Half-year Report

AstraZeneca PLC
28 July 2023
 

AstraZeneca

28 July 2023

H1 and Q2 2023 results

 

Strong revenue and EPS growth, reflecting momentum of recent launches and robust commercial execution

 

Revenue and EPS summary

 




H1 2023



Q2 2023





% Change


% Change

 

 

$m

Actual

CER[1]

$m

Actual

CER

- Product Sales


21,448 

(1)

10,882 

- Alliance Revenue[2]


627 

>2x 

>2x 

341 

>2x 

>2x 

- Collaboration Revenue2


220 

(16)

(15)

193 

n/m 

n/m 

Total Revenue


22,295 

11,416 

Total Revenue ex COVID-19

 

21,961 

12 

16 

11,237 

14 

17 

Reported[3] EPS[4]


$2.34 

>4x 

>6x 

$1.17 

>5x 

>9x 

Core[5] EPS


$4.07 

13 

21 

$2.15 

25 

38 

 

Financial performance (H1 2023 figures unless otherwise stated, growth numbers at CER)

 

‒    Total Revenue $22,295m, up 4% despite a decline of $2,181m from COVID-19 medicines[6]

 

‒    Excluding COVID-19 medicines, Total Revenue increased 16% and Product Sales increased 15%

 

‒    Total Revenue from Oncology medicines increased 22%, CVRM[7] 20%, R&I[8] 10%, and Rare Disease 12%

 

‒    Core Product Sales Gross Margin[9] of 83%, up three percentage points, reflecting the decline in sales of lower margin COVID‑19 medicines, the cost of production in prior periods, and ongoing mix shift to more speciality medicines

 

‒    In Q2 2023, Core Other operating income and expense included the previously-announced gain resulting from an update to the contractual relationships for Beyfortus (nirsevimab), totalling $712m

 

‒    Core EPS increased 21% to $4.07. Interim dividend maintained at $0.93 (71.8 pence, 9.64 SEK)

 

‒    Reiterating guidance for FY 2023 Total Revenue and Core EPS

 

Pascal Soriot, Chief Executive Officer, AstraZeneca, said:

 

"Each of our non-COVID-19 therapy areas saw double-digit revenue growth, with eight medicines delivering more than $1bn of revenue in the first half, demonstrating the strength of our business. Several medicines grew rapidly including Ultomiris, Imfinzi/Imjudo and Farxiga, with revenues up 64%, 57% and 40% respectively. 

 

Our pipeline momentum continues with eight positive pivotal trials for our Oncology medicines so far this year, and we are encouraged by the positive data from TROPION-Lung01, the first pivotal trial of datopotamab deruxtecan. We look forward to sharing the data with the medical community at an upcoming medical congress and are proceeding to file the data with the US Food and Drug Administration.

 

And finally, as part of our flagship sustainability programme, Ambition Zero Carbon, we announced a $400m investment in AZ Forest, raising our commitment to plant 200 million trees by 2030."

 

Key milestones achieved since the prior results announcement

 

‒    Key positive read-outs: datopotamab deruxtecan in lung cancer (TROPION-Lung01), Tagrisso in NSCLC[10] (FLAURA2), Lynparza + Imfinzi in endometrial cancer (DUO-E), Imfinzi in gastric and gastroesophageal cancers (MATTERHORN)                       

 

‒    Key regulatory approvals: US approvals for Lynparza in BRCA-mutated prostate cancer (PROpel), Farxiga in HF[11] regardless of ejection fraction (DELIVER), and Beyfortus for the prevention of RSV[12]; EU approvals for Ultomiris in NMOSD[13]; China approval for Enhertu in HER2[14]-low metastatic breast cancer, Soliris in gMG[15] and Koselugo in neurofibromatosis

 

‒    Other milestones: capivasertib in combination with Faslodex granted priority review in the US for advanced HR[16]-positive breast cancer

 

Guidance

 

The Company reiterates guidance for FY 2023 at CER, based on the average foreign exchange rates through 2022.

 

Total Revenue is expected to increase by a low-to-mid single-digit percentage.

Excluding COVID-19 medicines, Total Revenue is expected to increase by a low double-digit percentage.

Core EPS is expected to increase by a high single-digit to low double-digit percentage.

 

‒    Total Revenue from COVID-19 medicines (Vaxzevria[17] and COVID‑19 mAbs[18]) is expected to decline significantly in FY 2023

 

‒    Total Revenue from China is expected to return to growth and increase by a low-to-mid single-digit (previously low single-digit) percentage in FY 2023

 

‒    Alliance Revenue and Collaboration Revenue are both expected to increase[19], driven by continued growth of our partnered medicines and success-based milestones

 

‒    Core Operating expenses are expected to increase by a low-to-mid single-digit percentage, driven by investment in recent launches and the ungating of new trials following pipeline success

 

‒    The Core Tax Rate is expected to be between 18-22%

 

The Company is unable to provide guidance on a Reported basis because it cannot reliably forecast material elements of the Reported results, 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 2023 were to remain at the average rates seen in June 2023, it is anticipated that FY 2023 Total Revenue would incur a low single-digit adverse impact versus the performance at CER, and Core EPS would incur a low-to-mid single-digit adverse impact (previously a low single-digit adverse impact).

.

The Company's foreign exchange rate sensitivity analysis is provided in Table 19.

 

Table 1: Key elements of Total Revenue performance in Q2 2023

 

 

% Change 

 

 

Revenue type 


$m 

Actual 

CER 

 

 

Product Sales 


10,882 


* Double-digit growth at CER in Oncology, CVRM, R&I and Rare Disease

Alliance Revenue


341 

>2x

>2x


* $255m for Enhertu (Q2 2022: $100m)

* $62m for Tezspire (Q2 2022: $13m)

* See Table 6 for further details

Collaboration Revenue 


193 

n/m

n/m


* $180m for COVID-19 mAbs licence payment from Serum Institute of India Pvt. Ltd. (SII)

* See Table 7 for further details

Total Revenue 


11,416 


* Excluding COVID-19 medicines, Q2 2023 Total Revenue increased by 14% (17% at CER)

Therapy areas 


$m 

Actual %

CER %

 

 

Oncology 


4,646 

22 

25 


* Strong performance across key medicines and regions

* No sales or regulatory milestones from Lynparza in the quarter (Q2 2022: $nil)

CVRM 


2,682 

14 

18 

 

* Farxiga up 37% (41% CER), Lokelma up 51% (55% at CER), roxadustat up 42% (51% CER), Brilinta declined 5% (3% at CER)

R&I 


1,547 

11 

14 


* Fasenra up 15% (16% CER), Breztri up 75% (79% CER). Saphnelo and Tezspire continue to grow rapidly during their launch phase

V&I[20]


278 

(72)

(71)


* COVID-19 mAbs: $180m from Collaboration Revenue, -$1m Product Sales (Q2 2022: $445m)

* Vaxzevria: $nil (Q2 2022: $455m)

Rare Disease 


1,953 

10 


* Ultomiris up 64% (66% at CER), partially offset by decline in Soliris of 21% (19% at CER)

* Strensiq up 24% (25% at CER) reflecting strong patient demand and geographic expansion

Other Medicines 


311 

(27)

(23)


* Nexium generic competition in Japan

Total Revenue 


11,416 



Regions inc. COVID-19


$m 

Actual %

CER %

 

 

US 


4,782 

10 

10 



Emerging Markets 


3,115 

12 

19 



- China 

 

1,441 

-

 


- Ex-China Emerging Markets 

 

1,674 

23 

32 

 


Europe 


2,211 



Established RoW 


1,308 

(16)

(9)



Total Revenue inc. COVID-19


11,416 



Regions ex. COVID-19 

 

$m 

Actual %

CER %

 


 

US 


4,782 

17 

17 



Emerging Markets 


2,938 

13 

21 



- China 

 

1,441 


* Fourth consecutive quarter of growth at CER

- Ex-China Emerging Markets 

 

1,497 

28 

39 



Europe 


2,208 

18 

18 



Established RoW 


1,309 



Total Revenue ex. COVID-19


11,237 

14 

17 



 

Table 2: Key elements of financial performance in Q2 2023

 

Metric

Reported

Reported change

Core

Core
change


Comments[21]

Total Revenue

$11,416m

6% Actual   9% CER

$11,416m

6% Actual   9% CER


* Excluding COVID-19 medicines, Q2 2023 Total Revenue increased by 14% (17% at CER)

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

Product Sales Gross Margin

82%

+10pp Actual   +12pp CER

82%

Stable at Actual

+2pp CER


+  Increasing mix of sales from Oncology and Rare Disease medicines

+  Decreasing mix of Vaxzevria sales

‒   Increasing mix of products with profit-sharing arrangements, where AstraZeneca books Product Sales and records an expense in COGS[22] for the profit share due to its partner

* Variations in Product Sales Gross Margin can be expected between periods due to product seasonality, foreign exchange fluctuations, cost inflation and other effects

R&D expense

$2,667m

5% Actual   7% CER

$2,568m

6% Actual   8% CER


+  Increased investment in the pipeline

* Core R&D-to-Total Revenue ratio of 22%
(Q2 2022: 23%)

* Year-on-year comparisons can be impacted by differences in cost phasing driven by study starts and execution

SG&A expense

$4,986m

6% Actual   8% CER

$3,296m

5% Actual   8% CER


+  Market development for recent launches and pre-launch activities

+  Reported SG&A impacted by increased charges for legal provisions, including a $510m charge to provisions relating to a legal settlement in Q2 2023 (see Note 6)

* Core SG&A-to-Total Revenue ratio of 29%
(Q2 2022: 29%)

* Year-on-year comparisons can be impacted by differences in cost phasing

Other operating income and expense[23]

$784m

>6x Actual   >6x CER

$784m

>6x Actual   >6x CER


+  Reported and Core Other operating income includes a gain of $712m from an update to the contractual relationships for Beyfortus (nirsevimab)

Operating Margin

22%

+17pp Actual   +19pp CER

38%

+6pp Actual   +8pp CER


* See Product Sales Gross Margin, expenses and Other operating income commentary above

* Other operating income contributed seven percentage points to Operating margin in Q2 2023

Net finance expense

$367m

25% Actual   17% CER

$262m

17% Actual   4% CER


+  Higher rates on floating debt and bond issuances, partially offset by higher interest received on cash balances

+  Reported also impacted by the discount unwind on acquisition-related liabilities

Tax rate

13%

n/m

17%

+2pp Actual   +2pp CER


* Variations in the tax rate can be expected between periods

EPS

$1.17

>5x Actual   >9x CER

$2.15

25% Actual   38% CER


* Further details of differences between Reported and Core are shown in Table 14

 

Table 3: Pipeline highlights since prior results announcement

 

Event

Medicine

Indication / Trial

Event

Regulatory approvals and other regulatory actions

Lynparza

Prostate cancer (1st-line) (PROpel)

Regulatory approval (US)

Enhertu

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

Regulatory approval (CN)

Farxiga

HFpEF[24] (DELIVER)

Regulatory approval (US)

Xigduo

Type-2 diabetes (XR formulation)

Regulatory approval (CN)

Beyfortus

RSV (MELODY/MEDLEY)

Regulatory approval (US)

Ultomiris

NMOSD

Regulatory approval (EU, JP)

Koselugo

NF1-PN[25] (paediatric) (SPRINT)

Regulatory approval (CN)

Soliris

gMG

Regulatory approval (CN)

Soliris

gMG (refractory, children and adolescents)

Regulatory approval (EU)

Regulatory submissions
or acceptances

Enhertu

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

Regulatory submission (US)

capivasertib

HR+/HER2-negative breast cancer (2nd-line) (CAPItello-291)

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

Fasenra

Uncontrolled asthma (MIRACLE)

Regulatory submission (CN)


Beyfortus

RSV (MELODY/MEDLEY)

Regulatory submission and Priority Review (CN)


danicopan

PNH[26] with EVH[27]

Regulatory submission (US, JP)

Major Phase III data readouts and other developments

Tagrisso

EGFRm[28] NSCLC (1st-line) (FLAURA2)

Primary endpoint met

Lynparza + Imfinzi

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

Dual primary endpoint met

Lynparza + cediranib

Platinum-resistant or -refractory ovarian cancer (GY005)

Primary endpoint not met

Imfinzi

Resectable, early-stage and locally advanced gastric and gastroesophageal junction cancers (MATTERHORN)

Key secondary endpoint met (pCR[29])

datopotamab deruxtecan

NSCLC (2nd- and 3rd-line)
(TROPION-Lung01)

Dual primary endpoint met (PFS[30])

 

 

 

 

Upcoming pipeline catalysts

 

For a table of anticipated timings of key trial readouts, please refer to page 2 of the Clinical Trials Appendix, available on www.astrazeneca.com/investor-relations.html.

 

Other pipeline updates

 

The clinical development programme for brazikumab in inflammatory bowel diseases was discontinued following a review of brazikumab's development timeline.

 

A Phase III trial for Fasenra in bullous pemphigoid was discontinued for futility (efficacy).

 

Table 4: Phase III trials started since 1 January 2023

 

Medicine

Trial name

Indication

datopotamab deruxtecan

AVANZAR

NSCLC (1st-line)

TROPION-Lung07

Non-squamous NSCLC (1st-line)

camizestrant

CAMBRIA-1

HR-positive/HER2-negative adjuvant breast cancer

Tezspire

CROSSING

Eosinophilic oesophagitis

AZD3152

SUPERNOVA

COVID-19 prophylaxis

Ultomiris

ARTEMIS

Cardiac surgery-associated acute kidney injury

Breztri

LITHOS

Mild to moderate asthma

pMDI[31] portfolio

HFO1234ze

Mucociliary clearance in healthy volunteers

pMDI portfolio

HFO1234ze

Well-controlled or partially-controlled asthma

 

Corporate and business development

 

As announced in April 2023, the contractual relationship between AstraZeneca and Swedish Orphan Biovitrum AB (Sobi) relating to future sales of Beyfortus (nirsevimab) in the US has been replaced by a royalty relationship between Sanofi and Sobi. As a result, a non-current other payable representing AstraZeneca's future obligations to Sobi was eliminated from AstraZeneca's Statement of Financial Position in the quarter, and AstraZeneca recorded a gain of $712m in Core Other operating income.

 

In June 2023, AstraZeneca entered into an exclusive option and license agreement with Quell Therapeutics to develop multiple engineered T-regulator cell therapies that have the potential to be curative in Type-1 diabetes and inflammatory bowel disease indications.

 

In July 2023, AstraZeneca and Ionis Pharmaceuticals Inc. expanded their existing collaboration on eplontersen to also include Latin America. AstraZeneca will pay Ionis $20m for the right to commercialise eplontersen in this region.

 

In July 2023, AstraZeneca and Vaxess Technologies Inc. commenced a collaboration for the evaluation of a novel RNA-based pandemic influenza prototype vaccine in patch format. The collaboration is a part of a broader development programme based on AstraZeneca's February 2023 agreement with the US Government's Department of Defense via the MCDC Consortium, with funding from the Biomedical Advanced Research and Development Authority, to develop an RNA-based pandemic influenza vaccine.

 

In July 2023, Alexion, AstraZeneca Rare Disease (Alexion) and Pfizer Inc. (Pfizer) entered into an agreement for Alexion to purchase and licence the assets of Pfizer's early-stage rare disease gene therapy portfolio for a total consideration of up to $1bn, plus tiered royalties on sales. Alexion plans to close the transaction in Q3 2023, subject to the satisfaction of closing conditions.

 

Sustainability summary

 

In July 2023, AstraZeneca announced a $400m investment in AstraZeneca's AZ Forest programme, raising its commitment to plant 200 million trees by 2030. Global projects involve local communities and ecological experts to deliver reforestation at scale, as well as to support biodiversity and to sustain livelihoods.

 

Management changes

 

Sharon Barr, currently Senior Vice President, Head of Research and Product Development of Alexion, will succeed Mene Pangalos as Executive Vice President, BioPharmaceuticals R&D. Mene is retiring and will step down from his role early next year, after almost fourteen years with the company and an illustrious 35-year career. Sharon will report to Chief Executive Officer, Pascal Soriot and become a member of AstraZeneca's Senior Executive Team as of 1 August.

 

Conference call

 

A conference call and webcast for investors and analysts will begin today, 28 July 2023, at 11:45 UK time. Details can be accessed via astrazeneca.com.

 

Reporting calendar

 

The Company intends to publish its nine month and third quarter results on Thursday 9 November 2023.

 

Operating and financial review

 

All narrative on growth and results in this section is based on actual foreign 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 2023 ('the half' or 'H1 2023') compared to the six-month period to 30 June 2022 ('H1 2022'), or the three-month period to 30 June 2023 ('the quarter' or 'Q2 2023') compared to the three-month period to 30 June 2022 (Q2 2022).

 

Core financial measures, EBITDA, Net debt, Product Sales Gross Margin (previously termed as Gross Margin), Operating Margin and CER 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

 

‒    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 charges and fair value movements relating to contingent consideration on business combinations, imputed finance charges and remeasurement adjustments on certain Other payables arising from intangible asset acquisitions, legal settlements and remeasurement adjustments relating to certain Other payables assumed from the Alexion acquisition

 

‒    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 63 of the Annual Report and Form 20-F Information 2022.

 

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

 

Product Sales Gross Margin (previously termed Gross 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 Product Sales Gross Margin excludes the impact of Alliance Revenue and 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.

 

Operating margin is defined as Operating profit as a percentage of Total Revenue.

 

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.

 

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: Therapy area and medicine performance - Product Sales and Total Revenue

 

 

 

H1 2023 

Q2 2023

 

 

 

 

% Change 

 

 

% Change

Product Sales 

 

$m 

% Total 

Actual 

CER 

$m 

% Total 

Actual 

CER 

Oncology 

 

8,302 

37 

17 

21 

4,382 

38 

18 

22 

- Tagrisso 


2,915 

13 

12 

1,491 

13 

10 

- Imfinzi [32]


1,976 

53 

57 

1,076 

55 

58 

- Lynparza 


1,368 

10 

717 

- Calquence


1,185 

31 

33 

653 

34 

34 

- Enhertu


104 

>3x 

>3x 

67 

>3x 

>3x 

- Orpathys 


22 

(7)

13 

22 

30 

- Zoladex 


459 

(4)

233 

(1)

- Faslodex 


153 

(14)

(7)

78 

(8)

(3)

- Others 


120 

(37)

(33)

54 

(42)

(39)

BioPharmaceuticals: CVRM

 

5,205 

23 

14 

19 

2,675 

23 

14 

18 

- Farxiga 


2,804 

13 

33 

39 

1,505 

13 

36 

41 

- Brilinta 


665 

(1)

331 

(5)

(3)

- Lokelma 


198 

53 

59 

100 

51 

55 

- roxadustat 


134 

48 

59 

73 

46 

56 

- Andexxa


89 

28 

33 

45 

23 

26 

- Crestor 


585 

14 

280 

- Seloken/Toprol-XL 


343 

(27)

(20)

164 

(26)

(21)

- Onglyza


127 

(8)

(4)

65 

(9)

(6)

- Bydureon


89 

(37)

(37)

43 

(41)

(41)

- Others 


171 

(13)

(10)

69 

(30)

(28)

BioPharmaceuticals: R&I 

 

3,066 

14 

10 

1,483 

13 

10 

- Symbicort 


1,288 

600 

(2)

- Fasenra


744 

12 

14 

406 

15 

16 

- Breztri


307 

71 

76 

163 

75 

79 

- Saphnelo 


115 

>3x 

>3x 

68 

>2x 

>2x 

- Tezspire 


30 

n/m 

n/m 

19 

n/m 

n/m 

- Pulmicort 


346 

11 

124 

13 

- Bevespi


29 

(1)

(1)

15 

(1)

(3)

- Daliresp/Daxas


30 

(72)

(72)

17 

(71)

(70)

- Others 


177 

(30)

(26)

71 

(34)

(32)

BioPharmaceuticals: V&I 

 

443 

(84)

(83)

88 

(91)

(90)

- COVID-19 mAbs[33]

 

126 

(86)

(85)

(1)

n/m 

n/m 

- Vaxzevria

 

28 

(98)

(98)

n/m 

n/m 

- Beyfortus


n/m 

n/m 

n/m 

n/m 

- Synagis


284 

87 

16 

- FluMist


n/m 

n/m 

n/m 

n/m 

Rare Disease

 

3,819 

17 

12 

1,953 

17 

10 

- Soliris


1,648 

(18)

(16)

814 

(21)

(19)

- Ultomiris 


1,364 

60 

64 

713 

64 

66 

- Strensiq 


562 

25 

26 

300 

24 

25 

- Koselugo 


159 

57 

57 

80 

28 

30 

- Kanuma 


86 

16 

17 

46 

28 

30 

Other Medicines 

 

613 

(27)

(22)

301 

(28)

(24)

- Nexium 

 

492 

(27)

(22)

248 

(28)

(23)

- Others 


121 

(28)

(25)

53 

(29)

(27)

Product Sales 

 

21,448 

96 

(1)

10,882 

95 

Alliance Revenue

 

627 

>2x 

>2x 

341 

>2x 

>2x 

Collaboration Revenue 

 

220 

(16)

(15)

193 

n/m 

n/m 

Total Revenue

 

22,295 

100 

11,416 

100 

 

Table 6: Alliance Revenue



H1 2023

Q2 2023





% Change

 

 

% Change

 


$m 

% Total 

Actual 

CER 

$m 

% Total 

Actual 

CER 

Enhertu


475 

76 

>2x

>2x

255 

75 

>2x

>2x

Tezspire


105 

17 

>6x

>6x

62 

18 

>4x

>4x

Vaxzevria: royalties


n/m

n/m

n/m

n/m

Other royalty income 


41 

19 

18 

22 

15 

13 

Other Alliance Revenue 


57 

62 

(21)

(17)

Total 


627 

100 

>2x

>2x

341 

100 

>2x

>2x

 

 

Table 7: Collaboration Revenue

 



H1 2023

Q2 2023





% Change

 

 

% Change

 


$m 

% Total 

Actual 

CER 

$m 

% Total 

Actual 

CER 

COVID-19 mAbs: licence fees


180 

82 

n/m

n/m

180 

93 

n/m

n/m

Farxiga: sales milestones 


25 

11 

n/m

n/m

n/m

n/m

Other Collaboration Revenue 


15 

(3)

(1)

12 

>4x

>4x

Total 

 

220 

100 

(16)

(15)

193 

100 

n/m

n/m

 

Table 8: Total Revenue by therapy area

 



H1 2023 

Q2 2023




% Change 



% Change




$m 

% Total 

 Actual 

CER 

$m 

% Total 

 Actual 

CER 

Oncology 


8,794 

39 

18 

22 

4,646 

41 

22 

25 

BioPharmaceuticals


9,051 

41 

(13)

(9)

4,506 

39 

(5)

(2)

- CVRM

 

5,239 

24 

14 

20 

2,682 

23 

14 

18 

- R&I 

 

3,180 

14 

10 

1,547 

14 

11 

14 

- V&I 

 

632 

(77)

(76)

278 

(72)

(71)

Rare Disease


3,819 

17 

12 

1,953 

17 

10 

Other Medicines 


631 

(27)

(22)

311 

(27)

(23)

Total

 

22,295 

100 

11,416 

100 

 

Table 9: Total Revenue by region

 



H1 2023 

Q2 2023





% Change 



% Change



$m 

% Total 

 Actual 

CER 

$m 

% Total 

 Actual 

CER 

US


9,081 

41 

4,782 

42 

10 

10 

Emerging Markets 


6,277 

28 

3,115 

27 

12 

19 

- China 

 

3,043 

14 

1,441 

13 

      -

- Ex-China 

 

3,234 

15 

11 

1,674 

15 

23 

32 

Europe 


4,373 

20 

      -

2,211 

19 

Established RoW 


2,564 

11 

(19)

(11)

1,308 

11 

(16)

(9)

Total 

 

22,295 

100 

11,416 

100 

 

Table 10: Total Revenue by region - excluding COVID-19 medicines

 

 



H1 2023 

Q2 2023





% Change 



% Change



$m 

% Total 

 Actual 

CER 

$m 

% Total 

 Actual 

CER 

US


9,081 

41 

16 

16 

4,782 

43 

17 

17 

Emerging Markets 


6,074 

28 

14 

22 

2,938 

26 

13 

21 

- China 

 

3,043 

14 

1,441 

13 

- Ex-China 

 

3,031 

14 

30 

38 

1,497 

13 

28 

39 

Europe 


4,356 

20 

10 

13 

2,208 

20 

18 

18 

Established RoW 


2,450 

11 

(2)

1,309 

12 

Total 

 

21,961 

100 

12 

16 

11,237 

100 

14 

17 

 

Oncology

 

Oncology Total Revenue of $8,794m in H1 2023 increased by 18% (22% at CER), representing 39% of overall Total Revenue (H1 2022: 34%). There was no Lynparza Collaboration Revenue in H1 2023 (H1 2022: $175m), and Enhertu Alliance Revenue was $475m (H1 2022: $175m). Product Sales increased by 17% (21% at CER) in H1 2023 to $8,302m, reflecting new launches and increased patient access across key brands; partially offset by declines in legacy medicines.

 

Tagrisso

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


2,915


1,102

851

541

421

Actual change


8%


16%

6%

6%

(4%)

CER change


12%


16%

13%

9%

6%

 

Region


 Drivers and commentary

Worldwide


* Increased global demand use of Tagrisso in adjuvant and 1st-line settings

US


* Growth driven by increasing demand in 1st-line and adjuvant settings

Emerging Markets


* Growing demand in adjuvant and 1st-line settings in China, partially offset by impact of first full quarter of NRDL[34] renewal price effective March 2023 and competition

Europe


* Established standard of care in 1st-line and adjuvant settings across EU5[35], with increased adjuvant treatment rates in region

Established RoW


* Further use in 1st-line setting and launch acceleration in adjuvant setting offset by mandatory price reduction in Japan effective June 2023

 

Imfinzi and Imjudo

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


1,976


1,098

183

339

356

Actual change


53%


60%

37%

27%

74%

CER change


57%


60%

47%

30%

92%

 

Region


 Drivers and commentary

Worldwide


* Includes $100m of Total Revenue in the half from Imjudo, which launched in Q4 2022 following approvals in the US for patients with unresectable liver cancer (HIMALAYA) and Stage IV NSCLC (POSEIDON)

* Strong growth across all regions, driven by recent launches (BTC[36], HCC[37], Stage IV NSCLC) and established indications (Stage III NSCLC, SCLC[38])

US


* Continued demand growth driven primarily by BTC and HCC launches (Q3 2022 and Q4 2022 respectively)

Emerging Markets


* Growth across markets driven by BTC launches and recovery of diagnosis and treatment rates following the COVID‑19 pandemic

Europe


* Strong demand growth in SCLC, gaining share from competitors and expanded reimbursement for new launch indications

Established RoW


* Strong demand growth driven by BTC and HCC

 

 

Lynparza

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


1,368


580

278

365

145

Actual change


(7%)


-

15%

(28%)

5%

CER change


(4%)


-

23%

(25%)

15%

 

Product Sales


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


1,368


580

278

365

145

Actual change


6%


-

15%

11%

5%

CER change


10%


-

23%

14%

15%

 

Region


 Drivers and commentary

Worldwide


* Lynparza remains the leading medicine in the PARP[39] inhibitor class globally across four tumour types, as measured by total prescription volume

* No regulatory milestones received in H1 2023

US


* Continued share growth within PARP inhibitor class, offset by reduced overall class use in 2nd-line ovarian cancer and flattening of HRD[40] testing rates in ovarian cancer

Emerging Markets


* Increased demand in China offset by price reduction associated with NRDL re-enlistment that took effect in Q1 2023 for ovarian cancer indications (PSR[41] and BRCAm[42] 1st-line maintenance) and new NRDL enlistment in prostate cancer (PROfound)

Europe


* Growth driven by increased uptake in 1st-line HRD-positive ovarian cancer, gBRCAm[43] HER2‑negative early breast cancer and mCRPC, partially offset by reduced use in 2nd-line ovarian cancer

* Total Revenue in the prior year period included a $175m milestone in Collaboration Revenue

Established RoW


* Growth driven by increased uptake in 1st-line HRD-positive ovarian cancer

 

Enhertu

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


580


339

108

125

8

Actual change


>2x


>2x

>4x

>2x

>3x

CER change


>2x


>2x

>4x

>2x

>3x

 

Region


 Drivers and commentary

Worldwide


* Combined sales of Enhertu, recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted to $1,169m in H1 2023 (H1 2022: $436m)

* AstraZeneca's Total Revenue of $580m in the half includes $475m of Alliance Revenue from its share of gross profit and royalties in territories where Daiichi Sankyo records product sales

US


* US in-market sales, recorded by Daiichi Sankyo, amounted to $712m in the half (H1 2022: $274m)

* Rapid adoption as new standard of care across all launched indications including HER2-low mBC[44] with continued demand from metastatic breast cancer indications as well as additional use in gastric and lung cancer

Emerging Markets


* Strong uptake driven by new approvals and launches

Europe


* Continued growth driven by increased adoption of HER2-positive and HER2-low metastatic breast indications

Established RoW


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

 

Calquence

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


1,185


869

41

225

50

Actual change


31%


18%

>2x

85%

64%

CER change


33%


18%

>2x

92%

75%

 

Region


 Drivers and commentary

Worldwide


* Increased penetration globally; leading BTKi[45] in key markets

US


* Leadership maintained in growing BTKi class, sustained leading share in front line, offset by impact from competition in relapsed refractory setting

EU


* Solid growth continued amidst growing competitive pressure

* Increasing new patient starts following expanded access in key markets

 

Orpathys

 

Total Revenue of $22m (H1 2022: $24m) was driven by its inclusion in the updated NRDL in China from March 2023, for the treatment of patients with NSCLC with MET[46] exon 14 skipping alterations.

 

Other Oncology medicines

 


H1 2023

Change


 

Total Revenue


$m

Actual

CER


Zoladex


475

(3%)

5%

* Increased demand in Emerging Markets

Faslodex


153

(14%)

(7%)

* Generic competition

Other Oncology


120

(37%)

(33%)

* Includes Iressa, Arimidex, Casodex and other older medicines

 

 

BioPharmaceuticals

 

BioPharmaceuticals Total Revenue decreased by 13% (9% at CER) in H1 2023 to $9,051m, representing 41% of overall Total Revenue (H1 2022: 47%). Strong growth from Farxiga and newer R&I medicines offset decreases in revenues from COVID-19 medicines and some older products.

 

BioPharmaceuticals - CVRM

 

CVRM Total Revenue increased by 14% (20% at CER) to $5,239m in H1 2023, driven by the strong Farxiga performance, and represented 24% of overall Total Revenue (H1 2022: 21%).

 

Farxiga

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


2,834


634

1,076

850

274

Actual change


35%


35%

32%

36%

39%

CER change


40%


35%

41%

40%

52%

 

Region


 Drivers and commentary

Worldwide


* Farxiga volume is growing faster than the overall SGLT2[47] market in all major regions, fuelled by heart failure and CKD[48] launches

* Additional benefit from continued growth in the overall SGLT2 inhibitor class

US


* Growth driven by HFrEF[49] and CKD for patients with and without T2D[50] resulting in an increasing market share

Emerging Markets


* Solid growth despite generic competition in some markets

Europe


* Benefited from the addition of cardiovascular outcomes trial data to the label and growth in HFrEF, CKD and the HFpEF approval in February 2023

* Continued strong volume growth in the quarter and expanded class leadership in several key markets

Established RoW


* In Japan, AstraZeneca sells to collaborator Ono Pharmaceutical Co., Ltd, which records in-market sales. Continued volume growth driven by HF and CKD launches

* A sales milestone payment from Ono was recorded in the quarter

 

Brilinta

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


665


357

160

136

12

Actual change


(1%)


2%

10%

(9%)

(57%)

CER change


1%


2%

17%

(7%)

(53%)

 

Region


 Drivers and commentary

US


* Sales in the second quarter impacted by an unfavourable gross-to-net adjustment

Emerging Markets


* Growth in all major Emerging Markets regions following COVID-19 recovery

Europe


* European sales partly impacted by clawbacks

Established RoW


* Sales decline in the second quarter driven by generic entry in Canada

 

Lokelma

 

Total Revenue increased 53% (59% at CER) to $198m in H1 2023 with strong volume growth in all regions. In China, Lokelma was enlisted to the NRDL in January 2022 and is now the leading potassium binder in the country.

 

Roxadustat

 

Total Revenue increased 46% (57% at CER) to $137m, with roxadustat benefitting from increased volumes in China following NRDL renewal in 2022.

 

Andexxa

 

Total Revenue increased 12% (16% at CER) to $89m.

 

Other CVRM medicines

 


H1 2023

Change


Total Revenue


$m

Actual

CER


Crestor


586

7%

14%

* Strong sales growth in Emerging Markets, partly offset by declines in the US and Established RoW

Seloken


343

(27%)

(20%)

* Ongoing impact of China VBP[51] implementation

Onglyza


127

(8%)

(4%)

* Continued decline for DPP-IV[52] class

Bydureon


89

(37%)

(37%)

* Continued competitive pressures

Other CVRM


171

(13%)

(10%)


 

BioPharmaceuticals - R&I

 

Total Revenue of $3,180m from R&I medicines in H1 2023 increased 7% (10% at CER) and represented 14% of overall Total Revenue (H1 2022: 13%). This reflected growth in Fasenra, Tezspire, Breztri and Saphnelo, and stable performances from Symbicort and Pulmicort.

 

Fasenra

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


744


468

29

176

71

Actual change


12%


12%

66%

15%

(2%)

CER change


14%


12%

70%

19%

7%

                                                          

Region


 Drivers and commentary

Worldwide


* Retained market share leadership in severe eosinophilic asthma in major markets 

US


* Maintained share of a growing market, leading to strong volume growth

Emerging Markets


* Continues strong volume growth driven by launch acceleration across key markets 

Europe


* Expanded leadership in severe eosinophilic asthma, with strong volume growth partially offset by price impact in some markets 

Established RoW


* Maintained leadership in Japan

 

Breztri

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


307


165

81

36

25

Actual change


71%


55%

88%

>2x

53%

CER change


76%


55%

>2x

>2x

65%

 

Region


 Drivers and commentary

Worldwide


* Continues to gain market share within the growing FDC[53] triple class across major markets

US


* Consistent share growth within the FDC triple class in new-to-brand[54] and total market

Emerging Markets


* Maintained market share leadership in China with strong triple FDC class penetration 

Europe


* Sustained growth across markets as new launches continue to progress 

Established RoW


* Increasing market share gains within COPD[55] in Japan, and strong launch performance in Canada 

 

Tezspire

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


135

 

105

-

17

13

Actual change


>8x

 

>6x

n/m

n/m

n/m

CER change


>8x

 

>6x

n/m

n/m

n/m

 

Region


 Drivers and commentary

Worldwide


* Tezspire is approved in the US, EU and Japan (as well as other countries) for the treatment of severe asthma without biomarker or phenotypic limitation

* Amgen records sales in the US, and AstraZeneca records its share of US gross profits as Alliance Revenue. AstraZeneca books Product Sales in markets outside the US

* Combined sales of Tezspire by AstraZeneca and Amgen were $257m in H1 2023

US


* Increasing new-to-brand market share with majority of patients new to biologics

* Pre-filled pen approved in February 2023

Europe


* Achieved and maintained new-to-brand leadership in key markets

* Pre-filled pen approved in January 2023

Established RoW


* Japan maintained new-to-brand leadership

 

Saphnelo

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


115


107

1

3

4

Actual change


>3x


>3x

n/m

>4x

>4x

CER change


>3x


>3x

n/m

>4x

>4x

 

Region


 Drivers and commentary

Worldwide


* Demand acceleration in the US, and additional growth driven by ongoing launches in Europe and Japan 

 

Symbicort

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


1,288


434

405

284

165

Actual change


-


(10%)

32%

(9%)

(13%)

CER change


4%


(10%)

43%

(6%)

(6%)

 

Region


 Drivers and commentary

Worldwide


* Symbicort remains the global market leader within a stable ICS[56]/LABA[57] class 

US


* Market share resilience, consolidating leadership in a stable ICS/LABA market

* Generic entry expected in the US in H2 2023 

Emerging Markets


* Strong underlying demand across markets. Post-COVID-19 recovery in China and channel inventory rebuild supported by leading share performance 

Europe


* Continued price and volume erosion from generics and a slowing overall market

Established RoW


* Inventory destocking in some markets and generic erosion in Japan 

 

Other R&I medicines

 


H1 2023

  Change


Total Revenue


$m

Actual

CER


Pulmicort

 

346

4%

11%

* Approximately 80% of revenues from Emerging Markets

* China market share has stabilised, with VBP having been in effect for over 12 months

* Strong growth in Asia, Latin America and Middle East

Bevespi

 

29

(1%)

(1%)


Daliresp

 

30

(72%)

(72%)

* Impacted by uptake of multiple generics following loss of exclusivity in the US

Other R&I


187

(43%)

(40%)

* Collaboration Revenue of $nil (H1 2022: $70m)

* Product Sales of $177m decreased 30% (26% at CER) due to generic competition

 

BioPharmaceuticals - V&I

 

Total Revenue from V&I medicines declined by 77% (76% at CER) to $632m (H1 2022: $2,795m) and represented 3% of overall Total Revenue (H1 2022: 13%).

 

COVID-19 mAbs

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


306


-

185

7

114

Actual change


(67%)


n/m

98%

(95%)

(6%)

CER change


(65%)


n/m

98%

(95%)

6%

 

Region


 Drivers and commentary

Worldwide


* All Product Sales in H1 2023 were derived from sales of Evusheld in the first quarter

Emerging Markets


* $180m license fee from SII in Q2 2023, recorded as Collaboration Revenue

 

 

Vaxzevria

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


28


-

18

10

-

Actual change


(98%)


n/m

(97%)

(96%)

n/m

CER change


(98%)


n/m

(97%)

(96%)

n/m

 

Region


 Drivers and commentary

Worldwide


* Revenue in the period decreased by 98% due to the conclusion of Vaxzevria contracts

 

Other V&I medicines

 


H1 2023

Change


Total Revenue


$m

Actual

CER


Beyfortus

 

2

n/m

n/m

* The first sales to Sanofi of Beyfortus product manufactured by AstraZeneca were booked as Product Sales in Q2 2023

* AZ will also earn 50% of gross profits on sales of Beyfortus in major markets outside the US, and 25% of revenues in rest of world markets, which will be recorded as Alliance Revenue. AstraZeneca has no participation in US profits or losses

Synagis

 

284

1%

8%

* Early start to RSV season in Japan

FluMist


13

n/m

n/m

* $10m milestone received from Daiichi Sankyo in the second quarter following FluMist approval in Japan

 

Rare Disease

 

Total Revenue from Rare Disease medicines increased by 9% (12% at CER) in H1 2023 to $3,819m, representing 17% of overall Total Revenue (H1 2022: 16%).

 

Performance was driven by the continued growth and durability of the C5[58] franchise as well as the strength of Strensiq patient demand.

 

Ultomiris

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


1,364


815

30

311

208

Actual change


60%


79%

-

38%

46%

CER change


64%


79%

2%

42%

62%

 

Region


 Drivers and commentary

Worldwide


* Growth in neurology indications, expansion into new markets and continued conversion from Soliris

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

US


* Growth in neurology indications as well as successful conversion from Soliris across PNH, aHUS[59] and gMG

Emerging Markets


* Launch in new markets

Europe


* Strong demand generation following new launch markets as well as accelerated conversion in key markets

Established RoW


* Continued conversion from Soliris and strong demand following new launches

 

Soliris

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


1,648


893

214

367

174

Actual change


(18%)


(23%)

60%

(16%)

(38%)

CER change


(16%)


(23%)

76%

(14%)

(33%)

 

Region


 Drivers and commentary

US


* Performance impacted by successful conversion of Soliris patients to Ultomiris in PNH, aHUS and gMG, partially offset by Soliris growth in NMOSD

Emerging Markets


* Expansion into new markets as well as favourable timing of tender orders in some markets

Europe
Established RoW


* Successful conversion from Soliris to Ultomiris, partially offset by growth in NMOSD

 

Strensiq

 

Total Revenue


Worldwide


US

Emerging Markets

Europe

Established RoW

H1 2023 $m


562


453

24

42

43

Actual change


25%


28%

33%

5%

12%

CER change


26%


28%

26%

8%

23%

 

Region


 Drivers and commentary

Worldwide


* Strong patient demand as well as geographic expansion

 

Other Rare Disease medicines

 


H1 2023

Change


Total Revenue


$m

Actual

CER

Commentary

Koselugo


159

57%

57%

* Expansion in new markets

Kanuma


86

16%

17%

* Continued demand growth in ex-US markets

 

Other medicines (outside the main therapy areas)

 


H1 2023

Change


Total Revenue


$m

Actual

CER

Commentary

Nexium

 

500

(27%)

(22%)

* Generic launches in Japan in the latter part of 2022

Others


131

(26%)

(23%)

* Continued impact of generic competition

 

 

Financial performance

 

Table 11: Reported Profit and Loss

 



H1 2023

H1 2022

% Change 

Q2 2023

Q2 2022

% Change

 

 

$m 

$m 

Actual

CER

$m 

$m 

Actual

CER

 

 

Total Revenue

 

22,295 

22,161 

11,416 

10,771 

- Product Sales


21,448 

21,610 

(1)

10,882 

10,630 

- Alliance Revenue


627 

290 

>2x

>2x

341 

138 

>2x

>2x

- Collaboration Revenue


220 

261 

(16)

(15)

193 

n/m

n/m

Cost of sales


(3,865)

(6,509)

(41)

(41)

(1,960)

(2,998)

(35)

(38)

Gross profit

 

18,430 

15,652 

18 

24 

9,456 

7,773 

22 

28 

Product Sales Gross Margin

 

82.0% 

69.9% 

+12pp 

+13pp 

82.0% 

71.8% 

+10pp 

+12pp 

Distribution expense


(265)

(254)

(131)

(129)

% Total Revenue


1.2% 

1.1% 

1.1% 

1.2% 

R&D expense


(5,278)

(4,679)

13 

16 

(2,667)

(2,546)

% Total Revenue


23.7% 

21.1% 

-3pp 

-2pp 

23.4% 

23.6% 

SG&A expense


(9,045)

(9,521)

(5)

(2)

(4,986)

(4,681)

% Total Revenue


40.6% 

43.0% 

+2pp 

+3pp 

43.7% 

43.5% 

OOI[60] & expense


1,163 

219 

>5x

>5x

784 

122 

>6x

>6x

% Total Revenue


5.2% 

1.0% 

+4pp 

+4pp 

6.9% 

1.1% 

+6pp 

+6pp 

Operating profit

 

5,005 

1,417 

>3x

>4x

2,456 

539 

>4x

>6x

Operating Margin

 

22.4% 

6.4% 

+16pp 

+17pp 

21.5% 

5.0% 

+17pp 

+19pp 

Net finance expense


(654)

(612)

(367)

(293)

25 

17 

Joint ventures and associates


(1)

(5)

(71)

(69)

(1)

n/m

n/m

Profit before tax

 

4,350 

800 

>5x

>6x

2,088 

247 

>8x

n/m

Taxation


(726)

(52)

n/m

n/m

(268)

113 

n/m

n/m

Tax rate

 

17% 

7% 



13% 

-46% 

 

 

Profit after tax

 

3,624 

748 

>4x

>6x

1,820 

360 

>5x

>9x

Earnings per share

 

$2.34 

$0.48 

>4x

>6x

$1.17 

$0.23 

>5x

>9x

 

Table 12: Reconciliation of Reported Profit before tax to EBITDA

 



H1 2023

H1 2022

% Change

Q2 2023

Q2 2022

% Change



$m

$m 

Actual 

CER 

$m

$m 

Actual 

CER 

Reported Profit before tax 


4,350 

800 

>5x

>6x

2,088 

247 

>8x

n/m

Net finance expense 


654 

612 

367 

293 

25 

17 

Joint ventures and associates 


(71)

(69)

(1)

n/m

n/m

Depreciation, amortisation and impairment 


2,778 

2,666 

1,276 

1,357 

(6)

(4)

EBITDA 


7,783 

4,083 

91 

>2x

3,732 

1,896 

97 

>2x

 

EBITDA for the comparative H1 2022 was negatively impacted by $2,318m unwind of inventory fair value uplift recognised on the acquisition of Alexion. EBITDA for the comparative Q2 2022 was negatively impacted by $1,138m unwind of inventory fair value uplift recognised on the acquisition of Alexion. This unwind had a $55m negative impact on H1 2023 and a $19m negative impact on Q2 2023. It will continue to be minimal in future quarters and will unwind fully over the next two quarters.

 

Table 13: Reconciliation of Reported to Core financial measures: H1 2023

 

H1 2023


Reported

Restructuring

Intangible Asset Amortisation & Impairments

Acquisition
of Alexion

Other[61]

Core

Core

% Change



$m 

$m 

$m 

$m 

$m 

$m 

Actual 

CER 

Gross profit

 

18,430 

118 

16 

57 

18,618 

Product Sales Gross Margin

 

82.0% 

 

 

 

 

82.9% 

+2pp 

+3pp 

Distribution expense


(265)

(265)

R&D expense


(5,278)

69 

337 

(4,868)

SG&A expense


(9,045)

102 

1,906 

683 

(6,350)

Total operating expense


(14,588)

171 

2,243 

684 

(11,483)

Other operating income & expense


1,163 

(61)

1,102 

>5x

>5x

Operating profit

 

5,005 

228 

2,259 

64 

681 

8,237 

12 

20 

Operating Margin

 

22.4% 

 

 

 

 

36.9% 

+4pp 

+5pp 

Net finance expense


(654)

152 

(502)

Taxation


(726)

(52)

(428)

(15)

(204)

(1,425)

14 

22 

EPS

 

$2.34 

$0.11 

$1.18 

$0.03 

$0.41 

$4.07 

13 

21 

 

Table 14: Reconciliation of Reported to Core financial measures: Q2 2023

 

Q2 2023


Reported

Restructuring

Intangible Asset Amortisation & Impairments

Acquisition
of Alexion

Other54

Core

Core

% Change



$m 

$m 

$m 

$m 

$m 

$m 

Actual 

CER 

Gross profit

 

9,456 

23 

20 

(5)

9,502 

12 

Product Sales Gross Margin

 

82.0% 

 

 

 

 

82.4% 

+2pp 

Distribution expense


(131)

(131)

R&D expense


(2,667)

39 

57 

(2,568)

SG&A expense


(4,986)

61 

952 

675 

(3,296)

Total operating expense


(7,784)

100 

1,009 

677 

(5,995)

Other operating income & expense


784 

784 

>6x

>6x

Operating profit

 

2,456 

123 

1,017 

23 

672 

4,291 

27 

39 

Operating Margin

 

21.5% 

 

 

 

 

37.6% 

+6pp 

+8pp 

Net finance expense


(367)

- 

- 

- 

105 

(262)

17 

Taxation


(268)

(28)

(197)

(6)

(195)

(694)

44 

62 

EPS

 

$1.17 

$0.06 

$0.53 

$0.01 

$0.38 

$2.15 

25 

38 

 

Profit and Loss drivers

 

Gross profit

 

‒    The calculation of Reported and Core Product Sales Gross Margin excludes the impact of Alliance Revenue and Collaboration Revenue. The change in Product Sales Gross Margin (Reported and Core) in the half was impacted by:

 

‒    Positive effects from product mix. The increased contribution from Rare Disease and Oncology medicines had a positive impact on the Product Sales Gross Margin. Vaxzevria sales, which are dilutive to Product Sales Gross Margin, declined substantially

 

‒    Dilutive effects from product mix. The rising contribution of Product Sales with profit sharing arrangements (Lynparza, Enhertu and Tezspire) has a negative impact on Product Sales Gross Margin because AstraZeneca records product revenues in certain markets but pays away a share of the gross profit to its collaboration partners

 

‒    Dilutive effects from geographic mix. Emerging Markets, where Product Sales Gross Margin tends to be below the Company average, grew as a proportion of Total Revenue excluding COVID-19 medicines

 

‒    Variations in Product Sales Gross Margin performance between periods can continue to be expected due to product seasonality, foreign exchange fluctuations, cost inflation and other effects. The full impact of cost inflation is not seen in the Income Statement until older inventory built at lower cost has been sold; for some product lines the lag between inflation and impact can be several quarters

 

R&D expense

 

‒    The change in R&D expense (Reported and Core) in the half was impacted by:

 

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

 

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

 

‒    Reported R&D expense was also impacted by intangible asset impairments

 

SG&A expense

 

‒    The change in SG&A expense (Reported and Core) in the half was driven primarily by market development activities for launches

 

‒    Reported SG&A expense was also impacted by amortisation of intangible assets related to the Alexion acquisition and other acquisitions and collaborations

 

‒    Reported SG&A expense was also impacted by a $510m charge to provisions relating to a legal settlement in Q2 2023 and the prior year period was impacted by a $775m legal settlement with Chugai Pharmaceutical Co. Ltd

 

Other operating income

 

‒    Reported and Core Other operating income in the half included a $712m gain resulting from an update to the contractual relationships for Beyfortus (nirsevimab), a $241m gain on the disposal of the US rights to Pulmicort Flexhaler, and other disposal proceeds on the sale of tangible assets, and royalties on certain medicines

 

Net finance expense

 

‒    The increase in Net finance expense (Reported and Core) in the half was primarily driven by increased interest expense on floating rate debt and the interest on the $3.8bn of bonds issued in the period, partially offset by increased interest income on cash balances. Reported Net finance expense also increased due to changes in the discount unwind on acquisition related liabilities

 

Taxation

 

‒    The effective Reported Tax rate for the half was 17% (H1 2022: 7%) and the Core Tax rate was 18% (H1 2022: 18%). The Reported Tax rate was lower in H1 2022 because Reported Tax rate is influenced by the tax rates in territories where profit is earned and Reported Profit before tax was significantly lower during H1 2022 which increases the rate impact of benefits from items such as intellectual property incentive regimes

 

‒    The net cash paid for the half was $1,061m (H1 2022: $1,006m), representing 24% of Reported Profit before tax (H1 2022: 126%)

 

‒    On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational top-up tax, effective for accounting periods starting on or after 31 December 2023. The Company has applied the exception under the IAS 12 'Income Taxes' amendment for recognising and disclosing information about deferred tax assets and liabilities related to top-up income taxes. The Company is currently assessing the impact of these rules upon its financial statements

 

Dividend

 

‒    An interim dividend of $0.93 per share (71.8 pence, 9.64 SEK) has been declared. Dividend payments are normally paid as follows:

 

‒    First interim dividend - announced with half-year and second-quarter results and paid in September

 

‒    Second interim dividend - announced with full-year and fourth-quarter results and paid in March

 

Table 15: Cash Flow summary

 



H1 2023 

H1 2022 

Change 



$m 

$m 

$m 

Reported Operating profit


5,005 

1,417 

3,588 

Depreciation, amortisation and impairment


2,778 

2,666 

112 

Decrease in working capital and short-term provisions


(747)

2,391 

(3,138)

Gains on disposal of intangible assets


(249)

(81)

(168)

Fair value movements on contingent consideration arising from

business combinations


202 

293 

(91)

Non-cash and other movements


(594)

(814)

220 

Interest paid


(483)

(386)

(97)

Taxation paid


(1,061)

(1,006)

(55)

Net cash inflow from operating activities


4,851 

4,480 

371 

Net cash inflow before financing activities


3,085 

3,512 

(427)

Net cash outflow from financing activities


(3,550)

(5,035)

1,485 

 

 

In H1 2022, the Reported Operating profit of $1,417m included a negative impact of $2,318m relating to the unwind of the inventory fair value uplift recognised on the acquisition of Alexion. This was 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 had no impact on Net cash inflow from operating activities. This unwind had $55m negative impact on H1 2023 Reported operating profit and offsetting positive impact on Working capital movements, and will continue to be minimal in future quarters. As a result of the update to the contractual relationships between AstraZeneca, Sobi and Sanofi relating to the future sales of Beyfortus (nirsevimab) in the US, a gain of $712m has been recorded in non-cash and other movements, with no overall net impact on the Net cash inflow from operating activities.

 

The change in Net cash inflow before financing activities is primarily driven by the movement in Purchase of intangible assets of $1,436m, including the acquisition of CinCor, in the half year to 30 June 2023.

 

Included within Net cash inflow before financing activities is a movement in the profit-participation liability of $175m, resulting from the cash receipt from Sobi in Q1 2023 after achievement of a regulatory milestone. The associated cash flow is presented within investing activities.

 

The decrease in Net cash outflow from financing activities of $1,485m is primarily driven by the Issue of loans and borrowings of $3,816m, offset by the increase in Repayment of loans and borrowings of $2,151m.

 

Capital expenditure

 

Capital expenditure amounted to $517m in the half to 30 June 2023 (H1 2022: $472m).

 

Table 16: Net debt summary


 

At 30 

 Jun 2023 

At 31 

Dec 2022 

At 30 

Jun 2022 


 

$m 

$m 

$m 

Cash and cash equivalents


5,664 

6,166 

4,817 

Other investmentss


148 

239 

70 

Cash and investments

 

5,812 

6,405 

4,887 

Overdrafts and short-term borrowings


(421)

(350)

(747)

Lease liabilities


(953)

(953)

(905)

Current instalments of loans


(4,135)

(4,964)

(1,415)

Non-current instalments of loans


(24,329)

(22,965)

(26,461)

Interest-bearing loans and borrowings (Gross debt)

 

(29,838)

(29,232)

(29,528)

Net derivatives


56 

(96)

(48)

Net debt

 

(23,970)

(22,923)

(24,689)

 

 

Net debt increased by $1,047m in the half to 30 June 2023 to $23,970m. 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 and further details on Net Debt 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, 4.875% Notes due 2028, 1.750% Notes due 2028, 4.900% Notes due 2030, 2.250% Notes due 2031 and 4.875% Notes due 2033 (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[62] 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 reports on Form 6-K furnished to the SEC on 3 March 2023 and 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 17: Obligor group summarised Statement of comprehensive incomec

 


 

H1 2023

H1 2022


 

$m 

$m 

Total Revenue


Gross profit


Operating loss


(2)

(2)

Loss for the period


(480)

(275)

Transactions with subsidiaries that are not issuers or guarantors


9,487 

331 

 

Table 18: Obligor group summarised Statement of financial position

 


 

At 30 Jun 2023 

At 30 Jun 2022 


 

$m 

$m 

Current assets


Non-current assets


Current liabilities


(4,091)

(1,838)

Non-current liabilities


(24,165)

(23,994)

Amounts due from subsidiaries that are not issuers or guarantors


15,761 

7,459 

Amounts due to subsidiaries that are not issuers or guarantors


(290)

(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 19: Currency sensitivities

 

The Company provides the following currency-sensitivity information

 

 


 

 


Average

rates vs USD


Annual impact ($m) of 5% strengthening (FY 2023 average rate vs FY 2022 average) [63]

Currency

Primary Relevance

 

FY   
2022
[64]

YTD 
2023
[65]

Change

 (%)

June  
2023
[66]

Change[67]

 (%)

 

Total Revenue

Core Operating Profit

EUR

Total Revenue


0.95 

0.92

0.92


323 

159 

CNY

Total Revenue


6.74 

6.94

(3)

7.17

(6)


309 

174 

JPY

Total Revenue


131.59 

134.92

(2)

141.34

(7)


181 

122 

Other[68]









385 

202 

GBP

Operating expense


0.81 

0.81

(0)

0.79


46 

(92)

SEK

Operating expense


10.12 

10.48

(3)

10.77

(6)


7 

(55)

 

Related-party transactions

 

There have been no significant related-party transactions in the period.

 

Principal risks and uncertainties

 

The Principal Risks and uncertainties facing the Group are set out on pages 56 to 59 of the Annual Report and Form 20-F Information 2022, and summarised below. They are not expected to change in respect of the second six months of the financial year and remain appropriate for the Group.

 

In summary, the principal risks and uncertainties listed in the Annual Report and 20-F Information 2022 are:

 

1.  Product pipeline: failure or delay in the delivery of AstraZeneca's pipeline or launch of new medicines; failure to meet regulatory or ethical requirements for medicine development or approval.

 

2.  Commercialisation risks: pricing, affordability, access and competitive pressures; failures or delays in the quality or execution of the Group's commercial strategies.

 

3.  Supply-chain and business-execution risks: failure to maintain supply of compliant, quality medicines; failure in information technology or cybersecurity; failure to attract, develop, engage and retain a diverse, talented and capable workforce.

 

4.  Legal, regulatory and compliance risks: safety and efficacy of marketed medicines is questioned; adverse outcome of litigation and / or governmental investigations; IP risks related to our products.

 

5.  Economic and financial risks: failure to achieve strategic plans or meet targets or expectations; geopolitical and / or macroeconomic volatility disrupts the operation of our global business.

 

Sustainability

 

Since the last quarterly report, AstraZeneca:

 

Access to healthcare

 

‒    Participated in the World Health Assembly in Geneva in May, including through high-level meetings on lung health, cancer and chronic kidney disease and Chair Michel DemarŽ's formal participation at the World Health Organization public session on "The role of the Health Community in Climate Action: taking stock and moving forward" alongside the Director-General of the World Health Organization, CEO of COP28, German Ambassador to the U.N. and other dignitaries

 

‒    The Partnership for Health System Sustainability and Resilience (PHSSR) continued to create research and engagement opportunities for stakeholders in Brazil, Greece, Canada, Italy and Germany, activating policymakers and calling for action to strengthen health systems. The PHSSR also published its 2023 PHSSR Summary Report in May, which underscores the need for both health system resilience in the face of shocks and stresses, and sustainability amid longer-term demographic, social, technological, economic and environmental shifts. In addition, an EU PHSSR expert advisory group was convened to develop EU-level recommendations focused on non-communicable disease prevention and early detection

 

‒    Healthy Heart Africa (HHA) continued to contribute to healthcare system strengthening in Africa, through partnership between global and local stakeholders. HHA has trained more than 10,600 healthcare workers and has conducted more than 38.5 million blood pressure screenings since its launch in 2014, achieving a record one million screenings per month in February to June 2023 (data as at end of June 2023)

 

‒    Young Health Programme exceeded 10 million young people reached with information about NCD risk factors through prevention programming and advocacy work since launch in 2010. AstraZeneca and UNICEF were recognised with the Better Society Award for Best Partnership with an International Charity for the programme's impact

 

‒    A.Catalyst Network, the Company's global network of health innovation hubs, launched a new hub in Brazil which will focus on solutions for early diagnosis, disease awareness and the interconnection of electronic medical records in the health ecosystem, as well as reducing the emissions from the delivery of healthcare

 

Environmental protection

 

‒    Announced an innovative partnership with Vanguard Renewables to decarbonise all AstraZeneca research and manufacturing sites in the US by the end of 2026. Food and agricultural waste will be turned into renewable natural gas, a source of clean heat to power the Company's US sites. This partnership will deliver emissions reductions, contribute to the circular economy and capture methane that would have otherwise gone into atmosphere. Delivery of the renewable natural gas began in June 2023, and by 2026 as much as 650,000 million British thermal units of renewable natural gas will be produced, equivalent to the energy required to heat more than 17,800 US homes for a year

 

‒    Announced an expansion of the Company's global reforestation and biodiversity programme, AZ Forest, increasing investment to $400m to plant and maintain a total of 200 million trees by 2030, across six continents. This commitment includes new or expanded projects in Brazil, India, Vietnam, Ghana and Rwanda that will contribute to the Company's Ambition Zero Carbon programme, restore nature, promote biodiversity and build ecological and community resilience, spanning over 100,000 hectares worldwide

 

‒    CEO Pascal Soriot signed an Open Letter to suppliers through the Sustainable Markets Initiative Health Systems Task Force which he convenes, alongside six global pharmaceuticals leaders. This letter, endorsed by the World Health Organisation, calls on suppliers to commit to the joint, minimum climate and sustainability targets the Task Force has set, to help address the emissions across the healthcare value chain

 

‒    CEO Pascal Soriot gave a keynote address on the interconnection between population and planetary health at London Climate Week in June, highlighting the need to decarbonise healthcare which contributes approximately 5% of global greenhouse gas emissions. In May, Pam Cheng, EVP Global Operations & IT and Chief Sustainability Officer, gave a keynote speech at a G7 event in Japan on the interconnection between planetary and human health, led by the Health and Global Policy Institute and Nagasaki University

 

‒    Launched Activate, a new programme targeting the reduction of the environmental impact of the production of active pharmaceutical ingredients, together with Manufacture 2030 and five other pharmaceutical companies in 21 countries. Initially announced at COP27, the programme is built on opportunities identified for cross-industry collaboration and aims to make an impact across a key segment of the pharmaceutical industry's value chain

 

Ethics and transparency

 

‒    Held an internal panel discussion on Diversity in Clinical Trials, chaired by a member of the Global Inclusion & Diversity Council and featuring experts from across AstraZeneca. The focus was on the changes the Company is making in its approach, and the impact the work is having on patient populations

 

‒    Marked "World Day for Cultural Diversity for Dialogue and Development" with an employee engagement campaign giving colleagues the opportunity to share information about their cultures. Used the day to highlight the importance of cultural intelligence in a global organisation and the impact it can have on performance as well as launching a cultural intelligence toolkit to employees

 

‒    Marked Pride Month with posts across social media channels, events held internally across the globe and participation from the AZ Pride Employee Resources groups at Pride marches and parades across Asia, Europe, South America and the US

 

Research and development

 

This section covers R&D events and milestones that have occurred since the prior results announcement on 27 April 2023, up to and including events on 27 July 2023.

 

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 practice-changing data from cancer medicines across its robust pipeline at the 2023 American Society of Clinical Oncology (ASCO) congress in June 2023. More than 130 abstracts featured 22 approved and potential new medicines across the Company's diverse oncology portfolio and pipeline, including 11 oral presentations as well as the Company's fifth consecutive plenary presentation, featuring Tagrisso Phase III ADAURA overall survival data.

 

Tagrisso

 

Event



Commentary

Phase III trial readout

FLAURA2


Met primary endpoint demonstrating Tagrisso in combination with chemotherapy resulted in a statistically significant and clinically meaningful improvement in PFS compared to Tagrisso alone for patients with locally advanced or metastatic EGFRm NSCLC. Data to be featured as presidential plenary at the World Conference on Lung Cancer 2023. (May 2023)

Presentation: ASCO

ADAURA


Results from updated analysis of the ADAURA Phase III trial, presented at ASCO, demonstrated Tagrisso reduced the risk of death by 51% compared to placebo in both the primary analysis population (Stages II-IIIA), and in the overall trial population (Stages IB-IIIA). (June 2023)

 

Imfinzi and Imjudo

 

Event



Commentary

Phase III trial readout

MATTERHORN

 

Met key secondary endpoint demonstrating Imfinzi added to standard-of-care FLOT[69] neoadjuvant chemotherapy resulted in a statistically significant and clinically meaningful improvement in the key secondary endpoint of pCR versus neoadjuvant chemotherapy alone for patients with resectable, early-stage and locally advanced gastric and gastroesophageal junction cancers. (June 2023)

Presentation: ESMO GI[70]

HIMALAYA

 

Updated results showed Imfinzi plus Imjudo demonstrated a sustained, clinically meaningful 22% reduction in risk of death versus sorafenib in patients with unresectable HCC who had not received prior systemic therapy and were not eligible for localised treatment. (June 2023)

 

Lynparza

 

Event



Commentary

Phase III trial readout

DUO-E

(Lynparza and Imfinzi)


Met primary endpoint, demonstrating that Imfinzi in combination with platinum-based chemotherapy followed by either Imfinzi plus Lynparza or Imfinzi alone as maintenance therapy resulted in a statistically significant and clinically meaningful improvement in PFS compared to standard-of-care chemotherapy alone in patients with newly diagnosed advanced or recurrent endometrial cancer. (May 2023)

Approval

US


Lynparza in combination with abiraterone and prednisone or prednisolone for the treatment of adult patients with deleterious or suspected deleterious BRCAm mCRPC[71]. (June 2023)

Presentation: ASCO

DUO-O (Lynparza and Imfinzi)


Results from a planned interim analysis of the DUO-O Phase III trial, presented at ASCO, showed that the combination of Lynparza, Imfinzi, chemotherapy and bevacizumab reduced the relative risk of disease progression or death by 37% versus chemotherapy and bevacizumab in newly diagnosed patients with advanced high-grade epithelial ovarian cancer without tumour BRCAm. In the HRD-positive subgroup, Lynparza, Imfinzi, chemotherapy and bevacizumab reduced the relative risk of disease progression or death by 51% versus chemotherapy and bevacizumab alone. (June 2023)

Phase II/III trial readout

GY005


Did not meet primary endpoint in the intent-to-treat population of a statistically significant improvement in PFS with cediranib added to Lynparza or cediranib alone versus standard of care chemotherapy in patients with recurrent platinum-resistant or -refractory ovarian, fallopian tube, or primary peritoneal cancer. (July 2023)

 

Enhertu

 

Event



Commentary

Presentation: ASCO

DESTINY-PanTumor02

 

 

Results from a planned interim analysis of the DESTINY-PanTumor02 Phase II trial, presented at ASCO, demonstrated Enhertu resulted in a confirmed ORR[72] of 37.1% and DCR[73] of 68.2% in previously treated patients with HER2-expressing advanced solid tumours. (June 2023)

Phase II trial readout

DESTINY-PanTumor02

 

Primary analysis of the ongoing DESTINY-PanTumor02 Phase II trial showed Enhertu demonstrated clinically meaningful PFS and OS across multiple HER2-expressing advanced solid tumours, two secondary endpoints of the trial. (July 2023)

Approval

China

 

For the treatment of adult patients with unresectable or metastatic HER2-low (IHC[74] 1+ or IHC 2+/ISH[75]-) breast cancer who have received a prior systemic therapy in the metastatic setting or developed disease recurrence during or within six months of completing adjuvant chemotherapy. (July 2023)

 

capivasertib

 

Event



Commentary

FDA priority review

US

 

Capivasertib in combination with Faslodex for the treatment of HR-positive, HER2‑negative locally advanced or metastatic breast cancer following recurrence or progression on or after an endocrine-based regimen. (June 2023)

 

 

datopotamab deruxtecan (Dato-Dxd)

 

Event



Commentary

Presentation: ASCO

TROPION-Lung02

 

Updated results from the TROPION-Lung02 Phase Ib trial, presented at ASCO, demonstrated Dato-DXd plus pembrolizumab with or without platinum chemotherapy demonstrated objective response rates of 57% and 50%, respectively, with a disease control rate of 91% across cohorts, in patients with advanced NSCLC. (June 2023)

Phase III trial readout

TROPION-Lung01

 

Met dual primary endpoint demonstrating statistically significant improvement for PFS compared to docetaxel in patients with locally advanced or metastatic NSCLC treated with at least one prior therapy. (July 2023)

 

BioPharmaceuticals - CVRM

 

Farxiga

 

Event



Commentary

Approval

 

 

 

US


Approved to reduce the risk of cardiovascular death, hospitalisation for heart failure and urgent heart failure visits in adults with heart failure regardless of left ventricular ejection fraction status. The approval was based on positive results from the DELIVER Phase III trial. Farxiga was previously approved in the US for adults with heart failure with reduced ejection fraction. (May 2023)

Approval

China


Xigduo XR (Farxiga and metformin fixed-dose combination) approved for the treatment of adults with type-2 diabetes as an adjunct to diet and exercise to improve glycaemic control. (June 2023)

 

Andexxa

 

Event

 


Commentary

Phase IV readout

ANNEXA-I


A registrational post-marketing Phase IV trial was stopped early based on achieving pre-specified criteria of superior haemostatic efficacy versus usual care. A Phase IV trial was required to convert from conditional to full approval in the EU and US and the Company will now proceed with regulatory filings. (June 2023)

 

roxadustat

 

Event

 


Commentary

Phase III data readout

MATTERHORN

 

 

 


AstraZeneca's partner, FibroGen Inc., (FibroGen) announced that the MATTERHORN Phase III trial for the treatment of anaemia in patients with myelodysplastic syndrome did not meet its primary efficacy endpoint. (May 2023)

Phase II/III data readout

NCT03303066


FibroGen announced positive top-line data from a Phase III trial in patients receiving concurrent chemotherapy treatment for non-myeloid malignancies in China.
(May 2023)

 

 

eplontersen

 

Event

 


Commentary

Phase III data readout

NEURO-TTRansform


AstraZeneca's partner, Ionis Pharmaceuticals, announced positive top-line 85‑week data for eplontersen in patients with hereditary transthyretin-mediated amyloid polyneuropathy, showing sustained improvements in measures of neuropathy disease and a favourable safety and tolerability profile. (July 2023)

 

BioPharmaceuticals - R&I

 

Brazikumab

 

Event



Commentary

Phase III trials discontinued

INTREPID, EXPEDITION


The decision to discontinue brazikumab's inflammatory bowel disease development programme followed a review of brazikumab's development timeline and the context of a competitive landscape that has continued to evolve. The timeline was impacted by delays that could not be mitigated following global events. No safety concerns were identified for patients in these trials. (June 2023)

 

Fasenra

 

Event



Commentary

Phase III trial discontinued

FJORD


Trial in bullous pemphigoid discontinued for futility (efficacy). (July 2023)

 

 

BioPharmaceuticals - V&I

 

AZD3152

 

Event



Commentary

Phase I/III safety data

SUPERNOVA


Positive high-level results from the Phase I safety cohort of the ongoing SUPERNOVA Phase I/III COVID-19 prevention trial showed that AstraZeneca's long-acting antibody AZD3152 was generally well-tolerated and displayed pharmacokinetics consistent with Evusheld through day 29. These data are now being shared with regulatory authorities and could potentially lead to availability of AZD3152 in some countries outside of the US under early access mechanisms. (July 2023)

Trial design update

SUPERNOVA


The primary endpoint of the SUPERNOVA has been updated to measure the efficacy of a 300mg intramuscular dose of AZD3152. In consultation with the US FDA, a pivotal immunobridging sub-study has been added to the trial, which will compare neutralising antibody levels of subjects who receive a 1,200mg dose delivered intravenously to neutralising antibody levels of subjects who receive 300mg IM of Evusheld. Data from the sub study are expected late in H2 2023, and the efficacy data are expected in H1 2024.

 

Beyfortus

 

Event



Commentary

Approval

US


Approved in the US for the prevention of respiratory syncytial virus lower respiratory tract disease in newborns and infants born during or entering their first RSV season, and for children up to 24 months of age who remain vulnerable to severe RSV disease through their second RSV season. Beyfortus will be available in the US ahead of the upcoming 2023-2024 RSV season. (July 2023)

 

The approval follows the unanimous vote by the Antimicrobial Drugs Advisory Committee (AMDAC) on the favourable benefit-risk profile of Beyfortus. (June 2023)

 

 

Rare Disease

 

AstraZeneca presented new clinical and real-world data in multiple haematological conditions, further demonstrating its ambition to redefine care in haematology at the European Hematology Association (EHA). Alexion, AstraZeneca Rare Disease, showcased pivotal data in patients with paroxysmal nocturnal haemoglobinuria PNH experiencing symptoms of clinically significant extravascular haemolysis. Additional data and analyses were presented focusing on improving understanding, and management of debilitating rare diseases; AL[76] amyloidosis and aHUS.

 

Soliris

Event



Commentary

Approval

EU

 

Children and adolescents with refractory gMG. (June 2023)

Approval

China

 

Adults with refractory gMG. (June 2023)

 

 

Ultomiris

 

Event



Commentary

Approval

Japan

 

Prevention of relapses in patients with NMOSD. (May 2023)

Approval

EU


Adults with NMOSD. (May 2023)

 

 

danicopan

 

Event



Commentary

Presentation: EHA

ALPHA
Phase III

 

Positive results showed that, first-in-class oral Factor D inhibitor, danicopan as add-on to standard of care C5 inhibitor therapy Ultomiris or Soliris, demonstrated a statistically significant and clinically meaningful increase in haemoglobin levels and maintained disease control in patients with PNH who experience clinically significant EVH. Primary endpoint measured the change in haemoglobin from baseline to week 12, reported as least squares mean change from baseline and standard error of the mean (2.94 [0.211] g/dL vs 0.50 [0.313] g/dL; p<0.0001). All key secondary endpoints also met statistical superiority in favour of danicopan plus Ultomiris or Soliris, compared to placebo plus C5 inhibition. (June 2023)

 

 

Koselugo

 

Event



Commentary

Approval

China

 

Paediatric patients with neurofibromatosis type 1 and plexiform neurofibromas. (May 2023)

 

 

Interim Financial Statements

 

Table 20: Condensed consolidated statement of comprehensive income: H1 2023

 

For the half year ended 30 June

 

2023 

2022 

 

 

$m 

$m 

 

Total Revenue[77]

 

22,295 

22,161 

Product Sales

 

21,448 

21,610 

Alliance Revenue

 

627 

290 

Collaboration Revenue

 

220 

261 

Cost of sales


(3,865)

(6,509)

Gross profit

 

18,430 

15,652 

Distribution expense


(265)

(254)

Research and development expense


(5,278)

(4,679)

Selling, general and administrative expense


(9,045)

(9,521)

Other operating income and expense


1,163 

219 

Operating profit

 

5,005 

1,417 

Finance income


141 

35 

Finance expense


(795)

(647)

Share of after tax losses in associates and joint ventures


(1)

(5)

Profit before tax

 

4,350 

800 

Taxation


(726)

(52)

Profit for the period

 

3,624 

748 

Other comprehensive income

 

 

 

Items that will not be reclassified to profit or loss

 

 

 

Remeasurement of the defined benefit pension liability


1,031 

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


(48)

(12)

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


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


(5)

(275)

 

 

(42)

746 

Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation


105 

(1,326)

Foreign exchange arising on designated liabilities in net investment hedges


(101)

(195)

Fair value movements on cash flow hedges


89 

(138)

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


(71)

131 

Fair value movements on derivatives designated in net investment hedges


40 

34 

Costs of hedging


(1)

(13)

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


12 

46 



73 

(1,461)

Other comprehensive income/(loss), net of tax

 

31 

(715)

Total comprehensive income for the period

 

3,655 

33 

Profit attributable to:




Owners of the Parent


3,621 

746 

Non-controlling interests




3,624 

748 

Total comprehensive income attributable to:




Owners of the Parent


3,652 

33 

Non-controlling interests




3,655 

33 

Basic earnings per $0.25 Ordinary Share


$2.34 

$0.48 

Diluted earnings per $0.25 Ordinary Share


$2.32 

$0.48 

Weighted average number of Ordinary Shares in issue (millions)


1,549 

1,548 

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


1,560 

1,561 

 

Table 21: Condensed consolidated statement of comprehensive income: Q2 2023

 

For the quarter ended 30 June

 

Unreviewed[78] 

2023 

Unreviewed 

2022 

 

 

$m 

$m 

Total Revenue70

 

11,416 

10,771 

Product Sales

 

10,882 

10,630 

Alliance Revenue

 

341 

138 

Collaboration Revenue

 

193 

Cost of sales


(1,960)

(2,998)

Gross profit

 

9,456 

7,773 

Distribution expense


(131)

(129)

Research and development expense


(2,667)

(2,546)

Selling, general and administrative expense


(4,986)

(4,681)

Other operating income and expense


784 

122 

Operating profit

 

2,456 

539 

Finance income


64 

18 

Finance expense


(431)

(311)

Share of after tax (losses)/profits in associates and joint ventures


(1)

Profit before tax

 

2,088 

247 

Taxation


(268)

113 

Profit for the period

 

1,820 

360 

Other comprehensive income

 

 

 

Items that will not be reclassified to profit or loss

 

 

 

Remeasurement of the defined benefit pension liability


17 

696 

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


(94)

(30)

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


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


(29)

(181)

 

 

(104)

487 

Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation


(209)

(1,107)

Foreign exchange arising on designated liabilities in net investment hedges


(94)

(163)

Fair value movements on cash flow hedges


33 

(143)

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


120 

Fair value movements on derivatives designated in net investment hedges


24 

42 

Costs of hedging


(1)

(13)

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


45 



(243)

(1,219)

Other comprehensive loss, net of tax

 

(347)

(732)

Total comprehensive income/(loss) for the period

 

1,473 

(372)

Profit attributable to:




Owners of the Parent


1,818 

360 

Non-controlling interests




1,820 

360 

Total comprehensive income/(loss) attributable to:




Owners of the Parent


1,471 

(372)

Non-controlling interests




1,473 

(372)

Basic earnings per $0.25 Ordinary Share


$1.17 

$0.23 

Diluted earnings per $0.25 Ordinary Share


$1.17 

$0.23 

Weighted average number of Ordinary Shares in issue (millions)


1,550 

1,549 

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


1,560 

1,560 

 

Table 22: Condensed consolidated statement of financial position

 


 

Reviewed[79]

At 30 Jun

2023

Audited

At 31 Dec

2022

Reviewed

At 30 Jun

2022


 

$m 

$m

$m 

 

 

Assets





Non-current assets





Property, plant and equipment


8,675 

8,507 

8,722 

Right-of-use assets


949 

942 

905 

Goodwill


19,960 

19,820 

19,821 

Intangible assets


38,326 

39,307 

39,900 

Investments in associates and joint ventures


72 

76 

56 

Other investments


1,071 

1,066 

1,124 

Derivative financial instruments


163 

74 

113 

Other receivables


752 

835 

881 

Deferred tax assets


3,736 

3,263 

4,140 


 

73,704 

73,890 

75,662 

Current assets





Inventories


5,051 

4,699 

6,220 

Trade and other receivables


11,092 

10,521 

8,908 

Other investments


148 

239 

70 

Derivative financial instruments


44 

87 

109 

Intangible assets


89 

Income tax receivable


840 

731 

704 

Cash and cash equivalents


5,664 

6,166 

4,817 

Assets held for sale


150 


 

22,839 

22,593 

20,917 

Total assets

 

96,543 

96,483 

96,579 

Liabilities

 

 

 

 

Current liabilities





Interest-bearing loans and borrowings


(4,556)

(5,314)

(2,162)

Lease liabilities


(231)

(228)

(220)

Trade and other payables


(19,738)

(19,040)

(17,821)

Derivative financial instruments


(83)

(93)

(90)

Provisions


(567)

(722)

(541)

Income tax payable


(1,200)

(896)

(981)


 

(26,375)

(26,293)

(21,815)

Non-current liabilities





Interest-bearing loans and borrowings


(24,329)

(22,965)

(26,461)

Lease liabilities


(722)

(725)

(685)

Derivative financial instruments


(68)

(164)

(180)

Deferred tax liabilities


(2,800)

(2,944)

(5,275)

Retirement benefit obligations


(1,078)

(1,168)

(1,310)

Provisions


(1,357)

(896)

(892)

Other payables


(2,398)

(4,270)

(4,010)



(32,752)

(33,132)

(38,813)

Total liabilities

 

(59,127)

(59,425)

(60,628)

Net assets

 

37,416 

37,058 

35,951 

Equity





Capital and reserves attributable to equity holders of the Parent





Share capital


387 

387 

387 

Share premium account


35,163 

35,155 

35,134 

Other reserves


2,076 

2,069 

2,068 

Retained earnings


(234)

(574)

(1,657)


 

37,392 

37,037 

35,932 

Non-controlling interests


24 

21 

19 

Total equity

 

37,416 

37,058 

35,951 

 

 

Table 23: 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 2022


387 

35,126 

2,045 

1,710 

39,268 

19 

39,287 

Profit for the period


746 

746 

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


Share-based payments charge for the period


346 

346 

346 

Settlement of share plan awards


(677)

(677)

(677)

Net movement

 

23 

(3,367)

(3,336)

(3,336)

At 30 Jun 2022

 

387 

35,134 

2,068 

(1,657)

35,932 

19 

35,951 

 

 

 

 

 

 

 

 

 

At 1 Jan 2023

 

387 

35,155 

2,069 

(574)

37,037 

21 

37,058 

Profit for the period


3,621 

3,621 

3,624 

Other comprehensive income


31 

31 

31 

Transfer to other reserves


(7)

Transactions with owners









Dividends


(3,047)

(3,047)

(3,047)

Issue of Ordinary Shares


Share-based payments charge for the period


274 

274 

274 

Settlement of share plan awards


(532)

(532)

(532)

Net movement


340 

355 

358 

At 30 Jun 2023

 

387 

35,163 

2,076 

(234)

37,392 

24 

37,416 

 

Table 24: Condensed consolidated statement of cash flows

 

For the half year ended 30 June


2023 

2022 


$m 

$m 

 

Cash flows from operating activities




Profit before tax


4,350 

800 

Finance income and expense


654 

612 

Share of after tax losses of associates and joint ventures


Depreciation, amortisation and impairment


2,778 

2,666 

(Increase)/decrease in working capital and short-term provisions


(747)

2,391 

Gains on disposal of intangible assets


(249)

(81)

Fair value movements on contingent consideration arising from business combinations


202 

293 

Non-cash and other movements


(594)

(814)

Cash generated from operations

 

6,395 

5,872 

Interest paid


(483)

(386)

Tax paid


(1,061)

(1,006)

Net cash inflow from operating activities

 

4,851 

4,480 

 

Cash flows from investing activities



 

Acquisition of subsidiaries, net of cash acquired


(189)

Payments upon vesting of employee share awards attributable to business combinations


(23)

(158)

Payment of contingent consideration from business combinations


(398)

(367)

Purchase of property, plant and equipment


(517)

(472)

Disposal of property, plant and equipment


126 

Purchase of intangible assets


(1,436)

(434)

Disposal of intangible assets


288 

442 

Movement in profit-participation liability


175 

Purchase of non-current asset investments


(26)

(28)

Disposal of non-current asset investments


10 

35 

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


90 

Payments to associates and joint ventures


(5)

Interest received


134 

10 

Net cash outflow from investing activities


(1,766)

(968)

Net cash inflow before financing activities

 

3,085 

3,512 

 

Cash flows from financing activities




Proceeds from issue of share capital


Issue of loans and borrowings


3,816 

Repayment of loans and borrowings


(3,408)

(1,257)

Dividends paid


(3,069)

(2,971)

Hedge contracts relating to dividend payments


27 

(77)

Repayment of obligations under leases


(129)

(134)

Movement in short-term borrowings


72 

316 

Payment of Acerta Pharma share purchase liability


(867)

(920)

Net cash outflow from financing activities

 

(3,550)

(5,035)

Net decrease in Cash and cash equivalents in the period


(465)

(1,523)

Cash and cash equivalents at the beginning of the period


5,983 

6,038 

Exchange rate effects


(47)

(35)

Cash and cash equivalents at the end of the period

 

5,471 

4,480 

Cash and cash equivalents consist of:




Cash and cash equivalents


5,664 

4,817 

Overdrafts


(193)

(337)

 

 

5,471 

4,480 

 

 

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

 

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 2023 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

 

28 July 2023

 

Independent review report to AstraZeneca PLC

 

Report on the Interim financial statements

 

Our conclusion

 

We have reviewed AstraZeneca PLC's Interim financial statements (the "Interim financial statements") in the half-yearly financial report of AstraZeneca PLC for the six month period ended 30 June 2023 (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, 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 financial position as at 30 June 2023;

‒    the Condensed consolidated statement of comprehensive income: H1 2023 for the period then ended;

‒    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, 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 ("ISRE (UK) 2410"). 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 ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern.

 

Independent review report to AstraZeneca PLC (continued)

 

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

 

28 July 2023

 

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 2023 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 2023 were approved by the Board of Directors for publication on 28 July 2023.

 

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 2022 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 2022.

 

The comparative figures for the financial year ended 31 December 2022 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.

 

Alliance and Collaboration Revenues

 

Effective 1 January 2023, the Group has updated the presentation of Total Revenue on the face of the Statement of Comprehensive Income to include Alliance Revenue as a separate element to Collaboration Revenue. Alliance Revenue, previously reported within Collaboration Revenue, comprises income related to sales made by collaboration partners, where AstraZeneca is entitled to a profit share, revenue share or royalties, which are recurring in nature while the collaboration arrangement remains in place. Alliance Revenue does not include Product Sales where AstraZeneca is leading commercialisation in a territory. Collaboration Revenue arising from collaborative arrangements where the Group retains a significant ongoing economic interest and receives upfront amounts and event-triggered milestones, which arise from the licensing of intellectual property, will continue to be reported as Collaboration Revenue. In collaboration arrangements either AstraZeneca or the collaborator acts as principal in sales to the end customer. Where AstraZeneca acts as principal, we record 100% of sales to the end customer within Product Sales. The revised presentation reflects the increasing importance of income arising from profit share arrangements where collaboration partners are responsible for booking revenues in some or all territories.

 

The comparative revenue reported in H1 2023 relating to the half year to 30 June 2022 has been retrospectively adjusted to reflect the new split of Total Revenue, resulting in Alliance Revenue being reported for the half year 30 June 2022 of $290m, however the combined total of Alliance Revenue and Collaboration Revenue is equal to the previously reported Collaboration Revenue total for the half year 30 June 2022.  

 

Going concern

The Group has considerable financial resources available. As at 30 June 2023, the Group has $12.6bn in financial resources (Cash and cash equivalent balances of $5.7bn and undrawn committed bank facilities of $6.9bn available, of which $2.0bn of the facilities are available until February 2025 and the other $4.9bn are available until April 2026, with $4.6bn of borrowings due within one year). These facilities contain no financial covenants and were undrawn at 30 June 2023.

 

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 adversely affect 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, they continue to adopt the going concern basis in preparing the 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 2022.

 

IAS 12 'Income Taxes'

On 25 May 2023, the IASB issued an amendment to IAS 12 'Income Taxes' to clarify how the effects of the global minimum tax framework should be accounted for and disclosed effective 1 January 2023. This was endorsed by the UK Endorsement Board on 19 July 2023 and has been adopted by the Company for 2023 reporting. The Company has applied the exemption to recognising and disclosing information about deferred tax assets and liabilities related to Pillar 2 income taxes. The Company is currently assessing the potential impact of these draft rules upon its financial statements.

 

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 impairment charges of $320m have been recorded against intangible assets during the six months ended 30 June 2023 (H1 2022: $26m net reversal). Net impairment charges in respect of medicines in development were $320m (H1 2022: $9m reversal) including the $244m impairment of the ALXN1840 intangible asset, following decision to discontinue this development programme in Wilson's disease.

 

As previously disclosed, on 16 January 2023 AstraZeneca completed the acquisition of Neogene Therapeutics Inc. (Neogene), a global clinical-stage biotechnology company pioneering the discovery, development and manufacturing of next-generation T-cell receptor therapies (TCR-Ts). The purchase price allocation exercise has completed, with the fair value of total consideration determined at $267m. Intangible assets of $100m and goodwill of $158m were recognised in the acquisition balance sheet, as well as a cash outflow of $189m net of cash acquired. Future contingent milestones-based and non-contingent consideration is payable to a maximum of $120m. Neogene's results have been consolidated into the Group's results from 16 January 2023.

 

The acquisition of CinCor completed on 24 February 2023, recorded as an asset acquisition, with consideration and net assets acquired of $1,268m, which included intangible assets acquired of $780m, $424m of cash and cash equivalents, and $75m of marketable securities. The Condensed consolidated statement of cash flows includes a $1,204m payment for the intangible assets which is presented net of the $424m cash and cash equivalents acquired within Purchase of intangible assets, whilst the $75m increase in marketable securities is presented within Movement in short-term investments, fixed deposits and other investing instruments. Contingent consideration of up to $496m could be paid on achievement of regulatory milestones, and will be recognised when the associated milestones are triggered.

 

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 2022. Net Debt is a non-GAAP financial measure.

 

 

Table 25: Net debt

 


 

At 1 Jan 2023

Cash flow

Acquisitions

Non-cash
& other

Exchange movements

At 30 Jun 2023


 

$m

$m

$m

$m

$m

$m

Non-current instalments of loans


(22,965)

(3,827)

2,587 

(124)

(24,329)

Non-current instalments of leases


(725)

(1)

(6)

10 

(722)

Total long-term debt

 

(23,690)

(3,828)

(6)

2,597 

(124)

(25,051)

Current instalments of loans


(4,964)

3,409 

(2,594)

14 

(4,135)

Current instalments of leases


(228)

141 

(2)

(146)

(231)

Bank collateral received


(89)

(61)

(150)

Other short-term borrowings excluding overdrafts


(78)

(11)

11 

(78)

Overdrafts


(183)

(10)

(193)

Total current debt

 

(5,542)

3,468 

(2)

(2,740)

29 

(4,787)

Gross borrowings

 

(29,232)

(360)

(8)

(143)

(95)

(29,838)

Net derivative financial instruments


(96)

(27)

179 

56 

Net borrowings

 

(29,328)

(387)

(8)

36 

(95)

(29,782)

Cash and cash equivalents


6,166 

(455)

(47)

5,664 

Other investments - current


239 

(90)

(1)

148 

Cash and investments

 

6,405 

(545)

(48)

5,812 

Net debt

 

(22,923)

(932)

(8)

36 

(143)

(23,970)

 

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

 

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 2023 was $150m (31 December 2022: $89m) and the carrying value of such cash collateral posted by the Group at 30 June 2023 was $136m (31 December 2022: $162m).

 

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 $805m (31 December 2022: $1,646m), which is shown in current other payables.

 

Net debt increased by $1,047m in the half to $23,970m. Details of the committed undrawn bank facilities are disclosed within the going concern section of Note 1.

 

During the six months ended 30 June 2023, there were no changes to the Company's solicited credit ratings issued by Standard and Poor's (long term: A; short term: A-1) 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 that are categorised as Level 3 in the fair value hierarchy that are held at $247m at 30 June 2023 (31 December 2022: $186m) and for which fair value gains of $1m have been recognised in the six months ended 30 June 2023 (H1 2022: $48m). 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 2023 are Level 1 fair value measurements, valued based on quoted prices in active markets.

 

Financial instruments measured at fair value include $1,083m of other investments, $4,400m held in money-market funds, $289m of loans designated at fair value through profit or loss and $56m of derivatives as at 30 June 2023. With the exception of derivatives being Level 2 fair valued, certain equity investments as described above and an equity warrant of $16m categorised as Level 3, the aforementioned balances are Level 1 fair valued. Financial instruments measured at amortised cost include $136m of cash collateral pledged to counterparties. The total fair value of interest-bearing loans and borrowings at 30 June 2023, which have a carrying value of $29,838m in the Condensed consolidated statement of financial position, was $28,591m.

 

As announced in April 2023, the contractual relationship between AstraZeneca and Swedish Orphan Biovitrum AB (Sobi) relating to future sales of Beyfortus (nirsevimab) in the US has been replaced by a royalty relationship between Sanofi and Sobi. As a result, a non-current other payable representing AstraZeneca's future obligations to Sobi was eliminated from AstraZeneca's Statement of Financial Position in the quarter, and AstraZeneca recorded a gain of $712m in Core Other operating income.

 

Table 26: Financial instruments - contingent consideration

 


 

2023

2022

 

 

Diabetes alliance

Other

Total

Total

 

 

$m

$m

$m

$m

At 1 January


2,124 

98 

2,222 

2,865 

Additions through business combinations


60 

60 

Settlements


(395)

(3)

(398)

(367)

Disposals


(121)

Revaluations


229 

(27)

202 

293 

Discount unwind


62 

66 

85 

At 30 June

 

2,020 

132 

2,152 

2,755 

 

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 $2,020m (31 December 2022: $2,124m) would increase/decrease by $202m with an increase/decrease in sales of 10%, as compared with the current estimates.

 

Note 5: Pensions and other post-retirement benefit obligations

 

During the six months ended 30 June 2023, AstraZeneca Pharmaceuticals PLP terminated its main defined benefit pension plan. A total of $839m of pension obligations were discharged from the scheme, $142m of which was settled via a cash payment to the participants and the remaining $697m was transferred to an external insurer via a buy-out. At 30 June 2023, the plan contained immaterial residual assets and obligations which are expected to be discharged by the end of 2023, with minimal impact to the income statement.

 

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 2022 (the Disclosures).

 

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, AstraZeneca considers each of the claims to represent a contingent liability or a contingent asset where the matter is brought by AstraZeneca, and discloses information with respect to the nature and facts of the cases in accordance with IAS 37 'Provisions, Contingent Liabilities and Contingent Assets'.

 

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 2023 and to 28 July 2023

 

Patent litigation

 

Imfinzi and Imjudo 

Patent proceedings in the US and outside the US

 

As previously disclosed, 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 (the District Court) against AstraZeneca alleging that AstraZeneca's marketing of Imfinzi infringes several of their patents. In April 2023, Bristol-Myers Squibb Co., E.R. Squibb & Sons, LLC, Tasuku Honjo, Ono Pharmaceutical Co., Ltd., and the Dana-Farber Cancer Institute Inc. filed a separate lawsuit in the District Court against AstraZeneca alleging that AstraZeneca's marketing of Imfinzi infringes another of their patents. The cases were subsequently consolidated.

 

As previously disclosed, in January 2023, 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 Imjudo infringes two of their patents.

 

As previously disclosed, in February 2022, in Japan, 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.

 

In July 2023, AstraZeneca entered into a global settlement agreement with Bristol-Myers Squibb Co., E.R. Squibb & Sons, LLC, and Ono Pharmaceutical Co., Ltd. that resolves all patent disputes relating to Imfinzi and Imjudo between the companies. A provision covering both Imfinzi and Imjudo has been taken totalling $510m.

 

Faslodex

Patent proceedings outside the US

As previously disclosed, in 2021 in Japan, AstraZeneca received notice from the Japan Patent Office (JPO) that Sandoz K.K. and Sun Pharma Japan Ltd. (Sun) were seeking to invalidate the Faslodex formulation patent. AstraZeneca defended the challenged patent, and Sun withdrew from the JPO patent challenge. In July 2023, the JPO issued a final decision upholding various claims of the challenged patent and determining that other patent claims were invalid.  

 

Product liability litigation

 

Onglyza and Kombiglyze

US proceedings

In the US, AstraZeneca is defending various lawsuits alleging heart failure, cardiac injuries, and/or death from treatment with Onglyza or Kombiglyze. In February 2018, the Judicial Panel on Multidistrict Litigation ordered the transfer of various pending federal actions to the US District Court for the Eastern District of Kentucky (the District Court) for consolidated pre-trial proceedings with the federal actions pending in the District Court. The District Court granted AstraZeneca's motion for summary judgment in August 2022, and plaintiffs are in the process of appealing that decision. In the California State Court coordinated proceeding, AstraZeneca's motion for summary judgment was granted in March 2022. Plaintiffs appealed, and in April 2023, the California Appellate Court affirmed the lower court's decision to grant summary judgment. Plaintiffs have now appealed to the California Supreme Court.

 

Commercial litigation

 

AZD1222 Securities Litigation (US)

In January 2021, putative securities class action lawsuits were filed in the US District Court for the Southern District of New York (the District Court) against AstraZeneca PLC and certain officers, on behalf of purchasers of AstraZeneca publicly traded securities during a period later amended to cover 15 June 2020 through 29 January 2021 (the Amended Complaint). The Amended Complaint alleges that defendants made materially false and misleading statements in connection with the development of AZD1222, AstraZeneca's vaccine for the prevention of COVID-19. In September 2022, the District Court granted AstraZeneca's motion to dismiss the Amended Complaint with prejudice, disallowing any further amendments. Plaintiffs appealed this decision and in May of 2023, the US Court of Appeals for the Second Circuit affirmed the dismissal.

 

PARP Inhibitor Royalty Dispute

In October 2012, Tesaro, Inc. (now wholly owned by GlaxoSmithKline plc, 'GSK') entered into two worldwide, royalty-bearing patent license agreements with AstraZeneca related to GSK's product niraparib. In May 2021, AstraZeneca filed a lawsuit against GSK in the Commercial Court of England and Wales alleging that GSK has failed to pay all of the royalties due on niraparib sales under the license agreements. The case was transferred to the Chancery Division and a trial took place in March 2023. In April 2023, the court issued a decision in AstraZeneca's favour. GSK has been granted permission to appeal. The appellate hearing window has been scheduled for January 2024.

 

Syntimmune

In connection with Alexion's prior acquisition of Syntimmune, Inc., (Syntimmune) in December 2020, Alexion was served with a lawsuit filed by the stockholders' representative for Syntimmune in Delaware State Court that alleged, among other things, breaches of contractual obligations relating to the 2018 merger agreement. The stockholders' representative alleges that Alexion failed to meet its obligations under the merger agreement to use commercially reasonable efforts to achieve the milestones. Alexion also filed a claim for breach of the representations in the 2018 merger agreement. A trial was held in July 2023. A decision is not expected until 2024.

 

Government investigations/proceedings

 

US 340B litigations and proceedings

As previously disclosed, in January 2021, AstraZeneca filed a separate lawsuit in the US District Court for the District of Delaware (the District Court) alleging that an Advisory Opinion issued by the Department of Health and Human Services violates the Administrative Procedure Act. In June 2021, the District Court found in favour of AstraZeneca, invalidating the Advisory Opinion. However, in May 2021, prior to the District Court's ruling, the US government issued new and separate letters to AstraZeneca (and other companies) asserting that AstraZeneca's contract pharmacy policy violates the 340B statute. AstraZeneca amended the complaint to include allegations challenging the letter sent in May 2021, and in February 2022, the District Court ruled in favour of AstraZeneca invalidating those letters sent by the US Government. In January 2023, the Court of Appeals affirmed the District Court decision in AstraZeneca's favour. Final judgment was entered in favour of AstraZeneca in May 2023 and this matter is now concluded.

 

Matters disclosed in respect of the first quarter of 2023 and to 27 April 2023

 

Patent litigation

 

Enhertu

US patent proceedings

As previously disclosed, in December 2020 and January 2021, AstraZeneca and Daiichi Sankyo, Inc. filed post- grant review (PGR) petitions with the US Patent and Trademark Office (USPTO) alleging, inter alia, that the Seagen patent is invalid for lack of written description and enablement. The USPTO initially declined to institute the PGRs, but, in April 2022, the USPTO granted the rehearing requests, instituting both PGR petitions. Seagen subsequently disclaimed all patent claims at issue in one of the PGR proceedings. In July 2022, the USPTO reversed its institution decision and declined to institute the other PGR petition. AstraZeneca and Daiichi Sankyo, Inc. requested reconsideration of the decision not to institute review of the patent. In February 2023, the USPTO reinstituted the PGR proceeding. An oral hearing is scheduled for August 2023.

 

Lynparza

US patent proceedings

As previously disclosed, in December 2022, AstraZeneca received a Paragraph IV notice letter from an abbreviated new drug application (ANDA) filer relating to patents listed in the FDA Orange Book with reference to Lynparza. In February 2023, in response to the Paragraph IV notice, AstraZeneca, MSD International Business GmbH, and the University of Sheffield initiated ANDA litigation against Natco Pharma Limited (Natco) in the US District Court for the District of New Jersey. In the complaint, AstraZeneca alleged that Natco's generic version of Lynparza, if approved and marketed, would infringe patents listed in the FDA Orange Book with reference to Lynparza. No trial date has been scheduled.

 

Movantik

US patent proceedings

AstraZeneca has resolved by settlement the previously disclosed patent infringement lawsuit brought by Aether Therapeutics, Inc. in the US District Court for the District of Delaware against AstraZeneca, Nektar Therapeutics and Daiichi Sankyo, Inc., relating to Movantik. This matter is now concluded.

 

Symbicort

US patent proceedings

AstraZeneca has resolved via settlement the previously disclosed ANDA litigations with Mylan Pharmaceuticals Inc. and Kindeva Drug Delivery L.P. (together, the Defendants). In those actions, AstraZeneca alleged that the Defendants' generic versions of Symbicort, if approved and marketed, would infringe various AstraZeneca patents. This matter is now concluded.

 

Tagrisso

Patent proceedings outside the US

In Russia, in October 2021, AstraZeneca filed a lawsuit in the Arbitration Court of the Moscow Region (the Court) 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. In January 2023, the dismissal was affirmed on further appeal. This matter is now concluded.

 

Product liability litigation

 

Nexium and Losec/Prilosec

US proceedings

In the US, AstraZeneca is defending various previously disclosed lawsuits brought in federal and state courts involving multiple plaintiffs claiming that they have been diagnosed with various injuries following treatment with proton pump inhibitors (PPIs), including Nexium and Prilosec. The vast majority of those lawsuits relate to allegations of kidney injuries. In August 2017, the pending federal court cases were consolidated in a multidistrict litigation (MDL) proceeding in the US District Court for the District of New Jersey for pre-trial purposes. A bellwether trial has been scheduled for October 2023, with subsequent bellwether trials scheduled for November 2023 and January 2024. In addition to the MDL cases, there are cases filed in several state courts around the US; a case that was previously set to go to trial in Delaware state court was dismissed in October 2022.

 

In addition, AstraZeneca has been defending various lawsuits involving allegations of gastric cancer following treatment with proton pump inhibitors (PPIs), including Nexium and Prilosec. One such claim is filed in the US District Court for the Middle District of Louisiana has been scheduled to go to trial in April 2024.

 

Onglyza and Kombiglyze

US proceedings

As previously disclosed, 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. The District Court granted AstraZeneca's motion for summary judgment in August 2022, and plaintiffs are in the process of appealing that decision. In the California State Court coordinated proceeding, AstraZeneca's motion for summary judgment was granted in March 2022. Plaintiffs appealed, and in April 2023, the California Appellate Court affirmed the lower court's decision to grant summary judgment.

 

Commercial Litigation

 

Viela Bio, Inc. Shareholder Litigation

US proceedings

In February 2023, AstraZeneca was served with a lawsuit filed in the Delaware State Court against AstraZeneca and certain officers, on behalf of a putative class of Viela Bio, Inc. (Viela) shareholders. The complaint alleges that defendants breached their fiduciary duty to Viela shareholders in the course of Viela's 2021 merger with Horizon Therapeutics, plc. This case remains in the preliminary stages.

 

Definiens

In Germany, in July 2020, AstraZeneca received a notice of arbitration filed with the German Institution of Arbitration from the sellers of Definiens AG (the Sellers) regarding the 2014 Share Purchase Agreement (SPA) between AstraZeneca and the Sellers. The Sellers claim that they are owed approximately $140m in earn-outs under the SPA. The arbitration hearing took place in March 2023 and AstraZeneca awaits a decision.

 

PARP Inhibitor Royalty Dispute

In October 2012, Tesaro, Inc. (now wholly owned by GlaxoSmithKline plc, 'GSK') entered into two worldwide, royalty-bearing patent license agreements with AstraZeneca related to GSK's product niraparib. In May 2021, AstraZeneca filed a lawsuit against GSK in the Commercial Court of England and Wales alleging that GSK has failed to pay all of the royalties due on niraparib sales under the license agreements. The case was transferred to the Chancery Division and a trial took place in March 2023. In April 2023, the court issued a decision in AstraZeneca's favour.

 

Pay Equity Litigation (US)

AstraZeneca was 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 involved 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 sought 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. In January 2023, the District Court granted AstraZeneca's motion to dismiss plaintiffs' complaint. In March 2023, plaintiffs filed a Second Amended Complaint.

 

Portola Shareholder Litigation

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 operative 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. In March 2023, the court granted final approval of the settlement. This matter is now concluded.

 

Alexion Shareholder Litigation (US)

In December 2016, putative securities class action lawsuits were filed in the US District Court for the District of Connecticut (the District Court) against Alexion and certain officers and directors, on behalf of purchasers of Alexion publicly traded securities during the period 30 January 2014 through 26 May 2017. The amended complaint alleges that defendants engaged in securities fraud, including by making misrepresentations and omissions in its public disclosures concerning Alexion's Soliris sales practices, management changes, and related investigations. In August 2021, the District Court issued a decision denying in part Defendants' motion to dismiss the matter. The Court granted Plaintiffs' motion for class certification in April 2023.

 

Text Box: Financial StatementsSyntimmune

In connection with Alexion's prior acquisition of Syntimmune, Inc., (Syntimmune) in December 2020, Alexion was served with a lawsuit filed by the stockholders' representative for Syntimmune in Delaware State Court that alleged, among other things, breaches of contractual obligations relating to the 2018 merger agreement. The stockholders' representative alleges that Alexion failed to meet its obligations under the merger agreement to use commercially reasonable efforts to achieve the milestones. Alexion also filed a claim for breach of the representations in the 2018 merger agreement. A trial is scheduled for the matter in July 2023.

 

Government investigations/proceedings

Brazilian tax assessment matter (Brazil)

As previously disclosed, in August 2019, the Brazilian Federal Revenue Service provided a Notice of Tax and Description of the Facts (the Tax Assessment) to two Alexion subsidiaries (the Brazil Subsidiaries), as well as to two additional entities, a logistics provider utilised by Alexion and a distributor. The Tax Assessment focuses on the importation of Soliris vials pursuant to Alexion's free drug supply to patients programme in Brazil.

 

Alexion prevailed in the first level of administrative appeals in the Brazilian federal administrative proceeding system based on a deficiency in the Brazil Tax Assessment. The decision was subject to an automatic (ex officio) appeal to the second level of the administrative courts. In March 2023, the second level of the administrative courts issued a decision to remand the matter to the first level of administrative courts for a determination on the merits.

 

Note 7: Subsequent events

 

In July 2023, Alexion, AstraZeneca Rare Disease (Alexion) and Pfizer Inc. (Pfizer) entered into an agreement for Alexion to purchase and licence the assets of Pfizer's early-stage rare disease gene therapy portfolio for a total consideration of up to $1bn, plus tiered royalties on sales. Alexion plans to close the transaction in Q3 2023, subject to the satisfaction of closing conditions.

 

Note 8: Additional financial information

 

Table 27: H1 2023 - Product Sales year-on-year analysis[80]

 

The CER information in respect of H1 2023 included in the Interim Financial Statements has not been reviewed by PricewaterhouseCoopers LLP.

 

 

World

US

Emerging Markets

Europe

Established RoW


$m

Act % chg

CER % chg

$m

% chg

$m

Act % chg

CER % chg

$m

Act % chg

CER % chg

$m

Act % chg

CER % chg

Oncology

8,302 

17 

21 

3,666 

23 

1,953 

17 

1,579 

18 

21 

1,104 

13 

25 

Tagrisso

2,915 

12 

1,102 

16 

851 

13 

541 

421 

(4)

Imfinzi

1,976 

53 

57 

1,098 

60 

183 

37 

47 

339 

27 

30 

356 

74 

92 

Lynparza

1,368 

10 

580 

278 

15 

23 

365 

11 

14 

145 

15 

Calquence

1,185 

31 

33 

869 

18 

41 

n/m

n/m

225 

85 

92 

50 

64 

75 

Enhertu

104 

n/m

n/m

72 

n/m

n/m

24 

n/m

n/m

n/m

n/m

Orpathys

22 

(7)

22 

(7)

Zoladex

459 

(4)

(3)

339 

11 

66 

(3)

48 

(32)

(24)

Faslodex

153 

(14)

(7)

(37)

81 

16 

(50)

(48)

49 

(10)

Others

120 

(37)

(33)

(26)

86 

(39)

(35)

(53)

(51)

27 

(28)

(22)

BioPharmaceuticals: CVRM

5,205 

14 

19 

1,283 

11 

2,347 

12 

20 

1,168 

24 

27 

407 

12 

23 

Farxiga

2,804 

33 

39 

634 

35 

1,074 

32 

41 

850 

36 

40 

246 

27 

39 

Brilinta

665 

(1)

357 

160 

10 

17 

136 

(9)

(7)

12 

(57)

(53)

Lokelma

198 

53 

59 

105 

35 

24 

n/m

n/m

25 

98 

n/m

44 

32 

47 

roxadustat

134 

48 

59 

134 

48 

59 

Andexxa

89 

28 

33 

37 

(12)

29 

64 

70 

23 

n/m

n/m

Crestor

585 

14 

26 

(23)

458 

11 

18 

32 

52 

54 

69 

(11)

(3)

Seloken/Toprol-XL

343 

(27)

(20)

n/m

333 

(27)

(21)

(6)

(6)

(26)

(11)

Onglyza

127 

(8)

(4)

36 

(11)

67 

16 

(21)

(18)

(31)

(28)

Bydureon

89 

(37)

(37)

73 

(38)

(1)

14 

(32)

(30)

Others

171 

(13)

(10)

14 

(26)

95 

(9)

(3)

60 

(13)

(13)

(57)

(53)

BioPharmaceuticals: R&I

3,066 

10 

1,291 

(1)

893 

22 

31 

581 

301 

(3)

Symbicort

1,288 

434 

(10)

405 

32 

43 

284 

(9)

(6)

165 

(13)

(6)

Fasenra

744 

12 

14 

468 

12 

29 

66 

70 

176 

15 

19 

71 

(2)

Breztri

307 

71 

76 

165 

55 

81 

88 

n/m

36 

n/m

n/m

25 

53 

65 

Saphnelo

115 

n/m

n/m

107 

n/m

n/m 

n/m

n/m

n/m

n/m

n/m

Tezspire

30 

n/m

n/m

17 

n/m

n/m

13 

n/m

n/m

Pulmicort

346 

11 

17 

(54)

273 

16 

24 

36 

20 

(23)

(17)

Bevespi

29 

(1)

(1)

17 

(23)

36 

48 

67 

69 

Daliresp/Daxas

30 

(72)

(72)

24 

(77)

(16)

(14)

(11)

(5)

(39)

(36)

Others

177 

(30)

(26)

59 

(40)

100 

(20)

(13)

15 

(42)

(39)

(3)

BioPharmaceuticals: V&I

443 

(84)

(83)

n/m

149 

(83)

(82)

114 

(78)

(77)

180 

(75)

(72)

COVID-19 mAbs

126 

(86)

(85)

n/m

(95)

(95)

(95)

(95)

114 

(6)

Vaxzevria

28 

(98)

(98)

n/m

18 

(97)

(97)

10 

(96)

(96)

n/m

n/m

Beyfortus

n/m

n/m

n/m

n/m

Synagis

284 

n/m

126 

17 

23 

92 

(13)

(9)

66 

15 

FluMist

n/m

n/m

n/m

n/m

n/m

Rare Disease

3,819 

12 

2,290 

10 

324 

57 

67 

767 

438 

(6)

Soliris

1,648 

(18)

(16)

893 

(23)

214 

60 

76 

367 

(16)

(14)

174 

(38)

(33)

Ultomiris

1,364 

60 

64 

815 

79 

30 

311 

38 

42 

208 

46 

62 

Strensiq

562 

25 

26 

453 

28 

24 

33 

26 

42 

43 

12 

23 

Koselugo

159 

57 

57 

89 

15 

38 

n/m

n/m

23 

n/m

n/m

Kanuma

86 

16 

17 

40 

18 

95 

96 

24 

12 

22 

Other medicines

613 

(27)

(22)

68 

(9)

390 

(1)

48 

(28)

(27)

107 

(65)

(61)

Nexium

492 

(27)

(22)

60 

(6)

305 

14 

25 

(4)

(2)

102 

(65)

(62)

Others

121 

(28)

(25)

(26)

85 

(20)

(15)

23 

(44)

(44)

(49)

(47)

Total Product Sales

21,448 

(1)

8,598 

6,056 

4,257 

2,537 

(19)

(11)

 

Table 28: Q2 2023 - Product Sales year-on-year analysis (Unreviewed)[81]

 

The Q2 2023 information in respect of the three months ended 30 June 2023 included in the Interim Financial Statements has not been reviewed by PricewaterhouseCoopers LLP.

 

 

World

US

Emerging Markets

Europe

Established RoW


$m

Act % chg

CER % chg

$m

% chg

$m

Act % chg

CER % chg

$m

Act % chg

CER % chg

$m

Act % chg

CER % chg

Oncology

4,382 

18 

22 

1,962 

22 

987 

10 

18 

819 

19 

19 

614 

21 

30 

Tagrisso

1,491 

10 

581 

13 

408 

284 

11 

11 

218 

(6)

Imfinzi

1,076 

55 

58 

576 

54 

102 

35 

47 

176 

23 

23 

222 

n/m

n/m

Lynparza

717 

311 

142 

18 

28 

187 

10 

11 

77 

15 

Calquence

653 

34 

34 

485 

22 

24 

n/m

n/m

117 

76 

78 

27 

55 

64 

Enhertu

67 

n/m

n/m

48 

n/m

n/m

14 

n/m

n/m

n/m

n/m

Orpathys

13 

22 

30 

13 

22 

30 

Zoladex

233 

(1)

25 

171 

13 

34 

(1)

24 

(31)

(26)

Faslodex

78 

(8)

(3)

(41)

43 

16 

23 

(61)

(62)

26 

(6)

Others

54 

(42)

(39)

(24)

36 

(48)

(44)

(50)

(51)

15 

(24)

(21)

BioPharmaceuticals: CVRM

2,675 

14 

18 

661 

1,182 

10 

18 

611 

32 

33 

221 

19 

27 

Farxiga

1,505 

36 

41 

339 

23 

576 

36 

45 

456 

48 

48 

134 

39 

50 

Brilinta

331 

(5)

(3)

178 

(4)

79 

10 

68 

(7)

(7)

(55)

(53)

Lokelma

100 

51 

55 

49 

26 

13 

n/m

n/m

14 

98 

n/m

24 

34 

44 

roxadustat

73 

46 

56 

73 

46 

56 

Andexxa

45 

23 

26 

16 

(10)

15 

70 

74 

14 

44 

49 

Crestor

280 

12 

(25)

217 

16 

56 

51 

35 

(4)

Seloken/Toprol-XL

164 

(26)

(21)

159 

(27)

(21)

(16)

(9)

(28)

(2)

Onglyza

65 

(9)

(6)

22 

30 

(7)

(24)

(18)

(30)

(37)

Bydureon

43 

(41)

(41)

35 

(43)

(33)

(32)

(25)

(25)

Others

69 

(30)

(28)

(26)

34 

(35)

(31)

25 

(23)

(23)

(50)

(46)

BioPharmaceuticals: R&I

1,483 

10 

674 

360 

22 

31 

289 

160 

Symbicort

600 

(2)

200 

(10)

177 

27 

37 

137 

(11)

(11)

86 

(12)

(5)

Fasenra

406 

15 

16 

267 

16 

14 

37 

42 

89 

14 

14 

36 

Breztri

163 

75 

79 

84 

57 

43 

n/m

n/m

21 

n/m

n/m

15 

54 

60 

Saphnelo

68 

n/m

n/m

64 

n/m

n/m

n/m

n/m

n/m

n/m

n/m

Tezspire

19 

n/m

n/m

11 

n/m

n/m

n/m

n/m

Pulmicort

124 

13 

(53)

90 

26 

36 

16 

(7)

(7)

11 

(14)

(8)

Bevespi

15 

(1)

(3)

(30)

76 

90 

77 

73 

Daliresp/Daxas

17 

(71)

(70)

14 

(74)

(13)

(10)

(15)

(8)

Others

71 

(34)

(32)

30 

(35)

32 

(36)

(32)

(20)

(18)

BioPharmaceuticals: V&I

88 

(91)

(90)

n/m

46 

(80)

(78)

15 

(93)

(93)

27 

(90)

(89)

COVID-19 mAbs

(1)

n/m

n/m

n/m

(3)

n/m

n/m

(96)

(97)

(1)

n/m

n/m

Vaxzevria

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

Beyfortus

n/m

n/m

n/m

n/m

Synagis

87 

16 

n/m

49 

16 

27 

10 

(48)

(47)

28 

63 

75 

FluMist

n/m

n/m

n/m

‑ 

n/m

n/m

Rare Disease

1,953 

10 

1,196 

12 

150 

65 

78 

381 

226 

(15)

(9)

Soliris

814 

(21)

(19)

445 

(23)

99 

57 

74 

184 

(15)

(15)

86 

(50)

(47)

Ultomiris

713 

64 

66 

434 

84 

17 

n/m

n/m

152 

26 

26 

110 

53 

64 

Strensiq

300 

24 

25 

248 

29 

(1)

(4)

21 

(1)

22 

16 

25 

Koselugo

80 

28 

30 

48 

14 

36 

38 

12 

n/m

n/m

n/m

n/m

Kanuma

46 

28 

30 

21 

11 

n/m

n/m

12 

(4)

Other medicines

301 

(28)

(24)

32 

(11)

185 

(3)

26 

(16)

(17)

58 

(64)

(61)

Nexium

248 

(28)

(23)

30 

149 

11 

14 

16 

15 

55 

(65)

(62)

Others

53 

(29)

(27)

(68)

36 

(22)

(18)

12 

(36)

(36)

(28)

(31)

Total Product Sales

10,882 

4,525 

2,910 

12 

2,141 

1,306 

(16)

(9)

 

Table 29: Alliance Revenue



H1 2023

H1 2022



$m

$m

Enhertu


475 

175 

Tezspire


105 

16 

Vaxzevria: royalties


60 

Other royalty income


41 

34 

Other Alliance Revenue


Total


627 

290 

 

Table 30: Collaboration Revenue


H1 2023

H1 2022



$m

$m

Lynparza: regulatory milestones


175 

COVID-19 mAbs: licence fees


180 

Farxiga: sales milestones


25 

tralokinumab: sales milestones


70 

Other Collaboration Revenue


15 

16 

Total


220 

261 

 

Table 31: Other operating income and expense


H1 2023

H1 2022



$m

$m

brazikumab licence termination funding


75 

69 

Divestment of rights to Plendil


61 

Divestment of US rights to Pulmicort Flexhaler


241 

Update to the contractual relationships for Beyfortus (nirsevimab)


712 

Other


135 

89 

Total


1,163 

219 

 

 

Other shareholder information

 

Financial calendar

 

Announcement of nine month and third quarter 2023 results:        9 November 2023

Announcement of full year and fourth quarter 2023 results:          8 February 2024

 

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 2023, payable on 11 September 2023, will be 11 August 2023. The ex-dividend date will be 10 August 2023.

 

Contacts

 

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

 

Addresses for correspondence

 


 

 

 

Registered office

Registrar and transfer office

Swedish Central Securities Depository

US depositary

Deutsche Bank Trust Company Americas

1 Francis Crick Avenue

Cambridge Biomedical Campus

Cambridge

CB2 0AA

Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex

BN99 6DA

Euroclear Sweden AB PO Box 191

SE-101 23 Stockholm

American Stock Transfer

6201 15th Avenue

Brooklyn

NY 11219

 

United Kingdom

United Kingdom

Sweden

United States




+44 (0) 20 3749 5000

0800 389 1580

+46 (0) 8 402 9000


+44 (0) 121 415 7033





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); Beyfortus, a trademark of Sanofi Pasteur Inc.; Enhertu, a trademark of Daiichi Sankyo; Losec, owned by AstraZeneca or Cheplapharm (depending upon geography); Seloken, owned by AstraZeneca or Taiyo Pharma Co., Ltd (depending on geography); Synagis, owned by AstraZeneca or Sobi aka Swedish Orphan Biovitrum AB (publ). (depending on geography); and Tezspire, a trademark of Amgen, Inc.

 

Information on or accessible through AstraZeneca's websites, including astrazeneca.com, 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 2023 vs 2022. 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] Effective 1 January 2023, the Group has updated the presentation of Total Revenue. For further details of the presentation of Alliance Revenue and Collaboration Revenue, see the Basis of preparation and accounting policies section of the Notes to the Interim Financial Statements section.

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

[4] Earnings per share.

[5] Core financial measures are adjusted to exclude certain items. The differences between Reported and Core measures are primarily due to costs relating to the acquisition of Alexion, amortisation of intangibles, impairments, legal settlements and restructuring charges. A full reconciliation between Reported EPS and Core EPS is provided in Table 13 and Table 14 in the Financial performance section of this document.

[6] The COVID-19 medicines are Vaxzevria, Evusheld, and AZD3152 Ð the COVID-19 antibody currently in development.

[7] Cardiovascular, Renal and Metabolism.

[8] Respiratory & Immunology.

[9] The calculation of Reported and Core Product Sales Gross Margin (previously termed as Gross Margin) excludes the impact of Alliance Revenue and Collaboration Revenue.

[10]             Non-small cell lung cancer.

[11]             Heart failure.

[12]             Respiratory syncytial virus.

[13]             Neuromyelitis optica spectrum disorder.

[14]             Human epidermal growth factor receptor 2.

[15]             Generalised myasthenia gravis.

[16]             Hormone receptor.

[17]             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 royalties from sub-licensees that produce and supply the AstraZeneca COVID‑19 Vaccine under their own trademarks, recorded in Alliance Revenue.

[18]             Monoclonal antibodies. The COVID-19 mAbs are Evusheld and AZD3152.

[19]             For Alliance Revenue and Collaboration Revenue, the comparable amounts for FY 2022 are $749m and $604m respectively.

[20]             Vaccines & Immune Therapies.

[21]             In Table 2, the plus and minus symbols denote the directional impact of the item being discussed, e.g. a Ô+Õ symbol next to an R&D expense comment indicates that the item increased the R&D expense relative to the prior year.

[22]             Cost of goods sold.

[23]             Income from disposals of assets and businesses, where the Group does not retain a significant ongoing economic interest, continue to be recorded in Other operating income and expense in the CompanyÕs financial statements.

[24]             Heart failure with preserved ejection fraction.

[25]             Neurofibromatosis type 1 plexiform neurofibromas.

[26]             Paroxysmal nocturnal haemoglobinuria.

[27]             Extravascular haemolysis.

[28]             Epidermal growth factor receptor mutation.

[29]             Pathologic complete response.

[30]             Progression free survival.

[31]             Pressure metered dose inhaler.

[32] Product Sales shown in the Imfinzi line include Product Sales from Imjudo

[33] COVID-19 monoclonal antibodies. In H1 2023, all COVID-19 mAbs Product Sales were generated from sales of Evusheld

[34] National reimbursement drug list.

[35] France, Germany, Italy, Spain, UK.

[36] Biliary tract cancer.

[37] Hepatocellular carcinoma.

[38] Small cell lung cancer.

[39] Poly ADP ribose polymerase.

[40] Homologous recombination deficiency.

[41] Platinum sensitive relapse.

[42] Breast cancer gene mutation.

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

[44] Metastatic breast cancer.

[45] Bruton tyrosine kinase inhibitor.

[46] Mesenchymal-epithelial transition.

[47] Sodium-glucose cotransporter 2.

[48] Chronic kidney disease.

[49] Heart failure with reduced ejection fraction.

[50] Type-2 diabetes.

[51] Volume-based procurement.

[52] Dipeptidyl peptidase IV.

[53] Fixed dose combination.

[54] ÔNew-to-brandÕ share represents a medicineÕs share in the dynamic market.

[55] Chronic obstructive pulmonary disease.

[56] Inhaled corticosteroid.

[57] Long-acting beta-agonist.

[58] Complement component 5.

[59] Atypical haemolytic uraemic syndrome.

[60] Other Operating Income.

[61] Other adjustments include fair-value adjustments relating to contingent consideration on business combinations and other acquisition-related liabilities, discount unwind on acquisition-related liabilities (see Note 4) and provision movements related to certain legal matters, including a $510m charge to provisions relating to a legal settlement with BMS and Ono in Q2 2023 (see Note 6).

[62] Securities Exchange Commission.

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

[64] Based on average daily spot rates 1 Jan 2022 to 31 Dec 2022.

[65] Based on average daily spot rates 1 Jan 2023 to 30 Jun 2023.

[66] Based on average daily spot rates 1 Jun 2023 to 30 Jun 2023.

[67] Change vs the average spot rate for the previous year

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

[69] Fluorouracil, oxaliplatin and docetaxel.

[70] Gastrointestinal.

[71] Metastatic castration-resistant prostate cancer.

[72] Overall response rate.

[73] Disease Control Rate.

[74] Immunohistochemistry.

[75] In situ hybridization.

[76] Amyloid light chain.

[77] Effective 1 January 2023, the Group has updated the presentation of Total Revenue. See Note 1 for further details of the presentation of Alliance Revenue.

[78] The Q2 2023 and Q2 2022 information in respect of the three months ended 30 June 2023 and 30 June 2022 respectively included in

the Interim Financial Statements have not been reviewed by PricewaterhouseCoopers LLP.

[79] The Condensed consolidated statement of financial position as at 30 June 2023 and 30 June 2022 have been reviewed by

PricewaterhouseCoopers LLP. The Condensed consolidated statement of financial position as at 31 December 2022 has been audited

by PricewaterhouseCoopers LLP.

[80] 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.

[81] 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.

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