabolism.

9.  Respiratory & Immunology.

10.  FY 2022 Q1 growth rates on medicines acquired with Alexion have been calculated on a pro forma basis comparing to the corresponding period in the prior year, pre-acquisition as previously published by Alexion. The growth rates shown for the Rare Disease and CVRM disease areas include these pro forma adjustments.

11.  AstraZeneca is collaborating with Daiichi Sankyo to develop and commercialise Enhertu.

12.  Human epidermal growth factor receptor 2.

13.  Respiratory syncytial virus.

14.  Generalised myasthenia gravis.

15.  AstraZeneca is collaborating with MSD (Merck & Co., Inc. in the US and Canada) to develop and commercialise Lynparza.

16.  US Food and Drug Administration.

17.  European Medicines Agency.

18.  Volume based procurement.

19.  Vaccines & Immune Therapies.

20.  Growth rates greater than 100% are displayed as a multiple, for example Ô>2x' signifies that the value is more than double that of the comparable period

21.  Vaxzevria is AstraZeneca's trademark for the Company's supply of the AstraZeneca COVID-19 Vaccine. In the financial tables in this report, 'Vaxzevria Total Revenue' includes Collaboration Revenue from sub-licensees that produce and supply the AstraZeneca COVID‑19 Vaccine under their own trademarks.

22.  Paroxysmal nocturnal haemoglobinuria.

23.  Atypical haemolytic uraemic syndrome.

24.  Neuromyelitis optica spectrum disorder.

25.  National Reimbursement Drug List.

26.  The plus and minus signs in Table 2 indicate the directional impact of the item being discussed, e.g. a plus sign in R&D Expenses signifies that the comment refers to an item that increased the R&D Expense relative to the prior year.

27.  Gross Profit is defined as Total Revenue minus Cost of Sales. The calculation of Reported and Core Gross Margin excludes the impact of Collaboration Revenue and any associated costs, thereby reflecting the underlying performance of Product Sales.

28.  Where AstraZeneca does not retain a significant ongoing interest in medicines or potential new medicines, income from divestments is reported within Reported and Core Other Operating Income and Expense in the Company's financial statements.

 

 

 

Pipeline

 

Table 3 : Pipeline highlights since prior results announcement

 

 

Event

Medicine

Indication / Trial

Event

 

Lynparza

gBRCA[29] breast cancer (adjuvant) (OlympiA)

Regulatory approval (US)

Regulatory approvals and other regulatory actions

Saphnelo

SLE[30]

Regulatory approval (EU)

Ondexxya

Acute major bleed

Regulatory approval (JP)

Evusheld

COVID-19 pre-exposure prophylaxis (PROVENT)

Regulatory approval (EU)

 

Ultomiris

gMG (CHAMPION-MG)

Regulatory approval (US)

 

Imfinzi

Biliary tract cancer (TOPAZ-1)

Regulatory submission (JP)

 

Imfinzi + tremelimumab

Advanced liver cancer (1st-line) (HIMALAYA)

Priority review (US), regulatory submission (EU, JP)

 

Lynparza

Prostate cancer (1st-line) (PROpel)

Regulatory submission (JP)

Regulatory submissions or acceptances

Enhertu

HER2m NSCLC[31] (2nd-line+) (DESTINY-Lung01)

Priority review (US)

Calquence

CLL[32] (ELEVATE-TN)

Regulatory submission (JP)

 

nirsevimab

RSV (MELODY/MEDLEY)

Regulatory submission and EMA accelerated assessment (EU)

 

Evusheld

COVID-19 outpatient treatment (TACKLE)

Regulatory submission (US, EU)

 

Ultomiris

Subcutaneous, PNH and aHUS

Regulatory submission (EU)

 

Imfinzi

Cervical cancer (CALLA)

Primary endpoint not met

Major Phase III data readouts and other developments

Imfinzi

Biliary tract cancer (TOPAZ-1)

Orphan Drug Designation (JP)

Enhertu

HER2+ breast cancer (2nd-line) (DESTINY-Breast03)

Breakthrough Drug Designation (CN)

Enhertu

HER2-low breast cancer
(DESTINY-Breast04)

Primary endpoint met, Breakthrough Drug Designation, RTOR[33] (US)

 

Fasenra

Nasal polyps (OSTRO)

Complete response letter (US)

 

Brilinta

 

Paediatric exclusivity (US)

 

Table 4 : Pipeline anticipated major news flow

 

 

Timing

Medicine

Indication / Trial

Event

H1 2022

Imfinzi

Biliary tract cancer (TOPAZ-1)

Regulatory submission (US, EU)

 

Lynparza

Prostate cancer (1st-line) (PROpel)

Regulatory submission (US)

 

Enhertu

HER2+ breast cancer (2nd-line) (DESTINY-Breast03)

Regulatory decision (US), regulatory submission (CN)

 

Enhertu

HER2-low breast cancer (3rd-line) (DESTINY-Breast04)

Regulatory submission

 

Forxiga

CKD[34] (DAPA-CKD)

Regulatory decision (CN)

 

Farxiga

HFpEF[35] (DELIVER)

Data readout

 

eplontersen

hATTR-PN[36] (NEURO-TTRansform)

Data readout[37]

 

Brilinta

Stroke (THALES)

Regulatory decision (CN)

 

Tezspire

Severe asthma (NAVIGATOR)

Regulatory decision (EU, JP)

 

PT027

Asthma

Regulatory submission (US)

 

Evusheld

COVID-19 outpatient treatment (EU)

Regulatory decision (EU)

 

Vaxzevria

COVID-19

Regulatory submission (US)

 

Ultomiris

NMOSD

Data readout

H2 2022

Tagrisso

EGFRm NSCLC (adjuvant) (ADAURA)

Regulatory decision (JP)

 

Imfinzi

Biliary tract cancer (TOPAZ-1)

Regulatory decision

 

Imfinzi

Liver cancer (locoregional)
(EMERALD-1)

Data readout, regulatory submission

 

Imfinzi

NSCLC (1st-line) (PEARL)

Data readout

 

Imfinzi

NSCLC (unresectable, Stg. III) (PACIFIC-2)

Data readout

 

Imfinzi

Limited-stage SCLC (ADRIATIC)

Data readout

 

Imfinzi +/- tremelimumab

NSCLC (1st-line) (POSEIDON)

Regulatory decision

 

Imfinzi +/- tremelimumab

Liver cancer (1L) (HIMALAYA)

Regulatory decision

 

Lynparza

gBRCA breast cancer (adjuvant) (OlympiA)

Regulatory decision (EU, JP)

 

Lynparza

Ovarian cancer (1st-line) (PAOLA-1)

Regulatory decision (CN)

 

Lynparza

Prostate cancer (1st-line) (PROpel)

Regulatory decision

 

Enhertu

HER2+ breast cancer (3rd-line) (DESTINY-Breast02)

Data readout, regulatory submission

 

Enhertu

HER2+ breast cancer (2nd-line) (DESTINY-Breast03)

Regulatory decision (EU, JP)

 

Enhertu

HER2+ gastric cancer (2nd-line) (DESTINY-Gastric01)

Regulatory decision (EU)

 

Enhertu

HER2m NSCLC (2nd-line+)
(DESTINY-Lung01)

Regulatory decision

 

capivasertib

HR+/HER2-neg breast cancer (1st-line) (CAPItello-291)

Data readout

 

Farxiga

HFpEF (DELIVER)

Regulatory submission

 

eplontersen

hATTR-PN

Regulatory submission (US)

 

Fasenra

EOE[38] (MESSINA)

Data readout

 

nirsevimab

RSV (MELODY/MEDLEY)

Regulatory submission (US) and regulatory decision

 

Evusheld

COVID-19 (TACKLE/PROVENT)

Regulatory submission (JP, CN)

 

Evusheld

COVID-19 outpatient treatment (TACKLE)

Regulatory decision

 

Utomiris

gMG (CHAMPION-MG)

Regulatory decision (EU, JP)

 

Ultomiris

Subcutaneous, PNH and aHUS

Regulatory decision

 

Ultomiris

NMOSD

Regulatory submission

 

Koselugo

NF1-PN (SPRINT)

Regulatory submission (CN), regulatory decision (JP)

2023

Tagrisso

EGFRm[39] NSCLC (1st-line) (FLAURA2)

Data readout, regulatory submission

 

Tagrisso

EGFRm NSCLC (unresectable Stg. III) (LAURA)

Data readout, regulatory submission

 

Imfinzi

Bladder cancer (muscle invasive) (NIAGARA)

Data readout, regulatory submission

 

Imfinzi

Bladder cancer (1st-line) (NILE)

Data readout, regulatory submission

 

Imfinzi

NSCLC (neoadjuvant) (AEGEAN)

Data readout, regulatory submission

 

Imfinzi

Liver cancer (adjuvant) (EMERALD-2)

Data readout, regulatory submission

 

Imfinzi

NSCLC (unresectable, Stg. III) (PACIFIC-2)

Regulatory submission

 

Imfinzi

NSCLC (1st-line) (PEARL)

Regulatory submission

 

Imfinzi

Limited-stage SCLC (ADRIATIC)

Regulatory submission

 

Lynparza

gBRCA breast cancer (adjuvant) (OlympiA)

Regulatory submission (CN)

 

Lynparza + Imfinzi

Endometrial cancer (1st-line) (DUO-E)

Data readout

 

Lynparza + Imfinzi

Ovarian cancer (1st-line) (DUO-O)

Data readout

 

Enhertu

HER2-low breast cancer (2nd-line) (DESTINY-Breast06)

Data readout

 

Calquence

CLL (ELEVATE-TN)

Regulatory decision (JP)

 

Calquence

CLL (ACE-CL-311)

Data readout

 

Calquence

MCL[40] (1st-line) (ECHO)

Data readout

 

capivasertib

TNBC[41] (locally adv./met.)
(CAPItello-290) 

Data readout, regulatory submission

 

capivasertib

HR+/HER2-neg breast cancer (1st-line) (CAPItello-291)

Regulatory submission

 

camizestrant

HR+/HER2-neg breast cancer (SERENA-6)

Data readout

 

Dato-DXd

NSCLC (3rd-line) (TROPION-Lung01)

Data readout, regulatory submission

 

Farxiga

Myocardial infarction (DAPA-MI)

Data readout

 

roxadustat

Anaemia of myelodysplastic syndrome

Data readout

 

Fasenra

Bullous pemphigoid (FJORD)

Data readout

 

Fasenra

CRwNP[42] (ORCHID)

Data readout

 

Fasenra

EGPA[43] (MANDARA)

Data readout

 

Fasenra

EOE (MESSINA)

Regulatory submission

 

Fasenra

HES (NATRON)

Data readout

 

Fasenra

Severe asthma (MIRACLE)

Data readout

 

nirsevimab

RSV (MELODY/MEDLEY)

Regulatory submission (JP, CN)

 

Soliris

Guillain-Barre syndrome

Data readout

 

ALXN1840

Wilson disease

Regulatory submission

 

danicopan

PNH with extravascular haemolysis

Data readout, regulatory submission

 

Operating and financial review

 

All narrative on growth and results in this section is based on actual exchange rates, and financial figures are in US$ millions ($m), unless stated otherwise. The performance shown in this announcement covers the three-month period to 31 March 2022 (Ôthe quarter' or ÔQ1 2022') compared to the three-month period to 31 March 2021 (Q1 2021), unless stated otherwise.

 

Core financial measures, EBITDA, Net Debt, Initial Collaboration Revenue and Ongoing Collaboration Revenue are non-GAAP financial measures because they cannot be derived directly from the Group's Interim Financial Statements. Management believes that these non-GAAP financial measures, when provided in combination with Reported results, provide investors and analysts with helpful supplementary information to understand better the financial performance and position of the Group on a comparable basis from period to period. These non-GAAP financial measures are not a substitute for, or superior to, financial measures prepared in accordance with GAAP.

 

Core financial measures are adjusted to exclude certain significant items, such as:

 

Amortisation and impairment of intangible assets, including impairment reversals but excluding any charges relating to IT assets

 

Charges and provisions related to restructuring programmes, which includes charges that relate to the impact of restructuring programmes on capitalised IT assets as well as Post Alexion Acquisition Group Review items

 

Alexion acquisition-related items, primarily fair-value adjustments on acquired inventories and fair-value impact of replacement employee share awards

 

Other specified items, principally the imputed finance charge relating to contingent consideration on business combinations and legal settlements

 

Details on the nature of Core financial measures are provided on page 54 of the Annual Report and Form 20-F Information 2021.

 

Reference should be made to the Reconciliation of Reported to Core financial measures table included in the financial performance section in this announcement.

 

Gross Margin, previously termed Gross Profit Margin, is the percentage by which Product Sales exceeds the Cost of sales, calculated by dividing the difference between the two by the sales figure. The calculation of Reported and Core Gross Margin excludes the impact of Collaboration Revenue and any associated costs, thereby reflecting the underlying performance of Product Sales.

 

EBITDA is defined as Reported Profit Before Tax after adding back Net Finance Expense, results from Joint Ventures and Associates and charges for Depreciation, Amortisation and Impairment. Reference should be made to the Reconciliation of Reported Profit Before Tax to EBITDA included in the financial performance section in this announcement.

 

Net Debt is defined as Interest-bearing loans and borrowings and Lease liabilities, net of Cash and cash equivalents, Other investments, and net derivative financial instruments. Reference should be made to Note 3 ÔNet Debt' included in the Notes to the Interim Financial Statements in this announcement.

 

Ongoing Collaboration Revenue is defined as Collaboration Revenue excluding Initial Collaboration Revenue (which is defined as Collaboration Revenue that is recognised at the date of completion of an agreement or transaction, in respect of upfront consideration). Ongoing Collaboration Revenue comprises, among other items, royalties, milestone revenue and profit-sharing income. Reference should be made to the Collaboration Revenue table in this Operating and financial review.

 

The Company strongly encourages investors and analysts not to rely on any single financial measure, but to review AstraZeneca's financial statements, including the Notes thereto, and other available Company reports, carefully and in their entirety.

 

Due to rounding, the sum of a number of dollar values and percentages may not agree to totals.

 

Total Revenue

 

 

Table 5 : Disease area and medicine performance

 

 

 

Q1 2022

 

 

 

 

% Change

Product Sales 

 

$m 

% Total 

Actual 

CER 

Oncology 

 

3,388 

30 

14 

18 

- Tagrisso 

 

1,304 

11 

14 

17 

- Imfinzi 

 

599 

11 

- Lynparza 

 

617 

14 

17 

- Calquence 

 

414 

98 

100 

- Enhertu 

 

11 

>9x 

>9x 

- Orpathys 

 

13 

n/m 

n/m 

- Zoladex 

 

240 

12 

- Faslodex 

 

93 

(24)

(20)

- Iressa 

 

32 

(47)

(47)

- Arimidex 

 

32 

(27)

(25)

- Casodex 

 

21 

(48)

(47)

- Others 

 

12 

BioPharmaceuticals: CVRM 

 

2,207 

19 

14 

17 

- Farxiga 

 

1,000 

60 

67 

- Brilinta 

 

325 

(13)

(10)

- Lokelma

 

63 

92 

97 

- Roxadustat

 

41 

- Andexxa10 

 

33 

13 

14 

- Crestor 

 

267 

(2)

- Seloken/Toprol-XL 

 

244 

(2)

(1)

- Bydureon

 

68 

(34)

(33)

- Onglyza

 

68 

(33)

(31)

- Others 

 

98 

(15)

(13)

BioPharmaceuticals: R&I 

 

1,509 

13 

(2)

- Symbicort 

 

674 

(2)

- Fasenra

 

308 

18 

22 

- Breztri

 

87 

>3x 

>3x

- Saphnelo 

 

11 

n/m 

n/m 

- Pulmicort 

 

217 

(34)

(34)

- Daliresp 

 

51 

(16)

(16)

- Bevespi

 

15 

15 

14 

- Others 

 

146 

(9)

(9)

BioPharmaceuticals: V&I 

 

1,757 

15 

>5x 

>6x 

- Vaxzevria 

 

1,089 

10 

>3x 

>4x 

- Evusheld 

 

469 

n/m

n/m 

- Synagis

 

200 

>8x 

>8x 

- FluMist

 

(1)

n/m 

n/m 

Rare Disease 10 

 

1,694 

15 

- Soliris 10 

 

990 

(5)

- Ultomiris 10 

 

419 

20 

25 

- Strensiq 10 

 

208 

- Koselugo 

 

39 

82 

85 

- Kanuma10 

 

38 

15 

Other Medicines 

 

425 

(19)

(15)

- Nexium 

 

332 

(18)

(13)

- Others 

 

93 

(22)

(22)

Product Sales 

 

10,980 

96 

51 

56 

Collaboration Revenue 

 

410 

n/m

 n/m

Total Revenue 

 

11,390 

100 

56 

60 

 

Table 6 : Collaboration Revenue

 

 

 

Q1 2022

 

 

 

 

  % Change

 

 

$m

% Total

Actual

CER

 

Lynparza: milestone revenue

 

175

43

n/m

n/m

Enhertu: share of gross profits

 

75

18

96

96

Royalty income

 

73

18

n/m

n/m

Tralokinumab: sales milestones

 

70

17

n/m

n/m

Other Collaboration Revenue

 

17

4

n/m

n/m

Total

 

410

100

n/m

n/m

 

Table 7 : Total Revenue by region

 

 

 

Q1 2022 

 

 

 

% of 

% Change 

 

 

$m 

Total 

 Actual 

CER 

Emerging Markets 

 

3,364 

30 

30 

32 

- China 

 

1,622 

14 

(3)

(6)

- Ex-China 

 

1,742 

15 

91 

>2x  

US 

 

4,134 

36 

79 

79 

Europe 

 

2,284 

20 

48 

57 

Established RoW 

 

1,608 

14 

85 

98 

Total 

 

11,390 

100 

56  

60 

 

Oncology

 

Total Revenue increased by 21% (25% at CER) in Q1 2022 to $3,644m and represented 32% of overall Total Revenue (Q1 2021: 41%). This included Lynparza Collaboration Revenue of $175m and Enhertu Collaboration Revenue of $76m. Product Sales increased by 14% (18% at CER) in Q1 2022 to $3,388m, reflecting new launches and increased patient access for Tagrisso, Imfinzi, Lynparza, Calquence and Enhertu partially offset by declines in legacy medicines and an adverse gross-to-net[44] movement from the seasonal increase in Part-D related deductions typically seen in the first quarter.

 

Tagrisso

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

1,304

 

406

439

252

207

Actual change

 

14%

 

32%

6%

12%

2%

CER change

 

17%

 

33%

6%

21%

11%

 

Region

 

Worldwide

 

Increased adjuvant and 1st-line use offset by a continued adverse COVID-19 impact on diagnosis, testing and treatment

Emerging Markets

 

Increased 1st-line use in China and continued growth in other Emerging Markets

Tagrisso was admitted to the China NRDL in March 2021 for the 1st-line setting and renewed in the 2nd-line setting, resulting in an adverse effect on the comparator period from lower sales to distributors prior to the change and stock compensation payments

Rising demand from increased patient access in China has now offset the impact of the March 2021 NRDL price reduction

US

 

Greater 1st-line and adjuvant use, with longer duration of treatment, partially offset by lower 2nd-line use and a continued adverse COVID-19 impact

At the end of Q1 rates of diagnosis, testing and treatment in lung cancer are showing some signs of recovery, but remained around 5-15% below baseline

Established RoW

 

Increased use in 1st-line and adjuvant settings

 

Imfinzi

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

599

 

58

315

125

101

Actual change

 

8%

 

2%

8%

15%

4%

CER change

 

11%

 

3%

8%

23%

12%

 

Region

 

Worldwide

 

Increased use of Imfinzi to treat patients with ES-SCLC[45] was offset by impact from lower rates of diagnosis and treatment due to the current COVID-19 wave

Emerging Markets

 

Growth in ex-China continued, offset in China by reduction in inventory held by distributors and hospitals

US

 

Growth driven new patient starts across Stage III NSCLC and ES‑SCLC, despite the impact of COVID-19 on lung cancer diagnoses in recent months, offset by unfavourable seasonal inventory and gross-to-net movements

Europe

 

ES-SCLC market penetration increased, as did the number of reimbursed markets, offsetting the COVID-19 impact on rates of diagnosis and treatment

Established RoW

 

Growth driven by new reimbursements

 

Lynparza

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

792

 

121

270

335

66

Actual change

 

46%

 

39%

7%

>2x

22%

CER change

 

50%

 

43%

7%

>2x

32%

 

 

Product Sales

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

617

 

121

270

160

66

Actual change

 

14%

 

39%

7%

8%

22%

CER change

 

17%

 

43%

7%

16%

32%

 

Region

 

Worldwide

 

Total Revenue includes a $175m regulatory milestone received from MSD and recognised in the Europe geographic segment, in respect of the approval in the US for the adjuvant treatment of patients with breast cancer, based on the data from the OlympiA Phase III trial

Product sales growth was driven by further launches across multiple cancer types globally. Lynparza remains the leading medicine in the PARP[46]-inhibitor class globally across four tumour types, as measured by total prescription volume

Emerging Markets

 

Patient access to Lynparza increased following admission to China's NRDL as a 1st-line treatment for ovarian cancer patients with effect from March 2021 and launches in other markets

US

 

Growth in use in ovarian, breast and prostate cancers, offset by an adverse gross-to-net movement related to seasonal increase in Part-D related deductions typically seen in the first quarter, and reductions in inventory held by distributors

Europe

 

Reimbursements introduced in additional countries, increasing BRCAm-testing rates, and successful 1st-line BRCAm ovarian, 2nd-line HRRm[47] prostate and gBRCAm HER2-negative advanced breast cancer launches

Established RoW

 

Strong year on year growth driven by new product launches and high levels of HRD testing in Japan

 

Enhertu

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

86

 

9

57

20

1

Actual change

 

>2x

 

>7x

61%

>5x

n/m

CER change

 

>2x

 

>7x

61%

>5x

n/m

 

Region

 

Worldwide

 

Excluding Japan, global in-market sales recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted to $166m in the quarter (Q1 2021: $81m)

US

 

US in-market sales, recorded by Daiichi Sankyo, amounted to $119m in the quarter (Q1 2021: $73m)

Established RoW

 

In Japan, AstraZeneca receives a mid-single-digit percentage royalty on sales made by Daiichi Sankyo

 

Calquence

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

414

 

7

339

55

13

Actual change

 

98%

 

>3x

74%

>5x

>4x

CER change

 

100%

 

>3x

74%

>6x

>4x

 

Region

 

US

 

Strong performance despite COVID-19 impacts on CLL diagnosis rates, benefitting from increased new patient market share

Europe

 

Increased market share in new patient starts after launches in the region

 

Orpathys

 

Total Revenue of $11m in the quarter (2021: $nil) was driven by the 2021 launch in China, where Orpathys has been approved for patients with lung cancer and MET[48] gene alterations.

 

Other Oncology medicines

 

 

 

Q1 2022

% Change

 

Total Revenue

 

$m

Actual

CER

Commentary

Zoladex

 

247

10

13

Increase driven by usage in emerging markets

Faslodex

 

93

(24)

(20)


Iressa

 

32

(47)

(47)


Arimidex

 

32

(27)

(25)


Casodex

 

21

(48)

(47)


Others

 

12

1

6


 

 

BioPharmaceuticals

 

Including Vaccines & Immune Therapies medicines, BioPharmaceuticals Total Revenue increased by 49% (53% at CER) in Q1 2022 to $5,617m, representing 49% of overall Total Revenue (Q1 2021: 51%). Growth was driven by strong Farxiga performance and growth in the COVID-19 medicines.

 

Cardiovascular, Renal & Metabolism

 

CVRM Total Revenue increased by 14% (18% at CER) in Q1 2022, driven by strong Farxiga performance, to $2,219m and represented 19% of overall Total Revenue (Q1 2021: 26%).

 

Farxiga

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

1,001

 

391

193

318

99

Actual change

 

60%

 

50%

48%

83%

64%

CER change

 

67%

 

54%

48%

97%

76%

 

Region

 

Worldwide


The SGLT2[49] inhibitor class saw growth in many regions, with Farxiga volume growing faster than the overall SGLT2 market in most major regions. Performance also reflecting further HF and CKD launches and updated treatment guidelines including from ESC[50], AHA[51] and ACC[52], and beneficial impact from gross-to-net adjustments in the US versus Q1 2021

Emerging Markets


China performance was enhanced by uACR[53] and MRF[54] testing program, and solid growth in ex-China Emerging Markets. Forxiga's NRDL status in China was renewed in the fourth quarter of 2021

US


Continued strong growth, following the regulatory approval for HFrEF in May 2020, the approval for the treatment of CKD in May 2021, and the aforementioned gross-to-net adjustments. Both approvals included patients with and without T2D[55]. Farxiga continued to gain in-class brand share driven by HF and CKD launches.

Europe


SGLT2 inhibitor class growth, the beneficial addition of cardiovascular outcomes trial data to the label, the HFrEF regulatory approval in November 2020, and CKD regulatory approval in August 2021

Established RoW


In Japan, sales to collaborator Ono Pharmaceutical Co., Ltd, which records in-market sales, more than doubled to $69m

 

Brilinta

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

325

 

69

166

76

14

Actual change

 

(13%)

 

(35%)

-

(13%)

(5%)

CER change

 

(10%)

 

(32%)

-

(6%)

(1%)

 

Region

 

Worldwide

 

Continued adverse China VBP impact and fewer elective procedures in the EU and US due to the effects of the pandemic

 

Lokelma

 

Total Revenue increased 92% (97% at CER) to $63m in the quarter, driven by Lokelma extending its branded market share lead in the US and continued progress from recent launches across Europe. In China, Lokelma was included on the NRDL from 1 January 2022.

 

Andexxa

 

On a pro forma basis, Total Revenue increased 48% (49% at CER) to $43m.

 

Roxadustat

 

Total Revenue increased 1% (2% decrease at CER) to $41m. Total Revenue also increased sequentially, benefitting from increased volumes in China following NRDL price cuts.

 

Other CVRM medicines

 

Total Revenue

Q1 2022

% Change

 

 

$m

Actual

CER

 

Crestor

 

268

(2)

-

Sales decline in the US and Europe offset by growth in Emerging Markets

Seloken/Toprol-XL

 

245

(2)

(1)

Emerging Markets sales impacted by China VBP implementation of Betaloc[56] oral in H2 2021. BetalocZOK VBP to be implemented later in 2022

Bydureon

 

68

(34)

(33)

Continued competitive pressures

Onglyza

 

68

(33)

(31)

Continued declines in DPP-4[57] inhibitor class

Others

 

98

(15)

(13)


 

Respiratory & Immunology

 

R&I Total Revenue, which included Collaboration Revenue of $75m, increased by 2% in Q1 2022 (4% at CER) to $1,584m and represented 14% of overall Total Revenue (Q1 2021: 21%). COVID-19 continued to have a material impact across markets and the portfolio.

 

Symbicort

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

674

 

167

259

157

91

Actual change

 

(2%)

 

1%

(2%)

(7%)

(1%)

CER change

 

-

 

3%

(2%)

-

3%

 

Region

 

Worldwide

 

Symbicort remains the global market-volume and value leader within the ICS/LABA class.

Market share performance was driven by Established RoW and Emerging Markets, and growth in anti-inflammatory reliever launch markets

The global ICS/LABA market continues to be eroded as fixed-dose triple therapies (LAMA/LABA/ICS) continue to launch

Emerging Markets

 

Driven by growth outside China. China continues to be impacted by fixed-dose triple therapy launches

US

 

Maintained total prescription market share in a declining ICS/LABA market as fixed-dose triple therapy launches continue.  Continued growth in the authorised generic

Established RoW

 

Sales in Japan declined due to continued generic erosion

 

Fasenra

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

308

 

7

189

75

37

Actual change

 

18%

 

>2x

22%

20%

(5%)

CER change

 

22%

 

>2x

22%

29%

2%

 

Region

 

Worldwide

 

Expanded total market leadership in eosinophilic asthma, Fasenra is the leading IL-5 class biologic, in major markets (US, Japan and some EU countries). COVID-19 continues to impact total severe asthma market growth with most regions experiencing a slower growth

US

 

Sustained growth driven by volume

Europe

 

Increased volume from sustained leadership in new to brand prescriptions, in most EU markets

Established RoW

 

In Japan, revenues declined by 13% (5% at CER) to $23m, with rising demand and sustained leadership in new to brand prescriptions, offset by reduced demand from distributors ahead of expected mandatory price reduction in April

 

Breztri

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

87

 

22

53

5

7

Actual change

 

>3x

 

>2x

>4x

>7x

46%

CER change

 

>3x

 

>2x

>4x

>8x

59%

 

Region

 

Worldwide

 

Continued to gain market share within the fixed-dose triple markets; in US, China and Japan.

Emerging Markets

 

C ontinued its market share leadership within the fixed-dose triple market in China, which continues to gain share from the ICS/LABA class

US

 

Progress made in new to brand market share growth in the fixed-dose triple market

Europe

 

Launches continued in Europe

Established RoW

 

Sales in Japan were impacted by COVID-19 restrictions

 

Saphnelo

 

Total Revenue of $11m in the quarter (Q1 2021: $nil) was driven by the 2021 launch in the US, where Saphnelo has been approved for SLE.

 

Tezspire

 

Tezspire is being developed in collaboration with Amgen, and was approved in the US for severe asthma in December 2021. Amgen will record sales in the US and AstraZeneca's share of gross profits in the US will be recognised as Collaboration Revenue. Outside of the US, AstraZeneca will record Product Sales. In Q1 2022, AstraZeneca recognised $3m of Collaboration Revenue from $7m of in-market sales recorded by Amgen (Q1 2021: $nil).

 

Other R&I Medicines

 

 

 

Q1 2022

% Change

 

Total Revenue

$m

Actual

CER

 

Pulmicort

 

217

(34)

(34)

Revenue from Emerging Markets decreased 43% to $164m

Pulmicort Respules was included in the latest round of VBP in China, implemented in October 2021, resulted in significantly lower market access and a mandatory price reduction.

Daliresp

 

51

(16)

(16)


Bevespi

 

15

15

14


Others

 

218

32

32


 

Vaccines & Immune Therapies

 

Total Revenue from Vaccines and Immune Therapies medicines increased from $301m in Q1 2021 to $1,814m in Q1 2022 and represented 16% of overall Total Revenue (Q1 2021: 4%).

 

Vaxzevria

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

1,145

 

530

79

135

400

Actual change

 

>4x

 

>10x

n/m

(40%)

>10x

CER change

 

>4x

 

>10x

n/m

(37%)

>10x

 

Region

 

Worldwide

 

The majority of revenue in Q1 2022 came from initial, not-for-profit contracts

Emerging Markets

 

Growth was driven by initial and commercial contracts in Latin America and Asia

$46m of Collaboration Revenue came from a Chinese sub-licensee

US

 

Purchases by the US government for donation overseas

Europe

 

Sales were down versus Q1 2021, when Europe accounted for 82% of Vaxzevria revenue as vaccination programmes were rolled out in the UK and the EU

Established RoW

 

Sales in Japan, Canada and Australia

 

Evusheld

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

469

 

89

307

66

8

Actual change

 

n/m

 

n/m

n/m

n/m

n/m

CER change

 

n/m

 

n/m

n/m

n/m

n/m

 

Region

 

US

 

Emergency Use Authorisation was granted in December 2021, and in Q1 2022

AstraZeneca fulfilled a proportion of the US government order for 1.7m units of Evusheld (a unit consists of one 150mg vial of cilgavimab and one 150mg vial of tixagevimab). The remainder of that order will be fulfilled before the end of 2022

Emerging Markets

 

Multiple government contracts

Europe

 

Evusheld was approved in the EU in the quarter

 

Other V&I Medicines

 

 

Q1 2022

% Change

 

Total Revenue

$m

Actual

CER

 

Synagis

 

 

200

>8x

>8x

Q1 2022 captures all global revenues from Synagis by destination. In the comparable period, revenues reflected AstraZeneca's ex-US collaboration agreement with AbbVie, which expired on 30 June 2021 in which all ex-US revenue was reported in Europe. The regional growth rates shown in Table 22 have also been impacted by the change

FluMist

 

(1)

n/m

n/m

Normal seasonality of FluMist sales

 

Rare Disease

 

Rare Disease Total Revenue increased by 3% (7% at CER) pro forma in Q1 2022 to $1,694m, representing 15% of overall Total Revenue (Q1 2021: 0%).  Performance was driven by continued durability of the C5 franchise, including continued conversion from Soliris to Ultomiris in PNH and aHUS as well as Soliris growth in Neurology indications, gMG and NMOSD.

 

The pro forma growth rates on medicines acquired with Alexion shown in these tables have been calculated by comparing Q1 revenues with the corresponding prior year pre-acquisition revenues previously published by Alexion.

 

Soliris

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

990

 

71

591

221

107

Actual change

 

(5%)

 

(41%)

7%

(15%)

4%

CER change

 

-

 

(28%)

7%

(8%)

11%

 

Region

 

US

 

Performance driven by Soliris growth in neurology indications, gMG and NMOSD, offset by continued conversion to Ultomiris in PNH and aHUS

Ex-US

 

Strong underlying demand growth in EU and ERoW, EM growth impacted by prior year tender market order timing

 

Ultomiris

 

Total Revenue

 

Worldwide

 

Emerging Markets

US

Europe

Established RoW

Q1 2022 $m

 

419

 

24

220

105

70

Actual change

 

20%

 

n/m

6%

54%

(4%)

CER change

 

25%

 

n/m

6%

65%

7%

 

 

Region

 

Worldwide

 

Continued conversion and launches in new markets outside the US

Quarter-on-quarter revenue growth variability can be expected due to Ultomiris every eight-week dosing schedule and lower average annual treatment cost per patient compared to Soliris

US

 

Continued COVID-19 impact on rate of aHUS diagnoses and treatment coupled with hospital reimbursement dynamics favouring Soliris

Ex-US

 

Performance driven by new market approvals for PNH

 

Other Rare Disease medicines

 

 

Q1 2022

% Change

 

Total Revenue

$m

Actual

CER

Commentary

 

Strensiq

 

208

5

7

Performance impacted by inventory and payer dynamics

 

Koselugo

 

39

82

85

Reimbursed in 14 markets with ambition to continue expansion

 

Kanuma

 

38

9

15

Performance driven by markets outside the US

 

 

Other medicines (outside the main disease areas)

 

 

 

Q1 2022

% Change

 

Total Revenue

$m

Actual

CER

Commentary

 

Nexium

 

338

(17)

(13)

Nexium (oral) was included in China's VBP programme implemented in February 2021 and Nexium (i.v.) was implemented in the fifth round of VBP in October 2021.

 

Others

 

97

(22)

(21)


 

 

 

 

Financial performance

 

Table 8 : Reported Profit and Loss

 

 

 

Q1 2022

Q1 2021

  % Change 

 

 

$m 

$m 

Actual 

CER 

 

Total Revenue

 

11,390  

7,320  

56  

60  

 

- Product Sales

 

10,980 

7,257 

51 

56 

 

- Collaboration Revenue

 

410 

63 

n/m 

n/m 

 

Cost of Sales

 

(3,511)

(1,864)

88 

98 

 

Gross Profit

 

7,879  

5,456  

44  

48  

 

Gross Margin

 

68 .0%  

74.3%  

-6  

-7  

 

Distribution Expense

 

(125)

(99)

26 

32 

 

% Total Revenue

 

1.1%  

1.4%  

- 

- 

 

R&D Expense

 

(2,133)

(1,713)

24 

26 

 

% Total Revenue

 

18.7%  

23.4%  

+5  

+5  

 

SG&A Expense

 

(4,840)

(2,929)

65 

68 

 

% Total Revenue

 

42.5%  

40.0%  

-2  

-2  

 

OOI[58] & Expense

 

97 

1,180 

(92)

(92)

 

% Total Revenue

 

0.9%  

16.1%  

-15  

-15  

 

Operating Profit

 

878  

1,895  

(54)

(46)

 

Operating Margin

 

7.7%  

25.9%

-18  

-18  

 

Net Finance Expense

 

(319)

(283)

13 

7 

 

Joint Ventures and Associates

 

(6)

(4)

38 

53 

 

Profit before tax

 

553  

1,608  

(66)

(56)

 

Taxation

 

(165)

(46)

n/m 

n/m 

 

Tax rate

 

30% 

3% 

 

 

 

Profit after tax

 

388  

1,562  

(75)

(68)

 

Earnings per share

 

$0.25  

$1.19  

(79)

(73)

 

 

Table 9 : Reconciliation of Reported Profit before tax to EBITDA

 

 

 

Q1 2022 

Q1 2021 

  % Change

 

 

$m 

$m 

Actual 

CER 

Reported Profit before tax 

 

553  

1,608  

(66)

(56)

Net Finance Expense 

 

319 

283 

13 

7 

Joint Venture and Associates 

 

6 

4 

38 

53 

Depreciation, Amortisation and Impairment 

 

1,309 

797 

64 

56 

EBITDA 

 

2,187

2,692

(19)

(16)

 

EBITDA of $2,187m in the quarter (Q1 2021: $2,692m) has been negatively impacted by the $1,180m (Q1 2021: $nil) unwind of inventory fair value uplift recognised on the acquisition of Alexion. The unwind of inventory fair value is expected to depress EBITDA over the year in line with associated revenues.

 

Table 10 : Reconciliation of Reported to Core financial measures

 

Q1 2022

Reported

Restructuring

Intangible Asset Amortisation & Impairments

Acquisition of Alexion

Other

Core [59]

Core

% Change

 

$m

$m 

$m

$m 

$m 

$m 

Actual 

CER 

Gross Profit

7,879  

51  

8  

1,181  

-  

9,119  

66  

70  

Gross Margin

68 .0%  





79.3 %  

+5  

+4  

Distribution Expense

(125)

1  

-  

-  

-  

(124)

25  

30  

R&D Expense

(2,133)

5  

(69)

11  

-  

(2,186)

33  

36  

SG&A Expense

(4,840)

17  

1,098  

17  

762  

(2,946)

23  

25  

Total Operating Expense

(7,098)

23  

1,029  

28  

762  

(5,256)

27  

29  

OOI & Expense

97  

1  

-  

-  

-  

98  

(92)

(92)

Operating Profit

878  

75  

1,037  

1,209  

762  

3,961  

57  

60  

Operating Margin

7.7 %  



   


34.8 %  

-  

-  

Net Finance Expense

(319)

-  

-  

-  

67  

(252)

35  

23  

Taxation

(165)

(15)

(191)

(280)

(121)

(772)

n/m  

n/m  

EPS

$0.25  

$0.04  

$0.55  

$0.60  

$0.45  

$1.89  

16  

20  

 

Profit and Loss drivers

 

Gross Profit

 

The Gross Profit Margin (Reported and Core) in the quarter was impacted by:

 

Mix effects. The increased sales of Vaxzevria, and medicines with profit-sharing arrangements (primarily Lynparza) have a dilutive impact on the Gross Margin. The increased contribution from Rare Disease and Oncology medicines have a positive impact on the Gross Margin

 

Pricing pressure relating to the VBP and NRDL procurement programmes in China

 

Reported Gross Profit was also impacted by the unwind of the fair value adjustment to Alexion inventories at the date of acquisition. The fair value uplift is expected to unwind through Reported Cost of Sales over 2022 in line with associated revenues, and in Q1 2022, the impact of the fair value uplift unwind on Cost of Sales was $1,180m

 

Variations in Gross Margin performance between periods can be expected to continue

 

R&D Expense

 

The increased Reported and Core R&D Expense was driven by:

 

Increased investment in several late-stage Oncology trials and the advancement of a number of Phase II clinical development programmes in BioPharmaceuticals

 

The acquisition of Alexion in July 2021

 

Reported R&D Expense in Q1 was also impacted by intangible asset impairment reversals

 

SG&A Expense

 

The increased Reported and Core SG&A Expense was driven primarily by the acquisition of Alexion in July 2021

 

Reported SG&A Expense was also impacted by amortisation of intangible assets related to the Alexion acquisition and a $775m legal settlement with Chugai Pharmaceutical Co. Ltd

 

Other Operating Income

 

Other Operating Income of $97m consisted primarily of royalties and disposal proceeds on small divestments

 

In Q1 2021, Other Operating Income of $1,180m included $776m of divestment gains from AstraZeneca's share of Viela and $309m from the commercial rights to Crestor in over 30 countries in Europe (excluding UK and Spain)

 

Net Finance Expense

 

The increase in Net Finance Expense in the quarter was driven by financing costs on debt for the Alexion transaction, increased interest on tax, and exchange movements

 

Taxation

 

Both Reported and Core Tax rates are higher than the prior period due to one-off items in 2021, including the non-taxable gain on the divestment of Viela and updates to estimates of prior period tax liabilities following settlements with tax authorities

 

The net cash paid for the quarter was $228m (Q1 2021: $332m) representing 41% of Reported Profit Before Tax (Q1 2021: 21%)

 

The Reported Tax rate of 30% was higher than Core Tax rate of 21% due to the impact of Non-Core charges on the level of Reported Profit Before Tax

 

Table 11 : Cash Flow summary

 

 

 

Q1 2022 

Q1 2021 

Change 

 

 

$m 

$m 

$m 

Reported Operating Profit

 

878 

1,895 

(1,017)

Depreciation, Amortisation and Impairment

 

1,309 

797 

512 

Decrease in Working Capital and Short-term Provisions

 

1,804 

1,210 

594 

Gains on Disposal of Intangible Assets

 

(10)

(310)

300 

Gains on Disposal of Investments in Associates and Joint Ventures

 

- 

(776)

776 

Non-Cash and Other Movements

 

(327)

(363)

36 

Interest Paid

 

(194)

(187)

(7)

Taxation Paid

 

(228)

(332)

104 

Net Cash Inflow from Operating Activities

 

3,232 

1,934 

1,298 

Net Cash Inflow before Financing Activities

 

3,064 

2,489 

575 

Net Cash Outflow from Financing Activities

 

(3,740)

(2,731)

(1,009)

 

 

The increase in Net Cash Inflow from Operating Activities of $1,298m primarily reflected an underlying improvement in business performance, including the contribution from Alexion.

 

The Reported Operating Profit of $878m in the quarter includes a negative impact of $1,180m relating to the unwind of the inventory fair value uplift recognised on the acquisition of Alexion. This is offset by a corresponding item (positive impact of $1,180m) in Decrease in Working Capital and Short-term Provisions. Overall, the unwind of the fair value uplift has no impact on Net Cash Inflow from Operating Activities.

 

The change in Working Capital and Short-term Provisions of $594m, whilst being positively impacted by the aforementioned inventory fair value uplift unwind, has been adversely impacted by the reduction of Vaxzevria working capital balances predominantly within Trade and other payables.

 

Capital Expenditure

 

Capital Expenditure amounted to $219m in the quarter (Q1 2021: $220m). The Company anticipates an increase in Capital Expenditure relative to FY 2021, partly driven by an expansion in its capacity for growth and the acquisition of Alexion.

 

Table 12 : Net Debt summary

 

 

At 31 Mar 2022 

At 31 Dec 2021 

At 31 Mar 2021 

 

 

$m 

$m 

$m 

Cash and cash equivalents

 

5,762 

6,329 

7,636 

Other investments

 

61 

69 

129 

Cash and investments

 

5,823 

6,398 

7,765 

Overdrafts and short-term borrowings

 

(805)

(387)

(581)

Lease liabilities

 

(949)

(987)

(680)

Current instalments of loans

 

(1,264)

(1,273)

(1,461)

Non-current instalments of loans

 

(28,081)

(28,134)

(17,410)

Interest-bearing loans and borrowings

(Gross Debt)

 

(31,099)

(30,781)

(20,132)

Net derivatives

 

59 

61 

162 

Net Debt

 

(25,217)

(24,322 )

(12,205)

 

Net Debt increased by $895m in the year to date to $25,217m. Details of the committed undrawn bank facilities are disclosed within the going concern section of Note 1. Details of the Company's solicited credit ratings are disclosed in Note 3.

 

Capital allocation

 

The Board's aim is to continue to strike a balance between the interests of the business, financial creditors and the Company's shareholders. The Company's capital allocation priorities include investing in the business and pipeline, maintaining a strong, investment-grade credit rating, potential value-enhancing business development opportunities, and supporting the progressive dividend policy.

 

In approving the declaration of dividends, the Board considers both the liquidity of the company and the level of reserves legally available for distribution. Dividends are paid to shareholders from AstraZeneca PLC, a Group holding company with no direct operations. The ability of AstraZeneca PLC to make shareholder distributions is dependent on the creation of profits for distribution and the receipt of funds from subsidiary companies. The consolidated Group reserves set out in the Condensed consolidated statement of financial position do not reflect the profit available for distribution to the shareholders of AstraZeneca PLC.

 

Summarised financial information for guarantee of securities of subsidiaries

 

AstraZeneca Finance LLC ("AstraZeneca Finance") is the issuer of 0.700% Notes due 2024, 1.200% Notes due 2026, 1.750% Notes due 2028 and 2.250% Notes due 2031 (the "AstraZeneca Finance Notes"). Each series of AstraZeneca Finance Notes has been fully and unconditionally guaranteed by AstraZeneca PLC. AstraZeneca Finance is 100% owned by AstraZeneca PLC and each of the guarantees by AstraZeneca PLC is full and unconditional and joint and several.

 

The AstraZeneca Finance Notes are senior unsecured obligations of AstraZeneca Finance and rank equally with all of AstraZeneca Finance's existing and future senior unsecured and unsubordinated indebtedness. The guarantee by AstraZeneca PLC of the AstraZeneca Finance Notes is the senior unsecured obligation of AstraZeneca PLC and ranks equally with all of AstraZeneca PLC's existing and future senior unsecured and unsubordinated indebtedness. Each guarantee by AstraZeneca PLC is effectively subordinated to any secured indebtedness of AstraZeneca PLC to the extent of the value of the assets securing such indebtedness. The AstraZeneca Finance Notes are structurally subordinated to indebtedness and other liabilities of the subsidiaries of AstraZeneca PLC, none of which guarantee the AstraZeneca Finance Notes.

 

AstraZeneca PLC manages substantially all of its operations through divisions, branches and/or investments in subsidiaries and affiliates. Accordingly, the ability of AstraZeneca PLC to service its debt and guarantee obligations is also dependent upon the earnings of its subsidiaries, affiliates, branches and divisions, whether by dividends, distributions, loans or otherwise.

 

Please refer to the consolidated financial statements of AstraZeneca PLC in our Annual Report on Form 20-F and reports on Form 6-K with our quarterly financial results as filed or furnished with the SEC for further financial information regarding AstraZeneca PLC and its consolidated subsidiaries. For further details, terms and conditions of the AstraZeneca Finance Notes please refer to AstraZeneca PLC's Form 6-K furnished to the SEC on 28 May 2021.

 

Pursuant to Rule 13-01 and Rule 3-10 of Regulation S-X under the Securities Act of 1933, as amended (the "Securities Act"), we present below the summary financial information for AstraZeneca PLC, as Guarantor, excluding its consolidated subsidiaries, and AstraZeneca Finance, as the issuer, excluding its consolidated subsidiaries. The following summary financial information of AstraZeneca PLC and AstraZeneca Finance is presented on a combined basis and transactions between the combining entities have been eliminated. Financial information for non-guarantor entities has been excluded. Intercompany balances and transactions between the obligor group and the non-obligor subsidiaries are presented on separate lines.

 

Table 13 : Obligor group summarised Statement of comprehensive income

 

 

 

 

Q1 2022

Q1 2021 

 

 

$m 

$m 

Total revenue

 

Gross profit

 

Operating loss

 

(1)

(20)

Loss for the period

 

(155)

(166)

Transactions with subsidiaries that are not issuers or guarantors

 

164 

2,148 

 

Table 14 : Obligor group summarised Statement of financial position information

 

 

 

At 31 Mar 2022 

At 31 Mar 2021

 

 

$m 

$m 

Current assets

 

19 

28 

Non-current assets

 

Current liabilities

 

(1,682)

(1,656)

Non-current liabilities

 

(25,605)

(17,072)

Amounts due from subsidiaries that are not issuers or guarantors

 

8,652 

6,243 

Amounts due to subsidiaries that are not issuers or guarantors

 

(297)

(295)

 

Foreign exchange

 

The Company's transactional currency exposures on working-capital balances, which typically extend for up to three months, are hedged where practicable using forward foreign-exchange contracts against the individual companies' reporting currency. Foreign-exchange gains and losses on forward contracts for transactional hedging are taken to profit or loss. In addition, the Company's external dividend payments, paid principally in pounds sterling and Swedish krona, are fully hedged from announcement to payment date.

 

Table 15 : Currency sensitivities

 

The Company provides the following currency-sensitivity information:

 

 

 

 

Average exchange

rates versus USD

 

Annual impact of 5% strengthening in exchange rate versus USD ($m)[60]

 

Currency

Primary Relevance

 

FY 2021 [61]

 Q1 2022 [62]

% Change

Total Revenue

Core Operating Profit

CNY

Total Revenue

 

6.43

6.35

 277

 158 

EUR

Total Revenue

 

0.85

0.89

(5)

 317

 160 

JPY

Total Revenue

 

109.83

116.32

(6)

 229

 158 

Other[63]

 

 

 

 

 

 420

 196 

GBP

Operating Expense

 

0.73

0.75

(2)

 61

 (93)

SEK

Operating Expense

 

8.58

9.33

(8)

 6

 (82)

 

Sustainability

 

Since the last quarterly report, AstraZeneca:

 

Published its eighth annual Sustainability Report and Sustainability Data summary via its website and social media, released in conjunction with the Annual Report. Two fireside discussions from the accompanying investor roadshow are available on the AstraZeneca IR website

 

Facilitated a Climate and Health Policy Roundtable at Expo 2020 Dubai with global experts from the World Health Organisation, UNFCCC, Sustainability Healthcare Coalition, and health and environmental authorities from Sweden, Egypt, and the UAE to discuss the health of people and the planet

 

Convened a hybrid summit on health system sustainability and resilience, culminating in a global call to action to rebuild health system integrity following the COVID-19 pandemic

 

Access to healthcare

 

Released, along with its sub-licensees, more than 2.8 billion vaccine doses, for supply in over 180 countries. Approximately two-thirds of the doses have gone to low and middle-income countries

 

The Company's Healthy Heart Africa (HHA) programme expanded into Nigeria, its ninth country of operation, with the signing of a Memorandum of Understanding with the Federal Government of Nigeria. Launched the second phase in Tanzania with the Ministry of Health and our local partner PATH. The two-year project aims to reach over 500,000 people, providing services and support at 35 primary health care facilities. Since the programme launched in 2015, HHA has conducted over 25 million blood pressure screenings, identified over 4.8 million elevated readings, activated over 950 sites and trained more than 9,000 healthcare workers and volunteers

 

Expanded its Young Health Programme (YHP) into Italy and Israel, bringing the number of countries to 34

 

Awards to two youth-led organisations tackling air pollution, through the Lead2030 Challenge in partnership with One Young World (OYW), in line with the Company's commitment to SDG3. Winners receive mentorship from AstraZeneca, and a Scholarship to attend the OYW Summit

 

Environmental protection

 

Announced a collaboration with Honeywell to develop next-generation respiratory inhalers (pMDI) with a near-zero Global Warming Potential propellant. The innovation, using the propellant HFO-1234ze, is a key element supporting the delivery of AstraZeneca's Ambition Zero Carbon goals. AstraZeneca also announced that by the end of 2025, 95% of its key suppliers will have targets to limit global warming to <1.5C

 

Announced two new forestry commitments in Ghana (three million trees) and the US (one million trees) at the Global Forest Summit, building on existing AZ Forest projects in Australia, Indonesia, the UK

 

Marked World Water Day with an updated Position Paper on Water Stewardship. The Company has championed a water risk assessment of the global pharmaceutical supply chain in collaboration with WWF Sweden. AstraZeneca also joined the Alliance for Water Stewardship (AWS)

 

Featured in the Financial Times' list of Europe's Climate Leaders, for the second year running.  This recognises companies with the highest reduction in Scope 1 and 2 emissions from 2015 to 2020 

 

Ethics and transparency

 

Revised its Global Standard for Bioethics, which ensures its ethical principles cover evolving R&D activities

 

Marked International Day of Women and Girls in Science and International Women's Day with external and internal communications campaigns featuring members of the Senior Executive team and other Company scientists. AstraZeneca also signed the Wellbeing of Women Menopause Workplace Pledge

 

Observed Black History Month, with events hosted by the AstraZeneca African Heritage Business Resource Group, Alexion Black Professionals Network, AZ Inspire and the Inclusion and Diversity (I&D) team

 

Became a founding member of Neurodiversity in Business and celebrated Neurodiversity Week with the Company's TH!NK ERG programme of events

 

Research and development

 

This section covers R&D events and milestones in the period since the prior results announcement.

 

A comprehensive view of AstraZeneca's pipeline of medicines in human trials can be found in the latest clinical trials appendix, available on www.astrazeneca.com/investor-relations. The clinical trials appendix includes tables with details of the ongoing clinical trials for AstraZeneca medicines and new molecular entities in the pipeline.

 

Oncology

 

Significant new trials in Oncology included, EMERALD-3, a Phase III trial of Imfinzi plus tremelimumab, with and without lenvatinib, in combination with transarterial chemoembolisation in patients with locoregional HCC, PACIFIC-9, a Phase III trial of Imfinzi plus oleclumab and Imfinzi plus monalizumab in patients with locally advanced, Stage III, unresectable non-small cell lung cancer who have not progressed following platinum-based cCRT, and SAFFRON - a Phase III trial of Tagrisso in combination with AstraZeneca and HUTCHMED's Orpathys in patients EGFR-mutated NSCLC patients with MET-driven tumours following progression after treatment with Tagrisso.

 

AstraZeneca presented new data across its diverse portfolio of cancer medicines at the American Society of Clinical Oncology Genitourinary Cancers Symposium (ASCO GU) in February 2022. Presentations included a late-breaking presentation by AstraZeneca and MSD from the PROpel Phase III trial of Lynparza plus abiraterone, which showed the combination significantly delayed disease progression in 1st-line metastatic castration-resistant prostate cancer regardless of biomarker status. Lynparza is the first PARP inhibitor to demonstrate clinical benefit in combination with a new hormonal agent in this setting.

 

At the American Association for Cancer Research General Meeting 2022, new preclinical and early clinical data was presented across its pipeline. Data from 60 presentations, including five oral and three mini-oral presentations, featured the Company's next wave of potential cancer medicines spanning its immuno-oncology, DNA Damage Response and Antibody Drug Conjugate scientific platforms. This includes key data shared from three potential new medicines that illustrate the Company's innovative approach to designing molecules that address key challenges in treating cancer, including the ability to target different, complementary mechanisms.

 

Imfinzi

 

During the period, the Company announced that the CALLA Phase III trial for Imfinzi given concurrently with CRT did not achieve statistical significance for the primary endpoint of improving progression-free survival versus CRT alone in the treatment of patients with locally advanced cervical cancer.

 

In April 2022 the Company announced the regulatory submission acceptance for tremelimumab with Priority Review in the US, by the US FDA. The submission is supported by data from the HIMALAYA trial, in which a single priming dose of the anti-CTLA4[64] antibody added to Imfinzi for the treatment of patients with unresectable hepatocellular carcinoma significantly improved overall survival. A supplemental Biologics Licence Application has also been submitted for Imfinzi in this indication. The Prescription Drug User Fee Act date, the US FDA action date for their regulatory decision, is during the fourth quarter of 2022, following the use of a priority review voucher.

 

During the period, AstraZeneca completed regulatory submissions for tremelimumab and Imfinzi in Japan. The submissions were based on data from the aforementioned HIMALAYA trial, as well as the TOPAZ-1 trial in which Imfinzi, in combination with standard-of-care chemotherapy, demonstrated a statistically significant and clinically meaningful overall survival benefit versus chemotherapy alone as a 1st-line treatment for patients with advanced biliary tract cancer.

 

Lynparza

 

In February 2022, AstraZeneca presented results from the PROpel Phase III trial at the aforementioned 2022 ASCO GU meeting. AstraZeneca and MSD's Lynparza in combination with abiraterone demonstrated a statistically significant and clinically meaningful improvement in rPFS[65] versus abiraterone as a 1st-line treatment for patients with mCRPC[66] with or without HRR[67] gene mutations.

 

Lynparza in combination with abiraterone reduced the risk of disease progression or death by 34% versus abiraterone alone (HR[68] 0.66; 95% CI 0.54-0.81; p<0.0001). Median rPFS was 24.8 months for Lynparza plus abiraterone versus 16.6 for abiraterone alone.

 

Results also showed a favourable trend towards improved OS[69] with Lynparza plus abiraterone versus abiraterone alone, however the difference did not reach statistical significance at the time of this data cut-off (analysis at 29% data maturity). The trial will continue to assess OS as a key secondary endpoint.

 

During the period, Lynparza was also approved in the US for the adjuvant treatment of patients with germline BRCA-mutated HER2-negative high-risk early breast cancer who have already been treated with chemotherapy either before or after surgery. The approval by the US FDA was based on results from the OlympiA Phase III trial, in which Lynparza demonstrated a statistically significant and clinically meaningful improvement in invasive disease-free survival, reducing the risk of invasive breast cancer recurrences, second cancers or death, by 42% versus placebo (based on a HR of 0.58; 95% CI 0.46-0.74; p<0.0001).

 

In March, new updated results from the OlympiA trial presented at the European Society for Medical Oncology virtual plenary showed Lynparza demonstrated a statistically significant and clinically meaningful improvement in the key secondary endpoint of OS, reducing the risk of death by 32% versus placebo (based on a HR of 0.68; 95% CI 0.50-0.91; p=0.0091).

 

Enhertu

 

In February 2022, AstraZeneca announced positive high-level results from the DESTINY-Breast04 Phase III trial. Enhertu demonstrated a statistically significant and clinically meaningful improvement in both PFS[70] and OS in patients with HER2-low unresectable and/or metastatic breast cancer previously treated with one or two prior lines of chemotherapy, regardless of hormone receptor (HR) status, versus physician's choice of chemotherapy.

 

The US FDA has subsequently notified AstraZeneca and Daiichi Sankyo that the sBLA[71] for Enhertu has been accepted and granted Breakthrough Therapy Designation for the treatment of HER2-low unresectable and/or metastatic breast cancer in patients previously treated with one or two prior lines of chemotherapy.

 

The sBLA is being reviewed under the Real-Time Oncology Review (RTOR) programme. RTOR allows the FDA to review components of an application before submission of the complete application.

 

In April 2022, AstraZeneca and Daiichi Sankyo were notified by the US FDA that the sBLA for Enhertu has been accepted and granted Priority Review for the treatment of adult patients with previously treated HER2-mutant metastatic non-small cell lung cancer based on the results of the DESTINY-Lung01 Phase II trial.

 

Primary results from previously-treated patients with HER2-mutations (cohort 2) of DESTINY-Lung01 demonstrated a confirmed objective response rate (ORR) of 54.9% (95% CI: 44.2-65.4) in patients treated with Enhertu (6.4mg/kg).

 

During the period, the China Center for Drug Evaluation granted Breakthrough Therapy Designation for Enhertu for the 2nd-line treatment of patients with HER2+ metastatic breast cancer based on the results of the DESTINY-Breast03 Phase III trial.

 

BioPharmaceuticals - CVRM

 

Brilinta

 

During the period, the US FDA granted AstraZeneca six months paediatric exclusivity for Brilinta.

 

Andexxa

 

During the period, Ondexxya was approved in Japan for patients treated with Factor Xa inhibitors apixaban, rivaroxaban or edoxaban when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleedings. Ondexxya is approved in the EU, and in the US under the trade name Andexxa.

 

AZD8233

 

 

At the American College of Cardiology's 71st Annual Scientific Session, AstraZeneca and Ionis Pharmaceuticals, Inc. presented Phase IIb data for AZD8233, an antisense oligonucleotide, in development for the treatment of hypercholesterolemia. In the ETESIAN Phase IIb trial, AZD8233 showed reduction in LDL-C[72]  levels of 73% and PCSK9 reduction of 89%.

 

BioPharmaceuticals Ð R&I

 

As disclosed in the Sustainability section, AstraZeneca announced a collaboration with Honeywell, to develop next-generation respiratory inhalers (pMDI) using the propellant HFO-1234ze, which has up to 99.9% less Global Warming Potential (GWP) than propellants currently used in respiratory medicines. Recent results from the first in-human Phase I trial of the near-zero GWP propellant HFO-1234ze in a pMDI containing budesonide, glycopyrronium, formoterol fumarate in healthy adults were positive, demonstrating similar safety, tolerability and systemic exposure of the active ingredients when compared to Breztri Aerosphere (budesonide/glycopyrronium/formoterol fumarate). AstraZeneca expects Breztri to be the first medicine to transition to this new pMDI platform, subject to regulatory approval.

 

As of 29 April 2022, significant new trials in Respiratory & Immunology in which the first patient was dosed included; HUDSON, a Phase III trial of Fasenra in eosinophilic gastritis and eosinophilic gastroenteritis and,  OBERON and TITANIA, Phase III trials of tozorakimab in COPD.

 

Fasenra

 

During the period, the US FDA issued a CRL[73] regarding the sBLA for Fasenra for patients with inadequately controlled CRwNP

 

The sBLA included data from the OSTRO Phase III trial, which met both co-primary endpoints with a safety profile consistent with the known profile of the medicine. The CRL requested additional clinical data and AstraZeneca is working closely with the US FDA regarding next steps. AstraZeneca remains committed to bringing Fasenra to patients with CRSwNP and a second Phase III trial, ORCHID, in this indication is ongoing.

 

Saphnelo

 

During the period, Saphnelo received approval in the EU as an add-on therapy for the treatment of adult patients with moderate to severe, active autoantibody-positive SLE, despite receiving standard therapy, making it the first biologic for SLE approved in Europe with an indication that is not restricted to patients with a high degree of disease activity. The approval is based on results from the Saphnelo clinical development programme, which included the TULIP 1 and TULIP 2 Phase III trials and the MUSE Phase II trial. In these trials, more patients treated with Saphnelo experienced a reduction in overall disease activity across all affected organ systems from baseline and achieved sustained reduction in oral corticosteroid use compared to placebo, with both groups receiving standard therapy.  

 

BioPharmaceuticals Ð Vaccines and Immune Therapies

 

Evusheld

 

During the period, Evusheld was granted marketing authorisation in the EU for the pre-exposure prophylaxis (prevention) of COVID-19 in a broad population of adults and adolescents aged 12 years and older weighing at least 40kg.

 

Preclinical authentic Ôlive' virus data from Washington University School of Medicine demonstrated that Evusheld retains neutralising activity against the highly transmissible Omicron BA.2 subvariant. This study also showed that Evusheld reduced viral burden and limited inflammation in the lungs (in vivo) across all tested Omicron variants.

 

Detailed results from the PROVENT Phase III pre-exposure prophylaxis (prevention) trial, published in TheNew England Journal of Medicine, showed that AstraZeneca's Evusheld reduced the risk of developing symptomatic COVID-19 by 77% in the primary analysis and by 83% in the six-month follow-up analysis, compared to placebo. There were no cases of severe disease or COVID‑19 related deaths in the Evusheld group through the six-month follow up.

 

Nirsevimab

 

Nirsevimab was accepted under an accelerated assessment procedure by the EMA, for the prevention of medically attended LRTI[74] in all infants from birth entering their first RSV season.

 

Detailed results from the MELODY Phase III trial were published in the New England Journal of Medicine and demonstrated that nirsevimab showed 74.5% efficacy against medically attended LRTI caused by RSV in healthy infants compared to placebo. Additionally, results from the MEDLEY Phase II/III trial were also published in the journal. The results demonstrated nirsevimab had a similar safety and tolerability profile compared to Synagis, and that serum levels of nirsevimab following dosing (on day 151) in this trial were comparable with those observed in the MELODY Phase III trial.

 

Rare Disease

 

Ultomiris

Ultomiris was approved in the US for the treatment of adult patients with gMG who are anti-acetylcholine receptor antibody-positive, which represents 80% of people living with the disease. The approval by the US FDA was based on positive results from the CHAMPION-MG Phase III trial, in which Ultomiris was superior to placebo in the primary endpoint of change from baseline in the Myasthenia Gravis-Activities of Daily Living Profile (MG-ADL) total score at Week 26, a patient-reported scale that assesses patients' abilities to perform daily activities.

 

Interim Financial Statements

 

Table 16 : Q1 2022 - Condensed consolidated statement of comprehensive income

 

For the quarter ended 31 March

2022

2021

$m

$m

 

Total Revenue

11,390  

7,320  

Product Sales

10,980 

7,257 

Collaboration Revenue

410 

63 

Cost of Sales

(3,511)

(1,864)

Gross profit

7,879  

5,456  

Distribution expense

(125)

(99)

Research and development expense

(2,133)

(1,713)

Selling, general and administrative expense

(4,840)

(2,929)

Other operating income and expense

97 

1,180 

Operating profit

878  

1,895  

Finance income

17 

20 

Finance expense

(336)

(303)

Share of after tax losses in associates and joint ventures

(6)

(4)

Profit before tax

553  

1,608  

Taxation

(165)

(46)

Profit for the period

388  

1,562  

 

 

 

Other comprehensive income

 

 

Items that will not be reclassified to profit or loss

 

 

Remeasurement of the defined benefit pension liability

335 

481 

Net gains/(losses) on equity investments measured at fair value through other comprehensive income

18 

(108)

Fair value movements related to own credit risk on bonds designated as fair value through profit or loss

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

(94)

(94)

 

259  

280  

Items that may be reclassified subsequently to profit or loss

 

 

Foreign exchange arising on consolidation

(219)

(107)

Foreign exchange arising on designated borrowings in net investment hedges

(32)

(302)

Fair value movements on cash flow hedges

(86)

Fair value movements on cash flow hedges transferred to profit or loss

11 

121 

Fair value movements on derivatives designated in net investment hedges

(8)

13 

Costs of hedging

(1)

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

26 

 

(242)

(336)

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

17  

(56)

Total comprehensive income for the period

405  

1,506  

 

 

 

Profit attributable to:

 

 

Owners of the Parent

386 

1,561 

Non-controlling interests

 

388 

1,562 

Total comprehensive income attributable to:

 

 

Owners of the Parent

405 

1,506 

Non-controlling interests

 

405 

1,506 

Basic earnings per $0.25 Ordinary Share

$0.25 

$1.19 

Diluted earnings per $0.25 Ordinary Share

$0.25 

$1.18 

Weighted average number of Ordinary Shares in issue (millions)

1,548 

1,312 

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

1,561 

1,319 

 

 

 

 

Table 17 : Condensed consolidated statement of financial position

 


At 31 Mar 2022

At 31 Dec 2021

At 31 Mar 2021

 

$m 

$m 

$m 

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

9,061 

9,183 

8,189 

Right-of-use assets

954 

988 

660 

Goodwill

19,963 

19,997 

11,765 

Intangible assets

41,265 

42,387 

20,347 

Investments in associates and joint ventures

63 

69 

88 

Other investments

1,174 

1,168 

972 

Derivative financial instruments

87 

102 

115 

Other receivables

864 

895 

549 

Deferred tax assets

4,195 

4,330 

3,506 


77,626  

79,119  

46,191  

Current assets

 

 

 

Inventories

7,624 

8,983 

4,278 

Trade and other receivables

8,683 

9,644 

6,281 

Other investments

61 

69 

129 

Derivative financial instruments

54 

83 

64 

Intangible assets

96 

105 

Income tax receivable

367 

663 

347 

Cash and cash equivalents

5,762 

6,329 

7,636 

Assets held for sale

368 


22,647  

26,244  

18,735  

Total assets

100,273  

105,363  

64,926  

 

 

 

 

Liabilities


 


Current liabilities

 

 

 

Interest-bearing loans and borrowings

(2,069)

(1,660)

(2,042)

Lease liabilities

(225)

(233)

(216)

Trade and other payables

(17,864)

(18,938)

(17,370)

Derivative financial instruments

(35)

(79)

(16)

Provisions

(1,423)

(768)

(875)

Income tax payable

(1,124)

(916)

(994)

 

(22,740)

(22,594)

(21,513)

Non-current liabilities

 

 

 

Interest-bearing loans and borrowings

(28,081)

(28,134)

(17,410)

Lease liabilities

(724)

(754)

(464)

Derivative financial instruments

(47)

(45)

(1)

Deferred tax liabilities

(5,626)

(6,206)

(2,823)

Retirement benefit obligations

(1,991)

(2,454)

(2,545)

Provisions

(949)

(956)

(576)

Other payables

(3,756)

(4,933)

(5,148)


(41,174)

(43,482)

(28,967)

Total liabilities

(63,914)

(66,076)

(50,480)

Net assets

36,359  

39,287  

14,446  

Equity

 

 

 

Capital and reserves attributable to equity holders of the Parent

 

 

 

Share capital

387 

387 

328 

Share premium account

35,131 

35,126 

7,976 

Other reserves

2,050 

2,045 

2,037 

Retained earnings

(1,228)

1,710 

4,089 

 

36,340  

39,268  

14,430  

Non-controlling interests

19 

19 

16 

Total equity

36,359  

39,287  

14,446  

 

Table 18 : Condensed consolidated statement of changes in equity

 

 

Share capital

Share premium account

Other reserves

Retained earnings

Total attributable to owners of the parent

Non-controlling interests

Total equity


$m 

$m 

$m 

$m 

$m 

$m 

$m 

At 1 Jan 2021

328 

7,971 

2,024 

5,299 

15,622 

16 

15,638 

Profit for the period

1,561 

1,561 

1,562 

Other comprehensive loss

(55)

(55)

(1)

(56)

Transfer to other reserves

13

(13)

Transactions with owners:

 

 

 

 

 

 

 

Dividends

(2,490)

(2,490)

(2,490)

Issue of Ordinary Shares

Share-based payments charge for the period

82 

82 

82 

Settlement of share plan awards

(295)

(295)

(295)

Net movement

13 

(1,210)

(1,192)

(1,192)

At 31 Mar 2021

328 

7,976 

2,037 

4,089 

14,430 

16 

14,446 

At 1 Jan 2022

387 

35,126 

2,045 

1,710 

39,268 

19 

39,287 

Profit for the period

386 

386 

388 

Other comprehensive income

19 

19 

(2)

17 

Transfer to other reserves

(5)

Transactions with owners:

 

 

 

 

 

 

 

Dividends

(3,046)

(3,046)

(3,046)

Issue of Ordinary Shares

Share-based payments charge for the period

182 

182 

182 

Settlement of share plan awards

(474)

(474)

(474)

Net movement

(2,938)

(2,928)

(2,928)

At 31 Mar 2022

387 

35,131 

2,050 

(1,228)

36,340 

19 

36,359 

 

Table 19 : Condensed consolidated statement of cash flows

 

 

For the quarter ended 31 March

2022 

2021 

$m 

$m 

 

Cash flows from operating activities

 

 

Profit before tax

553 

1,608 

Finance income and expense

319 

283 

Share of after tax losses of associates and joint ventures

Depreciation, amortisation and impairment

1,309 

797 

Decrease in working capital and short-term provisions

1,804 

1,210 

Gains on disposal of intangible assets

(10)

(310)

Gains on disposal of investments in associates and joint ventures

(776)

Non-cash and other movements

(327)

(363)

Cash generated from operations

3,654  

2,453  

Interest paid

(194)

(187)

Tax paid

(228)

(332)

Net cash inflow from operating activities

3,232  

1,934  

Cash flows from investing activities

 

 

Payments upon vesting of employee share awards attributable to business combinations

(55)

-

Payment of contingent consideration from business combinations

(182)

(171)

Purchase of property, plant and equipment

(219)

(220)

Disposal of property, plant and equipment

Purchase of intangible assets

(144)

(249)

Disposal of intangible assets and assets held for sale

385 

418 

Purchase of non-current asset investments

(4)

Disposal of non-current asset investments

32 

Movement in short-term investments, fixed deposits and other investing instruments

21 

28 

Payments to associates and joint ventures

(5)

(55)

Disposal of investments in associates and joint ventures

776 

Interest received

24 

Net cash (outflow)/inflow from investing activities

(168)

555 

Net cash inflow before financing activities

3,064  

2,489  

Cash flows from financing activities

 

 

Proceeds from issue of share capital

Repayment of loans and borrowings

(4)

(4)

Dividends paid

(2,971)

(2,469)

Hedge contracts relating to dividend payments

(77)

(23)

Repayment of obligations under leases

(74)

(50)

Movement in short-term borrowings

301 

(190)

Payment of Acerta Pharma share purchase liability

(920)

 - 

Net cash outflow from financing activities

(3,740)

(2,731)

Net decrease in cash and cash equivalents in the period

(676)

(242)

Cash and cash equivalents at the beginning of the period

6,038 

7,546 

Exchange rate effects

(9)

(67)

Cash and cash equivalents at the end of the period

5,353  

7,237  

Cash and cash equivalents consist of:

 

 

Cash and cash equivalents

5,762 

7,636 

Overdrafts

(409)

(399)


5,353  

7,237  

 

Notes to the Interim Financial Statements

 

Note 1: Basis of preparation and accounting policies

 

These unaudited Interim Financial Statements for the three months ended 31 March 2022 have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Interim Financial Statements also comply fully with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) and International Accounting Standards as adopted by the European Union.

 

The unaudited Interim Financial Statements for the three months ended 31 March 2022 include Alexion's results for the period. Alexion was consolidated into the Group's results from 21 July 2021, hence Alexion's results are not included in the comparative periods shown.

 

The unaudited Interim Financial Statements for the three months ended 31 March 2022 were approved by the Board of Directors for publication on 29 April 2022.

 

The annual financial statements of the Group for the year ended 31 December 2021 were prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006. The annual financial statements also comply fully with IFRSs as issued by the IASB and International Accounting Standards as adopted by the European Union. Except for the estimation of the interim income tax charge, the Interim Financial Statements have been prepared applying the accounting policies that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2021.

 

The comparative figures for the financial year ended 31 December 2021 are not the Group's statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and will be delivered to the registrar of companies; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

Global and/or geopolitical events

 

There were no material accounting impacts identified relating to COVID-19 during the three months ended 31 March 2022.

 

The Group's current focus is to continue compliant business operations in Russia and Ukraine, focussing on safeguarding our employees, ensuring continuity of supply of essential and life-saving medicines and contributing to humanitarian relief efforts. There are no material accounting impacts arising from the conflict impacting our Q1 2022 reporting. The situation is dynamic and any future impact on our business is uncertain. We continue to closely monitor the situation.

 

The Group will continue to monitor these areas of increased judgement, estimation and risk for material changes.

 

Going concern

 

The Group has considerable financial resources available. As at 31 March 2022, the Group had $10.7bn in financial resources (cash and cash-equivalent balances of $5.8bn and undrawn committed bank facilities of $4.9bn available until April 2025, with only $2.3bn of borrowings due within one year). All facilities contain no financial covenants and were undrawn at 31 March 2022.

 

The Group's revenues are largely derived from sales of medicines covered by patents which provide a relatively high level of resilience and predictability to cash inflows, although government price interventions in response to budgetary constraints are expected to continue to affect adversely revenues in some of our significant markets. The Group, however, anticipates new revenue streams from both recently launched medicines and those in development, and the Group has a wide diversity of customers and suppliers across different geographic areas.

 

Consequently, the Directors believe that, overall, the Group is well-placed to manage its business risks successfully.

 

Accordingly, the going concern basis has been adopted in these Interim Financial Statements.

 

Legal proceedings

 

The information contained in Note 5 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2021.

 

Note 2: Intangible assets

 

In accordance with IAS 36 ÔImpairment of Assets', reviews for triggers at an individual asset or cash-generating-unit level were conducted, and impairment tests carried out where triggers were identified. As a result, total net impairment reversals of $94m have been recorded against intangible assets during the three months ended 31 March 2022 (Q1 2021: $55m charge). Net impairment reversals in respect of medicines in development and launched medicines were $77m (Q1 2021: $nil) and $nil (Q1 2021: $55m charge) respectively.

 

Note 3: Net Debt

 

The table below provides an analysis of Net Debt and a reconciliation of Net Cash Flow to the movement in Net Debt. The Group monitors Net Debt as part of its capital-management policy as described in Note 28 of the Annual Report and Form 20-F Information 2021. Net Debt is a non-GAAP financial measure.

 

Table 20 : Net Debt

 

 

At 1 Jan 2022

Cash flow

Non-cash
& other

Exchange movements

At 31 Mar 2022

 

$m

$m

$m

$m

$m

Non-current instalments of loans

(28,134)

47 

(28,081)

Non-current instalments of leases

(754)

21 

(724)

Total long-term debt

(28,888)

- 

27 

56 

(28,805)

Current instalments of loans

(1,273)

(1,264)

Current instalments of leases

(233)

70 

(66)

(225)

Commercial paper

(256)

(256)

Bank collateral

(93)

12 

(81)

Other short-term borrowings excluding overdrafts

(3)

(57)

(59)

Overdrafts

(291)

(123)

(409)

Total current debt

(1,893)

(350)

(61)

10 

(2,294)

Gross borrowings

(30,781)

(350)

(34)

66 

(31,099)

Net derivative financial instruments

61 

66 

(68)

59 

Net borrowings

(30,720)

(284)

(102)

66 

(31,040)

Cash and cash equivalents

6,329 

(553)

(14)

5,762 

Other investments - current

69 

(10)

61 

Cash and investments

6,398 

(563)

- 

(12)

5,823 

Net Debt

(24,322)

(847)

(102)

54 

(25,217)

 

Non-cash movements in the period include fair-value adjustments under IFRS 9.

 

The Group has agreements with some bank counterparties whereby the parties agree to post cash collateral on financial derivatives, for the benefit of the other, equivalent to the market valuation of the derivative positions above a predetermined threshold. The carrying value of such cash collateral held by the Group was $81m (31 December 2021: $93m) and the carrying value of such cash collateral posted by the Group was $64m (31 December 2021: $47m). Cash collateral posted by the Group is presented within Cash and cash equivalents.

 

The equivalent GAAP measure to Net Debt is Ôliabilities arising from financing activities', which excludes the amounts for cash and overdrafts, other investments and non-financing derivatives shown above and includes the Acerta Pharma share purchase liability of $1,564m (31 December 2021: $2,458m), $824m of which is shown in current other payables and $740m is shown in non-current other payables.

 

Net Debt increased by $895m in the year to date to $25,217m. Details of the committed undrawn bank facilities are disclosed within the going concern section of Note 1.

 

 

During the three months to 31 March 2022, there were no changes to the Company's solicited credit ratings issued by Standard and Poor's (long term: A-; short term: A-2) and from Moody's (long term: A3; short term: P‑2).

 

Note 4: Financial Instruments

 

As detailed in the Group's most recent annual financial statements, the principal financial instruments consist of derivative financial instruments, other investments, trade and other receivables, cash and cash equivalents, trade and other payables, lease liabilities and interest-bearing loans and borrowings.

 

All fair value gains and/or losses that are presented in Net gains/(losses) on equity investments measured at fair value through other comprehensive income in the Condensed consolidated statement of comprehensive income for the three months ending 31 March 2022 are Level 1 fair value measurements.

 

Financial instruments measured at fair value include $1,235m of other investments, $4,175m held in money-market funds, $308m of loans designated at fair value through profit or loss and $59m of derivatives as at 31 March 2022. The total fair value of interest-bearing loans and borrowings at 31 March 2022, which have a carrying value of $31,099m in the Condensed consolidated statement of financial position, was $31,902m.

 

Table 21 : Financial instruments - contingent consideration

 

 

 

2022

2021

 

 

 

Diabetes alliance

Other

Total

Total

 

 

$m

$m

$m

At 1 January

 

2,544 

321 

3,323 

Settlements

 

(173)

(9)

(182)

(171)

Disposals

 

(121)

(121)

Discount unwind

 

41 

55 

At 31 March

 

2,412 

192 

3,207 

 

Contingent consideration arising from business combinations is fair-valued using decision-tree analysis, with key inputs including the probability of success, consideration of potential delays and the expected levels of future revenues.

 

The contingent consideration balance relating to BMS's share of the global diabetes alliance of $2,412m (31 December 2021: $2,544m) would increase/decrease by $241m with an increase/decline in sales of 10%, as compared with the current estimates.

 

Note 5: Legal proceedings and contingent liabilities

 

AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation and investigations relating to product liability, commercial disputes, infringement of intellectual property (IP) rights, the validity of certain patents, anti-trust law and sales and marketing practices. The matters discussed below constitute the more significant developments since publication of the disclosures concerning legal proceedings in the Company's Annual Report and Form 20-F Information 2021 (the Disclosures). Unless noted otherwise below or in the Disclosures, no provisions have been established in respect of the claims discussed below.

 

As discussed in the Disclosures, the majority of claims involve highly complex issues. Often these issues are subject to substantial uncertainties and, therefore, the probability of a loss, if any, being sustained and/or an estimate of the amount of any loss is difficult to ascertain.

 

Unless specifically identified below that a provision has been taken, AstraZeneca considers each of the claims to represent a contingent liability and discloses information with respect to the nature and facts of the cases in accordance with IAS 37.

 

There is one matter concerning legal proceedings in the Disclosures, which is considered probable that an outflow will be required, but for which we are unable to make an estimate of the possible loss or range of possible losses at this stage.

 

In cases that have been settled or adjudicated, or where quantifiable fines and penalties have been assessed and which are not subject to appeal, or where a loss is probable and we are able to make a reasonable estimate of the loss, AstraZeneca records the loss absorbed or makes a provision for its best estimate of the expected loss. The position could change over time and the estimates that the Company made, and upon which the Company have relied in calculating these provisions are inherently imprecise. There can, therefore, be no assurance that any losses that result from the outcome of any legal proceedings will not exceed the amount of the provisions that have been booked in the accounts. The major factors causing this uncertainty are described more fully in the Disclosures and herein.

 

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

 

Matters disclosed in respect of the fourth quarter of 2021 and to 29 April 2022

 

Patent litigation

 

Enhertu

US patent proceedings

As previously disclosed, in October 2020, Seagen Inc. (Seagen) filed a complaint against Daiichi Sankyo Company, Limited (Daiichi Sankyo) in the US District Court for the Eastern District of Texas alleging that Enhertu infringes US Patent No. 10,808,039 (the Ô039 patent). AstraZeneca co-commercialises Enhertu with Daiichi Sankyo, Inc. in the US. The trial took place in April 2022. The jury found that the Ô039 patent was infringed and awarded Seagen $41.82m in past damages. The parties await the schedules for a bench trial on equitable issues and for consideration of post-trial motions.

 

As previously disclosed, in December 2020 and January 2021, AstraZeneca and Daiichi Sankyo filed post-grant review petitions with the US Patent and Trademark Office (USPTO) alleging, inter alia, that the Ô039 patent is invalid for lack of written description and enablement. The USPTO initially declined to institute the post-grant reviews, but in April 2022, the USPTO granted the rehearing requests, instituting both post-grant review petitions. An oral hearing is scheduled for January 2023 and a decision is expected by April 2023.

 

Imfinzi

US patent proceedings

In March 2022, Bristol-Myers Squibb Co. and E.R. Squibb & Sons, LLC filed a lawsuit in US District Court for the District of Delaware against AstraZeneca alleging that AstraZeneca's marketing of Imfinzi infringes several of their patents. No trial date has been scheduled.

 

Patent proceedings outside the US

In February 2022, Ono Pharmaceuticals filed a lawsuit in Tokyo District Court, Civil Division against AstraZeneca alleging that AstraZeneca's marketing of Imfinzi in Japan infringes several of their patents. No trial date has been scheduled.

 

Symbicort

US patent proceedings

As previously disclosed, AstraZeneca is involved in ongoing ANDA patent litigation with Mylan Pharmaceuticals Inc. (Mylan) and Kindeva Drug Delivery L.P. (Kindeva) brought in the US District Court for the Northern District of West Virginia (the District Court). In March 2022, the US Court of Appeals for the Federal Circuit (the Federal Circuit) denied AstraZeneca's Combined Petition for Panel Rehearing and Rehearing En Banc of the Federal Circuit's December 2021 decision and the case was remanded back to the District Court for further proceedings. In April 2022, the District Court entered a Stipulation and Order dismissing patent infringement claims related to various asserted patents and otherwise narrowing the issues for trial. A trial in the matter is scheduled to commence in May 2022.

 

In April 2022, AstraZeneca filed another ANDA action against Mylan and Kindeva in the District Court asserting patent infringement.

 

Tagrisso

US patent proceedings

In February 2020, in response to Paragraph IV notices from multiple ANDA filers, AstraZeneca filed patent infringement lawsuits in the US District Court for the District of Delaware. In its complaint, AstraZeneca alleged that a generic version of Tagrisso, if approved and marketed, would infringe a US Orange Book-listed Tagrisso patent. In the fourth quarter of 2021, AstraZeneca entered into settlement agreements with Zydus Pharmaceuticals (USA) Inc., Cadila Healthcare Limited, MSN Laboratories Pvt. Ltd., and MSN Pharmaceuticals Inc. In April 2022, AstraZeneca entered into a settlement agreement with Alembic Pharmaceuticals Limited. These settlements resolve all US patent litigation between the parties relating to Tagrisso.

 

Patent proceedings outside the US

In Russia, in October 2021, AstraZeneca filed a lawsuit in the Arbitration Court of the Moscow Region against Axelpharm, LLC to prevent it from obtaining authorisation to market a generic version of Tagrisso prior to the expiration of AstraZeneca's patents covering Tagrisso. The lawsuit also names the Ministry of Health of the Russian Federation as a third party. In March 2022, the court dismissed the lawsuit, and AstraZeneca has filed an appeal.

 

Ultomiris

As previously disclosed, Chugai Pharmaceutical Co., Ltd. (Chugai) filed lawsuits against Alexion in the Delaware District Court as well as in Tokyo District Court, alleging that Ultomiris infringed US and Japanese patents held by Chugai.

 

In March 2022, Alexion entered into a settlement agreement with Chugai that resolves all patent disputes between the two companies related to Ultomiris.

 

In accordance with the settlement agreement, Alexion and Chugai have taken steps to withdraw patent infringement proceedings filed with US District Court for the District of Delaware and Tokyo District Court. Under the terms of the agreement, Alexion will make a single payment of $775m in the second quarter of 2022, for which a related charge was recognised through the non-core P&L in the first quarter of 2022. No further amounts are payable by either party.

 

Product liability litigation

 

Onglyza and Kombiglyze

In the US, AstraZeneca is defending various lawsuits alleging heart failure, cardiac injuries, and/or death from treatment with Onglyza or Kombiglyze. In February 2018, the Judicial Panel on Multidistrict Litigation ordered the transfer of various pending federal actions to the US District Court for the Eastern District of Kentucky (the District Court) for consolidated pre-trial proceedings with the federal actions pending in the District Court. In the previously disclosed California State Court coordinated proceeding, AstraZeneca's motion for summary judgment was granted in March 2022. A motion for summary judgment is pending in the District Court.

 

Commercial litigation

 

Pay Equity Litigation (US)

AstraZeneca is defending a putative class and collective action matter in the US District Court for the Northern District of Illinois brought by three named plaintiffs, who are former AstraZeneca pharmaceutical sales representatives. The case involves claims under the federal and Illinois Equal Pay Acts, with the plaintiffs alleging they were paid less than male employees who performed substantially similar and/or equal work. The plaintiffs seek various damages on behalf of themselves and the putative class and/or collective, including without limitation backpay, liquidated damages, compensatory and punitive damages, attorneys' fees, and interest.

 

The Court has not set a trial date and no class or collective certification has been sought or granted as of this time.

 

Government investigations/proceedings

 

COVID-19 Vaccine Supply and Manufacturing Inquiries

As previously disclosed, in June 2021, Argentina's Federal Criminal Prosecutor's Office (the Prosecutor) contacted AstraZeneca Argentina seeking documents and electronic records in connection with a local criminal investigation relating to the public procurement and supply of Vaxzevria in that country. In October 2021, the Prosecutor filed a submission with the presiding court requesting dismissal of the criminal investigation, and that request was granted by the court in February 2022. This matter is now closed.  

 

In February 2022, a Brazilian Public Prosecutor filed a lawsuit against several defendants including the Brazilian Federal Government, AstraZeneca, and other COVID-19 vaccine manufacturers. In April 2022, a Brazilian Court issued an order dismissing the lawsuit.

 

US 340B Litigations and Proceedings

As previously disclosed, AstraZeneca is involved in several matters relating to its contract pharmacy recognition policy under the 340B Drug Pricing Program in the US. AstraZeneca has sought to intervene in three lawsuits against several US government agencies and their officials relating to the appropriate interpretation of the governing statute for the 340B Drug Pricing Program. Two of the three cases are currently stayed pending further proceedings and the third case has been dismissed. Administrative Dispute Resolution proceedings have also been initiated against AstraZeneca before the US Health Resources and Services Administration.  

 

As previously disclosed, in January 2021, AstraZeneca filed a separate lawsuit in federal court in Delaware alleging that an Advisory Opinion issued by the Department of Health and Human Services violates the Administrative Procedure Act. In June 2021, the Court found in favour of AstraZeneca, invalidating the Advisory Opinion. Prior to the Court's ruling, however, in May 2021, the US government issued new and separate letters to AstraZeneca (and other companies) asserting that our contract pharmacy policy violates the 340B statute. AstraZeneca amended the complaint to include allegations challenging the letter sent in May, and in February 2022, the Court ruled in favour of AstraZeneca invalidating those letters sent by the US Government. The US government has appealed the decision.

 

 Table 22: Q1 2022 - Product Sales year-on-year analysis[75]

 


World

Emerging Markets

US

Europe

Established RoW


$m

Act % chg

CER % chg

$m

Act % chg

CER % chg

$m

% Change

$m

Act % chg

CER % chg

$m

Act % chg

CER % chg

Oncology

3,388

14

18

895

17

19

1,374

17

650

13

21

469

4

12

Tagrisso

1,304

14

17

406

32

33

439

6

252

12

21

207

2

11

Imfinzi

599

8

11

58

2

3

315

8

125

15

23

101

4

12

Lynparza

617

14

17

121

39

43

270

7

160

8

16

66

22

32

Calquence

414

98

n/m

7

n/m

n/m

339

74

55

n/m

n/m

13

n/m

n/m

Enhertu

11

n/m

n/m

6

n/m

n/m

-

-

4

n/m

n/m

1

n/m

n/m

Orpathys

13

n/m

n/m

13

n/m

n/m

-

-

-

-

-

-

-

-

Zoladex

240

9

12

167

22

23

4

(19)

34

(9)

(3)

35

(18)

(9)

Faslodex

93

(24)

(20)

44

3

6

5

(41)

17

(59)

(56)

27

(8)

-

Iressa

32

(47)

(47)

27

(50)

(50)

2

(16)

1

(48)

(44)

2

(35)

(30)

Arimidex

32

(27)

(25)

25

(30)

(29)

-

51

1

(56)

(56)

6

(7)

1

Casodex

21

(48)

(47)

13

(59)

(59)

-

n/m

-

(24)

(24)

8

(10)

(1)

Others

12

1

6

8

3

7

-

n/m

1

49

61

3

(29)

(24)

BioPharmaceuticals: CVRM*

2,207

14

17

1,025

8

11

522

7

482

31

40

178

28

37

Farxiga

1,000

60

67

391

50

54

193

48

318

83

97

98

66

78

Brilinta

325

(13)

(10)

69

(35)

(32)

166

-

76

(13)

(6)

14

(5)

(1)

Lokelma

63

92

97

3

n/m

n/m

39

62

6

n/m

n/m

15

n/m

n/m

Roxadustat

41

6

4

41

6

4

-

-

-

-

-

-

-

-

Andexxa*

33

13

14

-

-

-

24

(7)

9

n/m

n/m

-

-

-

Crestor

267

(2)

-

197

4

6

18

(16)

11

(48)

(44)

41

(2)

6

Seloken/Toprol-XL

244

(2)

(1)

238

(2)

(1)

-

n/m

4

13

7

2

(7)

-

Bydureon

68

(34)

(33)

1

60

63

57

(34)

10

(28)

(23)

-

(92)

(91)

Onglyza

68

(33)

(31)

34

(42)

(40)

18

(2)

11

(31)

(26)

5

(45)

(44)

Others

98

(15)

(13)

51

5

7

7

(58)

37

(20)

(19)

3

(27)

(20)

BioPharmaceuticals: R&I

1,509

(2)

-

437

(19)

(19)

645

17

277

(7)

( 1)

150

-

5

Symbicort

674

(2)

-

167

1

3

259

(2)

157

(7)

-

91

(1)

3

Fasenra

308

18

22

7

n/m

n/m

189

22

75

20

29

37

(5)

2

Pulmicort

217

(34)

(34)

164

(43)

(43)

22

26

18

11

20

13

24

28

Breztri

87

n/m

n/m

22

n/m

n/m

53

n/m

5

n/m

n/m

7

46

59

Saphnelo

11

n/m

n/m

-

-

-

11

n/m

-

-

-

-

-

-

Daliresp

51

(16)

(16)

1

(28)

(25)

47

(13)

3

(45)

(41)

-

6

7

Bevespi

15

15

14

2

51

30

11

10

2

16

24

-

24

35

Others

146

(9)

(9)

74

(3)

(4)

53

47

17

(62)

(60)

2

(53)

(51)

BioPharmaceuticals: V&I

1,757

n/m

n/m

630

n/m

n/m

386

n/m

286

15

22

455

n/m

n/m

Vaxzevria

1,089

n/m

n/m

475

n/m

n/m

79

n/m

135

(40)

(37)

400

n/m

n/m

Evusheld

469

n/m

n/m

89

n/m

n/m

307

n/m

65

n/m

n/m

8

n/m

n/m

Synagis

200

n/m

n/m

66

n/m

n/m

-

(97)

87

n/m

n/m

47

-

-

FluMist

(1)

n/m

n/m

-

(98)

(98)

-

n/m

(1)

n/m

n/m

-

(4)

(2)

Rare Disease*

1,694

3

7

115

(12)

3

1,020

7

361

-

8

198

1

10

Soliris*

990

(5)

-

71

(41)

(28)

591

7

221

(15)

(8)

107

4

11

Ultomiris*

419

20

25

24

n/m

n/m

220

6

105

54

65

70

(4)

7

Strensiq*

208

5

7

9

65

68

161

3

19

(1)

6

19

7

19

Koselugo

39

82

85

5

n/m

n/m

30

43

4

n/m

n/m

-

-

-

Kanuma*

38

9

15

6

42

59

18

8

12

(1)

7

2

10

15

Other medicines

425

(19)

(15)

204

(31)

(29)

39

(24)

36

(31)

(28)

146

19

30

Nexium

332

(18)

(13)

144

(38)

(36)

33

4

15

(17)

(11)

140

17

28

Others

93

(22)

(22)

60

(4)

(4)

6

(71)

21

(39)

(37)

6

n/m

n/m

Total Product Sales

10,980

51

56

3,306

28

30

3,986

76

2,092

36

46

1,596

83

97

 

 

 

Table 23 : Collaboration Revenue

 

 

 

Q1 2022

Q1 2021

 

 

$m

$m

Lynparza: regulatory milestones

 

175

-

Enhertu: share of gross profits

 

75

38

Royalty income

 

73

18

Tralokinumab: sales milestones

 

70

-

Other Ongoing Collaboration Revenue

 

17

7

Total

 

410

63

 

 

Table 24 : Other Operating Income and Expense

 

 

 

Q1 2022

Q1 2021

 

 

$m

$m

Brazikumab licence termination funding

 

35

26

Divestment of Viela Bio, Inc. shareholding

 

-

776

Crestor (Europe ex-UK and Spain)

 

-

309

Other

 

62

69

Total

 

97

1,180

 

Other shareholder information

 

 

Financial calendar

 

Announcement of half year and second quarter results   29 July 2022

Announcement of year to date and third quarter results   10 November 2022

Announcement of full year and fourth quarter results    9 February 2023 (tentative)

 

 

Dividends are normally be paid as follows:

First interim:    Announced with the half-year and second-quarter results and paid in September

Second interim:    Announced with full-year and fourth-quarter results and paid in March

 

The record date for the first interim dividend for 2022, payable on 12 September 2022, will be 12 August 2022. The ex-dividend date will be 11 August 2022.

 

Contacts

 

For details on how to contact the Investor Relations Team, please click here. For Media contacts, click here

 

Addresses for correspondence

 

 

 

 

 

Registered office

Registrar and transfer office

Swedish Central Securities Depository

US depositary

Deutsche Bank Trust Company Americas

1 Francis Crick Avenue

Cambridge Biomedical Campus

Cambridge

CB2 0AA

Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex

BN99 6DA

Euroclear Sweden AB PO Box 191

SE-101 23 Stockholm

American Stock Transfer

6201 15th Avenue

Brooklyn

NY 11219

 

United Kingdom

United Kingdom

Sweden

United States

 

 

 

 

+44 (20 3749 5000

0800 389 1580

+46 (8 402 9000

+1 (88697 8018

 

+44 (121 415 7033

 

+1 (71921 8137

 

 

 

db@astfinancial.com

 

 

Trademarks

 

Trademarks of the AstraZeneca group of companies appear throughout this document in italics. Medical publications also appear throughout the document in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol are all trademarks of the AstraZeneca group of companies. Trademarks of companies other than AstraZeneca that appear in this document include Arimidex and Casodex, owned by AstraZeneca or JuvisŽ (depending on geography); Duaklir and Eklira, trademarks of Almirall, S.A.; Enhertu, a trademark of Daiichi Sankyo; Seloken, owned by AstraZeneca or Taiyo Pharma Co., Ltd (depending on geography); Synagis, owned by AstraZeneca or AbbVie Inc. (depending on geography); and Tezspire, a trademark of Amgen, Inc.

 

Information on or accessible through AstraZeneca's websites, including www.astrazeneca.com astrazeneca.com, 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 and follow the Company on Twitter @AstraZeneca.

 

Cautionary statements regarding forward-looking statements

 

In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act of 1995, AstraZeneca (hereafter Ôthe Group') provides the following cautionary statement:

 

This document contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group, including, among other things, statements about expected revenues, margins, earnings per share or other financial or other measures. Although the Group believes its expectations are based on reasonable assumptions, any forward-looking statements, by their very nature, involve risks and uncertainties and may be influenced by factors that could cause actual outcomes and results to be materially different from those predicted. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and the Group undertakes no obligation to update these forward-looking statements. The Group identifies the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in such statements. Important factors that could cause actual results to differ materially from those contained in forward-looking statements, certain of which are beyond the Group's control, include, among other things:

 

the risk of failure or delay in delivery of pipeline or launch of new medicines

the risk of failure to meet regulatory or ethical requirements for medicine development or approval

the risk of failures or delays in the quality or execution of the Group's commercial strategies

the risk of pricing, affordability, access and competitive pressures

the risk of failure to maintain supply of compliant, quality medicines

the risk of illegal trade in the Group's medicines

the impact of reliance on third-party goods and services

the risk of failure in information technology or cybersecurity

the risk of failure of critical processes

the risk of failure to collect and manage data in line with legal and regulatory requirements and strategic objectives

the risk of failure to attract, develop, engage and retain a diverse, talented and capable workforce

the risk of failure to meet regulatory or ethical expectations on environmental impact, including climate change

the risk of the safety and efficacy of marketed medicines being questioned

the risk of adverse outcome of litigation and/or governmental investigations

intellectual property-related risks to our products

the risk of failure to achieve strategic plans or meet targets or expectations

the risk of failure in financial control or the occurrence of fraud

the risk of unexpected deterioration in the Group's financial position

the impact that global and/or geopolitical events such as the COVID-19 pandemic and the Russia-Ukraine war, may have or continue to have on these risks, on the Group's ability to continue to mitigate these risks, and on the Group's operations, financial results or financial condition

 

Nothing in this document, or any related presentation/webcast, should be construed as a profit forecast.

 

- End of document -



[29] A breast cancer gene mutation.

[30] Systemic lupus erythematosus.

[31] Non-small cell lung cancer.

[32] Chronic lymphocytic leukaemia.

[33] Real-Time Oncology Review.

[34] Chronic kidney disease.

[35] Heart failure with preserved ejection fraction.

[36] Hereditary amyloid transthyretin polyneuropathy.

[37] Interim analysis, as disclosed by Ionis Pharmaceuticals, Inc.

[38] Eosinophilic oesophagitis.

[39] Epidermal growth factor receptor mutation.

[40] Mantle cell lymphoma.

[41] Triple negative breast cancer.

[42] Chronic rhinosinusitis with nasal polyps.

[43] Eosinophilic granulomatosis with polyangiitis.

[44] Sales of medicines through managed care and other channels are subject to rebates, discounts, return fees, etc.  An estimate of the likely levels of these items is subtracted from the gross (or total) sales of a medicine in order to establish the net product sales. A gross‑to‑net adjustment corrects any divergence between the actual and prior estimated level of rebate, discount or fee, once those items are known.

[45] Extensive stage non-small cell lung cancer.

[46] Poly ADP ribose polymerase.

[47] Homologous recombination repair gene mutation.

[48] MesenchymalÐepithelial transition.

[49] Sodium-glucose co-transporter-2.

[50] European Society of Cardiology.

[51] American Heart Association.

[52] American College of Cardiology.

[53] Urine albumin creatine ratio.

[54] Meaured renal function.

[55] Type-2 diabetes.

[56] Betaloc is the brand name for Seloken in China.

[57] Dipeptidyl peptidase IV.

[58] Other Operating Income.

[59] Core financial measures are adjusted to exclude certain items. For more information on the Reported to Core financial adjustments, please refer to the Operating and financial review.

[60] Based on best prevailing assumptions around currency profiles.

[61] Based on average daily spot rates in FY 2021.

[62] Based on average daily spot rates from 1 January 2022 to 31 March  2022.

[63] Other currencies include AUD, BRL, CAD, KRW and RUB.

[64] An immune checkpoint receptor.

[65] Radiographic progression-free survival.

[66] Metastatic castration-resistant prostate cancer.

[67] Homologous recombination repair.

[68] Hazard ratio.

[69] Overall survival.

[70] Progression-free survival.

[71] Supplemental Biologics License Application.

[72] Low-density lipoprotein cholesterol.

[73] Complete response letter.

[74] Lower respiratory tract infections.

[75] The table provides an analysis of year-on-year Product Sales, with Actual and CER growth rates reflecting year-on-year growth. Due to rounding, the sum of a number of dollar values and percentages may not agree to totals. * FY 2022 Q1 growth rates on medicines acquired with Alexion have been calculated on a pro forma basis comparing to the corresponding period in the prior year, pre-acquisition as previously published by Alexion. The growth rates shown for Rare Disease and CVRM disease area totals include these pro forma adjustments.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
QRFUWUKRUOUSUAR

Companies

AstraZeneca (AZN)
UK 100

Latest directors dealings