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 April 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
27 April 2017 07:00
Q1 2017 Results
An encouraging start as the pipeline newsflow continued in a potentially defining year
 
Financial Summary
 
$m
% change
Actual1
CER2
Total Revenue
5,405
(12)
(10)
Product Sales
4,843
(13)
(12)
Externalisation Revenue
562
2
3
 
 
 
 
Reported Operating Profit
917
(12)
(23)
Core3 Operating Profit
1,667
5
(2)
 
 
 
 
Reported Earnings Per Share (EPS)
$0.42
(17)
(35)
Core EPS
$0.99
4
(4)
 
● 
The Product Sales performance mainly reflected the residual impact of the US Crestor patent expiry
One third of Externalisation Revenue was represented by sustainable and ongoing income4
● 
Continued good progress on cost control, reflecting the evolving shape of the business:
-
Reported R&D costs declined by 2% (up by 2% at CER) to $1,453m; Core R&D costs declined by 6% (3% at CER) to $1,338m
-
Reported SG&A costs declined by 11% (8% at CER) to $2,300m; Core SG&A costs declined by 14% (12% at CER) to $1,829m
Reported EPS declined by 17% (35% at CER); Core EPS increased by 4% (down by 4% at CER)
Financial guidance for 2017 confirmed
 
Commercial Highlights
The Growth Platforms grew by 4% (5% at CER) and represented 66% of Total Revenue:
Emerging Markets: 7% growth (9% at CER), becoming AstraZeneca’s largest sales region
Respiratory: A decline of 2% (stable at CER), with growth offset by the performance of Symbicort in the US
New CVMD5: Growth of 5% (6% at CER), with competitive pressures in the US continuing
Japan: Growth of 5% (3% at CER), partly reflecting the ongoing successful launch of Tagrisso and the performance of Symbicort
New Oncology6: Sales of $236m (Q1 2016: $99m), accompanied by regulatory approval for Tagrisso in China
 
Achieving Scientific Leadership
The table below highlights the number of successes in the late-stage pipeline since the last results announcement:
 
Regulatory Approvals
Tagrisso - lung cancer (US, EU; full approval)
Tagrisso - lung cancer (CN)
Forxiga - type-2 diabetes (CN)
Qtern - type-2 diabetes (US)
Siliq - psoriasis (US; by partner)
Regulatory Submission Acceptances
Lynparza - ovarian cancer (2nd line) (US) (Priority Review)
Bydureon - type-2 diabetes (autoinjector) (US)
Symbicort - COPD exacerbations (US)
benralizumab - severe, uncontrolled asthma (JP)
Phase III or Major Data Readouts
Lynparza - breast cancer
Farxiga - type-2 diabetes (CVD-REAL real-world study)
Other Key Developments
Orphan Drug Designation: Lynparza - ovarian cancer (JP)
Complete Response Letter: ZS-9 (sodium zirconium cyclosilicate) - hyperkalaemia (US)
Orphan designation: inebilizumab - neuromyelitis optica spectrum disorder (EU)
 
Pascal Soriot, Chief Executive Officer, commenting on the results said:
“Our good start to the year supported our guidance for 2017. Notably, Emerging Markets became our largest region, representing 32% of sales. The pipeline continued to deliver in what we expect will be a pivotal year for AstraZeneca as we announced important developments, in particular in Oncology. In addition to the availability of positive data for Lynparza in ovarian and breast cancer, we also received full approvals in the US and Europe for Tagrisso in lung cancer and launched this important medicine in record time in China. While we were disappointed to receive the Complete Response Letter for ZS-9, we remain confident in this treatment for hyperkalaemia.
 
“The Total Revenue performance reflected the transitional impact of recent patent expiries, which is expected to recede in the second half of the year. Importantly, we anticipate the significant progress of the pipeline to continue, including our Immuno-Oncology and targeted treatments. We will also maintain our commitment to drive efficiency across the company to support our efforts to bring new medicines to patients.”
 
FY 2017 Guidance: Confirmed
The Company provides guidance on Total Revenue and Core EPS only. All commentary in this section is at CER and is unchanged from the prior results announcement:
 
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 in FY 2017 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 H2 2017, when the impact of the entry in July 2016 of multiple Crestor generic medicines in the US will annualise.
 
The Company presents Core EPS guidance only at CER. 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 unchanged guidance 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 income is expected to increase further as a proportion of total 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 in FY 2017, 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 Q1 2017 and the Company’s published currency sensitivities, the Company expects a low single-digit percentage adverse impact from currency movements on Total Revenue and a minimal impact on Core EPS. Further details on currency sensitivities are contained within the Operating and Financial Review.
 
Notes
 
1.
All growth rates are shown at actual exchange rates, unless stated otherwise.
2.
Constant exchange rates. These are non-GAAP measures because they remove the effects of currency movements from Reported results.
3.
Core financial measures. These are non-GAAP measures because, unlike Reported performance, they cannot be derived directly from the information in the Group Financial Statements. See the Operating and Financial Review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.
4.
Sustainable and ongoing income is defined as Externalisation Revenue, excluding upfront receipts.
5.
New Cardiovascular and Metabolic Diseases, incorporating Brilinta and Diabetes.
6.
New Oncology comprises Tagrisso, Lynparza and Iressa (US).
 
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.
 
Q2 2017
Faslodex - breast cancer (1st line): Regulatory decision (JP)
Lynparza - ovarian cancer (2nd line): Regulatory submission (EU)durvalumab (durva) - bladder cancer: Regulatory decision (US)
acalabrutinib - blood cancer: Data readout, regulatory submission (US) (Phase II)#
Bevespi - COPD: Regulatory submission (EU)
Mid-2017
durva +/- tremelimumab (treme) - lung cancer (MYSTIC): Data readout
H2 2017
Faslodex - breast cancer (1st line): Regulatory decision (US, EU)
Lynparza - ovarian cancer (2nd line): Regulatory decision (US)
Lynparza - breast cancer: Regulatory submission
Lynparza - ovarian cancer (1st line): Data readout
Tagrisso - lung cancer (1st line): Data readout
durvalumab - lung cancer (PACIFIC): Data readout, regulatory submission (US)durva +/- treme - lung cancer (ARCTIC): Data readout, regulatory submission
durva +/- treme - lung cancer (MYSTIC): Regulatory submission
durva +/- treme - head & neck cancer (KESTREL): Data readout
moxetumomab - leukaemia: Data readout
 
Bydureon - cardiovascular (CV) outcomes trial: Data readout, regulatory submission
 
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
 
Bydureon - autoinjector: Regulatory decision (US)
roxadustat - anaemia: Data readout (AstraZeneca-sponsored trials), regulatory submission
 
Duaklir - COPD: Regulatory submission (US)benralizumab - severe, uncontrolled asthma: Regulatory decision (EU, JP)
benralizumab - COPD: Data readout, regulatory submission
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.
 
Conference Call
A conference call and accompanying webcast for investors and analysts, hosted by management, will begin at 12pm UK time today. Details can be accessed via astrazeneca.com/investors.
 
Reporting Calendar
The Company intends to publish its first-half and second-quarter financial results on 27 July 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
Rob Skelding
UK/Global
+44 203 749 5821
Vanessa Rhodes
UK/Global
+44 203 749 5736
Karen Birmingham
UK/Global
+44 203 749 5634
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 (CVMD)
+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 actual exchange rates, unless stated otherwise. Financial figures are in US$ millions ($m). The performance shown in this announcement covers the three-month period to 31 March 2017 (the quarter) compared to the three-month period to 31 March 2016.
 
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. These non-GAAP measures are not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. 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 2016. Reference should be made to the reconciliation of Core to Reported financial information included therein and in the Reconciliation of Reported to Core Performance table listed later in this announcement. The Company strongly encourages readers not to rely on any single financial measure, but to review AstraZeneca’s financial statements, including the notes thereto, and other publicly-filed Company reports, carefully and in their entirety.
 
Total Revenue
 
 
$m
% change
Actual
CER
Product Sales
4,843
(13)
(12)
Externalisation Revenue
562
2
3
 
 
 
 
Total Revenue
5,405
(12)
(10)
 
Product Sales
The Product Sales performance was primarily driven by the impact of the entry in July 2016 of multiple Crestor generic medicines in the US. Emerging Markets became the largest sales region for the Company in the quarter, with sales growth of 7% (9% at CER) to $1,562m. US Product Sales declined by 34% to $1,485m, also impacted by the performances of Symbicort and Seroquel XR. Product Sales in Europe declined by 7% (3% at CER) to $1,129m.
 
Within Product Sales, the Growth Platforms grew by 4% (5% at CER), representing 66% of Total Revenue:
 
Growth Platform
 $m
% change
Actual
CER
Emerging Markets
1,562
7
9
Respiratory
1,181
(2)
-
New CVMD
798
5
6
Japan
450
5
3
New Oncology
236
n/m
n/m
 
 
 
 
Total*
3,572
4
5
*Total Product Sales for Growth Platforms adjusted to remove duplication on a medicine and regional basis.
 
Externalisation Revenue
Where AstraZeneca retains a significant ongoing interest in medicines or potential new medicines, income arising from externalisation agreements is reported as Externalisation Revenue in the Company’s financial statements.
 
The table below illustrates the level of sustainable and ongoing income within the total of Externalisation Revenue. The Company anticipates that sustainable and ongoing income will grow as a proportion of Externalisation Revenue over time.
 
 
$m
% of Total
% change
Actual
CER
Royalties
45
8
18
24
Milestones
136
24
44
50
 
 
 
 
 
Total Sustainable and Ongoing Externalisation Revenue
181
32
37
42
 
 
 
 
 
Upfront Receipts
381
68
(9)
(9)
 
 
 
 
 
Total Externalisation Revenue
562
100
2
3
 
A breakdown of Externalisation Revenue in the quarter is shown below:
 
Medicine
Partner
Region
$m
Zoladex
TerSera Therapeutics LLC (TerSera) - initial revenue
US and Canada
250
Siliq (brodalumab)
Valeant Pharmaceuticals International, Inc. (Valeant) - milestone revenue
US
130
MEDI8897
Sanofi Pasteur Inc. (Sanofi Pasteur) - initial revenue
Global
127
Other
 
 
55
Total
 
 
562
 
Examples of sustainable and ongoing income, as part of Externalisation Revenue, are shown below:
 
Announcement Date
Medicine
Partner
Region
Externalisation Revenue
3 March 2017
MEDI8897
Sanofi Pasteur
Global
 Initial €120m milestone
 Up to €495m in sales and development-related milestones
 
20 February 2017
Zoladex
TerSera
US and Canada
 Initial $250m milestone
 Up to $70m in sales-related milestones
 Mid-teen percentage royalties on sales
 
4 October 2016
Toprol-XL
Aralez Pharmaceuticals Inc.
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 A/S (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 Inc.
Global (excl. US)
 Initial $520m milestone
 Up to $250m in sales-related revenue
 Double-digit percentage trademark royalties on sales
 
1 September 2015
Siliq (brodalumab) - psoriasis
Valeant
Global, later
amended to US
 Initial $100m milestone
 Pre-launch milestone of $130m
 Sales-related royalties up to $175m
 Profit sharing
 
19 March 2015
Movantik
Daiichi Sankyo Company, Ltd (Daiichi Sankyo)
US
 Initial $200m milestone
 Up to $625m in sales-related revenue
 
A number of AstraZeneca medicines were externalised or disposed after Q1 2016, adversely impacting the overall Product Sales performance in the quarter:
 
Medicine
Region
Agreement Completion Date
Q1 2016Impacted RegionProduct Sales ($m)
Anaesthetics
Global (excl. US)
1 September 2016
134
Toprol-XL
US
31 October 2016
21
Bydureon and Byetta
China
11 October 2016
3
 
 
 
 
Total
 
 
158
 
 
Product Sales
_______________________________________________________________________________________
The performance of key medicines is shown below, with a geographical split shown in Note 6.
 
 
 
 
% change
 
 
$m
 
% of total*
 
Actual
 
CER
 
Oncology
 
 
 
 
 
Tagrisso
 
171
 
4
 
n/m
 
n/m
 
Iressa
 
124
 
3
 
(8)
 
(7)
 
Lynparza
 
57
 
1
 
30
 
32
 
 
 
 
 
 
Legacy:
 
 
 
 
 
Faslodex
 
214
 
4
 
13
 
13
 
Zoladex
 
185
 
4
 
4
 
5
 
Casodex
 
56
 
1
 
(10)
 
(8)
 
Arimidex
 
52
 
1
 
(9)
 
(7)
 
Others
 
26
 
1
 
24
 
24
 
Total Oncology
 
885
 
18
 
20
 
21
 
CVMD
 
 
 
 
 
Brilinta
 
224
 
5
 
24
 
27
 
Farxiga
 
207
 
4
 
25
 
25
 
Onglyza
 
154
 
3
 
(27)
 
(27)
 
Bydureon
 
153
 
3
 
13
 
14
 
Byetta
 
46
 
1
 
(26)
 
(24)
 
 
 
 
 
 
Legacy:
 
 
 
 
 
Crestor
 
631
 
13
 
(45)
 
(44)
 
Seloken/Toprol-XL
 
186
 
4
 
1
 
3
 
Atacand
 
75
 
2
 
4
 
7
 
Others
 
103
 
2
 
(18)
 
(16)
 
Total CVMD
 
1,779
 
37
 
(22)
 
(21)
 
Respiratory
 
 
 
 
 
Symbicort
 
677
 
14
 
(10)
 
(8)
 
Pulmicort
 
337
 
7
 
9
 
14
 
Daliresp/Daxas
 
44
 
1
 
42
 
42
 
Tudorza/Eklira
 
37
 
1
 
(5)
 
(3)
 
Duaklir
 
19
 
0
 
46
 
54
 
Others
 
67
 
1
 
3
 
6
 
Total Respiratory
 
1,181
 
24
 
(2)
 
-
 
Other
 
 
 
 
 
Nexium
461
10
-
1
Synagis
 
230
 
5
 
(6)
 
(6)
 
Losec/Prilosec
 
68
 
1
 
(9)
 
(7)
 
Seroquel XR
 
67
 
1
 
(67)
 
(66)
 
Movantik/Moventig
 
30
 
1
 
76
 
76
 
FluMist/Fluenz
 
0
 
0
 
(100)
 
(100)
 
Others
 
142
 
3
 
(56)
 
(56)
 
Total Other
 
998
 
21
 
(25)
 
(24)
 
Total Product Sales
 
4,843
 
100
 
(13)
 
(12)
 
*Due to rounding, the sum of individual brand percentages may not agree to totals.
 
 
Product Sales Summary
_______________________________________________________________________________________
 
ONCOLOGY
Product Sales of $885m; an increase of 20% (21% at CER).
Oncology Product Sales represented 18% of total Product Sales, up from 13% in Q1 2016.
 
Tagrisso
Product Sales of $171m (Q1 2016: $51m).
 
Tagrisso was the leading AstraZeneca medicine for the treatment of lung cancer by sales in the quarter. Regulatory approvals were granted in a number of new markets in the period, including Brazil, Hong Kong and Taiwan; the Company anticipates additional regulatory approvals and reimbursement decisions in due course. To date, Tagrisso has received regulatory approval in 48 countries.
 
In March 2017, the China Food and Drug Administration (China FDA) granted marketing authorisation for Tagrisso 40mg and 80mg once-daily oral tablets. Tagrisso was the first AstraZeneca medicine approved under the China FDA’s Priority Review pathway, using an accelerated timeline for an innovative medicine. Tagrisso was launched in China in April 2017.
 
Sales in the US and Europe were $90m and $35m, respectively. The doubling of sales in the US primarily reflected patient demand. Sequential Japan sales, at $39m, were stable. However, in local currency, sequential quarterly growth was 7%, underpinned by encouraging testing rates.
 
Iressa
Product Sales of $124m; a decline of 8% (7% at CER).
 
Emerging Markets sales declined by 9% (7% at CER) to $61m. China Product Sales declined by 8% (3% at CER) to $34m, a result of new pricing following the inclusion on the National Reimbursement Drug List (NRDL) in February 2017; this was the first update to the NRDL in China in many years. Strong competition from branded and generic medicines in South Korea also contributed to the overall sales decline.
 
Sales in the US increased to $8m (Q1 2016: $4m), with sales in Europe declining by 24% (24% at CER) to $26m. Given the extensive benefit to patients and the significant future potential of Tagrisso, the Company continues to prioritise the ongoing launch of Tagrisso.
 
Lynparza
Product Sales of $57m; an increase of 30% (32% at CER).
 
Lynparza was available to patients in 31 countries by the end of the quarter, 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. In the US, Lynparza is approved in later line, germline-BRCA, advanced ovarian cancer. Sales in the US declined by 4% to $27m, reflecting changes in the competitive landscape. Sales in Europe increased by 79% (79% at CER) to $25m, following a number of successful launches.
 
Legacy: Faslodex
Product Sales of $214m; an increase of 13% (13% at CER).
 
China sales grew by 20% (20% at CER) to $6m, supporting Emerging Markets sales of $27m which represented growth of 29% (24% at CER). US sales increased by 19% to $118m, mainly driven by an expansion of the label in March 2016 for 2nd-line advanced or metastatic breast cancer, in combination with palbociclib. Europe sales declined by 4% (2% at CER) to $54m. An increase in demand led to Japan sales growth of 8% (8% at CER) to $14m.
 
Legacy: Zoladex
Product Sales of $185m; an increase of 4% (5% at CER).
 
Emerging Markets sales growth of 30% (31% at CER) to $87m was particularly reflected in volume demand in China, where sales increased by 34% (44% at CER) to $43m. Sales in Europe declined by 18% (13% at CER) to $32m.
 
Sales in Established Rest Of World (ROW), declined by 6% (8% at CER) to $58m, driven by lower volume demand. Sales in the US, falling by 20% to $8m, declined as a result of unfavourable pricing, despite an increase in volume demand. On 31 March 2017, the Company completed an agreement with TerSera for the commercial rights to Zoladex in the US and Canada.
 
CVMD
Product Sales of $1,779m; a decline of 22% (21% at CER).
CVMD Product Sales represented 37% of total Product Sales, down from 41% in Q1 2016.
 
Brilinta
Product Sales of $224m; an increase of 24% (27% at CER).
 
Emerging Markets sales grew by 46% (54% at CER) to $60m, with China Product Sales increasing by 59% (68% at CER) to $35m. China represented 58% of Emerging Markets sales of Brilinta, despite not being included on the China NRDL. Brilinta was recently added to the price-negotiation list in China and the Company continues to aim towards favourable levels of reimbursement. Growth in Emerging Markets was underpinned by an improvement in market share, beyond geographic expansion and breadth of hospital listings. Strong sales growth was delivered in many markets outside China, including Russia, Turkey and India.
 
US sales of Brilinta, at $87m, represented an increase of 24%. The performance reflected updated preferred guidelines from the American College of Cardiology and the American Heart Association in 2016, as well as the narrowing of a competitor’s label; Brilinta remained the branded oral anti-platelet (OAP) market leader in the US. Sales of Brilique in Europe increased by 8% (12% at CER) to $65m, reflecting indication leadership across a number of markets. Brilique continued to outperform the overall OAP market in Europe.
 
Farxiga
Product Sales of $207m; an increase of 25% (25% at CER).
 
Farxiga continued to be the best-selling AstraZeneca medicine for the treatment of type-2 diabetes, as well as the global leader in the sodium-glucose co-transporter 2 (SGLT2) class, despite increasing levels of intra-class competition.
 
Emerging Markets sales increased by 100% (90% at CER) to $42m, driven by ongoing launches and improved access. In March 2017, Forxiga received approval from the China FDA. Forxiga was the first SGLT2 medicine to be approved in China.
 
US sales increased by 2% to $96m. Sales growth was subdued by the impact of affordability programmes and managed-care access, together with a modest change in levels of inventory. The SGLT2 class gained market share from other types of type-2 diabetes medicines; it also has the potential to take further share, based on presentations at medical meetings of real-world evidence provided by the CVD-REAL study (see the Research and Development Update).
 
Sales in Europe increased by 22% (24% at CER) to $50m, as the medicine continued to lead the growing class. In Japan, where Ono Pharmaceutical Co., Ltd is a partner, sales amounted to $7m.
 
Onglyza
Product Sales of $154m; a decline of 27% (27% at CER).
 
The performance reflected adverse pressures on the dipeptidyl peptidase-4 (DPP-4) class and an acceleration of the aforementioned Diabetes market dynamics. Sales in Emerging Markets declined by 17% (17% at CER) to $30m as the Company focused on Forxiga. However, Onglyza entered the NRDL in China in the period.
 
 
US sales declined by 35% to $81m. Continued competitive pressures in the DPP-4 class led to lower market share and were only partially offset by reduced levels of utilisation of patient-access programmes. Sales in Europe declined by 18% (18% at CER) to $27m.
 
Bydureon/Byetta
Product Sales of $199m; an increase of 1% (2% at CER).
 
Sales of Bydureon and Byetta in Emerging Markets were $1m and $5m, respectively. In 2016, AstraZeneca entered a strategic collaboration with 3SBio Inc. (3SBio) for the rights to commercialise Bydureon and Byetta in the Chinese market. The agreement allows the Company to benefit from 3SBio’s established local expertise in injectable medicines, as well as focus on its oral type-2 diabetes medicines. Thus, sales in China are recorded by 3SBio.
 
Combined US sales for Bydureon and Byetta were $157m. Bydureon US sales increased by 18% to $127m, representing 81% of total Bydureon/Byetta sales. The decline in US Byetta sales continued in the period; the fall of 29% to $30m reflected the Company’s promotional focus on once-weekly Bydureon over twice-daily Byetta. The new Bydureon autoinjector device was accepted for US regulatory review in the quarter. Combined sales in Europe declined by 9% (9% at CER) to $30m, reflecting the level of competitive pressures in the glucagon-like peptide-1(GLP-1) class.
 
Legacy: Crestor
Product Sales of $631m; a decline of 45% (44% at CER).
 
Sales in China grew by 13% (20% at CER) to $101m, while Russia sales grew to $6m. In the US, sales declined by 82% to $112m, reflecting the market entry in July 2016 of multiple Crestor generic medicines. In Europe, sales declined by 8% (4% at CER) to $195m, reflecting the increasing use of generic medicines. In Japan, where Shionogi Inc. is a partner, Crestor maintained its position as the leading statin, with growth of 1% (down by 1% at CER) to $109m.
 
 
RESPIRATORY
Product Sales of $1,181m; a decline of 2% (stable at CER).
Respiratory Product Sales represented 24% of total Product Sales, up from 22% in Q1 2016.
 
Symbicort
Product Sales of $677m; a decline of 10% (8% at CER).
Symbicort continued to lead the global market by volume within the inhaled corticosteroids (ICS) / Long-Acting Beta Agonist (LABA) class. Emerging Markets sales grew by 7% (10% at CER) to $112m, partly reflecting growth in China of 17% (24% at CER) to $48m and in Latin America (ex-Brazil), where sales grew by 63% (63% at CER) to $13m.
 
In contrast, US sales declined by 21% to $255m, in line with expectations of a competitive start to 2017. These expectations reflected the impact of the continued effects of pricing pressure from managed-care access within the class. Competition also remained intense from other classes, such as Long-Acting Muscarinic (LAMA)/LABA combination medicines. In Europe, sales declined by 13% (9% at CER) to $200m, primarily driven by competition from other branded and Symbicort-analogue medicines. In Japan, where Astellas Pharma Inc. is a partner, sales increased by 21% (19% at CER) to $51m.
 
Pulmicort
Product Sales of $337m; an increase of 9% (14% at CER).
 
Emerging Markets sales increased by 21% (28% at CER) to $250m, reflecting strong underlying volume growth. Emerging Markets represented 74% of total Pulmicort sales. China sales increased by 15% (22% at CER) to $210m and represented 62% of global sales. Volume demand in China continued to increase, due to the prevalence of acute chronic obstructive pulmonary disease (COPD) and paediatric asthma. Sales in the US and Europe declined by 27% to $41m and by 10% (7% at CER) to $26m, respectively.
 
Daliresp/Daxas
Product Sales of $44m; an increase of 42% (42% at CER).
 
US sales increased by 23% to $38m, driven primarily by favourable levels of market penetration. The US represented 86% of total sales.
 
Tudorza/Eklira
Product Sales of $37m; a decline of 5% (3% at CER).
 
Sales in the US declined by 12% to $15m, reflecting adverse market demand, limited Medicare Part-D access and the Company’s focus on the launch of Bevespi Aerosphere. Sales in Europe declined by 5% (stable at CER) to $20m.
 
Duaklir
Product Sales of $19m; an increase of 46% (54% at CER).
 
Duaklir is now helping to treat patients in over 25 countries. The growth in sales in the quarter was favourably impacted by the performance in Germany, where sales increased by 50% (50% at CER) to $9m.
 
Bevespi Aerosphere
Product Sales of $1m; launched in 2017.
 
The Bevespi Aerosphere inhalation aerosol was launched commercially in the US during the quarter and performed in line with similar launches.
 
 
OTHER
Product Sales of $998m; a decline of 25% (24% at CER).
Other Product Sales represented 21% of total Product Sales, down from 24% in Q1 2016.
 
Nexium
Product Sales of $461m; stable (up by 1% at CER).
 
Emerging Markets sales declined by 1% (up by 3% at CER) to $175m and increased by 4% to $136m in the US. The latter reflected favourable pricing, which offset a decline in volume demand and inventory destocking that followed the loss of exclusivity in 2015. Sales in Europe increased by 2% (3% at CER) to $61m. In Japan, where Daiichi Sankyo is a partner, sales declined by 1% (4% at CER) to $68m, reflecting the annualisation of the mandated biennial price reduction, effective from April 2016.
 
Synagis
Product Sales of $230m; a decline of 6% (6% at CER).
 
US sales declined by 2% to $157m for the quarter due to lower market demand. Product Sales to AbbVie Inc., which is responsible for the commercialisation of Synagis in over 80 countries outside the US, declined by 13% (13% at CER) to $73m.
 
Seroquel XR
Product Sales of $67m; a decline of 67% (66% at CER).
 
Sales of Seroquel XR in the US declined by 83% to $24m. Since November 2016, two competitors have launched generic medicines in the US. Sales of Seroquel XR in Europe declined by 37% (37% at CER) to $22m, reflecting the impact of generic-medicine competition.
 
FluMist/Fluenz
The Company confirmed in 2016 that the Advisory Committee on Immunization Practices 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.
 
 
Regional Product Sales
_______________________________________________________________________________________
 
 
$m
% of Total
% change
Actual
CER
 
 
 
 
 
Emerging Markets1
1,562
32
7
9
 
China
782
16
1
7
 
Ex. China
780
16
13
12
 
 
 
 
 
US
1,485
31
(34)
(34)
 
 
 
 
 
Europe
1,129
23
(7)
(3)
 
 
 
 
 
Established ROW2
667
14
5
2
 
Japan
450
9
5
3
 
Canada
125
3
8
3
 
Other Established ROW
92
2
1
(3)
 
 
 
 
 
 
 
 
 
 
Total
4,843
100
(13)
(12)
1Emerging Markets comprises all remaining Rest of World markets, including Brazil, China, India, Mexico, Russia and Turkey.
2Established ROW comprises Japan, Canada, Australia and New Zealand.
 
Emerging Markets
Product Sales of $1,562m; an increase of 7% (9% at CER).
 
Emerging Markets, representing 32% of total Product Sales, was the largest sales region for AstraZeneca in the quarter. China sales grew by 1% (7% at CER) to $782m, representing half of Emerging Markets sales. Alongside the aforementioned additions of Onglyza and Iressa on the NRDL in China, Brilinta, Faslodex and Seroquel XR entered the negotiation list in the quarter, with discussions on their potential reimbursement in progress. Crestor also had its 2nd-line usage restriction removed and Zoladex was reclassified from the hormone and endocrine classification to oncology, which is expected to continue to support growth.
 
Sales in Brazil and Russia continued to be adversely impacted by challenging macro-economic conditions, leading to a subdued sales increase of 2% (down by 19% at CER) to $85m in Brazil; Russia sales grew by 15% (down by 10% at CER) to $55m. Sales in Middle East, Africa & Others increased by 21% (33% at CER) to $247m.
 
US
Product Sales of $1,485m; a decline of 34%.
 
The decline in sales reflected generic-medicine launches that impacted sales of Crestor and Seroquel XR. Unfavourable managed-care pricing and continued competitive intensity adversely impacted sales of Symbicort. However, the New Oncology Growth Platform in the US grew by 62% to $125m, driven primarily by encouraging Tagrisso volume demand, where sales grew by 22% to $90m in Q1 2017 from $74m in Q4 2016. The New CVMD Growth Platform in the US declined by 2% to $435m, impacted by the competitive environment in Diabetes.
 
Europe
Product Sales of $1,129m; a decline of 7% (3% at CER).
 
The New Oncology Growth Platform in Europe grew by 186% (186% at CER) to $60m, partly driven by Tagrisso sales of $35m; Tagrisso was launched in Europe in Q1 2016. Lynparza sales of $25m represented growth of 79% (79% at CER). Forxiga sales growth of 22% (24% at CER) to $50m was accompanied by Brilique growth of 8% (12% at CER) to $65m. This growth was more than offset by a 13% decline (9% at CER) in Symbicort sales to $200m. However, Symbicort maintained its position as the number one ICS/LABA medicine by volume, despite competition from branded and analogue medicines.
 
Established ROW
Product Sales of $667m; an increase of 5% (2% at CER).
 
Japan sales increased by 5% (3% at CER) to $450m, partly reflecting the ongoing successful launch of Tagrisso and the performance of Symbicort, which offset the biennial price reduction, effective from April 2016. Symbicort sales in Japan increased by 21% (19% at CER) to $51m and, following the launch in Japan in May 2016, Tagrisso sales for the quarter amounted to $39m.
 
Nexium sales declined by 6% (9% at CER) to $89m and sales of Forxiga increased by 111% (111% at CER) to $19m.
 
 
Financial Performance
______________________________________________________________________________________
 
 
 
Reported
% change
 
Core1
% change
Q1 2017 ($m)
Q12016 ($m)
Actual
CER
 
Q12017 ($m)
Q1 2016 ($m)
Actual
CER
 
 
 
 
 
 
 
 
 
 
Gross Profit
 
4,511
 
5,111
 
(12)
 
(12)
 
 
4,578
 
5,149
 
(11)
 
(11)
 
Gross Margin2
 
82.3%
 
82.5%
 
-
 
-2
 
 
83.6%
 
83.1%
 
+1
 
-1
 
 
 
 
 
 
 
 
 
 
 
Distribution Expense
 
(77)
 
(76)
 
1
 
6
 
 
(77)
 
(76)
 
1
 
6
 
% Total Revenue
 
1.4%
 
1.2%
 
-
 
-
 
 
1.4%
 
1.2%
 
-
 
-
 
R&D Expense
 
(1,453)
 
(1,480)
 
(2)
 
2
 
 
(1,338)
 
(1,429)
 
(6)
 
(3)
 
% Total Revenue
 
26.9%
 
24.2%
 
-3
 
-3
 
 
24.8%
 
23.4%
 
-1
 
-2
 
SG&A Expense
 
(2,300)
 
(2,572)
 
(11)
 
(8)
 
 
(1,829)
 
(2,127)
 
(14)
 
(12)
 
% Total Revenue
 
42.6%
 
42.1%
 
-
 
-1
 
 
33.8%
 
34.8%
 
+1
 
+1
 
Other Operating Income
 
236
 
55
 
n/m
 
n/m
 
 
333
 
76
 
n/m
 
n/m
 
% Total Revenue
 
4.4%
 
0.9%
 
+3
 
+4
 
 
6.2%
 
1.2%
 
+5
 
+5
 
 
 
 
 
 
 
 
 
 
 
Operating Profit
 
917
 
1,038
 
(12)
 
(23)
 
 
1,667
 
1,593
 
5
 
(2)
 
% Total Revenue
 
17.0%
 
17.0%
 
-
 
-3
 
 
30.8%
 
26.1%
 
+5
 
+3
 
Net Finance Expense
 
(322)
 
(311)
 
3
 
9
 
 
(174)
 
(157)
 
11
 
15
 
Taxation
 
(70)
 
(98)
 
 
 
 
(258)
 
(249)
 
 
 
Tax Rate
 
12%
 
14%
 
 
 
 
17%
 
17%
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share ($)
 
0.42
 
0.51
 
(17)
 
(35)
 
 
0.99
 
0.95
 
4
 
(4)
 
1 Each of the measures in the Core column in the above table are non-GAAP measures.
2 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales.
 
Reconciliation Of Reported To Core Performance
 
 
 
Reported
Restructuring
Intangible Asset
Amortisation & Impairments
Diabetes Alliance
Other1
Core2
$m
$m
$m
$m
$m
$m
Gross Profit
 
4,511
 
38
 
29
 
-
 
-
 
4,578
 
 
 
 
 
 
 
 
R&D Expense
 
(1,453)
 
104
 
11
 
-
 
-
 
(1,338)
 
SG&A Expense
 
(2,300)
 
94
 
252
 
102
 
23
 
(1,829)
 
Other Operating Income
 
236
 
76
 
21
 
-
 
-
 
333
 
 
 
 
 
 
 
 
Operating Profit
 
917
 
312
 
313
 
102
 
23
 
1,667
 
 
 
 
 
 
 
 
Net Finance Expense
 
(322)
 
-
 
-
 
82
 
66
 
(174)
 
 
 
 
 
 
 
 
Profit Before Tax
 
582
 
312
 
313
 
184
 
89
 
1,480
 
 
 
 
 
 
 
 
Taxation
 
(70)
 
(66)
 
(78)
 
(37)
 
(7)
 
(258)
 
 
 
 
 
 
 
 
Earnings Per Share ($)
 
0.42
 
0.19
 
0.19
 
0.12
 
0.07
 
0.99
 
1 Other adjustments include provision charges related to certain legal matters (see Note 5) and discount unwind on acquisition-related liabilities (see Note 4).
2 Each of the measures in the Core column in the above table are non-GAAP measures.
 
Profit And Loss Commentary
 
Gross Profit
Reported Gross Profit declined by 12% (12% at CER) to $4,511m, partly reflecting the entry in July 2016 of multiple Crestor generic medicines in the US and the resulting impact on Product Sales. Excluding the impact of Externalisation Revenue, the Reported Gross Profit Margin was stable (down by two percentage points at CER) at 82.3%.
 
Core Gross Profit declined by 11% (11% at CER) to $4,578m and, excluding the impact of Externalisation Revenue, the Core Gross Profit margin increased by one percentage point (down by one percentage point at CER) to 83.6%, reflecting a changing mix of sales, including the impact of patent expiries, partly offset by the resilience of some legacy medicines in established markets and the growing influence of specialty-care medicines.
 
Operating Expenses: R&D
Reported R&D costs declined by 2% (up by 2% at CER) to $1,453m. Core R&D costs declined by 6% (3% at CER) to $1,338m, supported by resource prioritisation and cost control.
 
Operating Expenses: SG&A
Reported SG&A costs declined by 11% (8% at CER) to $2,300m, reflecting the evolving shape of the business. Core SG&A costs declined by 14% (12% at CER) to $1,829m.
 
The Company has continued to consolidate its operations used by multiple parts of the business. It is committed to driving simplification and standardisation through centralisation in shared services of back-office and some middle-office activities that are currently performed in various enabling units, including Finance, HR, Procurement and IT. Instead of operating numerous shared-service centres and managing outsourced vendors independently, the recently-launched Global Business Services organisation will, over time, provide integration of governance, locations and business practices to all shared services and outsourcing activities across AstraZeneca.
 
Other Operating Income
Where AstraZeneca does not retain a significant ongoing interest in medicines or potential new medicines, income from disposal transactions is reported as Other Operating Income in the Company’s financial statements.
 
Reported Other Operating Income of $236m included:
$161m of gains recognised on the sale of short-term investments
A milestone receipt of $50m in relation to the disposal of Zavicefta (ceftazidime and avibactam) to Pfizer Inc.
 
Core Other Operating Income was $333m, with the difference to Reported Other Operating Income primarily driven by a restructuring charge taken against land and buildings.
 
Operating Profit
Reported Operating Profit declined by 12% (23% at CER) to $917m. The Reported Operating Margin was stable (down by three percentage points at CER) at 17% of Total Revenue. Core Operating Profit increased by 5% (down by 2% at CER) to $1,667m. The Core Operating Margin increased by five percentage points (three percentage points at CER) to 31% of Total Revenue.
 
Net Finance Expense
Reported Net Finance Expense increased by 3% (9% at CER) to $322m, reflecting an increase in Net Debt that was driven by the majority investment in Acerta Pharma in February 2016. Excluding the discount unwind on acquisition-related liabilities, Core Net Finance Expense increased by 11% (15% at CER) to $174m.
 
Taxation
The Reported and Core tax rates for the quarter were 12% and 17% respectively. These tax rates were lower than the 2017 UK Corporation Tax Rate of 19.25%, mainly due to the impact of the geographical mix of profits. The net cash tax paid for the quarter was $62m, representing 11% of Reported Profit Before Tax and 4% of Core Profit Before Tax. Reduced net tax cash payments primarily reflected refunds following a previously disclosed agreement of inter-government transfer pricing arrangements. The Reported and Core tax rates for the comparative quarter were 14% and 17% respectively.
 
Earnings Per Share (EPS)
Reported EPS of $0.42 represented a decline of 17% (35% at CER). Core EPS grew by 4% (down by 4% at CER) to $0.99. The Core performance was driven by a decline in Total Revenue that was partly offset by good progress on cost control.
 
Cash Flow And Balance Sheet
 
Cash Flow
The Company generated a net cash inflow from operating activities of $88m, compared with $1,193m in the comparative period. The decline reflected partly the fall in Profit Before Tax, as well as an increase in working capital and short-term provisions of $887m, compared to a decrease of $64m in the comparative Q1 2016 period reflecting a different phasing of receipts in 2016.
 
Net cash outflows from investing activities were $146m compared with $2,887m in the comparative period. The prior-period outflow primarily reflected the upfront payment as part of the majority investment in Acerta Pharma.
 
Net cash outflows from financing activities were $2,042m, driven by dividend payments of $2,368m, partly offset by higher short-term borrowings.
 
The cash payment of contingent consideration in respect of the Bristol-Myers Squibb Company share of the global Diabetes alliance amounted to $138m, comprising a $100m milestone payment, in respect of Qtern and royalty payments.
 
Debt and Capital Structure
At 31 March 2017, outstanding gross debt (interest-bearing loans and borrowings) was $17,402m (31 March 2016: $16,312m). Of the gross debt outstanding at 31 March 2017, $2,839m was due within one year (31 March 2016: $2,168m). The Company’s net debt position at 31 March 2017 was $13,510m (31 March 2016: $11
 
Capital Expenditure
Capital expenditure in the period amounted to $286m.
 
Shares in Issue
During the quarter, 0.4 million shares were issued in respect of share option exercises for consideration of $17m. The total number of shares in issue as at 31 March 2017 was 1,266 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)1     
Currency
 
Primary Relevance
 
FY 2016
 
Q1 20172
 
change %
 
Total Revenue
 
Core Operating Profit
EUR
 
Product Sales
 
0.90
 
0.94
 
-4%
 
+179
 
+123
JPY
 
Product Sales
 
108.84
 
113.74
 
-4%
 
+104
 
+71
CNY
 
Product Sales
 
6.65
 
6.87
 
-3%
 
+131
 
+74
SEK
 
Costs
 
8.56
 
8.93
 
-4%
 
+7
 
-98
GBP
 
Costs
 
0.74
 
0.81
 
-9%
 
+29
 
-131
Other3
 
 
 
 
 
 
 
 
 
+194
 
+124
1Based on 2016 results at 2016 actual exchange rates.
2Based on average daily spot rates between 1 January and 31 March 2017.
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 March 2017, 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) Commercial Rights To Zoladex In The US And Canada
 
On 31 March 2017, AstraZeneca announced that it had completed an agreement with TerSera for the sale of commercial rights to Zoladex (goserelin acetate implant) in the US and Canada. Zoladex is an injectable luteinising hormone-releasing medicine, used to treat prostate cancer, breast cancer and certain benign gynaecological disorders. It was first approved in the US and Canada in 1989.
 
Under the terms of the agreement, AstraZeneca received a payment of $250m from TerSera in the quarter. As AstraZeneca will maintain a significant ongoing interest in Zoladex in the US and Canada, the payment was reported as Externalisation Revenue in the Company’s financial statements.
 
b) MedImmune And Sanofi Pasteur Form Alliance
On 3 March 2017, the Company announced that MedImmune, the global biologics research and development arm of AstraZeneca, and Sanofi Pasteur, the vaccines division of Sanofi, had agreed to develop and commercialise MEDI8897 jointly. MEDI8897 is a monoclonal antibody (mAb) for the prevention of lower respiratory tract illness (LRTI) caused by respiratory syncytial virus (RSV), the most prevalent cause of LRTI among infants and young children. MEDI8897 is currently in a Phase IIb clinical trial.
 
Under the global agreement that closed in March 2017, Sanofi Pasteur made an upfront payment of €120m and will pay up to €495m upon achievement of certain development and sales-related milestones. The two companies will share all costs and profits equally. MedImmune and AstraZeneca will continue to lead all development activity through initial approvals and AstraZeneca will retain MEDI8897 manufacturing activities. Sanofi Pasteur will lead commercialisation activities for MEDI8897. As AstraZeneca will maintain a significant ongoing interest in MEDI8897, the payment was reported as Externalisation Revenue in the Company’s financial statements.
 
c) Tudorza And Duaklir In The US
On 17 March 2017, AstraZeneca announced that it had entered a strategic collaboration with Circassia Pharmaceuticals plc (Circassia) for the development and commercialisation of Tudorza and Duaklir in the US. Tudorza was approved and launched in the US in 2012. Duaklir is expected to be submitted for US regulatory review in 2018. The transaction closed on 12 April 2017.
 
Under the terms of the agreement, AstraZeneca received $50m in Ordinary Shares in Circassia on completion and will receive $100m at the earlier of approval of Duaklir in the US or 30 June 2019. Should Circassia decide to exercise an option to sub-license the commercial rights to Tudorza in the US, it will pay up to a further $80m.
 
The two companies will share US profits from Tudorza equally. AstraZeneca will continue to book US Product Sales of Tudorza until Circassia’s potential exercise of the option. Circassia will pay AstraZeneca tiered percentage royalties on potential future US sales of Duaklir. In addition, Circassia will contribute up to $62.5m towards the development activities for the medicines. As AstraZeneca will retain a significant, ongoing interest in the medicines, income will be reported as Externalisation Revenue. This includes approximately $60m at closing, as well as any potential future royalties, deferred income and any future payment for the option to gain the US commercial rights to Tudorza. Any potential future supply of the medicines to Circassia will be reported as Product Sales.
 
d) Benralizumab Rights In Asia
On 24 March 2017, it was announced that AstraZeneca had entered an agreement with Kyowa Hakko Kirin Co., Ltd. (Kyowa) for the exclusive rights to benralizumab for the treatment of severe, uncontrolled asthma and COPD in Asia.
 
Under the terms of the agreement, AstraZeneca will pay Kyowa $15m upfront and subsequent payments for regulatory and commercial milestones, as well as low double-digit percentage sales royalties. As a result of the agreement, AstraZeneca will be responsible for the development, sales and marketing of benralizumab in 13 Asian countries and regions, except Japan, where AstraZeneca already holds the commercialisation rights to benralizumab.
 
 
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 2 February 2017 (the period):
 
Regulatory Approvals
6
-      Tagrisso - lung cancer (US, EU; full approval)
-      Tagrisso - lung cancer (CN)
-      Forxiga - type-2 diabetes (CN)
-     Qtern - type-2 diabetes (US)
-     Siliq - psoriasis (US; by partner)
Regulatory Submission Acceptances
4
 
-      Lynparza - ovarian cancer (2nd line) (US) (Priority Review)
-     Bydureon - type-2 diabetes (autoinjector) (US)
-    Symbicort - COPD exacerbations (US)
-     benralizumab - severe, uncontrolled asthma (JP)
 
Phase III or Major Data Readouts
2
 
-     Lynparza - breast cancer
-     Farxiga - type-2 diabetes (CVD-REAL real-world study)
Other Key Developments
3
 
- Orphan Designation: Lynparza - ovarian cancer (JP)
- Complete Response Letter: ZS-9 (sodium zirconium cyclosilicate) - hyperkalaemia (US)
- Orphan designation: inebilizumab - neuromyelitis optica spectrum disorder (EU)
 
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 (sodium zirconium cyclosilicate)* - hyperkalaemia
   -       roxadustat* - anaemia
 
Respiratory
  -       benralizumab* - severe, uncontrolled asthma, COPD
  -       tralokinumab - severe, uncontrolled asthma
  -       PT010 - COPD
 
Other
 -        anifrolumab - lupus
 -        lanabecestat (formerly AZD3293) - Alzheimer’s disease
 
Projects in clinical pipeline
124
 
*Under Regulatory Review
The table as at 27 April 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 Lynparza and Tagrisso are already benefitting patients. An extensive pipeline of small-molecule and biologic medicines is in development and the Company is committed to advancing Oncology, primarily focused on lung, ovarian, breast and blood cancers, as one of AstraZeneca’s Growth Platforms.
 
At the 2017 American Association for Cancer Research meeting in Washington D.C., 60 abstracts, including seven oral presentations, were published. These covered, inter alia, tumour drivers and resistance, immuno-oncology (IO), antibody-drug conjugates and DNA damage response.
 
a) Lynparza (multiple cancers)
During the period, the Company presented data from the Phase III SOLO-2 trial, in which women with germline BRCA-mutated, platinum-sensitive, relapsed ovarian cancer were treated with Lynparza tablets (300mg twice daily) or placebo, in the maintenance setting. The trial met its primary endpoint of investigator-assessed progression-free survival (PFS) with a hazard ratio of 0.30 (equal to a 70% reduction in the risk of disease progression) and a median survival of 19.1 months vs 5.5 months with placebo. PFS, as measured by Blinded Independent Central Review, demonstrated a hazard ratio of 0.25 (75% risk reduction), with a median PFS of 30.2 months vs 5.5 months for placebo, representing an improvement of over two years. Lynparza tablets demonstrated a safety profile generally consistent with previous trials, including a low incidence of haematological adverse events. The 300mg twice daily tablet dose used in SOLO-2 reduces the pill burden for patients from 16 capsules to 4 tablets per day.
 
During the period, the Company achieved regulatory submission acceptance for a New Drug Application (NDA) for Lynparza tablets for use in platinum-sensitive, relapsed ovarian cancer patients in the maintenance setting. Priority Review status was granted, with an anticipated Prescription Drug User Fee Act (PDUFA) date during Q3 2017. The regulatory submission included data from the aforementioned SOLO-2 trial, as well as a prior Lynparza trial in ovarian cancer, Study 19.
 
In the period, the Company received an Orphan Drug Designation for Lynparza in Japan. Presently, there are no approved medicines in Japan to treat BRCA-mutated ovarian cancer, which affects an estimated 3,500 women every year.
 
In breast cancer, Lynparza met the primary endpoint in the Phase III OlympiAD trial, comparing Lynparza tablets to standard of care (SoC) chemotherapy in the treatment of patients with HER2-negative metastatic breast cancer harbouring germline BRCA1 or BRCA2 mutations. Patients treated with Lynparza showed a statistically-significant and clinically-meaningful improvement in PFS, compared with those who received SoC chemotherapy. This was the first positive randomised Phase III trial to demonstrate the efficacy and safety of a poly ADP ribose polymerase (PARP) inhibitor beyond ovarian cancer. The Company anticipates presenting the data at the forthcoming American Society of Clinical Oncology Annual Meeting in Chicago, US in June 2017.
 
PROfound, a Phase III trial in metastatic, castrate-resistant prostate cancer patients, who have previously received a new hormonal agent, actively started recruitment in the period. This trial is based on early clinical data published in The New England Journal of Medicine. The prostate cancer indication received US Breakthrough Therapy Designation in 2016 and PROfound is the first pivotal trial for Lynparza in prostate cancer and the first to utilise a new 15-gene homologous recombination repair panel.
 
b) Tagrisso (lung cancer)
On 27 March 2017, the Company announced that it had received marketing authorisation by the China FDA for Tagrisso 40mg and 80mg once-daily oral tablets. These tablets are a treatment for adult patients with locally-advanced or metastatic epidermal growth factor receptor (EGFR) T790M mutation-positive non-small cell lung cancer (NSCLC), whose disease has progressed on or after EGFR tyrosine kinase inhibitor (TKI) therapy.
 
This early approval followed the China FDA’s Priority Review in recognition of the submitted data from the AURA17 and AURA18 trials. Tagrisso is the first AstraZeneca medicine approved under the China FDA’s Priority Review pathway, using an accelerated timeline for an innovative medicine. Presently, lung cancer is the most common form of cancer and the leading cause of cancer-related deaths in China. Approximately 30-40% of Chinese patients with NSCLC have the EGFR mutation at diagnosis and around half of patients with NSCLC, whose disease progresses after treatment with an EGFR-TKI-based medicine, develop the T790M mutation.
 
On 31 March 2017, the Company announced that the US FDA had granted full approval for Tagrisso 80mg once-daily tablets. These tablets are for the aforementioned treatment of patients with metastatic EGFR T790M mutation-positive NSCLC, as detected by an US FDA-approved test, whose disease has progressed on or after an EGFR-TKI therapy. The approval was based on the Phase III AURA3 trial data that demonstrated a significant improvement in PFS with Tagrisso, as compared to SoC chemotherapy. The trial also demonstrated a hazard ratio of 0.30 (equal to a 70% reduction in the risk of disease progression) and a median PFS of 10.1 months, compared to 4.4 months from chemotherapy. The full approval was converted from the prior accelerated approval.
 
On 25 April 2017, AstraZeneca announced that the European Medicines Agency (EMA) had granted full marketing authorisation for Tagrisso on a similar basis to the aforementioned approval in the US. The full approval was based on the results of the Phase III AURA3 trial, which were presented in 2016.
 
c) Durvalumab (multiple cancers)
The Company continues to advance multiple monotherapy trials of durvalumab and combination trials of durvalumab with tremelimumab and other potential new medicines in IO. The combination of durvalumab and tremelimumab is being assessed in Phase III trials in metastatic urothelial cancer, NSCLC, small cell lung cancer and head and neck squamous cell carcinoma (HNSCC) and in Phase I/II trials in gastric cancer, pancreatic cancer, hepatocellular carcinoma and haematological malignancies.
 
BLADDER CANCER
In December 2016, AstraZeneca received US FDA acceptance of the Biologics License Application for durvalumab in patients with locally-advanced or metastatic urothelial carcinoma, whose disease has progressed during or after one standard platinum-based regimen. The application was granted Priority Review status. The PDUFA date is anticipated to be in Q2 2017.
 
In Canada, the New Drug Submission (NDS) for durvalumab was filed with Health Canada, seeking conditional approval in patients with locally-advanced or metastatic urothelial carcinoma, whose disease has progressed during or after platinum-based chemotherapy. This NDS was granted advance consideration under Health Canada’s Notice of Compliance with Conditions policy, allowing the submission based on encouraging results from the Phase I/II Study 1108. In Australia, the Therapeutic Goods Administration accepted a similar submission in the period.
 
During the period, AstraZeneca announced updated efficacy and safety data for durvalumab in patients with locally-advanced or metastatic urothelial cancer from the Phase I/II 1108 trial. These data, presented at the 2017 American Society of Clinical Oncology Genitourinary Cancers Symposium, showed an objective response rate of 20.4% in all evaluable patients (n=103) and 31.1%, in patients whose tumours express PD-L1. At the time of data cut-off, median overall survival (OS) was 14.1 months. Durvalumab, dosed at a rate of 10mg/kg, was administered intravenously every two weeks for up to 12 months in this trial and demonstrated a manageable safety profile.
 
The following table details the ongoing Phase III trial in metastatic urothelial cancer:
 
Name
Phase
Line of Treatment
Population
Design
Timelines
Status
DANUBE
III
1st line
Cisplatin chemo-
therapy- eligible/
ineligible bladder cancer
 
durvalumab, durva + treme vs SoC chemotherapy
FPCD1 Q4 2015
 
LPCD2 Q1 20173
 
First data anticipated 2018
 
Recruitment completed3
1 First Patient Commenced Dosing
 
2Last Patient Commenced Dosing
 
3Global trial, excluding China
 
LUNG CANCER
During the period, the Company maintained strong momentum in its immunotherapy efforts in lung cancer, including the decision to initiate a new trial, POSEIDON, testing the durva + treme combination with chemotherapy. This followed successful Phase I testing of the Company’s triple combination of two immunotherapies combined with chemotherapy.
 
The Company now expects the first data from the Phase III ARCTIC trial in 3rd-line PDL1-low/negative NSCLC to be available in H2 2017. The trial results are event-driven; events for the primary endpoints of PFS and OS have occurred more slowly than originally anticipated in the advanced patient population that the trial is assessing.
 
As previously communicated, the ongoing Phase III NEPTUNE trial was expanded to include local Chinese patients to support regulatory submission of the 1st-line NSCLC durva + treme combination data in China. During the period, the first patient was dosed in the China expansion cohort. This expansion is not expected to impact the anticipated OS data readout in 2018 from the global cohort, which is fast approaching full recruitment. Further, during the period, the NEPTUNE trial was refined to include a primary OS endpoint for patients with PDL1-expressing tumours.
 
An overview of key AstraZeneca-sponsored ongoing Phase III trials in lung cancer is provided below:
 
Name
Phase
Line of Treatment
Population
Design
Timelines
Status
Monotherapy
ADJUVANT*
III
N/A
Stage Ib-IIIa NSCLC
durvalumab vs placebo
FPCD Q1 2015
 
First data anticipated 2020
Recruitment ongoing
PACIFIC
III
N/A
Stage III unresectable NSCLC
durvalumab vs placebo
FPCD Q2 2014
 
LPCD Q2 2016
 
First data anticipated H2 2017
Recruitment completed
PEARL
III
1st line
NSCLC (Asia)
durvalumab vs SoC chemotherapy
FPCD Q1 2017
 
First data anticipated 2020
Recruitment ongoing
Combination therapy
MYSTIC
III
1st line
NSCLC
durvalumab, durva + treme vs SoC chemotherapy
FPCD Q3 2015
 
LPCD Q3 2016
 
First data anticipated mid-2017
Recruitment completed
NEPTUNE
III
1st line
NSCLC
durva + treme vs SoC chemotherapy
FPCD Q4 2015
 
First data anticipated 2018
Recruitment ongoing
POSEIDON
III
1st line
NSCLC
durvalumab + SoC, durva + treme + SoC vs SoC chemotherapy
 -
Recruitment initiating
ARCTIC
III
3rd line
PDL1- low/neg. NSCLC
durvalumab, tremelimumab, durva + treme vs SoC chemotherapy
FPCD Q2 2015
 
LPCD Q3 2016
 
First data anticipated H2 2017
Recruitment completed
CASPIAN
III
1st line
Small-cell lung cancer (SCLC)
durvalumab + SoC, durva + treme + SoC vs SoC chemotherapy
FPCD Q1 2017
 
First data anticipated 2020
Recruitment ongoing
*Conducted by the National Cancer Institute of Canada
 
HEAD AND NECK CANCER
During the period, the Phase III KESTREL trial completed patient recruitment ahead of schedule, despite a delay from a partial clinical hold on recruitment in 2016. Additionally, the trial was refined to include a primary OS endpoint for patients with PDL1-expressing tumours. At this stage, the Company continues to anticipate data availability in H2 2017.
 
An overview of key AstraZeneca-sponsored ongoing Phase III trials in head and neck cancer is provided below:
 
Name
Phase
Line of Treatment
Population
Design
Timelines
Status
Combination therapy      
KESTREL
III
1st line
HNSCC
durvalumab, durva + treme vs SoC
FPCD Q4 2015
 
LPCD Q1 2017
 
First data anticipated H2 2017
Recruitment completed
EAGLE
III
2nd line
HNSCC
durvalumab, durva + treme vs SoC
First data anticipated 2018
Recruitment ongoing
 
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) Forxiga (type-2 diabetes)
In March 2017, the Company received marketing authorisation from the China FDA for Forxiga 5mg and 10mg once-daily oral tablets. These tablets are indicated as an adjunct to diet and exercise to improve glycaemic control (blood sugar level) in adults with type-2 diabetes. Forxiga was the first SGLT2 inhibitor to be approved in China and belongs to a newer class of oral diabetes medicines that works independently from insulin to help remove excess glucose from the body. The prevalence of diabetes is escalating rapidly in China, now impacting 114 million patients, representing almost one-third of diabetes cases worldwide.
 
b) Qtern (type-2 diabetes)
On 28 February 2017, AstraZeneca announced that once-daily Qtern tablets (Farxiga 10mg and Onglyza 5mg fixed-dose combination) had been approved by the US FDA as an adjunct to diet and exercise to improve glycaemic control in adults with type-2 diabetes who have inadequate control with Farxiga (10mg) or who are already treated with Farxiga and Onglyza.
 
c) Bydureon (type-2 diabetes)
During the period, the new Bydureon autoinjector regulatory submission was accepted for review by the US FDA. The autoinjector is designed to provide patients with a convenient, easy-to-use device for administration of Bydureon as a once-weekly treatment for type-2 diabetes patients.
 
In addition to the autoinjector, the regulatory submission of the DURATION-8 combination trial results (Farxiga plus Bydureon) was also accepted by the US FDA in the period. In parallel, an EU regulatory submission was accepted by the EMA. The DURATION-8 Phase III trial demonstrated that the addition of Bydureon to Farxiga provides benefits to patients above and beyond what is observed with the individual medicines, including reduced blood sugar, weight and systolic blood pressure. The Company anticipates a response from the regulatory agencies on the potential label additions for Bydureon and Farxiga in 2018 at the earliest.
 
d) 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.
 
At the 2017 American College of Cardiology Session and Expo, AstraZeneca shared results of the CVD-REAL real-world evidence study. The study showed that treatment with SGLT2 inhibitors, versus other type-2 diabetes medicines, significantly reduced rates of hospitalisation due to heart failure (HF) and all-cause mortality.
 
The study assessed more than 300,000 patients across Europe and the US, approximately 87% of whom did not have existing CV disease. It demonstrated that treatment with SGLT2 inhibitor medicines, including Farxiga (dapagliflozin), canagliflozin, and empagliflozin reduced the rate of hospitalisation for HF by 39% and death from any cause by 51%. For the composite endpoint of hospitalisation for HF and death from any cause, the reduction was 46%.
Patients with type-2 diabetes have a two to three times greater risk of HF and are at an increased risk of having a heart attack or stroke, when compared to the overall population. Around half of deaths of patients with type-2 diabetes are caused by CV disease. Two significant type-2 diabetes outcomes trials are highlighted below:
 
 
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 myocardial infarction or non-fatal stroke
H2 2017
Farxiga
DECLARE
SGLT2 inhibitor
~17,000*
Time to first occurrence of CV death, non-fatal myocardial infarction or non-fatal stroke
2019 at the latest
(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)
 
During the period, the first patients were dosed in the Farxiga HF and CKD Phase III trials. These two extensive outcomes trials are designed to help define the potential role of Farxiga in the management of HF and CKD respectively, in patients with and without type-2 diabetes. HF and CKD are common, disabling, costly and deadly conditions that continue to increase in prevalence and for which new and effective medicines are needed.
 
c) ZS-9 (sodium zirconium cyclosilicate) (hyperkalaemia)
On 17 March 2017, the Company announced that the US FDA had issued a second Complete Response Letter (CRL) regarding the NDA for ZS-9, which is being developed for the treatment of hyperkalaemia by ZS Pharma, a wholly-owned subsidiary of AstraZeneca. Hyperkalaemia is a serious condition characterised by high potassium levels in the blood serum caused by CV, renal and metabolic diseases.
 
The second CRL followed an inspection by the US FDA of the dedicated manufacturing facility. The second CRL did not require the generation of any new clinical data. AstraZeneca and ZS Pharma are actively working with the US FDA to resolve the remaining matters as soon as possible.
 
In the EU, the Company announced on 24 February 2017 that the Committee for Medicinal Products for Human Use (CHMP) of the EMA had issued a positive opinion recommending the approval of ZS-9 for the treatment of hyperkalaemia. Following the second CRL in the US, the CHMP will consider the potential impact of this new information on the adopted opinion.
 
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 anticipated launches between 2017 and 2020. The capability in inhalation technology spans both pressurised metered dose inhalers and dry-powder inhalers to serve patient needs, as well as the innovative Aerosphere CO-SUSPENSIONTM Delivery Technology, a focus of AstraZeneca’s future-platform development for respiratory-disease combination therapies.
 
a) Symbicort (COPD)
During the period, the US FDA accepted for review a supplemental NDA proposing an additional indication for Symbicort to reduce exacerbations in patients with COPD and a history of exacerbations. The PDUFA date for this additional indication is anticipated to be in Q3 2017.
 
b) Benralizumab (asthma)
During the period, the Pharmaceuticals and Medical Devices Agency in Japan accepted a regulatory submission for benralizumab. The submission, for the treatment of patients with severe, uncontrolled asthma with an eosinophilic phenotype, was based on the results of the Phase III trials, CALIMA, SIROCCO and ZONDA.
 
c) Tezepelumab (asthma)
In February 2017, tezepelumab, a first-in-class monoclonal antibody that targets thymic stromal lymphopoietin (TSLP) met its primary endpoint in a Phase IIb trial (PATHWAY) in patients with severe asthma. Tezepelumab, which is being developed in collaboration with Amgen Inc. (Amgen), demonstrated a significant reduction in the rate of asthma exacerbations, compared to placebo, over the 52-week treatment period. 
 
TSLP is thought to play a critical role in the activation of the immune system in response to allergens, viruses and other pathogens in the lung, all of which are known triggers for asthma exacerbations. Blocking TSLP with tezepelumab may uniquely prevent exacerbations across a broad population of patients with severe asthma. The Phase IIb data will be presented at a forthcoming medical meeting.
 
OTHER
 
a) Brodalumab (psoriasis)
On 16 February 2017, the Company announced that the US FDA had approved brodalumab (Siliq in the US) for the treatment of adult patients with moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy and have failed to respond or no longer respond to other systemic therapies.
 
Through a collaboration agreement, AstraZeneca granted Valeant, an expert in dermatology, the exclusive license to develop and commercialise brodalumab globally, except in Japan and certain other Asian countries where rights are held by Kyowa Hakko Kirin Co., Ltd through an agreement with Amgen and in Europe, where LEO Pharma holds exclusive rights to develop and commercialise brodalumab.
 
b) Inebilizumab (neuromyelitis optica spectrum disorder)
On 29 March 2017, the EMA granted Orphan designation to inebilizumab (formerly MEDI-551) for the treatment of neuromyelitis optica spectrum disorder (NMOSD). NMOSD is a rare and life-threatening autoimmune disease of the central nervous system in which the body’s immune system attacks healthy cells, most commonly in the optic nerve and spinal cord. NMOSD may cause severe muscle weakness and paralysis, loss of vision, respiratory failure, problems with bowel and bladder function and neuropathic pain. There is currently no cure or approved medicine for this rare disease.
 
Developed by MedImmune, inebilizumab is currently in Phase IIb clinical development for NMOSD and received Orphan Drug Designation by the US FDA in early 2016.
 
ASTRAZENECA DEVELOPMENT PIPELINE 31 March 2017
 
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
 
durvalumab#
PD-L1 mAb
≥2nd-line advanced bladder cancer
 
Accepted
(Breakthrough Therapy & Priority Review)
 
 
 
acalabrutinib#
BTK inhibitor
B-cell malignancy
Q1 2015
H1 2017
(Orphan drug)
 
 
 
acalabrutinib#
BTK inhibitor
1st-line CLL
Q3 2015
2020
(Orphan drug)
2020
(Orphan drug)
 
 
acalabrutinib#
BTK inhibitor
r/r CLL, high risk
Q4 2015
2020
(Orphan drug)
2020
(Orphan drug)
 
 
selumetinib ASTRA
MEK inhibitor
differentiated thyroid cancer
Q3 2013
2018
(Orphan drug)
2018
 
 
moxetumomab pasudotox#
PLAIT
anti-CD22 recombinant immunotoxin
hairy cell leukaemia
Q2 2013
2018
(Orphan drug)
 
 
 
durvalumab#PACIFIC
PD-L1 mAb
stage III NSCLC
Q2 2014
H2 2017
 
 
H2 2017
H2 2017
 
durvalumab#
PEARL
PD-L1 mAb
1st-line NSCLC
Q1 2017
 
 
 
2019
durvalumab# +
tremelimumabARCTIC
PD-L1 mAb + CTLA-4 mAb
3rd-line NSCLC
Q2 2015
H2 2017
H2 2017
H2 2017
 
durvalumab# + tremelimumab
MYSTIC
PD-L1 mAb + CTLA-4 mAb
 
1st-line NSCLC
Q3 2015
 
H2 2017
 
H2 2017
 
H2 2017
 
 
durvalumab# + tremelimumab
NEPTUNE
PD-L1 mAb + CTLA-4 mAb
1st-line NSCLC
Q4 2015
2019
2019
2019
2020
durvalumab# + tremelimumab + SoC
CASPIAN
PD-L1 mAb + CTLA-4 mAb + SoC
 
1st-line SCLC
Q1 2017
 
 
 
 
 
durvalumab# + tremelimumabKESTREL
PD-L1 mAb + CTLA-4 mAb
 
1st-line HNSCC
Q4 2015
 
2018
 
2018
 
2018
 
 
durvalumab# + tremelimumabEAGLE
PD-L1 mAb + CTLA-4 mAb
 
2nd-line HNSCC
Q4 2015
 
2018
 
2018
 
2018
 
 
durvalumab# + tremelimumab
DANUBE
PD-L1 mAb + CTLA-4 mAb
 
1st-line bladder cancer
Q4 2015
 
2018
2018
 
2018
 
 
Lynparza + cediranib CONCERTO
PARP inhibitor + VEGF inhibitor
 
recurrent platinum-resistant ovarian cancer
Q1 2017
 
2020
 
 
 
Cardiovascular & Metabolic Diseases
 
 
 
 
 
 
 
 
 
Farxiga2
SGLT2 inhibitor
type-2 diabetes
 
Launched
Launched
Launched
Approved
Epanova
omega-3 carboxylic acids
severe hypertriglyceridemia
 
Approved
 
2018
 
ZS-9 (sodium zirconium cyclosilicate)
potassium binder
hyperkalaemia
 
-
Accepted
2019
 
roxadustat# OLYMPUS (US) ROCKIES (US)
hypoxia-inducible factor prolyl hydroxylase inhibitor
anaemia in CKD/ESRD
Q3 2014
2018
 
 
Initiated3
Respiratory
 
Bevespi Aerosphere (PT003)
LABA/LAMA
COPD
 
Launched
 H1 2017
2018
2018
benralizumab#
CALIMA SIROCCO ZONDA BISE BORA
GREGALE
IL-5R mAb
severe asthma
 
Accepted
Accepted
Accepted
2020
benralizumab# TERRANOVA GALATHEA
IL-5R mAb
COPD
Q3 2014
2018
2018
2019
 
PT010
LABA/LAMA/ ICS
COPD
Q3 2015
2019
2019
2018
2019
tralokinumab STRATOS 1,2 TROPOS
MESOS
IL-13 mAb
severe asthma
Q3 2014
2018
2018
2018
 
Other
 
anifrolumab# TULIP
IFN-alphaR mAb
systemic lupus erythematosus
Q3 2015
2019
(Fast Track)
2019
2019
 
lanabecestat# (AZD3293)
AMARANTH + extension, DAYBREAK-ALZ
beta-secretase inhibitor
Alzheimer’s disease
Q2 2016
2020
(Fast Track)
2020
2020
 
 
 
¶      
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
 
 
 
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
I
Q1 2014
durvalumab# + AZD1775#
PD-L1 mAb + Wee1 inhibitor
solid tumours
I
Q4 2015
durvalumab# + MEDI0680
PD-L1 mAb + PD-1 mAb
solid tumours
II
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
MEDI3726#
PSMA antibody drug conjugate
prostate cancer
I
Q1 2017
MEDI4276
HER2 bi-specific antibody drug conjugate
solid tumours
I
Q4 2015
MEDI5083
immune activator
solid tumours
I
Q1 2017
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
HF with a preserved ejection fraction
I
Q3 2016
MEDI5884#
cholesterol modulation
cardiovascular
I
Q1 2017
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
PT010
LABA/LAMA/ICS
asthma
II
Q2 2014
AZD1419#
inhaled TLR9 agonist
asthma
II
Q4 2016
AZD8871#
MABA
COPD
II
Q1 2017
AZD0284
RORg
psoriasis/respiratory
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/respiratory
I
Q4 2015
Other
anifrolumab#
IFN-alphaR mAb
lupus nephritis
II
Q4 2015
anifrolumab#
IFN-alphaR mAb
systemic lupus erythematosus (subcutaneous)
II
Q1 2017
inebilizumab#
CD19 mAb
neuromyelitis optica
II
(Orphan drug US, EU)
Q1 2015
 
 
mavrilimumab#
GM-CSFR mAb
rheumatoid arthritis
II
Q1 2010
verinurad
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
MEDI3902
Psl/PcrV bispecific mAb
prevention of nosocomial Pseudomonas aeruginosa pneumonia
II
(Fast Track, US)
Q2 2016
 
 
MEDI4893
mAb binding to S. aureus toxin
prevention of nosocomial Staphylococcus aureus pneumonia
II
(Fast Track, US)
Q4 2014
 
 
MEDI8852
influenza A mAb
influenza A treatment
II
(Fast Track, US)
Q4 2015
 
 
MEDI8897#
RSV mAb-YTE
passive RSV prophylaxis
II
(Fast Track, US)
Q1 2015
 
 
MEDI0700#
BAFF/B7RP1 bispecific mAb
systemic lupus erythematosus
I
Q1 2016
MEDI1814#
amyloid beta mAb
Alzheimer’s disease
I
Q2 2014
MEDI4920
anti-CD40L-Tn3 fusion protein
primary Sjögren’s syndrome
I
Q2 2014
MEDI7352
NGF/TNF bispecific mAb
osteoarthritis pain
I
Q1 2016
MEDI7734
ILT7 mAb
myositis
I
Q3 2016
MEDI9314
IL-4R mAb
atopic dermatitis
I
Q1 2016
#            
Collaboration
 
Significant Lifecycle Management
 
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
2018
H2 2017
 
LynparzaSOLO-2
PARP inhibitor
2nd-line or greater BRCAm PSR ovarian cancer, maintenance monotherapy
Q3 2013
Accepted
(Priority Review)
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
PROfound
 
 
PARP inhibitor
prostate cancer
Q1 2017
 
 
(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
 
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
2019
2019
2019
2020
Brilinta1
HESTIA
P2Y12 receptor antagonist
prevention of vaso-occlusive crises in paediatric patients with sickle cell disease
Q1 2014
2020
2020
 
 
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
 
Farxiga3
SGLT2 inhibitor
effect of dapagliflozin on the incidence of worsening HF or cardiovascular death in patients with chronic HF
Q1 2017
2020
2020
2020
2020
Farxiga3
SGLT2 inhibitor
renal outcomes and cardiovascular mortality in patients with CKD
Q1 2017
2021
2021
N/A
2021
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
 
Approved
Launched
 
 
Bydureon weekly autoinjector
GLP-1 receptor agonist
type-2 diabetes
Q1 2013
Accepted
H2 2017
 
 
Bydureon EXSCEL
GLP-1 receptor agonist
type-2 diabetes outcomes trial
Q2 2010
H2 2017
H2 2017
 
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
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
#      
Collaboration
 
1      
Brilinta in the US and Japan; Brilique in ROW
 
2      
Kombiglyze XR in the US; Komboglyze in the EU
 
3      
Farxiga in the US; Forxiga in ROW
 
4      
Xigduo XR in the US; Xigduo in the EU
 
 
Terminations (discontinued projects: 1 January 2017 to 31 March 2017)
 
NME / Line Extension
Compound
Reason for Discontinuation
Area Under Investigation
Symbicort - breath actuated inhaler
ICS/LABA
Strategic
asthma/COPD
AZD3241
myeloperoxidase inhibitor
Safety/Efficacy
multiple system atrophy
AZD9412#
inhaled interferon beta
Strategic
asthma/COPD
 
Completed Projects / Divestitures (1 January 2017 to 31 March 2017)
 
Compound
Mechanism
Area Under Investigation
Completed/
Divested
Estimated Regulatory Submission Acceptance
US
EU
Japan
China
Tagrisso
AURA, AURA2, (AURA17 Asia regional)
EGFR inhibitor
≥2nd-line advanced EGFRm T790M NSCLC
Completed
Launched
(Breakthrough Therapy, Priority Review, Orphan drug)
Launched (Accelerated assessment)
Launched
Launched
Tagrisso
AURA3
EGFR inhibitor
≥2nd-line advanced EGFRm T790M NSCLC
Completed
Launched
 
 
Launched
 
 
Brilinta1
P2Y12 receptor antagonist
arterial thrombosis
Completed
Launched
Launched
Launched
Launched
Onglyza
SAVOR-TIMI 53
DPP-4 inhibitor
type-2 diabetes outcomes trial
Completed
Launched
Launched
 
Launched
 
 
Condensed Consolidated Statement of Comprehensive Income
 
For the quarter ended 31 March
 
2017
$m 
 
2016 
$m 
Product sales
 
4,843 
 
5,565 
Externalisation revenue
 
562 
 
550 
Total revenue
 
5,405 
 
6,115 
Cost of sales
 
(894)
 
(1,004)
Gross profit
 
4,511 
 
5,111 
Distribution costs
 
(77)
 
(76)
Research and development expense
 
(1,453)
 
(1,480)
Selling, general and administrative costs
 
(2,300)
 
(2,572)
Other operating income and expense
 
236 
 
55 
Operating profit
 
917 
 
1,038 
Finance income
 
18 
 
14 
Finance expense
 
(340)
 
(325)
Share of after tax losses in associates and joint ventures
 
(13)
 
(4)
Profit before tax
 
582 
 
723 
Taxation
 
(70)
 
(98)
Profit for the period
 
512 
 
625 
 
 
 
 
 
Other comprehensive income
 
 
 
 
Items that will not be reclassified to profit or loss
 
 
 
 
Remeasurement of the defined benefit pension liability
 
 
(191)
Tax on items that will not be reclassified to profit or loss
 
(1)
 
41 
 
 
 
(150)
Items that may be reclassified subsequently to profit or loss
 
 
 
 
Foreign exchange arising on consolidation
 
154 
 
(167)
Foreign exchange arising on designating borrowings in net investment hedges
 
100 
 
207 
Fair value movements on cash flow hedges
 
 
Fair value movements on cash flow hedges transferred to profit or loss
 
(39)
 
Fair value movements on derivatives designated in net investment hedges
 
(30)
 
(32)
Net available for sale losses taken to equity
 
(150)
 
(29)
Tax on items that may be reclassified subsequently to profit or loss
 
24 
 
10 
 
 
66 
 
(11)
Other comprehensive income for the period, net of tax
 
66 
 
(161)
Total comprehensive income for the period
 
578 
 
464 
 
 
 
 
 
Profit attributable to:
 
 
 
 
Owners of the Parent
 
537 
 
646 
Non-controlling interests
 
(25)
 
(21)
 
 
512 
 
625 
 
 
 
 
 
Total comprehensive income attributable to:
 
 
 
 
Owners of the Parent
 
603 
 
485 
Non-controlling interests
 
(25)
 
(21)
 
 
578 
 
464 
 
 
 
 
 
Basic earnings per $0.25 Ordinary Share
 
$0.42 
 
$0.51 
Diluted earnings per $0.25 Ordinary Share
 
$0.42 
 
$0.51 
Weighted average number of Ordinary Shares in issue (millions)
 
1,265 
 
1,264 
Diluted weighted average number of Ordinary Shares in issue (millions)
 
1,266 
 
1,265 
 
Condensed Consolidated Statement of Financial Position
 
 
 
 
At 31 Mar 2017
$m
 
 
At 31 Dec 2016
$m
 
Restated*
At 31 Mar 2016
$m
ASSETS
Non-current assets
 
 
 
 
 
 
Property, plant and equipment
 
6,954 
 
6,848 
 
6,560 
Goodwill
 
11,688 
 
11,658 
 
11,855 
Intangible assets
 
27,386 
 
27,586 
 
29,627 
Derivative financial instruments
 
310 
 
343 
 
419 
Investments in associates and joint ventures
 
88 
 
99 
 
104 
Other investments
 
739 
 
727 
 
500 
Other receivables
 
891 
 
901 
 
874 
Deferred tax assets
 
1,266 
 
1,102 
 
1,482 
 
 
49,322 
 
49,264 
 
51,421 
Current assets
 
 
 
 
 
 
Inventories
 
2,652 
 
2,334 
 
2,344 
Trade and other receivables
 
4,686 
 
4,573 
 
5,881 
Other investments
 
530 
 
884 
 
671 
Derivative financial instruments
 
13 
 
27 
 
Income tax receivable
 
627 
 
426 
 
452 
Cash and cash equivalents
 
3,129 
 
5,018 
 
3,428 
 
 
11,637 
 
13,262 
 
12,784 
Total assets
 
60,959 
 
62,526 
 
64,205 
LIABILITIES
Current liabilities
 
 
 
 
 
 
Interest-bearing loans and borrowings
 
(2,839)
 
(2,307)
 
(2,168)
Trade and other payables
 
(9,899)
 
(10,486)
 
(11,174)
Derivative financial instruments
 
(1)
 
(18)
 
(4)
Provisions
 
(1,044)
 
(1,065)
 
(790)
Income tax payable
 
(1,646)
 
(1,380)
 
(1,796)
 
 
(15,429)
 
(15,256)
 
(15,932)
Non-current liabilities
 
 
 
 
 
 
Interest-bearing loans and borrowings
 
(14,563)
 
(14,501)
 
(14,144)
Derivative financial instruments
 
(107)
 
(117)
 
Deferred tax liabilities
 
(4,036)
 
(3,956)
 
(4,302)
Retirement benefit obligations
 
(2,171)
 
(2,186)
 
(2,099)
Provisions
 
(378)
 
(353)
 
(461)
Other payables
 
(9,496)
 
(9,488)
 
(10,625)
 
 
(30,751)
 
(30,601)
 
(31,631)
Total liabilities
 
(46,180)
 
(45,857)
 
(47,563)
Net assets
 
14,779 
 
16,669 
 
16,642 
EQUITY
 
 
 
 
 
 
Capital and reserves attributable to equity holders of the Company
 
 
 
 
 
 
Share capital
 
316 
 
316 
 
316 
Share premium account
 
4,368 
 
4,351 
 
4,322 
Other reserves
 
2,042 
 
2,047 
 
2,028 
Retained earnings
 
6,263 
 
8,140 
 
8,075 
 
 
12,989 
 
14,854 
 
14,741 
Non-controlling interests
 
1,790 
 
1,815 
 
1,901 
Total equity
 
14,779 
 
16,669 
 
16,642 
 
*31 March comparatives have been restated to reflect an adjustment to the acquisition-accounting for ZS Pharma (as detailed in Note 25 of the AstraZeneca Annual Report and Form 20-F Information 2016, page 174) and an adjustment to the acquisition-accounting for Acerta Pharma (as detailed in Note 4 of the Full Year and Fourth Quarter 2016 Results Announcement).
 
 
 
Condensed Consolidated Statement of Cash Flows
 
 
For the quarter ended 31 March
 
2017
$m 
 
2016 
$m 
Cash flows from operating activities
 
 
 
 
Profit before tax
 
582 
 
723 
Finance income and expense
 
322 
 
311 
Share of after tax losses in associates and joint ventures
 
13 
 
Depreciation, amortisation and impairment
 
658 
 
569 
(Increase)/decrease in working capital and short-term provisions
 
(887)
 
64 
Non-cash and other movements
 
(349)
 
(88)
Cash generated from operations
 
339 
 
1,583 
Interest paid
 
(189)
 
(185)
Tax paid
 
(62)
 
(205)
Net cash inflow from operating activities
 
88 
 
1,193 
Cash flows from investing activities
 
 
 
 
Movement in short-term investments and fixed deposits
 
357 
 
33 
Purchase of property, plant and equipment
 
(286)
 
(267)
Disposal of property, plant and equipment
 
 
Purchase of intangible assets
 
(99)
 
(39)
Disposal of intangible assets
 
51 
 
Purchase of non-current asset investments
 
(18)
 
(68)
Disposal of non-current asset investments
 
 
Upfront payments on business combinations
 
 
(2,564)
Payment of contingent consideration on business combinations
 
(213)
 
(26)
Interest received
 
45 
 
42 
Net cash outflow from investing activities
 
(146)
 
(2,887)
Net cash outflow before financing activities
 
(58)
 
(1,694)
Cash flows from financing activities
 
 
 
 
Proceeds from issue of share capital
 
17 
 
18 
New long term loans
 
 
Dividends paid
 
(2,368)
 
(2,409)
Hedge contracts relating to dividend payments
 
(32)
 
Repayment of obligations under finance leases
 
(14)
 
(3)
Movement in short-term borrowings
 
352 
 
1,028 
Net cash outflow from financing activities
 
(2,042)
 
(1,361)
Net decrease in cash and cash equivalents in the period
 
(2,100)
 
(3,055)
Cash and cash equivalents at the beginning of the period
 
4,924 
 
6,051 
Exchange rate effects
 
14 
 
43 
Cash and cash equivalents at the end of the period
 
2,838 
 
3,039 
Cash and cash equivalents consists of:
 
 
 
 
Cash and cash equivalents
 
3,129 
 
3,428 
Overdrafts
 
(291)
 
(389)
 
 
2,838 
 
3,039 
 
 
 
 
 
 
 
 
Condensed Consolidated Statement of Changes in Equity
 
 
 
Sharecapital$m
 
Sharepremiumaccount$m
 
Otherreserves*$m
 
Retainedearnings$m
 
Total $m 
 
Non-controllinginterests$m
 
Totalequity$m
At 1 Jan 2016
 
316 
 
 
4,304 
 
 
2,036 
 
 
11,834 
 
 
18,490 
 
 
19 
 
 
18,509 
 
Profit for the period
 
 
 
 
 
 
 
646 
 
646 
 
(21)
 
625 
Other comprehensive income
 
 
 
 
(161)
 
(161)
 
 
(161)
Transfer to other reserves
 
 
 
(8)
 
 
 
 
Transactions with owners:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
 
 
 
 
(2,402)
 
(2,402)
 
 
(2,402)
Acerta put option
 
 
 
 
(1,825)
 
(1,825)
 
 
(1,825)
Changes in non-controlling interest
 
 
 
 
 
 
1,903 
 
1,903 
Issue of Ordinary Shares
 
 
18 
 
 
 
18 
 
 
18 
Share-based payments
 
 
 
 
(25)
 
(25)
 
 
(25)
Net movement