Interim Results (Part 1 of 3)

AstraZeneca PLC
26 July 2007







AstraZeneca PLC

Second Quarter and Half Year Results 2007

'Solid financial performance in the First Half.  Pipeline strengthened with two
new compounds progressing to Phase III development and the addition of
MedImmune.'



Financial Highlights
Group                      2nd Quarter  2nd Quarter    Actual      CER       Half Year   Half Year    Actual    CER
                                  2007         2006         %        %            2007        2006         %      %
                                    $m           $m                                 $m          $m

Sales                            7,273        6,625       +10       +6          14,239      12,805       +11     +8

Operating Profit                 1,973        2,131        -7      -11           4,143       4,107        +1     -1

Profit before Tax                1,991        2,209       -10      -14           4,258       4,253         -     -2

Earnings per Share               $0.95        $1.02        -7      -11           $1.97       $1.92        +3     +1

Adjusted EPS*                    $1.19        $1.02       +17      +13           $2.25       $1.92       +17    +15
(excluding MedImmune
& restructuring costs)


* Q2 and First Half 2007 Earnings per Share exclude ($0.06) per share impact
from the MedImmune acquisition (including consolidated trading from 1 June, net
interest expense on deal financing, amortisation of intangibles and one-off
costs associated with the acquisition).  Q2 and First Half 2007 Earnings per
Share exclude ($0.18) and ($0.22), respectively, in respect of restructuring
charges associated with ongoing and newly initiated productivity improvement
programmes.


All narrative in this section refers to growth rates at constant exchange rates
(CER)


•    Second quarter sales increased 6 percent to $7,273 million.  Excluding the MedImmune acquisition and
     restructuring charges from the second quarter, operating profit increased 11 percent to $2,452 million;
     Earnings per Share increased 13 percent to $1.19.
•    In the reported results for the second quarter, MedImmune recorded an operating loss of $103 million.
     Restructuring charges amounted to $376 million.
•    Restructuring initiatives have been significantly scaled up to deliver annual benefits in excess of $900
     million by 2010, at an estimated cost of $1.6 billion.
•    Successful completion of MedImmune acquisition; synergies on track.
•    Combined sales of five key growth products increased 15 percent in the first half: Nexium(TM)(up 4 percent),
     Seroquel(TM)(up 12 percent), Crestor(TM)(up 47 percent), Arimidex(TM)(up 12 percent) and Symbicort(TM)(up 22
     percent).  Symbicort(TM)was launched in the US market in June.
•    Free cash flow before acquisitions was $2,662 million in the first half.  Cash distributions to shareholders
     were $3,910 million, including net share repurchases of $2,032 million.
•    The Board has recommended a 6 percent increase in the first interim dividend to $0.52.
•    Two new compounds (dapagliflozin for diabetes and ZD4054 for prostate cancer) progress to Phase III
     development, bringing the total number of Phase III projects to eight.

David Brennan, Chief Executive Officer, said: 'A solid underlying financial
performance puts us on track to deliver our full year targets. The first half
saw excellent progress in strengthening the product pipeline; in addition to two
new compounds progressing into Phase III, the successful acquisition of
MedImmune will have a transformational impact upon AstraZeneca's science base.
AstraZeneca is now well positioned to deliver its biologics strategy on a
greatly accelerated timeline.'

London, 26 July 2007

Pictures of senior executives are available on www.newscast.co.uk.  Broadcast
footage of AstraZeneca products and activities is available on
www.thenewsmarket.com/astrazeneca.


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Enquiries:
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Business Highlights All narrative in this section refers to growth rates at
constant exchange rates (CER) unless otherwise indicated



Acquisition of MedImmune, Inc.



The acquisition of MedImmune, Inc. was completed in June.  As a result,
AstraZeneca consolidated financial results include the results of MedImmune with
effect from 1 June 2007.  The inclusion of MedImmune increased reported sales in
the second quarter by $24 million, contributed an operating loss of $103 million
and had a negative impact on earnings per share of 6 cents.  Included in the
operating loss is intangible amortisation of $35 million and $49 million in
one-off costs associated with the acquisition.  Incremental interest charges of
$37 million on the acquisition financing (net of MedImmune's interest income)
are included in the negative EPS impact of 6 cents.



Second Quarter



Sales in the second quarter increased by 6 percent at CER, or 10 percent on an
as reported basis (including a 4 percent positive impact from currency
movements).  Sales in the US were up 6 percent.  Sales outside the US were also
up 6 percent, on a strong 21 percent increase in Emerging Markets.



Operating profit in the second quarter was $1,973 million.  Included in this are
restructuring costs of $199 million associated with the previously announced
global supply chain productivity initiative and a further $177 million in
charges related to new productivity initiatives.  Excluding these restructuring
costs and the MedImmune impact referred to above, the underlying increase in
operating profit was 11 percent.



Expenditures on Research and Development were up 20 percent to $1,225 million,
including $28 million in relation to MedImmune.  Excluding MedImmune and $29
million in restructuring costs charged to R&D this quarter, R&D expense
increased 14 percent.



In the second quarter, SG&A expense increased 10 percent to $2,605 million.  SG&
A expenditures at MedImmune accounted for $120 million, including $35 million of
amortisation of intangible assets arising from the acquisition and one-off costs
of $49 million.  Excluding MedImmune SG&A and restructuring costs of $148
million, underlying SG&A expense was 2 percent lower than the second quarter
2006.



Reported earnings per share in the second quarter were $0.95.  Excluding
MedImmune and restructuring costs, adjusted earnings per share were $1.19
compared with $1.02 in 2006, an increase of 13 percent.



The combined sales of five key growth products (NexiumTM, SeroquelTM, CrestorTM,
Arimidex(TM)and SymbicortTM) grew by 12 percent in the second quarter to $3,797
million.



Nexium(TM)sales in the second quarter were $1,312 million, unchanged at CER.
Sales in the US were down 1 percent as generic omeprazole has captured most of
the growth in the US PPI market.  Nexium(TM)continues to gain share from the
other branded PPIs.  The US sales decline was offset by a 2 percent increase in
Nexium(TM)sales in other markets.



Seroquel(TM)sales increased 11 percent to $963 million in the second quarter.
Sales in the US were up 9 percent as continued expansion in use for bipolar
disorder has led to good volume growth, partially offset by the lower revenues
per prescription for this indication.  Sales in other markets were up 17
percent.  The launch of Seroquel XR(TM)for the treatment of schizophrenia in
adult patients is planned for August in the US.  The regulatory filing for
Seroquel XR(TM)in Europe is under review.



Crestor(TM)sales in the second quarter were up 38 percent to $678 million.  Sales
in the US were up 30 percent.  Sales in other markets were up 47 percent, aided
by good uptake from the launch in Japan.



Arimidex(TM)sales increased 10 percent in the second quarter, on a 14 percent
increase in the US and 7 percent sales growth in other markets.



Symbicort(TM)sales in the second quarter were up 25 percent to $414 million,
including $30 million in stocking sales in the US ahead of the launch on 25
June.  Sales in other markets were up 15 percent.



First Half



For the first half, sales increased 8 percent at CER, or 11 percent on an as
reported basis; currency movements had a 3 percent positive impact on reported
sales growth.  Sales in the US were up 9 percent.  In other markets, sales in
Established ROW were up 4 percent; 17 percent sales growth was achieved in
Emerging Markets.  Combined sales of five key growth products were up 15 percent
in the first half to $7,411 million, driven by strong growth in CrestorTM,
Seroquel(TM)and Symbicort(TM).



Reported operating profit was $4,143 million, down 1 percent at CER; currency
movements had a 2 percent positive impact.  Excluding $458 million in
restructuring costs charged in the first half 2007 and the impact from
MedImmune, underlying operating profit increased by 13 percent.  Reported
earnings per share were $1.97 in the first half.  Excluding MedImmune and
restructuring costs, adjusted earnings per share were $2.25 compared with $1.92
in 2006, an increase of 15 percent.



Enhancing Productivity

Management firmly believes that improving productivity and efficiency in all
parts of the organisation is a strategic imperative in order to drive
competitive financial performance in an increasingly challenging external
environment.

In February, the Company announced a three-year programme to improve asset
utilisation within the global supply chain.  Since that announcement, the
Company has identified, and the Board has approved, additional initiatives
related to European Sales and Marketing, Information Services and Business
Support infrastructure, as well as restructuring activities in Research and
Development.

The aggregate cost of all of these programmes, including an expanded scope to
the supply chain programme, is estimated to be $1,600 million, of which $458
million has been charged to the first half results.  When fully implemented, the
net reduction in positions will be around 7,600.  The annual benefit when these
programmes are complete is expected to be in excess of $900 million in 2010 (at
current rates of exchange).   All reductions in positions are subject to
consultations with works councils, trade unions and other employee
representatives and in accordance with local labour laws. (See page 11 for
details on the costs, timings and expected benefits for each of these
productivity programmes.)  The Company will continue to explore further
opportunities to reduce the cost base and improve future profitability, but
these are unlikely to significantly impact the 2007 charge.

MedImmune Synergies



Since the acquisition, synergies totalling $450 million have been identified
from SG&A ($105 million), manufacturing ($25 million), small molecule Research
and Development ($115 million) and revenue investments from the build-up of
AstraZeneca's biologics strategy that no longer need to be made ($205 million).
These synergies increase to over $500 million in 2010.  The implementation cost
is around $375 million.  The acquisition will be accretive to Core Earnings per
Share by 2009. (See below and page 14 for a definition of Core Earnings per
Share).

Core Earnings per Share

With the acquisition of MedImmune and the various payments related to exit
arrangements with Merck in the first half of 2008, the income statement will be
impacted by significant accounting amortisation charges going forward.  Together
with ongoing restructuring costs, this has led the Company to conclude that an
alternative measure of performance is required in addition to reported earnings
per share in accordance with IFRS.  This alternative measure will be termed '
Core Earnings per Share' (Core EPS).  The Company will report Core EPS beginning
with these second quarter results, and it is anticipated that 2008 earnings
guidance will be founded on this measure.  This measure is defined on page 14.

Future Prospects



Following the completion of the acquisition of MedImmune, Inc. a recalibration
of the Company's earnings guidance for the full year is now warranted.

This recalibration will use as its starting point the $3.80 to $4.05 earnings
per share target range we communicated at the beginning of the year, and
reconfirmed in the first quarter.  This range excluded any contribution from US
sales of Toprol-XL(TM)(and its authorised generic) and any one-off costs
associated with productivity initiatives.  Based on the underlying performance
of the AstraZeneca business, this range is now revised to earnings per share
between $3.90 and $4.05.

The MedImmune business has been consolidated from 1 June, and hence the full
year results will include intangible amortisation of approximately $245 million,
the $49 million in one-off costs related to the acquisition charged in the
second quarter and the initial costs and benefits from the synergies programme.
The Company's revised guidance for 2007 earnings per share, including MedImmune
related financing costs, is now in the range of $3.60 to $3.75 per share
(excluding Toprol-XL(TM)in the US and restructuring costs).

In addition, the Company estimates that around $900 million ($0.44 per share) of
the total productivity programme costs of $1,600 million will be charged in
2007.

In the first half, US sales of Toprol-XL(TM)contributed $0.27 to earnings per
share.  Under the current scenario of generic competition on just the 25mg
tablet, contribution from US sales of the Toprol-XL(TM)product range is expected
to generate EPS of around $0.04 per month; this estimate will be updated as
market conditions change.

Disclosure Notice:  The preceding forward-looking statements relating to
expectations for earnings and business prospects for AstraZeneca PLC are subject
to risks and uncertainties, which may cause results to differ materially from
those set forth in the forward-looking statements.  These include, but are not
limited to: when and if additional generic competitors to Toprol-XL(TM)are
introduced in the US market prior to completion of Appellate Court process, the
rate of growth in sales of generic omeprazole in the US, continued growth in
currently marketed products (in particular CrestorTM, NexiumTM, SeroquelTM,
Symbicort(TM)and ArimidexTM), the growth in costs and expenses, interest rate
movements, exchange rate fluctuations, and the tax rate.  For further details on
these and other risks and uncertainties, see AstraZeneca PLC's Securities and
Exchange Commission filings, including the 2006 Annual Report on Form 20-F.

Sales



All narrative in this section refers to growth rates at constant exchange rates
(CER) unless otherwise indicated

Gastrointestinal
                                   Second Quarter              CER %        Half Year                CER %
                                      2007        2006                      2007        2006
Nexium(TM)                            1,312       1,283             -       2,620       2,472            +4
LosecTM/Prilosec(TM)                    298         356           -19         577         700           -20
Total                                1,630       1,654            -4       3,237       3,205            -1


•    In the US, Nexium(TM)sales in the second quarter were $855 million, down 1 percent versus last year.  In
     contrast to 2006, when both Nexium(TM)and generic omeprazole were showing strong volume growth whilst combined
     volumes for other brands were declining, this quarter generic omeprazole has taken most of the market growth,
     with dispensed tablet volume up 48 percent.  Dispensed tablet volume for Nexium(TM)was up 3 percent in the
     quarter; all other brands combined were flat.


•    Nexium(TM)sales in the US in the first half were up 4 percent to $1,717 million.


•    Nexium(TM)sales in other markets in the second quarter increased 2 percent, as growth in Emerging Markets
     (benefiting from launch in China) and in Canada more than offset declines in Established Markets,
     particularly Germany and Italy.


•    Nexium(TM)sales in other markets were up 4 percent in the first half to $903 million.


•    Prilosec(TM)sales in the US were up 33 percent in the second quarter, resulting in a 14 percent increase in
     the first half.


•    Sales of Losec(TM)in other markets declined 26 percent in the first half, although sales continue to grow in
     Japan and China.





Cardiovascular
                                   Second Quarter              CER %        Half Year                CER %
                                      2007        2006                      2007        2006
Crestor(TM)                             678         480           +38       1,306         867           +47
Seloken(TM)/Toprol-XL(TM)                457         478            -6         901         934            -5
Atacand(TM)                             318         276            +9         614         530           +10
Plendil(TM)                              74          70             -         139         142            -7
Zestril(TM)                              76          78            -8         156         153            -3
Total                                1,755       1,540           +10       3,408       2,930           +13


•    In the US, Crestor(TM)sales in the second quarter were $353 million, a 30 percent increase over last year.
     Total prescriptions in the US statin market increased 10 percent in the second quarter; CrestorTM
     prescriptions were up 28 percent in the same period.  Crestor(TM)share of total prescriptions in the US statin
     market was 8.6 percent in June 2007, broadly unchanged from December 2006, which, although somewhat
     disappointing, is nonetheless a resilient performance in the face of a more than 4 point increase in market
     share for simvastatin over the same period.  In contrast, the market leader Lipitor has lost more than 4
     points of market share.


•    US sales for Crestor(TM)in the first half increased 42 percent to $696 million.


•    In other markets, Crestor(TM)sales in the second quarter were up 47 percent to $325 million.  Sales in the
     first half were up 54 percent to $610 million.


•    In the second quarter, Crestor(TM)sales in Western Europe were up 22 percent; sales in Canada were up 48
     percent.  Volume share of the statin market for Crestor(TM)is now 19.7 percent in Canada; 11.8 percent in the
     Netherlands; 20.2 percent in Italy; and 14.6 percent in France.


•    The launch of Crestor(TM)in Japan is off to a good start, achieving 6.7 percent of market share by value in
     May 2007.


•    US sales of the Toprol-XL(TM)product range, which includes sales of the authorised generic to Par, were down
     10 percent in the second quarter and down 8 percent in the first half.  Generic competition was confined to
     the 25mg dose during this period; generic products accounted for 21 percent of dispensed prescriptions across
     the entire product range in the second quarter.


•    Sales of Seloken(TM)in other markets were up 10 percent in the second quarter and 8 percent in the first half
     on good growth in Emerging Markets.


•    Atacand(TM)sales in the US were down 2 percent in the second quarter and were up 5 percent in the first half.


•    Sales of Atacand(TM)in other markets were up 13 percent in the second quarter and 12 percent in the first
     half.



Respiratory
                                   Second Quarter              CER %        Half Year                CER %
                                      2007        2006                      2007        2006
Symbicort(TM)                           414         308           +25         768         585           +22
Pulmicort(TM)                           320         301            +4         721         629           +12
Rhinocort(TM)                            95         102            -9         187         187            -2
Accolate(TM)                             19          21           -10          38          39            -3
Oxis(TM)                                 23          22             -          46          44            -2
Synagis(TM)*                             16           -           n/a          16           -           n/a
FluMist(TM)*                              -           -           n/a           -           -           n/a
Total                                  927         791           +12       1,858       1,556           +14

*Sales of these MedImmune products were consolidated in AstraZeneca accounts
from 1 June 2007.  As a result, there are no prior period sales included.


•    Symbicort(TM)sales in the second quarter were up 25 percent to $414 million, including $30 million in stocking
     sales in the US ahead of the launch on 25 June.  Sales in other markets were up 15 percent as a result of
     market growth and share gains, particularly in those markets where Symbicort(TM)SMART(TM)has been introduced.


•    Symbicort(TM)sales in the first half were up 22 percent to $768 million.


•    Sales of Pulmicort(TM)in the US increased 7 percent in the second quarter, chiefly as a result of the
     performance of Pulmicort(TM)RespulesTM, for which sales were up 23 percent.  US sales of Pulmicort(TM)products
     were up 19 percent in the first half.


•    Pulmicort(TM)sales in other markets were down 1 percent in the second quarter and up 2 percent in the first
     half.


•    Sales of Rhinocort(TM)Aqua in the US were down 5 percent in the first half. Total prescriptions declined 12
     percent.


•    Respiratory product sales include one-month sales of Synagis(TM)totalling $16 million.  Synagis(TM)sales are
     highly seasonal, with the majority of sales recorded in the fourth and first quarters, timed to the incidence
     of respiratory syncytial virus.



Oncology
                                   Second Quarter              CER %        Half Year                CER %
                                      2007        2006                      2007        2006
Arimidex(TM)                            430         379           +10         831         714           +12
Casodex(TM)                             331         306            +5         641         580            +7
Zoladex(TM)                             275         250            +6         524         481            +5
Iressa(TM)                               61          62             -         113         112            +2
Faslodex(TM)                             53          47            +9         102          91            +8
Nolvadex(TM)                             20          24           -17          39          45           -13
Ethyol(TM)*                               8           -           n/a           8           -           n/a
Total                                1,195       1,071            +8       2,291       2,029            +9

* Sales of this MedImmune product were consolidated in AstraZeneca accounts from
1 June 2007.  As a result, there are no prior period sales included.
•    In the US, sales of Arimidex(TM)were up 14 percent in the second quarter to $178 million.  Total prescriptions
     for Arimidex(TM)increased 9 percent in the first half.  Arimidex(TM)is the market leader among hormonal
     treatments for breast cancer, with market share of total prescriptions of 38 percent.  Sales in the first
     half were up 20 percent.


•    Arimidex(TM)sales in other markets were up 7 percent in both the second quarter and the first half.  First
     half sales were up 13 percent in Japan and increased 16 percent in Emerging Markets.


•    Casodex(TM)sales in the US were up 1 percent in the second quarter and 6 percent in the first half.


•    Casodex(TM)sales in other markets increased 6 percent in the second quarter and 7 percent in the first half.
     First half sales were up 7 percent in Western Europe and increased 15 percent in Japan.


•    Iressa(TM)sales were up 2 percent in the first half to $113 million.  First half sales were up 6 percent in
     Japan and were 40 percent higher in China.


•    Faslodex(TM)sales in the first half were up 8 percent.  Sales in the US were unchanged; sales in other markets
     increased 18 percent.



Neuroscience
                                   Second Quarter              CER %        Half Year                CER %
                                      2007        2006                      2007        2006
Seroquel(TM)                            963         849           +11       1,886       1,656           +12
Zomig(TM)                               106         103            -1         213         196            +5
Total                                1,293       1,178            +7       2,520       2,314            +6


•    In the US, Seroquel(TM)sales were up 9 percent in the second quarter to $678 million.  Total prescriptions
     were up 12 percent in the first half, nearly twice the rate of market growth for antipsychotics.   As the
     only single agent indicated for both the mania and depressive phases of bipolar disorder, Seroquel(TM)usage
     continues to expand in this segment, although growth in this indication does lead to somewhat lower revenue
     per prescription as a result of the lower doses used.


•    Seroquel(TM)sales in the US were up 10 percent in the first half.


•    The launch of Seroquel XR(TM)in the US is planned for August.  Seroquel XR(TM)provides the benefits of an
     improved dosage titration, with an effective dose reached by day 2, and the convenience of once daily dosing
     for the treatment of adult patients with schizophrenia.  The regulatory filing for Seroquel XR(TM)in Europe is
     under review.


•    Seroquel(TM)sales in other markets were up 17 percent in both the second quarter and the first half, on good
     growth in Western Europe and Emerging Markets.


•    Sales of Zomig(TM)were up 5 percent in the first half, with sales in the US up 3 percent and sales in other
     markets up 5 percent.



Geographic Sales
                               Second Quarter               CER %         Half Year                 CER %
                                  2007         2006                       2007         2006
North America                    3,542        3,340            +6        7,030        6,472            +9
  US                             3,268        3,077            +6        6,502        5,959            +9
Established ROW*                 2,842        2,586            +3        5,506        4,941            +4
Emerging ROW                       889          699           +21        1,703        1,392           +17

*Established ROW comprises Western Europe (including France, UK, Germany, Italy,
Sweden and others), Japan, Australia and New Zealand.
•    Sales in the US were up 6 percent in the second quarter, with CrestorTM, SeroquelTM, Arimidex(TM)and stocking
     sales for Symbicort(TM)accounting for most of the growth.


•    Sales growth in the Established Rest of World segment was 3 percent in the second quarter.  Sales in Western
     Europe were up 1 percent, as increases in SymbicortTM, Crestor(TM)and Seroquel(TM)managed to offset the
     declines in Losec(TM)and Nexium(TM).  Sales in Japan were up 8 percent, with sales of Crestor(TM)and Oncology
     products fuelling much of the increase.


•    Sales in Emerging Markets increased 21 percent in the second quarter.  Sales in Emerging Europe were up 19
     percent.  Sales in China increased 25 percent in the quarter.



Operating Review

All narrative in this section refers to growth rates at constant exchange rates
(CER) unless otherwise indicated



Second Quarter

Reported sales increased by 10 percent and operating profit fell by 7 percent.
At constant exchange rates, sales increased by 6 percent and operating profit
fell by 11 percent. Excluding the impact of MedImmune and restructuring costs,
operating profit increased by 11 percent.


Quarter Two                Operating Profit        CER %          EPS        CER %

                                         $m

Reported                              1,973          -11        $0.95          -11
MedImmune                               103          n/a        $0.06          n/a
Restructuring Costs                     376          n/a        $0.18          n/a
Underlying                            2,452          +11        $1.19          +13





Currency movements increased sales by 4 percent and operating profit by 4
percent. In comparison to last year, the dollar was 7 percent weaker against the
euro, increasing sales, and also against the Swedish krona (7 percent) and
sterling (8 percent), increasing costs.  The net effect of these currency
movements was a positive impact of 4 cents on earnings per share.



Underlying US sales growth is slightly ahead of reported growth of 6 percent
after adjusting for managed market accruals, inventory movements and provision
movements. Outside the US, sales increased by 6 percent.



In the second quarter, reported operating margin was 27.1 percent. Excluding the
MedImmune operating loss of $103 million and restructuring costs of $376
million, underlying operating margin was 33.8 percent, an increase of 1.6
percentage points on the second quarter in 2006 (see table below).


Quarter Two                    Reported %     Restructuring    MedImmune $m Underlying % Change versus
                                                      costs                                        PY*

                                                         $m

Gross Margin                         77.1             (199)             18          79.8          +0.8
Distribution                          0.9                 -             (1)          0.9             -
R&D                                  16.9              (29)            (28)         16.1          -1.7
SG&A                                 35.8             (148)           (120)         32.2          +2.3
Other Operating Income                3.6                 -             28           3.2          +0.2
Operating Profit                     27.1             (376)           (103)         33.8          +1.6

*Positive number indicates favourable effect on operating profit versus prior
year



Underlying gross margin of 79.8 percent in quarter two is 0.8 percentage points
higher than last year. Payments to Merck, at 4.2 percent of sales, were 0.4
percentage points lower than last year. Currency increased margin by 0.4
percentage points, counterbalancing a negative 0.4 percentage point impact from
increased royalty payments. Excluding the effect of these additional factors,
gross margin increased by 0.4 percentage points, due to continuing operational
efficiencies.



Underlying R&D expenditure was $1,168 million in the second quarter, up 14
percent over last year due principally to increased activity levels and the
effect of the externalisation strategy, particularly those relating to Cambridge
Antibody Technology and the collaboration with Bristol-Myers Squibb.



Underlying SG&A costs of $2,337 million were 2 percent lower than quarter two in
2006 as operating efficiencies continue to be driven from our sales and
marketing activities. The inclusion of MedImmune, Inc. added $120 million,
including intangible amortisation of $35 million and one-off costs of $49
million resulting from the acquisition.



Underlying other income of $231 million was $31 million above the second quarter
in 2006 and increased operating margin by 0.2 percentage points. Included within
the second quarter were gains of $139 million realised from the disposal of
non-core Infection products in Scandinavia, originally expected to occur in the
second half of 2007. In the second quarter of 2006, a gain of $109 million was
recognised on the divestment of US anaesthetic and analgesic products to Abraxis
BioScience, Inc. Other Income relating to MedImmune, Inc. amounted to $28
million and included a one-off gain of $17 million.



Included within cost of sales is the movement in the fair value of financial
instruments used to manage our transactional currency exposures; the net gain in
the quarter was $8 million (compared with a loss of $20 million for the same
period last year).  Other fair value movements of $10 million were charged
elsewhere in the income statement.





First Half

Reported sales increased by 11 percent and operating profit increased by 1
percent. At constant exchange rates, sales increased by 8 percent and operating
profit fell by 1 percent. Excluding the effect of MedImmune and restructuring
costs, operating profit increased by 13 percent.




Half One                   Operating Profit       CER  %          EPS       CER  %

                                         $m

Reported                              4,143           -1        $1.97           +1
MedImmune                               103          n/a        $0.06          n/a
Restructuring Costs                     458          n/a        $0.22          n/a
Underlying                            4,704          +13        $2.25          +15





Currency movements increased reported sales by 3 percent and operating profit by
2 percent. Cumulatively, exchange has increased earnings per share by 3 cents.
If current exchange rates are maintained for the remainder of the year, no
further benefits are expected to accrue.



Underlying US sales growth is broadly in line with reported growth of 9 percent
after adjusting for managed market accruals, inventory movements and provision
movements. Outside the US, sales increased by 7 percent.



In the first six months, reported operating margin was 29.1 percent.  Excluding
MedImmune and restructuring costs of $458 million, underlying operating margin
was 33.1 percent, an increase of 1.0 percentage points on 2006 (see table
below).




Half One                           Reported %     Restructuring        MedImmune Underlying %  Change versus
                                                          costs                                           PY
                                                             $m               $m
                                                             

Gross Margin                             77.8             (281)              18          79.8           +0.4
Distribution                              0.8                 -              (1)          0.9              -
R&D                                      16.8              (29)             (28)         16.4           -2.2
SG&A                                     33.9             (148)            (120)         32.0           +2.4
Other Operating Income                    2.8                 -              28           2.6           +0.4
Operating Profit                         29.1             (458)            (103)         33.1           +1.0





Underlying gross margin of 79.8 percent is 0.4 percentage points higher than
last year. Payments to Merck, at 4.3 percent of sales, were 0.3 percentage
points lower than last year. Currency increased gross margin by 0.1 percentage
points whilst higher royalty payments reduced margin by 0.4 percentage points.
Included in the first half were provisions totalling $24 million for fixed
assets and supplier commitments relating to the termination of AGI-1067
development. Excluding the effect of these additional factors, gross margin
increased by 0.6 percentage points due to continuing operational efficiencies
and a favourable geographic sales mix.



Underlying R&D expenditure was $2,338 million in the first half of 2007, up 20
percent over last year due principally to increased activity levels and the
effect of the externalisation strategy. Also included in this period are the
first quarter intangible impairments in respect of collaborations with
AtheroGenics and Avanir. SG&A costs excluding restructuring and MedImmune were 1
percent lower than the first half in 2006.



Included within cost of sales is the movement in the fair value of financial
instruments used to manage our transactional currency exposures; the net gain in
the first half was $9 million (compared with a loss of $21 million for the same
period last year).  Other fair value movements of $11 million were charged
elsewhere in the income statement.



Restructuring Costs

In April 2007, the Company announced its intention to bring forward productivity
initiatives, in addition to the programme to improve asset utilisation within
its global supply chain, to enhance the long-term efficiency of the business. As
of 30 June, the Board has approved the following programmes:




                                                        Total Charged at 30
                                                    Estimated          June
                                                    Programme
                                                                         $m
                                                           $m
Gross Margin

Global Supply Chain                                       750           281

SG&A

European Sales Force Restructuring                        300           146

IS and Business Infrastructure                            450             2

R&D

Restructuring of Clinical, Regulatory Affairs             100            29
and Disease Area Strategy

TOTAL (REPORTED BASIS)                                  1,600           458

Of which cash costs:                                    1,300           439






Implementation of the Global Supply Chain productivity initiative is progressing
well and has been expanded to add new opportunities to further strengthen gross
margin going forward.  These projects have an additional cost of $150 million.
With respect to the total programme, the charge in 2007 is now anticipated to be
around $350 million, full payback is expected in three years on a cash basis and
total headcount reduction is estimated at around 3,300.



The Company has undertaken a strategic review of the sales and marketing
resources required in Europe for the next three years. This review has
identified a number of different programmes, which will reduce total headcount
by around 1,800 positions. The total costs of restructuring have been estimated
at approximately $300 million, with around $200 million to be charged in 2007.
The improvement in the cost base following restructuring should ensure that
benefits begin to be realised in 2007 with a full payback by 2009.



Within our IS and Business Support infrastructure, programmes to focus on
improved productivity and strategic sourcing as we better use our global scale
are anticipated to reduce headcount by approximately 1,800 positions. Total
costs of these programmes are expected to amount to around $450 million, with
approximately $250 million to be charged in 2007. Full payback is expected by
2009.



R&D restructuring activity and costs include implementing the previously
announced Disease Area Strategy, streamlining the Global Regulatory function,
and our intention to create a substantially more efficient clinical data
management capability.  Headcount reductions of approximately 700 are expected.
In aggregate, R&D restructuring costs of around $100 million are expected over
the next two years, with the majority being charged in 2007. Full payback is
expected by 2009.



The Company will continue to look for further initiatives to improve the
long-term efficiency of the business. All reductions in positions detailed above
are subject to consultations with works councils, trade unions and other
employee representatives and to being in accordance with local labour laws.

Toprol-XLTM

In the first half, Toprol-XL(TM)contributed US sales of $670 million (2006 $732
million) and EPS of 27 cents (2006 26 cents).  To date only one Toprol-XLTM
tablet strength (25mg) is facing generic competition and it is not possible to
predict if or when further generic tablet strengths may be launched.  If
Toprol-XL(TM)were excluded from the first half results for both the current and
prior year periods, sales growth would be 9 percent (versus 8 percent on a
reported basis) and EPS growth would be flat (compared with a 1 percent increase
as reported).  Using the same basis in the second quarter, sales would be up 7
percent (compared with a 6 percent increase as reported) and EPS would be down
13 percent (compared with a 11 percent decline as reported).

Interest and Dividend Income

Net interest and dividend income for the first half was $115 million (2006 $146
million) and $18m in the second quarter (2006 $78 million). The decrease versus
the second quarter of 2006 is primarily attributable to the interest payable on
the borrowings to acquire MedImmune, Inc. The reported amounts include $16
million (2006 $24 million) in the first half and $8 million (2006 $12 million)
in the second quarter arising from employee benefit fund assets and liabilities
reported under IAS 19, 'Employee Benefits'.

Taxation

The effective tax rate for the second quarter is 27.8 percent (2006 27.5
percent) and 29.5 percent for the first half (2006 28.9 percent). For the full
year the tax rate is anticipated to be around 29 percent, with the acquisition
of MedImmune, Inc. not expected to have a significant effect.

Cash Flow

Free cash flow (net cash generated and available for acquisitions or
distribution to shareholders) for the six months was $2,662 million, compared to
$2,922 million in 2006; lower principally as a result of higher working capital
and tax payments. Returns to shareholders were $3,910 million (through net share
repurchases of $2,032 million and the dividend payment of $1,878 million).  The
investments in the acquisitions of MedImmune, Inc., and Arrow Therapeutics
Limited were $14,543 million.  This, together with $886 million of net debt
acquired with MedImmune, Inc. led to net funds of $6,537 million at the
beginning of the period becoming net debt of $10,088 million at 30 June.

Cash generated from operating activities in the period was $3,184 million, $237
million lower than in 2006.  The decrease is due to a $468 million increase in
tax cash paid and a $237 million outflow from increased working capital
requirements, which more than offsets the increase in operating profit (after
adding back non-cash items).

Net cash outflows from investing activities were $14,493 million in the period,
compared to $11 million in 2006.  This is primarily due to $14,543 million
payments made in respect of the acquisitions noted above.

Acquisition of MedImmune, Inc.

(i)                   Acquisition Accounting



Following the acquisition of MedImmune, an independent valuation exercise has
been undertaken to allocate the purchase price between the assets and
liabilities acquired (including tangible assets, intangible assets and deferred
tax) and goodwill, under IFRS 3 'Business Combinations'. In summary terms, the
purchase price for outstanding shares of $13.9 billion has been allocated
between intangible assets of $8.3 billion (including assets in respect of the
Synagis(TM)and Numax(TM)RSV franchise, FlumistTM, Ethyol(TM)and products in
development), goodwill of $8.6 billion and net liabilities of $3.0 billion. This
allocation, based on a strict accounting guidance, does not allow for the
separate recognition of valuable elements such as buyer specific synergies,
potential additional indications for identified products or the premium
attributable to a well established, highly regarded business in the innovative
biologics market. Such elements are instead subsumed within goodwill, which is
not amortised. This more conservative balance between goodwill and intangible
assets results in an amortisation charge of approximately $420 million per
annum, compared to the $750 million assumed at the time of the acquisition.



(ii)                 Synergies



At the time of the acquisition announcement, the Company committed to a synergy
target of towards $500 million and plans are now in place to deliver synergies
of $450 million in 2009 and over $500 million in 2010.  The breakdown of the
synergies is as follows:


                                                 $m
Sales and marketing costs                        50

General and administrative costs                 55

Manufacturing                                    25

AZ Biologics investments*                       205

Small molecules                                 115

Total                                           450


*Included in the AZ base case and forecasts were investments to build Cambridge
Antibody Technology from a biologics discovery unit to a fully fledged biologics
company.  As MedImmune, Inc. already possesses these skills and capabilities the
AZ internal investments no longer need to be made.



The savings represent the removal of duplication in all functional areas
together and the consequences of a comprehensive review of the capabilities and
portfolios within the two organisations. In addition, capital expenditure
planned in AstraZeneca will no longer be required, saving over $500 million. The
cost of implementation of the required programmes is expected to amount to
approximately $375 million.



(iii)                Flumist(TM)update



On 25 May, MedImmune issued a press release indicating that it had received a
Warning Letter from the FDA relating to compliance issues at the company's UK-1
manufacturing plant.  Consequently, MedImmune is currently precluded from
distributing FluMist(TM)in the US. Additionally, the expected FDA approval to
expand the vaccine's label to include children 2 to 5 years of age has been
delayed.  The Company takes the FDA's observations at the UK-1 plant very
seriously and is working to resolve the FDA's concerns as quickly as possible.
Toward this end, the Company has submitted a number of documents, plans and
assessments to the FDA, most notably a full formal response to the Warning
Letter on 7 June and the first periodic progress report on 11 July.

MedImmune's last sales guidance on FluMist(TM)for the 2007/2008 flu season was to
expect approximately 75% to 100% more doses to be sold than in the 2006/2007 flu
season.  This guidance was based on the assumption that the approvals for the
liquid formulation (known as CAIV-T) and the label expansion to include younger
children both occurred prior to the 2007 influenza season.  While the liquid
formulation was approved in January 2007, the current Warning Letter has
obviously delayed the other critical step in the process to relaunch an improved
FluMist(TM)this coming season.  Currently, the Company continues to believe that
it will be able to resolve the Warning Letter with the FDA in time to distribute
FluMist(TM)in the US prior to the flu season and as such, the Company also
continues to believe that it will achieve sales in the 2007/2008 season that are
at or near the lower end of its previously stated range of expectations.

Investments

In June, the Company paid $48 million for the last in a series of sales-based
milestone payments in relation to Zomig(TM).



In July, the Company entered a three-year research and development collaboration
with Silence Therapeutics plc to discover and develop proprietary siRNA
molecules. The agreement is primarily in relation to the Respiratory field but
includes an option to allow for targets that extend the collaboration into other
disease areas of interest to the Company. The initial access fee of $5 million
will be capitalised as an intangible asset and the $10 million equity investment
will be capitalised as a non-current asset investment.



Core Earnings per Share

Management believes that investors' understanding of the Company's performance
is enhanced by the disclosure of Core EPS, as it provides an understanding of
the underlying ability to generate returns to shareholders.  The Core EPS
measure is adjusted to exclude certain significant items, such as charges and
provisions related to restructuring and synergy programmes, amortisation of the
significant intangibles arising from corporate acquisitions and those related to
our current and future exit arrangements with Merck in the US, and other
specified items.  Core EPS is not, and should not be viewed as, a substitute for
EPS in accordance with IFRS.

The reconciliation of second quarter and first half Core EPS to reported
earnings per share is provided below:


                                                2nd        2nd                  Half Year    Half Year
                                            Quarter    Quarter       CER
                                               2007       2006                       2007         2006       CER
                                               
                                                                       %                                       %

Reported EPS                                  $0.95      $1.02       -11            $1.97        $1.92        +1

Restructuring Costs                           $0.18          -       n/a            $0.22            -       n/a

Amortisation of intangible assets
  MedImmune acquisition                       $0.02          -       n/a            $0.02            -       n/a
  Merck arrangements                          $0.02      $0.02       n/a            $0.03        $0.03       n/a

Core EPS                                      $1.17      $1.04        +9            $2.24        $1.95       +13



Shareholder Return and Capital Structure

In the light of the MedImmune, Inc. acquisition, the Board has reviewed both its
distribution policy and its overall financial strategy. The Board recognises the
need to balance the interests of the business, our shareholders and our
financial creditors, whilst maintaining a strong investment grade credit rating.
It is intended that our current level of gross debt of $15 billion will be
reduced over the next 3 to 4 years to a target level of $6-7 billion of
long-term debt (net of cash). Re-financing is expected to take place before the
end of the year.



The Company is in discussions with the credit rating agencies, and is targeting
a rating which allows flexibility to:


•    Provide the necessary funding for opportunities to further strengthen the pipeline;
•    Fund the Partial Retirement from our US Limited Partnership and possible First Option 
     exercise by Merck in the first half of 2008; and
•    Pay down debt within the next 3 to 4 years to reach our target level.



In this environment, the share re-purchase programme will be reviewed annually
by the Board until the target level of long-term debt is achieved, taking also
into account the Board's target credit rating, business cash flow and investment
opportunities.  The 2007 share re-purchase programme will remain at the
committed level of $4 billion. The Board will determine the level of the 2008
buyback in conjunction with the Annual Results announcement in January; it is
currently envisaged that the buyback is likely to be in the region of $1
billion.



The Board's dividend policy is unchanged; it is intended this will continue to
grow in line with reported earnings (before restructuring costs).  Consistent
with this policy, the Board has declared a First Interim Dividend for 2007 of
$0.52 per Ordinary Share (25.3 pence, SEK 3.49), payable on 17 September 2007.
We aim to maintain at least two times dividend cover.



Share Re-purchase Programme

During the second quarter, 17.9 million shares were re-purchased for
cancellation at a total cost of $976 million bringing the total re-purchases for
the first half of the year to 39.0 million shares at a total cost of $2,160
million. During the first six months, 2.7 million shares were issued in
consideration of share option exercises for a total of $128 million.

The total number of shares in issue at 30 June 2007 was 1,496 million.

The share re-purchase programme is calculated to have added 4 cents to EPS for
the half year after allowing for an estimate of interest income foregone.



R&D Update

An updated R&D pipeline table has been issued in conjunction with the
publication of this press release.  A copy of this table is available on the
Company's website, www.astrazeneca.com, under information for investors.

Half year pipeline highlights include four new projects in Phase III development
for launch, including  two molecules which have progressed to Phase III
development:




•    ZD4054, a specific Endothelin A antagonist for the treatment of hormone 
     resistant prostate cancer, which has shown survival benefits in Phase II, 
     has progressed to Phase III.


•    Dapagliflozin, a first in class oral SGLT2 inhibitor for type 2 diabetes 
     being jointly developed with Bristol-Myers Squibb has also progressed to 
     Phase III.


•    The acquisition of MedImmune added the Phase III product Motavizumab, a 
     novel monoclonal antibody against Respiratory Syncytial Virus (RSV), which 
     will be submitted for a Biologics License Application (BLA) this year.


•    RecentinTM, a VEGF/EGF TKI inhibitor will be commencing Phase III 
     development for recurrent glioblastoma in addition to its ongoing 
     development in non-small cell lung cancer and colorectal cancer 
     indications.



The Iressa(TM)Phase III INTEREST study met its primary objective and demonstrated
equivalent survival for Iressa(TM)and docetaxel in pre-treated NSCLC patients.
This is the first time an EGFR-TKI has demonstrated non-inferior survival to
chemotherapy in a head to head Phase III study in this setting.  The Company is
discussing these results with regulatory authorities.  The data have been
accepted for presentation at the World Congress of Lung Cancer in September
2007.



In July 2007, AstraZeneca submitted an sNDA to the FDA for a new indication for
Seroquel(TM)for the maintenance treatment of patients with bipolar I disorder as
adjunct to mood stabiliser based on data from two clinical trials. Pooled data
showed a greater incidence of blood glucose increases to hyperglycemic levels in
patients randomised to Seroquel(TM)and mood stabiliser than in patients
randomised to placebo and mood stabiliser. Seroquel(TM)U.S. Prescribing
Information has been updated to include additional details regarding these data.



Ten new molecules have had their first dosing in man since 1 February, bringing
the year to date total to fourteen, a record number for AstraZeneca, with a
number of additional opportunities planned for the second half.



The pipeline has been significantly enhanced by the addition of the MedImmune
portfolio which includes 14 products in clinical development and a further 28
projects.  The majority of the MedImmune portfolio is in monoclonal antibodies
and vaccines.  The extensive development and commercial antibody production
capabilities give AstraZeneca the capacity and skills to deliver an industry
leading biologicals product range significantly ahead of plan.



The overall pipeline now includes 157 projects.  Since 1 February 2007, 20
projects have progressed to their next phase of development; 53 compounds added
(including 42 new projects from MedImmune, 14 of which are clinical); 16
compounds have been withdrawn.



We have made considerable progress in speeding up delivery of our projects.
Over the last two years we have demonstrated clear progress in reducing our
overall development times and are progressing towards our target of 8 years from
first formal toxicology to first approval.  This target is a median across all
projects and we expect a number of projects, therefore, to deliver on an even
faster timescale.



In addition to improving the quality of the pipeline and placing an emphasis on
the late phase portfolio, we are reshaping R&D into a more lean and agile
organisation.  We have implemented the previously announced Disease Area
Strategy and, in addition, have made changes to our Regulatory and
Pharmaceutical areas, which has both reduced cost and increased effectiveness.
Additionally, we will be outsourcing some of our non-core activities in
Clinical, the first tranche of which is Data Processing.  The changes announced
to date will result in a reduction of approximately 700 positions.



Calendar
1 November 2007              Announcement of third quarter and nine months 2007 
                             results
6 December 2007              Business Review-Biologics




David Brennan
Chief Executive Officer


                      This information is provided by RNS
            The company news service from the London Stock Exchange