1st Quarter Results - Part 2

RNS Number : 4484R

AstraZeneca PLC

30 April 2009

 

Condensed Consolidated Statement of Comprehensive Income    

For the quarter ended 31 March		2009 $m		2008 $m
Revenue		7,701		7,677
Cost of sales		(1,383)		(1,502)
Gross profit		6,318		6,175
Distribution costs		(64)		(66)
Research and development		(980)		(1,236)
Selling, general and administrative costs		(2,376)		(2,737)
Other operating income and expense		265		121
Operating profit		3,163		2,257
Finance income		113		258
Finance expense		(273)		(372)
Profit before tax		3,003		2,143
Taxation		(859)		(638)
Profit for the period		2,144		1,505
Other comprehensive income:
Foreign exchange arising on consolidation		(231)		287
Foreign exchange differences on borrowings forming net investment hedges		129		(167)
Net available for sale losses taken to equity		(11)		(14)
Actuarial (loss)/gain for the period		(570)		290
Income tax relating to components of other comprehensive income		125		(26)
Other comprehensive income for the period, net of tax		(558)		370
Total comprehensive income for the period		1,586		1,875
Profit/(loss) attributable to:
Owners of the parent		2,146		1,503
Non-controlling interests		(2)		2
		2,144		1,505
Total comprehensive income attributable to:
Owners of the parent		1,588		1,865
Non-controlling interests		(2)		10
		1,586		1,875
Basic earnings per $0.25 Ordinary Share		$1.48		$1.03
Diluted earnings per $0.25 Ordinary Share		$1.48		$1.03
Weighted average number of Ordinary Shares in issue (millions)		1,447		1,457
Diluted average number of Ordinary Shares in issue (millions)		1,448		1,457

Condensed Consolidated Statement of Financial Position

		As at 31 Mar 2009 $m		As at 31 Dec 2008 $m		As at 31 Mar 2008 $m
ASSETS Non-current assets
Property, plant and equipment		6,820		7,043		8,486
Goodwill		9,855		9,874		9,906
Intangible assets		12,040		12,323		13,778
Derivative financial instruments		416		449		239
Other investments		149		156		197
Deferred tax assets		1,383		1,236		1,400
		30,663		31,081		34,006
Current assets
Inventories		1,702		1,636		2,169
Trade and other receivables		7,126		7,261		7,054
Derivative financial instruments		-		-		36
Other investments		49		105		55
Income tax receivable		2,534		2,581		2,218
Cash and cash equivalents		4,441		4,286		2,920
		15,852		15,869		14,452
Total assets		46,515		46,950		48,458
LIABILITIES Current liabilities
Interest bearing loans and borrowings		(1,628)		(993)		(3,886)
Trade and other payables		(7,150)		(7,178)		(7,194)
Derivative financial instruments		(125)		(95)		-
Provisions		(479)		(600)		(531)
Income tax payable		(4,667)		(4,549)		(4,071)
		(14,049)		(13,415)		(15,682)
Non-current liabilities
Interest bearing loans and borrowings		(10,006)		(10,855)		(11,116)
Derivative financial instruments		-		(71)		-
Deferred tax liabilities		(3,110)		(3,126)		(4,322)
Retirement benefit obligations		(3,174)		(2,732)		(1,755)
Provisions		(514)		(542)		(490)
Other payables		(133)		(149)		(226)
		(16,937)		(17,475)		(17,909)
Total liabilities		(30,986)		(30,890)		(33,591)
Net assets		15,529		16,060		14,867
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital		362		362		364
Share premium account		2,052		2,046		1,889
Other reserves		1,947		1,932		1,882
Retained earnings		11,022		11,572		10,585
		15,383		15,912		14,720
Non-controlling interests		146		148		147
Total equity		15,529		16,060		14,867

Condensed Consolidated Statement of Cash Flows 

For the quarter ended 31 March		2009 $m		2008 $m
Cash flows from operating activities
Profit before taxation		3,003		2,143
Finance income and expense		160		114
Depreciation, amortisation and impairment		385		702
Increase in working capital		(63)		(59)
Other non-cash movements		(295)		100
Cash generated from operations		3,190		3,000
Interest paid		(287)		(258)
Tax paid		(676)		(351)
Net cash inflow from operating activities		2,227		2,391
Cash flows from investing activities
Movement in short term investments and fixed deposits		68		(31)
Purchase of property, plant and equipment		(190)		(249)
Disposal of property, plant and equipment		15		14
Purchase of intangible assets		(94)		(2,689)
Disposal of intangible assets		269		-
Purchase of non-current asset investments		(10)		(29)
Disposal of non-current asset investments		1		-
Interest received		24		61
Dividends paid by subsidiaries to minority interest		(9)		(14)
Net cash inflow/(outflow) from investing activities		74		(2,937)
Net cash inflow/(outflow) before financing activities		2,301		(546)
Cash flows from financing activities
Proceeds from issue of share capital		6		1
Dividends paid		(2,103)		(2,007)
Movement in short term borrowings		(157)		(375)
Net cash outflow from financing activities		(2,254)		(2,381)
Net increase/(decrease) in cash and cash equivalents in the period		47		(2,927)
Cash and cash equivalents at the beginning of the period		4,123		5,727
Exchange rate effects		(25)		1
Cash and cash equivalents at the end of the period		4,145		2,801
Cash and cash equivalents consists of:
Cash and cash equivalents		4,441		2,920
Overdrafts		(296)		(119)
		4,145		2,801

Condensed Consolidated Statement of Changes in Equity 

		Share capital $m		Share premium account $m		Other* reserves $m		Retained earnings $m		Total $m		Non- controlling interests $m		Total equity $m
At 1 January 2008		364		1,888		1,902		10,624		14,778		137		14,915
Profit for the period		-		-		-		1,503		1,503		2		1,505
Other comprehensive income		-		-		-		362		362		8		370
Transfer to other reserve		-		-		(20)		20		-		-		-
Transactions with owners:
Dividends		-		-		-		(1,967)		(1,967)		-		(1,967)
Issue of AstraZeneca PLC Ordinary shares		-		1		-		-		1		-		1
Share-based payments		-		-		-		43		43		-		43
At 31 March 2008		364		1,889		1,882		10,585		14,720		147		14,867
		Share capital $m		Share premium account $m		Other* reserves $m		Retained earnings $m		Total $m		Non- controlling interests $m		Total equity $m
At 1 January 2009		362		2,046		1,932		11,572		15,912		148		16,060
Profit for the period		-		-		-		2,146		2,146		(2)		2,144
Other comprehensive income		-		-		-		(558)		(558)		-		(558)
Transfer to other reserve		-		-		15		(15)		-		-		-
Transactions with owners:
Dividends		-		-		-		(2,171)		(2,171)		-		(2,171)
Issue of AstraZeneca PLC Ordinary shares		-		6		-		-		6		-		6
Share-based payments		-		-		-		48		48		-		48
At 31 March 2009		362		2,052		1,947		11,022		15,383		146		15,529

* Other reserves includes the capital redemption reserve and the merger reserve.

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 2009 have been prepared in accordance with IAS34 Interim Financial Reporting as adopted by the European Union. Details of the accounting policies applied are those set out in AstraZeneca PLC's Annual Report and Form 20-F Information 2008. 

During the year, the Group has applied IAS 1 Presentation of Financial Statements (revised 2007) which has introduced a number of terminology changes (including titles for the condensed primary statements) and has resulted in a number of changes in presentation and disclosure. The revised standard has had no impact on the reported results or financial position of the Group. In addition, the Group has adopted IFRS 2 Amendment regarding Vesting Conditions and Cancellations, IFRS 8 Operating Segments, IAS 23 Borrowing Costs (revised 2007) and Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements, none of which have had a significant effect on the reported results or financial position of the Group. 

The Group has considerable financial resources available. The Group's revenues are largely derived from sales of products which are covered by patents and for which, historically at least, demand has been relatively unaffected by changes in the general economy. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook and as such, the interim financial statements have been prepared on a Going Concern basis.

The information contained in Note 4 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2008.

The comparative figures for the financial year ended 31 December 2008 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and 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 237(2) or (3) of the Companies Act 1985. 

2    Net debt

The table below provides an analysis of net debt and a reconciliation of net cash flow to the movement in net debt.

		At 1 Jan 2009 $m		Cash flow $m		Non-cash movements $m		Exchange movements $m		At 31 Mar 2009 $m
Loans due after one year		(10,855)		-		714		135		(10,006)
Current instalments of loans		(650)		-		(703)		44		(1,309)
Total loans		(11,505)		-		11		179		(11,315)
Other investments - current		105		(68)		13		(1)		49
Net derivative financial instruments		283		-		8		-		291
Cash and cash equivalents		4,286		180		-		(25)		4,441
Overdrafts		(163)		(133)		-		-		(296)
Short term borrowings		(180)		157		-		-		(23)
		4,331		136		21		(26)		4,462
Net debt		(7,174)		136		32		153		(6,853)

Non-cash movements in the period include fair value adjustments under IAS 39.

3    restructuring and synergy costs

Profit before tax for the quarter ended 31 March 2009 is stated after charging restructuring and synergy costs of $72 million ($117 million in 2008). These have been charged to the income statement as follows:

		1st Quarter 2009 $m		1st Quarter 2008 $m
Cost of sales		31		32
Research and development		-		54
Selling, general and administrative costs		41		31
Total		72		117

4    legal proceedings and contingent liabilities

AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation relating to product liability, commercial disputes, infringement of intellectual property rights, the validity of certain patents and anti-trust law. 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 2008.

Unless noted otherwise below or in the Annual Report and Form 20-F Information 2008, no provisions have been established in respect of the claims discussed below.

Crestor (rosuvastatin) 

Patent litigation - US

As previously disclosed, in January 2008 abbreviated new drug application-filers sued by AstraZeneca in the District of Delaware for infringement of the Patent No. RE37,314 (the '314 patent), responded to AstraZeneca's pleadings, some submitting jurisdictional motions seeking dismissals of parties and claims. In November 2008, the Court issued a magistrate's Report and Recommendation Regarding Motions to Dismiss deciding the defendants' various jurisdictional motions. In January 2009, the Court adopted the magistrate's recommendations. 

In March 2009, Magistrate Judge Leonard Stark heard argument and reserved judgment in the Court's Markman Hearing in respect of claim construction of the '314 patent claims. Discovery proceeds under an amended schedule. 

As previously disclosed, in October 2008, Teva Pharmaceuticals Industries Ltd. (Teva), filed a patent infringement lawsuit against AstraZeneca Pharmaceuticals LP, AstraZeneca PLC, AstraZeneca UK Limited and IPR Pharmaceuticals, Inc. in the Eastern District of Pennsylvania. In January 2009, AstraZeneca PLC and AstraZeneca UK Limited moved for dismissal on jurisdictional grounds. The Court administratively dismissed the motions without prejudice to allow time for discovery. In April 2009, AstraZeneca PLC and AstraZeneca UK Limited renewed those motions, which will proceed. In March 2009, AstraZeneca moved to transfer the case to the US District Court, District of Delaware. On 8 April 2009, AstraZeneca also moved to strike Teva's jury demand. Discovery is continuing. 

Patent litigation - Canada

On 1 April 2009, AstraZeneca Canada Inc. received a Notice of Allegation from Cobalt Pharmaceuticals, Inc. (Cobalt) in respect of Canadian Patent Nos. 2,072,945 (the '945 patent) and 2,313,783 (the '783 patent) listed on the Patent Register in Canada for Crestor. Cobalt claims that the '945 patent is not infringed and invalid; and that the '783 patent is not infringed and invalid.

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

Prilosec OTC (omeprazole magnesium)

Patent litigation

As previously disclosed, in June 2007 Dr. Reddy's Laboratories Inc. and Dr. Reddy's Laboratories Limited (together Dr. Reddy's) notified AstraZeneca that Dr. Reddy's had submitted an abbreviated new drug application (ANDA) seeking FDA approval to market a 20mg delayed release omeprazole magnesium product for the OTC market. In July 2007, AstraZeneca commenced patent infringement litigation against Dr. Reddy's in the Southern District of New York in response to Dr. Reddy's Paragraph IV certifications. In July 2008, Dr. Reddy's filed a motion for summary judgment of non-infringement of the patents-in-suit. In March 2009, the Court granted Dr. Reddy's motion for summary judgment of non-infringement of the patents-in-suit. AstraZeneca is considering options including appeal of the Court's summary judgment decision to the United States District Court for the Federal Circuit.

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

Nexium (esomeprazole magnesium)

Sales and marketing practices

As previously disclosed, AstraZeneca entities have been sued in various state and federal courts in the US in purported representative class actions involving the marketing of Nexium. In June 2008, AstraZeneca filed oppositions to the class certification motions filed in the California and Massachusetts cases, and also filed motions for summary judgment in California and Massachusetts. In March 2009, the California Court granted AstraZeneca's motions for summary judgment, ending the claims of all named plaintiffs. The Court also denied plaintiffs' motion for class certification. Oral argument on the Massachusetts motions is scheduled for 6 and 7 May 2009. 

As previously disclosed, the US Court of Appeals for the 3rd Circuit had affirmed the dismissal of a similar case filed in Delaware Federal Court, and the plaintiffs had filed a petition for certiorari in the US Supreme Court. In March 2009, the US Supreme Court granted certiorari, vacated the 3rd Circuit decision and remanded the case back to the 3rd Circuit for reconsideration in light of the Supreme Court's pre-emption decision in Wyeth v. Levine. AstraZeneca expects a briefing schedule to be established within the next few months.

Patent litigation

As previously disclosed in December 2008, AstraZeneca received a Paragraph IV Certification notice-letter from Sandoz, Inc. (Sandoz) that Sandoz had submitted an ANDA for 20mg and 40mg esomeprazole magnesium delayed-release capsules alleging invalidity and/or non-infringement in respect of certain AstraZeneca US patents. In January 2009, AstraZeneca commenced patent infringement litigation in the District of New Jersey in response. No trial date has been set. 

As previously disclosed, in May and June 2008, AstraZeneca received a complaint from IVAX Pharmaceuticals Inc. and IVAX Corporation (together IVAX) and a complaint from Dr. Reddy's for declaratory judgments of non-infringement and/or invalidity for patents that were not previously at issue in the ongoing infringement litigations. In August 2008, the Court dismissed the IVAX and Dr. Reddy's declaratory judgment actions as to certain patents and stayed the declaratory judgment actions as to remaining patents at issue. In January 2009, the Court vacated the August 2008 Orders that had dismissed and stayed the declaratory judgment actions. As a result, the IVAX and Dr. Reddy's declaratory judgment actions are proceeding. No trial date has been set.

As previously disclosed, in January 2006 AstraZeneca received a Paragraph IV Certification notice-letter from IVAX that IVAX had submitted an ANDA to the FDA for 20mg and 40mg esomeprazole magnesium delayed-release capsules. The ANDA contained Paragraph IV certifications of invalidity and/or non-infringement in respect of certain AstraZeneca US patents listed in the FDA Orange Book with reference to Nexium. In March 2006, AstraZeneca commenced wilful patent infringement litigation in the US District Court for the District of New Jersey against IVAX, its parent Teva Pharmaceuticals, and their affiliates. In December 2008, the Court granted AstraZeneca's motion to add Cipla, Ltd. as a defendant in the IVAX/Teva litigation. In January 2008, AstraZeneca commenced patent infringement litigation in the US District Court for the District of New Jersey against Dr. Reddy's in response to Dr. Reddy's Paragraph IV certifications regarding Nexium.   In March 2009, the Court consolidated the IVAX/Teva, Cipla and Dr. Reddy's patent infringement litigations. The Court has indicated trial in the consolidated patent infringement litigation as soon as January 2010.

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

Pulmicort Respules (budesonide inhalation suspension)

Patent litigation

In March 2009, AstraZeneca filed a lawsuit in the US District Court for the District of New Jersey against Apotex, Inc. and Apotex Corp. (together Apotex) seeking a declaration of patent infringement. The lawsuit follows the FDA approval of an ANDA filed by Apotex and concerns Apotex's intent to market a generic version of AstraZeneca's Pulmicort Respules in the US prior to the expiration of AstraZeneca's patents. On 16 April, the Court issued a Temporary Restraining Order barring Apotex from launching its generic version of Pulmicort Respules until further order of the Court. On 27 April, the Court commenced a hearing to determine whether to continue the injunction. 

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

Seroquel (quetiapine fumarate)

Sales and marketing practices

In February 2009, the State of New Mexico filed a lawsuit against AstraZeneca, similar to the previously disclosed suits filed by Pennsylvania, Arkansas, Montana and South Carolina, which seek compensation for costs incurred by the state for the treatment of Medicaid and other public assistance beneficiaries who allegedly developed diabetes, hyperglycemia and other conditions as a result of using Seroquel without adequate warning. In addition, these lawsuits seek reimbursement of payments made by the state Medicaid programs for prescriptions that relate to so-called non-medically accepted indications of Seroquel.  

Product liability 

As previously disclosed, AstraZeneca Pharmaceuticals LP, either alone or in conjunction with one or more affiliates, has been sued in numerous individual personal injury actions involving Seroquel. 

As of 13 April 2009, AstraZeneca was defending approximately 9,976 served or answered lawsuits involving approximately 16,198 plaintiff groups. To date, approximately 2,383 additional cases have been dismissed by order or agreement and approximately 1,500 of those cases have been dismissed with prejudice. 

On 30 January 2009 and 6 February 2009, the federal judge presiding over the Seroquel Multi-District Litigation (MDL) in the District Court for the Middle District of Florida granted AstraZeneca's motions for summary judgment in the first two Seroquel product liability cases set for trial and dismissed those cases. The plaintiff in one of these cases filed a notice of appeal to the United States Court of Appeals for the Eleventh Circuit. The federal MDL court has stayed all remaining Florida cases pending a decision on that appeal and is currently evaluating the procedural posture of all non-Florida cases. 

The first trial is scheduled to begin in Delaware state court on 29 June 2009. AstraZeneca expects that an additional two to four trials may be scheduled to commence in 2009. AstraZeneca is also aware of approximately 59 additional cases that have been filed but not yet served and has not determined how many additional cases, if any, may have been filed. Some of the cases also include claims against other pharmaceutical manufacturers such as Eli Lilly & Co., Janssen Pharmaceutica, Inc. and/or Bristol-Myers Squibb Company. AstraZeneca intends to litigate these cases on their individual merits and will defend against the cases vigorously.

Patent litigation 

In December 2008, Teva announced that the US Food and Drug Administration (FDA) had tentatively approved its generic quetiapine tablets. In July 2008, the US District Court, District of New Jersey had granted AstraZeneca's motion for summary judgment of No Inequitable Conduct. Teva and Sandoz appealed to the Federal Circuit Court of Appeals. In December 2008, the parties completed briefing. A three-judge panel of the Federal Circuit Court of Appeals heard oral argument in March 2009. The Court reserved judgment. A decision is pending.

In February 2009, AstraZeneca received a second Paragraph IV Certification notice-letter from Sandoz advising that it had amended its ANDA seeking approval to market a generic version of 25mg Seroquel tablets before expiration of AstraZeneca's patents covering the product. The amended ANDA seeks approval to market 50mg, 100mg, 150mg, 200mg, 300mg and 400mg tablets. In March 2009, AstraZeneca filed a second lawsuit in US District Court, District of New Jersey against Sandoz alleging infringement of AstraZeneca's patent covering the active ingredient of Seroquel tablets. The filing of this additional lawsuit triggered a 30-month stay of FDA final approval for Sandoz's 50mg, 100mg, 150mg, 200mg, 300mg and 400mg ANDA products.

Patent litigation - Seroquel XR

AstraZeneca lists two patents in the FDA's Orange Book referencing Seroquel XR: US Patent No. 4,879,288 (the '288 patent) covering quetiapine fumarate, the active ingredient, and US Patent No. 5,948,437 (the '437 patent) covering extended-release formulations, processes and methods in respect of quetiapine fumarate. 

In October and November 2008, AstraZeneca received a third and fourth Paragraph IV Certification notice-letter from Handa Pharmaceuticals (Handa) advising that it had submitted an ANDA seeking approval to market generic versions of 50mg and 150mg Seroquel XR tablets before expiration of AstraZeneca's patents covering the product. In October 2008, AstraZeneca filed a second lawsuit in District of New Jersey against Handa alleging infringement of AstraZeneca's patents covering the active ingredient and formulation of Seroquel XR 50mg tablets. In December 2008, AstraZeneca filed a third lawsuit against Handa alleging infringement of AstraZeneca's patents covering the active ingredient and formulation of Seroquel XR 150mg tablets. The filing of these additional lawsuits triggered 30-month stays of FDA final approval for Handa's 50mg and 150mg ANDA products.

For purposes of discovery, the three Handa actions and the previously disclosed Accord action have been consolidated under a common scheduling order. The consolidated matter proceeds.

In December 2008, AstraZeneca received a Paragraph IV Certification notice-letter from Biovail Laboratories International SRL (Biovail) stating that it had submitted an ANDA seeking approval to market generic versions of 200mg, 300mg and 400mg Seroquel XR tablets before the expiration of AstraZeneca's two listed patents covering Seroquel XR alleging non-infringement and invalidity in respect of AstraZeneca's patents. In January 2009, AstraZeneca filed a lawsuit in the District of New Jersey against Biovail alleging infringement of AstraZeneca's '288 and '437 patents covering Seroquel XR 200mg, 300mg and 400mg tablets. The filing of this lawsuit triggered a 30-month stay of FDA final approval for Biovail's ANDA products.

In January 2009, AstraZeneca received a second Paragraph IV Certification notice-letter from Accord advising that it had submitted an ANDA seeking approval to market a generic version of 150mg Seroquel XR tablets before expiration of AstraZeneca's '437 patent covering the product. In February 2009, AstraZeneca filed a second lawsuit in the District of New Jersey against Accord alleging infringement of AstraZeneca's patent covering the formulation of Seroquel XR 150mg tablets. The filing of this additional lawsuit triggered a 30-month stay of FDA final approval for Accord's 150mg ANDA product.

The three matters proceed in co-ordinated discovery. In April 2009, AstraZeneca moved to stay discovery respecting the '288 patent covering the active ingredient in Seroquel XR, pending the decision of the Federal Circuit Court of Appeals in the above described related case of AstraZeneca v. Teva and Sandoz, which pertains to ANDAs for Seroquel.  

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

Atacand (candesartan cilexetil)

Patent litigation - Canada

On 3 April 2009, AstraZeneca Canada Inc. received a Notice of Allegation from Sandoz Canada Inc. (Sandoz) in respect of Canadian Patent Nos. 2,040,955 (the '955 patent) and 2,083,305 (the '305 patent) listed on the Patent Register in Canada for Atacand. Sandoz has confirmed that it will await the expiry of the '955 patent, but alleges that the '305 patent is not infringed and is not properly listed on the Patent Register. 

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

Pain pump litigation 

As previously disclosed, starting in February 2008, AstraZeneca LP, AstraZeneca Pharmaceuticals LP, Zeneca Holdings Inc., and/or AstraZeneca PLC have been named as defendants and served in approximately 51 lawsuits, involving approximately 58 plaintiffs, filed in various US jurisdictions, alleging injuries caused by third-party pain pumps. The complaints in these cases generally allege that the use of Marcaine, Sensorcaine, Xylocaine and/or Naropin, with or without epinephrine, in pain pumps that were implanted into patients in connection with arthroscopic surgery, caused chrondrolysis. Other named defendants in these cases are other manufacturers and distributors of bupivacaine and lidocaine and other pain medications, pain pump manufacturers, and in some cases the surgeons. To date, 38 plaintiffs have dismissed their cases against the AstraZeneca defendants while the case was in preliminary stages, and a 39th plaintiff's case was involuntarily terminated when the court granted AstraZeneca's motion to dismiss. The AstraZeneca defendants have filed a motion to dismiss in one additional case. In addition, two active plaintiffs have voluntarily dismissed AstraZeneca PLC but have maintained their suits against other AstraZeneca defendants. 

Rights to market Sensorcaine, Xylocaine and Naropin in the US were sold to Abraxis Bioscience Inc. (Abraxis) in June 2006 but many of these lawsuits may be a retained liability under the terms of the Asset Purchase Agreement with Abraxis. To date, AstraZeneca has tendered approximately fifteen of the claims to Abraxis, twelve of which have been dismissed as described outlined above.

It was previously reported that plaintiffs moved to consolidate the federal pain pump cases under the Multi-District Litigation (MDL) process. The Judicial Panel on MDL denied that motion in August 2008. Accordingly, the cases will continue as individual lawsuits.

AstraZeneca intends to vigorously defend these cases.

Tax

As previously disclosed, AstraZeneca and Her Majesty's Revenue & Customs (HMRC) have made a joint referral to the UK Court in respect of transfer pricing between our UK and one of our overseas operations for the years 1996 to date as there continues to be a material difference between the Group's and HMRC's positions. An additional referral in respect of controlled foreign company aspects of the same case was made during 2008. Absent a negotiated settlement, litigation is set to commence in 2010. Management continues to believe that AstraZeneca's positions on all its transfer pricing audits and disputes are robust and that AstraZeneca is adequately provided.

5    FIRST QUARTER territorial sales analysis    

						% Growth
		1st Quarter 2009 $m		1st Quarter 2008 $m		Actual		Constant Currency
US		3,624		3,401		7		7
Canada		267		322		(17)		2
North America		3,891		3,723		5		6
Western Europe**		2,176		2,405		(10)		2
Japan		497		378		31		10
Other Established ROW		161		190		(15)		14
Established ROW*		2,834		2,973		(5)		4
Emerging Europe		264		287		(8)		16
China		190		133		43		35
Emerging Asia Pacific		184		204		(10)		7
Other Emerging ROW		338		357		(5)		12
Emerging ROW		976		981		(1)		15
Total Sales		7,701		7,677		-		7

*	Established ROW comprises Western Europe (including France, UK, Germany, Italy, Sweden and others), Japan, Australia and New Zealand.
**	For the first quarter 2009, Western Europe sales growth excluding Synagis would be -10 percent on an actual basis and 2 percent on a constant currency basis.

6    FIRST QUARTER product sales analysis

		World								US
		1st Quarter 2009 $m		1st Quarter 2008 $m		Actual Growth %		Constant Currency Growth %		1st Quarter 2009 $m		Actual Growth %
Gastrointestinal:
Nexium		1,192		1,238		(4)		2		705		(4)
Losec/Prilosec		211		252		(16)		(15)		18		(62)
Others		24		20		20		30		12		100
Total Gastrointestinal		1,427		1,510		(5)		-		735		(7)
Cardiovascular:
Crestor		969		772		26		35		478		35
Seloken/Toprol-XL		288		190		52		59		176		175
Atacand		323		346		(7)		6		61		(2)
Tenormin		66		70		(6)		(6)		4		(20)
Zestril		47		59		(20)		(14)		4		-
Plendil		61		66		(8)		(5)		3		(50)
Others		56		68		(18)		(7)		-		(100)
Total Cardiovascular		1,810		1,571		15		24		726		47
Respiratory:
Symbicort		515		471		9		24		99		125
Pulmicort		292		411		(29)		(26)		173		(37)
Rhinocort		64		80		(20)		(15)		37		(24)
Oxis		12		17		(29)		(12)		-		-
Accolate		16		18		(11)		(6)		12		-
Others		36		43		(16)		(2)		-		-
Total Respiratory		935		1,040		(10)		(1)		321		(16)
Oncology:
Arimidex		463		430		8		14		219		20
Casodex		236		316		(25)		(27)		54		(18)
Zoladex		232		255		(9)		-		11		(31)
Iressa		68		58		17		10		1		(50)
Ethyol		4		14		(71)		(71)		4		(71)
Others		80		92		(13)		(9)		26		(35)
Total Oncology		1,083		1,165		(7)		(3)		315		(2)
Neuroscience:
Seroquel		1,125		1,050		7		11		800		14
Local anaesthetics		132		138		(4)		7		8		-
Zomig		101		107		(6)		1		43		(2)
Diprivan		64		68		(6)		(1)		10		(9)
Others		10		15		(33)		(20)		1		(67)
Total Neuroscience		1,432		1,378		4		9		862		12
Infection and Other:
Synagis		545		519		5		5		471		3
Merrem		202		213		(5)		8		46		-
FluMist		2		-		n/a		n/a		2		n/a
Other Products		43		55		(22)		(15)		21		(28)
Total Infection and Other		792		787		1		5		540		2
Aptium Oncology		105		98		7		7		105		7
Astra Tech		117		128		(9)		3		20		5
Total		7,701		7,677		-		7		3,624		7

Shareholder Information

ANNOUNCEMENTS AND MEETINGS

Annual General Meeting	30 April 2009
Announcement of second quarter and half year 2009 results	30 July 2009
Announcement of third quarter and nine months 2009 results	29 October 2009

DIVIDENDS

Future dividends will normally be paid as follows:

First interim	Announced in July and paid in September
Second interim	Announced in January and paid in March

TRADEMARKS

Trademarks of the AstraZeneca group of companies 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 appear with a ® or ™ sign and include: Abraxane®, a registered trademark of Abraxis BioScience, LLC. and ONGLYZA™, a trademark of Bristol-Myers Squibb Company.

ADDRESSES FOR CORRESPONDENCE

Registrar and Transfer Office The AstraZeneca Registrar Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA UK	US Depositary JP Morgan Chase & Co PO Box 64504 St Paul MN 55164-0504 US	Registered Office 15 Stanhope Gate London W1K 1LN UK	Swedish Central Securities Depository Euroclear Sweden AB PO Box 7822 SE-103 97 Stockholm Sweden
Tel (freephone in UK):  0800 389 1580 Tel (outside UK):  [phone]	Tel (toll free in US):  800 990 1135 Tel (outside US):  [phone]	Tel: [phone]	Tel: [phone]

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: These 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 at the date of preparation of these 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. These forward-looking statements are subject to numerous risks and uncertainties. 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 risk of expiration or early loss of patents (including patents covering competing products), marketing exclusivity or trademarks; the risk of patent litigation; failure to obtain patent protection; the impact of fluctuations in exchange rates; our debt-funding arrangements; bad debts; the adverse impact of a sustained economic downturn; risks relating to owning and operating a biologics and vaccines business; competition; price controls and price reductions; taxation; the risk of substantial product liability claims; the performance of new products; environmental/occupational health and safety liabilities; the development of our business in emerging markets; product counterfeiting; the risk of adverse outcome of litigation and/or government investigations and risk of insufficient insurance coverage; the difficulties of obtaining and maintaining regulatory approvals for new products; the risk of failure to observe continuing regulatory oversight; the risk that R&D will not yield new products that achieve commercial success; the risk that acquisitions and strategic alliances formed as part of our externalisation strategy may be unsuccessful; the risk of reliance on third parties for supplies of materials and services; the risk of failure to manage a crisis; the risk of delay to new product launches; information technology and outsourcing; risks relating to productivity initiatives and reputation.

 

END

 

 

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