Interim Results - Part 1

ASTRAZENECA PLC
3 August 1999

Part 1

AstraZeneca PLC
Half Year Results 1999

              'Strong sales and profits growth in Healthcare'

Financial Highlights
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Continuing Operations (excluding Zeneca Specialties) before Exceptional
Items

                      -----------   ----------------------------------------
                       Statutory                Pro Forma Basis*             
                         Basis                                               
                      -----------   ----------------------------------------
                        1st Half     1st Half   1st Half           Constant  
                            1999         1999       1998           Currency  
                            USDm         USDm       USDm       %          %  
Sales:                                                                       
  Group                    9,043        9,043      8,096    + 12       + 12  
  Healthcare               7,382        7,382      6,360    + 16       + 16  
Operating Profit:                                                            
  Group                    2,103        2,091      1,938    +  8       +  9  
  Healthcare               1,834        1,822      1,610    + 13       + 13 
                                                                            
Profit before Tax          2,092        2,059      1,934    +  6       +  7 
Earnings per Share       USD0.83      USD0.81    USD0.75    +  8        n/a 
                      -----------   ----------------------------------------

All narrative in this report refers to pro forma growth rates.

Tom McKillop, Chief Executive, said: 'AstraZeneca has made an excellent
start with strong sales and profit growth in healthcare. Integration is
progressing well and we look forward to the future with great confidence.'

-  Healthcare sales up 16 per cent; US Healthcare sales up 17 per cent

-  Healthcare operating profit up 13 per cent

-  Agrochemicals sales down 5 per cent

-  Specialties sold for USD2 billion (H1 99 operating profit: USD71 million)

-  First interim dividend of USD0.23 per Ordinary Share (14.2 pence per
   share, SEK 1.89 per share)

-  New dividend policy including planned share repurchase programme

Group Statutory Basis (including Discontinued Operations and Exceptional
Items)

                           ---------------------   ----------
                            1st Half   1st Half               
                                1999       1998     Reported  
                                USDm       USDm            % 
                           ---------------------   ----------
Profit before Tax              1,342      2,089         - 36 
Earnings per Share (FRS3)    USD0.47    USD0.81         - 42 
                           ---------------------   ----------

*   Pro forma Basis: see basis of calculation description in Note 2.

n/a = not applicable

London, 3 August 1999


Media Enquiries:    Steve Brown/Lucy Williams (London)  [phone]/5034
                    Mikael Widell/
                     Staffan Ternby (Stockholm)          (8) 553 26428/26107
                    Rachel Bloom (Wilmington)                 [phone]

Analyst/Investor
  Enquiries:        Elizabeth Sutton/
                     Michael Olsson (London)            [phone]/5087
                    Staffan Ternby (Stockholm)                 (8) 553 26107
                    Ed Seage (Wilmington)                     [phone]
                    Jorgen Winroth (Wayne)                    [phone]


Chief Executive Officer's Review of Operations
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All narrative in this report refers to pro forma growth rates.

AstraZeneca was formed on 5 April 1999, the merger being completed in a
record 80 working days.  AstraZeneca is a leading force in world
pharmaceuticals and aims to be 'First for Innovation and Value'.

This has been a period of great progress involving the integration of the
companies, a fundamental review and restructuring of the Group, while at the
same time maintaining business focus to deliver strong results and maximise
the potential of the portfolio.

The key features of the results are strong sales and profits growth in
Healthcare (16 per cent and 13 per cent respectively).  This has been
achieved through good performances from established products, strong growth
from some newer products and valuable contributions from major markets.
Outstanding sales of the new fungicide Amistar have been more than offset by
the generally depressed agrochemicals market, particularly in North America.

Integration

Integration is proceeding quickly.  Over 600 management appointments were
made by 1 June 1999, when the Healthcare business began operating on a
unified basis.  The restructuring of the sales and marketing teams is
already taking place and focus has been maintained on the underlying
business during this period with sales up 16 per cent.  The integration of
sales and marketing will be substantially complete by the end of the year
and should help to deliver the full potential of the product portfolio.  An
extensive review of Research and Development is underway and the progress
with key projects in the portfolio will be presented at analyst conferences
in London and New York on 6 and 8 December this year.  Key decisions on
site locations have been made. All synergy targets have been allocated and
should deliver USD1.1 billion in cost savings within three years of
completion of the merger with around 10 per cent being realised in 1999.
The charge for synergy and restructuring in the first half of 1999 amounted
to USD130 million. It is expected that a significant proportion of the total
restructuring cost, currently estimated at USD1.2 billion, will be charged
by the end of the year.

Review & Restructuring of Group

The sale of Specialties was completed on 30 June 1999 for USD2 billion.  The
disposal realised a pre-tax profit of USD237 million and will generate net
cash of approximately USD1.5 billion.  Specialties results for the first
half of the year have been consolidated but reported separately as
discontinued operations including the contract manufacture of textile colour
intermediates for BASF which will cease in early 2000.  Marlow Foods is now
classified in Other Trading.

A full strategy review of the Salick Health Care business is being
undertaken in light of the pressures on the profitability of the US
healthcare service sector and the prospect of further tightening of
regulations.

The Agrochemicals industry, particularly in North America, is currently
facing very difficult market conditions created by the lowest commodity
prices for over a decade. Although by industry standards our sales
performance has been better than many, a programme to improve the quality of
earnings and ensure the competitiveness of the Agrochemicals business is
being accelerated in view of these poor trading conditions.

Financials

On a continuing operations and pre-exceptional basis, Group sales and
operating profits increased by 12 per cent and eight per cent respectively
(12 per cent and nine per cent at constant currency).

Healthcare sales were up 16 per cent (the same at constant currency) with
growth achieved across nearly all products.  Operating profits grew by 13
per cent (the same at constant currency).

Agrochemicals sales were down five per cent (the same at constant currency)
due to significantly reduced demand in the Americas, partially offset by
good growth in Western Europe and recovery in Asia Pacific.  Operating
profit declined by 16 per cent (10 per cent at constant currency).

The Group operating margin declined slightly from 23.9 per cent to 23.3 per
cent due partly to product mix and higher manufacturing costs in Healthcare,
and increased costs in Agrochemicals in respect of further biotechnology
investment and additional manufacturing capacity for Amistar and Touchdown.

Earnings per Share increased by eight per cent to USD0.81.

Dividend Policy including Share Repurchase Programme

Following changes in the tax treatment of dividends and the removal of tax
costs on companies repurchasing their own shares, the AstraZeneca
distribution policy will contain both a regular dividend cash flow and a
share repurchase component to give the company more flexibility in managing
its capital structure over time.

Dividends will be paid twice a year, with a greater proportion paid as a
second interim, and will be re-based over time so that earnings will cover
dividends by between two and three times.  The dividend (in the absence of
unforeseen circumstances) will be maintained at 70 cents per share until
such time as it falls comfortably within this range.  Thereafter, dividends
are intended to be grown in line with earnings.  Consistent with this policy
a first interim dividend of USD0.23 (14.2 pence, SEK 1.89) will be paid in
October.

The Group remains highly cash generative with operating cash flows amounting
to USD2 billion before merger costs.  The net cash position amounted to
USD1.8 billion at 30 June 1999.

Cash resources will first be deployed in attractive investments to secure
high quality long-term growth.  On present cash flow projections and subject
to unforeseen additional investment opportunities, at least USD2 billion
should be available for share repurchases.

Healthcare
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All narrative in this section refers to pro forma growth rates at constant
currency.

Sales grew by 16 per cent; operating profits were up 13 per cent.

Gastrointestinal

Sales of Losec/Prilosec, and the whole of the GI franchise, grew by 15 per
cent.  Prescription growth continues to be strong, with US share of the
anti-secretory market increasing to 37 per cent.  However, as expected,
due to the high stocking of product in June 1998, reported growth in US
Prilosec sales was slower, up 11 per cent, compared to the first half of
1998. The quarterly sales profile for 1999 is anticipated to be more evenly
spread than last year and this should see good third quarter growth
compared to 1998.  In Europe Losec sales grew by 29 per cent with strong
growth in France, the UK and Sweden.  Sales also benefited from the return
of marketing rights in Italy and Spain.  The launch of generic products in
April in Germany led to a flat first half sales performance.  Litigation is
ongoing against a number of generic products in the German market.

Cardiovascular

Sales of Cardiovascular products grew by 17 per cent.  Zestril sales
increased by 18 per cent due to strong growth in the USA where continued
prescription growth resulted in the market share increasing to 23.7 per
cent.  The rate of growth was influenced by wholesaler purchasing which,
together with the phasing of a major contract, may result in lower full year
growth rates.  Sales of Seloken were up 24 per cent due to strong growth in
the USA where the product is the only beta blocker being actively promoted
for hypertension.  Atacand sales of USD73 million resulted from good growth
in several major markets.  Since its launch in the USA last October, Atacand
has gained over a four per cent share of the US AII market. Market share in
Germany has reached 17 per cent.

Respiratory

Sales of Respiratory products grew by 11 per cent.  In the USA strong demand
for Pulmicort cannot be fully met owing to supply limitations. The situation
is steadily improving, market share is growing (now approaching five per
cent) and the longer term prospects are good. Rhinocort sales grew by 24 per
cent helped by strong demand in the USA following a product recall in late
1998. Oxis has continued to increase its market share in all current markets
with sales totalling USD41 million.  Increased competition in the USA and
slow progress in some European markets resulted in flat sales for Accolate.
However, the latest promotional and DTC campaigns in the USA have resulted
in some pick-up of prescriptions.

Oncology

Sales of Oncology products grew by 14 per cent.  Casodex sales grew by 44
per cent with continued growth in all markets boosted by strong uptake in
France and the launch in Japan.  Zoladex sales increased by nine per cent
with strongest growth in Japan.  The new indication for the treatment of
early prostate cancer in combination with radiotherapy is expected to
provide further beneficial product differentiation and potential for further
sales growth. A total sales increase of eight per cent for Nolvadex was
underpinned by double digit growth in the USA demonstrating the beneficial
effect of new indications, including that for the reduction of risk of
breast cancer in high risk women.  Sales of Arimidex grew by nine per cent.

Specialist/Hospital

Sales of Specialist/Hospital products (including Pain and CNS portfolios)
grew by 21 per cent.  Strong growth  in Seroquel sales to USD95 million
reflects increasing acceptance of the product's good tolerability profile,
especially in the important USA market. Zomig sales were USD86 million with
particularly strong sales growth in the USA and France.  In the US market
prescriptions for triptans are trending upwards; total triptan market volume
has increased by around 25 per cent over the last 12 months versus a flat
position for the US migraine market as a whole.  Merrem sales grew by 26 per
cent.  Xylocaine grew by seven per cent.  Diprivan sales increased by two
per cent.  Strong growth in Japan due to the new indication for use in
intensive care has been offset by a small decline in the USA compared to a
very strong first half in 1998 but also influenced by the launch of a
competitor formulation in April.

Astra Tech and Salick Health Care increased sales by 17 and 16 per cent
respectively.

Geographic

Sales in the USA grew by 17 per cent with the comparative growth affected by
the pattern of Prilosec sales in 1998 as highlighted above.  Sales in Europe
grew by 15 per cent with notably strong growth in France of 26 per cent.
Sales in Japan grew by five per cent, ahead of market growth, benefiting from
new launches and additional indications.

Research and Development

R & D expenditure totalled USD1.16 billion. Increased resources are being
applied to late stage development of ZD4522 ('superstatin'), a new
generation PPI and the thrombin programme. Progress with the R & D pipeline
will be reported at analyst meetings on 6 and 8 December in London and New
York.  As a condition of merger approval 'Chirocaine' has been returned to
Chiroscience. Two development collaborations have been terminated: the
collaboration with CarboMed on ZD0101 (an antiangiogenic compound in solid
tumours in Phase II development) and the collaboration with CytoTherapeutics
on 'Actid' (a cell therapy primarily for cancer pain in Phase II
development).

Operating Margin

Operating margin declined slightly from 25.3 per cent to 24.8 per cent
partly as a result of product mix and higher manufacturing costs in
anticipation of product sales' expansion.  The slightly lower rate of spend
in R & D at 16 per cent of sales was offset by higher promotional costs,
particularly for Nolvadex in the USA.  The relative rate of spend on R & D
is expected to increase in the second half of the year.

Agrochemicals
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All growth rates in this section are at constant currency and exclude the
effects of acquisitions and disposals.

Sales decreased by five per cent; operating profit decreased by 10 per cent
at constant exchange rates, and excluding the ISK integration costs charged
in 1998, by 19 per cent.

Herbicides

Herbicide sales were down 12 per cent.

The impact of the sharp fall in commodity prices to historically low levels
has been most marked in the important North American market.  The associated
reduction in incomes has led farmers to switch from premium to lower cost
products.  This movement particularly affected sales of selective herbicides
- notably Surpass on corn, Achieve on cereals and Flex and Fusilade on soya
- which fell by 19 per cent overall.

Non-selective herbicides were unchanged with increases in North America and
Asia Pacific offset by a significant fall in Latin America due to reduced
sales in Brazil following the economic crisis in early 1999.  Sales of
Touchdown continue to develop successfully with volume growth in excess of
20 per cent.

Insecticides

Insecticide sales decreased by 13 per cent largely due to a 61 per cent
decline in the corn insecticide Force as North American growers reduced
inputs in response to low corn prices.  Karate sales were down two per cent.

Fungicides

Fungicide sales were up 16 per cent with Amistar increasing 38 per cent to
USD276 million.  Amistar's market penetration increased in all key markets
with the product now registered in 49 countries on 55 crops; preliminary
market data indicates that Amistar is now the world's leading fungicide.
Sales of Bravo were down four per cent.

Geographic

European sales were up five per cent overall; strong growth in fungicides
and increased market share in Western Europe was somewhat reduced by lower
demand from Eastern Europe.

North American sales decreased 15 per cent with declines in selective
herbicides and the insecticide, Force, only partially offset by growth in
Amistar and Touchdown.

Latin American sales fell by 21 per cent, as a result of the combined impact
of low commodity prices and depressed economic conditions in Mercosur.

Sales in Asia Pacific, Africa and Australasia were 14 per cent higher as
operations in Asia Pacific capitalised on improved local conditions.

Research & Development

The business has continued to expand its investment in biotechnology
research and is entering a new collaborative agreement in rice with Japan
Tobacco (agreement completion is scheduled for October 1999).

Operating Margin

The operating margin reduced from 19.8 per cent to 18.8 per cent due to
increased costs in respect of further biotechnology investment and increased
operating costs on additional manufacturing capacity for Amistar and
Touchdown.

Advanta

Depressed agricultural conditions led to a somewhat reduced contribution
from Advanta.

Year 2000 Compliance Project
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The Year 2000 Programme for AstraZeneca has moved into its final phase;
98 per cent of the projects to confirm compliance of IT and embedded systems
have been completed and the outstanding projects are being closely managed
to meet deadlines.  Attention is now focused on continuity and contingency
planning.  Increased complexity has resulted from the merger and associated
changes in systems but management is taking concerted action to ensure there
is no loss of focus in achieving full Year 2000 compliance.  The Year 2000
Programme is expected to cost AstraZeneca USD166 million, excluding internal
manpower cost allocations.  Expenditure to date totals USD136 million,
including USD23 million in the first half of 1999.

Exceptional Items
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Exceptional charges in the first half of the year totalled USD822 million
(before taxation credits of USD141 million).

Exceptional charges within operating profit comprise: USD130 million of
integration costs; USD12 million for the programme, initiated in mid 1998,
to rationalise Astra's US operations following the Astra Merck
restructuring agreement.

The sale of Specialties realised a gain of USD237 million before tax (USD140
million after tax) after allowing for the write-off of goodwill
(USD406 million) previously charged to reserves, costs of separation from
other AstraZeneca businesses and provisions for pension liabilities.

The R & D related payment to Merck of USD713 million is included in merger
costs.  Merck has disputed the basis of calculation and claims the amount
should be USD822 million.  The matter has gone to arbitration.  Other merger
costs of USD204 million include the cost of withdrawing from the development
of 'Chirocaine' (as requested by the competition authorities).

Taxation
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The tax charge for the first half of 1999, on continuing operations before
exceptional items, was USD624 million, representing an effective tax rate of
30 per cent.  Only limited tax relief is available on the exceptional items
because of the element of goodwill within the charge.

Cash Flow
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Net cash generated from operations before exceptional items amounted to
USD2.0 billion in the first half of 1999 after absorbing a seasonal build up
of working capital in the Agrochemicals business. Capital expenditure of
USD0.9 billion included a USD180 million stage payment to Schering Plough,
relating to the Losec marketing rights in Italy and Spain, and investment in
the expansion of tabletting, bulk drug, Turbuhaler capacity, and research
facilities. After tax and dividends of USD0.6 billion and USD0.8 billion
respectively, the net cash outflow for the first half year was USD0.3
billion.

In the first half year, exceptional cash outflows associated with the
merger, including USD1.7 billion of payments to Merck and USD0.3 billion of
merger and integration costs, were matched by cash received from the sale
of Specialties.

At 30 June cash and short term investments exceeded borrowings by USD1.8
billion.

Dividends
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A first interim dividend of USD0.23 (14.2 pence, SEK 1.89) will be paid on
25 October 1999 to all shareholders on the register on 10 September 1999.

Future Prospects
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The strong business momentum achieved throughout the merger period is being
maintained. This should result in good double digit growth in pro forma
healthcare profits for the full year, based on continuing robust growth in
sales. Research and development programmes are moving forward effectively
and the progress with the development portfolio will be presented in
December.

No significant improvement is anticipated in the trading conditions for
Agrochemicals. The strategies of the non-pharmaceutical businesses are being
reviewed and some restructuring is expected before the year end.


Tom McKillop
Chief Executive Officer

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