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 October 2019
 
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
 
INDEX TO EXHIBITS
 
 
AstraZeneca year-to-date and Q3 2019 results 
 
AstraZeneca PLC
24 October 2019 07:00 BST
 
Year-to-date and Q3 2019 results
 
Patients to benefit from further pipeline progress; sales-growth momentum driving operating leverage
 
Year-to-date Product Sales growth of 13% (17% at CER1) to $17,315m included third-quarter Product Sales of $6,132m (+16%, +18% at CER). The third quarter again saw all three therapy areas and every sales region produce encouraging performances, including:
 
-    The continued performance of new medicines2, with sales growth in the quarter of 62% (+64% at CER) to $2,707m, including new-medicine growth in Emerging Markets of 85% (90% at CER) to $539m
 
-    Sales growth by therapy area in the quarter: Oncology +46% (+48% at CER) to $2,334m, New CVRM3 +8% (+11% at CER) to $1,113m and Respiratory +15% (+18% at CER) to $1,319m
 
-    Sales growth by region in the quarter: total Emerging Markets sales grew by 25% (29% at CER) to $2,123m, with China sales growth of 35% (40% at CER) to $1,283m, ahead of longer-term trends. US sales increased by 17% to $2,025m; Europe sales continued their return to growth, increasing by 1% (4% at CER) to $1,139m; Japan sales increased by 31% (27% at CER) to $657m
 
The Company today upgrades its Product Sales guidance at CER for the year.
 
 
 
YTD 2019
Q3 2019
 
$m
% change
$m
% change
 
Actual
CER
Actual
CER
Product Sales
17,315
13
17
6,132
16
18
Collaboration Revenue
405
3
6
274
n/m
n/m
Total Revenue
17,720
13
17
6,406
20
22
Reported4 Operating Profit
2,347
2
3
757
(11)
(13)
Core5 Operating Profit
4,891
41
42
1,880
43
41
 
 
 
 
 
 
 
Reported EPS6
$0.79
(11)
(15)
$0.23
(33)
(38)
Core EPS
$2.61
39
38
$0.99
40
36
 
 
 
 
 
 
 
 
 
 
Pascal Soriot, Chief Executive Officer, commenting on the results said:
"With AstraZeneca growing at pace, our sales guidance has been upgraded for the second consecutive quarter. Another strong performance from our new medicines accompanied impressive results in our key markets, most notably in China, the US and Japan. The performance reinforces our confidence in delivering sustainable earnings growth.
 
We delivered further positive news for patients. Lynparza demonstrated its potential as a treatment for prostate cancer and as an expanded treatment for ovarian cancer. TagrissoImfinzi and PT010 also had positive data, and we delivered breakthrough data in heart failure for Farxiga.
 
We are continuing to ensure that we capture the benefits of our growth by balancing reinvesting in our business, delivering on our sustainability commitments, continuing to improve our operating leverage and cash generation."
 
Financial summary
 
-    Product Sales increased by 13% in the year to date (17% at CER) to $17,315m. The performance in the quarter was supported by favourable inventory and gross-to-net movements which are not expected in the final quarter of the year
 
-    The Reported Gross Profit Margin increased by one percentage point in the year to date to 80%, partly reflecting the mix of sales; the Core Gross Profit Margin increased by one percentage point in the year to date to 81%
 
-    Reported Operating Expense increased by 11% in the year to date (15% at CER) to $12,871m and represented 73% of Total Revenue (YTD 2018: 74%)Core Operating Expense increased by 3% (6% at CER) to $10,537m and represented 59% of Total Revenue (YTD 2018: 65%), demonstrating a significant improvement in operating leverage
 
-    Reported R&D Expense increased by 1% in the year to date (5% at CER) to $3,968m. Core R&D Expense increased by 1% (4% at CER) to $3,826m, partly a result of investment in the development of the potential new oncology medicine, trastuzumab deruxtecan
 
-    Reported SG&A Expense increased by 16% (20% at CER) in the year to date to $8,656m, due to an increase in legal provisions and revaluation movements on acquisition-related liabilities in the year to date; Core SG&A Expense increased by 4% (8% at CER) to $6,464m, primarily reflecting growth in China, as well as ongoing additional support for new medicines. An update on legal matters and subsequent events is disclosed in Note 5 and Note 6
 
-    Reported Other Operating Income and Expense declined by 32% in the year to date (31% at CER) to $1,041m; Core Other Operating Income and Expense declined by 7% (6% at CER) to $1,060m
 
-    The Reported Operating Profit Margin declined in the year to date by one percentage point (two at CER) to 13%; the Core Operating Profit Margin increased by five percentage points to 28%
 
-    The Reported Tax Rate in the year to date was 27% (YTD 2018: 18%); the Core Tax Rate was 22% (YTD 2018: 19%). The tax rates in the year to date reflected the geographical mix of profits and the impact of collaboration and divestment activity
 
-    Reported EPS of $0.79 in the year to date, based on a weighted-average number of shares of 1,297m, represented a decline of 11% (15% at CER); Core EPS increased by 39% (38% at CER) to $2.61. In April 2019, the Company completed an issue of 44,386,214 new ordinary shares of $0.25 each at a price of £60.50 per share, resulting in an increase in share capital of $11m and an increase in share premium of $3,479m, net of transaction costs of $22m
 
-    The difference between the Reported and Core EPS year-on-year performance partly reflected the impact of a favourable $346m legal settlement in YTD 2018 that was recognised as income in Reported Other Operating Income and Expense. It was also a result of the aforementioned increase in legal provisions and revaluation movements on acquisition-related liabilities in 2019
 
-    The Company today upgrades its Product Sales guidance at CER for the year. Product Sales are now expected to increase by a low to mid-teens percentage; the prior guidance was for a low double-digit percentage increase
 
Commercial summary
 
Oncology
Sales growth of 50% in the year to date (54% at CER) to $6,393m, including:
 
-    Tagrisso sales of $2,305m, representing growth of 82% in the year to date (86% at CER). The performance included growth in Emerging Markets of 108% (120% at CER) to $553m that partly reflected the early-2019 inclusion of Tagrisso as a 2nd-line treatment for EGFR7-mutated (EGFRm) NSCLC8 on the China National Reimbursement List (NRDL). Tagrisso is now approved as a 1st-line treatment in most major markets
 
-    Imfinzi sales of $1,045m, representing growth of 182% (184% at CER). Commercial execution and favourable reimbursement decisions supported sales growth outside of the US. Europe sales increased significantly to $115m (YTD 2018: $9m), accompanying encouraging Japan sales of $149m (YTD 2018: $9m)
 
-    Lynparza sales of $847m, representing growth of 93% (98% at CER). The performance included growth in the US of 86% to $432m and Emerging Markets of 205% (227% at CER) to $101m as the medicine consolidated its leadership position in the poly ADP ribose polymerase (PARP)-inhibitor class    
 
-    The performance from more-mature Oncology medicines in the year to date included a decline in Faslodex sales of 4% (1% at CER) to $726m and a 16% decline in Iressa sales (11% at CER) to $343m. The Company anticipates continued declines for both medicines, partly reflecting generic Faslodex competition in the US and the pricing impact on Iressa from centralised procurement in China and the success of Tagrisso; both medicines saw significant declines in the third quarter
 
-    Oncology sales growth in Emerging Markets of 42% (51% at CER) to $1,665m
 
New CVRM
Sales growth of 11% in the year to date (14% at CER) to $3,207m, including:
 
-    Brilinta sales of $1,153m, representing growth of 22% (26% at CER). The performance was bolstered by results in Emerging Markets, where sales grew by 50% in the year to date (59% at CER) to $348m. Patient uptake continued in the treatment of acute coronary syndrome and high-risk post-myocardial infarction
 
-    Farxiga sales of $1,124m, with growth of 13% (17% at CER), ahead of the impact of label updates to reflect results from the DECLARE CV outcomes trial (CVOT). The level of sales growth in the US was adversely impacted by gross-to-net adjustments; underlying demand remained strong
 
-    Bydureon sales of $410m, a decline of 8% (7% at CER), partly driven by the impact of production constraints in the first half for the new Bydureon BCise device and declining volumes for the dual-chamber pen
 
-    New CVRM sales growth in Emerging Markets of 37% (46% at CER) to $835m
 
Respiratory
Sales growth of 9% in the year to date (13% at CER) to $3,854m, including:
 
-    A Symbicort sales decline of 7% (4% at CER) to $1,783m, reflecting continued pricing pressure and the impact of managed-market rebates in the US. This was partially offset by Emerging Markets growth of 10% (18% at CER) to $401m
 
-    Pulmicort sales growth of 17% (23% at CER) to $1,053m; the majority of Pulmicort sales were in Emerging Markets. Q3 2019 global sales increased by 28% (31% at CER) to $337m
 
-    Fasenra sales of $498m, representing growth of 189% (193% at CER). Fasenra leads the medicine class for the treatment of severe eosinophilic asthma by new patient share in a number of key markets
 
-    Respiratory sales growth in Emerging Markets of 24% (31% at CER) to $1,419m
 
Emerging Markets
As the Company's largest region, at 35% of total Product Sales, Emerging Markets sales increased by 19% in the year to date (26% at CER) to $6,074m, including:
 
-    A China sales increase of 30% (37% at CER) to $3,691m. Highlights included: 
-     Oncology sales growth of 58% (67% at CER) to $1,023m
-     New CVRM growth of 78% (88% at CER) to $359m
 
-    An ex-China sales increase of 5% (12% at CER) to $2,382m (Q3 2019: $839m, +12%, +15% at CER). All regions were in CER sales growth in the year to date, including: (ex-China) Asia-Pacific, Middle East and Africa, Brazil and Russia
 
Sustainability summary
In the year to date, AstraZeneca was recognised as a global sustainability leader:
 
-    The Company achieved fourth position overall in the pharmaceutical industry in the 2019 Dow Jones Sustainability Indices (DJSI). AstraZeneca maintained its 2018 overall score and achieved a perfect score of 100 in the areas of environmental reporting, labour-practice indicators, social reporting and health-outcome contribution. This marked the 18th time that AstraZeneca was included in the indices
 
-    The Company was again named as a member of the FTSE4Good Index Series, ranking in the 94th percentile of the healthcare industry, with perfect scores in climate change, anti-corruption, corporate governance and customer responsibility
 
Recent developments and progress against the Company's sustainability priorities are reported below:
 
-    Access to healthcare: the Company celebrated the fifth anniversary of its Healthy Heart Africa (HHA) programme, conducting over 12 million blood-pressure screenings and identifying over two million elevated readings since its launch in 2014, working with collaborators across Kenya, Ethiopia, Tanzania and Ghana
 
-    Environmental protection: AstraZeneca participated in Climate Week, taking part in events such as The Climate Group's 'Step Up: The Business Case for Greater Government Ambition' panel, as the first pharmaceutical-company member of the global EV100 initiative
 
-    Ethics and transparency: the Company launched an employee campaign, 'Speak Up - Your Voice Matters' using internal social-media channels. The campaign encouraged honest and open dialogue in support of a healthy business culture, where people feel able to make their voices heard
 
A more extensive Sustainability update is provided later in this announcement.
 
Pipeline highlights
The following table highlights significant developments in the late-stage pipeline since the prior results announcement:
 
 
Regulatory approvals
-     Tagrisso - NSCLC (1st line, EGFRm): regulatory approval (CN)
-     Farxiga/Forxiga - T2D10 CVOT: regulatory approval (US, EU)
-     roxadustat - anaemia of CKD11, NDD12: regulatory approval (CN)
-     Fasenra Pen - severe eosinophilic asthma; auto-injector and self-administration: regulatory approval (US)
Regulatory submissions and/or acceptances
-     Lynparza - pancreatic cancer (1st line, BRCAm): regulatory submission acceptance (US, EU)
-     Calquence - CLL13: regulatory submission under review (US)
-     trastuzumab deruxtecan - advanced/refractory, metastatic breast cancer (HER214-positive): regulatory submission acceptance (US, JP); Priority Review designation (US)
-     Brilinta/Brilique - CAD15/T2D CVOT: regulatory submission acceptance (US, EU)
Major
Phase III data readouts or other significant developments
-     Tagrisso - NSCLC (1st line, EGFRm): met Phase III key secondary endpoint (OS16)
-     Imfinzi + treme - NSCLC (1st line) (NEPTUNE): did not meet Phase III primary endpoint
-     Lynparza - ovarian cancer (1st line) (PAOLA-1): met Phase III primary endpoint
-     Lynparza - prostate cancer (2nd line, castration-resistant): met Phase III primary endpoint
-     Calquence - CLL: Breakthrough Therapy Designation (US)
-     Farxiga - HF17 CVOT: met Phase III primary endpoint; Fast Track designation (US)
-     Farxiga - CKD: Fast Track designation (US)
-     Qtrilmet - T2D: positive opinion (EU)
-     PT010 - COPD18 (ETHOS): met Phase III primary endpoint
-     PT010 - COPD: complete response letter (US)
-     Fasenra - eosinophilic oesophagitis: Orphan Drug Designation (US)
-     anifrolumab - lupus (SLE19) (TULIP 2): met Phase III primary endpoint
 
Guidance and financial priorities
All measures in this section are at CER and Company guidance is on Product Sales and Core EPS only.
 
All guidance and indications provided assume that the UK's anticipated exit from the EU, even in the event of a no-deal exit, proceeds in an orderly manner such that the impact is within the range expected, following the Company's extensive preparations for such an eventuality.
 
AstraZeneca anticipates strong and sustainable long-term Product Sales growth to be accompanied by operating leverage, leading to an improvement in profitability and cash generation.
 
Guidance: Product Sales
Reflecting the performance over the year to date, guidance for Product Sales in FY 2019 has been upgraded. Product Sales are now expected to increase by a low to mid-teens percentage; the prior guidance was for a low double-digit percentage increase.
 
Guidance: Core EPS
As a key part of its long-term growth strategy, the Company is committed to focusing on appropriate cash-generating and value-accretive collaboration activities that reflect the ongoing productivity of the pipeline. Separately, AstraZeneca will, from time to time, also focus its medicine portfolio through divestments.
 
AstraZeneca reiterates its Core EPS guidance of $3.50 to $3.70 over the full year. This guidance includes the anticipation of a significantly lower sum of Collaboration Revenue and Core Other Operating Income and Expense versus the prior year. It also reflects the opportunities being taken to reinvest in the business, particularly in China and in the Company's new medicines, in order to strengthen AstraZeneca's long-term growth profile.
 
Variations in performance between quarters can be expected to continue. The Company is unable to provide guidance and indications on a Reported basis because the Company cannot reliably forecast material elements of the Reported 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.
 
Operating leverage
The Company expects to deliver significant operating leverage over the long term; encouraging progress was made in the year to date. The Reported Operating Profit Margin declined in the year to date by one percentage point (two at CER) to 13%; the Core Operating Profit Margin, however, increased by five percentage points to 28%. Core Operating Profit in FY 2019 is anticipated to increase ahead of Product Sales.
 
Cash generation
In FY 2019, the cash performance is expected to include a number of payments relating to prior business-development transactions; the majority of the value of these payments in the year was settled in the first half. AstraZeneca generated a Net Cash Inflow from Operating Activities of $1,594m in the year to date, compared to an inflow of $394m in YTD 2018.
 
Other indications
The Company also provides other indications for FY 2019:
 
-    Capital expenditure is expected to be broadly stable and restructuring expenses are targeted to reduce versus the prior year
 
-    The Core Tax Rate range has been narrowed to 20-22% for FY 2019 from the previously anticipated range of 18-22% (FY 2018: 11%). Variations in the Core Tax Rate between quarters can be expected to continue
 
Currency impact
If foreign-exchange rates were to remain at the average of rates seen in the nine months to 30 September 2019, it is anticipated that there would be a low single-digit percentage adverse impact on Product Sales and Core EPS. In addition, the Company's foreign-exchange rate sensitivity analysis is contained within the operating and financial review.
 
Footnotes
The following notes refer to pages 1-6:
 
1.   Constant exchange rates. These are financial measures that are not accounted for according to generally-accepted accounting principles (GAAP) because they remove the effects of currency movements from Reported results.
 
2.   TagrissoImfinziLynparzaCalquenceFarxigaBrilintaLokelma, roxadustat, FasenraBevespi and Breztri. These new medicines are pillars in the main therapy areas and are important platforms for future growth.
 
3.   New Cardiovascular (CV), Renal and Metabolism, incorporating Diabetes medicines, Brilinta, Lokelma and roxadustat.
 
4.   Reported financial measures are the financial results presented in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board and adopted by the EU.
 
5.   Core financial measures. These are non-GAAP financial measures because, unlike Reported performance, they cannot be derived directly from the information in the Company Financial Statements. See the operating and financial review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.
 
6.   Earnings per share.
 
7.   Epidermal growth factor receptor.
 
8.   Non-small cell lung cancer.
 
9.   Breast cancer susceptibility genes 1/2.
 
10.  Type-2 diabetes.
 
11.  Chronic kidney disease.
 
12.  Non-dialysis dependent.
 
13.  Chronic lymphocytic leukaemia.
 
14.  Human epidermal growth factor receptor 2.
 
15.  Coronary artery disease.
 
16.  Overall survival.
 
17.  Heart failure.
 
18.  Chronic obstructive pulmonary disease.
 
19.  Systemic lupus erythematosus.
 
Pipeline: anticipated 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 and sustainable results from the pipeline.
 
 
Timing
News flow
Q4 2019
-      Imfinzi - unresectable, Stage III NSCLC (PACIFIC): regulatory decision (CN)
-      Imfinzi +/- treme - NSCLC (1st line) (POSEIDON): data readout, regulatory submission
-      Imfinzi +/- treme - SCLC[20]: regulatory submission
-      Lynparza - ovarian cancer (1st line, BRCAm) (SOLO-1): regulatory decision (CN)
-      Lynparza - pancreatic cancer (1st line, BRCAm): regulatory decision (US)
-      selumetinib - NF1[21]: regulatory submission (US)
 
-      roxadustat - anaemia of CKD: regulatory submission (US)
 
-      Symbicort - mild asthma: regulatory submission (CN)
-      PT010 - COPD: regulatory decision (CN)
H1 2020
-      Imfinzi +/- treme - head & neck cancer (1st line): data readout, regulatory submission
-      Imfinzi +/- treme - bladder cancer (1st line) (DANUBE): data readout, regulatory submission
-      Lynparza - breast cancer (BRCAm): regulatory decision (CN)
-      Lynparza - ovarian cancer (1st line) (PAOLA-1): regulatory submission
-      Lynparza - prostate cancer (2nd line, castration-resistant): regulatory submission
-      Lynparza + cediranib - ovarian cancer (2nd line): data readout
-      trastuzumab deruxtecan - advanced/refractory, metastatic breast cancer (HER2-positive): regulatory decision (US, JP)
-      trastuzumab deruxtecan - advanced/refractory, metastatic gastric cancer (HER2-positive): data readout, regulatory submission (JP)
-      Calquence - CLL: regulatory decision (US)
-      Calquence - CLL: regulatory submission (EU, JP)
-      selumetinib - NF1: regulatory submission (EU)
 
-      Forxiga - T2D CVOT: regulatory decision (CN)
-      Farxiga - HF CVOT: regulatory submission
-      Brilinta - stroke (THALES): data readout
-      Lokelma - hyperkalaemia: regulatory decision (JP, CN)
 
-      Symbicort - mild asthma: regulatory submission (EU)
-      Bevespi - COPD: regulatory decision (CN)
-      PT010 - COPD: regulatory decision (US, EU)
H2 2020
-      Imfinzi - neo-adjuvant NSCLC: data readout
-      Imfinzi - unresectable, Stage III NSCLC (PACIFIC-2): data readout
-      Imfinzi +/- treme - liver cancer (1st line): data readout
-      Lynparza - ovarian cancer (3rd line, BRCAm): regulatory submission (US)
-      Lynparza - pancreatic cancer (1st line, BRCAm): regulatory decision (EU)
 
-      Brilinta - stroke (THALES): regulatory submission
-      Epanova - hypertriglyceridaemia CVOT: data readout
-      roxadustat - anaemia of myelodysplastic syndrome: data readout
 
-      Fasenra - nasal polyposis: data readout
-      PT027 - asthma: data readout
-      tezepelumab - severe asthma: data readout
-      anifrolumab - lupus (SLE): regulatory submission
2021
-      Imfinzi - neo-adjuvant NSCLC: regulatory submission
-      Imfinzi - adjuvant NSCLC: data readout, regulatory submission
-      Imfinzi - unresectable, Stage III NSCLC (PACIFIC-2): regulatory submission
-      Imfinzi - unresectable, Stage III NSCLC (PACIFIC-5): data readout
-      Imfinzi - NSCLC (1st line) (PEARL): data readout, regulatory submission
-      Imfinzi +/- treme - limited-disease stage SCLC: data readout
-      Imfinzi +/- treme - bladder cancer (1st line) (NILE): data readout, regulatory submission
-      Imfinzi +/- treme - liver cancer (1st line): regulatory submission
-      Imfinzi - liver cancer (locoregional): data readout, regulatory submission
-      Imfinzi - biliary tract cancer: data readout
-      Lynparza - adjuvant breast cancer: data readout, regulatory submission
-      Lynparza - prostate cancer (1st line, castration-resistant): data readout, regulatory submission
-      Lynparza + cediranib - ovarian cancer (2nd line): regulatory submission
-      trastuzumab deruxtecan - advanced/refractory, metastatic breast cancer (HER2-positive, 3rd line+): data readout, regulatory submission
-      trastuzumab deruxtecan - advanced/refractory, metastatic breast cancer (HER2-positive, 2nd line): data readout
-      trastuzumab deruxtecan - advanced/refractory, metastatic breast cancer (HER2-low): data readout
 
-      Farxiga - chronic kidney disease: data readout, regulatory submission
-      Epanova - hypertriglyceridaemia CVOT: regulatory submission
-      roxadustat - anaemia of myelodysplastic syndrome: regulatory submission
 
-      Fasenra - nasal polyposis: regulatory submission
-      PT027 - asthma: regulatory submission
-      tezepelumab - severe asthma: regulatory submission
 
Conference call
A conference call and webcast for investors and analysts will begin at 12pm UK time today. Details can be accessed via astrazeneca.com.
 
Reporting calendar
The Company intends to publish its full year and fourth quarter financial results on 14 February 2020.
 
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 therapy areas - Oncology, CVRM and Respiratory. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information, please visit astrazeneca.com and follow the Company on Twitter @AstraZeneca.
 
 
Investor Relations
 
 
Thomas Kudsk Larsen
 
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Henry Wheeler
Oncology
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Christer Gruvris
BioPharmaceuticals (CV, Metabolism)
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BioPharmaceuticals (Renal), ESG
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BioPharmaceuticals (Respiratory), other medicines
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Finance, fixed income
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Corporate access, retail investors
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Gonzalo Viña
 
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Rob Skelding
Oncology
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Rebecca Einhorn
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BioPharmaceuticals
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Other
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Christina Malmberg Hägerstrand
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US
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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), unless stated otherwise. The performance shown in this announcement covers the nine-month period to 30 September 2019 (the year to date or YTD 2019) and three-month period to 30 September 2019 (the quarter or Q3 2019) compared to the nine-month period to 30 September 2018 (YTD 2018) and three-month period to 30 September 2018 (Q3 2018) respectively, unless stated otherwise.
 
Core financial measures, EBITDA, Net Debt, Initial Collaboration Revenue and Ongoing Collaboration Revenue are non-GAAP financial measures because they cannot be derived directly from the Company Condensed Consolidated Financial Statements. Management believes that these non-GAAP financial measures, when provided in combination with Reported results, will provide investors and analysts with helpful supplementary information to understand better the financial performance and position of the Company on a comparable basis from period to period. These non-GAAP financial measures are not a substitute for, or superior to, financial measures 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 restructuring programmes, which includes charges that relate to the impact of restructuring programmes on capitalised IT assets
 
-    Other specified items, principally comprising acquisition-related costs, which include fair-value adjustments and the imputed finance charge relating to contingent consideration on business combinations and legal settlements
 
Details on the nature of Core financial measures are provided on page 76 of the Annual Report and Form 20-F Information 2018. Reference should be made to the reconciliation of Core to Reported financial information and the Reconciliation of Reported to Core financial measures table included in the financial performance section of this announcement.
 
EBITDA is defined as Reported Profit Before Tax after adding back Net Finance Expense, results from Joint Ventures and Associates and charges for Depreciation, Amortisation and Impairment. Reference should be made to the Reconciliation of Reported Profit Before Tax to EBITDA included in the Financial Performance section of this announcement.
 
Net Debt is defined as interest-bearing loans and borrowings and lease liabilities, net of cash and cash equivalents, other investments, and net derivative financial instruments. Reference should be made to Note 3 'Net Debt' included in the Notes to the Interim Financial Statements section of this announcement.
 
Ongoing Collaboration Revenue is defined as Collaboration Revenue excluding Initial Collaboration Revenue (which is defined as Collaboration Revenue that is recognised at the date of completion of an agreement or transaction, in respect of upfront consideration). Ongoing Collaboration Revenue comprises, among other items, royalties, milestone revenue and profit-sharing income. Reference should be made to the Collaboration Revenue table in this operating and financial review.
 
The Company strongly encourages investors and analysts not to rely on any single financial measure, but to review AstraZeneca's financial statements, including the Notes thereto and other available Company reports, carefully and in their entirety.
 
Due to rounding, the sum of a number of dollar values and percentages may not agree to totals.
 
Table 1: Total Revenue
 
 
 
YTD 2019
Q3 2019
 
$m
% change
$m
% change
 
Actual
CER
Actual
CER
Product Sales
17,315
13
17
6,132
16
18
Collaboration Revenue
405
3
6
274
n/m
n/m
 
 
 
 
 
 
 
Total Revenue
17,720
13
17
6,406
20
22
 
 
 
 
 
 
 
 
 
Table 2: Product Sales
 
 
YTD 2019
Q3 2019
 
$m
% of total
% change
$m
% of total
% change
 
Actual
CER
Actual
CER
Oncology
6,393
37
50
54
2,334
38
46
48
 
 
 
 
 
 
 
 
 
BioPharmaceuticals
7,061
41
9
13
2,432
40
12
14
New CVRM
3,207
19
11
14
1,113
18
8
11
Respiratory
3,854
22
9
13
1,319
22
15
18
 
 
 
 
 
 
 
 
 
Other medicines
3,861
22
(16)
(12)
1,366
22
(9)
(7)
 
 
 
 
 
 
 
 
 
Total
17,315
100
13
17
6,132
100
16
18
 
 
 
 
 
 
 
 
 
 
 
 
Specialty-care medicines comprise all Oncology medicines, Brilinta and Fasenra. At 46% of Product Sales (YTD 2018: 35%), specialty-care medicine sales increased by 50% in the year to date (54% at CER) to $8,054m.
 
Table 3: Top-ten medicines by Product Sales
 
Medicine
Therapy area
YTD 2019
Q3 2019
$m
% of total
% change
$m
% of total
% change
Actual
CER
Actual
CER
Tagrisso
Oncology
2,305
13
82
86
891
15
76
78
Symbicort
Respiratory
1,783
10
(7)
(4)
613
10
(1)
1
Brilinta
CVRM
1,153
7
22
26
416
7
24
27
Nexium
Other medicines
1,130
7
(14)
(11)
374
6
(11)
(10)
Farxiga
CVRM
1,124
6
13
17
398
6
12
14
Pulmicort
Respiratory
1,053
6
17
23
337
6
28
31
Imfinzi
Oncology
1,045
6
n/m
n/m
412
7
n/m
n/m
Crestor
CVRM
982
6
(9)
(5)
337
6
(4)
(2)
Lynparza
Oncology
847
5
93
98
327
5
94
96
Faslodex
Oncology
726
4
(4)
(1)
205
3
(20)
(19)
Total
 
12,149
70
22
26
4,311
70
24
26
 
Table 4: Collaboration Revenue
 
 
YTD 2019
Q3 2019
 
 
 
% change
 
 
% change
 
$m
% of total
Actual
CER
$m
% of total
Actual
CER
Initial Collaboration Revenue
-
-
-
-
-
-
-
-
 
 
 
 
 
 
 
 
 
Ongoing Collaboration Revenue
405
100
45
49
274
100
n/m
n/m
Royalties
45
11
17
23
13
5
(27)
(25)
Milestones/other
360
89
49
53
261
95
n/m
n/m
 
 
 
 
 
 
 
 
 
Total
405
100
3
6
274
100
n/m
n/m
 
 
 
 
 
 
 
 
 
 
 
 
YTD 2019 Ongoing Collaboration Revenue included $260m of Lynparza milestone receipts as part of a collaboration with MSD[22]. Of this, $200m was received in the quarter.
 
Product Sales

 
The performance of new and legacy medicines is shown below, with a geographical split shown in Notes 7 & 8.
 
Table 5: YTD 2019 therapy area and medicine performance
 
Therapy area
Medicine
YTD 2019
$m
% of
total
% change
Actual
CER
Oncology
Tagrisso
2,305
13
82
86
Imfinzi
1,045
6
n/m
n/m
Lynparza
847
5
93
98
Iressa
343
2
(16)
(11)
Calquence
108
1
n/m
n/m
Legacy:
 
 
 
 
Faslodex
726
4
(4)
(1)
Zoladex
617
4
8
15
Arimidex
174
1
5
10
Casodex
157
1
2
6
Others
68
-
(26)
(24)
Total Oncology
6,393
37
50
54
BioPharmaceuticals: CVRM
Farxiga
1,124
6
13
17
Brilinta
1,153
7
22
26
Bydureon
410
2
(8)
(7)
Onglyza
396
2
-
4
Byetta
83
-
(12)
(10)
Other diabetes
36
-
33
35
Lokelma
6
-
n/m
n/m
Legacy:
 
 
 
 
Crestor
982
6
(9)
(5)
Seloken/Toprol-XL
570
3
3
10
Atacand
161
1
(20)
(16)
Others
199
1
(13)
(9)
BioPharmaceuticals: total CVRM
5,121
30
3
7
BioPharmaceuticals: Respiratory
Symbicort
1,783
10
(7)
(4)
Pulmicort
1,053
6
17
23
Fasenra
498
3
n/m
n/m
Daliresp/Daxas
157
1
16
17
Duaklir
55
-
(24)
(20)
Tudorza/Eklira
50
-
(45)
(42)
Bevespi
30
-
32
32
Breztri
1
-
n/m
n/m
Others
226
1
(3)
2
BioPharmaceuticals: total Respiratory
3,854
22
9
13
Other medicines
Nexium
1,130
7
(14)
(11)
Synagis
295
2
(29)
(29)
Losec/Prilosec
217
1
3
8
Seroquel XR/IR
151
1
(51)
(49)
Movantik/Moventig
72
-
(15)
(15)
Others
83
-
(54)
(48)
Total other medicines
1,948
11
(22)
(20)
 
Total Product Sales
17,315
100
13
17
 
 
Table 6: Q3 2019 therapy area and medicine performance
 
Therapy area
Medicine
Q3 2019
$m
% of
total
% change
Actual
CER
Oncology
Tagrisso
891
15
76
78
Imfinzi
412
7
n/m
n/m
Lynparza
327
5
94
96
Iressa
91
1
(31)
(29)
Calquence
44
1
n/m
n/m
Legacy:
 
 
 
 
Faslodex
205
3
(20)
(19)
Zoladex
226
4
17
21
Arimidex
63
1
15
17
Casodex
52
1
3
5
Others
20
-
(27)
(26)
Total Oncology
2,334
38
46
48
BioPharmaceuticals: CVRM
Farxiga
398
6
12
14
Brilinta
416
7
24
27
Onglyza
127
2
(9)
(7)
Bydureon
127
2
(16)
(16)
Byetta
28
-
(19)
(18)
Other diabetes
14
-
38
44
Lokelma
4
-
n/m
n/m
Legacy:
 
 
 
 
Crestor
337
6
(4)
(2)
Seloken/Toprol-XL
177
3
(1)
3
Atacand
55
1
(15)
(11)
Others
65
1
(8)
(6)
BioPharmaceuticals: total CVRM
1,749
29
3
6
BioPharmaceuticals: Respiratory
Symbicort
613
10
(1)
1
Pulmicort
337
6
28
31
Fasenra
202
3
n/m
n/m
Daliresp/Daxas
53
1
2
3
Duaklir
18
-
(21)
(19)
Tudorza/Eklira
17
-
(4)
-
Bevespi
10
-
4
4
Breztri
1
-
n/m
n/m
Others
67
1
(5)
-
BioPharmaceuticals: total Respiratory
1,319
22
15
18
Other medicines
Nexium
374
6
(11)
(10)
Synagis
146
2
(11)
(11)
Losec/Prilosec
73
1
10
13
Seroquel XR/IR
82
1
5
6
Movantik/Moventig
25
-
(22)
(23)
Others
31
1
(55)
(59)
Total other medicines
731
12
(12)
(11)
 
Total Product Sales
6,132
100
16
18
 
Product Sales summary

 
Oncology
Product Sales of $6,393m in the year to date; an increase of 50% (54% at CER). Oncology Product Sales represented 37% of total Product Sales, up from 28% in the first nine months of 2018.
 
Oncology: lung cancer
 
Tagrisso
Tagrisso has been approved and launched in 87 countries, including the US, China, in Europe and Japan for the 2nd-line treatment of patients with Stage IV EGFR T790M[23]-mutated NSCLC. Tagrisso has also been approved in 78 countries, including the US, China, in Europe and Japan for the 1st-line treatment of patients with EGFRm NSCLC; a number of additional regulatory reviews are underway.
 
Product Sales in the year to date of $2,305m represented growth of 82% (86% at CER), partly driven by regulatory approvals and reimbursements in the 1st-line setting. Continued growth was also delivered in the 2nd-line indication in other countries, including in Europe and Emerging Markets.
 
Sales in the US increased by 57% in the year to date to $909m. With a high penetration rate, Tagrisso is now established as the standard of care (SoC) in the 1st-line setting, following regulatory approval in 2018. There was a 17% sequential quarterly increase in US sales of Tagrisso in Q3 2019, reflecting continued underlying demand growth; sales were, however, flattered in the quarter by the impact of gross-to-net and stocking adjustments.
 
In Emerging Markets, Tagrisso sales increased by 108% in the year to date (120% at CER) to $553m, with notable growth in China, after the medicine was added to the NRDL with effect from January 2019 in the 2nd-line setting; it also received 1st-line regulatory approval in China during the period.
 
Sales of Tagrisso in Japan increased by 145% in the year to date to $468m, reflecting the increasing use of Tagrissoas a 1st-line treatment; the medicine has reached a very high penetration rate in Japan. The Asia-Pacific region has a relatively high prevalence of lung-cancer patients with an EGFR mutation; at c.30-40% of the total, this contrasts with c.10-15% in the Western Hemisphere.
 
In Europe, sales of $337m in the year to date represented an increase of 52% (61% at CER), driven by emerging use in the 1st-line setting as more countries granted reimbursement, as well as continued strong levels of demand in the 2nd-line setting.
 
Imfinzi
Imfinzi is approved in 53 countries, including the US, in Europe and Japan for the treatment of patients with unresectable, Stage III NSCLC whose disease has not progressed following platinum-based chemoradiation therapy (CRT). It is also approved for the 2nd-line treatment of patients with locally-advanced or metastatic urothelial carcinoma (bladder cancer) in 11 countries, including the US.
 
Global Product Sales of Imfinzi increased by 182% in the year to date (184% at CER) to $1,045m, of which $759m were in the US, almost entirely for the treatment of unresectable, Stage III NSCLC; sales in the US increased by 118% in the year to date.
 
In Japan, sales of $149m (YTD 2018: $9m) reflected encouraging levels of demand, supported by higher CRT and treatment rates. Sales in Europe of $115m (YTD 2018: $9m) followed recent regulatory approvals and launches; additional regulatory and reimbursement decisions are expected in due course.
 
Iressa
Product Sales in the year to date of $343m; a decline of 16% (11% at CER).
 
Emerging Markets sales were stable in the year to date (up by 6% at CER) to $227m; Iressa entered the NRDL in China in 2017 and remains within the China centralised-procurement programme. Given the growing use of Tagrisso, sales of Iressa declined by 31% to $14m in the US and by 29% (24% at CER) to $61m in Europe. Japan sales amounted to $37m, reflecting a decline of 45%.
 
Oncology: Lynparza
By the end of the period, Lynparza was approved in 65 countries for the treatment of ovarian cancer. Launches for the treatment of metastatic breast cancer took place in the US and Japan in 2018 and regulatory approval was granted in the EU in April 2019. Lynparza has now been approved in 44 countries for the treatment of metastatic breast cancer.
 
Product Sales of Lynparza amounted to $847m in the year to date, an increase of 93% (98% at CER). The strong performance was geographically spread, with launches continuing in Emerging Markets and the Established Rest of World region (RoW). Ongoing MSD co-promotion efforts also contributed to sales.
 
US sales increased by 86% to $432m, driven by the launch in the 1st-line BRCAm ovarian cancer indication at the end of 2018 and increased demand that reflected continued growth in the treatment with Lynparza of patients suffering from ovarian or breast cancer. Lynparza remained the leading medicine in the US in the PARP-inhibitor class, as measured by total prescription volumes in both ovarian and breast cancer.
 
Sales in Europe increased by 52% (61% at CER) to $208m, driven by increasing levels of reimbursement and BRCA-testing rates, as well as the recent 1st-line ovarian- and breast-indication launches. The Company continues to implement a number of launches in the broad, 2nd-line, maintenance ovarian-cancer indication, regardless of BRCAm status.
 
Following the initial launch in April 2018, and the subsequent breast- and 1st-line ovarian-cancer launches in 2019, Japan sales of Lynparza amounted to $91m in the year to date, representing growth of 262% (263% at CER). Emerging Markets sales of $101m, up by 205% (227% at CER), reflected the regulatory approval of Lynparza as a 2nd-line maintenance treatment of patients with ovarian cancer by the China National Medical Products Administration (NMPA), resulting in the subsequent launch of Lynparza in China, the first PARP inhibitor to be approved in the country.
 
Oncology: haematology and other medicines
 
Calquence
Product Sales in the year to date of $108m; an increase of 185%. The overwhelming majority of sales were in the US.
 
Calquence was approved and launched in the US in October 2017. The medicine delivered a promising performance in the year to date, with an increasing number of CLL patients now treated, following compendia inclusion in the National Comprehensive Cancer Network guidelines as Category 1 for relapsed/refractory CLL.
 
Legacy: Faslodex
Product Sales in the year to date of $726m; a decline of 4% (1% at CER).
 
Emerging Markets sales of Faslodex increased by 31% in the year to date (41% at CER) to $145m. US sales declined by 21% to $311m, reflecting the recent launch of multiple generic Faslodex medicines; in Q3 2019, Faslodex sales in the US declined by 55% to $60m. In Europe, where generic competitor medicines are also available, sales in the year to date declined by 2% (up by 4% at CER) to $168m, while in Japan, sales increased by 24% to $97m.
 
Legacy: Zoladex
Product Sales in the year to date of $617m; an increase of 8% (15% at CER).
 
Emerging Markets sales of Zoladex increased by 21% (30% at CER) year to date to $380m. Sales in Europe increased by 1% (7% at CER) to $100m. In the Established RoW region, sales declined by 13% (11% at CER) to $133m, driven by the effects of increased competition.
 
BioPharmaceuticals: CVRM
Total CVRM sales, which include Crestor and other legacy medicines, increased by 3% in the year to date (7% at CER) to $5,121m and represented 30% of total Product Sales (YTD 2018: 32%).
 
New CVRM sales increased by 11% in the year to date (14% at CER) to $3,207m, reflecting strong performances from Farxiga and Brilinta. New CVRM sales represented 19% of Product Sales in the year to date (YTD 2018: 19%).
 
 
CVRM: Diabetes
 
Farxiga
Product Sales of $1,124m in the year to date; an increase of 13% (17% at CER).
 
Emerging Markets sales increased by 40% (50% at CER) to $339m, fuelled by growth in ex-China Emerging Markets. US sales declined by 6% to $396m, impacted by changes in formulary access for competitor medicines. AstraZeneca was granted a label update in the US in Q4 2019 to reflect results from the DECLARE CVOT. The level of sales growth in the US in the year to date was, however, adversely impacted by gross-to-net adjustments; underlying demand remained strong.
 
Sales in Europe increased by 18% (26% at CER) to $273m. In Japan, sales to the collaborator, Ono Pharmaceutical Co., Ltd, which records in-market sales, increased by 32% (31% at CER) to $61m.
 
Onglyza
Product Sales of $396m in the year to date; a stable performance (growth of 4% at CER).
 
Sales in Emerging Markets increased by 8% (17% at CER) to $131m, driven by the performance in China. The performance was also supported in the US by favourable prior-year gross-to-net adjustments and improved realised price across the business mix; US sales of Onglyza increased by 7% in the year to date to $174m.
 
Europe sales declined by 22% (17% at CER) to $53m, highlighting the broader trend of a shift away from the dipeptidyl peptidase-4 inhibitor class. Given the significant future potential of Farxiga, the Company continues to prioritise commercial support over Onglyza.
 
Bydureon
Product Sales of $410m in the year to date; a decline of 8% (7% at CER).
 
Sales were partly driven by the impact of production constraints in the first half for the new Bydureon BCise device and declining volumes for the dual-chamber pen. US sales of $340m declined by 5% in the year to date, while Bydureonsales in Europe declined by 19% (14% at CER) to $50m.
 
CVRM: other medicines
 
Brilinta
Product Sales of $1,153m in the year to date; an increase of 22% (26% at CER).
 
Patient uptake continued in the treatment of acute coronary syndrome and high-risk post-myocardial infarction. Emerging Markets sales of Brilinta increased by 50% (59% at CER) to $348m. US sales of Brilinta, at $500m, represented an increase of 22%, driven primarily by increasing levels of demand in both hospital and retail settings, as well as a lengthening in the average-weighted duration of treatment, reflecting the growing impact of 90-day prescriptions. Sales of Brilique in Europe increased by 2% in the year to date (9% at CER) to $262m.
 
Lokelma
Product Sales of $6m in the year to date, predominantly in the US, where Lokelma was recently launched.
 
Lokelma is approved in the US and in the EU for the treatment of hyperkalaemia, a serious condition characterised by elevated potassium levels in the blood associated with CV, renal and metabolic diseases. Launches in a number of other markets are expected soon.
 
Legacy: Crestor
Product Sales of $982m in the year to date; a decline of 9% (5% at CER).
 
Sales in Emerging Markets declined by 2% (up by 4% at CER) to $621m; the CER growth came despite the impact from the aforementioned '4+7' pilot tender scheme in China. US sales declined by 31% to $88m, underlining the ongoing effect of generic Crestor medicines. In Europe, sales declined by 30% (25% at CER) to $112m, reflecting a similar impact that began in Europe in 2017.
 
In Japan, where AstraZeneca collaborates with Shionogi Co. Ltd, sales increased by 3% to $126m. This followed a period of decline resulting from the entry of multiple generic Crestor medicines in the Japan market at the end of 2017.
 
BioPharmaceuticals: Respiratory
Product Sales of $3,854m in the year to date; an increase of 9% (13% at CER). Respiratory represented 22% of total Product Sales (YTD 2018: 23%).
 
Symbicort
Product Sales in the year to date of $1,783m; a decline of 7% (4% at CER).
 
Symbicort continued to lead the global market by volume within the inhaled corticosteroid (ICS) / long-acting beta agonist (LABA) class. Emerging Markets sales of Symbicort increased by 10% (18% at CER) to $401m in the year to date. In contrast, US sales declined by 11% to $585m, reflecting continued pricing pressure and the impact of managed-market rebates. This was partially offset by positive volumes from government-buying patterns.
 
In Europe, sales declined by 14% in the year to date (8% at CER) to $508m, reflecting price competition from other branded and Symbicort-analogue medicines, plus government pricing interventions. Symbicort, however, continued to retain its class-leadership position, with volume growth achieved in a number of markets.
 
In Japan, sales declined by 13% in the year to date (14% at CER) to $131m (Q3 2019: $64m, +26%, +22% at CER); partly reflecting the destocking by Astellas Pharma Co. Ltd (Astellas) following the termination of the co-promotion agreement earlier in the year. In January 2019, AstraZeneca and Astellas announced that the sale and distribution of Symbicort, conducted by Astellas in Japan, was to be transferred back to AstraZeneca and that the co-promotion conducted by Astellas and AstraZeneca was to be terminated on 30 July 2019. Since the termination, the Company has solely distributed and promoted the medicine in Japan.
 
Pulmicort
Product Sales in the year to date of $1,053m; an increase of 17% (23% at CER).
 
Emerging Markets, where sales increased by 23% in the year to date (29% at CER) to $845m, represented 80% of global sales of Pulmicort. China, comprising the overwhelming majority of Pulmicort sales in Emerging Markets, delivered a particularly strong double-digit performance, strengthened by higher levels of demand and underpinned by the impact of AstraZeneca's support in China for over 17,000 nebulisation centres.
 
Sales in the US increased by 10% to $89m due to favourable managed-market rebates and sales in Europe declined by 12% (6% at CER) to $60m reflecting the legacy status of the medicine.
 
Fasenra
Fasenra has been approved in 50 countries, including the US, in the EU and Japan as an add-on maintenance treatment for patients with severe asthma and with an eosinophilic phenotype. The medicine is currently reimbursed in 32 countries, with early-access programmes in an additional 11 countries. At the end of the period, Fasenra led the medicine class for the treatment of severe eosinophilic asthma by new-patient share in a number of key markets. Product Sales of $498m in the year to date represented an increase of 189% (193% at CER).
 
Sales in the US increased by 166% in the year to date to $343m. In Europe and Japan, AstraZeneca was granted regulatory approval in 2018 on a similar basis to that in the US. In Europe, sales of $81m in the year to date represented an increase of 378% (406% at CER). Sales in Japan increased by 138% to $62m in the year to date, following the medicine's launch in 2018.
 
Daliresp/Daxas
Product Sales in the year to date of $157m; an increase of 16% (17% at CER).
 
US sales, representing 85% of the global total, increased by 21% to $134m in the year to date, driven by favourable affordability-programme changes and inventory movements. It is the only oral, selective, long-acting inhibitor of phosphodiesterase-4, an inflammatory enzyme associated with COPD.
 
Duaklir
Product Sales in the year to date of $55m; a decline of 24% (20% at CER).
 
In the first nine months of the year, the overwhelming majority of sales were in Europe, where sales declined by 24% (20% at CER) to $53m; the decline was predominately a result of an adverse performance in Germany. In Q1 2019, the medicine received US regulatory approval. As part of the collaboration agreement announced in March 2017, Circassia Pharmaceuticals plc (Circassia) became responsible for the commercialisation of Duaklir in the US, with AstraZeneca continuing to manufacture and supply the medicine. Circassia communicated making the medicine available to patients in the US in due course.
 
Bevespi
Product Sales in the year to date of $30m; an increase of 32%.
 
Bevespi saw prescriptions in the period track in line with other long-acting muscarinic antagonists / LABA launches; the class in the US, however, continued to grow more slowly than anticipated. Bevespi was the first medicine launched using the Company's proprietary Aerosphere delivery technology.
 
In June 2019, Bevespi received the first approval by the Japanese Ministry of Health, Labour and Welfare as a fixed-dose, long-acting dual bronchodilator in a pressurised metered-dose inhaler (pMDI) to relieve symptoms in patients with COPD.
 
Breztri
Product Sales in the year to date of $1m.
 
In June 2019, Breztri, formerly PT010, was approved in Japan as a triple-combination therapy to relieve symptoms of COPD. This was the first global regulatory approval for Breztri and was the first approval by the Japanese Ministry of Health, Labour and Welfare of a triple-combination therapy in a pressurised metered-dose inhaler (pMDI).
 
Other medicines (outside the main therapy areas)
 
Product Sales of $1,948m in the year to date; a decline of 22% (20% at CER), partly reflecting the H1 2019 divestment of US rights to Synagis and the H2 2018 divestment of the prescription medicine rights to Nexium in Europe.
 
Other Product Sales represented 11% of total Product Sales, down from 16% in the first nine months of 2018.
 
Nexium
Product Sales in the year to date of $1,130m; a decline of 14% (11% at CER).
 
Emerging Markets sales of Nexium increased by 10% (16% at CER) to $574m. In Europe, sales declined by 73% (71% at CER) to $49m, reflecting the aforementioned divestment. Sales in the US declined by 30% to $175m, reflecting its 2015 loss of exclusivity and, in Japan, where AstraZeneca collaborates with Daiichi Sankyo Company, Limited (Daiichi Sankyo), sales declined by 6% (5% at CER) to $291m.
 
Regional Product Sales
 
 
Table 7: Regional Product Sales
 
Global Sales
YTD 2019
Q3 2019
$m
% of total
% change
$m
% of total
% change
Actual
CER
Actual
CER
Emerging Markets
6,074
35
19
26
2,123
35
25
29
China
3,691
21
30
37
1,283
21
35
40
 Ex-China
2,382
14
5
12
839
14
12
15
 
 
 
 
 
 
 
 
 
US
5,688
33
18
18
2,025
33
17
17
 
 
 
 
 
 
 
 
 
Europe
3,168
18
(4)
2
1,139
19
1
4
 
 
 
 
 
 
 
 
 
Established RoW
2,385
14
17
19
845
14
21
19
Japan
1,830
11
29
29
657
11
31
27
Canada
345
2
(4)
(1)
120
2
5
5
Other Established RoW
211
1
(18)
(12)
69
1
(16)
(11)
 
 
 
 
 
 
 
 
 
Total
17,315
100
13
17
6,132
100
16
18
 
Table 8: Regional Product Sales, Emerging Markets
Product Sales of $6,074m in the year to date; an increase of 19% (26% at CER).
 
 
 Emerging Markets
YTD 2019
Q3 2019
$m
% of total
% change
$m
% of total
% change
Actual
CER
Actual
CER
Oncology
1,665
27
42
51
617
29
45
49
 
 
 
 
 
 
 
 
 
BioPharmaceuticals
3,644
60
16
23
1,240
58
20
24
CVRM
2,225
37
11
18
777
37
16
19
Respiratory
1,419
23
24
31
463
22
28
32
 
 
 
 
 
 
 
 
 
Other medicines
765
13
(4)
1
266
13
10
19
 
 
 
 
 
 
 
 
 
Total Emerging Markets
6,074
100
19
26
2,123
100
25
29
 
New medicines represented 22% of Emerging Markets sales (YTD 2018: 15%). Notable performances included:
 
-    Tagrisso ($553m, +108%, +120% at CER)
-    Lynparza ($101m, +205%, +227% at CER)
-    Brilinta ($348m, +50%, +59% at CER)
-    Farxiga ($339m, +40%, +50% at CER)
 
The performance was also underpinned by the strong sales of a number of other medicines, including:
 
-    Zoladex ($380m, +21%, +30% at CER)
-    Pulmicort ($845m, +23%, +29% at CER)
-    Symbicort ($401m, +10%, +18% at CER)
 
Ex-China Emerging Markets sales increased by 5% in the year to date (12% at CER) to $2,382m and new medicines represented 28% of sales (YTD 2018: 21%). In Q3 2019, ex-China Emerging Markets sales delivered impressive growth, increasing by 12% (15% at CER) to $839m, with new medicines representing 31% of sales (Q3 2018: 22%). The performance was supported by encouraging levels of growth in (ex-China) Asia Pacific, Middle East and Africa, Brazil and Russia.
 
China sales comprised 61% of Emerging Markets sales, increasing by 30% in the year to date (37% at CER) to $3,691m. New medicines, primarily driven by Tagrisso and Lynparza in Oncology and Brilinta and Farxiga in New CVRM, delivered particularly encouraging sales growth. New medicines represented 19% of China sales (YTD 2018: 9%). This performance was augmented by strong sales from PulmicortNexium and Symbicort.
 
During the period, the Chinese National Healthcare Security Administration published the preliminary 2019 NRDL update. The list included one additional AstraZeneca medicine, namely Kombiglyze for Diabetes. As a further result of the update, respiratory medicines, including Symbicort for asthma and COPD and Nexium for acid reflux, had reimbursement restrictions removed. The updated final list is anticipated to be published in Q4 2019, after the conclusion of reimbursement discussions. Since the year 2000, AstraZeneca has had more than 40 medicines added to the NRDL and, from 2012, 15 of the Company's medicines have been admitted to the National Essential Drug List.
 
Table 9: Regional Product Sales, US
Product Sales of $5,688m; an increase of 18% in the year to date.
 
 
US
YTD 2019
Q3 2019
$m
% of total
% change
$m
% of total
% change
Oncology
2,538
45
57
917
45
40
 
 
 
 
 
 
 
BioPharmaceuticals
2,805
49
7
964
48
4
CVRM
1,622
29
1
537
27
(6)
Respiratory
1,183
21
15
427
21
20
 
 
 
 
 
 
 
Other medicines
345
6
(41)
144
7
(6)
 
 
 
 
 
 
 
Total US
5,688
100
18
2,025
100
17
 
New medicines represented 61% of US Product Sales (YTD 2018: 45%). The performance reflected, in particular, the success of the new Oncology medicines ($2,208m, +84%), including TagrissoImfinzi and Lynparza in Oncology, Brilinta in New CVRM, plus the compelling performance of Fasenra in Respiratory.
 
Table 10: Regional Product Sales, Europe
Product Sales in the year to date of $3,168m; a decline of 4% (up by 2% at CER).
 
 
 Europe
YTD 2019
Q3 2019
$m
% of total
% change
$m
% of total
% change
Actual
CER
Actual
CER
Oncology
1,027
32
34
42
377
33
44
51
 
 
 
 
 
 
 
 
 
BioPharmaceuticals
1,677
53
(10)
(4)
550
49
(6)
(0)
CVRM
858
27
(8)
(3)
292
26
(3)
2
Respiratory
819
26
(11)
(6)
258
23
(8)
(3)
 
 
 
 
 
 
 
 
 
Other medicines
465
15
(30)
(28)
213
19
(26)
(29)
 
 
 
 
 
 
 
 
 
Total Europe
3,168
100
(4)
2
1,139
100
1
4
 
The performance in Europe partly reflected adverse continued pricing pressures, the impact of the aforementioned divestment of the prescription medicine rights to Nexium in H2 2018 and declining sales of Crestor. New medicines, however, represented 40% of Product Sales (YTD 2018: 27%) and the Europe sales performance continued to improve through 2019. Oncology delivered particularly compelling growth in the year to date, with the following medicines representing 64% of Oncology sales in Europe:
 
-    Tagrisso ($337m, +52% +61% at CER)
-    Lynparza ($208m, +52%, +61% at CER)
-    Imfinzi ($115m, YTD 2018: $9m)
 
This strong performance was also supported by the successes of Brilinta and Forxiga in New CVRM and Fasenra in Respiratory.
 
Table 11: Regional Product Sales, Established RoW
Product Sales in the year to date of $2,385m; an increase of 17% (19% at CER).
 
 
Established RoW 
YTD 2019
Q3 2019
$m
% of total
% change
$m
% of total
% change
Actual
CER
Actual
CER
Oncology
1,163
49
66
67
423
50
67
63
 
 
 
 
 
 
 
 
 
BioPharmaceuticals
849
36
(3)
(1)
314
37
6
6
CVRM
416
17
(2)
1
143
17
(4)
(3)
Respiratory
433
18
(4)
(2)
171
20
17
16
 
 
 
 
 
 
 
 
 
Other medicines
373
16
(19)
(16)
108
13
(27)
(31)
 
 
 
 
 
 
 
 
 
Total Established RoW
2,385
100
17
19
845
100
21
19
 
New medicines represented 42% of Established RoW sales (YTD 2018: 20%). The performance during the year to date reflected, in particular, the successes of Tagrisso and Imfinzi in Oncology, Forxiga in New CVRM and Fasenra in Respiratory.
 
Japan sales, comprising 77% of total Established RoW sales, increased by 29% in the year to date to $1,830m. New medicines represented 45% of Japan sales (YTD 2018: 21%), particularly reflecting the strong performance of Tagrisso as a 1st-line treatment for patients with EGFRm NSCLC, following regulatory approval in this setting in the third quarter of 2018. Overall, in the year to date, Oncology sales in Japan increased by 69% to $1,057m and represented 58% of Japan sales. This performance was also supported a number of other ongoing successes, including:
 
-    Farxiga ($61m, +32%, +31% at CER)
-    Fasenra ($62m, +138%, +138% at CER)
 
Financial performance

 
Table 12: YTD 2019 Reported Profit and Loss
 
 
Reported
YTD 2019
YTD 2018
% change
$m
$m
Actual
CER
Product Sales
17,315
15,281
13
17
Collaboration Revenue
405
392
3
6
Total Revenue
17,720
15,673
13
17
 
 
 
 
 
Cost of Sales
(3,543)
(3,299)
7
12
 
 
 
 
 
Gross Profit
14,177
12,374
15
18
Gross Profit Margin[24]
79.5%
78.4%
+1
+1
 
 
 
 
 
Distribution Expense
(247)
(238)
4
10
% Total Revenue
1.4%
1.5%
-
-
R&D Expense
(3,968)
(3,920)
1
5
% Total Revenue
22.4%
25.0%
+3
+3
SG&A Expense
(8,656)
(7,431)
16
20
% Total Revenue
48.9%
47.4%
-1
-1
Other Operating Income & Expense
1,041
1,525
(32)
(31)
% Total Revenue
5.9%
9.7%
-4
-4
 
 
 
 
 
Operating Profit
2,347
2,310
2
3
Operating Profit Margin
13.2%
14.7%
-1
-2
Net Finance Expense
(948)
(970)
(2)
6
Joint Ventures and Associates
(91)
(77)
18
21
Profit Before Tax
1,308
1,263
4
(1)
Taxation
(358)
(222)
61
54
Tax Rate
27%
18%
 
 
Profit After Tax
950
1,041
(9)
(13)
 
 
 
 
 
EPS
$0.79
$0.88
(11)
(15)
 
Table 13: Q3 2019 Reported Profit and Loss
 
 
 
Reported
Q3 2019
Q3 2018
% change
$m
$m
Actual
CER
Product Sales
6,132
5,266
16
18
Collaboration Revenue
274
74
n/m
n/m
Total Revenue
6,406
5,340
20
22
 
 
 
 
 
Cost of Sales
(1,351)
(1,153)
17
23
 
 
 
 
 
Gross Profit
5,055
4,187
21
22
Gross Profit Margin
78.0%
78.1%
-
-1
 
 
 
 
 
Distribution Expense
(88)
(73)
20
25
% Total Revenue
1.4%
1.4%
-
-
R&D Expense
(1,346)
(1,279)
5
8
% Total Revenue
21.0%
24.0%
+3
+3
SG&A Expense
(3,199)
(2,423)
32
34
% Total Revenue
49.9%
45.4%
-5
-4
Other Operating Income & Expense
335
439
(24)
(23)
% Total Revenue
5.2%
8.2%
-3
-3
 
 
 
 
 
Operating Profit
757
851
(11)
(13)
Operating Profit Margin
11.8%
15.9%
-4
-5
Net Finance Expense
(316)
(330)
(4)
2
Joint Ventures and Associates
(32)
(44)
(27)
(21)
Profit Before Tax
409
477
(14)
(21)
Taxation
(129)
(71)
81
65
Tax Rate
32%
15%
 
 
Profit After Tax
280
406
(31)
(36)
 
 
 
 
 
EPS
$0.23
$0.34
(33)
(38)
 
Table 14: YTD 2019 reconciliation of Reported Profit Before Tax to EBITDA[25]
 
 
 
YTD 2019
YTD 2018
% change
 
$m
$m
Actual
CER
Reported Profit Before Tax
1,308
1,263
4
(1)
Net Finance Expense
948
970
(2)
6
Joint Ventures and Associates
91
77
18
21
Depreciation, Amortisation and Impairment
2,119
2,091
1
5
 
 
 
 
 
EBITDA
4,466
4,401
1
4
 
Table 15: Q3 2019 reconciliation of Reported Profit Before Tax to EBITDA
 
 
 
Q3 2019
Q3 2018
% change
 
$m
$m
Actual
CER
Reported Profit Before Tax
409
477
(14)
(21)
Net Finance Expense
316
330
(4)
2
Joint Ventures and Associates
32
44
(27)
(21)
Depreciation, Amortisation and Impairment
716
698
2
5
EBITDA
1,473
1,549
(5)
(5)
 
Table 16: YTD 2019 reconciliation of Reported to Core financial measures
 
 
 
Reported
Restructuring
Intangible Asset
Amortisation & Impairments
Diabetes Alliance
Other[26]
Core[27]
Core
% change
$m
$m
$m
$m
$m
$m
Actual
CER
Gross Profit
14,177
122
69
-
-
14,368
14
18
Gross Profit Margin[28]
79.5%
 
 
 
 
80.6%
+1
+1
 
 
 
 
 
 
 
 
 
Distribution Expense
(247)
-
-
-
-
(247)
4
10
R&D Expense
(3,968)
82
60
-
-
(3,826)
1
4
SG&A Expense
(8,656)
147
1,009
294
742
(6,464)
4
8
Other Operating Income & Expense
1,041
-
3
-
16
1,060
(7)
(6)
 
 
 
 
 
 
 
 
 
Operating Profit
2,347
351
1,141
294
758
4,891
41
42
Operating Profit Margin
13.2%
 
 
 
 
27.6%
+5
+5
 
 
 
 
 
 
 
 
 
Net Finance Expense
(948)
-
-
216
153
(579)
3
13
Taxation
(358)
(74)
(240)
(106)
(136)
(914)
68
68
 
 
 
 
 
 
 
 
 
EPS
 $0.79
 $0.22
 $0.69
 $0.31
 $0.60
 $2.61
39
38
 
Table 17: Q3 2019 reconciliation of Reported to Core financial measures
 
 
 
Reported
Restructuring
Intangible Asset
Amortisation & Impairments
Diabetes Alliance
Other26
Core27
Core
% change
$m
$m
$m
$m
$m
$m
Actual
CER
Gross Profit
5,055
70
18
-
-
5,143
21
22
Gross Profit Margin28
78.0%
 
 
 
 
79.4%
-
-1
 
 
 
 
 
 
 
 
 
Distribution Expense
(88)
-
-
-
-
(88)
20
25
R&D Expense
(1,346)
18
7
-
-
(1,321)
6
9
SG&A Expense
(3,199)
37
327
96
533
(2,206)
7
9
Other Operating Income & Expense
335
-
1
-
16
352
(20)
(19)
 
 
 
 
 
 
 
 
 
Operating Profit
757
125
353
96
549
1,880
43
41
Operating Profit Margin
11.8%
 
 
 
 
29.3%
+5
+4
 
 
 
 
 
 
 
 
 
Net Finance Expense
(316)
-
-
72
52
(192)
(1)
5
Taxation
(129)
(27)
(75)
(35)
(116)
(382)
80
75
 
 
 
 
 
 
 
 
 
EPS
 $0.23
 $0.08
 $0.20
 $0.10
 $0.38
 $0.99
40
36
 
Profit and loss summary

a)   Gross Profit
Reported Gross Profit increased by 15% in the year to date (18% at CER) to $14,177m; Core Gross Profit increased by 14% (18% at CER) to $14,368m, reflecting the growth in Product Sales. The calculation of Reported and Core Gross Profit Margin excludes the impact of Collaboration Revenue and any associated costs, thereby reflecting the underlying performance of Product Sales. The Reported Gross Profit Margin increased by one percentage point in the year to date to 80%, partly reflecting the mix of Product Sales; the Core Gross Profit Margin increased by one percentage point to 81%.
 
b)   Operating Expense
Reported Operating Expense increased by 11% in the year to date (15% at CER) to $12,871m and represented 73% of Total Revenue (YTD 2018: 74%). Core Operating Expense increased by 3% (6% at CER) to $10,537m and represented 59% of Total Revenue (YTD 2018: 65%), demonstrating a significant improvement in operating leverage.
 
Reported R&D Expense increased by 1% in the year to date (5% at CER) to $3,968m. Core R&D Expense increased by 1% (4% at CER) to $3,826m, partly a result of investment in the development of the potential new oncology medicine, trastuzumab deruxtecan.
 
Reported SG&A Expense increased by 16% in the year to date (20% at CER) to $8,656m; Core SG&A Expense increased by 4% (8% at CER) to $6,464m, primarily a result of investment in additional colleagues to support the China expansion strategy, as well as further support for new medicines. The difference between the growth of Reported and Core SG&A Expense partly reflected fair-value adjustments arising on acquisition-related liabilities recognised in 2019, as well as an increase in legal provisions.
 
c)   Other Operating Income and Expense
Where AstraZeneca does not retain a significant ongoing interest in medicines or potential new medicines, income from divestments is reported within Other Operating Income and Expense in the Company's financial statements. Reported Other Operating Income and Expense declined by 32% in the year to date (31% at CER) to $1,041m and included:
 
-    $515m, reflecting an agreement to sell US rights to Synagis to Swedish Orphan Biovitrum AB (publ) (Sobi)
-    $243m, as part of an agreement to divest the global commercial rights, excluding China, Japan, the US and Mexico, for Losec and associated brands to Cheplapharm Arzneimittel GmbH (Cheplapharm)
 
Core Other Operating Income and Expense declined by 7% in the year to date (6% at CER) to $1,060m.
 
d)   Operating Profit
Reported Operating Profit increased by 2% in the year to date (3% at CER) to $2,347m, with the growth in Product Sales offset by the aforementioned increase in Reported SG&A Expense and the decline in Other Operating Income & Expense; the Reported Operating Profit Margin declined by one percentage point (two at CER) to 13%. Core Operating Profit increased by 41% (42% at CER) to $4,891m; the Core Operating Profit Margin increased by five percentage points to 28%, demonstrating a significant improvement in operating leverage.
 
e)   Net Finance Expense
Reported Net Finance Expense declined by 2% in the year to date (up by 6% at CER) to $948m. The charge partly reflected higher Net Debt, as well as the effect of the adoption of IFRS 16 (see Note 1). There was also an adverse impact from a higher cost of debt, plus a higher level of discount unwind in respect of the Bristol-Myers Squibb global Diabetes alliance profit-participation liability. Excluding the discount unwind on acquisition-related liabilities, Core Net Finance Expense increased by 3% (13% at CER) to $579m.
 
f)    Profit Before Tax
Reported Profit Before Tax increased by 4% in the year to date (a decline of 1% at CER) to $1,308m, reflecting the growth in Product Sales offset by the aforementioned increase in Reported SG&A Expense and the decline in Other Operating Income & Expense. Core Profit Before Tax increased by 49% (48% at CER) to $4,221m, partly a result of the growth in Product Sales ahead of the growth of Core Operating Expense.
 
 
g)   Taxation
The Reported Tax Rate for the year to date was 27% and the Core Tax Rate was 22% (YTD 2018: 18% and 19%, respectively). These tax rates were higher than the UK Corporation Tax Rate due to the impact of the geographical mix of profits and the impact of collaboration and divestment activity. Taxation paid for the year to date was $965m, representing 74% of Reported Profit Before Tax (YTD 2018: $406m, 32%); the increase primarily reflected the phasing of tax payments between periods and included refunds in FY 2018, following agreement of prior-year liabilities.
 
h)   EPS
Reported EPS of $0.79 in the year to date, based on a weighted-average number of shares of 1,297m, represented a decline of 11% (15% at CER); Core EPS increased by 39% (38% at CER) to $2.61. The difference between the Reported and Core year-on-year performance partly reflected the impact of a favourable $346m legal settlement in YTD 2018 that was recognised as income in Reported Other Operating Income and Expense. It was also a result of an increase in legal provisions and revaluation movements on acquisition-related liabilities in 2019.
 
In April 2019, the Company completed an issue of 44,386,214 new ordinary shares of $0.25 each at a price of £60.50 per share, resulting in an increase in share capital of $11m and an increase in share premium of $3,479m, net of transaction costs of $22m.
 
Table 18: Cash Flow
 
 
 
YTD 2019
YTD 2018
Change
 
$m
$m
$m
Reported Operating Profit
2,347
2,310
37
Depreciation, Amortisation and Impairment
2,119
2,091
28
 
 
 
 
Increase in Working Capital and Short-Term Provisions
(812)
(1,741)
929
Gains on Disposal of Intangible Assets
(833)
(975)
142
Non-Cash and Other Movements
313
(428)
741
Interest Paid
(575)
(457)
(118)
Taxation Paid
(965)
(406)
(559)
 
 
 
 
Net Cash Inflow from Operating Activities
1,594
394
1,200
Net Cash Inflow before Financing Activities
879
430
449
Net Cash Outflow from Financing Activities
(1,771)
(312)
(1,459)
 
A Net Cash Inflow from Operating Activities of $1,594m in the year to date compared to an inflow of $394m in YTD 2018, reflecting an underlying improvement in business performance combined with favourable working-capital movements. The improvement in the movement of Working Capital and Short-Term Provisions centred on the release of various provisions and accruals within Trade and Other Payables, including the impact of a number of legal settlements. The favourable performance was partly offset by an increase in Taxation Paid, at $965m (YTD 2018: $406m); the increase reflected the aforementioned phasing of tax payments between periods and included refunds in FY 2018, following agreement of prior-year liabilities.
 
Net Cash Inflows before Financing Activities of $879m compared with an inflow of $430m in YTD 2018. The movement in Net Cash Inflow from Operating Activities was more than offset by changes in the Purchase of Intangible Assets, namely:
 
-    The first of two $675m upfront payments to Daiichi Sankyo as part of the agreement on trastuzumab deruxtecan
-    The impact of a final true-up net payment of $413m to MSD, based on sales of Nexium and Prilosec from 2014 to 2018; this was accrued over the same period
 
A payment from Pfizer, Inc. of $175m was received in the period, recorded within Disposal of Intangible Assets, as part of a prior agreement to sell the commercialisation and development rights to AstraZeneca's late-stage small-molecule antibiotics business in most markets globally outside the US. Reflecting strong sales growth and a pre-defined increase in royalty rates, the cash payment of contingent consideration, in respect of the Bristol-Myers Squibb share of the global Diabetes alliance, amounted to $337m in the year to date (YTD 2018: $247m).
 
As part of the total consideration of $821m included in Disposal of Intangible Assets received in respect of the aforementioned agreement to sell US rights to Synagis, $150m related to the rights to participate in the future cash flows from the US profits or losses for nirsevimab (MEDI8897). This was recognised as financial liability and is presented in Other Payables within Non-current Liabilities. The associated cash flow is presented within Investing Activities.
 
In April 2019, the Company completed an equity placing of $3.5bn, in conjunction with the recent strategic collaboration with Daiichi Sankyo. The purpose of the placing was to fund the initial upfront and near-term milestone commitments arising from the collaboration, as well to strengthen AstraZeneca's balance sheet. The placing was recorded in the second quarter.
 
i)    Capital expenditure
Capital expenditure amounted to $659m in the year to date, compared to $728m in YTD 2018. This included investment in the new AstraZeneca R&D centre on the Biomedical Campus in Cambridge, UK. AstraZeneca is targeting an initial occupation date of late 2020, with an overall full completion of the building expected in late 2021. The Company expects associated capital expenditure of c.$1,270m (c.£980m, translated at average exchange rates in the first half of the year), the majority of which was paid in prior periods. The Company has made significant progress on its transition to Cambridge; as of the end of September 2019, c.3,000 colleagues were based in the city.
 
The Company anticipates of a broadly stable level of total capital expenditure in FY 2019 (FY 2018: $1,043m).
 
Table 19: Debt and capital structure
 
 
 
At
30 Sep 2019
At
31 Dec 2018
At
30 Sep 2018
 
$m
$m
$m
Cash and Cash Equivalents
3,967
4,831
3,420
Other Investments
909
895
860
 
 
 
 
Cash and Investments
4,876
5,726
4,280
 
 
 
 
Overdrafts and Short-Term Borrowings
(228)
(755)
(1,092)
Leases[29]
(712)
-
-
Current Instalments of Loans
-
(999)
(1,399)
Loans Due After One Year
(17,218)
(17,359)
(18,422)
 
 
 
 
Interest-Bearing Loans and Borrowings (Gross Debt)
(18,158)
(19,113)
(20,913)
 
 
 
 
Net Derivatives
(16)
384
448
Net Debt
(13,298)
(13,003)
(16,185)
 
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.
 
Foreign exchange
The Company's transactional currency exposures on working-capital balances, which typically extend for up to three months, are hedged where practicable using forward foreign-exchange contracts against the individual companies' reporting currency. In addition, the Company's external dividend payments, paid principally in pounds sterling and Swedish krona, are fully hedged from announcement to payment date. Foreign-exchange gains and losses on forward contracts for transactional hedging are taken to profit or loss.
 
Table 20: Currency sensitivities
The Company provides the following currency-sensitivity information:
 
 
 
Average Exchange
Rates versus USD
 
Annual Impact of 5% Strengthening in Exchange Rate versus USD ($m)[30]
Currency
Primary Relevance
FY 2018[31]
YTD 2019[32]
% change
Product Sales
Core Operating Profit
CNY
Product Sales
6.62
6.87
(4)
221
126
EUR
Product Sales
0.85
0.89
(5)
145
66
JPY
Product Sales
110.45
109.07
1
114
74
Other[33]
 
 
 
 
216
105
GBP
Operating Expense
0.75
0.79
(5)
26
(72)
SEK
Operating Expense
8.69
9.40
(8)
4
(73)
 
Corporate and business development
 
a)   Divestment of rights for Losec
In September 2019, the Company agreed to sell the global commercial rights, excluding China, Japan, the US and Mexico, for Losec (omeprazole) and associated medicines to Cheplapharm. The divestment included medicines containing omeprazole marketed by AstraZeneca or its collaborators under the brand names AcimaxAntraMepralMopralOmepral and Zoltum.
 
Losec is a proton pump inhibitor discovered and developed by AstraZeneca, which helps to reduce the amount of acid produced by the stomach in patients with gastrointestinal reflux conditions and ulcers. It has a number of approved indications and is commonly prescribed for patients with gastro oesophageal reflux disease.
 
Cheplapharm paid AstraZeneca $243m on completion of the agreement in the quarter and will also pay sales-contingent milestones of up to $33m across 2021 and 2022. Income arising from the upfront payment was reported in the Company's financial statements within Other Operating Income and Expense. In 2018, Losec sales in the countries covered by the agreement were $98m.
 
b)   Amended collaboration agreement with Ironwood for Linzess in China
In September 2019, AstraZeneca amended its collaboration agreement with Ironwood Pharmaceuticals, Inc. (Ironwood) in mainland China, China Hong Kong and China Macau for Linzess (linaclotide), a first-in-class new treatment for patients with irritable bowel syndrome with constipation. The amended agreement gave AstraZeneca sole responsibility for developing, manufacturing and commercialising Linzess in the above markets.
 
AstraZeneca will pay Ironwood three non-contingent payments, totalling $35m, between 2021 and 2024. In addition, Ironwood could receive up to $90m in milestone payments, contingent on the achievement of certain sales targets. Ironwood will also be eligible for royalties beginning in the mid-single-digit percent, based on the annual net sales of Linzess in the above markets, where Ironwood will no longer jointly funds the development and commercialisation of Linzess or share in the profit from sales.
 
Sustainability

 
AstraZeneca's sustainability ambition has three priority areas[34], aligned with the Company's purpose and business strategy:
 
-    Access to healthcare
-    Environmental protection
-    Ethics and transparency
 
Recent developments and progress against the Company's priorities are reported below:
 
a)   Access to healthcare
During the period, the Company celebrated the fifth anniversary of its HHA programme. HHA is committed to tackling hypertension and the increasing burden of CV disease, with a presence across East and West Africa. By the end of August 2019, HHA had conducted over 12 million blood-pressure screenings and identified over two million elevated readings since launch in 2014, working with collaborators across Kenya, Ethiopia, Tanzania and Ghana.
 
In September 2019, the Company launched its Young Health Programme (YHP) in the Republic of the Union of Myanmar with global collaborator, Plan International UK, a children's charity that strives to advance children's rights and equality for girls. In the US, the Company enhanced its existing country-wide programme by announcing a charitable collaboration with Learning Undefeated, a non-profit organisation that provides life-changing science, technology, engineering and mathematics (STEM) education opportunities for underserved communities. The US programme introduces a new model for YHP, combining a focus on STEM with elements of disease-prevention education. The intention is to make STEM education engaging, accessible and exciting for middle-school students while, at the same time, incorporating important disease prevention and health-promotion lessons and experiments. The addition of the two new programmes brought the total number of active global plans to 19.
 
The YHP selected and provided sponsorships to 25 young people to attend the One Young World 2019 Summit in London, UK in October 2019. The summit brought together delegates from more than 190 countries to highlight and discuss some of the most severe issues facing the next generation and build connections that work towards solutions. The YHP delegation consisted of young leaders in their own right, actively leading efforts to improve the health and wellbeing of young people in their home countries.
 
During the period, the YHP and Plan International UK held a series of workshops with young people in three countries on three continents: Kenya, India and Brazil, to solicit their ideas and opinions on adolescent health and universal health coverage. Their feedback informed the development of a Manifesto on Adolescent Health that AstraZeneca and Plan International UK shared with the UN General Assembly and the first high-level meeting on universal health coverage in September 2019. This vital work formed part of the Company's advocacy work within the YHP and was an important way to include young voices in global-health discourse.
 
b)   Environmental protection
During the period, the Company held a stakeholder workshop in Nairobi, Kenya to discuss policy, education and research needs to address concerns relating to pharmaceuticals in the environment, arising from increasing patient access to medicines in emerging economies where there is inadequate environmental infrastructure and different water use and re-use patterns. The workshop brought together key international experts and opinion leaders.
 
In Emerging Markets, AstraZeneca goes above and beyond local guidelines and conducts research to ensure adherence to the same high standards of behaviour as in more tightly-regulated locations.
 
In September 2019, the Company participated in side-meetings alongside the United Nations General Assemblyfocused on climate action and access to healthcare. Since June 2018, AstraZeneca has been contributing to the UN Global Compact's Health Is Everyone's Business initiative. In September 2019, Pam Cheng, AstraZeneca Executive Vice President Operations & IT, spoke at the launch event for their Business Leadership Brief for Healthy Planet, Healthy People, linking health and the environment and the need to act on climate change. The brief included AstraZeneca's best-practice examples taken from United Nations Global Compact, Health Case Study.
 
In September 2019, the Company also participated in Climate Week, taking part in events such as The Climate Group's'Step Up: The Business Case for Greater Government Ambition' panel, as the first pharmaceutical-company member of the global EV100 initiative[35]. The Company is also a member of The Climate Group's RE100 initiative, in collaboration with CDP (formerly the Carbon Disclosure Project), where it has committed to sourcing 100% renewable electricity by 2020 in Europe and the US, and by 2025 for its global operations.
 
c)   Ethics and transparency
During the period, the Company expanded the Bioethics information available on its website. Bioethics refers in the broadest sense to the range of ethical issues that arise from the study and practice of biological and medical science. The Global Standard: Bioethics sets out the fundamental policy principles and practices that apply to each of the subject-matter areas. The Company worked with the Slave-Free Alliance (SFA) on a risk-gap analysis which showed positive management engagement and drive, significant global efforts to drive risk awareness amongst employees, as well as robust third-party risk management and whistleblowing platforms. The SFA also identified opportunities to provide further public information, and to action site audits focused on this risk area. Ongoing external benchmarking is planned in due course.
 
During the period, the Company launched an employee campaign, 'Speak Up - Your Voice Matters' using internal social-media channels. The campaign encouraged honest and open dialogue, and included interactive scenario videos, senior-leader reflections and guides for manager in support of a healthy business culture, where people feel able to make their voices heard.
 
In September 2019, recognising transparency as a foundation of trust with AstraZeneca stakeholders, the Company launched a 'Transparency Map'. This is an interactive tool designed to increase transparency around data on sourcing and suppliers, site environmental and wellbeing programmes, intellectual property and healthcare-professional payment-disclosure practices, and access to healthcare programmes. At present, no other pharmaceutical company has disclosed this level of information in this easily accessible way.
 
d)   Other developments
In September 2019, the Company was recognised for its sustainability efforts in the DJSI, achieving fourth position overall in the pharmaceutical industry. The DJSI is the longest-running, global sustainability-benchmark system and is an in-depth analysis of companies' economic, social and environmental performance. AstraZeneca maintained its 2018 overall score and achieved a perfect score of 100 in the areas of environmental reporting, labour-practice indicators, social reporting and health-outcome contribution. This marked the 18th time the Company has been included in the DJSI.
 
In September 2019, the Company was again named as a member of the FTSE4Good Index Series, ranking in the 94th percentile of the healthcare industry, with perfect scores in climate change, anti-corruption, corporate governance and customer responsibility. Since its inception in 2001, the FTSE4Good Index Series has only included companies that reflect strong Environmental, Social and Governance (ESG) risk-management practices, as measured by an overall ESG rating.
 
 
 

For more details on AstraZeneca's sustainability ambition, approach and targets, please refer to the latest Sustainability Report 2018 and Sustainability Data Summary 2018, available at astrazeneca.com/sustainability.
 

 
 
Research and development

A comprehensive data pack comprising AstraZeneca's pipeline of medicines in human trials can be found in the clinical-trials appendix, available on astrazeneca.com. Highlights of developments in the Company's late-stage pipeline since the prior results announcement are shown below:
 
Table 21: Update from the late-stage pipeline
 
 
Regulatory approvals
5
-     Tagrisso - NSCLC (1st line, EGFRm): regulatory approval (CN)
-     Farxiga/Forxiga - T2D CVOT: regulatory approval (US, EU)
-     roxadustat - anaemia of CKD, NDD: regulatory approval (CN)
-     Fasenra Pen - severe eosinophilic asthma; auto-injector and self-administration: regulatory approval (US)
Regulatory submissions and/or acceptances
6
-     Lynparza - pancreatic cancer (BRCAm): regulatory submission acceptance (US, EU)
-     Calquence - CLL: regulatory submission under review (US)
-     trastuzumab deruxtecan - advanced/refractory, metastatic breast cancer (HER2-positive): regulatory submission acceptance (US, JP); Priority Review designation (US)
-     Brilinta/Brilique - CAD/T2D CVOT: regulatory submission acceptance (US, EU)
Major Phase III data readouts
or other major developments
13
-     Tagrisso - NSCLC (1st line, EGFRm): met Phase III key secondary endpoint (OS)
-     Imfinzi + treme - NSCLC (1st line) (NEPTUNE trial): did not meet Phase III primary endpoint
-     Lynparza - ovarian cancer (1st line) (PAOLA-1): met Phase III primary endpoint
-     Lynparza - prostate cancer (2nd line, castration-resistant): met Phase III primary endpoint
-     Calquence - CLL: Breakthrough Therapy Designation (US)
-     Farxiga - HF CVOT: met Phase III primary endpoint; Fast Track designation (US)
-     Farxiga - CKD: Fast Track designation (US)
-     Qtrilmet - T2D: positive opinion (EU)
-     PT010 - COPD (ETHOS): met Phase III primary endpoint
-     PT010 - COPD: complete response letter (US)
-     Fasenra - eosinophilic oesophagitis: Orphan Drug Designation (US)
-     anifrolumab - SLE (TULIP 2): met Phase III primary endpoint
New molecular
entities and major lifecycle medicines in Phase III trials or under regulatory review
16
Oncology
-     Tagrisso - NSCLC
-           Imfinzi - multiple cancers
-     Lynparza - multiple cancers
-     trastuzumab deruxtecan - breast and other cancers
-     capivasertib - breast cancer
-     Calquence - blood cancers
-     tremelimumab - multiple cancers
-     selumetinib - NF1[36]
-     savolitinib - NSCLC36
CVRM
-     roxadustat - anaemia of CKD
Respiratory (and immunology)
-     Fasenra - multiple indications
-     Breztri - COPD
-     PT027 - asthma
-     tezepelumab - severe asthma
-     nirsevimab - lower respiratory tract infection
-     anifrolumab - lupus
Total projects
in clinical pipeline
144
 
 
Oncology
 
AstraZeneca has a deep-rooted heritage in Oncology and offers a new generation of medicines that have the potential to transform patients' lives and the Company's future. At least six Oncology medicines are expected to be launched between 2014 and 2020, of which TagrissoImfinziLynparzaCalquence and Lumoxiti[37] are already benefitting patients. An extensive pipeline of medicines is in development, and the Company is committed to advancing Oncology medicines, primarily focused on the treatment of patients with lung, ovarian, breast and blood cancers.
 
At the 2019 European Society of Medical Oncology congress (ESMO 2019), the Company presented over 60 abstracts spanning multiple tumour types, including seven oral presentations, with five Presidential presentations and five late-breaking abstracts. Highlights included late-breaking results from the Phase III Lynparza PAOLA-1 trial in 1st-line advanced ovarian cancer, and results of the Phase III Lynparza PROfound trial in metastatic, castrate-resistant prostate cancer (mCRPC), where both trials met their primary endpoint. Positive OS data from the Tagrisso Phase III FLAURA trial in 1st-line EGFRm NSCLC were also presented.
 
The Company presented further evidence of its progress at the 2019 International Association for the Study of Lung Cancer World Congress on Lung Cancer (WCLC) in Barcelona, Spain where Phase III Imfinzi CASPIAN SCLC data were presented in the Presidential Symposium.
 
Oncology: lung cancer
 
a)   Tagrisso
Tagrisso has now received approval in 78 countries, including in the US, Japan, China and in the EU, for the 1st-line treatment of patients with Stage IV EGFRm NSCLC. Regulatory approvals have been achieved in 87 countries, including the US, in the EU, Japan and in China for the 2nd-line treatment of patients with EGFR T790M-mutated NSCLC.
 
In September 2019, AstraZeneca announced that it had received marketing authorisation from the China NMPA for Tagrisso as a 1st-line treatment for adults with locally-advanced or metastatic NSCLC whose tumours have the genetic mutations of EGFR exon 19 deletions or exon 21 (L858R) substitutions. The approval followed the priority-review pathway and was based on results from the Phase III FLAURA trial.
 
During the period, AstraZeneca announced positive OS results from the Phase III FLAURA trial, a randomised, double-blind, multi-centre trial of Tagrisso in previously-untreated patients with locally-advanced or metastatic NSCLC whose tumours have EGFR mutations. Tagrisso showed a statistically significant and clinically meaningful improvement in OS, a key secondary endpoint for Tagrisso versus gefitinib or erlotinib, both of which were previous SoC treatments in this setting (HR[38] 0.799 [95% CI[39], 0.641-0.997], p=0.0462). Tagrisso delivered a median OS of 38.6 months, versus 31.8 months for the comparator arm. At three years, 28% of patients in the Tagrisso arm and only 9% of patients in the comparator arm remained on treatment. Tagrisso also showed a statistically significant and clinically meaningful 52% reduction in the risk of central nervous system (CNS) disease progression, increasing the time patients with CNS metastases lived without CNS-disease progression or death (HR 0.48 [95% CI, 0.26-0.86], p=0.014).
 
Table 22: Key ongoing Tagrisso trials in lung cancer
 
 
Trial
Population
Design
Timeline
Status
Phase III
ADAURA
Adjuvant EGFRm NSCLC
Placebo or Tagrisso
FPCD[40]
Q4 2015
 
LPCD[41]
Q1 2019
 
First data anticipated
2021+[42]
Recruitment
completed
Phase III
LAURA
Locally-advanced, unresectable EGFRm NSCLC
Placebo or Tagrisso
FPCD
Q3 2018
 
First data anticipated
2021+
Recruitment
ongoing
Phase III
FLAURA2
1st-line EGFRm NSCLC
Tagrisso or Tagrisso + platinum-based chemotherapy doublet
FPCD
Q3 2019
 
First data anticipated
2021+
Recruitment ongoing
Phase II
SAVANNAH
EGFRm, MET+ locally-advanced or metastatic NSCLC patients who have progressed on Tagrisso
Tagrisso + savolitinib
FPCD
Q1 2019
 
First data anticipated
2021+
Recruitment
ongoing
Phase II
ORCHARD
1st-line EGFRm NSCLC post Tagrisso
SoC chemotherapy or Tagrisso +savolitinib or Tagrisso + Iressa or Tagrisso + necitumumab or Imfinzi + chemotherapy
FPCD
Q2 2019
 
First data anticipated
2021+
Recruitment
ongoing
 
b)   Imfinzi
During the period, the Company presented detailed results from the Phase III CASPIAN trial of Imfinzi in patients with previously-untreated extensive-stage SCLC at the aforementioned Presidential Symposium of the International Association for the Study of Lung Cancer WCLC 2019 in Barcelona, Spain. Imfinzi, in combination with four cycles of SoC chemotherapy (etoposide, with either cisplatin or carboplatin), demonstrated a statistically significant and clinically meaningful improvement in OS versus SoC consisting of up to six cycles of chemotherapy and optional prophylactic cranial irradiation. The risk of death was reduced by 27% (equal to a HR of 0.73), with median OS of 13.0 months for Imfinzi plus chemotherapy, versus 10.3 months for SoC.
 
Results showed a prolonged OS benefit, with an estimated 33.9% of patients alive at 18 months following treatment with Imfinzi plus chemotherapy, versus 24.7% of patients following SoC. Across all efficacy endpoints, benefits were observed in patients treated with Imfinzi plus chemotherapy versus SoC. Results showed a significantly higher PFS rate at 12 months (17.5% versus 4.7%), a 10.3% increase in confirmed objective response rate (ORR) (67.9% versus 57.6%), and improved duration of response at 12 months (22.7% versus 6.3%).
This trial also includes a third arm containing tremelimumab, an anti-CTLA4 antibody and potential new medicine, with Imfinzi and chemotherapy. The trial will continue to the final analysis of OS for the combination of dual immune checkpoint blockade with chemotherapy.
 
During the period, AstraZeneca announced final OS results from the Phase III NEPTUNE trial, a randomised, open-label, multi-centre, global trial of Imfinzi in combination with tremelimumab versus SoC platinum-based chemotherapy in previously-untreated Stage IV (metastatic) NSCLC patients. The trial was performed in an 'all-comers' population, and the primary-analysis population was patients with a high tumour mutational burden (TMB). TMB is a measurement of the number of mutations within the genome (DNA) of a tumour, and tumours with high levels of TMB may be more visible to the immune system. In the primary analysis population of patients whose blood TMB was 20 or more mutations per megabase (mut/Mb), the combination of Imfinzi and tremelimumab did not meet the primary endpoint of improving OS, compared to SoC chemotherapy. The safety and tolerability profile for the combination of Imfinzi and tremelimumab was consistent with previous trials.
 
Trial timelines throughout the Imfinzi programme have been updated and optimised to reflect event rates and an effort to optimise the trials to focus on Imfinzi as a monotherapy based on learnings from previous trials.
 
Table 23: Key ongoing Imfinzi trials in lung cancer
 
 
Trial
Population
Design
Timeline
Status
Phase III
AEGEAN
Neo-adjuvant (before surgery) NSCLC
SoC chemotherapy +/- Imfinzi,
followed by
surgery, followed by placebo or Imfinzi
FPCD
Q1 2019
 
First data anticipated
H2 2020
Recruitment
ongoing
Phase III
ADJUVANT BR.31[43]
Stage Ib-IIIa NSCLC
Placebo or
Imfinzi
FPCD
Q1 2015
 
First data anticipated
2021
Recruitment
ongoing
Phase III
PACIFIC-2
Unresectable, Stage III NSCLC
Concurrent CRT concurrent with
placebo or
Imfinzi, followed
by placebo or
Imfinzi
FPCD
Q2 2018
 
First data anticipated
H2 2020
Recruitment
ongoing
Phase III
PACIFIC-4
Unresectable, Stage I-II NSCLC
Stereotactic
body radiation
therapy followed
by placebo or
Imfinzi
FPCD
Q2 2019
 
First data anticipated
2021+
Recruitment
ongoing
Phase III
PACIFIC-5
Unresectable, Stage III NSCLC
(predominantly Asia)
Concurrent or sequential CRT,
followed by
placebo or
Imfinzi
FPCD
Q1 2019
 
First data anticipated
2021
Recruitment
ongoing
Phase III
ADRIATIC
Limited-disease stage SCLC
Concurrent CRT,
followed by
placebo or
Imfinzi or Imfinzi + treme
FPCD
Q4 2018
 
First data anticipated
2021
Recruitment
ongoing
Phase III
PEARL
Stage IV, 1st-line NSCLC (Asia)
SoC chemotherapy or Imfinzi
FPCD
Q1 2017
 
LPCD
Q1 2019
 
First data anticipated
2021
Recruitment
completed
Phase III
POSEIDON
Stage IV, 1st-line NSCLC
SoC chemotherapy or SoC + Imfinzi or SoC + Imfinzi + treme
FPCD
Q2 2017
 
LPCD
Q3 2018
 
First data anticipated
Q4 2019
Recruitment completed
Phase III
CASPIAN
Extensive-disease stage SCLC
SoC chemotherapy or SoC + Imfinzi or SoC + Imfinzi + treme
FPCD
Q1 2017
 
LPCD
Q2 2018
OS primary endpoint met for Imfinzimonotherapy arm
 
Imfinzi as a potential new medicine in other tumour types
The Company continues to advance multiple monotherapy trials of Imfinzi and combination trials of Imfinzi with tremelimumab and other potential new medicines in tumour types other than lung cancer.
 
Imfinzi has received regulatory approval for the 2nd-line treatment of patients with locally-advanced or metastatic urothelial carcinoma (bladder cancer) in 11 countries.
 
Table 24: Key Imfinzi trials in tumour types other than lung cancer
 
Trial
Population
Design
Timeline
Status
Phase III
POTOMAC
Non-muscle invasive bladder cancer
SoC BCG[44] or SoC BCG + Imfinzi
FPCD
Q3 2018
 
First data
anticipated
2021+
Recruitment ongoing
Phase III
NIAGARA
Muscle-invasive bladder cancer
Neo-adjuvant cisplatin and gemcitabine SoC chemotherapy or SoC + Imfinzi, followed by adjuvant placebo or Imfinzi
FPCD
Q4 2018
 
First data
anticipated
2021+
Recruitment ongoing
Phase III
EMERALD-1
Locoregional hepatocellular carcinoma (liver cancer)
TACE[45] followed by placebo or TACE + Imfinzi, followed by Imfinzi+
bevacizumab or
TACE + Imfinzi
followed by Imfinzi
FPCD
Q1 2019
 
First data
anticipated
2021
Recruitment ongoing
Phase III
EMERALD-2
Locoregional hepatocellular carcinoma at high risk of recurrence after surgery or radiofrequency ablation
Adjuvant Imfinzi or Imfinzi + bevacizumab
FPCD
Q2 2019
 
First data anticipated
2021+
Recruitment ongoing
Phase III
CALLA
Locally-advanced cervical cancer
CRT or CRT + Imfinzi, followed by placebo or Imfinzi
FPCD
Q1 2019
 
First data anticipated
2021+
Recruitment ongoing
Phase III
DANUBE
Stage IV, 1st-line cisplatin chemotherapy- eligible/ineligible bladder cancer
SoC chemotherapy or Imfinzi or Imfinzi+ treme
FPCD
Q4 2015
 
LPCD
Q1 2017
 
First data
anticipated
H1 2020
Recruitment completed
Phase III
NILE
Stage IV, 1st-line cisplatin chemotherapy- eligible bladder cancer
SoC chemotherapy or SoC + Imfinzi or SoC + Imfinzi + treme
FPCD
Q4 2018
 
First data anticipated
2021
Recruitment
ongoing
Phase III
KESTREL
Stage IV, 1st-line HNSCC
SoC or Imfinzi or Imfinzi + treme
FPCD
Q4 2015
 
LPCD
Q1 2017
 
First data
anticipated
H1 2020
Recruitment completed
Phase III
HIMALAYA
Stage IV, 1st-line unresectable hepatocellular carcinoma
Sorafenib or Imfinzior Imfinzi + treme
FPCD
Q4 2017
 
LPCD
Q3 2019
 
First data
anticipated
H2 2020
Recruitment
completed
Phase III
TOPAZ-1
Stage IV, 1st-line biliary-tract cancer
Gemcitabine and cisplatin SoC chemotherapy or SoC + Imfinzi
FPCD
Q2 2019
 
First data anticipated
2021
Recruitment ongoing
 
Oncology: Lynparza (multiple cancers)
During the period, the Company announced positive data and presented the detailed positive results at the aforementioned ESMO 2019 meeting from the Phase III PAOLA-1 trial in patients with advanced ovarian cancer. The trial, in the 1st-line maintenance setting, compared Lynparza added to SoC bevacizumab versus bevacizumab alone, in women with or without BRCA-gene mutations.
 
Investigator-assessed results showed that Lynparza added to bevacizumab reduced the risk of disease progression or death by 41% (equal to a HR of 0.59) and improved PFS to a median of 22.1 months, versus 16.6 months for those treated with bevacizumab alone. At two years since trial initiation, 46% of patients treated with Lynparza added to bevacizumab showed no disease progression, versus 28% of patients receiving bevacizumab alone.
 
The sensitivity analysis of blinded independent central review (BICR) of PFS was consistent and showed a similar improvement, with a median of 26.1 months for Lynparza added to bevacizumab, versus 18.3 months for bevacizumab alone. The safety and tolerability profiles of Lynparza and bevacizumab were consistent with that known from previous trials for each medicine, and with no detriment to quality of life.
 
AstraZeneca also announced and presented detailed positive results at ESMO 2019 from the Phase III PROfound trial of Lynparza in men with mCRPC who have a homologous recombination repair (HRR) gene mutation and have progressed on prior treatment with new hormonal anticancer treatments, e.g. enzalutamide and abiraterone. Results showed a statistically significant and clinically meaningful improvement with Lynparza in the primary endpoint of radiographic progression-free survival (rPFS), improving the time men with BRCA1/2- or ATM-mutated mCRPC lived without disease progression or death to a median of 7.4 months versus 3.6 months for those treated with abiraterone or enzalutamide. Lynparza reduced the risk of disease progression or death by 66% (equal to a HR of 0.34) for these patients.
 
The trial also met the key secondary endpoint of rPFS in the overall HRR-mutated (HRRm) population, where Lynparza reduced the risk of disease progression or death by 51% (equal to a HR of 0.49) and improved rPFS to a median of 5.8 months, versus 3.5 months for abiraterone or enzalutamide.
 
During the period, the Company received submission acceptances from the US FDA and the European Medicines Agency (EMA) for supplemental New Drug Applications (sNDA) for the use of Lynparza tablets in BRCAm pancreatic cancer. A regulatory decision in the US is anticipated in Q4 2019, while the Company anticipates an EMA decision in H2 2020.
 
Table 25: Key Lynparza trials
 
Trial
Population
Design
Timeline
Status
Phase III
OlympiA
Adjuvant BRCAm breast cancer
SoC placebo or Lynparza
 
FPCD
Q2 2014
 
LPCD
Q2 2019
 
First data anticipated
2021
Recruitment completed
 
Phase III
PROfound
Metastatic castration-resistant 2nd-line+ HRRm prostate cancer
SoC (abiraterone or enzalutamide) or Lynparza
FPCD
Q2 2017
 
LPCD
Q4 2018
Primary endpoint met
Phase III
PAOLA-1[46]
Stage IV, 1st-line
ovarian cancer
Bevacizumab maintenance or
bevacizumab +
Lynparzamaintenance
FPCD
Q2 2015
 
LPCD Q2 2018
Primary endpoint met
Phase III
GY004[47]
Recurrent platinum-sensitive ovarian cancer
SoC chemotherapy or cediranib or cediranib + Lynparza
FPCD
Q1 2016
 
First data
anticipated
H1 2020
Recruitment ongoing
Phase II/III
GY00547
Recurrent platinum-resistant/refractory ovarian cancer
SoC chemotherapy or cediranib or cediranib + Lynparza
FPCD
Q2 2016
(Phase II)
 
FPCD
Q1 2019
(Phase III)
 
First data
anticipated
2021+
Recruitment ongoing (Phase III component)
Phase III
DuO-O
Stage IV, 1st-line
ovarian cancer
Chemotherapy +
bevacizumab or
chemotherapy +
bevacizumab +
Imfinzi +/-
Lynparzamaintenance
FPCD
Q1 2019