27th Apr 2006 10:00
AstraZeneca PLC27 April 2006 Consolidated Income Statement For the Quarter ended 31 March 2006 2005 $m $m Sales 6,180 5,743 Cost of sales (1,251) (1,410) Distribution costs (54) (50) Research and development (861) (865) Selling, general and administrative expenses (2,115) (2,007) Other operating income 77 42 Operating profit 1,976 1,453 Finance income 200 119 Finance expense (132) (86) Profit before tax 2,044 1,486 Taxation (620) (443) Profit for the period 1,424 1,043 Attributable to: Equity holders of the Company 1,425 1,040 Minority interests (1) 3 1,424 1,043 Basic earnings per $0.25 Ordinary Share $0.90 $0.63 Diluted earnings per $0.25 Ordinary Share $0.90 $0.63 Weighted average number of Ordinary Shares in issue (millions) 1,579 1,640 Diluted average number of Ordinary Shares in issue (millions) 1,582 1,640 Consolidated Balance Sheet As at 31 March 31 December 2006 2005 $m $mASSETS Non-current assets Property, plant and equipment 7,031 6,985Intangible assets 3,062 2,712Other investments 243 256Deferred tax assets 1,307 1,117 11,643 11,070 Current assets Inventories 2,180 2,206Trade and other receivables 5,158 4,778Other investments 1,624 3,111Income tax receivable 103 183Cash and cash equivalents 2,954 4,979 13,506 13,770Total assets 25,149 24,840 LIABILITIES Current liabilities Interest bearing loans and borrowings (93) (90)Trade and other payables (5,499) (5,466)Income tax payable (1,547) (1,283) (7,139) (6,839)Non-current liabilities Interest bearing loans and borrowings (1,078) (1,111)Deferred tax liabilities (1,291) (1,112)Retirement benefit obligations (1,575) (1,706)Provisions (280) (309) Other payables (74) (72) (4,298) (4,310)Total liabilities (11,437) (11,149)Net assets 13,712 13,691 EQUITY Capital and reserves attributable to equity holders Share capital 395 395 Share premium account 1,051 692 Other reserves 1,837 1,831 Retained earnings 10,335 10,679 13,618 13,597 Minority equity interests 94 94 Total equity and reserves 13,712 13,691 Consolidated Cash Flow Statement For the Quarter ended 31 March 2006 2005 $m $mCash flows from operating activities Operating profit before taxation 1,976 1,453Depreciation and amortisation 282 309Increase in working capital (365) (111)Other non-cash movements 41 170Cash generated from operations 1,934 1,821 Interest paid (12) (6) Tax paid (410) (306) Net cash inflow from operating activities 1,512 1,509 Cash flows from investing activities Acquisition of business (203) -Movement in short term investments and fixed deposits (1,524) 158Purchases of property, plant and equipment (181) (213)Disposals of property, plant and equipment 12 8Purchase of intangible assets (108) (19)Purchase of non-current asset investments (14) (2)Disposals of non-current asset investments 54 -Interest received 65 43Dividends paid by subsidiaries to minority interests (4) (4)Net cash outflow from investing activities (1,903) (29)Net cash (outflow)/inflow before financing activities (391) 1,480 Cash flows from financing activities Proceeds from issue of share capital 362 4Repurchase of shares (564) (481)Dividends paid (1,442) (1,079)Movement in short term borrowings 2 (2)Net cash outflow from financing activities (1,642) (1,558)Net decrease in cash and cash equivalents in the period (2,033) (78) Cash and cash equivalents at the beginning of the period 4,895 3,927Exchange rate effects 7 (10)Cash and cash equivalents at the end of the period 2,869 3,839Cash and cash equivalents consist of:Cash and cash equivalents 2,954 3,905Overdrafts (85) (66) 2,869 3,839 Consolidated Statement of Recognised Income and Expense For the Quarter ended 31 March 2006 2005 $m $m Profit for the period 1,424 1,043 Foreign exchange adjustments on consolidation 87 (381) Available for sale gains/(losses) taken to equity 18 (15) Actuarial gain for the period 151 20 Tax on items taken directly to reserves (33) (14) Total recognised income and expense for the period 1,647 653 Attributable to: Equity holders of the Company 1,647 650 Minority interests - 3 Notes to the Interim Financial Statements 1 BASIS OF PREPARATION AND ACCOUNTING POLICIES The unaudited financial statements for the quarter ended 31 March 2006 have beenprepared in accordance with International Accounting Standards and InternationalFinancial Reporting Standards (collectively "IFRS") as adopted by the EuropeanUnion (EU). Details of the accounting policies applied are those set out inAstraZeneca PLC's Annual Report and Form 20-F Information 2005. These accountingpolicies reflect the adoption in the second quarter of 2005 of the amendment toIAS39 'Financial Instruments: Recognition and Measurement - The Fair ValueOption'; the comparative information in these interim financial statements hasbeen restated accordingly. The effect of adoption on the comparative results wasnot significant. The information contained in Note 3 updates the disclosures concerning legalproceedings and contingent liabilities in the Company's Annual Report and Form20-F Information 2005. These interim financial statements do not constitute statutory accounts of theGroup within the meaning of Section 240 of the Companies Act 1985. Statutoryaccounts for the year ended 31 December 2005 will be filed with the Registrar ofCompanies following the Company's Annual General Meeting. The auditors' reporton those accounts was unqualified and did not contain any statement underSection 237 of the Companies Act 1985. 2 NET FUNDS The table below provides an analysis of net funds and a reconciliation of netcash flow to the movement in net funds. 1 Jan Cash Non-cash Exchange At 31 March 2006 flow movements movements 2006 $m $m $m $m $m Loans due after 1 year (1,111) - 33 - (1,078) Total loans (1,111) - 33 - (1,078) Other investments - current 1,624 1,524 (38) 1 3,111Cash and cash equivalents 4,979 (2,032) - 7 2,954Overdrafts (84) (1) - - (85)Short term borrowings (6) (2) - - (8) 6,513 (511) (38) 8 5,972 Net funds 5,402 (511) (5) 8 4,894 Non-cash movements in the period consist of fair value adjustments under IAS 39. 3 LEGAL PROCEEDINGS and contingent liabilities LosecTM / PrilosecTM (omeprazole) In February 2006, in the legal proceedings in Canada involving Apotex describedin AstraZeneca's Annual Report and Form 20-F Information 2005, the CanadianFederal Court of Appeal upheld a lower court decision that precludes theissuance of a notice of compliance (marketing approval) in Canada for Apotex'sgeneric omeprazole magnesium tablet product until the expiry of an AstraZenecaformulation patent relating to omeprazole in December 2008. This decision doesnot affect the continuing proceedings in the Supreme Court of Canada in whichApotex is appealing a lower court decision to quash Apotex's notice ofcompliance (marketing approval) for its generic omeprazole capsule product, nordoes it affect the stay allowing Apotex to continue selling its omeprazolecapsules in Canada pending a decision by the Supreme Court on Apotex's appeal. NexiumTM (esomeprazole) As previously disclosed, in March 2006 AstraZeneca commenced wilful infringementpatent litigation in the US District Court for the District of New Jerseyagainst IVAX Corporation and its affiliates in response to an Abbreviated NewDrug Application filed by IVAX with the US Food and Drug Administrationregarding IVAX's intent to market a generic version of NexiumTM in the US priorto the expiration of five AstraZeneca patents: 5,714,504; 5,877,192;6,369,085; 6,428,810; and 6,875,872. The expiration dates for these patentsrange from 2014 through to 2019. AstraZeneca has full confidence in and will continue vigorously to defend andenforce its intellectual property rights protecting NexiumTM. SeroquelTM (quetiapine fumarate) Since 2003, AstraZeneca has been served with approximately 130 lawsuits in theUS in which plaintiffs have alleged that they developed diabetes or otherallegedly related injuries, and in some cases pancreatitis, as a result oftaking SeroquelTM and/or other atypical anti-psychotics made by otherpharmaceutical companies. Many of these cases were filed in Missouri in August2005, days before Missouri's tort reform laws became effective. Eli Lilly, themaker of olanzapine, is a defendant in the majority of the cases served onAstraZeneca. Janssen Pharmaceutica and Bristol-Myers Squibb, the makers ofother atypical anti-psychotics, are also defending a number of them. AstraZeneca has also been served with a putative nationwide class actioncomplaint, which was filed in federal court in the Southern District ofIllinois. It is very similar in form and content to the complaint filed in theUS District Court for the Middle District of Florida in 2003 (Susan Zehel-Milleret al. v. AstraZenaca (sic), AstraZenaca Pharmaceuticals LP, (sic)) that soughtcertification of a nationwide class of SeroquelTM users and others, includingindividuals who were alleged to have developed diabetes as a result of usingSeroquelTM. The federal court in Florida denied certification of the class inthe Zehel-Miller case. In early 2005, after the plaintiffs' efforts in thatcase to secure appellate relief failed, the plaintiffs agreed to a voluntarydismissal of all of their claims with prejudice. AstraZeneca is also aware of approximately 360 other cases involving SeroquelTM(and in many instances, other atypical anti-psychotics) and allegations ofdiabetes or other allegedly related injuries that have been filed in variousstates, but these have not been served. Recently, two consortia of plaintiffs' lawyers filed motions with the JudicialPanel on Multidistrict Litigation seeking centralisation of all of the federalcourt cases alleging that SeroquelTM caused diabetes or other allegedly relatedinjuries. AstraZeneca has opposed this motion. The Panel's decision is notexpected before the end of May 2006. AstraZeneca intends to defend vigorously all of the pending cases relating toSeroquelTM. Toprol-XLTM (metoprolol succinate) Following issuance of the summary judgement decision that the Toprol-XLTMpatents are invalid and unenforceable, AstraZeneca has been served with severalputative class action complaints filed in the US District Court for the Districtof Delaware, one such action filed in the US District Court for the District ofMassachusetts and one such action filed in the US District Court for theSouthern District of Florida alleging that AstraZeneca monopolised the marketfor metoprolol succinate by filing patent litigation against KV PharmaceuticalCompany, Andrx Pharmaceuticals LLC and Eon Labs Manufacturing Inc. assertinginvalid and unenforceable patents in violation of US anti-trust laws. Thecomplaints include those by plaintiffs purporting to represent the class ofdistributors who purchased Toprol-XLTM directly from AstraZeneca at allegedlysupra-competitive prices and those by plaintiffs purporting to represent theclass of consumers and third party payers who are indirect purchasers ofToprol-XLTM at allegedly supra-competitive prices. AstraZeneca has appealed theunderlying judgment that the patents are invalid and unenforceable to the USCourt of Appeals for the Federal Circuit. AstraZeneca also denies theallegations of the anti-trust complaints and will vigorously defend them. 4 FIRST QUARTER TERRITORIAL SALES ANALYSIS % Growth 1st Quarter 1st Quarter 2006 2005 Constant $m $m Actual Currency US 2,882 2,500 15 15 Canada 250 248 1 (5) North America 3,132 2,748 14 13 France 415 451 (8) 2 UK 193 188 3 12 Germany 279 315 (11) (2) Italy 314 285 10 22 Sweden 78 80 (3) 11 Europe others 893 846 6 16 Total Europe 2,172 2,165 - 10 Japan 304 337 (10) 1 China 72 62 16 14 Rest of World 500 431 16 15 Total 6,180 5,743 8 12 5 FIRST QUARTER PRODUCT SALES ANALYSIS World US 1st 1st Constant 1st Quarter Quarter Actual Currency Quarter Actual 2006 2005 Growth Growth 2006 Growth $m $m % % $m %Gastrointestinal: Nexium 1,189 1,055 13 16 791 14Losec/Prilosec 344 427 (19) (15) 55 (8)Others 18 17 6 12 3 -Total Gastrointestinal 1,551 1,499 3 6 849 13Cardiovascular: Seloken/Toprol-XL 456 408 12 13 354 21Crestor 387 273 42 45 220 43Atacand 254 235 8 14 58 4Tenormin 76 83 (8) (2) 7 133Zestril 75 87 (14) (8) 6 200Plendil 72 93 (23) (20) 6 (73)Others 70 78 (10) (4) 1 (50)Total Cardiovascular 1,390 1,257 11 15 652 23Respiratory:Pulmicort 328 314 4 7 209 20Symbicort 277 247 12 21 - -Rhinocort 85 92 (8) (7) 61 (9)Oxis 22 23 (4) 5 - -Accolate 18 28 (36) (36) 12 (43)Others 35 42 (17) (10) - -Total Respiratory 765 746 3 8 282 8Oncology:Arimidex 335 256 31 38 128 27Casodex 274 277 (1) 6 66 6Zoladex 231 231 - 6 24 (25)Iressa 50 81 (38) (34) 4 (87)Faslodex 44 29 52 55 25 25Nolvadex 21 28 (25) (18) 1 -Others 3 3 - - - -Total Oncology 958 905 6 12 248 1Neuroscience:Seroquel 807 633 27 29 590 29Local anaesthetics 132 127 4 10 24 41Zomig 93 68 37 43 40 344Diprivan 89 107 (17) (14) 34 (24)Others 15 17 (12) (6) 4 (20)Total Neuroscience 1,136 952 19 22 692 30Infection and Other:Merrem 141 131 8 13 29 -Other Products 68 97 (30) (26) 33 (42)Total Infection and Other 209 228 (8) (4) 62 (28)Aptium Oncology 88 83 6 6 88 6Astra Tech 83 73 14 25 9 50 Total 6,180 5,743 8 12 2,882 15 Shareholder Information ANNOUNCEMENTS AND MEETINGS Annual General Meeting 2006 27 April 2006 Announcement of second quarter and half year 2006 results 27 July 2006 Announcement of third quarter and nine months 2006 26 October 2006results DIVIDENDS The record date for the second interim dividend for 2005 paid on 20 March 2006was 10 February 2006. Ordinary Shares traded ex-dividend on the London andStockholm Stock Exchanges from 8 February 2006. ADRs traded ex-dividend on theNew York Stock Exchange from the same date. Dividends will normally be paid as follows: First interim Announced in July and paid in September Second interim Announced in January/February and paid in March TRADEMARKS The following brand names used in this interim report are trademarks of theAstraZeneca group of companies: Accolate Arimidex Astra Tech Atacand Casodex Crestor Diprivan FaslodexIressa Losec Merrem Nexium Nolvadex Oxis Plendil Prilosec PulmicortPulmicort Respules Rhinocort Seloken Seroquel Symbicort TenorminToprol-XL Zestril Zoladex Zomig ADDRESSES FOR CORRESPONDENCE Registrar and Depositary Registered Office Swedish SecuritiesTransfer Office for ADRs Registration Centre The AstraZeneca Registrar JP Morgan Chase Bank 15 Stanhope Gate VPC ABLloyds TSB Registrars JP Morgan Service Center London PO Box 7822The Causeway PO Box 3408 W1K 1LN SE-103 97 StockholmWorthing South Hackensack UK SwedenWest Sussex NJ 07606-3408BN99 6DA USUK Tel: +44 (0)20 7304 5000 Tel: +46 (0)8 402 9000Tel (freephone in UK): Tel (toll free in US):0800 389 1580 888 697 8018Tel (outside UK): Tel (outside US):+44 (0)121 415 7033 +1 (201) 680 6630 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS In order to utilise the 'Safe Harbor' provisions of the United States PrivateSecurities Litigation Reform Act of 1995, AstraZeneca is providing the followingcautionary statement. This announcement contains forward-looking statementswith respect to the financial condition, results of operations and businesses ofAstraZeneca. By their nature, forward-looking statements and forecasts involverisk and uncertainty because they relate to events and depend on circumstancesthat will occur in the future. There are a number of factors that could causeactual results and developments to differ materially from that expressed orimplied by these forward-looking statements. These factors include, among otherthings, the loss or expiration of patents, marketing exclusivity or trade marks;exchange rate fluctuations; the risk that R&D will not yield new products thatachieve commercial success; the impact of competition, price controls and pricereductions; taxation risks; the risk of substantial product liability claims;the impact of any failure by third parties to supply materials or services; therisk of delay to new product launches; the difficulties of obtaining andmaintaining governmental approvals for products; and the risk of environmentalliabilities. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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