1st Quarter Results - 2 of 2
AstraZeneca PLC
27 April 2006
Consolidated Income Statement
For the Quarter ended 31 March 2006 2005
$m $m
Sales 6,180 5,743
Cost of sales (1,251) (1,410)
Distribution costs (54) (50)
Research and development (861) (865)
Selling, general and administrative expenses (2,115) (2,007)
Other operating income 77 42
Operating profit 1,976 1,453
Finance income 200 119
Finance expense (132) (86)
Profit before tax 2,044 1,486
Taxation (620) (443)
Profit for the period 1,424 1,043
Attributable to:
Equity holders of the Company 1,425 1,040
Minority interests (1) 3
1,424 1,043
Basic earnings per $0.25 Ordinary Share $0.90 $0.63
Diluted earnings per $0.25 Ordinary Share $0.90 $0.63
Weighted average number of Ordinary Shares in issue (millions) 1,579 1,640
Diluted average number of Ordinary Shares in issue (millions) 1,582 1,640
Consolidated Balance Sheet
As at 31 March 31 December
2006 2005
$m $m
ASSETS
Non-current assets
Property, plant and equipment 7,031 6,985
Intangible assets 3,062 2,712
Other investments 243 256
Deferred tax assets 1,307 1,117
11,643 11,070
Current assets
Inventories 2,180 2,206
Trade and other receivables 5,158 4,778
Other investments 1,624
3,111
Income tax receivable 103 183
Cash and cash equivalents 2,954 4,979
13,506 13,770
Total assets 25,149 24,840
LIABILITIES
Current liabilities
Interest bearing loans and borrowings (93) (90)
Trade and other payables (5,499) (5,466)
Income tax payable (1,547) (1,283)
(7,139) (6,839)
Non-current liabilities
Interest bearing loans and borrowings (1,078) (1,111)
Deferred tax liabilities (1,291) (1,112)
Retirement benefit obligations (1,575) (1,706)
Provisions (280) (309)
Other payables (74) (72)
(4,298) (4,310)
Total liabilities (11,437) (11,149)
Net assets 13,712 13,691
EQUITY
Capital and reserves attributable to equity holders
Share capital 395 395
Share premium account 1,051 692
Other reserves 1,837 1,831
Retained earnings 10,335 10,679
13,618 13,597
Minority equity interests 94 94
Total equity and reserves 13,712 13,691
Consolidated Cash Flow Statement
For the Quarter ended 31 March 2006 2005
$m $m
Cash flows from operating activities
Operating profit before taxation 1,976 1,453
Depreciation and amortisation 282 309
Increase in working capital (365) (111)
Other non-cash movements 41 170
Cash generated from operations 1,934 1,821
Interest paid (12) (6)
Tax paid (410) (306)
Net cash inflow from operating activities 1,512 1,509
Cash flows from investing activities
Acquisition of business (203) -
Movement in short term investments and fixed deposits (1,524) 158
Purchases of property, plant and equipment (181) (213)
Disposals of property, plant and equipment 12 8
Purchase of intangible assets (108) (19)
Purchase of non-current asset investments (14) (2)
Disposals of non-current asset investments 54 -
Interest received 65 43
Dividends paid by subsidiaries to minority interests (4) (4)
Net cash outflow from investing activities (1,903) (29)
Net cash (outflow)/inflow before financing activities (391) 1,480
Cash flows from financing activities
Proceeds from issue of share capital 362 4
Repurchase of shares (564) (481)
Dividends paid (1,442) (1,079)
Movement in short term borrowings 2 (2)
Net cash outflow from financing activities (1,642) (1,558)
Net decrease in cash and cash equivalents in the period (2,033) (78)
Cash and cash equivalents at the beginning of the period 4,895 3,927
Exchange rate effects 7 (10)
Cash and cash equivalents at the end of the period 2,869 3,839
Cash and cash equivalents consist of:
Cash and cash equivalents 2,954 3,905
Overdrafts (85) (66)
2,869 3,839
Consolidated Statement of Recognised Income and Expense
For the Quarter ended 31 March 2006 2005
$m $m
Profit for the period 1,424 1,043
Foreign exchange adjustments on consolidation 87 (381)
Available for sale gains/(losses) taken to equity 18 (15)
Actuarial gain for the period 151 20
Tax on items taken directly to reserves (33) (14)
Total recognised income and expense for the period 1,647 653
Attributable to:
Equity holders of the Company 1,647 650
Minority interests - 3
Notes to the Interim Financial Statements
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited financial statements for the quarter ended 31 March 2006 have been
prepared in accordance with International Accounting Standards and International
Financial Reporting Standards (collectively 'IFRS') as adopted by the European
Union (EU). Details of the accounting policies applied are those set out in
AstraZeneca PLC's Annual Report and Form 20-F Information 2005. These accounting
policies reflect the adoption in the second quarter of 2005 of the amendment to
IAS39 'Financial Instruments: Recognition and Measurement - The Fair Value
Option'; the comparative information in these interim financial statements has
been restated accordingly. The effect of adoption on the comparative results was
not significant.
The information contained in Note 3 updates the disclosures concerning legal
proceedings and contingent liabilities in the Company's Annual Report and Form
20-F Information 2005.
These interim financial statements do not constitute statutory accounts of the
Group within the meaning of Section 240 of the Companies Act 1985. Statutory
accounts for the year ended 31 December 2005 will be filed with the Registrar of
Companies following the Company's Annual General Meeting. The auditors' report
on those accounts was unqualified and did not contain any statement under
Section 237 of the Companies Act 1985.
2 NET FUNDS
The table below provides an analysis of net funds and a reconciliation of net
cash flow to the movement in net funds.
1 Jan Cash Non-cash Exchange At 31 March
2006 flow movements movements 2006
$m $m $m $m $m
Loans due after 1 year (1,111) - 33 - (1,078)
Total loans (1,111) - 33 - (1,078)
Other investments - current 1,624 1,524 (38) 1 3,111
Cash and cash equivalents 4,979 (2,032) - 7 2,954
Overdrafts (84) (1) - - (85)
Short term borrowings (6) (2) - - (8)
6,513 (511) (38) 8 5,972
Net funds 5,402 (511) (5) 8 4,894
Non-cash movements in the period consist of fair value adjustments under IAS 39.
3 LEGAL PROCEEDINGS and contingent liabilities
LosecTM / PrilosecTM (omeprazole)
In February 2006, in the legal proceedings in Canada involving Apotex described
in AstraZeneca's Annual Report and Form 20-F Information 2005, the Canadian
Federal Court of Appeal upheld a lower court decision that precludes the
issuance of a notice of compliance (marketing approval) in Canada for Apotex's
generic omeprazole magnesium tablet product until the expiry of an AstraZeneca
formulation patent relating to omeprazole in December 2008. This decision does
not affect the continuing proceedings in the Supreme Court of Canada in which
Apotex is appealing a lower court decision to quash Apotex's notice of
compliance (marketing approval) for its generic omeprazole capsule product, nor
does it affect the stay allowing Apotex to continue selling its omeprazole
capsules in Canada pending a decision by the Supreme Court on Apotex's appeal.
NexiumTM (esomeprazole)
As previously disclosed, in March 2006 AstraZeneca commenced wilful infringement
patent litigation in the US District Court for the District of New Jersey
against IVAX Corporation and its affiliates in response to an Abbreviated New
Drug Application filed by IVAX with the US Food and Drug Administration
regarding IVAX's intent to market a generic version of NexiumTM in the US prior
to the expiration of five AstraZeneca patents: 5,714,504; 5,877,192;
6,369,085; 6,428,810; and 6,875,872. The expiration dates for these patents
range from 2014 through to 2019.
AstraZeneca has full confidence in and will continue vigorously to defend and
enforce its intellectual property rights protecting NexiumTM.
SeroquelTM (quetiapine fumarate)
Since 2003, AstraZeneca has been served with approximately 130 lawsuits in the
US in which plaintiffs have alleged that they developed diabetes or other
allegedly related injuries, and in some cases pancreatitis, as a result of
taking SeroquelTM and/or other atypical anti-psychotics made by other
pharmaceutical companies. Many of these cases were filed in Missouri in August
2005, days before Missouri's tort reform laws became effective. Eli Lilly, the
maker of olanzapine, is a defendant in the majority of the cases served on
AstraZeneca. Janssen Pharmaceutica and Bristol-Myers Squibb, the makers of
other atypical anti-psychotics, are also defending a number of them.
AstraZeneca has also been served with a putative nationwide class action
complaint, which was filed in federal court in the Southern District of
Illinois. It is very similar in form and content to the complaint filed in the
US District Court for the Middle District of Florida in 2003 (Susan Zehel-Miller
et al. v. AstraZenaca (sic), AstraZenaca Pharmaceuticals LP, (sic)) that sought
certification of a nationwide class of SeroquelTM users and others, including
individuals who were alleged to have developed diabetes as a result of using
SeroquelTM. The federal court in Florida denied certification of the class in
the Zehel-Miller case. In early 2005, after the plaintiffs' efforts in that
case to secure appellate relief failed, the plaintiffs agreed to a voluntary
dismissal of all of their claims with prejudice.
AstraZeneca is also aware of approximately 360 other cases involving SeroquelTM
(and in many instances, other atypical anti-psychotics) and allegations of
diabetes or other allegedly related injuries that have been filed in various
states, but these have not been served.
Recently, two consortia of plaintiffs' lawyers filed motions with the Judicial
Panel on Multidistrict Litigation seeking centralisation of all of the federal
court cases alleging that SeroquelTM caused diabetes or other allegedly related
injuries. AstraZeneca has opposed this motion. The Panel's decision is not
expected before the end of May 2006.
AstraZeneca intends to defend vigorously all of the pending cases relating to
SeroquelTM.
Toprol-XLTM (metoprolol succinate)
Following issuance of the summary judgement decision that the Toprol-XLTM
patents are invalid and unenforceable, AstraZeneca has been served with several
putative class action complaints filed in the US District Court for the District
of Delaware, one such action filed in the US District Court for the District of
Massachusetts and one such action filed in the US District Court for the
Southern District of Florida alleging that AstraZeneca monopolised the market
for metoprolol succinate by filing patent litigation against KV Pharmaceutical
Company, Andrx Pharmaceuticals LLC and Eon Labs Manufacturing Inc. asserting
invalid and unenforceable patents in violation of US anti-trust laws. The
complaints include those by plaintiffs purporting to represent the class of
distributors who purchased Toprol-XLTM directly from AstraZeneca at allegedly
supra-competitive prices and those by plaintiffs purporting to represent the
class of consumers and third party payers who are indirect purchasers of
Toprol-XLTM at allegedly supra-competitive prices. AstraZeneca has appealed the
underlying judgment that the patents are invalid and unenforceable to the US
Court of Appeals for the Federal Circuit. AstraZeneca also denies the
allegations of the anti-trust complaints and will vigorously defend them.
4 FIRST QUARTER TERRITORIAL SALES ANALYSIS
% Growth
1st Quarter 1st Quarter
2006 2005 Constant
$m $m Actual Currency
US 2,882 2,500 15 15
Canada 250 248 1 (5)
North America 3,132 2,748 14 13
France 415 451 (8) 2
UK 193 188 3 12
Germany 279 315 (11) (2)
Italy 314 285 10 22
Sweden 78 80 (3) 11
Europe others 893 846 6 16
Total Europe 2,172 2,165 - 10
Japan 304 337 (10) 1
China 72 62 16 14
Rest of World 500 431 16 15
Total 6,180 5,743 8 12
5 FIRST QUARTER PRODUCT SALES ANALYSIS
World US
1st 1st Constant 1st
Quarter Quarter Actual Currency Quarter Actual
2006 2005 Growth Growth 2006 Growth
$m $m % % $m %
Gastrointestinal:
Nexium 1,189 1,055 13 16 791 14
Losec/Prilosec 344 427 (19) (15) 55 (8)
Others 18 17 6 12 3 -
Total Gastrointestinal 1,551 1,499 3 6 849 13
Cardiovascular:
Seloken/Toprol-XL 456 408 12 13 354 21
Crestor 387 273 42 45 220 43
Atacand 254 235 8 14 58 4
Tenormin 76 83 (8) (2) 7 133
Zestril 75 87 (14) (8) 6 200
Plendil 72 93 (23) (20) 6 (73)
Others 70 78 (10) (4) 1 (50)
Total Cardiovascular 1,390 1,257 11 15 652 23
Respiratory:
Pulmicort 328 314 4 7 209 20
Symbicort 277 247 12 21 - -
Rhinocort 85 92 (8) (7) 61 (9)
Oxis 22 23 (4) 5 - -
Accolate 18 28 (36) (36) 12 (43)
Others 35 42 (17) (10) - -
Total Respiratory 765 746 3 8 282 8
Oncology:
Arimidex 335 256 31 38 128 27
Casodex 274 277 (1) 6 66 6
Zoladex 231 231 - 6 24 (25)
Iressa 50 81 (38) (34) 4 (87)
Faslodex 44 29 52 55 25 25
Nolvadex 21 28 (25) (18) 1 -
Others 3 3 - - - -
Total Oncology 958 905 6 12 248 1
Neuroscience:
Seroquel 807 633 27 29 590 29
Local anaesthetics 132 127 4 10 24 41
Zomig 93 68 37 43 40 344
Diprivan 89 107 (17) (14) 34 (24)
Others 15 17 (12) (6) 4 (20)
Total Neuroscience 1,136 952 19 22 692 30
Infection and Other:
Merrem 141 131 8 13 29 -
Other Products 68 97 (30) (26) 33 (42)
Total Infection and Other 209 228 (8) (4) 62 (28)
Aptium Oncology 88 83 6 6 88 6
Astra Tech 83 73 14 25 9 50
Total 6,180 5,743 8 12 2,882 15
Shareholder Information
ANNOUNCEMENTS AND MEETINGS
Annual General Meeting 2006 27 April 2006
Announcement of second quarter and half year 2006 results 27 July 2006
Announcement of third quarter and nine months 2006 26 October 2006
results
DIVIDENDS
The record date for the second interim dividend for 2005 paid on 20 March 2006
was 10 February 2006. Ordinary Shares traded ex-dividend on the London and
Stockholm Stock Exchanges from 8 February 2006. ADRs traded ex-dividend on the
New York Stock Exchange from the same date.
Dividends will normally be paid as follows:
First interim Announced in July and paid in September
Second interim Announced in January/February and paid in March
TRADEMARKS
The following brand names used in this interim report are trademarks of the
AstraZeneca group of companies:
Accolate Arimidex Astra Tech Atacand Casodex Crestor Diprivan Faslodex
Iressa Losec Merrem Nexium Nolvadex Oxis Plendil Prilosec Pulmicort
Pulmicort Respules Rhinocort Seloken Seroquel Symbicort Tenormin
Toprol-XL Zestril Zoladex Zomig
ADDRESSES FOR CORRESPONDENCE
Registrar and Depositary Registered Office Swedish Securities
Transfer Office for ADRs Registration Centre
The AstraZeneca Registrar JP Morgan Chase Bank 15 Stanhope Gate VPC AB
Lloyds TSB Registrars JP Morgan Service Center London PO Box 7822
The Causeway PO Box 3408 W1K 1LN SE-103 97 Stockholm
Worthing South Hackensack UK Sweden
West Sussex NJ 07606-3408
BN99 6DA US
UK Tel: +44 (0)20 7304 5000 Tel: +46 (0)8 402 9000
Tel (freephone in UK): Tel (toll free in US):
0800 389 1580 888 697 8018
Tel (outside UK): Tel (outside US):
+44 (0)121 415 7033 +1 (201) 680 6630
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
In order to utilise the 'Safe Harbor' provisions of the United States Private
Securities Litigation Reform Act of 1995, AstraZeneca is providing the following
cautionary statement. This announcement contains forward-looking statements
with respect to the financial condition, results of operations and businesses of
AstraZeneca. By their nature, forward-looking statements and forecasts involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from that expressed or
implied by these forward-looking statements. These factors include, among other
things, the loss or expiration of patents, marketing exclusivity or trade marks;
exchange rate fluctuations; the risk that R&D will not yield new products that
achieve commercial success; the impact of competition, price controls and price
reductions; taxation risks; the risk of substantial product liability claims;
the impact of any failure by third parties to supply materials or services; the
risk of delay to new product launches; the difficulties of obtaining and
maintaining governmental approvals for products; and the risk of environmental
liabilities.
This information is provided by RNS
The company news service from the London Stock Exchange
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