Interim Results - Part 1 of 2

AstraZeneca PLC
27 July 2006







AstraZeneca PLC

Second Quarter and Half Year Results 2006

'A strong second quarter, with sales up 10 percent and Earnings per Share up 41
percent; on track to achieve financial targets for the full year.'

Financial Highlights

Group                  2nd Quarter   2nd Quarter     Actual    CER       Half Year   Half Year    Actual       CER
                              2006          2005          %      %            2006        2005         %         %
                                $m            $m                                $m          $m

Sales                        6,625         6,132         +8    +10          12,805      11,875        +8       +11

Operating Profit            2,131*         1,718        +24    +30          4,107*       3,171       +30       +31

Profit before Tax            2,209         1,749        +26    +31           4,253       3,235       +31       +33

Earnings per Share         $1.02**         $0.75        +36    +41         $1.92**       $1.38       +39       +41

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

*Includes $109 million in other income in respect of the divestment of the US
anaesthetic and analgesic products to Abraxis BioScience, Inc.

**Includes $0.05 in respect of the divestment

•   Second quarter sales increased by 10 percent to $6,625 million.  Operating profit increased by 30 percent to
    $2,131 million, including a $109 million divestment gain. Underlying operating profit (excluding the
    divestment gain) increased by 23 percent.

•   First half sales were $12,805 million, up 11 percent.  First half operating profit increased by 31 percent (up
    28 percent underlying) to $4,107 million; first half operating margin was 32.1 percent.

•   Strong first half sales for five key growth products: NexiumTM (up 11 percent), SeroquelTM (up 29 percent),
    CrestorTM (up 48 percent), ArimidexTM (up 34 percent) and SymbicortTM (up 24 percent).

•   Free cash flow (see page 9) of $2,922 million in the first half.  Share repurchases totalled $1,627 million.

•   The Board has recommended a 29 percent increase in the first interim dividend to $0.49.

•   Offer for Cambridge Antibody Technology Group plc (CAT) declared unconditional 22 June.  As of 30 June, the
    Company had acquired or received valid acceptances in respect of more than 95 percent of CAT shares.
    Compulsory acquisition of remaining CAT shares now underway.

•   On 21 July, the US FDA approved SymbicortTM for the maintenance treatment of asthma in patients aged 12 years
    and older.

•   On 17 July, a regulatory submission was made in the US for a once daily sustained release (SR) formulation of
    SeroquelTM for the treatment of patients with schizophrenia.  Filings in the EU expected towards end of this
    year.

•   Company anticipates earnings per share in the upper half of the range of $3.60 to $3.90.

David Brennan, Chief Executive Officer, said:  'The strong second quarter
earnings performance reflects our continued delivery of good sales growth and
margin expansion. The prospects for our current portfolio have been strengthened
by the SymbicortTM approval in the US and the regulatory submission for Seroquel
SRTM in the US.  Progress continues in our licensing and business development
initiatives, as evidenced by the completed acquisition of CAT and the recently
announced collaboration with Abbott in the US cholesterol market.'

London, 27 July 2006
Media Enquiries:          Steve Brown/Edel McCaffrey (London)          [phone]/5034
                          Staffan Ternby (Sodertalje)                  (8) 553 26107
                          Carla Burigatto (Wilmington)                 [phone]
Analyst/Investor          Mina Blair/ Jonathan Hunt (London)           [phone]/5087
Enquiries:
                          Staffan Ternby (Sodertalje)                  (8) 553 26107
                          Ed Seage/Jorgen Winroth (USA)                [phone]/[phone]

Pictures of senior executives are available on www.newscast.co.uk.  Broadcast
footage of AstraZeneca products and activities is available on
www.thenewsmarket.com/astrazeneca


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



Second Quarter



Sales in the second quarter increased by 10 percent at CER, or 8 percent on an
as reported basis (including a 2 percent adverse impact from currency
movements).  Sales outside the US were up 8 percent.  Reported US sales growth
was 12 percent, with underlying sales growth slightly higher.



R&D expense increased by 15 percent to $955 million, including full accrual for
all remaining costs associated with GalidaTM.  Excluding this charge, underlying
R&D costs grew by 10 percent, SG&A expenses increased by 5 percent to $2,290
million.  Operating profit was up 30 percent in the second quarter to $2,131
million, including $109 million in other income associated with the recognition
of a portion of the gain on the divestment of the US anaesthetic and analgesic
products.  Underlying operating profit growth (excluding the gain) was up 23
percent.  Second quarter operating margin was 32.2 percent on an as reported
basis, compared with 28.0 percent in the second quarter 2005.  Earnings per
share in the second quarter were $1.02 versus $0.75 in 2005, an increase of 41
percent.



The combined sales of five key growth products (NexiumTM, SeroquelTM, CrestorTM,
ArimidexTM, and SymbicortTM) grew by 21 percent in the second quarter, to $3,299
million.



NexiumTM sales in the second quarter were $1,283 million, up 8 percent.  Nexium
TM sales outside the US were up 13 percent.  Reported US sales growth was 5
percent, which was affected by changes in managed care rebate accruals (chiefly
in the second quarter 2005) and some inventory movements; underlying growth was
estimated to be 14 percent, a continuation of the trend of strong volume growth
partially offset by lower realized prices.



CrestorTM sales in the second quarter were $480 million, up 51 percent.  Sales
in the US were up 47 percent.  CrestorTM share of total prescriptions in the US
statin market was 8.0 percent in the week ending 14 July, up 1.7 points since
the beginning of the year.  CrestorTM sales in other markets were up 58 percent.
  On 5 July, AstraZeneca and Abbott announced a US collaboration to co-develop
and market a single pill, fixed dose combination of CrestorTM and Abbott's next
generation TriCor(R)  (ABT-335) as part of a comprehensive treatment regimen for
mixed lipid disorders.



SymbicortTM sales in the second quarter were $308 million (up 25 percent) as
sales continue to outpace the market growth for fixed combination treatments for
asthma and COPD.  On 21 July, the US FDA approved SymbicortTM for the
maintenance treatment of asthma in patients aged 12 years and older.
AstraZeneca plans to launch SymbicortTM in the US in mid-2007.



ArimidexTM sales in the second quarter were $379 million, up 31 percent on
continued growth in usage for primary adjuvant treatment of early breast cancer
in post-menopausal women.  Recently, a new indication for ArimidexTM was granted
in some EU markets (UK, Germany, Austria, Italy, Spain and Portugal).  In these
countries, ArimidexTM is now indicated for the adjuvant treatment of early
breast cancer in hormone receptor positive post-menopausal women who have
received two to three years of adjuvant tamoxifen.  This new indication makes
ArimidexTM the first and only aromatase inhibitor to be approved for both
primary adjuvant use and following two to three years of tamoxifen.



SeroquelTM sales in the second quarter were up 28 percent, to $849 million, on
good growth in the US (up 30 percent) and in other markets (up 24 percent).  On
17 July, the Company announced the submission of a New Drug Application to the
US FDA for a sustained release (SR) once-daily formulation of SeroquelTM for the
treatment of patients with schizophrenia.  A filing for Seroquel SRTM in Europe
is expected towards the end of this year.





First Half



For the first half, sales increased 11 percent at CER, or 8 percent on an as
reported basis (including a 3 percent adverse impact from currency movements).
Sales in the US were up 14 percent, with sales in other markets up 8 percent.
Combined sales for five key growth products were $6,294 million (up 23 percent)
in the first half, on strong performances for NexiumTM (up 11 percent), Seroquel
TM (up 29 percent), CrestorTM (up 48 percent), ArimidexTM (up 34 percent), and
SymbicortTM (up 24 percent).



Double-digit sales growth and continued cost discipline resulted in a 28 percent
underlying increase in operating profit.  With the divestment gain included,
operating profit was up 31 percent, with a 5.4 percentage point improvement in
operating margin (to 32.1 percent of sales) in the first half.  Earnings per
share were $1.92 compared with $1.38 last year, an increase of 41 percent.



Future Prospects



The strong sales and earnings momentum keeps the Company firmly on track to
deliver its financial targets for the full year.  Also included in earnings for
the year is the one-off gain on the divestment of the US anaesthetic and
analgesic products and the amortization of the related deferred gain, as well as
full consolidation of CAT and the amortization of its intangibles.  Taking all
these factors into account, the Company anticipates earnings per share in the
upper half of the target range of $3.60 to $3.90.



Included in this target is around 24 cents of earnings related to Toprol-XLTM in
the US for the remaining 5 months of the year.  This assumes generic companies
do not receive final regulatory approval and seek to launch 'at risk'.  This 24
cents of earnings exposure excludes any one-time asset or inventory adjustments
that may be required.


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 a generic competitor to Toprol-XLTM were 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 2005 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
                                      Second Quarter              CER %        Half Year              CER %
                                      2006        2005                      2006        2005

LosecTM/PrilosecTM                     356         438           -17         700         865           -16
NexiumTM                             1,283       1,204            +8       2,472       2,259           +11
Total                                1,654       1,661            +1       3,205       3,160            +3


•   In the second quarter, dispensed tablet volume in the US PPI market increased by 10 percent.  This volume
    increase was driven by the growth for omeprazole products (up 48 percent) and for NexiumTM (up 20 percent).
    In aggregate, volume for all other brands declined by 5 percent in the quarter.

•   In the US, reported sales growth for NexiumTM in the second quarter was 5 percent; however, adjusted for
    differences in managed care rebate accruals (chiefly in the second quarter 2005) and inventory movements
    between periods, underlying sales growth was around 14 percent as the strong volume growth was partially
    offset by lower realized prices.  First half sales on a similar basis increased by 15 percent (9 percent as
    reported).

•   NexiumTM sales in other markets were up 13 percent in the second quarter.  Sales in Europe were up 12 percent
    despite a 4 percent decline in Germany as a result of a significant reduction in the reference price for
    PPI's.  For the first half, NexiumTM sales in other markets increased 15 percent.

•   PrilosecTM sales in the US were down 38 percent in the second quarter and down 24 percent in the first half.

•   Sales of LosecTM in other markets declined by 14 percent in the first half, although sales in Japan were up 11
    percent.



Cardiovascular
                                       Second Quarter           CER %          Half Year              CER %
                                      2006        2005                      2006        2005
SelokenTM /Toprol-XLTM                 478         435           +11         934         843           +12
CrestorTM                              480         317           +51         867         590           +48
AtacandTM                              276         254           +11         530         489           +12
PlendilTM                               70         112           -38         142         205           -30
ZestrilTM                               78          78            +3         153         165            -3
Total                                1,540       1,370           +13       2,930       2,627           +14


•   Sales of Toprol-XLTM in the US were up 19 percent in the second quarter and up 20 percent in the first half.
    Total prescriptions for Toprol-XLTM in the US increased by 12 percent compared with 8 percent growth for the
    beta blocker market.

•   During the second quarter, AstraZeneca submitted a supplemental New Drug Application to the US FDA for
    Toprol-XLTM for the management of pediatric hypertension.

•   Sales of SelokenTM in other markets were down 12 percent in the second quarter and 9 percent in the first
    half.

•   CrestorTM sales in the second quarter were $480 million (up 51 percent), including $271 million in the US (up
    47 percent).  Total prescriptions in the US statin market grew at double-digit rates in the first half.
    CrestorTM share of total prescriptions in the US statin market was 8.0 percent in the week ending 14 July, up
    from 6.3 percent in December 2005.

•   US sales for CrestorTM in the first half increased 45 percent to $491 million.

•   In other markets, CrestorTM sales in the second quarter were $209 million (up 58 percent) on continued strong
    growth in Europe (up 58 percent) and Canada (up 25 percent).  Volume share of the statin market for CrestorTM
    is now 15.3 percent in Canada; 10.9 percent in the Netherlands; 17.4 percent in Italy and 9.6 percent in
    France.

•   CrestorTM sales in other markets increased 52 percent in the first half to $376 million.

•   The interim report of the CrestorTM post-marketing surveillance programme in Japan has been successfully
    completed.  It is anticipated that there may be some reported commercial sales for CrestorTM in Japan in the
    second half of 2006.

•   On 5 July, AstraZeneca and Abbott announced a US collaboration to co-develop and market a single pill, fixed
    dose combination of CrestorTM and Abbott's next generation TriCor(R)  (ABT-335) as part of a comprehensive
    treatment regimen for mixed lipid disorders.

•   AtacandTM sales in the US were down 3 percent in the second quarter and unchanged in the first half.

•   Sales of AtacandTM in other markets were up 16 percent in both the second quarter and the first half.

•   PlendilTM sales in the first half were down 30 percent as a result of generic competition in the US, where
    sales declined 82 percent.



Respiratory
                                       Second Quarter            CER %         Half Year              CER %
                                      2006        2005                      2006        2005
PulmicortTM                            301         276           +10         629         590            +9
SymbicortTM                            308         255           +25         585         502           +24
RhinocortTM                            102         112            -9         187         204            -8
AccolateTM                              21          13           +62          39          41            -5
OxisTM                                  22          23            -4          44          46             -
Total                                  791         718           +12       1,556       1,464            +9


•   SymbicortTM sales in the second quarter were up 25 percent to $308 million on share gains and market growth of
    fixed combination treatments for asthma and COPD.  Sales in the first half were up 24 percent.

•   On 21 July, the US FDA approved SymbicortTM for the maintenance treatment of asthma in patients aged 12 years
    and older.  AstraZeneca plans to launch SymbicortTM in the US in mid-2007.

•   PulmicortTM sales in the first half were up 9 percent.  Reported sales growth for PulmicortTM RespulesTM in
    the US was 18 percent; as total prescriptions were unchanged, the positive variance arises from price changes
    and differences in managed care rebate accruals. First half sales of PulmicortTM in other markets were down 4
    percent.

•   Sales of RhinocortTM Aqua in the US were down 11 percent in the first half. Total prescriptions declined by 16
    percent.



Oncology
                                       Second Quarter           CER %          Half Year              CER %
                                      2006        2005                      2006        2005
ArimidexTM                             379         297           +31         714         553           +34
CasodexTM                              306         287           +11         580         564            +8
ZoladexTM                              250         263            -2         481         494            +2
IressaTM                                62          59            +8         112         140           -16
FaslodexTM                              47          35           +37          91          64           +45
NolvadexTM                              24          32           -22          45          60           -20
Total                                1,071         976           +13       2,029       1,881           +13


•   ArimidexTM continued its strong performance in the second quarter, with sales up 31 percent to $379 million.
    Sales in the US increased 28 percent in the second quarter and 27 percent in the first half.  Total
    prescriptions for ArimidexTM in the US increased 26 percent in the first half; market share in June was 36.7
    percent, up two percentage points since December 2005.

•   ArimidexTM sales in other markets were up 32 percent in the second quarter and up 38 percent in the first
    half.  First half sales increased 43 percent in Europe and were up 25 percent in Asia Pacific.

•   On 12 July, the Company announced that a new indication for ArimidexTM was granted in some EU markets (UK,
    Germany, Austria, Italy, Spain and Portugal).  In these countries, ArimidexTM is now indicated for the
    adjuvant treatment of early breast cancer in hormone receptor positive post-menopausal women who have received
    two to three years of adjuvant tamoxifen.  This new indication makes ArimidexTM the first and only aromatase
    inhibitor to be approved for both primary adjuvant use and following two to three years of tamoxifen.

•   CasodexTM sales in the US in the first half were up 19 percent (to $140 million) on a small volume increase
    (up 3 percent) and favourable price changes, inventory movements and other factors.

•   In other markets, CasodexTM sales were up 6 percent in the first half to $440 million.

•   First half sales of ZoladexTM were down 15 percent in the US.  Sales in other markets were up 4 percent,
    resulting in a 2 percent increase overall.

•   IressaTM sales in the second quarter were up 8 percent to $62 million on growth in Japan and China.  Sales in
    the first half were down 16 percent as $37 million of sales in the US were recorded in the first quarter of
    2005.

•   FaslodexTM sales increased 45 percent in the first half (to $91 million) as sales nearly doubled in Europe and
    were up 16 percent in the US.



Neuroscience
                                      Second Quarter            CER %          Half Year              CER %
                                      2006        2005                      2006        2005
SeroquelTM                             849         667           +28       1,656       1,300           +29
ZomigTM                                103         104            +1         196         172           +17
Total                                1,178       1,022           +16       2,314       1,974           +19


•   SeroquelTM sales in the second quarter were $849 million (up 28 percent) on good growth in the US (up 30
    percent), Europe (up 20 percent) and Asia Pacific (up 30 percent).

•   In the US, SeroquelTM sales in the second quarter were up 30 percent, on volume growth (total prescriptions up
    13 percent year to date), favourable price changes, and some inventory destocking in the second quarter 2005.
    SeroquelTM market share of new prescriptions reached 30.5 percent in June, up from 29.8 percent in December
    2005.

•   SeroquelTM sales in the first half in the US were $1,210 million (up 30 percent).

•   SeroquelTM sales in other markets increased 24 percent in the second quarter and 27 percent in the first half
    on continued gains in market share.

•   On 18 July, the Company announced the submission of a New Drug Application to the US FDA for a sustained
    release (SR) once daily formulation of SeroquelTM for the treatment of patients with schizophrenia.  A filing
    for Seroquel SRTM in Europe is expected towards the end of this year.

•   ZomigTM sales comparisons in the US are affected by the resumption of full responsibility for US
    commercialization on 1 April 2005.  Second quarter sales were $46 million, the same as second quarter 2005.
    First half sales were up 56 percent, reflecting the low sales to Medpointe during the first quarter last year.

•   ZomigTM sales in other markets were up 1 percent in the second quarter and down 1 percent for the first half.



Geographic Sales
                                   Second Quarter            CER %           Half Year               CER %
                                  2006         2005                       2006         2005
USA                              3,077        2,743           +12        5,959        5,243           +14
Europe                           2,255        2,197            +7        4,427        4,362            +8
Japan                              387          399            +5          691          736            +4
RoW                                906          793           +12        1,728        1,534           +10


•   Sales in the US in the second quarter were fuelled by strong growth for SeroquelTM, CrestorTM, Toprol-XLTM,
    NexiumTM, and ArimidexTM.

•   Sales growth in Europe in the second quarter was driven by SymbicortTM (up 24 percent), CrestorTM (up 58
    percent), ArimidexTM (up 37 percent), NexiumTM (up 12 percent despite weak sales in Germany) and SeroquelTM
    (up 20 percent).

•   Second quarter sales in Japan were up 5 percent, as volume rebounded from the destocking in the first quarter
    ahead of the April price decreases.  There was good growth in LosecTM (up 14 percent) and oncology products
    (up 7 percent).

•   Sales in China increased 12 percent in the second quarter, led by IressaTM and PulmicortTM.



Operating Review

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



Second Quarter

Reported sales increased by 8 percent and operating profit by 24 percent. At
constant exchange rates, sales increased by 10 percent and operating profit by
30 percent.



Currency movements for the quarter had an adverse impact to sales of 2 percent
and 6 percent to operating profit, resulting in a decrease to earnings per share
of 3 cents for the quarter. Although in comparison to quarter two last year, the
dollar was slightly stronger against most currencies (euro 0.2 percent, Japanese
yen 6.5 percent, Swedish krona 1.7 percent and sterling 1.6 percent), the impact
of currency volatility within the quarter on settlements has exaggerated the
impact on operating profit.  Consequently, the normal hedging effect of the cost
base has not occurred, resulting in a higher impact on profit than sales.



Underlying US sales growth is slightly above reported growth of 12 percent after
adjusting for managed market accruals, inventory movements and other factors.
Outside the US, sales increased by 8 percent.



Reported operating margin increased by 4.2 percentage points from 28.0 percent
to 32.2 percent.  Currency reduced margin by 0.7 percentage points and the gain
on the divestment of the US anaesthetic and analgesic products increased margin
by 1.7 percentage points, resulting in an underlying margin improvement of 3.2
percentage points for the quarter.



Gross margin increased by 0.4 percentage points to 79.0 percent of sales.
Currency depressed gross margin by 1.1 percentage points and payments to Merck
at 4.6 percent of sales were 0.4 percentage points lower than second quarter
last year, implying an underlying margin increase of 1.1 percentage points, due
mostly to favourable sales mix and continuing operational efficiencies.



R&D expenditure was $955 million in the second quarter, up 15 percent over last
year due to increased investment in the early portfolio and life cycle
management programmes.  Included in R&D is a charge of $38 million as a result
of the discontinuation of the GalidaTM development programme, which represents
the estimated costs to complete all remaining clinical work. Excluding this
charge, underlying R&D costs grew by approximately 10 percent.  In comparison to
the second quarter 2005, R&D reduced operating margin by 0.6 percentage points.
SG&A increased by 5 percent to $2,290 million for the quarter due to the
continued investment in key products across the business.  SG&A added 1.7
percentage points to operating margin in the quarter.



Higher other income increased operating margin by 2.3 percentage points due
principally to higher royalties and a gain of $109 million arising from the
divestment of the US anaesthetic and analgesic products to Abraxis BioScience,
Inc. in the US (see Investments below).



The fair value adjustments relating to financial instruments amounted to a $5
million benefit in the quarter; $3 million credit in cost of sales, $3 million
charge in R&D and $5 million credit to interest.



First Half

Reported sales increased by 8 percent and operating profit by 30 percent. At
constant exchange rates, sales increased by 11 percent and operating profit by
31 percent.



Currency had an adverse impact to sales of 3 percent and 2 percent to operating
profit. Cumulatively, exchange has decreased EPS by 2 cents.  Assuming current
exchange rates remain unchanged for the remainder of the year, we would expect
currency to have a broadly neutral impact on EPS in the second half of the year.



Underlying US sales growth approximates to reported sales growth of 14 percent
for the six months. Outside the US, sales increased by 8 percent.



Operating margin increased by 5.4 percentage points from 26.7 percent to 32.1
percent.  Excluding the effects of currency and the divestment gain, underlying
margin improved 4.0 percentage points for the half year.



Gross margin increased by 2.3 percentage points to 79.4 percent of sales.
Included in the half year last year was a provision for the early termination of
the Medpointe ZomigTM US distribution agreement.  Excluding this, together with
lower payments to Merck (4.6 percent of sales) and currency movements,
underlying margin improved by 2.1 percentage points.



R&D expenditure was up 12 percent to $1,816 million (9 percent excluding Galida
TM costs) primarily due to increased investment across the portfolio.  Compared
with the first half 2005, R&D reduced operating margin by 0.1 percentage points.
  SG&A increased by 7 percent to $4,405 million over last year primarily the
result of increased investment in the key products.  SG&A added 1.1 percentage
points to operating margin in the first half.



The fair value adjustments relating to financial instruments amounted to a $4
million charge for the half year; $5 million charge in cost of sales and $1
million credit to interest.

Toprol-XLTM

In the six months, Toprol-XLTM contributed sales of $732 million and EPS of 26
cents.  While uncertainties exist as to whether, when and with which strengths
generic companies will launch, the Company is determined to maximise the value
contribution from Toprol-XLTM for its remaining life.  Given these uncertainties
and the impact various scenarios have on expected performance for 2006, 2007 and
2008, 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 periods, sales growth for the quarter
and half year would be 9 percent and 10 percent respectively and EPS growth
would be 41 percent in both periods.

Based on current forecasts, the contribution of Toprol-XLTM to EPS for the
remaining five months of the year is estimated at 24 cents, assuming no generic
launches 'at risk'.

Interest and Dividend Income

Net interest and dividend income for the first half was $146 million (2005 $64
million), with $78 million in the second quarter (2005 $31 million). The
increase over 2005 is primarily attributable to higher average investment
balances and yields. The reported amounts include $24 million (2005 $11 million)
in the first half and $13 million (2005 $6 million) in the quarter arising from
employee benefit fund assets and liabilities reported under IAS 19, 'Employee
Benefits'.



Taxation

The effective tax rate for the half year was 28.9 percent compared with 29.9
percent for the same period last year. The full year 2005 tax rate was 29.1
percent.  It is anticipated that the full year tax rate for 2006 will be around
29 percent.



Cash Flow

Free cash flow* for the first six months was $2,922 million compared to $2,855
million in the first half of 2005.

Shareholder returns of $3,069 million comprising share repurchases of $1,627
million and $1,442 million dividend payment and a net $213 million cash outflow
primarily from the acquisition of KuDOS Pharmaceuticals Limited in the first
quarter were offset by proceeds from share issues of $746 million, $157 million
additional short term investments held by Cambridge Antibody Technology Group
plc, and $20 million of other non-cash movements, resulting in an overall
increase in net funds of $563 million. The offer by AstraZeneca UK Limited for
Cambridge Antibody Technology Group plc was declared unconditional on 22 June.
As of 30 June, valid acceptances in respect of more than 95 percent of the
shares to which the offer relates had been acquired or received.  Settlement in
respect of these acceptances, totalling $858 million (£463 million) occurred in
July. Compulsory acquisition of remaining shares for a total of $43 million (£23
million) is now underway.

Cash generated from operating activities in the period was $3,421 million, $267
million higher than in the first half of 2005. An increase in profit before tax
of $1,018 million was offset by a $483 million increase in working capital
requirements, mainly as a result of higher sales volumes and a $197 million
increase in tax paid.

Net cash outflows from investing activities of $11 million for the first half
contrast with inflows of $477 million for the similar period of 2005. The
reduction is a result of $331 million expenditure on collaboration deals with
Abraxis BioScience, Inc., Protherics PLC, Targacept, Inc. and AtheroGenics, Inc.
together with outflows of $203 million in respect of the acquisition of KuDOS
Pharmaceuticals Limited.

* - Cash flows before share issues and returns to shareholders; movements in
short term investments, fixed deposits and short term borrowings; and
acquisitions.

Investments

In January, the Company acquired KuDOS Pharmaceuticals Limited, a UK
biotechnology company focused on the discovery and development of oncology
therapies based on inhibition of DNA repair.  The acquisition provides the
Company with a widely recognised expert group and technology platform that
complements the existing capabilities of the oncology franchise, one of the
Company's key therapy areas.  The acquisition price of $210 million, which was
settled in cash, consists mainly of an intangible asset of $285 million,
goodwill of $12 million and a deferred tax liability of $85 million.

In April, the Company announced an agreement with Abraxis BioScience, Inc. to
co-promote for five and a half years their cancer therapy product ABRAXANE(R) in
the US from 1 July as well as the divestment of the Company's US anaesthetic and
analgesic products to Abraxis BioScience, Inc. The co-promotion of ABRAXANE(R)
provides the Company with access to the key US chemotherapy market and at the
same time complements and extends the US oncology product portfolio.  For the
right to co-promote ABRAXANE(R) the company paid Abraxis BioScience, Inc. $200
million which has been classified as an intangible asset on the balance sheet
and is to be amortised over the term of the agreement which includes two years
after the completion of the co-promotion (7.5 years).  The divestment of the US
anaesthetic and analgesic products, which was completed 28 June, resulted in a
gain of $235 million, of which $109 million was recognised in quarter two with
the remaining $126 million to be recognized over the five year supply contract.



The Company announced in May its intention for AstraZeneca UK Limited to acquire
the remaining share capital of Cambridge Antibody Technology Group plc.  On 22
June, it was announced that the offer to acquire the entire share capital of
Cambridge Antibody Technology Group plc had been declared unconditional.  The
cost of acquisition, including all directly attributable expenses was
substantially settled in July, although Cambridge Antibody Technology Group plc
has been consolidated from the date of the offer being declared unconditional.
Cash was used to acquire all the equity instruments of Cambridge Antibody
Technology Group plc.  The Company has consolidated total net assets of
approximately $1,200 million, including intangible assets and goodwill of
approximately $1,300 million, representing products in development, royalty
income from launched products and the technologies utilized by Cambridge
Antibody Technology Group plc in developing monoclonal antibodies together with
the resultant libraries and a deferred tax liability of $390 million plus other
net assets of $300 million.



In July, the Company announced collaboration with Abbott to co-develop and
market a combination product using CrestorTM and Abbott's proprietary, next
generation TriCor(R) (ABT-335).



Dividends

The Board has recommended a 29 percent increase in the first interim dividend to
$0.49 (26.6 pence, SEK 3.60) to be paid on 18 September 2006 to all shareholders
on the register on 11 August 2006.



Share Repurchase Programme

During the second quarter, 19.5 million shares were repurchased for cancellation
at a total cost of $1,063 million bringing the total repurchases for the first
half of the year to 31.1 million shares at a total cost of $1,627 million.
During the first six months, 18.2 million shares were issued in consideration of
share option exercises for a total  of $746 million.

The total number of shares in issue at 30 June 2006 was 1,568 million.

The share buy back programme is calculated to have added 3 cents to EPS for the
half year after allowing for an estimate of interest income foregone.



Although it has not yet done so, the Company remains open to the possibility of
using its existing authority from shareholders to give irrevocable instructions
to banks, in order to continue the share repurchase programme during close
periods ahead of publication of its results.  Appropriate announcements about
any such transactions would be made.


Updated R&D Pipeline Table

The R&D pipeline table was updated in conjunction with the Business Review
meeting held on 8 June.  A copy of this table is available on the Company's
website, www.astrazeneca.com, under information for investors.

Pipeline developments that have occurred subsequent to this update include:

•  With the completion of the acquisition of CAT, the following compounds
have been added to the pipeline: CAT-3888 (in Phase II development for hairy
cell leukaemia); CAT-354 (in Phase I development for asthma); and two
preclinical compounds, CAT-8015 (haematological malignancies) and CAT-5001
(solid tumours).

•  In collaboration with Abbott, the Company is co-developing a single
pill, fixed-dose combination of CrestorTM and Abbott's next generation
TriCor(R) (ABT-335) for mixed lipid disorders for the US market.  In parallel,
a combination product based on Abbott's currently marketed fibrate TriCor(R) and
AstraZeneca's CrestorTM will also be evaluated.

•  The development of the intravenous dosage form of AZD7009 for atrial
fibrillation conversion has been discontinued.

•  The US regulatory submission has been made for Seroquel SRTM for the
treatment of schizophrenia.  The filing in the EU is expected before the end of
the year.

•  On 21 July, the US FDA approved SymbicortTM for the maintenance
treatment of asthma in patients aged 12 years and older.

Calendar

26 October 2006     Announcement of third quarter and nine months 2006 results
1 February 2007     Announcement of fourth quarter and full year 2006 results




David Brennan
Chief Executive Officer


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