Half-year Report

RNS Number : 1686U
AstraZeneca PLC
29 July 2022
 

AstraZeneca PLC

29 July 2022 07:00 GMT

H1 2022 results

 

Strong revenue performance and R&D success enables further investment in the pipeline and new launches

 

Revenue and EPS summary

 




H1 2022 



Q2 2022 





  % Change


  % Change

 

 

$m 

Actual 

CER[1]

$m 

Actual 

CER 

- Product Sales 


21,610 

41 

47 

10,630 

32 

38 

- Collaboration Revenue 


551 

n/m 

n/m 

141 

(20)

(20)

Total Revenue 


22,161 

43 

48 

10,771 

31 

37 

Reported[2] EPS [3]


$0.48 

(70)

(66)

$0.23 

(45)

(46)

Core[4] EPS 


$3.61 

43 

44 

$1.72 

92 

89 

 

H1 2022 Financial performance ( growth numbers and commentary at CER)

 

Total Revenue increased 48% to $22,161m, with growth coming from all disease areas and from the addition of Alexion

 

Total Revenue from Oncology increased 22%[5], including receipt of a milestone payment. Product Sales from Oncology increased 18%. Total Revenue from R&I[6] increased 3%, CVRM[7] increased 19%[8] and Rare Disease increased 10% 8 . Excluding a one-off historical pricing adjustment, Rare Disease increased 8%

 

Core Gross Margin of 81%, with the second quarter benefitting from currency fluctuations, and phasing of COVID-19 medicine contracts

 

Core Operating Margin of 33%. Core Total Operating Expense increased 33%, reflecting the addition of Alexion, and continued investment in new launches and the pipeline to build industry-leading mid-to-long term growth

 

Core EPS of $3.61, with the second quarter benefitting from a Core Tax Rate of 15%. The FY 2022 expectation for the Core Tax Rate remains 18-22%

 

Interim dividend declared of $0.93 (76.4 pence, 9.49 SEK) per ordinary share, reflecting the Board's intent to increase to $2.90 in FY 2022, as announced at FY 2021

 

FY 2022 Total Revenue guidance at CER increased due to an updated outlook for COVID-19 medicines and continued strong performance of the overall business, enabling further investment in the pipeline. With an expectation that Other Operating Income in H2 2022 will be similar to H1 2022, EPS guidance is unchanged

 

Key milestones achieved since the prior results

 

Key data: Positive read-outs for Farxiga in HFpEF[9] (DELIVER), Imfinzi in early NSCLC[10] (AEGEAN), eplontersen in ATTRv-PN[11] (NEURO-TTRansform) and Ultomiris in NMOSD[12] (CHAMPION-NMOSD). Full results from the Enhertu DESTINY-Breast04 trial in HER2[13]-low breast cancer, presented at ASCO

 

Key approvals: Enhertu for HER2-positive breast cancer (DESTINY-Breast03) in the US and EU; positive CHMP[14] opinions in the EU for Tezspire in severe asthma (NAVIGATOR), Lynparza[15] in early breast cancer (OlympiA) and Ultomiris in gMG[16] (CHAMPION-MG)

 

Other regulatory milestones: US Priority Review for Imfinzi in biliary tract cancer (TOPAZ-1) and Enhertu in HER2-low metastatic breast cancer (DESTINY-Breast04), China Priority Review for Koselugo in NF1-PN[17]

 

Pascal Soriot, Chief Executive Officer, AstraZeneca, said:

 

"AstraZeneca had a strong financial first half of 2022, and great pipeline delivery. We announced practice-changing data for several medicines including Enhertu in breast cancer, Farxiga in heart failure and Ultomiris in neuromyelitis optica spectrum disorder.

 

We have made great progress in our efforts to combat COVID-19 . Vaxzevria is estimated to have saved more than six million lives during the first year of roll-out, and Evusheld has protected hundreds of thousands of immunocompromised people, enabling them to return to a more normal life. Evusheld continues to demonstrate activity against new variants.

 

Given the ongoing performance of our underlying business and the contribution of our COVID-19 medicines, we are updating our revenue guidance for 2022. This has enabled us to increase our R&D investment in the exciting number of pipeline opportunities that can benefit patients and drive long term sustainable growth for our company. We look forward to announcing the results of several important late-stage trials this year and next ".

 

Guidance

 

The Company updates FY 2022 guidance due to strength in its overall business, an updated outlook for COVID‑19 medicines, as well as increased investment in R&D to drive long term sustainable growth.

 

 

 

Total Revenue is expected to increase by a low twenties percentage (previously high teens)

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

 

 

‒   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 be broadly flat versus FY 2021 (previously a low-to-mid twenties percentage decline), with growth in Evusheld offsetting an expected decline in Vaxzevria sales. The majority of Vaxzevria revenue in 2022 is expected to come from initial contracts

 

As previously indicated, 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 mid-to-high teens percentage, driven in part by the full year integration of Alexion expenses. (Previous guidance was a low-to-mid teens percentage increase. The update is a result of increased R&D spend following positive trial readouts, and increased spend to support new launches, including Evusheld)

 

Other Operating Income in H2 2022 is expected to be similar to the level seen in H1 2022

 

Emerging Markets Total Revenue, including China, is expected to grow by a mid single-digit percentage in FY 2022 (unchanged). China Total Revenue is expected to decline by a midsingle-digit percentage in FY 2022 (unchanged), primarily due to the continued NRDL[18] and VBP[19] programmes 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% (unchanged)

 

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 July to December 2022 were to remain at the spot rates seen on 30 June 2022, it is anticipated that FY 2022 Total Revenue would incur a mid single-digit adverse impact (previously a low single-digit adverse impact) versus the financials at CER, and, as previously indicated, FY 2022 Core EPS would incur a mid-single-digit adverse impact.

 

The Company's foreign-exchange rate sensitivity analysis is contained in Table 18.

 

Table 1 : Key elements of Total Revenue performance in Q2 2022

 

 

% Change

 

 

Revenue type 


$m 

Actual 

CER 

 

 

Product Sales 


10,630 

32 

38 


$1,776m from medicines acquired with Alexion 

Collaboration Revenue 


141 

(20)

(20)


$100m for Enhertu (Q2 2021: $46m)

$13m for Tezspire (Q2 2021: $nil)

Total Revenue 


10,771 

31 

37 



Disease areas 


$m 

Actual 

CER 

 

 

Oncology 


3,810 

15 

20 


Good performance across key medicines and regions, despite lower diagnosis rates and adverse impact in China from COVID-19-related lockdowns

CVRM8


2,356 

14 

19 

 

Farxiga achieved another blockbuster quarter with $1,104m in revenues in the quarter  

R&I 


1,395 

(2)


Growth across Breztri and Fasenra offsetting a decline in Pulmicort of 30% (28% at CER) primarily due to the impact of VBP implementation and COVID-19 lockdowns in China

V&I[20]


981 

12 


$455m from Vaxzevria [21] , $445m from Evusheld 

Majority of Vaxzevria revenue from initial contracts

Rare Disease8


1,801 

12 


Durable C5 franchise growth, including continued conversion to Ultomiris in PNH and aHUS and launch in gMG in the US

Excluding a one-off historic pricing adjustment in Q2 that benefitted ex-US Total Revenue, Rare Disease pro forma revenue growth would have been 2% (8% at CER)

Other Medicines 


427 

(17)

(10)



Total Revenue 


10,771 

31 

37 



Regions inc. Vaxzevria 


$m 

Actual 

CER 

 

 

Emerging Markets 


2,792 

(3)



- China 


1,435 

(6)

(5)


Pricing pressure associated with the NRDL and VBP programmes

COVID-19-related lockdowns

- Ex-China Emerging Markets 


1,357 



US 


4,348 

72 

72 



Europe 


2,080 

21 

35 



Established RoW 


1,550 

39 

55 



Total Revenue inc. Vaxzevria


10,771 

31 

37 



Regions exc. Vaxzevria 

 

$m 

Actual 

CER 

 


Contribution of medicines acquired with Alexion

Emerging Markets 


2,603 

11 


$81m

- China 


1,435 

(6)

(5)



- Ex-China Emerging Markets 


1,167 

31 

39 


$81m

US 


4,348 

72 

72 


$1,041m

Europe 


1,952 

43 

59 


$377m

Established RoW 


1,412 

39 

56 


$277m

Total Revenue exc. Vaxzevria


10,316 

41 

47 


$1,776m








 

 

Table 2 : Key elements of financial performance in Q2 2022

 

 

Metric
($m or %)

Reported

Reported change

Core

Core
change


Comments[22]

Total Revenue

$10,771m

31% Actual  37% CER

$10,771m

31% Actual  37% CER


See Table 1 and the Total Revenue section of this document for further details

Gross Margin[23]

72%

(1pp) Actual  (2pp) CER

83%

10% Actual  8% CER


+ Addition of Alexion

+ Increasing mix of Oncology sales

+ Positive effect from phasing of COVID-19 contracts

+ Positive impact from currency fluctuations

China impact of NRDL and VBP

Impact from profit-sharing arrangements (e.g.  Lynparza)

Reported Gross Margin impacted by unwind of Alexion inventory fair value adjustment

Foreign exchange fluctuations may have a positive or negative impact on Gross Margin in future quarters

R&D Expense

$2,546m

39% Actual  44% CER

$2,431m

35% Actual  40% CER


+ Addition of Alexion

+ Increased investment in the pipeline following un-gating of additional late-stage trials

+ One-off $89m impairment (included in Reported and Core) of a pre-paid asset relating to a discontinued collaboration with an external partner

+ Reversal of the beneficial cost phasing effects seen in Q1 2022

Core R&D-to-Total Revenue ratio of 23% (Q2 2021: 22%)

SG&A Expense

$4,681m

51% Actual  56% CER

$3,137m

27% Actual  33% CER


+ Addition of Alexion

+ Market development activities for recent launches, including Evusheld

+ Core SG&A-to-Total Revenue ratio of 29%
(Q2 2021: 30%)

Other Operating Income[24]

$122m

(5%) Actual  (5%) CER

$112m

(12%) Actual  (13%) CER


Includes $61m divestment from Plendil, and income coming from royalties and prior transactions

Operating Margin

5%

(9pp) Actual  (9pp) CER

31%

9% Actual  8% CER


See Gross Margin and Expenses
commentary above

Net Finance Expense

$293m

(8%) Actual  10% CER

$223m

1% Actual  26% CER


+ Alexion debt financing costs

Reported impacted by lower discount unwind on acquisition-related liabilities

Tax Rate

(46%)

n/m

15%

(8%) Actual  (9%) CER


15% tax rate in the quarter reflected geographical mix of profits and favourable adjustments to prior year tax liabilities in a number of major jurisdictions

Variations in the tax rate can be expected to continue quarter to quarter

Full year expectation remains 18-22%

EPS

$0.23

(45%) Actual  (46%) CER

$1.72

92% Actual  89% CER


Further details of differences between Reported and Core are shown in Table 13

 

 

Corporate and business development

 

In May 2022, AstraZeneca entered into a licence agreement with RQ Biotechnologies Ltd for a portfolio of early-

stage mAbs[25] targeted against SARS-CoV-2, the virus that causes COVID-19. Under the agreement, AstraZeneca acquired an exclusive worldwide licence to develop, manufacture and commercialise mAbs against SARS-CoV-2.

 

Also in May, AstraZeneca completed the sale of commercial rights to Plendil in 35 markets globally, resulting in a $61m gain being recognised in Other Operating Income in the quarter.

 

In June 2022, the Company entered into a broad strategic collaboration with GRAIL, LLC to develop and commercialise companion diagnostic assays for use with AstraZeneca's therapies. The collaboration will initially focus on developing companion diagnostic tests to identify patients with high-risk, early-stage disease, with plans to embark on numerous trials across multiple indications over the next several years. The deal also encompasses the use of GRAIL's technology to enable recruitment of patients with early-stage cancer for AstraZeneca's clinical trials.

 

In July 2022, AstraZeneca announced an agreement to acquire TeneoTwo, Inc., including its Phase I clinical-stage CD19xCD3 T-cell engager, TNB-486 , currently under evaluation in relapsed and refractory B-cell non-Hodgkin lymphoma. AstraZeneca will acquire all outstanding equity of TeneoTwo in exchange for an upfront payment of $100m on deal closing. Under the terms of the agreement, AstraZeneca will make additional contingent R&D-related milestone payments of up to $805m and additional contingent commercial-related milestone payments of up to $360m to TeneoTwo's equity holders. The transaction is expected to close in the third quarter of 2022.

 

Sustainability summary

 

Airfinity, an independent provider of global real-time health intelligence, estimates that the AstraZeneca COVID-19 vaccine saved over six million lives during the period 8 December 2020 to 8 December 2021. This analysis is based on data from Imperial College, London, published in The Lancet in June 2022.

 

Management changes

 

AstraZeneca PLC today announced the appointment of Michel DemarŽ as the Chair-designate of the Board. His appointment followed a robust succession planning process led by Philip Broadley in his capacity as senior

independent Non-Executive Director.

 

As previously communicated, Leif Johansson, current Chair of the Board of AstraZeneca will be retiring at the conclusion of the Company's Annual General Meeting in April 2023. Michel's appointment is effective immediately thereafter allowing for a managed handover period over the coming months.

 

Michel was appointed to the Board of AstraZeneca in September 2019 as an independent Non-Executive Director and is currently Chair of the Company's Remuneration Committee and member of the Audit Committee and the Nomination and Governance Committee. He is a Non-Executive Director of Vodafone Group Plc and Louis Dreyfus Int'l Holdings BV. He is also Chairman of IMD Business School and Chairman of Nomoko AG. 

 

Conference call

 

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

 

Reporting calendar

 

The Company intends to publish its year-to-date and third quarter results on Thursday 10 November 2022.

 

Table 3 : Pipeline highlights since prior results announcement

 

 

Event

Medicine

Indication / Trial

Event


Enhertu

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

Regulatory approval (US, EU)

Regulatory approvals and other regulatory actions

Lynparza

gBRCAm[26] breast cancer (adjuvant) (OlympiA)

CHMP positive opinion (EU)

Tezspire

Severe asthma (NAVIGATOR)

CHMP positive opinion (EU)

Ultomiris

gMG (CHAMPION-MG)

CHMP positive opinion (EU)


Ultomiris

Subcutaneous, PNH[27] and aHUS[28]

Regulatory approval (US)


Imfinzi

Biliary tract cancer (TOPAZ-1)

Priority Review (US), regulatory submission (EU)


Enhertu

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

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


Enhertu

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

Regulatory submission (CN)

Regulatory submissions
or acceptances

PT027

Asthma (MANDALA/DENALI)

Regulatory submission (US)

Evusheld

COVID-19 (PROVENT/TACKLE)

Regulatory submission (JP)


Soliris

gMG

Regulatory submission (CN)


Koselugo

NF1-PN (SPRINT)

Priority Review (CN)


Imfinzi

NSCLC (neoadjuvant) (AEGEAN)

Primary co-endpoint met (pCR)

Major Phase III data readouts and other developments

camizestrant

HR+[29]/HER2-neg breast cancer (SERENA-6)

Fast Track Designation (US)

Farxiga

HFpEF (DELIVER)

Primary endpoint met


eplontersen

ATTRv-PN (NEURO-TTRansform)

Primary co-endpoints met


Ultomiris

NMOSD (CHAMPION-NMOSD)

Primary endpoint met

 

 

Table 4 : Pipeline - anticipated major news flow

 

 

Timing

Medicine

Indication / Trial

Event

H2 2022

Tagrisso

NSCLC (adjuvant) (ADAURA)

Regulatory decision (JP)


Imfinzi

Liver cancer (locoregional)
(EMERALD-1)

Data readout


Imfinzi

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

Data readout


Imfinzi

NSCLC (1st-line) (PEARL)

Data readout


Imfinzi

Biliary tract cancer (TOPAZ-1)

Regulatory decision


Imfinzi +/-

tremelimumab

Liver cancer (1st-line) (HIMALAYA)

Regulatory decision


Imfinzi +/-

tremelimumab

 

NSCLC (1st-line) (POSEIDON)

Regulatory decision


Lynparza

gBRCAm breast cancer (adjuvant) (OlympiA)

Regulatory decision (JP)


Lynparza

Prostate cancer (1st-line) (PROpel)

Regulatory submission (US), regulatory decision


Enhertu

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

Data readout, regulatory submission


Enhertu

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

Regulatory decision


Enhertu

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

Regulatory decision, regulatory submission (CN)


Enhertu

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

Regulatory decision (EU)


Enhertu

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

Regulatory decision


Calquence

CLL[30] (ELEVATE-TN)

Regulatory decision (JP)


capivasertib

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

Data readout


Farxiga

HFpEF (DELIVER)

Regulatory submission

 

Forxiga

CKD[31] (DAPA-CKD)

Regulatory decision (CN)

 

eplontersen

ATTRv-PN (NEURO-TTRansform)

Regulatory submission (US)

 

Fasenra

EOE[32] (MESSINA)

Data readout


Tezspire

Severe asthma (NAVIGATOR)

Regulatory decision


PT027

Asthma (MANDALA/DENALI)

Regulatory decision (US)


nirsevimab

RSV[33] (MELODY/MEDLEY)

Regulatory submission (US), regulatory decision (EU)


Evusheld

COVID-19 (PROVENT/TACKLE)

Regulatory submission (CN)


Evusheld

COVID-19 outpatient treatment

(TACKLE)

Regulatory decision


Vaxzevria

COVID-19

Regulatory submission (US)


Soliris

Guillain-BarrŽ syndrome

Data readout


Ultomiris

gMG (CHAMPION-MG)

Regulatory decision


Ultomiris

Subcutaneous, PNH and aHUS

Regulatory decision (EU)


Ultomiris

NMOSD (CHAMPION-NMOSD)

Regulatory submission


Koselugo

NF1-PN (SPRINT)

Regulatory decision (JP)

H1 2023

Tagrisso

EGFRm[34] NSCLC (1st-line) (FLAURA2)

Data readout


Tagrisso

EGFRm NSCLC (unresectable Stg. III) (LAURA)

Data readout


Imfinzi

Bladder cancer (muscle invasive) (NIAGARA)

Data readout


Imfinzi

Bladder cancer (1st-line) (NILE)

Data readout


Imfinzi

NSCLC (neoadjuvant) (AEGEAN)

Data readout


Imfinzi

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

Regulatory submission


Imfinzi

Liver cancer (locoregional)
(EMERALD-1)

Regulatory submission


Imfinzi

Liver cancer (adjuvant) (EMERALD-2)

Data readout, regulatory submission


Imfinzi

NSCLC (1st-line) (PEARL)

Regulatory submission


Imfinzi

SCLC (limited-stage) (ADRIATIC)

Data readout


Lynparza

gBRCAm[35] breast cancer (adjuvant) (OlympiA)

Regulatory submission (CN)


Lynparza

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

Regulatory decision (CN)


Lynparza + Imfinzi

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

Data readout


Enhertu

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

Data readout


capivasertib

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

Regulatory submission


Dato-DXd

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

Data readout, regulatory submission


roxadustat

Anaemia of myelodysplastic syndrome

Data readout


Fasenra

EOE (MESSINA)

Regulatory submission


nirsevimab

RSV (MELODY/MEDLEY)

Regulatory submission (JP, CN)


danicopan

PNH with extravascular haemolysis

Data readout

H2 2023

Tagrisso

EGFRm NSCLC (1st-line) (FLAURA2)

Regulatory submission


Tagrisso

EGFRm NSCLC (unresectable Stg. III) (LAURA)

Regulatory submission


Imfinzi

Biliary tract cancer (TOPAZ-1)

Regulatory submission (CN)


Imfinzi

Bladder cancer (muscle invasive) (NIAGARA)

Regulatory submission


Imfinzi

Bladder cancer (1st-line) (NILE)

Regulatory submission


Imfinzi

Liver cancer (locoregional) (EMERALD-1)

Regulatory submission (CN)


Imfinzi

NSCLC (neoadjuvant) (AEGEAN)

Regulatory submission


Imfinzi

SCLC (limited-stage) (ADRIATIC)

Regulatory submission


Lynparza + Imfinzi

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

Data readout


Calquence

CLL (ACE-CL-311)

Data readout


Calquence

MCL[36] (1st-line) (ECHO)

Data readout


capivasertib

TNBC[37] (locally adv./met.)
(CAPItello-290) 

Data readout, regulatory submission


camizestrant

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

Data readout


Farxiga

Myocardial infarction (DAPA-MI)

Data readout


Fasenra

EGPA[38] (MANDARA)

Data readout


Fasenra

HES[39] (NATRON)

Data readout


Soliris

gMG

Regulatory decision (CN)


Koselugo

NF1-PN (SPRINT)

Regulatory decision (CN)


ALXN1840

Wilson disease

Regulatory submission


danicopan

PNH with extravascular haemolysis

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. Unless stated otherwise, the performance shown in this announcement covers the six-month period to 30 June 2022 ('the half' or 'H1 2022') compared to the six-month period to 30 June 2021 (H1 2021), or the three-month period to 30 June 2022 ('the quarter' or 'Q2 2022') compared to the three-month period to 30 June 2021 (Q2 2021).

 

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

 

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

 

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

 

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

 

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

 

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

 

The tax effects of the adjustments above are excluded from the Core Tax charge

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Total Revenue

 

 

Table 5 : Disease area and medicine performance

 

 

 

H1 2022

Q2 2022

 

 

 

 

% Change

 

 

% Change

Product Sales 

 

$m 

% Total 

Actual 

CER 

$m 

% Total 

Actual 

CER 

Oncology 

 

7,089 

32 

14 

18 

3,701 

34 

14 

18 

- Tagrisso 


2,704 

12 

10 

14 

1,400 

13 

12 

- Imfinzi 


1,294 

12 

16 

695 

15 

20 

- Lynparza 


1,291 

14 

18 

673 

15 

20 

- Calquence 


903 

84 

87 

489 

74 

77 

- Enhertu 


29 

>6x 

>6x 

18 

>5x 

>5x 

- Orpathys 


23 

n/m 

n/m 

11 

n/m 

n/m 

- Zoladex 


477 

236 

(3)

- Faslodex 


178 

(21)

(16)

86 

(18)

(11)

- Iressa 


63 

(41)

(39)

32 

(32)

(29)

- Arimidex 


61 

(17)

(13)

28 

(1)

- Casodex 


42 

(49)

(47)

21 

(50)

(48)

- Others 


24 

(4)

12 

(8)

BioPharmaceuticals: CVRM 8

 

4,559 

21 

14 

18 

2,352 

22 

14 

19 

- Farxiga 


2,103 

55 

63 

1,103 

10 

51 

59 

- Brilinta 


675 

(10)

(7)

350 

(7)

(4)

- Lokelma 


129 

79 

87 

66 

68 

79 

- Roxadustat 


91 

50 

(2)

(1)

- Andexxa 8


70 

12 

37 

11 

- Crestor 


547 

280 

11 

- Seloken/Toprol-XL 


467 

(9)

(7)

223 

(16)

(13)

- Bydureon


141 

(29)

(28)

73 

(23)

(22)

- Onglyza


139 

(31)

(28)

71 

(28)

(25)

- Others 


197 

(9)

(7)

99 

(1)

BioPharmaceuticals: R&I 

 

2,891 

13 

(2)

-

1,381 

13 

(3)

- Symbicort 


1,288 

(6)

(3)

614 

(10)

(6)

- Fasenra


662 

14 

18 

354 

11 

15 

- Breztri 


179 

>2x 

>2x 

93 

66 

72 

- Saphnelo 


36 

n/m 

n/m 

24 

n/m 

n/m 

- Pulmicort 


334 

(33)

(32)

116 

(30)

(28)

- Daliresp 


109 

(5)

(4)

58 

- Bevespi


30 

13 

16 

15 

12 

17 

- Others 


253 

(13)

(12)

107 

(18)

(17)

BioPharmaceuticals: V&I 

 

2,734 

12 

>2x

>2x

977 

10 

15 

- Vaxzevria 

 

1,540 

36 

41 

451 

(48)

(44)

- Evusheld 

 

914 

n/m 

n/m 

445 

n/m 

n/m 

- Synagis


280 

>5x 

>6x 

80 

>3x

>3x

- FluMist


n/m

n/m

n/m

n/m

Rare Disease 8

 

3,495 

16 

10 

1,801 

17 

12 

- Soliris 8


2,017 

(5)

1,027 

10 

(5)

- Ultomiris 8


853 

22 

28 

434 

23 

31 

- Strensiq 8


450 

11 

13 

242 

16 

18 

- Koselugo 


101 

>2x

>2x

62 

>2x

>2x

- Kanuma 8


74 

14 

36 

13 

Other Medicines 

 

842 

(11)

(6)

418 

(3)

- Nexium 

 

674 

(9)

(2)

343 

12 

- Others 


168 

(21)

(20)

75 

(19)

(17)

Product Sales 

 

21,610 

98 

41 

47 

10,630 

99 

32 

38 

Collaboration Revenue 

 

551 

>2x 

>2x 

141 

(20)

(20)

Total Revenue 

 

22,161 

100 

43 

48 

10,771 

100 

31 

37 

 

 

Table 6 : Collaboration Revenue

 



H1 2022

Q2 2022





% Change

 

 

% Change

 


$m 

% Total 

Actual 

CER 

$m 

% Total 

Actual 

CER 

Lynparza : regulatory milestones 


175 

32 

n/m  

n/m  

-

-

n/m  

n/m  

Enhertu : share of gross profits 


173 

31 

>2x 

>2x 

99 

70 

>2x 

>2x 

Tezspire: share of gross profits 


16 

n/m  

n/m  

13 

n/m  

n/m  

Vaxzevria : royalties 


60 

11 

83  

77  

(87)

(88)

Tralokinumab: sales milestone


70 

13 

n/m  

n/m  

-

-

n/m  

n/m  

Other royalty income 


37 

2  

2  

20 

14 

7  

9  

Other Collaboration Revenue 


20 

(77)

(77)

(93)

(93)

Total 

 

551 

100 

>2x  

>2x  

141 

100 

(20)

(20)

 

Table 7 : Total Revenue by disease area

 



H1 2022 

Q2 2022 





% Change 



% Change 



$m 

% Total 

 Actual 

CER 

$m 

% Total 

 Actual 

CER 

Oncology 


7,454 

34 

18 

22 

3,810 

35 

15 

20 

BioPharmaceuticals 


10,350 

47 

26 

31 

4,733 

44 

13 

- CVRM 

 

4,576 

21 

14 

19 

2,356 

22 

14 

19 

- R&I 

 

2,979 

13 

1,395 

13 

(2)

- V&I 

 

2,795 

13 

>2x 

>2x 

981 

12 

Rare Disease 


3,495 

16 

10 

1,801 

17 

12 

Other Medicines 


862 

(18)

(12)

427 

(17)

(10)

Total

 

22,161 

100 

43 

48 

10,771 

100 

31 

37 

 

Table 8 : Total Revenue by region

 



H1 2022 

Q2 2022 





% Change 



% Change 



$m 

% Total 

 Actual 

CER 

$m 

% Total 

 Actual 

CER 

Emerging Markets 


6,156 

28 

13 

16 

2,792 

26 

(3)

- China 

 

3,057 

14 

(5)

(5)

1,435 

13 

(6)

(5)

- Ex-China 

 

3,099 

14 

38 

46 

1,357 

13 

US 


8,482 

38 

75 

75 

4,348 

40 

72 

72 

Europe 


4,364 

20 

34 

45 

2,080 

19 

21 

35 

Established RoW 


3,159 

14 

59 

74 

1,551 

14 

39 

55 

Total 

 

22,161 

100 

43  

48  

10,771 

100 

31  

37  

 

Table 9 : Total Revenue by region - excluding Vaxzevria

 



H1 2022 

Q2 2022 





% Change 



% Change 



$m 

% Total 

 Actual 

CER 

$m 

% Total 

 Actual 

CER 

Emerging Markets 


5,436 

25 

13 

2,603 

24 

11 

- China 

 

3,011 

14 

(6)

(7)

1,435 

13 

(6)

(5)

- Ex-China 

 

2,425 

11 

38 

48 

1,167 

11 

31 

39 

US 


8,403 

38 

74 

74 

4,348 

40 

72 

72 

Europe 


4,102 

19 

53 

66 

1,952 

18 

43 

59 

Established RoW 


2,620 

12 

40 

53 

1,412 

13 

39 

56 

Total 

 

20,561 

93 

43 

48 

10,316 

96 

41 

47 

 

Oncology

 

Oncology Total Revenue increased by 18% (22% at CER) in H1 2022 to $7,454m and represented 34% of overall Total Revenue (H1 2021: 41%). This included Lynparza Collaboration Revenue of $175m (H1 2021: $nil) and Enhertu Collaboration Revenue of $175m (H1 2021: $85m). Product Sales increased by 14% (18% at CER) in H1 2022 to $7,089m, reflecting new launches and increased patient access for Tagrisso, Imfinzi, Lynparza and Calquence partially offset by declines in legacy medicines.

 

Overall rates of cancer diagnosis, testing and treatment in the half continued to show a cumulative impact from the COVID-19 pandemic with rates in CLL, lung cancer and ovarian cancer remaining below pre-COVID-19 baseline, with some signs of improvement. Rates of breast cancer diagnosis in the US appear to be approaching normal levels. In China, COVID-19 related lockdowns in several major cities had an adverse impact during the second quarter.

 

Tagrisso

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


2,704


805

951

509

439

Actual change


10%


16%

11%

9%

1%

CER change


14%


17%

11%

19%

12%

 

Region


 Drivers and commentary

Worldwide


Increased use of Tagrisso in adjuvant and 1st-line setting

Emerging Markets


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

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

In China, COVID-19 related lockdowns in several major cities had an adverse impact

US


Increasing EGFR testing rates.

Greater use in 1st-line

Strong adjuvant launch momentum

Europe


Greater use in 1st-line and adjuvant settings, with longer duration of treatment, partially offset by lower 2nd-line use

Established RoW


Increased use in 1st-line setting and launch progress in adjuvant

 

Imfinzi

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


1,294


134

689

267

204

Actual change


12%


1%

15%

18%

1%

CER change


16%


2%

15%

29%

12%

 

Region


 Drivers and commentary

Worldwide


Increased use of Imfinzi to treat patients with ES-SCLC [40] , offset by impact from lower rates of diagnosis and treatment due to the ongoing COVID-19 pandemic

Emerging Markets


Growth in ex-China, offset by an adverse impact in CRT[41] rates and hospital use of infused oncology medicines due to COVID-19 lockdowns in several major cities in China during the period

US


New patient starts across Stage III NSCLC and ES-SCLC

Europe


Increased market penetration in ES-SCLC, growth in the number of reimbursed markets, offsetting the impact of COVID-19 on rates of diagnosis and treatment

Established RoW


New reimbursements

 

Lynparza

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


1,466


241

582

504

139

Actual change


30%


30%

11%

67%

15%

CER change


34%


32%

11%

78%

27%

 

 

Product Sales


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


1,291


241

582

329

139

Actual change


14%


30%

11%

9%

15%

CER change


18%


32%

11%

20%

27%

 

Region


 Drivers and commentary

Worldwide


Lynparza remains the leading medicine in the PARP [42] -inhibitor class globally across four tumour types, as measured by total prescription volume

Total Revenue includes a $175m regulatory milestone received from MSD and recognised in Europe, 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

Emerging Markets


Increased patient access following admission to China's NRDL as a 1st-line treatment for ovarian cancer patients, with effect from March 2021; also launches in other markets

In China, COVID-19-related lockdowns in several major cities had an adverse impact

US


US launch in early breast cancer following US FDA[43] approval in March based on data from the OlympiA Phase III trial

Growth in use in ovarian and prostate cancers

Europe


Reimbursements introduced in additional countries, increasing BRCAm-testing rates, and successful launches in 1st-line BRCAm ovarian, 2nd-line HRRm [44] prostate and gBRCAm HER2-negative advanced breast cancer

Established RoW


New product launches and high levels of HRD[45] testing in Japan

 

Enhert u

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


204


26

130

46

2

Actual change


>2x


>6x

72%

>4x

n/m

CER change


>2x


>6x

72%

>4x

n/m

 

Region


 Drivers and commentary

Worldwide


Excluding Japan, Enhertu global in-market sales recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted to $ 397 m in the half (H1 2021: $183m)

AstraZeneca's Total Revenue of $204m includes $175m of Collaboration Revenue from its share of gross profit in territories where Daiichi Sankyo records product sales

Emerging Markets


Strong uptake in early launch markets

US


US in-market sales, recorded by Daiichi Sankyo, amounted to $274m in the half (H1 2021: $161m)

US launch in 2nd-line HER2-positive metastatic breast cancer after US FDA approval in May based on data from the DESTINY-Breast03 Phase III trial

Europe


Growth in 3rd-line+ HER2-positive metastatic breast cancer in large European markets

ESMO guidelines updated in late 2021 to include Enhertu use in 2nd-line

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

H1 2022 $m


903


16

735

122

30

Actual change


84%


>2x

65%

>3x

>4x

CER change


87%


>2x

65%

>4x

>5x

 

Region



US


Increased new patient market share led to a strong performance, despite continued COVID‑19 impacts on CLL diagnosis rates

Europe


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

 

Orpathys

 

Orpathys Total Revenue of $24m in the half (H1 2021: $nil) was driven by the 2021 launch in China, where it is approved for patients with lung cancer and MET[46] gene alterations.

 

Other Oncology medicines

 



H1 2022

% Change


Total Revenue


$m

Actual

CER


Zoladex


491

3%

8%

Increased use in ex-China Emerging Markets, offsetting a price cut in Japan

Faslodex


178

(21%)

(16%)

Generic competition

Iressa


63

(41%)

(39%)

Continued share loss to next generation TKI[47]s

Arimidex


61

(17%)

(13%)


Casodex


42

(49%)

(47%)

Ongoing impact from VBP implementation

Other Oncology


24

(4%)

3%


 

 

BioPharmaceuticals

 

Including Vaccines & Immune Therapies medicines, BioPharmaceuticals Total Revenue increased by 26% (31% at CER) in H1 2022 to $10,350m, representing 47% of overall Total Revenue (H1 2021: 53%). Growth was driven by strong Farxiga performance and growth in the COVID-19 medicines.

 

Cardiovascular, Renal & Metabolism

 

Total Revenue from CVRM medicines increased by 14% (19% at CER) in H1 2022, driven by a strong Farxiga performance, to $4,576m and represented 21% of overall Total Revenue (H1 2021: 25%).

 

Farxiga

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


2,105


814

468

627

197

Actual change


55%


46%

55%

69%

54%

CER change


62%


50%

55%

85%

68%

 

Region



Worldwide


Farxiga volume is growing faster than the overall SGLT2 [48] market in most major regions

Growth in the SGLT2 inhibitor class

Further HF[49] and CKD launches and updated treatment guidelines including from ESC [50] and AHA [51] /ACC [52] /HFSA [53]

Emerging Markets


uACR [54] and MRF [55] testing programs in China, and solid growth in ex-China Emerging Markets, particularly Latin America

In China, Forxiga's NRDL status was renewed in the fourth quarter of 2021

US


Regulatory approval for HFrEF[56] in May 2020, treatment of CKD in May 2021, and favourable gross-to-net adjustments

Both approvals included patients with and without T2D [57]

Farxiga continued to gain in-class brand share, driven by HF and CKD launches

Europe


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

Forxiga continued gains in-class market share in the period

Established RoW


In Japan, sales to collaborator Ono Pharmaceutical Co., Ltd, which records in-market sales, were $134m (H1 2021: $71m)

 

Brilinta

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


675


146

351

150

28

Actual change


(10%)


(19%)

(2%)

(16%)

(12%)

CER change


(7%)


(15%)

(2%)

(8%)

(8%)

 

Region



Emerging Markets


Adverse impact from Brilinta's inclusion in China's VBP programme

Strong growth in ex-China Emerging Markets

US, Europe


Fewer elective procedures due to the effects of the pandemic

 

Lokelma

 

Total Revenue increased 79% (87% at CER) to $129m in H1, driven by Lokelma extending its branded market share lead in the US and also achieving total market share leadership in the period. Continued progress in Europe from recent launches across the region. In China, Lokelma was included on the NRDL with effect from 1 January 2022.

 

Andexxa

 

On a pro forma basis, Total Revenue increased 25% (28% at CER) to $80m. Andexxa launched in Japan in May 2022.

 

Roxadustat

 

Total Revenue increased 1% to $94m. Total Revenue also increased quarter-on-quarter, with roxadustat benefitting from increased volumes in China following NRDL price cuts.

 

Other CVRM medicines

 



H1 2022

% Change


Total Revenue


$m

Actual

CER


Crestor


548

2%

6%

Sales growth driven in Emerging Markets, offset by declines in the US and Europe

Seloken


468

(9%)

(7%)

Emerging Markets sales impacted by China VBP implementation of Betaloc [58] oral in H2 2021. BetalocZOK VBP to be implemented later in 2022

Onglyza


139

(31%)

(28%)

Ongoing impact from VBP implementation

Bydureon


141

(29%)

(28%)

Continued competitive pressures

Other CVRM


197

(9%)

(7%)


 

Respiratory & Immunology

 

Total Revenue from R&I medicines was stable in H1 2022 (increased 3% at CER) at $2,979m and represented 13% of overall Total Revenue (H1 2021: 19%).

 

Symbicort

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


1,288


306

481

312

189

Actual change


(6%)


-

(9%)

(9%)

(1%)

CER change


(3%)


3%

(9%)

(1%)

4%

 

Region



Worldwide


Symbicort remains the global market leader within the ICS[59]/LABA[60] class

The global ICS/LABA market continues to be eroded as fixed-dose triple therapies (LAMA[61]/LABA/ICS) continue to launch in major markets (US, China and Japan)

Emerging Markets


Growth in Ex-China Emerging Markets

Continued impact of fixed-dose triple therapy launches and COVID-19 restrictions in China

US


Maintained market share and leadership in a declining ICS/LABA market as fixed-dose triple therapy launches continue

Unfavourable gross-to-net adjustment during the second quarter

Established RoW


Sales in Japan continued to decline due to continued generic erosion as well as the annual mandatory price reduction, which occurred in April

 

Fasenra

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


662


17

419

153

73

Actual change


14%


>2x

18%

12%

(8%)

CER change


18%


>2x

18%

23%

1%

 

Region



Worldwide


Fasenra continued to lead the IL-5 class, in severe eosinophilic asthma, in major markets (US, Japan and some EU countries)

US


Maintained a stable new-to-brand share of the severe uncontrolled asthma class

Europe


Growth driven by increased market share performance

Established RoW


Increased demand and sustained leadership in new-to-brand prescriptions in Japan, offset by the mandatory price reduction, which took effect in April

 

Breztri

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


179


43

106

14

16

Actual change


>2x


61%

>2x

>10x

46%

CER change


>2x


61%

>2x

>10x

65%

 

Region



Worldwide


Breztri continued to gain market share within the fixed-dose triple class in major markets

Emerging Markets


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

COVID-19 restrictions impacted inhaled maintenance market growth

US


Increased new-to-brand market share within the fixed-dose triple class

Europe


Sustained growth across markets as new launches continue to progress

Established RoW


Strong launch performance in Japan

 

Saphnelo

 

Total Revenue of $36m in the half (H1 2021: $nil) was driven by the 2021 launch in the US, where Saphnelo has been approved for SLE[62] and received a permanent J-code facilitating reimbursement. In Japan, there was an adverse impact as COVID-19 lockdowns limited access to hospitals.

 

Tezspire

 

Total Revenue of $16m in the half (H1 2021: $nil) was comprised entirely of Collaboration Revenue and reflected the US launch of Tezspire as add-on maintenance treatment for patients with severe asthma following US FDA approval in December 2021. Amgen records sales in the US and AstraZeneca records its share of gross profits in the US as Collaboration Revenue. US in-market sales were $36m.

 

Other R&I medicines

 


H1 2022

% Change


Total Revenue


$m

Actual

CER


Pulmicort

 

334

(33%)

(32%)

Revenue from Emerging Markets decreased 42% (41% at CER) to $236m, impacted by VBP implementation in China and lower rates of elective surgery and limited access to nebulisation centres due to COVID-19 lockdowns

Daliresp

 

109

(5%)

(4%)


Bevespi


30

13%

16%


Other R&I


326

9%

9%


 

Vaccines & Immune Therapies

 

Total Revenue from Vaccines & Immune Therapies medicines increased to $2,795m (H1 2021: $1,221m) and represented 13% of overall Total Revenue (H1 2021: 8%).

 

Vaxzevria

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


1,600


720

80

262

538

Actual change


37%


47%

n/m

(54%)

>4x

CER change


42%


47%

n/m

(50%)

>5x

 

Region



Worldwide


The majority of Vaxzevria revenue in H1 2022 came from initial, not-for-profit contracts

Revenue in the second quarter decreased by 49% (46% at CER)

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 producing vaccines for export

Revenue in the second quarter decreased by 57%

US


Purchases by the US government for donation overseas

No revenue recorded in the second quarter

Europe


Revenue in the second quarter decreased by 63% (59% at CER)

Established RoW


Sales in Japan, Canada and Australia

Revenue in the second quarter increased by 36% (50% at CER)

 

Evusheld

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


914


93

556

143

122

Actual change


n/m


n/m

n/m

n/m

n/m

CER change


n/m


n/m

n/m

n/m

n/m

 

Region



US


Evusheld received Emergency Use Authorisation for prevention of COVID-19 in December 2021

In H1 2022, AstraZeneca continued fulfilment of the US Government's order for 1.7m units. The remainder of that order is expected to be fulfilled before the end of 2022

Emerging Markets


Multiple government contracts in Central and Eastern Europe, Latin America and South East Asia and China. Evusheld is the first non-Chinese medicine to be used for the prevention of COVID-19 in China

Europe


Approved in the EU for prevention of COVID-19 in March 2022

 

Other V&I medicines

 



H1 2022

% Change


Total Revenue


$m

Actual

CER


Synagis

 

280

>5x

>6x

The year-on-year increase reflects the reversion of ex-US rights to AstraZeneca following expiry of the collaboration agreement with AbbVie Inc. on 30 June 2021

FluMist


-

n/m

n/m

Normal seasonality of FluMist sales

 

Rare Disease

 

On a pro forma basis, Total Revenue from Rare Disease medicines increased by 5% (10% at CER) in H1 2022 to $3,495m. In H1 2022, Rare Disease represented 16% of overall Total Revenue. Excluding a one-off historic pricing adjustment that benefited ex-US Total Revenue in the second quarter, Rare Disease pro forma revenue growth would have been 2% (8% at CER). Performance was driven by continued conversion from Soliris to Ultomiris, and initial uptake of Ultomiris in gMG following US launch. Strensiq and Koselugo performances were driven by patient growth and market expansion respectively.

 

These tables show pro forma growth rates for the medicines acquired with Alexion, calculated by comparing H1 2022 revenues with the revenues to 30 June 2021 as reported by Alexion.

 

Soliris

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


2,017


134

1,165

437

281

Actual change 8


(5%)


(45%)

2%

(17%)

34%

CER change 8


1%


(29%)

2%

(8%)

46%

 

Region



US


Growth in neurology indications (gMG and NMOSD), offset by continued conversion from Soliris to Ultomiris

Ex-US


Performance driven by neurology growth in new markets and a one-off adjustment in the second quarter

 

Ultomiris

 

Total Revenue


Worldwide


Emerging Markets

US

Europe

Established RoW

H1 2022 $m


853


30

456

225

142

Actual change 8


22%


>6x

10%

65%

(3%)

CER change 8


28%


>6x

10%

81%

11%

 

 

Region



Worldwide


Continued conversion from Soliris to Ultomiris and expansion into new markets

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 conversion and patient growth in PNH and aHUS, as well as initial uptake following recent gMG approval and launch

Ex-US


Accelerated conversion in newly-launched markets

 

Other Rare Disease medicines

 



H1 2022

% Change


Total Revenue


$m

Actual

CER

Commentary

 

Strensiq 8

 

450

11%

13%

Performance driven by demand growth and one-time benefit from timing of inventory dynamics

 

Koselugo


101

>2x

>2x

Performance driven by expansion in the US and new markets, as well as timing of certain ex-US tender market orders

 

Kanuma 8


74

9%

14%

Continued demand growth in ex-US markets

 

 

Other medicines (outside the main disease areas)

 

 



H1 2022

% Change


Total Revenue


$m

Actual

CER

Commentary

Nexium

 

685

(17%)

(11%)

Nexium (oral) was included in China's VBP programme implemented in February 2021 and Nexium (i.v.[63]) was implemented in the fifth round of VBP in October 2021

Others


177

(20%)

(19%)


 

 

Financial performance

 

Table 10 : Reported Profit and Loss

 



H1 2022

H1 2021

% Change 

Q2 2022

Q2 2021

% Change

 

 

$m 

$m 

Actual 

CER 

$m 

$m 

Actual 

CER 

 

22,161  

15,540  

43  

48  

10,771  

8,220  

31  

37  

- Product Sales


21,610  

15,302  

41  

47  

10,630  

8,045  

32  

38  

- Collaboration Revenue


551  

238  

n/m  

n/m  

141  

175  

(20)

(20)

Cost of Sales


(6,509)

(4,055)

61  

71  

(2,998)

(2,191)

37  

49  

 

15,652  

11,485  

36  

40  

7,773  

6,029  

29  

33  

Gross Margin

 

69.9%  

73.5%  

-4  

-4  

71.8%  

72.8%  

-1  

-2  


(254)

(202)

26  

32  

(129)

(103)

25  

33  

% Total Revenue


1.1%  

1.3%  

-  

-  

1.2%  

1.3%  

 - 

 - 

R&D Expense


(4,679)

(3,542)

32  

35  

(2,546)

(1,829)

39  

44  

% Total Revenue


21.1%  

22.8%  

2  

2  

23.6%  

22.2%  

-1  

-1  

SG&A Expense


(9,521)

(6,027)

58  

62  

(4,681)

(3,098)

51  

56  

% Total Revenue


43.0%  

38.8%  

-4  

-4  

43.5%  

37.7%  

-6  

-5  

OOI[64] & Expense


219  

1,308  

(83)

(83)

122  

128  

(5)

(5)

% Total Revenue


1.0%  

8.4%  

-7  

-7  

1.1%  

1.6%  

  -    

  - 

 

1,417  

3,022  

(53)

(49)

539  

1,127  

(52)

(53)

Operating Margin

 

6.4%  

19.4%  

-13  

-13  

5.0%  

13.7%  

-9  

-9  


(612)

(602)

2  

9  

(293)

(319)

(8)

10  

Joint Ventures and Associates


(5)

(48)

(90)

(88)

1  

(44)

n/m 

n/m 

Profit before tax

 

800  

2,372  

(66)

(62)

247  

764  

(68)

(75)


(52)

(260)

(80)

(77)

113  

(214)

n/m 

n/m 

Tax rate

 

7%  

11%  



-46%  

28%  



Profit after tax

 

748  

2,112  

(65)

(60)

360  

550  

(35)

(37)

Earnings per share

 

$0.48  

$1.61  

(70)

(66)

$0.23  

$0.42  

(45)

(46)

 

Table 11 : Reconciliation of Reported Profit before tax to EBITDA

 



H1 2022

H1 2021

% Change

Q2 2022

Q2 2021

% Change



$m 

$m 

Actual 

CER 

$m 

$m 

Actual 

CER 


800  

2,372  

(66)

(62)

247

764

(68)

(75)

Net Finance Expense 


612  

602  

2  

9  

293

319

(8)

10  

Joint Ventures and Associates 


5  

48  

(90)

(88)

(1)

44

n/m  

n/m  

Depreciation, Amortisation and Impairment 


2,666  

1,550  

72  

73  

1,357

753

80  

82  

EBITDA 


4,083  

4,572  

(11)

(8)

1,896

1,880

1  

1  

 

EBITDA of $4,083m in the half (H1 2021: $4,572m) has been negatively impacted by the $2,318m (H1 2021: $nil) unwind of inventory fair value uplift recognised on the acquisition of Alexion. EBITDA of $1,896m in the quarter (Q2 2021: $1,880m) has been negatively impacted by the $1,138m (Q2 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 12 : Reconciliation of Reported to Core financial measures: H1 2022

 

H1 2022


Reported

Restructuring

Intangible Asset Amortisation & Impairments

Acquisition
of Alexion

Other

Core

Core

% Change



$m

$m 

$m

$m 

$m 

$m 

Actual 

CER 

Gross Profit

 

15,652  

81  

16  

2,320  

-  

18,069  

57  

60  

Gross Margin

 

69.9%  

 

 

 

 

81.1%  

+7pp  

+6pp  

Distribution Expense


(254)

1  

-  

-  

-  

(253)

25  

32  

R&D Expense


(4,679)

38  

6  

18  

-  

(4,617)

34  

38  

SG&A Expense


(9,521)

198  

2,081  

30  

1,129[65]  

(6,083)

25  

29  

Total Operating Expense


(14,454)

237  

2,087  

48  

1,129  

(10,953)

29  

33  

Other Operating Income & Expense


219  

(9)

-  

-  

-  

210  

(84)

(84)

Operating Profit

 

1,417  

309  

2,103  

2,368  

1,129  

7,326  

69  

71  

Operating Margin

 

6.4%  

 

 

 

 

33.1%  

+5pp  

+4pp  

Net Finance Expense


(612)

-  

-  


137  

(475)

16  

24  

Taxation


(52)

(61)

(387)

(546)

(207)

(1,253)

n/m  

n/m  

EPS

 

$0.48  

$0.16  

$1.10  

$1.18  

$0.69  

$3.61  

43  

44  

 

Table 13 : Reconciliation of Reported to Core financial measures: Q2 2022

 

Q2 2022


Reported

Restructuring

Intangible Asset Amortisation & Impairments

Acquisition
of Alexion

Other

Core

Core

% Change



$m

$m 

$m

$m 

$m 

$m 

Actual 

CER 

Gross Profit

 

7,773  

30  

8  

1,139  

-  

8,950  

48  

52  

Gross Margin

 

71.8%  

 

 

 

 

82.9%  

+10pp  

+8pp  

Distribution Expense


(129)

-  

-  

-  

-  

(129)

25  

33  

R&D Expense


(2,546)

33  

75  

7  

-  

(2,431)

35  

40  

SG&A Expense


(4,681)

181  

983  

13  

367  

(3,137)

27  

33  

Total Operating Expense


(7,356)

214  

1,058  

20  

367  

(5,697)

30  

36  

Other Operating Income & Expense


122  

(10)

-  

-  

-  

112  

(12)

(13)

Operating Profit

 

539  

234  

1,066  

1,159  

367  

3,365  

86  

87  

Operating Margin

 

5.0%  

 

 

 

 

31.2%  

+9pp  

+8pp  

Net Finance Expense


(293)

-  

-  

-  

70  

(223)

1  

26  

Taxation


113  

(46)

(196)

(266)

(86)

(481)

32  

28  

EPS

 

$0.23  

$0.12  

$0.56  

$0.58  

$0.23  

$1.72  

92  

89  

 

 

Profit and Loss drivers

 

Gross Profit

 

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

 

Positive mix effects: the increased contribution from Rare Disease and Oncology medicines had a positive impact on the Gross Margin

 

Negative mix effects: sales of Vaxzevria and medicines with profit-sharing arrangements (primarily Lynparza) had a dilutive impact on the Gross Margin. In the second quarter, there was less dilution from Vaxzevria than in previous quarters, due to phasing on Vaxzevria contracts that were fulfilled in the quarter

 

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 H1 2022, the impact of the fair value uplift unwind on Cost of Sales was $2,318m

 

Currency fluctuations had a positive impact in the first half. Currency fluctuations may have a positive or negative impact on Gross Margin in future quarters

 

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

 

R&D Expense

 

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

 

The acquisition of Alexion in July 2021

 

Recent positive data read outs for several high priority medicines that ungated late-stage Oncology trials

 

The advancement of a number of Phase II clinical development programmes in BioPharmaceuticals

 

Investment in platforms, new technology and capabilities to enhance R&D productivity

 

A one-off $89m impairment of a pre-paid asset relating to a discontinued collaboration with an external partner

 

Reported R&D Expense in H1 2022 was also impacted by intangible asset impairment reversals

 

SG&A Expense

 

The increase in Reported and Core SG&A Expense was driven by:

 

The acquisition of Alexion

 

Market development activities for recent launches, including Evusheld

 

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

 

 

Other Operating Income

 

Other Operating Income of $219m consisted primarily of royalties and disposal proceeds on small divestments, including the divestment of rights to Plendil in the second quarter

 

In H1 2021, Other Operating Income of $1,308m included $776m of divestment gains from AstraZeneca's share of Viela Bio, Inc. and $309m from the commercial rights to Crestor in over 30 countries in Europe (excluding UK and Spain)

 

Net Finance Expense

 

The increase in Net Finance Expense in the half was driven by financing costs on debt for the Alexion transaction, increased interest on tax, and currency fluctuations

 

Taxation

 

Reported Tax rate is lower than H1 2021 and Core Tax rate is higher than  H1 2021. Reported tax rate is lower due to impact of non-core charges on the level of Reported Profit Before Tax in H1 2022 and both Reported and Core Tax rates were impacted by one-off items in 2021, including the non-taxable gain on the divestment of Viela and updates to estimates of prior period tax liabilities following settlements with tax authorities

 

The net cash paid for the half was $1,006m (H1 2021: $869m) representing 126% of Reported Profit Before Tax (H1 2021: 37%). The cash tax rate increased due to the impact of Non-core charges on the level of Reported Profit Before Tax and effects of US rules around deferral of tax relief on R&D costs

 

The Reported Tax rate of 7% was lower than Core Tax rate of 18% due to the impact of Non-Core charges on the level of Reported Profit Before Tax. Q2 2022 Reported and Core Tax rates also benefited from the geographical mix of profits and favourable adjustments to prior year tax liabilities in a number of major jurisdictions in the quarter

 

On 20 July 2022, the UK Government issued draft legislation in relation to the new global minimum tax framework, expected to be brought into effect in the UK from 2024. The Company is currently assessing potential impact of these draft rules upon its financial statements.

 

Dividend

 

Interim dividend declared of $0.93 (76.4 pence, 9.49 SEK) per ordinary share

 

Table 14 : Cash Flow summary

 



H1 2022 

H1 2021 

Change 



$m 

$m 

$m 

Reported Operating Profit


1,417  

3,022  

(1,605)

Depreciation, Amortisation and Impairment


2,666  

1,550  

1,116  

Decrease in Working Capital and Short-term Provisions


2,391  

857  

1,534  

Gains on Disposal of Intangible Assets


(81)

(354)

273  

Gains on Disposal of Investments in Associates and Joint Ventures


-  

(776)

776  

Fair value movements on contingent consideration arising from business combinations


293  

82  

211  

Non-Cash and Other Movements


(814)

(363)

(451)

Interest Paid


(386)

(323)

(63)

Taxation Paid


(1,006)

(869)

(137)

Net Cash Inflow from Operating Activities


4,480  

2,826  

1,654  

Net Cash Inflow before Financing Activities


3,512  

3,145  

367  

Net Cash (Outflow)/Inflow from Financing Activities


(5,035)

4,558  

(9,593)

 

The increase in Net Cash Inflow from Operating Activities of $1,654m primarily reflected an underlying
improvement in business performance, including the contribution from Alexion.

 

The Reported Operating Profit of $1,417m in the period includes a negative impact of $2,318m 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 $2,318m) in Decrease in Working Capital and Short-term Provisions. Overall, the unwind of the fair value uplift has no impact on Net Cash Inflow from Operating Activities.

 

The change in Working Capital and Short-term Provisions of $1,534m, 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 $472m in the half (H1 2021: $508m). 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 15 : Net Debt summary


 

At 30 

 Jun 2022 

At 31 

Dec 2021 

At 30 

 Jun 2021 


 

$m 

$m 

$m 

Cash and cash equivalents


4,817  

6,329  

15,567  

Other investments


70  

69  

62  

Cash and investments

 

4,887  

6,398  

15,629  

Overdrafts and short-term borrowings


(747)

(387 )

(560)

Lease liabilities


(905)

(987 )

(690)

Current instalments of loans


(1,415)

(1,273 )

(2,136)

Non-current instalments of loans


(26,461)

(28,134 )

(24,109)

Interest-bearing loans and borrowings (Gross Debt)

 

(29,528)

(30,781)

(27,495)

Net derivatives


(48)

61  

145  

Net Debt

 

(24,689)

(24,322 )

(11,721)

 

Net Debt increased by $367m in the half to $24,689m. 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 16 : Obligor group summarised Statement of comprehensive income

 


 

H1 2022

H1 2021 


 

$m 

$m 

Total revenue


-  

-  

Gross profit


-  

-  

Operating loss


(2)

(43)

Loss for the period


(275)

(336)

Transactions with subsidiaries that are not issuers or guarantors


331  

2,582  

 

Table 17 : Obligor group summarised Statement of financial position information

 


 

At 30 Jun 2022 

At 30 Jun 2021


 

$m 

$m 

Current assets


7  

7  

Non-current assets


-  

4  

Current liabilities


(1,838)

(2,341)

Non-current liabilities


(23,994)

(23,808)

Amounts due from subsidiaries that are not issuers or guarantors


7,459  

15,039  

Amounts due to subsidiaries that are not issuers or guarantors


(295)

(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 18 : Currency sensitivities

 

The Company provides the following currency-sensitivity information:

 

 

 

 

Exchange

rates versus USD

 

Annual impact of 5% strengthening in exchange rate versus USD ($m)[66]

 

Currency

Primary Relevance

 

FY 2021[67]

 30 Jun 2022[68]

% Change

Total Revenue

Core Operating Profit

CNY

Total Revenue


6.43

6.70

(4)

 277

 158 

EUR

Total Revenue


0.85

0.96

(12)

 317

 160 

JPY

Total Revenue


109.83

136.34

(19)

 229

 158 

Other[69]






 420

 196 

GBP

Operating Expense


0.73

0.82

(12)

 61

 (93)

SEK

Operating Expense


8.58

10.26

(16)

 6

 (82)

 

 

 

Sustainability

 

Since the last quarterly report, AstraZeneca:

 

Access to healthcare

 

Expanded the Healthy Heart Africa programme into Rwanda in collaboration with the Rwanda Ministry of Health and PATH, the programme implementing partner

 

Launched a collaboration with the Kenya Ministry of Health and Amref Health Africa to deploy mobile clinics to bring COVID-19 vaccines and non-communicable disease awareness to hard-to-reach communities across Kenya

 

Joined EDISON Alliance's One Billion Lives Challenge, to improve access to innovative and scalable digital health solutions by 2025. As part of the Challenge, AstraZeneca aims to screen five million patients for lung cancer using AI-based technology, in collaboration with Qure.ai

 

Expanded its in-depth health system research as part of the Partnership for Health System Resilience and Sustainability into 13 new countries (now 21 in total), with Japan and Greece being the first Phase 2 countries to announce their research results

 

Announced findings from Young Health Programme-funded research by RTI International that shows for every $1 invested in evidence-based interventions to prevent and treat mental health issues among adolescents, $24 in health and economic benefits would be returned to the global economy over 80 years

 

Also, analysis from health analytics firm Airfinity showed that the AstraZeneca COVID-19 Vaccine helped save over six million lives during the period 8 December 2020 to 8 December 2021

 

Environmental protection

 

Continued to progress conversion of its fleet to electric/hybrid vehicles, currently at 59%

 

Confirmed collaboration with the WHO-led Alliance for Transformative Action of Climate and Health, to share recommendations with governments on how to deliver low-carbon, climate resilient healthcare

 

Wrote, together with SMI[70] Health Systems Taskforce, an editorial calling for the healthcare sector to consider what it can contribute to decarbonisation

 

Reinforced its commitment to reforestation through tree planting at sites around the world, including Algeria, Canada, Ghana, Greece, India, Libya and the US

 

Also, the ground source heat pump at AstraZeneca's Discovery Centre in Cambridge, one of the largest in the UK, became the first of its kind to be independently certified as a source of renewable heat by the UK Government

 

Ethics and transparency

 

Contributed to a study by the Tufts Center for the Study of Drug Development on clinical trial diversity

 

Revised sustainability standards in the Company's Expectations of Third Parties

 

Celebrated Pride Month with activities across the world focused on allyship and education to promote progression towards LGBTQIA+ rights and equality

 

Was recognised by Diversity Inc in the 'Top 50 Companies for Diversity' list, for the third successive year

 

Was recognised as a 2022 Gold Top Global for Supplier Diversity & Inclusion Champion by WEConnect International

 

Was awarded the EcoVadis Silver Medal for the second time, in recognition of the quality of the company's sustainability management system

 

Research and development

 

This section covers R&D events and milestones that have occurred 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

 

AstraZeneca presented new data across its diverse portfolio of cancer medicines at the ASCO[71] Annual Meeting, underscoring its ambition to redefine cancer care. More than 100 abstracts featured 18 approved and potential new medicines across the Company's industry-leading oncology portfolio, including one plenary presentation and nine oral presentations.

 

Significant new trials in Oncology initiated during the period included ADAURA2, a Phase III trial of Tagrisso in Stage IA2 to IA3 NSCLC after complete resection, TROPION-Breast02, a Phase III trial of datopotamab deruxtecan in patients with previously untreated locally recurrent inoperable or metastatic TNBC not eligible to receive PD-1[72]/PD-L1[73] inhibitor therapy; and CAPItello-280, a Phase III trial of capivasertib in combination with docetaxel in participants with metastatic castrate-resistant prostate cancer.

 

Imfinzi

 

During the period, the Company received US regulatory submission acceptance with Priority Review for Imfinzi in combination with chemotherapy for the treatment of locally advanced or metastatic biliary tract cancer. The regulatory submission was based on positive results from the TOPAZ-1 Phase III trial. The PDUFA[74] date[75] is anticipated to be during the third quarter of 2022.

 

In June 2022, positive high-level results from a planned interim analysis of the AEGEAN Phase III trial showed treatment with AstraZeneca's Imfinzi in combination with neoadjuvant chemotherapy before surgery demonstrated a statistically significant and meaningful improvement in pathologic complete response compared to neoadjuvant chemotherapy alone for patients with resectable NSCLC. A statistically significant improvement in major pathologic response was also observed. The trial will continue as planned to assess the additional primary endpoint of event-free survival to which the Company, investigators and participants remain blinded.

 

In July 2022, Imfinzi was assigned category 1 status in the US NCCN[76] guidelines for the 1st-line treatment of patients with biliary tract cancer, based on the results from the TOPAZ-1 Phase III trial.

 

Lynparza

 

During the period, AstraZeneca and MSD's Lynparza was recommended for marketing authorisation in the EU as monotherapy or in combination with endocrine therapy for the adjuvant treatment of adult patients with germline BRCA1/2 mutations who have HER2-negative high-risk early breast cancer previously treated with neoadjuvant or adjuvant chemotherapy, by the Committee for CHMP of the EMA, based on the results of the OlympiA Phase III trial.

 

In July 2022, AstraZeneca and MSD received notification from an Independent Data Monitoring Committee that data from a pre-specified interim efficacy analysis of the LYNK-003 Phase III trial of Lynparza in patients with unresectable or metastatic colorectal cancer was unlikely to demonstrate a benefit to patients and recommended that the trial be discontinued. Accordingly, MSD announced that the trial would stop for futility.

 

Calquence

 

In June 2022, at the aforementioned ASCO Annual Meeting, updated results from the ELEVATE-TN Phase III trial showed Calquence maintained a statistically significant PFS[77] benefit versus chlorambucil plus obinutuzumab and a safety and tolerability profile consistent with the known profile for Calquence at a median follow up of approximately five years in combination and as a monotherapy in CLL. Results also showed longer OS[78] for Calquence combined with obinutuzumab compared with chlorambucil combined with obinutuzumab in previously untreated adults with CLL.

 

Separately, follow-up data from the ASCEND Phase III trial showed Calquence demonstrated a sustained PFS benefit at four years based on investigator assessment compared with investigator's choice of rituximab combined with either idelalisib or bendamustine in adults with relapsed or refractory CLL.

 

Enhertu

 

In May 2022, AstraZeneca and Daiichi Sankyo's Enhertu was approved in the US for the treatment of patients with unresectable or metastatic HER2-positive breast cancer who have received a prior anti-HER2-based regimen either in the metastatic setting, or in the neoadjuvant or adjuvant setting and have developed disease recurrence during or within six months of completing therapy. The approval by the US FDA[79] was based on positive results from the DESTINY-Breast03 Phase III trial.

 

In July 2022, Enhertu was approved for use in the EU as a monotherapy for the treatment of adult patients with unresectable or metastatic HER2-positive breast cancer who have received one or more prior anti-HER2-based regimens. The approval followed the EMA's positive CHMP opinion based on the results from DESTINY-Breast03 Phase III trial.

 

At this year's ASCO Annual Meeting, results from the DESTINY-Breast04 Phase III trial were presented during the Plenary Session. Enhertu demonstrated superior and clinically meaningful PFS and OS in previously treated patients with HER2-low unresectable and/or metastatic breast cancer with HR-positive or HR-negative disease versus standard of care physician's choice of chemotherapy. Results were simultaneously published in The New England Journal of Medicine.

 

Soon after the presentation of these data, Enhertu was assigned category 1 status in the US NCCN guidelines for the treatment of patients with (HR-positive and HR-negative) tumours that are HER2-low, who have received at least one prior line of chemotherapy for metastatic disease and, where the tumour is HR-positive, are refractory to endocrine therapy. In July, ASCO guidelines were updated to recommend Enhertu in the same setting.

 

During the period, based on the results of the DESTINY-Breast04 Phase III trial, AstraZeneca and Daiichi Sankyo received US regulatory submission acceptance with Priority Review, EU regulatory submission acceptance, and completed regulatory submission in Japan.

 

Camizestrant

 

During the period, the US FDA granted Fast Track Designation to camizestrant in combination with palbociclib or abemaciclib in the treatment of in patients with HR-positive/HER2-negative metastatic breast cancer with detectable ESR1[80] mutations who have not experienced disease progression on first-line therapy (SERENA-6).

 

BioPharmaceuticals - CVRM

 

Brilinta

 

During the period, AstraZeneca withdrew Brilinta's regulatory submission in China to prevent acute ischaemic stroke or TIA[81]. The submission was based on the THALES Phase III trial where Brilinta plus aspirin significantly reduced the rate of stroke and death compared to aspirin alone in patients with acute ischaemic stroke or TIA. Brilinta was approved in the US in the aforementioned indication in November 2020.

 

Farxiga

 

In May 2022, the Company announced positive high-level results from the DELIVER Phase III trial where Farxiga showed a statistically significant and clinically meaningful reduction in the primary endpoint of cardiovascular death or worsening heart failure. The trial was conducted in patients with heart failure with mildly reduced or preserved ejection fraction, defined as left ventricular ejection fraction greater than 40%. 

 

Bydureon

 

During the period, AstraZeneca received a marketing extension in the EU for Bydureon BCise to include the treatment of type-2 diabetes in children and adolescents aged 10 years and above.

 

Eplontersen

 

In June 2022, AstraZeneca and Ionis Pharmaceuticals, Inc. announced positive high-level results from the NEURO-TTRansform Phase III trial for eplontersen in patients with hereditary transthyretin-mediated amyloid polyneuropathy. In the trial, eplontersen reached a statistically significant and clinically meaningful change from baseline for its co-primary endpoint of percent change in serum TTR[82] concentration, reducing TTR protein production. Eplontersen also reached its co-primary endpoint of change from baseline in the modified Neuropathy Impairment Score +7, a measure of neuropathic disease progression, versus the external placebo group. The secondary endpoint of change from baseline in the Norfolk Quality of Life Questionnaire-Diabetic Neuropathy was also met, showing that treatment with eplontersen significantly improved patient-reported quality of life versus the external placebo group.

 

BioPharmaceuticals - R&I

 

During the period the Company initiated IRIS, a Phase III trial of Saphnelo in lupus nephritis.

 

Tezspire

 

In July 2022, Tezspire was recommended for approval in the EU by the CHMP for the treatment of severe asthma. Tezspire is the first and only biologic approved in a broad population of severe asthma irrespective of biomarker status.

 

The GINA[83] severe asthma guidelines were updated during the period, to include anti-TSLP, as an add-on biologic therapy for patients 12 years and over with severe asthma.

 

PT027

 

In May 2022, full results from the Phase III MANDALA trial were published in The New England Journal of Medicine and presented along with results from the Phase III DENALI trial at the American Thoracic Society International Conference. The use of PT027, a novel fixed-dose combination of albuterol and budesonide, as an as-needed rescue medicine significantly reduced the risk of severe exacerbation by 27% in patients with asthma, compared with albuterol alone.

 

BioPharmaceuticals - V&I

 

Evusheld

 

Detailed results published in The Lancet Respiratory Medicine from the Phase III TACKLE outpatient treatment trial showed that Evusheld provided clinically and statistically significant protection against progression to severe COVID-19 or death from any cause compared to placebo, with treatment with Evusheld earlier in the disease course leading to more favourable outcomes.

 

A single 600mg intramuscular dose of Evusheld significantly reduced the relative risk of progressing to severe COVID-19 or death (from any cause) by 50% through Day 29 compared to placebo in non-hospitalised patients with mild-to-moderate COVID-19 who were symptomatic for seven days or less, the trial's primary endpoint. In pre-specified analyses of participants who received treatment within three days of symptom onset, Evusheld reduced the risk of developing severe COVID-19 or death (from any cause) by 88% compared to placebo, and the risk reduction was 67% when participants received Evusheld within five days of symptom onset.

 

Preclinical pseudovirus assay data from the University of Oxford, published in Cell , demonstrated that Evusheld retains neutralisation activity against the Omicron BA.4 and BA.5 variants.

 

Nirsevimab

 

Results from a pre-specified pooled analysis of the pivotal Phase III/IIb MELODY trial presented at the European Society for Paediatric Infectious Diseases meeting showed that nirsevimab demonstrated efficacy (relative risk reduction versus placebo) of 79.5% against medically-attended LRTI[84], such as bronchiolitis or pneumonia, caused by RSV in infants born at term or preterm entering their first RSV season. The pooled analysis evaluated healthy preterm and term infants who received the optimised dose of nirsevimab compared to placebo through Day 151 and showed efficacy of 77.3% against RSV LRTI hospitalisations.

 

Vaxzevria

 

In May 2022, Vaxzevria was granted EMA approval for use in the EU as a third dose booster in adults.

 

Airfinity, the provider of global real-time health intelligence, has analysed data from Imperial College, London, and estimates that Vaxzevria saved over six million lives during the period 8 December 2020 to 8 December 2021. The data from Imperial College was published in The Lancet in June 2022.

 

Vaxzevria was found to be 73% effective at preventing Omicron-related infections after a fourth dose in a real-world evidence study by Chiang Mai University in Thailand.

 

Rare Disease

 

Ultomiris

 

In May 2022, the Company announced results of the CHAMPION-NMOSD Phase III trial demonstrating Ultomiris achieved a statistically significant and clinically meaningful reduction in the risk of relapse in adults with anti-aquaporin-4 antibody-positive NMOSD compared to the external placebo arm. Ultomiris met primary endpoint of time to first on-trial relapse and as confirmed by an independent adjudication committee; notably, zero adjudicated relapses were observed over a median treatment duration of 73 weeks.

 

Ultomiris also received regulatory submission acceptance in China for the treatment of gMG, as well as positive CHMP opinion in the EU as an add-on to standard therapy for the treatment of adult patients with gMG. The regulatory submission were based on positive results from the CHAMPION-MG Phase III trial. Additionally, Ultomiris subcutaneous formulation received regulatory approval in the US for the treatment of PNH and aHUS.

 

Koselugo

 

Koselugo was granted Priority Review in China for the treatment of NF1-PN in children 2 years old or over.

 

ALXN1840

 

In June 2022, Results from the FoCus Phase III trial in Wilson disease were presented at the 2022 International Liver Congress. The detailed results showed ALXN1840, a novel once-daily oral medicine, met its primary endpoint, demonstrating three-times greater copper mobilisation from tissues compared to standard of care, including in patients who had been treated previously for an average of 10 years. Patients taking ALXN1840 experienced rapid copper mobilisation, with a response at four weeks and sustained through 48 weeks.

 

 

Interim financial statements

 

Table 19 : Condensed consolidated statement of comprehensive income - H1 2022

 

For the half year ended 30 June

 

2022 

2021 

 

 

$m 

$m  

Total Revenue

 

22,161  

15,540  

Product Sales

 

21,610  

15,302  

Collaboration Revenue

 

551  

238  

Cost of Sales


(6,509)

(4,055)  

Gross profit

 

15,652  

11,485  

Distribution expense


(254)

(202)

Research and development expense


(4,679)

(3,542)

Selling, general and administrative expense


(9,521)

(6,027)

Other operating income and expense


219  

1,308  

Operating profit

 

1,417  

3,022  

Finance income


35  

27  

Finance expense


(647)

(629)

Share of after tax losses in associates and joint ventures


(5)

(48)

Profit before tax

 

800  

2,372  

Taxation


(52)

(260)

Profit for the period

 

748  

2,112  

Other comprehensive (loss)/income

 

 

 

Items that will not be reclassified to profit or loss

 

 

 

Remeasurement of the defined benefit pension liability


1,031  

692  

Net losses on equity investments measured at fair value through other comprehensive income


(12)

(27)

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


2  

2  

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


(275)

52  

 

 

746  

719  

Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation


(1,326)

59  

Foreign exchange arising on designated borrowings in net investment hedges


(195)

(230)

Fair value movements on cash flow hedges


(138)

(59)

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


131  

73  

Fair value movements on derivatives designated in net investment hedges


34  

7  

Costs of hedging


(13)

(2)

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


46  

18  



(1,461)

(134)

Other comprehensive (loss)/income, net of tax

 

(715)

585  

Total comprehensive income for the period

 

33  

2,697  

Profit attributable to:




Owners of the Parent


746 

2,111  

Non-controlling interests


1  



748 

2,112  

Total comprehensive income attributable to:




Owners of the Parent


33 

2,696  

Non-controlling interests


1  



33 

2,697  

Basic earnings per $0.25 Ordinary Share


$0.48  

$1.61  

Diluted earnings per $0.25 Ordinary Share


$0.48  

$1.60  

Weighted average number of Ordinary Shares in issue (m)


1,548  

1,312  

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


1,561  

1,319  

 

 

Table 20 : Condensed consolidated statement of comprehensive income - Q2 2022

 

For the quarter ended 30 June

 

Unreviewed[85] 2022 

Unreviewed 2021 

 

 

$m 

$m  

Total Revenue

 

10,771  

8,220  

Product Sales

 

10,630  

8,045  

Collaboration Revenue

 

141  

175  

Cost of Sales


(2,998)

(2,191)

Gross profit

 

7,773  

6,029  

Distribution expense


(129)

(103)

Research and development expense


(2,546)

(1,829)

Selling, general and administrative expense


(4,681)

(3,098)

Other operating income and expense


122  

128  

Operating profit

 

539  

1,127  

Finance income


18  

7  

Finance expense


(311)

(326)

Share of after tax losses in associates and joint ventures


1  

(44)

Profit before tax

 

247  

764  

Taxation


113  

(214)

Profit for the period

 

360  

550  

Other comprehensive (loss)/income

 

 

 

Items that will not be reclassified to profit or loss

 

 

 

Remeasurement of the defined benefit pension liability


696  

211  

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


(30)

81  

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


2  

1  

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


(181)

146  

 

 

487  

439  

Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation


(1,107)

166  

Foreign exchange arising on designated borrowings in net investment hedges


(163)

72  

Fair value movements on cash flow hedges


(143)

27  

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


120  

(48)

Fair value movements on derivatives designated in net investment hedges


42  

(6)

Costs of hedging


(13)

(1)

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


45  

(8)



(1,219)

202  

Other comprehensive (loss)/income, net of tax

 

(732)

641  

Total comprehensive (loss)/income for the period

 

(372)

1,191  

Profit attributable to:




Owners of the Parent


360  

550  

Non-controlling interests


-  

-  



360  

550  

Total comprehensive (loss)/income attributable to:




Owners of the Parent


(372)

1,190  

Non-controlling interests


1  



(372)

1,191  

Basic earnings per $0.25 Ordinary Share


$0.23  

$0.42  

Diluted earnings per $0.25 Ordinary Share


$0.23  

$0.42  

Weighted average number of Ordinary Shares in issue (m)


1,549  

1,312  

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


1,560  

1,318  

 

Table 21 : Condensed consolidated statement of financial position


 

Reviewed[86]

Audited

Reviewed


 

At 30 Jun 2022

At 31 Dec 2021

At 30 Jun 2021


 

$m 

$m 

$m 

Assets





Non-current assets





Property, plant and equipment


8,722  

9,183  

8,357  

Right-of-use assets


905  

988  

674  

Goodwill


19,821  

19,997  

11,798  

Intangible assets


39,900  

42,387  

20,006  

Investments in associates and joint ventures


56  

69  

48  

Other investments


1,124  

1,168  

1,072  

Derivative financial instruments


113  

102  

124  

Other receivables


881  

895  

565  

Deferred tax assets


4,140  

4,330  

3,723  


 

75,662  

79,119  

46,367  

Current assets





Inventories


6,220  

8,983  

4,762  

Trade and other receivables


8,908  

9,644  

6,356  

Other investments


70  

69  

62  

Derivative financial instruments


109  

83  

41  

Intangible assets


89  

105  

-  

Income tax receivable


704  

663  

486  

Cash and cash equivalents


4,817  

6,329  

15,567  

Assets held for sale


-  

368  

-  


 

20,917  

26,244

27,274  

Total assets

 

96,579  

105,363  

73,641  

Liabilities





Current liabilities





Interest-bearing loans and borrowings


(2,162)

(1,660)

(2,696)

Lease liabilities


(220)

(233)

(198)

Trade and other payables


(17,821)

(18,938)

(17,729)

Derivative financial instruments


(90)

(79)

(17)

Provisions


(541)

(768)

(802)

Income tax payable


(981)

(916)

(780)


 

(21,815)

(22,594)

(22,222)

Non-current liabilities





Interest-bearing loans and borrowings


(26,461)

(28,134)

(24,109)

Lease liabilities


(685)

(754)

(492)

Derivative financial instruments


(180)

(45)

(3)

Deferred tax liabilities


(5,275)

(6,206)

(2,927)

Retirement benefit obligations


(1,310)

(2,454)

(2,383)

Provisions


(892)

(956)

(620)

Other payables


(4,010)

(4,933)

(5,192)



(38,813)

(43,482)

(35,726)

Total liabilities

 

(60,628)

(66,076)

(57,948)

Net assets

 

35,951  

39,287  

15,693  

Equity





Capital and reserves attributable to equity holders of the Parent





Share capital


387  

387  

328  

Share premium account


35,134  

35,126  

7,980  

Other reserves


2,068  

2,045  

2,033  

Retained earnings


(1,657)

1,710  

5,335  


 

35,932  

39,268  

15,676  

Non-controlling interests


19  

19  

17  

Total equity

 

35,951  

39,287  

15,693  

 

Table 22 : 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


-  

-  

-  

2,111  

2,111  

1  

2,112  

Other comprehensive income


-  

-  

-  

585  

585  

-  

585  

Transfer to other reserves


-  

-  

9  

(9)

-  

-  

-  

Transactions with owners:









Dividends


-  

-  

-  

(2,490)

(2,490)

-  

(2,490)

Issue of Ordinary Shares


-  

9  

-  

-  

9  

-  

9  

Share-based payments charge for the period


-  

-  

-  

160  

160  

-  

160  

Settlement of share plan awards


-  

-  

-  

(321)

(321)

-  

(321)

Net movement

 

-  

9  

9  

36  

54  

1  

55  

At 30 Jun 2021

 

328  

7,980  

2,033  

5,335  

15,676  

17  

15,693  

 

 

 

 

 

 

 

 

 

At 1 Jan 2022

 

387  

35,126  

2,045  

1,710  

39,268  

19  

39,287  

Profit for the period


-  

-  

-  

746  

746  

2  

748  

Other comprehensive loss


-  

-  

-  

(713)

(713)

(2)

(715)

Transfer to other reserves


-  

-  

23  

(23)

-  

-  

-  

Transactions with owners:









Dividends


-  

-  

-  

(3,046)

(3,046)

-  

(3,046)

Issue of Ordinary Shares


-  

8  

-  

-  

8  

-  

8  

Share-based payments charge for the period


-  

-  

-  

346  

346  

-  

346  

Settlement of share plan awards


-  

-  

-  

(677)

(677)

-  

(677)

Net movement


-  

8  

23  

(3,367)

(3,336)

-  

(3,336)

At 30 Jun 2022

 

387  

35,134  

2,068  

(1,657)

35,932  

19  

35,951  

 

Table 23 : Condensed consolidated statement of cash flows

 

 

For the half year ended 30 June


2022

2021


$m 

$m  

Cash flows from operating activities




Profit before tax


800  

2,372  

Finance income and expense


612  

602  

Share of after tax losses of associates and joint ventures


5  

48  

Depreciation, amortisation and impairment


2,666  

1,550  

Decrease in working capital and short-term provisions


2,391  

857  

Gains on disposal of intangible assets


(81)

(354)

Gains on disposal of investments in associates and joint ventures


-  

(776)

Fair value movements on contingent consideration arising from business combinations


293  

82  

Non-cash and other movements


(814)

(363)

Cash generated from operations

 

5,872  

4,018  

Interest paid


(386)

(323)

Tax paid


(1,006)

(869)

Net cash inflow from operating activities

 

4,480  

2,826  

Cash flows from investing activities




Payments upon vesting of employee share awards attributable to business combinations


(158)

-  

Payment of contingent consideration from business combinations


(367)

(309)

Purchase of property, plant and equipment


(472)

(508)

Disposal of property, plant and equipment


-  

4  

Purchase of intangible assets


(434)

(314)

Disposal of intangible assets and assets held for sale


442  

573  

Purchase of non-current asset investments


(28)

(10)

Disposal of non-current asset investments


35  

-  

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


9  

135  

Payments to associates and joint ventures


(5)

(55)

Disposal of investments in associates and joint ventures


-  

776  

Interest received


10  

27  

Net cash (outflow)/inflow from investing activities


(968)

319  

Net cash inflow before financing activities

 

3,512  

3,145  

Cash flows from financing activities




Proceeds from issue of share capital


8  

9  

Repayment of loans and borrowings


(1,257)

(611)

Issue of loans


-  

7,944  

Dividends paid


(2,971)

(2,469)

Hedge contracts relating to dividend payments


(77)

(22)

Repayment of obligations under leases


(134)

(111)

Movement in short-term borrowings


316  

(182)

Payment of Acerta Pharma share purchase liability


(920)

-  

Net cash (outflow)/inflow from financing activities

 

(5,035)

4,558  

Net (decrease)/increase in cash and cash equivalents in the period


(1,523)

7,703  

Cash and cash equivalents at the beginning of the period


6,038  

7,546  

Exchange rate effects


(35)

(52)

Cash and cash equivalents at the end of the period

 

4,480  

15,197  

Cash and cash equivalents consist of:




Cash and cash equivalents


4,817  

15,567  

Overdrafts


(337)

(370)

 

 

4,480  

15,197  

 

Responsibility statement of the directors in respect of the half-yearly financial report

 

We confirm that to the best of our knowledge:

 

the condensed consolidated Interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB), IAS 34 as adopted by the European Union and UK-adopted IAS 34;

 

the half-yearly management report gives a true and fair view of the assets, liabilities, financial position and profit or loss of the company;

 

the half-yearly management report includes a fair review of the information required by:

 

a)  DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated Interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

b)  DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the enterprise during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

The Board

 

The Board of Directors that served during all or part of the six month period to 30 June 2022 and their respective responsibilities can be found on the Leadership team section of astrazeneca.com.

 

Approved by the Board and signed on its behalf by

 

Pascal Soriot

Chief Executive Officer

 

29 July 2022

 

Independent review report to AstraZeneca PLC

 

Report on the condensed consolidated interim financial statements

 

Our conclusion

 

We have reviewed AstraZeneca PLC's condensed consolidated interim financial statements (the "Interim financial statements") in the half-yearly financial report of AstraZeneca PLC for the 6 month period ended 30 June 2022 (the "period").

 

Based on our review, nothing has come to our attention that causes us to believe that the Interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting' (IAS 34), as issued by the International Accounting Standards Board (IASB), IAS 34 as adopted by the European Union and  UK-adopted IAS 34, and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

The Interim financial statements comprise:

 

the Condensed consolidated statement of comprehensive income for the period then ended - H1 2022;

the Condensed consolidated statement of financial position as at 30 June 2022;

the Condensed consolidated statement of changes in equity for the period then ended; 

the Condensed consolidated statement of cash flows for the period then ended; and

the explanatory notes to the Interim financial statements.

 

The Interim financial statements included in the half-yearly financial report of AstraZeneca PLC have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' (IAS 34), as issued by the International Accounting Standards Board (IASB), IAS 34 as adopted by the European Union and UK-adopted IAS 34, and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

Basis for conclusion

 

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the Interim financial statements.

 

Conclusions relating to going concern

 

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with this ISRE. However, future events or conditions may cause the group to cease to continue as a going concern.  

 

Independent review report to AstraZeneca PLC

 

Responsibilities for the Interim financial statements and the review

 

Our responsibilities and those of the directors

 

The half-yearly financial report, including the Interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the half-yearly financial report, including the Interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

 

Our responsibility is to express a conclusion on the Interim financial statements in the half-yearly financial report based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

PricewaterhouseCoopers LLP

Chartered Accountants

London

 

29 July 2022

 

Notes to the Interim financial statements

 

Note 1: Basis of preparation and accounting policies

 

These unaudited condensed consolidated Interim financial statements for the six months ended 30 June 2022 have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' (IAS 34), as issued by the International Accounting Standards Board (IASB), IAS 34 as adopted by the European Union, UK-adopted IAS 34 and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. 

 

The unaudited Interim financial statements for the six months ended 30 June 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 six months ended 30 June 2022 were approved by the Board of Directors for publication on 29 July 2022.

 

This results announcement does not constitute statutory accounts of the Group within the meaning of sections 434(3) and 435(3) of the Companies Act 2006. The annual financial statements of the Group for the year ended 31 December 2021 were prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006. The annual financial statements also comply fully with IFRSs as issued by the IASB and International Accounting Standards as adopted by the European Union. Except for the estimation of the interim income tax charge, the Interim financial statements have been prepared applying the accounting policies that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2021.

 

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

 

Global and/or geopolitical events

 

There were no material accounting impacts identified relating to COVID-19 during the six months ended 30 June 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 H1 2022 reporting. The situation is dynamic and any future impact on our business is uncertain.

 

Throughout July 2022, a range of EU/US/Swiss and UK sanctions have come into force placing restrictions on specific business activities and/or individuals related to on-going business with Russia. We are monitoring closely and our work in this regard continues to progress to provide assurance over managements activities to ensure ongoing sanctions compliance.

 

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

 

Going concern

 

The Group has considerable financial resources available. As at 30 June 2022, the Group had $9.7bn in financial resources (cash and cash-equivalent balances of $4.8bn and undrawn committed bank facilities of $4.9bn available until April 2025, with only $2.4bn of borrowings due within one year). All facilities contain no financial covenants and were undrawn at 30 June 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 6 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 'Impairment of Assets', reviews for triggers of impairment or impairment reversals at an individual asset or cash-generating-unit level were conducted, and impairment tests carried out where triggers were identified. As a result, total net impairment reversals of $26m have been recorded against intangible assets during the six months ended 30 June 2022 (H1 2021: $55m charge). Net impairment reversals in respect of medicines in development and launched medicines were $9m (H1 2021: $nil) and $nil (H1 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 24 : Net Debt

 


 

At 1 Jan 2022

Cash flow

Non-cash
& other

Exchange movements

At 30 Jun 2022


 

$m

$m

$m

$m

$m

Non-current instalments of loans


(28,134)

-  

1,409  

264  

(26,461)

Non-current instalments of leases


(754)

-  

37  

32  

(685)

Total long-term debt

 

(28,888)

-  

1,446  

296  

(27,146)

Current instalments of loans


(1,273)

1,257  

(1,399)

-  

(1,415)

Current instalments of leases


(233)

133  

(131)

11  

(220)

Commercial paper


-  

(256)

-  

-  

(256)

Bank collateral


(93)

(18)

-  

-  

(111)

Other short-term borrowings excluding overdrafts


(3)

(42)

-  

2  

(43)

Overdrafts


(291)

(65)

-  

19  

(337)

Total current debt

 

(1,893)

1,009  

(1,530)

32  

(2,382)

Gross borrowings

 

(30,781)

1,009  

(84)

328  

(29,528)

Net derivative financial instruments


61  

66  

(175)

-  

(48)

Net borrowings

 

(30,720)

1,075  

(259)

328  

(29,576)

Cash and cash equivalents


6,329  

(1,458)

-  

(54)

4,817  

Other investments - current


69  

2  

-  

(1)

70  

Cash and investments

 

6,398  

(1,456)

-  

(55)

4,887  

Net Debt

 

(24,322)

(381)

(259)

273  

(24,689)

 

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

 

The Group has agreements with some bank counterparties whereby the parties agree to post cash collateral on financial derivatives, for the benefit of the other, equivalent to the market valuation of the derivative positions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 30 June 2022 was $111m (31 December 2021: $93m) and the carrying value of such cash collateral posted by the Group at 30 June 2022 was $184m (31 December 2021: $47m). Cash collateral posted by the Group is presented within Cash and cash equivalents.

 

Restricted cash and cash equivalents at 30 June 2022 totalled $236m (31 December 2021: $47m), comprising cash collateral posted by the Group and other items.

 

The equivalent GAAP measure to Net Debt is 'liabilities arising from financing activities', which excludes the amounts for cash and overdrafts, other investments and non-financing derivatives shown above and includes the Acerta Pharma share purchase liability of $1,590m (31 December 2021: $2,458m), $838m of which is shown in current other payables and $752m is shown in non-current other payables.

 

Net Debt increased by $367m in the year to date to $24,689m. Details of the committed undrawn bank facilities are disclosed within the going concern section of Note 1.

 

 

During the six months to 30 June 2022, there were no changes to the Company's solicited credit ratings issued by Standard and Poor's (long term: A-; short term: A-2) and from Moody's (long term: A3; short term: P‑2).

 

Note 4: Financial Instruments

 

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

 

The Group has certain equity investments held at $180m at 30 June 2022 (31 December 2021: $104m) that are categorised as Level 3 in the fair-value hierarchy and for which fair-value gains of $48m (FY 2021: $nil) have been recognised in the six months ended 30 June 2022. In the absence of specific market data, these

unlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new funding rounds, which are seen to approximate the fair value. All other fair-value gains and/or losses that are presented in Net losses on equity investments measured at fair value through other comprehensive income in the Condensed consolidated statement of comprehensive income for the six months ended 30 June 2022 are Level 1 fair-value measurements, valued based on quoted prices in active markets.

 

Financial instruments measured at fair value include $1,194m of other investments, $3,098m held in money-market funds, $301m of loans designated at fair value through profit or loss and $48m of derivatives as at 30 June 2022. With the exception of derivatives being Level 2 fair-valued, the aforementioned balances are Level 1 fair-valued. The total fair value of interest-bearing loans and borrowings at 30 June 2022, which have a carrying value of $29,528m in the Condensed consolidated statement of financial position, was $29,019m.

 

Table 25 : Financial instruments - contingent consideration

 


 

2022

2021

 

 

Diabetes alliance

Other

Total

Total

 

 

$m

$m

$m

$m

At 1 January


2,544  

321  

2,865  

3,323  

Settlements


(358)

(9)

(367)

(309)

Disposals


-  

(121)

(121)

-  

Revaluations


320  

(27)

293  

82  

Discount unwind


81  

4  

85  

112  

At 30 June

 

2,587  

168  

2,755  

3,208  

 

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 $2,587m (31 December 2021: $2,544m) would increase/decrease by $259m with an increase/decline in sales of 10%, as compared with the current estimates.

 

 

Note 5: Pensions and other post-retirement benefit obligations

 

The net pensions and other post-retirement benefit obligations position, as recorded under IAS 19, at 30 June 2022 was a liability of $1,136m (31 December 2021: $2,454m liability). Pension schemes in a net surplus position at 30 June 2022 totalled $174m (31 December 2021: $nil) and are recorded within Other receivables in non-current assets. Pension schemes in a net deficit position at 30 June 2022 totalled $1,310m (31 December 2021: $2,454m) and are recorded within Retirement benefit obligations in non-current liabilities.

 

The decrease in the net liability of $1,318m is driven by actuarial gains of $1,031m that have been reflected within the Condensed consolidated statement of comprehensive income.

 

Changes in actuarial assumptions, primarily movements in discount rates, led to a decrease in the net liability in the half of $2,599m (a decrease in UK, Sweden, US and German liabilities of $1,698m, $518m, $221m and $162m respectively), which reflected increases in corporate bond yields. These movements were partially offset by decreases in the pension fund asset values in the half of $1,563m and experience losses of $5m. 

 

Note 6: Legal proceedings and contingent liabilities

 

AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation and investigations, including Government investigations, relating to product liability, commercial disputes, infringement of intellectual property (IP) rights, the validity of certain patents, anti-trust law and sales and marketing practices. The matters discussed below constitute the more significant developments since publication of the disclosures concerning legal proceedings in the Company's Annual Report and Form 20-F Information 2021 (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 second quarter of 2022 and to 29 July 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 (the Court) alleging that Enhertu infringes US Patent No. 10,808,039 (the '039 patent). AstraZeneca co-commercialises Enhertu with Daiichi Sankyo, Inc. in the US. The trial took place in April 2022. The jury found that the '039 patent was infringed and awarded Seagen $41.82m in past damages. In July 2022, the Court decided not to enhance damages based on the jury's finding of willfulness and entered judgment for Seagen. The parties await consideration of post-trial motions.

 

As previously disclosed, in December 2020 and January 2021, AstraZeneca and Daiichi Sankyo filed post-grant review (PGR) petitions with the US Patent and Trademark Office (USPTO) alleging, inter alia, that the '039 patent is invalid for lack of written description and enablement. The USPTO initially declined to institute the PGRs, but in April 2022, the USPTO granted the rehearing requests, instituting both PGR petitions. Seagen subsequently disclaimed all patent claims at issue in one of the PGR proceedings. In July 2022, the USPTO reversed its institution decision and declined to institute AstraZeneca and Daiichi Sankyo's other PGR petition.

 

Faslodex

Patent Proceedings outside the US

As previously disclosed, in Japan, Sandoz K.K. and Sun Pharma Japan Ltd are seeking to invalidate the Faslodex formulation patent at the Japan Patent Office (JPO) and AstraZeneca is defending the challenged patent. The JPO held the hearing in the matter in May 2022.  A decision is awaited.

 

Lokelma

US patent proceedings

In July 2022, AstraZeneca received Paragraph IV notices from multiple ANDA filers relating to patents listed in the FDA Orange Book with reference to Lokelma.  AstraZeneca is reviewing the notices in preparation for litigation.

 

Symbicort

US patent proceedings

As previously disclosed, AstraZeneca is involved in ongoing ANDA patent litigation with Mylan Pharmaceuticals Inc. (Mylan) and Kindeva Drug Delivery L.P. (Kindeva) brought in the US District Court for the Northern District of West Virginia (the District Court). A trial in the matter was held in May 2022 and closing arguments were held in June 2022.  A decision is awaited. 

 

As previously disclosed, in April 2022, AstraZeneca filed a separate ANDA action against Mylan and Kindeva in the District Court asserting infringement of a patent covering Symbicort.  In June 2022, Mylan and Kindeva responded and claim noninfringement of the asserted patent and that the asserted patent is invalid. A trial in the matter is scheduled for November 2022.

 

Tagrisso

US patent proceedings

 

As previously disclosed, in September 2021, Puma Biotechnology, Inc. and Wyeth LLC filed a patent infringement lawsuit in the US District Court for the District of Delaware against AstraZeneca relating to Tagrisso. A claim construction hearing has been scheduled for January 2023 and a trial has been scheduled for May 2024.

 

Patent proceedings outside the US

As previously disclosed, 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. In June 2022, the dismissal was affirmed on appeal, and AstraZeneca is considering its options. 

 

 

Commercial litigation

 

Array BioPharma

 

As previously disclosed, in the US, in December 2017, AstraZeneca was served with a complaint filed in New York State court by Array BioPharma, Inc. (Array) alleging breaches of contractual obligations relating to a 2003 collaboration agreement between AstraZeneca and Array. In May 2022, the parties resolved this dispute. This matter is now concluded. 

 

Portola Shareholder Litigation

 

As previously disclosed, in the US, in connection with Alexion's July 2020 acquisition of Portola Pharmaceuticals, Inc (Portola), Alexion assumed litigation to which Portola is a party. In January 2020, putative securities class action lawsuits were filed in the US District Court for the Northern District of California against Portola and certain officers and directors, on behalf of purchasers of Portola publicly traded securities during the period 8 January 2019 through 26 February 2020.The complaints allege that defendants made materially false and/or misleading statements or omissions with regard to Andexxa. In June 2022, the parties reached a settlement in principle of this matter, which is subject to court approval. A provision has been recognised in the quarter.    

 

Seroquel XR (Antitrust Litigation)

As previously disclosed, in the US, in 2019, AstraZeneca was named in several related complaints which are currently pending in the US District Court for the District of Delaware (the Court), including several putative class action lawsuits that were purportedly brought on behalf of classes of direct purchasers or end payors of Seroquel XR.  The complaints allege that AstraZeneca and two different generic drug manufacturers violated antitrust laws when settling patent litigation related to Seroquel XR. In July 2022, in response to AstraZeneca's motions, the Court dismissed all plaintiffs' claims to the extent they were based on the settlement with one of the generic manufacturers but denied the motions with respect to certain claims relating to the second generic manufacturer and allowed such claims to proceed.

 

 

Matters disclosed in respect of the first quarter of 2022 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 '039 patent). AstraZeneca co-commercialises Enhertu with Daiichi Sankyo, Inc. in the US. The trial took place in April 2022. The jury found that the '039 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 '039 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 made 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 26 : H1 2022 - Product Sales year-on-year analysis [87]

The CER information in respect of H1 2022 included in the Interim financial statements has not been reviewed by PricewaterhouseCoopers LLP.

 

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

7,089

14  

18  

1,792

10  

12  

2,979

22  

1,341

13  

24  

977

1  

12  

Tagrisso

2,704

10  

14  

805

16  

17  

951

11  

509

9  

19  

439

1  

12  

Imfinzi

1,294

12  

16  

134

1  

2  

689

15  

267

18  

29  

204

1  

12  

Lynparza

1,291

14  

18  

241

30  

32  

582

11  

329

9  

20  

139

15  

27  

Calquence

903

84  

87  

16

n/m  

n/m  

735

65  

122

n/m  

n/m  

30

n/m  

n/m  

Enhertu

29

n/m  

n/m  

19

n/m  

n/m  

-

-  

8

n/m  

n/m  

2

n/m  

n/m  

Orpathys

23

n/m  

n/m  

23

n/m  

n/m  

-

-  

-

-  

-  

-

-  

-  

Zoladex

477

2  

7  

332

12  

14  

7

(14)

68

(8)

-  

70

(21)

(11)

Faslodex

178

(21)

(16)

81

1  

5  

10

(36)

32

(54)

(50)

55

(8)

3  

Iressa

63

(41)

(39)

52

(41)

(40)

4

(24)

1

(55)

(44)

6

(44)

(36)

Arimidex

61

(17)

(13)

47

(16)

(15)

-

1  

1

(69)

(69)

13

(14)

(1)

Casodex

42

(49)

(47)

27

(58)

(58)

-

n/m  

1

49  

21  

14

(19)

(11)

Others

24

(4)

3  

15

4  

9  

1

n/m  

3

6  

16  

5

(32)

(24)

BioPharmaceuticals: CVRM*

4,559

14  

18  

2,099

9  

12  

1,151

10  

945

28  

40  

364

21  

33  

Farxiga

2,103

55  

63  

814

46  

50  

468

55  

627

69  

85  

194

55  

70  

Brilinta

675

(10)

(7)

146

(19)

(15)

351

(2)

150

(16)

(8)

28

(12)

(8)

Lokelma

129

79  

87  

5

n/m  

n/m  

78

58  

13

n/m  

n/m  

33

n/m  

n/m  

Roxadustat

91

1  

1  

91

1  

1  

-

-  

-

-  

-  

-

-  

-  

Andexxa*

70

9  

12  

-

-  

-  

42

(23)

18

90  

n/m  

10

n/m  

n/m  

Crestor

547

2  

6  

414

11  

15  

35

(15)

21

(36)

(30)

77

(18)

(10)

Seloken/Toprol-XL

467

(9)

(7)

456

(9)

(7)

-

n/m  

6

5  

2  

5

(10)

1  

Bydureon

141

(29)

(28)

2

1  

3  

119

(27)

20

(31)

(25)

-

(93)

(93)

Onglyza

139

(31)

(28)

66

(39)

(36)

40

(9)

21

(32)

(26)

12

(29)

(28)

Others

197

(9)

(7)

105

(2)

-  

18

(35)

69

(6)

(4)

5

(27)

(20)

BioPharmaceuticals: R&I

2,891

(2)

-  

731

(17)

(16)

1,300

13  

551

(11)

(3)

309

(1)

6  

Symbicort

1,288

(6)

(3)

306

-  

3  

481

(9)

312

(9)

(1)

189

(1)

4  

Fasenra

662

14  

18  

17

n/m  

n/m  

419

18  

153

12  

23  

73

(8)

1  

Pulmicort

334

(33)

(32)

236

(42)

(41)

37

5  

35

3  

13  

26

13  

20  

Breztri

179

n/m  

n/m  

43

61  

61  

106

n/m  

14

n/m  

n/m  

16

46  

65  

Saphnelo

36

n/m  

n/m  

-

-  

-  

34

n/m  

1

n/m  

n/m  

1

n/m  

n/m  

Daliresp

109

(5)

(4)

1

(32)

(30)

102

(2)

5

(37)

(31)

1

16  

18  

Bevespi

30

13  

16  

3

49  

47  

22

9  

5

21  

32  

-

(26)

43  

Others

253

(13)

(12)

125

(8)

(8)

99

65  

26

(71)

(68)

3

(50)

(48)

BioPharmaceuticals: V&I

2,734

n/m  

n/m  

861

89  

92  

638

n/m  

511

(17)

(10)

724

n/m  

n/m  

Vaxzevria

1,540

36  

41  

660

45  

45  

80

n/m  

262

(54)

(50)

538

n/m  

n/m  

Evusheld

914

n/m  

n/m  

93

n/m  

n/m  

556

n/m  

143

n/m  

n/m  

122

n/m  

n/m  

Synagis

280

n/m  

n/m  

108

n/m  

n/m  

2

(55)

106

n/m  

n/m  

64

n/m  

n/m  

FluMist

-

n/m 

n/m  

-

n/m 

n/m 

-

-  

-

n/m  

n/m  

-

-  

-  

Rare Disease*

3,495

5  

10  

206

(24)

(8)

2,090

7  

733

1  

12  

466

17  

30  

Soliris*

2,017

(5)

1  

134

(45)

(29)

1,165

2  

437

(17)

(8)

281

34  

46  

Ultomiris*

853

22  

28  

30

n/m  

n/m  

456

10  

225

65  

81  

142

(3)

11  

Strensiq*

450

11  

13  

18

24  

16  

353

12  

40

-  

9  

39

4  

18  

Koselugo

101

n/m  

n/m  

15

n/m  

n/m  

78

65  

8

n/m  

n/m  

-

-  

-  

Kanuma*

74

9  

14  

9

4  

12  

38

11  

23

7  

18  

4

16  

20  

Other medicines

842

(11)

(6)

395

(26)

(24)

75

(21)

67

(32)

(28)

305

38  

54  

Nexium

674

(9)

(2)

289

(31)

(28)

63

(5)

26

(26)

(19)

296

36  

52  

Others

168

(21)

(20)

106

(9)

(8)

12

(59)

41

(36)

(34)

9

n/m  

n/m  

Total Product Sales

21,610

41  

47  

6,084

12  

15  

8,233

74  

4,148

28  

40  

3,145

65  

81  

 

Table 27 : Q2 2022 - Product Sales year-on-year analysis (Unreviewed) [88]

The Q2 2022 information in respect of the three months ended 30 June 2022 included in the Interim financial statements has not been reviewed by PricewaterhouseCoopers LLP.

 

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

3,701

14  

18  

897

4  

6  

1,605

26  

691

14  

26  

508

(1)

12  

Tagrisso

1,400

7  

12  

400

2  

4  

513

17  

256

5  

17  

231

(1)

12  

Imfinzi

695

15  

20  

75

-  

1  

374

22  

142

21  

34  

104

(2)

11  

Lynparza

673

15  

20  

120

21  

23  

312

16  

169

11  

23  

72

8  

23  

Calquence

489

74  

77  

8

80  

77  

396

59  

67

n/m  

n/m  

18

n/m  

n/m  

Enhertu

18

n/m  

n/m  

12

n/m  

n/m  

-

-  

4

n/m  

n/m  

2

n/m  

n/m  

Orpathys

11

n/m  

n/m  

11

n/m  

n/m  

-

-  

-

-  

-  

-

-  

-  

Zoladex

236

(3)

2  

165

3  

7  

3

(7)

34

(7)

3  

34

(23)

(14)

Faslodex

86

(18)

(11)

37

(1)

3  

5

(29)

16

(48)

(42)

28

(8)

5  

Iressa

32

(32)

(29)

26

(28)

(26)

2

(32)

-

(63)

(43)

4

(48)

(39)

Arimidex

28

(1)

5  

22

8  

11  

-

(45)

-

(93)

(93)

6

(19)

(4)

Casodex

21

(50)

(48)

14

(57)

(57)

-

(99)

1

n/m  

n/m  

6

(29)

(19)

Others

12

(8)

1  

7

5  

11  

-

-  

2

(14)

(4)

3

(35)

(25)

BioPharmaceuticals: CVRM*

2,352

14  

19  

1,074

10  

14  

629

14  

463

26  

39  

186

16  

30  

Farxiga

1,103

51  

59  

423

42  

47  

275

61  

309

56  

74  

96

45  

63  

Brilinta

350

(7)

(4)

78

4  

8  

185

(5)

73

(19)

(10)

14

(17)

(14)

Lokelma

66

68  

79  

2

89  

n/m  

39

55  

7

n/m  

n/m  

18

78  

n/m  

Roxadustat

50

(2)

(1)

50

(2)

(1)

-

-  

-

-  

-  

-

-  

-  

Andexxa*

37

5  

11  

-

-  

-  

18

(37)

9

49  

61  

10

n/m  

n/m  

Crestor

280

6  

11  

217

19  

24  

16

(14)

10

(14)

(4)

37

(30)

(22)

Seloken/Toprol-XL

223

(16)

(13)

218

(16)

(13)

-

-  

3

(3)

(4)

2

(13)

1  

Bydureon

73

(23)

(22)

1

(20)

(18)

62

(20)

10

(34)

(26)

-

(95)

(95)

Onglyza

71

(28)

(25)

32

(36)

(32)

22

(15)

10

(33)

(26)

7

(8)

(7)

Others

99

(1)

1  

53

(8)

(7)

12

(6)

32

19  

22  

2

(28)

(19)

BioPharmaceuticals: R&I

1,381

(3)

1  

294

(14)

(12)

654

10  

274

(14)

(4)

159

(2)

6  

Symbicort

614

(10)

(6)

139

(1)

2  

222

(16)

155

(12)

(3)

98

(1)

5  

Fasenra

354

11  

15  

10

94  

89  

230

15  

78

6  

18  

36

(11)

-  

Pulmicort

116

(30)

(28)

72

(40)

(39)

15

(16)

17

(4)

8  

12

3  

12  

Breztri

93

66  

72  

21

20  

21  

53

71  

9

n/m  

n/m  

10

47  

69  

Saphnelo

24

n/m  

n/m  

-

-  

-  

23

n/m  

-

-  

-  

1

n/m  

n/m  

Daliresp

58

7  

8  

1

(37)

(34)

54

11  

3

(27)

(19)

-

34  

38  

Bevespi

15

12  

17  

1

46  

73  

11

8  

3

25  

39  

-

(59)

49  

Others

107

(18)

(17)

50

(14)

(14)

46

90  

9

(79)

(77)

2

(47)

(45)

BioPharmaceuticals: V&I

977

10  

15  

231

(44)

(44)

252

n/m  

225

(39)

(32)

269

n/m  

n/m  

Vaxzevria

451

(48)

(44)

185

(55)

(55)

-

-  

128

(63)

(59)

138

36  

50  

Evusheld

445

n/m  

n/m  

4

n/m  

n/m  

250

n/m  

77

n/m  

n/m  

114

n/m  

n/m  

Synagis

80

n/m  

n/m  

42

n/m  

n/m  

2

(32)

19

(9)

(6)

17

n/m  

n/m  

FluMist

1

n/m 

n/m 

-

-  

-  

-

-  

1

n/m  

n/m  

-

n/m 

n/m  

Rare Disease*

1,801

6  

12  

91

(35)

(19)

1,070

8  

373

2  

15  

267

33  

50  

Soliris*

1,027

(5)

2  

63

(48)

(30)

574

(2)

216

(19)

(8)

174

63  

81  

Ultomiris*

434

23  

31  

6

21  

25  

236

14  

120

76  

98  

72

(3)

15  

Strensiq*

242

16  

18  

9

1  

(13)

193

21  

21

-  

12  

19

2  

17  

Koselugo

62

n/m  

n/m  

10

n/m  

n/m  

47

83  

5

n/m  

n/m  

-

-  

-  

Kanuma*

36

9  

13  

3

(36)

(39)

20

15  

11

15  

30  

2

22  

24  

Other medicines

418

(3)

6  

191

(20)

(16)

36

(17)

31

(33)

(29)

160

60  

84  

Nexium

343

2  

12  

145

(22)

(17)

30

(13)

12

(35)

(28)

156

59  

82  

Others

75

(19)

(17)

46

(14)

(13)

6

(32)

19

(32)

(30)

4

n/m  

n/m  

Total Product Sales

10,630

32  

38  

2,778

(2)

1  

4,246

72  

2,057

21  

34  

1,549

49  

67  

 

Table 28 : Collaboration Revenue

 



H1 2022

H1 2021



$m

$m

Lynparza : regulatory milestones


175

-

Enhertu : share of gross profits


173

83

Vaxzevria: royalties


60

33

Tezspire: share of gross profits


16

-

Tralokinumab: sales milestones


70

-

Other royalty income


37

36

Other Collaboration Revenue


20

86

Total


551

238

 

 

Table 29 : Other Operating Income and Expense

 



H1 2022

H1 2021



$m

$m

Brazikumab licence termination funding


69

51

Divestment of rights to Plendil


61

-

Divestment of Viela Bio, Inc. shareholding


-

776

Crestor (Europe ex-UK and Spain)


-

309

Other


89

172

Total


219

1,308

 

Other shareholder information

 

Financial calendar

 

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

Announcement of full year and fourth quarter results  9 February 2023

 

 

Dividends are normally paid as follows:

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

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

 

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

Swedish Central Securities Depository

US depositary

Deutsche Bank Trust Company Americas

1 Francis Crick Avenue

Cambridge Biomedical Campus

Cambridge

CB2 0AA

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 (0) 20 3749 5000

0800 389 1580

+46 (0) 8 402 9000

+1 (888) 697 8018


+44 (0) 121 415 7033


+1 (718) 921 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); 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 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 'the Group') provides the following cautionary statement:

 

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

 

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

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

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

the risk of pricing, affordability, access and competitive pressures

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

the risk of illegal trade in the Group's medicines

the impact of reliance on third-party goods and services

the risk of failure in information technology or cybersecurity

the risk of failure of critical processes

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

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

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

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

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

intellectual property-related risks to our products

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

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

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

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

 

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

 

- End of document -



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

[3] Earnings per share.

[4] Core financial measures are adjusted to exclude certain items. The differences between Reported and Core measures are primarily due to items related to the acquisition of Alexion, amortisation of intangibles, impairments, restructuring charges, and, as previously disclosed, a charge to provisions relating to a legal settlement with Chugai Pharmaceutical Co. Ltd (Chugai) that led to a payment of $775m in Q2 2022. A full reconciliation between Reported EPS and Core EPS is provided in Tables 12 and 13 in the Financial performance section of this document.

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

[6] Respiratory & Immunology.

[7] Cardiovascular, Renal and Metabolism.

[8] H1 2022 and Q2 2022 growth rates on medicines acquired with Alexion have been calculated on a pro forma basis comparing to the corresponding period in the prior year, pre-acquisition as previously published by Alexion. The growth rates shown for the Rare Disease and CVRM disease areas include these pro forma adjustments.

[9] Heart failure with preserved ejection fraction.

[10]   Non-small cell lung cancer.

[11]   Hereditary transthyretin-mediated amyloid polyneuropathy.

[12]   Neuromyelitis optica spectrum disorder.

[13]   Human epidermal growth factor receptor 2.

[14]   Committee for Medicinal Products for Human Use.

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

[16]   Generalised myasthenia gravis.

[17]   Neurofibromatosis type 1 plexiform neurofibromas.

[18]   National reimbursement drug list.

[19]   Volume-based procurement.

[20]   Vaccines & Immune Therapies.

[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]   In Table 2, the Ô+ / -Õ symbols indicate the directional impact of the item being discussed, e.g. a Ô+Õ symbol next to an item relating to R&D Expenses signifies that the item increased the R&D Expense relative to the prior year.

[23]   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.

[24]   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 CompanyÕs financial statements.

[25]   Monoclonal antibodies.

[26] Germline (hereditary) breast cancer gene mutation.

[27] Paroxysmal nocturnal haemoglobinuria.

[28] Atypical haemolytic uraemic syndrome.

[29] Hormone receptor positive.

[30] Chronic lymphocytic leukaemia.

[31] Chronic kidney disease.

[32] Eosinophilic oesophagitis.

[33] Respiratory syncytial virus.

[34] Epidermal growth factor receptor mutation.

[35] Germline (hereditary) breast cancer gene mutation.

[36] Mantle cell lymphoma.

[37] Triple negative breast cancer.

[38] Eosinophilic granulomatosis with polyangiitis.

[39] Hyper-eosinophilic syndrome.

[40] Extensive-stage small cell lung cancer.

[41] Chemoradiation therapy.

[42] Poly ADP ribose polymerase.

[43] US Food and Drug Administration.

[44] Homologous recombination repair gene mutation.

[45] Homologous recombination deficiency.

[46] Mesenchymal-epithelial transition.

[47] Tyrosine kinase inhibitor.

[48] Sodium-glucose cotransporter 2.

[49] Heart failure.

[50] European Society of Cardiology.

[51] American Heart Association.

[52] American College of Cardiology.

[53] Heart Failure Society of America.

[54] Urine albumin creatine ratio.

[55] Measured renal function.

[56] Heart failure with reserved ejection fraction.

[57] Type-2 diabetes.

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

[59] Inhaled corticosteroid.

[60] Long-acting beta-agonist.

[61] Long-acting muscarinic-agonist.

[62] Systemic lupus erythematosus.

[63] Intravenous injection.

[64] Other Operating Income.

[65] Other SG&A expense of $1,129m predominantly includes the $775m charge to provisions relating to the legal settlement with Chugai and $293m of fair value movements on contingent consideration arising from business combinations.

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

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

[68] Spot rates on 30 June 2022.

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

[70] Sustainable Markets Initiative.

[71] American Society of Clinical Oncology.

[72] Programmed cell death protein 1.

[73] Programmed death-ligand 1.

[74] Prescription Drug User Fee Act.

[75] The PDFUA date is the day the US FDA targets for regulatory decision.

[76] National Comprehensive Cancer Network.

[77] Progression free survival.

[78] Overall survival.

[79] US Food and Drug Agency

[80] Oestrogen Receptor 1 gene.

[81] Transient ischaemic attack of stroke.

[82] Transthyretin.

[83] Global Initiative for Asthma.

[84] Lower respiratory tract infection.

[85]   The Q2 2022 and Q2 2021 information in respect of the three months ended 30 June 2022 and 30 June 2021 respectively included in the Interim financial statements has not been reviewed by PricewaterhouseCoopers LLP.

[86] The Condensed consolidated statement of financial position as at 30 June 2022 and 30 June 2021 has been reviewed by PricewaterhouseCoopers LLP. The Condensed consolidated statement of financial position as at 31 December 2021 has been audited by PricewaterhouseCoopers LLP.

[87] 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 Q2 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.

[88] 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 Q2 growth rates on medicines acquired with Alexion have been calculated on a pro forma basis comparing to the corresponding period in the prior year, pre-acquisition as previously published by Alexion. The growth rates shown for Rare Disease and CVRM disease area totals include these pro forma adjustments.

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