3rd Quarter Results (2 of 2)
AstraZeneca PLC
21 October 2004
Consolidated Profit & Loss Account
2004 2003
For the nine months ended 30 September $m $m
Sales 15,627 13,974
Cost of sales (3,624) (3,412)
Distribution costs (132) (116)
Research and development (2,840) (2,409)
Selling, general and administrative expenses (5,811) (4,907)
Other operating income 231 132
Operating profit 3,451 3,262
Profit on sale of interest in joint venture 219 -
Net interest and dividend income 70 71
Profit on ordinary activities before taxation 3,740 3,333
Profit on ordinary activities before taxation before exceptional 3,521 3,333
items
Exceptional items 219 -
Taxation (884) (917)
Profit on ordinary activities after taxation 2,856 2,416
Profit on ordinary activities after taxation before exceptional 2,570 2,416
items
Exceptional items 286 -
Attributable to minorities (11) (15)
Net profit for the period 2,845 2,401
Dividends to shareholders (494) (436)
Profit retained for the period 2,351 1,965
Earnings per Ordinary Share before exceptional items $1.52 $1.40
Earnings per Ordinary Share $1.69 $1.40
Diluted earnings per Ordinary Share $1.69 $1.40
Weighted average number of Ordinary Shares in issue (millions) 1,679 1,713
Diluted average number of Ordinary Shares in issue (millions) 1,681 1,714
Statement of Total Recognised Gains & Losses
2004 2003
For the nine months ended 30 September $m $m
Net profit for the period 2,845 2,401
Exchange adjustments on net assets (117) 823
Tax on foreign exchange adjustments 357 41
Total recognised gains and losses relating to the period 3,085 3,265
Consolidated Profit & Loss Account
2004 2003
For the quarter ended 30 September $m $m
Sales 5,265 4,803
Cost of sales (1,259) (1,175)
Distribution costs (46) (41)
Research and development (917) (812)
Selling, general and administrative expenses (1,843) (1,744)
Other operating income 61 70
Operating profit 1,261 1,101
Profit on sale of interest in joint venture 219 -
Net interest and dividend income 13 18
Profit on ordinary activities before taxation 1,493 1,119
Profit on ordinary activities before taxation before exceptional 1,274 1,119
items
Exceptional items 219 -
Taxation (278) (308)
Profit on ordinary activities after taxation 1,215 811
Profit on ordinary activities after taxation before exceptional 929 811
items
Exceptional items 286 -
Attributable to minorities (4) (8)
Net profit for the period 1,211 803
Dividends to shareholders - -
Profit retained for the period 1,211 803
Earnings per Ordinary Share before exceptional items $0.55 $0.47
Earnings per Ordinary Share $0.72 $0.47
Diluted earnings per Ordinary Share $0.72 $0.47
Weighted average number of Ordinary Shares in issue (millions) 1,669 1,710
Diluted average number of Ordinary Shares in issue (millions) 1,671 1,711
Consolidated Balance Sheet
2004 2003
As at 30 September $m $m
Fixed assets 10,474 10,058
Current assets 14,043 12,996
Total assets 24,517 23,054
Creditors due within one year (6,926) (7,095)
Net current assets 7,117 5,901
Total assets less current liabilities 17,591 15,959
Creditors due after more than one year (1,092) (348)
Provisions for liabilities and charges (2,115) (2,046)
Net assets 14,384 13,565
Capital and reserves
Shareholders' funds and minority interests 14,384 13,565
Consolidated Cash Flow Statement
2004 2003
For the nine months ended 30 September $m $m
Cash flow from operating activities
Operating profit 3,451 3,262
Depreciation and amortisation 915 900
Increase in working capital and other non-cash movements (561) (630)
Net cash inflow from operating activities before exceptional
items 3,805 3,532
Outflow related to exceptional items (8) (387)
Net cash inflow from operating activities 3,797 3,145
Returns on investments and servicing of finance 76 49
Tax paid (1,011) (1,007)
Capital expenditure and financial investment (917) (1,002)
Acquisitions and disposals 308 80
Equity dividends paid to shareholders (1,378) (770)
Net cash inflow before management of liquid resources and
financing 875 495
Net purchase of shares (1,475) (501)
Exchange and other movements (7) 65
(Decrease)/increase in net cash funds in the period (607) 59
Net cash funds at beginning of period 3,496 3,844
Net cash funds at end of period 2,889 3,903
Notes to the Interim Financial Statements
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited financial statements for the nine months ended 30 September 2004
have been prepared in accordance with UK generally accepted accounting
principles (UK GAAP). The accounting policies applied are those set out in
AstraZeneca PLC's Annual Report and Form 20-F Information 2003, except that,
during the period, the Company adopted UITF No. 38 'Accounting for ESOP Trusts'.
This adoption had no effect on net profit or shareholders' funds. The
information contained in Note 4 below updates the disclosures concerning legal
proceedings in the Company's Annual Report and Form 20-F Information 2003 and
Half Year Results 2004.
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 2003 have been filed with the Registrar
of Companies. The auditor's report on those accounts was unqualified and did
not contain any statement under Section 237 of the Companies Act 1985.
2 International Accounting
AstraZeneca's first results reported under International Accounting Standards
and International Financial Reporting Standards (IAS/IFRS) will be the interim
results for Q1 2005. On Monday, 25 October 2004, the Company will publish
financial information in respect of 2003 and the first six months of 2004 under
IAS/IFRS. The information to be published includes the accounting policies
AstraZeneca will adopt under IAS/IFRS, the primary financial statements, a
reconciliation to UK GAAP and a commentary to explain the changes. A conference
call will be held on Monday, 25 October at 13:00 BST to discuss the
re-statements.
3 NET CASH FUNDS
The table below provides an analysis of net cash funds and a reconciliation of
net cash flow to the movement in net cash funds.
At 1 Jan Cash Other Exchange At 30 Sept
2004 flow non-cash movements 2004
$m $m $m $m $m
Loans due after 1 year (303) (734) - (1) (1,038)
Current instalments of loans - - - - -
Total loans (303) (734) - (1) (1,038)
Short-term investments 3,218 219 - (2) 3,435
Cash 733 (67) - (4) 662
Overdrafts (152) (16) - - (168)
Short-term borrowings - (2) - - (2)
3,799 134 - (6) 3,927
Net cash funds 3,496 (600) - (7) 2,889
Issue of AstraZeneca PLC
Ordinary Shares (75)
Repurchase of AstraZeneca
PLC Ordinary Shares 1,550
Net cash inflow before
management of liquid resources
and financing 875
4 LEGAL PROCEEDINGS
AstraZeneca is involved in various legal proceedings considered typical to its
business, including litigation relating to employment matters, product
liability, commercial disputes, infringement of intellectual property rights and
the validity of certain patents. The matters discussed below constitute the
more significant developments since publication of the disclosures concerning
legal proceedings in the Company's Annual Report and Form 20-F Information 2003
and Half Year Results 2004.
Losec(TM)/Prilosec(TM) (omeprazole)
As disclosed in the Company's Annual Report and Form 20-F Information 2003,
AstraZeneca has been involved in proceedings in Canada involving Apotex which
relate to omeprazole capsules or omeprazole magnesium tablets and involve
various patents. Following the launch by Apotex of a generic omeprazole capsule
product in April 2004, AstraZeneca launched judicial review proceedings seeking
to quash Apotex's Notice of Compliance (marketing approval). In September 2004,
the case was decided against AstraZeneca. AstraZeneca has appealed the
decision.
Plendil(TM) (felodipine)
In September 2004, the US Court of Appeals for the Federal Circuit issued a
decision in AstraZeneca's patent infringement action against Mutual
Pharmaceutical Co., Inc. commenced in 2000. As disclosed in the Company's
Annual Report and Form 20-F Information 2003, Mutual had appealed against
decisions of the US District Court for the Eastern District of Pennsylvania
which granted summary judgement to AstraZeneca as to both AstraZeneca's
infringement and validity claims in respect of its patent covering the extended
release formulation of Plendil(TM) (felodipine) tablets. In September 2004, the
Federal Circuit Court reversed the ruling by the District Court as to
infringement and held that Mutual's extended release felodipine tablets as a
matter of law do not infringe AstraZeneca's formulation patent. However, the
Federal Circuit Court upheld the District Court's decision as to validity,
ruling that AstraZeneca's formulation patent is valid as a matter of law.
In August 2004, the US District Court for the District of New Jersey issued an
order dismissing the patent infringement action brought by AstraZeneca
Pharmaceuticals LP against Zenith Goldline Pharmaceuticals Inc. (now known as
IVAX Pharmaceuticals, Inc.). The patent infringement action against Zenith/
IVAX, which AstraZeneca filed in July 2001, resulted from a May 2001 letter to
AstraZeneca wherein Zenith/IVAX declared its intention to market a generic
version of AstraZeneca's Plendil(TM) extended release tablets (felodipine) prior
to the expiration of AstraZeneca's patent covering the extended release
formulation. Zenith/IVAX filed counterclaims in the litigation alleging
non-infringement. The District Court's August 2004 order dismissed the case,
without prejudice, pending the consummation of a settlement of the matter and
granting the parties the right upon motion and good cause shown, to re-open the
legal action if the settlement is not consummated within 60 days of the date of
the order. The parties are jointly proposing, to the District Court, that the
60 day period be extended by 30 days.
Toprol-XL(TM) (metoprolol succinate)
In July 2004, AstraZeneca filed proceedings against Andrx Pharmaceuticals in the
US District Court for the District of Delaware following Andrx's notification
that it had filed an abbreviated new drug application with the US Food and Drug
Administration seeking approval to market a generic form of Toprol-XL(TM) in the
25mg dose. In August 2004, AstraZeneca filed proceedings against KV
Pharmaceutical Company in the US District Court for the Eastern District of
Missouri following KV's notification that it had filed an abbreviated new drug
application with the US Food and Drug Administration seeking approval to market
a generic form of Toprol-XL(TM) in the 50mg dose. AstraZeneca maintains that its
patents are valid and infringed by these Andrx and KV products. All of the
patent litigation related to Toprol-XL(TM) against Andrx, KV and Eon Labs
Manufacturing Inc. (the Eon proceedings having been disclosed in the Company's
Half Year Results 2004) has been consolidated for pre-trial discovery purposes
and motion practice in the US District Court for the Eastern District of
Missouri. These aspects of the proceedings will continue in the first half of
2005. No trial date has yet been scheduled in the consolidated proceedings.
Drug Importation Anti-trust Litigation
In the Company's Half Year Results 2004, AstraZeneca disclosed pending,
purported class action proceedings in Minnesota in which the plaintiffs allege
that AstraZeneca Pharmaceuticals LP and eight other pharmaceutical manufacturer
defendants conspired to prevent American consumers from purchasing prescription
drugs from Canada, 'depriving consumers of the ability to purchase' drugs at
competitive prices. The plaintiffs seek injunctive relief, restitution and
other remedies. In August 2004, Californian retail pharmacy plaintiffs filed an
action in the Superior Court of California making similar allegations.
Government Investigations into Drug Marketing Practices
In October 2004, AstraZeneca received an additional subpoena from the US
Attorney's Office in Boston, Massachusetts seeking documents relating to
interactions with physicians at a large, regional clinic and affiliated entities
in north eastern Massachusetts. On October 15, AstraZeneca was informed that it
was going to receive a subpoena from the US Attorney's Office for the Eastern
District of Pennsylvania seeking documents relating to the formulary status of
Prilosec(TM) and Nexium(TM) at a regional Health Maintenance Organization (HMO) and
a national Pharmacy Benefits Manager (PBM). AstraZeneca intends to cooperate
fully with these document requests.
General
With respect to each of the legal proceedings described above, we are unable to
make estimates of the loss or range of losses at this stage. We also do not
believe that disclosure of the amount sought by plaintiffs, if that is known,
would be meaningful with respect to those legal proceedings.
5 NINE MONTHS TERRITORIAL SALES ANALYSIS
% Growth
Nine Months Nine Months
2004 2003 Constant
$m $m Actual Currency
US 6,974 6,703 4 4
Canada 651 519 25 14
North America 7,625 7,222 6 5
France 1,208 1,058 14 -
UK 432 394 10 (2)
Germany 717 623 15 2
Italy 809 680 19 5
Sweden 222 229 (3) (14)
Europe others 2,273 1,879 21 9
Total Europe 5,661 4,863 16 3
Japan 1,018 833 22 9
Rest of World 1,323 1,056 25 17
Total 15,627 13,974 12 6
6 THIRD QUARTER TERRITORIAL SALES ANALYSIS
% Growth
3rd Quarter 3rd Quarter
2004 2003 Constant
Actual
$m $m Currency
US 2,407 2,271 6 6
Canada 202 189 7 7
North America 2,609 2,460 6 6
France 361 370 (2) (6)
UK 151 120 26 15
Germany 250 233 7 2
Italy 266 230 16 11
Sweden 69 77 (10) (14)
Europe others 761 632 20 15
Total Europe 1,858 1,662 12 7
Japan 352 297 19 9
Rest of World 446 384 16 15
Total 5,265 4,803 10 7
7 NINE MONTHS PRODUCT SALES ANALYSIS
World US
Nine Nine Constant Nine
Months Months Actual Currency Months Actual
2004 2003 Growth Growth 2004 Growth
$m $m % % $m %
Gastrointestinal:
Losec 1,501 2,037 (26) (32) 287 (63)
Nexium 2,777 2,466 13 10 1,931 2
Others 64 53 21 13 22 22
Total Gastrointestinal 4,342 4,556 (5) (10) 2,240 (17)
Cardiovascular:
Zestril 327 342 (4) (12) 48 (26)
Seloken 1,006 1,034 (3) (5) 708 (7)
Atacand 639 543 18 10 189 (4)
Plendil 361 383 (6) (10) 140 (10)
Tenormin 271 246 10 1 26 86
Crestor 596 88 n/m n/m 347 n/m
Others 256 284 (10) (18) 12 (8)
Total Cardiovascular 3,456 2,920 18 12 1,470 16
Respiratory:
Pulmicort 737 674 9 4 388 11
Rhinocort 268 272 (1) (4) 192 (5)
Symbicort 578 377 53 37 - -
Accolate 84 76 11 8 60 22
Oxis 76 91 (16) (25) - -
Others 118 110 7 (2) - -
Total Respiratory 1,861 1,600 16 8 640 7
Oncology:
Zoladex 675 630 7 (1) 118 (8)
Casodex 736 647 14 5 169 (10)
Nolvadex 99 138 (28) (35) 2 (95)
Arimidex 578 372 55 45 217 42
Iressa 309 136 127 117 159 194
Faslodex 73 56 30 28 62 13
Others 11 14 (21) (28) - -
Total Oncology 2,481 1,993 24 15 727 18
Neuroscience:
Seroquel 1,465 1,059 38 35 1,092 37
Zomig 267 245 9 2 112 2
Diprivan 374 339 10 5 201 18
Local anaesthetics 398 344 16 7 94 11
Others 54 54 - (9) 15 15
Total Neuroscience 2,558 2,041 25 20 1,514 29
Infection and Other:
Merrem 310 242 28 20 54 35
Other Products 207 229 (10) (16) 90 (9)
Total Infection and Other 517 471 10 3 144 4
Salick Health Care 226 200 13 13 226 13
Astra Tech 186 144 29 16 13 18
Marlow Foods - 49 n/m n/m - n/m
Total 15,627 13,974 12 6 6,974 4
n/m not meaningful
8 THIRD QUARTER PRODUCT SALES ANALYSIS
World US
3rd 3rd Constant 3rd
Quarter Quarter Actual Currency Quarter Actual
2004 2003 Growth Growth 2004 Growth
$m $m % % $m %
Gastrointestinal:
Losec 430 631 (32) (34) 79 (62)
Nexium 951 1,000 (5) (6) 651 (17)
Others 26 18 44 44 11 57
Total Gastrointestinal 1,407 1,649 (15) (17) 741 (26)
Cardiovascular:
Zestril 105 116 (9) (12) 17 (23)
Seloken 353 286 23 22 255 35
Atacand 214 185 16 13 64 7
Plendil 102 144 (29) (30) 34 (49)
Tenormin 93 81 15 10 11 n/m
Crestor 260 76 n/m n/m 162 n/m
Others 81 96 (16) (19) 3 (25)
Total Cardiovascular 1,208 984 23 20 546 37
Respiratory:
Pulmicort 211 184 15 12 108 24
Rhinocort 87 86 1 - 65 (2)
Symbicort 185 128 45 39 - -
Accolate 31 20 55 55 24 118
Oxis 25 31 (19) (22) - -
Others 35 36 (3) (6) - -
Total Respiratory 574 485 18 15 197 20
Oncology:
Zoladex 236 224 5 1 25 (41)
Casodex 258 230 12 7 62 13
Nolvadex 30 38 (21) (26) - n/m
Arimidex 221 136 63 58 87 67
Iressa 113 70 61 57 59 64
Faslodex 24 19 26 26 19 6
Others 3 5 (40) (40) - -
Total Oncology 885 722 23 18 252 21
Neuroscience:
Seroquel 529 345 53 51 398 59
Zomig 81 83 (2) (4) 29 (9)
Diprivan 126 105 20 18 73 55
Local anaesthetics 128 121 6 4 34 6
Others 16 17 (6) (12) 5 67
Total Neuroscience 880 671 31 29 539 48
Infection and Other:
Merrem 101 88 15 13 18 20
Other Products 71 88 (19) (22) 31 (38)
Total Infection and Other 172 176 (2) (5) 49 (25)
Salick Health Care 78 66 18 18 78 18
Astra Tech 61 50 22 16 5 25
Marlow Foods - - - - - -
Total 5,265 4,803 10 7 2,407 6
n/m not meaningful
Shareholder Information
ANNOUNCEMENTS AND MEETINGS
Announcement of fourth quarter and full year 2004 27 January 2005
results
Announcement of first quarter 2005 results 28 April 2005
Annual General Meeting 2005 28 April 2005
Announcement of second quarter and half year 2005 28 July 2005
results
Announcement of third quarter 2005 results 27 October 2005
DIVIDENDS
The record date for the first interim dividend paid on 20 September 2004 (in the
UK, Sweden and the US) was 13 August 2004. Ordinary Shares traded ex-dividend
on the London and Stockholm Stock Exchanges from 11 August 2004. ADRs traded
ex-dividend on the New York Stock Exchange from the same date.
The record date for the second interim dividend for 2004 payable on 21 March
2005 (in the UK, Sweden and the US) will be 11 February 2005. Ordinary Shares
will trade ex-dividend on the London and Stockholm Stock Exchanges from 9
February 2005. ADRs will trade ex-dividend on the New York Stock Exchange from
the same date. The accelerated payment of the second interim dividend for 2004
in March 2005 instead of April payment, as was previous practice, will result in
the Company making three dividend payments to shareholders in the UK 2004/2005
tax year.
Future dividends will normally be paid as follows:
First interim Announced in July and paid in September
Second interim Announced in January and paid in March
TRADEMARKS
The following brand names used in this interim report are trade marks of the
AstraZeneca group of companies:
Accolate Arimidex Astra Tech Atacand Casodex Crestor Diprivan Exanta
Faslodex Iressa Losec Merrem Nexium Nolvadex Oxis Plendil Prilosec
Pulmicort Pulmicort Respules Rhinocort Rhinocort Aqua Seloken Seroquel
Symbicort Tenormin Toprol-XL Zestril Zoladex Zomig
ADDRESSES FOR CORRESPONDENCE
Registrar and Depositary Registered Office Swedish Securities Register Centre
Transfer Office for ADRs VPC AB
The AstraZeneca Registrar JPMorgan Chase Bank 15 Stanhope Gate PO Box 7822
Lloyds TSB Registrars PO Box 43013 London S-103 97 Stockholm
The Causeway Providence W1K 1LN Sweden
Worthing RI 02940-3013 UK
West Sussex US
BN99 6DA
UK
Tel: +44 (0)121 433 8000 Tel: +1 (781) 575 4328 Tel: +44 (0)20 7304 5000 Tel: +46 (0)8 402 9000
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 Interim Report 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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