Final Results - Part 2 of 3

RNS Number : 6675W
AstraZeneca PLC
02 February 2012
 



Condensed Consolidated Statement of Comprehensive Income        

 

 

For the year ended 31 December


2011

$m


2010

$m

Revenue


33,591 


33,269 

Cost of sales


(6,026)


(6,389)

Gross profit


27,565 


26,880 

Distribution costs


(346)


(335)

Research and development1


(5,523)


(5,318)

Selling, general and administrative costs2


(11,161)


(10,445)

Profit on disposal of subsidiary


1,483 


Other operating income and expense


777 


712 

Operating profit


12,795 


11,494 

Finance income


552 


516 

Finance expense


(980)


(1,033)

Profit before tax


12,367 


10,977 

Taxation


(2,351)


(2,896)

Profit for the period


10,016 


8,081 

Other comprehensive income:





Foreign exchange arising on consolidation


(60)


26 

Foreign exchange differences on borrowings forming net investment hedges


24 


101 

Amortisation of loss on cash flow hedge



Net available for sale gains taken to equity


31 


Actuarial loss for the period


(741)


(46)

Income tax relating to components of other comprehensive income


198 


(61)

Other comprehensive income for the period, net of tax


(546)


25 

Total comprehensive income for the period


9,470 


8,106 

 





Profit attributable to:





Owners of the parent


9,983 


8,053 

Non-controlling interests


33 


28 

 


10,016 


8,081 

 





Total comprehensive income attributable to:





Owners of the parent


9,428 


8,058 

Non-controlling interests


42 


48 

 


9,470 


8,106 

 





Basic earnings per $0.25 Ordinary Share


$7.33 


$5.60 

Diluted earnings per $0.25 Ordinary Share


$7.30 


$5.57 

Weighted average number of Ordinary Shares in issue (millions)


1,361 


1,438 

Diluted weighted average number of Ordinary Shares in issue (millions)


1,367 


1,446 

 

1   In 2011, research and development includes a total of $553 million of intangible asset impairments relating to olaparib, TC-5214 and other projects in development. In 2010, research and development includes a $445 million impairment of intangible assets related specifically to motavizumab.

2   In 2010, selling, general and administrative costs includes a provision of $592 million with respect to Seroquel legal matters and gains of $791 million arising from changes made to benefits under certain of the Group's post-retirement benefit plans, chiefly the Group's UK pension plan.

 

Condensed Consolidated Statement of Comprehensive Income        

 

 

For the quarter ended 31 December


2011

$m


2010

$m

Revenue


8,656 


8,617 

Cost of sales


(1,612)


(1,759)

Gross profit


7,044 


6,858 

Distribution costs


(85)


(87)

Research and development1


(1,867)


(1,930)

Selling, general and administrative costs2


(3,141)


(2,522)

Other operating income and expense


216 


92 

Operating profit


2,167 


2,411 

Finance income


126 


140 

Finance expense


(241)


(268)

Profit before tax


2,052 


2,283 

Taxation


(559)


(651)

Profit for the period


1,493 


1,632 

Other comprehensive income:





Foreign exchange arising on consolidation


(81)


13 

Foreign exchange differences on borrowings forming net investment hedges


49 


38 

Amortisation of loss on cash flow hedge



Net available for sale gains taken to equity


36 


Actuarial (loss)/gain for the period


(688)


338 

Income tax relating to components of other comprehensive income


194 


(145)

Other comprehensive income for the period, net of tax


(490)


248 

Total comprehensive income for the period


1,003 


1,880 

 





Profit attributable to:





Owners of the parent


1,486 


1,621 

Non-controlling interests



11 

 


1,493 


1,632 

 





Total comprehensive income attributable to:





Owners of the parent


999 


1,865 

Non-controlling interests



15 

 


1,003 


1,880 

 





Basic earnings per $0.25 Ordinary Share


$1.16 


$1.15 

Diluted earnings per $0.25 Ordinary Share


$1.16 


$1.14 

Weighted average number of Ordinary Shares in issue (millions)


1,312 


1,418 

Diluted weighted average number of Ordinary Shares in issue (millions)


1,317 


1,426 

 

 

1 In 2011, research and development includes a total of $471 million of intangible asset impairments relating to olaparib, TC-5214 and other projects in development. In 2010, research and development includes a $445 million impairment of intangible assets related specifically to motavizumab.

2 In 2010, selling, general and administrative costs includes gains of $791 million arising from changes made to benefits under certain of the Group's post-retirement benefit plans, chiefly the Group's UK pension plan.

 

Condensed Consolidated Statement of Financial Position

 




At 31 Dec 2011

$m


At 31 Dec 2010

$m

ASSETS

Non-current assets







Property, plant and equipment




6,425 


6,957 

Goodwill




9,862 


9,871 

Intangible assets




10,980 


12,158 

Derivative financial instruments




342 


324 

Other investments




201 


211 

Deferred tax assets




1,514 


1,475 

 




29,324 


30,996 

Current assets







Inventories




1,852 


1,682 

Trade and other receivables




8,754 


7,847 

Other investments




4,248 


1,482 

Derivative financial instruments




25 


Income tax receivable




1,056 


3,043 

Cash and cash equivalents




7,571 


11,068 





23,506 


25,131 

Total assets




52,830 


56,127 

LIABILITIES

Current liabilities







Interest-bearing loans and borrowings




(1,990)


(125)

Trade and other payables




(8,975)


(8,661)

Derivative financial instruments




(9)


(8)

Provisions




(1,388)


(1,095)

Income tax payable




(3,390)


(6,898)





(15,752)


(16,787)

Non-current liabilities







Interest-bearing loans and borrowings




(7,338)


(9,097)

Deferred tax liabilities




(2,735)


(3,145)

Retirement benefit obligations




(2,674)


(2,472)

Provisions




(474)


(843)

Other payables




(385)


(373)





(13,606)


(15,930)

Total liabilities




(29,358)


(32,717)

Net assets




23,472 


23,410 

EQUITY







Capital and reserves attributable to equity holders of the Company







Share capital




323 


352 

Share premium account




3,078 


2,672 

Other reserves




1,951 


1,917 

Retained earnings




17,894 


18,272 

 




23,246 


23,213 

Non-controlling interests




226 


197 

Total equity




23,472 


23,410 

 

 

Condensed Consolidated Statement of Cash Flows

 

 

For the year ended 31 December


2011

$m


Restated

2010

$m

Cash flows from operating activities





Profit before taxation


12,367 


10,977 

Finance income and expense


428 


517 

Depreciation, amortisation and impairment


2,550 


2,741 

(Increase)/decrease in working capital and short-term provisions


(897)


82 

Profit on sale of subsidiary


(1,483)


Other non-cash movements


(597)


(463)

Cash generated from operations


12,368 


13,854 

Interest paid


(548)


(641)

Tax paid


(3,999)


(2,533)

Net cash inflow from operating activities


7,821 


10,680 

Cash flows from investing activities





Movement in short-term investments and fixed deposits1


(2,743)


(125)

Purchase of property, plant and equipment


(839)


(791)

Disposal of property, plant and equipment


102 


83 

Purchase of intangible assets


(458)


(1,390)

Disposal of intangible assets



210 

Purchase of non-current asset investments


(11)


(34)

Disposal of non-current asset investments



Acquisitions of business operations



(348)

Net cash received on disposal of subsidiary


1,772 


Interest received


171 


174 

Payments made by subsidiaries to non-controlling interests


(16)


(10)

Net cash outflow from investing activities


(2,022)


(2,226)

Net cash inflow before financing activities


5,799 


8,454 

Cash flows from financing activities





Proceeds from issue of share capital


409 


494 

Repurchase of shares for cancellation


(6,015)


(2,604)

Repayment of loans



(1,741)

Dividends paid


(3,764)


(3,361)

Hedge contracts relating to dividend payments1



(114)

Movement in short-term borrowings


46 


(8)

Net cash outflow from financing activities


(9,321)


(7,334)

Net (decrease)/increase in cash and cash equivalents in the period


(3,522)


1,120 

Cash and cash equivalents at the beginning of the period


10,981 


9,828 

Exchange rate effects


(25)


33 

Cash and cash equivalents at the end of the period


7,434 


10,981 

Cash and cash equivalents consists of:





Cash and cash equivalents


7,571 


11,068 

Overdrafts


(137)


(87)



7,434 


10,981 

 

1 2010 restated to reclassify $114m cash paid in hedge contracts relating to dividend payments to cash flows from financing activities.

 

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 2010


363 


2,180 


1,919 


16,198 


20,660 


161 


20,821 

Profit for the period





8,053 


8,053 


28 


8,081 

Other comprehensive income

 







20 


25 

Transfer to other reserve




(15)


15 




Transactions with owners:















Dividends





(3,494)


(3,494)



(3,494)

Issue of Ordinary Shares



492 




494 



494 

Repurchase of Ordinary Shares


(13)



13 


(2,604)


(2,604)



(2,604)

Share-based payments





99 


99 



99 

Transfer from non-controlling interests to payables







(11)


(11)

Dividend paid to non-controlling interest







(1)


(1)

Net movement


(11)


492 


(2)


2,074 


2,553 


36 


2,589 

At 31 December 2010


352 


2,672 


1,917 


18,272 


23,213 


197 


23,410 

















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 2011


352 


2,672


1,917 


18,272 


23,213 


197 


23,410 

Profit for the period





9,983 


9,983 


33 


10,016 

Other comprehensive income





(555)


(555)



(546)

Transfer to other reserve





(2)




Transactions with owners:















Dividends





(3,752)


(3,752)



(3,752)

Issue of Ordinary Shares



406 




409 



409 

Repurchase of Ordinary Shares


(32)



32 


(6,015)


(6,015)



(6,015)

Share-based payments




 - 


(37)


(37)



(37)

Transfer from non-controlling interests to payables







(9)


(9)

Dividend paid to non-controlling interests







(4)


(4)

Net movement


(29)


406 


34 


(378)


33 


29 


62 

At 31 December 2011


323 


3,078 


1,951 


17,894 


23,246 


226 


23,472 

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

 

Notes to the Interim Financial Statements

 

1      BASIS OF PREPARATION AND ACCOUNTING POLICIES

The preliminary announcement for the year ended 31 December 2011 has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and as issued by the International Accounting Standards Board. There have been no significant changes in accounting policies from those set out in AstraZeneca PLC's Annual Report and Form 20-F Information 2010.  

 

The information contained in Note 5 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2010 and the Third Quarter and Nine Months Results 2011.

 

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 preliminary announcement has been prepared on a Going Concern basis.

 

The financial information included in the preliminary announcement does not constitute statutory accounts of the Group for the years ended 31 December 2011 and 2010 but is derived from those accounts.  Statutory accounts for 2010 have been delivered to the registrar of companies and those for 2011 will be delivered in due course. The auditors have reported on those accounts; their reports were (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      Net FUNDS

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



At 1 Jan 

2011 

$m 


Cash 

flow 

$m 


Non-cash 

mvmts 

$m 


Exchange 

mvmts 

$m 


At 31 Dec 

2011 

$m 

Loans due after one year


(9,097)



1,736 


23 


(7,338)

Current instalments of loan




(1,769)



(1,769)

Total loans


(9,097)



(33)


23 


(9,107)

Other investments - current


1,482 


2,743 


29 


(6)


4,248 

Net derivative financial instruments


325 


(3)


36 



358 

Cash and cash equivalents


11,068 


(3,473)



(24)


7,571 

Overdrafts


(87)


(49)



(1)


(137)

Short-term borrowings


(38)


(46)




(84)



12,750 


(828)


65 


(31)


11,956 

Net funds


3,653 


(828)


32 


(8)


2,849 

 

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

 

 

3      restructuring costs

Profit before tax for the year ended 31 December 2011 is stated after charging restructuring costs of $1,161 million ($1,202million in 2010).  These have been charged to profit as follows:

 



4th Quarter

2011
$m


4th Quarter

2010
$m


Full Year

2011
$m


Full Year

2010
$m

Cost of sales


36


34


54


144

Research and development


175


191


468


654

Selling, general and administrative costs


448


200


639


404

Total


659


425


1,161


1,202

 

 

4      DISPOSAL OF ASTRA TECH

In August 2011, the Group announced the sale of the Astra Tech business to Dentsply International for approximately $1.8 billion in cash. At 31 December 2011, the Group has reported a profit on disposal of $1,483 million and a total cash inflow of $1,772 million as a result of this transaction.





$m 


Consideration



1,795 


Net assets



(279)


Fees and other disposal costs



(59)


Exchange recycled on disposal



26 


Profit on disposal



1,483 


 





$m 


Consideration



1,795 


Cash held in Astra Tech on disposal



(23)


Cash inflow on disposal



1,772 


 

 

5      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 2010 and the Interim Management Statement 2011 as part of the Company's Half-Yearly Financial Report for the six-month period to 30 June 2011 and the Third Quarter and Nine Month results 2011 (together "2011 Disclosures"). Unless noted otherwise below or in the 2011 Disclosures, no provisions have been established in respect of the claims discussed below.

 

As discussed in the Company's Annual Report and Form 20-F Information 2010, 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 Annual Report and Form 20-F Information 2010 and herein.

 

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

 

Matters disclosed in respect of the fourth quarter of 2011 and January 2012

 

Crestor (rosuvastatin calcium)

Patent litigation - US

Teva Pharmaceutical Industries LTD. (Teva LTD) Infringement suit in the Eastern District of Pennsylvania

In December 2011, the US Court of Appeals for the Federal Circuit affirmed the decision by the US District Court for the Eastern District of Pennsylvania granting AstraZeneca's motion for summary judgment and invalidating Teva LTD's formulation patent. 

 

Regulatory Related Matters - US 

In November 2011, AstraZeneca filed a Citizen Petition with the FDA for Crestor asking the FDA to withhold approval of any generic rosuvastatin drug product which omits from its labelling the diabetes-related warning and adverse reaction information which AstraZeneca was required to include in Crestor's labelling when the FDA approved Crestor's primary prevention of cardiovascular disease indication. The FDA is required to issue a decision on this petition by 12 May 2012. 

 

Regulatory litigation - Brazil

The court denied AstraZeneca's request for data exclusivity for Crestor. AstraZeneca requested an interlocutory appeal of the decision, which was denied. AstraZeneca filed a motion for reconsideration in September 2011, which was denied in November 2011.

 

Patent litigation - Australia 

Apotex Pty Ltd. (Apotex) challenged the validity of AstraZeneca's Australian patent no. 769897 regarding the use of starting dosages of 5mg and 10mg dose of rosuvastatin (dosage patent) in May 2011. In November 2011, AstraZeneca was informed that Apotex was intending to start commercialising its generic rosuvastatin product. AstraZeneca sought a preliminary injunction based on the dosage patent, a formulation patent and the patent claiming the use of Crestor for heterozygous familial hypercholesterolemia (HeFH). In December 2011, the Court granted the preliminary injunction until further order. Apotex's motion to vacate the injunction was heard on 31 January 2012.  A decision is pending.

 

In January 2012, AstraZeneca instituted proceedings against Watson Pharm Pty Ltd. (Watson) and Actavis Australia Pty Ltd. (Actavis) asserting infringement of the dosage patent, formulation patent and HeFH patent for Crestor. AstraZeneca has applied for interlocutory relief against both Watson and Actavis, pending resolution of the infringement actions.  Sandoz has agreed to an undertaking to refrain from launching a product pending decisions on the Apotex, Watson and Actavis injunctions.

 

Patent litigation - Mexico 

In November 2011, AstraZeneca filed a lawsuit against the Mexican Health Authority, contesting the Sandoz rosuvastatin health registration claiming that it is in violation of the linkage regulation.  As part of the lawsuit, AstraZeneca also requested a preliminary injunction to stay the Sandoz health registration. The preliminary injunction was first granted and then lifted by the court in December 2011. AstraZeneca has appealed the decision to lift the preliminary injunction. Sandoz' product is on the market.

 

Patent litigation - Canada

In Canada, in January 2012, the Federal Court of Canada held a hearing in the patent proceeding involving Pharmascience Inc. The parties await the Court's decision. In 2011, AstraZeneca reached settlements with, Mylan Pharmaceuticals Inc., (Mylan) and Ranbaxy Pharmaceuticals Canada Inc. resolving the litigation regarding AstraZeneca's Crestor substance patent, and, as part of the agreements, those companies may enter the Canadian market on 2 April 2012, or earlier, in certain circumstances.

 

Iressa (gefitinib)

Product liability - Japan

AstraZeneca and the Japanese Ministry of Health, Labour and Welfare (MHLW) appealed the decision of the Tokyo District Court ordering AstraZeneca and the MHLW to pay approximately $192,000, plus interest.  In November 2011, the Tokyo High Court reversed the Tokyo District Court decision and ruled that neither AstraZeneca, nor the MHLW, had any liability for any of the claims. The plaintiffs have appealed the Tokyo High Court decision to the Japanese Supreme Court.

 

Losec/Prilosec (omeprazole)

European Commission omeprazole case

AstraZeneca is awaiting a ruling on the cross-appeals from the General Court of the European Union's judgment regarding the European Commission's 2005 decision fining AstraZeneca €60 million (reduced to €52.5 million by the General Court) for abuse of a dominant position regarding omeprazole. An oral hearing took place on 12 January 2012.

 

Nexium (esomeprazole magnesium)

Patent litigation - US

In January 2012, AstraZeneca entered into a settlement agreement with Lupin Ltd. (Lupin) to settle AstraZeneca's previously disclosed patent infringement suit against Lupin in the US District Court for the District of New Jersey in respect of Lupin's ANDA for esomeprazole magnesium delayed-release capsules.  As part of the settlement agreement, AstraZeneca has granted Lupin a licence to enter the US market with its generic esomeprazole magnesium product on 27 May 2014, subject to regulatory approval, or earlier in certain circumstances. 

 

In January 2012, AstraZeneca commenced a patent infringement action against Torrent Pharmaceuticals Ltd. (Torrent) in the US District Court for the District of New Jersey based on Torrent's  December 2011 Paragraph IV notice letter stating that it had submitted an ANDA for approval to market esomeprazole magnesium capsules. Torrent alleges non-infringement and/or invalidity of 11 patents listed in the Orange Book in reference to Nexium

 

In January 2012, AstraZeneca received a Paragraph IV Certification notice letter from Mylan Laboratories Limited (Mylan) stating that it had submitted an ANDA for approval to market esomeprazole magnesium capsules. Mylan alleges non-infringement and/or invalidity of three patents listed in the Orange Book in reference to Nexium.  AstraZeneca is evaluating Mylan's notice.

 

Patent litigation - EU: 10-year countries

In July 2010, Consilient Health Limited (Consilient) was granted marketing approval in the UK for a generic esomeprazole product manufactured by Krka, d.d., Novo Mesto (Krka). AstraZeneca initiated infringement proceedings against Consilient and Krka in September 2010. In December 2011, the parties agreed to settle these cases.

 

In October 2011, the Court stayed the infringement case against Krka in Sweden pending the outcome of the proceedings at the European Patent Office (EPO) regarding EP 1020461 (the '461 patent). In January 2011, AstraZeneca was served with a lawsuit filed by ratiopharm GmbH and ratiopharm AB (both ratiopharm) claiming that the Nexium esomeprazole magnesium patent (the '461 patent) is invalid in Sweden. In November 2011, the Court stayed the invalidity case initiated by ratiopharm pending the outcome of the proceedings at the EPO regarding the '461 patent.

 

Patent litigation - Finland

In July 2008, AstraZeneca initiated a declaratory action against Sandoz AS and Sandoz A/S and in September 2008 Hexal AG, Sandoz Oy Ab and Sandoz A/S initiated an invalidity case regarding the esomeprazole enantiomer patent. On 22 December 2011, the Helsinki District Court found the patent invalid and also dismissed AstraZeneca's claims in the declaratory action. AstraZeneca has the opportunity to appeal.

 

Patent litigation - Turkey

In July 2011, AstraZeneca initiated patent infringement proceedings against Logus Ilac, Integri Ilac, Vem Ilac, Biofarma Ilac and Sandoz Ilac San. ve Tic. AS based on esomeprazole related patents. In September 2011, the Court dismissed the case against Integri Ilac. In October 2011, the Court dismissed the case against Biofarma Ilac and Logus Ilac due to the fact that these companies had transferred their applications for marketing authorisations to third parties.

 

Government investigations/proceedings

The Dutch National Competition Authority (NMa) investigation into alleged practices regarding Nexium and alleged breaches of both Dutch and EU competition laws is ongoing. On 23 December 2011, the investigation team issued a report alleging foreclosure of generic versions of certain Proton Pump Inhibitors. The file has now been passed to the Legal Department of the NMa.

 

Seroquel (quetiapine fumarate)

Product liability

With regard to Seroquel product liability litigation in the US, which primarily relates to diabetes and/or other related injuries, as of 31 January 2012, AstraZeneca was aware of approximately 25 claims that have not been settled in principle. As of 31 January 2012, pursuant to court-ordered mediation, AstraZeneca has reached agreements in principle on monetary terms, subject to various subsequent conditions, approvals and agreement on non-monetary terms, with the attorneys representing 28,575 claimants. The mediation process is ongoing with regard to other currently unsettled claims.

 

With regard to insurance coverage for the substantial legal defence costs and settlements that have been incurred in connection with Seroquel-related product liability claims, disputes continue with insurers about the availability of coverage under insurance policies. These policies have aggregate coverage limits of $300 million. In September 2011, AstraZeneca Insurance Company Limited commenced formal legal proceedings in the High Court, in London, against two of these insurers for recovery of money which AstraZeneca believes is due under two of these policies. No insurance receivable can be recognised under applicable accounting standards at this time.

 

State Attorney General Matters

Various states have sued AstraZeneca generally alleging that AstraZeneca made false and/or misleading statements in marketing and promoting Seroquel. AstraZeneca reached settlement agreements in principle with the Attorneys General of Arkansas in November 2011 and Alaska in December 2011 and provisions have been taken.

 

Patent litigation - Portugal

In the cases against Generis Farmacêutica, S.A., KRKA - Farmacêutica, Sociedade Unipessoal, Lda., Mer Medicamentos, Lda. and Wynn Industrial Pharma, S.A. preliminary injunctions were granted by the Court of Appeal in November 2011.

 

In October 2011, the Court of Appeal granted preliminary injunctions against Cinfa Portugal, Lda. and Bluescience Lda., S.A. and ordered suspension of their retail price until 27 March 2012.

 

Seroquel XR (quetiapine fumarate)

Patent Litigation - Canada 

In November 2011, Sandoz Canada Inc. (Sandoz) filed a Statement of Claim against AstraZeneca in respect of the Canadian patent no. 2,251,944 (the '944 patent).  Sandoz seeks a declaration that its generic copies of Seroquel XR do not infringe the '944 patent.  

 

Patent Litigation - the Netherlands

In January 2012, the District Court in the Hague heard the revocation action filed by Sandoz BV, Hexal AG, Accord Healthcare Ltd and Accord Healthcare BV against AstraZeneca AB. A decision is expected in March 2012.

 

Synagis (palivizumab)

In September 2011, AstraZeneca's biologics unit, MedImmune, filed an action against Abbott International, LLC (Abbott) in the Circuit Court for Montgomery County, Maryland.  Abbott moved to dismiss the action and MedImmune filed its opposition.  A hearing on the motions has been set for 9 February 2012.

 

In September 2011, Abbott filed a parallel action in the Illinois State Court. MedImmune filed a motion to dismiss the action and Abbott filed a motion seeking to deposit the 'disputed funds' in escrow.  Both MedImmune's motion to dismiss and Abbott's motion for escrow were heard on 19 January 2012.  A ruling on those motions is expected by mid-February.

 

Symbicort (budesonide/formoterol)

Patent litigation - US 

In December 2011, Accuhale LLC (Accuhale) filed a patent infringement action against AstraZeneca in the US District Court for the Eastern District of Texas. Accuhale alleges sales of Symbicort infringe its US Patent No. 5,718,355.

 

Vimovo(fixed-dose combination of naproxen and esomeprazole)

Patent litigation - US

In October 2011, AstraZeneca and Pozen Inc. sued Anchen Pharmaceuticals, Inc. (Anchen) in the US District Court for the District of New Jersey for patent infringement based on Anchen's September 2011 Paragraph IV notice letter to AstraZeneca stating that Anchen had submitted an ANDA for approval to market generic versions of Vimovo tablets before expiration of patents listed in the Orange Book referencing Vimovo.   

 

Other Commercial Litigation

Toprol XL (metoprolol succinate)

AstraZeneca is defending anti-trust claims regarding the listing and enforcement of patents protecting Toprol XL, brought by both direct purchasers and end-payers. In December 2011, AstraZeneca paid $15 million to settle the claims of those plaintiffs who have opted-out of the putative class of direct purchasers and took a corresponding provision. AstraZeneca continues to defend against the remaining claims alleged by end-payers.

 

Other Government Investigations

Serbia

In August 2011, AstraZeneca UK Limited's Representative Office in Belgrade, Serbia was served with a criminal indictment alleging that local employees of AstraZeneca, and several other pharmaceutical companies who are also named defendants in the indictment, made allegedly improper payments to physicians at the Institute of Oncology and Radiology of Serbia. AstraZeneca filed a number of preliminary procedural objections asking the Serbian criminal court to dismiss the indictment against the Representative Office and those objections were granted in November 2011. The Serbian prosecutor then amended and re-served the indictment, and in December 2011 AstraZeneca asked the Court again to dismiss the indictment.

 

Advance PCS

In November 2006, AstraZeneca was notified of an inquiry by the US Attorney's Office for the Eastern District of Pennsylvania regarding whether a payment made by AstraZeneca to Advance PCS was taken into account when calculating best price.  In December 2011, the matter was resolved in principle with Centers for Medicare and Medicaid Services  and the Department of Justice.

 

Korea - KFTC Investigation

In September 2011, the Korean Fair Trade Commission (KFTC) announced administrative fines against AstraZeneca and five other pharmaceutical companies as a result of the third and final wave of its investigation into alleged unfair trade practices related to interactions between the local pharmaceutical industry and Korean healthcare providers. AstraZeneca was fined KRW 1,512 million (approximately US$ 1.24 million), but was not referred to the public prosecutor for criminal proceedings. The KFTC's final investigation report was provided to AstraZeneca in November and alleges that AstraZeneca Korea induced prescriptions through improper marketing to physicians in 2006 and 2007, but recognises that such alleged unfair conduct stopped in 2007 after AstraZeneca voluntarily implemented an improved and effective compliance programme across its business in Korea.

 

 

6      FULL YEAR territorial REVENUE analysis  






% Growth



Full Year

2011

$m


Full Year

2010

$m


Actual


Constant

Currency

US


13,426


13,727


(2)


(2)

Western Europe1


8,501


9,168


(7)


(11)

Canada


1,604


1,510




3,064


2,617


17 



1,233


1,049


18 


Established ROW2


5,901


5,176


14 


Emerging Europe


1,244


1,165




1,261


1,047


20 


15 


968


890




2,290


2,096



12 

Emerging ROW3


5,763


5,198


11 


10 

Total Revenue


33,591


33,269



(2)

 

1 Western Europe comprises France, Germany, Italy, Sweden, UK and others.

2Established ROW comprises Australia, Canada, Japan and New Zealand.

3 Emerging ROW comprises Brazil, China, India, Mexico, Russia, Turkey and all other ROW countries.

 

 

7      FOURTH QUARTER territorial REVENUE analysis    






% Growth



4th Quarter

2011

$m


4th Quarter

2010

$m


Actual


Constant

Currency

US


3,643


3,454



Western Europe1


2,005


2,347


(15)


(15)

Canada


363


408


(11)


(11)


926


763


21 


12 


311


304



Established ROW2


1,600


1,475



Emerging Europe


318


306



11 


314


267


18 


12 


236


239


(1)



540


529



13 

Emerging ROW3


1,408


1,341



10 

Total Revenue


8,656


8,617



 

1 Western Europe comprises France, Germany, Italy, Sweden, UK and others.

2Established ROW comprises Australia, Canada, Japan and New Zealand.

3 Emerging ROW comprises Brazil, China, India, Mexico, Russia, Turkey and all other ROW countries.

 


8      FULL YEAR product REVENUE analysis        



World


US


Western Europe


Established ROW


Emerging ROW

 



Full Year

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%


Full Year

2011

$m


Actual
Growth
%


Full Year

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%


Full Year

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%


Full Year

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%

Gastrointestinal:





























Nexium


4,429


(11)


(12)


2,397


(11)


762


(37)


(39)


540


19 


10 


730


18 


20 

Losec/Prilosec


946


(4)


(11)


38


(21)


242


(4)


(10)


447



(7)


219


(12)


(15)

Others


161


21 


19 


101


33 


46



(2)


7


17 


17 


7


17 


Total Gastrointestinal


5,536


(9)


(11)


2,536


(10)


1,050


(30)


(33)


994


11 



956



10 

Cardiovascular:





























Crestor


6,622


16 


13 


3,074


16 


1,225


10 



1,662


25 


15 


661



Atacand


1,450


(2)


(6)


182


(16)


731


(1)


(6)


213


(5)


(13)


324



Seloken/Toprol-XL


986


(19)


(20)


404


(41)


85


(7)


(12)


38


(3)


(13)


459


17 


15 

Plendil


256



(4)


8


(47)


23


(15)


(19)


14



(7)


211



Tenormin


270


(2)


(8)


11


(15)


59


(3)


(8)


125


(2)


(10)


75



(1)

Zestril


144


(8)


(11)


10



71


(12)


(16)


14


(18)


(24)


49



(2)

OnglyzaTM


211


206 


206 


156


189 


34


240 


240 


7


250 


250 


14


367 


367

Brilinta/Brilique


21


n/m 


n/m 


11


n/m 


9


n/m 


n/m 


-




1


n/m 


n/m 

Others


252


(4)


(7)


-


(100)


119




25


(4)


(15)


108



Total Cardiovascular


10,212



5


3,856


6


2,356




2,098


18 


9


1,902



Respiratory:





























Symbicort


3,148


15 


11 


846


17 


1,434




418


46 


35 


450


21 


19 

Pulmicort


892




279


(9)


189


(12)


(16)


126


11 



298


25 


23 

Rhinocort


212


(7)


(9)


74


(20)


37


(5)


(10)


20


25 


13 


81



Others


216


(15)


(19)


8


(80)


109


(8)


(13)


23




76



Total Respiratory


4,468




1,207



1,769



(3)


587


34 


24 


905


19 


17 

Oncology:





























Arimidex


756


(50)


(53)


42


(91)


260


(55)


(56)


308



(2)


146


(3)


(6)

Zoladex


1,179




39


(15)


262


(5)


(9)


494


10 



384


12 


18 

Casodex


550


(5)


(12)


(6)


(138)


80


(29)


(33)


364



(5)


112



Iressa


554


41 


32 


2


(50)


127


159 


147 


204


12 



221


40 


34 

Others


666


49 


46 


276


71 


206


53 


46 


70


15 



114


28 


26 

Total Oncology


3,705


(8)


(12)


353


(51)


935


(19)


(22)


1,440



(1)


977


16 


16 

Neuroscience:





























Seroquel IR


4,338




3,344



546


(3)


(8)


228



(8)


220


(15)


(17)

Seroquel XR


1,490


29 


27 


779


22 


490


36 


30 


89


46 


34 


132


40 


41 

Local Anaesthetics


602



(6)


10


(66)


242


(9)


(13)


205


10 



145


16 


13 

Zomig


413


(4)


(7)


158


(10)


174



(4)


68


(1)


(9)


13


18 


Diprivan


294


(9)


(13)


12


(73)


42


(16)


(20)


83




157



(1)

Vimovo


34


n/m 


n/m 


21


n/m 


6


n/m 


n/m 


6


n/m 


n/m 


1


n/m 


n/m

Others


33


(21)


(24)


1



17


(37)


(41)


3




12



Total Neuroscience


7,204




4,325



1,517




682


10 



680



Infection & Other:





























Synagis


975


(6)


(6)


570


(12)


404




-




1



Merrem


583


(29)


(30)


41


(68)


179


(45)


(48)


53


(7)


(14)


310



FluMist


161


(7)


(7)


160


(8)


-




-




1



Others


137


(8)


(8)


77


(28)


10


n/m 


n/m


20



(25)


30


55 


90 

Total Infection & Other


1,856


(15)


(15)


848


(19)


593


(18)


(19)


73


(5)


(17)


342



Aptium Oncology


224




224



-




-




-



Astra Tech


386


(28)


(32)


77


(24)


281


(28)


(33)


27


(29)


(39)


1


(67)


(67)

Total


33,591



(2)


13,426


(2)


8,501


(7)


(11)


5,901


14 



5,763


11 


10 

 

9      fourth QUARTER product REVENUE analysis          



World


US


Western Europe


Established ROW


Emerging ROW

 



4th Quarter

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%


4th Quarter

2011

$m


Actual
Growth
%


4th Quarter

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%


4th Quarter

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%


4th Quarter

2011

$m


Actual
Growth
%


Constant
 Currency
Growth

%

Gastrointestinal:





























Nexium


1,067


(13)


(13)


614


(8)


145


(50)


(50)


132




176


15 


24 

Losec/Prilosec


248



(2)


8


(11)


57




132



(2)


51


(6)


(6)

Others


49


88 


88 


34


209 


11


(8)


(8)


1




3


50 


50 

Total Gastrointestinal


1,364


(9)


(9)


656


(4)


213


(40)


(41)


265




230


10 


16 

Cardiovascular:





























Crestor


1,771


12 


11 


843


12 


305




465


19 


15 


158



Atacand


346


(8)


(6)


43


(14)


183


(4)


(4)


40


(33)


(35)


80



16 

Seloken/Toprol-XL


236


(7)


(5)


89


(25)


22


(8)


(8)


10



(10)


115


14 


19 

Plendil


60


(5)


(8)


1


(67)


5


(17)


(17)


4




50



(4)

Tenormin


68


(3)


(4)


2


(33)


14


(7)


(7)


34


(3)


(9)


18



12 

Zestril


35


(13)


(13)


2



17


(15)


(15)


2


(50)


(50)


14



OnglyzaTM


71


122 


122 


53


121 


10


100 


100


3


200 


200 


5


150 


150

Brilinta/Brilique


5


n/m 


n/m 


-



5


n/m 


n/m 


-




-



Others


62


(7)


(6)


-



28




7


(13)


(25)


27


(16)


(9)

Total Cardiovascular


2,654




1,033



589




565


10 


6


467



10 

Respiratory:





























Symbicort


839


13 


13 


242


26 


359




123


31 


26 


115


14 


19 

Pulmicort


223


(4)


(4)


61


(10)


46


(19)


(19)


40


11 



76



Rhinocort


50


(4)


(2)


16


(16)


8


(11)


(11)


5




21


11 


16 

Others


54


(10)


(8)


2


(50)


26


(13)


(13)


4




22



Total Respiratory


1,166




321


13 


439


(2)


(3)


172


24 


19 


234



14 

Oncology:





























Arimidex


166


(40)


(42)


5


(77)


45


(68)


(68)


84



(1)


32


(11)


(11)

Zoladex


298


(1)


(1)


8


(33)


63


(6)


(6)


137




90


(6)


Casodex


142


(4)


(9)


(5)


(350)


17


(35)


(35)


102



(1)


28


12 


12 

Iressa


149


30 


25 


-


(100)


34


70 


70 


60


11 



55


38 


38 

Others


184


32 


32 


76


31 


55


41 


41 


23


21 


16 


30


30 


30 

Total Oncology


939


(4)


(6)


84


(12)


214


(27)


(27)


406




235



11 

Neuroscience:





























Seroquel IR


1,148


12 


12 


910


18 


128


(9)


(9)


63


31 


21 


47


(29)


(24)

Seroquel XR


398


26 


27 


214


31 


127


19 


19 


23


21 


16 


34


26 


37 

Local Anaesthetics


148


(9)


(10)


-


(100)


57


(20)


(20)


54



(6)


37


16 


19 

Zomig


101


(8)


(9)


41


(11)


43




16


(16)


(21)


1


(50)


(50)

Diprivan


67


(17)


(19)


-


(100)


9


(18)


(18)


20


(13)


(17)


38


(5)


(5)

Vimovo


14


n/m 


n/m 


7


n/m 


4


n/m 


n/m 


3


n/m 


n/m 


-



Others


7


(46)


(46)


-



3


(57)


(57)


-




4


(40)


(40)

Total Neuroscience


1,883


10 


10 


1,172


18 


371


(2)


(2)


179




161


(6)


(2)

Infection & Other:





























Synagis


411




261


(5)


150


24 


24 


-




-



Merrem


114


(38)


(35)


8


(60)


28


(58)


(58)


7


(56)


(56)


71


(11)


(5)

FluMist


34


(33)


(33)


34


(34)


-







-



Others


36


44 


44 


19


(9)


1


n/m 


n/m 


6


(40)


(40)


10


n/m 


n/m 

Total Infection & Other


595


(9)


(9)


322


(13)


179


(3)


(4)


13


(50)


(50)


81



13 

Aptium Oncology


55




55



-




-




-



Astra Tech


-


(100)


(100)


-


(100)


-


(100)


(100)


-


(100)


(100)


-


(100)


(100)

Total


8,656




3,643



2,005


(15)


(15)


1,600




1,408



10 


Convenience Translation of Key Financial Information

 

 

For the quarter ended 31 December


2011 

$m 


2010 

$m 


2011 

£m 


2010 

£m 


2011 

SEKm 


2010 

SEKm 

Revenue


8,656 


8,617


5,605 


5,580


59,770 


59,500

Reported













Operating profit


2,167 


2,411


1,403 


1,561


14,963 


16,648

Profit before tax


2,052 


2,283


1,329 


1,478


14,169 


15,764

Earnings per share


$1.16 


$1.15


£0.75 


£0.74


SEK8.01 


SEK7.94

Core













Operating profit


2,990 


2,865


1,936 


1,855


20,646 


19,783

Profit before tax


2,875 


2,737


1,862 


1,772


19,852 


18,899

Earnings per share


$1.61 


$1.39


£1.04 


£0.90


SEK11.12 


SEK9.60

 

 

For the year ended 31 December


2011 

$m 


2010 

$m 


2011 

£m 


2010 

£m 


2011 

SEKm 


2010 

SEKm 

Revenue


33,591 


33,269


21,751 


21,542


231,946 


229,722

Reported













Operating profit


12,795 


11,494


8,285 


7,443


88,349 


79,366

Profit before tax


12,367 


10,977


8,008 


7,108


85,394 


75,796

Earnings per share


$7.33 


$5.60


£4.75 


£3.63


SEK50.61 


SEK38.67

Core













Operating profit


13,167 


13,603


8,526 


8,808


90,918 


93,929

Profit before tax


12,739 


13,086


8,249 


8,473


87,963 


90,359

Earnings per share


$7.28 


$6.71


£4.71 


£4.34


SEK50.27 


SEK46.33

Dividend per Ordinary Share


$2.80 


$2.55


£1.76 


£1.62


SEK18.54 


SEK17.11

Net cash inflow from operating activities


7,821 


10,680


5,064 


6,916


54,004 


73,745

(Decrease)/increase in cash & cash equivalents


(3,522)


1,120


(2,281)


725


(24,319)


7,734

Capital and Reserves Attributable to Equity Holders


23,246 


23,213


15,052 


15,031


160,514 


160,286

 

 

All Sterling (£) and Swedish krona (SEK) equivalents are shown for convenience and have been calculated using the current period end rates of $1= £0.64752 and $1= SEK6.905 respectively.  Dividend per Ordinary Share is shown as the actual amount payable using the rates at the date of declaration of the dividend.

 

Shareholder Information

ANNOUNCEMENTS AND MEETINGS

 

Announcement of first quarter 2012 results

26 April 2012

Annual General Meeting

26 April 2012

Announcement of second quarter and half year 2012 results

26 July 2012

Announcement of third quarter and nine months 2012 results

25 October 2012

 

DIVIDENDS

 

The record date for the first interim dividend payable on 12 September 2011 was 5 August 2011. Shares traded ex-dividend from 3 August 2011.

 

The record date for the second interim dividend for 2011, payable on 19 March 2012 will be 17 February 2012. Shares will trade ex-dividend from 15 February 2012.

 

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: ONGLYZA™, KOMBOGLYZE™ and KOMBIGLYZE XR™, trademarks of Bristol-Myers Squibb Company.

 

ADDRESSES FOR CORRESPONDENCE

 

Registrar and

Transfer Office

West Sussex

BN99 6DA

UK

 

US Depositary

St Paul

MN 55164-0504

US

 

 

Registered Office

Swedish Central Securities Depository

Tel (toll free in US):

800 990 1135

 

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 preliminary announcement contains 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 preliminary announcement 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; 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 failure by third parties to supply materials or services; the risk of failure to manage a crisis; 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 that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects; and the impact of increasing implementation and enforcement of more stringent anti-bribery and anti-corruption legislation.

 


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

Companies

AstraZeneca (AZN)
UK 100