FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
For the month of (February 2017)
 
Commission File Number: 001-11960
 
AstraZeneca PLC
 
1 Francis Crick Avenue
Cambridge Biomedical Campus
Cambridge CB2 0AA
United Kingdom
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F __
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes __ No X
If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-_____________
 
 
AstraZeneca PLC
2 February 2017 07:00
 
Full-Year and Q4 2016 Results
Performance in line with expectations; 2017 has the potential to be a defining year
 
Financial Summary
 
FY 2016
 
Q4 2016
 
$m
% change
$m 
% change
 
CER1
Actual
CER
Actual
Total Revenue
23,002
(5)
(7)
5,585
(12)
(13)
Product Sales
21,319
(8)
(10)
5,260
(15)
(15)
Externalisation Revenue
1,683
59
58
325
77
69
 
 
 
 
 
 
 
Reported Operating Profit
4,902
9
19
2,533
n/m
n/m
Core Operating Profit2
6,721
(7)
(3)
2,026
15
30
 
 
 
 
 
 
 
Reported Earnings Per Share (EPS)
$2.77
9
24
$1.46
93
n/m
Core EPS
$4.31
(5)
1
 
$1.21
9
29
 
 
● The fall in Product Sales primarily reflected the entry of Crestor generic medicines in the US;Crestor represents the last anticipated blockbuster3 patent expiry, ahead of significant late-stage pipeline news flow
● Good progress on cost control in the year, reflecting the evolving shape of the business:
- Reported and Core R&D cost growth of 2% to $5,890m and 5% to $5,631m, respectively, including the absorption of the R&D costs of Acerta Pharma and ZS Pharma
- Reported and Core SG&A costs declined by 12% to $9,413m and by 9% to $8,169m, respectively
Reported EPS increased by 9% in the year to $2.77, reflecting a revaluation of acquisition-related liabilities. A 5% fall in Core EPS was driven by a corresponding rate of decline in Total Revenue
   
 A second interim dividend of $1.90 per share has been declared, bringing the dividend for the full year to $2.80 per share. The Board reaffirms its commitment to the Company's progressive dividend policy
 
 
Commercial Highlights
The Growth Platforms grew by 5% in the year (Q4 2016: Up by 3%). Highlights included:
 
Emerging Markets: 6% growth (Q4 2016: Up by 7%) to $5,794m, supported by China, up by 10% to $2,636m
   
    Diabetes: Growth of 11%, as Farxiga became the Company's largest-selling Diabetes medicine
 
Japan: A sales decline of 3% to $2,184m, reflecting the biennial price reduction in the year
 
Brilinta: Sales grew by 39% to $839m; on track to be a blockbuster medicine
 
Respiratory: A decline of 3% to $4,753m (Q4 2016: Down by 5%), reflecting US pricing pressure for Symbicort
 
New Oncology: Strong sales of $664m (Q4 2016: $216m);Tagrisso delivered sales of $423m in its first year
 
 
Achieving Scientific Leadership
The pipeline-driven progress of AstraZeneca continued in the year. Twelve potential new medicines are in
Phase III/under regulatory review, primarily within the three therapy areas of Oncology, Cardiovascular & Metabolic Diseases and Respiratory. The Oncology pipeline, which attracted over 40% of R&D investment in the year, is progressing ahead of the Company's expectations, in particular Tagrisso and the Immuno-Oncology programmes. The table below highlights successes in the late-stage pipeline since the last results announcement:
 
Regulatory Submission Acceptances
- durvalumab - bladder cancer (US)
- Tagrisso - lung cancer (AURA3 trial) (US, EU)
- Faslodex - breast cancer (1st line) (US, EU)
- roxadustat - anaemia (CN) (rolling submission)
- benralizumab - severe, uncontrolled asthma (US, EU)
 
Other Key Developments
 
- Priority Review Designation: durvalumab (US)
- Priority Review Designation: Tagrisso (US)
 
 
 
Pascal Soriot, Chief Executive Officer, commenting on the results said:
"Our financial results in the year were in line with expectations and reflected the ongoing transition of our company. We brought a sharper strategic focus to our three main therapy areas, boosting pipeline productivity further as we saw with Priority Review Designations for durvalumab and Tagrisso, as well as regulatory submission acceptances for durvalumab in bladder cancer and for benralizumab in severe, uncontrolled asthma. Our underlying business is growing as a new AstraZeneca emerges, driven by competitive franchises and Emerging Markets.
2017 has the potential to be a turning point for our company as we near the end of our patent-expiry period and bring new medicines to patients across the globe. We anticipate defining data, in particular from our outstanding pipeline of Immuno-Oncology and targeted treatments. This year we have the opportunity to launch several life-changing medicines for cancer, respiratory and metabolic diseases. It is an exciting time as we rapidly approach the inflection point for our anticipated return to long-term growth, built on the solid foundations of a science-led pipeline."
 
FY 2017 Guidance
The Company provides guidance on Total Revenue and Core EPS only. All measures in this section are at constant exchange rates1:
 
Total Revenue
A low to mid single-digit percentage decline
Core EPS
A low to mid teens percentage decline*
*The Core EPS guidance anticipates a normalised effective Core tax rate of 16-20% (FY 2016: 11%).
 
Guidance is subject to base-case assumptions of the progression of the pipeline and the extensive level of news flow listed on the following page. Variations in performance between quarters can be expected to continue, with year-on-year comparisons expected to ease in the second half of FY 2017, when the impact of the entry of Crestor generic medicines in the US will annualise.
 
The Company presents Core EPS guidance. It is unable to provide guidance on a Reported/GAAP basis because the Company cannot reliably forecast material elements of the Reported/GAAP result, including the fair-value adjustments arising on acquisition-related liabilities, intangible-asset impairment charges and legal-settlement provisions. Please refer to the section 'Cautionary Statements Regarding Forward-Looking Statements' at the end of this announcement.
 
In addition to the guidance listed above, the Company also provides indications in other areas of the Income Statement. The sum of Externalisation Revenue and Other Operating Income in FY 2017 is anticipated to be ahead of that in FY 2016. Sustainable and ongoing income4 is expected to increase further as a proportion of Externalisation Revenue in FY 2017. Core R&D costs are expected to be broadly in line with those in FY 2016 and the Company anticipates a further reduction in Core SG&A costs, reflecting the evolving shape of the business. A full explanation of these items is listed in the Operating & Financial Review.
 
FY 2017 Currency Impact
Based only on average exchange rates in January 2017 and the Company's published currency sensitivities, there is expected to be a low single-digit percentage adverse impact from currency movements on Total Revenue and Core EPS in the year. Further details on currency sensitivities are contained within the Operating and Financial Review.
 
Notes
1. All growth rates and guidance are shown at constant exchange rates (CER) unless specified otherwise.
2. See the Operating and Financial Review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.
3. The term 'blockbuster' is defined as a medicine with Product Sales in excess of $1bn over a period of 12 months.
4. Sustainable and ongoing income is defined as Externalisation Revenue excluding upfront receipts.
 
 
Pipeline: Forthcoming Major News Flow
Innovation is critical to addressing unmet patient needs and is at the heart of the Company's growth strategy. The focus on research and development is designed to yield strong results from the pipeline.
 
H1 2017
Faslodex - breast cancer (1st line): Regulatory decision (JP)
Lynparza - ovarian cancer (2nd line): Regulatory submission
Lynparza - breast cancer: Data readout
Tagrisso - lung cancer (AURA3): Regulatory decision (US)
durvalumab - bladder cancer: Regulatory decision (US)
durva +/- treme - lung cancer (ARCTIC): Data readout
acalabrutinib - blood cancer: Data readout, regulatory submission (US) (Phase II)#
 
Bydureon - autoinjector: Regulatory submission (US)
saxagliptin/dapagliflozin - type-2 diabetes: Regulatory decision (US)
ZS-9 (sodium zirconium cyclosilicate) - hyperkalaemia: Regulatory decision (US, EU)
 
Bevespi - COPD: Regulatory submission (EU)
benralizumab - severe, uncontrolled asthma: Regulatory submission (JP)
Mid-2017
durva +/- treme - lung cancer (MYSTIC): Data readout
H2 2017
Faslodex - breast cancer (1st line): Regulatory decision (US, EU)
Lynparza - breast cancer: Regulatory submission
Lynparza - ovarian cancer (1st line): Data readout
Tagrisso - lung cancer: Regulatory decision (CN)Tagrisso - lung cancer (AURA3): Regulatory decision (EU)
Tagrisso - lung cancer (1st line): Data readout
durvalumab - lung cancer (PACIFIC): Data readout, regulatory submission (US)
durva +/- treme - lung cancer (MYSTIC): Regulatory submission
durva +/- treme - lung cancer (ARCTIC): Regulatory submission
durva +/- treme - head & neck cancer (KESTREL): Data readout
moxetumomab - leukaemia: Data readout
 
benralizumab - severe, uncontrolled asthma: Regulatory decision (US)
tralokinumab - severe, uncontrolled asthma: Data readout
2018
Lynparza - ovarian cancer (1st line): Regulatory submission
Tagrisso - lung cancer (1st line): Regulatory submission
durva + treme - lung cancer (NEPTUNE): Data readout
durva +/- treme - head & neck cancer (KESTREL): Regulatory submission
durva +/- treme - head & neck cancer (EAGLE): Data readout, regulatory submission
durva +/- treme - bladder cancer (DANUBE): Data readout, regulatory submission
moxetumomab - leukaemia: Regulatory submission
selumetinib - thyroid cancer: Data readout, regulatory submission
 
Brilinta - type-2 diabetes / coronary artery disease: Data readout, regulatory submission
Bydureon - cardiovascular (CV) outcomes trial: Data readout, regulatory submission
roxadustat - anaemia: Data readout (AstraZeneca-sponsored trials), regulatory submission
 
Duaklir - COPD: Regulatory submission (US)
benralizumab - severe, uncontrolled asthma: Regulatory decision (EU)
tralokinumab - severe, uncontrolled asthma: Regulatory submission
PT010 - COPD: Data readout, regulatory submission
 
anifrolumab - lupus: Data readout
The term 'data readout' in this section refers to Phase III data readouts, unless specified otherwise.
#Potential fast-to-market opportunity ahead of randomised, controlled trials.
 
Results Presentation
A presentation and accompanying live webcast for investors and analysts, hosted by management, will begin at 12.30pm UK time today. Details can be accessed via astrazeneca.com/investors.
 
Reporting Calendar
The Company intends to publish its first quarter financial results on 27 April 2017.
 
About AstraZeneca
AstraZeneca is a global, science-led biopharmaceutical company that focuses on the discovery, development and commercialisation of prescription medicines, primarily for the treatment of diseases in three main therapy areas - Oncology, Cardiovascular & Metabolic Diseases and Respiratory. The Company also is selectively active in the areas of autoimmunity, neuroscience and infection. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information, please visit www.astrazeneca.com and follow us on Twitter @AstraZeneca.
 
Media Enquiries
Esra Erkal-Paler
UK/Global
+44 203 749 5638
 
Neil Burrows
UK/Global
+44 203 749 5637
 
Vanessa Rhodes
UK/Global
+44 203 749 5736
 
Karen Birmingham
UK/Global
+44 203 749 5634
 
Rob Skelding
UK/Global
+44 203 749 5821
 
Jacob Lund
Sweden
+46 8 553 260 20
 
Michele Meixell
US
+1 302 885 2677
 
Investor Relations
Thomas Kudsk Larsen
 
+44 203 749 5712
 
Craig Marks
Finance, Fixed Income, M&A
+44 7881 615 764
 
Henry Wheeler
Oncology
+44 203 749 5797
 
Mitchell Chan
Oncology
+1 240 477 3771
 
Lindsey Trickett
Cardiovascular & Metabolic Diseases
+1 240 543 7970
 
Nick Stone
Respiratory
+44 203 749 5716
 
Christer Gruvris
Autoimmunity, Neuroscience & Infection
+44 203 749 5711
 
US toll free
 
+1 866 381 7277
 
 
 
Operating And Financial Review
_______________________________________________________________________________________
All narrative on growth and results in this section is based on CER unless stated otherwise. Financial figures are in US$ millions ($m). The performance shown in this announcement covers the twelve and three-month periods to 31 December 2016 (the year and the quarter, respectively) compared to the twelve and three-month periods to 31 December 2015.
 
Core measures, which are presented in addition to Reported financial information, are non-GAAP measures provided to enhance understanding of the Company's underlying financial performance. Core financial measures are adjusted to exclude certain significant items, such as:
 
-    amortisation and impairment of intangible assets, including impairment reversals but excluding any charges relating to IT assets
-    charges and provisions related to global restructuring programmes (this will include such charges that relate to the impact of global restructuring programmes on capitalised IT assets)
-   other specified items, principally comprising legal settlements and acquisition-related costs, which include fair-value adjustments and the imputed finance charge relating to contingent consideration on business combinations
 
Details on the nature of these measures are provided on page 64 of the Annual Report and Form 20-F Information 2015.
 
Total Revenue
 
 
FY 2016
Q4 2016
$m
% CER change
$m
% CER change
Product Sales
21,319
(8)
5,260
(15)
Externalisation Revenue
1,683
59
325
77
Total Revenue
23,002
(5)
5,585
(12)
 
Based on actual exchange rates, Total Revenue declined by 7% in the year and by 13% in the quarter.
 
Product Sales
The level of decline in Product Sales was driven by the impact of the entry of Crestor generic medicines in the US, as well as the reducing impact of Nexium generic medicines in the US. Sales of Crestor and Nexium in the US declined by 57% and 39%, respectively. Overall US Product Sales declined by 22% in the year to $7,365m (Q4 2016: Down by 37% to $1,618m). Product Sales in Europe declined by 3% in the year to $5,064m (Q4 2016: Down by 3% to $1,332m).
 
Within Product Sales, the Growth Platforms grew by 5% in the year, representing 63% of Total Revenue:
 
Growth Platform
FY 2016
Q4 2016
Product Sales ($m)
% CER change
Product Sales ($m)
% CER change
Emerging Markets
5,794
6
1,486
7
Respiratory
4,753
(3)
1,210
(5)
Diabetes
2,427
11
598
3
Japan
2,184
(3)
591
(5)
Brilinta
839
39
236
37
New Oncology1
664
n/m
216
n/m
Total2
14,491
5
3,728
3
1New Oncology comprises Lynparza, Iressa (US) and Tagrisso.
2Total Product Sales for Growth Platforms adjusted to remove duplication on a medicine and regional basis. 
 
Externalisation Revenue
Where AstraZeneca retains a significant economic interest in medicines or potential new medicines, income from transactions is reported as Externalisation Revenue in the Company's financial statements. The table below illustrates the level of sustainable and ongoing income1 within the total of Externalisation Revenue. Sustainable and ongoing income is anticipated to grow as a proportion of Externalisation Revenue over time.
 
 
FY 2016
 
Q4 2016
 
 
$m
 
% of Total
% change
 
$m
 
% of Total
 
% change
 
 
CER
 
Actual
 
CER
 
Actual
 
Royalties2
 
119
 
7
 
69
 
58
 
45
 
14
 
222
 
230
 
Milestones
 
237
 
14
 
35
 
33
 
10
 
3
 
(87)
 
(87)
 
Sub-total Sustainable and Ongoing Externalisation Revenue
 
356
 
21
 
45
 
40
 
55
 
17
 
(37)
 
(40)
 
Upfront Receipts
 
1,327
 
79
 
63
 
63
 
270
 
83
 
172
 
171
 
Total Externalisation Revenue
 
1,683
 
100
 
59
 
58
 
325
 
100
 
77
 
69
 
1Sustainable and ongoing income is defined as Externalisation Revenue excluding upfront receipts.
2Royalties in FY 2016 included those derived from the Aspen Global Incorporated (Aspen) transaction highlighted below.
 
Externalisation Revenue recognised in the year amounted to $1,683m. Highlights included:
 
Medicine
Partner
Region
$m
Anaesthetics
Aspen - initial revenue
Global (excl. US)
520
Plendil
China Medical System Holdings Ltd -commercialisation rights - initial revenue
China
298
Toprol-XL
Aralez Pharmaceuticals Trading DAC (Aralez) - initial revenue
US
175
Tralokinumab - atopic dermatitis
LEO Pharma A/S (LEO Pharma) - initial revenue
Global
115
AZD3293
Eli Lilly and Company (Lilly) - milestone revenue
Global
100
Nexium OTC 20mg
Pfizer Inc. (Pfizer) - milestone revenue
Global
93
Moventig
ProStrakan Group plc - commercialisation rights - initial and milestone revenue
EU
78
Others
 
 
304
Total
 
 
1,683
 
Examples of sustainable and ongoing Externalisation Revenue streams are shown below:
 
Announcement Date
Medicine
Partner
Region
Externalisation Revenue
4 October 2016
Toprol-XL
Aralez
US
●        Initial $175m milestone
●        Up to $48m milestone and sales-related  revenue
●        Mid-teen percentage royalties on sales
1 July 2016
Tralokinumab - atopic dermatitis
LEO Pharma
Global
●        Initial $115m milestone
●        Up to $1bn in commercially-related milestones
●        Up to mid-teen tiered percentage royalties on sales
9 June 2016
Anaesthetics
Aspen
Global (excl. US)
●        Initial $520m milestone
●        Up to $250m in sales-related revenue
●        Double-digit percentage trademark royalties on sales
1 September 2015
Brodalumab - psoriasis
Valeant Pharmaceuticals International, Inc. (Valeant)
Global, later
amended to US
●        Initial $100m milestone
●        Pre-launch milestone up to $170m
●        Sales-related royalties up to $175m
19 March 2015
Movantik
Daiichi Sankyo
US
●        Initial $200m milestone
●        Up to $625m in Product Sales-related revenue
 
 
Product Sales
_______________________________________________________________________________________
The performance of key medicines is shown below, with a geographical split shown in Notes 8 and 9.
 
 
FY 2016
 
Q4 2016
 
 
$m
 
% of Total
% change
 
$m
 
% change
 
 
CER
 
Actual
 
CER
 
Actual
 
Oncology
 
 
 
 
 
 
 
 
Iressa
 
513
 
2
 
(5)
 
(6)
 
118
 
(11)
 
(9)
 
Tagrisso
 
423
 
2
 
n/m
 
n/m
 
147
 
n/m
 
n/m
 
Lynparza
 
218
 
1
 
n/m
 
n/m
 
62
 
72
 
72
 
Legacy:
 
 
 
 
 
 
 
 
Faslodex
 
830
 
4
 
19
 
18
 
222
 
19
 
20
 
Zoladex
 
816
 
4
 
-
 
-
 
235
 
13
 
19
 
Casodex
 
247
 
1
 
(9)
 
(7)
 
60
 
(8)
 
(5)
 
Arimidex
 
232
 
1
 
(6)
 
(7)
 
57
 
(7)
 
(5)
 
Others
 
104
 
-
 
(26)
 
(21)
 
29
 
-
 
12
 
Total Oncology
 
3,383
 
16
 
20
 
20
 
930
 
26
 
30
 
Cardiovascular & Metabolic Diseases
 
 
 
 
 
 
 
 
Brilinta
 
839
 
4
 
39
 
36
 
236
 
37
 
36
 
Farxiga
 
835
 
4
 
72
 
70
 
239
 
57
 
57
 
Onglyza
 
720
 
3
 
(6)
 
(8)
 
149
 
(21)
 
(22)
 
Bydureon
 
578
 
3
 
-
 
-
 
142
 
(8)
 
(8)
 
Byetta
 
254
 
1
 
(19)
 
(20)
 
55
 
(22)
 
(24)
 
 
 
 
 
 
 
 
 
Legacy:
 
 
 
 
 
 
 
 
Crestor
 
3,401
 
16
 
(32)
 
(32)
 
631
 
(53)
 
(52)
 
Seloken/Toprol-XL
 
737
 
3
 
9
 
4
 
178
 
14
 
11
 
Atacand
 
315
 
1
 
(8)
 
(13)
 
81
 
(5)
 
(6)
 
Others
 
437
 
2
 
(26)
 
(28)
 
100
 
(31)
 
(32)
 
Total Cardiovascular & Metabolic Diseases
 
8,116
 
38
 
(13)
 
(14)
 
1,811
 
(26)
 
(26)
 
Respiratory
 
 
 
 
 
 
 
 
Symbicort
 
2,989
 
14
 
(10)
 
(12)
 
740
 
(13)
 
(14)
 
Pulmicort
 
1,061
 
5
 
8
 
5
 
288
 
8
 
5
 
Tudorza/Eklira
 
170
 
1
 
(9)
 
(11)
 
36
 
(23)
 
(23)
 
Daliresp/Daxas
 
154
 
1
 
48
 
48
 
41
 
28
 
28
 
Duaklir
 
63
 
-
 
n/m
 
n/m
 
19
 
58
 
58
 
Others
 
316
 
1
 
27
 
22
 
86
 
37
 
32
 
Total Respiratory
 
4,753
 
22
 
(3)
 
(5)
 
1,210
 
(5)
 
(6)
 
Other
 
 
 
 
 
 
 
 
Nexium
2,032
10
(18)
(19)
491
(15)
(13)
Seroquel XR
 
735
 
3
 
(27)
 
(28)
 
118
 
(51)
 
(51)
 
Synagis
 
677
 
3
 
2
 
2
 
302
 
10
 
10
 
Losec/Prilosec
 
276
 
1
 
(17)
 
(19)
 
59
 
(23)
 
(23)
 
FluMist/Fluenz
 
104
 
-
 
(59)
 
(64)
 
67
 
(60)
 
(65)
 
Movantik/Moventig
 
91
 
-
 
n/m
 
n/m
 
26
 
73
 
73
 
Others
 
1,152
 
5
 
(20)
 
(23)
 
246
 
(34)
 
(35)
 
Total Other
 
5,067
 
24
 
(19)
 
(20)
 
1,309
 
(25)
 
(25)
 
Total Product Sales
 
21,319
 
100
 
(8)
 
(10)
 
5,260
 
(15)
 
(15)
 
 
 
Product Sales Summary
_______________________________________________________________________________________
 
ONCOLOGY
Full-year sales of $3,383m; up by 20%.
Oncology sales represented 16% of Total Product Sales.
 
Iressa (full-year sales of $513m; down by 5%)
Sales in the US amounted to $23m, with sales in Europe declining by 5% to $120m. The Company prioritised the launch of Tagrisso in the year, given its potential impact for patients and the Company. Emerging Markets sales (defined in the Regional Product Sales section on page 13) declined by 10% to $233m. China sales declined by 16% to $116m, a result of a new price following national reimbursement listing obtained in June 2016. Strong competition from branded and generic medicines in Korea also contributed to the decline.
 
Tagrisso (full-year sales of $423m)
In the second half of the year, sales of Tagrisso surpassed those of Iressa, with Tagrisso becoming the leading AstraZeneca medicine for the treatment of lung cancer. Regulatory approvals were granted in a number of markets, including Brazil, Hong Kong, Singapore, Taiwan and the United Arab Emirates; the Company anticipates additional regulatory approvals and reimbursement decisions in due course. To date, Tagrisso has received regulatory approval in 46 countries worldwide.
 
Sales in the US amounted to $254m. After regulatory approval in the EU and Japan earlier in the year, sales in the year were $76m in Europe and $82m in Japan.
On 27 December 2016, a third-party, blood-based companion-diagnostic test for Tagrisso was approved in Japan. The test is designed to confirm the presence of a T790M mutation in patients. Similarly, the blood-based companion-diagnostic partner test for Tagrisso was approved in the US on 29 September 2016.
 
Lynparza (full-year sales of $218m)
Lynparza was available to patients in 31 countries by the end of 2016, with regulatory reviews underway in seven additional countries including Russia, Brazil and Singapore. Almost 5,000 patients globally have been prescribed Lynparza since the first launch in December 2014. Sales in the US increased by 81% in the year to $127m;Lynparza now has a high market penetration. Sales in Europe increased to $81m, following a number of successful launches.
 
Legacy: Faslodex (full-year sales of $830m; up by 19%)
Sales in the US in the year increased by 23% to $438m, mainly driven by an expanded label in March 2016 for 2nd-line advanced or metastatic breast cancer, in combination with palbociclib. Europe full-year sales increased by 11% to $228m. An increase in demand in Japan led to sales growth of 12% to $63m. China sales, up by 91% to $20m, supported Emerging Markets sales of $96m, representing an increase of 25%.
 
Legacy: Zoladex (full-year sales of $816m; stable)
The stable performance was attributed to Europe sales (down by 4% to $156m) and Established Rest Of World (ROW) sales (down by 7% to $270m) being offset by favourable sales performances in the US (up by 25% to $35m) and Emerging Markets (up by 6% to $355m).
 
CARDIOVASCULAR & METABOLIC DISEASES
Full-year sales of $8,116m; down by 13%.
Cardiovascular & Metabolic Diseases sales represented 38% of Total Product Sales.
 
Brilinta (full-year sales of $839m; up by 39%)
Sales of Brilinta in the US were $348m, representing an increase of 45%. The performance reflected updated preferred guidelines from the American College of Cardiology and the American Heart Association in the first half of the year;Brilinta remained the branded oral anti-platelet market leader in the US. Brilinta's new-to-brand weekly prescription market share jumped to around 15% at the end of the year, representing an increase of around three percentage points.
 
Full-year sales of Brilique in Europe increased by 15% to $258m, reflecting indication leadership across a number of markets. In the year, the German Institute for Quality and Efficiency in Healthcare (IQWiG) gave its assessment of the additional benefit from Brilique at the 60mg dose as tested in the PEGASUS trial, as did the National Institute for Health and Clinical Excellence in England, UK.
 
Emerging Markets full-year sales grew by 80% to $189m, with China sales more than doubling. China represented 47% of Emerging Markets sales of the medicine at $89m, despite it not being included on the National Reimbursement Drug List. The Company anticipates inclusion in due course. Growth was underpinned by a combination of strong levels of hospital-listing expansion and increased use in existing hospitals.
 
Farxiga (full-year sales of $835m; up by 72%)
In the year, sales of Farxiga surpassed those of Onglyza and Farxiga became the leading AstraZeneca medicine for the treatment of diabetes, consolidating its position as global leader in the SGLT2 class.
 
Sales of Farxiga in the US increased by 75% to $457m, primarily reflecting overall market growth and a higher net price. A stronger emphasis on promotional activity and improved levels of patient access resulted in market-share growth. Full-year sales of Forxiga in Europe increased by 52% to $187m, as the medicine continued to lead the growing class. Emerging Markets sales increased by 96% to $133m, driven by ongoing launches and improved access. In particular, strong performances were seen in the Asia-Pacific region (up by 108% to $52m), Brazil (up by 50% to $28m), and the Middle East, Africa & Others region (up to $32m).
 
Onglyza (full-year sales of $720m; down by 6%)
Sales in the US declined by 10% to $376m, as the Company prioritised sales and marketing resources towards Farxiga. Continued competitive pressures in the DPP-4 class led to lower market share but were partially offset by reduced levels of utilisation of patient-access programmes. Full-year sales in Europe declined by 5% to $132m and by 4% in Emerging Markets to $142m, again reflecting the Company's focus on Farxiga.
 
In the quarter, global sales declined by 21%, due to adverse pressures on the DPP-4 class and reflecting an acceleration of the previously-mentioned market dynamics.
 
Bydureon/Byetta (full-year sales of $832m; down by 7%)
Combined full-year US sales for Bydureon/Byetta were $627m. Bydureon sales in the US declined by 4% to $463m, representing 74% of total Bydureon/Byetta US sales. Around 75% of sales came from the new dual-chamber pen compared to the prior tray presentation. The decline in US Byetta sales of 22% to $164m was attributed to the Company's promotional focus on Bydureon. The decline in both Bydureon and Byetta US sales reflected lower net pricing; a regulatory submission for the new Bydureon autoinjector is anticipated in the US in the first half of 2017.
 
Full-year sales in Europe increased by 3% to $145m, reflecting the Company's ongoing effort to expand its Diabetes presence. Full-year sales of Byetta and Bydureon in Emerging Markets increased by 13% to $24m and decreased by 25% to $4m, respectively. On 10 October 2016, AstraZeneca entered into a strategic collaboration with 3SBio Inc. (3SBio) for the rights to commercialise Bydureon and Byetta in the Chinese market. The agreement allowed the Company to benefit from 3SBio's established local expertise in injectable medicines as well as focus on its oral type-2 diabetes medicines.
 
Legacy: Crestor (full-year sales of $3,401m; down by 32%)
In the US, Crestor full-year sales declined by 57% to $1,223m, reflecting the market entry of Crestor generic medicines. Sales in the quarter declined by 88% to $95m. In Europe, full-year sales declined by 4% to $866m, reflecting the increasing use of generic medicines. In contrast, Crestor consolidated its position as the leading statin in Japan, with full-year sales stable at $521m. Full-year sales in China grew by 27% to $311m, while Russia sales grew by 28% to $29m.
 
RESPIRATORY
Full-year sales of $4,753m; down by 3%.
Respiratory sales represented 22% of Total Product Sales.
 
Symbicort (full-year sales of $2,989m; down by 10%)
Full-year sales in the US declined by 18% to $1,242m. This primarily reflected the impact of the continued effects of pricing pressure from managed-care access within the ICS/LABA class. Competition also remained intense from other classes. In Europe, full-year sales declined by 12% to $909m, primarily a result of competition from branded and analogue medicines. The performance improved during the year, with Q4 2016 sales in Europe declining by only 3% to $230m.
 
In contrast, full-year Emerging Markets sales grew by 10% to $402m, reflecting sales growth in China of 32% to $156m and Latin America (ex-Brazil) sales growth of 12% to $37m.
 
Symbicort continued to lead the global market by volume within the class; the medicine provides a platform for the launch of Bevespi and potential launch of benralizumab.
 
Pulmicort (full-year sales of $1,061m; up by 8%)
Pulmicort returned to being a blockbuster medicine in the year.
 
Strong underlying volume growth in Emerging Markets drove a 21% sales increase in that region to $698m. Emerging Markets, representing 66% of Pulmicort sales, more than offset sales declines in the US, Europe and Established ROW. China sales increased by 24% to $570m and represented 54% of sales of Pulmicort. Volume demand in China partly reflected the long-term increase in China of acute chronic obstructive pulmonary disease (COPD) and paediatric asthma. AstraZeneca continued its expansion of treatment centres and provided increased access to home-based patient-care systems.
 
Tudorza/Eklira (full-year sales of $170m; down by 9%)
Sales in the US declined by 25% to $77m, reflecting adverse market demand, limited Medicare Part D access and the focus on the launch of Bevespi. Sales in Europe increased by 9% to $83m.
 
Daliresp/Daxas (full-year sales of $154m; up by 48%)
Sales in the US increased by 29% to $134m in the year, driven primarily by favourable market penetration. US sales represented 87% of global sales. ROW sales rights were added in May 2016 and, since completion, Daxas sales in Europe amounted to $15m.
 
Duaklir (full-year sales of $63m)
Duaklir has been launched successfully in excess of 25 countries;sales more than doubled in the year. This followed the strategic transaction with Almirall, S.A., which was completed in October 2014.
 
Bevespi
Bevespi Aerosphere inhalation aerosol was launched commercially in the US in January 2017 and is available in pharmacies for the long-term, maintenance treatment of airflow obstruction in patients with COPD. It is the only LAMA/LABA combination treatment to be delivered in a pressurised metered-dose inhaler (pMDI) and the first FDA-approved therapy to be formulated with AstraZeneca's co-suspension delivery technology, a focus of the Company's future-platform development for respiratory-disease combination therapies. Bevespi also demonstrated a 381mL improvement in peak inspiratory capacity, a potentially differentiating factor.
 
OTHER
Full-year sales of $5,067m; down by 19%.
Other sales represented 24% of Total Product Sales.
 
Nexium (full-year sales of $2,032m; down by 18%)
Sales in the US declined by 39% to $554m in the year, reflecting lower demand and inventory de-stocking, which followed the loss of exclusivity in 2015. Sales in Europe declined by 11% to $251m, and Emerging Markets sales decreased 3% to $690m. Japan sales declined by 4% to $436m, reflecting the mandated biennial price reduction, effective from April 2016.
 
Seroquel XR (full-year sales of $735m; down by 27%)
Sales of Seroquel XR in the US declined by 28% to $515m in the year (Q4 2016: Down by 60% to $71m). Since 1 November 2016, two companies have launched generic medicines in the US. Full-year sales of Seroquel XR in Europe declined by 32% to $134m reflecting the impact of generic-medicine competition.
 
Synagis (full-year sales of $677m; up by 2%)
Sales in the US increased by 14% to $325m for the full year due to greater market demand. Sales to AbbVie Inc., which is responsible for the commercialisation of Synagis in over 80 countries outside the US, declined by 7% to $352m.
 
FluMist/Fluenz (full-year sales of $104m;down by 59%)
The Company confirmed on 23 June 2016 that the Advisory Committee on Immunization Practices (ACIP) of the US Centers for Disease Control and Prevention had provided its interim recommendation not to use FluMist Quadrivalent Live Attenuated Influenza Vaccine (FluMist Quadrivalent) in the US for the 2016-2017 influenza season.
 
The Company wrote down the value of its inventory of FluMist by $47m in the year, which was reflected within the Cost of Sales. Full-year sales of FluMist in the US declined by 84% to $33m. Europe sales increased by 3% in the year to $64m.
 
 
Regional Product Sales
_______________________________________________________________________________________
 
 
FY 2016
Q4 2016
 
 
$m
% of Total
% change
$m
% change
 
 
CER
Actual
CER
Actual
 
US
7,365
35
(22)
(22)
1,618
(37)
(37)
 
Europe
5,064
24
(3)
(5)
1,332
(3)
(6)
 
Established ROW1
3,096
15
(4)
2
824
(6)
5
 
 
Japan
2,184
10
(3)
8
591
(5)
9
 
 
Canada
497
2
(2)
(7)
126
(5)
(6)
 
 
Other Established ROW
415
2
(10)
(12)
107
(10)
(4)
 
Emerging Markets2
5,794
27
6
-
1,486
7
4
 
 
China
2,636
12
10
4
609
8
2
 
 
Ex. China
3,158
15
3
(4)
877
6
5
 
Total
21,319
100
(8)
(10)
5,260
(15)
(15)
 
1 Established ROW comprises Japan, Canada, Australia and New Zealand.
2 Emerging Markets comprises all remaining Rest of World markets, including Brazil, China, India, Mexico, Russia and Turkey.
 
US (full-year sales of $7,365m; down by 22%)
The full-year decline in US sales reflected the competition from Crestor generic medicines that entered the US market from July 2016. Unfavourable managed-care pricing and continued competitive intensity also impacted sales of Symbicort.
 
Europe (full-year sales of $5,064m; down by 3%)
Strong growth in sales of Forxiga (up by 52% to $187m) and Brilique (up by 15% to $258m) was more than offset by a 12% decline in Symbicort sales to $909m. However, Symbicort maintained its position as the number one ICS/LABA medicine by volume, despite competition from branded and analogue medicines. Lynparza and Tagrisso sales increased to $81m and $76m respectively.
 
Established ROW (full-year sales of $3,096m; down by 4%)
Full-year sales of Forxiga in Established ROW increased by 72% to $58m. Nexium sales declined by 10% to $537m.
 
Japan sales declined by 3% to $2,184m, reflecting the biennial price reduction, effective from April 2016, of around 6%. The decline was partly mitigated by stable sales of Crestor of $521m in the year. Since the launch of Tagrisso in Japan in May 2016, sales amounted to $82m. 
 
Emerging Markets (full-year sales of $5,794m; up by 6%)
Emerging Markets, representing 27% of global Product Sales, is the second-largest sales region for AstraZeneca.
 
Sales growth for the year in Emerging Markets was impacted by challenging macro-economic conditions in Latin America, where ex-Brazil full-year sales declined by 7% to $516m. The effect of reductions in Saudi Arabian governmental healthcare spending, as well as the reduction of AstraZeneca's activities in Venezuela, also adversely impacted sales. China sales, however, grew by 10% to $2,636m, representing 45% of Emerging Markets sales in the year.
 
Sales in Brazil increased by 2% to $348m, reflecting the strong performances of Forxiga (up by 50% to $28m), Oncology medicines (up by 1% to $82m) and Seloken (up by 6% to $63m). Russia sales increased by 13% to $233m, led by strong performances in Cardiovascular & Metabolic Diseases medicine sales (up by 38% to $80m).
A number of AstraZeneca medicines were externalised or disposed of in the year, adversely impacting the level of Product Sales:
Medicine
Region
Externalisation / Disposal Completion Date
FY 2015Impacted RegionProduct Sales ($m)
Bydureon & Byetta
China
11 October 2016
15
Anaesthetics
Global (excl. US)
1 September 2016
594
Plendil
China
29 February 2016
189
Moventig
Europe
1 March 2016
1
Toprol-XL
US
31 October 2016
89
Imdur
Global (excl. US)
3 May 2016
55
Total
 
 
943
 
 
Financial Performance
______________________________________________________________________________________
 
Year
Reported
% change
 
Core
% change
FY2016
FY2015
CER
Actual
 
FY 2016
FY
2015
CER
Actual
Product Sales
 
21,319
 
23,641
 
(8)
 
(10)
 
 
21,319
 
23,641
 
(8)
 
(10)
 
Externalisation Revenue
 
1,683
 
1,067
 
59
 
58
 
 
1,683
 
1,067
 
59
 
58
 
Total Revenue
 
23,002
 
24,708
 
(5)
 
(7)
 
 
23,002
 
24,708
 
(5)
 
(7)
 
Cost of Sales
 
(4,126)
 
(4,646)
 
(7)
 
(11)
 
 
(3,872)
 
(4,119)
 
(2)
 
(6)
 
 
 
 
 
 
 
 
 
 
 
Gross Profit
 
18,876
 
20,062
 
(5)
 
(6)
 
 
19,130
 
20,589
 
(6)
 
(7)
 
Gross Margin1
 
80.8%
 
80.3%
 
-0.1
 
+0.5
 
 
82.0%
 
82.6%
 
-1.1
 
-0.6
 
 
 
 
 
 
 
 
 
 
 
Distribution Expense
 
(326)
 
(339)
 
1
 
(4)
 
 
(326)
 
(339)
 
1
 
(4)
 
% Total Revenue
 
1.4%
 
1.4%
 
-
 
-
 
 
1.4%
 
1.4%
 
-
 
-
 
R&D Expense
 
(5,890)
 
(5,997)
 
2
 
(2)
 
 
(5,631)
 
(5,603)
 
5
 
-
 
% Total Revenue
 
25.6%
 
24.3%
 
-2
 
-1
 
 
24.5%
 
22.7%
 
-2
 
-2
 
SG&A Expense
 
(9,413)
 
(11,112)
 
(12)
 
(15)
 
 
(8,169)
 
(9,265)
 
(9)
 
(12)
 
% Total Revenue
 
40.9%
 
45.0%
 
+3
 
+4
 
 
35.5%
 
37.5%
 
+1
 
+2
 
Other Operating Income
 
1,655
 
1,500
 
12
 
10
 
 
1,717
 
1,520
 
14
 
13
 
% Total Revenue
 
7.2%
 
6.1%
 
+1
 
+1
 
 
7.5%
 
6.2%
 
+1
 
+1
 
Operating Profit
 
4,902
 
4,114
 
9
 
19
 
 
6,721
 
6,902
 
(7)
 
(3)
 
% Total Revenue
 
21.3%
 
16.7%
 
+3
 
+5
 
 
29.2%
 
27.9%
 
-
 
+1
 
Net Finance Expense
 
(1,317)
 
(1,029)
 
37
 
28
 
 
(661)
 
(505)
 
46
 
31
 
Joint Ventures
 
(33)
 
(16)
 
 
 
 
(33)
 
(16)
 
 
 
Profit Before Tax
 
3,552
 
3,069
 
-
 
16
 
 
6,027
 
6,381
 
(11)
 
(6)
 
Taxation
 
(146)
 
(243)
 
 
 
 
(658)
 
(990)
 
 
 
Tax Rate %
 
4%
 
8%
 
 
 
 
11%
 
16%
 
 
 
Profit After Tax
 
3,406
 
2,826
 
6
 
21
 
 
5,369
 
5,391
 
(6)
 
-
 
Non-controlling Interests
 
93
 
(1)
 
 
 
 
86
 
(1)
 
 
 
Net Profit
 
3,499
 
2,825
 
9
 
24
 
 
5,455
 
5,390
 
(5)
 
1
 
Weighted Average Shares
 
1,265
 
1,264
 
 
 
 
1,265
 
1,264
 
 
 
Earnings Per Share ($)
 
2.77
 
2.23
 
9
 
24
 
 
4.31
 
4.26
 
(5)
 
1
 
1 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales
2 All financial figures, except Earnings Per Share, are in $ millions ($m). Weighted Average Shares are in millions.
 
Quarter
Reported
% change
 
Core
% change
Q4 2016
Q42015
CER
Actual
 
Q42016
Q4 2015
CER
Actual
Product Sales
 
5,260
 
6,207
 
(15)
 
(15)
 
 
5,260
 
6,207
 
(15)
 
(15)
 
Externalisation Revenue
 
325
 
192
 
77
 
69
 
 
325
 
192
 
77
 
69
 
Total Revenue
 
5,585
 
6,399
 
(12)
 
(13)
 
 
5,585
 
6,399
 
(12)
 
(13)
 
Cost of Sales
 
(1,160)
 
(1,269)
 
(2)
 
(9)
 
 
(1,087)
 
(1,209)
 
(4)
 
(10)
 
Gross Profit
 
4,425
 
5,130
 
(15)
 
(14)
 
 
4,498
 
5,190
 
(14)
 
(13)
 
Gross Margin1
 
77.9%
 
79.6%
 
-3.1
 
-1.7
 
 
79.3%
 
80.5%
 
-2.6
 
-1.2
 
Distribution Expense
 
(83)
 
(99)
 
(11)
 
(16)
 
 
(83)
 
(99)
 
(11)
 
(16)
 
% Total Revenue
 
1.5%
 
1.5%
 
-
 
-
 
 
1.5%
 
1.5%
 
-
 
-
 
R&D Expense
 
(1,543)
 
(1,746)
 
(5)
 
(12)
 
 
(1,481)
 
(1,567)
 
2
 
(5)
 
% Total Revenue
 
27.6%
 
27.3%
 
-2
 
-
 
 
26.5%
 
24.5%
 
-4
 
-2
 
SG&A Expense
 
(1,386)
 
(2,668)
 
(44)
 
(48)
 
 
(2,050)
 
(2,461)
 
(14)
 
(17)
 
% Total Revenue
 
24.8%
 
41.7%
 
+15
 
+17
 
 
36.7%
 
38.5%
 
+1
 
+2
 
Other Operating Income
 
1,120
 
471
 
n/m
 
n/m
 
 
1,142
 
493
 
n/m
 
n/m
 
% Total Revenue
 
20.1%
 
7.4%
 
+13
 
+13
 
 
20.4%
 
7.7%
 
+13
 
+13
 
Operating Profit
 
2,533
 
1,088
 
n/m
 
n/m
 
 
2,026
 
1,556
 
15
 
30
 
% Total Revenue
 
45.4%
 
17.0%
 
+23
 
+28
 
 
36.3%
 
24.3%
 
+8
 
+12
 
Net Finance Expense
 
(339)
 
(279)
 
36
 
22
 
 
(172)
 
(150)
 
36
 
15
 
Joint Ventures
 
(11)
 
(7)
 
 
 
 
(11)
 
(7)
 
 
 
Profit Before Tax
 
2,183
 
802
 
n/m
 
n/m
 
 
1,843
 
1,399
 
13
 
32
 
Taxation
 
(366)
 
6
 
 
 
 
(333)
 
(200)
 
 
 
Tax Rate %
 
17%
 
(1)%
 
 
 
 
18%
 
14%
 
 
 
Profit After Tax
 
1,817
 
808
 
91
 
n/m
 
 
1,510
 
1,199
 
7
 
26
 
Net Profit
 
1,842
 
808
 
94
 
n/m
 
 
1,533
 
1,199
 
9
 
28
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares
 
1,265
 
1,264
 
 
 
 
1,265
 
1,264
 
 
 
Earnings Per Share ($)
 
1.46
 
0.63
 
93
 
n/m
 
 
1.21
 
0.94
 
9
 
29
 
1 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales
2 All financial figures, except Earnings Per Share, are in $ millions ($m). Weighted Average Shares are in millions
 
Reconciliation Of Reported To Core Performance 
 
FY 2016
 
Reported
Restructuring
Intangible Asset
Amortisation & Impairments
Diabetes Alliance
Other1
Core
$m
$m
$m
$m
$m
$m
Cost of Sales
 
(4,126)
 
130
 
124
 
-
 
-
 
(3,872)
 
R&D Expense
 
(5,890)
 
178
 
81
 
-
 
-
 
(5,631)
 
SG&A Expense
 
(9,413)
 
823
 
1,000
 
(627)
 
48
 
(8,169)
 
Other Operating Income
 
1,655
 
(24)
 
86
 
-
 
-
 
1,717
 
Net Finance Expense
 
(1,317)
 
-
 
-
 
389
 
267
 
(661)
 
Taxation
 
(146)
 
(232)
 
(307)
 
23
 
4
 
(658)
 
Non-controlling Interests
 
93
 
(7)
 
-
 
-
 
-
 
86
 
Total
 
 
868
 
984
 
(215)
 
319
 
 
 
Q4 2016
 
Reported
Restructuring
Intangible Asset
Amortisation & Impairments
Diabetes Alliance
Other1
Core
$m
$m
$m
$m
$m
$m
Cost of Sales
 
(1,160)
 
43
 
30
 
-
 
-
 
(1,087)
 
R&D Expense
 
(1,543)
 
32
 
30
 
-
 
-
 
(1,481)
 
SG&A Expense
 
(1,386)
 
319
 
246
 
(938)
 
(291)
 
(2,050)
 
Other Operating Income
 
1,120
 
-
 
22
 
-
 
-
 
1,142
 
Net Finance Expense
 
(339)
 
-
 
-
 
97
 
70
 
(172)
 
Taxation
 
(366)
 
(82)
 
(86)
 
162
 
39
 
(333)
 
Non-controlling Interests
 
25
 
(2)
 
-
 
-
 
-
 
23
 
Total
 
 
310
 
242
 
(679)
 
(182)
 
 
1 Other adjustments include provision charges related to certain legal matters (see Note 7) and fair-value adjustments arising on acquisition-related liabilities (see Note 6).
 
Profit And Loss Commentary
 
Gross Profit
Reported Gross Profit declined by 5% in the year to $18,876m reflecting the market entry of Crestor generic medicines in the US. Excluding the impact of Externalisation Revenue, the Reported Gross Profit Margin was broadly stable at 80.8%, with lower restructuring and amortisation charges offset by an adverse impact from the mix of sales and a write-down of FluMist inventory in the US. Excluding these lower restructuring and amortisation charges, Core Gross Profit declined by 6% in the year to $19,130m and, excluding the impact of externalisation, the Core Gross Profit margin declined by one percentage point to 82.0%.
 
In the quarter, Reported Gross Profit declined by 15% to $4,425m and Reported Gross Margin declined by three percentage points to 77.9%. Excluding restructuring and amortisation charges, Core Gross Profit declined by 14% to $4,498m and the Core Gross Margin declined by three percentage points to 79.3%.
 
Operating Expenses: R&D
Reported R&D costs increased by 2% in the year to $5,890m (Q4 2016: $1,543m, a decline of 5%). The full-year increase reflected the number of potential new medicines in pivotal trials as well as the absorption of the R&D costs of ZS Pharma and Acerta Pharma. These costs were partially offset by lower restructuring costs and impairment charges. Without the impact of ZS Pharma and Acerta Pharma, Reported R&D costs in the year would have declined by 3%.
 
Excluding the impact of lower restructuring and impairment charges, Core R&D costs increased by 5% in the year to $5,631m (Q4 2016: $1,481m, an increase of 2%). Without the impact of the previously-mentioned investments in ZS Pharma and Acerta Pharma, Core R&D costs in the year would have declined by 1%. This compares to the 21% increase in Core R&D costs in FY 2015.
 
Operating Expenses: SG&A
Reported SG&A costs declined by 12% in the year to $9,413m, reflecting the evolving shape of the business. The decline was also driven by efficiency savings in sales and marketing operations and further reductions in IT costs. These actions included a material reduction in the sales and head-office structure in the US marketing business. Reported SG&A costs declined by 44% in the quarter to $1,386m, reflecting the fair-value adjustment to acquisition-related liabilities.
 
Core SG&A costs declined by 9% in the year to $8,169m, in line with full-year expectations of a material reduction. Core SG&A costs declined by 14% in the quarter to $2,050m.
 
Other Operating Income
Where AstraZeneca does not retain a significant economic interest in medicines or potential new medicines, income from transactions is reported as Other Operating Income in the Company's financial statements.
 
Reported Other Operating Income of $1,655m in the year included:
 
$m
 
Sale of the small-molecule antibiotics business to Pfizer
368
net of carrying values disposed and other costs to sell
Sale of the ex-US rights to Rhinocort Aqua to Cilag GmbH International (Cilag)
321
Sale of ex-US rights of Imdur
183
Crestor royalties
165
Out-licensing of a potential medicine (MEDI2070) for inflammatory diseases to Allergan plc (Allergan)
148
 net, reflecting an agreement with Amgen Inc. (Amgen)
HPV royalties
134
Other
336
Total
1,655
 
Operating Profit
Reported Operating Profit increased by 9% in the year to $4,902m. The Reported Operating Margin increased by three percentage points to 21% of Total Revenue.
 
Core Operating Profit declined by 7% in the year to $6,721m. The Core Operating Margin was stable at 29% of Total Revenue.
 
Net Finance Expense
Reported Net Finance Expense increased by 37% in the year to $1,317m, reflecting an increase in Net Debt that was driven by the acquisition of ZS Pharma and the majority investment in Acerta Pharma. Excluding the discount unwind on acquisition-related liabilities, Core Net Finance Expense increased by 46% in the year to $661m.
 
Taxation
Excluding a one-off benefit of $453m following agreements between the Canadian tax authority and the UK and Swedish tax authorities in respect of transfer pricing arrangements for the 13-year period from 2004-2016, the Reported and Core tax rates for the year were 17% and 18% respectively. Including the impact of this benefit, the Reported and Core tax rates for the year were 4% and 11% respectively. The cash tax paid for the year was $412m, which was 12% of Reported Profit Before Tax and 7% of Core Profit Before Tax.
 
The Reported and Core tax rates in FY 2015 were 22% and 21% respectively when excluding a one-off tax benefit of $186m following the agreement of US federal tax liabilities of open years up to 2008, other provision releases and the benefit of the UK patent box. Including the impact of these benefits, the Reported and Core tax rates in FY 2015 were 8% and 16% respectively.
 
Earnings Per Share (EPS)
Reported EPS of $2.77 in the year represented growth of 9%; this included a gain of $0.76 on the revaluation of acquisition-related liabilities. Core EPS in the year declined by 5% to $4.31, driven by the same rate of decline in Total Revenue. Both Reported and Core EPS in the year included a non-recurring benefit of $0.36, following the previously-mentioned agreements between the Canadian tax authority and the UK and Swedish tax authorities.
 
Dividends
The Board has declared a second interim dividend of $1.90 per share (150.2 pence, 16.57 SEK) bringing the dividend per share for the full year to $2.80 (218.9 pence, 24.38 SEK). The Board reaffirms its commitment to the Company's progressive dividend policy.
 
For holders of the Company's American Depositary Shares (ADSs), the $1.90 per Ordinary Share equates to $0.95 per ADS. Two ADSs equal one Ordinary Share.
 
Productivity
AstraZeneca's evolution and the changing shape of the business have enabled productivity improvements through the implementation of restructuring initiatives. These included those announced on 29 April 2016. Restructuring charges of $1,107m were incurred in the year. The Company remains on track to realise benefits and incur costs in line with prior announcements.
 
Cash Flow And Balance Sheet
 
Cash Flow
The Company generated a net cash inflow from operating activities of $4,145m in the year, compared with $3,324m in the comparative period. The increase reflected improved cash management performance and one-off tax refunds.
 
Net cash outflows from investing activities were $3,969m compared with $4,239m in the comparative period. The outflows partly reflected the net cash outflow of $2,383m in relation to the majority investment in Acerta Pharma, as well as $1,446m for the purchase of property, plant and equipment.
 
Net cash outflows from financing activities were $1,324m, incorporating $2,491m of new long-term loans, net of dividend payments in the year of $3,561m. This compared to an inflow of $878m in the comparative period.
 
The cash payment of contingent consideration in respect of the Bristol-Myers Squibb Company share of the global Diabetes alliance amounted to $242m in the year. The consideration is based on a tiered structure, whereby a higher royalty rate is applied until a specified level of sales is achieved in the year; thereafter a lower rate is applied to the remaining sales in the year and settled in the quarter following the application of the charge. From FY 2017 a single annual rate will be applied.
 
Capital Expenditure
Capital expenditure amounted to $1,449m in the year, representing an increase of 3%; the majority of capital expenditure was in maintenance. Investment in AstraZeneca's return to growth continued, with an element of capital expenditure split between expansion of biologics manufacturing capacity and the impending completion of the R&D centre and global headquarters in Cambridge, UK.
 
Debt and Capital Structure
At 31 December 2016, outstanding gross debt (interest-bearing loans and borrowings) was $16,808m
(31 December 2015: $15,053m). Of the gross debt outstanding at 31 December 2016, $2,307m was due within one year (31 December 2015: $916m). The Company's net debt position at 31 December 2016 was $10,657m (31 December 2015: $7,762m).
 
Shares in Issue
During the year, 1.1 million shares were issued in respect of share option exercises for consideration of $47m. The total number of shares in issue as at 31 December 2016 was 1,265 million.
 
Capital Allocation
The Board's aim is to continue to strike a balance between the interests of the business, financial creditors and the Company's shareholders. After providing for investment in the business, supporting the progressive dividend policy and maintaining a strong, investment-grade credit rating, the Board will keep under review potential investment in immediately earnings-accretive, value-enhancing opportunities. The Board reconfirms the continued suspension of the share repurchase programme.
 
Sensitivity: Foreign-Exchange Rates
The Company provides the following currency sensitivity information:
 
 
 
 
 
 
 
Average Exchange Rates Versus USD
 
 
 
Impact Of 5% Strengthening In Exchange Rate Versus USD ($m)2
Currency
 
Primary Relevance
 
FY 2016
 
YTD 20171
 
change %
 
Total Revenue
 
Core Operating Profit
EUR
 
Product Sales
 
0.90
 
0.94
 
-4%
 
+179
 
+123
JPY
 
Product Sales
 
108.84
 
115.14
 
-5%
 
+104
 
+71
CNY
 
Product Sales
 
6.65
 
6.87
 
-3%
 
+131
 
+74
SEK
 
Costs
 
8.56
 
8.97
 
-5%
 
+7
 
-98
GBP
 
Costs
 
0.74
 
0.81
 
-9%
 
+29
 
-131
Other3
 
 
 
 
 
 
 
 
 
+194
 
+124
1Based on average daily spot rates between 1st January and 30th January 2017
2Based on 2016 actual results at 2016 actual exchange rates
3Other important currencies include AUD, BRL, CAD, KRW and RUB
 
 
 
Currency Hedging
AstraZeneca monitors the impact of adverse currency movements on a portfolio basis, recognising correlation effects. The Company may hedge to protect against adverse impacts on cash flow over the short to medium term. As at 31 December 2016, AstraZeneca had hedged 96% of forecast short-term currency exposure that arises between the booking and settlement dates on Product Sales and non-local currency purchases.
 
 
Corporate And Business Development Update
______________________________________________________________________________________
 
The highlights of the Company's corporate and business development activities since the prior results announcement are shown below:
 
a) Sale Of Small-Molecule Antibiotics Business
On 24 August 2016, the Company announced that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its small-molecule antibiotics business and late-stage pipeline in most markets outside the US. The transaction closed in the quarter. As AstraZeneca will not maintain a significant ongoing interest in the late-stage, small-molecule antibiotics business, all payments were and will be reported as Other Operating Income in the Company's financial statements. This includes the upfront payment of $550m and an unconditional payment of $175m in 2019 (both recognised net of the carrying value of assets disposed and other costs to sell in 2016). The future payments include the milestones of up to $250m, sales-related payments of up to $600m and recurring double-digit royalties on sales of Zavicefta and ATM AVI.
 
b) Sale Of Respiratory Medicine Rhinocort Aqua (Nasal Spray)
On 7 October 2016, the Company announced that it had entered an agreement with Cilag, an affiliate of Johnson & Johnson, for the divestment of the rights to Rhinocort Aqua outside the US. The transaction closed in the quarter.
 
c) Externalisation Of Beta-Blocker Medicine Toprol-XL
On 31 October 2016, the Company completed an agreement with Aralez Pharmaceuticals Trading DAC, a subsidiary of Aralez Pharmaceuticals Inc., for the rights to branded and authorised generic Toprol-XL (metoprolol succinate) in the US. AstraZeneca will retain a significant ongoing interest in Toprol-XL through retained ownership of the medicine in ROW markets and product supply to Aralez. Therefore, the upfront payment of $175m, milestones and sales-related payments of up to $48m and mid-teen percentage royalties was and will be reported as Externalisation Revenue in the Company's financial statements.
 
d) Licensing Agreement: Monoclonal Antibody MEDI2070 (Crohn's Disease)
On 3 October 2016, the Company announced that MedImmune, its global biologics research and development arm, had entered a licensing agreement with Allergan for the global rights to MEDI2070 (moderate-to-severe Crohn's disease). The transaction closed in the quarter. AstraZeneca retained $148m of the upfront payment and will retain up to approximately $847m in future potential milestones, as well as the tiered royalty payments of up to low double-digit percent, following payment to Amgen under the provisions of the original agreement.
 
e) Externalisation Of Diabetes Medicines Bydureon And Byetta In China
On 10 October 2016, AstraZeneca entered a strategic collaboration with 3SBio for the rights to commercialise Bydureon and Byetta in the Chinese market. The agreement allowed the Company to benefit from 3SBio's established expertise in injectable medicines and also focus resources on AstraZeneca's oral diabetes franchise, including Onglyza, which is already marketed in China, as well as Forxiga and Kombiglyze, which are anticipated to launch in China in 2017. The transaction closed in the quarter.
 
Under the terms of the collaboration agreement, 3SBio made an upfront payment of $50m and will pay development milestones of up to a further $50m for the exclusive rights to commercialise Bydureon and Byetta in the Chinese market (excluding Hong Kong) for an initial period of 20 years. AstraZeneca will retain a significant ongoing interest in Bydureon and Byetta through retained ownership of the medicines in other markets and will manufacture and supply these medicines to 3SBio for an agreed purchase price.
 
f) MEDI1814 (Alzheimer's Disease)
AstraZeneca continues to collaborate with Lilly in the development of medicines for patients impacted by Alzheimer's disease (AD). Building on the current collaboration for the BACE inhibitor, AZD3293, currently in two Phase III trials, the companies are now also co-developing MEDI1814, an antibody selective for amyloid-beta 42 (Ab42), which is currently in Phase I development as a potential disease-modifying treatment for AD. The build-up of plaque in the brain containing the peptide amyloid-beta (Ab) is one of the pathological hallmarks of AD. MEDI1814 binds selectively to Ab42, which is believed to be a more toxic Ab species. In pre-clinical models, MEDI1814 dose-dependently reduces levels of this peptide, potentially slowing the progression of AD.
 
g) Senior Executive Team Changes
In January 2017, Leon Wang was appointed to the newly-created SET role of Executive Vice-President, Asia Pacific, with responsibility for the Company's activities in China and Hong Kong, Asia Area, Australia and New Zealand. Leon joined AstraZeneca China in 2013 as a Vice-President and became President in 2014. Under his leadership China became AstraZeneca's second-largest market worldwide. Leon has twenty years of experience in the pharmaceutical industry.
 
As Executive Vice-President, International West, Mark Mallon retains responsibility for AstraZeneca's businesses in Russia, Latin America, and the Middle East and Africa in addition to his role as EVP, Global Product and Portfolio Strategy, Global Medical Affairs & Corporate Affairs.
 
It was announced in January 2017 that Luke Miels, formerly Executive Vice-President, Europe would leave AstraZeneca to take up a senior position with a main competitor.
 
 
Research and Development Update
____________________________________________________________________
 
A comprehensive table with AstraZeneca's pipeline of medicines in human trials can be found later in this document.
 
Since the results announcement on 10 November 2016 (the period):
 
Regulatory Submission Acceptances
8
 
- durvalumab - bladder cancer (US)
- Tagrisso - lung cancer (AURA3 trial) (US, EU)
- Faslodex - breast cancer (1L) (US, EU)
- roxadustat - anaemia (CN) (rolling submission)
- benralizumab - severe, uncontrolled asthma (US, EU)
 
Other Key Developments
2
 
- Priority Review Designation: durvalumab (US)
- Priority Review Designation: Tagrisso (US)
 
 
New Molecular Entities(NMEs) In Phase III TrialsOr Under Regulatory Review*#
12
 
 
Oncology
- durvalumab* - multiple cancers
- durva + treme - multiple cancers
- acalabrutinib - blood cancers
- moxetumomab pasudotox - leukaemia
- selumetinib - thyroid cancer
 
Cardiovascular & Metabolic Diseases
- ZS-9* - hyperkalaemia
- roxadustat* - anaemia
 
Respiratory
- benralizumab* - severe, uncontrolled asthma
- tralokinumab - severe, uncontrolled asthma
- PT010 - COPD
 
Other
- anifrolumab - lupus
- AZD3293 - Alzheimer's disease
 
Projects in clinical pipeline#
120
 
#As at 2 February 2017
 
ONCOLOGY
AstraZeneca has a deep-rooted heritage in Oncology and offers a growing portfolio of new medicines that has the potential to transform patients' lives and the Company's future. At least six new Oncology medicines are expected to be launched between 2014 and 2020, of which two have already been launched (Lynparza and Tagrisso). A broad pipeline of small molecules and biologics is in development and the Company is committed to advancing Oncology as one of AstraZeneca's Growth Platforms primarily focused on lung, ovarian, breast and blood cancers.
 
In addition to its own existing cancer medicine capabilities, the Company is actively pursuing innovative collaborations and investments that are designed to accelerate the delivery of AstraZeneca's strategy, as illustrated by the Company's majority investment in Acerta Pharma in haematology that closed in 2016.
 
At three recent medical meetings, ASH (American Society of Hematology), WCLC (World Conference on Lung Cancer) and the San Antonio Breast Cancer Symposium, AstraZeneca highlighted its continued momentum in Oncology with a total of 50 abstracts, including 15 oral presentations. Abstracts and presentations provided a comprehensive update on recent data from Faslodex, Iressa, Tagrisso and the Company's emerging presence in blood cancers, through acalabrutinib.
 
a) Faslodex (breast cancer)
During the period, the Company received regulatory submission acceptances for Faslodex in 1st-line metastatic breast cancer in the US and the EU. The submissions were based on the Phase III FALCON trial that compared Faslodex 500mg to Arimidex 1mg for the treatment of locally-advanced or metastatic breast cancer, in post-menopausal women who have not had prior hormonal treatment for hormone receptor-positive breast cancer. Faslodex demonstrated superiority compared with Arimidex and met its primary endpoint of extended progression-free survival (PFS).
 
b) Tagrisso (lung cancer)
In December 2016, data from the AURA3 trial were presented at WCLC. AURA3 was the first randomised and controlled trial for Tagrisso and tested the medicine in 2nd-line treatment of patients with epidermal growth factor receptor (EGFR) T790M mutation-positive locally-advanced or metastatic NSCLC against standard-of-care (SoC) platinum-based doublet chemotherapy. The trial showed that Tagrisso significantly improved PFS by 5.7 months with a hazard ratio of 0.30 (equal to a risk reduction of 70%).
Additionally, in the 34% of patients with central nervous system (CNS) metastases at baseline, PFS was also significantly greater (4.3 months, hazard ratio 0.32) with Tagrisso. The medicine's ability to provide benefit in patients with CNS metastases is encouraging and Tagrisso continues to be tested in the BLOOM trial. Based on results from AURA3, regulatory submissions were made in the US and EU during the period; acceptances were received on both submissions and Priority Review Designation was obtained in the US.
c) Durvalumab (multiple cancers)
In December 2016, AstraZeneca received FDA acceptance with Priority Review status of the Biologics License Application (BLA) for durvalumab in patients with locally-advanced or metastatic urothelial carcinoma, whose disease has progressed during or after one standard platinum-based regimen. This acceptance was based on the results of the urothelial cancer cohort of Study 1108 and follows the FDA's Breakthrough Therapy Designation for durvalumab in bladder cancer in February 2016. The Prescription Drug User Fee Act (PDUFA) date is in the second quarter of 2017.
The Company is also advancing durvalumab alone and in combination with tremelimumab in bladder cancer.
 
METASTATIC UROTHELIAL BLADDER CANCER
 
Name
Phase
Line of Treatment
Population
Design
Timelines
Status
Combination therapy
DANUBE
III
1st Line
Cisplatin chemo-
therapy- eligible/
ineligible bladder cancer
 
durvalumab, durva + treme vs SoC chemotherapy
FPD1 Q4 2015
 
 
First data anticipated 2018
 
Ongoing
 
The Company continues to advance multiple monotherapy trials of durvalumab and combination trials of durvalumab with tremelimumab and other potential new medicines in Immuno-Oncology (IO). An update on key AstraZeneca-sponsored ongoing trials with durvalumab outside bladder cancer is provided below:
LUNG CANCER
Name
Phase
Line of Treatment
Population
Design
Timelines
Status
Monotherapy
ADJUVANT2
III
N/A
Stage Ib-IIIa NSCLC
durvalumab vs placebo
FPD Q1 2015
 
First data anticipated 2020
Ongoing
PACIFIC
III
N/A
Stage III unresectable NSCLC
durvalumab vs placebo
FPD Q2 2014
 
LPCD3 Q2 2016
 
First data anticipated H2 2017
Recruitment completed
PEARL
III
1st line
NSCLC (Asia)
durvalumab vs SoC chemotherapy
First data anticipated 2020
Initiating
Combination therapy
MYSTIC
III
1st line
NSCLC
durvalumab, durva + treme vs SoC chemotherapy
FPD Q3 2015LPCD Q3 2016
 
First data anticipated mid-2017
Recruitment completed
NEPTUNE
III
1st line
NSCLC
durva + treme vs SoC chemotherapy
FPD Q4 2015
 
First data anticipated 2018
Ongoing
 
-
III
1st line
NSCLC
durvalumab + chemotherapy +/- tremelimumab
-
Ongoing in safety lead-in Phase I/II trial
ARCTIC
III
3rd line
PD-L1 neg. NSCLC
durvalumab, tremelimumab, durva + treme vs SoC chemotherapy
FPD Q2 2015
 
LPCD Q3 2016
 
First data anticipated H1 2017
Recruitment completed
CASPIAN
III
1st line
Small-cell lung cancer
durvalumab + SoC, durva + treme + SoC vs SoC chemotherapy
-
Initiating
1 FPD = First Patient Dosed
2 Conducted by the National Cancer Institute of Canada
3 LPCD = Last Patient Commenced Dosing
 
On 17 January 2017, the Company provided an update on its late-stage IO clinical-development programme in 1st-line NSCLC, including a refinement of the Phase III MYSTIC trial. The trial was initially designed to assess the benefit of durvalumab monotherapy and durvalumab and tremelimumab (durva + treme) combination therapy versus SoC chemotherapy, focused on PFS.
 
The MYSTIC trial will now assess PFS and overall survival (OS) endpoints in patients with PDL1-expressing tumours for both durvalumab monotherapy and the combination of durva + treme, as well as in 'all comers' for the combination of durva + treme, versus SoC chemotherapy. While the focus remains on exploring the benefit of durva + treme as combination therapy, the Company has updated the endpoints of the MYSTIC trial to include OS and PFS in durvalumab monotherapy. This is based on recent internal and external data, including durvalumab's strong efficacy in monotherapy presented at recent medical meetings, as well as significant opportunities in the competitive landscape.
 
The estimated primary completion date was updated to reflect both an increase in patient recruitment (as reported in February 2016 with the inclusion of OS as a co-primary endpoint) and the event-based nature of the trial. As a result, the Company anticipates MYSTIC PFS data in mid-2017 and final OS data, at the latest, in 2018. MYSTIC also includes several undisclosed interim analyses for OS.
 
Additionally, the ongoing Phase III NEPTUNE trial will be expanded with local patients to support regulatory submission of durva + treme combination therapy in China for 1st-line NSCLC patients, without delaying the anticipated OS data readout in 2018 from the global cohort, which is approaching full recruitment. The Company has also initiated the new Phase III PEARL trial of durvalumab monotherapy versus SoC chemotherapy in 1st-line NSCLC patients, whose tumours express PD-L1. The PEARL trial focuses on Asian countries, primarily China, due to the prevalence of NSCLC in the region.
 
At WCLC, AstraZeneca presented safety findings from the safety lead-in Phase Ib trial of durvalumab with or without tremelimumab in combination with doublet chemotherapy. The conclusion of this trial was that in a
PD-L1 unselected patient population, durvalumab and tremelimumab can be safely combined with full doses of pemetrexed/cisplatin chemotherapy.
 
  METASTATIC OR RECURRENT HEAD AND NECK CANCER
 
Name
Phase
Line of Treatment
Population
Design
Timelines
Status  
Combination therapy
KESTREL
 
III
1st line
HNSCC*
durvalumab, durva + treme vs SoC
FPD Q4 2015
 
First data anticipated H2 2017
Ongoing  
EAGLE
III
2nd line
HNSCC
durvalumab, durva + treme vs SoC
FPD Q4 2015
 
First data anticipated 2018
Ongoing  
  *Head and Neck Squamous Cell Carcinoma
 
As communicated on 15 December 2016, the Company has reviewed data from the CONDOR trial, a randomised, but non-controlled Phase II trial in 2nd-line PDL1-negative HNSCC patients. While the data show efficacy and safety of the experimental medicines, AstraZeneca does not believe that a non-controlled trial can facilitate a regulatory submission for accelerated approval in a setting where a PD1-targeted medicine was approved during 2016, based on an OS benefit in all-comers.
 
On 22 November 2016, AstraZeneca announced that the FDA had lifted the partial clinical hold on the enrolment of new patients with HNSCC for clinical trials of durvalumab as monotherapy and in combination with tremelimumab or other potential new medicines. The partial clinical hold on new patient enrolment was communicated on 27 October 2016, after preliminary findings from ongoing clinical trials related specifically to HNSCC. The FDA lifted the hold following a review of the comprehensive analysis provided by AstraZeneca of bleeding events that were observed as part of the routine safety monitoring of the Phase III KESTREL and EAGLE trials.
 
d) Acalabrutinib (blood cancers)
Less than a year after announcing a majority investment in Acerta Pharma, AstraZeneca provided new clinical data on acalabrutinib, a highly-selective, potent Bruton tyrosine-kinase (BTK) inhibitor in Phase III development for B-cell malignancies. At the 2016 ASH annual meeting, two oral presentations were shared on acalabrutinib, in patients with Richter's transformation and in patients with ibrutinib intolerance, both Phase I/II trials.
 
In patients with Richter's transformation, acalabrutinib monotherapy produced a partial or complete response in 38% of patients, with a median time on treatment of 3.4 months. In 21 Richter-transformation patients evaluable for efficacy measures in the trial, median PFS was 2.1 months and the median duration of response was 5.2 months. Acalabrutinib monotherapy demonstrated a tolerable safety profile in patients with Richter's transformation and these data suggested that further investigation, in combination with immunotherapy or other targeted therapies, is warranted.
 
Acalabrutinib was well tolerated in ibrutinib-intolerant patients, with a total of 12 of 33 (36%) patients experiencing adverse event (AE) recurrence, most of which reduced or had the same severity as before; no patients discontinued treatment because of a recurrent AE. This safety profile was coupled with promising activity (objective response rate of 79%) and response duration (81% of responding patients had a duration of response ≥12 months).
 
CARDIOVASCULAR & METABOLIC DISEASES
This therapy area includes a broad type-2 diabetes portfolio, differentiated devices and unique small and large-molecule programmes to reduce morbidity, mortality and organ damage across CV disease, diabetes and chronic kidney disease (CKD) indications.
 
a) Bydureon (type-2 diabetes)
During the period, the DURATION-7 trial met its primary endpoint of a reduction in blood glucose (HbA1c) at 28 weeks as well as key secondary endpoints. No new safety findings were observed and the overall rates of AEs and serious AEs were low in both groups.
 
DURATION-7 was a multi-centre, randomised, double-blind, placebo-controlled, parallel group, Phase III trial that evaluated the safety and efficacy of once-weekly Bydureon therapy added to titrated basal insulin glargine, compared with placebo added to titrated basal insulin glargine, in patients with type-2 diabetes who have inadequate glycaemic control on basal insulin glargine with or without metformin.
 
b) Type-2 diabetes medicines in CV outcomes trials
As the field of type-2 diabetes medicines evolves, with multiple outcomes trials producing data, AstraZeneca continues to assess both Farxiga and Bydureon for potential long-term CV benefits. Two significant type-2 diabetes outcomes trials are progressing:
 
Medicine
Trial
Mode of Action
Number of Patients
Primary Endpoint
Timeline
Bydureon
 
EXSCEL
 
GLP-1 agonist
 
~14,000
 
Time to first occurrence of CV death, non-fatal MI or non-fatal stroke
Latest 2018
(final analysis)
Farxiga
DECLARE
SGLT2 inhibitor
~17,000*
Time to first occurrence of CV death, non-fatal MI or non-fatal stroke
Latest 2019
(final analysis)
*Includes ~10,000 patients who have had no prior index event (primary prevention) and ~7,000 patients who have suffered an index event (secondary prevention).
 
c) Roxadustat (anaemia)
Roxadustat is a potential first-in-class oral HIF-PH inhibitor in Phase III development for the treatment of anaemia in CKD patients. AstraZeneca, FibroGen, Inc. (FibroGen) and Astellas Pharma Inc. are jointly undertaking an extensive worldwide Phase III trial programme, enrolling more than 8,000 patients.
 
In addition to evaluating efficacy, the US/global programme is designed to demonstrate the CV safety of roxadustat in comparison to epoetin alfa in dialysis patients (based on data pooled from four clinical trials) and in comparison to placebo in non-dialysis patients (based on data pooled from three clinical trials). AstraZeneca and FibroGen anticipate data readout and US regulatory submission in 2018.
 
FibroGen is responsible for development and regulatory activities in China, and recently announced that the submission process had initiated and is expected to complete in the second or third quarter of 2017.
Additionally, on 30 January 2017, FibroGen reported positive results from two Phase III clinical trials of roxadustat in China. The two Phase III clinical trials evaluated roxadustat for anaemia in CKD in patients on dialysis and not on dialysis. Both Phase III trials met their primary efficacy endpoints, confirming earlier results. Initial analysis suggests that adverse events were consistent with previous clinical trials of roxadustat in the CKD patient population.
 
RESPIRATORY
AstraZeneca's Respiratory portfolio is aimed at transforming the treatment of asthma and COPD through combination inhaled therapies, biologics for the unmet medical needs of specific patient populations and an early pipeline focused on disease modification. The growing range of medicines includes up to four launches between 2017 and 2020. The capability in inhalation technology spans both pMDIs and dry-powder inhalers to serve patient needs, as well as the innovative Aerosphere co-suspension delivery technology, a focus of AstraZeneca's future-platform development for respiratory-disease combination therapies.
a) Symbicort (asthma, COPD)
During the period, the Company received EU approval for Symbicort SMART (Symbicort Maintenance And Reliever Therapy) for adolescent asthma patients (aged 12 to <18 years). The SMART regimen for adolescents is the same as for adult patients, with a daily maintenance dose of Symbicort Turbuhaler plus additional doses as needed in response to symptoms. Symbicort SMART is a key component of the Company's commitment to 'patient-adjusted therapy' in treating asthma.
 
On 26 January 2017, AstraZeneca announced that the FDA had granted six months of paediatric exclusivity for Symbicort, based on the evaluation of trials conducted in children with asthma aged six up to 12 years.
 
b) Benralizumab (severe, uncontrolled asthma)
During the period, AstraZeneca announced that the FDA accepted a BLA for benralizumab, an anti-eosinophil monoclonal antibody (mAb), with a PDUFA date anticipated in Q4 2017. The Company also announced that the European Medicines Agency accepted the Marketing Authorisation Application (MAA) for benralizumab.
The BLA and MAA submissions, for the treatment of patients with severe, uncontrolled asthma with an eosinophilic phenotype, were based on the results of the pivotal Phase III trials, SIROCCO and CALIMA, that demonstrated that adding benralizumab to SoC significantly reduced exacerbations and improved lung function and asthma symptoms. To date, five positive Phase III trials (BISE, SIROCCO, CALIMA, GREGALE and ZONDA) have supported the efficacy and safety profile of benralizumab. 
 
 
ASTRAZENECA DEVELOPMENT PIPELINE 31 DECEMBER 2016
AstraZeneca-sponsored or -directed trials
Phase III / Pivotal Phase II / Registration
New Molecular Entities (NMEs) and significant additional indications
Regulatory submission dates shown for assets in Phase III and beyond. As disclosure of compound information is balanced by the business need to maintain confidentiality, information in relation to some compounds listed here has not been disclosed at this time.
 
Compound
Mechanism
Area Under Investigation
Date Commenced Phase
Estimated Regulatory Acceptance Date / Submission Status
US
EU
Japan
China
Oncology
 
Faslodex
FALCON
oestrogen receptor antagonist
1st-line hormone receptor +ve advanced breast cancer
 
Accepted
Accepted
Accepted
H2 2017
Lynparza OlympiAD
PARP inhibitor
gBRCA metastatic breast cancer
Q2 2014
H2 2017
H2 2017
H2 2017
 
LynparzaSOLO-2
PARP inhibitor
2nd-line or greater BRCAm PSR ovarian cancer, maintenance monotherapy
Q3 2013
H1 2017
(Fast Track)
H1 2017
H2 2017
 
LynparzaSOLO-1
PARP inhibitor
1st-line BRCAm ovarian cancer
Q3 2013
2018
2018
2018
 
LynparzaSOLO-3
PARP inhibitor
gBRCA PSR ovarian cancer
Q1 2015
2018
 
 
 
LynparzaPOLO
PARP inhibitor
pancreatic cancer
Q1 2015
2018
2018
 
 
Lynparza
 
PARP inhibitor
prostate cancer
Q3 2014
 
(Breakthrough Therapy)
 
 
 
Lynparza
OlympiA
PARP inhibitor
gBRCA adjuvant breast cancer
Q2 2014
2020
2020
2020
 
Tagrisso
FLAURA
EGFR inhibitor
1st-line advanced EGFRm NSCLC
Q1 2015
H2 2017
H2 2017
H2 2017
H2 2017
Tagrisso
ADAURA
EGFR inhibitor
adjuvant EGFRm NSCLC
Q4 2015
2022
2022
2022
2022
Cardiovascular & Metabolic Diseases
 
Brilinta1PEGASUS-TIMI 54
P2Y12 receptor antagonist
outcomes trial in patients with prior myocardial infarction
 
Launched
(Priority Review)
Launched
Approved
Accepted
Brilinta1
THEMIS
P2Y12 receptor antagonist
outcomes trial in patients with type-2 diabetes and CAD, but without a previous history of myocardial infarction or stroke
Q1 2014
2018
2018
2018
2019
Brilinta1
HESTIA
P2Y12 receptor antagonist
prevention of vaso-occlusive crises in paediatric patients with sickle cell disease
Q1 2014
2020
2020
 
 
Onglyza
SAVOR-TIMI 53
DPP-4 inhibitor
type-2 diabetes outcomes trial
 
Launched
Launched
 
Accepted
Kombiglyze XR/Komboglyze2
DPP-4 inhibitor/ metformin FDC
type-2 diabetes
 
Launched
Launched
 
Accepted
Farxiga3DECLARE-TIMI 58
SGLT2 inhibitor
type-2 diabetes outcomes trial
Q2 2013
2020
2020
 
 
Farxiga3
SGLT2 inhibitor
type-1 diabetes
Q4 2014
2018
2018
2018
 
Xigduo XR/
Xigduo4
SGLT2 inhibitor/ metformin FDC
type-2 diabetes
 
Launched
Launched
 
 
Qtern (saxagliptin/
dapagliflozin FDC)
DPP-4 inhibitor/ SGLT2 inhibitor FDC
type-2 diabetes
 
Accepted
Approved
 
 
Bydureon weeklysuspension
GLP-1 receptor agonist
type-2 diabetes
Q1 2013
H1 2017
H2 2017
 
 
Bydureon EXSCEL
GLP-1 receptor agonist
type-2 diabetes outcomes trial
Q2 2010
2018
2018
 
2018
Epanova
STRENGTH
omega-3 carboxylic acids
outcomes trial in statin-treated patients at high CV risk, with persistent hypertriglyceridemia plus low HDL-cholesterol
Q4 2014
2020
2020
2020
2020
Respiratory
 
Symbicort
SYGMA
ICS/LABA
as-needed use in mild asthma
Q4 2014
 
2018
 
2019
Symbicort
ICS/LABA
breath actuated Inhaler asthma/COPD
 
2018
 
 
 
Duaklir Genuair#
LAMA/LABA
COPD
 
2018
Launched
 
2019
Other
 
Nexium
proton pump inhibitor
stress ulcer prophylaxis
 
 
 
 
Submitted
Nexium
proton pump inhibitor
paediatrics
 
Launched
Launched
Accepted
 
linaclotide#
GC-C receptor peptide agonist
irritable bowel syndrome with constipation(IBS-C)
 
 
 
 
Accepted
Registrational Phase II trial
# Collaboration
1 Brilinta in the US and Japan; Brilique in ROW
2 Farxiga in the US; Forxiga in ROW
3 Rolling New Drug Application (NDA) regulatory submission initiated in Q4 2016
4 Bevespi Aerosphere (glycopyrrolate and formoterol fumarate) inhalation aerosol was launched commercially in the US in January 2017
 
 
Phases I and II
NMEs and significant additional indications
Compound
Mechanism
Area Under Investigation
Phase
Date Commenced Phase
 
 
Oncology
 
durvalumab#
PD-L1 mAb
solid tumours
II
Q3 2014
 
durvalumab# + tremelimumab
PD-L1 mAb + CTLA-4 mAb
Hepatocellular carcinoma (liver cancer)
II
Q4 2016
 
durvalumab# + tremelimumab
PD-L1 mAb + CTLA-4 mAb
gastric cancer
II
Q2 2015
 
durvalumab# + AZD5069
PD-L1 mAb + CXCR2
HNSCC
II
Q3 2015
 
durvalumab# + AZD9150#
PD-L1 mAb + STAT3 inhibitor
 
durvalumab# + dabrafenib + trametinib
PD-L1 mAb+ BRAF inhibitor + MEK inhibitor
melanoma
II
Q1 2014
 
durvalumab# + AZD1775#
PD-L1 mAb + Wee1 inhibitor
solid tumours
I
Q4 2015
 
durvalumab# + MEDI0680
PD-L1 mAb + PD-1 mAb
solid tumours
I
Q3 2016
 
durvalumab# or durvalumab# + (tremelimumab or AZD9150#)
 
PD-L1 mAb or PD-L1 mAb + (CTLA-4 mAb or STAT3 inhibitor)
diffuse large B-cell lymphoma
I
Q3 2016
 
durvalumab# + Iressa
PD-L1 mAb+ EGFR inhibitor
NSCLC
I
Q2 2014
 
durvalumab# + MEDI0562#
PD-L1 mAb + humanised OX40 agonist
solid tumours
I
Q2 2016
 
durvalumab# + MEDI9447
PD-L1 mAb + CD73 mAb
solid tumours
I
Q1 2016
 
durvalumab# + monalizumab
PD-L1 mAb + NKG2a mAb
solid tumours
I
Q1 2016
 
durvalumab# + selumetinib
PD-L1 mAb + MEK inhibitor
solid tumours
I
Q4 2015
 
durvalumab# + tremelimumab
PD-L1 mAb + CTLA-4 mAb
solid tumours
I
Q4 2013
 
tremelimumab + MEDI0562#
CTLA-4 mAb + humanised OX40 agonist
solid tumours
I
Q2 2016
 
Lynparza + AZD6738
PARP inhibitor + ATR inhibitor
gastric cancer
II
Q3 2016
 
Lynparza + AZD1775#
PARP inhibitor + Wee1 inhibitor
solid tumours
I
Q3 2015
 
savolitinib#
MET inhibitor
papillary renal cell carcinoma
II
Q2 2014
 
Tagrisso + (selumetinib# or savolitinib#)
TATTON
EGFR inhibitor + (MEK inhibitor or MET inhibitor)
advanced EGFRm NSCLC
II
Q2 2016
 
Tagrisso BLOOM
EGFR inhibitor
CNS metastases in advanced EGFRm NSCLC
II
Q4 2015
 
AZD1775# + chemotherapy
Wee1 inhibitor + chemotherapy
ovarian cancer
II
Q4 2012
 
AZD1775#
Wee1 inhibitor
solid tumours
II
Q1 2016
 
vistusertib (AZD2014)
mTOR inhibitor
solid tumours
II
Q1 2013
 
AZD5363#
AKT inhibitor
breast cancer
II
Q1 2014
 
AZD4547
FGFR inhibitor
solid tumours
II
Q4 2011
 
MEDI-573#
IGF mAb
metastatic breast cancer
II
Q2 2012
 
AZD0156
ATM inhibitor
solid tumours
I
Q4 2015
 
AZD2811#
Aurora B inhibitor
solid tumours
I
Q4 2015
 
AZD4635
A2aR inhibitor
solid tumours
I
Q2 2016
 
AZD6738
ATR inhibitor
solid tumours
I
Q4 2013
 
AZD8186
PI3k inhibitor
solid tumours
I
Q2 2013
 
AZD9150#
STAT3 inhibitor
haematological malignancies
I
Q1 2012
 
AZD9496
selective oestrogen receptor downregulator (SERD)
ER+ breast cancer
I
Q4 2014
 
MEDI-565#
CEA BiTE mAb
solid tumours
I
Q1 2011
 
MEDI0562#
humanised OX40 agonist
solid tumours
I
Q1 2015
 
MEDI0680
PD-1 mAb
solid tumours
I
Q4 2013
 
MEDI1873
GITR agonist fusion protein
solid tumours
I
Q4 2015
 
MEDI4276
HER2 bispecific ADC mAb
solid tumours
I
Q4 2015
 
MEDI9197#
TLR 7/8 agonist
solid tumours
I
Q4 2015
 
MEDI9447
CD73 mAb
solid tumours
I
Q3 2015
 
Cardiovascular & Metabolic Diseases
 
MEDI0382
GLP-1/
glucagon dual agonist
diabetes / obesity
II
Q3 2016
 
MEDI4166
PCSK9/GLP-1 mAb + peptide fusion
diabetes / cardiovascular
II
Q1 2016
 
MEDI6012
LCAT
ACS
II
Q4 2015
 
AZD4076
anti-miR103/107 oligonucleotide
non-alcoholic fatty liver disease/non-alcoholic steatohepatitis (NASH)
II
Q4 2016
 
AZD4831
Myeloperoxidase
Heart failure with a preserved ejection fraction
I
Q3 2016
 
AZD5718
FLAP
CAD
I
Q1 2016
 
AZD8601#
VEGF-A
cardiovascular
I
Q1 2017
 
MEDI8111
Rh-factor II
trauma / bleeding
I
Q1 2014
 
Respiratory
 
tezepelumab#
TSLP mAb
asthma / atopic dermatitis
II
Q2 2014
 
abediterol#
LABA
asthma/COPD
II
Q4 2007
 
AZD7594
inhaled SGRM
asthma/COPD
II
Q3 2015
 
AZD9412#
inhaled interferon beta
asthma/COPD
II
Q3 2015
 
PT010
LABA/LAMA/ICS
asthma
II
Q2 2014
 
AZD1419#
TLR9 agonist
asthma
II
Q4 2016
 
AZD8871#
MABA
COPD
II
Q1 2017
 
AZD0284
Inhaled RORg
psoriasis
I
Q4 2016
 
AZD5634
inhaled ENaC
cystic fibrosis
I
Q1 2016
 
AZD7594+abediterol#
Inhaled SGRM+LABA
asthma/COPD
I
Q4 2016
 
AZD7986#
DPP1
COPD
I
Q4 2014
 
AZD9567
oral SGRM
rheumatoid arthritis
I
Q4 2015
 
Other
 
anifrolumab#
IFN-alphaR mAb
lupus nephritis
II
Q4 2015
 
anifrolumab#
IFN-alphaR mAb
systemic lupus erythematosus (subcutaneous)
I
Q4 2015
 
inebilizumab#
CD19 mAb
neuromyelitis optica
II
Q1 2015
(Orphan drug)
 
mavrilimumab#
GM-CSFR mAb
rheumatoid arthritis
II
Q1 2010
 
verinurad1
selective uric acid reabsorption inhibitor (URAT-1)
chronic treatment of hyperuricemia in patients with gout
II
Q3 2013
 
MEDI5872#
B7RP1 mAb
primary Sjögren's syndrome
II
Q3 2016
 
AZD3241
myeloperoxidase inhibitor
multiple system atrophy
II
Q2 2015
(Orphan drug)
 
MEDI3902