1st Quarter Results - Part 1

AstraZeneca PLC
23 April 2007




AstraZeneca PLC

First Quarter Results 2007

'First quarter sales up 9 percent and Earnings per Share up 14 percent.  On
track to achieve full year financial targets.'

Financial Highlights
  Group                         1st Quarter   1st Quarter    Actual       CER
                                       2007          2006         %         %
                                         $m            $m

 Sales                                6,966         6,180       +13        +9

 Operating Profit                     2,170         1,976       +10       +10

 Profit before Tax                    2,267         2,044       +11       +11

 Earnings per Share                  $1.02*         $0.90       +13       +14

Adjusted to exclude
Toprol-XLTM in US**
Sales                                 6,635         5,826       +14       +10
Earnings per Share                   $0.89*         $0.79       +14       +14

*Includes ($0.04) restructuring charge associated with the supply chain
 productivity initiative.

**This Non-GAAP presentation excludes US sales and earnings contribution from
  Toprol-XLTM from both current and prior year period.



All narrative in this section refers to growth rates at constant exchange rates
(CER)

•    Earnings per Share, before restructuring charges, were $1.06 ($0.93 adjusted to exclude Toprol-XLTM).

•    First quarter sales increased by 9 percent to $6,966 million and operating profit increased by 10 percent to
     $2,170 million.  Excluding the $82 million charge to cost of sales associated with the previously announced
     supply chain productivity initiative, operating profit increased by 15 percent.

•    Combined sales of five key growth products (NexiumTM, SeroquelTM, CrestorTM, ArimidexTM and SymbicortTM)
     increased by 17 percent to $3,614 million.

•    Free cash flow of $1,907 million in the first quarter.  Cash distributions to shareholders, including net
     share repurchases of $1,151 million, totalled $3,029 million in the quarter.

•    The Company expects to launch SymbicortTM in the US around the middle of this year.

•    On 25 March at the Scientific Sessions of the American College of Cardiology, data from the METEOR trial of
     CrestorTM was presented, demonstrating that CrestorTM treatment slowed progression of atherosclerosis in
     people with early signs of carotid artery disease and at low risk of coronary artery disease.

•    As previously announced, the ARISE trial did not meet its primary endpoint.  After completion of the final
     study analysis, and under the terms of the licensing and collaboration agreement, the Company has confirmed
     to AtheroGenics Inc. that it has decided to terminate the licensing and collaboration agreement.  Charges
     totalling $83 million have been taken in conjunction with this decision.

•    On 23 April, the Company announced it is to acquire MedImmune, Inc. for $58 per share in an all cash
     transaction with a total enterprise value of $15.2 billion.



David Brennan, Chief Executive Officer, said:  'We continue to deliver on our
three strategic priorities: with a good sales and earnings performance in the
first quarter, we are on track to achieve our full year targets; we continue our
efforts to strengthen the pipeline - our number one priority; and the entire
organisation is rising to the productivity challenge. This constitutes a good
start to the year, building on sound foundations established over the last 3
years.'

London, 23 April 2007


Media Enquiries:              Steve Brown/Edel McCaffrey (London)          [phone]/5034
                              Staffan Ternby (Sodertalje)                  (8) 553 26107
                              Emily Denney (Wilmington)                    [phone]

Analyst/Investor Enquiries:   Mina Blair (London)/Karl Hard (London)       [phone]/5322
                              Jonathan Hunt (London)                       [phone]
                              Staffan Ternby (Sodertalje)                  (8) 553 26107
                              Ed Seage/Jorgen Winroth (US)                 [phone]/[phone]




Business Highlights All narrative in this section refers to growth rates at
constant exchange rates (CER) unless otherwise indicated

Sales in the first quarter increased by 9 percent at CER, or 13 percent on an as
reported basis (including an exchange benefit of 4 percent).  Sales in the US
were up 12 percent (up 15 percent excluding sales of Toprol-XLTM from both
periods).  Outside the US, sales were up 7 percent as a result of strong
double-digit sales growth in Emerging Markets and Japan.  Sales in Western
Europe were up 4 percent.



Operating profit in the first quarter was up 10 percent, with currency movements
having minimal effect on this growth rate.  Operating margin, at 31.2 percent of
sales, was 0.8 percentage points lower than first quarter last year, including
an adverse exchange impact of 1.2 percentage points.  A charge of $82 million,
out of the approximately $500 million supply chain rationalisation programme
announced in February, is included in cost of sales in the quarter.  Excluding
this charge, operating profit increased by 15 percent.



Operating margin also includes charges of $93 million comprising fixed assets
and supplier commitments relating to the termination of the AGI-1067
collaboration ($24 million) and $69 million related to write-offs of intangible
assets associated with the return of rights to AZD2479 to Avanir Pharmaceuticals
and the decision to end the collaboration on AGI-1067. Expenditure on Research
and Development was up 26 percent at CER.  SG&A expense was unchanged from the
first quarter last year.



Earnings per share in the first quarter were $1.02 compared with $0.90 in the
first quarter 2006, an increase of 14 percent at CER.  Excluding the profit
contribution from US sales of Toprol-XLTM from both periods, earnings per share
also increased by 14 percent, from $0.79 to $0.89.



The combined sales of five key growth products (NexiumTM, SeroquelTM, CrestorTM,
ArimidexTM, and SymbicortTM) grew by 17 percent in the first quarter to $3,614
million.



NexiumTM sales were up 8 percent to $1,308 million.  Sales were up 9 percent in
the US, broadly in line with dispensed tablet growth. Sales in other markets
were up 5 percent, affected by the significant price erosion and lower
underlying demand in Germany.



SeroquelTM sales increased 13 percent to $923 million.  Expanding use in bipolar
disorder in the US has resulted in a further increase in US market share during
the quarter, reaching 31 percent in March.  US sales were up 11 percent.  Sales
in other markets increased by 17 percent.



CrestorTM sales reached $628 million in the first quarter, an increase of 59
percent over last year.  Sales in the US were up 56 percent and sales in other
markets were up 62 percent. Data from the METEOR clinical trial were presented
at the American College of Cardiology meeting on 25 March.  This is the first
study to show positive benefit on atherosclerosis for people with early signs of
diseased arteries.  The data show that CrestorTM treatment slowed the
progression of atherosclerosis in people at low risk of coronary artery disease.
  Atherosclerosis regulatory submissions are under review in the European Union
and the United States.



ArimidexTM sales increased 15 percent to $401 million.  SymbicortTM sales were
up 19 percent.  The Company expects to launch SymbicortTM in the US around the
middle of this year.



Future Prospects



Current performance trends are consistent with achieving the financial targets
set at the beginning of the year.  The target range of $3.80 to $4.05 per share
excludes any contribution from US sales of Toprol-XLTM and does not include any
one-off costs associated with productivity initiatives.  In the first quarter,
US sales of Toprol-XLTM contributed $0.13 per share to earnings.  Also in the
first quarter, $82 million (approximately $0.04 per share) associated with the
supply chain rationalisation programme announced in February was charged to cost
of sales.  Adjusting the earnings target for these two items results in
anticipated EPS in the range of $3.89 to $4.14 for the full year.  This range
assumes no further contribution from Toprol-XLTM for the balance of the year,
and does not include any additional restructuring charges that may arise from
the productivity initiatives.



Under the current scenario of generic competition on just the 25mg tablet,
profit contribution for US sales of the Toprol-XLTM product range is running at
around $100 million per month; this estimate will be updated as market
conditions change.



Approximately $250 million of the $500 million supply chain rationalisation
programme announced in February is expected to be incurred in 2007.



Disclosure Notice:  The preceding forward-looking statements relating to
expectations for earnings and business prospects for AstraZeneca PLC are subject
to risks and uncertainties, which may cause results to differ materially from
those set forth in the forward-looking statements.  These include, but are not
limited to: when and if additional generic competitors to Toprol-XLTM are
introduced in the US market prior to completion of Appellate Court process, the
rate of growth in sales of generic omeprazole in the US, continued growth in
currently marketed products (in particular CrestorTM, NexiumTM, SeroquelTM,
SymbicortTM and ArimidexTM), the growth in costs and expenses, interest rate
movements, exchange rate fluctuations, and the tax rate.  For further details on
these and other risks and uncertainties, see AstraZeneca PLC's Securities and
Exchange Commission filings, including the 2006 Annual Report on Form 20-F.



Sales

All narrative in this section refers to growth rates at constant exchange rates
(CER) unless otherwise indicated

Gastrointestinal
                                               First Quarter                    CER %
                                                 2007          2006

NexiumTM                                        1,308         1,189                +8
LosecTM/ PrilosecTM                               279           344               -22
Total                                           1,607         1,551                +1


•    In the US, NexiumTM sales in the first quarter were $862 million, a 9 percent increase that was broadly in
     line with the increase in dispensed tablet volume.  Realised prices were broadly unchanged.  In contrast,
     other branded PPI's declined by 1 percent in volume terms.


•    NexiumTM sales in other markets increased 5 percent, as a 28 percent increase in Emerging Markets helped
     mitigate the significant price erosion and declining volumes in Germany.


•    PrilosecTM sales in the US were down 2 percent in the first quarter.  LosecTM sales in other markets were
     down 26 percent on declining sales in Canada and Western Europe.



Cardiovascular
                                               First Quarter                    CER %
                                                 2007          2006

SelokenTM / Toprol-XLTM                           444           456                -4
CrestorTM                                         628           387               +59
AtacandTM                                         296           254               +11
PlendilTM                                          65            72               -14
ZestrilTM                                          80            75                +1
Total                                           1,653         1,390               +16


•    In the US, CrestorTM sales in the first quarter were $343 million, a 56 percent increase over last year.
     Total prescriptions in the US statin market increased by 11 percent in the first quarter; CrestorTM
     prescriptions were up 46 percent.  CrestorTM share of total prescriptions in the US statin market was 8.8
     percent in March 2007.


•    CrestorTM sales in other markets were up 62 percent to $285 million.  Sales in Western Europe were up 46
     percent; sales in Emerging Markets increased by 88 percent.  Volume share of the statin market for CrestorTM
     is now 18.5 percent in Canada; 11.6 percent in the Netherlands; 20.2 percent in Italy; and 13.6 percent in
     France.


•    Data from the METEOR clinical trial were presented at the American College of Cardiology meeting on 25
     March.  This is the first study to show positive benefit on atherosclerosis for people with early signs of
     diseased arteries.  The data show that CrestorTM treatment slowed the progression of atherosclerosis in
     people at low risk of coronary artery disease.  Atherosclerosis regulatory submissions are under review in
     the European Union and the United States.


•    US sales of the Toprol-XLTM product range, which includes sales of the authorised generic to Par, were $331
     million, down 7 percent compared to the first quarter last year.  Generic competition was confined to the
     25mg dose during the quarter; these generic products accounted for 20 percent of dispensed prescriptions
     across the entire product range.


•    Sales of SelokenTM in other markets were up 6 percent as a result of an 11 percent increase in Emerging
     Markets.


•    AtacandTM sales in the US were up 12 percent; sales in other markets were up 11 percent.



Respiratory and Inflammation
                                               First Quarter                    CER %
                                                 2007          2006

PulmicortTM                                       401           328               +20
SymbicortTM                                       354           277               +19
RhinocortTM                                        92            85                +6
OxisTM                                             23            22                -5
AccolateTM                                         19            18                +6
Total                                             931           765               +17


•    Sales of SymbicortTM increased 19 percent to $354 million as a result of share gains in a growing market.
     Sales in Western Europe were up 18 percent and sales in Emerging Markets were up 28 percent in the first
     quarter.


•    The Company expects to launch SymbicortTM in the US for the maintenance treatment of asthma in patients aged
     12 and above around the middle of this year.


•    PulmicortTM sales in the US were up 29 percent in the first quarter, to $270 million.  Volume growth for
     PulmicortTM RespulesTM in the US was 16 percent.  US sales in the first quarter also included initial
     stocking sales for the new PulmicortTM FlexhalerTM dry powder inhaler.  The introduction of PulmicortTM
     FlexhalerTM will be accompanied by the phasing out of PulmicortTM TurbuhalerTM in the US as supplies run
     down in the market.


•    PulmicortTM sales in other markets were up 4 percent as a result of sales growth in Japan and China.



Oncology
                                               First Quarter                    CER %
                                                 2007          2006

ArimidexTM                                        401           335               +15
CasodexTM                                         310           274                +9
ZoladexTM                                         249           231                +4
IressaTM                                           52            50                +4
FaslodexTM                                         49            44                +7
NolvadexTM                                         19            21               -10
Total                                           1,096           958               +11


•    In the US, sales of ArimidexTM were up 27 percent in the first quarter, to $162 million.  Total
     prescriptions for ArimidexTM increased 11 percent over the first quarter last year, and ArimidexTM market
     share of total prescriptions reached 37.8 percent in March.  The reported sales growth rate benefited from
     some inventory destocking in the first quarter 2006.


•    ArimidexTM sales in other markets were up 8 percent.  Sales in Western Europe increased by 4 percent, as
     double-digit volume growth was offset by lower prices.  Sales in Japan were up 19 percent.


•    US sales of CasodexTM were up 11 percent in the first quarter.  Sales in other markets were up 9 percent, on
     a 10 percent increase in Western Europe and a 17 percent sales increase in Japan.


•    IressaTM sales were up 4 percent to $52 million.  Sales in Japan were up 14 percent and sales increased 50
     percent in China.


•    The 7 percent sales increase for FaslodexTM in the quarter was a result of the 16 percent increase in sales
     outside the US.  US sales were unchanged in the quarter as a small increase in volume was offset by
     inventory movements and movements in returns reserves.



Neuroscience
                                               First Quarter                    CER %
                                                 2007          2006

SeroquelTM                                        923           807               +13
ZomigTM                                           107            93               +11
Total                                           1,227         1,136                +6


•    In the US, SeroquelTM sales were up 11 percent to $655 million.  Total prescriptions were up 12 percent in
     the first quarter, and SeroquelTM market share of total prescriptions in the US antipsychotic market was 31
     percent in March, up a further 0.5 percentage points from December 2006.  Usage in bipolar disorder
     continues to increase, fuelled by the approval for bipolar depression late last year, although the dollar
     value per prescription for bipolar depression is lower as a result of the lower doses prescribed for this
     indication.


•    SeroquelTM sales in other markets were up 17 percent, in line with sales growth rates in Western Europe and
     in Emerging Markets.


•    In March, clinical trial data for SeroquelTM sustained release formulation were presented at the European
     Congress of Psychiatry in Madrid.  These data demonstrated that the SeroquelTM sustained release
     formulation, administered once daily, significantly improved symptoms associated with schizophrenia and
     increased the time to psychiatric relapse, when administered through a three-step dose titration aimed at
     reaching the effective dose range on the second day of treatment.  Regulatory filings for the treatment of
     schizophrenia with SeroquelTM sustained release formulation were submitted to authorities in the US,
     European Union, and other markets in 2006.


•    Sales of ZomigTM in the first quarter were up 18 percent in the US and were up 6 percent in other markets.



Geographic Sales
                                         First Quarter                   CER %
                                            2007        2006

North America                              3,488       3,132               +11
   US                                      3,234       2,882               +12
Established ROW*                           2,664       2,355                +5
Emerging ROW                                 814         693               +14



*Established ROW comprises Western Europe (including France, UK, Germany, Italy,
Sweden, and others), Japan, Australia and New
Zealand.


•    The sales increase in North America was driven by the 12 percent increase in sales in the US, with Crestor
     TM, SeroquelTM and NexiumTM the three largest contributors to the increase.


•    Sales in the Established Rest of World segment are in line with the 4 percent increase in Western Europe.
     Sales in Japan were up 12 percent compared with the first quarter last year, which experienced destocking
     ahead of the April price decreases.


•    Within the Emerging Markets segment, sales in Emerging Europe were unchanged.  Sales in China were up 25
     percent.



Operating Review

All narrative in this section refers to growth rates at constant exchange rates
(CER) unless otherwise indicated

Operating Results



Reported sales increased by 13 percent and operating profit by 10 percent. At
constant exchange rates, sales increased by 9 percent and operating profit by 10
percent. Excluding the restructuring costs described below operating profit
increased by 15 percent.



Currency movements increased sales by 4 percent but had minimal impact on
operating profit. In comparison to last year, the dollar was 8 percent weaker
against the euro, increasing sales, and also against the Swedish krona (10
percent) and sterling (10 percent), increasing costs.  The net effect of these
currency movements was a negative impact of less than 1 cent on earnings per
share. If current exchange rates are maintained for the remainder of the year,
it is anticipated that there will be a small negative EPS impact.



Underlying US sales growth is broadly in line with reported growth of 12 percent
after adjusting for managed market accruals, inventory movements and provision
movements. Outside the US, sales increased by 7 percent.



Reported operating margin decreased by 0.8 percentage points from 32.0 percent
to 31.2 percent.  Excluding the effects of currency, underlying margin increased
0.4 percentage points for the quarter.



Reported gross margin of 78.7 percent is 1.1 percentage points lower than last
year. Payments to Merck, at 4.4 percent of sales, were 0.2 percentage points
lower than last year. Currency and royalty payments reduced margin by 0.1 and
0.4 percentage points respectively.  Included in quarter one were provisions of
$82 million in respect of the global supply chain productivity initiatives
announced in February and $24 million for fixed assets and supplier commitments
relating to termination of AGI-1067 development. Taking all these factors
together, underlying gross margin increased by 0.7 percentage points, primarily
due to continuing operational efficiencies.



R&D expenditure was $1,170 million in the quarter, up 26 percent over last year
due principally to increased activity levels, the effect of the externalisation
strategy and intangible impairment provisions totalling $69 million in respect
of collaborations with AtheroGenics (AGI-1067) and Avanir (Reverse Cholesterol
Transport enhancing compounds).  In comparison to the first quarter 2006, R&D as
a percentage of sales increased 2.9 percentage points to 16.8 percent, of which
currency accounted for 0.7 percentage points.



At constant rates of exchange, SG&A costs of $2,217 million were in line with
quarter one in 2006. In comparison to the first quarter 2006, SG&A as a
percentage of sales fell by 2.4 percentage points to 31.8 percent of sales, of
which currency accounted for 0.4 percentage points.



Other income of $138 million was $61 million higher than the first quarter in
2006 and increased operating margin by 0.8 percentage points. The increase was
primarily due to unanticipated insurance recoveries offset by expected
reductions in royalty income.



Included within cost of sales is the movement in the fair value of financial
instruments used to manage our transactional currency exposures; the net gain in
the quarter was $1 million (compared with a loss of $1 million for the same
period last year).  Other fair value movements of $1 million are charged
elsewhere in the income statement.



Toprol-XLTM



In quarter one, Toprol-XLTM combined with the authorised generic contributed US
sales of $331 million and EPS of $0.13.   The timing of entry to the markets of
other proposed generic products is difficult to predict; as a result, the
Company believes that future performance can be best judged by excluding
Toprol-XLTM from current performance.  Consequently, if Toprol-XLTM were
excluded from the current and prior year, sales growth would be 10 percent and
EPS growth would be 14 percent on a CER basis.



Productivity Initiatives



In February 2007, the Company announced a programme to improve asset utilisation
within its global supply chain.  The programme is anticipated to span a
three-year period, and cost approximately $500 million (of which approximately
$300 million will be cash).  Approximately $250 million is expected to be
incurred in 2007, of which cash restructuring costs of $82 million were charged
to cost of sales in the first quarter.



Over the remainder of the year, further restructuring initiatives will be
undertaken to improve the long-term efficiency of the business.



Interest and Dividend Income



Net interest and dividend income for the quarter was $97 million, compared with
$68 million for the same period last year. The increase over quarter one last
year is primarily attributable to higher average investment balances and yields.
The reported amounts include $8 million (2006 $11 million) arising from employee
benefit fund assets and liabilities reported under IAS 19, 'Employee Benefits'.



Taxation



The effective tax rate for the quarter is 31.0 percent compared with 30.3
percent for the same period last year and 29.0 percent for 2006. The increase in
the tax rate is due to a different geographical mix of profits and a lower level
of tax relief in respect of share based payments. For the full year the tax rate
is anticipated to be around 29 percent.



Cash Flow



Free cash flow (net cash generated and available for acquisitions or
distribution to shareholders) for the quarter was $1,907 million, compared to
$1,336 million in 2006. $3,029 million was returned to shareholders (through net
share repurchases of $1,151 million and the dividend payment of $1,878 million)
and $143 million was invested in the acquisition of Arrow Therapeutics Limited,
leading to an overall decrease in net funds of $1,265 million for the quarter.

Cash generated from operating activities in the first quarter was $2,187
million, $675 million higher than in 2006.  This was driven partly by increased
profit before tax and also by a reduction in working capital outflows compared
to 2006, which is due to the timing of payments to suppliers, offset by outflows
from higher trade recoverables.

Net cash outflows from investing activities were $616 million in the quarter,
compared to $1,903 million in 2006.  This reduction substantially reflects the
reallocation of funds between cash equivalents and short-term deposits; after
eliminating this effect, the net outflow reflects increased expenditure on
intangible assets arising from new externalisation deals.



Investments



In January, the Company capitalised $100 million relating to the collaboration
with Bristol-Myers Squibb (BMS) in respect of the two investigational compounds
for the treatment of Type 2 Diabetes, saxagliptin and dapagliflozin.



Also in January, the Company announced an exclusive global licensing and
research collaboration with Palatin Technologies Inc. to discover, develop and
commercialise small molecule compounds that target melanocortin receptors for
the treatment of obesity and related indications. The $10 million upfront
payment has been capitalised as an intangible asset.



In February, the Company completed the acquisition of Arrow Therapeutics Limited
at a net cost of $143 million, strengthening its portfolio of promising
anti-infective treatments from external opportunities and providing a widely
recognised expert group and technology platform in an area of research that
complements internal capabilities in anti-bacterials.



In March, a further milestone payment of $20 million was accrued in relation to
the collaboration with Protherics Plc. This was payable upon the successful
scale-up of the manufacturing process under the development and
commercialisation agreement for the anti-sepsis product CytoFabTM.


Share Repurchase Programme

During the first quarter, 21.1 million shares were repurchased for cancellation
at a total cost of $1,184 million. 0.7 million shares were issued, in
consideration of share option exercises and in relation to employee share plans,
for a total of $33 million.



The total number of shares in issue at 31 March 2007 is 1,512 million.



The share buy back programme is calculated to have added 2 cents to EPS for the
quarter, after allowing for an estimate of interest income foregone.



R&D Update

In January, the Company and Palatin Technologies Inc. announced an exclusive
global licensing and research collaboration to discover, develop and
commercialise small molecule compounds that target melanocortin receptors.  This
programme offers significant potential for the development of novel treatments
for obesity, diabetes and metabolic syndrome.



During the first quarter, the Company's collaboration partner Protherics Inc.
successfully scaled up the manufacturing process for CytoFabTM to a 600 litre
batch size.  This will enable the start of the expanded Phase II clinical
programme in the second half of the year as planned.



As previously announced, the phase III ARISE trial, a clinical outcomes trial
which studied AGI-1067, an investigational anti-atherosclerosis agent from
AtheroGenics, Inc., did not meet its primary endpoint.  After completion of the
final study analysis, and under the terms of the licensing and collaboration
agreement, the Company has confirmed to AtheroGenics Inc. that it has decided to
terminate the licensing and collaboration agreement.



On 16 April, the Company announced that agreement has been reached between KuDOS
Pharmaceuticals Ltd., which is a wholly owned subsidiary of AstraZeneca UK Ltd.,
Novacea Inc. and BTG plc regarding future development of AQ4N (Bonoxantrone,
AZD1689).  Novacea will acquire exclusive rights for the worldwide development
of AQ4N, including countries (outside of North America) which were formerly
exclusively licensed to KuDOS.



Development of AZD9684, a CPU inhibitor being investigated as a treatment for
thrombosis, has been discontinued.



The Company and Avanir Pharmaceuticals have mutually agreed to end their
research collaboration and license agreement on the Reverse Cholesterol
Transport compounds.  As a consequence, the Company will discontinue further
development of the Phase I compound AZD2479.



Calendar

26 July 2007            Announcement of second quarter and half year 2007 results

1 November 2007         Announcement of third quarter and nine months 2007 results



David Brennan

Chief Executive Officer


                      This information is provided by RNS
            The company news service from the London Stock Exchange