FORM 6-K
 
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Report of Foreign Issuer
 
 
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
For the month of November 2016
 
Commission File Number:  001-11960
 
AstraZeneca PLC
 
1 Francis Crick Avenue
Cambridge Biomedical Campus
Cambridge CB2 0AA
 United Kingdom
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F X            Form 40-F  __
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):            
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes  __                 No X
 
If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b):   82-_____________
 
 
  
 
AstraZeneca PLC
10 November 2016 07:00
 
Year-To-Date and Q3 2016 Results
Performance in line with our expectations
 
Financial Summary
YTD 2016

Q3 2016

$m
% change
$m 
% change




CER1
Actual
CER
Actual
Total Revenue
17,417
(3)
(5)
5,699
(4)
(4)
Product Sales
16,059
(6)
(8)
5,025
(14)
(14)
Externalisation Revenue
1,358
56
55
674
n/m
n/m







Reported Operating Profit
2,369
(26)
(22)
1,028
(29)
(12)
Core Operating Profit2
4,695
(13)
(12)
1,696
(13)
(2)







Reported Earnings Per Share (EPS)
$1.31
(26)
(18)
$0.80
4
32
Core EPS
$3.10
(10)
(7)

$1.32
12
28
 
The Reported and Core EPS performance in Q3 2016 included a non-recurring tax benefit of $0.36, resulting from agreements on transfer pricing arrangements between various tax authorities.
 
          ●     Total Revenue declined by 3% in the year to date to $17,417m, reflecting a decline in Product Sales that was driven by the entry in the US of multiple Crestor generic medicines
          ●     Continued good progress on cost control:
                -      Reported and Core R&D expenses grew by 4% to $1,402m and were stable at $1,337m in the third quarter, respectively
                -      Reported and Core SG&A expenses reduced by 8% to $2,403m and by 12% to $1,892m in the third quarter, respectively
          ●     Reported EPS declined by 26% in the year to date, reflecting the fall in Product Sales. Core EPS declined by 10%, reflecting the phasing of Other Operating Income towards the final quarter of the year
          ●     Full-year financial guidance remains unchanged
 
Commercial Highlights
The Growth Platforms grew by 6% in the year to date (Q3 2016: Up by 3%):
        ●     Emerging Markets: 6% growth supported by China (up by 10%); Latin America sales declined by 11%, impacted by the reduction of activities in Venezuela
        ●     Diabetes: Growth of 13%. Farxiga became the Company's largest-selling Diabetes medicine. Slower Diabetes growth of 6% in the third quarter, reflecting an expected decline in the sales of Onglyza
        ●     Respiratory: A decline of 2%, with marked declines in the sale of Symbicort in the US and Europe, reflecting the competitive environment and a Q3 rebate true-up in the US
        ●     Brilinta: Growth of 39%. Deceleration in the third quarter, a function of wholesaler stocking in the comparative period
        ●     New Oncology: Strong sales of $197m in Q3 2016 (H1: $251m), driven by Tagrisso and Lynparza 
 
Achieving Scientific Leadership: Progress Since The Last Results Announcement
Regulatory Approvals
- Brilinta - cardiovascular (CV) disease (JP)
Regulatory Submissions*
/Acceptances
        - Faslodex - breast cancer (1st line) (JP)*  
        - Tagrisso - lung cancer (CN)*  
- ZS-9 - hyperkalaemia (US)
Positive Phase III Data Readouts
- Lynparza - ovarian cancer (2nd line)
- Farxiga + Bydureon - type-2 diabetes
- benralizumab - severe, uncontrolled asthma
Other Key Developments
- Priority Review Designation: Tagrisso (CN)
- Fast Track Designation: AZD3293 - Alzheimer's disease (US)
 
Pascal Soriot, Chief Executive Officer, commenting on the results said:
"The performance in the third quarter was in line with our expectations, reflecting the transitional impact from the first full quarter of generic competition to Crestor in the US. We sharpened significantly our focus on our three therapy areas, by prioritising our portfolio through externalisation and divestments. This focus, underpinned by our productivity initiatives, supported the rapid reduction in SG&A costs. This enabled our increased investment in Oncology, as well as in China and launched new medicines in key markets.
 
Our late-stage pipeline continued to advance at a pace we could not have anticipated three years ago, as we saw with recent positive results for Tagrisso in lung cancer, Lynparza in ovarian cancer and our first respiratory biologic medicine, benralizumab, in severe, uncontrolled asthma. 
 
Importantly, we are entering an intensive period of news flow over the next twelve months, in particular revealing the potential of our Immuno-Oncology and targeted medicines. Our focus on scientific excellence keeps us on track with our goals, as we approach an inflection point of a pipeline designed to transform our company and the lives of patients."
FY 2016 Guidance
Guidance for FY 2016 is unchanged and is shown at CER1:
 
Total Revenue
A low to mid single-digit percentage decline
Core EPS
A low to mid single-digit percentage decline
 
The above guidance incorporates the dilutive effects arising from the Acerta Pharma B.V. (Acerta Pharma) and ZS Pharma, Inc. (ZS Pharma) transactions announced in FY 2015.
 
Core R&D costs are now expected to be ahead of those in FY 2015. The Company will materially reduce Core SG&A costs in FY 2016 versus the prior year. These measures are based on constant exchange rates.
 
The Company presents Core EPS guidance. It is unable to provide guidance on a Reported/GAAP basis because the Company cannot reliably forecast material elements of the Reported/GAAP result, including the fair-value adjustments arising on acquisition-related liabilities, intangible-asset impairment charges and legal-settlement provisions.
FY 2016 Currency Impact
Based on average exchange rates in the year to date and the Company's published currency sensitivities, there is expected to be an immaterial impact from currency movements on Total Revenue in FY 2016. Core EPS is expected to benefit from currency movements by a low to mid single-digit percentage versus the prior year. Further details on currency sensitivities are contained within the Operating and Financial Review.
 
Notes
       1.     All growth rates and guidance are shown at constant exchange rates (CER) unless otherwise specified.
       2.     See the Operating and Financial Review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.
 
Pipeline: Forthcoming Major News Flow
Innovation is critical to addressing unmet patient needs and is at the heart of the Company's growth strategy. The focus on research and development is designed to yield strong results from the pipeline.
 
Q4 2016
 
Tagrisso - lung cancer: Regulatory submission (US, EU) (AURA3)
 
roxadustat - anaemia: Rolling regulatory submission (CN)
 
benralizumab - severe, uncontrolled asthma: Regulatory submission (US, EU)
 
H1 2017
 
Faslodex - breast cancer (1st line): Regulatory decision (JP); regulatory submission (US, EU)
Lynparza - breast cancer: Data readout
Lynparza - ovarian cancer (2nd line): Regulatory submission
 
durva + treme - lung cancer (MYSTIC): Data readout
durva + treme - lung cancer (ARCTIC): Data readout
durva + treme - HNSCC# (CONDOR): Data readout, regulatory submission (US) (Phase II)*
acalabrutinib - blood cancer: Data readout, regulatory submission (US) (Phase II)*
 
saxagliptin/dapagliflozin - type-2 diabetes: Regulatory decision (US)
Bydureon - autoinjector: Regulatory submission (US)
ZS-9 - hyperkalaemia: Regulatory decision (US, EU)  
 
benralizumab - severe, uncontrolled asthma: Regulatory submission (JP)  
 
brodalumab - psoriasis: Regulatory decision (US, EU)
 
H2 2017
 
Lynparza - ovarian cancer (1st line): Data readout
Lynparza - breast cancer: Regulatory submission
Tagrisso - lung cancer: Regulatory decision (CN)
Tagrisso - lung cancer (1st line): Data readout
 
durvalumab - lung cancer (PACIFIC): Data readout, regulatory submission (US)
durva + treme - lung cancer (MYSTIC): Regulatory submission
durva + treme - lung cancer (ARCTIC): Regulatory submission
durva + treme - HNSCC# (KESTREL): Data readout
moxetumomab - leukaemia: Data readout
 
roxadustat - anaemia: Data readout (AstraZeneca-sponsored trial)
 
tralokinumab - severe, uncontrolled asthma: Data readout
 
The term 'data readout' in this section refers to Phase III data readouts, unless specified otherwise.
*Potential fast-to-market opportunity ahead of randomised, controlled trials.
#Head and Neck Squamous Cell Carcinoma
 
Results Presentation
A conference call and webcast for investors and analysts, hosted by management, will begin at midday UK time today. Click here to register for the webcast, with further details available via astrazeneca.com/investors.
 
Reporting Calendar
The Company intends to publish its full-year and fourth-quarter financial results on 2 February 2017.
 
About AstraZeneca
AstraZeneca is a global, science-led biopharmaceutical company that focuses on the discovery, development and commercialisation of prescription medicines, primarily for the treatment of diseases in three main therapy areas - Oncology, Cardiovascular & Metabolic Diseases and Respiratory. The Company also is selectively active in the areas of autoimmunity, neuroscience and infection. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information, please visit www.astrazeneca.com and follow us on Twitter @AstraZeneca.
 
Media Enquiries
Esra Erkal-Paler
UK/Global
+44 203 749 5638
Neil Burrows
UK/Global
+44 203 749 5637
Vanessa Rhodes
UK/Global
+44 203 749 5736
Karen Birmingham
UK/Global
+44 203 749 5634
Rob Skelding
UK/Global
+44 203 749 5821
Jacob Lund
Sweden
+46 8 553 260 20
Michele Meixell
US
+1 302 885 2677
Investor Relations


Thomas Kudsk Larsen

+44 203 749 5712
Craig Marks
Finance, Fixed Income, M&A
+44 7881 615 764
Henry Wheeler
Oncology
+44 203 749 5797
Mitchell Chan
Oncology
+1 240 477 3771
Lindsey Trickett
Cardiovascular & Metabolic Diseases
+1 240 543 7970
Nick Stone
Respiratory
+44 203 749 5716
Christer Gruvris
Autoimmunity, neuroscience & infection
+44 203 749 5711
US toll free

+1 866 381 7277
 
 
Operating and Financial Review
_______________________________________________________________________________________
All narrative on growth and results in this section is based on CER unless stated otherwise. Financial figures are in US$ millions ($m). The performance shown in this announcement covers the nine and three-month periods to 30 September 2016 (the year to date (YTD) and the third quarter, respectively) compared to the nine and three-month periods to 30 September 2015.
 
Core measures, which are presented in addition to Reported financial information, are non-GAAP measures provided to enhance understanding of the Company's underlying financial performance. Core financial measures are adjusted to exclude certain significant items, such as:
 
          -     amortisation and impairment of intangible assets, including impairment reversals but excluding any charges relating to IT assets
          -     charges and provisions related to global restructuring programmes (this will include such charges that relate to the impact of global restructuring programmes on capitalised IT assets)
          -     other specified items, principally comprising legal settlements and acquisition-related costs, which include fair value adjustments and the imputed finance charge relating to contingent consideration on business combinations
 
Details on the nature of these measures are provided on page 64 of the Annual Report and Form 20-F Information 2015.
 
Total Revenue
 
YTD 2016
Q3 2016
$m
% CER change
$m
% CER change
Product Sales
16,059
(6)
5,025
(14)
Externalisation Revenue
1,358
56
674
n/m





Total Revenue
17,417
(3)
5,699
(4)
 
Based on actual exchange rates, Total Revenue declined by 5% in the year to date, reflecting the strength of the US dollar.
 
Product Sales
The level of decline in Product Sales was driven by the US market entry of multiple Crestor generic medicines in the third quarter, as well as the ongoing impact of Nexium generic medicines in the US. Q3 2016 sales of Crestor and Nexium in the US declined by 82% and 50%, respectively. Overall US Product Sales declined by 17% in the year to date (Q3 2016: Down by 35%), with Product Sales in Europe declining by 2% (Q3 2016: Down by 1%).
 
Within Product Sales, the Growth Platforms grew by 6% in the year to date, representing 62% of Total Revenue:
Growth Platforms
YTD 2016
Q3 2016
Product Sales ($m)
% CER change
Product Sales ($m)
% CER change
Emerging Markets
4,308
6
1,395
3
Respiratory
3,543
(2)
1,110
(8)
Diabetes
1,829
13
606
6
Japan
1,593
(2)
595
-
Brilinta
603
39
208
25
New Oncology1
448
n/m
197
n/m





Total2
10,763
6
3,584
3
1New Oncology comprises Lynparza, Iressa (US) and Tagrisso
2Total Product Sales for Growth Platforms adjusted to remove duplication on a medicine and regional basis 
 
Externalisation Revenue
Externalisation Revenue recognised in the year to date amounted to $1,358m. Highlights included:
 
Medicine
Partner
Region
$m
Anaesthetics
Aspen Global Incorporated (Aspen) - initial revenue
Global (excl. US)
520
Plendil
China Medical System Holdings Ltd -commercialisation rights - initial revenue
China
298
Tralokinumab - atopic dermatitis
LEO Pharma A/S (LEO Pharma) - initial revenue
Global
115
AZD3293
Eli Lilly and Company (Lilly) - milestone revenue
Global
100
Nexium OTC 20mg
Pfizer Inc. (Pfizer) - milestone revenue
Global
93
Moventig
ProStrakan Group plc (ProStrakan) - commercialisation rights - initial and milestone revenue
EU
78
 
Examples of sustainable future Externalisation Revenue streams are shown below:
 
Announcement Date
Medicine
Partner
Region
Externalisation Revenue
1 July 2016
Tralokinumab - atopic dermatitis
LEO Pharma
Global
     ● Initial $115m milestone
     ● Up to $1bn in commercially-related milestones
     ● Up to mid-teen tiered percentage royalties on sales
9 June  2016
Anaesthetics
Aspen
Global (excl. US)
     ● Initial $520m milestone
     ● Up to $250m in sales-related revenue
     ● Double-digit percentage trademark royalties on sales
2 September 2015
FluMist
Daiichi Sankyo Company, Ltd. (Daiichi Sankyo)
 
Japan
     ● Initial (undisclosed) milestone
     ● Sales-related revenue (undisclosed)
1 September 2015
Brodalumab
Valeant Pharmaceuticals International, Inc. (Valeant)
Global, later amended to US
     ● Initial $100m milestone
     ● Pre-launch milestone up to $170m
     ● Sales-related royalties up to $175m
19 March 2015
Movantik
Daiichi Sankyo
US
     ● Initial $200m milestone
     ● Up to $625m in Product Sales-related revenue
 
 
Product Sales
_______________________________________________________________________________________
The performance of key medicines is shown below, with a geographical split shown in Notes 8 and 9.
 
YTD 2016
Q3 2016

$m
% of Total
% Change
$m
% Change

CER
Actual
CER
Actual
Oncology







Iressa
395
2
(3)
(5)
125
(13)
(11)
Tagrisso
276
2
n/m
n/m
133
n/m
n/m
Lynparza
156
1
n/m
n/m
58
111
107








Legacy:







Faslodex
608
4
19
17
207
11
11
Zoladex
581
4
(4)
(6)
199
(5)
(5)
Casodex
187
1
(9)
(8)
62
(8)
(5)
Arimidex
175
1
(6)
(8)
56
(14)
(13)
Others
75
-
(32)
(29)
27
(29)
(21)
Total Oncology
2,453
15
17
16
867
17
19
Cardiovascular & Metabolic Diseases







Brilinta
603
4
39
36
208
25
22
Farxiga
596
4
79
75
220
64
63
Onglyza
571
4
(2)
(4)
169
(16)
(17)
Bydureon
436
3
3
3
145
(10)
(10)
Byetta
199
1
(18)
(18)
61
(15)
(15)








Legacy:







Crestor
2,770
17
(24)
(25)
688
(44)
(44)
Seloken/Toprol-XL
559
3
8
2
185
12
8
Atacand
234
1
(9)
(15)
74
(3)
(6)
Others
337
2
(24)
(27)
95
(28)
(29)
Total Cardiovascular & Metabolic Diseases
6,305
39
(8)
(10)
1,845
(21)
(21)
Respiratory







Symbicort
2,249
14
(10)
(11)
697
(17)
(18)
Pulmicort
773
5
8
4
224
4
1
Tudorza/Eklira
134
1
(5)
(6)
47
(17)
(19)
Daliresp/Daxas
113
1
57
57
42
27
27
Duaklir
44
-
n/m
n/m
14
88
75
Others
230
1
23
19
86
46
41
Total Respiratory
3,543
22
(2)
(4)
1,110
(8)
(10)
Other







Nexium
1,541
10
(19)
(20)
516
(21)
(20)
Seroquel XR
617
4
(20)
(21)
190
(26)
(26)
Synagis
375
2
(3)
(3)
104
(11)
(11)
Losec/Prilosec
217
1
(15)
(17)
72
(11)
(12)
Movantik/Moventig
65
-
n/m
n/m
25
n/m
n/m
FluMist/Fluenz
37
-
(58)
(62)
26
(61)
(66)
Others
906
6
(15)
(19)
270
(25)
(25)
Total Other
3,758
23
(16)
(18)
1,203
(22)
(22)
Total Product Sales
16,059
100
(6)
(8)
5,025
(14)
(14)
 
 
Product Sales Summary
_______________________________________________________________________________________
 
ONCOLOGY
YTD sales of $2,453m; up by 17%. Oncology sales represented 15% of Total Product Sales.
 
Iressa (YTD sales of $395m; down by 3%)
Sales in the US were $16m as the Company prioritised the launch of Tagrisso.
 
In Europe, sales declined by 5% to $91m, reflected primarily in lower market shares.
 
Emerging Markets sales declined by 6% to $187m. China sales declined by 13% to $98m, as a result of the price re-set following national reimbursement listing in China that was obtained in June. The price adjustment was partially offset by an expected increase in volume demand.
 
Tagrisso (YTD sales of $276m)
In the third quarter, sales of Tagrisso were higher than Iressa sales for the first time. Tagrisso became the leading AstraZeneca medicine for the treatment of lung cancer. Regulatory approvals were granted in a number of additional markets, including Korea, Switzerland and Canada; the Company anticipates additional regulatory approvals and reimbursement decisions in due course. To date, Tagrisso has received regulatory approval in 41 markets worldwide.
 
Sales in the US increased by 33% in the third quarter as compared to the second quarter, taking year-to-date sales to $180m. Sales growth in the third quarter was driven by new patient starts and treatment duration.
 
On 29 September 2016, a third-party, blood-based companion-diagnostic test for Tagrisso was approved in the US, to confirm the presence of a T790M mutation in patients with locally-advanced or metastatic EGFR T790M mutation-positive non-small cell lung cancer (NSCLC), who have been previously treated with EGFR tyrosine kinase inhibitor (TKI) therapy.
 
After regulatory approval in the EU and Japan earlier in the year, sales in the year to date were $49m in Europe and $43m in Japan.
Lynparza (YTD sales of $156m)
Lynparza is now available to patients in 30 countries, with regulatory reviews underway in seven additional countries including Singapore, Brazil, and Russia. Almost 4,800 patients have been prescribed Lynparza since the US launch in December 2014.
 
Sales in the US increased by 109% in the year to date to $96m, primarily driven by longer duration of therapy, as patients stayed on treatment for longer due to efficacy benefits.
 
Sales in Europe increased to $56m, following several successful launches.
 
Legacy: Faslodex (YTD sales of $608m; up by 19%)
Sales in the US in the year to date increased by 23% to $321m, mainly driven by an expanded label in March 2016 for 2nd-line advanced or metastatic breast cancer, in combination with another recently-approved medicine.
 
Europe year-to-date sales increased by 11% to $169m.
 
An increase in demand in Brazil (sales up by 4% to $20m) and China (sales up by 114% to $14m) drove Emerging Markets sales to $70m, representing an increase of 26%.
 
Legacy: Zoladex (YTD sales of $581m; down by 4%)
The decline in global sales was attributed to Europe sales (down 5% to $117m) and Established Rest Of World (ROW) sales (down by 6% to $199m). This decline in demand was partially offset by favourable sales performances in the US (up by 23% to $27m) and China (up by 22% to $105m). Latin America sales, outside of Brazil, declined by 40% in the year to date, reflecting the reduction of AstraZeneca's activities in Venezuela.
 
 
CARDIOVASCULAR & METABOLIC DISEASES
YTD sales of $6,305m; down by 8%. Cardiovascular & Metabolic Diseases sales represented 39% of Total Product Sales.
 
Brilinta (YTD sales of $603m; up by 39%)
A slowdown in third-quarter sales growth of 25% to $208m reflected inventory built by US wholesalers in Q3 2015, during the launch of the 60mg dose; underlying growth remained strong in the period.
 
Sales in the US in the year to date were $243m, representing an increase of 43%. The overall performance reflected updated preferred guidelines from the American College of Cardiology and the American Heart Association in the first half of the year; Brilinta remained the branded oral anti-platelet market leader in the US. Brilinta's new-to-brand prescription market share was 12.8% at the end of the third quarter, representing an increase of four basis points.
 
Year-to-date sales of Brilique in Europe increased by 15% to $192m, reflecting indication leadership across a number of markets. In the first half of the year, the German Institute for Quality and Efficiency in Healthcare gave its assessment of the additional benefit from Brilique at the 60mg dose. This assessment referred to the new indication (high-risk, post-myocardial infarction), reflecting the PEGASUS trial.
 
Emerging Markets year-to-date sales grew by 88% to $136m, with China representing 48% of Emerging Markets sales at $65m, despite the medicine not being included on the National Reimbursement Drug List yet. The Company anticipates inclusion in due course. Growth in China was underpinned by strong levels of hospital-listing expansion. Year-to-date sales in the overall Asia-Pacific region increased by 52% to $30m.
 
Farxiga (YTD sales of $596m; up by 79%)
In the year to date, sales of Farxiga surpassed those of Onglyza and became the leading AstraZeneca medicine for type-2 diabetes.
 
Sales of Farxiga in the US increased by 78% to $327m in the year to date, primarily reflecting overall market growth and increased market share. Greater emphasis on promotional activity and improved levels of patient access resulted in higher market share. As a consequence, total prescription share grew against the backdrop of a US slowdown in SGLT2 market growth.
 
Year-to-date sales of Forxiga in Europe increased by 58% to $136m, as the medicine continued to lead the SGLT2 class.
 
Emerging Markets sales increased by 120% to $92m, driven by ongoing launches and improved access across all regions. In particular, strong performances were seen in the Asia-Pacific region (up by 124% to $36m), Brazil (up by 53% to $19m), and Middle East, Africa & Others (up to $22m).
 
Onglyza (YTD sales of $571m; down by 2%)
Year-to-date sales in the US declined by 6% to $304m, as the Company prioritised sales and marketing resources towards Farxiga. Continued competitive pressures in the DPP-4 class were partially offset by favourable restocking activity, encouraging federal-business sales and lower utilisation of patient-access programmes.
 
Year-to-date sales in Europe declined by 5% to $102m. In contrast, sales in Canada (up by 8% to $39m) and Emerging Markets sales (up by 3% to $110m) reflected encouraging volume demand.
 
Sales in Japan to Kyowa Hakko Kirin Co., Ltd (Kyowa), who are responsible for the sale and marketing of Onglyza, increased to $11m.
 
Bydureon/Byetta (YTD sales of $635m; down by 4%)
Combined year-to-date US sales for Bydureon/Byetta were $476m. Bydureon sales in the US declined by 3% to $349m, representing 73% of total Bydureon/Byetta US sales. Around 75% of sales came from the new dual-chamber pen compared to the previous tray presentation. The decline in Byetta sales of 23% to $127m was attributed to the Company's promotional focus on Bydureon. The decline in both Bydureon and Byetta US sales was attributed to lower market growth, increased competition from new market entrants and the lack of a competitive delivery device. A regulatory submission for the new Bydureon autoinjector is anticipated in the US in the first half of 2017.
 
Year-to-date sales in Europe increased by 12% to $112m, reflecting the Company's ongoing effort to expand its Diabetes presence. Year-to-date sales of Byetta and Bydureon in Emerging Markets increased by 31% to $19m and by 50% to $4m, respectively. On 10 October 2016, AstraZeneca entered into a strategic collaboration with 3SBio Inc. (3SBio), a leading Chinese biotechnology business, for the rights to commercialise Byetta and Bydureon in the Chinese market and drive greater access for patients.
 
Legacy: Crestor (YTD sales of $2,770m; down by 24%)
In the US, Crestor year-to-date sales declined by 45% to $1,128m, reflecting generic Crestor (rosuvastatin) penetration since May 2016. Third-quarter sales declined by 82% to $124m and reflected the multiple generic Crestor medicines that entered the US market from July 2016.
 
In Europe, year-to-date sales declined by 3% to $657m, reflecting the increasing prevalence of generic-medicine competition. Crestor consolidated its position as the leading statin in Japan, with year-to-date sales growth of 6% to $392m. Year-to-date sales in China grew by 24% to $238m, while Russia sales grew by 33% to $20m.
 
 
RESPIRATORY
YTD sales of $3,543m; down by 2%. Respiratory sales represented 22% of Total Product Sales.
 
Symbicort (YTD sales of $2,249m; down by 10%)
Year-to-date sales in the US declined by 14% to $958m. This reflected a Q3 rebate true-up in the US and the competitive environment. These influences were partially offset by volume and market-share growth.
 
In Europe, year-to-date sales declined by 15% to $679m, a result of reducing market demand in the class, as well as increased competition from analogue medicines.
 
In contrast to western markets, year-to-date Emerging Markets sales grew by 11% to $302m, reflecting sales growth in China of 33% to $120m, Latin America sales growth of 10% to $26m and Russia sales growth of 3% to $25m. Emerging Markets sales in the third quarter, down by 13% to $93m, were adversely impacted by significant healthcare spending cuts in Saudi Arabia.
 
Pulmicort (YTD sales of $773m; up by 8%)
Strong underlying growth in Emerging Markets drove a 20% sales increase to $501m in the year to date.
 
Emerging Markets represented 65% of Pulmicort sales, which more than offset sales declines in the US, Europe and Established ROW. China sales increased by 21% to $408m and represented 53% of sales of Pulmicort. Volume demand in China reflected the increasing prevalence of acute chronic obstructive pulmonary disease (COPD) and paediatric asthma. AstraZeneca continued its expansion of treatment centres and provided increased access to home-based patient-care systems.
 
Tudorza/Eklira (YTD sales of $134m; down by 5%)
Sales in the US declined by 22% to $61m in the year to date, reflecting adverse market demand and limited Medicare Part D access in the first half of the year. Sales in Europe increased by 14% to $65m.
 
Daliresp/Daxas (YTD sales of $113m; up by 57%)
Sales in the US increased by 40% to $101m in the year to date, driven primarily by favourable market penetration. US rights were acquired in March 2015 and US sales represented 89% of total global sales in the year to date; European rights were added in May 2016. Since completion, Daxas year-to-date sales in Europe amounted to $10m.
 
Duaklir (YTD sales of $44m)
Duaklir has been launched successfully in more than 25 countries and sales grew to $44m in the year to date.
 
 
OTHER
YTD sales of $3,758m; down by 16%. Other sales represented 23% of Total Product Sales.
 
Nexium (YTD sales of $1,541m; down by 19%)
Sales in the US declined by 42% to $419m in the year to date, reflecting lower demand and inventory destocking, which followed the loss of exclusivity in 2015.
 
Year-to-date sales in Europe declined by 7% to $190m, with Emerging Markets sales stable at $543m. Japan sales declined by 5% to $312m, reflecting a mandated biennial price reduction, effective from April 2016.
 
Seroquel XR (YTD sales of $617m; down by 20%)
Year-to-date sales of Seroquel XR in the US declined by 18% to $444m. Since 1 November 2016, two generic medicines have had the ability to launch in the US.
 
Year-to-date sales of Seroquel XR in Europe declined by 33% to $106m as a number of European markets continued to face generic competition.
 
Synagis (YTD sales of $375m; down by 3%)
Sales in the US increased by 9% to $171m in the year to date, despite more-restrictive guidelines from the American Academy of Pediatrics Committee on Infectious Disease which has reduced the number of patients eligible for preventative therapy with Synagis.
 
Sales in Europe to AbbVie Inc., who are responsible for the sale and marketing, declined by 11% to $204m.
 
FluMist/Fluenz (YTD sales of $37m; down by 58%)
The Company confirmed on 23 June 2016 that the Advisory Committee on Immunization Practices (ACIP) of the US Centers for Disease Control and Prevention had provided its interim recommendation not to use FluMist Quadrivalent Live Attenuated Influenza Vaccine (FluMist Quadrivalent) in the US for the 2016-2017 influenza season. The ACIP's updated recommendation is expected to result in very limited US demand in this influenza season.
 
The Company consequently wrote down the value of its inventory of FluMist by $47m in the first half of the year, which was reflected within the Cost of Sales. Year-to-date sales of FluMist in the US declined by 85% to $13m.
 
 
Regional Product Sales
_______________________________________________________________________________________
 
YTD 2016
Q3 2016

$m
% of Total
% Change
$m
% Change

CER
Actual
CER
Actual
US
5,747
36
(17)
(17)
1,538
(35)
(35)








Europe
3,732
23
(2)
(4)
1,265
(1)
(3)








Established ROW1
2,272
14
(3)
2
827
(1)
11

Japan
1,593
10
(2)
8
595
-
19

Canada
371
2
(1)
(7)
126
1
-

Other Established ROW
308
2
(10)
(14)
106
(11)
(10)








Emerging Markets2
4,308
27
6
(2)
1,395
3
(2)

China
2,027
13
10
5
643
10
3

Ex. China
2,281
14
2
(7)
752
(1)
(6)








Total
16,059
100
(6)
(8)
5,025
(14)
(14)
 
 
 
 
 
 
 
 
 
 
1 Established ROW comprises Japan, Canada, Australia and New Zealand.
2 Emerging Markets comprises all remaining Rest of World markets, including Brazil, China, India, Mexico, Russia and Turkey.
 
US (YTD sales of $5,747m; down by 17%)
The year-to-date decline in US sales reflected generic Crestor (rosuvastatin) competition since May 2016, and in particular, multiple generic Crestor medicines that entered the US market from July 2016. Unfavourable managed-care pricing and continued competitive intensity also impacted sales of Symbicort.
 
Europe (YTD sales of $3,732m; down by 2%)
Strong growth in sales of Forxiga (up by 58% to $136m) and Brilique (up by 15% to $192m) was more than offset by a 15% decline in Symbicort sales to $679m in the year to date. However, Symbicort maintained its position as the number one ICS/LABA medicine by volume despite competition from analogue medicines. Lynparza and Tagrisso sales increased to $56m and $49m respectively, following encouraging launches.
 
Established ROW (YTD sales of $2,272m; down by 3%)
Year-to-date sales of Forxiga in Established ROW increased by 82% to $41m. Nexium sales declined by 12% to $389m.
 
Japan sales declined by 2% to $1,593m, reflecting the biennial price reduction effective from April 2016 of around 6%. The decline was partly offset by sales of Crestor, up by 6% to $392m in the year to date. Since the launch of Tagrisso in Japan in May 2016, sales amounted to $43m. 
 
Emerging Markets (YTD sales of $4,308m; up by 6%)
Sales growth in the year to date in Emerging Markets was impacted by challenging macro-economic conditions in Latin America, where year-to-date sales declined by 11% to $364m. The effects of significant reductions in Saudi Arabian governmental healthcare spending, as well as the reduction of AstraZeneca's activities in Venezuela, also adversely impacted sales. China sales, however, grew by 10% to $2,027m, representing 47% of Emerging Markets sales in the year to date.
 
Sales in Brazil increased by 5% to $265m, reflecting the strong performances of Forxiga (up by 53% to $19m), Oncology medicines (up by 3% to $59m) and Seloken (up by 9% to $47m). Russia sales increased by 13% to $155m, led by strong performances in Cardiovascular & Metabolic Diseases medicine sales (up by 35% to $54m).
 
 
Financial Performance
______________________________________________________________________________________
 
Year To Date
Reported
% Change

Core
% Change
YTD 2016
YTD 2015
CER
Actual

YTD 2016
YTD 2015
CER
Actual
Product Sales
16,059
17,434
(6)
(8)

16,059
17,434
(6)
(8)
Externalisation Revenue
1,358
875
56
55

1,358
875
56
55
Total Revenue
17,417
18,309
(3)
(5)

17,417
18,309
(3)
(5)










Cost of Sales
(2,966)
(3,377)
(9)
(12)

(2,785)
(2,910)
(1)
(4)










Gross Profit
14,451
14,932
(2)
(3)

14,632
15,399
(3)
(5)
Gross Margin1
81.7%
80.6%
+0.6
+0.9

82.9%
83.3%
-0.9
-0.4










Distribution Expense
(243)
(240)
7
2

(243)
(240)
7
2
% Total Revenue
1.4%
1.3%
-0.1
-0.1

1.4%
1.3%
-0.1
-0.1
R&D Expense
(4,347)
(4,251)
5
2

(4,150)
(4,036)
6
3
% Total Revenue
25.0%
23.2%
-2.1
-1.8

23.8%
22.0%
-2.0
-1.8
SG&A Expense
(8,027)
(8,444)
(2)
(5)

(6,119)
(6,804)
(7)
(10)
% Total Revenue
46.1%
46.1%
-0.4
-

35.1%
37.2%
+1.7
+2.1
Other Operating Income
535
1,029
(47)
(48)

575
1,027
(43)
(44)
% Total Revenue
3.1%
5.6%
-2.5
-2.5

3.3%
5.6%
-2.3
-2.3










Operating Profit
2,369
3,026
(26)
(22)

4,695
5,346
(13)
(12)
% Total Revenue
13.6%
16.5%
-4.0
-2.9

27.0%
29.2%
-3.2
-2.2










Net Finance  Expense
(978)
(750)
37
30

(489)
(355)
50
38
Joint Ventures
(22)
(9)



(22)
(9)












Profit Before Tax
1,369
2,267
(46)
(40)

4,184
4,982
(18)
(16)
Taxation
220
(249)



(325)
(790)


Tax Rate %
(16)%
11%



8%
16%


Profit After Tax
1,589
2,018
(30)
(21)

3,859
4,192
(11)
(8)










Non-controlling Interests
68
(1)



63
(1)


Net Profit
1,657
2,017
(26)
(18)

3,922
4,191
(10)
(6)










Weighted Average Shares
1,265
1,264



1,265
1,264












Earnings Per Share ($)
1.31
1.60
(26)
(18)

3.10
3.32
(10)
(7)
1 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales
2 All financial figures, except Earnings Per Share, are in $ millions ($m). Weighted Average Shares are in millions.
 
 
Quarter
Reported
% Change

Core
% Change
Q3 2016
Q3  2015
CER
Actual

Q3   2016
Q3 2015
CER
Actual
Product Sales
5,025
5,850
(14)
(14)

5,025
5,850
(14)
(14)
Externalisation Revenue
674
95
n/m
n/m

674
95
n/m
n/m
Total Revenue
5,699
5,945
(4)
(4)

5,699
5,945
(4)
(4)










Cost of Sales
(900)
(1,041)
(6)
(14)

(805)
(992)
(11)
(19)










Gross Profit
4,799
4,904
(4)
(2)

4,894
4,953
(2)
(1)
Gross Margin1
82.2%
82.2%
-1.6
-0.1

84.1%
83.0%
-0.5
+1.1










Distribution Expense
(76)
(79)
2
(3)

(76)
(79)
2
(3)
% Total Revenue
1.3%
1.3%
-0.1
-

1.3%
1.3%
-0.1
-
R&D Expense
(1,402)
(1,429)
4
(2)

(1,337)
(1,400)
-
(5)
% Total Revenue
24.6%
24.0%
-1.9
-0.6

23.5%
23.5%
-1.1
-
SG&A Expense
(2,403)
(2,679)
(8)
(10)

(1,892)
(2,220)
(12)
(15)
% Total Revenue
42.2%
45.1%
+1.9
+2.9

33.2%
37.3%
+3.1
+4.1
Other Operating Income
110
453
(75)
(76)

107
474
(76)
(77)
% Total Revenue
1.9%
7.6%
-5.6
-5.7

1.9%
8.0%
-6.0
-6.1










Operating Profit
1,028
1,170
(29)
(12)

1,696
1,728
(13)
(2)
% Total Revenue
18.0%
19.7%
-5.3
-1.7

29.8%
29.1%
-2.8
+0.7








-.

Net Finance Expense
(342)
(237)
45
44

(174)
(105)
62
64
Joint Ventures
(10)
(2)



(10)
(2)












Profit Before Tax
676
931
(49)
(27)

1,512
1,621
(18)
(7)
Taxation
319
(161)



136
(318)


Tax Rate %
(47)%
17%



(9)%
20%


Profit After Tax
995
770
1
29

1,648
1,303
11
26










Non-controlling Interests
19
-



19
-


Net Profit
1,014
770
4
32

1,667
1,303
12
28










Weighted Average Shares
1,265
1,264



1,265
1,264












Earnings Per Share ($)
0.80
0.61
4
32

1.32
1.03
12
28
1 Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales
2 All financial figures, except Earnings Per Share, are in $ millions ($m). Weighted Average Shares are in millions.
 
 
Reconciliation of Reported to Core Performance 
 
YTD 2016
 
Reported
Restructuring
Intangible Asset
Amortisation & Impairments
Diabetes Alliance
Other1
Core
$m
$m
$m
$m
$m
$m
Cost of Sales
(2,966)
87
94
-
-
(2,785)
R&D Expense
(4,347)
146
51
-
-
(4,150)
SG&A Expense
(8,027)
504
754
311
339
(6,119)
Other Operating Income
535
(24)
64
-
-
575
Net Finance Expense
(978)
-
-
292
197
(489)
Taxation
220
(150)
(221)
(139)
(35)
(325)
Non-controlling Interests
68
(5)
-
-
-
63
Total

558
742
464
501

 
Q3 2016
 
Reported
Restructuring
Intangible Asset
Amortisation & Impairments
Diabetes Alliance
Other1
Core
$m
$m
$m
$m
$m
$m
Cost of Sales
(900)
59
36
-
-
(805)
R&D Expense
(1,402)
39
26
-
-
(1,337)
SG&A Expense
(2,403)
176
250
93
(8)
(1,892)
Other Operating Income
110
(24)
21
-
-
107
Net Finance Expense
(342)
-
-
97
71
(174)
Taxation
319
(53)
(81)
(44)
(5)
136
Non-controlling Interests
19
-
-
-
-
19
Total

197
252
146
58

1 Other adjustments include provision charges related to certain legal matters (see Note 7) and fair value adjustments arising on acquisition-related liabilities (see Note 6).
 
 
Profit and Loss Commentary
 
Gross Profit
Reported Gross Profit declined by 2% in the year to date to $14,451m reflecting the market entry of multiple Crestor generic medicines in the US. Excluding the impact of externalisation revenue, the Reported Gross Profit Margin was 81.7%, representing an increase of one percentage point driven by lower restructuring and amortisation charges, partially offset by an adverse impact from the mix of sales and a write-down of FluMist inventory in the US. Excluding these lower restructuring and amortisation charges, Core Gross Profit declined by 3% in the year to date to $14,632m and, excluding the impact of externalisation, the Core Gross Profit margin declined by one percentage point to 82.9%.
 
In the third quarter, Reported Gross Profit declined by 4% to $4,799m and Reported Gross Margin declined by two percentage points to 82.2%. Excluding restructuring and amortisation charges, Core Gross Profit declined by 2% to $4,894m and Core Gross Margin was stable, including the favourable impact of the growth in the sale of specialty-care medicines.
 
Operating Expenses: R&D
Reported R&D costs increased by 5% in the year to date to $4,347m (Q3 2016: $1,402m, growth of 4%). These increases reflected the number of potential medicines in pivotal trials as well as the absorption of the R&D costs of ZS Pharma and Acerta Pharma. These costs were partially offset by lower restructuring costs and impairment charges. Without the impact of ZS Pharma and Acerta Pharma, Reported R&D costs in the year to date would have increased by 1%.
 
Excluding the impact of lower restructuring and impairment charges, Core R&D costs increased by 6% in the year to date to $4,150m (Q3 2016: $1,337m, stable). Without the impact of the aforementioned investments in ZS Pharma and Acerta Pharma, Core R&D costs in the year to date would have increased by 1%.
 
Operating Expenses: SG&A
Reported SG&A costs declined by 2% in the year to date to $8,027m, with efficiency savings in sales and marketing operations and further reductions in IT costs partly offset by higher restructuring costs, amortisation charges and other adjustments, which are excluded from the Core measurement. Reported SG&A costs declined by 8% in the third quarter to $2,403m.
 
Core SG&A costs declined by 7% in the year to date to $6,119m, in line with full-year expectations of a material reduction. Core SG&A costs declined by 12% in the quarter to $1,892m.
 
Other Operating Income
Reported Other Operating Income of $535m in the year to date included:
Agreement
$m
Sale of ex-US rights to Imdur
183
Crestor royalties
165
HPV royalties
94
Ertapenem royalties
36
 
A number of transactions have closed or are expected to close in the fourth quarter of 2016, favourably impacting Other Operating Income. These include:
Agreement
 $m
Sale of the small-molecule antibiotics business to Pfizer. The total payment is to be recognised net of the carrying values disposed and other costs to sell
c.335 net
Sale of the ex-US rights to Rhinocort Aqua to Cilag GmbH International (Cilag)
330
Out-licensing of a potential medicine (MEDI2070) for inflammatory diseases to Allergan plc (Allergan)
167 net, reflecting an agreement with Amgen Inc. (Amgen)
Licensing agreement with Insmed Inc. for global exclusive rights to AZD7986, a novel oral inhibitor of dipeptidyl peptidase
30
 
Operating Profit
Reported Operating Profit declined by 26% in the year to date to $2,369m. The Reported Operating Margin declined by four percentage points to 14% of Total Revenue.
 
Core Operating Profit declined by 13% to $4,695m in the year to date. The Core Operating Margin declined by three percentage points to 27% of Total Revenue.
 
Net Finance Expense
Reported Net Finance Expense increased by 37% in the year to date to $978m reflecting an increase in Net Debt that was driven by the acquisition of ZS Pharma and the majority investment in Acerta Pharma. Excluding the discount unwind on acquisition-related liabilities, Core Net Finance Expense increased by 50% in the year to date to $489m.
 
Taxation
Excluding a one-off benefit of $453m following agreements between the Canadian tax authority and the UK and Swedish tax authorities in respect of transfer pricing arrangements for the 13-year period from 2004-2016, the Reported and Core tax rates for the year to date were 17% and 19% respectively. Including the impact of this benefit, the Reported and Core tax rates for the year to date were (16)% and 8% respectively. The cash tax paid for the year to date was $445m, which was 33% of Reported Profit Before Tax and 11% of Core Profit Before Tax.
 
The Reported and Core tax rates for the first nine months of 2015 were 24% and 22% respectively when excluding a one-off tax benefit of $186m following agreement of US federal tax liabilities of open years up to 2008, other provision releases and the benefit of the UK patent box. Including the impact of these benefits, the Reported and Core tax rates were 11% and 16% respectively.
 
Earnings Per Share (EPS)
Reported EPS of $1.31 in the year to date represented a 26% decline, with Core EPS in the year to date declining by 10% to $3.10. Both Reported and Core EPS in the year to date included a non-recurring benefit of $0.36 in the third quarter, resulting from the aforementioned agreement on transfer pricing.
 
The declines were driven by the market entry of multiple Crestor generic medicines in the US, as well as the ongoing impact of US Nexium generic medicines. The reductions reflected higher Other Operating Income in 2015. The anticipated phasing of Other Operating Income in 2016 is towards the final quarter of the year.
 
Productivity
AstraZeneca continues to enhance productivity through the implementation of its restructuring initiatives, including those announced on 29 April 2016. Restructuring charges of $713m were incurred in the year to date. The Company remains on track to realise benefits and incur costs in line with prior announcements.
 
To continue the focus on cost discipline, the Company disposed of its R&D facility in Bangalore, India in the period and announced plans to bring together five of its San Francisco Bay Area, US sites into one location. More than 350 employees in existing AstraZeneca, Acerta Pharma, MedImmune and Pearl facilities will move to the new location in 2017.
 
 
Cash Flow and Balance Sheet
 
Cash Flow
The Company generated a net cash inflow from operating activities of $2,185m, compared with $2,753m in the comparative period. This primarily reflected the material decline in Profit Before Tax in the year to date.
 
Net cash outflows from investing activities were $4,572m compared with $1,654m in the comparative period. The increase primarily reflected the net cash outflow of $2,383m in relation to the majority investment in Acerta Pharma. On 10 August 2016, the Company also announced that it had increased its equity interest in Moderna Therapeutics (Moderna) with a $140m investment, as part of Moderna's preferred-stock financing.
 
Net cash outflows from financing activities were $1,020m, incorporating $2,483m of new long-term loans, net of dividend payments in the year to date of $3,561m. This compared to an outflow of $3,406m in the comparative period.
 
The cash payment of contingent consideration in respect of the Bristol-Myers Squibb Company share of the global Diabetes alliance amounted to $197m in the year to date. The consideration is based on a tiered structure, whereby a higher royalty rate is applied until a specified level of sales is achieved in the year; thereafter a lower rate is applied to the remaining sales in the year and settled in the quarter following the application of the charge. From 2017 a single annual rate will be applied.
 
Debt and Capital Structure
At 30 September 2016, outstanding gross debt (interest-bearing loans and borrowings) was $17,683m (30 September 2015: $10,947m). Of the gross debt outstanding at 30 September 2016, $2,939m was due within one year (30 September 2015: $2,671m). The Company's net debt position at 30 September 2016 was $13,399m (30 September 2015: $5,886m).
 
Shares in Issue
During the year to date, 0.9 million shares were issued in respect of share option exercises for a consideration of $40m. The total number of shares in issue as at 30 September 2016 was 1,265 million.
 
Capital Allocation
The Board's aim is to continue to strike a balance between the interests of the business, financial creditors and the Company's shareholders. After providing for investment in the business, supporting the progressive dividend policy and maintaining a strong, investment-grade credit rating, the Board will keep under review potential investment in immediately earnings-accretive, value-enhancing opportunities.
 
Sensitivity: Foreign-Exchange Rates
The Company provides the following currency sensitivity information:
 



Average Exchange Rates Versus USD



Impact Of 5% Weakening In Exchange Rate Versus USD ($m)2
Currency

Primary Relevance

FY 2015

YTD 20161

Change %

Total Revenue

Core Operating Profit
EUR

Product Sales

0.90

0.90

1

(178)

(103)
JPY

Product Sales

121.04

108.64

11

(102)

(66)
CNY

Product Sales

6.28

6.59

(5)

(133)

(62)
SEK

Costs

8.43

8.40

-

(8)

71
GBP

Costs

0.65

0.72

(9)

(34)

96
Other3









(201)

(122)
1Based on average daily spot rates in the nine months to the end of September 2016.
2Based on 2015 actual results at 2015 actual exchange rates.
3Other important currencies include AUD, BRL, CAD, KRW and RUB.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Currency Hedging
AstraZeneca monitors the impact of adverse currency movements on a portfolio basis, recognising correlation effects. The Company may hedge to protect against adverse impacts on cash flow over the short to medium term. As at 30 September 2016, AstraZeneca had hedged 86% of forecast short-term currency exposure that arises between the booking and settlement dates on Product Sales and non-local currency purchases.
 
 
Corporate and Business Development Update
______________________________________________________________________________________
 
The highlights of the Company's corporate and business development activities since the prior results announcement are shown below.
 
a) Sale Of Small-Molecule Antibiotics Business
On 24 August 2016, the Company announced that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its small-molecule antibiotics business and late-stage pipeline in most markets outside the US. The agreement with Pfizer is expected to close in the fourth quarter of 2016, subject to customary closing conditions.
 
As AstraZeneca will de-recognise an intangible product asset and will not maintain a significant ongoing interest in the late-stage, small-molecule antibiotics business, all payments will be reported as Other Operating Income in the Company's financial statements. This includes the upfront payment of $550m and an unconditional payment of $175m in 2019 (both to be recognised net of the carrying value of assets disposed and other costs to sell in 2016), the milestones of up to $250m, sales-related payments of up to $600m and recurring double-digit royalties on sales of Zavicefta and ATM AVI.
 
b) Sale Of Rhinocort Aqua
On 7 October 2016, the Company announced that it had entered into an agreement with Cilag, an affiliate of Johnson & Johnson, for the divestment of the rights to Rhinocort Aqua outside the US. Rhinocort Aqua is a nasal spray indicated for allergic and non-allergic rhinitis (inflammation of the inside of the nose), and for the treatment of nasal polyps (swelling of the nasal lining). The active ingredient is the anti-inflammatory medicine budesonide.
 
The agreement is subject to customary closing conditions and is expected to complete in the fourth quarter of 2016. As AstraZeneca will not maintain a significant ongoing interest in Rhinocort Aqua, the $330m payment received from Cilag upon completion of the transaction will be recognised as Other Operating Income in the Company's financial statements.
 
c) Externalisation Of Beta-Blocker Medicine Toprol-XL
On 31 October 2016, the Company completed an agreement with Aralez Pharmaceuticals Trading DAC, a subsidiary of Aralez Pharmaceuticals Inc., for the rights to branded and authorised generic Toprol-XL (metoprolol succinate) in the US. Toprol-XL is a beta-blocker medicine for the control of hypertension (high blood pressure), angina (chest pain) and heart failure. It was first approved in the US in 1992.
 
AstraZeneca will retain a significant ongoing interest in Toprol-XL through retained ownership of the brand in Rest of World (ROW) markets and product supply to Aralez. Therefore the upfront payment of $175m, milestones and sales-related payments of up to $48m and mid-teen percentage royalties will be reported as Externalisation Revenue in the Company's financial statements.
 
d) Licensing Agreement: Monoclonal Antibody MEDI2070
On 3 October 2016, the Company announced that MedImmune, its global biologics research and development arm, had entered into a licensing agreement with Allergan for the global rights to MEDI2070. MEDI2070 is an IL-23 monoclonal antibody currently in a Phase IIb clinical trial for moderate-to-severe Crohn's disease (a chronic inflammatory disease of the intestines) and is ready for Phase II for ulcerative colitis (a chronic inflammatory condition of the colon and rectum). MedImmune will continue the ongoing Phase II trials until a mutually-agreed transition date.
 
The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart Scott Rodino Act. AstraZeneca is expected to retain approximately $167m of the upfront payment and up to approximately $847m in future potential milestones, as well as the tiered royalty payments of up to low double-digit percent, following payment to Amgen under the provisions of the original agreement. As AstraZeneca will not retain a significant ongoing interest in MEDI2070, all income will be reported as Other Operating Income in the Company's financial statements.
 
e) Benralizumab in Japan
On 28 October 2016, AstraZeneca exercised its exclusive option to commercialise benralizumab for the treatment of severe, uncontrolled asthma and COPD in Japan. This follows the option agreement entered into with Kyowa in July 2015. Previously, Kyowa held the exclusive development and commercialisation rights for benralizumab in Japan, as well as certain other countries in Asia, while AstraZeneca has exclusive rights in all other countries, including the US and Europe. On exercising the option, AstraZeneca is responsible for all sales and marketing activity for benralizumab in asthma and COPD in Japan.
 
f) Externalisation of Bydureon and Byetta in China
On 10 October 2016, AstraZeneca entered into a strategic collaboration with 3SBio for the rights to commercialise Bydureon and Byetta in the Chinese market. The agreement allows the Company to benefit from 3SBio's established expertise in injectable medicines and also focus resources on AstraZeneca's oral diabetes franchise, including Onglyza, which is already marketed in China, as well as Forxiga and Kombiglyze, which are anticipated to launch in China in 2017.
 
Under the terms of the collaboration agreement, 3SBio will make an upfront payment of $50m and will pay development milestones of up to a further $50m for the exclusive rights to commercialise Bydureon and Byetta in the Chinese market (excluding Hong Kong) for an initial period of 20 years. AstraZeneca will retain a significant ongoing interest in Bydureon and Byetta through retained ownership of the brands in other markets and will manufacture and supply these medicines to 3SBio for an agreed purchase price. Therefore the upfront payment and development milestones will be reported as Externalisation Revenue in the Company's financial statements.
 
 
Research and Development Update
______________________________________________________________________________________
 
A comprehensive table with AstraZeneca's pipeline of medicines in human trials can be found later in this document.
 
Since the results announcement on 28 July 2016 (the period):
 
Regulatory Approvals
1
-    Brilinta - CV disease (JP)
Regulatory Submissions* /Acceptances
3
 
        -     Faslodex - breast cancer (1st line) (JP)*
        -     Tagrisso - lung cancer (CN)*
        -     ZS-9 - hyperkalaemia (US)
Positive Phase III Data Readouts
3
 
        -     Lynparza - ovarian cancer (2nd line)  
        -     Farxiga + Bydureon - type-2 diabetes                      
        -     benralizumab - severe, uncontrolled asthma
Other Key Developments
2
 
        -     Priority Review Designation: Tagrisso (CN)
        -     Fast Track Designation: AZD3293 - Alzheimer's disease (US)
New Molecular Entities (NMEs) in Pivotal Trials or under Regulatory Review**#
13

 
 
Oncology
        -     durvalumab - multiple cancers
        -     durva + treme - multiple cancers
        -     acalabrutinib - blood cancers
        -     moxetumomab pasudotox - leukaemia
        -     selumetinib - thyroid cancer
 
Cardiovascular & Metabolic Diseases
        -     ZS-9** - hyperkalaemia
        -     roxadustat - anaemia
 
Respiratory
        -     benralizumab - severe, uncontrolled asthma
        -     tralokinumab - severe, uncontrolled asthma
        -     PT010 - COPD
 
Other
        -     brodalumab - psoriasis**
        -     anifrolumab - lupus
        -     AZD3293 - Alzheimer's disease
 
Projects in clinical pipeline#
138

# As at 10 November 2016
 
ONCOLOGY
 
AstraZeneca has a deep-rooted heritage in Oncology and offers a growing portfolio of new medicines that has the potential to transform patients' lives and the Company's future. With at least six new medicines to be launched between 2014 and 2020 and a broad pipeline of small molecules and biologics in development, the Company is committed to advancing New Oncology as one of AstraZeneca's six Growth Platforms focused on lung, ovarian, breast and blood cancers.
 
In addition to core capabilities, the Company is actively pursuing innovative collaborations and investments that accelerate the delivery of AstraZeneca's strategy, as illustrated by the Company's recent investment in Acerta Pharma in haematology.
 
At the recent European Society for Medical Oncology meeting, AstraZeneca highlighted its progress in Oncology with 46 scientific presentations, including new 1st-line data that demonstrated the superiority of Faslodex over the current standard of care in postmenopausal women with HR-positive, locally-advanced or metastatic breast cancer. The Company also presented updated safety and efficacy data from two cohorts from Study 1108; durvalumab monotherapy in NSCLC and HNSCC, in addition to a comparative analysis of PD-L1 diagnostic assays in c.500 HNSCC-tumour samples.
a) Lynparza (ovarian and other cancers)
Lynparza continues to be the cornerstone of the AstraZeneca DNA Damage Response (DDR) line of medicines. An extensive lifecycle programme is underway, including in earlier lines of treatment in metastatic ovarian, breast and prostate cancers. For the potential treatment in metastatic BRCA-mutated breast cancer, the OLYMPIAD trial has seen fewer events than originally expected and, as a consequence, the data readout is now anticipated to be in the first half of 2017.
 
During the period, the Company reported positive results from the Phase III SOLO-2 trial designed to determine the efficacy of Lynparza tablets (300mg, twice daily) as a monotherapy for the maintenance treatment of platinum-sensitive relapsed, BRCA-mutated ovarian cancer. Results from the trial demonstrated a clinically-meaningful and statistically-significant improvement of progression-free survival (PFS) among patients treated with Lynparza, compared to placebo and provided additional evidence to support the use of Lynparza in this patient population.
 
b) Tagrisso (lung cancer)
During the period, Tagrisso was accepted for submission and granted Priority Review status by the China Food and Drug Administration agency as a potential treatment for patients with locally-advanced, or metastatic EGFR T790M mutation-positive NSCLC, who have been previously treated with EGFR TKI therapy. The designation has the potential to expedite more rapid access to Tagrisso for patients in China. The Chinese application was supported by three key trials - a China-led Asian regional trial (AURA17), a pharmaco-kinetic trial in the local population (AURA18) and the global AURA3 trial, which included Chinese patients.
c) Cediranib (ovarian cancer)
On 21 September 2016, AstraZeneca announced the decision to voluntarily withdraw the marketing authorisation application (MAA) submitted to the EMA's Committee for Medicinal Products for Human Use for cediranib in combination with platinum-based chemotherapy, followed by maintenance monotherapy for the treatment of adult patients with platinum-sensitive relapsed ovarian cancer (including fallopian tube or primary peritoneal). The decision to withdraw the MAA was based on questions raised by the EMA at the late stage of the review process. The MAA for cediranib was supported by data from ICON6, a Phase III trial led by investigators from University College, London and the Medical Research Council. The Company has not made additional regulatory submissions for cediranib in this indication in any other markets.
 
Cediranib remains an important part of AstraZeneca's ovarian cancer pipeline, and a number of Phase III trials are ongoing to test cediranib as a potential combination partner with Lynparza and other pipeline medicines; these trials are not affected by the aforementioned withdrawal.
 
d) Selumetinib (multiple cancers)
On 9 August 2016, the Company announced the high-level results from the Phase III SELECT-1 trial for selumetinib in patients with 2nd-line KRAS mutant (KRASm) NSCLC. The results showed that the trial did not meet its primary endpoint of PFS, and selumetinib did not have a significant effect on overall survival (OS). The adverse event profiles for selumetinib and docetaxel were consistent with those seen previously. This outcome did not impact the on-going selumetinib programme in differentiated thyroid cancer, in paediatric neurofibromatosis Type 1 (in collaboration with the US National Cancer Institute), and in combination with other potential medicines in a range of tumour types.
 
e) Savolitinib (multiple cancers)
Based on data from multiple Phase I/II trials, savolitinib has shown early clinical benefit as a highly selective c-Met inhibitor in a number of cancers. As a result, Chi-Med (part of CK Hutchison Holdings Limited) and AstraZeneca have expanded the joint development plan for savolitinib to cover multiple c-Met-driven, solid tumour indications including NSCLC, kidney, gastric and colorectal cancers.
f) Durvalumab (multiple cancers)
The Company continues to advance multiple monotherapy trials of durvalumab and combination trials of durvalumab with tremelimumab and other potential medicines in Immuno-Oncology (IO). An update on key AstraZeneca-sponsored ongoing trials with durvalumab is provided over the page:
 LUNG CANCER
Name
Phase
Line of treatment
Population
Design
Timelines
Status
Early disease
 
Monotherapy
ADJUVANT1
III
N/A
Stage Ib-IIIa NSCLC
durvalumab vs placebo
FPD2 Q1 2015
 
Data expected 2020
Ongoing
PACIFIC
III
N/A
Stage III unresectable NSCLC
durvalumab vs placebo
FPD Q2 2014
 
LPCD3 Q2 2016
 
Data expected H2 2017
Recruitment completed
Advanced/metastatic disease
 
Combination therapy
MYSTIC
III
1st line
NSCLC
durvalumab vs durva + treme vs SoC4
FPD Q3 2015

LPCD Q3 2016
 
Data expected H1 2017
Recruitment completed
NEPTUNE
III
1st line
NSCLC
durva + treme vs SoC
FPD Q4 2015
 
Data expected 2018
Ongoing
 
-
III
1st line
NSCLC
durvalumab + chemotherapy +/- tremelimumab
-
Ongoing in safety lead-in Phase I/II trial
ARCTIC
III
3rd line
PD-L1 neg. NSCLC
durvalumab vs tremelimumab vs durva + treme vs SoC
FPD Q2 2015
 
LPCD Q3 2016
 
Data expected H1 2017
Recruitment completed
 
1 Conducted by the National Cancer Institute of Canada   2 FPD = First Patient Dosed   3LPCD = Last Patient Commenced Dosing
4 SoC = Standard of Care 5 SCLC = Small Cell Lung Cancer
 
 
 METASTATIC OR RECURRENT HEAD AND NECK CANCER
Name
Phase
Line of treatment
Population
Design
Timelines
Status
Monotherapy
HAWK
II
2nd line
PD-L1 pos. HNSCC
Durvalumab (single arm)
FPD Q1 2015

LPCD Q2 2016

Data expected Q4 2016 (internal availability)
Recruitment completed
Combination therapy
CONDOR
II
2nd line
PD-L1 neg. HNSCC
durvalumab vs tremelimumab vs durva + treme
FPD Q2 2015
 
LPCD Q2 2016
 
Data expected H1 2017
Recruitment completed
 
KESTREL
 
III
1st line
HNSCC
durvalumab vs durva + treme vs SoC
FPD Q4 2015
 
Data expected H2 2017
Ongoing
EAGLE
III
2nd line
HNSCC
durvalumab vs durva + treme vs SoC
FPD Q4 2015
 
Data expected 2018
Ongoing
 
With recent changes in the HNSCC competitive landscape, including the approval in the US for PD-1 monotherapy for recurrent or metastatic HNSCC with disease progression on or after platinum-containing chemotherapy, the Company is unlikely to make a regulatory submission for this single-arm Phase II trial. This trial in PD-L1+ patients was originally designed as a potential fast-to-market opportunity in 2nd-line HNSCC. The HAWK trial results are anticipated to be available internally in due course, following trial conclusion and data analysis.
 
On 27 October 2016, AstraZeneca confirmed that the FDA had placed a partial clinical hold on the enrolment of new patients with HNSCC in clinical trials of durvalumab as monotherapy and in combination with tremelimumab or other potential medicines. All trials are continuing with existing patients. The partial clinical hold on new patient enrolment relates only to HNSCC. Trials for durvalumab in different cancer types, as monotherapy, or in combination with tremelimumab or other potential medicines, are progressing as planned with pivotal data in lung cancer anticipated in the first half of 2017.
 
METASTATIC UROTHELIAL BLADDER CANCER
Name
Phase
Line of treatment
Population
Design
Timelines
Status
Combination therapy
DANUBE
III
1st line
Cisplatin chemo-
therapy- eligible/
ineligible bladder cancer
durvalumab vs durva + treme vs SoC
FPD Q4 2015
 
 
Data expected 2018
Ongoing
 
 
 
g) Acalabrutinib (blood cancers)
Based on maturity of clinical data in an intended fast-to-market indication of unmet need in B-cell blood cancers, the Company rolled the potential data readout and regulatory submission for one blood cancer to the first half of 2017.
 
Acalabrutinib is a cornerstone of the AstraZeneca strategy in haematology and the Company continues to see important progress in the clinical-development programme for the potential medicine. With more than 2,000 patients now having been treated with acalabrutinib in clinical trials, the safety profile supports the potential for acalabrutinib to become a best-in-class BTK inhibitor for patients intolerant to a currently-approved BTK inhibitor with B-cell cancers.
 
 
CARDIOVASCULAR & METABOLIC DISEASES
 
This therapy area includes a broad type-2 diabetes portfolio, differentiated devices and unique small and large-molecule programmes to reduce morbidity, mortality and organ damage across CV disease, diabetes and chronic kidney disease (CKD) indications.
 
a) Brilinta (CV disease)
During the period, the EUCLID Phase III trial in Peripheral Artery Disease (PAD) readout, with the data demonstrating that the primary endpoint of superiority over clopidogrel was not met. Safety findings from the trial were in line with the known safety profile of Brilinta. Based on the current expectations, it is unlikely that the Company will seek regulatory submission of an indication in PAD.
 
During the period, the Japanese Ministry of Health, Labour and Welfare approved Brilinta 90mg for patients with acute coronary syndrome (ACS) for whom the use of other antiplatelet medicines in combination with aspirin is difficult. Brilinta 60mg was also approved for patients who have suffered a heart attack at least one year prior and are at high risk of developing a further atherothrombotic event.
 
b) Farxiga + Bydureon (type-2 diabetes)
With the increasing evidence suggesting the beneficial effect of SGLT2 inhibitors, such as Farxiga, on renal and CV outcomes in patients with type-2 diabetes, the decision was made to design two large Phase IIIb outcome trials to further investigate the potential role of Farxiga in the management of CKD and chronic heart failure (CHF), in patients with or without type-2 diabetes. This marked the first time that a major outcome trial will be conducted to evaluate an SGLT2 inhibitor in CKD, for which there are currently few treatment options and a significant unmet medical need.
 
During the period, the DURATION-8 combination trial of Farxiga and Bydureon showed reduced blood sugar, weight and systolic blood pressure. The Phase III trial demonstrated that the combination of these medicines provides benefits to patients above and beyond what is seen with the individual medicines. The Company is currently assessing the potential for a regulatory submission based on these data.
 
c) Type-2 diabetes medicines in CV outcomes trials
As the field of type-2 diabetes medicines consistently evolves, with multiple outcomes trials producing data, AstraZeneca continues to assess both Farxiga and Bydureon for potential long-term CV benefits. Two significant type-2 diabetes outcomes trials are underway and are ongoing:
 
Medicine
Trial
Mode of Action
Number of Patients
Primary Endpoint
Timeline
Bydureon
 
EXSCEL
 
GLP-1 agonist
 
~15,000
 
Time to first occurrence of CV death, non-fatal MI or non-fatal stroke
Latest 2018
(final analysis)
Farxiga
DECLARE
SGLT2 inhibitor
~17,000*
Time to first occurrence of CV death, non-fatal MI or non-fatal stroke
Latest 2019
(final analysis)
 
2017
(anticipated interim analysis)
*Includes ~10,000 patients who have had no prior index event (primary prevention) and ~7,000 patients who have suffered an index event (secondary prevention).
 
d) ZS-9 (hyperkalaemia)
In the beginning of the fourth quarter, the FDA accepted AstraZeneca's resubmission of the new drug application (NDA) for ZS-9 (sodium zirconium cyclosilicate), the medicine in development for the treatment of hyperkalaemia (high potassium level in blood serum) by ZS Pharma, a wholly owned subsidiary of AstraZeneca. The FDA indicated that this was a complete Class 2 response; the Agency is anticipated to act on the resubmission within 6 months of the date of receipt.
 
e) Roxadustat (anaemia)
Roxadustat is a potential first-in-class oral HIF-PH inhibitor in Phase III development for the treatment of anaemia in CKD patients, including those on dialysis and not on dialysis. AstraZeneca, FibroGen, Inc. (Fibrogen) and Astellas Pharma Inc. are jointly undertaking an extensive worldwide Phase III programme consisting of 15 trials enrolling more than 8,000 patients.
 
FibroGen, responsible for regulatory activities in China, recently announced that enrolment had completed in both Phase III clinical trials, intended for regulatory submission. These trials include both CKD patients on and not on dialysis. Further, FibroGen has confirmed that roxadustat is on track to initiate the rolling regulatory-submission process in 2016.
 
RESPIRATORY
 
AstraZeneca's Respiratory portfolio includes a range of differentiated potential medicines such as novel combinations, biologics and devices for the treatment of asthma and COPD.
Benralizumab (severe, uncontrolled asthma)
AstraZeneca shared positive benralizumab Phase III data from the SIROCCO and CALIMA trials at the recent European Respiratory Society meeting. These data were also published in The Lancet on 5 September 2016. These results demonstrated that adding benralizumab to the standard of care significantly reduced exacerbations and improved lung function and asthma symptoms in severe, uncontrolled asthma. The outcomes were demonstrated for the 8-week dosing regimen, with no additional benefit observed with 4-week dosing.
During the period, the Phase III ZONDA trial also met its primary endpoint. ZONDA is an efficacy and safety trial of benralizumab to reduce oral corticosteroid use in patients with uncontrolled asthma on high-dose, inhaled corticosteroid plus long-acting Beta2 agonist and chronic oral corticosteroid therapy. Full results will be presented at a forthcoming medical meeting. ZONDA is the fourth positive efficacy trial supporting benralizumab's unique efficacy and safety profile in severe, uncontrolled asthma.
 
 
OTHER
 
a) Anifrolumab (lupus)
During the period, the first patient completed the anifrolumab systemic lupus erythematosus (SLE) Phase III trial and rolled over to the long-term extension trial for another three years of treatment/follow-up. The Phase III programme consists of two double-blind placebo controlled trials (TULIP SLE1 and TULIP SLE2) as well as the long-term extension; the Company continues to anticipate regulatory submission in 2019.
 
Anifrolumab is a monoclonal antibody that blocks the type I interferon (IFN) receptor, thereby inhibiting the activity of all type I IFNs, which play a central role in lupus pathophysiology. Anifrolumab is currently in Phase III development for SLE and Phase II for Lupus Nephritis; a Phase I trial for expansion from current intravenous to subcutaneous administration was recently completed.
 
b) AZD3293 (Alzheimer's Disease) 
On 22 August 2016, AstraZeneca and Lilly announced the receipt of the FDA's Fast Track Designation for the development programme in Alzheimer's disease for AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in Phase III clinical trial. The FDA's Fast Track programme is designed to expedite the development and review of new therapies to treat serious conditions and tackle key unmet medical needs. Lilly leads clinical development, in collaboration with scientists from AstraZeneca who will be responsible for manufacturing.
 
AZD3293 has been shown in trials to reduce levels of amyloid beta in the cerebrospinal fluid of people with Alzheimer's and healthy volunteers. The progression of Alzheimer's disease is characterised by the accumulation of amyloid plaque in the brain. BACE is an enzyme associated with the development of amyloid beta. Inhibiting BACE is expected to prevent the formation of amyloid plaque and eventually slow the progression of the disease. In addition to the AMARANTH Phase III trial for AZD3293, AstraZeneca and Lilly have dosed patients in a second Phase III trial, DAYBREAK-ALZ, which studies the safety and efficacy of AZD3293 in patients with mild Alzheimer's disease.
 
 
ASTRAZENECA DEVELOPMENT PIPELINE 30 SEPTEMBER 2016
AstraZeneca-sponsored or -directed studies
Phase III / Pivotal Phase II / Registration
New Molecular Entities (NMEs) and significant additional indications
Regulatory submission dates shown for assets in Phase III and beyond. As disclosure of compound information is balanced by the business need to maintain confidentiality, information in relation to some compounds listed here has not been disclosed at this time.
 
Compound
 
 
Mechanism
 
 
Area Under Investigation
Date Commenced Phase
Estimated Regulatory Acceptance Date / Submission Status
US
EU
Japan
China
Oncology
Tagrisso
AURA, AURA2, (AURA17 Asia regional)
EGFR tyrosine kinase inhibitor
≥2nd-line advanced EGFRm T790M NSCLC
 
Q2 2014
Launched
 
 
(Breakthrough Therapy, Priority Review, Orphan drug)
 
 
Launched (Accelerated assessment)
 
 
Approved
Accepted1
Tagrisso
AURA3
EGFR tyrosine kinase inhibitor
≥2nd-line advanced EGFRm T790M NSCLC
Q3 2014
Q4 2016
 
 
 
 
 
Q4 2016
 
 
N/A2
N/A
acalabrutinib#
BTK inhibitor
B-cell malignancy
Q1 2015
2017
 
 
(Orphan drug)
 
 

 
 


acalabrutinib#
BTK inhibitor
1st-line CLL
Q3 2015
2020
 
 
(Orphan drug)
 
 
2020
 
 
(Orphan drug)
 
 


acalabrutinib#
BTK inhibitor
r/r CLL, high risk
Q4 2015
2020
 
 
(Orphan drug)
 
 
2020
 
 
(Orphan drug)
 
 


selumetinib#
ASTRA
MEK inhibitor
differentiated thyroid cancer
Q3 2013
2018
(Orphan drug)
2018


moxetumomab pasudotox#
PLAIT
anti-CD22 recombinant
immunotoxin
hairy cell leukaemia
Q2 2013
2017
(Orphan drug)
2018


durvalumab#
PACIFIC
PD-L1 mAb
stage III NSCLC
Q2 2014
2017
 
2017
2017

durvalumab#
HAWK
PD-L1 mAb
2nd-line HNSCC (PD-L1 positive)
Q1 2015
 
2017
(Fast Track)
2017


durvalumab# +
tremelimumab
ARCTIC
PD-L1 mAb + CTLA-4 mAb
3rd-line NSCLC
Q2 2015
2017
2017
2017

durvalumab# + tremelimumab
MYSTIC
PD-L1 mAb + CTLA-4 mAb
1st-line NSCLC
Q3 2015
2017
2017
2017
2020
durvalumab# + tremelimumab
NEPTUNE
PD-L1 mAb + CTLA-4 mAb
1st-line NSCLC
Q4 2015
2019
2019
2019

durvalumab# + tremelimumab
CONDOR
PD-L1 mAb + CTLA-4 mAb
2nd-line HNSCC (PD-L1 negative)
Q2 2015
2017
2017


durvalumab# + tremelimumab
KESTREL
PD-L1 mAb + CTLA-4 mAb
1st-line HNSCC
Q4 2015
2018
2018
2018

durvalumab# + tremelimumab
EAGLE
PD-L1 mAb + CTLA-4 mAb
2nd-line HNSCC
Q4 2015
2018
2018
2018

durvalumab# + tremelimumab
ALPS
PD-L1 mAb + CTLA-4 mAb
metastatic pancreatic ductal carcinoma
Q4 2015
2017
2017
2017

durvalumab# + tremelimumab
DANUBE
PD-L1 mAb + CTLA-4 mAb
1st-line bladder cancer
Q4 2015
2018
 
2018
2018

Cardiovascular & Metabolic Diseases
Brilinta3  
P2Y12 receptor antagonist
arterial thrombosis

Launched
Launched
Approved3
Launched
Farxiga4
SGLT2 inhibitor
type-2 diabetes

Launched
Launched
Launched
Accepted
Epanova#
omega-3 carboxylic acids
severe hypertrigly-ceridemia

Approved

2018

ZS-9 (sodium zirconium cyclosilicate)
potassium binder
hyperkalaemia

Accepted5
Accepted


roxadustat# OLYMPUS (US) ROCKIES (US)
hypoxia-inducible factor prolyl hydroxylase inhibitor
anaemia in CKD/ESRD
Q3 2014
2018
N/A
N/A
Q4 20166
Respiratory
Bevespi Aerosphere (PT003)
LABA/LAMA
COPD
Q2 2013
Approved
 2017
2018
2018
benralizumab#
CALIMA SIROCCO ZONDA
BISE
BORA
GREGALE
IL-5R mAb
severe asthma
Q4 2013
Q4 2016
Q4 2016
N/A
N/A
benralizumab#
TERRANOVA GALATHEA
IL-5R mAb
COPD
Q3 2014
2018
2018
N/A
N/A
PT010
LABA/LAMA/ICS
COPD
Q3 2015
2018
2018
2018
2019
tralokinumab
STRATOS 1,2
TROPOS
MESOS
IL-13 mAb
severe asthma
Q3 2014
2018
2018
2018

Other
anifrolumab# TULIP
IFN-alphaR mAb
systemic lupus erythematosus
Q3 2015
2019
(Fast Track)
2019
2019

Zinforo#7  
extended spectrum cephalosporin with affinity to penicillin-binding proteins
pneumonia/skin infections

N/A
Launched
N/A
Submitted
Zavicefta#7
(CAZ AVI#)
cephalosporin/ beta lactamase inhibitor
hospital-acquired pneumonia/ ventilator-associated pneumonia
Q2 2013
N/A
 Approved
N/A
2017
Zavicefta#7
cephalosporin/
beta lactamase inhibitor
serious infections, complicated intra-abdominal infection, complicated urinary tract infection
Q1 2012
N/A
 Approved
N/A
2017
AZD3293#
AMARANTH
DAYBREAK-ALZ
beta-secretase inhibitor
Alzheimer's disease
Q2 2016
20208
(Fast Track)
2020
2020

 
¶    Registrational Phase II trial
#    Collaboration
1    CN submission accepted 1 September 2016
2    Tagrisso has full approval in Japan.  A Japanese Patient Information update will include AURA3 data
3    Brilinta in the US; Brilique in rest of world. JP approval received 28 Sept 2016
4    Farxiga in the US; Forxiga in rest of world
5    US resubmission accepted on 13 October 2016
6    Rolling NDA submission to be initiated in Q4 2016
        7   AstraZeneca announced on 24 August 2016 that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its late-stage, small-molecule antibiotics business in most markets globally outside the US. The transaction is expected to close during Q4 2016
8    Fast Track Designation, 22 August 2016
 
 
Phases I and II
NMEs and significant additional indications
Compound
 
 
Mechanism
 
 
Area Under Investigation
Phase
Date Commenced Phase
 
 
Oncology
 
durvalumab#
PD-L1 mAb
bladder cancer
II
Q1 2016
(Breakthrough Therapy)
 
durvalumab#
PD-L1 mAb
solid tumours
II
Q3 2014
 
durvalumab# + tremelimumab
PD-L1 mAb + CTLA-4 mAb
gastric cancer
II
Q2 2015
 
durvalumab# + AZD5069
PD-L1 mAb + CXCR2
HNSCC
II
Q3 2015
 
durvalumab# + AZD9150#
PD-L1 mAb + STAT3 inhibitor
 
durvalumab# + MEDI0680
PD-L1 mAb + PD-1 mAb
solid tumours
II
Q3 2016
 
durvalumab#
PD-L1 mAb
solid tumours
I
Q3 2014
 
durvalumab# + monalizumab
PD-L1 mAb + NKG2a mAb
solid tumours
I
Q1 2016
 
durvalumab# + MEDI9447
PD-L1 mAb + CD73 mAb
solid tumours
I
Q1 2016
 
durvalumab# + Iressa
PD-L1 mAb+ EGFR tyrosine kinase inhibitor
NSCLC
I
Q2 2014
 
durvalumab# + dabrafenib + trametinib
PD-L1 mAb+ BRAF inhibitor + MEK inhibitor
melanoma
I
Q1 2014
 
durvalumab# + tremelimumab
PD-L1 mAb + CTLA-4 mAb
solid tumours
I
Q4 2013
 
Tagrisso + (durvalumab# or selumetinib# or savolitinib#)
TATTON
EGFR tyrosine kinase inhibitor + (PD-L1 mAb or MEK inhibitor or MET tyrosine kinase inhibitor)
advanced EGFRm NSCLC
II
Q2 2016
 
Tagrisso
EGFRm
leptomeningeal disease
II
Q3 2016
 
selumetinib + durvalumab#
MEK inhibitor + PD-L1 mAb
solid tumours
I
Q4 2015
 
savolitinib/volitinib#
MET tyrosine kinase inhibitor
papillary renal cell carcinoma
II
Q2 2014
 
AZD1775# + chemotherapy
Wee1 inhibitor + chemotherapy
ovarian cancer
II
Q4 2012
 
AZD1775#
Wee1 inhibitor
solid tumours
I
Q3 2015
 
AZD1775# + Lynparza
Wee1 inhibitor + PARP inhibitor
solid tumours
I
Q3 2015
 
AZD1775# + durvalumab#
Wee1 inhibitor +
PD-L1 mAb
solid tumours
I
Q4 2015
 
AZD6738 + Lynparza
ATR inhibitor
gastric cancer
II
Q3 2016
 
vistusertib (AZD2014)
mTOR serine/ threonine kinase inhibitor
solid tumours
II
Q1 2013
 
AZD3759 BLOOM#
EGFR tyrosine kinase inhibitor
CNS metastases in advanced EGFRm NSCLC
 
II
Q4 2015
 
Tagrisso BLOOM
EGFR tyrosine kinase inhibitor
 
AZD5363#
AKT kinase inhibitor
breast cancer
II
Q1 2014
 
AZD4547
FGFR tyrosine kinase inhibitor
solid tumours
II
Q4 2011
 
MEDI-573#
IGF mAb
metastatic breast cancer
II
Q2 2012
 
AZD0156
ATM serine/threonine kinase inhibitor
solid tumours
I
Q4 2015
 
AZD2811#
Aurora B kinase inhibitor
solid tumours  
I
Q4 2015
 
AZD6738
ATR serine/threonine kinase inhibitor
solid tumours
I
Q4 2013
 
AZD8186
PI3 kinase beta inhibitor
solid tumours
I
Q2 2013
 
AZD9150#
STAT3 inhibitor
haematological malignancies
I
Q1 2012
 
AZD9496
selective oestrogen receptor downregulator (SERD)
ER+ breast cancer
I
Q4 2014
 
AZD4635
A2aR inhibitor
solid tumours
I
Q2 2016
 
MEDI0562#
humanised OX40 agonist
solid tumours
I
Q1 2015
 
MEDI0562# + tremelimumab
humanised OX40 agonist + CTLA-4 mAb
solid tumours
I
Q2 2016
 
MEDI0562# + durvalumab#
humanised OX40 agonist + PD-L1 mAb
solid tumours
I
Q2 2016
 
MEDI-565#
CEA BiTE mAb
solid tumours
I
Q1 2011
 
MEDI0680
PD-1 mAb
solid tumours
I
Q4 2013
 
MEDI1873
GITR agonist fusion protein
solid tumours
I
Q4 2015
 
MEDI4276
HER2 bispecific ADC mAb
solid tumours
I
Q4 2015
 
MEDI9197#
TLR 7/8 agonist
solid tumours
I
Q4 2015
 
MEDI9447
CD73 mAb
solid tumours
I
Q3 2015
 
Cardiovascular & Metabolic Diseases
 
MEDI0382
GLP-1/
glucagon dual agonist
diabetes / obesity
II
Q3 2016
 
MEDI4166
PCSK9/GLP-1 mAb + peptide fusion
diabetes / cardiovascular
II
Q1 2016
 
MEDI6012
LCAT
ACS
II
Q4 2015
 
AZD4076
anti-miR103/107 oligonucleotide
non-alcoholic fatty liver disease/non-alcoholic steatohepatitis (NASH)
I
Q4 2015
 
AZD4831
Myeloperoxidase
Heart failure with a preserved ejection fraction
I
Q3 2016
 
AZD5718
FLAP
CAD
I
Q1 2016
 
MEDI8111
Rh-factor II
trauma / bleeding
I
Q1 2014
 
Respiratory
 
 
 
PT010
LABA/LAMA/ICS
asthma
II
Q2 2014
 
abediterol#
LABA
asthma/COPD
II
Q4 2007
 
AZD7594
inhaled SGRM
asthma/COPD
II
Q3 2015
 
AZD9412#
inhaled interferon beta
asthma/COPD
II
Q3 2015
 
tezepelumab#
TSLP mAb
asthma / atopic dermatitis
II
Q2 2014
 
AZD1419#
TLR9 agonist
asthma
II
Q3 2013
 
AZD5634
inhaled ENaC
cystic fibrosis
I
Q1 2016
 
AZD7986#
DPP1
COPD
I
Q4 2014
 
AZD8871#
MABA
COPD
I
Q4 2015
 
AZD9567
oral SGRM
rheumatoid arthritis
I
Q4 2015
 
MEDI9314
IL-4R mAb
atopic dermatitis
I
Q1 2016
 
Other
 
anifrolumab#
IFN-alphaR mAb
lupus nephritis
II
Q4 2015
 
anifrolumab#
IFN-alphaR mAb
systemic lupus erythematosus (subcutaneous)
I
Q4 2015
 
verinurad
selective uric acid reabsorption inhibitor (URAT-1)
chronic treatment of hyperuricemia in patients with gout
II
Q3 2013
 
mavrilimumab#
GM-CSFR mAb
rheumatoid arthritis
II
Q1 2010
 
inebilizumab#
CD19 mAb
neuromyelitis optica
II
Q1 2015
(Orphan drug)
 
MEDI2070#1
IL-23 mAb
Crohn's disease
II
Q1 2013
 
MEDI7734
ILT7 mAb
myositis
I
Q3 2016
 
MEDI0700#
BAFF/B7RP1 bispecific mAb
systemic lupus erythematosus
I
Q1 2016
 
MEDI4920
anti-CD40L-Tn3 fusion protein
primary Sjögren's syndrome
I
Q2 2014
 
MEDI5872#
B7RP1 mAb
primary Sjögren's syndrome
II
Q3 2016
 
CXL#2
beta lactamase inhibitor / cephalosporin
methicillin-resistant S. aureus
II
Q4 2010
 
AZD3241
myeloperoxidase inhibitor
multiple system atrophy
II
Q2 2015
(Orphan drug)
 
MEDI3902
Psl/PcrV bispecific mAb
prevention of nosocomial pseudomonas pneumonia
II
Q2 2016
(Fast Track, US)
 
MEDI4893
mAb binding to S. aureus toxin
hospital-acquired pneumonia / serious S. aureus infection
II
Q4 2014
(Fast Track, US)
 
MEDI7510
 
Respiratory syncytial virus (RSV) sF+GLA-SE
Prevention of RSV disease in older patients
II
Q3 2015
 
MEDI8852
influenza A mAb
influenza A treatment
II
Q4 2015
(Fast Track, US)
 
MEDI8897#
RSV mAb-YTE
passive RSV prophylaxis
II
Q1 2015
(Fast Track, US
 
ATM AVI#2
monobactam/ beta lactamase inhibitor
targeted serious bacterial infections
II
Q2 2016
 
AZD8108
NMDA antagonist
suicidal ideation
I
Q4 2014
 
MEDI1814
amyloid beta mAb
Alzheimer's disease
I
Q2 2014
 
MEDI7352
NGF/TNF bispecific mAb
osteoarthritis pain
I
Q1 2016
 
#  Collaboration
        1  AstraZeneca entered into a licensing agreement with Allergan (3 October 2016)
     2  AstraZeneca announced on 24 August 2016 that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its late-stage, small-molecule antibiotics business in most markets globally outside the US. The transaction is expected to close during Q4 2016
 
 
Significant Lifecycle Management (LCM)
Compound
 
 
Mechanism
 
 
Area Under Investigation
Date Commenced Phase
Estimated Regulatory Acceptance Date / Submission Status
US
EU
Japan
China
Oncology
Faslodex
FALCON
oestrogen receptor antagonist
1st-line hormone receptor +ve advanced breast cancer
Q4 2012
H1 2017
H1 2017
Accepted1
2017
Lynparza OlympiAD
PARP inhibitor
gBRCA metastatic breast cancer
Q2 2014
2017
2017
2017

Lynparza      SOLO-2
PARP inhibitor
2nd-line or greater BRCAm PSR ovarian cancer, maintenance monotherapy
Q3 2013
2017
(Fast Track)
2017
2017

Lynparza      SOLO-1
PARP inhibitor
1st-line BRCAm ovarian cancer
Q3 2013
2018
2018
2018

Lynparza      SOLO-3
PARP inhibitor
gBRCA PSR ovarian cancer
Q1 2015
2018



Lynparza       POLO
PARP inhibitor
pancreatic cancer
Q1 2015
2018
2018
N/A

Lynparza  
PARP inhibitor
prostate cancer
Q3 2014
 
(Breakthrough Therapy)



Lynparza  
OlympiA
PARP inhibitor
gBRCA adjuvant breast cancer
Q2 2014
2020
2020
2020

Tagrisso
FLAURA
EGFR tyrosine kinase inhibitor
1st-line advanced EGFRm NSCLC
Q1 2015
2017
2017
2017
2017
Tagrisso
ADAURA
EGFR tyrosine kinase inhibitor
adjuvant EGFRm NSCLC
Q4 2015
2022
2022
2022
2022
Cardiovascular & Metabolic Diseases
Brilinta2
PEGASUS-
TIMI 54
P2Y12 receptor antagonist
outcomes trial in patients with prior myocardial infarction
Q4 2010
Launched
(Priority Review)
Launched
Approved2
Accepted
Brilinta2  
THEMIS
P2Y12 receptor antagonist
outcomes trial in patients with type-2 diabetes and CAD, but without a previous history of MI or stroke
Q1 2014
2018
2018
2018
2019
Brilinta2
HESTIA
P2Y12 receptor antagonist
prevention of vaso-occlusive crises in paediatric patients with sickle cell disease
Q1 2014
2020
2020


Onglyza  
SAVOR-TIMI 53
DPP-4 inhibitor
type-2 diabetes outcomes trial
Q2 2010
Launched
Launched

Accepted
Kombiglyze XR/Komboglyze3
DPP-4 inhibitor/ metformin FDC
type-2 diabetes

Launched
Launched

Submitted
Farxiga4  
DECLARE-
TIMI 58
SGLT2 inhibitor
type-2 diabetes outcomes trial
Q2 2013
2020
2020


Farxiga3
SGLT2 inhibitor
type-1 diabetes
Q4 2014
2018
2018
2018

Xigduo XR/
Xigduo5
SGLT2 inhibitor/ metformin FDC
type-2 diabetes

Launched
Launched


Qtern (saxagliptin/
dapagliflozin FDC)
DPP-4 inhibitor/ SGLT2 inhibitor FDC
type-2 diabetes
Q2 2012
Accepted
 
 
Approved


Bydureon weekly
suspension
GLP-1 receptor agonist
type-2 diabetes
Q1 2013
2017
2017


Bydureon EXSCEL
GLP-1 receptor agonist
type-2 diabetes outcomes trial
Q2 2010
2018
2018
2018

Epanova  
STRENGTH
omega-3 carboxylic acids
outcomes trial in statin-treated patients at high CV risk, with persistent hypertriglyceridemia plus low HDL-cholesterol
Q4 2014
2020
2020
2020
2020
Respiratory
Symbicort
SYGMA
ICS/LABA
as-needed use in mild asthma
Q4 2014
N/A
2018

2019
Symbicort
ICS/LABA
breath actuated Inhaler asthma/COPD

2018



Duaklir Genuair#
LAMA/LABA
COPD
Q3 2016
2018
Launched

2019
Other
Nexium
proton pump inhibitor
stress ulcer prophylaxis

N/A
N/A
N/A
Q4 2016
Nexium
proton pump inhibitor
paediatrics

Launched
Launched
Q4 2016
Accepted
linaclotide#
GC-C receptor peptide agonist
irritable bowel syndrome with constipation
(IBS-C)

N/A
N/A
N/A
Accepted
#    Collaboration
1    JP submission accepted 19 August 016
2    Brilinta in the US; Brilique in rest of world. JP approval received 28 Sept 2016
3    Kombiglyze XR in the US; Komboglyze in the EU
4    Farxiga in the US; Forxiga in rest of world
5    Xigduo XR in the US; Xigduo in the EU
 
 
Terminations (discontinued projects between 1 July 2016 and 30 September 2016)
NME / Line Extension
Compound
Reason for Discontinuation
Area Under Investigation
NME
AZD7624
Safety/Efficacy
COPD
LCM
Brilinta EUCLID
Safety/Efficacy
Peripheral artery disease
NME
inebilizumab
Safety/Efficacy
Diffuse large B-cell lymphoma
NME
MEDI3617#
Safety/Efficacy
solid tumours
NME
cediranib ICON 6
Regulatory
PSR ovarian cancer
NME
selumetinib#
SELECT-1
Safety/Efficacy
2nd-line KRASm NSCLC
 
 
Completed Projects / Divestitures
Compound
 
 
Mechanism
 
 
Area Under Investigation
Completed/
Divested
Estimated Regulatory Submission Acceptance†
US
EU
Japan
China
Zurampic1
selective uric acid reabsorption inhibitor (URAT-1)
chronic treatment of hyperuricemia in patients with gout
Completed / Divested
Launched
Approved
n/a
n/a
Zurampic + allopurinol FDC1
selective uric acid reabsorption inhibitor (URAT-1)+xanthine oxidase inhibitor FDC
chronic treatment of hyperuricemia in patients with gout
Divested




MEDI-550
pandemic influenza virus vaccine
pandemic influenza prophylaxis
Completed
n/a
Approved
n/a
n/a
tralokinumab2
IL-13 mAb
atopic dermatitis
Divested




brodalumab3
AMAGINE-1,2,3
IL-17R mAb
psoriasis
Divested












       
         1    AstraZeneca has granted Ironwood Pharmaceuticals, Inc. exclusive US rights (26 April 2016) and Grünenthal GmbH exclusive rights in Europe and Latin America (2 June 2016). Zurampic launched in US on 3 Oct 2016 
         2    AstraZeneca entered licensing agreement with LEO Pharma (1 July 2016, completed on 16 August 2016)
         3    AstraZeneca and Valeant agreed to terminate the licence for Valeant's right to develop and commercialise brodalumab in Europe.  AstraZeneca entered into an agreement with LEO Pharma for the exclusive licence to brodalumab in Europe (1 July 2016)
 
 
Condensed Consolidated Statement of Comprehensive Income
For the nine months ended 30 September

2016 
$m 

2015 
$m 
Product sales

16,059 

17,434 
Externalisation revenue

1,358 

875 
Total revenue

17,417 

18,309 
Cost of sales

(2,966)

(3,377)
Gross profit

14,451 

14,932 
Distribution costs

(243)

(240)
Research and development expense

(4,347)

(4,251)
Selling, general and administrative costs

(8,027)

(8,444)
Other operating income and expense

535 

1,029 
Operating profit

2,369 

3,026 
Finance income

44 

33 
Finance expense

(1,022)

(783)
Share of after tax losses in associates and joint ventures

(22)

(9)
Profit before tax

1,369 

2,267 
Taxation

220 

(249)
Profit for the period

1,589 

2,018 
 




Other comprehensive income




Items that will not be reclassified to profit or loss




Remeasurement of the defined benefit pension liability

(1,127)

34 
Tax on items that will not be reclassified to profit or loss

256 

(12)
 

(871)

22 
Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation

(690)

(359)
Foreign exchange arising on designating borrowings in net investment hedges

(194)

(322)
Fair value movements on cash flow hedges

(26)

- 
Fair value movements on cash flow hedges transferred to profit or loss

41 

- 
Fair value movements on derivatives designated in net investment hedges

(96)

24 
Amortisation of loss on cash flow hedge

1 

1 
Net available for sale gains/(losses) taken to equity

126 

(63)
Tax on items that may be reclassified subsequently to profit or loss

63 

84 
 

(775)

(635)
Other comprehensive income for the period, net of tax

(1,646)

(613)
Total comprehensive income for the period

(57)

1,405 
 




Profit attributable to:




Owners of the Parent

1,657 

2,017 
Non-controlling interests

(68)

1 
 

1,589 

2,018 
 




Total comprehensive income attributable to:




Owners of the Parent

12 

1,405 
Non-controlling interests

(69)

- 
 

(57)

1,405 
 




Basic earnings per $0.25 Ordinary Share

$1.31 

$1.60 
Diluted earnings per $0.25 Ordinary Share

$1.31 

$1.59 
Weighted average number of Ordinary Shares in issue (millions)

1,265 

1,264 
Diluted weighted average number of Ordinary Shares in issue (millions)

1,266 

1,265 
 
 
Condensed Consolidated Statement of Comprehensive Income
For the quarter ended 30 September

2016 
$m 

2015 
$m 
Product sales

5,025 

5,850 
Externalisation revenue

674 

95 
Total revenue

5,699 

5,945 
Cost of sales

(900)

(1,041)
Gross profit

4,799 

4,904 
Distribution costs

(76)

(79)
Research and development expense

(1,402)

(1,429)
Selling, general and administrative costs

(2,403)

(2,679)
Other operating income and expense

110 

453 
Operating profit

1,028 

1,170 
Finance income

13 

9 
Finance expense

(355)

(246)
Share of after tax losses in associates and joint ventures

(10)

(2)
Profit before tax

676 

931 
Taxation

319 

(161)
Profit for the period

995 

770 
 




Other comprehensive income




Items that will not be reclassified to profit or loss




Remeasurement of the defined benefit pension liability

(285)

(208)
Tax on items that will not be reclassified to profit or loss

21 

45 
 

(264)

(163)
Items that may be reclassified subsequently to profit or loss




Foreign exchange arising on consolidation

(167)

(348)
Foreign exchange arising on designating borrowings in net investment hedges

(127)

(105)
Fair value movements on cash flow hedges

77 

- 
Fair value movements on cash flow hedges transferred to profit or loss

(19)

- 
Fair value movements on derivatives designated in net investment hedges

(17)

4 
Net available for sale gains/(losses) taken to equity

162 

(34)
Tax on items that may be reclassified subsequently to profit or loss

(12)

41 
 

(103)

(442)
Other comprehensive income for the period, net of tax

(367)

(605)
Total comprehensive income for the period

628 

165 
 




Profit attributable to:




Owners of the Parent

1,014 

770 
Non-controlling interests

(19)

- 
 

995 

770 
 




Total comprehensive income attributable to:




Owners of the Parent

648 

166 
Non-controlling interests

(20)

(1)
 

628 

165 
 




Basic earnings per $0.25 Ordinary Share

$0.80 

$0.61 
Diluted earnings per $0.25 Ordinary Share

$0.80 

$0.60 
Weighted average number of Ordinary Shares in issue (millions)

1,265 

1,264 
Diluted weighted average number of Ordinary Shares in issue (millions)

1,266 

1,265 
 
 
Condensed Consolidated Statement of Financial Position
 

At 30 Sep 2016
$m

At 31 Dec 2015
$m

At 30 Sep 2015
$m
ASSETS
Non-current assets






Property, plant and equipment

6,690 

6,413 

6,205 
Goodwill

11,806 

11,868 

11,430 
Intangible assets

28,507 

22,646 

19,997 
Derivative financial instruments

278 

446 

479 
Investments in associates and joint ventures

95 

85 

48 
Other investments

715 

458 

444 
Other receivables

681 

907 

925 
Deferred tax assets

1,584 

1,294 

1,391 
 

50,356 

44,117 

40,919 
Current assets






Inventories

2,420 

2,143 

2,193 
Assets held for sale

332 

- 

- 
Trade and other receivables

5,449 

6,622 

5,876 
Other investments

909 

613 

496 
Derivative financial instruments

26 

2 

30 
Income tax receivable

640 

387 

523 
Cash and cash equivalents

3,090 

6,240 

4,081 


12,866 

16,007 

13,199 
Total assets

63,222 

60,124 

54,118 
LIABILITIES
Current liabilities






Interest-bearing loans and borrowings

(2,939)

(916)

(2,671)
Trade and other payables

(9,961)

(11,663)

(10,593)
Derivative financial instruments

(12)

(9)

(25)
Provisions

(936)

(798)

(682)
Income tax payable

(1,534)

(1,483)

(2,065)


(15,382)

(14,869)

(16,036)
Non-current liabilities






Interest-bearing loans and borrowings

(14,744)

(14,137)

(8,276)
Derivative financial instruments

(25)

(1)

- 
Deferred tax liabilities

(4,051)

(2,733)

(1,559)
Retirement benefit obligations

(2,870)

(1,974)

(2,542)
Provisions

(396)

(444)

(381)
Other payables

(10,842)

(7,457)

(7,956)


(32,928)

(26,746)

(20,714)
Total liabilities

(48,310)

(41,615)

(36,750)
Net assets

14,912 

18,509 

17,368 
EQUITY






Capital and reserves attributable to equity holders of the Company






Share capital

316 

316 

316 
Share premium account

4,344 

4,304 

4,291 
Other reserves

2,031 

2,036 

2,035 
Retained earnings

6,381 

11,834 

10,707 
 

13,072 

18,490 

17,349 
Non-controlling interests

1,840 

19 

19 
Total equity

14,912 

18,509 

17,368 
 






 
 
Condensed Consolidated Statement of Cash Flows
 
For the nine months ended  30 September

2016
$m 

2015 
$m 
Cash flows from operating activities




Profit before tax

1,369 

2,267 
Finance income and expense

978 

750 
Share of after tax losses in associates and joint ventures

22 

9 
Depreciation, amortisation and impairment

1,767 

2,136 
Increase in working capital and short-term provisions

(472)

(35)
Non-cash and other movements

(545)

(987)
Cash generated from operations

3,119 

4,140 
Interest paid

(489)

(433)
Tax paid

(445)

(954)
Net cash inflow from operating activities

2,185 

2,753 
Cash flows from investing activities




Movement in short-term investments and fixed deposits

(165)

285 
Purchase of property, plant and equipment

(912)

(874)
Disposal of property, plant and equipment

47 

16 
Purchase of intangible assets

(761)

(1,379)
Disposal of intangible assets

117 

737 
Purchase of non-current asset investments

(210)

(47)
Disposal of non-current asset investments

- 

59 
Payments to joint ventures

(19)

- 
Upfront payments on business acquisitions

(2,564)

- 
Payment of contingent consideration on business acquisitions

(197)

(553)
Interest received

105 

102 
Payments made by subsidiaries to non-controlling interests

(13)

- 
Net cash outflow from investing activities

(4,572)

(1,654)
Net cash (outflow)/inflow before financing activities

(2,387)

1,099 
Cash flows from financing activities




Proceeds from issue of share capital

40 

30 
New long-term loans

2,483 

- 
Repayment of loans

- 

(884)
Dividends paid

(3,561)

(3,486)
Hedge contracts relating to dividend payments

18 

(51)
Repayment of obligations under finance leases

(12)

(40)
Movement in short-term borrowings

12 

1,025 
Net cash outflow from financing activities

(1,020)

(3,406)
Net decrease in cash and cash equivalents in the period

(3,407)

(2,307)
Cash and cash equivalents at the beginning of the period

6,051 

6,164 
Exchange rate effects

43 

(70)
Cash and cash equivalents at the end of the period

2,687 

3,787 
Cash and cash equivalents consists of:




Cash and cash equivalents

3,090 

4,081 
Overdrafts

(403)

(294)


2,687 

3,787 





 
 
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 Jan 2015

316

4,261

2,021

13,029 

19,627 

19 

19,646 
Profit for the period

-

-

-

2,017 

2,017 

1 

2,018 
Other comprehensive income

-

-

-

(612)

(612)

(1)

(613)
Transfer to other reserves

-

-

14

(14)

- 

- 

- 
Transactions with owners:














Dividends

-

-

-

(3,537)

(3,537)

- 

(3,537)
Issue of Ordinary Shares

-

30

-

- 

30 

- 

30 
Share-based payments

-

-

-

(176)

(176)

- 

(176)
Net movement

-

30

14

(2,322)

(2,278)

- 

(2,278)
At 30 Sep 2015

316

4,291

2,035

10,707 

17,349 

19 

17,368 

















Share
capital
$m

Share
premium
account
$m

Other
reserves*
$m

Retained
earnings
$m

Total 
$m 

Non-
controlling
interests
$m

Total
equity
$m
At 1 Jan 2016

316

4,304

2,036 

11,834

18,490 

19 

18,509 
Profit for the period

-

-

- 

1,657 

1,657 

(68)

1,589 
Other comprehensive income

-

-

- 

(1,645)

(1,645)

(1)

(1,646)
Transfer to other reserves

-

-

(5)

5

- 

- 

- 
Transactions with owners:














Dividends

-

-

- 

(3,540)

(3,540)

- 

(3,540)
Dividend paid by subsidiary to non-controlling interest

-

-

- 

- 

- 

(13)

(13)
Acerta put option

-

-

- 

(1,825)

(1,825)

- 

(1,825)
Changes in non-controlling interest

-

-

- 

- 

- 

1,903 

1,903 
Issue of Ordinary Shares

-

40

- 

- 

40 

- 

40 
Share-based payments

-

-

- 

(105)

(105)

- 

(105)
Net movement

-

40

(5)

(5,453)

(5,418)

1,821 

(3,597)
At 30 Sep 2016

316

4,344

2,031 

6,381 

13,072 

1,840 

14,912 
* Other reserves include 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 nine months ended 30 September 2016 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union (EU) and as issued by the International Accounting Standards Board (IASB).
 
The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and as issued by the IASB. The interim financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2015. There have been no significant new or revised accounting standards applied in the nine months ended 30 September 2016.
 
Legal proceedings
The information contained in Note 7 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2015 and Interim Financial Statements for the six months ended 30 June 2016.
 
Going concern
The Group has considerable financial resources available. As at 30 September 2016 the Group has $3.2bn in financial resources (cash balances of $3.1bn and undrawn committed bank facilities of $3bn which are available until April 2021, with only $2.9bn of debt due within one year). The Group's revenues are largely derived from sales of products which are covered by patents which provide a relatively high level of resilience and predictability to cash inflows, although our revenue is expected to continue to be significantly impacted by the expiry of patents over the medium term. In addition, government price interventions in response to budgetary constraints are expected to continue to adversely affect revenues in many of our mature markets. However, we anticipate new revenue streams from both recently launched medicines and products in development, and the Group has a wide diversity of customers and suppliers across different geographic areas. Consequently, the Directors believe that, overall, the Group is well placed to manage its business risks successfully.
 
On the basis of the above paragraph and after making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the interim financial statements have been prepared on a going concern basis.
 
Financial information
The comparative figures shown for the financial year ended 31 December 2015 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and have been delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
 
 
2   RESTRUCTURING COSTS
Profit before tax for the year ended 30 September 2016 is stated after charging restructuring costs of $713m ($250m for the third quarter of 2016). These have been charged to profit as follows:
 

YTD 2016
$m

YTD 2015
$m

Q3 2016
$m

Q3 2015
$m
Cost of sales

87 

124

59 

23
Research and development expense

146 

180

39 

56
Selling, general and administrative costs

504 

358

176 

135
Other operating income and expense

(24)

-

(24)

-
Total

713 

662

250 

214
 
 
3   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 
2016 
$m 

Cash Flow
 
 
$m 

 
 
Acquisitions
 
 
 
 
 
$m
 
 

 
 
Non-cash
 
 
& Other
 
 
$m
 
 

Exchange Movements
 
 
$m

At 30 Sep
 
 
2016 
 
 
$m 
Loans due after one year

(14,109)

(2,483)

- 

1,772 

84 

(14,736)
Finance leases due after one year

(28)

- 

- 

20 

- 

(8)
Total long-term debt
 
 

(14,137)

(2,483)

- 

1,792 

84 

(14,744)













Current instalments of loans

- 

- 

- 

(1,775)

- 

(1,775)
Current instalments of finance leases

(67)

12 

- 

(34)

- 

(89)
Total current debt
 
 

(67)

12 

- 

(1,809)

- 

(1,864)













Other Investments

613 

167 

140 

59 

(52)

927 
Net derivative financial instruments

438 

(2)

- 

(169)

- 

267 
Cash and cash equivalents

6,240 

(3,183)

- 

- 

33 

3,090 
Overdrafts

(189)

(224)

- 

- 

10 

(403)
Short-term borrowings

(660)

(12)

- 

(1)

1 

(672)


6,442 

(3,254)

140 

(111)

(8)

3,209 
Net debt
 
 

(7,762)

(5,725)

140 

(128)

76 

(13,399)
 
Non-cash movements in the period include fair value adjustments under IAS 39.
 
 
4      MAJORITY EQUITY INVESTMENT IN ACERTA PHARMA
On 2 February 2016, AstraZeneca completed an agreement to invest in a majority equity stake in Acerta Pharma, a privately-owned biopharmaceutical company based in the Netherlands and US. The transaction provides AstraZeneca with a potential best-in-class irreversible oral Bruton's tyrosine kinase (BTK) inhibitor, acalabrutinib (ACP-196), currently in Phase III development for B-cell blood cancers and in Phase I/II clinical trials in multiple solid tumours.
 
Under the terms of the agreement, AstraZeneca has acquired 55% of the issued share capital of Acerta for an upfront payment of $2.5bn. A further payment of $1.5bn will be paid either on receipt of the first regulatory approval for acalabrutinib for any indication in the US, or the end of 2018, depending on which is first. The agreement also includes options which, if exercised, provide the opportunity for Acerta shareholders to sell, and AstraZeneca to buy, the remaining 45% of shares in Acerta. The options can be exercised at various points in time, conditional on the first approval of acalabrutinib in both the US and Europe and when the extent of the commercial opportunity has been fully established, at a price of approximately $3bn net of certain costs and payments incurred by AstraZeneca and net of agreed future adjusting items, using a pre-agreed pricing mechanism. Acerta has approximately 150 employees.
 
AstraZeneca's 55% holding is a controlling interest and Acerta's combination of intangible product rights with an established workforce and their operating processes requires that the transaction is accounted for as a business combination in accordance with IFRS 3.
 
Goodwill is principally attributable to the value of the specialist knowhow inherent in the acquired workforce and the accounting for deferred taxes. Goodwill is not expected to be deductible for tax purposes. Acerta Pharma's results have been consolidated into the Group's results from 2 February 2016. From the period from acquisition to 30 September 2016, Acerta Pharma had no revenues and its loss after tax was $157m.
 
In the period since 2 February 2016, the acquisition accounting has been adjusted to reflect new information regarding the value of net assets acquired with Acerta. This has resulted in an increase in other assets and a decrease in goodwill of $15m.
 
 


 
Fair value
$m
Intangible assets


7,307 
 
 
Other assets including cash and cash equivalents


253 
 
 
Deferred tax liabilities


(1,827)
 
 
Other liabilities


(90)
 
 
Total net assets acquired


5,643 
 
 
Non-controlling interests


(1,903)
 
 
Goodwill


69 
 
 
Fair value of total consideration


3,809 
 
 
Less: fair value of deferred consideration


(1,332)
 
 
Total upfront consideration


2,477 
 
 
Less: cash and cash equivalents acquired


(94)
 
 
Net cash outflow


2,383 
 
 
 
 
 
5     ACQUISITION OF ZS PHARMA
On 17 December 2015, AstraZeneca completed the acquisition of ZS Pharma, a biopharmaceutical company based in San Mateo, California. ZS Pharma uses its proprietary ion-trap technology to develop novel treatments for hyperkalaemia, a serious condition of elevated potassium in the bloodstream, typically associated with CKD and Chronic Heart Failure.
 
During 2016, we have revised our assessment of the fair values of the assets and liabilities acquired as a result of new information obtained about facts and circumstances that existed at the date of acquisition that impact the value of deferred tax. This has resulted in a reduction to both deferred tax liabilities and goodwill of $68m.
 


Fair value
$m
Non-current assets



Intangible assets


3,162 
Property, plant and equipment


21 



3,183 
Current assets


169 
Current liabilities


(50)
Non-current liabilities



Deferred tax liabilities


(977)
Other liabilities


(13)



(990)
Total net assets acquired


2,312 
Goodwill


388 
Total upfront consideration


2,700 
Less: cash and cash equivalents acquired


(73)
Less: deferred upfront consideration


(181)
Net cash outflow


2,446 
 
6     FINANCIAL INSTRUMENTS
As detailed in the Group's most recent annual financial statements, our principal financial instruments consist of derivative financial instruments, other investments, trade and other receivables, cash and cash equivalents, trade and other payables, and interest-bearing loans and borrowings. As indicated in Note 1, there have been no changes to the accounting policies for financial instruments, including fair value measurement, from those disclosed on pages 146 and 147 of the Company's Annual Report and Form 20-F Information 2015. In addition, there have been no changes of significance to the categorisation or fair value hierarchy of our financial instruments. Financial instruments measured at fair value include $1,624m of other investments, $1,749m of loans, and $267m of derivatives as at 30 September 2016. The total fair value of interest-bearing loans and borrowings at 30 September 2016 which have a carrying value of $17,683m in the Condensed Consolidated Statement of Financial Position, was $19,559m. Contingent consideration liabilities arising on business combinations have been classified under Level 3 in the fair value hierarchy and movements in fair value are shown below:
 
 

Diabetes
Alliance
2016

Other
 
2016

Total
 
2016

Total
 
2015


$m

$m

$m

$m
 At 1 January

5,092 

1,319

6,411 

6,899 
 Settlements

(197)

-

(197)

(553)
 Revaluations

32 

100

132 

58 
 Discount unwind

292 

80

372 

395 
 Foreign exchange

-

2

2 

2 
 At 30 September

5,219 

1,501

6,720 

6,801 


 
7     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 2015 and as part of the Company's Half-Yearly Financial Report for the six-month period to 30 June 2016  (the Disclosures). Unless noted otherwise below or in the Disclosures, no provisions have been established in respect of the claims discussed below.
 
As discussed in the Disclosures, for the majority of claims in which AstraZeneca is involved it is not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of the proceedings. In these cases, AstraZeneca discloses information with respect only to the nature and facts of the cases but no provision is made.
 
In cases that have been settled or adjudicated, or where quantifiable fines and penalties have been assessed and which are not subject to appeal, or where a loss is probable and we are able to make a reasonable estimate of the loss, we record the loss absorbed or make a provision for our best estimate of the expected loss.
 
The position could change over time and the estimates that we have made and upon which we have relied in calculating these provisions are inherently imprecise. There can, therefore, be no assurance that any losses that result from the outcome of any legal proceedings will not exceed the amount of the provisions that have been booked in the accounts. The major factors causing this uncertainty are described more fully in the Disclosures and herein.
 
AstraZeneca has full confidence in, and will vigorously defend and enforce, its intellectual property.
 
Matters disclosed in respect of the third quarter of 2016 and to 10 November 2016.
 
Patent litigation
 
Tagrisso (osimertinib)
Patent proceedings outside the US
In Europe, in October 2016, Stada Arzneimittel AG filed an opposition to the grant of European Patent No. 2,736,895.
 
Faslodex (fulvestrant)
US patent proceedings
As previously disclosed, AstraZeneca has filed patent infringement lawsuits in the US District Court in New Jersey relating to four patents listed in the FDA Orange Book with reference to Faslodex. A trial against two of the defendants commenced on 11 July 2016 and was scheduled to reconvene on 1 August 2016. AstraZeneca settled the lawsuits against both of these defendants prior to trial reconvening and consequently those cases have since been dismissed. AstraZeneca continues to litigate against several additional defendants with trial anticipated in 2017.
 
Patent proceedings outside the US
As previously disclosed, in Spain, in January 2016 the Barcelona Commercial Court ordered a preliminary injunction preventing Sandoz Farmacéutica, S. A. from launching its generic version of Faslodex. The preliminary injunction was maintained following an oral hearing in July 2016.
 
In Germany, in September 2016, a provisional injunction request based on European Patent No. 1,250,138 (the '138 Patent) was granted by the Regional Court of Düsseldorf against ratiopharm GmbH (ratiopharm). As previously disclosed, in July 2015, AstraZeneca was served with complaints filed by Hexal AG (Hexal) and ratiopharm requesting the revocation of the '138 patent. The German Federal Patent Court has scheduled a hearing on this matter for 22 November 2016.
 
Also in Germany, as previously disclosed, in December 2015 AstraZeneca filed a patent infringement suit relating to European Patent No. 2,255,573 against Hexal in the Regional Court of Mannheim referring to Hexal's threatened launch of a generic Faslodex product. These proceedings were stayed at an oral hearing in August 2016.
 
Onglyza (saxagliptin) and Kombiglyze (saxagliptin and metformin)
US patent proceedings
As previously disclosed, AstraZeneca initiated patent infringement proceedings against Wockhardt Bio AG and Wockhardt USA LLC, Sun Pharma Global FZE, Sun Pharmaceutical Industries Ltd. and Amneal Pharmaceuticals LLC (Wockhardt, Sun and Amneal) in the US District Court for the District of Delaware (the District Court) after those entities had submitted ANDAs containing a Paragraph IV Certification alleging that US Patent No. RE44,186 (the '186 Patent), listed in the FDA Orange Book with reference to Onglyza and Kombiglyze XR, is invalid and/or will not be infringed by the products as described in their ANDAs. In August and September 2016, AstraZeneca was informed that Wockhardt, Sun and Amneal had changed their Paragraph IV Certifications to Paragraph III Certifications, seeking approval to market the products described in their ANDAs following expiration of the '186 Patent. The patent infringement proceedings against these entities continues.
 
A trial was held in September 2016 against Wockhardt, Sun and Amneal, Mylan Pharmaceuticals Inc. (Mylan),  Aurobindo Pharma Ltd., Aurobindo Pharma U.S.A., Inc., Actavis Laboratories FL, Inc. and Watson Laboratories, Inc. in the District Court. A decision on the validity of the '186 Patent is awaited. In September 2016, Apotex Corp. and Apotex, Inc. agreed to be bound by the District Court's judgment. 
 
As previously disclosed, in June 2016, the US Court of Appeals for the Federal Circuit denied Mylan's petition for rehearing en banc of the decision affirming the denial of Mylan's motion to dismiss for lack of jurisdiction. In September 2016, Mylan filed a petition for writ of certiorari with the Supreme Court of the United States seeking an appeal of that decision. 
 
As previously disclosed, in May 2016, the US Patent and Trademark Office (USPTO) instituted an inter partes review brought by Mylan challenging the validity of the '186 Patent (the Mylan IPR) and a number of generics companies also filed petitions for inter partes review challenging the validity of the '186 Patent and sought to join the Mylan IPR. In August and September 2016 respectively, Wockhardt Bio AG and Teva Pharmaceuticals USA, Inc. were joined with the Mylan IPR. A decision as to whether the others will be permitted to join the Mylan IPR is awaited.
 
Crestor (rosuvastatin) 
Patent proceedings outside the US
As previously disclosed, in France, in February 2016, Biogaran S.A.S. (Biogaran) obtained a marketing authorisation for its rosuvastatin zinc product. In April 2016, AstraZeneca and Shionogi Seiyaku Kabushiki Kaisha (Shionogi) sought a preliminary injunction to prevent Biogaran from launching its product. On 4 July 2016, the Paris Court of First Instance declined to issue a preliminary injunction. AstraZeneca and Shionogi appealed; however, the parties settled the preliminary proceedings before the appeal hearing. AstraZeneca and Shionogi have commenced patent infringement proceedings against Biogaran.
 
As previously disclosed, in Japan, in March 2015, an individual filed a patent invalidation request with the Japanese Patent Office (JPO) in relation to the Crestor substance patent. On 13 July 2016, the JPO dismissed the request. The individual has appealed to the Intellectual Property High Court of Japan with the intervention of Nippon Chemiphar Co. Ltd (Nippon).  In addition, Nippon has commenced a separate patent invalidation request with the JPO in relation to the Crestor substance patent.  A hearing was held on 30 September 2016.
 
As previously disclosed, in the UK, in October 2015, Resolution Chemicals Ltd. commenced an action in the UK Patent Court alleging partial invalidity and non-infringement of the supplementary protection certificate related to the Crestor substance patent. The case has been stayed.
 
In Switzerland, in May 2016, Mepha Pharma AG challenged the validity of the supplementary protection certificate related to the Crestor substance patent. In September 2016, AstraZeneca responded.
 
Product liability litigation
 
Farxiga (dapagliflozin)
As previously disclosed, AstraZeneca has been named as a defendant in lawsuits filed in four jurisdictions involving plaintiffs claiming physical injury, including diabetic ketoacidosis and kidney failure, from treatment with Farxiga. Since then, additional cases with similar allegations have been filed in other jurisdictions. On 25 October 2016, one of these cases was dismissed with prejudice in favour of AstraZeneca. Motions to dismiss are pending in other jurisdictions. In October 2016, counsel for plaintiffs in a product liability action pertaining to Invokana (a product in the same class as Farxiga) filed a motion with the Judicial Panel on Multidistrict Litigation seeking transfer of any currently pending cases as well as any similar, subsequently filed cases to a coordinated and consolidated pre-trial Multidistrict Litigation proceeding on a class-wide basis. 
 
Onglyza/Kombiglyze (saxagliptin)
As previously disclosed, AstraZeneca is defending various lawsuits filed in state and federal courts in the US involving multiple plaintiffs claiming heart failure, cardiac failure and/or death injuries from treatment with either Onglyza or Kombiglyze. In October 2016, 14 of these claims were dismissed in response to motions filed by AstraZeneca. Approximately 80 plaintiffs claims currently remain in active litigation.
 
Synagis (palivizumab)
As previously disclosed, AstraZeneca and MedImmune were named as defendants in a lawsuit filed in the US District Court for the Middle District of Louisiana involving two plaintiffs alleging wrongful death from treatment with Synagis. In July 2016, the plaintiffs dismissed their claims voluntarily.
 
Nexium and Prilosec (esomeprazole and omeprazole)
As previously disclosed, all claims alleging that Nexium caused osteoporotic injuries, such as bone deterioration, loss of bone density and/or bone fractures, have now been dismissed with judgment entered in AstraZeneca's favour. Approximately 270 plaintiffs have appealed the dismissal of their claims to the US Court of Appeals for the Ninth Circuit, and fewer than 40 plaintiffs have appealed the dismissal of their claims to the California Second Appellate Division. On 27 October 2016, the US Court of Appeals for the Ninth Circuit affirmed the dismissal of the approximately 270 claims that were pending in federal court.
 
AstraZeneca is defending various lawsuits in federal courts in the US involving multiple plaintiffs claiming that they have been diagnosed with kidney injuries following treatment with proton pump inhibitors, including Nexium and Prilosec. In October 2016, counsel for these plaintiffs filed a motion with the Judicial Panel on Multidistrict Litigation seeking transfer of any currently pending cases as well as any similar, subsequently filed cases to a coordinated and consolidated pre-trial Multidistrict Litigation proceeding.
 
 
 
Commercial litigation
 
 
 
 
 
Pearl Therapeutics
 
 
As previously disclosed, AstraZeneca was served with a complaint filed in Delaware State court by the former shareholders of Pearl Therapeutics, Inc. (Pearl) that alleged, among other things, breaches of contractual obligations relating to a 2013 merger agreement between AstraZeneca and Pearl. This case has been resolved.
 
 
 
Crestor Citizen's Petition
As previously disclosed, in May 2016, AstraZeneca filed a Citizen's Petition with the FDA requesting that the FDA does not approve any pending generic ANDAs for rosuvastatin until the expiration of the paediatric orphan exclusivity for Crestor.  In June 2016, AstraZeneca filed its Complaint for Declaratory and Injunctive Relief and an Application for a Temporary Restraining Order (TRO) with the US District Court for the District of Columbia. The filings requested that the Court prohibit the FDA from granting final approval to any pending ANDAs for generic versions of Crestor until the expiration of paediatric orphan exclusivity. In July 2016, the Court denied AstraZeneca's application for a TRO. On 19 August 2016, the Court entered an order dismissing the case without prejudice.
 
Nexium settlement anti-trust litigation
As previously disclosed, AstraZeneca is a defendant in a multidistrict litigation class action and individual lawsuit alleging that AstraZeneca's settlements of certain patent litigation in the US relating to Nexium violated US anti-trust law and various state laws. A trial in the US District Court for the District of Massachusetts commenced in October 2014 and, in December 2014, a jury returned a verdict in favour of AstraZeneca. Following the Court's denial of the plaintiffs' motion for a new trial and preliminary injunction, the Court entered judgment in favour of AstraZeneca in September 2015.  The plaintiffs have appealed that judgment and oral argument on the appeal was heard on 5 October 2016.
 
 
 
Nexium/Prilosec trademark litigation
As previously disclosed, AstraZeneca filed separate complaints in the US District Court for the District of Delaware against Camber Pharmaceuticals, Inc. and Dr. Reddy's Laboratories, Inc. to enforce certain AstraZeneca trademark rights related to Nexium and Prilosec. This matter is now resolved. 
 
Government investigations/proceedings
 
 
 
Foreign Corrupt Practices Act
 
 
As previously disclosed, in connection with investigations into anti-bribery and corruption issues in the pharmaceutical industry, AstraZeneca received inquiries from enforcement agencies, including the Department of Justice (DOJ) and the Securities Exchange Commission (SEC), regarding, among other things, sales practices, internal controls, certain distributors and interactions with healthcare providers and other government officials in several countries. In August 2016, AstraZeneca entered into a civil settlement with the SEC to resolve these inquiries. The DOJ has informed AstraZeneca that it has closed its inquiry into this matter.
 
Seroquel IR (quetiapine fumarate) and Seroquel XR (quetiapine fumarate)
As previously disclosed, AstraZeneca was in litigation with the Attorney General of Mississippi in relation to the state law claims brought by state Attorneys General which alleged that AstraZeneca had made false and/or misleading statements in marketing and promoting Seroquel.  This litigation has been resolved and the matter has been dismissed.
 

8 product analysis - YTD 2016
 

World

US

Europe

Established ROW

Emerging Markets


YTD 2016
$m

CER
%

YTD 2016
$m

CER
%

YTD 2016
$m

CER
%

YTD 2016
$m

CER
%

YTD 2016
$m

CER
%
Oncology:




















 Iressa

395

(3)

16

n/m 

91

(5)

101

(9)

187

(6)
 Tagrisso

276

n/m 

180

n/m 

49

n/m 

43

n/m 

4

n/m 
 Lynparza

156

n/m 

96

109 

56

n/m 

-

- 

4

n/m 
 Legacy:




















 Faslodex

608

19 

321

23 

169

11 

48

13 

70

26 
 Zoladex

581

(4)

27

23 

117

(5)

199

(6)

238

(3)
 Casodex

187

(9)

2

n/m 

19

(14)

84

(21)

82

6 
 Arimidex

175

(6)

12

(20)

27

(27)

53

(16)

83

13 
 Others

75

(32)

-

n/m 

4

(80)

51

7 

20

(9)
 Total Oncology

2,453

17 

654

79 

532

14 

579

(1)

688

3 
 Cardiovascular & Metabolic Diseases:




















 Brilinta

603

39 

243

43 

192

15 

32

26 

136

88 
 Farxiga

596

79 

327

78 

136

58 

41

82 

92

120 
 Onglyza

571

(2)

304

(6)

102

(5)

55

21 

110

3 
 Bydureon

436

3 

349

(3)

75

38 

8

17 

4

50 
 Byetta

199

(18)

127

(23)

37

(19)

16

- 

19

31 
 Legacy:




















 Crestor

2,770

(24)

1,128

(45)

657

(3)

445

(1)

540

12 
 Seloken/Toprol-XL

559

8 

81

16 

67

(6)

10

11 

401

9 
 Atacand

234

(9)

28

4 

74

(6)

15

(29)

117

(10)
 Others

337

(24)

27

(34)

89

(16)

38

(18)

183

(27)
 Total Cardiovascular & Metabolic Diseases

6,305

(8)

2,614

(23)

1,429

3 

660

3 

1,602

9 
 Respiratory:




















 Symbicort

2,249

(10)

958

(14)

679

(15)

310

1 

302

11 
 Pulmicort

773

8 

138

(7)

73

(15)

61

(5)

501

20 
 Tudorza/Eklira

134

(5)

61

(22)

65

14 

7

- 

1

n/m 
 Daliresp/Daxas

113

57 

101

40 

10

n/m 

1

n/m 

1

n/m 
 Duaklir

44

n/m 

-

- 

42

n/m 

1

n/m 

1

n/m 
 Others

230

23 

7

(42)

83

24 

33

94 

107

18 
 Total Respiratory

3,543

(2)

1,265

(11)

952

(7)

413

5 

913

17 
 Other:




















 Nexium

1,541

(19)

419

(42)

190

(7)

389

(12)

543

- 
 Seroquel XR

617

(20)

444

(18)

106

(33)

14

(30)

53

(5)
 Synagis

375

(3)

171

9 

204

(11)

-

- 

-

- 
 Losec/Prilosec

217

(15)

7

(61)

63

(11)

42

(30)

105

(3)
 Movantik/Moventig

65

n/m 

64

n/m 

-

- 

-

- 

1

n/m 
 FluMist/Fluenz

37

(58)

13

(85)

21

n/m 

2

n/m 

1

n/m 
 Others

906

(15)

96

(43)

235

(11)

173

(14)

402

(9)
 Total Other

3,758

(16)

1,214

(29)

819

(12)

620

(14)

1,105

(4)
 Total Product Sales

16,059

(6)

5,747

(17)

3,732

(2)

2,272

(3)

4,308

6 
 
 
 
 
9 product analysis - Q3 2016
 

World

US

Europe

Established ROW

Emerging Markets


Q3 2016
$m

CER
%

Q3 2016
$m

CER
%

Q3 2016
$m

CER
%

Q3 2016
$m

CER
%

Q3 2016
$m

CER
%
Oncology:




















 Iressa

125

(13)

6

n/m 

30

- 

36

(14)

53

(23)
 Tagrisso

133

n/m 

77

n/m 

24

n/m 

28

n/m 

4

n/m 
 Lynparza

58

111 

34

70 

24

n/m 

-

- 

-

- 
 Legacy:




















 Faslodex

207

11 

110

15 

56

8 

18

7 

23

9 
 Zoladex

199

(5)

8

- 

37

(9)

69

(12)

85

1 
 Casodex

62

(8)

-

- 

6

(14)

28

(25)

28

15 
 Arimidex

56

(14)

2

(75)

9

(25)

18

(11)

27

8 
 Others

27

(29)

-

n/m 

1

(86)

19

13 

7

- 
 Total Oncology

867

17 

237

69 

187

19 

216

2 

227

(1)
 Cardiovascular & Metabolic Diseases:




















 Brilinta

208

25 

84

22 

67

11 

12

20 

45

60 
 Farxiga

220

64 

118

71 

47

37 

16

36 

39

100 
 Onglyza

169

(16)

92

(17)

29

(22)

18

19 

30

(21)
 Bydureon

145

(10)

115

(17)

25

30 

3

(33)

2

n/m 
 Byetta

61

(15)

38

(16)

12

(24)

6

- 

5

- 
 Legacy:




















 Crestor

688

(44)

124

(82)

219

- 

159

1 

186

17 
 Seloken/Toprol-XL

185

12 

28

27 

23

(4)

5

150 

129

10 
 Atacand

74

(3)

7

(22)

25

(7)

5

(29)

37

11 
 Others

95

(28)

11

83 

25

(26)

13

(14)

46

(39)
 Total Cardiovascular & Metabolic Disease

1,845

(21)

617

(47)

472

- 

237

4 

519

9 
Respiratory:




















 Symbicort

697

(17)

277

(30)

213

(8)

114

4 

93

(13)
 Pulmicort

224

4 

32

(20)

19

(5)

21

(10)

152

13 
 Tudorza/Eklira

47

(17)

20

(39)

24

9 

3

- 

-

n/m 
 Daliresp/Daxas

42

27 

35

6 

6

n/m 

1

n/m 

-

- 
 Duaklir

14

88 

-

- 

14

88 

- 

- 

-

- 
 Others

86

46 

-

n/m 

32

48 

16

n/m 

38

31 
 Total Respiratory

1,110

(8)

364

(27)

308

2 

155

10 

283

5 
 Other:




















 Nexium

516

(21)

125

(50)

63

(2)

152

(5)

176

(2)
 Seroquel XR

190

(26)

138

(26)

30

(34)

4

(33)

18

6 
 Synagis

104

(11)

8

n/m 

96

(20)

-

- 

-

- 
 Losec/Prilosec

72

(11)

2

(67)

22

- 

15

(28)

33

- 
 Movantik/Moventig

25

n/m 

24

n/m 

-

- 

-

- 

1

n/m 
 FluMist/Fluenz

26

(61)

2

(97)

21

n/m 

2

n/m 

1

n/m 
 Others

270

(25)

21

(66)

66

(24)

46

(37)

137

(4)
 Total Other

1,203

(22)

320

(44)

298

(13)

219

(16)

366

(2)
 Total Product Sales

5,025

(14)

1,538

(35)

1,265

(1)

827

(1)

1,395

3 
 

Shareholder Information
 
Announcement of full year and fourth quarter 2016 results
2 February 2017
Announcement of first quarter 2017 results
27 April 2017
Annual General Meeting
27 April 2017
Announcement of half year and second quarter 2017 results
27 July 2017
Announcement of nine months and third quarter 2017 results
9 November 2017
 
Future dividends will normally be paid as follows:
First interim          Announced with half year and second quarter results and paid in September
Second interim      Announced with full year and fourth quarter results and paid in March
 
The record date for the second interim dividend for 2016, payable on 20 March 2017, will be 17 February 2017. Ordinary Shares listed in London and Stockholm will trade ex-dividend from 16 February 2017. American Depositary Shares listed in New York will trade ex-dividend from 15 February 2017.
 
The record date for the first interim dividend for 2017, payable on 11 September 2017, will be 11 August 2017. Ordinary Shares listed in London and Stockholm will trade ex-dividend from 10 August 2017. American Depositary Shares listed in New York will trade ex-dividend from 9 August 2017.
                                                                         
Trademarks of the AstraZeneca group of companies and of companies other than AstraZeneca appear throughout this document in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol are all trademarks of the AstraZeneca group of companies. Trademarks of companies other than AstraZeneca that appear in this document include Duaklir Genuair, Duaklir, Eklira, and Tudorza, trademarks of Almirall, S.A.; Epanova, a trademark of Chrysalis Pharma AG; Zinforo, a trademark of Forest Laboratories; and Invokana, a trademark of Johnson & Johnson/ Janssen Pharmaceutica NV.
 
Addresses for Correspondence
Registered Office
1 Francis Crick Avenue
Cambridge Biomedical Campus, Cambridge
CB2 0AA
UK
 
 
Registrar and
Transfer Office
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
UK
Swedish Central Securities Depository
Euroclear Sweden AB
PO Box 191
SE-101 23 Stockholm
Sweden
 
 
US Depositary
Citibank Shareholder Services
PO Box 43077
Providence
RI 02940-3077
USA
 
Tel: +44 (0)20 3749 5000
Tel (freephone in UK):
0800 389 1580
 
Tel (outside UK):
+44 (0)121 415 7033
Tel: +46 (0)8 402 9000
Tel: (toll free in the US)
+1 (888) 697 8018
 
Tel: (outside the US)
+1 (781) 575 4555
 
citibank@shareholders-online.com




 
Cautionary Statements 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: This document contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group, including, among other things, statements about expected revenues, margins, earnings per share or other financial or other measures. 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 this document 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, or limitations to, patents, marketing exclusivity or trademarks, or the risk of failure to obtain and enforce patent protection; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage; effects of patent litigation in respect of IP rights; exchange rate fluctuations; the risk that R&D will not yield new products that achieve commercial success; the risk that strategic alliances and acquisitions, including licensing and collaborations, will be unsuccessful; the impact of competition, price controls and price reductions; taxation risks; the risk of substantial product liability claims; the impact of any delays in the manufacturing, distribution and sale of any of our products; the impact of any failure by third parties to supply materials or services; the risk of failure of outsourcing; the risks associated with manufacturing biologics; the risk of delay to new product launches; the difficulties of obtaining and maintaining regulatory approvals for products; the risk of failure to adhere to applicable laws, rules and regulations; the risk of failure to adhere to applicable laws, rules and regulations relating to anti-competitive behaviour; the risk that new products do not perform as we expect; failure to achieve strategic priorities or to meet targets or expectations; the risk of an adverse impact of a sustained economic downturn; political and socio-economic conditions; the risk of environmental liabilities; the risk of occupational health and safety liabilities; the risk associated with pensions liabilities; the risk of misuse of social medial platforms and new technology; the risks associated with developing our business in emerging markets; the risk of illegal trade in our products; the risks from pressures resulting from generic competition; the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring programmes; economic, regulatory and political pressures to limit or reduce the cost of our products; the risk that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects; the impact of failing to attract and retain key personnel and to successfully engage with our employees; the impact of increasing implementation and enforcement of more stringent anti-bribery and anti-corruption legislation; and the risk of failure of information technology and cybercrime. Nothing in this document/presentation/webcast should be construed as a profit forecast.
 
-ENDS-
 
 
 
SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
AstraZeneca PLC
 
 
 
 
Date: 10 November 2016
By:  /s/ Adrian Kemp
 
Name: Adrian Kemp
 
Title: Company Secretary