1st Quarter Results (part 2 of 2)

Condensed Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Cash Flows

Condensed Consolidated Statement of Changes in Equity

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

Notes to the Interim Financial Statements

These unaudited condensed consolidated interim financial statements ("interim financial statements") for the quarter ended 31 March 2011 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union and as issued by the International Accounting Standards Board. These interim financial statements have been prepared using the same accounting policies and methods of computation as followed in the most recent annual financial statements. Details of the accounting policies applied are those set out in AstraZeneca PLC's Annual Report and Form 20-F Information 2010.

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

The information contained in Note 4 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2010.

The comparative figures for the financial year ended 31 December 2010 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

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

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

Profit before tax for the quarter ended 31 March 2011 is stated after charging restructuring costs of $143 million ($95million for the first quarter 2010). These have been charged to profit as follows:

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, sales and marketing practices. The matters discussed below constitute the more significant developments since publication of the disclosures concerning legal proceedings in the Company's Annual Report and Form 20-F Information 2010. Unless noted otherwise below or in the Annual Report and Form 20-F Information 2010, no provisions have been established in respect of the claims discussed below.

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

Matters disclosed in respect of the first quarter of 2011

Atacand

Patent litigation - Canada

As previously reported, in December 2010, AstraZeneca received a second Notice of Allegation from Teva Canada Limited (Teva) in respect of Canadian Atacand substance patent no. 2,040,955 (the '955 patent) and formulation patent no. 2,083,305 (the '305 patent) listed on the Canadian Patent Register for Atacand. Teva has confirmed it will await the expiry of the '955 patent. AstraZeneca did not commence an application in response.

In March 2011, AstraZeneca received a Notice of Allegation from Apotex Inc. (Apotex) in respect of the '955 and '305 patents listed on the Canadian Patent Register for Atacand. Apotex has confirmed it will await the expiry of the '955 patent. AstraZeneca did not commence an application in response.

Patent litigation - Brazil

As previously reported, in October 2010, AstraZeneca filed an infringement action with a request for an interlocutory injunction against Sandoz do Brasil Industria Farmaceutica Ltda (Sandoz) in the Central Court of São Paolo. The Court denied the request for an interlocutory injunction. AstraZeneca appealed the decision and in February 2011, the Court of Appeal upheld the lower court's decision to deny the request for an interlocutory injunction. The main infringement action continues.

Patent litigation - EU

As previously reported, in Portugal, a request was filed with the Lisbon Administrative Court of First Instance in December 2009 seeking a preliminary injunction to suspend the marketing authorisations for generic candesartan cilexetil granted to Sandoz Farmacêutica Limitada (Sandoz). The Court denied the preliminary injunction. The decision was appealed and the Court of Appeal ordered the Court of First Instance to hold a hearing. After a hearing in February 2011 the Lisbon Administrative Court of First Instance granted the request for a preliminary injunction and ordered the suspension of the marketing authorisations granted to Sandoz until 24 October 2012, i.e. the date of expiry of the supplementary protection certificate. This decision can be appealed.

Atacand Plus (candesartan cilexetil/hydrochlorothiazide)

Patent litigation - Canada

As previously reported, in April 2010, AstraZeneca received a Notice of Allegation from Pharmascience Inc. (PMS) in respect of the Atacand Plus formulation patent no. 2,083,305 (the '305 patent) listed on the Canadian Patent Register for Atacand Plus. AstraZeneca commenced a proceeding in response in June 2010. In February 2011, AstraZeneca discontinued its application.

As previously reported, in December 2010, AstraZeneca received a Notice of Allegation from PMS in respect of the Atacand Plus combination patent no. 2,125,251 (the '251 patent). AstraZeneca commenced an application in response in February 2011.

In January 2011, AstraZeneca received two Notices of Allegation from Teva Canada Limited (Teva) in respect of the '251 and the '305 patents. Teva has agreed to await the expiry of the '955 patent. AstraZeneca commenced applications in response in March 2011.

Crestor (rosuvastatin calcium)

Patent litigation - US

US Patent No. RE37,314 (the '314 patent)

As previously disclosed, in June 2010, the US District Court for the District of Delaware found the '314 patent valid and enforceable and infringed by the eight generic defendants. The defendants appealed the decision to the Court of Appeals for the Federal Circuit. AstraZeneca and Shionogi Seiyaku Kabushiki Kaisha filed a comprehensive responsive brief in March 2011. Defendants filed reply briefs and briefing is now complete. A date for oral argument has not been set.

505(b)(2) New Drug Application for rosuvastatin zinc tablets (the '314 patent)and US Patent Nos. 6,858,618 (the '618 patent) and 7,030,152 (the '152 patent)

As previously reported, in October 2010, AstraZeneca and Shionogi Seiyaku Kabushiki Kaisha commenced a patent infringement action in the US District Court for the District of Delaware against Watson Laboratories, Inc. (Watson) for infringement of the '314 patent. In March 2011, the Court entered an order based on a stipulation which precludes Watson from re-litigating the invalidity and unenforceability issues currently pending before the Federal Circuit in the Crestor appeal involving the '314 patent. The Court has set a case-schedule for discovery and other litigation events, including a trial date in May 2012. On 19 April 2011, in this case, AstraZeneca moved to amend the complaint to add The Brighams & Women's Hospital as a co-plaintiff and add claims of infringement of the '618 and '152 method patents.

Abbreviated New Drug Applications for rosuvastatin calcium tablets (the '618 and '152 patents)

In 2010, AstraZeneca and The Brighams & Women's Hospital, AstraZeneca's licensor of the '152 patent (together the Plaintiffs), filed ten patent infringement actions involving Crestor in the US District Court for the District of Delaware, based on the '152 patent and the '618 patent. As previously reported in December 2010, the Court dismissed nine of the infringement actions for lack of subject-matter jurisdiction. In January 2011, the Plaintiffs appealed the dismissals to the Federal Circuit. The Plaintiffs also asked the District Court to stay the remaining action against Sandoz Inc. pending the outcome of the appeals. In March 2011, the Plaintiffs filed an opening brief in the Federal Circuit.

Palmetto Pharmaceuticals, LLC v. AstraZeneca Pharmaceuticals LP (Infringement Suit)

AstraZeneca Pharmaceuticals LP v. Palmetto Pharmaceuticals, LLC (Declaratory Judgment suit)

On 5 April 2011, Palmetto Pharmaceuticals, LLC (Palmetto) filed a patent infringement suit in the US District Court for the District of South Carolina asserting that AstraZeneca's sales of Crestor induce infringement of Palmetto's US patent no. 6,465,516 (the '516 patent), for which an Ex Parte Reexamination Certificate was issued on 5 April 2011.

On 7 April 2011, AstraZeneca filed a declaratory judgment action in the US District Court for the District of Delaware against Palmetto seeking a judgment of non-infringement and invalidity of Palmetto's '516 patent.

On 26 April 2011, AstraZeneca filed a motion seeking dismissal or, alternatively, summary judgment of non-infringement in Palmetto's patent infringement suit in the District of South Carolina.

Patent litigation - Canada

As previously reported, in February 2010, AstraZeneca received a Notice of Allegation from Pharmascience Inc. (PMS) in respect of Crestor substance patent no. 2,072,945 (the '945 patent) and formulation patent no. 2,313,783 (the '783 patent). AstraZeneca commenced an application in response in April 2010. A 4-day hearing will commence 9 January 2012.

As previously reported, in August 2010, AstraZeneca received a Notice of Allegation from Mylan Pharmaceuticals ULC (Mylan) in respect of the '945 and '783 patents and formulation patent 2,315,141 listed on the Canadian Patent Register for Crestor. In April 2011, AstraZeneca reached a comprehensive settlement resolving the litigation and as part of the agreement, Mylan may enter the Canadian market in April 2012, or earlier in certain circumstances.

Patent litigation - EU

In Portugal, in February and March 2011, the Appeal Court confirmed the preliminary injunctions to suspend the marketing authorisations granted to Teva Pharma Lda and Sandoz Farmaceutica Lda and dismissed the appeal. The suspension of the marketing authorisations will be maintained until a decision is rendered within the main administrative action.

Patent litigation - Brazil

AstraZeneca filed an administrative action against the administrative body ANVISA for a preliminary injunction for immediate suspension of the decision to grant market approval of Germed Farmacêutica Ltda's (Germed) generic rosuvastatin and to revoke the marketing approval. The preliminary injunction was partially granted on 4 March 2011. On 15 March 2011 the preliminary injunction was dismissed by the court of first instance. AstraZeneca has appealed the decision. On 18 March 2011, AstraZeneca filed a patent infringement action against Germed with a request for a preliminary injunction. On 31 March 2011 the court denied AstraZeneca's request. AstraZeneca appealed the decision and on 14 April 2011 the Reporting Judge of the Appeal Court rejected the request. AstraZeneca is awaiting the decision by the panel of the Appeal Court.

Iressa

Both the Osaka and Tokyo courts have issued decisions regarding the Iressa product liability litigation (the details of which have been previously reported). On 25 February 2011, the Osaka District Court issued its decision, dismissing one claim, and ordering AstraZeneca to pay approximately $670,000 for the remaining three claims, plus interest. AstraZeneca is appealing the Osaka decision. On 23 March 2011, the Tokyo District Court issued its decision dismissing one Iressa claim and ordering AstraZeneca and the Japanese Ministry of Health, Labour and Welfare to pay approximately $192,000 on the remaining two claims, plus interest. AstraZeneca is appealing the Tokyo decision.

Nexium (esomeprazole magnesium)

Patent litigation - US

Abbreviated New Drug Applications (ANDAs)

As previously reported, in January 2011, AstraZeneca entered into an agreement to settle the litigation with Dr Reddy's Laboratories Ltd and Dr Reddy's Laboratories Inc (together DRL), a prior ANDA filer. As a result of the DRL settlement and entry of a consent judgment, all of the DRL ANDA litigation was dismissed.

As to the remaining ANDA filers, as previously reported, in 2008, AstraZeneca received a Paragraph IV Certification notice-letter from Sandoz Inc. (Sandoz) stating that Sandoz had submitted an ANDA for approval to market esomeprazole magnesium delayed-release capsules. In 2009, AstraZeneca commenced patent infringement litigation in the US District Court for the District of New Jersey. In 2009, the Court stayed the Sandoz patent infringement litigation. In view of the settlement with DRL in January 2011, the Court referred the matter back to Magistrate Judge Bongiovanni for scheduling and further proceedings. On 26 April 2011, the magistrate judge entered an order staying for one month the case-schedule she entered for this case on 14 April 2011.

In addition, as previously reported, in 2009, AstraZeneca received a Paragraph IV Certification notice-letter from Lupin Limited (Lupin) stating that Lupin had submitted an ANDA for approval to market esomeprazole magnesium delayed-release capsules. In October 2009, AstraZeneca commenced patent infringement litigation against Lupin in the US District Court for the District of New Jersey. In March 2010, the Court stayed the Lupin patent infringement litigation. In view of the settlement with DRL in January 2011, the Court has also referred the Lupin matter back to Magistrate Judge Bongiovanni for scheduling and further proceedings.

505(b)(2) New Drug Application for esomeprazole strontium capsules

As previously reported in December 2010, AstraZeneca received a Paragraph IV Certification notice-letter from Hanmi USA Inc. (Hanmi) stating that it had submitted a New Drug Application under section 505(b)(2) for FDA approval to market 20 and 40mg esomeprazole strontium capsules. Hanmi alleges non-infringement or invalidity of 11 patents listed in the FDA's Orange Book with reference to Nexium. AstraZeneca commenced a patent infringement action against Hanmi in the United States District Court for the District of New Jersey in February 2011.

Patent litigation - Canada

As previously reported, AstraZeneca commenced a patent infringement action against Apotex Inc. (Apotex) in October 2010. Trial is set to begin in September 2013. In response to indications in the Canadian market that Apotex launched its generic esomeprazole magnesium product on 7 March 2011, AstraZeneca brought a motion for interim and interlocutory injunctions on 11 March 2011 to prevent such sales pending determination of the patent infringement action between the parties. On 19 April 2011, the Canadian Federal Court conducted a hearing on the motion. The Court reserved judgment.

In March 2011, Apotex served AstraZeneca with a claim for damages pursuant to Section 8 of the Patented Medicines (Notice of Compliance) Regulations. AstraZeneca is considering its response.

Patent Litigation - EU: 10-year countries

In the UK, Consilient Health Limited (Consilient) was granted approval for a generic esomeprazole product manufactured by Krka, d.d., Novo Mesto (Krka) in Slovenia. AstraZeneca initiated infringement proceedings against both companies in September 2010. Consilient and Krka have agreed not to launch their product pending the outcome of the main infringement case and AstraZeneca has undertaken to be liable for losses of the defendants and third parties if the injunction is lifted at a later date. The trial will start on 23 January 2012.

In the UK, in October 2010 AstraZeneca was served an invalidity case in which Ranbaxy (UK) Ltd (Ranbaxy UK) claimed that the Nexium esomeprazole magnesium patent (EP 1020461) and the esomeprazole magnesium trihydrate patent (EP 0984957) are invalid in the UK. Ranbaxy UK further requested the court to confirm that its generic esomeprazole product does not infringe either patent if launched in the UK. In March 2011 AstraZeneca filed suit against Ranbaxy UK claiming that its generic esomeprazole product infringes the Nexium esomeprazole magnesium patent (EP 1020461). The trial of the non-infringement part will commence on 7 June 2011. The invalidity part has been stayed pending the non-infringement trial.

In Germany, in December 2010 the court rejected AstraZeneca's request for preliminary injunctions to prevent Krka, d.d., Novo Mesto, TAD Pharma GmbH, Abz-Pharma GmbH, CT Artzneimittel GmbH, ratiopharm GmbH, Teva GmbH, Hexal AG and Sandoz Pharmaceuticals GmbH from marketing and selling generic esomeprazole products in Germany. The decision was published in March 2011. AstraZeneca has decided not to appeal.

In Italy, in the Court of Turin, EG s.p.a. (a company in the Stada group) (EG) filed a law suit in June 2010 claiming the Nexium esomeprazole magnesium patent (EP 1020461) as invalid in Italy. These proceedings are in early stages. AstraZeneca has added a counterclaim of infringement against EG and in February 2011, AstraZeneca filed a request for and received a preliminary injunction against EG. The injunction was revoked in April 2011.

In February and March 2011, in the District Court of Trieste, AstraZeneca was granted preliminary injunctions against Teva Italia s.r.l., ratiopharm GmbH, ratiopharm Italia s.r.l., Doc Generici s.r.l., Sandoz Pharmaceuticals GmbH, Sandoz s.p.a. and Mylan s.p.a. The generic companies appealed and in March 2011 the injunctions were revoked. In February and March 2011 in Milan, generic companies including Mylan s.p.a., Sandoz s.p.a., Crinos s.p.a., Ranbaxy Italia s.p.a., Zentiva ks and Zentiva Italia s.r.l. initiated preliminary proceedings for declaratory judgments of non-infringement regarding esomeprazole magnesium patent (EP 1020461). Initial hearings are scheduled for May 2011. In February in Trieste, Mylan s.p.a. filed law suits claiming the Nexium esomeprazole magnesium patent (EP 1020461) and Nexium formulation patent (EP 0984773) as invalid in Italy. Separate hearings are set for 13 July 2011 and 15 July 2011 respectively.

In France, ratiopharm GmbH and Laboratoire ratiopharm S.A. (together ratiopharm) filed a law suit against AstraZeneca in August 2010 claiming the Nexium esomeprazole magnesium patent (EP 1020461) as invalid in France. ratiopharm has since withdrawn this law suit. Ethypharm S.A. filed a law suit against AstraZeneca in August 2010 claiming the Nexium esomeprazole magnesium patent (EP 1020461) and a cloud-point formulation patent (EP 1124539) as invalid in France. The next hearing in these cases will be in June 2011. In February 2011, Mylan S.A.S. filed a law suit against AstraZeneca claiming the Nexium esomeprazole magnesium patent (EP 1020461) as invalid in France. In April 2011, AstraZeneca filed a patent infringement suit against Ethypharm S.A. for infringement of the Nexium esomeprazole magnesium patent (EP1020461) and the Nexium process patent (EP 0773940) and requested a preliminary injunction against Ethypharm S.A. A preliminary injunction hearing is scheduled for May 2011.

Patent Litigation - EU: 6-year countries

In Denmark, in 2010, the court granted AstraZeneca preliminary injunctions preventing Sandoz from continuing to sell the product based on infringement of the Nexium esomeprazole magnesium patent (EP 1020461) and the Nexium process patent (EP 0773940). The injunctions were upheld by the Appeal Court in February 2011.

In Austria, in February 2011, the court denied AstraZeneca's request for preliminary injunction to prevent ratiopharm Arzneimittel Vertriebs-GmbH from marketing and selling generic esomeprazole magnesium product in Austria. AstraZeneca has appealed this decision.

In Finland in March 2011, AstraZeneca initiated a declaratory action requesting the District Court of Helsinki to confirm that Krka Sverige AB and ratiopharm GmbH would infringe a patent relating to esomeprazole if they were to commercialise generic esomeprazole magnesium products in Finland.  AstraZeneca initiated a similar declaratory action against Ranbaxy (UK) Limited in December 2009 and the trial has been scheduled for 25 and 26 May 2011.

In Spain, AstraZeneca's request for a preliminary injunction against Sandoz Farmacéutica S.A., Bexal Farmacéutica S.A., and Acost Comercial Genericpharma, S.L. (all in the Sandoz group) was initially granted by the court but revoked in July 2010 after a hearing. AstraZeneca has appealed this ruling and awaits the appellate decision. Separately, in AstraZeneca's main patent infringement action against Sandoz Farmacéutica S.A., Bexal Farmacéutica S.A., and Acost Comercial Genericpharma, S.L., trial is scheduled for September 2011.

In Ireland, in August 2010, AstraZeneca initiated a main action against Krka, d.d., Novo Mesto and Pinewood Laboratories Ltd claiming that the sale and marketing of their generic esomeprazole magnesium products infringes the Nexium esomeprazole magnesium patent (EP 1020461). The defendants have filed a counter action claiming that EP 1020461 is invalid in Ireland.

In Lithuania and Estonia in March 2011, the Appeal Courts upheld the interlocutory injunctions against Krka, d.d., Novo Mesto to restrain this company from commercialising generic magnesium esomeprazole product in Lithuania and Estonia.

Patent litigation - Norway

In Norway, in July 2008 Hexal AG, Sandoz AS and Sandoz A/S initiated an invalidity case regarding two esomeprazole-related patents. In December 2009, the Court of Oslo invalidated a formulation patent but upheld a substance patent related to esomeprazole. In March 2011 the Appeal Court confirmed the decision from the Court of Oslo.

Patent Proceedings

As previously disclosed, the European Patent Office (EPO) published the grant of two patents that relate to Nexium (EP 1020461) and Nexium i.v. (EP1020460) in July 2009. The period for filing Notices of Opposition to the grant of these new patents expired in April 2010. Thirteen Notices of Opposition have been filed in relation to EP 1020461 and six Notices of Opposition in relation to EP 1020460. The EPO has now issued summonses to attend oral hearing proceedings relating to both sets of oppositions. Oral proceedings relating to EP 1020461 will be held on 7, 8 and 9 June 2011. Oral proceedings relating to EP 1020460 will be held on 30 June and 1 July 2011.

Pulmicort Respules (budesonide inhalation suspension)

In January 2011, the Court of Appeals for the Federal Circuit denied Apotex Group's petition for an en banc rehearing of their appeal of the preliminary injunction entered by the US District Court for the District of New Jersey.

In March 2011, the Court ordered the patent case against Sandoz, Inc. to be consolidated with the already consolidated actions against Breath Ltd. (now Watson Pharmaceuticals, Inc.) and the Apotex Group. A new scheduling order for the consolidated cases was subsequently entered by the Court. No trial date has been set.

Seroquel (quetiapine fumarate)

Sales and marketing practices

In March 2011, AstraZeneca completed a previously announced settlement in principle to resolve Seroquel-related consumer protection and deceptive trade practice claims under state law with 37 states and Washington, DC as part of the National Association of Attorneys General for $68.5m in the aggregate (as to which AstraZeneca previously had established a provision).

As previously reported, the states of Alaska, Arkansas, Mississippi, Montana, New Mexico, South Carolina and Utah have sued AstraZeneca under various state laws generally alleging that AstraZeneca made false and/or misleading statements in connection with the marketing and promotion of Seroquel. In February 2011, the state of Utah filed an amended complaint after a federal judge had dismissed its complaint in December 2010.

In March 2011, the US Court of Appeals for the Eleventh Circuit affirmed the November 2008 dismissal by the Seroquel Multi-DistrictLitigation (MDL) court of a putative nationwide class action lawsuit brought on behalf of all individual and non-governmental third-party payers of Seroquel, which had alleged that AstraZeneca promoted Seroquel for off-label uses and misled class members into believing that Seroquel was superior to lower-cost alternative medicines.

Product liability

As of 31 March 2011, approximately 26,085 claims have been settled in principle.

As of 31 March 2011, AstraZeneca was aware of approximately 2,600 Seroquel US product liability claims that have not been settled in principle. The majority of these remaining claims are pending in the New Jersey, New York and California state courts, although some claims are pending in a handful of other state courts and in the federal MDL.

As of 31 March 2011, legal defence costs of approximately $743m have been incurred in connection with Seroquel-related product liability claims. As previously disclosed, AstraZeneca settled its claims against several of its insurers for a substantial part of those legal defence costs.

As previously disclosed, disputes continue with other insurers about the availability of coverage under certain insurance policies for legal defence costs and potential damages amounts. As of 31 March 2011, out of the legal defence costs of $743m mentioned above, AstraZeneca believes that approximately $128m is covered by these other insurance policies.

Patent litigation - Brazil

As previously reported, in January 2006 AstraZeneca filed a lawsuit before the Federal Courts of Rio de Janeiro seeking judicial declaration extending the term of one of its patents from 2006 to 2012. In March 2011, the Federal Courts of Rio de Janeiro denied AstraZeneca's request for an extension. AstraZeneca has decided not to appeal.

Seroquel XR

Patent litigation - US

As previously reported, in December 2010, Torrent Pharmaceuticals Ltd. (Torrent) filed a Motion for Clarification and Reconsideration of the decision by the US District Court for the District of New Jersey interpreting claims of the Seroquel XR formulation patent (US patent no. 5,948,437). In February 2011, the Court denied Torrent's motion.

As previously reported, in July 2010, AstraZeneca received a Paragraph IV Certification notice-letter from Osmotica Pharmaceutical Corporation (Osmotica) indicating that it was seeking approval to market generic versions of 200, 300 and 400mg Seroquel XR tablets before the expiration of US Patent No. 5,948,437 (the '437 patent). In August 2010, AstraZeneca filed a law suit in the US District Court for the District of New Jersey against Osmotica. In April 2011, AstraZeneca received another Paragraph IV Certification notice-letter from Osmotica indicating that it was seeking approval to market generic versions of 50 and 150mg Seroquel XR tablets before the expiration of the '437 patent.

As previously reported, in October 2010, AstraZeneca received a Paragraph IV Certification notice-letter from Mylan Pharmaceuticals Inc. (Mylan) indicating that it was seeking approval to market generic versions of 200mg Seroquel XR tablets before the expiration of the '437 patent. In October 2010, AstraZeneca filed a lawsuit in the US District Court for the District of New Jersey against Mylan. In April 2011, AstraZeneca received another Paragraph IV Certification notice-letter from Mylan indicating that it was seeking approval to market generic versions of 50, 150, 300 and 400mg Seroquel XR tablets before the expiration of the '437 patent.

Patent litigation - EU

In the UK, Teva UK Limited and Teva Pharmaceuticals Limited (together, Teva) issued revocation proceedings against AstraZeneca in December 2010. Teva claims that the formulation patent for Seroquel XR (EP 0907364) is invalid in the UK. Similar revocation actions were filed by Accord Healthcare Limited, Intas Pharmaceuticals Limited, Hexal AG and Sandoz Ltd in March and April 2011.

In Hungary, AstraZeneca was notified that Teva Pharmaceuticals Limited and Teva Gyógyszergyár Zrt (together Teva) had filed a request for nullity of the Hungarian formulation patent for Seroquel XR with the Hungarian Patent Office in January 2011. Teva claims that Hungarian patent no. 225 152 should be declared null and void. AstraZeneca is preparing its response.

In Germany, Teva Deutschland GmbH (Teva) issued revocation proceedings against AstraZeneca in February 2011. Teva claims that the formulation patent for Seroquel XR (EP 0907364) is invalid in Germany. AstraZeneca filed its response in March 2011.

Synagis (palivizumab)

As previously reported, this matter concerned MedImmune's action seeking a declaratory judgment that the Queen patents owned by PDL BioPharma, Inc. (PDL) are invalid and/or not infringed by either Synagis and/or motavizumab, and that no further royalties are owed under a patent licence MedImmune and PDL signed in 1997. The matter was settled in February 2011 with PDL agreeing to pay MedImmune $92.5m ($65m in February 2011 and $27.5m in February 2012). In addition, PDL agreed to the release of approximately $9m in escrow to MedImmune. MedImmune will pay no further royalties to PDL relative to Synagis.

Vimovo  (fixed-dose combination of naproxen and esomeprazole) 

In April 2010, the FDA approved Vimovo for marketing in the US. Vimovo was co-developed by POZEN Inc. (Pozen) and AstraZeneca via a collaboration agreement originating in August 2006. AstraZeneca commenced marketing of Vimovo in the US in the third quarter of 2010. Seven patents are listed in the FDA's Orange Book referencing Vimovo.

In March 2011, the FDA's web-site reported a filing of a first Abbreviated New Drug Application (ANDA) containing Paragraph IV Certifications and seeking approval to market generic copies of the 375/20 mg and 500/20 mg doses of Vimovo.

On 14 March 2011, AstraZeneca received a Paragraph IV Certification Notice-letter in respect of Vimovo from Dr. Reddy's Laboratories, Inc. and Dr. Reddy's Laboratories, Ltd. (together, DRL). DRL certified under Paragraph IV in its ANDA that US Patent No. 6,926,907 (the '907 patent) is invalid, unenforceable, and/or not infringed. AstraZeneca licenses the '907 patent from Pozen and, with a February 2023 expiry, the patent is the last expiring of the seven Orange Book listed patents. On 21 April 2011, AstraZeneca and Pozen sued DRL in the US District Court for the District of New Jersey.

Zomig (zolmitriptan)

Patent litigation - Canada

In April 2011, AstraZeneca received a Notice of Allegation from Apotex Inc. (Apotex) in respect of Canadian Zomig product-by-process patent no. 2,572,508 listed on the Canadian Patent Register for Zomig. Apotex did not address the listed 2,064,815 substance patent (the '815 patent), which expires in June 2011. Therefore, Apotex cannot receive a marketing approval before expiration of the '815 patent. AstraZeneca is evaluating the allegations.

Other Commercial Litigation

Dr. George Pieczenik v. AstraZeneca Pharmaceuticals LP, AstraZeneca LP, et al.

On 23 March 2011, the District Court granted the defendants' joint motion to dismiss the plaintiff's claims with prejudice. On 24 March 2011 the plaintiff filed a pro forma Notice of Appeal from the order granting dismissal of the patent infringement and Racketeering Institution and Corrupt Organisation Act claims and denying the motion for recusal.

Resonant Biotechnologies, LLC v. AstraZeneca LP, et al.

In April 2011, AstraZeneca LP, a number of AstraZeneca entities (collectively AstraZeneca) and multiple other entities were named in a patent infringement lawsuit filed in the United States District Court for the District of Delaware. Plaintiff purports to be the exclusive licensee of US patent no. 6,218,194 (the '194 Patent) which is titled "Analytical Methods And Apparatus Employing An Optical Sensor Device With Refractive Index Modulation." Specific to AstraZeneca, Plaintiff alleges that AstraZeneca infringes the '194 patent "by using the Corning Epic® system", described in the complaint as a "high-throughput label-free screening device." Plaintiff seeks monetary relief. AstraZeneca is considering its response.

Network Signatures, Inc. v. AstraZeneca Pharmaceuticals LP

In April 2011, AstraZeneca Pharmaceuticals LP was named in a patent infringement law suit filed in the United States District Court for the Central District of California. The plaintiff purports to have title to United States Patent No. 5,511,122 (the '122 patent) entitled "Intermediate Network Authentication." The plaintiff alleges that AstraZeneca's use of "digital certificates and digital signatures implemented through the use of public key infrastructure to facilitate communication with its employees and customers" infringes the '122 patent. The plaintiff seeks monetary and injunctive relief. AstraZeneca is considering its response.

Other Pricing Litigation

Average Wholesale Price Litigation

In February 2011, the US District Court for the District of Massachusetts granted final approval of two previously announced settlements that resolve class action law suits brought by Massachusetts-only and multi-state classes of payers of Zoladex for $13m and $90m, respectively (which amounts have been paid by AstraZeneca).

340B Class Action Litigation

In March 2011, the US Supreme Court reversed a decision of the US Court of Appeals for the Ninth Circuit and held that covered entities under the 340B program do not have enforceable rights to sue as third party beneficiaries of the Pharmaceutical Pricing Agreement, thereby dismissing this case and entitling AstraZeneca, and the other defendants, to judgment as a matter of law.

Other Anti-trust Litigation and Investigations

Drug importation anti-trust litigation

As previously disclosed, in August 2004, Californian retail pharmacy plaintiffs filed an action in the Superior Court of California alleging a conspiracy by AstraZeneca and approximately 15 other pharmaceutical manufacturer defendants to set the price of drugs sold in California at or above the Canadian sales price for those same drugs and otherwise restrict the importation of pharmaceuticals into the US.

In March 2011, the Superior Court of California granted the defendants' motion for summary judgment on grounds that the plaintiffs failed to prove their allegations of a conspiracy and that the defendants were entitled to judgment as a matter of law. In April 2011, the plaintiffs appealed the decision to the Court of Appeal of the State of California.

Other Actual and Threatened Government Investigations and Related Litigation

Foreign Corrupt Practices Act

As previously reported, AstraZeneca has received inquiries from the US Department of Justice and the Securities and Exchange Commission in connection with an investigation into Foreign Corrupt Practices Act issues in the pharmaceutical industry across several countries. AstraZeneca is co-operating with these inquiries and is investigating, among other things, sales practices, internal controls, certain distributors, and interactions with healthcare providers, institutions, and other government officials. AstraZeneca is investigating inappropriate conduct in certain countries, including China. AstraZeneca's investigations are ongoing and additional governmental authorities could become involved. It is not currently possible to predict the scope, duration or outcome of these matters, which could involve the payment of fines or other penalties.

Tax

Transfer pricing and other international tax contingencies

On 28 March 2011, AstraZeneca announced that HM Revenue & Customs in the UK and the US Internal Revenue Service had agreed the terms of an Advance Pricing Agreement regarding transfer pricing arrangements for AstraZeneca's US business covering the 13 year period from 2002 to the end of 2014. The Company also announced that an agreement had been reached on a related valuation matter arising on integration of the legacy Astra and legacy Zeneca US businesses in 2000 following the global AstraZeneca merger in 1999. The provision for US transfer pricing and related valuation matters is a substantial proportion of the total net accrual for transfer pricing and other international tax contingencies of $2,310m disclosed in Note 25 of the Financial Statements on page 195 of the AstraZeneca Annual Report and Form 20-F Information 2010.

Based on the above mentioned agreements, AstraZeneca now expects to pay a net amount of $1.1bn to resolve all US transfer pricing and related valuation matters for the period from 2000 to the end of 2010 and $540m of provisions have been released to earnings in the first quarter.The net amount payable of $1.1bn reflects expected US tax payments and updated estimates of corresponding tax refunds in other jurisdictions.

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

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

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