AstraZeneca First Quarter 2014 financial results

AstraZeneca First Quarter 2014 financial results

Revenue up 3% at constant exchange rates (CER) in first quarter. Consolidation of full diabetes franchise contributed 2 percentage points of revenue growth. All growth platforms growing strongly.

• Brilinta sales $99 million (+94% CER), diabetes $347 million (+106% CER), respiratory $1,271 million

(+12% CER), Emerging Markets $1,421 million (+11% CER) and Japan $537 million (+13% CER).

Significant progress made towards achieving scientific leadership in core therapeutic areas.

• AZD9291 has been granted Breakthrough Therapy designation by the US FDA for the treatment of

patients with metastatic, EGFR T790M mutation-positive, non-small cell lung cancer (NSCLC) whose

NSCLC has progressed during treatment with an FDA-approved, EGFR tyrosine kinase inhibitor.

• Olaparib accepted for Priority Review by the US FDA in BRCA-mutated platinum-sensitive relapsed

ovarian cancer.

• Phase III investment decisions made for MEDI4736, AZD9291, benralizumab and tralokinumab.

Other R&D Highlights

• Olaparib commenced Phase III trial in metastatic BRCAm breast cancer.

• Brodalumab commenced Phase III trial in psoriatic arthritis.

• Selumetinib commenced a registration trial in metastatic uveal melanoma.

• Bydureon Pen and orphan drug Myalept approved by the US FDA.

• Saxagliptin and dapagliflozin combination data submitted for presentation at American Diabetes

Association meeting in June.

• Late stage pipeline now has 11 NMEs in Phase III or under regulatory review.

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Pascal Soriot, Chief Executive Officer, commenting on the results, said:

"The first quarter has seen continued momentum across the business and our revenue growth reflects the

increasing contribution from the five growth platforms that showed strong performance.

"I am pleased with the significant progress we are making towards achieving scientific leadership in our core

therapeutic areas. We have confirmed our decision to advance four programmes to Phase III in oncology and

respiratory disease. The Breakthrough Therapy designation for AZD9291 in non-small cell lung cancer and the

Priority Review granted for olaparib in ovarian cancer by the FDA act as a reminder of the distinctive science

that AstraZeneca can bring to patients.

"We are investing in our rapidly progressing pipeline and the key platforms that are the backbone of our strategy

to return to growth. To further concentrate organisational focus, we will continue to redeploy our resources in

our core priorities and pursue opportunities that maximise the value of our pipeline and portfolio."

Research and Development Update __________________________________________________________________________________________________________________________________________________________________________________

A comprehensive update of the AstraZeneca R&D pipeline is presented in conjunction with this Q1 2014 results

announcement and is available on the Company's website.

The AstraZeneca pipeline continues to grow and now includes 104 projects, of which 90 are in the clinical phase

of development. During Q1 2014, across the portfolio, 4 projects were approved and 7 projects have

successfully progressed to their next phase (including 1 project entering first human testing).

In conjunction with the Full Year 2013 results, the Company announced that it anticipates 4 to 5 additional new

molecular entity (NME) Phase III starts in 2014. The late stage pipeline now includes 11 NMEs in Phase lll or

under regulatory review. Myalept (metreleptin) gained regulatory approval from the US FDA in the first quarter.

A decision has been taken to initiate the first Phase III study in the Company's broad portfolio of immune-

mediated therapies for cancer (IMT-C). The Phase III PACIFIC study will investigate the efficacy of MEDI4736,

an anti-PD-L1 monoclonal antibody (MAb), as a sequential therapy following chemoradiation in patients with

locally advanced, unresectable NSCLC and is anticipated to randomise the first patient imminently. The Phase

lll programme follows the evaluation of clinical activity and safety profile in the Company's Phase l programme,

which will be presented at the American Society of Clinical Oncology (ASCO) conference in Chicago, 30 May –

3 June 2014.

On 16 April 2014, AZD9291 was granted Breakthrough Therapy designation by the US FDA, for the treatment of

patients with metastatic, epidermal growth factor receptor (EGFR) T790M mutation-positive NSCLC, whose

NSCLC has progressed during treatment with an FDA-approved, EGFR tyrosine kinase inhibitor (TKI).

The Breakthrough Therapy designation for AZD9291 was granted by the US FDA on the basis of early clinical

data from a Phase I study in patients with advanced/metastatic EGFR mutation-positive NSCLC whose disease

had progressed following treatment with an EGFR TKI, including T790M mutation-positive tumours. This data

will be presented at the 2014 ASCO annual congress.

In addition to the updates above, other significant pipeline developments since the Full Year 2013 results

announcement include:

Further Phase III investment decisions

Since the Full Year 2013 results update on 6 February 2014, the Company has taken decisions to progress

AZD9291 (NSCLC), benralizumab (COPD) and tralokinumab (severe asthma) into Phase III. The decisions to

progress to Phase III were based on Phase I data for AZD9291 and Phase II data sets for benralizumab and

tralokinumab, which will be presented at scientific congresses in Q2 2014.

Olaparib

The US FDA has granted Priority Review for olaparib, an oral poly ADP-ribose polymerase (PARP) inhibitor that

exploits DNA repair pathway deficiencies to preferentially kill cancer cells. Olaparib is being reviewed for the

treatment of ovarian cancer patients who have a BRCA mutation (BRCAm) and whose cancer has relapsed

following a complete or partial response to platinum-based chemotherapy. Patients with the BRCA mutation are

being identified through a companion diagnostic test.

The US FDA grants Priority Review to medicines that, if approved, would deliver significant improvements in the

safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions when compared to

standard applications. The Priority Review status means that the US FDA intends to take action on the olaparib.

application within six months (compared to ten months under standard review). The Prescription Drug User Fee

Act (PDUFA) date for the US FDA is 3 October 2014. The US FDA advisory committee meeting is scheduled for

25 June 2014.

Olaparib has the potential to be the first PARP inhibitor available for patients with BRCAm platinum-sensitive

relapsed ovarian cancer.

AstraZeneca has also randomised first patient in the Phase III clinical development programme for olaparib in

BRCAm breast cancer. The first of three studies to randomise patients is the OLaparib in ADvanced BRCAm

(OLympiAD) study. OLympiAD is an open label, randomised, controlled, global and multi-centre Phase III study

that will assess the efficacy and safety of single agent olaparib versus standard of care, based on physician's

choice, in metastatic breast cancer patients with gBRCAm. A total of 310 patients will be randomised in 2:1 ratio

to receive either olaparib (300mg twice daily) or physician's choice of capecitabine, vinorelbine or eribulin –

continually to disease progression. The primary endpoint of the study is progression free survival.

AstraZeneca plans to initiate two additional studies in the breast cancer development programme during 2014,

in BRCAm neoadjuvant breast cancer and BRCAm adjuvant breast cancer and anticipates first regulatory filing

in breast cancer in the US and EU in 2016.

Brodalumab

Amgen and AstraZeneca have initiated two Phase III studies of brodalumab in psoriatic arthritis, AMVISION-1

and AMVISION-2, which together will provide detailed information on the impact of brodalumab on clinical signs

and symptoms and its ability to prevent joint damage in psoriatic arthritis. Brodalumab is a novel human

monoclonal antibody that binds to and blocks signalling of the interleukin-17 (IL-17) receptor. In addition to

psoriatic arthritis (Phase III), brodalumab is currently being investigated for the treatment of moderate-to-severe

plaque psoriasis (Phase III) and asthma (Phase II).

 

In April 2012, Amgen and AstraZeneca formed a collaboration to jointly develop and commercialise five monoclonal antibodies from Amgen's clinical inflammation portfolio.

Selumetinib

In Q1 2014, a Phase II study with registrational intent evaluating selumetinib in combination with chemotherapy

in patients with metastatic uveal melanoma was initiated. Selumetinib is a MEK inhibitor that has been shown to

be clinically active and tolerated in clinical studies evaluating a range of solid tumours as monotherapy and in combination with chemotherapy standards of care. As of April 2014, three Phase III/registrational studies are investigating selumetinib in 2nd line KRAS mutation NSCLC, differentiated thyroid cancer and metastatic uveal melanoma.

 

AstraZeneca acquired exclusive worldwide rights to selumetinib from Array BioPharma in 2003.

 

Forxiga

On 24 March 2014, AstraZeneca announced that the Japanese Ministry of Health, Labour and Welfare (MHLW) approved Forxiga (dapagliflozin) in 5mg and 10mg tablets, as a once-daily oral treatment for type 2 diabetes. Forxiga is a selective and reversible inhibitor of sodium-glucose co-transporter 2 (SGLT2) that works independently of insulin to help remove excess glucose from the body. The Forxiga application was submitted to the MHLW by Bristol-Myers Squibb K.K.

AstraZeneca and Ono Pharmaceutical entered into an agreement to co-promote Forxiga on 3 December 2013. In addition, the Company has successfully completed the first combination study of dapagliflozin and saxagliptin, as a dual add on to metformin in patients with HbA1c>8%, and will present the results as a late breaker at the American Diabetes Association conference to be held in San Francisco, 13-17 June 2014.

Bydureon Dual Chamber Pen

On 3 March 2014, AstraZeneca announced that the US FDA has approved the Bydureon Dual Chamber Pen (exenatide extended-release for injectable suspension) 2mg as an adjunct to diet and exercise to improve glycaemic control in adults with type 2 diabetes. Bydureon was the first once-weekly medicine for adults with type 2 diabetes.

The Bydureon Dual Chamber Pen is a pre-filled, single-use pen injector, eliminating the need for the patient to transfer the medication between a vial and syringe during the self-injection process. It contains the same formulation and dose as the original Bydureon single-dose tray, providing the same continuous release of exenatide. Launch is planned for the second half of 2014.

Myalept

On 25 February 2014, the US FDA approved orphan drug Myalept (metreleptin for injection), which is indicated as an adjunct to diet as replacement therapy for the treatment of complications of leptin deficiency in patients with congenital or acquired generalised lipodystrophy. Myalept, a recombinant analogue of human leptin, is the first and only treatment approved by the US FDA for these patients.

Naloxegol

AstraZeneca has been informed that the US FDA Anesthetic and Analgesic Drug Products Advisory Committee (AADPAC) is planning to review safety data as it relates to the peripherally acting mu opioid receptor antagonist class of therapies for the treatment of opioid-induced constipation. Naloxegol will be included as part of the US FDA AADPAC discussion, tentatively scheduled for 11-12 June 2014. The PDUFA date for naloxegol is 16 September 2014.

Naloxegol is part of an exclusive worldwide licence agreement between AstraZeneca and Nektar Therapeutics.

 

American Thoracic Society (ATS) meeting, 16 – 21 May 2014

On 21 March 2014, ATS posted accepted abstracts, including Phase IIb abstracts evaluating safety and efficacy results for benralizumab, an anti-IL-5Rα MAb, and tralokinumab, an anti-IL-13 MAb, suggesting that these agents may provide useful therapeutic options for patients with severe, uncontrolled asthma. Benralizumab data will be confirmed in an ongoing Phase III programme currently underway and tralokinumab is anticipated to move into Phase III development in 2014. Phase IIa data for benralizumab in COPD will also be presented at ATS, and benralizumab is expected to move into Phase lll development for COPD in 2014.

AstraZeneca will host a briefing for analysts and investors during the ATS conference, to be held in San Diego on 20 May 2014.

American Society of Clinical Oncology (ASCO) meeting, 30 May – 3 June 2014

On 21 April 2014, ASCO announced acceptance of numerous scientific abstracts for compounds across AstraZeneca's oncology pipeline, including the monotherapy studies for MEDI4736 and AZD9291.

AstraZeneca will host a briefing for analysts and investors during the ASCO conference, to be held in Chicago on 2 June 2014.

Business Development and Corporate Transactions __________________________________________________________________________________________________________________________________________________________________________________

Delisting of AstraZeneca Pharma India Limited

On 1 March 2014, AstraZeneca proposed to make a voluntary delisting offer to the public shareholders of AstraZeneca Pharma India Limited in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations 2009, as amended, with a view to delist its equity shares from BSE Limited,

National Stock Exchange of India Limited and Bangalore Stock Exchange Limited, being the stock exchanges on which the equity shares of AstraZeneca Pharma India Limited are currently listed. AstraZeneca holds 75.00% of the total paid-up share capital of AstraZeneca Pharma India Limited.

University of Cambridge collaboration

On 12 March 2014, MedImmune announced a three-year oncology research collaboration with the University of Cambridge. This partnership aims to advance cancer research by using imaging technologies to measure key biologic changes within growing tumours.

MD Anderson collaboration

On 13 March 2014, MedImmune announced a three-year translational and clinical research collaboration with The University of Texas MD Anderson Cancer Center to study therapies that unleash patients' immune systems to attack their cancers through MD Anderson's Moon Shots Program. MD Anderson's Moon Shots Program is an ambitious effort to dramatically reduce cancer deaths by targeting eight cancers with the support of several new research platforms that provide infrastructure, expertise and technology.

Acquisition of AstraZeneca K.K. (Japan) minority

On 26 March 2014, the Company announced the completion of the purchase of Sumitomo Chemical's remaining shares in AstraZeneca K.K., a shareholding that related to a historic relationship between Sumitomo and ICI in Japan. The purchase was valued at $102 million and gives AstraZeneca ownership of the entire shareholding of

 

AstraZeneca K.K.

AstraZeneca and Medical Research Council (MRC) strategic collaboration

On 31 March 2014, AstraZeneca and MRC announced a groundbreaking collaboration aimed at better understanding the mechanisms of human disease. The collaboration will see the creation of a joint research facility at AstraZeneca's new R&D centre in Cambridge in the UK. The AstraZeneca MRC UK Centre for Lead Discovery will sit within the new AstraZeneca site at the Cambridge Biomedical Campus, due to be completed in 2016. It will see world class MRC-supported researchers working side by side with scientists in AstraZeneca's high throughput screening group, identifying new methods to better understand a range of diseases and potential treatment options.

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Revenue in the first quarter was up 3 percent at CER and was broadly flat on an actual basis as a result of the negative impact of exchange rate movements, chiefly the weakening of the Japanese yen versus the US dollar. Major patent expiries have now largely annualised but the impact from losses of exclusivity amounted to nearly $150 million in the quarter, with the authorised generic for Toprol-XL in the US and Crestor in Australia among the major drivers.

 

US revenues were up 3 percent. Crestor grew by 8 percent in the quarter, driven by prior year rebate adjustments. Diabetes revenues were boosted by the consolidation of the full franchise as well as progress in Bydureon's market share. The launch of Farxiga is proceeding strongly and the share penetration is the best of all oral anti-diatebic launches since the launch of sitagliptin.

Revenue in the Rest of World (ROW) was up 3 percent. Revenue in Europe was down 4 percent, chiefly on the continuing impact of loss of exclusivity for Seroquel IR, Atacand and Nexium and erosion to Seroquel XR from adverse patent rulings in some markets coupled with "at risk" launches for generics. Revenue in Established

ROW was up 2 percent, with the generic competition for Crestor in Australia more than offset by a 13 percent revenue increase in Japan. Revenue in Emerging Markets was up 11 percent, with a 22 percent increase in China being the major driver.

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Core gross profit in the first quarter increased by 2 percent, slightly less than the increase in revenue. Core gross margin was 81.4 percent, down 0.7 percentage points, as an unfavourable mix effect and the impact of including the costs associated with diabetes brands previously accounted for as alliance revenue more than offset the benefit of a lower Crestor royalty.

Core R&D expense was up 13 percent in the first quarter. Our pipeline is growing strongly in quantity and quality, and projects are progressing rapidly, resulting in the need to invest to sustain our portfolio.

Expenditures in Core SG&A were up 14 percent. This increase was driven by the inclusion of 100 percent of the costs associated with the diabetes portfolio, the launch of Farxiga in the US and continued investment in Emerging Markets, particularly China. The excise fee imposed by the enactment of US healthcare reform measures amounted to 2.4 percent of Core SG&A expense in the quarter.

The growth in Core R&D and Core SG&A also reflects a low 2013 base. Core SG&A in the first quarter of 2013 decreased by 2 percent in comparison with the prior year and Core R&D was down 7 percent in the first quarter of 2013 compared with the same period in 2012.

Core other income of $216 million was up 29 percent. This quarter included a one-off milestone receipt, which accounted for about 70 percent of the growth.Core operating profit was down 11 percent to $1,952 million. Core operating margin was down 5.0 percentage points to 30.4 percent of revenue, as a result of the increased investment in R&D and the growth platforms.

Core earnings per share were down 11 percent to $1.17, in line with the decline in Core operating profit, as the impact of a higher number of shares outstanding and higher net finance expense were broadly offset by the lower tax rate compared to the first quarter last year.

Reported operating profit was down 31 percent to $836 million. Reported EPS was down 40 percent to $0.40. Reported operating profit in the quarter was reduced by the loss on disposal of the previously disclosed sale of the Company's R&D site at Alderley Park and the impact of the acquisition of BMS's share of the global diabetes alliance.

Finance Income and Expense

Core net finance expense was $126 million for the first quarter, versus $93 million in the same period of 2013. The increase is principally due to exchange movements and the effect of discounting a long-term liability. Since this liability does not relate to a business combination, under our definition for Core financial measures the charge is not excluded from the Core result. In the first quarter of 2014, Reported net finance expense include a charge of $72 million relating to the discount unwind on contingent consideration creditors recognised on business combinations, principally relating to the acquisition of BMS's share of the global diabetes alliance.

Taxation

The Reported tax rate for the first quarter was 20.7 percent compared with 22.4 percent for the same period last year.

Cash Flow

Cash generated from operating activities was $1,187 million in the three months to 31 March 2014. Net cash outflows from investing activities were $3,777 million in the first quarter of 2014, compared with $364 million in the prior year. Cash outflows as a result of the acquisition of BMS's share of the global diabetes alliance, in the first quarter of 2014, was the principal reason for the increase.

Net cash distributions to shareholders were $2,228 million, through idends of $2,425 million partially offset by proceeds from the issue of shares of $197 million.

Debt and Capital Structure

At 31 March 2014, outstanding gross debt (interest-bearing loans and borrowings) was $10,340 million (31 December 2013: $10,376 million). Of the gross debt outstanding at 31 March 2014, $2,787 million is due within one year (31 December 2013: $1,788 million).

The Company's net debt position at 31 March 2014 was $4,833 million.

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Shares in Issue

In the quarter, 4.1 million shares were issued in respect of share option exercises for a consideration of $197 million.

The total number of shares in issue at 31 March 2014 was 1,261 million.

Future Prospects

The Company maintains its guidance for 2014:

 

• It expects a low-to-mid single digit percentage decline in revenue at CER for 2014.

 

• In percentage terms, Core EPS for 2014 is expected to decline in the teens at CER.

 

This guidance is predicated on the launch of generic Nexium in the US at the end of May 2014.

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• In the US, Crestor sales in the first quarter were $705 million, up 8 percent. Total prescriptions for statin products

 

in the US decreased by 1 percent in the first quarter. Crestor total prescriptions were down 6 percent. Favourable

 

net price realisation in the first quarter was driven by prior year rebate adjustments.

 

 

 

Crestor sales in the Rest of World were down 4 percent to $627 million, reflecting the impact of generic

 

competition in Australia. In addition to the decline in Australia, Canada also contributed to the 10 percent decline

 

in Established Rest of World. Sales in Japan increased by 15 percent in the quarter and sales in Emerging

 

Markets were up 13 percent, with China growing by 90 percent.

 

US sales of the Toprol-XL product range, which includes sales of the authorised generic, were down 57 percent to

 

$24 million, largely the result of market share loss following additional generic entrants. Seloken sales in other

 

markets were up 5 percent to $169 million.

 

Onglyza revenue was up 81 percent in the first quarter to $162 million, of which $106 million was in the US and

 

$56 million in other markets. AstraZeneca completed the acquisition of BMS's share of the global diabetes alliance

 

on 1 February 2014 and began reflecting 100 percent ownership at that point. Total prescriptions for the Onglyza

 

franchise in the US were down 3 percent compared with the first quarter last year; share of total prescriptions was

 

15.8 percent in March 2014, down 0.5 percentage points since December 2013. Average realised selling prices

 

were lower in the quarter.

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US sales of Atacand were down 59 percent in the quarter to $11 million. Generic competition for the diuretic

 

combination product followed the loss of exclusivity in December 2012. Atacand sales in other markets were down

 

19 percent to $111 million, reflecting loss of exclusivity in many markets.

 

Sales of Brilinta/Brilique were $99 million in the first quarter. More than half of the sales were in Europe, where

 

first quarter sales have increased by 70 percent compared with the first quarter of 2013. Performance in Canada,

 

Australia and Emerging Markets is also contributing to brand revenue growth.

 

Brilinta sales in the US in the first quarter were $28 million. Total prescriptions for Brilinta in the US in the first

 

quarter of 2014 were 11 percent higher than the fourth quarter of 2013. New to brand share is now 6.8 percent,

 

growth of 0.7 percentage points in the quarter.

 

Byetta and Bydureon revenues in the US were $121 million, and $37 million in ROW. No revenue was recorded in

 

ROW in Q1 2013 as the alliance only assumed responsibility for promotion outside the US in April 2013. Bydureon

 

share of total prescriptions in the US was 19.6 percent in March 2014, up 2.4 percentage points since December

 

2013 largely due to favourable formulary position.

 

Oncology

 

• Iressa sales in the first quarter were up 5 percent to $169 million. There was continued growth in Japan following

 

first line approval, with sales up 23 percent.

 

Faslodex sales in the US were up 4 percent to $76 million. Sales in the Rest of World were up 18 percent to $96

 

million, chiefly on growth in Europe.

 

Arimidex sales were $78 million in the first quarter. Sales in markets outside the US were $73 million, down 13

 

percent as sales continue to decline as a result of loss of exclusivity.

 

Respiratory, Inflammation and Autoimmunity

 

Symbicort sales in the US were $344 million in the first quarter, a 20 percent increase over last year. Total

 

prescriptions for Symbicort were up 27 percent, compared to a stable market for fixed combination products.

 

Symbicort share of total prescriptions for fixed combination products reached 29.8 percent in March 2013, up 3.5

 

percentage points since December 2013, accelerated by favourable formulary position. Strong demand was

 

partially offset by higher inventory destocking in the quarter; price was broadly flat.

 

Symbicort sales in other markets in the first quarter were $584 million, up 10 percent. Sales in Europe were down

 

3 percent. Sales in Established Rest of World were up 57 percent on growth in Japan, Australia and New

 

Zealand. Sales in Emerging Markets were up 24 percent.

 

US sales of Pulmicort were down 16 percent to $52 million. Pulmicort sales in the Rest of World were up 24

 

percent to $211 million, with China now comprising more than half.

 

Infection, Neuroscience and Gastrointestinal

 

• In the US, Nexium sales in the first quarter were $484 million, down 7 percent compared with the first quarter last

 

year. Dispensed retail tablet volume declined by approximately 13 percent and realised net price is slightly lower.

 

Declines were partially offset by sales related to third party clinical trial supply and other adjustments.

 

 

 

Nexium sales in other markets were up 14 percent to $446 million. Sales in Europe were down 1 percent,

 

reflecting the continued effects of generic competition. Sales in Established Rest of World were up 34 percent on

 

a continued strong performance in Japan, partially offset by the impact of generic competition in Canada. Sales in

 

Emerging Markets were up 8 percent, with 40 percent growth in China partially offset by declining volume in Latin

 

America.

 

Sales of Synagis in the US were $256 million in the first quarter, down 18 percent largely driven by a mix effect on

 

price and favourable adjustments to Medicaid provisions in the prior year. Outside the US, Synagis sales were

 

down 21 percent to $72 million, attributable to timing of shipments to our marketing partner AbbVie.

 

Sales of Seroquel XR in the US were $166 million, down 2 percent. Total prescriptions were down 6 percent,

 

offset by slightly higher realised net price.

 

Sales of Seroquel XR in the Rest of World were down 16 percent to $126 million, as a result of generic

 

competition (including some "at risk" launches) in Europe. Sales in Established Rest of World were down 57

 

percent, as a result of generic competition in Canada. Sales in Emerging Markets were down 7 percent.

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Sales of Seroquel IR were down 46 percent in the quarter to $66 million. More than half of this decline is

 

attributable to Japan, as the partner built inventory in 2013 in anticipation of a manufacturing site change.

 

Losec sales in markets outside the US were down 12 percent in the first quarter to $102 million, largely on lower

 

sales in Japan.

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In the US, revenue was up 3 percent in the first quarter, with declines in revenue from brands such as Nexium,

 

Toprol-XL and Synagis offset by the growth platforms and the impact of completing the acquisition of BMS's share

 

of the global diabetes alliance. The diabetes products provided $103 million of incremental revenue, with growth

 

from Symbicort, Brilinta and Crestor also contributing.

 

• In the first quarter, revenue in Europe was down 4 percent, due to continuing impact from loss of exclusivity on

 

Seroquel IR, Seroquel XR in some markets, and Atacand, timing of partner purchases on Synagis and volume

 

declines on Crestor. This is partially offset by favourable impact from the acquisition of BMS's share of the global

 

diabetes alliance and 70 percent sales growth for Brilinta.

 

Revenue in Established ROW was up 2 percent in the quarter, chiefly due to the growth of Nexium, Crestor and

 

Symbicort in Japan. Nexium is now the number one proton pump inhibitor in Japan measured in value. Forxiga

 

was approved in Japan during the quarter. There was generic competition on Crestor in Australia and on Nexium

 

and Seroquel XR in Canada.

 

Revenue in Emerging Markets was up 11 percent in the quarter, largely the result of a 22 percent increase in

 

China. China now represents approximately 40 percent of the total Emerging Markets business, with growth

 

driven by Pulmicort, Crestor, Nexium and Symbicort. Pulmicort sales in China increased by 60 percent in the

 

quarter to $107 million as the Company has been investing in nebulising centres.

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Notes to the Interim Financial Statements

 

1 BASIS OF PREPARATION AND ACCOUNTING POLICIES

 

These unaudited condensed consolidated interim financial statements ("interim financial statements") for the quarter

 

ended 31 March 2014 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the

 

European Union and as issued by the International Accounting Standards Board. These interim financial statements

 

have been prepared using the same accounting policies and methods of computation as followed in the most recent

 

annual financial statements. Details of the accounting policies applied are those set out in AstraZeneca PLC's Annual

 

Report and Form 20-F Information 2013. There have been no significant new or revised accounting standards applied in

 

the quarter ended 31 March 2014.

 

The information contained in Note 6 updates the disclosures concerning legal proceedings and contingent liabilities in

 

the Group's Annual Report and Form 20-F Information 2013.

 

The Group has considerable financial resources available. As at 31 March 2014, the Group had $4.6 billion in financial

 

resources (cash balances of $4.4 billion and undrawn committed bank facilities of $3.0 billion that are available until

 

April 2017, with $2.8 billion of debt due within one year). The Group's revenues are largely derived from sales of

 

products which are covered by patents which provide a relatively high level of resilience and predictability to cash

 

inflows, although our revenue is expected to continue to be significantly impacted by the expiry of patents over the

 

medium term. In addition, recent government price interventions in response to budgetary constraints are expected to

 

continue to adversely affect revenues in many of our mature markets. However, we anticipate new revenue streams

 

from both recently launched medicines and products in development, and the Group has a wide ersity of customers

 

and suppliers across different geographic areas. Consequently, the Directors believe that, overall, the Group is well

 

placed to manage its business risks successfully.

 

On the basis of the above paragraph and after making enquiries, the Directors have a reasonable expectation that the

 

Company and the Group have adequate resources to continue in operational existence for the foreseeable future.

 

Accordingly, the interim financial statements have been prepared on a going concern basis.

 

The comparative figures for the financial year ended 31 December 2013 are not the Company's statutory accounts for

 

that financial year. Those accounts have been reported on by the Group's auditors and will be delivered to the registrar

 

of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the

 

auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under

 

section 498(2) or (3) of the Companies Act 2006.

 

2 RESTRUCTURING COSTS

 

Profit before tax for the quarter ended 31 March 2014 is stated after charging restructuring costs of $479 million ($543

 

million for the first quarter 2013). These have been charged to profit as follows:

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4 ACQUISITION OF BMS SHARE OF GLOBAL DIABETES ALLIANCE ASSETS

 

On 1 February 2014, AstraZeneca completed the acquisition of BMS's interests in the companies' diabetes alliance.

 

The acquisition provides AstraZeneca with 100% ownership of the intellectual property and global rights for the

 

development, manufacture and commercialisation of the diabetes business, which includes Onglyza (saxagliptin),

 

Kombiglyze XR (saxagliptin and metformin HCl extended release), Komboglyze (saxagliptin and metformin HCl),

 

Farxiga (dapagliflozin, marketed as Forxiga outside the US), Xigduo (dapagliflozin and metformin HCl), Byetta

 

(exenatide), Bydureon (exenatide extended release for injectable suspension), Myalept (metreleptin) and Symlin

 

(pramlintide acetate).

 

The transaction consolidates worldwide ownership of the diabetes business within AstraZeneca, leveraging its primary

 

and specialty care capabilities and its geographical reach, especially in emerging markets. The transaction included the

 

acquisition of 100% of the share capital of Amylin Pharmaceuticals, LLC, and the asset purchase of the additional

 

intellectual property and global rights not already owned by AstraZeneca, for the development, manufacture and

 

commercialisation of Onglyza, Kombiglyze XR, Komboglyze and Farxiga. In total, approximately 4,200 BMS employees

 

are expected to transfer as part of the acquisition. This combination of intangible product rights and manufacturing

 

assets with an established work force and their associated operating processes, principally those related to the global

 

manufacturing and selling and marketing operations, requires that the acquisition is accounted for as a business

 

combination in accordance with IFRS 3 Business Combinations.

 

Upfront consideration for the acquisition of $2.7 billion was paid on 1 February 2014, with further payments of up to $1.4

 

billion being payable for future regulatory, launch and sales-related milestones. AstraZeneca has also agreed to pay

 

various sales-related royalty payments up until 2025. The amount of royalties payable under the agreement is inherently

 

uncertain and difficult to predict, given the direct link to future sales and the range of outcomes cannot be reliably

 

estimated. The maximum amount payable in each year is with reference to net sales. AstraZeneca may also make

 

payments up to $225 million when certain additional assets are subsequently transferred. Contingent consideration has

 

been fair valued using decision tree analysis, with key inputs including the probability of success and consideration of

 

potential delays. In accordance with IFRS 3, the fair value of contingent consideration, including future royalties, is

 

recognised immediately as a liability.

 

In addition to the acquired interests, AstraZeneca has entered into certain agreements with BMS to maintain the

 

manufacturing and supply chain of the full portfolio of diabetes products. BMS will also continue to deliver specified

 

clinical trials in line with the ongoing clinical trial plan, with an agreed number of R&D and manufacturing employees

 

dedicated to diabetes remaining with BMS to progress the diabetes portfolio and support the transition for these areas.

 

These arrangements will be carried out over future periods and future payments by AstraZeneca to BMS in relation to

 

these arrangements will be expensed as incurred. No amounts have been recognised in the initial acquisition

 

accounting in relation to these arrangements but have been separated, at fair value, from the business combination

 

accounting in accordance with IFRS 3.

 

The terms of the agreement partially reflect settlement of the launch and sales-related milestones under the pre-existing

 

Onglyza and Farxiga collaboration agreements, which have been terminated in relation to the acquisition. The expected

 

value of those pre-existing milestones is $0.3 billion and has been recognised as a separate component of consideration and excluded from the business combination accounting in accordance with IFRS 3. Separate intangible

 

assets have been recognised.

 

Goodwill of $1.6 billion is underpinned by a number of elements, which in idually cannot be quantified. Most

 

significant among these are the synergies AstraZeneca expect to be able to generate through more efficient

 

manufacturing processes and the incremental value accessible through strategic and operational independence upon

 

taking full control of the alliance.

 

The fair value of receivables acquired as part of the acquisition approximates the gross contractual amounts receivable.

 

There are no significant amounts which are not expected to be collected.

 

The results from the additional acquired interests in the diabetes alliance have been consolidated into the Company's

 

results from 1 February 2014.

< >

Future contingent consideration has been recognised initially at fair value and subsequently revalued to fair value at

 

each balance sheet date. Changes in fair value can arise as a result of a number of factors, including external news flow

 

and internal re-forecasts, which may affect the likelihood of specific milestones becoming payable or the expected

 

quantum of future royalty payments. These changes, which are potentially volatile and material, are included within

 

selling, general and administrative costs. They are excluded from the Group's Core results.

 

The fair value of contingent consideration is also affected over time by the unwinding effect of discounting. This effect

 

gives a charge to finance income and expense which reduces over time as the liability reduces. As a direct result of a

 

material business acquisition, this effect is excluded from the Group's Core results.

 

In the period between acquisition and 31 March 2014, the effect of discounting increased the contingent consideration

 

liability by $62 million and there were no revaluations to fair value.

 

In addition, inventory acquired at completion has been recorded at fair value, which is higher than manufacturing cost.

 

The adjustment to increase the inventory to fair value is held in inventory until product is sold, at which time it is

 

released to profit as a cost of sale. This results in a lower gross margin in the first turn of inventory and, since this arises

 

as a direct result of a material business acquisition, this effect is excluded from the Group's Core results. The charge to

 

cost of sales in the first quarter was $124 million and represents the significant majority of the total adjustment to the fair value of inventory.

< >

5 FINANCIAL INSTRUMENTS

 

As detailed in our most recent annual financial statements, our principal financial instruments consist of derivative

 

financial instruments, other investments, trade and other receivables, cash and cash equivalents, trade and other

 

payables, and interest-bearing loans and borrowings. There have been no significant changes to the accounting

 

policies, including fair value measurement, for financial instruments from those disclosed on page 139 of the Company's

 

Annual Report and Form 20-F Information 2013. In addition, there have been no changes of significance to the

 

categorisation or fair value hierarchy of our financial instruments. Financial instruments measured at fair value include

 

$1,074 million of other investments, $1,969 million of loans, and $351 million of derivatives as at 31 March 2014. The

 

total fair value of interest-bearing loans and borrowings at 31 March 2014, which have a carrying value of $10,340

 

million in the Condensed Consolidated Statement of Financial Position, was $11,336 million. As detailed in Note 4,

 

contingent consideration arising on the Company's acquisition during the year has been fair valued under Level 3 fair

 

value methodology. For all other financial instruments which are carried at amortised costs, amortised cost

 

approximates to fair value.

 

6 LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES

 

AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation and

 

investigations relating to product liability, commercial disputes, infringement of intellectual property rights, the validity of

 

certain patents, anti-trust law and sales and marketing practices. The matters discussed below constitute the more

 

significant developments since publication of the disclosures concerning legal proceedings in the Company's Annual

 

Report and Form 20-F Information 2013 (the 2013 Disclosures). Unless noted otherwise below or in the 2013

 

Disclosures, no provisions have been established in respect of the claims discussed below.

 

As discussed in the 2013 Disclosures, for the majority of claims in which AstraZeneca is involved it is not possible to

 

make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of the

 

proceedings. In these cases, AstraZeneca discloses information with respect only to the nature and facts of the cases

 

but no provision is made.

 

In cases that have been settled or adjudicated, or where quantifiable fines and penalties have been assessed and which

 

are not subject to appeal, or where a loss is probable and we are able to make a reasonable estimate of the loss, we

 

record the loss absorbed or make a provision for our best estimate of the expected loss.

 

The position could change over time and the estimates that we have made and upon which we have relied in calculating

 

these provisions are inherently imprecise. There can, therefore, be no assurance that any losses that result from the

 

outcome of any legal proceedings will not exceed the amount of the provisions that have been booked in the accounts.

 

The major factors causing this uncertainty are described more fully in the 2013 Disclosures and herein.

 

AstraZeneca has full confidence in, and will vigorously defend and enforce, its intellectual property.

 

Matters disclosed in respect of the first quarter of 2014 and April 2014

 

Patent litigation

 

Crestor (rosuvastatin calcium)

 

Patent proceedings outside the US

 

On 1 April 2014, Shionogi & Co. Ltd, the licensor of the Crestor patent, received confirmation of a request for trial for

 

patent invalidation in the Japanese Patent Office. The request was initiated by Teva Pharma Japan Inc. and relates to

 

the substance patent.

 

On 17 April 2014, AstraZeneca received a writ of summons from Resolution Chemicals Ltd. (Resolution) challenging the

 

validity of Supplementary Protection Certificate 300125 for Crestor in the Netherlands. Resolution also seeks a

 

declaration of non-infringement of its rosuvastatin zinc product that it intends to market in the Netherlands.

 

Epanova

 

Patent proceedings in the US

 

In March 2014, AstraZeneca received a complaint from Amarin Pharmaceuticals Ireland Ltd. alleging that AstraZeneca's

 

proposed Epanova product (for the treatment of patients with severe hypertriglyceridaemia) infringes US Patent No.

 

8,663,662. On 18 September 2013, AstraZeneca announced that the FDA had accepted for review a New Drug Application

 

for Epanova and the Prescription Drug User Fee Act goal date for the FDA is 5 May 2014.

 

Pulmicort Respules (budesonide inhalation suspension)

 

Patent proceedings in the US

 

As previously disclosed, in December 2013, the US District Court for the District of New Jersey granted AstraZeneca's

 

motion and temporarily enjoined the generic defendants from entering the market until resolution of AstraZeneca's

 

motion for a preliminary injunction. On 1 April 2014, the Court entered an order scheduling oral argument on

 

AstraZeneca's motion for a preliminary injunction for 9 May 2014.

 

Faslodex (fulvestrant)

 

Patent proceedings in the US

 

In April 2014, Sandoz Inc. sent notice that it had submitted an Abbreviated New Drug Application (ANDA) for fulvestrant

 

injection, 250mg/5ml containing a Paragraph IV Certification alleging that patents listed in the FDA Orange Book with

 

reference to Faslodex are invalid, unenforceable and/or will not be infringed by the Sandoz product as described in its

 

ANDA. The challenged patents are US Patent Nos. 6,774,122; 7,456,160; 8,329,680 and 8,466,139.

< >

Patent proceedings outside the US

 

As previously disclosed, in Europe, in 2008, the Opposition ision of the European Patent Office (EPO) maintained a

 

Faslodex formulation patent, EP 1250138, following an opposition against the grant of this patent by Gedeon Richter

 

Plc, which appealed this decision. The Board of Appeal of the EPO called the parties to oral proceedings in March 2014

 

and decided to remit the case back to the Opposition ision for further consideration.

 

Nexium (esomeprazole magnesium)

 

Patent proceedings outside the US

 

As previously disclosed, in the UK, in 2010, AstraZeneca initiated patent infringement proceedings against Consilient

 

Health Limited and Krka, d.d. Novo Mesto (Consilient/Krka). During previous proceedings, Consilient/Krka agreed not

 

to launch their esomeprazole magnesium product. This injunction was discharged in July 2011. In March 2014, in

 

damages proceedings initiated by Consilient/Krka, the High Court awarded Consilient/Krka £27.4 million in damages.

 

AstraZeneca is considering its legal options including seeking leave to appeal. A provision has been taken.

 

Onglyza (saxagliptin)

 

Patent proceedings in the US

 

In April 2014, multiple generic companies sent notices that they had submitted Abbreviated New Drug Applications

 

(ANDAs) for saxagliptin hydrochloride 2.5 mg and 5 mg tablets containing Paragraph IV Certifications alleging that US

 

Patent No. 7,951,400 and/or RE44,186, listed in the FDA Orange Book with reference to Onglyza, are invalid,

 

unenforceable and/or will not be infringed by the products as described in the ANDAs.

 

 

 

Seroquel XR (quetiapine fumarate)

 

Patent proceedings outside the US

 

As previously disclosed, in Germany, Ratiopharm GmbH, CT Arzneimittel GmbH and AbZ Pharma GmbH are seeking

 

damages relating to the preliminary injunction issued in April 2012 that prevented generic Seroquel XR sales by those

 

entities. The injunction was subsequently lifted following the November 2012 Federal Patent Court (the Federal Court)

 

decision that held that the Seroquel XR patent was invalid. AstraZeneca has appealed the Federal Court's decision.

 

In Romania, in March 2014, AstraZeneca settled patent litigation with Teva Pharmaceutical Industries Ltd. and Teva

 

Pharmaceuticals S.R.L.

 

Product liability litigation

 

Byetta/Bydureon (exenatide)

 

As previously disclosed, Amylin Pharmaceuticals, LLC, a wholly owned subsidiary of AstraZeneca, and/or AstraZeneca

 

are among multiple defendants in various lawsuits filed in federal and state courts in the US involving approximately 409

 

plaintiffs claiming physical injury from treatment with Byetta and/or Bydureon. The lawsuits allege multiple types of

 

injuries including pancreatitis, pancreatic cancer and thyroid cancer. A Multi-District Litigation has been established in

 

the US District Court for the Southern District of California in regard to the alleged pancreatic cancer cases in federal

 

courts. Further, a coordinated proceeding has been established in Los Angeles, California in regard to the various

 

lawsuits in California state courts. AstraZeneca and certain defendants recently reached an agreement to settle 84

 

cases pending in the California state court proceeding, including a matter that was scheduled for trial in February 2014.

 

Nexium (esomeprazole magnesium)

 

As previously disclosed, in December 2013, 522 already dismissed plaintiffs collectively moved the federal Multi-District

 

Litigation court (the MDL Court) to have their claims reinstated, and AstraZeneca opposed that motion. In March 2014,

 

more than 440 of the 522 plaintiffs seeking reinstatement failed to satisfy certain court-imposed conditions for

 

reinstatement, and their claims are in the process of being dismissed with prejudice. AstraZeneca has withdrawn its

 

opposition to more than 50 of the 522 plaintiffs' requests for reinstatement after they satisfied certain court-imposed

 

conditions, and those plaintiffs' claims will be reinstated. The remaining of the 522 plaintiffs' requests for reinstatement

 

remain outstanding and in dispute. In addition, in February 2014, the MDL Court dismissed the claims of an additional

 

62 plaintiffs.

 

Commercial litigation

 

Average Wholesale Price (AWP) Litigation

 

As previously disclosed, AstraZeneca and other pharmaceutical manufacturers were named as defendants in litigation

 

involving allegations that, by causing the publication of allegedly inflated wholesale list prices, defendants caused

 

entities to overpay for prescription drugs. In March 2014, AstraZeneca reached a settlement with the State of Utah and

 

in April 2014, AstraZeneca reached a settlement in principle with the State of Wisconsin. With these settlements,

 

AstraZeneca has brought the AWP litigation to a conclusion.

 

Crestor qui tam litigation

 

As previously disclosed, the US Attorney's Offices and all US states, except for the State of Texas, have declined to

 

intervene in the civil component of a previously disclosed investigation regarding Crestor. Partly as a result thereof,

 

AstraZeneca was served with two additional lawsuits filed in the US District Court for the District of Delaware under the

 

qui tam (whistleblower) provisions of the federal False Claims Act and related state statutes, alleging that AstraZeneca

 

directed certain employees to promote Crestor off-label and provided unlawful remuneration to physicians in connection

 

with the promotion of Crestor. AstraZeneca intends to vigorously defend these matters.

 

Nexium settlement anti-trust litigation

< >

Shareholder Information

 

ANNOUNCEMENTS AND MEETINGS _______________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

Annual General Meeting 24 April 2014

 

Announcement of second quarter and half year 2014 results 31 July 2014

 

Announcement of third quarter and nine months 2014 results 6 November 2014

 

IDENDS _______________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

Future idends will normally be paid as follows:

 

First interim Announced with second quarter and half year results and paid in September

 

Second interim Announced with fourth quarter and full year results and paid in March

 

TRADEMARKS _______________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

Trademarks of the AstraZeneca group of companies and of companies other than AstraZeneca appear throughout this

 

document in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol are all trademarks of the

 

AstraZeneca group of companies. Trademarks of companies other than AstraZeneca that appear in this document include

 

Epanova, a trademark of Chrysalis Pharma AG and Zinforo, a trademark of Forest Laboratories, Inc.

 

ADDRESSES FOR CORRESPONDENCE _______________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

Registrar and

 

Transfer Office

 

Equiniti Limited

 

Aspect House

 

Spencer Road

 

Lancing

 

West Sussex

 

BN99 6DA

 

UK

 

Tel (freephone in UK):

 

0800 389 1580

 

Tel (outside UK):

 

+44 (0)121 415 7033

 

CONTACT INFORMATION _______________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

Media Enquiries: Esra Erkal-Paler (London) +44 (0) 20 7604 8030

 

US Depositary

 

JP Morgan Chase & Co

 

PO Box 64504

 

St Paul

 

MN 55164-0504

 

US

 

Tel (toll free in US):

 

888 697 8018

 

Tel (outside US):

 

+1 (651) 453 2128

 

Registered Office

 

2 Kingdom Street

 

London

 

W2 6BD

 

UK

 

 

 

 

 

Tel: +44 (0)20 7604 8000 Tel: +46 (0)8 402 9000

 

Analyst/Investor Enquiries: Karl Hård (London) +44 (0) 20 7604 8123

 

Vanessa Rhodes (London) +44 (0) 20 7604 8037

 

Ayesha Bharmal (London) +44 (0) 20 7604 8034

 

Jacob Lund (Södertälje) +46 (0) 8 553 260 20

 

Colleen Proctor (US) +1 302 886 1842

 

Anthony Brown (London) +44 (0) 20 7604 8067

 

Jens Lindberg (London) +44 (0) 20 7604 8414

 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS _______________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995, we are providing the following

 

cautionary statement: The interim financial statements contain certain forward-looking statements with respect to the operations, performance and financial

 

condition of the Group. Although we believe our expectations are based on reasonable assumptions, any forward-looking statements, by their very nature,

 

involve risks and uncertainties and may be influenced by factors that could cause actual outcomes and results to be materially different from those predicted.

 

The forward-looking statements reflect knowledge and information available at the date of preparation of the interim financial statements and AstraZeneca

 

undertakes no obligation to update these forward-looking statements. We identify the forward-looking statements by using the words 'anticipates', 'believes',

 

'expects', 'intends' and similar expressions in such statements. Important factors that could cause actual results to differ materially from those contained in

 

forward-looking statements, certain of which are beyond our control, include, among other things: the loss or expiration of patents, marketing exclusivity or

 

trademarks, or the risk of failure to obtain patent protection; the risk of substantial adverse litigation/government investigation claims and insufficient insurance

 

coverage; exchange rate fluctuations; the risk that R&D will not yield new products that achieve commercial success; the risk that strategic alliances and

 

acquisitions will be unsuccessful; the impact of competition, price controls and price reductions; taxation risks; the risk of substantial product liability claims; the

 

impact of any delays in the manufacturing, distribution and sale of any of our products; the impact of any failure by third parties to supply materials or services;

 

the risk of failure to manage a crisis; the risk of failure of information technology and cybercrime; the risk of delay to new product launches; the difficulties of

 

obtaining and maintaining regulatory approvals for products; the risk of failure to observe ongoing regulatory oversight; the risk that new products do not perform

 

as we expect; the risk of environmental liabilities; the risks associated with conducting business in emerging markets; the risk of reputational damage; the risk of

 

product counterfeiting; the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring

 

programmes; the risk that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects; the impact of failing to

 

attract and retain key personnel and to successfully engage with our employees; and the impact of increasing implementation and enforcement of more

 

stringent anti-bribery and anti-corruption legislation.

 

As previously disclosed, AstraZeneca is one of several defendants in a Multi-District Litigation proposed class action

 

and in idual lawsuits alleging that AstraZeneca's settlements of certain patent litigation in the US relating to Nexium

 

violated US anti-trust law and various state laws. On 12 February 2014, the US District Court for the District of Massachusetts (the Court) issued an order granting three motions for summary judgment in full, granting two in part,

 

denying one as premature, and denying five.

 

In particular, the Court held that AstraZeneca's settlement agreements with Teva and Dr. Reddy's Laboratories did not

 

include "large, unjustified reverse payments" that would raise anti-trust concerns. The Court granted the motion as to the

 

Ranbaxy agreement because plaintiffs could not establish that the agreement delayed generic entry beyond any delay

 

caused by Ranbaxy's manufacturing and approval issues. The Court denied the motion seeking judgment on the

 

allegation of a conspiracy among all defendants.

 

The Court initially indefinitely postponed the trial and administratively closed the case pending the issuance of written

 

decisions. On 17 April 2014, the Court granted the plaintiffs' motion for reconsideration of the motion directed to the

 

Teva agreement and decided that there was sufficient evidence to proceed to trial on the question of whether the Teva

 

settlement raised anti-trust concerns. The Court scheduled an October 2014 trial on the plaintiffs' claims that remain in

 

the case. The Court's decisions are subject to further motions, including additional motions for reconsideration, and

 

appeal.

 

Separately, AstraZeneca was notified that indirect purchaser plaintiffs who opted out of the Massachusetts class action

 

intend to file complaints in the Pennsylvania Court of Common Pleas.

 

Government investigations

 

 

 

Medco New Jersey subpoena

 

In April 2014, AstraZeneca was served with a subpoena from the New Jersey Attorney General's Office seeking certain

 

documents relating to the price of Nexium and/or its business relationships with Medco Health Solutions, Inc. and

 

Express Scripts Holding Company.

Integration of BMS part of diabetes alliance proceeding as planned. Strong launch of Farxiga in the US

 

and continued success in Germany; Forxiga approved in Japan.

 

The Company maintains its financial guidance for 2014.

< >

Financial Performance Highlights

 

Revenue for the quarter was $6,416 million, up 3% at CER.

 

• The key growth platforms Brilinta, diabetes, respiratory, Emerging Markets and Japan delivered $3.3

 

billion (+15% CER) of revenue in the first quarter. Emerging Markets grew by 11% at CER, with revenue

 

in China increasing by 22% at CER.

 

Core EPS was $1.17 for the quarter, an 11% decline at CER.

 

• Core EPS declined despite revenue growth, primarily due to investment in the Company's key growth

 

platforms and rapidly progressing pipeline.

 

Reported EPS was $0.40 for the quarter, a 40% decline at CER.

 

• Due to the loss on disposal of Alderley Park and the impact of the acquisition of the global diabetes

alliance.

 

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