AstraZeneca's H1 and Q2 2024 Financial Results

Strong underlying growth supports FY 2024 guidance upgrade, with both Total Revenue and Core EPS now expected to increase by a mid teens percentage at CER¹

AstraZeneca:

Revenue and EPS summary

Financial performance for H1 2024 (Growth numbers at constant exchange rates)

• Total Revenue up 18% to $25,617m, driven by an 18% increase in Product Sales and continued growth in Alliance Revenue from partnered medicines
• Total Revenue growth from Oncology was 22%, CVRM 22%, R&I 22%, and Rare Disease 15%
• Core Product Sales Gross Margin³ of 82%
• Core Operating Margin of 33%
• Core Tax Rate of 20%
• Core EPS increased 5% to $4.03. The increase in Core EPS was lower than Total Revenue growth principally due to gains recognised in the prior year, specifically a $241m gain on the disposal of Pulmicort Flexhaler US rights (Q1 2023), and a $712m gain relating to updates to contractual arrangements for Beyfortus (Q2 2023)
• Interim dividend increased 7c to $1.00 (77.6 pence, 10.79 SEK) has been declared
• Guidance for FY 2024 increased, with Total Revenue and Core EPS anticipated to grow by a mid teens percentage at CER (previously a low double-digit to low teens percentage). An increase in Collaboration Revenue is not assumed in the upgraded guidance

Pascal Soriot, Chief Executive Officer, AstraZeneca, said:

"Building on our strong growth in the first half of the year and continued underlying demand for our medicines we are upgrading our FY 2024 guidance for both Total Revenue and Core EPS.

At our Investor Day in May we set out a new revenue ambition to deliver $80 billion of Total Revenue by 2030. This is a clear reflection of the substantial growth potential we see from both our approved medicines and those in our late-stage pipeline. Already this year we have announced five positive, potentially practice-changing Phase III studies that are anticipated to meaningfully contribute to our growth.

In the year to date we have continued to make encouraging progress with several disruptive technologies, including antibody drug conjugates, bispecifics, cell and gene therapies, radioconjugates, and weight management medicines, all of which have the potential to drive our growth beyond 2030."

Key milestones achieved since the prior results announcement

• Positive read-outs for Imfinzi in combination with chemotherapy in muscle-invasive bladder cancer (NIAGARA), Calquence in untreated mantle cell lymphoma (ECHO), Enhertu in HR-positive, HER2-low metastatic breast cancer (DESTINY-Breast06)
• US approvals for Imfinzi in combination with chemotherapy followed by Imfinzi monotherapy for primary advanced or recurrent endometrial cancer that is mismatch repair deficient (DUO-E). EU approvals for Truqap in combination with Faslodex for biomarker-positive estrogen receptor-positive, HER2‑negative advanced breast cancer (CAPItello-291), Tagrisso with the addition of chemotherapy for 1st‑line EGFRm NSCLC (FLAURA2). Japan and China approvals for Tagrisso with the addition of chemotherapy for the 1st­­‑line EGFRm NSCLC (FLAURA2)

Guidance

Due to strong underlying growth in Product Sales and Alliance Revenue, the Company raises its Total Revenue and Core EPS guidance for FY 2024 at CER, based on the average foreign exchange rates through 2023.

• An increase in Collaboration Revenue is not assumed in the upgraded guidance (previously assumed a substantial increase)
• Other operating income is expected to decrease substantially (FY 2023 included a $241m gain on the disposal of Pulmicort Flexhaler US rights, and a $712m one-time gain relating to updates to contractual arrangements for Beyfortus)
• The Core Tax rate is expected to be between 18-22%

The Company is unable to provide guidance on a Reported basis because it cannot reliably forecast material elements of the Reported results, including any fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the cautionary statements section regarding forward-looking statements at the end of this announcement.

Currency impact

If foreign exchange rates for July 2024 to December 2024 were to remain at the average rates seen in June 2024, it is anticipated that FY 2024 Total Revenue would incur a low single-digit percentage adverse impact compared to the performance at CER, and Core EPS would incur a mid single-digit percentage adverse impact. The Company's foreign exchange rate sensitivity analysis is provided in Table 17.

Table 1: Key elements of Total Revenue performance in Q2 2024

Key partnered medicines

• Combined sales of Enhertu, recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted $1,772m in H1 2024 (H1 2023: $1,169m).
• Combined sales of Tezspire, recorded by Amgen and AstraZeneca, amounted to $507m in H1 2024 (H1 2023: $257m).

Table 2: Key elements of financial performance in Q2 2024

Table 3: Pipeline highlights since prior results announcement

Upcoming pipeline catalysts

For recent trial starts and anticipated timings of key trial readouts, please refer to the Clinical Trials Appendix, available on www.astrazeneca.com/investor-relations.html.

Corporate and business development

In May 2024, AstraZeneca announced its intention to build a $1.5 billion manufacturing facility in Singapore for antibody drug conjugates (ADCs), enhancing global supply of its ADC portfolio. ADCs are next-generation treatments that deliver highly potent cancer-killing agents directly to cancer cells through a targeted antibody. The planned greenfield facility, supported by the Singapore Economic Development Board, will be AstraZeneca's first end-to-end ADC production site, fully incorporating all steps of the manufacturing process at a commercial scale. Manufacturing of ADCs is a multi-step process that comprises antibody production, synthesis of chemotherapy drug and linker, conjugation of drug-linker to the antibody, and filling of the completed ADC substance.

In May 2024, AstraZeneca completed an additional $140m equity investment in Cellectis, a clinical-stage biotechnology company. The equity investment and a research collaboration agreement, announced in November 2023, will leverage the Cellectis proprietary gene editing technologies and manufacturing capabilities, to design up to 10 novel cell and gene therapy products for areas of high unmet need, including oncology, immunology and rare diseases. In Q4 2023, Cellectis received an initial payment of $105m from AstraZeneca, which comprised a $25m upfront cash payment under the terms of a research collaboration agreement and an $80m equity investment. Now that the additional $140m equity investment has closed, AstraZeneca holds a total equity stake of c.44% in Cellectis and AstraZeneca continues to treat its investment in Cellectis as an associate.

In June 2024, AstraZeneca completed the acquisition of Fusion Pharmaceuticals Inc., a clinical-stage biopharmaceutical company developing next-generation radioconjugates. The acquisition marks a major step forward in AstraZeneca delivering on its ambition to transform cancer treatment and outcomes for patients by replacing traditional regimens like chemotherapy and radiotherapy with more targeted treatments. The acquisition complements AstraZeneca's leading oncology portfolio with the addition of the Fusion pipeline of radioconjugates, including FPI-2265, a potential new treatment for patients with mCRPC, and brings new expertise and pioneering R&D, manufacturing and supply chain capabilities in actinium-based radioconjugates to AstraZeneca. See Note 5 for further information.

In July 2024, AstraZeneca completed the acquisition of Amolyt Pharma, a clinical-stage biotechnology company focused on developing novel treatments for rare endocrine diseases. The acquisition bolsters the Alexion, AstraZeneca Rare Disease late-stage pipeline and expands on its bone metabolism franchise with the notable addition of eneboparatide (AZP-3601), a Phase III investigational therapeutic peptide with a novel mechanism of action designed to meet key therapeutic goals for hypoparathyroidism. In patients with hypoparathyroidism, a deficiency in parathyroid hormone production results in significant dysregulation of calcium and phosphate, which can lead to life-altering symptoms and complications, including chronic kidney disease. See Note 7 for further information.

Sustainability highlights

At the 77th World Health Assembly in Geneva, Switzerland in May, AstraZeneca convened Ministers of Health, industry, civil society and patient groups. Areas of focus for engagement, led by Ruud Dobber, EVP BioPharmaceuticals, included the need to increase early action to prevent, diagnose and treat disease and to accelerate collaboration to build resilient, equitable and net zero health systems.

Conference call

A conference call and webcast for investors and analysts will begin today, 25 July 2024, at 11:45 UK time. Details can be accessed via astrazeneca.com.

Reporting calendar

The Company intends to publish its 9M and Q3 2024 results on 12 November 2024.

To read AstraZeneca's H1 and Q2 2024 Financial Results press release in full including the glossary, please click here.

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