UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Date of event requiring this shell company report…………………………………..
For the transition period from ___________________ to _______________________
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Telephone: + Facsimile number: +44 1223 352 858 |
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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* | Not for trading, but only in connection with the registration of American Depositary Shares representing such Ordinary Shares pursuant to the requirements of the Securities and Exchange Commission. |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None |
(Title of Class) |
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None |
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Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
The number of outstanding shares of each class of stock of AstraZeneca PLC as of December 31, 2022 was:
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Redeemable Preference Shares of £1 each: |
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ◻
Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| U.S. GAAP | ☐ | ☒ | Other ☐ | |||
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☐
Pursuant to Rule 12b-23(a) of the Securities Exchange Act of 1934, as amended, the information for the 2022 Form 20-F of AstraZeneca PLC (the “Company”) set out below is being incorporated by reference from AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023.
References below to major headings include all information under such major headings, including subheadings, unless such reference is a reference to a subheading, in which case such reference includes only the information contained under such subheading. Unless the context otherwise requires, “AstraZeneca” or “Group” refers to the Company and its consolidated entities. Other information contained within AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F, including graphs and tabular data, is not included in this Form 20-F unless specifically identified below. Photographs are also not included.
In addition to the information set out below, the information (including tabular data) set forth under the headings “Use of terms” on the inside front cover, “Strategic Report—Financial Review—Measuring performance” on page 62, and the tables on pages 63 and 64, “Additional Information —Trade Marks” on page 219, “—Glossary” on pages 220 to 223 and “—Important information for readers of this Annual Report—Cautionary statement regarding forward-looking statements”, “—Inclusion of Reported performance, Core financial measures and constant exchange rate growth rates”, “—Statements of competitive position, growth rates and sales”, “— AstraZeneca websites”, “—External/third-party websites” and “—Figures” on page 224, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference. References herein to AstraZeneca websites, including where a link is provided, are textual references only and information on or accessible through such websites does not form part of and is not incorporated into this Form 20-F dated February 21, 2023. Reference to “audited” information (including graphs and tabular data) set forth under the heading “Corporate Governance—Directors’ Remuneration Report” refers to procedures performed by the Company’s external auditor in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law and does not form part of the “Report of Independent Registered Public Accounting Firm” in Item 18 herein. For the avoidance of doubt, the “Independent auditors’ report to the members of AstraZeneca PLC” on pages 131 to 137 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 does not form part of, and is not incorporated into, this Form 20-F dated February 21, 2023.
PART 1
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
A. Reserved
B. Capitalization and Indebtedness
Not applicable.
C. Reason for the Offer and Use of Proceeds
Not applicable.
4
D. Risk Factors
Operating in the pharmaceutical sector carries various inherent risks and uncertainties that may affect our business. In this section, we describe the risks and uncertainties that we consider material to our business, in that they may have a significant effect on our financial condition, results of operations, and/or reputation.
These risks have been categorised consistently with the “Risk Overview—Principal Risks” detailed from page 58 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023, each of which are included below (in addition to other risks that we face). We believe that the forward-looking statements about AstraZeneca in this Form 20-F dated February 21, 2023, identified by words such as ‘anticipates’, ‘believes’, ‘expects’ and ‘intends’, are based on reasonable assumptions. However, forward-looking statements involve inherent risks and uncertainties such as those summarised below. They relate to events that may occur in the future, that may be influenced by factors beyond our control and that may have actual outcomes materially different from our expectations. Therefore, other risks, unknown or not currently considered material, could have a material adverse effect on our financial condition or results of operations.
Product pipeline risks |
| Impact |
Failure or delay in the delivery of our pipeline or launch of new medicines | ||
Our continued success depends on the development and successful launch of innovative new drugs. The development of pharmaceutical product candidates is a complex, risky and lengthy process involving significant resources. A project may fail at any stage of the process due to various factors, including: failure to obtain the required regulatory or marketing approvals, unfavourable clinical efficacy data, safety concerns, failure to demonstrate adequate cost-effective benefits to regulatory authorities and/or payers, and the emergence of competing products. More details of projects that have suffered setbacks or failures during 2022 can be found in the “Strategic Report—Therapy Area Review” on pages 18 to 33 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023. Launch activities may be delayed by a number of factors, including: adverse findings in pre-clinical or clinical studies, regulatory demands, price negotiation, large-scale natural disasters or global pandemics, competitor activity, and technology transfer. In addition to developing products in-house, we continue to expand our portfolio through licensing arrangements and strategic collaborations which may not ultimately be successful. | Failure or delay in development of new product candidates could damage the reputation of our RD capabilities, and materially adversely affect our future business and results of operations. See also “Failure to achieve strategic plans or meet targets or expectations” below. Delays to launches can lead to excess expenses in the manufacture of pre-launch inventories, marketing materials and sales force training. For the launch of products that are seasonal in nature, delays in regulatory approvals or manufacturing may delay launch to the next season which, in turn, may significantly reduce the return on costs incurred in preparing for the launch for that season. Furthermore, in immuno-oncology in particular, speed to market is critical given the large number of clinical trials being conducted by competitors. Delay of launch can also erode the term of patent exclusivity. Competition from other pharmaceutical companies means that we may have to pay a significant premium over book or market values for our acquisitions. Failure to complete collaborative projects in a timely, cost-effective manner may limit our ability to access a greater portfolio of products, IP, technology and shared expertise. In many cases we make milestone payments in advance of the commercialisation of the products, with no assurance of recouping costs. | |
Failure to meet regulatory or ethical requirements for medicine development or approval | ||
We are subject to laws and regulations that control our ability to market our pharmaceutical products. Our development programmes must meet many standards to prove that our products are safe, effective and of high quality. Health authorities, such as the FDA in the US and the EMA in the EU, can refuse to approve our products or they may require us to conduct additional clinical trials or scientific testing before they will approve them for marketing. Many factors influence a health authority’s decision to approve or reject a marketing application for a pharmaceutical product. These include advances in science and technology; new laws, regulations and policies; different standards for evaluating safety and effectiveness by health authorities; and input from the general public and public interest groups. Following approval, a health authority may require us to conduct additional clinical trials or scientific testing to address concerns raised after our products have been used by patients in the marketplace. | Delays in regulatory approvals could delay our ability to market our products and may adversely affect our revenue. In addition, post-approval requirements, including additional clinical trials, could result in increased costs. We seek to manage these risks, but policymaking by governments and health authorities can be unpredictable and unforeseen circumstances, such as public health emergencies, may strain health authority resources. These factors may delay the approval of our products. New data may impact a product’s approval status or can lead to labelling changes that may limit the use of a product. | |
5
D. Risk Factors
continued
Commercialisation risks |
| Impact |
Failures or delays in the quality or execution of the Group’s commercial strategies | ||
Maximising the commercial potential of our new products underpins the success of our strategy and the delivery of our short- and medium-term targets. We may ultimately be unable to achieve commercial success for various reasons, including: difficulties in manufacturing sufficient quantities of the product; any price control measures imposed by governments and healthcare authorities; the outcome of negative negotiations with third-party payers; erosion of IP rights; failure to show a differentiated product profile and changes in prescribing habits. The ability to successfully carry out business in emerging markets can be more challenging than in established markets. Such challenges may include: volatility in economic or political climates; inadequate protection against crime (including counterfeiting, corruption and fraud) and inadvertent breaches of local and international law. | Failure to execute our commercial strategies or achieve the level of sales anticipated for a medicine could materially adversely impact our business or results of operations. Failure to leverage potential opportunities or appropriately manage risks in emerging markets may materially adversely affect our reputation, business or results of operations. | |
Pricing affordability, access and competitive pressures | ||
Continuing global pressures to reduce healthcare spending in response to political, socio-economic and financial factors may lead to cost containment measures being implemented by payers including: drug pricing system reforms restrictive reimbursement policies (e.g., Germany Financial Stability Act) payer consolidation in the US new US government price-setting programs (Inflation Reduction Act) price transparency reference pricing expedited approval of generic drugs and introduction of laws, regulations and policies which encourage generic utilisation cost transparency. | Deterioration of, or lack of improvement in, socio-economic conditions could adversely affect supply and/or distribution in affected countries and the ability or willingness of customers to purchase our medicines, putting pressure on price and/or volumes. This could adversely affect our business or results of operations, for example, those health systems most severely impacted by downturn may seek alternative ways to settle their debts at a discount. Other customers may cease to trade, which may result in losses from writing off debts or a reduction in demand for products. Across the industry, a new government-run drug price-setting programme in the US could reduce the value of certain products sooner than planned, and impact the RD pipeline as companies seek to avoid investing in lower yield products. | |
Supply chain and business execution risks |
| Impact |
Failure to maintain supply of compliant, quality medicines | ||
We may experience challenges, delays or interruptions in the manufacturing and supply of our products for various reasons, including: Significant unforecasted demand growth or supply chain disruptions (e.g., natural disasters, COVID 19, geopolitics), which may lead to supply shortages or delays in construction of facilities to support future demand of our products. The inability to supply products due to a product quality failure or regulatory compliance action such as licence withdrawal, product recall or change of regulatory standards (e.g., nitrosamines, where regulators have been introducing new limits/expectations for regulatory filings). It is necessary for us to meet all regulations, including compliance with Good Manufacturing Practices (GMP) and Good Distribution Practices (GDP) and comparable regulatory dossier conditions of approval in all countries in which our products are licensed, manufactured or sold. We increasingly rely on third parties for the timely supply of goods (e.g., active ingredients, packaging components etc.), many of which are difficult to substitute in a timely manner or at all. | Supply chain difficulties may result in product shortages, which could lead to lost Product Sales and materially affect our reputation and results of operations. Failure to comply with all manufacturing regulations can result in negative regulatory inspection findings leading to the halting of manufacturing, product seizure, debarment or recalls which could have an adverse effect on our business, financial condition and results of operations. In the event of insolvency of third-party suppliers, it would be difficult to substitute in a timely manner or at all. | |
Illegal trade in the Group’s medicines | ||
The illegal trade of pharmaceutical products, including counterfeiting, tampering, theft and illegal diversion (where products are found in a market where we did not send them and where they are not approved to be sold) may lead to a loss of public confidence in the integrity of medicines. | The incidence of illegal trade could materially adversely affect our reputation, financial performance and pose a direct risk to patient safety. In addition, concern about this issue may cause some patients to stop taking their medicines, with consequential risks to their health. If we are found liable for breaches in our supply chains, authorities may take action, financial or otherwise, that could restrict the distribution of our products. | |
6
D. Risk Factors
continued
Reliance on third-party goods and services | ||
A significant proportion of AstraZeneca’s annual costs relates to spend with third-party suppliers. The level of spend supports the length of our value chain from discovery to manufacture and commercialisation of our medicines. Many of our business-critical operations are outsourced to third-party providers. We are, therefore, heavily reliant on these third parties to get medicines to patients, comply with applicable laws and regulations, while also ensuring prudent use of AstraZeneca financial resources. |
| Failure to successfully secure, onboard and manage outsourced services, particularly with inflationary pressures increasing, or the failure of outsourced providers to deliver timely services, and to the required level of quality, could materially adversely affect our reputation, our financial condition and operating results as well as our ability to deliver medicines to patients. Failure to effectively manage third-party suppliers when external factors, including geopolitical tensions, or raw materials and components shortages, place increased pressure on AstraZeneca’s ability to purchase goods and services may lead to major business disruption. Any breach of security, whether physical, cyber or data related, or failure of these third parties to operate in a way that is consistent with laws or regulations, may lead to regulatory penalties, materially affect the results of operations and adversely impact our reputation. |
Failure in information technology or cybersecurity | ||
IT systems are the foundation of all critical business functions. Critical business processes and functions are increasingly dependent on partner and vendor IT stability and integrity. Our ability to deliver life-changing medicines is tightly coupled with continuous access to collaboration environments, global communications channels, applications and data. Uninterrupted service and high-fidelity IT systems remain a business imperative. In addition to availability and reliability, IT systems must comply with provisions specified in data security, privacy and individual protection laws. Data is now considered the most valuable business commodity we must maintain continuous access to and protect. Data is often characterised as strictly confidential information. Examples of strictly confidential data include clinical trial records, personal information, intellectual property, RD data, and compliance information. IT systems and data are potentially vulnerable to service interruptions and security breaches via attacks by malicious third parties or intentional or inadvertent actions by our employees or vendors. Attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives and expertise, including organised criminal groups, ‘hacktivists’, nation states, employees and others. The internet is our primary critical business transaction channel. The internet is increasingly exposed to geopolitical situational disruption. Privacy legislation includes obligations to report data protection breaches to regulators and affected individuals within expedited timeframes. | Disruption to these IT systems and/or the internet (including breaches of data security or cybersecurity, failure to integrate new and existing IT systems) or failure to comply with additional requirements under applicable laws, could harm our reputation and materially adversely affect our financial condition or results of operations. While we invest heavily in the protection of our data and IT, we may be unable to prevent hardware or software failures or breaches which could result in disclosure of confidential information, damage to our reputation, regulatory penalties or sanctions, or financial loss. The inability to back-up and restore data effectively could lead to permanent loss of data that could, in turn, result in non-compliance with applicable laws and regulations and otherwise harm our business. Data loss could lead to public disclosure of confidential information which may damage our reputation, materially affect our business or results of operations, and expose us to legal risks and/or additional legal obligations. Public disclosure of sensitive information could materially adversely affect our reputation and business or operations results. Cybersecurity insurance coverage limits may not protect against any future claim or claim proceeds may be delayed. Failure to comply with regulatory disclosure requirements could cause reputational damage and a loss of public trust. | |
Failure of critical processes | ||
Unexpected events and/or events beyond our control could result in the failure of critical processes within the Company or at third parties on whom we are reliant. The business faces threats to business continuity from many directions. Examples of material threats include: Disruption to our business or the global markets if there is instability in a particular geographic region, including as a result of war, terrorism, pandemics, armed conflicts, riots, unstable governments, civil insurrection or social unrest. Natural disasters in areas of the world prone to extreme weather events, which may increase in frequency or severity as a result of climate change, and phenomena such as earthquakes. Cyber threats similar to those detailed in the ‘Failure in information technology or cybersecurity’ section above. | Such material threats may heighten certain other risks, such as those relating to the delivery of the pipeline, launch of new medicines, or the manufacture and supply of medicines, and may lead to loss of revenue and have a materially adverse impact on our financial results. | |
7
D. Risk Factors
continued
Failure to collect and manage data in line with legal and regulatory requirements and strategic objectives | ||
We are seeing significant change in global privacy laws with many countries creating new or strengthening existing laws regarding how organisations can process personal data, including the EU General Data Protection Regulation, the UK Data Protection Act, the US California Consumer Privacy Act and California Privacy Rights Act and Personal Information Protection Law in China. Such laws require us, for example, to maintain appropriate data security measures, implement measures to allow us to transfer personal data across country borders, and to provide timely notice to individuals and/or regulators if personal data is compromised. Further, the interpretation of privacy laws may differ or may be inconsistent across jurisdictions, and other countries where we operate are also enforcing their own laws more aggressively and/or adopting tougher new measures. AstraZeneca processes significant volumes of personal data, including sensitive data relating to health and genomics, which is subject to heightened protections and may attract increased attention under privacy laws. AstraZeneca uses personal data in all our core operations and thus the ability to process personal data in a lawful and compliant manner is essential to achieving our stated business aims. |
| Despite taking measures designed to ensure compliance with applicable privacy laws by our personnel and our third parties, non-compliance has occurred and may occur again in the future. If future instances of non-compliance are deemed significant, these may attract material regulatory sanctions or fines and corresponding reputational damage, orders to stop certain processing of personal data, or legal action on behalf of impacted individuals. Further, failure to protect personal data could lead to a competitive disadvantage, loss of trust from our stakeholders, including patients, and prevent us from delivering our strategic objectives. If the scope of privacy laws is expanded or if the interpretation of existing laws or new laws are implemented, AstraZeneca and its third-party vendors may be required to change their business practices or data processing practices and policies. This may lead to substantial compliance-related costs or materially adversely impact our business and financial condition. |
Failure to attract, develop, engage and retain a diverse, talented and capable workforce | ||
We rely heavily on recruiting and retaining talented employees with a diverse range of skills and capabilities to meet our strategic objectives. Externally there is intense competition for well-qualified individuals, as the supply of people with certain skills or in specific geographic regions may be limited. Ensuring our employees are continually developed and engaged with strategic objectives embeds commitment across the workforce. | The inability to attract and retain highly skilled personnel may weaken our succession plans for critical positions, impact the implementation of our strategic objectives and ultimately result in the failure of our business operations. Failure to develop and engage our workforce could result in business disruption, a loss of productivity and higher turnover rates, all of which could materially adversely affect our business. | |
Legal, regulatory and compliance risks |
| Impact |
Failure to meet regulatory or ethical expectations on environmental impact, including climate change | ||
Environmental issues will become more material as healthcare systems embrace net-zero climate targets. Our environmental targets and performance will have increased scrutiny by investors, governments and non-governmental organisations. Environmental considerations are becoming embedded in the public procurement of goods and services, including medicinal products and devices. Specific materials used to manufacture medicines, or used as excipients or propellants, are coming under increased regulation and may be subject to time-limited exemptions or potential phase-out. The physical impacts of climate change could impact the resilience of our business operations and supply chain. | Investors are increasingly focusing on environmental issues. We continue to see an increased requirement to quantify the impact of specific environmental issues and to disclose our strategy, targets and performance. Failure to maximise our environmental sustainability credentials could expose us to increased regulatory risk and put us at a commercial disadvantage relative to our peers. This could adversely impact our financial results and lead to reputational damage. Failure to proactively manage the physical risks associated with climate change could impact the resilience of our operations and supply chain. This could result in supply interruptions, loss of stock and adversely impact our financial results. | |
8
D. Risk Factors
continued
Safety and efficacy of marketed medicines is questioned | ||
Our ability to accurately assess, prior to launch, the eventual safety or efficacy of a new product once in broader clinical use can only be based on data available at that time, which is inherently limited due to relatively short periods of product testing and relatively small clinical study patient samples. Any unforeseen safety concerns or adverse events relating to our products, or failure to comply with laws, rules and regulations relating to provision of appropriate warnings concerning the dangers and risks of our products that result in injuries, could expose us to large product liability damages claims, settlements and awards, particularly in the US. Adverse publicity relating to the safety of a product, or of other competing products, may increase the risk of product liability claims. Details of material product liability litigation matters can be found in “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets” on pages 192 to 198 of AstraZeneca’s “Annual Report and Form 20-F Information 2022”, included as exhibit 15.1 to Form 20-F dated February 21, 2023. | Serious safety concerns or adverse events relating to our products could lead to product recalls, seizures, loss of product approvals, declining sales and interruption of supply, and could materially adversely impact patient access, our reputation and financial revenues. Significant product liability claims could also arise which could be costly, divert management attention, or damage our reputation and demand for our products. Unfavourable resolution of such current and similar future product liability claims could subject us to enhanced damages, consumer fraud and/or other claims, including civil and criminal governmental actions. This could require us to make significant provisions in our accounts relating to legal proceedings and could materially adversely affect our financial condition or results of operations, particularly where such circumstances are not covered by insurance. | |
Adverse outcome of litigation and/or governmental investigations | ||
Our business is subject to a wide range of laws and regulations around the world. We have been, and may continue to be, subject to various legal proceedings and governmental investigations. Actual or perceived failure to comply with laws or regulations has historically and may in the future result in AstraZeneca and/or its employees being investigated by government agencies and authorities and/or in civil legal proceedings. Relevant authorities have wide-ranging administrative powers to deal with any failure to comply with laws, regulations or continuing regulatory oversight, and this could affect us, whether such failure is our own or that of our contractors or external partners. In particular, the manufacturing, marketing, exportation, promotional, clinical, pharmacovigilance, and pricing practices of pharmaceutical manufacturers, as well as the manner in which manufacturers interact with regulatory agencies, purchasers, prescribers and patients, are subject to extensive regulation, litigation and governmental investigation. Moreover, such laws, rules and regulations are subject to change. Details of material litigations and governmental investigations can be found in “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets” on pages 192 to 198 of AstraZeneca’s “Annual Report and Form 20-F Information 2022”, included as exhibit 15.1 to Form 20-F dated February 21, 2023. |
| Many companies, including AstraZeneca, have been subject to legal claims asserted by federal and state governmental authorities and private payers and consumers, which have resulted in substantial expense and other significant consequences. Governmental investigations or proceedings could result in us becoming subject to civil or criminal sanctions and/or being forced to pay fines or damages. Civil litigation, particularly in the US, is inherently unpredictable, and unexpectedly high awards for damages can result from an adverse result. In many cases, litigation adversaries may claim enhanced damages in extremely high amounts. Government investigations, litigations, and other legal proceedings, regardless of the outcome, could be costly, divert management attention, or damage our reputation and demand for our products. Unfavourable resolutions to current and similar future proceedings against us that could subject us to criminal liability, fines, penalties or other monetary or non-monetary remedies, including enhanced damages, require us to make significant provisions in our accounts relating to legal proceedings and could materially adversely affect our business or results of operations. |
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D. Risk Factors
continued
IP risks related to our products | ||
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IP protection provides the foundation for continued investment in developing innovative medicines to improve patient health. However, the pharmaceutical industry is experiencing pressure from governments and other healthcare payers to impose limits on IP protections in an effort to manage healthcare costs. Additionally, policymakers are progressively leveraging regulations to expedite the approval of generic drugs and encourage generic drug utilisation. These policies may drive accelerated utilisation of generic alternatives to our products following expiry or loss of our IP rights. We also recognise increasing use of compulsory licensing in some countries in which we operate. We are subject to numerous patent challenges relating to various products or processes and assertions of non-infringement of our patents. A loss in any of these challenges could result in loss of patent protection on the covered product and a risk to the revenue generated by the product. We also face the risk that our products may be found to infringe patents owned or licensed by third parties and be subject to monetary damages or compelled to cease sales of the infringing product, resulting in a potential risk to revenue. These challenges threaten the value of our investment in pharmaceutical development. Details of material patent litigation matters can be found in “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets” on pages 192 to 198 of AstraZeneca’s “Annual Report and Form 20-F Information 2022”, included as exhibit 15.1 to this Form 20-F dated February 21, 2023. | If we are unable to obtain, defend and enforce our IP, we may experience accelerated and intensified competition. Also, if our products are found to infringe a third-party patent, we may be subject to monetary damages or compelled to cease sales of the infringing product. These negative outcomes could have an adverse, material impact on our financial results. | |
Economic and financial risks |
| Impact |
Failure to achieve strategic plans or meet targets or expectations | ||
When we communicate our business strategy, targets or performance expectations, all such statements are forward-looking and based on assumptions and judgements, all of which are subject to significant inherent risks and uncertainties. | To achieve our strategic objectives, we must continue to develop commercially viable new products and successfully integrate new organisations we have acquired. There can be no guarantee that our strategy or expectations will materialise. Any failure to successfully implement our business strategy may frustrate the achievement of our financial targets, which may therefore materially damage our brand, business, financial position or results of operations. | |
Geopolitical and/or macroeconomic volatility disrupts the operation of our global business | ||
Operating in more than 100 countries, we are subject to political, socio-economic and financial factors around the world. A sustained global economic downturn or pervasive levels of high inflation may adversely impact financial markets and/or exacerbate pressure from governments and other healthcare payers on medicine prices and other cost control measures in order to limit healthcare spending. Geopolitical tensions may lead to the imposition or escalation of trade controls, tariffs, taxes or other restrictions to market access which may increase our costs or reduce revenues. | The most recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, such as the most recent global financial crisis, could result in a variety of risks to our business, including weakened demand for medicines and our ability to raise additional capital when needed or on favourable terms, if at all. A weak or declining economy could strain our suppliers, possibly resulting in supply disruption, or cause delays in payments for our services by third-party payers. Measures taken to limit healthcare spending may lead to lower than anticipated rates of growth in some markets and an adverse impact on revenues and profitability. Additionally, there can be no guarantee that measures we take to mitigate the impact of inflation will be effective. If such measures do not deliver to the extent anticipated, the Group could incur an additional $300 million in costs attributable to inflationary pressure in the year ending December 31, 2023. Any escalation in barriers to the global free flow of medicines is likely to increase costs to serve affected markets which may lead to downward pressure on margins. While the introduction of severe sanctions is unlikely in relation to medicines, it could occur if matters escalate significantly and could impact processes for the commercialisation of medicines and levels of sales in affected markets. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. | |
10
D. Risk Factors
continued
Failure in financial control or the occurrence of fraud | ||
Effective internal controls assist in the provision of reliable Financial Statements and the detection and prevention of fraud. Testing of internal controls provides only limited assurance over the accuracy of Financial Statements and may not prevent or detect misstatements or fraud. | Significant resources may be required to remediate any deficiency in internal controls. Any such deficiency may trigger related investigations and may result in fines being levied against individual Directors or officers. Serious fraud may lead to prosecution of senior management. | |
Unexpected deterioration in the Group’s financial position | ||
Movements in exchange rates against the US dollar, our reporting currency, impact our reported results. The key currencies of Product Sales and costs are: US dollar, Chinese renminbi, euro, Japanese yen, Swedish krona and pound sterling. The majority of our cash is invested in AAA credit-rated institutional money market funds, fixed income securities issued by government, financial and non-financial entities and collateralised and non-collateralised bank deposits. Our credit exposure is a mix of US, EU and rest of world default risk across these institutions. We invest in a large number of projects in an effort to develop a successful portfolio of approved products. Our consolidated balance sheet therefore contains significant investments in intangible assets, including goodwill. Our ability to realise value on these investments depends on regulatory approvals, market acceptance, competition and legal developments. Our defined benefit post-retirement obligations (primarily in the UK, Sweden and the US) can materially change in value, but are largely backed by assets invested in growth and liability hedging portfolios, which hedge some of the risks inherent in liability valuations. Although we maintain relevant insurance coverage for risks arising within the Group, we may not be able to maintain our insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses. Tax law is complex leading to the risk of different interpretations. Revenue authorities can make conflicting claims to the profits taxed in individual countries leading to double taxation. Tax laws can change following action by international bodies such as the Organisation for Economic Co-operation and Development (OECD) or individual governments. |
| FX rate movements may materially adversely affect our financial condition or results of operations. In a sustained economic downturn, such institutions may cease to trade and there can be no guarantee that we will be able to access the full value of our investments. We expect that some of our intangible assets will become impaired in the future. Impairment losses may materially adversely affect our financial condition or results of operations. Solvency headroom could fall, leading to higher contributions if there are: falls in assets; increases in liability valuations (from falls in bond yields, increases in inflation or lower mortality); or changes in regulations. As liability valuation risks are hedged, significant collateral may need to be posted, which in extreme circumstances could lead to a short-term liquidity risk in some pension schemes and a request to the Group to provide temporary liquidity. Uninsured losses, or those where an insurer denies coverage, could materially adversely affect our financial condition. The resolution of tax disputes can result in incremental tax costs, a reallocation of profits or losses between jurisdictions, or even double taxation. They are costly, divert management attention and may adversely affect our reputation. If tax treaties are withdrawn or amended, this could materially adversely affect our financial position. For details of our financial risk management policies, see “Strategic Report—Financial Review—Financial risk management” on page 73 and for details of current tax disputes, see “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets” on pages 192 to 198, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023. Changes in tax regimes could result in a material impact on the Group’s cash tax liabilities and tax charge, resulting in either an increase or a reduction in financial results. |
11
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
AstraZeneca PLC was incorporated in England and Wales on June 17, 1992 under the Companies Act 1985. It is a public limited company domiciled in the UK. The Company’s registered number is 2723534 and its registered office is at 1 Francis Crick Avenue, Cambridge Biomedical Campus, Cambridge CB2 0AA, UK (Tel: +44 (0)20 3749 5000). From February 1993 until April 1999, the Company was called Zeneca Group PLC. On April 6, 1999, the Company changed its name to AstraZeneca PLC.
The Company was formed when the pharmaceutical, agrochemical and specialty chemical businesses of Imperial Chemical Industries PLC were demerged in 1993. In 1999, the Company sold the specialty chemical business. Also in 1999, the Company merged with Astra of Sweden. In 2000, it demerged the agrochemical business and merged it with the similar business of Novartis to form a new company called Syngenta AG. In 2007, the Group acquired MedImmune, a biologics and vaccines business based in the US. In 2021, the Group acquired Alexion, a rare disease business based in the US.
In 1999, in connection with the merger between Astra and Zeneca, the Company’s share capital was redenominated in US dollars. On 6 April 1999, Zeneca shares were cancelled and US dollar shares issued, credited as fully paid on the basis of one dollar share for each Zeneca share then held.
This was achieved by a reduction of capital under section 135 of the Companies Act 1985. Upon the reduction of capital becoming effective, all issued and unissued Zeneca shares were cancelled and the sum arising as a result of the share cancellation credited to a special reserve, which was converted into US dollars at the rate of exchange prevailing on the record date. This US dollar reserve was then applied in paying up, at par, newly created US dollar shares.
At the same time as the US dollar shares were issued, the Company issued 50,000 Redeemable Preference Shares for cash, at par. The Redeemable Preference Shares carry limited class voting rights, no dividend rights and are capable of redemption, at par, at the option of the Company on the giving of seven days’ written notice to the registered holder of the Redeemable Preference Shares.
A total of 826 million Ordinary Shares were issued to Astra shareholders who accepted the merger offer before the final closing date, 21 May 1999. The Company received acceptances from Astra shareholders representing 99.6% of Astra’s shares and the remaining 0.4% was acquired in 2000, for cash.
In 2021, in connection with the acquisition of Alexion, a total of 236 million Ordinary Shares (the majority of which were represented by new AstraZeneca ADRs) were issued to Alexion shareholders in part consideration for the acquisition.
The information (including tabular data) set forth under the headings “Strategic Report—Financial Review—Collaboration Revenue” on page 67, “Strategic Report—Financial Review—Business combinations” on page 70, “Strategic Report—Financial Review—Investments, divestments and capital expenditure” on page 71, “Corporate Governance—Corporate Governance Report—Compliance with the UK Corporate Governance Code—Board Leadership and Company Purpose” on page 83 and “Additional Information—Important information for readers of this Annual Report—AstraZeneca websites” on page 224, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
The United States Securities and Exchange Commission (the “SEC”) maintains a website at www.sec.gov which contains in electronic form each of the reports and other information that we have filed electronically with the SEC.
12
B. Business Overview
The information (including graphs and tabular data) set forth under the headings “Strategic Report—AstraZeneca at a Glance” on pages 4 to 5, “Strategic Report—Chair’s Statement” on page 6, “Strategic Report—Chief Executive Officer’s Review” on pages 7 to 8, “Strategic Report—Healthcare in a Changing World” on pages 9 to 11, “Strategic Report—Our Purpose, Values and Business Model” on pages 12 to 13, “Strategic Report—Our strategy and Key Performance Indicators” on pages 14 to 17, “Strategic Report—Therapy Area Review” on pages 18 to 33, “Strategic Report—Business Review” on pages 34 to 51, “Strategic Report—Task Force on Climate-related Financial Disclosures Summary Statement” on pages 53 to 55, “Strategic Report—Risk Overview—Managing risk”, “—Risk Overview—Emerging risks”, “—Risk Overview—Climate risk” on page 56, “Corporate Governance—Corporate Governance Report—Compliance with the UK Corporate Governance Code—Global Compliance and Group Internal Audit (GIA)” on page 85, “Financial Statements—Notes to the Group Financial Statements—Note 1—Revenue” on pages 149 to 150, “Financial Statements—Notes to the Group Financial Statements—Note 6—Segment information” on pages 157 to 158, “Additional Information—Sustainability: supplementary information” on page 218, and “Additional Information—Important information for readers of this Annual Report—Statements of competitive position, growth rates and sales” on page 224, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
13
Development Pipeline as of February 9, 2023
This section sets out AstraZeneca-sponsored or -directed trial New Molecular Entities (NMEs) and significant indications.
First major market regulatory submission date and submission status is provided for assets in Phase III or 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.
Key:
PP = Partnered product
Phase I
Compound |
| Mechanism |
| Additional | Area Under Investigation | |
Oncology | ||||||
AZD0466 | BCL2/xL | (PP) | haematological malignancies | |||
AZD1390 | ATM inhibitor | glioblastoma | ||||
AZD7789 | PD1/TIM3 bispecific mAb | solid tumours, haematological malignancies | ||||
AZD8853 | GDF-15 | solid tumours | ||||
AZD9574 | PARP inhibitor | advanced solid malignancies | ||||
AZD9592 | EGFR/cMET | solid tumours | ||||
IPH5201 | CD39 | (PP) | solid tumours | |||
volrustomig + lenvatinib | PD-1/CTLA-4 bispecific mAb + VEGF | advanced renal cell carcinoma | ||||
CVRM | ||||||
AZD0186 | GLP1R agonism | type-2 diabetes | ||||
AZD0780 | PCSK9 | dyslipidaemia | ||||
AZD2373 | podocyte health | nephropathy | ||||
AZD2693 | NASH resolution | non-alcoholic steatohepatitis | ||||
AZD3366 | CD39L3 | cardiovascular disease | ||||
AZD3427 | relaxin mimetic | cardiovascular disease | ||||
AZD5462 | RXFP1 agonist | cardiovascular disease | ||||
AZD6234 | peptide | obesity with related comorbidities | ||||
AZD7503 | ASO | non-alcoholic steatohepatitis | ||||
Respiratory Immunology | ||||||
AZD4604 | inhaled JAK1 inhibitor | asthma | ||||
AZD5055 | porcupine inhibitor | idiopathic pulmonary fibrosis | ||||
AZD6793 | IRAK4 inhibitor | inflammatory diseases | ||||
AZD7798 | humanised mAb targets T cells subset | Crohn’s disease | ||||
AZD8630 | inhaled TSLP FAb | (PP) | asthma | |||
Rare Disease | ||||||
ALXN1820 | anti-properdin bi-specific | haematology | ||||
ALXN1850 | next gen TNSALP ERT | hypophosphatasia | ||||
ALXN1910 | next gen TNSALP ERT | bone metabolism | ||||
ALXN2030 | siRNA targeting complement C3 | nephrology | ||||
ALXN2080 | oral factor D inhibitor | healthy volunteers | ||||
NI006 | TTR depleter | (PP) | transthyretin amyloid cardiomyopathy | |||
Other Medicines | ||||||
AZD4041 | orexin 1 receptor antagonist | (PP) | opioid use disorder | |||
MEDI0618 | PAR2 antagonist mAb | Phase I/IIa | osteoarthritis pain | |||
MEDI1814 | amyloid beta mAb | (PP) | Alzheimer’s disease |
14
Phase II
Compound |
| Mechanism |
| Additional |
| Area Under Investigation |
Oncology | ||||||
AZD0171 + Imfinzi + CTx | anti-LIF mAb + PD-L1 mAb + CTx | 1st-line metastatic pancreatic ductal adenocarcinoma | ||||
AZD4573 | CDK9 inhibitor | haematological malignancies | ||||
AZD4573 + Calquence | CDK9 inhibitor + BTK inhibitor | haematological malignancies | ||||
AZD5305 | PARP1Sel | solid tumours | ||||
AZD8205 | B7-H4 targeting ADC | solid tumours | ||||
camizestrant | selective oestrogen receptor degrader | oestrogen receptor +ve breast cancer | ||||
capivasertib | AKT inhibitor | prostate cancer | ||||
ceralasertib | ATR inhibitor | solid tumours | ||||
Imfinzi + monalizumab | PD-L1 mAb + NKG2A mAb | (PP) | solid tumours | |||
oleclumab + CTx or Imfinzi + oleclumab + CTx | CD73 mAb + CTx or PD-L1 mAb + | metastatic pancreatic cancer | ||||
rilvegostomig (AZD2936) ARTEMIDE-1 | PD1/TIGIT bispecific mAb | (PP) | solid tumours | |||
volrustomig | PD-1/CTLA-4 bispecific mAb | solid tumours | ||||
CVRM | ||||||
balcinrenone/dapagliflozin | MR modulator + SGLT2 inhibitor | heart failure with CKD | ||||
cotadutide | GLP-1/glucagon dual agonist | Phase IIb/III | non-alcoholic steatohepatitis (NASH) | |||
MEDI6570 | LOX-1 mAb | cardiovascular disease | ||||
mitiperstat | myeloperoxidase | heart failure with preserved ejection fraction/NASH | ||||
tozorakimab | IL-33 mAb | diabetic kidney disease | ||||
zibotentan/dapagliflozin | endothelin A receptor antagonist + SGLT2 inhibitor | chronic kidney disease | ||||
Respiratory Immunology | ||||||
atuliflapon | FLAP inhibitor | asthma | ||||
brazikumab EXPEDITION | IL-23 mAb | ulcerative colitis | ||||
elarekibep (AZD1402) | inhaled IL-4Ra | (PP) | asthma | |||
mitiperstat | myeloperoxidase | COPD | ||||
tozorakimab | IL-33 mAb | asthma | ||||
FRONTIER 3 | ||||||
Rare Disease | ||||||
danicopan | oral factor D inhibitor | geographic atrophy | ||||
vemircopan | oral factor D inhibitor | paroxysmal nocturnal haemoglobinuria | ||||
vemircopan | oral factor D inhibitor | generalised myasthenia gravis | ||||
vemircopan | oral factor D inhibitor | proliferative lupus nephritis or immunoglobulin A nephropathy | ||||
Other Medicines | ||||||
MEDI1341 | alpha synuclein mAb | (PP) | multiple system atrophy/Parkinson’s disease | |||
MEDI7352 | NGF/TNF bispecific mAb | osteoarthritis pain and painful diabetic neuropathy |
15
Phase III/Pivotal Phase II/Registration (listed until launched in all applicable major markets)
Compound |
| Mechanism |
| Area Under Investigation |
| Additional |
| Estimated |
Oncology | ||||||||
camizestrant + CDK4/6i SERENA-6 | selective oestrogen receptor degrader + CDK4/6 inhibitors | 1st-line HR+ HER2- ESR1m breast cancer | 2024 | |||||
camizestrant + palbociclib SERENA-4 | selective oestrogen receptor degrader + CDK4/6 inhibitor | 1st-line HR+ HER2- breast cancer | 2024 | |||||
capivasertib + abiraterone CAPItello-281 | AKT inhibitor + abiraterone | PTEN deficient metastatic hormone sensitive prostate cancer | 2024 | |||||
capivasertib + CTx CAPItello-290 | AKT inhibitor + CTx | 1st-line metastatic triple negative breast cancer | H2 2023 | |||||
capivasertib + docetaxel CAPItello-280 | AKT inhibitor + docetaxel | mCRPC prostate cancer | 2024 | |||||
capivasertib + fulvestrant + palbociclib CAPItello-292 | AKT inhibitor + fulvestrant + CDK4/6 inhibitor | 1st-line triplet in early relapse/ET resistant locally advanced (inoperable) or metastatic breast cancer | 2024 | |||||
capivasertib + fulvestrant CAPItello-291 | AKT inhibitor + fulvestrant | 2nd-line and beyond in AI resistant locally advanced (inoperable) or metastatic breast cancer | H1 2023 | |||||
ceralasertib + Imfinzi LATIFY | ATR inhibitor + PDL-1 mAb | non-small cell lung cancer (NSCLC) | 2024 | |||||
ceralasertib + Imfinzi MONETTE | ATR inhibitor + PDL-1 mAb | melanoma | Phase II | 2024 | ||||
datopotamab deruxtecan AVANZAR | TROP2 ADC | 1st-line NSCLC, squamous and non-squamous 1L NSCLC, TROP2 BM+ | (PP) | 2024 | ||||
datopotamab deruxtecan TROPION-Lung07 | TROP2 ADC | 1st-line NSCLC PD-L1 50% non-squamous | (PP) | 2024 | ||||
datopotamab deruxtecan TROPION-Lung08 | TROP2 ADC | 1st-line metastatic NSCLC without actionable genomic alterations and PD-L1 TPS ≥50% | (PP) | 2024 | ||||
datopotamab deruxtecan TROPION-Breast01 | TROP2 ADC | 2nd-3rd-line HR+ HER2- breast cancer | (PP) | 2024 | ||||
datopotamab deruxtecan TROPION-Breast02 | TROP2 ADC | 1st-line triple negative breast cancer | (PP) | 2024 | ||||
datopotamab deruxtecan TROPION-Breast03 | TROP2 ADC | adjuvant residual disease triple negative breast cancer | (PP) | 2024 | ||||
datopotamab deruxtecan TROPION-Lung01 | TROP2 ADC | 2nd-line+ NSCLC with or without actionable genomic alterations | (PP) | H1 2023 | ||||
Imfinzi + Imjudo HIMALAYA | PD-L1 mAb + CTLA-4 mAb | 1st-line hepatocellular carcinoma | (PP) | Launched | ||||
Imfinzi +/- oleclumab +/- monalizumab PACIFIC-9 | PD-L1 + NKG2A or PD-L1 + CD73 | unresectable stage III NSCLC | (PP) | 2024 | ||||
CVRM | ||||||||
Andexxa | anti-factor Xa reversal | acute major bleed | Launched | |||||
eplontersen | ligand-conjugated antisense | patients with hereditary or wild-type transthyretin-mediated amyloid cardiomyopathy (ATTR CM) | (PP) | 2024 | ||||
eplontersen | ligand-conjugated antisense | patients with hereditary transthyretin-mediated amyloid polyneuropathy (hATTR-PN) | (PP) | H1 2023 | ||||
roxadustat OLYMPUS ROCKIES | hypoxia-inducible factor prolyl hydroxylase inhibitor | anaemia in chronic kidney disease/end-stage renal disease | (PP) | Launched | ||||
Respiratory Immunology | ||||||||
Airsupra (PT010) | ICS/SABA | asthma | (PP) | Approved | ||||
brazikumab INTREPID | IL-23 mAb | Crohn’s disease | Phase II/III | 2024 | ||||
Fasenra CALIMA SIROCCO ZONDA BISE BORA GREGALE MIRACLE | IL-5R mAb | severe uncontrolled asthma | (PP) | Launched | ||||
Saphnelo TULIP 1 TULIP 2 AZALEA (China) | Type I IFN receptor mAb | systemic lupus erythematosus | (PP) | Launched | ||||
Tezspire NAVIGATOR DIRECTION | TSLP mAb | severe uncontrolled asthma | (PP) | Launched | ||||
tozorakimab OBERON TITANIA | IL-33 mAb | chronic obstructive pulmonary disease | 2024 | |||||
tozorakimab TILIA | IL-33 mAb | acute respiratory failure | 2024 | |||||
Vaccine Immune Therapies | ||||||||
AZD3152 SUPERNOVA | SARS-CoV-2 LAAB | prevention of COVID-19 | Phase I/III | H2 2023 | ||||
Beyfortus | RSV mAb-YTE | passive RSV immunisation | (PP) | Approved | ||||
Evusheld | COVID-19 LAAB combination | prevention and treatment of COVID-19 | Launched | |||||
Rare Disease | ||||||||
acoramidis | oral TTR stabiliser | transthyretin amyloid cardiomyopathy | (PP) | 2024 | ||||
ALXN1840 | bis-choline tetrathiomolybdate | Wilson’s disease | H2 2023 | |||||
anselamimab (CAEL-101) | fibril-reactive mAb | AL amyloidosis | 2024 | |||||
danicopan | oral factor D inhibitor | paroxysmal nocturnal haemoglobinuria with extravascular haemolysis | H1 2023 | |||||
gefurulimab | humanised bispecific VHH antibody | generalised myasthenia gravis | 2024 | |||||
Koselugo/selumetinib SPRINT | MEK inhibitor | paediatric neurofibromatosis type-1 | (PP) | Launched |
16
Significant Life-cycle Management
First major market regulatory submission date and submission status is provided for assets in Phase III or beyond. Projects in Phase III unless otherwise noted.
Compound |
| Mechanism |
| Area Under Investigation |
| Additional |
| Estimated |
|---|---|---|---|---|---|---|---|---|
Oncology | ||||||||
Calquence + R-CHOP ESCALADE | BTK inhibitor + R-CHOP | 1st-line diffuse large B cell lymphoma | 2024 | |||||
Calquence + venetoclax + obinutuzumab AMPLIFY | BTK inhibitor + BCL-2 inhibitor + anti-CD20 mAb | 1st-line chronic lymphocytic leukaemia | (PP) | 2024 | ||||
Calquence ASCEND | BTK inhibitor | relapsed/refractory chronic lymphocytic leukaemia | (PP) | Launched | ||||
Calquence ECHO | BTK inhibitor | 1st-line mantle cell lymphoma | (PP) | 2024 | ||||
Calquence ELEVATE-TN | BTK inhibitor | 1st-line chronic lymphocytic leukaemia | (PP) | Launched | ||||
Enhertu (platform) DESTINY-Breast07 | HER2 targeting ADC | HER2+ breast cancer | (PP) Phase II | |||||
Enhertu (platform) DESTINY-Breast08 | HER2 targeting ADC | HER2-low breast cancer | (PP) Phase I | |||||
Enhertu DESTINY-Breast02 | HER2 targeting ADC | HER2+, unresectable and/or metastatic breast cancer pretreated with prior standard of care HER2 therapies, including T-DM1 | (PP) | H1 2023 | ||||
Enhertu DESTINY-Breast03 | HER2 targeting ADC | HER2+, unresectable and/or metastatic breast cancer subjects previously treated with trastuzumab and taxane | (PP) | Launched | ||||
Enhertu DESTINY-Breast04 | HER2 targeting ADC | HER2-low, unresectable and/or metastatic breast cancer subjects | (PP) | Launched | ||||
Enhertu DESTINY-Breast05 | HER2 targeting ADC | HER2+ post-neoadjuvant high-risk breast cancer | (PP) | 2024 | ||||
Enhertu DESTINY-Breast06 | HER2 targeting ADC | post-ET HER2-low/HR+ breast cancer 2L | (PP) | 2024 | ||||
Enhertu DESTINY-Breast09 | HER2 targeting ADC | 1st-line HER2+ breast cancer | (PP) | 2024 | ||||
Enhertu DESTINY-Breast11 | HER2 targeting ADC | neoadjuvant HER2+ breast cancer | (PP) | 2024 | ||||
Enhertu DESTINY-Gastric01 | HER2 targeting ADC | HER2-overexpressing advanced gastric or gastroesophageal junction adenocarcinoma patients who have progressed on two prior treatment regimens | (PP) Phase II | Launched | ||||
Enhertu DESTINY-Gastric04 | HER2 targeting ADC | 2nd-line HER2+ gastric cancer | (PP) | 2024 | ||||
Enhertu DESTINY-Lung01 | HER2 targeting ADC | HER2-over-expressing or -mutated, unresectable and/or metastatic NSCLC | (PP) Phase II | Launched | ||||
Enhertu DESTINY-Lung04 | HER2 targeting ADC | 1st-line HER2 mutated NSCLC | (PP) | 2024 | ||||
Enhertu DESTINY-PanTumour01 | HER2 targeting ADC | HER2 mutant tumours | (PP) Phase II | |||||
Enhertu DESTINY-PanTumour02 | HER2 targeting ADC | HER2 expressing solid tumours | (PP) Phase II | |||||
Imfinzi (platform) BEGONIA | PD-L1 mAb with paclitaxel with multiple novel oncology therapies | 1st-line metastatic triple negative breast cancer | Phase II | |||||
Imfinzi (platform) COAST | PD-L1 mAb + multiple novel oncology therapies | NSCLC | (PP) Phase II | |||||
Imfinzi (platform) HUDSON | PD-L1 mAb + multiple novel oncology therapies | post-IO NSCLC | Phase II | |||||
Imfinzi (platform) MAGELLAN | D-L1 mAb + multiple novel oncology therapies +/- CTx | 1st-line metastatic NSCLC | (PP) Phase II | |||||
Imfinzi (platform) NeoCOAST | PD-L1 mAb + multiple novel oncology therapies | NSCLC | (PP) Phase II | |||||
Imfinzi + CRT KUNLUN | PD-L1 mAb + CRT | locally advanced oesophageal squamous cell carcinoma | (PP) | 2024 | ||||
Imfinzi + CRT PACIFIC-2 | PD-L1 mAb + CRT | locally-advanced (stage III) NSCLC | (PP) | 2024 | ||||
Imfinzi + CRT PACIFIC-5 (China) | PD-L1 mAb + CRT | locally-advanced (stage III) NSCLC | (PP) | H1 2023 | ||||
Imfinzi + CTx neoadjuvant AEGEAN | PD-L1 mAb + CTx | locally-advanced (stage II-III) NSCLC | H2 2023 | |||||
Imfinzi + CTx NIAGARA | PD-L1 mAb + CTx | muscle invasive bladder cancer | H2 2023 | |||||
Imfinzi + CTx TOPAZ-1 | PD-L1 mAb + CTx | 1st-line biliary tract cancer | (PP) | Launched | ||||
Imfinzi + domvanalimab (AB154) + CTx PACIFIC-8 | PD-L1 mAb + TIGIT | unresectable stage III NSCLC | (PP) | 2024 | ||||
Imfinzi + EV +/- Imjudo VOLGA | PD-L1 + nectin-4 targeting ADC +/- CTLA4 | muscle invasive bladder cancer | 2024 | |||||
Imfinzi + FLOT MATTERHORN | PD-L1 mAb + CTx | neo-adjuvant/adjuvant gastric cancer | (PP) | 2024 | ||||
Imfinzi + Imjudo + SoC NILE | PL-L1 mAb + CTLA-4 mAb + SoC | 1st-line urothelial cancer | H2 2023 | |||||
Imfinzi + Imjudo + | PD-L1 + CTLA4 + VEGF +/- chemo-embolisation | locoregional hepatocellular carcinoma | 2024 |
17
Compound |
| Mechanism |
| Area Under Investigation |
| Additional |
| Estimated |
|---|---|---|---|---|---|---|---|---|
TACE +/- lenvatinib EMERALD-3 | ||||||||
Imfinzi + Lynparza ORION | PD-L1 mAb + PARP inhibitor | 1st-line metastatic NSCLC | (PP) Phase II | |||||
Imfinzi + VEGF + TACE EMERALD-1 | PD-L1 mAb + VEGF + TACE | locoregional hepatocellular carcinoma | (PP) | 2024 | ||||
Imfinzi + VEGF EMERALD-2 | PD-L1 mAb + VEGF | adjuvant hepatocellular carcinoma | (PP) | H2 2023 | ||||
Imfinzi +/- Imjudo + CRT ADRIATIC | PD-L1 mAb +/- CTLA-4 mAb + CRT | 1st-line limited-stage small-cell lung cancer | (PP) | 2024 | ||||
Imfinzi +/- Imjudo + CTx POSEIDON | PD-L1 mAb +/- CTLA-4 mAb + CTx | 1st-line NSCLC | Launched | |||||
Imfinzi post-SBRT PACIFIC-4 | PD-L1 mAb post-SBRT | stage I/II NSCLC | (PP) | 2024 | ||||
Imfinzi POTOMAC | PD-L1 mAb | non-muscle invasive bladder cancer | 2024 | |||||
Lynparza (basket) LYNK002 | PARP inhibitor | HRRm cancer | (PP) Phase II | |||||
Lynparza + abiraterone PROpel | PARP inhibitor + NHA | prostate cancer | (PP) | Launched | ||||
Lynparza + Imfinzi + bevacizumab DUO-O | PARP inhibitor + PD-L1 mAb + VEGF inhibitor | 1st-line ovarian cancer | (PP) | 2024 | ||||
Lynparza + Imfinzi DUO-E | PARP inhibitor + PD-L1 mAb | 1st-line endometrial cancer | (PP) | 2024 | ||||
Lynparza MONO-OLA1 | PARP inhibitor | 1st-line BRCAwt ovarian cancer | (PP) | 2024 | ||||
Lynparza OlympiA | PARP inhibitor | gBRCA adjuvant breast cancer | (PP) | Launched | ||||
Orpathys + Imfinzi SAMETA | MET inhibitor + PD-L1 mAb | 1st-line papillary renal cell carcinoma | (PP) | 2024 | ||||
Tagrisso + (Koselugo or Orpathys) TATTON | EGFR inhibitor + (MEK inhibitor or MET inhibitor) | advanced EGFRm NSCLC | (PP) Phase I | |||||
Tagrisso + CTx FLAURA2 | EGFR inhibitor + CTx | 1st-line advanced EGFRm NSCLC | H2 2023 | |||||
Tagrisso + Orpathys SAFFRON | EGFR inhibitor + MET inhibitor | advanced EGFRm NSCLC | (PP) | 2024 | ||||
Tagrisso + Orpathys SAVANNAH | EGFR inhibitor + MET inhibitor | advanced EGFRm NSCLC | (PP) Phase II | |||||
Tagrisso +/- CTx neoadjuvant NeoADAURA | EGFR inhibitor +/- CTx | stage II/III resectable EGFRm NSCLC | 2024 | |||||
Tagrisso ADAURA2 | EGFR inhibitor | adjuvant EGFRm NSCLC stage Ia2-Ia3 following complete tumour resection | 2024 | |||||
Tagrisso LAURA | EGFR inhibitor | stage III EGFRm NSCLC | H2 2023 | |||||
Tagrisso (platform) ORCHARD | EGFR inhibitor + multiple novel oncology therapies | 2nd-line EGFRm osimertinib-resistant NSCLC | (PP) Phase II | |||||
CVRM |
|
|
|
| ||||
Andexxa | anti-factor Xa reversal | urgent surgery | Phase II | |||||
Farxiga/Forxiga DAPA-MI | SGLT-2 inhibitor | prevention of heart failure and CV death following a myocardial infarction | n/a | |||||
Farxiga/Forxiga DELIVER | SGLT-2 inhibitor | worsening HF or CV death in patients with chronic heart failure (HFpEF) | Approved | |||||
Lokelma DIALIZE-Outcomes | potassium binder | CV outcomes in patients on chronic haemodialysis with hyperkalaemia | 2024 | |||||
Lokelma STABILIZE-CKD | potassium binder | hyperkalaemia in CKD | 2024 | |||||
roxadustat | hypoxia-inducible factor prolyl hydroxylase inhibitor | chemotherapy induced anaemia | (PP) Phase II | |||||
roxadustat | hypoxia-inducible factor prolyl hydroxylase inhibitor | anaemia in myelodysplastic syndrome | (PP) | 2024 | ||||
Xigduo XR/Xigduo | SGLT-2 inhibitor/metformin FDC | type-2 diabetes | Launched | |||||
Respiratory Immunology | ||||||||
Breztri/Trixeo (PT010) KALOS LOGOS | LABA/LAMA/ICS | asthma | 2024 | |||||
Fasenra FJORD | IL-5R mAb | bullous pemphigoid | 2024 | |||||
Fasenra MANDARA | IL-5R mAb | eosinophilic granulomatosis with polyangiitis | 2024 | |||||
Fasenra NATRON | IL-5R mAb | hypereosinophilic syndrome | 2024 | |||||
Fasenra ORCHID | IL-5R mAb | nasal polyps | (PP) | 2024 | ||||
Fasenra RESOLUTE | IL-5R mAb | COPD | (PP) | 2024 | ||||
Saphnelo IRIS | Type I IFN receptor mAb | lupus nephritis | (PP) | 2024 | ||||
Saphnelo TULIP-SC | Type I IFN receptor mAb | systemic lupus erythematosus (subcutaneous) | (PP) | 2024 | ||||
Tezspire COURSE | TSLP mAb | COPD | (PP) Phase II | |||||
Tezspire WAYPOINT | TSLP mAb | nasal polyps | (PP) | 2024 | ||||
Rare Disease | ||||||||
Ultomiris | anti-complement C5 mAb | dermatomyositis | Phase II/III | 2024 | ||||
Ultomiris | anti-complement C5 mAb | haematopoietic stem cell transplant–associated thrombotic microangiopathy | 2024 |
18
Compound |
| Mechanism |
| Area Under Investigation |
| Additional |
| Estimated |
|---|---|---|---|---|---|---|---|---|
Ultomiris | anti-complement C5 mAb | generalised myasthenia gravis | Launched | |||||
Ultomiris | anti-complement C5 mAb | subcutaneous, paroxysmal nocturnal haemoglobinuria and atypical haemolytic uraemic syndrome | Approved | |||||
Ultomiris CHAMPION-NMOSD | anti-complement C5 mAb | neuromyelitis optica spectrum disorder | Under review |
19
Patent Expiries of Key Marketed Products
Patents covering our products are, or may be, challenged by third parties. Generic products may be launched ‘at risk’ and our patents may be revoked, circumvented or found not to be infringed. Many of our products are subject to challenges by third parties. Details of material challenges by third parties can be found in “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets” on pages 192 to 198 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 and incorporated by reference. The expiry dates shown below include granted Supplementary Protection Certificate and Patent Term Extension (PTE) and/or Paediatric Exclusivity periods (as appropriate). In Europe, the exact SPC situation may vary by country as different Patent Offices grant SPCs at different rates. Bolded expiry dates relate to new molecular entity patents, the remaining dates relate to other patents. The expiry dates of relevant regulatory data exclusivity periods are not represented in the table below. A number of our products are subject to generic competition in one or more markets. There may be agreements permitting generic or biosimilar entry prior to the expiry dates shown below.
Aggregate Product | ||||||||||||||||||||||
US | Sales Ex-US2 | |||||||||||||||||||||
Product Sales ($m) | ($m) | |||||||||||||||||||||
Key Marketed products |
| Description |
| US |
| China |
| EU1 |
| Japan |
| 2022 |
| 2021 |
| 2020 |
| 2022 |
| 2021 |
| 2020 |
Oncology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calquence (acalabrutinib) |
| A selective inhibitor of Bruton’s tyrosine kinase indicated for the treatment of chronic lymphocytic leukaemia (CLL) and mantle cell lymphoma (MCL) and in development for the treatment of multiple B-cell malignancies. |
| 2026-2032, 2032-2036 |
| 2032, 2036 |
| 2032, 20362 |
| 2037, 2036 |
| 1,657 |
| 1,089 |
| 511 |
| 400 |
| 149 |
| 11 |
Enhertu3 (trastuzumab deruxtecan) |
| A HER2-directed antibody drug conjugate indicated for HER2-positive and HER2-low advanced breast cancers, for HER2-mutant metastatic non-small cell lung cancer (NSCLC), and for HER2-positive advanced gastric cancer. |
| 2033 |
| 2033-2035 |
| 2033-2035 |
| 4 |
| — |
| — |
| — |
| 79 |
| 17 |
| — |
Faslodex (fulvestrant) |
| An injectable oestrogen receptor antagonist used for the treatment of hormone receptor positive advanced breast cancer that has progressed following treatment with prior endocrine therapy. |
| expired |
| expired |
| expired |
| 2025-2026 |
| 17 |
| 30 |
| 55 | 317 |
| 401 |
| 525 | |
Imfinzi (durvalumab) |
| A human monoclonal antibody (mAb) that blocks PD-1 and CD80 on T-cells indicated for unresectable, Stage III NSCLC, for extensive-stage small cell lung cancer in combination with chemotherapy, for advanced biliary tract cancer in combination with chemotherapy, for unresectable heptatocellular carcinoma (uHCC) in combination with Imjudo, for NSCLC in combination with Imjudo and chemotherapy, and for advanced bladder cancer. |
| 2031 |
| 2030 |
| 2030 |
| 2033 |
| 1,539 |
| 1,245 |
| 1,185 |
| 1,232 |
| 1,167 |
| 857 |
Imjudo5(tremelimumab) | A cytotoxic T-lymphocyte-associated antigen 4 blocking antibody indicated for uHCC in combination with Imfinzi and for NSCLC in combination with Imfinzi and chemotherapy. | 2031 | 2026 | 2026 | 2026 | 13 | — | — | — | — | — | |||||||||||
Iressa (gefitinib) |
| An epidermal growth factor receptor-tyrosine kinase inhibitor (EGFR-TKI) that acts to block signals for cancer cell growth and survival in advanced NSCLC. |
| expired6 |
| 2023 |
| 2023 |
| 2023 |
| 9 |
| 11 |
| 14 |
| 105 |
| 172 |
| 254 |
Lynparza7 (olaparib) |
| An oral poly ADP-ribose polymerase inhibitor indicated for platinum-sensitive relapsed and for BRCA-mutated (BRCAm) ovarian cancers, for homologous recombination repair deficient (HRD)-positive advanced ovarian cancer in combination with bevacizumab, for gBRCAm, HER2-negative early and metastatic breast cancers, for gBRCAm metastatic pancreatic cancer, for HRR gene-mutated and BRCAm metastatic castration-resistant prostate cancers (mCRPC), and for 1st-line mCRPC in combination with abiraterone. |
| 2022-2024, 2028*, 2024-2031 |
| 2024, 2024-2029 |
| 2029, 2024-2029 |
| 2029, 2024-2034 |
| 1,226 |
| 1,087 |
| 876 |
| 1,412 |
| 1,261 |
| 900 |
Orpathys (savolitinib) |
| An oral, potent and highly selective MET TKI indicated for NSCLC with MET gene alterations. |
| 2030 |
| 2030 |
| 2030 |
| 2030 |
| — |
| — |
| — |
| 33 |
| 16 |
| — |
Tagrisso (osimertinib) |
| An EGFR-TKI indicated for early- and late-stage EGFR-mutated NSCLC. |
| 2032, 2035 |
| 2032, 2035 |
| 2032, 2035 |
| 2034, 2035 |
| 2,007 |
| 1,780 |
| 1,566 |
| 3,437 |
| 3,235 |
| 2,762 |
Zoladex8 (goserelin acetate implant) |
| A luteinising hormone-releasing hormone (LHRH) agonist used to treat prostate cancer, breast cancer and certain benign gynaecological disorders. |
| 2022 |
| expired |
| expired |
| expired |
| 15 |
| 13 |
| 5 |
| 912 |
| 935 |
| 883 |
CVRM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andexxa/ Ondexxya (andexnet alfa) | A factor Xa inhibitor reversal agent. | 2032, 2028-2037 | 2028, 2030-2035 | 2028, 2030-2037 | 2028, 2030-2037 | 77 | 50 | — | 73 | 18 | — | |||||||||||
Brilinta/ Brilique (ticagrelor) |
| An oral P2Y12 platelet inhibitor for acute coronary syndromes (ACS) (ticagrelor 90mg) or continuation therapy in high-risk patients (ticagrelor 60mg) with a history of myocardial infarction (MI). An oral P2Y12 platelet inhibitor for the prevention of atherothrombotic events in adult patients with ACS or high-risk patients with history of MI, high-risk patients with coronary artery disease or stroke. |
| 2025, 2030-2036 |
| expired |
| 2024 |
| 2023-2024, 2025-2030 |
| 744 |
| 735 |
| 732 |
| 614 |
| 737 |
| 861 |
Bydureon/ Bydureon BCise (exenatide XR injectable suspension) |
| An injectable glucagon-like peptide-1 (GLP-1) receptor agonist available as a single-dose tray, a single-dose pen or autoinjector device indicated for use in adults with T2D. |
| 2022-2028, 20319 |
| 2024-2028, 20299 |
| 2024-2028, 20299 |
| 2024-2028, 20299 |
| 242 |
| 321 |
| 382 |
| 38 |
| 64 |
| 66 |
Byetta (exenatide injection) |
| An injectable GLP-1 receptor agonist indicated for adults with T2D. |
| expired |
| expired |
| expired |
| expired |
| 14 |
| 26 |
| 37 |
| 17 |
| 30 |
| 31 |
20
Key Marketed products |
| Description |
| US |
| China |
| EU |
| Japan |
| 2022 |
| 2021 |
| 2020 |
| 2022 |
| 2021 |
| 2020 |
Crestor (rosuvastatin calcium) |
| A statin for dyslipidaemia and hypercholesterolaemia. |
| 2022 |
| expired |
| expired |
| 2023 |
| 65 |
| 80 |
| 92 | 983 |
| 1,016 |
| 1,088 | |
Farxiga/ Forxiga (dapagliflozin) |
| A sodium-glucose cotransporter 2 (SGLT-2 inhibitor) indicated for adult patients with T2D or in adults with or without T2D with heart failure with reduced ejection fraction or chronic kidney disease (CKD). |
| 2025, 2025-2040 |
| 2023, 2028 |
| 2027 |
| 2024-2025, 2028 |
| 960 |
| 644 |
| 456 |
| 2,711 |
| 1,770 |
| 1,049 |
Komboglyze/ Kombiglyze XR10 (saxagliptin/ metformin) |
| Combines saxagliptin and metformin as either Komboglyze, for T2D, or Kombiglyze XR, an extended release tablet for T2D. |
| 2023, 2025 |
| 2025 |
| 2026, 2025 |
| 4 | 25 |
| 32 |
| 56 |
| 88 |
| 92 |
| 82 | |
Lokelma (sodium zirconium cyclosilicate) |
| An insoluble, non-absorbed sodium zirconium cyclosilicate, formulated as a powder for oral suspension, that acts as a highly selective potassium-removing agent for the treatment of hyperkalaemia. |
| 2032-2035 |
| 2033-2034 |
| 20322 |
| 2032-2037 |
| 170 |
| 115 |
| 57 |
| 119 |
| 60 |
| 19 |
Onglyza (saxagliptin) |
| An oral dipeptidyl peptidase 4 (DPP-4) inhibitor for T2D. |
| 2023, 2028 |
| 2025 |
| 2024, 2025 |
| 4 | 51 |
| 56 |
| 110 |
| 93 |
| 179 |
| 222 | |
Roxadustat11 |
| An oral hypoxia-inducible factor prolyl hydroxylase inhibitor (HIF-PHI) indicated for the treatment of anaemia from CKD. |
| 2024, 2024-2034 |
| 2024, 2024-2033 |
| 4 |
| 4 | — |
| — |
| — |
| 197 |
| 174 |
| — | |
Xigduo/ Xigduo XR12 (dapagliflozin/ metformin) |
| Combines dapagliflozin and metformin as either Xigduo – to improve glycaemic control in adults with T2D who are inadequately controlled on metformin alone or Xigduo XR – an extended release tablet for adults with T2D who are inadequately controlled on metformin alone. |
| 2025, 2025-2030 |
| 2023 |
| 2028 |
| 2024-2025, 2030 |
| 111 |
| 88 |
| 113 |
| 599 |
| 498 |
| 340 |
Respiratory Immunology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bevespi Aerosphere (glycopyrrolate/ formoterol) |
| A combination of a long-acting muscarinic antagonist (LAMA) and a long-acting beta2-agonist (LABA) delivered in a pressurised metered-dose inhaler (pMDI) used for the long-term maintenance treatment of airflow obstruction in chronic obstructive pulmonary disease (COPD). |
| 2030-2031 |
| 2030 |
| 2030 |
| 2030-2034 |
| 42 |
| 39 |
| 44 |
| 16 |
| 15 |
| 4 |
Breztri/Trixeo Aerosphere (PT010) (budesonide/ glycopyrrolate/ formoterol) |
| A fixed-dose triple combination of an inhaled corticosteroid (ICS), a LAMA and a LABA delivered in a pMDI, used for the long-term maintenance treatment of COPD. |
| 2030-2031 |
| 2030 |
| 2030 |
| 2030-2034 |
| 239 |
| 115 |
| 5 |
| 159 |
| 88 |
| 23 |
Daliresp/ Daxas (roflumilast) |
| An oral phosphodiesterase-4 inhibitor for adults with severe COPD to decrease their number of exacerbations. |
| 2023-2024 |
| 2023 |
| 2023 |
| expired |
| 176 |
| 207 |
| 190 |
| 13 |
| 20 |
| 27 |
Fasenra (benralizumab) |
| A mAb for add-on maintenance treatment of patients with severe asthma aged 12 years and older, and with an eosinophilic phenotype, which directly targets and depletes eosinophils by recruiting natural killer cells and inducing apoptosis (programmed cell death). |
| 2024, 2028-2034 |
| 2028 |
| 2025, 2028-2034 |
| 2025, 2034 |
| 906 |
| 790 |
| 603 |
| 490 |
| 468 |
| 346 |
Pulmicort (budesonide) |
| An inhaled corticosteroid for maintenance treatment of asthma available as Turbuhaler and as Respules. |
| expired |
| expired |
| expired |
| expired |
| 65 |
| 72 |
| 71 |
| 580 |
| 890 |
| 925 |
Saphnelo (anifrolumab) |
| A first-in-class fully human mAb for moderate to severe systemic lupus erythematosus (SLE) that binds to subunit 1 of the type I IFN receptor, blocking the activity of type I IFNs. Type I IFNs such as IFN-alpha, IFN-beta and IFN-kappa are cytokines involved in driving the inflammatory pathways implicated in SLE. |
| 2025-2029, 2033-2036 |
| 2025-2029 |
| 2025-2029, 2036 |
| 2025-2029, 2033-2036 |
| 111 |
| 8 |
| — |
| 5 |
| — |
| — |
Symbicort (budesonide/ formoterol) |
| A combination of an inhaled corticosteroid and a fast-onset LABA to treat asthma and/or COPD either as Symbicort Turbuhaler or Symbicort pMDI. |
| 2022- 202913 |
| expired |
| expired |
| expired |
| 973 |
| 1,065 |
| 1,022 |
| 1,565 |
| 1,663 |
| 1,699 |
Tezspire14 (tezepelumab) |
| A first-in-class human mAb that inhibits the action of TSLP, a key epithelial cytokine that sits at the top of multiple inflammatory cascades and is critical in the initiation and persistence of airway inflammation and airway hyperresponsiveness in severe asthma. Approved for a broad population of severe asthma patients, without phenotype and biomarker limitation. Developed in collaboration with Amgen. |
| 2028, 2038 |
| 2028 |
| 2028 |
| 2028 |
| — |
| — |
| — |
| 4 |
| — |
| — |
Vaccines Immune Therapies | ||||||||||||||||||||||
Beyfortus (nirsevimab) | A long-acting anti-RSV F mAb used to prevent RSV lower respiratory tract disease in neonates and infants during their first RSV season. Jointly developed and commercialised with Sanofi. | 2028-2035, 2038 | 2035 | 2035, 2038 | — | — | — | — | — | — | ||||||||||||
Evusheld (tixagevimab co-packaged with cilgavimab) | A combination of two long-acting antibodies, developed for the prevention and treatment of COVID-19. | 2041 | 1,067 | — | — | 1,118 | 85 | — | ||||||||||||||
Fluenz Tetra/ FluMist Quadrivalent (live attenuated influenza vaccine) | A live attenuated vaccine indicated for active immunisation for the prevention of influenza disease caused by influenza A subtype viruses and type B viruses contained in the vaccine. | 2025-2026 | 2025 | 2025 | 202515 | 21 | 27 | 70 | 154 | 226 | 225 | |||||||||||
Synagis (palivizumab) | A humanised mAb used to prevent serious lower respiratory tract disease caused by RSV in infants at high risk of acquiring RSV disease. | 202316 | expired | 2023 | 2023 | 1 | 23 | 47 | 577 | 387 | 325 | |||||||||||
Vaxzevria17 (ChAdOx1-S Recombinant) | An adenoviral vector vaccine, based on a weakened version of the common cold virus, for active immunisation against COVID-19. | 2032 | 2032 | 2032 | 2032 | 79 | 64 | — | 1,719 | 3,853 | 2 |
21
Key Marketed products |
| Description |
| US |
| China |
| EU |
| Japan |
| 2022 |
| 2021 |
| 2020 |
| 2022 |
| 2021 |
| 2020 |
Rare Disease |
| |||||||||||||||||||||
Kanuma (sebelipase alfa) | A recombinant form of the human lysosomal acid lipase (LAL) enzyme, the enzyme replacement therapy is for the treatment of LAL deficiency. | 2031 | 2031 | 2031, 2026-2037 | 2031, 2032 | 77 | 32 | — | 83 | 30 | — | |||||||||||
Koselugo (selumetinib) | Koselugo (selumetinib) blocks specific enzymes (mitogen-activated protein kinases (MEK1 and MEK2), which are involved in stimulating cells to grow. In neurofibromatosis type 1 (NF1), these enzymes are overactive, causing tumour cells to grow in an unregulated way. By blocking these enzymes, Koselugo slows down the growth of tumour cells. | 2023, 2023-2026 | 2023, 2026-2029 | 2023, 2026-2029 | 2023, 2023-2026 | 162 | 104 | 38 | 46 | 4 | — | |||||||||||
Soliris (eculizumab) |
| A C5 inhibitor for the treatment of paroxysmal nocturnal haemoglobinuria, atypical haemolytic uraemic syndrome, generalised myasthenia gravis and neuromyelitis optica spectrum disorder. |
| 2027, 2025-2032 |
|
| 202718, 2029 |
| 2027, 2029 |
| 2,180 |
| 1,068 |
| — |
| 1,582 |
| 806 |
| — | |
Strensiq (asfotase alfa) | A targeted enzyme replacement therapy for patients with hypophosphatasia. | 2025-2029, 2035-2038 | 2025-2031, 2036 | 2028, 2035-2036 | 769 | 297 | — | 189 | 81 | — | ||||||||||||
Ultomiris (ravulizumab) |
| A long-acting C5 inhibitor for the treatment of paroxysmal nocturnal haemoglobinuria and atypical haemolytic uraemic syndrome. |
| 2035, 2038 |
| 2035 |
| 2035 |
| 2036, 2038 |
| 1,136 |
| 381 |
| — |
| 829 |
| 307 |
| — |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nexium19 (esomeprazole) |
| A proton pump inhibitor used to treat acid-related diseases. |
| expired |
| expired |
| expired |
| expired |
| 120 |
| 128 |
| 169 |
| 1,165 |
| 1,198 |
| 1,323 |
* | Date represents expiry of a pending SPC/PTE and/or Paediatric Exclusivity period. |
1 | Expiry in major EU markets, which includes the UK. |
2 | The patent is the subject of a pending opposition proceeding at the European Patent Office (EPO). The patentee successfully defended the patent in that proceeding, but the opponents have appealed. |
3 | AstraZeneca has recorded $519 million of Collaboration Revenue in relation to this Product in 2022 (2021: $193 million; 2020: $94 million) as set out in “Financial Statements—Notes to the Group Financial Statements—Note 1—Revenue” on page 149 included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023. |
4 | AstraZeneca does not have commercialisation rights. |
5 | Imjudo Product Sales is included in the Imfinzi Product Sales figure. |
6 | In the US, Iressa had seven years’ Orphan Drug exclusivity to 13 July 2022. |
7 | In addition to any Product Sales, AstraZeneca has also recorded $355 million of Collaboration Revenue in relation to this product in 2022 (2021: $400 million; 2020: $460 million), as set out in “Financial Statements—Notes to the Group Financial Statements—Note 1—Revenue” on page 149 included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023. |
8 | Rights licensed to TerSera in the US. |
9 | Patent expiry date relates to BCise. |
10 | Komboglyze/Kombiglyze XR Product Sales is included in the Onglyza Product Sales figure. |
11 | AstraZeneca has recorded $5 million of Collaboration Revenue in relation to this Product in 2022 (2021: $6 million; 2020: $30 million), as set out in “Financial Statements—Notes to the Group Financial Statements—Note 1—Revenue” on page 149 included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023. |
12 | Xigduo/Xigduo XR Product Sales is included in the Farxiga Product Sales figure. |
13 | Patent expiry information relates to the Symbicort pMDI product, including any granted Paediatric Exclusivity term. |
14 | AstraZeneca has recorded $79 million of Collaboration Revenue in relation to this Product in 2022 (2021: $nil; 2020: $nil), as set out in “Financial Statements—Notes to the Group Financial Statements—Note 1—Revenue” on page 149 included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023. |
15 | Rights sold to Swedish Orphan Biovitrum AB (publ). |
16 | Rights licensed to Daiichi Sankyo Company, Ltd. |
17 | AstraZeneca has recorded $76 million of Collaboration Revenue in relation to this Product in 2022 (2021: $64 million; 2020: $nil), as set out in “Financial Statements—Notes to the Group Financial Statements—Note 1—Revenue” on page 149 included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023. |
18 | The patent was revoked during opposition proceedings at the EPO. The patentee has appealed that decision. |
19 | AstraZeneca has recorded $62 million of Collaboration Revenue in relation to this Product in 2022 (2021: $75 million; 2020: $nil), as set out in “Financial Statements—Notes to the Group Financial Statements—Note 1—Revenue” on page 149 included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023. |
22
Geographical Review
This section Item 4—“Information on the Company—Business Overview—Geographical Review” should be read in conjunction with Item 5—“Operating and Financial Review and Prospects—Operating Results” below.
World |
| Emerging Markets |
| U.S. |
| Europe |
| Established ROW | ||||||||||||||||||||
| Sales |
| Actual | CER | Sales | Actual | CER | Sales | Actual | Sales | Actual | CER | Sales | Actual | CER | |||||||||||||
2022 | $m |
| % |
| % |
| $m |
| % |
| % |
| $m |
| % |
| $m |
| % |
| % |
| $m |
| % |
| % | |
Oncology: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tagrisso |
| 5,444 |
| 9 |
| 15 |
| 1,567 |
| 17 |
| 22 |
| 2,007 |
| 13 |
| 1,023 |
| 4 |
| 17 |
| 847 |
| (7) |
| 8 |
Imfinzi |
| 2,784 |
| 15 |
| 21 |
| 287 |
| 4 |
| 7 |
| 1,552 |
| 25 |
| 544 |
| 12 |
| 26 |
| 401 |
| (1) |
| 15 |
Lynparza |
| 2,638 |
| 12 |
| 18 |
| 488 |
| 27 |
| 31 |
| 1,226 |
| 13 |
| 655 |
| 6 |
| 19 |
| 269 |
| 4 |
| 20 |
Calquence |
| 2,057 |
| 66 |
| 69 |
| 45 |
| n/m |
| n/m |
| 1,657 |
| 52 |
| 286 |
| n/m |
| n/m |
| 69 |
| n/m |
| n/m |
Enhertu |
| 79 |
| n/m |
| n/m |
| 51 |
| n/m |
| n/m |
| — |
| — |
| 21 |
| n/m |
| n/m |
| 7 |
| n/m |
| n/m |
Orpathys |
| 33 |
| n/m |
| n/m |
| 33 |
| n/m |
| n/m |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Zoladex |
| 927 |
| (2) |
| 6 |
| 657 |
| 6 |
| 12 |
| 15 |
| 15 |
| 133 |
| (10) |
| 1 |
| 122 |
| (28) |
| (15) |
Faslodex |
| 334 |
| (22) |
| (14) |
| 159 |
| (4) |
| 3 |
| 17 |
| (45) |
| 55 |
| (52) |
| (46) |
| 103 |
| (15) |
| 1 |
Iressa |
| 114 |
| (38) |
| (34) |
| 94 |
| (38) |
| (35) |
| 9 |
| (19) |
| 2 |
| (52) |
| (41) |
| 9 |
| (44) |
| (35) |
Arimidex |
| 99 |
| (29) |
| (24) |
| 76 |
| (29) |
| (26) |
| — |
| — |
| — |
| (87) |
| (86) |
| 23 |
| (23) |
| (11) |
Casodex |
| 78 |
| (45) |
| (40) |
| 53 |
| (50) |
| (47) |
| — |
| — |
| 1 |
| (49) |
| (48) |
| 24 |
| (31) |
| (19) |
Others |
| 44 |
| (14) |
| (6) |
| 27 |
| (6) |
| 1 |
| 1 |
| 59 |
| 6 |
| (4) |
| 4 |
| 10 |
| (36) |
| (26) |
Total Oncology |
| 14,631 |
| 13 |
| 19 |
| 3,537 |
| 10 |
| 14 |
| 6,484 |
| 23 |
| 2,726 |
| 10 |
| 23 |
| 1,884 |
| (5) |
| 10 |
BioPharmaceuticals: CVRM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Farxiga |
| 4,381 |
| 46 |
| 56 |
| 1,665 |
| 39 |
| 47 |
| 1,071 |
| 46 |
| 1,297 |
| 60 |
| 81 |
| 348 |
| 32 |
| 49 |
Brilinta |
| 1,358 |
| (8) |
| (4) |
| 286 |
| (13) |
| (10) |
| 744 |
| 1 |
| 282 |
| (18) |
| (8) |
| 46 |
| (27) |
| (22) |
Lokelma |
| 289 |
| 65 |
| 75 |
| 20 |
| n/m |
| n/m |
| 170 |
| 47 |
| 30 |
| n/m |
| n/m |
| 69 |
| 55 |
| 83 |
Roxadustat |
| 197 |
| 13 |
| 18 |
| 197 |
| 13 |
| 18 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Andexxa* | 150 | 5 | 14 | — | — | — | 77 | (32) | 41 | 41 | 58 | 32 | n/m | n/m | ||||||||||||||
Crestor |
| 1,048 |
| (4) |
| 2 |
| 794 |
| 2 |
| 9 |
| 65 |
| (19) |
| 41 |
| (21) |
| (12) |
| 148 |
| (21) |
| (10) |
Seloken/Toprol-XL |
| 862 |
| (9) |
| (4) |
| 839 |
| (10) |
| (4) |
| — |
| n/m |
| 14 |
| 26 |
| 27 |
| 9 |
| (16) |
| (13) |
Bydureon | 280 | (27) | (26) | 3 | (16) | (18) | 242 | (24) | 35 | (37) | (29) | — | (95) | (94) | ||||||||||||||
Onglyza | 257 | (28) | (25) | 121 | (32) | (28) | 76 | (13) | 38 | (37) | (29) | 22 | (32) | (30) | ||||||||||||||
Others |
| 366 |
| (10) |
| (7) |
| 194 |
| (1) |
| 4 |
| 34 |
| (35) |
| 128 |
| (12) |
| (10) |
| 10 |
| (32) |
| (24) |
Total CVRM |
| 9,188 |
| 13 |
| 19 |
| 4,119 |
| 9 |
| 15 |
| 2,479 |
| 11 |
| 1,906 |
| 25 |
| 40 |
| 684 |
| 10 |
| 25 |
BioPharmaceuticals: Respiratory Immunology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Symbicort |
| 2,538 |
| (7) |
| (2) |
| 608 |
| — |
| 5 |
| 973 |
| (9) |
| 582 |
| (13) |
| (3) |
| 375 |
| (2) |
| 5 |
Fasenra |
| 1,396 |
| 11 |
| 15 |
| 43 |
| n/m |
| n/m |
| 906 |
| 15 |
| 305 |
| 7 |
| 20 |
| 142 |
| (12) |
| (1) |
Breztri |
| 398 |
| 96 |
| n/m |
| 92 |
| 68 |
| 75 |
| 239 |
| n/m |
| 33 |
| n/m |
| n/m |
| 34 |
| 32 |
| 56 |
Saphnelo |
| 116 |
| n/m |
| n/m |
| — |
| — |
| — |
| 111 |
| n/m |
| 2 |
| n/m |
| n/m |
| 3 |
| n/m |
| n/m |
Tezspire |
| 4 |
| n/m |
| n/m |
| — |
| — |
| — |
| — |
| - |
| 2 |
| n/m |
| n/m |
| 2 |
| n/m |
| n/m |
Pulmicort |
| 645 |
| (33) |
| (31) |
| 462 |
| (40) |
| (39) |
| 65 |
| (9) |
| 69 |
| (6) |
| 6 |
| 49 |
| 5 |
| 15 |
Daliresp |
| 189 |
| (17) |
| (16) |
| 3 |
| (28) |
| (24) |
| 176 |
| (15) |
| 9 |
| (39) |
| (32) |
| 1 |
| 3 |
| 7 |
Bevespi | 58 | 7 | 9 | 5 | 31 | 38 | 42 | 7 | 10 | (7) | 5 | 1 | n/m | n/m | ||||||||||||||
Others |
| 421 |
| (29) |
| (27) |
| 230 |
| (20) |
| (17) |
| 143 |
| 32 |
| 42 |
| (77) |
| (75) |
| 6 |
| (53) |
| (46) |
Total Respiratory Immunology |
| 5,765 |
| (4) |
| — |
| 1,443 |
| (18) |
| (14) |
| 2,655 |
| 10 |
| 1,054 |
| (15) |
| (5) |
| 613 |
| (3) |
| 7 |
BioPharmaceuticals: Vaccines Immune Therapies | ||||||||||||||||||||||||||||
Vaxzevria | 1,798 | (54) | (52) | 729 | (67) | (67) | 79 | 24 | 365 | (65) | (61) | 625 | 8 | 17 | ||||||||||||||
Evusheld | 2,185 | n/m | n/m | 413 | n/m | n/m | 1,067 | n/m | 298 | n/m | n/m | 407 | n/m | n/m | ||||||||||||||
Synagis | 578 | 41 | 59 | 173 | n/m | n/m | 1 | (94) | 213 | 5 | 17 | 191 | 28 | 51 | ||||||||||||||
FluMist | 175 | (31) | (20) | 1 | (51) | (54) | 21 | (21) | 151 | (32) | (20) | 2 | (4) | (10) | ||||||||||||||
Total Vaccines Immune Therapies | 4,736 | 2 | 8 | 1,316 | (43) | (41) | 1,168 | n/m | 1,027 | (33) | (24) | 1,225 | 68 | 89 | ||||||||||||||
Rare Disease*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Soliris* |
| 3,762 |
| (11) |
| (5) |
| 301 |
| (29) |
| (10) |
| 2,180 |
| (7) |
| 805 |
| (21) |
| (12) |
| 476 |
| 11 |
| 24 |
Ultomiris* |
| 1,965 |
| 34 |
| 42 |
| 38 |
| n/m |
| n/m |
| 1,136 |
| 35 |
| 481 |
| 49 |
| 68 |
| 310 |
| 6 |
| 26 |
Strensiq* |
| 958 |
| 16 |
| 18 |
| 35 |
| 41 |
| 31 |
| 769 |
| 19 |
| 78 |
| (3) |
| 9 |
| 76 |
| (1) |
| 16 |
Koselugo |
| 208 |
| 93 |
| 96 |
| 26 |
| n/m |
| n/m |
| 162 |
| 55 |
| 20 |
| n/m |
| n/m |
| — |
| — |
| — |
Kanuma* |
| 160 |
| 16 |
| 19 |
| 31 |
| 73 |
| 61 |
| 77 |
| 12 |
| 44 |
| (3) |
| 10 |
| 8 |
| 21 |
| 38 |
Total Rare Disease |
| 7,053 |
| 4 |
| 10 |
| 431 |
| (10) |
| 6 |
| 4,324 |
| 8 |
| 1,428 |
| (3) |
| 9 |
| 870 |
| 8 |
| 24 |
Other medicines |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nexium |
| 1,285 |
| (3) | 8 | 568 | (19) | (13) |
| 120 | (6) | 46 | (26) | (17) | 551 | 28 | 50 | |||||||||||
Others |
| 340 |
| (10) | (7) | 220 | 4 | 7 |
| 24 | (45) | 77 | (29) | (27) | 19 | 37 | 54 | |||||||||||
Total Other medicines |
| 1,625 |
| (5) | 4 | 788 | (14) | (9) |
| 144 | (16) | 123 | (28) | (24) | 570 | 28 | 50 | |||||||||||
Total Product Sales | 42,998 | 18 | 24 | 11,634 | (4) | 1 | 17,254 | 44 | 8,264 | 9 | 22 | 5,846 | 22 | 40 | ||||||||||||||
23
World |
| Emerging Markets |
| U.S. |
| Europe |
| Established ROW | ||||||||||||||||||||
| Sales |
| Actual | CER | Sales | Actual | CER | Sales | Actual | Sales | Actual | CER | Sales | Actual | CER | |||||||||||||
2021 | $m |
| % |
| % |
| $m |
| % |
| % |
| $m |
| % |
| $m |
| % |
| % |
| $m |
| % |
| % | |
Oncology: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tagrisso |
| 5,015 | 16 | 13 | 1,336 | 11 | 6 | 1,780 | 14 | 986 | 32 | 25 | 913 | 13 | 14 | |||||||||||||
Imfinzi |
| 2,412 | 18 | 16 | 277 | 76 | 68 | 1,245 | 5 | 485 | 31 | 25 | 405 | 23 | 23 | |||||||||||||
Lynparza |
| 2,348 | 32 | 30 | 384 | 45 | 41 | 1,087 | 24 | 618 | 42 | 35 | 259 | 29 | 28 | |||||||||||||
Calquence |
| 1,238 | n/m | n/m | 20 | n/m | n/m | 1,089 | n/m | 111 | n/m | n/m | 18 | n/m | n/m | |||||||||||||
Koselugo |
| 108 | n/m | n/m | 1 | n/m | n/m | 104 | n/m | 3 | n/m | n/m | — | — | — | |||||||||||||
Enhertu | 17 | n/m | n/m | 12 | n/m | n/m | — | — | 4 | n/m | n/m | 1 | n/m | n/m | ||||||||||||||
Orpathys |
| 16 | n/m | n/m | 16 | n/m | n/m | — | — | — | — | — | — | — | — | |||||||||||||
Zoladex |
| 948 | 7 | 3 | 619 | 10 | 5 | 13 | n/m | 147 | 5 | (1) | 169 | (7) | (7) | |||||||||||||
Faslodex |
| 431 | (26) | (27) | 167 | (8) | (10) | 30 | (46) | 113 | (49) | (52) | 121 | (2) | (1) | |||||||||||||
Iressa |
| 183 | (32) | (35) | 151 | (31) | (35) | 11 | (23) | 5 | (58) | (60) | 16 | (26) | (26) | |||||||||||||
Casodex |
| 143 | (17) | (21) | 105 | (21) | (26) | — | — | 3 | (3) | 6 | 35 | (3) | (3) | |||||||||||||
Arimidex |
| 139 | (25) | (27) | 106 | (28) | (31) | — | — | 4 | 5 | 7 | 29 | (15) | (14) | |||||||||||||
Others | 50 | 1 | (1) | 29 | 3 | 1 | — | — | 5 | 51 | 43 | 16 | (16) | (15) | ||||||||||||||
Total Oncology |
| 13,048 | 20 | 18 | 3,223 | 11 | 6 | 5,359 | 26 | 2,484 | 28 | 22 | 1,982 | 13 | 13 | |||||||||||||
BioPharmaceuticals: | ||||||||||||||||||||||||||||
CVRM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Farxiga |
| 3,000 | 53 | 49 | 1,195 | 74 | 70 | 732 | 29 | 810 | 60 | 52 | 263 | 34 | 31 | |||||||||||||
Brilinta |
| 1,472 | (8) | (10) | 328 | (29) | (31) | 735 | 1 | 346 | 1 | (4) | 63 | 8 | (1) | |||||||||||||
Bydureon |
| 385 | (14) | (15) | 3 | (25) | (26) | 321 | (16) | 55 | 5 | — | 6 | (40) | (44) | |||||||||||||
Onglyza |
| 360 | (23) | (26) | 179 | (11) | (14) | 88 | (47) | 61 | 5 | (1) | 32 | (29) | (33) | |||||||||||||
Byetta |
| 55 | (19) | (19) | 12 | 61 | 75 | 26 | (31) | 11 | (20) | (25) | 6 | (36) | (38) | |||||||||||||
Other diabetes |
| 59 | 26 | 24 | 18 | n/m | n/m | 22 | (12) | 17 | 35 | 31 | 2 | 11 | 12 | |||||||||||||
Lokelma |
| 175 | n/m | n/m | 3 | (44) | (48) | 115 | n/m | 13 | n/m | n/m | 44 | n/m | n/m | |||||||||||||
Roxadustat |
| 174 | n/m | n/m | 174 | n/m | n/m | — | — | — | — | — | — | — | — | |||||||||||||
Crestor |
| 1,096 | (7) | (10) | 775 | 4 | — | 80 | (13) | 52 | (60) | (62) | 189 | (11) | (10) | |||||||||||||
Seloken/Toprol-XL | 951 | 16 | 10 | 928 | 19 | 13 | 1 | (89) | 11 | (33) | (33) | 11 | 9 | (3) | ||||||||||||||
Atacand |
| 97 | (60) | (60) | 28 | (84) | (84) | 4 | (65) | 65 | 87 | 86 | — | n/m | n/m | |||||||||||||
Others |
| 196 | 3 | (2) | 137 | 9 | 3 | — | — | 53 | (7) | (8) | 6 | (21) | (25) | |||||||||||||
Total CVRM |
| 8,020 | 13 | 10 | 3,780 | 18 | 14 | 2,124 | 2 | 1,494 | 22 | 16 | 622 | 7 | 5 | |||||||||||||
BioPharmaceuticals: | ||||||||||||||||||||||||||||
Respiratory Immunology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Symbicort |
| 2,728 | — | (2) | 609 | 7 | 4 | 1,065 | 4 | 670 | (3) | (8) | 384 | (12) | (17) | |||||||||||||
Fasenra |
| 1,258 | 33 | 31 | 20 | 67 | 67 | 790 | 31 | 286 | 41 | 34 | 162 | 24 | 22 | |||||||||||||
Pulmicort |
| 962 | (3) | (8) | 770 | (3) | (9) | 72 | 1 | 73 | — | (5) | 47 | (13) | (15) | |||||||||||||
Daliresp |
| 227 | 5 | 4 | 4 | — | (2) | 207 | 9 | 15 | (32) | (37) | 1 | (3) | (10) | |||||||||||||
Breztri |
| 203 | n/m | n/m | 55 | n/m | n/m | 115 | n/m | 7 | n/m | n/m | 26 | n/m | n/m | |||||||||||||
Bevespi |
| 54 | 12 | 12 | 4 | n/m | n/m | 39 | (11) | 11 | n/m | n/m | — | — | — | |||||||||||||
Saphnelo |
| 8 | n/m | n/m | — | — | — | 8 | — | — | — | — | — | — | — | |||||||||||||
Others | 594 | 49 | 42 | 287 | 41 | 32 | 108 | n/m | 185 | 5 | — | 14 | 1 | (6) | ||||||||||||||
Total Respiratory Immunology |
| 6,034 | 13 | 9 | 1,749 | 9 | 4 | 2,404 | 24 | 1,247 | 6 | 1 | 634 | (2) | (5) | |||||||||||||
Rare Disease*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Soliris* |
| 1,874 | 1 | 2 | 170 | 1 | 8 | 1,068 | 4 | 439 | (8) | (7) | 197 | 8 | 11 | |||||||||||||
Ultomiris* |
| 688 | 27 | 29 | 9 | n/m | n/m | 381 | 20 | 169 | 73 | 74 | 129 | 4 | 11 | |||||||||||||
Strensiq* |
| 378 | 13 | 13 | 10 | 81 | 78 | 297 | 13 | 36 | 2 | 3 | 35 | 9 | 14 | |||||||||||||
Andexxa* |
| 68 | (3) | (3) | — | — | — | 50 | (21) | 18 | 7 | 6 | — | — | — | |||||||||||||
Kanuma* |
| 62 | 20 | 21 | 7 | n/m | n/m | 32 | 13 | 20 | 7 | 9 | 3 | 14 | 25 | |||||||||||||
Total Rare Disease |
| 3,070 | 8 | 9 | 196 | 11 | 18 | 1,828 | 8 | 682 | 7 | 9 | 364 | 7 | 11 | |||||||||||||
Other medicines |
| |||||||||||||||||||||||||||
Nexium | 1,326 | (11) | (12) | 705 | (7) | (10) | 128 | (24) | 62 | (13) | (18) | 431 | (13) | (12) | ||||||||||||||
Synagis | 410 | 10 | 13 | 35 | — | — | 23 | (51) | 203 | (38) | (37) | 149 | — | — | ||||||||||||||
FluMist | 253 | (14) | (17) | 2 | 15 | 2 | 27 | (62) | 222 | 1 | (2) | 2 | (50) | (53) | ||||||||||||||
Losec/Prilosec | 180 | (2) | (7) | 152 | — | (7) | 1 | (89) | 26 | 32 | 31 | 1 | (82) | (72) | ||||||||||||||
Seroquel XR/IR | 92 | (21) | (20) | 46 | (17) | (15) | 12 | (30) | 29 | 2 | 2 | 5 | (71) | (67) | ||||||||||||||
Others | 106 | (16) | (19) | 14 | n/m | n/m | 30 | (45) | 54 | (5) | (9) | 8 | (13) | (19) | ||||||||||||||
Total Other medicines | 2,367 | (8) | (10) | 954 | (2) | (5) | 221 | (39) | 596 | (17) | (19) | 596 | 12 | 15 | ||||||||||||||
COVID-19 | ||||||||||||||||||||||||||||
Vaxzevria | 3,917 | n/m | n/m | 2,240 | n/m | n/m | 64 | n/m | 1,035 | n/m | n/m | 578 | n/m | n/m | ||||||||||||||
Evusheld | 85 | n/m | n/m | 19 | n/m | n/m | — | — | 66 | n/m | n/m | — | — | — | ||||||||||||||
Total COVID-19 | 4,002 | n/m | n/m | 2,259 | n/m | n/m | 64 | n/m | 1,101 | n/m | n/m | 578 | n/m | n/m | ||||||||||||||
Total Product Sales | 36,541 | 41 | 38 | 12,161 | 40 | 36 | 12,000 | 39 | 7,604 | 50 | 44 | 4,776 | 36 | 36 | ||||||||||||||
* | Growth rates on Rare Disease medicines have been calculated on a pro forma basis compared with the corresponding period in the prior year. |
24
World | Emerging Markets | U.S. | Europe | Established ROW | ||||||||||||||||||||||||
Sales | Actual | CER | Sales | Actual | CER | Sales |
| Actual | Sales | Actual | CER | Sales | Actual | CER | ||||||||||||||
2020 |
| $m |
| % |
| % |
| $m |
| % |
| % |
| $m |
| % |
| $m |
| % |
| % |
| $m |
| % |
| % |
Oncology: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tagrisso |
| 4,328 | 36 | 36 | 1,208 | 59 | 63 | 1,566 | 24 | 748 | 58 | 56 | 806 | 18 | 16 | |||||||||||||
Imfinzi |
| 2,042 | 39 | 39 | 158 | n/m | n/m | 1,185 | 14 | 370 | n/m | n/m | 329 | 51 | 49 | |||||||||||||
Lynparza |
| 1,776 | 48 | 49 | 264 | 98 | n/m | 876 | 40 | 435 | 52 | 51 | 201 | 32 | 32 | |||||||||||||
Calquence |
| 522 | n/m | n/m | 6 | n/m | n/m | 511 | n/m | 2 | n/m | n/m | 3 | n/m | n/m | |||||||||||||
Koselugo |
| 38 | n/m | n/m | — | — | — | 38 | n/m | — | — | — | — | — | — | |||||||||||||
Zoladex |
| 888 | 9 | 13 | 561 | 14 | 20 | 5 | (22) | 140 | 4 | 4 | 182 | 1 | 1 | |||||||||||||
Faslodex |
| 580 | (35) | (34) | 180 | (9) | (4) | 55 | (83) | 221 | (3) | (3) | 124 | (10) | (11) | |||||||||||||
Iressa |
| 268 | (37) | (36) | 221 | (23) | (22) | 14 | (21) | 12 | (82) | (82) | 21 | (57) | (57) | |||||||||||||
Arimidex |
| 185 | (18) | (16) | 147 | (3) | 1 | — | — | 3 | (88) | (88) | 35 | (23) | (24) | |||||||||||||
Casodex |
| 172 | (14) | (14) | 133 | 4 | 6 | — | — | 3 | (83) | (83) | 36 | (37) | (38) | |||||||||||||
Others | 51 | (47) | (46) | 28 | (1) | 1 | — | — | 4 | (41) | (40) | 19 | (69) | (69) | ||||||||||||||
Total Oncology |
| 10,850 | 25 | 26 | 2,906 | 31 | 36 | 4,250 | 23 | 1,938 | 36 | 35 | 1,756 | 11 | 10 | |||||||||||||
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Farxiga |
| 1,959 | 27 | 30 | 686 | 46 | 55 | 569 | 6 | 507 | 36 | 35 | 197 | 21 | 21 | |||||||||||||
Brilinta |
| 1,593 | 1 | 2 | 461 | — | 4 | 732 | 3 | 342 | (3) | (3) | 58 | — | 2 | |||||||||||||
Onglyza |
| 470 | (11) | (10) | 201 | 14 | 18 | 166 | (28) | 58 | (16) | (17) | 45 | (12) | (11) | |||||||||||||
Bydureon |
| 448 | (18) | (18) | 4 | (62) | (59) | 382 | (17) | 53 | (20) | (20) | 9 | (32) | (31) | |||||||||||||
Byetta |
| 68 | (37) | (36) | 8 | (35) | (23) | 37 | (45) | 14 | (24) | (24) | 9 | (18) | (17) | |||||||||||||
Other diabetes |
| 47 | (10) | (10) | 7 | n/m | n/m | 25 | (37) | 13 | 38 | 38 | 2 | 26 | 28 | |||||||||||||
Lokelma |
| 76 | n/m | n/m | 5 | n/m | n/m | 57 | n/m | 4 | n/m | n/m | 10 | n/m | n/m | |||||||||||||
Crestor |
| 1,180 | (8) | (7) | 748 | (7) | (5) | 92 | (11) | 129 | (13) | (15) | 211 | (4) | (5) | |||||||||||||
Seloken/Toprol-XL |
| 821 | 8 | 12 | 782 | 14 | 18 | 13 | (66) | 16 | (35) | (35) | 10 | (11) | (10) | |||||||||||||
Atacand |
| 243 | 10 | 15 | 175 | 9 | 17 | 10 | (12) | 35 | 17 | 17 | 23 | 15 | 15 | |||||||||||||
Others |
| 191 | (30) | (30) | 126 | (35) | (34) | — | — | 57 | (5) | (4) | 8 | (60) | (61) | |||||||||||||
Total CVRM |
| 7,096 | 3 | 5 | 3,203 | 8 | 12 | 2,083 | (6) | 1,228 | 7 | 6 | 582 | 2 | 2 | |||||||||||||
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Symbicort |
| 2,721 | 9 | 10 | 567 | 4 | 9 | 1,022 | 23 | 694 | 2 | 2 | 438 | (1) | — | |||||||||||||
Pulmicort |
| 996 | (32) | (32) | 798 | (33) | (33) | 71 | (35) | 73 | (10) | (10) | 54 | (37) | (37) | |||||||||||||
Fasenra |
| 949 | 35 | 34 | 12 | n/m | n/m | 603 | 25 | 203 | 72 | 70 | 131 | 33 | 32 | |||||||||||||
Daliresp/Daxas |
| 217 | 1 | 1 | 4 | (9) | (8) | 190 | 3 | 22 | (14) | (13) | 1 | (10) | (8) | |||||||||||||
Bevespi |
| 48 | 16 | 15 | 1 | n/m | n/m | 44 | 7 | 3 | n/m | n/m | — | — | — | |||||||||||||
Breztri |
| 28 | n/m | n/m | 14 | n/m | n/m | 5 | n/m | — | — | — | 9 | n/m | n/m | |||||||||||||
Others |
| 398 | (15) | (15) | 203 | (15) | (16) | 6 | (12) | 176 | (14) | (15) | 13 | (15) | (7) | |||||||||||||
Total Respiratory Immunology |
| 5,357 | (1) | — | 1,599 | (20) | (18) | 1,941 | 17 | 1,171 | 6 | 5 | 646 | — | 1 | |||||||||||||
Other: |
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Nexium |
| 1,492 | 1 | 2 | 757 | 1 | 4 | 169 | (22) | 71 | 12 | 10 | 495 | 9 | 8 | |||||||||||||
Synagis |
| 372 | 4 | 4 | — | — | — | 47 | 2 | 325 | 4 | 4 | — | — | — | |||||||||||||
FluMist |
| 295 | n/m | n/m | 1 | n/m | n/m | 70 | n/m | 219 | n/m | n/m | 5 | n/m | n/m | |||||||||||||
Losec/Prilosec |
| 183 | (30) | (30) | 152 | (15) | (14) | 6 | (44) | 20 | (59) | (59) | 5 | (78) | (79) | |||||||||||||
Seroquel XR/IR |
| 117 | (39) | (37) | 55 | 11 | 14 | 17 | (48) | 29 | (67) | (67) | 16 | (19) | (18) | |||||||||||||
Others |
| 128 | (33) | (34) | 6 | (51) | (44) | 55 | (50) | 58 | (7) | (8) | 9 | 6 | (5) | |||||||||||||
Total Other Medicines |
| 2,587 | (1) | n/m | 971 | (2) | 1 | 364 | (17) | 722 | 8 | 7 | 530 | 5 | 3 | |||||||||||||
Total Product Sales | 25,890 | 10 | 11 | 8,679 | 6 | 10 | 8,638 | 12 | 5,059 | 16 | 15 | 3,514 | 6 | 6 | ||||||||||||||
All commentary in “—Geographical Review” relates to Product Sales. The market definitions used in the geographical areas review below are defined in the Glossary on pages 220 to 223 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated and submitted on February 21, 2023.
From January 1, 2022, the Group reported Andexxa in CVRM, Koselugo in Rare Disease and launched a new unit, Vaccines Immune Therapies, under which Vaxzevria, Evusheld, Synagis and FluMist are reported. Included below in the 2022 in brief and Sales by Region in 2022, current year figures for these products are presented within their respective current therapy areas and their comparatives and growth rates shown for each therapy area have been calculated as though these changes had been implemented in 2020.
2022 in brief
Product Sales increased by 18% (CER: 24%) in 2022 to $42,998 million (2021: $36,541 million; 2020: $25,890 million) including Vaccines Immune Therapies Product Sales. Following completion of the Alexion acquisition on 21 July 2021, Rare Disease medicines generated $7,053 million, growing 4% (CER: 10%) on a pro forma basis, and contributed to 16% of AstraZeneca’s Total Product Sales.
In 2022, Product Sales in Emerging Markets decreased by 4% (CER: increased by 1%) to $11,634 million (2021: $12,161 million; 2020: $8,679 million). Excluding Vaxzevria, Product Sales in Emerging Markets increased by 10% (16% at CER) in the year to $10,905 million. China sales, comprising 49% of Emerging Markets sales, decreased by 4% (CER: 1%) to $5,740 million (2021: $5,995 million; 2020: $5,345 million) and contributed to 13% of Product Sales in 2022.
Ex-China Emerging Markets Product Sales decreased by 4% (increase of 2% at CER) to $5,894 million (2021: $6,166 million; 2020: $3,334 million). Excluding Vaxzevria sales, Product Sales in Ex-China Emerging Markets increased by 32% in the year (CER: 42%) to $5,165 million, driven by Oncology medicines and Farxiga from
25
CVRM. Product Sales of Vaxzevria in Ex-China Emerging Markets generated $729 million in the year. Product Sales of Evusheld in Ex-China Emerging Markets generated $411 million in the year.
Product Sales in the U.S. increased by 44% to $17,254 million (2021: $12,000 million; 2020: $8,638 million) driven by strong performance of Oncology and CVRM medicines. Sales of Rare Disease medicines in the U.S. increased to $4,324 million, representing 61% of total Rare Disease sales. This is largely driven by Product Sales of Ultomiris.
Product Sales in Europe increased by 9% (CER: 22%) to $8,264 million (2021: $7,604 million; 2020: $5,059 million). Sales of Rare Disease medicines comprised 17% of Europe Product Sales, which decreased on a pro forma basis by 3% (increased by 9% at CER) to $1,428 million in 2022. Oncology sales in Europe grew by 10% (CER: 23%) to $2,726 million (2021: $2,481 million; 2020: $1,938 million) and represented 33% of Europe sales, primarily driven by sales of Tagrisso, Lynparza and Imfinzi. Vaxzevria Product Sales contributed $365 million, amounting to 4% of total Europe Product Sales and 20% of the total Vaxzevria Product Sales in 2022. Excluding Vaxzevria, Product Sales in Europe grew by 20% (35% at CER) to $7,899 million.
Product Sales in the Established ROW region increased by 22% (CER: 40%) to $5,846 million (2021: $4,776 million; 2020: $3,514 million) largely driven by Soliris and Farxiga. Japan, comprising 69% of total Established ROW Product Sales, increased by 17% (CER: 39%) to $4,007 million (2021: $3,416 million; 2020: $2,600 million), underpinned by sales of Vaxzevria, Evusheld and Nexium. Product Sales in Canada, which contributed to 20% of total Established ROW Product Sales, increased by 51% (CER: 57%) to $1,165 million (2021: $772 million; 2020: $605 million).
2021 in brief
Product Sales increased by 41% (CER: 38%) in 2021 to $36,541 million (2020: $25,890 million) including COVID-19 vaccine revenues. Product Sales excluding vaccines increased 26% (24% at CER) to $32,624 million. Growth was well balanced across AstraZeneca’s strategic areas of focus with double-digit growth in all major regions, including Emerging Markets, despite some headwinds in China. Following completion of the Alexion acquisition on 21 July 2021, Rare Disease medicines generated $3,070 million, growing 8% (CER: 9%) on a pro-rata basis, and contributed to 8% of AstraZeneca’s Total Product Sales.
In 2021, Product Sales in Emerging Markets increased by 40% (CER: 36%) to $12,161 million (2020: $8,679 million). Excluding Vaxzevria, Product Sales in Emerging Markets increased by 14% (10% CER) in the year to $9,921 million. China sales, comprising 49% of Emerging Markets sales, increased by 12% (CER: 4%) to $5,995 million (2020: $5,345 million). This contributed to 16% of Product Sales in 2021.
Ex-China Emerging Markets Product Sales increased by 85% (86% at CER) to $6,166 million (2020: $3,334 million). Excluding Vaxzezria sales, Product Sales in Ex-China Emerging Markets increased by 18% in the year (CER: 19%) to $3,926 million, driven by Oncology medicines and Farxiga. Product Sales of Vaxzevria in Ex-China Emerging Markets generated $2,240 million in the year.
Sales in the U.S. increased by 39% to $12,000 million (2020: $8,638 million) driven by strong performance of Oncology and Respiratory Immunology medicines. Sales of Rare Disease medicines in the U.S. post acquisition increased to $1,828 million, representing a pro rata increase of 8% thereby contributing to 60% of total Rare Disease sales. This is largely driven by Product Sales of Soliris.
Product Sales in Europe increased by 50% (CER: 44%) to $7,604 million (2020: $5,059 million). Sales of Rare Disease medicines comprised 9% of Europe Product Sales, which grew on a pro rata basis by 7% (CER: 9%) to $682 million in 2021. Oncology sales in Europe grew by 28% (CER: 22%) to $2,484 million (2020: $1,938 million) and represented 33% of Europe sales, primarily driven by sales of Tagrisso, Lynparza and Imfinzi. Vaxzevria sales contributed $1,035 million, amounting to 14% of total Europe Product Sales and 26% to the total Vaxzevria sales in 2021. Excluding Vaxzevria, Product Sales in Europe grew by 30% (25% CER) to $6,568 million.
Sales in the Established ROW region increased by 36% (CER: 36%) to $4,776 million (2020: $3,514 million) largely driven by Tagrisso and Imfinzi. Japan, comprising 72% of total Established ROW sales, increased by 31% (CER: 35%) to $3,416 million (2020: $2,600 million), underpinned by sales of Oncology. Sales in Canada, which contributed 16% of total Established ROW sales, increased by 28% (CER: 19%) to $772 million (2020: $605 million). Other Established ROW sales increased by 90% (CER: 76%) to $588 million in the year (2020: $309 million), largely driven by Vaxzevria.
The Group has ceased reporting New Medicines as a performance metric (Tagrisso, Imfinzi, Lynparza, Calquence, Enhertu, Koselugo, Farxiga, Brilinta, Lokelma, roxadustat, Fasenra, Bevespi and Breztri). In line with practice these medicines were reported within their respective disease areas.
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2020 in brief
Product Sales increased by 10% (CER: 11%) in 2020 to $25,890 million with the fourth quarter of that year being the first for many years where the Product Sales exceeded $7,000 million. The growth in Product Sales is primarily driven by solid performances of New Medicines in Emerging Markets.
Sales of New Medicines increased by 35% (CER: 36%) to $13,359 million including growth in Emerging Markets of 51% (CER: 57%) to $2,814 million. New Medicines represented 52% of Total Product Sales globally with outstanding performances across the major therapy areas.
Sales of specialty-care medicines increased by 23% (CER: 24%) to $13,468 million, with a significant contribution from Emerging Markets consisting of 25% of total sales.
In 2020, Product Sales in Emerging Markets increased by 6% (CER: 10%) to $8,679 million. New Medicines grew by 51% (CER: 57%) to $2,814 million and represented 32% of Emerging Markets sales. China sales comprised 62% of Emerging Markets sales and increased by 10% (CER: 10%) to $5,345 million. New Medicines, primarily driven by Tagrisso and Lynparza in Oncology and Forxiga in New CVRM delivered particularly encouraging growth and represented 30% of China Total Product Sales. Strong sales of Zoladex, Seloken and Symbicort supplemented this performance. The decline of Pulmicort in China by 36% (CER: 37%) to $648 million restricted growth in the year.
Ex-China Emerging Markets Product Sales increased by 2% (10% at CER) to $3,334 million, with particularly strong performances in Russia, where it grew by 28% (42% at CER) to $314 million and ex-Brazil Latin America which was stable (growth of 18% at CER), with sales of $447 million.
Sales in the U.S. increased by 12% to $8,638 million. This was driven by sustained growth of New Medicines, which contributes to 72% of Product Sales, as a result of continuing growth across the Oncology and New Respiratory Immunology therapy areas as well as Forxiga.
Product Sales in Europe increased by 16% (CER: 15%) to $5,059 million. Sales of New Medicines comprised 52% of Europe Product Sales, which grew by 47% (CER: 45%) to $2,614 million in 2020. Oncology sales in Europe grew by 36% (CER: 35%) to $1,938 million and represented 38% of Europe sales, driven by growth in Tagrisso, Imfinzi and Lynparza.
Sales in the Established ROW region increased by 6% (CER: 6%) to $3,514 million driven by accelerating growth in New Medicines, which made up 50% of Product Sales in that region. Japan, comprising 74% of total Established ROW sales, increased by 2% (CER: 1%) to $2,600 million and is underpinned by increased sales of Tagrisso by 16% (14% at CER) to $731 million, despite a price reduction of 15% in 2019.
Sales by Region in 2022
Emerging Markets
Product Sales in Emerging Markets decreased by 4% (CER: increased by 1%) to $11,634 million (2021: $12,161 million; 2020: $8,679 million).
Oncology
Oncology Product Sales in Emerging Markets increased by 10% (CER: 14%) to $3,537 million (2021: $3,222 million; 2020: $2,906 million).
Tagrisso sales in Emerging Markets increased by 17% (CER: 22%) to $1,567 million (2021: $1,336 million; 2020: $1,208 million). Sales performance was impacted by the admission to China NRDL in March 2021 for the 1st-line setting and the renewal in the 2nd-line setting. However, the rising demand from increased patient access in China continues to offset the impact of the March 2021 NRDL price reduction.
Imfinzi sales in Emerging Markets increased by 4% (CER: 7%) to $287 million (2021: $277 million; 2020: $158 million) as a result of improved diagnosis and treatment rates following the COVID-19 pandemic.
Lynparza sales in Emerging Markets increased by 27% (CER: 31%) to $488 million (2021: $384 million; 2020: $264 million), benefiting from increased patient access to Lynparza following admission to China’s NRDL as a 1st-line treatment for BRCAm ovarian cancer patients with effect from March 2021.
Calquence sales in Emerging Markets were $45 million (2021: $20 million; 2020: $6 million).
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Enhertu sales in Emerging Markets were $51 million (2021: $12 million; 2020: $nil), demonstrating strong uptake in early launch markets.
Orpathys Product Sales, after its launch in China in 2021, were $33 million (2021: $16 million; 2020: $nil) in Emerging Markets.
Zoladex sales in Emerging Markets increased by 6% (CER: 12%) to $657 million (2021: $619 million; 2020: $561 million) driven by ex-China markets offsetting a price cut in Japan.
Faslodex sales in Emerging Markets fell by 4% (CER: increased by 3%) to $159 million (2021: $167 million; 2020: $180 million) due to increasing competition from several generic versions of the medicine.
Iressa sales in Emerging Markets declined by 38% (CER: 35%) to $94 million (2021: $151 million; 2020: $221 million) reflecting generic competition.
Arimidex sales in Emerging Markets declined by 29% (CER: 26%) to $76 million (2021: $106 million; 2020: $147 million).
Casodex sales in Emerging Markets declined by 50% (CER: 47%) to $53 million (2021: $105 million; 2020: $133 million).
CVRM
CVRM Product Sales in Emerging Markets increased on a pro forma basis by 9% (CER: 15%) to $4,119 million (2021: $3,780 million; 2020: $3,203 million).
Forxiga sales in Emerging Markets increased by 39% (CER: 47%) to $1,665 million (2021: $1,195 million; 2020: $686 million) due to solid growth in ex-China Emerging markets, particularly Latin America, despite generic competition in some markets.
Emerging Markets sales of Brilinta declined by 13% (CER: 10%) to $286 million (2021: $328 million; 2020: $461 million), reflecting the adverse impact from Brilinta’s inclusion in China’s VBP programme, offset by growth in ex-China Emerging markets.
Lokelma sales in Emerging Markets were $20 million (2021: $3 million; 2020: $5 million) where, in China, Lokelma was admitted to the NRDL with effect from 1 January 2022 and is now the leading potassium binder in the country.
Roxadustat sales in Emerging Markets increased by 13% (CER: 18%) to $197 million (2021: $174 million; 2020: $nil), benefitting from increased volumes in China following NRDL price cuts.
Crestor sales in Emerging Markets increased by 2% (CER: 9%) to $794 million (2021: $775 million; 2020: $748 million).
Seloken sales in Emerging Markets declined by 10% (CER: 4%) to $839 million (2021: $928 million; 2020: $782 million).
Bydureon sales in Emerging Markets declined by 16% (CER: 18%) to $3 million (2021: $3 million; 2020: $4 million).
Onglyza sales in Emerging Markets decreased by 32% (CER: 28%) to $121 million (2021: $179 million; 2020: $201 million).
Respiratory Immunology
Respiratory Immunology Product Sales in Emerging Markets decreased by 18% (CER: 14%) to $1,443 million (2021: $1,749 million; 2020: $1,599 million).
Emerging Markets sales of Symbicort were stable (CER: increase of 5%) at $608 million in the year (2021: $609 million; 2020: $567 million) as a result of growth driven primarily by Latin America, Middle East and Asia Area, offset by a decrease in China due to COVID-19 restrictions.
Fasenra sales in Emerging Markets grew to $43 million (2021: $20 million; 2020: $12 million) as a result of strong volume growth driven by launch acceleration across key markets.
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Breztri sales in Emerging Markets increased by 68% (CER: 75%) to $92 million (2021: $55 million; 2020: $14 million). In China, Breztri is the market share leader within the fixed-dose triple market, which continues to gain share from ICS/LABA class.
Pulmicort sales in Emerging Markets, which represents 72% of the global total Product Sales, declined by 40% (CER: 39%) to $462 million (2021: $770 million; 2020: $798 million) largely as a result of the inclusion of Pulmicort in the latest round of VBP in China implemented in 2021, lower rates of hospitalisations and limited access to nebulisation centres in China due to COVID-19 lockdowns.
Daliresp sales in Emerging Markets declined by 28% (CER: 24%) to $3 million (2021: $4 million; 2020: $4 million).
Bevespi sales in Emerging Markets increased by 31% (CER: 38%) to $5 million during the year (2021: $4 million; 2020: $1 million).
Vaccines Immune Therapies
Vaccines Immune Therapies Product Sales in Emerging Markets decreased by 43% (CER: 41%) to $1,316 million (2021: $2,295 million; 2020: $2 million).
Vaxzevria sales in Emerging Markets declined by 67% (CER: 67%) to $729 million (2021: $2,240 million; 2020: $nil) and contributed 41% to total Product Sales of Vaxzevria.
Evusheld sales in Emerging Markets were $413 million (2021: $19 million; 2020: $nil), benefitting from multiple government contracts in Central and Eastern Europe, Latin America and South East Asia.
Synagis sales in Emerging Markets grew to $173 million (2021: $35 million; 2020: $nil).
Rare Disease
Rare Disease Product Sales in Emerging Markets were $431 million (2021: $197 million; 2020: $nil), representing a pro forma decline of 10% (CER: increase of 6%).
Soliris sales in Emerging Markets amounted to $301 million (2021: $170 million; 2020: $nil), representing a pro forma decrease of 29% (10% at CER), driven by successful conversion to Ultomiris, slightly offset by growth in NMOSD and expansion in new markets.
Ultomiris sales in Emerging Markets amounted to $38 million (2021: $9 million; 2020: $nil).
Strensiq sales in the Emerging Markets grew to $35 million (2021: $10 million: 2020: $nil), representing a pro forma increase of 41% (CER: 31%), driven by strong patient demand and geographic expansion.
Koselugo sales in Emerging markets grew to $26 million (2021: $1 million; 2020: $nil).
Kanuma sales in Emerging markets increased by 73% (CER: 61%) on a pro forma basis to $31 million (2021: $7 million; 2020: $nil).
Other
Other medicines Product Sales in Emerging Markets decreased by 14% (CER: 9%) to $788 million (2021: $917 million; 2020: $970 million).
Nexium sales in Emerging Markets decreased by 19% (CER: 13%) to $568 million (2021: $705 million; 2020: $757 million), reflecting the impact of the inclusion of Nexium (oral) in China’s VBP programme in 2021 resulting in significantly lower market access and a mandatory price reduction.
U.S.
Product Sales in the U.S. increased by 44% to $17,254 million (2021: $12,000 million; 2020: $8,638 million), benefitting from increased epidermal growth factor receptor testing rates for Tagrisso.
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Oncology
Oncology Product Sales in the U.S. increased by 23% to $6,484 million (2021: $5,255 million; 2020: $4,212 million).
Tagrisso sales in the U.S. increased by 13% to $2,007 million (2021: $1,780 million; 2020: $1,566 million). Performance benefitted from improving use in 1st-line with longer duration of treatment and increasing adjuvant penetration, partially offset by lower 2nd-line use.
Imfinzi sales in the U.S. increased by 25% to $1,552 million (2021: $1,245 million; 2020: $1,185 million), benefitting from new patient starts across Stage III NSCLC and ES-SCLC as well as the strong launch in BTC following September 2022 FDA approval, based on TOPAZ-1 Phase III and growing penetration of Imfinzi + Imjudo in metastatic NSCLC and HCC.
Lynparza sales in the U.S. grew by 13% to $1,226 million (2021: $1,087 million; 2020: $876 million), as a result of increased use in breast, ovarian and prostate cancers as well as U.S. launch in early breast cancer following March 2022 FDA approval, based on data from the Phase III OlympiA trial.
Calquence sales in the U.S. exhibited a strong performance with an increase of 52% to $1,657 million (2021: $1,089 million; 2020: $511 million), as a result of increased market share in new patient starts.
Zoladex sales in the U.S. increased by 15% to $15 million (2021: $13 million; 2020: $5 million).
Faslodex sales in the U.S. declined by 45% to $17 million (2021: $30 million; 2020: $55 million) due to increasing competition from several generic versions of the medicine.
Iressa sales in the U.S. decreased by 19% to $9 million (2021: $11 million; 2020: $14 million) due to continued share loss to next-generation TKIs.
CVRM
CVRM Product Sales in the U.S. increased on a pro forma basis by 11% to $2,479 million (2021: $2,174 million; 2020: $2,083 million).
In the U.S. Farxiga sales grew by 46% to $1,071 million (2021: $732 million; 2020: $569 million), reflecting the benefit of the regulatory approval in 2020 for HFrEF and the May 2021 approval for the treatment of CKD, both of which include patients with and without T2D. Farxiga continued to gain in-class brand share, driven by HF and CKD launches.
Brilinta sales in the U.S. increased by 1% to $744 million (2021: $735 million; 2020: $732 million), resulting from favourable sales growth impacted by a one-time adjustment and some market recovery of oral antiplatelet therapies following the pandemic.
Lokelma sales in the U.S. increased by 47% to $170 million (2021: $115 million; 2020: $57 million), extending its branded market share lead in the US and also achieving total potassium binder market share leadership in the period.
Andexxa sales in the U.S. were $77 million (2021: $50 million), representing a pro forma decline of 32%.
Crestor sales in the U.S. decreased by 19% to $65 million (2021: $80 million; 2020: $92 million).
Bydureon sales in the U.S. declined by 24% to $242 million (2021: $321 million; 2020: $382 million) due to continued competitive pressures.
U.S sales of Onglyza fell by 13% in the year to $76 million (2021: $88 million; 2020: $166 million).
Respiratory Immunology
Respiratory Immunology Product Sales in the U.S. increased by 10% to $2,655 million (2021: $2,404 million; 2020: $1,941 million).
Symbicort sales in the U.S. decreased by 9% to $973 million (2021: $1,065 million; 2020: $1,022 million) due to strong market share performance, consolidating leadership in a declining ICS/LABA market, offset by pricing pressure.
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Fasenra sales in the U.S. increased by 15% to $906 million (2021: $790 million; 2020: $603 million), maintaining a strong total patient share in the severe asthma market.
Breztri sales in the U.S. were $239 million (2021: $115 million; 2020: $5 million), following new-to-brand and total market share growth in the fixed-dose triple class market.
Saphnelo sales in the U.S. amounted to $111 million (2021: $8 million; 2020: $nil) as a result of sales acceleration in the U.S., where Saphnelo achieved new-to-brand leadership in the i.v. segment for SLE and received a permanent J-code facilitating reimbursement.
Pulmicort sales in the U.S. decreased by 9% to $65 million (2021: $72 million; 2020: $71 million).
Daliresp sales in the U.S. decreased by 15% to $176 million (2021: $207 million; 2020: $190 million).
Bevespi sales in the U.S. increased by 7% to $42 million (2021: $39 million; 2020: $44 million).
Vaccines Immune Therapies
Vaccines Immune Therapies Product Sales in the U.S. were $1,168 million (2021: $113 million; 2020: $117 million).
Vaxzevria sales in the U.S. increased by 24% to $79 million (2021: $64 million; 2020: $nil), benefitting from purchases by the US Government for donation overseas.
Evusheld sales in the U.S. were $1,067 million (2021: $nil; 2020: $nil), following Emergency Use Authorisation for the prevention of COVID-19 in December 2021. AstraZeneca fulfilled the U.S. Government’s order for 1.7 million units during the year. In January 2023, the FDA revised the Emergency Use Authorisation to limit the use of Evusheld to when the combined frequency of non-susceptible variants is ≤90%.
Synagis sales in the U.S. decreased by 94% to $1 million (2021: $23 million; 2020: $47 million).
FluMist sales in the U.S. declined by 21% to $21 million in the year (2021: $27 million; 2020: $70 million).
Rare Disease
Rare Disease Product Sales in the U.S. were $4,324 million (2021: $1,882 million; 2020: $38 million), representing a pro forma increase of 8%.
Soliris sales in the U.S. were $2,180 million (2021: $1,068 million; 2020: $nil), representing a pro forma decrease of 7%. Sales benefitted from growing use in NMOSD, offset by the successful conversion to Ultomiris in haematological indications PNH, aHUS and gMG.
Ultomiris sales in the U.S. increased by 35% on a pro forma basis to $1,136 million (2021: $381 million; 2020: $nil), as a result of the successful conversion from Soliris in PNH, gMG and aHUS.
Strensiq sales in the U.S. increased to $769 million (2021: $297 million; 2020: $nil), representing a pro forma growth of 19%. Performance benefitted from increased demand over the course of the year.
Koselugo sales in the U.S. increased by 55% to $162 million (2021: $104 million; 2020: $38 million) following its launch in 2020.
Kanuma sales in the U.S. increased by 12% on a pro forma basis to $77 million (2021: $32 million; 2020: $nil).
Other
Other medicines Product Sales in the U.S. decreased by 16% to $144 million (2021: $171 million; 2020: $247 million).
Nexium sales in the U.S. decreased by 6% to $120 million (2021: $128 million; 2020: $169 million).
Europe
Product Sales in Europe increased by 9% (CER: 22%) and grew to $8,264 million (2021: $7,604 million; 2020: $5,059 million).
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Oncology
Oncology Product Sales in Europe increased by 10% (CER: 23%) to $2,726 million (2021: $2,481 million; 2020: $1,938 million).
Tagrisso sales in Europe increased by 4% (CER: 17%) to $1,023 million (2021: $986 million; 2020: $748 million), driven by greater adoption in the 1st-line and adjuvant settings and established 1L standard of care in EU5, partially offset by lower 2nd line use.
Imfinzi sales in Europe increased by 12% (CER: 26%) to $544 million (2021: $485 million; 2020: $370 million), reflecting an increase in ES-SCLC market penetration, an increase in the number of reimbursed markets and an ongoing recovery in rates of diagnosis and treatment.
Lynparza sales in Europe increased by 6% (CER: 19%) to $655 million (2021: $618 million; 2020: $435 million), reflecting increasing HRD testing rates and use in 1st-line HRD-positive ovarian cancer, increased Lynparza uptake in BRCAm mCRPC and gBRCAm HER2-negative advanced breast cancer and the EU launch in gBRCAm early breast cancer following EMA approval in August based on data from the OlympiA Phase III trial.
Calquence sales in Europe were $286 million (2021: $111 million; 2020: $2 million) through increased market share in new patient starts after launches in the region.
Enhertu sales in Europe were $21 million (2021: $4 million; 2020: $nil).
Zoladex sales in Europe decreased by 10% (CER: increased by 1%) to $133 million (2021: $147 million; 2020: $140 million).
Faslodex sales in Europe decreased by 52% (CER: 46%) to $55 million (2021: $113 million; 2020: $221 million) due to increasing competition from several generic versions of the medicine.
Iressa sales in Europe declined by 52% (CER: 41%) to $2 million (2021: $5 million; 2020: $12 million).
CVRM
CVRM Product Sales in Europe increased on a pro forma basis by 25% (CER: 40%) to $1,906 million (2021: $1,512 million; 2020: $1,228 million).
Forxiga sales in Europe increased by 60% (CER: 81%) to $1,297 million (2021: $810 million; 2020: $507 million). The performance reflected the beneficial addition of cardiovascular outcomes trial data to the label, the HFrEF regulatory approval in November 2020, and CKD regulatory approval in August 2021. Forxiga continued gaining in-class market share in the period.
Brilique sales in Europe decreased by 18% (CER: 8%) to $282 million (2021: $346 million; 2020: $342 million).
Lokelma sales in Europe amounted to $30 million (2021: $13 million; 2020: $4 million) during the year with expansion from recent launches across the region where Lokelma extended its market share in the period.
Andexxa sales in Europe were $41 million (2021: $18 million; 2020: $nil), representing a pro forma increase of 41% (CER: 58%).
Crestor sales in Europe declined by 21% (CER: 12%) to $41 million (2021: $52 million; 2020: $129 million), following the divestment of European rights in more than 30 countries to Grünenthal in February 2021.
Seloken/Toprol-XL sales in Europe increased by 26% (CER: 27%) to $14 million (2021: $11 million; 2020: $16 million).
Bydureon sales in Europe decreased by 37% (CER: 29%) to $35 million (2021: $55 million; 2020: $53 million).
Onglyza sales in Europe decreased by 37% (CER: 29%) to $38 million (2021: $61 million; 2020: $58 million).
Respiratory Immunology
Respiratory Immunology Product Sales in Europe declined by 15% (CER: 5%) to $1,054 million (2021: $1,247 million; 2020: $1,171 million).
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Symbicort sales in Europe decreased by 13% (CER: 3%) to $582 million (2021: $670 million; 2020: $694 million), as a result of resilient market share in growing ICS/LABA market, offset by pricing pressure.
Fasenra sales in Europe increased by 7% (CER: 20%) to $305 million (2021: $286 million; 2020: $203 million), benefiting from sustained growth by expanding leadership in severe eosinophilic asthma.
Trixeo sales in Europe were $33 million (2021: $7 million; 2020: $nil), demonstrating sustained growth across markets as new launches continue to progress.
Pulmicort sales in Europe declined by 6% (CER: increased by 6%) to $69 million (2021: $73 million; 2020: $73 million).
Daxas sales in Europe decreased by 39% (CER: 32%) to $9 million (2021: $15 million; 2020: $22 million).
Bevespi sales in Europe declined by 7% (CER: increased by 5%) to $10 million (2021: $11 million; 2020: $3 million).
Vaccines Immune Therapies
Vaccines Immune Therapies Product Sales in Europe decreased by 33% (CER: 24%) to $1,027 million (2021: $1,526 million; 2020: $546 million).
Vaxzevria sales in Europe decreased by 65% (CER: 61%) to $365 million (2021: $1,035 million; 2020: $nil).
Evusheld sales in Europe were $298 million (2021: $66 million; 2020: $nil), benefitting from approval in the EU for prevention of COVID-19 in March 2022 and treatment of COVID-19 in September 2022.
Synagis sales in Europe increased by 5% (CER: 17%) to $213 million (2021: $203 million; 2020: $325 million). This was due to the expiry of the ex-US commercial rights agreement between AstraZeneca and AbbVie in June 2021, and changes as a result of the reversion of ex-US rights to AstraZeneca thereafter, prior to which AstraZeneca’s sales to AbbVie were reported in Europe.
FluMist sales in Europe decreased by 32% (CER: 20%) to $151 million (2021: $222 million; 2020: $219 million) due to the late start to the influenza season in Europe.
Rare Disease
Rare Disease Product Sales in Europe were $1,428 million (2021: $667 million; 2020: $nil), representing a pro forma decrease of 3% (CER: increase of 9%).
Soliris sales in Europe were $805 million (2021: $439 million; 2020: $nil), representing a pro forma decline of 21% (CER: 12%).
Ultomiris sales in Europe increased to $481 million (2021: $169 million; 2020: $nil), representing a pro forma increase of 49% (CER: 68%), driven by strong demand generation following new launch markets.
Strensiq sales in Europe were $78 million (2021: $36 million; 2020: $nil), representing a pro forma decrease of 3% (CER: increase of 9%).
Koselugo sales in Europe were $20 million (2021: $3 million; 2020: $nil).
Kanuma sales in Europe were $44 million (2021: $20 million; 2020: $nil), representing a pro forma decrease of 3% (CER: increase of 10%)
Other
Other medicines Product Sales in Europe decreased by 28% (CER: 24%) to $123 million (2021: $171 million; 2020: $176 million).
Nexium sales in Europe decreased by 26% (CER: 17%) to $46 million (2021: $62 million; 2020: $71 million).
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Established ROW
Product Sales in Established ROW region increased by 22% (CER: 40%) to $5,846 million (2021: $4,776 million; 2020: $3,514 million).
Oncology
Oncology Product Sales in the Established ROW region decreased by 5% (CER: increased by 10%) to $1,884 million (2021: $1,982 million; 2020: $1,756 million). Sales in Japan decreased by 10% (CER: increased by 7%) to $1,501 million in the year.
Tagrisso sales in the Established ROW region decreased by 7% (CER: increased by 8%) to $847 million (2021: $913 million; 2020: $806 million), following increased use in 1st-line setting and launch progress in adjuvant, including Japan. In Japan, sales of Tagrisso declined by 10% (CER: increased by 6%) to $695 million in the year.
Imfinzi sales in the Established ROW region decreased by 1% (CER: increased by 15%) to $401 million (2021: $405 million; 2020: $329 million), due to new reimbursements. In Japan, sales of $329 million represented a decline of 5% (increase of 13% at CER).
Lynparza sales in the Established ROW region increased by 4% (CER: 20%) to $269 million (2021: $259 million; 2020: $201 million), benefitting from new launches and high levels of HRD testing in Japan. Sales in Japan amounted to $203 million, representing a growth of 2% (CER: 21%).
Calquence sales in the Established ROW region were $69 million (2021: $18 million; 2020: $3 million).
Zoladex sales in the Established ROW region decreased by 28% (CER: 15%) to $122 million (2021: $169 million; 2020: $182 million). In Japan, sales decreased by 23% (CER: 9%) to $107 million due to a price cut.
Faslodex sales in the Established ROW region decreased by 15% (CER: increased by 1%) to $103 million (2021: $121 million; 2020: $124 million). In Japan, sales decreased by 14% (CER: increased by 2%) to $101 million.
Iressa sales in the Established ROW region decreased by 44% (CER: 35%) to $9 million (2021: $16 million; 2020: $21 million).
Arimidex sales in the Established ROW region decreased by 23% (CER: 11%) to $23 million (2021: $29 million; 2020: $35 million).
Casodex sales in the Established ROW region decreased by 31% (CER: 19%) to $24 million (2021: $35 million; 2020: $36 million).
CVRM
CVRM Product Sales in the Established ROW region increased on a pro forma basis by 10% (CER: 25%) to $684 million (2021: $622 million; 2020: $582 million).
Forxiga sales in the Established ROW region increased by 32% (CER: 49%) to $348 million (2021: $263 million; 2020: $197 million). Japan sales grew by 43% (CER: 68%) to $215 million. In Japan, AstraZeneca sells to collaborator Ono Pharmaceutical Co., Ltd, which records in-market sales. The continued volume growth is driven by HF and CKD launches.
Brilinta sales in the Established ROW region decreased by 27% (CER: 22%) to $46 million (2021: $63 million; 2020: $58 million).
Lokelma sales in the Established ROW region increased by 55% (CER: 83%) to $69 million (2021: $44 million; 2020: $10 million). Sales in Japan increased by 54% (CER: 84%) to $67 million in the year.
Andexxa sales in the Established ROW region were $32 million (2021: $nil; 2020: $nil).
Crestor sales in the Established ROW region decreased by 21% (CER: 10%) to $148 million (2021: $189 million; 2020: $211 million) with a decline in Japan sales of 24% (10% at CER) to $114 million, where AstraZeneca collaborates with Shionogi.
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Seloken/Toprol-XL sales in the Established ROW region showed a decrease of 16% (13% at CER) to $9 million (2021: $11 million; 2020: $10 million).
Bydureon sales in the Established ROW region declined by 95% (CER: 94%) to $nil (2021: $6 million; 2020: $9 million).
Onglyza sales in the Established ROW region declined by 32% (CER: 30%) to $22 million (2021: $32 million; 2020: $45 million).
Respiratory Immunology
Respiratory Immunology Product Sales in the Established ROW region decreased by 3% (CER: increased by 7%) to $613 million (2021: $634 million; 2020: $646 million).
Symbicort sales in the Established ROW region decreased by 2% (CER: increased by 5%) to $375 million (2021: $384 million; 2020: $438 million). Sales in Japan declined by 34% (23% at CER) to $81 million in the year. The growth in some countries is driven by share gains and a continued recovery in the ICS/LABA market. That growth was offset by generic erosion in other countries.
Fasenra sales in the Established ROW region decreased by 12% (CER: 1%) to $142 million (2021: $162 million; 2020: $131 million), as a result of price adjustments and impact in the dynamic market related to the rise in COVID-19 cases. Sales in Japan declined by 20% (6% at CER) to $88 million in the year.
Breztri sales in the Established ROW region increased by 32% (CER: 56%) to $34 million (2021: $26 million; 2020: $9 million) which is largely contributable to the sales in Japan of $31 million, following strong new-to-brand market share performance in Japan, with the dynamic market impacted by access restrictions related to the rise in COVID-19 cases.
Pulmicort sales in the Established ROW region increased by 5% (CER: 15%) to $49 million (2021: $47 million; 2020: $54 million). In Japan, sales decreased by 29% (16% at CER) in the year to $17 million.
Vaccines Immune Therapies
Vaccines Immune Therapies Product Sales in the Established ROW region increased by 68% (CER: 89%) to $1,225 million (2021: $730 million; 2020: $5 million)
Vaxzevria sales in the Established ROW region grew by 8% (CER: 17%) to $625 million (2021: $578 million; 2020: $nil). Sales in Japan increased by 18% (CER: 29%) to $379 million.
Evusheld sales in the Established ROW region were $407 million (2021: $nil; 2020: $nil), following approval in Japan for prevention and treatment of COVID-19 in August 2022. Sales in Japan were $215 million.
Synagis sales in the Established ROW region increased by 28% (CER 51%) to $191 million (2021: $149 million; 2020: $nil), where the ex-US rights reverted to AstraZeneca after 30 June 2021, from AbbVie Inc.
Rare Disease
Rare Disease Product Sales in Established ROW increased on a pro forma basis by 8% (CER: 24%) to $870 million (2021: $364 million; 2020: $nil).
Soliris sales in the Established ROW increased on a pro forma basis by 11% (CER: 24%) to $476 million (2021: $197 million; 2020: $nil). Sales in Japan declined on a pro forma basis by 8% (CER: increased by 11%) to $224 million.
Ultomiris sales in the Established ROW increased on a pro forma basis by 6% (CER: 26%) to $310 million (2021: $129 million; 2020: $nil), driven by rapid conversion in new launch markets and strong growth in Japan following gMG launch. Sales in Japan declined on a pro forma basis by 3% (CER: increased by 17%) to $285 million.
Strensiq sales in the Established ROW decreased on a pro forma basis by 1% (CER: increased by 16%) to $76 million (2021: $35 million; 2020: $nil).
Kanuma sales in the Established ROW increased on a pro forma basis by 21% (CER: 38%) to $8 million (2021: $3 million; 2020: $nil).
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Other
Other Product Sales in the Established ROW region were $570 million (2021: $445 million; 2020: $526 million).
Nexium sales in the Established ROW region increased by 28% (CER: 50%) to $551 million (2021: $431 million; 2020: $495 million). Sales in Japan grew by 35% (60% at CER) to $497 million, where AstraZeneca collaborated with Daiichi Sankyo until September 2021.
Disclosures Under the Iran Threat Reduction and Syria Human Rights Act of 2012
AstraZeneca is a global, innovation-driven biopharmaceutical business with operations in over 100 countries and its innovative medicines are used by millions of patients worldwide. AstraZeneca has a legal entity based in Iran, AstraZeneca Pars Company (“AstraZeneca Pars”), which has no employees, and is owned by non-U.S. Group companies. In July 2017, AstraZeneca Pars submitted regulatory applications to the Iranian Food and Drug Administration and subsequently received marketing authorizations for several products. AstraZeneca Pars has not entered into any commercial transaction since its incorporation; products registered under AstraZeneca Pars are exclusively sold by a third-party distributor.
AstraZeneca, through one of its non-U.S. Group companies that is neither a U.S. person nor a foreign subsidiary of a U.S. person, currently has sales of prescription pharmaceuticals in Iran solely through a single third-party distributor, which uses three known entities in the Iranian distribution chain. At this time, none of AstraZeneca’s U.S. entities are involved in any business activities in Iran, or with the Iranian government. To the best knowledge of the management of AstraZeneca, the third-party distributor used by AstraZeneca is not owned or controlled by the Iranian government and AstraZeneca does not have any agreements, commercial arrangements, or other contracts with the Iranian government. However, AstraZeneca understands that one of the independent sub-distributors of AstraZeneca’s third-party distributor is likely to be indirectly controlled by the Iranian government. Further, AstraZeneca’s third-party distributor may initiate payments using banks associated with the government of Iran for the purchase of AstraZeneca products. Finally, Government agencies, hospitals and institutions may purchase AstraZeneca products from the third-party distributor or the sub-distributors.
Throughout 2017 to 2022, AstraZeneca, through a distributor, sponsored health care provider education programs in Iran, including for employees of hospitals owned or controlled by the Iranian Ministry of Health.
For the year ended December 31, 2022, the Company’s gross revenues and net profits attributable to the above-mentioned Iranian activities were $23 million and $8 million, respectively. For the same period, AstraZeneca’s gross revenues and net profits were $44.3 billion and $3.3 billion, respectively. Accordingly, the gross revenues and net profits attributable to the above-mentioned Iranian activities amounted to approximately 0.05% of AstraZeneca’s gross revenues and approximately 0.25% of its net profits.
At the time of publication, the management of AstraZeneca does not anticipate any change in its activities in Iran that would result in a material impact on AstraZeneca.
C. Organizational Structure
The information (including tabular data) set forth under the headings “Additional Information—Directors’ Report—Subsidiaries and principal activities” on page 215, “—Branches and countries in which the Group conducts business” on page 215, and “Financial Statements—Group Subsidiaries and Holdings” on pages 199 to 203, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
D. Property, Plant and Equipment
Please see the information below under the heading Item 5—“Operating and Financial Review and Prospects—Operating Results—2022 compared with 2021”. The information (including tabular data) set forth under the headings “Strategic Report—Business Review—Science and Innovation—Research and Development” on pages 35 to 36, “Strategic Report—Business Review—Growth in Therapy Area Leadership—Operations” on page 42, “—IT and IS resources” on page 43, “Financial Statements—Notes to the Group Financial Statements—Note 7—Property, plant and equipment” on page 159, “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets—Environmental costs and liabilities” on page 192, and “Financial Statements—Notes to the Group Financial Statements—Note 8—Leases” on page 160, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
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Substantially all of the Group’s properties are held freehold, free of material encumbrances and are fit for their purpose. For more information, please refer to “Financial Statements—Notes to the Group Financial Statements—Note 7—Property, plant and equipment” on page 159 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The information (including graphs and tabular data) set forth under the headings “Strategic Report—Our Strategy and Key Performance Indicators” on pages 14 to 17, “Strategic Report—Business Review—Science and Innovation—Research and Development” on pages 35 to 36, “—Development pipeline overview” on page 37, “Financial Statements— Notes to the Group Financial Statements—Note 1—Revenue—Product Sales” on page 149, “Financial Statements—Notes to the Group Financial Statements—Note 19—Interest-bearing loans and borrowings” on pages 168 to 170, “Financial Statements—Notes to the Group Financial Statements—Note 13—Derivative financial instruments” on page 166, “Financial Statements—Notes to the Group Financial Statements—Note 23—Reserves” on page 180, “Financial Statements—Notes to the Group Financial Statements—Note 28—Financial risk management objectives and policies” on pages 184 to 189, “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets” on pages 192 to 198 and “Additional Information—Important information for readers of this Annual Report” on page 224, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference. The information contained herein under “Item 8A – Summarized financial information for guarantee of securities of subsidiaries” is incorporated by reference. Please also see the information above under the heading Item 4—“Information on the Company— Business Overview—Geographical Review”.
We consider the Group’s working capital to be sufficient for its present requirements.
A. Operating Results
2022 compared with 2021
The information set forth under the heading “Strategic Report—Financial Review” on pages 60 to 75 (excluding the information set forth under the subheading “Full year 2023: additional commentary” on page 72) of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated herein by reference.
2021 compared with 2020
The information set forth under the heading “Strategic Report—Financial Review” on pages 52 to 70 of AstraZeneca’s “Annual Report and Form 20-F Information 2021” included as exhibit 15.1 to the Form 20-F dated February 22, 2022 is incorporated herein by reference.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The information (including tabular data) set forth under the headings “Corporate Governance—Board of Directors as at 31 December 2022” on pages 80 to 81, and “Corporate Governance—Annual Report on Remuneration—Governance—Directors’ service contracts and letters of appointment” on page 128, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
In addition to the Board of Directors, the Senior Executive Team, or SET, is the body through which the CEO exercises the authority delegated to him by the Board. The CEO leads the SET and has executive responsibility for the management, development and performance of the business. The CEO, CFO and SET also take the lead in developing the strategy for review, constructive challenge and approval by the Board as part of the annual strategy review process. The information set forth under the heading “Corporate Governance—Senior Executive Team (SET) as at 31 December 2022” on page 82 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
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Senior Executive Team (SET) Biographies as at December 31, 2022
Katarina Ageborg – Executive Vice-President, Sustainability and Chief Compliance Officer, President of AstraZeneca AB Sweden (resigned 9 January 2023)
Katarina was appointed Executive Vice-President, Sustainability in 2017 and has been a member of SET since 2011. She has overall responsibility for the delivery, design and implementation of the Company’s sustainability programme, covering three priority areas: access to healthcare; environmental protection; and ethics and transparency. She leads the Global Sustainability function, including teams focusing on Compliance, and Safety, Health and Environment. Katarina was also appointed President of AstraZeneca AB (Sweden) in 2018, and her role is focused on strengthening corporate reputation and relations by actively representing the Company in the Swedish business and academic community. Prior to her current roles, Katarina led the Global Intellectual Property function from 2008 to 2011, during which time she streamlined the organisation and launched a new patent filing strategy before taking the role as Chief Compliance Officer. Katarina holds a Master of Law Degree from Uppsala University School of Law in Sweden and ran her own law firm before joining AstraZeneca in 1998.
Pam Cheng – Executive Vice-President, Operations and Information Technology (Executive Vice-President, Operations, Information Technology and Sustainability from 9 January 2023)
Pam joined AstraZeneca in June 2015 after having spent 18 years with Merck/MSD in Global Manufacturing and Supply Chain and Commercial roles. Pam was the Head of Global Supply Chain Management Logistics for Merck and led the transformation of Merck supply chains across the global supply network. Pam also held the role of President of MSD China, responsible for MSD’s entire business in China. Prior to joining Merck, Pam held various engineering and project management positions at Universal Oil Products, Union Carbide Corporation and GAF Chemicals. Pam holds Bachelor’s and Master’s degrees in chemical engineering from Stevens Institute of Technology in New Jersey and an MBA in marketing from Pace University in New York. In addition to her role at AstraZeneca, Pam serves as a Non-Executive Director of the Smiths Group plc Board. Pam also serves as an Advisor to the International Society of Pharmaceutical Engineering (ISPE) Board of Directors.
Ruud Dobber – Executive Vice-President and President, BioPharmaceuticals Business Unit
Ruud was appointed Executive Vice-President, BioPharmaceuticals Business Unit in January 2019 and is responsible for product strategy and commercial delivery for CVRM, Respiratory and Immunology, and Vaccines Immune Therapies. Prior to this, Ruud held the role of Executive Vice-President, North America and was responsible for driving growth and maximising the contribution of the commercial operations in North America. Ruud joined Astra (later to become AstraZeneca) in 1997 and has assumed leadership roles with increasing responsibility including Executive Vice-President, North America; Executive Vice-President, Europe; Regional Vice-President, Europe, Middle East and Africa; and Regional Vice-President, Asia Pacific. Ruud served as a member of the board and executive committee of the European Federation of Pharmaceutical Industries and Associations and was previously Chairman of the Asia division of Pharmaceutical Research and Manufacturers of America. Ruud holds a doctorate in immunology from the University of Leiden, Netherlands, beginning his career as a research scientist in immunology and ageing.
Other appointments: Ruud was appointed as a non-executive director of the Board of Almirall S.A. in June 2021.
Marc Dunoyer – Chief Executive Officer, Alexion and Chief Strategy Officer, AstraZeneca
Marc became CEO of Alexion, AstraZeneca’s Rare Disease group, in August 2021 following its acquisition in July. He had previously served as an Executive Director and AstraZeneca’s Chief Financial Officer from November 2013. Marc’s career in pharmaceuticals, which has included periods with Roussel Uclaf, Hoechst Marion Roussel and GSK, has given him extensive industry experience. He is a qualified accountant and joined AstraZeneca in 2013, serving as Executive Vice-President, Global Product and Portfolio Strategy from June to October 2013. Prior to that, he served as Global Head of Rare Diseases at GSK and (concurrently) Chairman, GSK Japan. He holds an MBA from HEC Paris and a Bachelor of Law degree from Paris University.
Other appointments: Marc is a Director of Orchard Therapeutics Plc.
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David Fredrickson – Executive Vice-President, Oncology Business Unit
Dave was appointed Executive Vice-President, Oncology Business Unit in October 2017 and is responsible for driving growth and maximising the commercial performance of the AstraZeneca global Oncology portfolio. He has global accountability for marketing, sales, medical affairs and market access in Oncology and plays a critical leadership role in setting the Oncology portfolio and product strategy. Previously, Dave served as President of AstraZeneca K.K. in Japan, and Vice-President, Specialty Care in the US. While in Japan, Dave also served as Vice Chairman of the European Federation of Pharmaceutical Industries and Associations Japan and was a Director of the Japan Pharmaceutical Manufacturers Association. Before joining AstraZeneca, Dave worked at Roche/Genentech, where he served in several functions and leadership positions, including Oncology Business Unit Manager in Spain, and strategy, marketing and sales roles in the US. Prior to this, Dave worked at the Monitor Group, LLC (now Monitor Deloitte Group, LLC), a global strategy consultancy. Dave is a graduate of Georgetown University in Washington DC.
Susan Galbraith - Executive Vice-President, Oncology RD
Susan was appointed as Executive Vice-President, Oncology RD in July 2021. In this role, Susan has global accountability for the Oncology portfolio from discovery through to late-stage development. Since joining AstraZeneca in 2010, Susan has been instrumental in bringing seven new medicines to patients, four of which are now blockbusters. Prior to AstraZeneca, Susan held senior Oncology RD roles at Bristol-Myers Squibb. A Clinical Oncologist by background, Susan trained in medicine at Manchester and Cambridge Universities and has a PhD from the University of London. She holds an honorary Doctorate of Medical Science from the Institute of Cancer Research and is a Fellow of the Academy of Medical Sciences. Susan serves on the American Association for Cancer Research Board of Directors, the Institute of Cancer Research Scientific Advisory Board and the European Association of Cancer Research Advisory Council.
Menelas (Mene) Pangalos – Executive Vice-President, BioPharmaceuticals RD
Mene was appointed as Executive Vice-President, BioPharmaceuticals RD in January 2019. Mene is responsible for discovery through to late-stage development across CVRM, Respiratory Immunology, Vaccines Immune Therapies and Neuroscience. Since joining AstraZeneca in 2010, Mene has led the transformation of RD leading to a greater than fivefold improvement in productivity. Prior to joining AstraZeneca, Mene held senior RD roles at Pfizer, Wyeth and GSK. Mene holds Honorary Doctorates from Glasgow University and Imperial College, London, is a Fellow of the Academy of Medical Sciences, the Royal Society of Biology and Clare Hall, University of Cambridge and is a Visiting Professor at The Wolfson Centre at Kings College. He co-chairs the UK Life Sciences Council Expert Group on Innovation, Clinical Research and Data and is a member of the Life Sciences Industrial Strategy Implementation Board. He is also on the Boards of The Francis Crick Institute, The Judge Business School, Cambridge University and Dizal Pharma, and is a member of the Life Sciences Vision Advisory Group. In 2019, Mene was awarded a knighthood from The Queen and the Prix Galien Medal, Greece. In 2021, Mene was awarded an Honorary Fellowship of the British Pharmacological Society. He has overseen the creation of AstraZeneca’s new Global RD Centre in Cambridge and the company’s COVID-19 efforts.
Jeff Pott – Chief Human Resources Officer and General Counsel (Chief Human Resources Officer, Chief Compliance Officer and General Counsel from 9 January 2023)
Jeff was appointed General Counsel in January 2009 and has overall responsibility for all aspects of AstraZeneca’s Legal and IP function. In addition to his role as General Counsel, he was appointed Chief Human Resources Officer in January 2021 assuming additional responsibilities for the AstraZeneca Human Resources function. Jeff joined AstraZeneca in 1995 and has worked in various litigation roles, where he has had responsibility for IP, anti-trust and product liability litigation. Before joining AstraZeneca, he spent five years at the US legal firm Drinker Biddle and Reath LLP, where he specialised in pharmaceutical product liability litigation and anti-trust advice and litigation. He received his Bachelor’s degree in political science from Wheaton College and his Juris Doctor Degree from Villanova University School of Law.
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Iskra Reic – Executive Vice-President, Vaccines and Immune Therapies
Iskra was appointed Executive Vice-President (EVP), Vaccines Immune Therapies, in November 2021, and is responsible for both the early and late stage development of the Unit’s pipeline and portfolio, as well as medical affairs and commercial operations. Having trained as a Doctor of dental medicine at the Medical University of Zagreb, Croatia, Iskra joined AstraZeneca in 2001. During this time, Iskra has held a variety of in-market, regional sales and marketing and general management roles, including Head of Specialty Care, Central Eastern Europe, Middle East and Africa. In 2012 she joined AstraZeneca Russia as Marketing Director, before being appointed General Manager in 2014. Subsequently, in 2016 Iskra was made Area Vice-President for Russia and Eurasia, before her appointment as EVP, Europe in April 2017, and the later expansion of this role to Europe Canada in 2019. Iskra has an International Executive MBA in Business and Leadership from the IEDC-Bled School of Management, Slovenia.
Leon Wang – Executive Vice-President, International and China President
Leon Wang is Executive Vice-President, International and President, China. He is responsible for overall strategy driving sustainable growth across the International region, which includes China. Leon joined AstraZeneca China in March 2013 and was promoted to become President, AstraZeneca China in 2014. Under Leon’s leadership, China has become AstraZeneca’s second largest market worldwide and AstraZeneca has become the largest pharmaceutical company in China. In January 2017, Leon was promoted to Executive Vice-President, Asia Pacific Region. Prior to joining AstraZeneca, Leon held positions of increasing responsibility in marketing and business leadership at Roche, where he was a Business Unit Vice-President. In addition, Leon holds several positions in local trade associations and other prominent organisations in China. Leon holds an EMBA from China Europe International Business School, and a Bachelor of Arts from Shanghai International Studies University.
B. Compensation
The information (including graphs and tabular data) set forth under the headings “Corporate Governance—Directors’ Remuneration Report” on pages 104 to 107, “Corporate Governance—Remuneration at a glance” on page 108, “Corporate Governance—How our performance measures for 2023 support the delivery of our strategy” on page 109, “Corporate Governance—How the Remuneration Committee ensures targets are stretching” on page 110, “Corporate Governance—Annual Report on Remuneration” on pages 111 to 128, “Financial Statements—Notes to the Group Financial Statements—Note 22—Post-retirement and other defined benefit schemes” on pages 173 to 180, “Financial Statements—Notes to the Group Financial Statements—Note 29—Employee costs and share plans for employees” on pages 189 to 191 and “Financial Statements—Notes to the Group Financial Statements—Note 31—Statutory and other information—Key management personnel compensation”, on page 198, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
C. Board Practices
The information (including graphs and tabular data) set forth under the headings “Corporate Governance—Corporate Governance Overview” on page 79, “Corporate Governance—Board of Directors as at 31 December 2022” on pages 80 to 81, “Corporate Governance—Senior Executive Team (SET) as at 31 December 2022” on page 82, “Corporate Governance—Corporate Governance Report—Compliance with the UK Corporate Governance Code—Board Leadership and Company Purpose” on page 83, “Corporate Governance—Corporate Governance Report—Division of responsibilities” on page 83, “Corporate Governance—Corporate Governance Report—Remuneration” on pages 84 to 85, “Corporate Governance—Science Committee Report” on page 94, “Corporate Governance—Nomination and Governance Committee Report” on pages 92 to 93, “Corporate Governance—Sustainability Committee Report” on page 95, “Corporate Governance— Compliance with the UK Corporate Governance Code—Risk management and controls—Global Compliance and Group Internal Audit (GIA) on page 85, “Corporate Governance—Annual Report on Remuneration—Governance—Directors’ service contracts and letters of appointment” on page 128, “Corporate Governance—Annual Report on Remuneration—Executive Directors’ remuneration” on pages 111 to 119 and “Corporate Governance—Audit Committee Report” on pages 96 to 103, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
Please also see the information above under the heading Item 6.A “Directors and Senior Management—Senior Executive Team (SET) Biographies”.
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D. Employees
The information set forth under the headings , “Strategic Report—Business Review—Science and Innovation—Research and Development” on pages 35 to 36, “Strategic Report—Business Review—Growth and Therapy Area Leadership—Responsible sales and marketing” on page 41, “—Operations” on page 42, “—IT and IS resources” on page 43, “—Business Development” on page 43, “Strategic Report—Business Review—People and Sustainability” on pages 44 to 51 and “Financial Statements—Notes to the Group Financial Statements—Note 29—Employee costs and share plans for employees” (including the tabular data) on pages 189 to 191, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
E. Share Ownership
The information (including graphs and tabular data) set forth under the headings “Financial Statements—Notes to the Group Financial Statements—Note 29—Employee costs and share plans for employees” on pages 189 to 191, “Corporate Governance—Annual Report on Remuneration—Directors’ shareholdings” on pages 121 to 123, and “Additional Information—Directors’ Report—Directors’, officers’ and SET shareholdings” and “—Options to purchase securities from registrant or subsidiaries” on page 216, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
F. Disclosure of a registrant’s action to recover erroneously awarded compensation
Not applicable.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The information set forth under the heading “Additional Information—Shareholder information—US holdings” on page 214 and “Additional Information—Directors’ Report—Major shareholdings” (including tabular data) on page 216 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
B. Related Party Transactions
The information set forth under the headings “Financial Statements—Notes to the Group Financial Statements—Note 31—Statutory and other information—Related party transactions” on page 198, “Additional Information—Shareholder information—Related party transactions” on page 213, “Additional Information—Shareholder information—Issued share capital, shareholdings and share prices” on page 214, “Additional Information—Shareholder information—US holdings” on page 214 and “Additional Information—Directors’ Report—Major shareholdings” on page 216, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
C. Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
Please see the information below under the heading Item 18—“Financial Statements.” The information (including graphs and tabular data) set forth under the headings “Additional Information—Shareholder information” on pages 213 to 214, “Strategic Report —Financial Review—Dividend and share repurchases” on page 72 and “Additional Information—Directors’ Report—Distributions to shareholders-dividends for 2022” on page 216, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
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Summarized financial information for guarantee of securities of subsidiaries
AstraZeneca Finance LLC (“AstraZeneca Finance”) is the issuer of 0.700% Notes due 2024, 1.200% Notes due 2026, 1.750% Notes due 2028 and 2.250% Notes due 2031 (the “AstraZeneca Finance Notes”). Each series of AstraZeneca Finance Notes has been fully and unconditionally guaranteed by AstraZeneca PLC. AstraZeneca Finance is 100% owned by AstraZeneca PLC and each of the guarantees by AstraZeneca PLC is full and unconditional and joint and several.
The AstraZeneca Finance Notes are senior unsecured obligations of AstraZeneca Finance and rank equally with all of AstraZeneca Finance’s existing and future senior unsecured and unsubordinated indebtedness. The guarantee by AstraZeneca PLC of the AstraZeneca Finance Notes is the senior unsecured obligation of AstraZeneca PLC and ranks equally with all of AstraZeneca PLC’s existing and future senior unsecured and unsubordinated indebtedness. Each guarantee by AstraZeneca PLC is effectively subordinated to any secured indebtedness of AstraZeneca PLC to the extent of the value of the assets securing such indebtedness. The AstraZeneca Finance Notes are structurally subordinated to indebtedness and other liabilities of the subsidiaries of AstraZeneca PLC, none of which guarantee the AstraZeneca Finance Notes.
AstraZeneca PLC manages substantially all of its operations through divisions, branches and/or investments in subsidiaries and affiliates. Accordingly, the ability of AstraZeneca PLC to service its debt and guarantee obligations is also dependent upon the earnings of its subsidiaries, affiliates, branches and divisions, whether by dividends, distributions, loans or otherwise.
Pursuant to Rule 13-01 and Rule 3-10 of Regulation S-X of the Securities Act, we present below the summary financial information for AstraZeneca PLC, as Guarantor, excluding its consolidated subsidiaries, and AstraZeneca Finance, as the issuer, excluding its consolidated subsidiaries. The following summary financial information of AstraZeneca PLC and AstraZeneca Finance is presented on a combined basis and transactions between the combining entities have been eliminated. Financial information for non-guarantor entities has been excluded. Intercompany balances and transactions between the obligor group and the non-obligor subsidiaries are presented on separate lines.
Obligor group summarised Statement of Comprehensive Income
| FY 2022 |
| FY 2021 | |
$m | $m | |||
Total Revenue |
| — |
| — |
Gross profit |
| — |
| — |
Operating loss |
| (27) |
| (157) |
Loss for the period |
| (687) |
| (773) |
Transactions with subsidiaries that are not issuers or guarantors |
| 1,071 |
| 5,914 |
Obligor group summarised Statement of Financial Position information
| At 31 Dec 2022 |
| At 31 Dec 2021 | |
$m | $m | |||
Current assets |
| 4 |
| 8 |
Non-current assets |
| — |
| — |
Current liabilities |
| (2,839) |
| (1,442) |
Non-current liabilities |
| (22,797) |
| (25,646) |
Amounts due from subsidiaries that are not issuers or guarantors |
| 7,806 |
| 11,510 |
Amounts due to subsidiaries that are not issuers or guarantors |
| (293) |
| (293) |
Developments in Legal Proceedings
For information in respect of material legal proceedings in which AstraZeneca is currently involved, including those discussed below, please see the information (including tabular data) set forth under the heading “Financial Statements—Notes to the Group Financial Statements—Note 30—Commitments, contingent liabilities and contingent assets” on pages 192 to 198 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 and is incorporated by reference.
The proceedings discussed below are provided to supplement and update the corresponding disclosure in AstraZeneca’s “Annual Report and Form 20-F Information 2022”. Unless noted below or in AstraZeneca’s “Annual Report and Form 20-F Information 2022”, no provisions have been established in respect of these proceedings.
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US proceedings
Viela Bio, Inc. Shareholder Lawsuit
In February 2023, a lawsuit was filed in the Delaware State Court against AstraZeneca and certain officers, on behalf of a putative class of Viela Bio, Inc. (“Viela”) shareholders. The complaint alleges that defendants breached their fiduciary duty to Viela shareholders in the course of Viela’s 2021 merger with Horizon Therapeutics, plc.
B. Significant Changes
Please see the information set forth under the heading “Financial Statements—Notes to the Group Financial Statements—Note 32—Subsequent events” on page 198 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 and is incorporated by reference.
Other than as disclosed in this Item, since the date of the annual consolidated financial statements included in this Form 20-F dated February 21, 2023, no significant change has occurred.
ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details
The information (including tabular data) set forth under the heading “Additional Information—Shareholder information” on pages 213 to 214 and “Additional Information—Shareholder information—Ordinary Shares in issue” on page 214 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
The corresponding trading symbol is “AZN” in each of AstraZeneca’s principal markets for trading in AstraZeneca shares.
B. Plan of Distribution
Not applicable.
C. Markets
The information set forth in the introductory paragraph under the heading “Additional Information— Shareholder information” on page 213 and “Additional Information—Shareholder information—Issued share capital, shareholdings and share prices” on page 214 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
The information set forth under the heading “Additional Information—Directors’ Report—Articles of Association” on pages 216 to 217 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
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C. Material Contracts
Not applicable.
D. Exchange Controls
The information set forth under the headings “Additional Information—Shareholder information—Exchange controls and other limitations affecting security holders” on page 214 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
E. Taxation
Taxation for US persons
The following is a summary of material UK and US federal income tax consequences of ownership of Ordinary Shares or ADRs held as capital assets by the US holders described below. This summary is based on current UK and US federal income tax law, including the current US/UK double taxation convention. This summary does not describe all of the tax consequences that may be relevant in light of the US holders’ particular circumstances (including the US Medicare contribution tax or the US alternative minimum tax) and tax consequences applicable to US holders subject to special rules. US holders and any holders who may be subject to tax in the US or the UK are urged to consult their tax advisers regarding the UK and US federal income tax consequences of the ownership and disposition of Ordinary Shares or ADRs in their particular circumstances.
This summary is based in part on representations of the depositary for ADRs and assumes that each obligation in the deposit agreement among the Company and the depositary and the holders from time to time of ADRs and any related agreements will be performed in accordance with its terms. For the purposes of this summary, the term ‘US holder’ means a beneficial owner of Ordinary Shares or ADRs that is, for US federal income tax purposes, an individual, a corporation or an estate or trust that, in each case, is treated as a US person.
For US federal income tax purposes, a holder of ADRs generally will be treated as the owner of the underlying Ordinary Shares. Accordingly, deposits or withdrawals of Ordinary Shares for ADRs will not be subject to US federal income tax.
UK and US income taxation of dividends
The UK does not currently impose a withholding tax on dividends paid by a UK company, such as the Company. Shareholders resident outside the UK will otherwise commonly not be subject to UK taxation on dividend income but should consult their own tax adviser.
For US federal income tax purposes, distributions paid by the Company to a US holder are generally included in gross income as foreign source ordinary dividend income when actually or constructively received. For any dividend paid in a foreign currency, the amount of the dividend will, in the case of ADRs, be the US dollar value of the foreign currency payment received by the depositary determined at the spot rate of the relevant foreign currency on the date the dividend is received by the depositary (or, in the case of Ordinary Shares, the US dollar value of the foreign currency payment received by the US holders, determined at the spot rate of the relevant foreign currency on the date the dividend is received by the US holders, regardless of whether the dividend is converted into US dollars). Dividends will not be eligible for the dividends received deduction generally available to US corporations.
If the dividend is converted into US dollars on the date of receipt, US holders of Ordinary Shares generally should not be required to recognise foreign currency gains or losses in respect of the dividend income. They may have foreign currency gain or loss (which would be US source and taxable at the rates applicable to ordinary income) if the amount of such dividend is converted into US dollars after the date of its receipt.
Subject to applicable limitations, dividends received by certain non-corporate US holders of Ordinary Shares or ADRs may be taxable at favourable US federal income tax rates. US holders should consult their own tax advisers to determine whether they are subject to any special rules which may limit their ability to be taxed at these favourable rates.
Taxation on capital gains
Under present English law, individuals or companies who are not resident in the UK will generally not be liable for UK tax on capital gains made on the disposal of their Ordinary Shares or ADRs, unless such Ordinary Shares or
44
ADRs are used, held or acquired in connection with a trade, profession or vocation carried on in the UK through a branch or agency or other permanent establishment.
For US federal income tax purposes, a US holder will generally recognise US source capital gain or loss on the sale or exchange of Ordinary Shares or ADRs in an amount equal to the difference between the US dollar amount realised and such holder’s US dollar tax basis in the Ordinary Shares or ADRs. US holders should consult their own tax advisers about the treatment of capital gains, which may be taxed at lower rates than ordinary income for non-corporate US holders, and capital losses, the deductibility of which may be subject to limitations.
Passive Foreign Investment Company (PFIC) rules
We believe that we were not a PFIC for US federal income tax purposes for the year ended 31 December 2022. However, since PFIC status depends on the composition of our income and assets, and the market value of our assets, from time to time, there can be no assurance that we will not be considered a PFIC for any taxable year. If we were treated as a PFIC, certain adverse tax consequences could apply to US holders.
Information reporting and backup withholding
Payments of dividends and sales proceeds that are made within the US or through certain US-related financial intermediaries may be subject to information reporting and backup withholding, unless, the US holder is an exempt recipient or, in the case of backup withholding, the US holder provides its taxpayer identification number and certifies that it is not subject to backup withholding. The amount of any backup withholding from a payment to a US holder will be allowed as a credit against the holder’s US federal income tax liability and may entitle the holder to a refund, provided that the required information is timely supplied to the US Internal Revenue Service.
Certain US holders who are individuals (or certain specified entities) may be required to report information relating to securities issued by non-US persons (or foreign accounts through which the securities are held), subject to certain exceptions (including an exception for securities held in accounts maintained by US financial institutions). US holders should consult their tax advisers regarding their reporting obligations.
UK inheritance tax
Ordinary Shares or ADRs held by an individual who is domiciled in the US for the purposes of the United States – United Kingdom Double Taxation Convention relating to estate and gift taxes (the Estate Tax Convention), and who is not for such purposes a national of the UK, will generally not be subject to UK inheritance tax on the individual’s death or on a lifetime transfer of the Ordinary Shares or ADRs, provided that any applicable US federal gift or estate tax liability is paid, except in certain cases where the Ordinary Shares or ADRs: (i) are comprised in a settlement (unless, at the time of the settlement, the settlor was domiciled in the US and not a national of the UK); (ii) are part of the business property of a UK permanent establishment of an enterprise; or (iii) pertain to a UK fixed base of an individual used for the performance of independent personal services. In the exceptional case where the Ordinary Shares or ADRs are subject to both UK inheritance tax and US federal gift or estate tax, the Estate Tax Convention generally provides for double taxation to be relieved by means of credit relief.
UK stamp duty reserve tax and stamp duty
A charge to UK stamp duty or UK stamp duty reserve tax (SDRT) may arise on the deposit of Ordinary Shares in connection with the creation of ADRs. The rate of stamp duty or SDRT will generally be 1.5% of the value of the consideration or, in some circumstances, the value of the Ordinary Shares. Under current HMRC practice, this charge will not be applied on the issue (or, where it is integral to the raising of new capital, the transfer) of Ordinary Shares into the ADR arrangement.
Transfers of Ordinary Shares into CREST will generally not be subject to stamp duty or SDRT, unless such a transfer is made for a consideration in money or money’s worth, in which case a liability to stamp duty or SDRT will arise, usually at the rate of 0.5% of the value of the consideration.
A transfer of, or an agreement to transfer, Ordinary Shares (whether within or outside CREST) will generally be subject to UK stamp duty or SDRT at 0.5% of the amount or value of any consideration (in the case of stamp duty, this will be rounded up to the nearest £5). The purchaser would usually pay this duty. No UK stamp duty or SDRT will be payable on the acquisition or transfer of existing ADRs provided that there is no written instrument of transfer.
F. Dividends and Paying Agents
Not applicable.
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G. Statement by Experts
Not applicable.
H. Documents on Display
The Company’s Articles of Association and other documents concerning the Company which are referred to in this Form 20-F dated February 21, 2023, may be inspected at the Company’s registered office at 1 Francis Crick Avenue, Cambridge Biomedical Campus, Cambridge CB2 0AA, UK.
I. Subsidiary Information
Not applicable.
J. Annual Report to Security Holders
The Company intends to submit any annual report provided to security holders in electronic format as an exhibit to a current report on Form 6-K.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information (including graphs and tabular data) set forth under the headings “Strategic Report—Financial Review—Financial risk management” on page 73 and “Financial Statements—Notes to the Group Financial Statements—Note 28—Financial risk management objectives and policies” on pages 184 to 189, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.
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D. American Depositary Shares
Fees and Charges Payable by ADR Holders
The Company’s American Depositary Receipt (“ADR”) program is administered by Deutsche Bank Trust Company Americas (“DBTCA” or the “Depositary”), as the depositary. The holder of an ADR may have to pay the following fees and charges to DBTCA in connection with ownership of the ADR:
Category |
| Depositary actions |
| Associated fee or charge |
(a) Depositing or substituting the underlying shares |
| Issuances upon deposits of shares (excluding issuances as a result of stock distributions or the exercise of rights) |
| Up to $5.00 for each 100 ADSs (or fraction thereof) issued |
|
|
|
|
|
(b) Receiving or distributing dividends (1) |
| Distributions of stock dividends or other free stock distributions, cash dividends or other cash distributions (i.e., sale of rights and other entitlements), distributions of securities other than ADSs or rights to purchase additional ADSs |
| Up to $5.00 for each 100 ADSs (or fraction thereof) |
|
|
|
|
|
(c) Selling or exercising rights |
| The exercise of rights to purchase additional ADSs |
| Up to $5.00 for each 100 ADSs (or fraction thereof) |
|
|
|
|
|
(d) Withdrawing, cancelling or reducing an underlying security |
| Surrendering ADSs for cancellation and withdrawal of deposited property |
| Up to $5.00 for each 100 ADSs (or portion thereof) surrendered or cancelled (as the case may be) |
|
|
|
|
|
(e) Transferring, combination or split-up of receipts |
|
|
| Not applicable. |
|
|
|
|
|
(f) General depositary services, particularly those charged on an annual basis(1) |
| Depositary services fee |
| A fee not in excess of $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary. |
|
|
|
|
|
(g) Fees and expenses of the depositary |
| Fees and expenses incurred by the Depositary or the Depositary’s agents on behalf of holders, including in connection with: ● taxes (including applicable interest and penalties) and other governmental charges ● registration of shares or other deposited securities on the share register and applicable to transfers of shares or other deposited securities to or from the name of the custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively; ● cable, telex and facsimile transmission and delivery expenses ● expenses and charges incurred by the Depositary in conversion of foreign currency into U.S. dollars ● compliance with exchange control regulations and other regulatory requirements applicable to the shares, deposited securities, ADSs and ADRs ● the fees and expenses incurred by the Depositary, the custodian, or any nominee in connection with the delivery or servicing of deposited property (as defined in the Deposit Agreement) |
| As incurred by the Depositary. |
| (1) | $0.03 per ADR annually |
Fees and Payments Made by DBTCA to Us
Pursuant to the deposit agreement, the Depositary may charge a fee up to $0.05 per ADR in respect of dividends paid by us. For the year ended December 31, 2022, we agreed that the Depositary could charge an annual fee of $0.03 per ADR in respect of dividends paid by us. As at December 31, 2022, we have paid approximately $17.28 million arising out of fees charged in respect of dividends paid during 2022 and $2.42 million as a (further) contribution to the Company’s ADR program costs. We also have an agreement with the Depositary that it will waive a certain amount of its fees for standard costs associated with the administration of the ADR program up to $10,000 per year.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not applicable.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15. CONTROLS AND PROCEDURES
A. Disclosure Controls and Procedures
The information set forth under the heading “Corporate Governance—Corporate Governance Report—Compliance with the UK Corporate Governance Code—Risk Management and Controls” on page 85, “Corporate Governance—Audit Committee Report—Internal Controls” on page 102, and “Financial Statements—Directors’ Annual Report on Internal Controls over Financial Reporting” on page 130, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
US corporate governance requirements
The Company’s ADRs are traded on the Nasdaq and, accordingly, it is subject to the reporting and other requirements of the SEC applicable to foreign private issuers. Section 404 of the Sarbanes-Oxley Act requires companies to include in their annual report on Form 20-F filed with the SEC, a report by management stating its responsibility for establishing internal control over financial reporting and to assess annually the effectiveness of such internal control. The Company has complied with those provisions of the Sarbanes-Oxley Act applicable to foreign private issuers.
B. Management’s Annual Report on Internal Control over Financial Reporting
As required by U.S. regulations, management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, and is required to identify the framework used to evaluate the effectiveness of the Company’s internal control over financial reporting and to assess the effectiveness of such internal control. In this regard, management has made the same assessment and reached the same conclusion as that set forth in the section entitled “Financial Statements—Directors’ Annual Report on Internal Controls over Financial Reporting” on page 130 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023, which is incorporated by reference.
C. Attestation Report of Independent Registered Public Accounting Firm
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, has been audited by PricewaterhouseCoopers LLP, independent registered public accounting firm, as stated in its report dated February 21, 2023, which is included below under the heading Item 18—“Financial Statements—Report of Independent Registered Public Accounting Firm”.
D. Changes in Internal Control over Financial Reporting
Based on the evaluation conducted, management has concluded that no such changes have occurred during the period covered by this Form 20-F that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 16. RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The information set forth under the heading “Corporate Governance—Corporate Governance Overview—Board Committee membership and meeting attendance in 2022” on page 79 and “Corporate Governance—Audit Committee Report—Committee overview—Committee composition” on page 97, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
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ITEM 16B. CODE OF ETHICS
The information set forth under the headings “Strategic Report—Business Review—People and Sustainability—Code of Ethics” on page 51, “Corporate Governance—Corporate Governance Report—Compliance with the UK Corporate Governance Code—Risk Management and Controls—Global Compliance and Group Internal Audit (GIA)” on page 85, “Business Review—Science and Innovation—Bioethics” on page 38, and “Corporate Governance—Audit Committee Report—Legal and Compliance” on page 98, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference. AstraZeneca’s Code of Ethics is available within the ‘Ethics and transparency’ section of our website at www.astrazeneca.com/sustainability/ethics-and-transparency.html.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees for professional services rendered by PricewaterhouseCoopers LLP (PCAOB ID
Year ended December 31, | ||||
| 2022 |
| 2021 | |
($ million) | ||||
Audit fees |
| 28.7 |
| 28.6 |
Audit-related fees |
| 0.4 |
| 3.6 |
All other fees |
| 0.2 |
| 3.7 |
Total |
| 29.3 |
| 35.9 |
Audit fees included $15.1 million for the audit of subsidiaries pursuant to legislation (2021: $15.2 million), $9.9 million for the Group audit (2021: $10.5 million), $0.6 million for assurance services in relation to interim financial statements (2021: $0.9 million) and $3.1 million in respect of section 404 of the Sarbanes-Oxley Act (2021: $2.0 million). $0.6 million of Audit fees payable in 2022 are in respect of the Group audit and audit of subsidiaries related to prior years ($0.4 million of Audit fees payable in 2021 are in respect of the Group audit and audit of subsidiaries related to prior years).
Audit-related fees included $0.1 million of other audit-related services (2021: $3.6 million) and $0.3 million for the audit of subsidiaries’ pension schemes. Included in Audit-related fees for 2021 are $3.0 million of services provided in relation to the acquisition of Alexion and related debt issuance.
All other fees of $0.2 million relate to other assurance services. Included in All other fees for 2021 are $3.1 million of services provided in relation to the acquisition of Alexion and related debt issuance, and $0.3 million for the audit of subsidiaries’ pension schemes.
In 2021, $0.3 million of Audit fees and $0.7 million of Audit-related fees related to pre-acquisition fees incurred by Alexion.
The information (including tabular data) set forth under the heading “Corporate Governance—Audit Committee Report” on pages 96 to 103 of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
U.S. law and regulations permit the Audit Committee pre-approval requirement to be waived with respect to engagements for non-audit services aggregating to no more than five percent of the total amount of fees paid by AstraZeneca to its principal accountants, if such engagements were not recognized by AstraZeneca at the time of engagement and were promptly brought to the attention of the Audit Committee or a designated member thereof and approved prior to the completion of the audit. In 2022 and 2021, the percentage of the total amount of fees paid by AstraZeneca to its principal accountant for non-audit services in each category that was subject to such a waiver was less than five per cent for each year.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
49
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
(d) Maximum | ||||||||
Number (or | ||||||||
|
|
| Approximate Dollar | |||||
|
|
| (c) Total Number of |
| Value) of Shares (or | |||
|
|
| Shares (or Units) |
| Units) that May Yet | |||
(a) Total number of | (b) Average Price |
| Purchased as Part of |
| Be Purchased Under | |||
Shares (or Units) | Paid per |
| Publicly Announced |
| the Plans or | |||
Period |
| Purchased |
| Share (or Unit) |
| Plans or Programs |
| Programs |
|
| ($) | ($ billion) | |||||
Month #1 Jan 1 - Jan 31 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #2 Feb 1 - Feb 28 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #3 Mar 1 - Mar 31 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #4 Apr 1 - Apr 30 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #5 May 1 - May 31 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #6 Jun 1 - Jun 30 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #7 Jul 1 - Jul 31 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #8 Aug 1 - Aug 31 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #9 Sep 1 - Sep 30 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #10 Oct 1 - Oct 31 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #11 Nov 1 - Nov 30 |
| 0 |
| N/A |
| 0 |
| 0 |
Month #12 Dec 1 - Dec 31 |
| 0 |
| N/A |
| 0 |
| 0 |
Total |
| 0 |
| N/A |
| 0 |
| 0 |
There have been no share repurchases since October 1, 2012, when the Company announced the suspension of its share repurchase program. At the 2022 Annual General Meeting the Company’s shareholders authorized the Company to repurchase 154,944,713 of its own shares, but the Company’s Board of Directors did not lift the suspension on share repurchases and, accordingly, the Company did not repurchase any of its shares in 2022.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
The Company is a public limited company incorporated in England and Wales, admitted to the premium segment of the Official List of the Financial Conduct Authority (“FCA”) and to trading on the main market of the London Stock Exchange. As a result, it follows the U.K. Corporate Governance Code 2018 (the “U.K. Code”) in respect of its corporate governance practices. The current edition of the U.K. Code, which came into effect for reporting periods beginning on or after January 1, 2019, was effective to the Company for the year ended December 31, 2022. The Companies Act 2006 (the “U.K. Act”) and the Listing Rules of the U.K. Financial Conduct Authority (the “FCA Rules”) imposes certain requirements that also influence the Company’s corporate governance practices. The Company has ADRs listed on the Nasdaq Stock Exchange and, under the Nasdaq Listing Rules applicable to listed companies, as a foreign private issuer, the Company is permitted to follow the corporate governance practice of its home country in lieu of certain provisions of the Nasdaq Listing Rules.
The Company is required to disclose any significant ways in which its corporate governance practices differ from those followed by US companies under the Nasdaq Corporate Governance Requirements. In addition, the Company must comply fully with the provisions of the Nasdaq Corporate Governance Requirements relating to the composition, responsibilities and operation of audit committees, applicable to foreign private issuers. These provisions incorporate the rules concerning audit committees implemented by the SEC under the Sarbanes-Oxley Act. The Company has reviewed the corporate governance practices required to be followed by US companies under the Nasdaq Corporate Governance Requirements and its corporate governance practices are generally consistent with those standards.
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A summary of the significant ways in which the Company’s corporate governance practices differ from those followed by U.S. domestic companies under the Nasdaq Standards is set forth below.
Nasdaq Listing Rules |
| AstraZeneca Corporate Governance Practice |
1. Under the Nasdaq Listing Rules, the audit committee is to be directly responsible for the appointment, compensation, retention and oversight of a listed company’s external auditor. |
| Under the U.K. Act, a company’s external auditors are appointed by its shareholders, or in limited circumstances, by the directors of the company or the Secretary of State. Under the U.K. Code, a company’s audit committee is responsible for, amongst other things: conducting the tender process and making recommendations to the board, about the appointment, reappointment and removal of the external auditor, and approving the remuneration and terms of engagement of the external auditor; reviewing and monitoring the external auditor’s independence and objectivity; reviewing the effectiveness of the external audit process, taking into consideration relevant U.K. professional and regulatory requirements; and developing and implementing policy on the engagement of the external auditor to supply non-audit services. In the event that the board does not accept the audit committee’s recommendation on the external auditor appointment, reappointment or removal, a statement from the audit committee explaining its recommendation and the reasons why the board has taken a different position should be included in the company’s annual report. This should also be included in any papers recommending appointment or reappointment. |
|
|
|
2. Under the Nasdaq Listing Rules, each listed company must have a formal written compensation committee charter that specifies (A) the compensation committee’s responsibility for determining, or recommending to the board for determination, the compensation of the chief executive officer and all other Executive Officers of the company, and (B) that the chief executive officer may not be present during voting or deliberations on his or her compensation. |
| Under the U.K. Code, the Company’s Remuneration Committee determines the Company’s global remuneration frameworks and principles, approves individual salary decisions and related matters for executive members of the Company’s Board of Directors, the Senior Executive Team and the Company Secretary, and reviews annual bonus payments for all executives reporting directly to the Senior Executive Team members. While the Remuneration Committee does not make initial recommendations to the Board of Directors in this respect, it does report to the Board of Directors on these matters. Under the U.K. Act, the Company is required to offer shareholders: (i) a binding vote on the Company’s forward looking remuneration policy for its directors at least every three years; and (ii) a separate annual advisory vote on the implementation of the Company’s existing remuneration policy in terms of the payments and share awards made to its directors during the year, which is disclosed in an annual remuneration report. The U.K. Code does not require that the terms of reference of the Company’s Remuneration Committee specify that the chief executive officer may not be present during voting or deliberations on his or her compensation. |
3. Under the Nasdaq Listing Rules, each listed company must have a compensation committee comprised of at least two members each of whom must be an Independent Director, as defined under Listing Rule 5605(a)(2). |
| Under the U.K. Code, all of the members of the Company’s Remuneration Committee should be independent non-executive directors, with a minimum membership of three. Under the U.K. Code, the chair of the Company may be a member, but not chair, of the Remuneration Committee, provided he or she was considered independent on appointment as chair. In addition, the chair of a company’s remuneration committee should have served for at least 12 months on a remuneration committee before his or her appointment. |
4. Under the Nasdaq Listing Rules, director nominees must either be selected, or recommended for the Board’s selection, either by (A) Independent Directors constituting a majority of the Board’s Independent Directors in a vote in which only Independent Directors participate, or (B) a nominations committee comprised solely of Independent Directors. |
| Under the U.K. Code, a majority of the members of the Company’s nomination committee should be independent non-executive directors. Under the U.K. Code, the chair of the Company may be a member or chair of the nomination committee, provided he or she was considered independent on appointment as chair. However, the chair of the board may not chair the nomination committee when it is dealing with the appointment of his or her successor. |
5. Under the Nasdaq Listing Rules, the by-laws of a listed company, other than a limited partnership, must provide for a quorum requirement for shareholder meetings of not less than 331/3% of the outstanding shares of voting common stock. |
| Under the U.K. Act, if a company’s articles of association do not provide otherwise, two qualifying persons must be present at a meeting for a valid quorum, unless they are both representatives of the same corporation or have been appointed as proxies by the same shareholder. The Company’s Articles of Association contain a similar requirement. |
6. Under the Nasdaq Listing Rules, subject to certain exceptions, shareholder approval is required prior to the issuance of securities when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants. |
| Under the FCA Rules, shareholder approval is required to be obtained by the Company for the adoption of equity compensation plans which are either long-term incentive schemes in which directors of the Company can participate or schemes which may involve the issue of new shares. Under the FCA Rules, these plans may not be changed to the benefit of the plan participants unless shareholder approval is obtained (with certain minor exceptions, for example, to benefit the administration of the plan or to take account of tax benefits). |
51
Board Diversity Matrix (as of December 31, 2022)
Country of Principal Executive Offices: |
| England and Wales |
Foreign Private Issuer |
| Yes |
Disclosure Prohibited Under Home Country Law |
| No |
Total Number of Directors |
| 13 |
| Female |
| Male |
| Non-Binary |
| Did Not Disclose Gender | |
Part I: Gender Identity |
|
|
|
| ||||
Directors | 5 | 8 | - | - | ||||
Part II: Demographic Background |
|
| ||||||
Underrepresented Individual in Home Country Jurisdiction |
| 3 | ||||||
LGBTQ+ |
| - | ||||||
Did Not Disclose Demographic Background |
| 2 | ||||||
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 17. FINANCIAL STATEMENTS
The Company has responded to Item 18 in lieu of this item.
ITEM 18. FINANCIAL STATEMENTS
The accompanying Consolidated Statements of Financial Position, of Comprehensive Income, of Changes in Equity and of Cash Flows and the Group Accounting Policies and the related notes (including tabular data) set forth under the headings “Financial Statements” on pages 129 to 210 (excluding the information set forth under the subheadings “Independent auditors’ report to the members of AstraZeneca PLC” on pages 131 to 137) and “Financial Statements—Group Financial Record” on page 211, in each case of AstraZeneca’s “Annual Report and Form 20-F Information 2022” included as exhibit 15.1 to this Form 20-F dated February 21, 2023 is incorporated by reference.
In accordance with Rule 405(a)(3) under Regulation S-T, this information (including tabular data) is reproduced under Item 8 herein tagged with Inline XBRL formatting.
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of AstraZeneca PLC
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying Consolidated Statement of Financial Position of AstraZeneca PLC and its subsidiaries (the “Group”) as of 31 December 2022, 31 December 2021 and 31 December 2020, and the related Consolidated Statements of Comprehensive Income, of Changes in Equity and of Cash Flows for each of the three years in the period ended 31 December 2022, including the Group Accounting Policies and the related Notes to the Group Financial Statements (collectively referred to as the “consolidated financial statements”). We also have audited the Group’s internal control over financial reporting as of 31 December 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of 31 December 2022, 31 December 2021 and 31 December 2020, and the results of its operations and its cash flows for each of the three years in the period ended 31 December 2022 in accordance with (i) International Financial Reporting Standards as issued by the International Accounting Standards Board, (ii) UK-adopted International Accounting Standards and (iii) International Financial Reporting Standards adopted by the European Union. Also in our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
52
Basis for opinions
The Group’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15.B. Our responsibility is to express opinions on the Group’s consolidated financial statements and on the Group’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical audit matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Recognition and measurement of accruals for Managed Care, Medicaid and Medicare Part D rebates on US Product Sales (excluding Rare Diseases)
53
As described in the Group Accounting Policies, and Notes 1 and 20 to the consolidated financial statements when invoicing Product Sales in the US, management estimates the rebates the Group expects to pay and management considers there to be a significant estimate associated with the rebates for Managed Care, Medicaid and Medicare Part D. The major market with rebates and other revenue accruals is the US. The US Rebates, chargebacks, returns and other revenue accruals liability at 31 December 2022 amounted to $3,961 million (includes $139 m attributed to Rare Diseases), principally consisting of rebates related to Managed Care, Medicaid and Medicare Part D. Rebates are amounts payable or credited to a customer, usually based on the quantity or value of Product Sales to the customer for specific products in a certain period. At the time Product Sales are invoiced, rebates and deductions that the Group expects to pay are estimated. These rebates typically arise from sales contracts with government payers, third-party managed care organisations and various state programmes. The methodology and assumptions used to estimate rebates are monitored and adjusted regularly in the light of contractual and legal obligations, historical trends, past experience and projected market conditions.
The principal considerations for our determination that performing procedures relating to recognition and measurement of accruals for Managed Care, Medicaid and Medicare Part D rebates on US Product Sales (excluding Rare Diseases) is a critical audit matter are the (i) significant estimation by management in determining the accruals for the Managed Care, Medicaid, and Medicare Part D programmes, which are monitored and adjusted in light of contractual and legal obligations, historical trends, past experience and projected market conditions and (ii) high degree of auditor judgement, subjectivity, and effort in evaluating management’s significant assumptions.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s recognition and measurement of the Managed Care, Medicaid, and Medicare Part D rebate accruals. These procedures also included, among others, (i) developing an independent estimate of these accruals; (ii) comparing our independent estimates to the accruals recorded by management; (iii) assessing the effect of any adjustments to prior years’ accruals in the current year’s results; and (iv) testing actual payments made and rebate claims processed by the Group, and evaluating those claims for consistency with the contractual and mandated terms of the Group’s arrangements. Developing the independent estimate of the accruals involved assessing the terms of the specific rebate programmes and/or contracts with customers; historical revenue data; market demand and market conditions in the US; third party information on inventory held by direct and indirect customers; and the historical trend of actual rebate claims paid.
Impairment assessment of the product, marketing and distribution rights and other intangibles
As described in the Group Accounting Policies and Note 10 to the consolidated financial statements, the Group has product, marketing and distribution rights totalling $38,393 million and other intangibles totalling $497 million (hereafter the intangible assets) at 31 December 2022. Management performs an impairment trigger assessment for all intangible assets. Intangible assets under development and not available for use are tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing is required, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss or reversal. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU) to which it belongs. Group level budgets and forecasts include forecast capital investment and operational impacts related to sustainability projects, as well as inflationary impacts, and form the basis for the value in use models used for impairment testing. An asset’s recoverable amount is determined as the higher of an asset’s or CGU’s fair value less costs to sell or value in use, in both cases using discounted cash flow calculations where the asset’s expected post-tax cash flows are risk-adjusted over their estimated remaining period of expected economic benefit. The estimates used in calculating the recoverable amount are considered to be significant and are highly sensitive and depend on assumptions including the outcome of research and development activities, probability of technical and regulatory success, market volume, share and pricing (to derive peak year sales), the amount and timing of projected future cash flows, and sales erosion curves following patent expiry. In 2022, the Group recorded impairment charges of $236 million related to product, marketing and distribution rights (partially offset by a $77 million impairment reversal) and $82 million related to other intangibles.
The principal considerations for our determination that performing procedures relating to the impairment assessment of the product, marketing and distribution rights and other intangibles is a critical audit matter are the significant judgements made by management when determining the recoverable amount of the Group’s individual assets or CGUs. This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating assumptions in management’s cash flow projections related to the probability of technical and regulatory success, peak year sales and sales erosion curves following patent expiry. In addition, the audit effort involved the use of professionals with specialised skill and knowledge.
54
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s intangible asset impairment assessment, controls over the identification of triggering events and the development of assumptions used to estimate the recoverable amounts of the Group’s CGUs. These procedures also included, among others, testing management’s process for identifying indicators for impairment and for determining the recoverable amount of the Group’s individual assets or CGUs. Testing management’s process involved a) evaluating the reasonableness of significant assumptions of i) probability of technical and regulatory success, with the assistance of professionals with specialised skill and knowledge and ii) amount and timing of projected future cash flows (in particular, the drivers of peak year sales and sales erosion curves following patent expiry); and b) reconciling the cash flows to the Board approved Group level budgets and forecasts. Evaluating management’s assumptions related to the probability of technical and regulatory success and the amount and timing of projected future cash flows involved evaluating whether the assumptions used were reasonable through (1) comparing significant assumptions to external data and benchmarks; and (2) performing a retrospective comparison of past forecasted revenues to actual past performance.
Recognition and measurement of legal provisions and disclosure of contingent liabilities
As described in the Group Accounting Policies, Note 21 and Note 30 to the consolidated financial statements, the Group is involved in various legal proceedings considered typical to its business, including actual or threatened litigation and actual or potential government investigations relating to employment matters, product liability, commercial disputes, pricing, sales and marketing practices, infringement of IP rights and the validity of certain patents and competition laws. Most of the claims involve highly complex issues. Often these issues are subject to substantial uncertainties and, therefore, the probability of a loss, if any, being sustained and/or an estimate of the amount of any loss is difficult to ascertain. As at 31 December 2022 the Group held legal provisions of $161 million and disclosed the more significant legal matters in Note 30. Provisions are recognised when either a legal or constructive obligation as a result of a past event exists as of the Consolidated Statement of Financial Position date, it is probable that an outflow of economic resources will be required to settle the obligation and a reasonable estimate can be made of the amount of the obligation (the timing or amount of the liability is uncertain). Provision is made where an adverse outcome is probable and associated costs, including related legal costs, can be estimated reliably. In other cases, appropriate disclosures are included. Management’s assessment as to whether or not to recognise provisions or assets, and of the amounts concerned, usually involves a series of complex judgements about future events and can rely heavily on estimates and assumptions. Determining the timing of recognition of when an adverse outcome is probable is considered a key judgement.
The principal considerations for our determination that performing procedures related to recognition and measurement of legal provisions and disclosure of contingent liabilities is a critical audit matter are the significant judgement by management when assessing whether an adverse outcome is probable and estimable, which in turn led to a high degree of auditor judgement and subjectivity in performing procedures and evaluating management’s assessment of the legal provisions and disclosures of contingent liabilities.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s evaluation of the liability of legal claims, including controls over determining the probability of a loss and whether the amount of loss can be reasonably estimated, as well as financial statement disclosures. These procedures also included, among others, (i) obtaining and evaluating letters of audit inquiry with internal and external legal counsel for significant litigation; (ii) testing the completeness of management’s assessment of both the identification of legal claims and possible outcomes of each significant legal claim; (iii) evaluating the reasonableness of management’s assessment regarding whether an adverse outcome is probable and estimated reliably; (iv) inspecting certain external legal documents; and (v) evaluating the sufficiency of the Group’s legal provisions and contingent liabilities disclosures.
Recognition, measurement and disclosure of tax liabilities for uncertain tax treatments
As described in the Group Accounting Policies and Note 30 to the consolidated financial statements, the Group faces a number of audits and reviews in jurisdictions around the world and, in some cases, is in dispute with the tax authorities. As at 31 December 2022 the total net tax liability recognised in respect of uncertain tax positions is $830 million and the potential for additional liabilities where the possibility of the additional liabilities falling due is more than remote is (a) $245 million related to transfer pricing matters including items under tax audit, (b) $209 million related to other tax liabilities where the Group estimates the potential for additional liabilities above the amount provided, and (c) $280 million related to other tax matters for which no tax liability has been recognised, as disclosed in Note 30. Tax liabilities recognised for uncertain tax treatments require management to make key judgements with respect to the outcome of current and potential future tax audits, and actual results could vary from these estimates. Accruals for tax contingencies are measured using either the most likely amount or the expected value amount depending on which method management expects to better predict the resolution of the uncertainty.
55
The principal considerations for our determination that performing procedures relating to recognition, measurement and disclosure of tax liabilities for uncertain tax treatments is a critical audit matter is the significant judgement made by management to estimate the tax liability, and the significant estimation uncertainty relative to the expectation of the resolution of tax audits or other disputes with tax authorities. This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating management’s key judgements with respect to the outcome, estimation and recognition of current and potential future tax audits. In addition, the audit effort involved the use of professionals with specialised skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the identification, recognition and measurement of accruals for tax liabilities. These procedures also included, among others, testing management’s process for determining tax liabilities and uncertain tax treatments for which no tax liability is recognised; i) evaluating the completeness of management’s assessment of the identification of tax liabilities and evaluating management’s process for estimating the possible outcomes of each tax liability; ii) obtaining the status and results of tax audits and discussions with the relevant tax authorities; iii) testing the completeness and accuracy of underlying data used in the estimate; iv) evaluating the reasonableness of significant assumptions related to the outcome of tax audits and assumptions relating to the most likely amount or expected value depending on the resolution of the uncertainty; and v) evaluating the sufficiency of the Group’s disclosures where no tax liability is recognised. Professionals with specialised skill and knowledge were used to assist in evaluating management’s assumptions relating to determining the key judgements with respect to the outcome of tax audits and assumptions relating to the most likely amount of expected value depending on the resolution of uncertainty involved evaluating whether the assumptions used were reasonable considering the technical merits of tax treatments and advice, if any, received from the Group’s external advisors.
Valuation of defined benefit obligations (in the UK and Sweden)
As described in the Group Accounting Policies and Note 22 to the consolidated financial statements, the Group and most of its subsidiaries offer retirement plans which cover the majority of its employees. Several of these plans are defined benefit, where benefits are based on employees’ length of service and linked to their salary. As at 31 December 2022 the Group had defined benefit obligations of $8,108 million mainly in the UK, US and Sweden. Qualified independent actuaries have updated the actuarial valuations under IAS 19 for the major defined benefit schemes operated by the Group to 31 December 2022. In respect of defined benefit plans, obligations are determined using the projected unit credit method and are discounted to present value by reference to market yields on high quality corporate bonds. Given the extent of the assumptions used to determine the value of scheme liabilities, these are considered to be significant estimates. The assumptions which had the most material impact on the results of the Group for the UK and Sweden were the discount rate, inflation, mortality rate (UK).
The principal considerations for our determination that performing procedures relating to the valuation of defined benefit obligations in the UK and Sweden is a critical audit matter are the significant judgement made by management in determining the discount rate, inflation and mortality rates (UK) assumptions. This in turn led to a high degree of auditor judgement and subjectivity in applying procedures relating to these assumptions. In addition, the audit effort involved the use of professionals with specialised skill and knowledge to assist in performing these procedures and evaluating audit evidence.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the assumptions used and the accuracy of the obligations. These procedures also included, among others, (i) the involvement of professionals with specialised skill and knowledge to assist in developing an independent expectation of the defined benefit obligations for the UK and Sweden, (ii) comparing the independent estimate to management’s estimate to evaluate the reasonableness of management’s estimate, and (iii) testing the completeness and accuracy of the underlying data used in the models. Developing the independent estimate involved independently deriving inflation, discount rate and mortality assumptions by evaluating the specifics of each plan and, where applicable, considering national information, and comparing the discount and inflation rates with developed ranges of recent external reporting of other companies.
/s/
9 February 2023
We have served as the Group’s auditor since 2017.
56
ITEM 19. EXHIBITS(1)
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4.1 |
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4.3 | Form of Deed of Indemnity for Directors (used for all Directors from November 10, 2022). | |
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8.1 |
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13.1 |
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15.1 |
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15.2 |
| Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. |
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15.4 |
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17.1 | List of subsidiary guarantors and issuers of guaranteed securities. | |
101.INS |
| XBRL Instance Document. |
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101.SCH |
| XBRL Taxonomy Extension Schema. |
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101.CAL |
| XBRL Taxonomy Extension Scheme Calculation Linkbase. |
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101.DEF |
| XBRL Taxonomy Extension Scheme Definition Linkbase. |
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101.LAB |
| XBRL Taxonomy Extension Scheme Label Linkbase. |
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101.PRE |
| XBRL Taxonomy Extension Scheme Presentation Linkbase. |
| (1) | Exhibits other than those listed above are omitted when in the opinion of the registrant they are either not applicable or not material. Other Exhibits previously filed have been omitted when in the opinion of the registrant such Exhibits are no longer material. |
| (2) | Certain of the information included within Exhibit 15.1, which is provided pursuant to Rule 12b-23(a)(3) of the Securities Exchange Act of 1934, as amended, is incorporated by reference in this Form 20-F, as specified elsewhere in this Form 20-F. With the exception of the items and pages so specified, the Annual Report and Form 20-F Information 2022 is not deemed to be filed as part of this Annual Report on Form 20-F. |
57
SIGNATURE
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| AstraZeneca PLC | ||
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| By: | /s/ Adrian Kemp | |
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| Name: | Adrian Kemp |
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| Title: | Company Secretary |
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London, England |
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February 21, 2023 |
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58
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
1. | F-2 | |
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-14 |
F-1
Consolidated Statement of Comprehensive Income
for the year ended 31 December
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| 2022 |
| 2021 |
| 2020 |
| |||||
Notes | $m | $m | $m |
| ||||||||
Product Sales | 1 | | | | ||||||||
Collaboration Revenue | 1 | | | | ||||||||
Total Revenue | | | | |||||||||
Cost of sales | ( | ( | ( | |||||||||
Gross profit | | | | |||||||||
Distribution expense | ( | ( | ( | |||||||||
Research and development expense | 2 | ( | ( | ( | ||||||||
Selling, general and administrative expense | 2 | ( | ( | ( | ||||||||
Other operating income and expense | 2 | | | | ||||||||
Operating profit | | | | |||||||||
Finance income | 3 | | | | ||||||||
Finance expense | 3 | ( | ( | ( | ||||||||
Share of after tax losses in associates and joint ventures | 11 | ( | ( | ( | ||||||||
Profit /(loss) before tax | | ( | | |||||||||
Taxation | 4 | | | ( | ||||||||
Profit for the period | | | | |||||||||
Other comprehensive income: | ||||||||||||
Items that will not be reclassified to profit or loss: | ||||||||||||
Remeasurement of the defined benefit pension liability | 22 | | | ( | ||||||||
Net (losses)/gains on equity investments measured at fair value through other comprehensive income | ( | ( | | |||||||||
Fair value movements related to own credit risk on bonds designated as fair value through profit and loss | | – | ( | |||||||||
Tax on items that will not be reclassified to profit or loss | 4 | ( | | ( | ||||||||
| | | ||||||||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||||
Foreign exchange arising on consolidation | 23 | ( | ( | | ||||||||
Foreign exchange arising on designated liabilities in net investment hedges | 23 | ( | ( | | ||||||||
Fair value movements on cash flow hedges | ( | ( | | |||||||||
Fair value movements on cash flow hedges transferred to profit and loss | | | ( | |||||||||
Fair value movements on derivatives designated in net investment hedges | 23 | ( | | | ||||||||
(Costs)/gains of hedging | ( | ( | | |||||||||
Tax on items that may be reclassified subsequently to profit or loss | 4 | | | ( | ||||||||
( | ( | | ||||||||||
Other comprehensive (loss)/income for the period, net of tax | ( | ( | | |||||||||
Total comprehensive income/(loss) for the period | | ( | | |||||||||
Profit attributable to: | ||||||||||||
Owners of the Parent | | | | |||||||||
Non-controlling interests | 26 | | | ( | ||||||||
Total comprehensive income/(loss) attributable to: | ||||||||||||
Owners of the Parent | | ( | | |||||||||
Non-controlling interests | 26 | | | ( | ||||||||
Basic earnings per $ | 5 | $ | $ | $ | ||||||||
Diluted earnings per $ | 5 | $ | $ | $ | ||||||||
Weighted average number of Ordinary Shares in issue (millions) | 5 | | | | ||||||||
Diluted weighted average number of Ordinary Shares in issue (millions) | 5 | | | | ||||||||
Dividends declared and paid in the period | 25 | | | |
All activities were in respect of continuing operations.
$m means millions of US dollars.
F-2
Consolidated Statement of Financial Position
at 31 December
|
| 2022 | 2021 | 2020 |
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Notes | $m | $m | $m |
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Assets | |||||||||
Non-current assets | |||||||||
Property, plant and equipment | 7 | | | | |||||
Right-of-use assets | 8 | | | | |||||
Goodwill | 9 | | | | |||||
Intangible assets | 10 | | | | |||||
Investments in associates and joint ventures | 11 | | | | |||||
Other investments | 12 | | | | |||||
Derivative financial instruments | 13 | | | | |||||
Other receivables | 14 | | | | |||||
Deferred tax assets | 4 | | | | |||||
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Current assets | |||||||||
Inventories | 15 | | | | |||||
Trade and other receivables | 16 | | | | |||||
Other investments | 12 | | | | |||||
Derivative financial instruments | 13 | | | | |||||
Intangible assets | 10 | – | | – | |||||
Income tax receivable | | | | ||||||
Cash and cash equivalents | 17 | | | | |||||
Assets held for sale | 18 | | | – | |||||
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Total assets | | | | ||||||
Liabilities | |||||||||
Current liabilities | |||||||||
Interest-bearing loans and borrowings | 19 | ( | ( | ( | |||||
Lease liabilities | 8 | ( | ( | ( | |||||
Trade and other payables | 20 | ( | ( | ( | |||||
Derivative financial instruments | 13 | ( | ( | ( | |||||
Provisions | 21 | ( | ( | ( | |||||
Income tax payable | ( | ( | ( | ||||||
( | ( | ( | |||||||
Non-current liabilities | |||||||||
Interest-bearing loans and borrowings | 19 | ( | ( | ( | |||||
Lease liabilities | 8 | ( | ( | ( | |||||
Derivative financial instruments | 13 | ( | ( | ( | |||||
Deferred tax liabilities | 4 | ( | ( | ( | |||||
Retirement benefit obligations | 22 | ( | ( | ( | |||||
Provisions | 21 | ( | ( | ( | |||||
Other payables | 20 | ( | ( | ( | |||||
( | ( | ( | |||||||
Total liabilities | ( | ( | ( | ||||||
Net assets | | | | ||||||
Equity | |||||||||
Capital and reserves attributable to equity holders of the Company | |||||||||
Share capital | 24 | | | | |||||
Share premium account | | | | ||||||
Capital redemption reserve | | | | ||||||
Merger reserve | | | | ||||||
Other reserves | 23 | | | | |||||
Retained earnings | 23 | ( | | | |||||
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Non-controlling interests | 26 | | | | |||||
Total equity | | | |
The Financial Statements from pages 138 to 203 were approved by the Board and were signed on its behalf by
Pascal Soriot | Aradhana Sarin |
Director | Director |
9 February 2023 |
F-3
Consolidated Statement of Changes in Equity
for the year ended 31 December
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| Share |
| Capital |
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| Total |
| Non- |
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Share | premium | redemption | Merger | Other | Retained | attributable | controlling | Total |
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capital | account | reserve | reserve | reserves | earnings | to owners | interests | equity |
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$m | $m | $m | $m | $m | $m | $m | $m | $m |
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At 1 January 2020 |
| | | | | | | | | | |||||||||
Profit for the period | – | – | – | – | – | | | ( | | ||||||||||
Other comprehensive income1 |
| – | – | – | – | – | | | – | | |||||||||
Transfer to other reserves2, 3 |
| – | – | – | – | ( | | | ( | – | |||||||||
Transactions with owners |
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Dividends (Note 25) |
| – | – | – | – | – | ( | ( | – | ( | |||||||||
Issue of Ordinary Shares |
| – | | – | – | – | – | | – | | |||||||||
Share-based payments charge for the period (Note 29) |
| – | – | – | – | – | | | – | | |||||||||
Settlement of share plan awards | – | – | – | – | – | ( | ( | – | ( | ||||||||||
Net movement |
| – | | – | – | ( | | | ( | | |||||||||
At 31 December 2020 |
| | | | | | | | | | |||||||||
Profit for the period |
| – | – | – | – | – | | | | | |||||||||
Other comprehensive loss1 |
| – | – | – | – | – | ( | ( | – | ( | |||||||||
Transfer to other reserves2 |
| – | – | – | – | | ( | – | – | – | |||||||||
Transactions with owners |
| ||||||||||||||||||
Dividends (Note 25) |
| – | – | – | – | – | ( | ( | – | ( | |||||||||
Issue of Ordinary Shares |
| | | – | – | – | – | | – | | |||||||||
Share-based payments charge for the period (Note 29) |
| – | – | – | – | – | | | – | | |||||||||
Settlement of share plan awards | – | – | – | – | – | ( | ( | – | ( | ||||||||||
Issue of replacement Alexion share awards upon acquisition (Note 27)4 | – | – | – | – | – | | | – | | ||||||||||
Net movement |
| | | – | – | | ( | | | | |||||||||
At 31 December 2021 |
| | | | | | | | | | |||||||||
Profit for the period |
| – | – | – | – | – | | | | | |||||||||
Other comprehensive loss1 |
| – | – | – | – | – | ( | ( | ( | ( | |||||||||
Transfer to other reserves2 |
| – | – | – | – | | ( | – | – | – | |||||||||
Transactions with owners |
| ||||||||||||||||||
Dividends (Note 25) |
| – | – | – | – | – | ( | ( | – | ( | |||||||||
Issue of Ordinary Shares |
| – | | – | – | – | – | | – | | |||||||||
Share-based payments charge for the period (Note 29) |
| – | – | – | – | – | | | – | | |||||||||
Settlement of share plan awards | – | – | – | – | – | ( | ( | – | ( | ||||||||||
Net movement |
| – | | – | – | | ( | ( | | ( | |||||||||
At 31 December 2022 |
| | | | | | ( | | | |
| 1. |
| 2. |
| 3. |
| 4. |
F-4
Consolidated Statement of Cash Flows
for the year ended 31 December
|
| 2022 |
| 2021 |
| 2020 |
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Notes | $m | $m | $m |
| |||||
Cash flows from operating activities | |||||||||
Profit/(loss) before tax | | ( | | ||||||
Finance income and expense | 3 | | | | |||||
Share of after tax losses of associates and joint ventures | 11 | | | | |||||
Depreciation, amortisation and impairment | | | | ||||||
Increase in trade and other receivables | ( | ( | ( | ||||||
Decrease/(increase) in inventories | | | ( | ||||||
Increase in trade and other payables and provisions | | | | ||||||
Gains on disposal of intangible assets | 2 | ( | ( | ( | |||||
Gains on disposal of investments in associates and joint ventures | 2 | – | ( | – | |||||
Fair value movements on contingent consideration arising from business combinations | 20 | | | ( | |||||
Non-cash and other movements | 17 | ( | | ( | |||||
Cash generated from operations | | | | ||||||
Interest paid | ( | ( | ( | ||||||
Tax paid | ( | ( | ( | ||||||
Net cash inflow from operating activities | | | | ||||||
Cash flows from investing activities | |||||||||
Acquisition of subsidiaries, net of cash acquired | 27 | ( | ( | – | |||||
Payments upon vesting of employee share awards attributable to business combinations | 27 | ( | ( | – | |||||
Payment of contingent consideration from business combinations | 20 | ( | ( | ( | |||||
Purchase of property, plant and equipment | ( | ( | ( | ||||||
Disposal of property, plant and equipment | | | | ||||||
Purchase of intangible assets | ( | ( | ( | ||||||
Disposal of intangible assets and assets held for sale | | | | ||||||
Movement in profit-participation liability | 2 | – | | | |||||
Purchase of non-current asset investments | ( | ( | ( | ||||||
Disposal of non-current asset investments | | | | ||||||
Movement in short-term investments, fixed deposits and other investing instruments | ( | | | ||||||
Payments to associates and joint ventures | 11 | ( | ( | ( | |||||
Disposal of investments in associates and joint ventures | – | | – | ||||||
Interest received | | | | ||||||
Net cash outflow from investing activities | ( | ( | ( | ||||||
Net cash inflow/(outflow) before financing activities | | ( | | ||||||
Cash flows from financing activities | |||||||||
Proceeds from issue of share capital | | | | ||||||
Issue of loans and borrowings | – | | | ||||||
Repayment of loans and borrowings | ( | ( | ( | ||||||
Dividends paid | ( | ( | ( | ||||||
Hedge contracts relating to dividend payments | ( | ( | ( | ||||||
Repayment of obligations under leases | ( | ( | ( | ||||||
Movement in short-term borrowings | | ( | | ||||||
Payments to acquire non-controlling interests | – | ( | – | ||||||
Payment of Acerta Pharma share purchase liability | ( | – | – | ||||||
Net cash (outflow)/inflow from financing activities | ( | | ( | ||||||
Net increase/(decrease) in Cash and cash equivalents in the period | | ( | | ||||||
Cash and cash equivalents at the beginning of the period | | | | ||||||
Exchange rate effects | ( | ( | | ||||||
Cash and cash equivalents at the end of the period | 17 | | | |
F-5
Group Accounting Policies
Basis of accounting and preparation of financial information
The Consolidated Financial Statements have been prepared under the historical cost convention, modified to include revaluation to fair value of certain financial instruments as described below, in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Consolidated Financial Statements also comply fully with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) and International Accounting Standards as adopted by the European Union.
The Consolidated Financial Statements are presented in US dollars, which is the Company’s functional currency.
In preparing their individual financial statements, the accounting policies of some overseas subsidiaries do not conform with IASB-issued IFRSs. Therefore, where appropriate, adjustments are made in order to present the Consolidated Financial Statements on a consistent basis.
Basis for preparation of Financial Statements on a going concern basis
The Group has considerable financial resources available. As at 31 December 2022, the Group has $
The Group’s revenues are largely derived from sales of medicines covered by patents, which provide a relatively high level of resilience and predictability to cash inflows, although government price interventions in response to budgetary constraints are expected to continue to adversely affect revenues in some of our significant markets. The Group, however, anticipates new revenue streams from both recently launched medicines and those 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. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Financial Statements.
Estimates and judgements
The preparation of the Financial Statements in conformity with generally accepted accounting principles requires management to make estimates and judgements that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The accounting policy descriptions set out the areas where judgements and estimates need exercising, the most significant of which include the following Key Judgements and Significant Estimates:
| revenue recognition – see Revenue Accounting Policy on page 142 and Note 1 on page 149 |
| expensing of internal development expenses – see Research and Development Policy on page 144 |
| impairment reviews of Intangible assets – see Note 10 on page 161 |
| useful economic life of Intangible assets – see Research and Development Policy on page 144 |
| business combinations and Goodwill – see Business Combinations and Goodwill Policy on page 146 and Note 27 on page 182 |
| litigation liabilities – see Litigation and Environmental Liabilities within Note 30 on page 192 |
| operating segments – see Note 6 on page 157 |
| employee benefits – see Note 22 on page 173 |
| taxation – see Note 30 on page 192. |
AstraZeneca has assessed the impact of the uncertainty presented by the COVID-19 pandemic and the Russia-Ukraine conflict on the Financial Statements, specifically considering the impact on key judgements and significant estimates along with several other areas of increased risk. No material accounting impacts relating to COVID-19 or the Russia-Ukraine conflict were recognised in the year.
The Group will continue to monitor these areas of increased judgement, estimation and risk for material changes.
The Group has assessed the impact of climate risk on its financial reporting. The impact assessment was primarily focused on the valuation and useful lives of intangible assets and the identification and valuation of provisions and contingent liabilities, as these are judged to be the key areas that could be impacted by climate risks. No material accounting impacts or changes to judgements or other required disclosures were noted.
Key Judgements are those judgements made in applying the Group’s accounting policies that have a material effect on the amounts of assets and liabilities recognised in the financial statements.
A Significant Estimate has a significant risk of material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Financial risk management policies are detailed in Note 28 to the Financial Statements from page 184.
AstraZeneca’s management considers the following to be the most significant accounting policies in the context of the Group’s operations.
Revenue
Revenue comprises Product Sales and Collaboration Revenue.
Revenue excludes inter-company revenues and value-added taxes.
Product Sales
Product Sales represent net invoice value less estimated rebates, returns and chargebacks, which are considered to be variable consideration and include significant estimates. Sales are recognised when the control of the goods has been transferred to a third party. This is usually when title passes to the customer, either on shipment or on receipt of goods by the customer, depending on local trading terms. In markets where returns are significant, estimates of the quantity and value of goods which may ultimately be returned are accounted for at the point revenue is recognised. Revenue is not recognised in full until it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur.
Rebates are amounts payable or credited to a customer, usually based on the quantity or value of Product Sales to the customer for specific products in a certain period. Product sales rebates, which relate to Product Sales that occur over a period of time, are normally issued retrospectively.
At the time Product Sales are invoiced, rebates and deductions that the Group expects to pay are estimated based upon assumptions developed using contractual terms, historical experience and market related information. The rebates and deductions are recognised as variable consideration and recorded as a reduction to revenue with an accrual recorded. These rebates typically arise from sales contracts with government payers, third-party managed care organisations, hospitals, long-term care facilities, group purchasing organisations and various state programmes.
F-6
Our returns accruals are based on actual experience over the preceding
When a product faces generic competition, particular attention is given to the possible levels of returns and, in cases where the circumstances are such that the level of Product Sales are considered highly probable to reverse, revenues are only recognised when the right of return expires, which is generally on ultimate prescription of the product to patients.
The methodology and assumptions used to estimate rebates and returns are monitored and adjusted regularly in the light of contractual and legal obligations, historical trends, past experience and projected market conditions. Once the uncertainty associated with returns is resolved, revenue is adjusted accordingly.
Under certain collaboration agreements which include a profit sharing mechanism, our recognition of Product Sales depends on which party acts as principal in sales to the end customer. In the cases where AstraZeneca acts as principal, we record
Contracts relating to the supply of certain Vaccines Immune Therapies medicines relating to the COVID-19 pandemic include conditions whereby payments are receivable from customers in advance of the delivery of product. Such amounts are held on the balance sheet as contract liabilities until the related revenue is recognised, generally upon product delivery. Certain of these contracts contain further provisions that restrict the use of inventory manufactured in specified supply chains to specified customers, resulting in an enforceable right to payment as the activities are performed. Under IFRS 15, such contracts require revenue to be recognised over time using an appropriate and reasonably measurable method to measure progress. Revenue is recognised on these contracts based on the proportion of product delivered compared to the total contracted volumes.
Certain arrangements include bill-and-hold arrangements under which the Group invoices a customer for a product but retains physical possession of the product until it is transferred to the customer at a point in time in the future. For these types of arrangements, an assessment is made to determine when the performance obligation has been satisfied, which is when control of the product is transferred to the customer. If the customer has obtained control of the product even though that product remains in the Group's physical possession, the performance obligation to transfer a product has been satisfied and Product Sales are recognised. Control is considered to have transferred when the product is segregated as belonging to the customer, is readily available to be delivered to the customer and AstraZeneca is unable to sell the product to another customer.
Collaboration Revenue
Collaboration Revenue includes income from collaborative arrangements where either the Group has out-licensed (sold) or has in-licenced (acquired) certain rights associated with products, where either AstraZeneca (out-licences) or the collaborator (in-licences) retains a significant ongoing economic interest in the product. Significant interest can include ongoing supply of finished goods, profit sharing arrangements or being principal in the sales of medicines. These collaborations may include development, manufacturing and/or commercialisation arrangements with the collaborator. Income from out-licences may take the form of upfront fees, milestones and royalties and income from in-licences may comprise the sharing of profit arising from sales made as principal by the collaborator.
Timing of recognition of clinical and regulatory milestones is considered to be a key judgement. There can be significant uncertainty over whether it is highly probable that there would not be a significant reversal of revenue in respect of specific milestones if these are recognised before they are triggered due to them being subject to the actions of third parties. In general, where the triggering of a milestone is subject to the decisions of third parties (e.g. the acceptance or approval of a filing by a regulatory authority), the Group does not consider that the threshold for recognition is met until that decision is made.
Where Collaboration Revenue arises from the licensing of the Group’s own intellectual property, the licences we grant are typically rights to use intellectual property which do not change during the period of the licence and therefore related non-conditional revenue is recognised at the point the license is granted and variable consideration as soon as recognition criteria are met.
Other performance obligations in the contract might include the supply of product. These arrangements typically involve the receipt of an upfront payment, which the contract attributes to the license of the intangible assets, and ongoing receipts for supply, which the contract attributes to the sale of the product we manufacture. In cases where the transaction has two or more components, we account for the delivered item (for example, the transfer of title to the intangible asset) as a separate unit of account and record revenue on delivery of that component. Where practicable, consideration is allocated to performance obligations on the basis of the standalone selling price of each performance obligation. However, where there is a licence of intellectual property, it is not always possible to establish a reliable estimate of the standalone selling price of the licence as they are unique. Therefore, in these rare situations, the residual approach is used to determine the consideration attributable to the licence.
Where fixed amounts are payable over one year from the effective date of a contract, an assessment is made as to whether a significant financing component exists, and if so, the fair value of this component is deferred and recognised as financing income over the period to the expected date of receipt.
Where control of a right to use licence for an intangible asset passes at the outset of an arrangement, revenue is recognised at the point in time control is transferred. Where the substance of a licence arrangement is that of a right to access rights attributable to an intangible asset, revenue is recognised over time, normally on a straight-line basis over the life of the contract.
Where the Group provides ongoing development services, revenue in respect of this element is recognised over the duration of those services. Where the arrangement meets the definition of a licence agreement, sales milestones and sales royalties are recognised when achieved by applying the royalty exemption under IFRS 15. All other milestones and sales royalties are recognised when considered it is highly probable there will not be a significant reversal of cumulative income. The determination requires estimates to be made in relation to future Product Sales.
Where Collaboration Revenue is recorded and there is a related Intangible asset that is licensed as part of the arrangement, an appropriate amount of that Intangible asset is charged to Cost of sales based on an allocation of cost or value to the rights that have been licenced.
The Group periodically enters into transactions where it acquires part of the rights to a product intangible (either on-market or in-process RD), but for commercial reasons does not act as principal in selling the product to the customer and therefore does not recognise income from the product in the form of Product Sales. This may occur where, for example, a collaboration partner retains the right to commercialise in a specific territory, and has sufficient local control over that commercialisation to book product sale revenue, while the Group instead receives a proportion of the value generated by those product sales, either in the form of a royalty or a profit share (alliance revenue).
Cost of sales
Cost of sales are recognised as the associated revenue is recognised. Cost of sales include manufacturing costs, royalties payable on revenues recognised, movements in provisions for inventories, inventory write-offs and impairment charges in relation to manufacturing assets. Cost of sales also includes co-collaborator sharing of profit arising from collaborations, and foreign exchange gains and losses arising from business trading activities.
F-7
Research and development
Research expenditure is charged to profit and loss in the year in which it is incurred.
Internal development expenditure is capitalised only if it meets the recognition criteria of IAS 38 ‘Intangible Assets’. This is considered a key judgement. Where regulatory and other uncertainties are such that the criteria are not met, the expenditure is charged to profit and loss and this is almost invariably the case prior to approval of the drug by the relevant regulatory authority. Where, however, recognition criteria are met, Intangible assets are capitalised and amortised on a straight-line basis over their useful economic lives from product launch. At 31 December 2022,
Payments to in-license products and compounds from third parties for new research and development projects (in process research and development) generally take the form of upfront payments, milestones and royalty payments. Where payments made to third parties represent consideration for future research and development activities, an evaluation is made as to the nature of the payments. Such payments are expensed if they represent compensation for sub-contracted research and development services not resulting in a transfer of intellectual property. By contrast, payments are capitalised if they represent compensation for the transfer of identifiable intellectual property developed at the risk of the third party. Such payments may be made once development or regulatory milestones are met and may also be made on the basis of sales volumes once a product is launched. Development and regulatory milestone payments are capitalised as the milestone is triggered. Sales-related payments are accrued and capitalised with reference to the latest Group sales forecasts for approved indications. Assets capitalised are amortised, on a straight-line basis, over their useful economic lives from product launch.
The determination of useful economic life is considered to be a key judgement. On product launch, the Group makes a judgement as to the expected useful economic life with reference to the expiry of associated patents for the product, expectation around the competitive environment specific to the product and our detailed long-term risk-adjusted sales projections compiled annually across the Group and approved by the Board.
The useful economic life can extend beyond patent expiry dependent upon the nature of the product and the complexity of the development and manufacturing process. Significant sales can often be achieved post patent expiration.
Intangible assets
Intangible assets are stated at cost less amortisation and impairments. Intangible assets relating to products in development are subject to impairment testing annually. All Intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable. The determination of the recoverable amounts include key estimates which are highly sensitive to, and depend upon, key assumptions as detailed in Note 10 to the Financial Statements from page 161
Impairment reviews have been carried out on all Intangible assets that are in development (and not being amortised), all major intangible assets acquired during the year and all other intangible assets that have had indications of impairment during the year. Recoverable amount is determined as the higher of value in use or fair value less costs to sell using a discounted cash flow calculation, with the products’ expected cash flows risk-adjusted over their estimated remaining useful economic life. Sales forecasts and specific allocated costs (which have both been subject to appropriate senior management review and approval) are risk-adjusted and discounted using appropriate rates based on our post-tax weighted average cost of capital or for fair value less costs to sell, a required rate of return for a market participant. Our weighted average cost of capital reflects factors such as our capital structure and our costs of debt and equity.
Any impairment losses are recognised immediately in Operating profit. Intangible assets relating to products which fail during development (or for which development ceases for other reasons) are also tested for impairment and are written down to their recoverable amount (which is usually nil).
If, subsequent to an impairment loss being recognised, development restarts or other facts and circumstances change indicating that the impairment is less or no longer exists, the value of the asset is re-estimated and its carrying value is increased to the recoverable amount, but not exceeding the original value, by recognising an impairment reversal in Operating profit.
Government grants
Government grants are recognised in the Consolidated Statement of Comprehensive Income so as to match with the related expenses that they are intended to compensate. Where grants are received in advance of the related expenses, they are initially recognised in the Consolidated Statement of Financial Position under Trade and other payables as deferred income and released to net off against the related expenditure when incurred.
Each contract is assessed to determine whether there are both grant elements and supply of product which need to be separated. In each case, the contracts set out the specified terms for the supply of the product and the provisions for funding for certain costs, primarily research and development associated with the IP. It is considered whether there are any conditions for the funding to be refunded. The consideration in the contract is allocated between the grant and supply elements. The standalone selling price for the supply of products is determined by reference to observed prices with other customers. The amount allocated as a government grant is determined by reference to the specific agreed costs and activities identified in the contract as not directly attributable to the supply of product. Government grants are recorded as an offset to the relevant expense in the Consolidated Statement of Comprehensive Income and are capped to match the relevant costs incurred.
Joint arrangements and associates
The Group has arrangements over which it has joint control and which qualify as joint operations or joint ventures under IFRS 11 ‘Joint Arrangements’. For joint operations, the Group recognises its share of revenue that it earns from the joint operations and its share of expenses incurred. The Group also recognises the assets associated with the joint operations that it controls and the liabilities it incurs under the joint arrangement. For joint ventures and associates, the Group recognises its interest in the joint venture or associate as an investment and uses the equity method of accounting.
Employee benefits
The Group accounts for pensions and other employee benefits (principally healthcare) under IAS 19 ‘Employee Benefits’. In respect of defined benefit plans, obligations are determined using the projected unit credit method and are discounted to present value by reference to market yields on high-quality corporate bonds, while plan assets are measured at fair value. Given the extent of the assumptions used to determine the value of scheme assets and scheme liabilities, these are considered to be significant estimates. The operating and financing costs of such plans are recognised separately in profit; current service costs are spread systematically over the lives of employees and financing costs are recognised in full in the periods in which they arise. Remeasurements of the net defined benefit pension liability, including actuarial gains and losses, are recognised immediately in Other comprehensive income.
Where the calculation results in a surplus to the Group, the recognised asset is limited to the present value of any available future refunds from the plan or reductions in future contributions to the plan subject to consideration of the effect any minimum funding requirement for future service has on the benefit available as a reduction in future contributions.
Payments to defined contribution plans are recognised in profit as they fall due.
F-8
Taxation
The current tax payable is based on taxable profit for the year. Taxable profit differs from reported profit because taxable profit excludes items that are either never taxable or tax deductible or items that are taxable or tax deductible in a different period. The Group's current tax assets and liabilities are calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised to the extent that there are future taxable temporary differences or it is probable that future taxable profit will be available against which the asset can be utilised. This requires judgements to be made in respect of the availability of future taxable income.
No deferred tax asset or liability is recognised in respect of temporary differences associated with investments in subsidiaries and branches where the Group is able to control the timing of reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.
The Group's Deferred tax assets and liabilities are calculated using tax rates that are expected to apply in the period when the liability is settled or the asset realised based on tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset in the Consolidated Statement of Financial Position if, and only if, the taxable entity has a legally enforceable right to set off current tax assets and liabilities, and the Deferred tax assets and liabilities relate to taxes levied by the same taxation authority on the same taxable entity.
Liabilities for uncertain tax positions require management to make judgements of potential exposures in relation to tax audit issues. Tax benefits are not recognised unless the tax positions will probably be accepted by the tax authorities. This is based upon management's interpretation of applicable laws and regulations and the expectation of how the tax authority will resolve the matter. Once considered probable of not being accepted, management reviews each material tax benefit and reflects the effect of the uncertainty in determining the related taxable result.
Liabilities for uncertain tax positions are measured using either the most likely amount or the expected value amount depending on which method the entity expects to better predict the resolution of the uncertainty.
Further details of the estimates and assumptions made in determining our recorded liability for transfer pricing contingencies and other tax contingencies are included in Note 30 to the Financial Statements from page 192.
Share-based payments
All plans have been classified as equity settled after assessment. The grant date fair value of the market-based performance elements of employee share plan awards is calculated using a modified Monte Carlo model, with other elements at market price. In accordance with IFRS 2 ‘Share-based Payment’, the resulting cost is recognised in profit on a straight-line basis over the vesting period of the awards. The value of the charge is adjusted to reflect expected and actual levels of awards vesting, except where the failure to vest is as a result of not meeting a market condition. Cancellations of equity instruments are treated as an acceleration of the vesting period and any outstanding charge is recognised in profit immediately.
Cash outflows relating to the vesting of share plans for our employees are recognised within operating activities, as they relate to employee remuneration. The cash flows relating to replacement awards issued to employees as part of the Alexion acquisition (see Note 27 from page 182) are classified within investing activities, as they are part of the aggregate cash flows arising from obtaining control of the subsidiary.
Property, plant and equipment
The Group’s policy is to depreciate the difference between the cost of each item of Property, plant and equipment and its residual value over its estimated useful life on a straight-line basis. Assets under construction are not depreciated until the asset is available for use, at which point the asset is transferred into either Land and buildings or Plant and equipment, and depreciated over its estimated useful economic life.
Reviews are made annually of the estimated remaining lives and residual values of individual productive assets, taking account of commercial and technological obsolescence as well as normal wear and tear. It is impractical to calculate average asset lives exactly. However, the useful economic lives range from approximately
Leases
The Group’s lease arrangements are principally for property, most notably a portfolio of office premises and employee accommodation, and for a global car fleet, utilised primarily by our sales and marketing teams.
The lease liability and corresponding right-of-use asset arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
| fixed payments, less any lease incentives receivable |
| variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date |
| the exercise price of a purchase option if the Group is reasonably certain to exercise that option |
| payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option, and |
| amounts expected to be payable by the Group under residual value guarantees. |
Right-of-use assets are measured at cost comprising the following:
| the amount of the initial measurement of lease liability |
| any lease payments made at or before the commencement date less any lease incentives received |
| any initial direct costs, and |
| restoration costs. |
Judgements made in calculating the lease liability include assessing whether arrangements contain a lease and determining the lease term. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Property leases will often include an early termination or extension option to the lease term. Fleet management policies vary by jurisdiction and may include renewal of a lease until a measurement threshold, such as mileage, is reached. Extension and termination options have been considered when determining the lease term, along with all facts and circumstances that may create an economic incentive to exercise an extension option, or not exercise a termination option. Extension periods (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The lease payments are discounted using incremental borrowing rates, as in the majority of leases held by the Group the interest rate implicit in the lease is not readily identifiable. Calculating the discount rate is an estimate made in calculating the lease liability. This rate is the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Group uses a risk-free interest rate adjusted for credit risk, adjusting for terms specific to the lease including term, country and currency.
F-9
The Group is exposed to potential future increases in variable lease payments that are based on an index or rate, which are initially measured as at the commencement date, with any future changes in the index or rate excluded from the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the Consolidated Statement of Comprehensive Income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Payments associated with short-term leases of Property, plant and equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in the Consolidated Statement of Comprehensive Income. Short-term leases are leases with a lease term of 12 months or less. Low-value leases are those where the underlying asset value, when new, is $
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative standalone prices.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life. It is impractical to calculate average asset lives exactly. However, the total lives range from approximately
There are no material lease agreements under which the Group is a lessor.
Business combinations and goodwill
In assessing whether an acquired set of assets and activities is a business or an asset, management will first elect whether to apply an optional concentration test to simplify the assessment. Where the concentration test is applied, the acquisition will be treated as the acquisition of an asset if substantially all of the fair value of the gross assets acquired (excluding cash and cash equivalents, deferred tax assets, and related goodwill) is concentrated in a single asset or group of similar identifiable assets.
Where the concentration test is not applied, or is not met, a further assessment of whether the acquired set of assets and activities is a business will be performed.
The determination of whether an acquired set of assets and activities is a business or an asset can be judgemental, particularly if the target is not producing outputs. Management uses a number of factors to make this determination, which are primarily focused on whether the acquired set of assets and activities include substantive processes that mean the set is capable of being managed for the purpose of providing a return. Key determining factors include the stage of development of any assets acquired, the readiness and ability of the acquired set to produce outputs and the presence of key experienced employees capable of conducting activities required to develop or manufacture the assets. Typically, the specialised nature of many pharmaceutical assets and processes is such that until assets are substantively ready for production and promotion, there are not the required processes for a set of assets and activities to meet the definition of a business in IFRS 3.
On the acquisition of a business, fair values are attributed to the identifiable assets and liabilities. Attributing fair values is a key judgement; refer to Note 27 to the Financial Statements on page 182 for additional details of the 2021 acquisition. Contingent liabilities are also recorded at fair value unless the fair value cannot be measured reliably, in which case the value is subsumed into goodwill. Where fair values of acquired contingent liabilities cannot be measured reliably, the assumed contingent liability is not recognised but is disclosed in the same manner as other contingent liabilities. Where the Group fully acquires, through a business combination, assets that were previously held in joint operations, the Group has elected not to uplift the book value of the existing interest in the asset held in the joint operation to fair value at the date full control is taken.
Where not all of the equity of a subsidiary is acquired, the non-controlling interest is recognised either at fair value or at the non-controlling interest’s proportionate share of the net assets of the subsidiary, on a case-by-case basis. Put options over non-controlling interests are recognised as a financial liability, with a corresponding entry in either Retained earnings or against non-controlling interest reserves on a case-by-case basis.
The timing and amount of future contingent elements of consideration is an estimate. Contingent consideration, which may include development and launch milestones, revenue threshold milestones and revenue-based royalties, is fair valued at the date of acquisition using decision-tree analysis with key inputs including probability of success, consideration of potential delays and revenue projections based on the Group’s internal forecasts. Unsettled amounts of consideration are held at fair value within payables with changes in fair value recognised immediately in profit.
Goodwill is the difference between the fair value of the consideration and the fair value of net assets acquired.
Goodwill arising on acquisitions is capitalised and subject to an impairment review, both annually and when there is an indication that the carrying value may not be recoverable.
The Group’s policy up to and including 1997 was to eliminate Goodwill arising upon acquisitions against reserves. Under IFRS 1 ‘First-time Adoption of International Financial Reporting Standards’ and IFRS 3 ‘Business Combinations’, such Goodwill will remain eliminated against reserves.
Subsidiaries
A subsidiary is an entity controlled, directly or indirectly, by AstraZeneca PLC. Control is regarded as the exposure or rights to the variable returns of the entity when combined with the power to affect those returns. Control is normally evidenced by holding more than 50% of the share capital of the company, however other agreements may be in place that result in control where they give AstraZeneca finance decision-making authority over the relevant activities of the company.
The financial results of subsidiaries are consolidated from the date control is obtained until the date that control ceases.
Inventories
Inventories are stated at the lower of cost and net realisable value. The first in, first out or an average method of valuation is used. For finished goods and work in progress, cost includes directly attributable costs and certain overhead expenses (including depreciation). Selling expenses and certain other overhead expenses (principally central administration costs) are excluded. Net realisable value is determined as estimated selling price less all estimated costs of completion and costs to be incurred in selling and distribution.
Write-downs of inventory occur in the general course of business and are recognised in Cost of sales for launched or approved products and in Research and development expense for products in development.
Assets held for sale
Non-current assets are classified as Assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. A sale is considered highly probable only when the appropriate level of management has committed to the sale.
F-10
Assets held for sale are stated at the lower of carrying amount and fair value less costs to sell. Where there is a partial transfer of a non-current asset to held for sale, an allocation of value is made between the current and non-current portions of the asset based on the relative value of the two portions, unless there is a methodology that better reflects the asset to be disposed of.
Assets held for sale are not depreciated or amortised.
Trade and other receivables
Financial assets included in Trade and other receivables are recognised initially at fair value. The Group holds the Trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest rate method, less any impairment losses.
Trade receivables that are subject to debt factoring arrangements are derecognised if they meet the conditions for derecognition detailed in IFRS 9 ‘Financial Instruments’.
Trade and other payables
Financial liabilities included in Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest rate method. Contingent consideration payables are held at fair value within Level 3 of the fair value hierarchy as defined in Note 12.
Financial instruments
The Group’s financial instruments include Lease liabilities, Trade and other receivables and payables, liabilities for contingent consideration and put options under business combinations, and rights and obligations under employee benefit plans which are dealt with in specific accounting policies.
The Group’s other financial instruments include:
| Cash and cash equivalents |
| Fixed deposits |
| Other investments |
| Bank and other borrowings |
| Derivatives. |
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and highly liquid investments with maturities of three months or less when acquired. They are readily convertible into known amounts of cash and are held at amortised cost under the hold to collect classification, where they meet the hold to collect ‘solely payments of principal and interest’ test criteria under IFRS 9. Those not meeting these criteria are held at fair value through profit and loss. Cash and cash equivalents in the Consolidated Statement of Cash Flows include unsecured bank overdrafts at the balance sheet date where balances often fluctuate between a cash and overdraft position.
Fixed deposits
Fixed deposits, principally comprising funds held with banks and other financial institutions, are initially measured at fair value, plus direct transaction costs, and are subsequently measured at amortised cost using the effective interest rate method at each reporting date. Changes in carrying value are recognised in the Consolidated Statement of Comprehensive Income.
Other investments
Investments are classified as fair value through profit or loss (FVPL), unless the Group makes an irrevocable election at initial recognition for certain non-current equity investments to present changes in Other comprehensive income (FVOCI). If this election is made, there is no subsequent reclassification of fair value gains and losses to profit and loss following the derecognition of the investment.
Bank and other borrowings
The Group uses derivatives, principally interest rate swaps, to hedge the interest rate exposure inherent in a portion of its fixed interest rate debt. In such cases the Group will either designate the debt as fair value through profit and loss when certain criteria are met or as the hedged item under a fair value hedge.
If the debt instrument is designated as fair value through profit or loss, the debt is initially measured at fair value (with direct transaction costs being included in profit as an expense) and is remeasured to fair value at each reporting date with changes in carrying value being recognised in profit (along with changes in the fair value of the related derivative), with the exception of changes in the fair value of the debt instrument relating to own credit risk which are recorded in Other comprehensive income in accordance with IFRS 9. Such a designation has been made where this significantly reduces an accounting mismatch which would result from recognising gains and losses on different bases.
If the debt is designated as the hedged item under a fair value hedge, the debt is initially measured at fair value (with direct transaction costs being amortised over the life of the debt) and is remeasured for fair value changes in respect of the hedged risk at each reporting date with changes in carrying value being recognised in profit (along with changes in the fair value of the related derivative).
If the debt is designated in a cash flow hedge, the debt is measured at amortised cost (with gains or losses taken to profit and direct transaction costs being amortised over the life of the debt). The related derivative is remeasured for fair value changes at each reporting date with the portion of the gain or loss on the derivative that is determined to be an effective hedge recognised in Other comprehensive income. The amounts that have been recognised in Other comprehensive income are reclassified to profit in the same period that the hedged forecast cash flows affect profit. The reclassification adjustment is included in Finance expense in the Consolidated Statement of Comprehensive Income.
Other interest-bearing loans are initially measured at fair value (with direct transaction costs being amortised over the life of the loan) and are subsequently measured at amortised cost using the effective interest rate method at each reporting date. Changes in carrying value are recognised in the Consolidated Statement of Comprehensive Income.
Derivatives
Derivatives are initially measured at fair value (with direct transaction costs being included in profit as an expense) and are subsequently remeasured to fair value at each reporting date. Changes in carrying value of derivatives not designated in hedging relationships are recognised in profit or loss.
The Group has agreements with some bank counterparties whereby the parties agree to post cash collateral, for the benefit of the other, equivalent to the market valuation of all of the derivative positions above a predetermined threshold. Cash collateral received from counterparties is included within current Interest-bearing loans and borrowings within the Consolidated Statement of Financial Position. Cash collateral pledged to counterparties is recognised as a financial asset and is included in current Other investments within the Consolidated Statement of Financial Position. In prior years, cash collateral pledged to counterparties was included in Cash and cash equivalents. Cash collateral received is included in Movement in short-term borrowings within financing activities in the Consolidated Cash Flow Statement.
F-11
Cash collateral paid is included in Movements in short-term investments within investing activities in the Consolidated Cash Flow Statement. The cash flow presentation of cash paid and received follows the Consolidated Statement of Financial Position presentation of the financial asset and financial liability that is recognised from posting the collateral.
Foreign currencies
Foreign currency transactions, being transactions denominated in a currency other than an individual Group entity’s functional currency, are translated into the relevant functional currencies of individual Group entities at average rates for the relevant monthly accounting periods, which approximate to actual rates.
Monetary assets and liabilities arising from foreign currency transactions are retranslated at exchange rates prevailing at the reporting date. Exchange gains and losses on loans and on short-term foreign currency borrowings and deposits are included within Finance expense. Exchange differences on all other foreign currency transactions are recognised in Operating profit in the individual Group entity’s accounting records.
Non-monetary items arising from foreign currency transactions are not retranslated in the individual Group entity’s accounting records.
In the Consolidated Financial Statements, income and expense items for Group entities with a functional currency other than US dollars are translated into US dollars at average exchange rates, which approximate to actual rates, for the relevant accounting periods. Assets and liabilities are translated at the US dollar exchange rates prevailing at the reporting date. Exchange differences arising on consolidation are recognised in Other comprehensive income.
If certain criteria are met, non-US dollar-denominated loans or derivatives are designated as net investment hedges of foreign operations. Exchange differences arising on retranslation of net investments, and of foreign currency loans which are designated in an effective net investment hedge relationship, are recognised in Other comprehensive income in the Consolidated Financial Statements. Foreign exchange derivatives hedging net investments in foreign operations are carried at fair value. Effective fair value movements are recognised in Other comprehensive income, with any ineffectiveness taken to profit. Gains and losses accumulated in the translation reserve will be recycled to profit and loss when the foreign operation is sold.
Provisions
Provisions are recognised when either a legal or constructive obligation as a result of a past event exists at the Consolidated Statement of Financial Position date, it is probable that an outflow of economic resources will be required to settle the obligation and a reasonable estimate can be made of the amount of the obligation (the timing or amount of the liability is uncertain).
Litigation and environmental liabilities
AstraZeneca is involved in legal disputes, the settlement of which may involve cost to the Group. Provision is made where an adverse outcome is probable and associated costs, including related legal costs, can be estimated reliably. In other cases, appropriate disclosures are included. Determining the timing of recognition of when an adverse outcome is probable is considered a key judgement, refer to Note 30 to the Financial Statements on page 192.
Where it is considered that the Group is more likely than not to prevail, or in the extremely rare circumstances where the amount of the legal liability cannot be estimated reliably, legal costs involved in defending the claim are charged to the Consolidated Statement of Comprehensive Income as they are incurred.
Where it is considered that the Group has a valid contract which provides the right to reimbursement (from insurance or otherwise) of legal costs and/or all or part of any loss incurred or for which a provision has been established, the best estimate of the amount expected to be received is recognised as an asset only when it is virtually certain.
AstraZeneca is exposed to environmental liabilities relating to its past operations, principally in respect of soil and groundwater remediation costs. Provisions for these costs are made when there is a present obligation and where it is probable that expenditure on remedial work will be required and a reliable estimate can be made of the cost. Provisions are discounted at the relevant pre-tax discount rate where the effect is material.
Restructuring
Restructuring costs are incurred in programmes that are planned and controlled by the Group which materially change either the scope of a business undertaken by the Group, or the manner in which that business is conducted.
A provision for restructuring costs is recognised when a detailed formal plan is in place and has either been announced to those affected or has started to be implemented. The general recognition criteria for provisions must also be met, as described in the Provisions policy.
Impairment
The carrying values of non-financial assets, other than Inventories and Deferred tax assets, are reviewed at least annually to determine whether there is any indication of impairment. For Goodwill, Intangible assets under development and for any other assets where such indication exists, the asset’s recoverable amount is estimated based on the greater of its value in use and its fair value less cost to sell. In assessing the recoverable amount, the estimated future cash flows, adjusted for the risks associated with the probability of success specific to each asset, as well as inflationary impacts, are discounted to their present value using a nominal discount rate that reflects current market assessments of the time value of money, the general risks affecting the pharmaceutical industry and other risks specific to each asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash flows of other assets. Impairment losses are recognised immediately in the Consolidated Statement of Comprehensive Income.
International accounting transition
On transition to using adopted IFRSs in the year ended 31 December 2005, the Group took advantage of several optional exemptions available in IFRS 1 ‘First-time Adoption of International Financial Reporting Standards’. The major impacts which are of continuing importance are detailed below:
| Business combinations – IFRS 3 ‘Business Combinations’ has been applied from 1 January 2003, the date of transition, rather than being applied fully retrospectively. As a result, the combination of Astra and Zeneca is still accounted for as a merger, rather than through purchase accounting. If purchase accounting had been adopted, Zeneca would have been deemed to have acquired Astra. |
| Cumulative exchange differences – the Group chose to set the cumulative exchange difference reserve at 1 January 2003 to |
F-12
Applicable accounting standards and interpretations issued but not yet adopted
At the date of authorisation of these financial statements, certain new accounting standards and amendments were in issue relating to the following standards and interpretations but not yet adopted by the Group:
| amendments to IAS 12 ‘Income Taxes’, IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, IAS 1 ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Making Materiality Judgements’, effective for periods beginning on or after 1 January 2023 – endorsed by the UK Endorsement Board (UKEB) on 30 November 2022, |
| new accounting standard IFRS 17 ‘Insurance Contracts’, effective for periods beginning on or after 1 January 2023 – endorsed by the UKEB on 16 May 2022, and |
| amendments to IAS 1 ‘Presentation of Financial Statements’ and IFRS 16 ‘Leases’, effective for periods beginning on or after 1 January 2024 – not endorsed by the UKEB. |
These new standards, amendments and interpretations are not expected to have a significant impact on the Group’s net results.
F-13
Notes to the Group Financial Statements
1 Revenue
Product Sales
| 2022 |
| 2021 |
| 2020 |
| |||||||||||||||||||||||||
Emerging | Rest of | Emerging | Rest of | Emerging | Rest of | ||||||||||||||||||||||||||
Markets | US | Europe | World | Total | Markets | US | Europe | World | Total | Markets | US | Europe | World | Total | |||||||||||||||||
$m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m |
| ||||||||||||||||
Oncology: |
|
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|
|
|
| |||||||||||||||||||||||||
Tagrisso |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Imfinzi | | | | | | | | | | | | | | | | ||||||||||||||||
Lynparza |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Calquence | | | | | | | | | | | | | | | | ||||||||||||||||
Enhertu | | – | | | | | – | | | | – | – | – | – | – | ||||||||||||||||
Orpathys | | – | – | – | | | – | – | – | | – | – | – | – | – | ||||||||||||||||
Zoladex |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Faslodex |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Iressa |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Arimidex |
| | – | – | | |
| | – | | | | | – | | | | ||||||||||||||
Casodex |
| | – | | | |
| | – | | | | | – | | | | ||||||||||||||
Others |
| | | | | |
| | – | | | | | – | | | | ||||||||||||||
| | | | | |
| | | | | | | | | | | |||||||||||||||
Cardiovascular, Renal Metabolism: |
|
| |||||||||||||||||||||||||||||
Farxiga |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Brilinta |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Lokelma | | | | | | | | | | | | | | | | ||||||||||||||||
Roxadustat | | – | – | – | | | – | – | – | | – | – | – | – | – | ||||||||||||||||
Andexxa | – | | | | | – | | | – | | – | – | – | – | – | ||||||||||||||||
Crestor |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Seloken/Toprol-XL |
| | – | | | |
| | | | | | | | | | | ||||||||||||||
Bydureon |
| | | | – | |
| | | | | | | | | | | ||||||||||||||
Onglyza |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Others |
| | | | | |
| | | | | | | | | | | ||||||||||||||
| | | | | |
| | | | | | | | | | | |||||||||||||||
Respiratory Immunology: |
|
| |||||||||||||||||||||||||||||
Symbicort |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Fasenra |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Breztri | | | | | | | | | | | | | – | | | ||||||||||||||||
Saphnelo | – | | | | | – | | – | – | | – | – | – | – | – | ||||||||||||||||
Tezspire | – | – | | | | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||
Pulmicort | | | | | | | | | | | | | | | | ||||||||||||||||
Daliresp/Daxas |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Bevespi | | | | | | | | | – | | | | | – | | ||||||||||||||||
Others |
| | | | | |
| | | | | | | | | | | ||||||||||||||
| | | | | |
| | | | | | | | | | | |||||||||||||||
Vaccines Immune Therapies: | |||||||||||||||||||||||||||||||
Vaxzevria | | | | | | | | | | | – | – | | – | | ||||||||||||||||
Evusheld | | | | | | | – | | – | | – | – | – | – | – | ||||||||||||||||
Synagis |
| | | | | |
| | | | | | – | | | – | | ||||||||||||||
FluMist |
| | | | | |
| | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | |||||||||||||||||
Rare Disease: | |||||||||||||||||||||||||||||||
Soliris | | | | | | | | | | | – | – | – | – | – | ||||||||||||||||
Ultomiris | | | | | | | | | | | – | – | – | – | – | ||||||||||||||||
Strensiq | | | | | | | | | | | – | – | – | – | – | ||||||||||||||||
Koselugo | | | | – | | | | | – | | – | | – | – | | ||||||||||||||||
Kanuma | | | | | | | | | | | – | – | – | – | – | ||||||||||||||||
| | | | | | | | | | – | | – | – | | |||||||||||||||||
Other: |
|
| |||||||||||||||||||||||||||||
Nexium |
| | | | | |
| | | | | | | | | | | ||||||||||||||
Others |
| | | | | |
| | | | | | | | | | | ||||||||||||||
| | | | | |
| | | | | | | | | | | |||||||||||||||
Product Sales |
| | | | | |
| | | | | | | | | | |
Rebates and chargebacks in the US
The major market where estimates are seen as significant is the US. When invoicing Product Sales in the US, we estimate the rebates and chargebacks we expect to pay and we consider there to be a significant estimate associated with the rebates for Managed Care, Medicaid and Medicare Part D.
F-14
The total adjustment in respect of prior year net US Product Sales revenue in 2022 was
The adjustment in respect of the prior year net US Product Sales revenue, excluding the Rare Disease therapy area in 2022, was
These values demonstrate the level of sensitivity; further meaningful sensitivity is not able to be provided due to the large volume of variables that contribute to the overall rebates, chargebacks, returns and other revenue accruals.
Collaboration Revenue
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Enhertu: alliance revenue1 | | | | ||||
Tezspire: alliance revenue1 | | – | – | ||||
Roxadustat: alliance revenue1 | | | | ||||
Lynparza/Koselugo (MSD) – regulatory milestones | | – | | ||||
Lynparza/Koselugo (MSD) – sales-related milestones | – | | | ||||
Tralokinumab: sales milestone | | – | – | ||||
Vaxzevria: royalties | | | – | ||||
Other royalty income | | | | ||||
Nexium: sale of rights | | | – | ||||
Other Collaboration Revenue | | | | ||||
| |
| |
| |
1 | Alliance revenue (previously referred to as share of gross profits) comprises income arising from collaborative arrangements, where AstraZeneca is entitled to a share of gross profits but does not lead on the commercialisation in the territory and so does not recognise Product Sales. Alliance revenue is included within Collaboration Revenue. |
Collaboration Revenue includes some income that does not arise from the satisfaction of performance obligations, in particular profit share entitlements arising from product sales made by collaborators who have licenced intellectual property to AstraZeneca. $
2 Operating profit
Operating profit includes the following significant items:
Cost of sales
In 2022, Cost of sales includes a charge of $
During the year
Selling, general and administrative expense
In 2022, Selling, general and administrative expense includes a charge of $
In 2022, Selling, general and administrative costs includes a credit of $
In 2022, Selling, general and administrative expense also includes a charge of $
Research and development expense: Government grants
During the year $
Other operating income and expense
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Royalty income |
| |
| |
| | |
Gains on disposal of intangible assets |
| |
| |
| | |
Gains on disposal of investments in associates and joint ventures | – | | – | ||||
Net gains/(losses) on disposal of other non-current assets |
| |
| ( |
| | |
Impairment of property, plant and equipment | – | – | ( | ||||
Other income1 |
| |
| |
| | |
Other expense |
| ( |
| ( |
| ( | |
Other operating income and expense |
| |
| |
| |
| 1 | Other income in 2022 includes $ |
Gains on disposal of intangible assets in 2021 includes $
F-15
Gains on disposal of intangible assets in 2020 includes $
Net gains/(losses) on disposal of other non-current assets in 2022 includes a $
Gains on disposal of investments in associates and joint ventures in 2021 relates to the disposal of the
As part of the total consideration received in respect of the agreement to sell US rights to Synagis in 2019, $
Restructuring costs
In conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed at integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. These activities are expected to be substantially complete by the end of 2025, with a number of planned activities having commenced in late 2021 and during 2022. The Group has also continued to progress other legacy restructuring programmes.
During 2022, the Group has incurred $
Total restructuring costs in 2022 include impairment reversal of Property, plant and equipment of $
The tables below show the costs that have been charged in respect of restructuring programmes by cost category and type. Severance provisions are detailed in Note 21.
| 2022 |
| 2021 |
| 2020 | ||
$m | $m | $m | |||||
Cost of sales |
| |
| |
| | |
Distribution expense | | – | – | ||||
Research and development expense |
| |
| |
| | |
Selling, general and administrative expense |
| |
| |
| | |
Other operating income and expense |
| ( |
| – |
| | |
Total charge |
| |
| |
| |
| 2022 |
| 2021 |
| 2020 | ||
$m | $m | $m | |||||
Severance costs |
| |
| |
| | |
Accelerated depreciation and impairment charges |
| |
| |
| | |
Other1 |
| |
| |
| | |
Total charge |
| |
| |
| |
| 1 | Other costs are those incurred in designing and implementing the Group’s various restructuring initiatives, including costs of integrating systems, structure and processes as part of our Post Alexion Acquisition Group Review, costs relating to the Alexion acquisition, internal project costs and external consultancy fees. |
Financial instruments
Included within Operating profit are the following net gains and losses on financial instruments:
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Gains/(losses) on forward foreign exchange contracts |
| |
| ( |
| ( | |
(Losses)/gains on receivables and payables | ( | ( | | ||||
Total |
| ( |
| ( |
| |
Impairment charges
Details of impairment charges for 2022, 2021 and 2020 are included in Notes 7, 8 and 10.
F-16
3 Finance income and expense
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Finance income |
|
|
|
|
|
| |
Returns on deposits and equity securities |
| |
| |
| | |
Fair value gains on debt and interest rate swaps |
| |
| – |
| | |
Discount unwind on other long-term assets |
| – |
| – |
| | |
Interest income on income tax balances | | | | ||||
Total |
| |
| |
| | |
Finance expense |
|
|
| ||||
Interest on debt, leases and other financing costs |
| ( |
| ( |
| ( | |
Net interest on post-employment defined benefit plan net liabilities (Note 22) |
| ( |
| ( |
| ( | |
Net exchange losses |
| ( |
| ( |
| ( | |
Discount unwind on contingent consideration arising from business combinations (Note 20) |
| ( |
| ( |
| ( | |
Discount unwind on other long-term liabilities1 |
| ( |
| ( |
| ( | |
Fair value losses on debt and interest rate swaps |
| – |
| ( |
| – | |
Interest expense on income tax balances | ( | ( | ( | ||||
Total |
| ( |
| ( |
| ( | |
Net finance expense |
| ( |
| ( |
| ( |
| 1 | Included within Discount unwind on other long-term liabilities is $ |
There was
Financial instruments
Included within finance income and expense are the following net gains and losses on financial instruments:
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Interest and fair value adjustments in respect of debt designated at fair value through profit or loss, net of derivatives |
| ( |
| ( |
| ( | |
Interest and changes in carrying values of debt designated as hedged items in fair value hedges, net of derivatives |
| – |
| ( |
| ( | |
Interest and fair value changes on fixed and short-term deposits, equity securities, other derivatives and tax balances |
| |
| |
| | |
Interest on debt, commercial paper, overdrafts and lease liabilities held at amortised cost |
| ( |
| ( |
| ( |
The interest rate fair value hedges were closed in 2021. Fair value gain or loss of $
Fair value loss of $
4 Taxation
Taxation charge/(credit) recognised in the Consolidated Statement of Comprehensive Income is as follows:
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Current tax |
|
|
|
|
|
| |
Current year |
| |
| |
| | |
Adjustment to prior years |
| ( |
| ( |
| ( | |
Total |
| |
| |
| | |
Deferred tax |
|
|
| ||||
Origination and reversal of temporary differences |
| ( |
| ( |
| ( | |
Adjustment to prior years |
| |
| ( |
| ( | |
Total |
| ( |
| ( |
| ( | |
Taxation (credit)/charge recognised in the profit for the period |
| ( |
| ( |
| |
Taxation (charge)/credit recognised in Other comprehensive income is as follows:
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Current and deferred tax |
|
|
|
|
|
| |
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
| |
Remeasurement of the defined benefit liability |
| ( |
| ( |
| | |
Equity investments measured at fair value through Other comprehensive income | | | ( | ||||
Movement in deferred taxes relating to changes in tax rates |
| – |
| |
| | |
Total |
| ( |
| |
| ( | |
Items that may be reclassified subsequently to profit or loss: |
|
|
| ||||
Foreign exchange arising on designated liabilities in net investment hedges1 |
| |
| |
| ( | |
Fair value movement on cash flow hedges2 | – | ( | | ||||
Movement in deferred taxes relating to changes in tax rates |
| – |
| |
| – | |
Total |
| |
| |
| ( | |
Taxation (charge)/credit recognised in Other comprehensive income |
| ( |
| |
| ( |
1 | Previously reported as Foreign exchange arising on consolidation. |
F-17
2 | Previously reported within Foreign exchange arising on designated liabilities in net investment hedges. |
The reported tax rate in the year was (
The income tax paid for the year was $
Taxation has been provided at current rates on the profits earned for the periods covered by the Group Financial Statements. The 2022 prior period current tax adjustment relates mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax positions. The 2021 prior period current tax adjustment relates mainly to tax accrual to tax return adjustments. The 2020 prior period current tax adjustment relates mainly to net reductions in liabilities for uncertain tax positions and tax accrual to tax return adjustments.
The 2022 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to liabilities for uncertain tax positions. The 2021 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments and updates to estimates of prior period tax liabilities following settlements with tax authorities. The 2020 prior period deferred tax adjustments relate mainly to tax accrual to tax return adjustments offset by net increases in liabilities for uncertain tax positions.
To the extent that dividends remitted from overseas subsidiaries, joint ventures and associates are expected to result in additional taxes, appropriate amounts have been provided for. Unremitted earnings or differences in the carrying value and tax basis of investments may be liable to additional taxes if distributed as dividends or on a liquidation event. Deferred tax is provided for such differences in relation to Group entities where management is intending to remit earnings in the foreseeable future. The aggregate amount of gross temporary differences associated with investments in subsidiaries, partnerships and branches for which deferred tax liabilities have not been recognised totalled approximately $
Factors affecting future tax charges
As a Group with worldwide operations, AstraZeneca is subject to several factors that may affect future tax charges, principally the levels and mix of profitability in different jurisdictions, transfer pricing regulations, tax rates imposed and tax regime reforms. In 2021, the UK Government enacted legislation to increase the main rate of UK statutory Corporation Tax to
Tax reconciliation to UK statutory rate
The table below reconciles the UK statutory tax charge to the Group’s total tax (credit)/charge:
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Profit/(loss) before tax |
| |
| ( |
| | |
Notional taxation charge at UK corporation tax rate of |
| |
| ( |
| | |
Differences in effective overseas tax rates |
| ( |
| |
| ( | |
Deferred tax (credit)/charge relating to change in tax rates1 |
| ( |
| |
| | |
Unrecognised deferred tax asset2 |
| |
| |
| | |
Items not deductible for tax purposes |
| |
| |
| | |
Items not chargeable for tax purposes |
| – |
| ( |
| ( | |
Intellectual Property incentive regimes3 | ( | – | ( | ||||
Other items4 |
| ( |
| ( |
| ( | |
Adjustments in respect of prior periods5 |
| ( |
| ( |
| ( | |
Total tax (credit)/charge for the period |
| ( |
| ( |
| |
| 1 | The 2022 item relates to the impact of the US state tax rate change and the impact of the difference in the UK current tax and deferred tax rates during 2022. The 2021 item relates to substantive enactment of the increase in UK Corporation Tax rate from |
| 2 | The 2022 item relates to the derecognition of previously recognised deferred tax assets. The 2021 item includes a $ |
| 3 | Previously reported within Items not deductible for tax purposes. |
| 4 | Other items in 2022 relate to the aforementioned one-time favourable net adjustment of $ |
| 5 | Further details explaining the adjustments in respect of prior periods are set out on page 153. |
AstraZeneca is domiciled in the UK but operates in other countries where the tax rates and laws are different to those in the UK. The impact on differences in effective overseas tax rates on the Group’s overall tax charge is noted above. Profits arising from our manufacturing operation in Puerto Rico are granted special status and are taxed at a reduced rate compared with the normal rate of tax in that territory under a tax incentive grant continuing until 2031. The Group receives tax incentives in relation to Intellectual Property incentives in certain jurisdictions, resulting in a reduction to the tax charge in the income statement of $
F-18
Deferred tax
The total movement in the net deferred tax balance in the year was $
| Intangibles, |
| Pension and |
| Elimination of |
|
| Losses and |
| Accrued |
|
| |||
property, plant | post-retirement | unrealised profit | Untaxed | tax credits | expenses |
| |||||||||
and equipment | 1 | benefits | on inventory | reserves | 2 | carried forward | and other | Total |
| ||||||
$m | $m | $m | $m | $m | $m | $m |
| ||||||||
Net deferred tax balance at 1 January 2020 |
| ( | | | ( | | | | |||||||
Income statement | ( | ( | | ( | | | | ||||||||
Other comprehensive income | ( | | – | ( | – | | | ||||||||
Equity | – | – | – | – | – | ( | ( | ||||||||
Exchange |
| ( | | | ( | | | | |||||||
Net deferred tax balance at 31 December 2020 |
| ( | | | ( | | | | |||||||
Income statement | | ( | ( | ( | | | | ||||||||
Other comprehensive income | | | – | – | – | | | ||||||||
Equity | – | – | – | – | – | | | ||||||||
Additions through business combinations3 |
| ( | | | – | | ( | ( | |||||||
Exchange |
| | ( | ( | | ( | ( | | |||||||
Net deferred tax balance at 31 December 2021 |
| ( | | | ( | | | ( | |||||||
Income statement4 |
| | ( | | | ( | | | |||||||
Other comprehensive income |
| | ( | – | – | – | | ( | |||||||
Equity | – | – | – | – | – | | | ||||||||
Exchange |
| | ( | ( | | ( | ( | ( | |||||||
Net deferred tax balance at 31 December 2022⁵ | ( | | | ( | | | |
1 | Includes deferred tax of $ |
2 | Untaxed reserves relate to taxable profits where the tax liability is deferred to later periods. |
3 | The deferred tax liability of $ |
4 | The income statement movement in 2022 includes the aforementioned net adjustment to deferred taxes of $ |
5 | The Group recognises deferred tax assets to the extent that there are either taxable temporary differences or that it is probable that sufficient future taxable profits will arise, against which these deductible temporary differences can be utilised. The US includes a net deferred tax asset of $ |
The net deferred tax balance, before the offset of balances within countries, consists of:
| Intangibles, |
| Pension and |
| Elimination of |
|
| Losses and |
| Accrued |
|
| |||
property, plant | post-retirement | unrealised profit | Untaxed | tax credits | expenses |
| |||||||||
and equipment | benefits | on inventory | reserves | carried forward | and other | Total |
| ||||||||
$m | $m | $m | $m | $m | $m | $m |
| ||||||||
Deferred tax assets at 31 December 2020 |
| | | | – | | | | |||||||
Deferred tax liabilities at 31 December 2020 |
| ( | ( | ( | ( | ( | ( | ( | |||||||
Net deferred tax balance at 31 December 2020 |
| ( | | | ( | | | | |||||||
Deferred tax assets at 31 December 2021 |
| | | | – | | | | |||||||
Deferred tax liabilities at 31 December 2021 |
| ( | ( | ( | ( | ( | ( | ( | |||||||
Net deferred tax balance at 31 December 2021 |
| ( | | | ( | | | ( | |||||||
Deferred tax assets at 31 December 2022 |
| | | | – | | | | |||||||
Deferred tax liabilities at 31 December 2022 |
| ( | ( | ( | ( | ( | ( | ( | |||||||
Net deferred tax balance at 31 December 2022 |
| ( | | | ( | | | |
Analysed in the Consolidated Statement of Financial Position, after offset of balances within countries, as follows:
2022 | 2021 | 2020 |
| ||||
$m | $m | $m |
| ||||
Deferred tax assets |
| |
| |
| | |
Deferred tax liabilities |
| ( |
| ( |
| ( | |
Net deferred tax balance |
| |
| ( |
| |
F-19
Unrecognised deferred tax assets
Deferred tax assets (DTA) of $
2022 | 2022 | 2021 | 2021 | 2020 | 2020 | ||||||||
Temporary | Unrecognised | Temporary | Unrecognised | Temporary | Unrecognised | ||||||||
differences | DTA | differences | DTA | differences | DTA | ||||||||
$m | $m | $m | $m | $m | $m | ||||||||
Trading and capital losses expiring: |
|
| |||||||||||
Within 10 years | | | | | | – | |||||||
More than 10 years | | | | | – | – | |||||||
Indefinite | | | | | | | |||||||
| | | | | | | |||||||
Tax credits and State tax losses expiring: | |||||||||||||
Within 10 years | | | | ||||||||||
More than 10 years | | | | ||||||||||
Indefinite | | | | ||||||||||
| | | |||||||||||
Total |
| | | |
5 Earnings per $0.25 Ordinary Share
| 2022 |
| 2021 |
| 2020 |
| ||||
Profit for the year attributable to equity holders ($m) |
| |
| |
| | ||||
Basic earnings per Ordinary Share | $ | $ | $ | |||||||
Diluted earnings per Ordinary Share | $ | $ | $ | |||||||
Weighted average number of Ordinary Shares in issue for basic earnings (millions) |
| |
| |
| | ||||
Dilutive impact of share options outstanding (millions) |
| |
| |
| | ||||
Diluted weighted average number of Ordinary Shares in issue (millions) |
| |
| |
| |
The earnings figures used in the calculations above are post-tax. The weighted average number of Ordinary Shares in issue is calculated by taking the number of Ordinary Shares outstanding each day weighted by the number of days that those shares were outstanding.
6 Segment information
The Group has reviewed its assessment of reportable segments under IFRS 8 ‘Operating Segments’ and concluded that the Group continues to have
This determination is considered to be a Key Judgement and this judgement has been taken with reference to the following factors:
1 The level of integration across the different functions of the Group’s pharmaceutical business:
AstraZeneca is engaged in a single business activity of pharmaceuticals and the Group does not have multiple operating segments. AstraZeneca’s pharmaceuticals business consists of the discovery and development of new products, which are then manufactured, marketed and sold. All of these functional activities take place (and are managed) globally on a highly integrated basis. These individual functional areas are not managed separately.
2 The identification of the Chief Operating Decision Maker (CODM) and the nature and extent of the financial information reviewed by the CODM:
The SET, established and chaired by the CEO, is the vehicle through which the CEO exercises the authority delegated to him from the Board for the management, development and performance of AstraZeneca as a whole. It is considered that the SET is AstraZeneca’s Chief Operating Decision Making body (as defined by IFRS 8). The operation of the SET is principally driven by the management of the Commercial operations, RD, manufacturing and supply and enabling functions. All significant operating decisions are undertaken by the SET. While members of the SET have responsibility for implementation of decisions in their respective areas, operating decision making is at SET level as a whole. Where necessary, these are implemented through cross-functional sub-committees that consider the Group-wide impact of a new decision. For example, product launch decisions would be initially considered by the SET and, on approval, passed to an appropriate sub team for implementation. The ability of the enterprise to develop, produce, deliver and commercialise a wide range of pharmaceutical products are central to the SET decision-making process.
In assessing performance, the SET reviews financial information on an integrated basis for the Group as a whole, substantially in the form of, and on the same basis as, the Group’s IFRS Financial Statements. The high upfront cost of discovering and developing new products, coupled with the relatively insignificant and stable unit cost of production, means that there is not the clear link that exists in many manufacturing businesses between the revenue generated on an individual product sale and the associated cost and hence margin generated on a product. Consequently, the profitability of individual drugs or classes of drugs is not considered a key measure of performance for the business and is not monitored by the SET. The focus of additional financial information reviewed is at brand sales and gross margin level within specific geographies. Expenditure analysis is completed for the science units, operations and enabling functions; there is no allocation of these centrally managed Group costs to the individual product or brands. The bonus of SET members’ continues to be derived from the Group scorecard outcome as discussed in our Directors’ Remuneration Report.
3 How resources are allocated:
Resources are allocated on a Group-wide basis according to need. In particular, capital expenditure, in-licensing, and RD resources are allocated between activities on merit, based on overall therapeutic considerations and strategy under the aegis of the Group’s Early-Stage Product Committees and Late-Stage Product Committees.
F-20
Geographic areas
The following table shows information for Total Revenue by geographic area and material countries. The additional tables show the Operating profit and Profit before tax made by companies located in that area, together with Non-current assets, Total assets, assets acquired, net operating assets, and Property, plant and equipment owned by the same companies. Product Sales by geographic market are included in the area/country where the legal entity resides and from which those sales were made.
| Total Revenue |
| |||||
2022 |
| 2021 |
| 2020 |
| ||
$m | $m | $m |
| ||||
UK |
| |
| |
| | |
|
|
| |||||
Rest of Europe |
|
|
| ||||
France |
| |
| |
| | |
Germany |
| |
| |
| | |
Italy |
| |
| |
| | |
Spain |
| |
| |
| | |
Sweden |
| |
| |
| | |
Others |
| |
| |
| | |
| |
| |
| | ||
The Americas |
|
|
| ||||
Canada |
| |
| |
| | |
US |
| |
| |
| | |
Others |
| |
| |
| | |
| |
| |
| | ||
Asia, Africa Australasia |
|
|
| ||||
Australia |
| |
| |
| | |
China |
| |
| |
| | |
Japan |
| |
| |
| | |
Others |
| |
| |
| | |
| |
| |
| | ||
Total Revenue |
| |
| |
| |
Total Revenue outside of the UK totalled $
Operating profit/(loss) |
| Profit/(loss) before tax |
| ||||||||||
2022 | 2021 | 2020 | 2022 | 2021 | 2020 |
| |||||||
| $m |
| $m |
| $m |
| $m |
| $m |
| $m |
| |
UK |
| |
| ( |
| |
| |
| ( |
| | |
Rest of Europe |
| |
| |
| |
| |
| |
| | |
The Americas |
| ( |
| ( |
| |
| ( |
| ( |
| | |
Asia, Africa Australasia |
| |
| |
| |
| |
| |
| | |
Continuing operations |
| |
| |
| |
| |
| ( |
| | |
| Non-current assets | 1 | Total assets |
| |||||||||
2022 | 2021 | 2020 | 2022 | 2021 | 2020 |
| |||||||
$m | $m | $m | $m | $m | $m |
| |||||||
UK | |
| |
| | |
| |
| | |||
Rest of Europe | |
| |
| | |
| |
| | |||
The Americas | |
| |
| | |
| |
| | |||
Asia, Africa Australasia | |
| |
| | |
| |
| | |||
Continuing operations | |
| |
| | | | | |||||
Assets acquired | 2 | Net operating assets | 3 | ||||||||||
2022 | 2021 | 2020 | 2022 | 2021 | 2020 |
| |||||||
| $m |
| $m |
| $m |
| $m |
| $m |
| $m |
| |
UK |
| |
| |
| | |
| |
| | ||
Rest of Europe |
| |
| |
| | |
| |
| | ||
The Americas |
| |
| |
| | |
| |
| | ||
Asia, Africa Australasia |
| |
| |
| | |
| |
| | ||
Continuing operations |
| |
| |
| | |
| |
| | ||
| 1 | Non-current assets exclude Deferred tax assets and Derivative financial instruments. |
| 2 | Included in Assets acquired are those assets that are expected to be used during more than one period (Property, plant and equipment, Goodwill and Intangible assets) and include those acquired through business combinations (Note 27). |
| 3 | Net operating assets exclude short-term investments, cash, short-term borrowings, loans, Derivative financial instruments, Retirement benefit obligations and non-operating receivables and payables. |
Property, plant and equipment |
| ||||||
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
UK |
| |
| |
| | |
Ireland | | | – | ||||
Sweden |
| |
| |
| | |
US |
| |
| |
| | |
Rest of the world |
| |
| |
| | |
Continuing operations |
| |
| |
| | |
F-21
Geographic markets
The table below shows Product Sales in each geographic market in which customers are located.
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
UK |
| |
| |
| | |
Rest of Europe |
| |
| |
| | |
The Americas |
| |
| |
| | |
Asia, Africa Australasia |
| |
| |
| | |
Continuing operations |
| |
| |
| |
Product Sales are recognised when control of the goods has been transferred to a third party. A significant proportion of this is upon delivery of the products to wholesalers.
7 Property, plant and equipment
|
|
| Assets in |
| Total property, |
| |||
Land and | Plant and | course of | plant and |
| |||||
buildings | equipment | construction | equipment |
| |||||
$m | $m | $m | $m |
| |||||
Cost | |||||||||
At 1 January 2020 | | | | | |||||
Capital expenditure | | | | | |||||
Transfer of assets into use | | | ( | – | |||||
Disposals and other movements | ( | ( | ( | ( | |||||
Exchange adjustments | | | | | |||||
At 31 December 2020 | | | | | |||||
Additions through business combinations (Note 27) | | | | | |||||
Capital expenditure | | | | | |||||
Transfer of assets into use | | | ( | – | |||||
Disposals and other movements | ( | ( | ( | ( | |||||
Exchange adjustments | ( | ( | ( | ( | |||||
At 31 December 2021 | | | | | |||||
Capital expenditure | | | | | |||||
Transfer of assets into use | | | ( | – | |||||
Transferred to Assets held for sale (Note 18) | ( | ( | – | ( | |||||
Disposals and other movements | ( | ( | | ( | |||||
Exchange adjustments | ( | ( | ( | ( | |||||
At 31 December 2022 | | | | | |||||
Depreciation and impairment | |||||||||
At 1 January 2020 | | | – | | |||||
Depreciation charge for the year | | | – | | |||||
Impairment (reversal)/charge | ( | | | | |||||
Disposals and other movements | ( | ( | ( | ( | |||||
Exchange adjustments | | | – | | |||||
At 31 December 2020 | | | – | | |||||
Depreciation charge for the year | | | – | | |||||
Impairment (reversal)/charge | ( | | | | |||||
Disposals and other movements | ( | ( | ( | ( | |||||
Exchange adjustments | ( | ( | – | ( | |||||
At 31 December 2021 | | | – | | |||||
Depreciation charge for the year | | | – | | |||||
Impairment charge/(reversal) | | | ( | – | |||||
Transferred to Assets held for sale (Note 18) | ( | ( | – | ( | |||||
Disposals and other movements | ( | ( | | ( | |||||
Exchange adjustments | ( | ( | – | ( | |||||
At 31 December 2022 | | | – | | |||||
Net book value | |||||||||
At 31 December 2020 | | | | | |||||
At 31 December 2021 | | | | | |||||
At 31 December 2022 | | | | |
Impairment charges in 2021 totalling $
F-22
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
The net book value of land and buildings comprised: | |||||||
Freeholds | | | | ||||
Leaseholds | | | |
8 Leases
Right-of-use assets
|
|
|
| Total right- |
| ||||
Land and | Motor | of-use |
| ||||||
buildings | vehicles | Other | assets |
| |||||
$m | $m | $m | $m |
| |||||
Cost |
|
|
|
|
|
|
|
| |
At 1 January 2020 |
| | | | | ||||
Additions – separately acquired |
| | | | | ||||
Disposals and other movements |
| – | ( | ( | ( | ||||
Exchange adjustments |
| | | | | ||||
At 31 December 2020 |
| | | | | ||||
Additions through business combinations (Note 27) | | | – | | |||||
Additions – separately acquired |
| | | | | ||||
Disposals and other movements |
| | ( | ( | ( | ||||
Exchange adjustments |
| ( | ( | ( | ( | ||||
At 31 December 2021 |
| | | | | ||||
Additions through business combinations | | – | – | | |||||
Additions – separately acquired | | | | | |||||
Disposals and other movements | ( | ( | ( | ( | |||||
Exchange adjustments | ( | ( | ( | ( | |||||
At 31 December 2022 | | | | | |||||
Depreciation and impairment | |||||||||
At 1 January 2020 |
| | | | | ||||
Depreciation charge for the year |
| | | | | ||||
Disposals and other movements |
| ( | ( | ( | ( | ||||
Exchange adjustments | | | – | | |||||
At 31 December 2020 |
| | | | | ||||
Depreciation charge for the year |
| | | | | ||||
Disposals and other movements |
| ( | ( | – | ( | ||||
Exchange adjustments | ( | ( | – | ( | |||||
At 31 December 2021 |
| | | | | ||||
Depreciation charge for the year | | | | | |||||
Impairment charge | | – | – | | |||||
Disposals and other movements | ( | ( | ( | ( | |||||
Exchange adjustments | ( | ( | ( | ( | |||||
At 31 December 2022 | | | | | |||||
Net book value |
| ||||||||
At 31 December 2020 | | | | | |||||
At 31 December 2021 | | | | | |||||
At 31 December 2022 | | | | |
Lease Liability
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
The present value of lease liabilities is as follows: | |||||||
Within one year | ( | ( | ( | ||||
Later than one year and not later than five years | ( | ( | ( | ||||
Later than five years | ( | ( | ( | ||||
Total lease liabilities | ( | ( | ( |
The interest expense on lease liabilities included within finance costs was $
The total cash outflow for leases in 2022 was $
The discount rates used for calculating the present value of lease liabilities range from
The Group has entered into lease contracts that have not yet commenced. The nominal value of estimated future lease payments under these lease contracts approximates $
The Group entered into a sale and leaseback agreement in relation to the Waltham RD site in MA, US in 2022. Prior to the sale, the carrying value of the Property, plant and equipment was $
F-23
9 Goodwill
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Cost | |||||||
At 1 January | | | | ||||
Additions through business combinations (Note 27) | | | – | ||||
Exchange and other adjustments | ( | ( | | ||||
At 31 December | | | | ||||
Amortisation and impairment losses | |||||||
At 1 January | | | | ||||
Exchange and other adjustments | ( | ( | | ||||
At 31 December | | | | ||||
Net book value | |||||||
At 31 December | | | |
Goodwill is tested for impairment at the operating segment level, this being the level at which goodwill is monitored for internal management purposes. As detailed in Note 6, the Group does not have multiple operating segments and is engaged in a single business activity of pharmaceuticals.
Recoverable amount is determined on a fair value less costs to sell basis using the market value of the Company’s outstanding Ordinary Shares. Our market capitalisation is compared to the book value of the Group’s net assets and this indicates a significant surplus at 31 December 2022 (and 31 December 2021 and 31 December 2020).
F-24
10 Intangible assets
| Product, |
|
| Software |
|
| |||
marketing and | Other | development |
| ||||||
distribution rights | intangibles | costs | Total |
| |||||
$m | $m | $m | $m |
| |||||
Cost |
|
|
|
|
|
|
|
| |
At 1 January 2020 |
| | | | | ||||
Additions – separately acquired |
| | | | | ||||
Disposals |
| ( | ( | ( | ( | ||||
Exchange and other adjustments |
| | | | | ||||
At 31 December 2020 |
| | | | | ||||
Additions through business combinations (Note 27) | | | | | |||||
Additions – separately acquired |
| | | | | ||||
Transferred to Assets held for sale (Note 18) | ( | ( | – | ( | |||||
Disposals |
| ( | ( | ( | ( | ||||
Exchange and other adjustments |
| ( | ( | ( | ( | ||||
At 31 December 2021 |
| | | | | ||||
Additions through business combinations (Note 27) | – | | – | | |||||
Additions – separately acquired |
| | | | | ||||
Disposals |
| ( | ( | ( | ( | ||||
Exchange and other adjustments |
| ( | ( | ( | ( | ||||
At 31 December 2022 | | | | | |||||
Amortisation and impairment losses |
|
|
|
|
|
|
|
| |
At 1 January 2020 |
| | | | | ||||
Amortisation for year |
| | | | | ||||
Impairment charges |
| | – | – | | ||||
Impairment reversals | ( | – | – | ( | |||||
Disposals |
| ( | ( | ( | ( | ||||
Exchange and other adjustments |
| | | ( | | ||||
At 31 December 2020 |
| | | | | ||||
Amortisation for year |
| | | | | ||||
Impairment charges |
| | – | | | ||||
Transferred to Assets held for sale (Note 18) | ( | ( | – | ( | |||||
Disposals |
| ( | ( | ( | ( | ||||
Exchange and other adjustments |
| ( | ( | ( | ( | ||||
At 31 December 2021 |
| | | | | ||||
Amortisation for year |
| | | | | ||||
Impairment charges |
| | | – | | ||||
Impairment reversals | ( | – | ( | ( | |||||
Disposals |
| ( | ( | ( | ( | ||||
Exchange and other adjustments |
| ( | ( | ( | ( | ||||
At 31 December 2022 |
| | | | | ||||
Net book value |
|
|
|
|
|
|
|
| |
At 31 December 2020 |
| | | | | ||||
At 31 December 2021 |
| | | | | ||||
At 31 December 2022 |
| | | | |
F-25
2022 | 2021 | 2020 | |||||||
$m | $m | $m | |||||||
Net book value | |||||||||
Current intangible assets | – | | – | ||||||
Non-current intangible assets | | | | ||||||
At 31 December | | | |
Other intangibles consist mainly of research and device technologies and the Alexion brand name. Included within Software development costs are assets currently in development that will commence amortisation when ready for use.
Included within Additions − separately acquired are amounts of $
Amortisation charges are recognised in profit as follows:
| Product, |
|
| Software |
|
| |||
marketing and | Other | development |
| ||||||
distribution rights | intangibles | costs | Total |
| |||||
$m | $m | $m | $m |
| |||||
Year ended 31 December 2020 |
|
|
|
|
|
|
|
| |
Cost of sales |
| | – | – | | ||||
Research and development expense |
| – | | – | | ||||
Selling, general and administrative expense |
| | | | | ||||
Other operating income and expense |
| – | | – | | ||||
Total |
| | | | | ||||
Year ended 31 December 2021 |
|
|
|
|
|
|
|
| |
Cost of sales |
| | – | – | | ||||
Research and development expense |
| – | | – | | ||||
Selling, general and administrative expense |
| | | | | ||||
Other operating income and expense |
| – | | – | | ||||
Total |
| | | | | ||||
Year ended 31 December 2022 |
|
|
|
|
|
|
|
| |
Cost of sales |
| | – | – | | ||||
Research and development expense |
| – | | – | | ||||
Selling, general and administrative expense |
| | | | | ||||
Total |
| | | | |
Net impairment charges are recognised in profit as follows:
| Product, |
|
| Software |
|
| |||
marketing and | Other | development |
| ||||||
distribution rights | intangibles | costs | Total |
| |||||
$m | $m | $m | $m |
| |||||
Year ended 31 December 2020 |
|
|
|
|
|
|
|
| |
Research and development expense |
| | – | – | | ||||
Selling, general and administrative expense |
| | – | – | | ||||
Total |
| | – | – | | ||||
Year ended 31 December 2021 |
| ||||||||
Research and development expense |
| | – | – | | ||||
Selling, general and administrative expense |
| | – | | | ||||
Total |
| | – | | | ||||
Year ended 31 December 2022 |
| ||||||||
Research and development expense |
| | – | – | | ||||
Selling, general and administrative expense |
| | | ( | | ||||
Total |
| | | ( | |
Impairment charges and reversals
We perform a rigorous impairment trigger assessment for all our intangible assets. Intangible assets under development and not available for use are tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing is required, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss or reversal. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU) to which it belongs. The Group considers that as the intangible assets are linked to individual products and that product cash flows are considered to be largely independent of other product cash flows, the CGU for intangibles is at the product level. Group level budgets and forecasts include forecast capital investment and operational impacts related to sustainability projects, as well as inflationary impacts, and form the basis for the value in use models used for impairment testing.
An asset’s recoverable amount is determined as the higher of an asset’s or CGU’s fair value less costs to sell or value in use, in both cases using discounted cash flow calculations where the asset’s expected post-tax cash flows are risk-adjusted over their estimated remaining period of expected economic benefit. Where the value in use approach is used, the post-tax risk-adjusted cash flows are discounted using AstraZeneca’s post-tax weighted average cost of capital (
F-26
The estimates used in calculating the recoverable amount are considered significant estimates, highly sensitive and depend on assumptions specific to the nature of the Group’s activities including:
| outcome of RD activities |
| probability of technical and regulatory success |
| market volume, share and pricing (to derive peak year sales) |
| amount and timing of projected future cash flows |
| sales erosion curves following patent expiry. |
For assets held at fair value less costs to sell, we make appropriate adjustments to reflect market participant assessments.
In 2022, the Group recorded impairment charges of $
In 2021, the Group recorded impairment charges of $
Impairment charges recorded against products in development in 2021, based on fair value less costs to sell, totalled $
In 2020, the Group recorded impairment charges of $
The Group has performed an assessment on assets which have had impairments recorded in previous periods to determine if any reversals of impairments were required. Impairment reversals of $
When launched products, such as the ones detailed above, are partially impaired, the carrying values of these assets in future periods are particularly sensitive to changes in forecast assumptions, including those assumptions set out above, as the asset is impaired down to its recoverable amount.
Significant assets
| Carrying value |
| Remaining amortisation |
| |
$m | period |
| |||
C5 franchise (Soliris/Ultomiris) intangible assets arising from the acquisition of Alexion |
| | |||
Intangible assets arising from the acquisition of Acerta Pharma | | ||||
Strensiq, Kanuma and Andexxa intangible assets arising from the acquisition of Alexion | | ||||
Enhertu intangible assets acquired from Daiichi Sankyo | | ||||
Intangible asset products in development arising from the acquisition of Alexion1 | | Not amortised | |||
Intangible assets arising from the acquisition of ZS Pharma |
| | |||
Other intangible assets (DS-1062) acquired from Daiichi Sankyo1 |
| | Not amortised | ||
Intangible assets arising from the restructuring of a historical joint venture with MSD |
| | |||
Farxiga/Forxiga intangible assets acquired from BMS |
| | |||
Intangible assets arising from the acquisition of Pearl Therapeutics |
| | |||
RSV franchise assets arising from the acquisition of MedImmune |
| | |||
Monalizumab intangible assets acquired from Innate Pharma1 |
| | Not amortised |
| 1 | Assets in development are not amortised but are tested annually for impairment. |
The acquisition of intangible assets relating to DS-1062 in 2020 was assessed under the optional concentration test in IFRS 3 and was determined to be an asset acquisition, as substantially all of the value of the gross assets acquired was concentrated in a single asset.
11 Investments in associates and joint ventures
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
At 1 January |
| |
| |
| | |
Additions |
| |
| |
| | |
Share of after tax losses |
| ( |
| ( |
| ( | |
Exchange and other adjustments |
| ( |
| |
| – | |
At 31 December |
| |
| |
| |
On 29 January 2021, AstraZeneca entered into an agreement with IHP Holdings Limited to create and run an online platform (iHospital) offering consultations with physicians, repeat prescriptions and e-pharmacy in China. The agreement resulted in the formation of a new entity, IHP HK Holdings Limited. AstraZeneca contributed $
On 1 December 2020, AstraZeneca and China International Capital Corporation (CICC) entered into an agreement to set up a Global Healthcare Industrial Fund to drive healthcare system innovation by leveraging local capital and accelerating China-related innovation incubation. The agreement resulted in the formation of a new entity, Wuxi AstraZeneca-CICC Venture Capital Partnership (Limited Partnership). AstraZeneca holds a
F-27
On 23 September 2021, AstraZeneca entered into an agreement with VaxEquity Limited to collaborate and develop self-amplifying RNA technology with the aim of generating treatments for target diseases. AstraZeneca contributed $
On 23 February 2018, AstraZeneca entered into an agreement with a consortium of investors to form a new, US-domiciled standalone company called Viela Bio. In February 2021, AstraZeneca agreed to divest its
On 27 November 2017, AstraZeneca entered into a joint venture agreement with Chinese Future Industry Investment Fund (FIIF), to discover, develop and commercialise potential new medicines to help address unmet medical needs globally, and to bring innovative new medicines to patients in China more quickly. The agreement resulted in the formation of a joint venture entity based in China, Dizal (Jiangsu) Pharmaceutical Co., Limited (Dizal). Since its establishment, AstraZeneca has contributed $
On 1 December 2015, AstraZeneca entered into a joint venture agreement with Fujifilm Kyowa Kirin Biologics Co., Ltd. to develop a biosimilar using the combined capabilities of the two parties. The agreement resulted in the formation of a joint venture entity based in the UK, Centus Biotherapeutics Limited (Centus). Since its establishment, AstraZeneca has contributed $
On 30 April 2014, AstraZeneca entered into a joint venture agreement with Samsung Biologics Co., Ltd. which resulted in the formation of a joint venture entity based in the UK, Archigen Biotech Limited (Archigen). On 31 March 2022, Archigen entered a voluntary liquidation process.
All investments are accounted for using the equity method. At 31 December 2022, unrecognised losses in associates and joint ventures totalled $
Aggregated summarised financial information for the associate and joint venture entities is set out below:
| 2022 |
| 2021 |
| 2020 | ||
$m | $m | $m | |||||
Non-current assets |
| |
| |
| | |
Current assets |
| |
| |
| | |
Total liabilities |
| ( |
| ( |
| ( | |
Net assets |
| |
| |
| | |
Amount attributable to AstraZeneca |
| |
| |
| | |
Exchange adjustments |
| ( |
| |
| | |
Carrying value of investments in associates and joint ventures |
| |
| |
| |
A joint contractual arrangement was entered into between AstraZeneca and Daiichi Sankyo Company Limited (Daiichi Sankyo) in March 2019 for the co-development and co-commercialisation of Enhertu. Each party shares global pre-tax net income from the collaboration on a
12 Other investments
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Non-current investments |
|
|
|
|
|
| |
Equity securities at fair value through Other comprehensive income | | | | ||||
Fixed income securities at fair value through profit and loss | | – | – | ||||
Total |
| |
| |
| | |
Current investments |
|
|
| ||||
Fixed income securities at fair value through profit and loss | | | | ||||
Cash collateral pledged to counterparties | | – | – | ||||
Fixed deposits |
| |
| |
| | |
Total |
| |
| |
| |
Other investments held at fair value through Other comprehensive income include equity securities which are not held for trading and which the Group has irrevocably elected at initial recognition to recognise in this category. Other investments held at fair value through profit and loss mainly comprise fixed income securities that the Group holds to sell.
The fair value of listed investments is based on year end quoted market prices. Fixed deposits and Cash collateral pledged to counterparties are held at amortised cost with carrying value being a reasonable approximation of fair value given their short-term nature.
Cash collateral pledged to counterparties relates to collateral pledged on derivatives entered into to hedge the Group's risk exposures. In 2022, following significant foreign currency volatility increasing the collateral requirements, the Group revised its presentation to Other investments. Prior year amounts of $
Fair value hierarchy
The table below analyses equity securities and bonds, contained within Other investments and carried at fair value, by valuation method. The different levels have been defined as follows:
| Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities |
| Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) |
| Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). |
F-28
| 2022 |
| 2022 | 2021 |
| 2021 |
| 2020 |
| 2020 |
| ||
FVPL | FVOCI | FVPL | FVOCI | FVPL | FVOCI | ||||||||
$m | $m | $m | $m | $m | $m | ||||||||
Level 1 |
| | | | | | |
| |||||
Level 2 |
| – | – | – | – | – | – |
| |||||
Level 3 |
| | | – | | – | |
| |||||
Total |
| | | | | | |
|
During 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $
Equity securities that are analysed at Level 3 include investments in private biotech companies. In the absence of specific market data, these unlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new funding rounds, which approximates to fair value. Movements in Level 3 investments are detailed below:
| 2022 |
| 2022 |
| 2021 |
| 2020 |
| |
FVPL | FVOCI | FVOCI | FVOCI | ||||||
$m | $m | $m | $m |
| |||||
At 1 January |
| – |
| |
| |
| | |
Additions |
| |
| |
| |
| | |
Revaluations |
| – |
| |
| – |
| | |
Net transfers out |
| – |
| ( |
| ( |
| ( | |
Disposals |
| – |
| ( |
| – |
| ( | |
Impairments and exchange adjustments |
| – |
| ( |
| ( |
| | |
At 31 December |
| |
| |
| |
| |
Assets are transferred in or out of Level 3 on the date of the event or change in circumstances that caused the transfer.
13 Derivative financial instruments
| Non-current |
| Current |
| Current |
| Non-current |
|
| ||
assets | assets | liabilities | liabilities | Total |
| ||||||
$m | $m | $m | $m | $m |
| ||||||
Interest rate swaps related to instruments designated at fair value through profit and loss |
| | – | – | – | | |||||
Cross currency swaps designated in a net investment hedge |
| | – | – | ( | | |||||
Cross currency swaps designated in a cash flow hedge | | | – | – | | ||||||
Cross currency swaps designated in a fair value hedge1 |
| – | | – | – | | |||||
Forward FX designated in a cash flow hedge2 | – | | ( | – | | ||||||
Other derivatives |
| – | | ( | – | | |||||
31 December 2020 |
| | | ( | ( | |
| Non-current |
| Current |
| Current |
| Non-current |
| |||
assets | assets | liabilities | liabilities | Total | |||||||
$m | $m | $m | $m | $m | |||||||
Interest rate swaps related to instruments designated at fair value through profit and loss |
| | – | – | – | | |||||
Cross currency swaps designated in a net investment hedge |
| | – | – | ( | | |||||
Cross currency swaps designated in a cash flow hedge |
| – | – | – | ( | ( | |||||
Forward FX designated in a cash flow hedge2 | – | | – | – | | ||||||
Other derivatives |
| | | ( | – | | |||||
31 December 2021 |
| | | ( | ( | |
| Non-current |
| Current |
| Current |
| Non-current |
| |||
assets | assets | liabilities | liabilities | Total | |||||||
$m | $m | $m | $m | $m | |||||||
Interest rate swaps related to instruments designated at fair value through profit and loss |
| – | | – | – | | |||||
Cross currency swaps designated in a net investment hedge |
| | – | – | ( | | |||||
Cross currency swaps designated in a cash flow hedge |
| – | – | – | ( | ( | |||||
Forward FX designated in a cash flow hedge2 | – | | ( | – | ( | ||||||
Other derivatives |
| | | ( | – | | |||||
31 December 2022 |
| | | ( | ( | ( |
| 1 | Cross currency swaps designated in a fair value hedge refers to a cross currency interest rate swap that hedges a designated euro |
| 2 | Forward FX designated in a cash flow hedge relates to contracts hedging anticipated CNY, EUR, GBP, JPY and SEK transactions occurring in the quarter immediately after the balance sheet date. |
All derivatives are held at fair value and fall within Level 2 of the fair value hierarchy as defined in Note 12, except for an equity warrant which falls within Level 3 (valued at $
The fair value of interest rate swaps and cross currency swaps is estimated using appropriate zero coupon curve valuation techniques to discount future contractual cash flows based on rates at the current year end.
The fair value of forward foreign exchange contracts and currency options are estimated by cash flow accounting models using appropriate yield curves based on market forward foreign exchange rates at the year end. The majority of forward foreign exchange contracts for existing transactions had maturities of less than
F-29
The interest rates used to discount future cash flows for fair value adjustments, where applicable, are based on market swap curves at the reporting date, and were as follows:
| 2022 |
| 2021 |
| 2020 | |||||||||||
Derivatives |
| | % | to | | % | ( | % | to | | % | ( | % | to | | % |
14 Non-current other receivables
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Prepayments |
| |
| |
| | |
Accrued income |
| |
| |
| | |
Retirement benefit scheme surpluses (Note 22) | | – | – | ||||
Other receivables |
| |
| |
| | |
Non-current other receivables |
| |
| |
| |
Prepayments include $
15 Inventories
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Raw materials and consumables |
| |
| |
| | |
Inventories in process |
| |
| |
| | |
Finished goods and goods for resale |
| |
| |
| | |
Inventories |
| |
| |
| |
The Group recognised $
Inventory write-offs in the year amounted to $
16 Current trade and other receivables
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Trade receivables |
| |
| |
| | |
Less: Expected credit loss provision (Note 28) |
| ( |
| ( |
| ( | |
| |
| |
| | ||
Other receivables |
| |
| |
| | |
Prepayments | | | | ||||
Government grants receivable | | – | | ||||
Accrued income |
| |
| |
| | |
Trade and other receivables |
| |
| |
| |
Trade receivables include $
All other financial assets included within Current trade and other receivables are held at amortised cost with carrying value being a reasonable approximation of fair value.
17 Cash and cash equivalents
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Cash at bank and in hand |
| |
| |
| | |
Short-term deposits |
| |
| |
| | |
Cash and cash equivalents |
| |
| |
| | |
Unsecured bank overdrafts |
| ( |
| ( |
| ( | |
Cash and cash equivalents in the cash flow statement |
| |
| |
| |
AstraZeneca invests in constant net asset value funds and low-volatility net asset value funds with same day access for subscription and redemption. These investments fail the ‘solely payments of principal and interest’ test criteria under IFRS 9. They are therefore measured at fair value through profit and loss, although the fair value is materially the same as amortised cost.
F-30
Non-cash and other movements, within operating activities in the Consolidated Statement of Cash Flows, includes:
| 2022 |
| 2021 |
| 2020 | ||
$m | $m | $m | |||||
Share-based payments charge for the period |
| |
| |
| | |
Settlement of share plan awards | ( | ( | ( | ||||
Pension contributions | ( | ( | ( | ||||
Pension charges recorded in operating profit | | | | ||||
Long-term provision charges recorded in operating profit | | | | ||||
Non-cash intangible additions | – | – | ( | ||||
(Gain)/loss on disposal of tangible assets | ( | | ( | ||||
Foreign exchange and other1 | ( | ( | ( | ||||
Total operating activities non-cash and other movements |
| ( |
| |
| ( |
1 | Foreign exchange and other includes, among other items, the foreign exchange of intercompany transactions, including dividends, across Group entities and the related impact from hedging those transactions. |
18 Assets held for sale
Assets held for sale amount to $
In 2021, Assets held for sale comprised Intangible assets relating to the rights to certain respiratory assets acquired from Almirall and Actavis (including Tudorza and Duaklir). The transaction closed on 4 January 2022.
F-31
19 Interest-bearing loans and borrowings
|
|
| Repayment |
| 2022 |
| 2021 |
| 2020 |
| |
dates | $m | $m | $m |
| |||||||
Current liabilities |
|
| |||||||||
Bank overdrafts |
|
|
| On demand |
| |
| |
| | |
Other short-term borrowings excluding overdrafts | | | | ||||||||
Collateral received from derivative counterparties | | | | ||||||||
Lease liabilities |
|
|
| |
| |
| | |||
euros | 2021 | – | – | | |||||||
euros | 2021 | – | – | | |||||||
Floating rate notes | US dollars | 2022 | – | | – | ||||||
US dollars | 2022 | – | | – | |||||||
US dollars | 2023 | | – | – | |||||||
2023 Floating bank loan | US dollars | 2023 | | – | – | ||||||
Floating rate notes | US dollars | 2023 | | – | – | ||||||
US dollars | 2023 | | – | – | |||||||
US dollars | 2023 | | – | – | |||||||
Other loans (including commercial paper) | Within one year |
| |
| |
| | ||||
Total |
|
|
| |
| |
| | |||
Non-current liabilities |
|
| |||||||||
Lease liabilities | | | | ||||||||
Floating rate notes | US dollars | 2022 | – | – | | ||||||
US dollars | 2022 | – | – | | |||||||
US dollars | 2023 | – | | – | |||||||
2023 Floating rate bank loan |
| US dollars |
| 2023 |
| – |
| |
| – | |
Floating rate notes | US dollars | 2023 | – | | | ||||||
US dollars | 2023 | – | | | |||||||
US dollars | 2023 | – | | | |||||||
euros | 2024 | | | | |||||||
US dollars | 2024 | | | – | |||||||
2024 Floating rate bank loan |
| US dollars |
| 2024 |
| |
| |
| – | |
| US dollars |
| 2025 |
| |
| |
| | ||
US dollars | 2026 | | | | |||||||
US dollars | 2026 | | | – | |||||||
US dollars | 2027 | | | | |||||||
| euros |
| 2028 |
| |
| |
| | ||
US dollars | 2028 | | | – | |||||||
US dollars | 2029 | | | | |||||||
euros | 2029 | | | – | |||||||
US dollars | 2030 | | | | |||||||
US dollars | 2031 | | | – | |||||||
| pounds sterling |
| 2031 |
| |
| |
| | ||
| US dollars |
| 2037 |
| |
| |
| | ||
| US dollars |
| 2042 |
| |
| |
| | ||
| US dollars |
| 2045 |
| |
| |
| | ||
US dollars | 2048 | | | | |||||||
US dollars | 2050 | | | | |||||||
US dollars | 2051 | | | – | |||||||
Other loans |
| US dollars |
| |
| |
| | |||
Total |
|
|
| |
| |
| | |||
Total interest-bearing loans and borrowings1, 2 |
|
|
| |
| |
| |
| 1 | All loans and borrowings above are unsecured apart from $ |
| 2 | The $ |
F-32
Total | Total | Total | |||||||||||
loans and | loans and | loans and | |||||||||||
borrowings | borrowings | borrowings | |||||||||||
2022 | 2021 | 2020 | |||||||||||
$m | $m | $m | |||||||||||
At 1 January |
|
|
|
| | | | ||||||
Changes from financing cash flows |
|
|
|
|
|
| |||||||
Issue of loans and borrowings | – | | | ||||||||||
Repayment of loans and borrowings | ( | ( | ( | ||||||||||
Movement in short-term borrowings | | ( | | ||||||||||
Repayment of obligations under leases | ( | ( | ( | ||||||||||
Total changes in cash flows arising on financing activities from borrowings | ( | | | ||||||||||
Movement in overdrafts | ( | | | ||||||||||
New lease liabilities | | | | ||||||||||
Additions through business combinations | | | – | ||||||||||
Exchange | ( | ( | | ||||||||||
Other movements |
|
| | | | ||||||||
At 31 December |
|
|
|
| | | |
Also included within cash flows arising from financing activities within the Consolidated Statement of Cash Flows is a $
Set out below is a comparison by category of carrying values and fair values of all the Group’s interest-bearing loans and borrowings:
| Instruments in a |
| Instruments |
| Instruments |
|
| Total |
|
| |||
fair value hedge | designated | designated in | Amortised | carrying | Fair |
| |||||||
relationship | 1 | at fair value | 2 | cash flow hedge | 3 | cost | value | value |
| ||||
$m | $m | $m | $m | $m | $m |
| |||||||
2020 |
|
|
|
|
|
|
|
|
|
|
|
| |
Overdrafts |
| – | – | – | | | | ||||||
Lease liabilities due within one year | – | – | – | | | | |||||||
Lease liabilities due after more than one year | – | – | – | | | | |||||||
Loans and borrowings due within one year |
| | – | | | | | ||||||
Loans and borrowings due after more than one year |
| – | | | | | | ||||||
Total at 31 December 2020 |
| | | | | | | ||||||
2021 |
|
|
|
|
|
|
|
|
|
|
|
| |
Overdrafts |
| – | – | – | | | | ||||||
Lease liabilities due within one year | – | – | – | | | | |||||||
Lease liabilities due after more than one year |
| – | – | – | | | | ||||||
Loans and borrowings due within one year |
| – | – | – | | | | ||||||
Loans and borrowings due after more than one year |
| – | | | | | | ||||||
Total at 31 December 2021 |
| – | | | | | | ||||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
| |
Overdrafts |
| – | – | – | | | | ||||||
Lease liabilities due within one year |
| – | – | – | | | | ||||||
Lease liabilities due after more than one year | – | – | – | | | | |||||||
Loans and borrowings due within one year |
| – | | – | | | | ||||||
Loans and borrowings due after more than one year |
| – | – | | | | | ||||||
Total at 31 December 2022 |
| – | | | | | |
1 | Instruments designated as hedged items in a fair value hedge relationship relate to a designated euro |
2 | Instruments designated at fair value through profit or loss include the US dollar |
3 | Instruments designated in cash flow hedges are our euro |
The fair value of fixed-rate publicly traded debt is based on year end quoted market prices; the fair value of floating rate debt is nominal value, as mark-to-market differences would be minimal given the frequency of resets. The carrying value of loans designated at fair value through profit or loss is the fair value; this falls within the Level 1 valuation method as defined in Note 12. For loans designated in a fair value hedge relationship, carrying value is initially measured at fair value and remeasured for fair value changes in respect of the hedged risk at each reporting date. All other loans are held at amortised cost. Fair values, as disclosed in the table above, are all determined using the Level 1 valuation method as defined in Note 12, with the exception of overdrafts and lease liabilities, where fair value approximates to carrying values.
A gain of $
The interest rates used to discount future cash flows for fair value adjustments, where applicable, are based on market swap curves at the reporting date, and were as follows:
| 2022 |
| 2021 |
| 2020 |
| ||||||||||
Loans and borrowings |
| | % | to | | % | | % | to | | % | ( | % | to | | % |
F-33
20 Trade and other payables
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Current liabilities |
|
|
|
|
|
| |
Trade payables |
| |
| |
| | |
Value-added and payroll taxes and social security |
| |
| |
| | |
Rebates, chargebacks, returns and other revenue accruals |
| |
| |
| | |
Clinical trial accruals |
| |
| |
| | |
Other accruals | | | | ||||
Collaboration Revenue contract liabilities | | | | ||||
Vaccine contract liabilities | | | | ||||
Deferred government grant income | | | | ||||
Contingent consideration |
| |
| |
| | |
Acerta Pharma share purchase liability (Note 26) | | | – | ||||
Other payables |
| |
| |
| | |
Total |
| |
| |
| | |
Non-current liabilities |
|
|
| ||||
Accruals |
| |
| |
| | |
Collaboration Revenue contract liabilities | | | | ||||
Contingent consideration |
| |
| |
| | |
Acerta Pharma share purchase liability (Note 26) | | | | ||||
Other payables |
| |
| |
| | |
Total |
| |
| |
| |
Included within Rebates, chargebacks, returns and other revenue accruals are contract liabilities of $
Trade payables includes $
Vaccine contract liabilities relate to amounts received from customers, primarily government bodies, in advance of supply of product. Substantially all of the Vaccine contract liabilities are expected to be recognised as revenue during the next financial year. The revenue recognised in the year related to Vaccine contract liabilities held at the beginning of the year was $
Deferred government grant income relates to government grants received or receivable but for which the related expenses have not been incurred.
Included within current Other payables are liabilities to Daiichi Sankyo totalling $
In November 2020, Calquence received marketing approval in the EU, which removed all remaining conditionality in respect of the Acerta Pharma put and call options regarding the non-controlling interest; the option was exercised in April 2021 (see Note 26). In October 2019, an amendment to the share purchase and option agreement (SPOA) with the sellers of Acerta Pharma (originally entered into in December 2015) came into effect, changing certain terms of the SPOA on both the timing and also reducing the maximum consideration that would be required to be made to acquire the remaining outstanding shares of Acerta Pharma if the options were exercised. The payments will be made in similar annual instalments in 2022 through to 2024, with the first payment of $
With the exception of Contingent consideration payables of $
Contingent consideration
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
At 1 January |
| |
| |
| | |
Settlements |
| ( |
| ( |
| ( | |
Disposals1 | ( | – | – | ||||
Revaluations |
| |
| |
| ( | |
Reclassification to Other payables | – | ( | – | ||||
Discount unwind (Note 3) |
| |
| |
| | |
At 31 December |
| |
| |
| |
1 | On 4 January 2022, AstraZeneca completed the sale of the global rights to Tudorza and Duaklir to Covis Pharma GmbH. The divestment resulted in the remaining outstanding Contingent consideration payable of $ |
F-34
Contingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability of success, consideration of potential delays and the expected levels of future revenues.
Revaluations of Contingent consideration are recognised in Selling, general and administrative expense and include an increase of $
The discount rate used for the Contingent consideration balances range from
Management has identified that reasonably possible changes in certain key assumptions, including the likelihood of achieving successful trial results, obtaining regulatory approval, the projected market share of the therapy area and expected pricing for launched products, may cause the calculated fair value of the above contingent consideration to vary materially in future years.
The contingent consideration balance relating to BMS’s share of Global Diabetes Alliance of $
The maximum development and sales milestones payable under outstanding Contingent consideration arrangements arising on business combinations are as follows:
|
| Nature of |
| Maximum future milestones |
| ||
Acquisitions | Year | contingent consideration | $m |
| |||
Spirogen |
| 2013 |
| Milestones |
| | |
Amplimmune |
| 2013 |
| Milestones |
| | |
Almirall1 | 2014 | Milestones and royalties | |
| 1 | These contingent consideration liabilities have been designated as the hedge instrument in a net investment hedge of foreign currency risk arising on the Group’s underlying US dollar net investments held in non-US dollar denominated subsidiaries. Exchange differences on the retranslation of the contingent consideration liability are recognised in Other comprehensive income to the extent that the hedge is effective. Any ineffectiveness is taken to profit. |
The amount of royalties payable under the arrangements is inherently uncertain and difficult to predict, given the direct link to future sales and the range of outcomes. The maximum amount of royalties payable in each year is with reference to net sales.
21 Provisions
|
|
| Employee |
|
| Other |
|
| |||||
Severance | Environmental | benefits | Legal | provisions | Total |
| |||||||
$m | $m | $m | $m | $m | $m |
| |||||||
At 1 January 2020 |
| | | | | | | ||||||
Transfers in | – | – | – | – | | | |||||||
Charge for year |
| | | | | | | ||||||
Cash paid |
| ( | ( | ( | ( | ( | ( | ||||||
Reversals |
| ( | – | ( | ( | ( | ( | ||||||
Exchange and other movements |
| | – | | ( | | | ||||||
At 31 December 2020 |
| | | | | | | ||||||
Additions through business combinations (Note 27) | – | – | | | | | |||||||
Charge for year |
| | | | | | | ||||||
Cash paid |
| ( | ( | ( | ( | ( | ( | ||||||
Reversals |
| ( | – | – | ( | ( | ( | ||||||
Exchange and other movements |
| ( | ( | | ( | ( | | ||||||
At 31 December 2021 |
| | | | | | | ||||||
Charge for year |
| | | | | | | ||||||
Cash paid |
| ( | ( | ( | ( | ( | ( | ||||||
Reversals |
| ( | – | ( | ( | ( | ( | ||||||
Exchange and other movements |
| ( | ( | | – | ( | ( | ||||||
At 31 December 2022 |
| | | | | | |
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Due within one year |
| |
| |
| | |
Due after more than one year |
| |
| |
| | |
Total |
| |
| |
| |
Provisions are often subject to substantial uncertainties with regard to the timing and final amounts of any payments. As such, once established, these amounts remain in Provisions until settlement is reached and uncertainty resolved, with no transfer to Trade and other payables prior to payment.
Severance provisions arise predominantly in connection with global restructuring initiatives, including the Post Alexion Acquisition Group Review, which involve rationalisation of the global supply chain, the sales and marketing organisation, IT and business support infrastructure, and RD.
In conjunction with the acquisition of Alexion in 2021, the enlarged Group initiated a comprehensive Post Alexion Acquisition Group Review, aimed at integrating systems, structure and processes, optimising the global footprint and prioritising resource allocations and investments. The Group has also continued to progress other legacy restructuring programmes.
Employee costs in connection with the initiatives are recognised in severance provisions when a detailed formal plan has been communicated to those employees affected. Final severance costs are often subject to the completion of the requisite consultations on the areas impacted, with the majority of the cost expected to be paid within one year. AstraZeneca endeavours to support employees affected by restructuring initiatives to seek alternative roles within the organisation. Where the employee is successful, any severance provisions will be released.
Details of the Environmental provisions totalling $
F-35
The majority of Employee benefit provisions relate to Executive Deferred Compensation Plans, which include uncertainty over the ultimate timing and amount of payment to be made to the executives.
Other provisions comprise amounts relating to specific contractual or constructive obligations and disputes. Included within Other provisions are amounts associated with long-standing product liability settlements that arose prior to the merger of Astra and Zeneca, which given the nature of the provision, the amounts are expected to be settled over many years; the final settlement values and timings are uncertain. Also included in Other provisions is an amount of $
No provision has been released or applied for any purpose other than that for which it was established.
22 Post-retirement and other defined benefit schemes
Background
This section predominantly covers defined benefit arrangements like post retirement pension and medical plans which make up the vast bulk of the Group’s liabilities. However, it also incorporates other benefits which fall under IAS 19 rules and which require an actuarial valuation, including but not limited to: Lump Sum plans, Long Service Awards and defined contribution pension plans which have some defined benefit characteristics (e.g. a minimum guaranteed level of benefit). In total, over
The Group and most of its subsidiaries offer retirement plans which cover the majority of employees. The Group’s policy is to provide defined contribution (DC) orientated pension provision to its employees unless otherwise compelled by local regulation. As a result, many of these retirement plans are DC, where the Group contribution and resulting charge is fixed at a set level or is a set percentage of employees’ pay. However, several plans, mainly in the UK, the US and Sweden, are defined benefit (DB), where benefits are based on employees’ length of service and linked to their salary. The major DB plans are largely legacy arrangements as they have been closed to new entrants since 2000, apart from the collectively bargained Swedish plan (which is still open to employees born before 1979). During 2010, following consultation with its UK employees’ representatives, the Group introduced a freeze on pensionable pay at 30 June 2010 levels for DB members of the UK Pension Fund. The number of active members in the Fund continues to decline and is now
The major DB plans are funded through separate, fiduciary-administered assets. The cash funding of the plans, which may from time to time involve special Group payments, is designed, in consultation with independent qualified actuaries, to ensure that the assets are sufficient to meet future obligations as and when they fall due. The funding level is monitored by the Group and local fiduciaries, who take into account the strength of the Group’s covenant, local regulation, cash flows, and the solvency and maturity of the pension scheme.
With a general improvement in funding solvency over the course of 2022,
Financing Principles and Funding Framework
per cent of the Group’s total DB obligations (or
The Group has developed a long-term funding framework to implement these principles. This framework targets either full funding on a low-risk funding measure, or buyout with an external insurer as the pension funds mature, with affordable long-term de-risking of investment strategy along the way. Unless local regulation dictates otherwise, this framework determines the cash contributions payable.
UK
The UK Pension Fund represents approximately
Role of Trustee and Regulation
The UK Pension Fund is governed and administered by a corporate Trustee which is legally separate from the Group. The Trustee Directors are comprised of representatives appointed by both the employer and employees and include an independent professional Trustee Director. The Trustee Directors are required by law to act in the interest of all relevant beneficiaries and are responsible in particular for investment strategy and the day-to-day administration of the benefits. They are also responsible for jointly agreeing with the employer the level of contributions due to the UK Pension Fund.
The UK pensions market is regulated by The Pensions Regulator whose statutory objectives and regulatory powers are described on its website, www.thepensionsregulator.gov.uk.
The Pension Scheme Act 2021 became effective in the UK from 1 October 2021. A section of this Act places additional legal requirements on companies who sponsor UK defined benefit pension schemes, to monitor and assess corporate activity, with a focus on the potential impact of such activity on the ongoing security of these benefits. The Group has developed a framework to ensure it meets its responsibilities under the Act.
There have been two UK High Court Rulings relating to Guaranteed Minimum Pensions (GMP) equalisation in 2018 and 2020. Following the publication of guidance around implementation in 2021, the Trustee, with input from the Group, has made significant progress in equalising benefits. Further details are set out later on in this Note. An estimate of the impact of these changes has already been recognised in 2018 and 2020, and actual experience is in line with the estimates previously recognised.
Funding requirements
UK legislation requires that DB pension schemes are funded prudently. On a triennial basis, the Trustee and the Group must agree on a set of assumptions used to value the liabilities as a part of an actuarial valuation. Together with the asset valuation, this facilitates the calculation of a funding level and of the contributions required (if any) to ensure the UK Pension Fund is fully funded over an appropriate time period and on a suitably prudent measure. The technical provisions assumptions used to value the liabilities for the triennial actuarial valuation are usually set more prudently than the assumptions used to prepare an accounting valuation of the liabilities, which are set under IAS 19 rules to be a ‘best estimate’.
F-36
The last full actuarial valuation of the UK Pension Fund was carried out by a qualified actuary as at 31 March 2019. It was finalised in June 2020 and in early 2021, the Pensions Regulator acknowledged the outcome and no issues were raised. The funding assumptions used in this actuarial valuation were set out in the Group’s 2020 report. The actuarial valuation as at 31 March 2022 is currently in progress, with a likely timescale for completion during the second quarter of 2023. However, the value of the Fund’s obligations disclosed at 31 December 2022 incorporates data from this latest actuarial valuation including updated membership information and demographic assumptions.
Aspects of the triennial actuarial valuation are governed by a long-term funding agreement, effective since October 2016 and which sets out a path to full funding on a low-risk measure. Under this agreement, if a deficit exists, the Group is required to provide security. A key element of this security is to grant a charge in favour of the Trustee over land and buildings on the Cambridge Biomedical Campus, required to be effective within three months of the practical completion of the site, or by 30 June 2023 (whichever is earlier). An extension was granted by the Trustee to this backstop date in 2022. This charge is not currently in force. When effective, the charge would only crystallise in the event of the Group’s insolvency. This charge will provide long-term security in respect of future UK Pension Fund contributions and is capped at £
In relation to deficit recovery contributions, a lump sum contribution of £
During 2017, the Group provided a letter of credit to the Trustee, to underwrite the deferral of an additional deficit recovery contribution of approximately £
Substantial progress was made over 2022 in equalising GMP for members of the UK Pension Fund. The method of equalisation adopted was to convert GMP to simplify the structure and administration of benefits. As at 31 December 2022, a majority of pensioner and dependent members have had their benefits equalised. Further work will be completed over 2023 to address equalisation for the remaining affected members. As part of the GMP equalisation project, a Pension Increase Exchange (“PiE”) option has also been provisionally made available to the majority of pensioner members, at the Group’s discretion. This option provides the member with a choice to opt for a higher pension right away, but with no (or fewer) inflation linked increases in the future. The PIE option element of the project is currently ongoing and if it proceeds, will not conclude until 2023.
Under the governing documentation of the UK Pension Fund, any future surplus in the Fund would be returnable to the Group by refund assuming gradual settlement of the liabilities over the lifetime of the Fund. In particular, the Trustee has no unilateral right to wind up the Fund without Company consent nor does it have the power to unilaterally use surplus to augment benefits prior to wind-up. As such, there are
On current bases, it is expected that ongoing contributions (excluding those in respect of past service deficit contributions) during the year ending 31 December 2023 for the UK scheme will be approximately $
Liquidity and liability hedging
Significant increases in UK Government bond yields over September and October created liquidity challenges for many UK defined benefit schemes with liability hedging portfolios, who needed to post collateral quickly to meet margin calls on derivative holdings. The Group's UK Pension Fund was not adversely impacted over this period due to a combination of Group and Trustee oversight and a functioning risk management policy. The UK Pension Fund did not require any financial support from the Group, was self-sufficient and operated normally throughout this period. The Fund maintained its investment strategy and funding solvency materially improved over the year. Furthermore, with the UK Pension Fund ahead of its long term plan, this improvement allowed the Trustee, with support from the Group to de-risk investment strategy ahead of plan, reducing long term investment risk both to the Group and members in an affordable manner.
United States and Sweden
The US and Sweden plans account for
The US defined benefit pension plans were actuarially revalued at 31 December 2022, when plan obligations were $
The Swedish defined benefit pension plans were actuarially valued at 31 December 2022, when plan obligations were estimated to amount to $
On current bases, it is expected that ongoing contributions (excluding those in respect of past service deficit contributions) during the year ending 31 December 2023 for the United States and Sweden will be approximately $
Other defined benefit plans
The Group provides benefit plans other than pensions which have to be reported under IAS 19. These include Lump Sum plans, Long Service Awards and defined contribution pension plans which have a guaranteed minimum benefit. However, the largest category of these ‘other’ non-pension plans are healthcare benefits.
In the US, and to a lesser extent in certain other countries, the Group’s employment practices include the provision of healthcare and life assurance benefits for eligible retired employees. As at 31 December 2022, some
In the US, the Post Retirement Welfare Plan which provides retiree medical benefits has a surplus of $
The cost of post-retirement benefits other than pensions for the Group in 2022 was $
F-37
Financial assumptions
Qualified independent actuaries have updated the actuarial valuations under IAS 19 for the major defined benefit schemes operated by the Group to 31 December 2022. The assumptions used may not necessarily be borne out in practice, due to the inherent financial and demographic uncertainty associated with making long-term projections. These assumptions reflect the changes which have the most material impact on the results of the Group and were as follows:
2021 | |||||||||
UK |
| US | Sweden | Rest of Group4 | |||||
Inflation assumption | | % | – | | % | | % | ||
Rate of increase in salaries | – | 1 | – | | % | | % | ||
Rate of increase in pensions in payment | | % | – | | % | | % | ||
Discount rate – defined benefit obligation | | % | | % | | % | | % | |
Discount rate – interest cost | | % | | % | | % | | % | |
Discount rate – service cost | | % | n/a | | % | | % | ||
2022 | |||||||||
UK |
| US | Sweden | Rest of Group4 | |||||
Inflation assumption | | % | – | | % | | % | ||
Rate of increase in salaries | – | 1 | – | | % | | % | ||
Rate of increase in pensions in payment | | % | – | | % | | % | ||
Discount rate – defined benefit obligation2 | | % | | % | | % | | % | |
Discount rate – interest cost3 | | % | | % | | % | | % | |
Discount rate – service cost3 | | % | n/a | | % | | % | ||
| 1 | Pensionable pay frozen at 30 June 2010 levels following UK fund changes. |
| 2 | Group defined benefit obligation as at 31 December 2022 calculated using discount rates based on market conditions as at 31 December 2022. |
| 3 | 2022 interest costs and service costs calculated using discount rates based on market conditions as at 31 December 2021. |
| 4 | Rest of Group reflects the assumptions in Germany as these have the most material impact on the Group. |
The weighted average duration of the post-retirement scheme obligations is approximately
Demographic assumptions
The mortality assumptions are based on country-specific mortality tables. These are compared to actual experience and adjusted where sufficient data are available. Additional allowance for future improvements in life expectancy is included for all major schemes where there is credible data to support a continuing trend.
The table below illustrates life expectancy assumptions at age for male and female members retiring in 2022 and male and female members expected to retire in 2042 (2021: 2021 and 2041 respectively).
Life expectancy assumption for a male member retiring at age 65 |
| Life expectancy assumption for a female member retiring at age 65 |
| ||||||||||||||
Country |
| 2022 |
| 2042 |
| 2021 |
| 2041 |
| 2022 |
| 2042 |
| 2021 |
| 2041 |
|
UK |
|
|
| ||||||||||||||
US |
|
|
| ||||||||||||||
Sweden |
|
|
| ||||||||||||||
In the UK, the Group updated the mortality tables used, reflecting analysis carried out as part of the latest actuarial valuation and adopted the CMI 2021 Mortality Projections Model with a
In the US and Sweden the Group continues to use the most recently published mortality tables. No update was published in the US in 2022 and MP-2021 continues to be used, but a new table, DUS21, has been used in Sweden.
F-38
Risks associated with the Group’s defined benefit pension schemes
The UK defined benefit plan accounts for
Risk |
| Description |
| Mitigation |
Volatile asset returns | The Defined Benefit Obligation (DBO) is calculated using a discount rate set with reference to AA-rated corporate bond yields; asset returns that differ from the discount rate will create an element of volatility in the solvency ratio. Approximately | In order to mitigate investment risk, the Trustee invests in a suitably diversified range of asset classes, return drivers and investment managers. The investment strategy will evolve to further improve the expected risk/return profile as opportunities arise. De-risking of the investment strategy took place over 2022, as the Fund moved ahead of its long-term target, with exposure to Growth Assets reducing from approximately The Trustee has hedged approximately | ||
Changes in bond yields | A decrease in corporate bond yields will increase the present value placed on the DBO for accounting purposes. | The interest rate hedge of the UK Pension Fund is implemented via holding gilts (and gilt repurchase agreements or “gilt repo”) of appropriate duration, set to target a hedge ratio of approximately | ||
Inflation risk | The majority of the DBO is indexed in line with price inflation (mainly inflation as measured by the UK Retail Price Index (RPI) but also for some members a component of pensions is indexed by the UK Consumer Price Index (CPI)) and higher inflation will lead to higher liabilities (although, in most cases, this is capped at an annual increase of | The UK Pension Fund holds RPI index-linked gilts and gilt repo. As with the interest rate hedge, the liability benchmark was changed over 2022 to facilitate hedging solely with gilts rather than the previous mix of gilts and swaps. The inflation hedge of the UK Pension Fund protects to some degree against higher-than-expected inflation increases on the DBO (approximately | ||
Life expectancy | The majority of the UK Pension Fund’s obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the liabilities. | The UK Pension Fund entered into a longevity swap during 2013 which provides hedging against the longevity risk of increasing life expectancy over the next |
Other risks
There are a number of other risks of administering the UK Pension Fund which the Trustee manages with Group input. Some of the major risks include counterparty risks from using derivatives and collateral management risk (mitigated by using a specialist investment manager to oversee a diversified range of counterparties of high standing, ensuring positions are collateralised daily and having a robust collateral management policy). Furthermore, there are operational risks (such as paying out the wrong benefits) and legislative risks (such as the pensions regulator introducing new legislation). These are mitigated so far as possible via the governance structure in place which oversees and administers the pension funds.
The Group’s pension plans in the US and Sweden also manage these key risks, where they are relevant, in a similar way, with the local fiduciary bodies investing in a diversified manner and employing a framework to hedge interest rate risk.
Local fiduciary boards are aware of Environmental, Social and Governance (ESG) risks as they pertain to investment policy, and where local regulation allows, have policies in place to monitor and manage such risks and comply with local legislation and disclosure requirements.
Assets and obligations of defined benefit schemes
The assets and obligations of the defined benefit schemes operated by the Group at 31 December 2022, as calculated in accordance with IAS 19, are shown below. The fair values of the schemes’ assets are not intended to be realised in the short term and may be subject to significant change before they are realised. The present value of the schemes’ obligations is derived from cash flow projections over long periods and is therefore inherently uncertain.
There has been a material fall in both asset and liability valuations over 2022, predominantly due to significant increases in long-term global bond yields. This had the impact of lowering liability and asset valuations.
F-39
Scheme assets
2021 | |||||||||||||||||||||||
| UK | US | Sweden |
| Rest of Group |
| Total | ||||||||||||||||
Quoted |
| Unquoted | Quoted | Unquoted | Quoted | Unquoted |
| Quoted |
| Unquoted |
| Quoted |
| Unquoted |
| Total | |||||||
$m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | |||||||||||||
Government bonds1 |
| | – | | – | – | – | | – | | – | | |||||||||||
Corporate bonds2 |
| – | – | | – | – | – | | – | | – | | |||||||||||
Derivatives3 |
| – | ( | | ( | – | | ( | – | | | | |||||||||||
Investment funds: Listed Equities4 |
| – | | – | – | – | | | | | | | |||||||||||
Investment funds: Absolute Return/Multi Strategy4 |
| – | | – | – | – | | | – | | | | |||||||||||
Investment funds: Corporate Bonds/Credit4 |
| – | | – | – | – | | | | | | | |||||||||||
Cash and cash equivalents |
| | | | – | – | | – | | | | | |||||||||||
Other |
| – | – | – | | – | – | | | | | | |||||||||||
Total fair value of scheme assets5 |
| | | | | – | | | | | | |
2022 | |||||||||||||||||||||||
| UK | US | Sweden |
| Rest of Group |
| Total | ||||||||||||||||
Quoted |
| Unquoted | Quoted | Unquoted | Quoted | Unquoted |
| Quoted |
| Unquoted |
| Quoted |
| Unquoted |
| Total | |||||||
$m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | |||||||||||||
Government bonds1 |
| | – | | – | – | – | | – | | – | | |||||||||||
Corporate bonds2 |
| – | – | | – | – | – | | – | | – | | |||||||||||
Derivatives3 |
| – | ( | ( | ( | – | | ( | – | ( | ( | ( | |||||||||||
Investment funds: Listed Equities4 |
| – | | – | – | – | – | | | | | | |||||||||||
Investment funds: Absolute Return/Multi Strategy4 |
| – | | – | – | – | | | – | | | | |||||||||||
Investment funds: Corporate Bonds/Credit4 |
| – | | – | – | – | | | | | | | |||||||||||
Cash and cash equivalents |
| | | | – | – | | – | | | | | |||||||||||
Other |
| – | – | – | | – | – | | | | | | |||||||||||
Total fair value of scheme assets5 |
| | | | ( | – | | | | | | |
| 1 | Predominantly developed markets in nature. |
| 2 | Predominantly developed markets in nature and investment grade (AAA-BBB). |
| 3 | Includes interest rate swaps, inflation swaps, longevity swap, equity total return swaps and other contracts. More detail is given in the section Risks associated with the Group’s defined benefit pensions on page 176. Valuations are determined by independent third parties. |
| 4 | Investment Funds are pooled, commingled vehicles, whereby the pension scheme owns units in the fund, alongside other investors. The pension schemes invest in a number of Investment Funds, including Listed Equities (primarily developed markets with some emerging markets), Corporate Bonds/Credit (a range of investment-grade and non investment-grade credit) and Absolute Return/Multi Strategy (multi-asset exposure both across and within traditional and alternative asset classes). The price of the funds is set by independent administrators/custodians employed by the investment managers and based on the value of the underlying assets held in the fund. Details of pricing methodology is set out within internal control reports provided for each fund. Prices are updated daily, weekly or monthly depending upon the frequency of the fund’s dealing. |
| 5 | Included in scheme assets is less than $ |
Scheme obligations
2021 | ||||||||||
| UK | US | Sweden |
| Rest of Group |
| Total | |||
$m | $m | $m | $m | $m | ||||||
Present value of scheme obligations in respect of: |
| |||||||||
Active membership |
| ( | ( | ( | ( | ( | ||||
Deferred membership |
| ( | ( | ( | ( | ( | ||||
Pensioners |
| ( | ( | ( | ( | ( | ||||
Total value of scheme obligations |
| ( | ( | ( | ( | ( |
2022 | ||||||||||
| UK | US | Sweden |
| Rest of Group |
| Total | |||
$m | $m | $m | $m | $m | ||||||
Present value of scheme obligations in respect of: |
| |||||||||
Active membership |
| ( | ( | ( | ( | ( | ||||
Deferred membership |
| ( | ( | ( | ( | ( | ||||
Pensioners |
| ( | ( | ( | ( | ( | ||||
Total value of scheme obligations |
| ( | ( | ( | ( | ( |
F-40
Net (deficit)/surplus in the scheme
2021 | |||||||||
UK | US | Sweden |
| Rest of Group |
| Total | |||
$m | $m | $m | $m | $m | |||||
Total fair value of scheme assets | | | | | | ||||
Total value of scheme obligations | ( | ( | ( | ( | ( | ||||
Deficit in the scheme as recognised in the | ( | | ( | ( | ( | ||||
Included in Non-current other receivables | – | – | – | – | – | ||||
Included in Retirement benefit obligations | ( | | ( | ( | ( | ||||
( | | ( | ( | ( |
2022 | |||||||||
UK | US | Sweden |
| Rest of Group |
| Total | |||
$m | $m | $m | $m | $m | |||||
Total fair value of scheme assets | | | | | | ||||
Total value of scheme obligations | ( | ( | ( | ( | ( | ||||
Deficit in the scheme as recognised in the | ( | ( | ( | ( | ( | ||||
Included in Non-current other receivables | – | | – | | 1 | | |||
Included in Retirement benefit obligations | ( | ( | ( | ( | ( | ||||
( | ( | ( | ( | ( |
1 | Surpluses were recognised in Ireland and Belgium. |
Fair value of scheme assets
2022 | 2021 |
| ||||||||||||||||||
UK | US | Sweden |
| Rest of Group |
| Total |
| UK | US | Sweden |
| Rest of Group |
| Total |
| |||||
$m | $m | $m | $m | $m | $m | $m | $m | $m | $m |
| ||||||||||
At beginning of year | | | | | |
| | | | | | |||||||||
Interest income on scheme assets | | | | | |
| | | | | | |||||||||
Expenses | ( | ( | – | – | ( |
| ( | – | – | – | ( | |||||||||
Actuarial gains/(losses) | ( | ( | ( | ( | ( |
| | ( | | | | |||||||||
Exchange and other adjustments | ( | – | ( | ( | ( |
| ( | ( | ( | | ( | |||||||||
Employer contributions | | | | | |
| | | | | | |||||||||
Participant contributions | | | – | | |
| | – | – | | | |||||||||
Benefits paid | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Scheme assets’ fair value at end of year | | | | | |
| | | | | |
The actual return on the plan assets was a loss of $
Movement in post-retirement scheme obligations
2022 | 2021 | |||||||||||||||||||
UK | US | Sweden |
| Rest of Group |
| Total |
| UK | US | Sweden |
| Rest of Group |
| Total | ||||||
$m | $m | $m | $m | $m | $m | $m | $m | $m | $m | |||||||||||
Present value of obligations in scheme at beginning of year | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Current service cost | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Past service (cost)/credit | ( | – | ( | | ( |
| ( | – | ( | – | ( | |||||||||
Participant contributions | ( | ( | – | ( | ( |
| ( | – | – | ( | ( | |||||||||
Benefits paid | | | | | |
| | | | | | |||||||||
Interest expense on post-retirement scheme obligations | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Actuarial gains/(losses) | | | | | |
| | | ( | | | |||||||||
Exchange and other adjustments | | ( | | | |
| | | | | | |||||||||
Present value of obligations in scheme at end of year | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( |
The obligations arise from over
2022 | 2021 |
| ||||||||||||||||||
UK | US | Sweden |
| Rest of Group |
| Total |
| UK | US | Sweden |
| Rest of Group |
| Total |
| |||||
$m | $m | $m | $m | $m | $m | $m | $m | $m | $m |
| ||||||||||
Funded – pension schemes1 | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Funded – post-retirement healthcare | – | ( | – | – | ( |
| – | ( | – | – | ( | |||||||||
Unfunded – pension schemes1 | – | ( | ( | ( | ( |
| – | ( | ( | ( | ( | |||||||||
Unfunded – post-retirement healthcare | ( | – | – | ( | ( |
| ( | – | – | ( | ( | |||||||||
Total | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( |
1 | Includes defined benefit pension schemes and other plans, such as Lump Sum, Long Service Award and DC plans with underpins. |
F-41
Consolidated Statement of Comprehensive Income disclosures
The amounts that have been charged to the Consolidated Statement of Comprehensive Income, in respect of defined benefit schemes for the year ended 31 December 2022, are set out below.
2022 | 2021 |
| ||||||||||||||||||
UK | US | Sweden |
| Rest of Group |
| Total |
| UK | US | Sweden |
| Rest of Group |
| Total |
| |||||
$m | $m | $m | $m | $m | $m | $m | $m | $m | $m |
| ||||||||||
Operating profit |
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current service cost | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Past service (cost)/credit | ( | – | ( | | ( |
| ( | – | ( | – | ( | |||||||||
Expenses | ( | ( | – | – | ( |
| ( | – | – | – | ( | |||||||||
Total charge to Operating profit | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Finance expense |
| |||||||||||||||||||
Interest income on scheme assets | | | | | |
| | | | | | |||||||||
Interest expense on post-retirement scheme obligations | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Net interest on post-employment defined benefit plan liabilities | ( | – | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Charge before taxation | ( | ( | ( | ( | ( |
| ( | ( | ( | ( | ( | |||||||||
Other comprehensive income |
| |||||||||||||||||||
Difference between the actual return and the expected return on the post-retirement scheme assets | ( | ( | ( | ( | ( |
| | ( | | | | |||||||||
Experience gains/(losses) arising on the post-retirement scheme obligations | | ( | ( | ( | ( |
| ( | ( | – | | | |||||||||
Changes in financial assumptions underlying the present value of the post-retirement scheme obligations | | | | | |
| | | ( | ( | | |||||||||
Changes in demographic assumptions | ( | – | | ( | ( |
| | ( | – | ( | ( | |||||||||
Remeasurement of the defined benefit liability | | ( | | | |
| | | | | |
Past service costs include granting early retirement in UK and Sweden.
Total Group pension costs in respect of defined contribution and defined benefit schemes during the year are set out below (see Note 29).
| 2022 |
| 2021 |
| |||
$m | $m |
| |||||
Defined contribution schemes |
| |
| | |||
Defined benefit schemes − current service costs and expenses | | | |||||
Defined benefit schemes − past service cost |
| |
| | |||
Pension costs |
| |
| |
Rate sensitivities
The following table shows the US dollar effect of a change in the significant actuarial assumptions used to determine the retirement benefits obligations in our
2022 | 2021 |
| |||||||
| + |
|
| + |
|
| |||
Discount rate |
|
|
|
|
| ||||
UK ($m) |
| | ( |
| | ( | |||
US ($m) |
| | ( |
| | ( | |||
Sweden ($m) |
| | ( |
| | ( | |||
Total ($m) |
| | ( |
| | ( |
2022 | 2021 |
| |||||||
| + |
|
| + |
|
| |||
Inflation rate1 |
|
|
|
|
|
|
|
| |
UK ($m) |
| ( | |
| ( | | |||
US ($m) |
| n/a | n/a |
| n/a | n/a | |||
Sweden ($m) |
| ( | |
| ( | | |||
Total ($m) |
| ( | |
| ( | |
2022 | 2021 |
| |||||||
| + |
|
| + |
|
| |||
Rate of increase in salaries |
|
|
|
|
|
|
|
| |
UK ($m) |
| n/a | n/a |
| n/a | n/a | |||
US ($m) |
| n/a | n/a |
| n/a | n/a | |||
Sweden ($m) |
| ( | |
| ( | | |||
Total ($m) |
| ( | |
| ( | |
2022 | 2021 | ||||||||
|
|
|
| ||||||
Mortality rate |
|
|
|
|
|
|
|
| |
UK ($m) |
| ( | 2 | | 3 | ( | | ||
US ($m) |
| ( | | ( | | ||||
Sweden ($m) |
| ( | | ( | | ||||
Total ($m) |
| ( | | ( | |
| 1 | Rate of increase in pensions in payment follows inflation. |
| 2 | Of the $ |
| 3 | Of the $ |
F-42
The sensitivity to the financial assumptions shown above has been estimated taking into account the approximate duration of the liabilities and the overall profile of the plan membership.
The inflation sensitivity allows for the impact of a change in inflation on salary increases and pension increases (where these assumptions are inflation-linked).
The salary increase sensitivity reflects the impact of an increase of only salary relative to inflation.
The sensitivity to the life expectancy assumption is estimated based on a revised mortality assumption that extends/reduces the current life expectancy by one year for a particular age.
23 Reserves
Retained earnings
The cumulative amount of goodwill written off directly to reserves resulting from acquisitions, net of disposals, amounted to $
At 31 December 2022,
There are no significant statutory or contractual restrictions on the distribution of current profits of subsidiaries; undistributed profits of prior years are, in the main, permanently employed in the businesses of these companies. The undistributed income of AstraZeneca companies overseas might be liable to overseas taxes and/or UK taxation (after allowing for double taxation relief) if they were to be distributed as dividends (see Note 4).
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Cumulative translation differences included within Retained earnings |
|
|
|
|
|
| |
At 1 January |
| ( |
| ( |
| ( | |
Foreign exchange arising on consolidation |
| ( |
| ( |
| | |
Exchange adjustments on goodwill (recorded against other reserves) |
| ( |
| ( |
| | |
Foreign exchange arising on designated liabilities in net investment hedges1 |
| ( |
| ( |
| | |
Fair value movements on derivatives designated in net investment hedges |
| ( |
| |
| | |
Net exchange movement in Retained earnings |
| ( |
| ( |
| | |
At 31 December |
| ( |
| ( |
| ( |
| 1 | Foreign exchange arising on designated liabilities in net investment hedges includes $ |
The cumulative loss with respect to costs of hedging is $
The balance remaining in the foreign currency translation reserve from net investment hedging relationships for which hedge accounting no longer applied is a gain of $
Other reserves
The other reserves arose from the cancellation of £
24 Share capital
Allotted, called-up and fully paid |
| ||||||
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Issued Ordinary Shares ($ |
| |
| |
| | |
Redeemable Preference Shares (£ |
| – |
| – |
| – | |
At 31 December |
| |
| |
| | |
The Redeemable Preference Shares carry limited class voting rights and
The Company does not have a limited amount of authorised share capital.
The movements in the number of Ordinary Shares during the year can be summarised as follows:
No. of shares |
| ||||||
| 2022 |
| 2021 |
| 2020 |
| |
At 1 January |
| |
| |
| | |
Issue of share capital (business combinations) | – | | – | ||||
Issue of shares (share schemes) |
| |
| |
| | |
At 31 December |
| |
| |
| |
Share issues
Issue of share capital (business combinations) represents share capital issued as part of the acquisition of Alexion (see Note 27).
Share repurchases
Shares held by subsidiaries
F-43
25 Dividends to shareholders
| 2022 |
| 2021 |
| 2020 |
| 2022 |
| 2021 |
| 2020 |
| ||||
Per share | Per share | Per share | $m | $m | $m |
| ||||||||||
Second interim (March 2022) | $ | $ | $ |
| |
| |
| | |||||||
First interim (September 2022) | $ | $ | $ |
| |
| |
| | |||||||
Total | $ | $ | $ |
| |
| |
| |
The Company has exercised its authority in accordance with the provisions set out in the Company’s Articles of Association, that the balance of unclaimed dividends outstanding past
The 2021 second interim dividend of $
Reconciliation of dividends charged to equity to cash flow statement:
2022 | 2021 | 2020 | ||||||
|
| $m |
| $m |
| $m | ||
Dividends charged to equity |
|
| |
| |
| | |
Exchange losses on payment of dividend | | | | |||||
Hedge contracts relating to payment of dividends (cash flow statement) |
|
| ( | ( | ( | |||
Dividends paid (cash flow statement) |
|
| | | |
26 Non-controlling interests
The Group Financial Statements at 31 December 2022 reflect equity of $
In addition to the non-controlling interests in AstraZeneca Pharma India Limited, P.T. AstraZeneca Indonesia and Beijing Falikang Pharmaceutical (China) Co. Limited, the Group Financial Statements at 31 December 2022 also reflect total comprehensive losses of $
In February 2016, AstraZeneca acquired a
As part of the acquisition of Alexion in July 2021, a pre-existing non-controlling interest in Caelum Biosciences was recognised (Note 27). This was valued at $
27 Acquisition of business operations
Acquisitions of business operations in 2022
On 16 November 2022, AstraZeneca completed the acquisition of
Acquisitions of business operations in 2021
On 21 July 2021, AstraZeneca completed the acquisition of
At closing, Alexion shareholders received
The Group funded the cash element of the acquisition with $
The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with IFRS 3 ‘Business Combinations’ and consequently the Alexion assets acquired, and liabilities assumed were recorded by AstraZeneca at fair value, with the excess of the purchase price over the fair value of the identifiable assets and liabilities being recognised as goodwill.
As part of the Alexion acquisition in 2021, we identified the assets (comprising principally launched products and IPRD post pre-clinical stage) and liabilities acquired. Attributing fair values to assets acquired and liabilities assumed as part of business combinations is considered to be a key
F-44
judgement. The purchase price allocation was performed with assistance from an independent valuer to advise on the valuation techniques and key assumptions in the valuation, in particular in respect of the valuation of the intangible assets and inventory.
The fair values assigned to the Alexion business combination in 2021 were:
|
| Fair value |
| ||||
$m |
| ||||||
Non-current assets |
| ||||||
Property, plant and equipment | | ||||||
Right-of-use assets | | ||||||
Intangible assets | | ||||||
Other non-current assets | | ||||||
| |||||||
Current assets | |||||||
Inventories | | ||||||
Trade and other receivables | | ||||||
Intangible assets | | ||||||
Cash and cash equivalents | | ||||||
| |||||||
Current liabilities | |||||||
Interest-bearing loans and borrowings | ( | ||||||
Trade and other payables | ( | ||||||
Other current liabilities | ( | ||||||
( | |||||||
Non-current liabilities | |||||||
Lease liabilities | ( | ||||||
Deferred tax liabilities | ( | ||||||
Other non-current liabilities | ( | ||||||
( | |||||||
Total net assets acquired | | ||||||
Less: non-controlling interests | ( | ||||||
Goodwill | | ||||||
Total fair value of consideration | | ||||||
Less: fair value of equity consideration | ( | ||||||
Less: fair value of replacement employee share awards |
| ( | |||||
Less: cash and cash equivalents acquired | ( | ||||||
Net cash outflow |
| |
The estimated fair value and useful lives of intangible assets were as follows:
| Fair value |
| Useful lives |
| |||
$m | Years |
| |||||
Launched products – C5 franchise (Soliris/Ultomiris) | | ||||||
Launched products – Strensiq, Kanuma, Andexxa | | ||||||
Products in development | | Not amortised | |||||
Other intangibles | | ||||||
|
The fair value attributed to intangible assets was $
The fair value of inventory, which includes raw materials, work in progress and finished goods related to the launched products was estimated at $
Property, plant and equipment principally comprises the manufacturing facilities in Dublin and Athlone, Ireland and was fair valued using a cost approach. The estimated fair value of $
The estimated fair value of contingent liabilities was $
The estimated fair value of trade and other receivables was $
The net deferred tax position reflected an adjustment of $
Goodwill amounting to $
F-45
products that future research and development may yield and the core technological capabilities and knowledge base of the company. Goodwill is not expected to be deductible for tax purposes.
Non-controlling interests reflect Alexion’s pre-existing minority equity interest in Caelum Biosciences and have been valued at $
Alexion’s results have been consolidated into the Group’s results from 21 July 2021. For the period from acquisition to 31 December 2021, before reflecting the fair value adjustments arising on the acquisition, Alexion’s Total Revenues were $
Total acquisition-related costs of $
The terms of the acquisition include a retention bonus plan for legacy Alexion employees whereby up to $
Upon completion of the acquisition, all unvested Alexion employee share awards were converted into AstraZeneca restricted stock awards that continue to have, and shall be subject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to completion. Alexion Performance Stock Plan (PSU) awards that included performance-based vesting conditions were converted using the greater of the original target level and Alexion's assessment of the level of achievement immediately prior to completion (subject to a limit of
There were no acquisitions of business operations in 2020.
28 Financial risk management objectives and policies
The Group’s principal financial instruments, other than derivatives, comprise bank overdrafts, loans and other borrowings, lease liabilities, current and non-current investments, cash and short-term deposits. The main purpose of these financial instruments is to manage the Group’s funding and liquidity requirements. The Group has other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.
The principal financial risks to which the Group is exposed are those of liquidity, interest rate, foreign currency and credit. Each of these is managed in accordance with Board-approved policies. These policies, together with the Group's approach to capital management, are set out below.
Capital management
The capital structure of the Group consists of Shareholders’ equity (Note 24), Debt (Note 19), Other current investments (Note 12) and Cash (Note 17). For the foreseeable future, the Board will maintain a capital structure that supports the Group’s strategic objectives through:
| managing funding and liquidity risk |
| optimising shareholder return |
| maintaining a strong, investment-grade credit rating. |
The Group utilises factoring arrangements for selected trade receivables. These factoring arrangements qualify for full derecognition of the associated trade receivables under IFRS 9. Amounts due on invoices that have not been factored at year end, from customers that are subject to factoring arrangements are disclosed in Note 16.
Funding and liquidity risk are reviewed regularly by the Board and managed in accordance with policies described below.
The Board regularly reviews its shareholders’ distribution policy, which comprises a regular cash dividend and potentially a share repurchase component. No share repurchases have been made since 2012.
The Group’s net debt position (loans and borrowings net of Cash and cash equivalents, Other investments and Derivative financial instruments) has decreased by $
Liquidity risk
The Board reviews the Group’s ongoing liquidity risks annually as part of the planning process and on an ad hoc basis. The Board considers short-term requirements against available sources of funding, taking into account forecast cash flows. The Group manages liquidity risk by maintaining access to a number of sources of funding which are sufficient to meet anticipated funding requirements. Specifically, the Group uses US and European commercial paper, bank loans, committed bank facilities and cash resources to manage short-term liquidity and manages long-term liquidity by raising funds through the capital markets. At 31 December 2022, the Group was assigned short-term credit ratings of P-2 by Moody’s and A-1 by Standard and Poor’s. The Group’s long-term credit rating was A3 Stable outlook by Moody’s and A Stable outlook by Standard and Poor’s.
In addition to Cash and cash equivalents of $
At 31 December 2022, the Group has $
F-46
The maturity profile of the anticipated future contractual cash flows including interest in relation to the Group’s financial liabilities, on an undiscounted basis and which, therefore, differs from both the carrying value and fair value, is as follows:
| Bank |
|
|
|
| Total |
| Derivative |
| Derivative |
| Total |
|
| |||||
overdrafts | Trade | non-derivative | financial | financial | derivative |
| |||||||||||||
and other | Bonds and | Lease | and other | financial | instruments | instruments | financial |
| |||||||||||
loans | bank loans | liability | payables | instruments | receivable | payable | instruments | Total |
| ||||||||||
$m | $m | $m | $m | $m | $m | $m | $m | $m |
| ||||||||||
Within one year |
| | | | | | ( | | ( | | |||||||||
In one to two years |
| – | | | | | ( | | | | |||||||||
In two to three years |
| – | | | | | ( | | | | |||||||||
In three to four years |
| – | | | | | ( | | ( | | |||||||||
In four to five years |
| – | | | | | ( | | | | |||||||||
In more than five years |
| – | | | | | ( | | ( | | |||||||||
| | | | | | ( | | ( | | ||||||||||
Effect of interest |
| – | ( | – | – | ( | | ( | ( | ( | |||||||||
Effect of discounting, fair values and issue costs |
| ( | ( | ( | ( | ( | ( | | ( | ( | |||||||||
31 December 2020 |
| | | | | | ( | | ( | |
| Bank |
|
|
|
| Total |
| Derivative |
| Derivative |
| Total |
|
| |||||
overdrafts | Trade | non-derivative | financial | financial | derivative |
| |||||||||||||
and other | Bonds and | Lease | and other | financial | instruments | instruments | financial |
| |||||||||||
loans | bank loans | liability | payables | instruments | receivable | payable | instruments | Total |
| ||||||||||
$m | $m | $m | $m | $m | $m | $m | $m | $m |
| ||||||||||
Within one year |
| | | | | | ( | | | | |||||||||
In one to two years |
| – | | | | | ( | | | | |||||||||
In two to three years |
| – | | | | | ( | | | | |||||||||
In three to four years |
| – | | | | | ( | | | | |||||||||
In four to five years |
| – | | | | | ( | | ( | | |||||||||
In more than five years |
| – | | | | | ( | | ( | | |||||||||
| | | | | | ( | | ( | | ||||||||||
Effect of interest |
| – | ( | – | – | ( | | ( | ( | ( | |||||||||
Effect of discounting, fair values and issue costs |
| – | ( | ( | ( | ( | ( | | ( | ( | |||||||||
31 December 2021 |
| | | | | | ( | | ( | |
| Bank |
|
|
|
| Total |
| Derivative |
| Derivative |
| Total |
|
| |||||
overdrafts | Trade | non-derivative | financial | financial | derivative |
| |||||||||||||
and other | Bonds and | Lease | and other | financial | instruments | instruments | financial |
| |||||||||||
loans | bank loans | liability | payables | instruments | receivable | payable | instruments | Total |
| ||||||||||
$m | $m | $m | $m | $m | $m | $m | $m | $m |
| ||||||||||
Within one year |
| | | | | | ( | | | | |||||||||
In one to two years |
| – | | | | | ( | | | | |||||||||
In two to three years |
| – | | | | | ( | | | | |||||||||
In three to four years |
| – | | | | | ( | | – | | |||||||||
In four to five years |
| – | | | | | ( | | | | |||||||||
In more than five years |
| – | | | | | ( | | ( | | |||||||||
| | | | | | ( | | | | ||||||||||
Effect of interest |
| ( | ( | – | – | ( | | ( | ( | ( | |||||||||
Effect of discounting, fair values and issue costs |
| – | ( | ( | ( | ( | | | | ( | |||||||||
31 December 2022 |
| | | | | | ( | | | |
Where interest payments are on a floating rate basis, it is assumed that rates will remain unchanged from the last business day of each year ended 31 December.
The Group has $
Market risk
Interest rate risk
The Group maintains a Board-approved mix of fixed and floating rate debt and uses underlying debt, interest rate swaps and forward rate agreements to manage this mix.
At 31 December 2022, interest rate swaps with a notional value of $
The majority of surplus cash is currently invested in US dollar liquidity funds and investment-grade fixed income securities.
F-47
The interest rate profile of the Group’s interest-bearing financial instruments are set out below. In the case of current and non-current financial liabilities, the classification includes the impact of interest rate swaps which convert the debt to floating rate.
2022 | 2021 | 2020 |
| ||||||||||||||||
| Fixed rate |
| Floating rate |
| Total |
| Fixed rate |
| Floating rate |
| Total |
| Fixed rate |
| Floating rate |
| Total |
| |
| $m |
| $m |
| $m |
| $m |
| $m |
| $m |
| $m |
| $m |
| $m |
| |
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Interest-bearing loans and borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Current |
| | | | | | | | | | |||||||||
Non-current |
| | | | | | | | | | |||||||||
Total |
| | | | | | | | | | |||||||||
Financial assets |
| ||||||||||||||||||
Fixed deposits |
| | – | | | – | | | – | | |||||||||
Cash collateral pledged to counterparties | – | | | – | – | – | – | – | – | ||||||||||
Cash and cash equivalents |
| | | | – | | | – | | | |||||||||
Total |
| | | | | | | | | |
In addition to the financial assets above, there are $
The Group is also exposed to market risk on other investments.
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Equity securities at fair value through Other comprehensive income (Note 12) | | | | ||||
Non-current fixed income securities at fair value through profit and loss (Note 12) | | – | – | ||||
Total |
| |
| |
| |
Foreign currency risk
The US dollar is the Group’s most significant currency. As a consequence, the Group results are presented in US dollars and exposures are managed against US dollars accordingly.
Translational
Approximately
This currency exposure is managed centrally, based on forecast cash flows. The impact of movements in exchange rates is mitigated significantly by the correlations which exist between the major currencies to which the Group is exposed and the US dollar. Monitoring of currency exposures and correlations is undertaken on a regular basis and hedging is subject to pre-execution approval.
As at 31 December 2022, before the impact of derivatives,
The Group holds cross-currency swaps to hedge against the impact of fluctuations in foreign exchange rates. Fair value movements on the revaluation of the cross-currency swaps are recognised in Other comprehensive income to the extent that the hedge is effective, with any ineffectiveness taken to profit.
As at 31 December 2022, the Group operates in three countries designated as hyperinflationary, being Argentina, Venezuela and Turkey. The foreign exchange risk of these markets has been assessed and deemed to be immaterial.
Transactional
The Group aims to hedge all its forecasted major transactional currency exposures on working capital balances, which typically extend for up to three months. Where practicable, these are hedged using forward foreign exchange contracts. In addition, external dividend payments in pounds sterling to UK shareholders and in Swedish krona to Swedish shareholders are fully hedged from announcement date to payment date. Foreign exchange gains and losses on forward contracts transacted for transactional hedging are taken to profit or to Other comprehensive income if the contract is in a designated cashflow hedge.
Sensitivity analysis
The sensitivity analysis set out below summarises the sensitivity of the market value of our financial instruments to hypothetical changes in market rates and prices. The range of variables chosen for the sensitivity analysis reflects our view of changes which are reasonably possible over a one-year period. Market values are the present value of future cash flows based on market rates and prices at the valuation date. For long-term debt, an increase in interest rates results in a decline in the fair value of debt.
The sensitivity analysis assumes an instantaneous basis point change in interest rates in all currencies from their levels at 31 December 2022, with all other variables held constant. Based on the composition of our long-term debt portfolio and cash reserves as at 31 December 2022, a
F-48
Each incremental
Interest rates | Exchange rates | ||||||||
31 December 2020 |
| + |
|
| + |
| |||
Increase/(decrease) in fair value of financial instruments ($m) |
| | ( | | ( | ||||
Impact on profit: (loss)/gain ($m) |
| – | – | ( | | ||||
Impact on equity: gain/(loss) ($m) |
| – | – | | ( |
Interest rates | Exchange rates | ||||||||
31 December 2021 |
| + |
|
| + |
| |||
Increase/(decrease) in fair value of financial instruments ($m) |
| | ( | | ( | ||||
Impact on profit: gain/(loss) ($m) |
| – | – | | ( | ||||
Impact on equity: gain/(loss) ($m) |
| – | – | | ( |
Interest rates | Exchange rates | ||||||||
31 December 2022 |
| + |
|
| + |
| |||
Increase/(decrease) in fair value of financial instruments ($m) |
| | ( | | ( | ||||
Impact on profit: gain/(loss) ($m) |
| – | – | | ( | ||||
Impact on equity: gain/(loss) ($m) |
| – | – | | ( |
Credit risk
The Group is exposed to credit risk on financial assets, such as cash investments, derivative instruments, and Trade and other receivables. The Group is also exposed in its Net asset position to its own credit risk in respect of the 2023 debentures which are accounted for at fair value through profit or loss. Under IFRS 9, the effect of the losses and gains arising from own credit risk on the fair value of bonds designated at fair value through profit or loss are recorded in Other comprehensive income.
Financial counterparty credit risk
The majority of the AstraZeneca Group’s cash is centralised within the Group treasury entity and is subject to counterparty risk on the principal invested. The level of the Group’s cash investments and hence credit risk will depend on the cash flow generated by the Group and the timing of the use of that cash. The credit risk is mitigated through a policy of prioritising security and liquidity over return and, as such, cash is only invested in high credit-quality investments. Counterparty limits are set according to the assessed risk of each counterparty and exposures are monitored against these limits on a regular basis.
The Group’s principal financial counterparty credit risks at 31 December 2022 were as follows:
Current assets
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Cash at bank and in hand |
| |
| |
| | |
Money market liquidity funds |
| |
| |
| | |
Other short-term cash equivalents | | | | ||||
Total Cash and cash equivalents (Note 17) |
| |
| |
| | |
Fixed income securities at fair value through profit and loss (Note 12) | | | | ||||
Cash collateral pledged to counterparties (Note 12) | | – | – | ||||
Fixed deposits (Note 12) | | | | ||||
Total derivative financial instruments (Note 13) |
| |
| |
| | |
Current assets subject to credit risk |
| |
| |
| |
Non-current assets
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Derivative financial instruments (Note 13) |
| |
| |
| | |
Non-current assets subject to credit risk |
| |
| |
| |
The majority of the Group’s cash is invested in US dollar AAA rated money market liquidity funds. The money market liquidity fund portfolios are managed by
All financial derivatives are transacted with commercial banks, in line with standard market practice. The Group has agreements with some bank counterparties whereby the parties agree to post cash collateral, for the benefit of the other, equivalent to the market valuation of the derivative positions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 31 December 2022 was $
The impairment provision for other financial assets at 31 December 2022 was immaterial.
Trade receivables
Trade receivable exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the customer. The Group is exposed to customers ranging from government-backed agencies and large private wholesalers to privately owned pharmacies, and the underlying local economic and sovereign risks vary throughout the world. Where appropriate, the Group endeavours to minimise risks by the use of trade finance instruments such as letters of credit and insurance. The Group applies the expected credit loss approach to establish an allowance for impairment that represents its estimate of expected losses in respect of Trade receivables.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all Trade receivables. To measure expected credit losses, Trade receivables have been grouped based on shared credit characteristics and the days past due.
F-49
The expected loss rates are based on payment profiles over a period of
On that basis, the loss allowance was determined as follows:
|
| 0-90 days |
| 90-180 days |
| Over 180 days |
|
| |||
31 December 2020 |
| Current |
| past due |
| past due |
| past due |
| Total |
|
Expected loss rate |
| % | | % | | % | | % | |||
Gross carrying amount ($m) |
| | | | | | |||||
Loss allowance ($m) |
| | | | | |
|
| 0-90 days |
| 90-180 days |
| Over 180 days |
|
| |||
31 December 2021 |
| Current |
| past due |
| past due |
| past due |
| Total |
|
Expected loss rate |
| % | | % | | % | | % | |||
Gross carrying amount ($m) |
| | | | | | |||||
Loss allowance ($m) |
| | | | | |
|
| 0-90 days |
| 90-180 days |
| Over 180 days |
|
| |||
31 December 2022 |
| Current |
| past due |
| past due |
| past due |
| Total |
|
Expected loss rate |
| % | | % | | % | | % | |||
Gross carrying amount ($m) |
| | | | | | |||||
Loss allowance ($m) |
| | | | | |
Trade receivables are written off where there is no reasonable expectation of recovery.
Impairment losses on Trade receivables are presented as net impairment losses within Operating profit, any subsequent recoveries are credited against the same line.
In the US, sales to
The movements of the Group expected credit losses provision are follows:
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
At 1 January |
| |
| |
| | |
Net movement recognised in income statement |
| |
| ( |
| | |
Amounts utilised, exchange and other movements |
| ( |
| |
| ( | |
At 31 December |
| |
| |
| |
Given the profile of our customers, including large wholesalers and government-backed agencies, no further credit risk has been identified with the Trade receivables not past due other than those balances for which an allowance has been made. The income statement credit or charge is recorded in Operating profit.
Hedge accounting
The Group uses foreign currency borrowings, foreign currency forwards and swaps, currency options, interest rate swaps and cross-currency interest rate swaps for the purpose of hedging its foreign currency and interest rate risks. The Group may designate certain financial instruments as fair value hedges, cash flow hedges or net investment hedges in accordance with IFRS 9. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. Sources of hedge effectiveness will depend on the hedge relationship designation but may include:
| a significant change in the credit risk of either party to the hedging relationship |
| a timing mismatch between the hedging instrument and the hedged item |
| movements in foreign currency basis spread for derivatives in a fair value hedge |
| a significant change in the value of the foreign currency denominated net assets of the Group in a net investment hedge. |
The hedge ratio for each designation will be established by comparing the quantity of the hedging instrument and the quantity of the hedged item to determine their relative weighting; for all of the Group’s existing hedge relationships the hedge ratio has been determined as
F-50
The following table represents the Group’s continuing designated hedge relationships under IFRS 9.
2020
Other comprehensive income | |||||||||||||||||||
Fair value | |||||||||||||||||||
loss | |||||||||||||||||||
Opening |
| Fair value |
| recycled |
| Closing |
|
| |||||||||||
Nominal | balance | (gain)/loss | to the | balance |
|
| Average |
| |||||||||||
amounts | Carrying | 1 January | deferred | Income | 31 December | Average | Average | pay |
| ||||||||||
in local | value | 2020 | to OCI | statement | 2020 | maturity | USD FX | interest |
| ||||||||||
currency | $m | $m | $m | $m | $m | year | rate | rate |
| ||||||||||
Fair value hedge – foreign currency and interest rate risk1 | |||||||||||||||||||
Cross currency interest rate swap – Euro bond | EUR | | – | – | – | – | 2021 | | USD LIBOR + | ||||||||||
Cash flow hedges – foreign currency and interest rate risk2, 4, 5 | |||||||||||||||||||
Cross currency interest rate swaps – Euro bonds | EUR | | ( | ( | | | 2025 | | USD | ||||||||||
FX Forwards − short term FX risk | USD | | – | ( | | ( | 2021 | – | – | ||||||||||
Net investment hedge – foreign exchange risk3, 4 | |||||||||||||||||||
Transactions matured pre-2020 | – | ( | – | – | ( | – | – | – | |||||||||||
Cross currency interest rate swap – JPY investment | JPY | | ( | ( | – | ( | 2029 | | JPY | ||||||||||
Cross currency interest rate swap – CNY investment | CNY | ( | | | – | | 2026 | | CNY | ||||||||||
Foreign currency borrowing – GBP investment | GBP | ( | ( | | – | ( | 2031 | n/a | GBP | ||||||||||
Foreign currency borrowing – EUR investment6 | EUR | ( | | | – | | 2021 | n/a | EUR | ||||||||||
Contingent consideration liabilities and Acerta Pharma put option liability – AZUK and AZAB USD investments | USD | ( | | ( | – | | – | – | – | ||||||||||
2021
Other comprehensive income | |||||||||||||||||||
Fair value | |||||||||||||||||||
loss | |||||||||||||||||||
Opening |
| Fair value |
| recycled |
| Closing |
|
| |||||||||||
Nominal | balance | (gain)/loss | to the | balance |
|
| Average |
| |||||||||||
amounts | Carrying | 1 January | deferred | Income | 31 December | Average | Average | pay |
| ||||||||||
in local | value | 2021 | to OCI | statement | 2021 | maturity | USD FX | interest |
| ||||||||||
currency | $m | $m | $m | $m | $m | year | rate | rate |
| ||||||||||
Cash flow hedges – foreign currency and interest rate risk2, 4, 5 | |||||||||||||||||||
Cross currency interest rate swaps – Euro bonds | EUR | ( | | | ( | | 2026 | | USD | ||||||||||
FX Forwards − short term FX risk | USD | | ( | – | ( | ( | 2022 | – | – | ||||||||||
Net investment hedge – foreign exchange risk3, 4 | |||||||||||||||||||
Transactions matured pre-2021 | – | ( | – | – | ( | – | – | – | |||||||||||
Cross currency interest rate swap – JPY investment | JPY | | ( | ( | – | ( | 2029 | | JPY | ||||||||||
Cross currency interest rate swap – CNY investment | CNY | ( | | – | – | | 2026 | | CNY | ||||||||||
Foreign currency borrowing – GBP investment | GBP | | ( | ( | – | ( | 2031 | n/a | GBP | ||||||||||
Foreign currency borrowing – EUR investment6 | EUR | – | | ( | – | | 2021 | n/a | EUR | ||||||||||
Foreign currency borrowing – EUR investment7 | EUR | | – | ( | – | ( | 2029 | n/a | EUR | ||||||||||
Contingent consideration liabilities and Acerta Pharma share purchase liability – AZUK and AZAB USD investments | USD | ( | | | – | | – | – | – | ||||||||||
2022
Other comprehensive income | |||||||||||||||||||
Fair value | |||||||||||||||||||
(gain)/loss | |||||||||||||||||||
Opening |
| Fair value |
| recycled |
| Closing |
|
| |||||||||||
Nominal | balance | (gain)/loss | to the | balance |
|
| Average |
| |||||||||||
amounts | Carrying | 1 January | deferred | Income | 31 December | Average | Average | pay |
| ||||||||||
in local | value | 2022 | to OCI | statement | 2022 | maturity | USD FX | interest |
| ||||||||||
currency | $m | $m | $m | $m | $m | year | rate | rate |
| ||||||||||
Cash flow hedges – foreign currency and interest rate risk2, 4, 5 | |||||||||||||||||||
Cross currency interest rate swaps – Euro bonds | EUR | ( | | | ( | | 2026 | | USD | ||||||||||
FX Forwards − short term FX risk | USD | ( | ( | ( | | | 2023 | – | – | ||||||||||
Net investment hedge – foreign exchange risk3, 4 | |||||||||||||||||||
Transactions matured pre-2022 | – | ( | – | – | ( | – | – | – | |||||||||||
Cross currency interest rate swap – JPY investment | JPY | | ( | | – | ( | 2029 | | JPY | ||||||||||
Cross currency interest rate swap – CNY investment | CNY | ( | | | – | | 2026 | | CNY | ||||||||||
Foreign currency borrowing – GBP investment | GBP | | ( | ( | – | ( | 2031 | n/a | GBP | ||||||||||
Foreign currency borrowing – EUR investment7 | EUR | | ( | ( | – | ( | 2029 | n/a | EUR | ||||||||||
Contingent consideration liabilities and Acerta Pharma share purchase liability – AZUK and AZAB USD investments | USD | ( | | | – | | – | – | – | ||||||||||
| 1 | Swaps designated in a fair value hedge matured on 24 November 2021 and hedge ineffectiveness during 2022 was $ |
| 2 | Hedge ineffectiveness recognised on swaps designated in a cash flow hedge during the period was $ |
| 3 | Hedge ineffectiveness recognised on swaps designated in a net investment hedge during the period was $ |
| 4 | Fair value movements on cross-currency interest rate swaps in cash flow hedge and net investment hedge relationships are shown inclusive of the impact of costs of hedging. |
| 5 | Nominal amount of FX forwards in a cash flow hedge of $ |
| 6 | The EUR |
| 7 | On 3 June 2021, upon issuance of the EUR |
Key controls applied to transactions in derivative financial instruments are to use only instruments where good market liquidity exists, to revalue all financial instruments regularly using current market rates and to sell options only to offset previously purchased options or as part of a risk management strategy. The Group is not a net seller of options, and does not use derivative financial instruments for speculative purposes. The Group held
F-51
29 Employee costs and share plans for employees
Employee costs
The monthly average number of people, to the nearest hundred, employed by the Group is set out in the table below. In accordance with the Companies Act 2006, this includes part-time employees.
| 2022 |
| 2021 |
| 2020 |
| |
Employees |
|
|
|
|
|
| |
UK |
| |
| |
| | |
Rest of Europe |
| |
| |
| | |
The Americas |
| |
| |
| | |
Asia, Africa Australasia |
| |
| |
| | |
Continuing operations |
| |
| |
| |
Geographical distribution described in the table above is by location of legal entity employing staff. Certain staff will undertake some or all of their activity in a different location.
The number of people employed by the Group at the end of 2022 was
The costs incurred during the year in respect of these employees were:
| 2022 |
| 2021 |
| 2020 |
| |
$m | $m | $m |
| ||||
Wages and salaries |
| |
| |
| | |
Social security costs |
| |
| |
| | |
Pension costs |
| |
| |
| | |
Other employment costs |
| |
| |
| | |
Total |
| |
| |
| |
Severance costs of $
The charge for share-based payments in respect of share plans is $
The Directors believe that, together with the basic salary system, the Group’s employee incentive schemes provide competitive and market-related packages to motivate employees. They should also align the interests of employees with those of shareholders, as a whole, through long-term share ownership in the Company. The Group’s current US, UK and Swedish schemes are described below, other arrangements apply elsewhere.
Bonus and share plans
US
In the US, there are
UK
The AstraZeneca UK Performance Bonus Plan
Employees of participating AstraZeneca UK companies are invited to participate in this bonus plan, which rewards strong individual performance. Bonuses are paid in cash.
The AstraZeneca UK All-Employee Share Plan
The Company offers UK employees the opportunity to buy Partnership Shares (Ordinary Shares). Employees may invest up to £
Sweden
In Sweden, an all-employee performance bonus plan is in operation, which rewards strong individual performance. Bonuses are paid 50% into a fund investing in AstraZeneca equities and 50% in cash. The AstraZeneca Executive Annual Bonus Scheme, the AstraZeneca Performance Share Plan and the AstraZeneca Global Restricted Stock Plan all operate in respect of relevant AstraZeneca employees in Sweden.
Other bonus and share plans that operate across the Group are described below.
The AstraZeneca Executive Annual Bonus Scheme
This scheme is a performance bonus scheme for Directors and senior employees who do not participate in the AstraZeneca UK Performance Bonus Plan. Annual bonuses are paid in cash and reflect both corporate and individual performance measures. The Remuneration Committee has discretion to reduce or withhold bonuses if business performance falls sufficiently short of expectations in any year such as to make the payment of bonuses inappropriate.
The AstraZeneca Deferred Bonus Plan
This plan was introduced in 2006 and is used to defer a portion of the bonus earned under the AstraZeneca Executive Annual Bonus Scheme into Ordinary Shares in the Company for a period of
The AstraZeneca Performance Share Plan
This plan was approved by shareholders in 2020 for a period of
F-52
Awards granted under the plan vest after
The AstraZeneca Investment Plan
This plan was introduced in 2010 and approved by shareholders at the 2010 AGM. The final grant of awards under this plan took place in March 2016. Awards granted under the plan vest after
The AstraZeneca Global Restricted Stock Plan
This plan was introduced in 2010. This plan provides for the grant of restricted stock unit (RSU) awards to selected below SET-level employees and is used in conjunction with the AstraZeneca Performance Share Plan to provide a mix of RSUs and performance shares. Awards typically vest on the third anniversary of the date of grant and are contingent on continued employment with the Company. The Remuneration Committee has responsibility for agreeing any awards under the plan and for setting the policy for the way in which the plan should be operated.
The AstraZeneca Restricted Share Plan
This plan was introduced in 2008 and provides for the grant of restricted share awards to key employees, excluding Executive Directors. Awards are made on an ad hoc basis with variable vesting dates. The plan has been used
The AstraZeneca Extended Incentive Plan
This plan was introduced in 2018 and provides for the grant of awards to key employees, excluding Executive Directors. Awards are made on an ad hoc basis and
Details of share options outstanding during the year for the main share plans are shown below.
The AstraZeneca | The AstraZeneca | The AstraZeneca | The AstraZeneca | ||||||||||||||
| Ordinary Shares |
| ADR Shares |
| Ordinary Shares |
| ADR Shares | 1 | Ordinary Shares |
| ADR Shares | Ordinary Shares | ADR Shares | ||||
ʼ000 | ʼ000 | ʼ000 | ʼ000 | ʼ000 | ʼ000 | ʼ000 | ʼ000 | ||||||||||
Outstanding at 1 January 2020 | | | | | | | | | |||||||||
Granted | | | | | | | | – | |||||||||
Forfeited |
| ( |
| ( |
| ( |
| ( |
| ( | ( | – | – | ||||
Cancelled | ( | – | – | ( | – | – | – | – | |||||||||
Exercised | ( | ( | ( | ( | ( | ( | – | – | |||||||||
Outstanding at 31 December 2020 | | | | | | | | | |||||||||
Granted | | | | | | | – | | |||||||||
Forfeited |
| ( |
| ( |
| ( |
| ( |
| ( | ( | ( | ( | ||||
Cancelled | ( | – | ( | ( | – | – | – | – | |||||||||
Exercised | ( | ( | ( | ( | ( | ( | – | – | |||||||||
Outstanding at 31 December 2021 | | | | | | | | | |||||||||
Granted | | | | | | | – | – | |||||||||
Forfeited | ( | ( | ( | ( | ( | ( | ( | – | |||||||||
Cancelled | – | – | – | ( | – | – | – | – | |||||||||
Exercised | ( | ( | ( | ( | ( | ( | – | – | |||||||||
Outstanding at 31 December 2022 |
| |
| |
| |
| |
| | | | | ||||
1 | Shares issued to Alexion employees under the GRSP are covered under the Alexion employee share award below. |
The AstraZeneca | The AstraZeneca | The AstraZeneca | The AstraZeneca | ||||||||||||||
| WAFV | 1 | WAFV |
| WAFV |
| WAFV |
| WAFV |
| WAFV | WAFV | WAFV | ||||
pence | $ | pence | $ | pence | $ | pence | $ | ||||||||||
WAFV of 2020 grants | | | | – | |||||||||||||
WAFV of 2021 grants | | | | – | | ||||||||||||
WAFV of 2022 grants | | | | – | – | ||||||||||||
1 | Weighted average fair value. |
Alexion employee share award plan
At acquisition in 2021, Alexion employee share awards were converted into AstraZeneca restricted stock awards that continue to have, and shall be subject to, the same terms and conditions as applied in the corresponding Alexion awards immediately prior to completion. The fair value at the grant date was $
The weighted average fair value for awards granted under the AstraZeneca Performance Share Plan is primarily based on the market price at the point of grant adjusted for the market-based performance elements which are valued using a modified version of the Monte Carlo method. The fair values of all other plans are set using the market price at the point of award. These awards are settled in equity including dividends accumulated from the date of award to vesting.
F-53
30 Commitments, contingent liabilities and contingent assets
| 2022 |
| 2021 |
| 2020 |
| |
Commitments | $m | $m | $m |
| |||
Contracts placed for future capital expenditure on Property, plant and equipment and |
| |
| |
| |
Guarantees and contingencies arising in the ordinary course of business, for which no security has been given, are not expected to result in any material financial loss.
Research and development collaboration payments
The Group has various ongoing collaborations, including in-licensing and similar arrangements with development partners. Such collaborations may require the Group to make payments on achievement of stages of development, launch or revenue milestones, although the Group generally has the right to terminate these agreements at no cost. The Group recognises research and development milestones as an intangible asset once it is committed to payment, which is generally when the Group reaches set trigger points in the development cycle. Revenue-related milestones are recognised as intangible assets on product launch at a value based on the Group’s long-term revenue forecasts for the related product. The table below indicates potential development and revenue-related payments that the Group may be required to make under such collaborations.
|
| Years 5 |
| ||||||||
Total |
| Under 1 year |
| Years 1 and 2 |
| Years 3 and 4 | and greater |
| |||
$m | $m | $m | $m | $m |
| ||||||
Future potential research and development milestone payments |
| | | | | | |||||
Future potential revenue milestone payments |
| | | | | |
The table includes all potential payments for achievement of milestones under ongoing research and development arrangements. Revenue-related milestone payments represent the maximum possible amount payable on achievement of specified levels of revenue as set out in individual contract agreements, but exclude variable payments that are based on unit sales (e.g. royalty-type payments) which are expensed as the associated sale is recognised. The table excludes any payments already capitalised in the Financial Statements for the year ended 31 December 2022.
The future payments we disclose represent contracted payments and, as such, are not discounted and are not risk-adjusted. As detailed in the Risk section from page 56, the development of any pharmaceutical product candidate is a complex and risky process that may fail at any stage in the development process due to a number of factors (including items such as failure to obtain regulatory approval, unfavourable data from key studies, adverse reactions to the product candidate or indications of other safety concerns). The timing of the payments is based on the Group’s current best estimate of achievement of the relevant milestone.
Environmental costs and liabilities
The Group’s expenditure on environmental protection, including both capital and revenue items, relates to costs that are necessary for implementing internal systems and programmes, and meeting legal and regulatory requirements for processes and products. This includes investment to conserve natural resources and otherwise minimise the impact of our activities on the environment.
They are an integral part of normal ongoing expenditure for carrying out the Group’s research, manufacturing and commercial operations and are not separated from overall operating and development costs. There are no known changes in legal, regulatory or other requirements resulting in material changes to the levels of expenditure for 2020, 2021 or 2022.
In addition to expenditure for meeting current and foreseen environmental protection requirements, the Group incurs costs in investigating and cleaning up legacy land and groundwater contamination. In particular, AstraZeneca has environmental liabilities at some currently or formerly owned, leased and third-party sites.
In the US, Zeneca Inc., and/or its indemnitees, have been named as potentially responsible parties (PRPs) or defendants at a number of sites where Zeneca Inc. is likely to incur future environmental investigation, remediation, operation and maintenance costs under federal, state, statutory or common law environmental liability allocation schemes (together, US Environmental Consequences). Similarly, Stauffer Management Company LLC (SMC), which was established in 1987 to own and manage certain assets of Stauffer Chemical Company acquired that year, and/or its indemnitees, have been named as PRPs or defendants at a number of sites where SMC is likely to incur US Environmental Consequences.
AstraZeneca has also given indemnities to third parties for a number of sites outside the US. These environmental liabilities arise from legacy operations that are not currently part of the Group’s business and, at most of these sites, remediation, where required, is either completed or in progress. AstraZeneca has made provisions for the estimated costs of future environmental investigation, remediation, operation and maintenance activity beyond normal ongoing expenditure for maintaining the Group’s RD and manufacturing capacity and product ranges, where a present obligation exists, it is probable that such costs will be incurred and they can be estimated reliably. With respect to such estimated future costs, there were provisions at 31 December 2022 in the aggregate of $
It is possible that AstraZeneca could incur future environmental costs beyond the extent of our current provisions. The extent of such possible additional costs is inherently difficult to estimate due to a number of factors, including: (i) the nature and extent of claims that may be asserted in the future; (ii) whether AstraZeneca has or will have any legal obligation with respect to asserted or unasserted claims; (iii) the type of remedial action, if any, that may be selected at sites where the remedy is presently not known; (iv) the potential for recoveries from or allocation of liability to third parties; and (v) the length of time that the environmental investigation, remediation and liability allocation process can take. As per our accounting policy on page 148, provisions for these costs are made when there is a present obligation and where it is probable that expenditure on remedial work will be required and a reliable estimate can be made of the cost. Notwithstanding and subject to the foregoing, we estimate the potential additional loss for future environmental investigation, remediation, remedial operation and maintenance activity above and beyond our provisions to be, in aggregate, between $
Legal proceedings
AstraZeneca is involved in various legal proceedings considered typical to its business, including actual or threatened litigation and actual or potential government investigations relating to employment matters, product liability, commercial disputes, pricing, sales and marketing practices, infringement of IP rights, and the validity of certain patents and competition laws. The more significant matters are discussed below.
Most of the claims involve highly complex issues. Often these issues are subject to substantial uncertainties and, therefore, the probability of a loss, if any, being sustained and/or an estimate of the amount of any loss is difficult to ascertain.
There is one matter, which is considered probable that an outflow will be required, but for which we are unable to make an estimate of the possible loss or range of possible losses at this stage.
F-54
We do not believe that disclosure of the amounts sought by plaintiffs, if known, would be meaningful with respect to these legal proceedings. This is due to a number of factors, including (i) the stage of the proceedings (in many cases trial dates have not been set) and the overall length and extent of pre-trial discovery; (ii) the entitlement of the parties to an action to appeal a decision; (iii) clarity as to theories of liability, damages and governing law; (iv) uncertainties in timing of litigation; and (v) the possible need for further legal proceedings to establish the appropriate amount of damages, if any.
While there can be no assurance regarding the outcome of any of the legal proceedings referred to in this Note 30, based on management’s current and considered view of each situation, we do not currently expect them to have a material adverse effect on our financial position including within the next financial year. This position could of course change over time, not least because of the factors referred to above.
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 other similar forms of relief), or where a loss is probable and we are able to make a reasonable estimate of the loss, we indicate the loss absorbed or make a provision for our best estimate of the expected loss.
Where it is considered that the Group is more likely than not to prevail, legal costs involved in defending the claim are charged to profit as they are incurred.
Where it is considered that the Group has a valid contract which provides the right to reimbursement (from insurance or otherwise) of legal costs and/or all or part of any loss incurred or for which a provision has been established, and we consider recovery to be virtually certain, the best estimate of the amount expected to be received is recognised as an asset.
Assessments as to whether or not to recognise provisions or assets, and of the amounts concerned, usually involve a series of complex judgements about future events and can rely heavily on estimates and assumptions. AstraZeneca believes that the provisions recorded are adequate based on currently available information and that the insurance recoveries recorded will be received. However, given the inherent uncertainties involved in assessing the outcomes of these cases, and in estimating the amount of the potential losses and the associated insurance recoveries, we could in the future incur judgments or insurance settlements that could have a material adverse effect on our results in any particular period.
IP claims include challenges to the Group’s patents on various products or processes and assertions of non-infringement of patents. A loss in any of these cases could result in loss of patent protection on the related product. The consequences of any such loss could be a significant decrease in Product Sales, which could have a material adverse effect on our results. The lawsuits filed by AstraZeneca for patent infringement against companies that have filed abbreviated new drug applications (ANDAs) in the US, seeking to market generic forms of products sold by the Group prior to the expiry of the applicable patents covering these products, typically also involve allegations of non-infringement, invalidity and unenforceability of these patents by the ANDA filers. In the event that the Group is unsuccessful in these actions or the statutory 30-month stay expires before a ruling is obtained, the ANDA filers involved will also have the ability, subject to FDA approval, to introduce generic versions of the product concerned.
AstraZeneca has full confidence in, and will vigorously defend and enforce, its IP.
Over the course of the past several years, including in 2022, a significant number of commercial litigation claims in which AstraZeneca is involved have been resolved, particularly in the US, thereby reducing potential contingent liability exposure arising from such litigation. Similarly, in part due to patent litigation and settlement developments, greater certainty has been achieved regarding possible generic entry dates with respect to some of our patented products. At the same time, like other companies in the pharmaceutical sector and other industries, AstraZeneca continues to be subject to government investigations around the world.
Patent litigation
Legal proceedings brought against AstraZeneca considered to be contingent liabilities
Enhertu
US patent proceedings
In October 2020, Seagen Inc. (Seagen) filed a complaint against Daiichi Sankyo Company, Limited in the US District Court for the Eastern District of Texas alleging that Enhertu infringes US Patent No. 10,808,039 (the ‘039 patent). AstraZeneca Pharmaceuticals LP co-commercialises Enhertu with Daiichi Sankyo, Inc. in the US. After trial in April 2022, the jury found that the patent was infringed and awarded Seagen $
In December 2020 and January 2021, AstraZeneca and Daiichi Sankyo, Inc. filed post-grant review (PGR) petitions with the US Patent and Trademark Office (USPTO) alleging, inter alia, that the Seagen patent is invalid for lack of written description and enablement. The USPTO initially declined to institute the PGRs, but, in April 2022, the USPTO granted the rehearing requests, instituting both PGR petitions. Seagen subsequently disclaimed all patent claims at issue in one of the PGR proceedings. In July 2022, the USPTO reversed its institution decision and declined to institute the other PGR petition. AstraZeneca and Daiichi Sankyo, Inc. have requested reconsideration of the decision not to institute review of the patent.
Imfinzi
US patent proceedings
In March 2022, Bristol-Myers Squibb Co. and E.R. Squibb Sons, LLC filed a lawsuit in US District Court for the District of Delaware against AstraZeneca alleging that AstraZeneca’s marketing of Imfinzi infringes several of their patents. Trial has been scheduled for April 2024.
Patent proceedings outside the US
In February 2022, in Japan, Ono Pharmaceuticals filed a lawsuit in Tokyo District Court, Civil Division against AstraZeneca alleging that AstraZeneca’s marketing of Imfinzi in Japan infringes several of their patents.
Imjudo
US patent proceedings
In January 2023, Bristol-Myers Squibb Co. and E.R. Squibb Sons, LLC filed a lawsuit in US District Court for the District of Delaware against AstraZeneca alleging that AstraZeneca’s marketing of Imjudo infringes
Tagrisso
US patent proceedings
In September 2021, Puma Biotechnology, Inc. and Wyeth LLC filed a patent infringement lawsuit in the US District Court for the District of Delaware against AstraZeneca relating to Tagrisso. Trial has been scheduled for May 2024.
Movantik
US patent proceedings
In March 2020, Aether Therapeutics, Inc. filed a patent infringement lawsuit in the US District Court for the District of Delaware against AstraZeneca, Nektar Therapeutics and Daiichi Sankyo, Inc., relating to Movantik. Trial has been scheduled for March 2023.
F-55
Legal proceedings brought against AstraZeneca which have been concluded
Roxadustat
US patent proceedings
In April 2021, Akebia Therapeutics, Inc. (Akebia) and Otsuka America Pharmaceutical, Inc. (Otsuka) served AstraZeneca with a complaint seeking a declaration of invalidity and non-infringement for several of FibroGen, Inc’s (FibroGen) method of use patents related to HIF prolylhydroxylase inhibitors. AstraZeneca is the exclusive licensee of FibroGen in the United States. In April 2022, this matter was dismissed and is now concluded.
Ultomiris
US patent proceedings
In November and December of 2018, Chugai Pharmaceutical Co., Ltd. (Chugai) filed lawsuits against Alexion in the Delaware District Court as well as in Tokyo District Court, alleging that Ultomiris infringed US and Japanese patents held by Chugai. In March 2022, Alexion entered into a settlement agreement with Chugai for $
Legal proceedings brought by AstraZeneca considered to be contingent assets
Brilinta
US patent proceedings
In 2015 and subsequently, in response to Paragraph IV notices from ANDA filers, AstraZeneca filed patent infringement lawsuits in the US District Court for the District of Delaware (the District Court) relating to patents listed in the FDA Orange Book with reference to Brilinta. In 2022, AstraZeneca entered into several separate settlements and the District Court entered consent judgments to dismiss each of the corresponding litigations. Additional proceedings are ongoing in the District Court. No trial date has been set.
Calquence
US patent proceedings
In February 2022, in response to Paragraph IV notices from multiple ANDA filers, AstraZeneca filed patent infringement lawsuits in the US District Court for the District of Delaware. In its complaint, AstraZeneca alleges that a generic version of Calquence, if approved and marketed, would infringe patents listed in the US FDA Orange Book with reference to Calquence that are owned or licensed by AstraZeneca. Trial has been scheduled for March 2025.
In February 2023, Sandoz Inc. filed a petition for inter partes review with the US Patent and Trademark Office (USPTO) of certain Calquence patent claims in US Patent No. 10,272,083 (the ‘083 patent). AstraZeneca has asserted claims for infringement of the ‘083 patent against Sandoz and other defendants in the US ANDA litigation. AstraZeneca is considering its response to Sandoz’s petition before the USPTO.
Daliresp
US patent proceedings
In 2015 and subsequently, in response to Paragraph IV notices from ANDA filers, AstraZeneca filed patent infringement lawsuits in the US District Court for the District of New Jersey (the District Court) relating to patents listed in the FDA Orange Book with reference to Daliresp. In 2022, AstraZeneca entered into a settlement and the District Court entered a consent judgment to dismiss the corresponding litigation. Additional ANDA challenges are pending.
Faslodex
Patent proceedings outside the US
In 2021 in Japan, AstraZeneca received notice from the Japan Patent Office (JPO) that Sandoz K.K. and Sun Pharma Japan Ltd. (Sun) were seeking to invalidate the Faslodex formulation patent. AstraZeneca defended the challenged patent, and Sun withdrew from the JPO patent challenge. In May 2022, the JPO held the hearing in the matter and issued its preliminary decision in September 2022 upholding various claims of the challenged patent and determining that other patent claims were invalid. A final JPO decision is forthcoming.
Tagrisso
Patent proceedings outside the US
In Russia in October 2021, AstraZeneca filed a lawsuit in the Arbitration Court of the Moscow Region (the Court) against Axelpharm, LLC to prevent it from obtaining authorisation to market a generic version of Tagrisso prior to the expiration of AstraZeneca’s patents covering Tagrisso. The lawsuit also names the Ministry of Health of the Russian Federation as a third party. In March 2022, the Court dismissed the lawsuit. In June 2022, the dismissal was affirmed on appeal. In January 2023, the dismissal was affirmed on further appeal. AstraZeneca is considering its option.
Farxiga/Forxiga
US patent proceedings
In 2018, in response to Paragraph IV notices, AstraZeneca initiated ANDA litigation against Zydus Pharmaceuticals (USA) Inc. (Zydus) in the US District Court for the District of Delaware (the District Court). In May 2021, trial against Zydus proceeded in the District Court and in October 2021, the District Court issued a decision finding the asserted claims of AstraZeneca’s patent as valid and infringed by Zydus’s ANDA product. In August 2022, Zydus appealed the District Court’s decision. In November 2022, Zydus’s appeal was dismissed. Additional ANDA challenges are pending.
Lokelma
US patent proceedings
In August 2022, in response to Paragraph IV notices, AstraZeneca initiated ANDA litigation against multiple generic filers in the US District Court for the District of Delaware. Trial has been scheduled for March 2025.
Symbicort
US patent proceedings
AstraZeneca is involved in ongoing ANDA litigations with Mylan Pharmaceuticals Inc. (Mylan) and Kindeva Drug Delivery L.P. (Kindeva) brought in the US District Court for the Northern District of West Virginia (the District Court). In the actions, AstraZeneca alleges that the defendants' generic versions of Symbicort, if approved and marketed, would infringe various AstraZeneca patents.
In one of those matters, in November 2022, the District Court determined that the asserted patent was invalid. In November 2022, AstraZeneca appealed that decision to the United States Court of Appeals for the Federal Circuit (the Federal Circuit). With respect to the other matter, following a stipulation of infringement and validity by Mylan and Kindeva that was subject to certain appeal issues, in December 2022, the District Court issued a Final Judgment in favour of AstraZeneca. In December 2022, Mylan and Kindeva appealed the Final Judgment to the Federal Circuit. Both appeals are scheduled to be heard in March 2023.
Lynparza
US patent proceedings
In December 2022, AstraZeneca received a Paragraph IV notice letter from an ANDA filer relating to patents listed in the FDA Orange Book with reference to Lynparza. AstraZeneca is reviewing the notice letter.
F-56
Legal proceedings brought by AstraZeneca which have been concluded
Tagrisso
US patent proceedings
In February 2020, in response to Paragraph IV notices from multiple ANDA filers, AstraZeneca filed patent infringement lawsuits in the US District Court for the District of Delaware. In its complaint, AstraZeneca alleges that a generic version of Tagrisso, if approved and marketed, would infringe a US Orange Book-listed Tagrisso patent. In the fourth quarter of 2021 and April 2022, AstraZeneca entered into settlement agreements with Zydus Pharmaceuticals (USA) Inc., Cadila Healthcare Limited, MSN Laboratories Pvt. Ltd., MSN Pharmaceuticals Inc. and Alembic Pharmaceuticals Limited. These settlements resolve all US patent litigation between the parties relating to Tagrisso.
Product liability litigation
Legal proceedings brought against AstraZeneca considered to be contingent liabilities
Farxiga and Xigduo XR
US proceedings
In several jurisdictions in the US, AstraZeneca has been named as a defendant in lawsuits involving plaintiffs claiming physical injury, including Fournier's Gangrene and necrotising fasciitis, from treatment with Farxiga and/or Xigduo XR. A majority of these claims are filed in Delaware state court and remain pending. One case, filed in state court in Minnesota, is scheduled for trial in October 2023.
Nexium and Losec/Prilosec
US proceedings
In the US, AstraZeneca is defending various lawsuits brought in federal and state courts involving multiple plaintiffs claiming that they have been diagnosed with various injuries following treatment with proton pump inhibitors (PPIs), including Nexium and Prilosec. The vast majority of those lawsuits relate to allegations of kidney injuries. In May 2017, counsel for a group of such plaintiffs claiming that they have been diagnosed with kidney injuries filed a motion with the Judicial Panel on Multidistrict Litigation (JPML) seeking the transfer of any currently pending federal court cases as well as any similar, subsequently filed cases to a coordinated and consolidated pre-trial multidistrict litigation (MDL) proceeding. In August 2017, the JPML granted the motion and consolidated the pending federal court cases in an MDL proceeding in District Court in New Jersey for pre-trial purposes. A bellwether trial has been scheduled for June 2023, with subsequent bellwether trials scheduled for July and September 2023. In addition to the MDL cases, there are cases filed in several state courts around the US; a case that was previously set to go to trial in Delaware state court was dismissed in October 2022.
In addition, AstraZeneca has been defending lawsuits involving allegations of gastric cancer following treatment with PPIs. One such claim is filed in the US District Court for the Middle District of Louisiana and was scheduled to go to trial in January 2023. That case has been postponed and a new trial date has not yet been set.
Canada proceedings
In Canada, in July and August 2017, AstraZeneca was served with
Onglyza and Kombiglyze
US proceedings
In the US, AstraZeneca is defending various lawsuits alleging heart failure, cardiac injuries, and/or death from treatment with Onglyza or Kombiglyze. In February 2018, the Judicial Panel on Multidistrict Litigation ordered the transfer of various pending federal actions to the US District Court for the Eastern District of Kentucky (the District Court) for consolidated pre-trial proceedings with the federal actions pending in the District Court. In the California State Court coordinated proceeding, AstraZeneca’s motion for summary judgment was granted in March 2022. The District Court granted AstraZeneca’s motion for summary judgment in August 2022. Plaintiffs are in the process of appealing both decisions.
Legal proceedings brought against AstraZeneca which have been concluded
Byetta/Bydureon
US proceedings
In the US, Amylin Pharmaceuticals, LLC (a wholly owned subsidiary of AstraZeneca) and AstraZeneca are among multiple defendants in various lawsuits filed in federal and state courts involving claims of physical injury from treatment with Byetta and/or Bydureon. The lawsuits allege several types of injuries including pancreatic cancer and thyroid cancer. A multidistrict litigation was established in the US District Court for the Southern District of California (the District Court) in regard to the alleged pancreatic cancer cases in federal courts. Further, a coordinated proceeding has been established in Superior Court in Los Angeles, California (the California Court) for cases in California state courts. In March and April 2021, the District Court and the California Court respectively granted the Defendants’ summary judgment motions, dismissing all cases alleging pancreatic cancer with prejudice. All remaining claims in both courts, including those alleging thyroid cancer, have since been dismissed. This matter is now concluded.
Commercial litigation
Legal proceedings brought against AstraZeneca considered to be contingent liabilities
Alexion Shareholder Litigation (US)
In December 2016, putative securities class action lawsuits were filed in the US District Court for the District of Connecticut (the District Court) against Alexion and certain officers and directors, on behalf of purchasers of Alexion publicly traded securities during the period 30 January 2014 through 26 May 2017. The amended complaint alleges that defendants engaged in securities fraud, including by making misrepresentations and omissions in its public disclosures concerning Alexion’s Soliris sales practices, management changes, and related investigations. In August 2021, the District Court issued a decision denying in part Defendants’ motion to dismiss the matter. Plaintiffs’ motion for class certification, which Alexion opposed in April 2022, remains pending.
Anti-Terrorism Act Civil Lawsuit
In the US, in October 2017, AstraZeneca and certain other pharmaceutical and/or medical device companies were named as defendants in a complaint filed in US District Court for the District of Columbia (the District Court) by US nationals (or their estates, survivors, or heirs) who were killed or wounded in Iraq between 2005 and 2013. The plaintiffs allege that the defendants violated the US Anti-Terrorism Act and various state laws by selling pharmaceuticals and medical supplies to the Iraqi Ministry of Health. In July 2020, the District Court granted AstraZeneca’s and the other defendants’ motion and dismissed the lawsuit, and the plaintiffs appealed to the DC Circuit Court of Appeals (the Appellate Court). In January 2022, a panel of the Appellate Court reversed the dismissal and remanded the case back to the District Court. AstraZeneca and the other defendants have filed petitions requesting en banc review by the entire Appellate Court, which were denied in February 2023.
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AZD1222 Securities Litigation
In January 2021, putative securities class action lawsuits were filed in the US District Court for the Southern District of New York (the District Court) against AstraZeneca PLC and certain officers, on behalf of purchasers of AstraZeneca publicly traded securities during a period later amended to cover 15 June 2020 through 29 January 2021. The Amended Complaint alleges that defendants made materially false and misleading statements in connection with the development of AZD1222, AstraZeneca’s vaccine for the prevention of COVID-19. In September 2022, the District Court granted AstraZeneca’s motion to dismiss the Amended Complaint with prejudice, disallowing any further amendments. Plaintiffs have appealed this decision.
Definiens
In Germany, in July 2020, AstraZeneca received a notice of arbitration filed with the German Institution of Arbitration from the sellers of Definiens AG (the Sellers) regarding the 2014 Share Purchase Agreement (SPA) between AstraZeneca and the Sellers. The Sellers claim that they are owed approximately $
Employment Litigation (US)
In December 2022, AstraZeneca was served with a lawsuit filed by
Equity Litigation (US)
AstraZeneca was defending a putative class and collective action matter in the US District Court for the Northern District of Illinois brought by
Portola Shareholder Litigation
In the US, in connection with Alexion’s July 2020 acquisition of Portola Pharmaceuticals, Inc (Portola), Alexion assumed litigation to which Portola is a party. In January 2020, putative securities class action lawsuits were filed in the US District Court for the Northern District of California against Portola and certain officers and directors, on behalf of purchasers of Portola publicly traded securities during the period 8 January 2019 through 26 February 2020. The operative complaints allege that defendants made materially false and/or misleading statements or omissions with regard to Andexxa. In June 2022, the parties reached a settlement in principle of this matter, which is subject to court approval.
Seroquel XR (Antitrust Litigation)
In the US in 2019, AstraZeneca was named in several related complaints brought in the US District Court for the Southern District of New York (the District Court), including several putative class action lawsuits that were purportedly brought on behalf of classes of direct purchasers or end payors of Seroquel XR, that allege AstraZeneca and generic drug manufacturers violated US antitrust laws when settling patent litigation related to Seroquel XR. In July 2022, in response to AstraZeneca’s motion, the District Court dismissed all claims relating to the settlement with one of the generic manufacturers but denied the motion with respect to all claims relating to the second generic manufacturer and allowed those claims to proceed.
Syntimmune
In connection with Alexion’s prior acquisition of Syntimmune, Inc., (Syntimmune) in December 2020, Alexion was served with a lawsuit filed by the stockholders’ representative for Syntimmune in Delaware State Court that alleged, among other things, breaches of contractual obligations relating to the 2018 merger agreement. The stockholders’ representative alleges that Alexion failed to meet its obligations under the merger agreement to use commercially reasonable efforts to achieve the milestones. Alexion also filed a claim for breach of the representations in the 2018 merger agreement.
Legal proceedings brought against AstraZeneca which have been concluded
Array BioPharma
In December 2017, AstraZeneca was served with a complaint filed in New York State court by Array BioPharma, Inc. (Array) alleging breaches of contractual obligations relating to a 2003 collaboration agreement between AstraZeneca and Array. In May 2022, the parties resolved this dispute. This matter is now concluded.
Legal proceedings brought by AstraZeneca considered to be contingent assets
PARP Inhibitor Royalty Dispute
In October 2012, Tesaro, Inc. (now wholly owned by GlaxoSmithKline plc, ‘GSK’) entered into
Government investigations/proceedings
Legal proceedings brought against AstraZeneca considered to be contingent liabilities
Brazilian tax assessment matter
In connection with an ongoing matter, in August 2019, the Brazilian Federal Revenue Service provided a Notice of Tax and Description of the Facts (the Tax Assessment) to
Alexion prevailed in the first level of administrative appeals in the Brazilian federal administrative proceeding system based on a deficiency in the Brazil Tax Assessment. The decision was subject to an automatic (ex officio) appeal to the second level of the administrative courts, which is pending.
COVID-19 vaccine supply and manufacturing inquiries
In February 2022, a Brazilian Public Prosecutor filed a lawsuit against several defendants including the Brazilian Federal Government, AstraZeneca, and other COVID-19 vaccine manufacturers. In April 2022, a Brazilian Court issued an order dismissing the lawsuit. An appeal is pending.
Turkish Ministry of Health matter
In Turkey, in July 2020, the Turkish Ministry of Health (Ministry of Health) initiated an investigation regarding payments to healthcare providers by Alexion Turkey and former employees and consultants. The investigation arose from Alexion’s disclosure of a $
F-58
Texas Qui Tam
US proceedings
In December 2022, AstraZeneca was served with an unsealed civil lawsuit brought by a qui tam relator on behalf of the State of Texas in Texas state court, which alleges that AstraZeneca engaged in unlawful marketing practices.
Vermont US Attorney investigation
US proceedings
In April 2020, AstraZeneca received a Civil Investigative Demand from the US Attorney’s Office in Vermont and the Department of Justice, Civil Division, seeking documents and information relating to AstraZeneca’s relationships with electronic health-record vendors. AstraZeneca is cooperating with this enquiry.
Legal proceedings brought against AstraZeneca which have been concluded
Brazilian operations investigation
In May 2017, Brazilian authorities seized records and data from Alexion’s Brazil offices as part of an investigation being conducted into Alexion’s Brazilian operations. AstraZeneca cooperated with this enquiry. The prosecutor recommended discontinuance in September 2022 after determining that there was insufficient evidence to support a legal claim. The judicial authority approved discontinuance of the investigation, without any further enforcement action, in November 2022. This matter is now concluded.
COVID-19 vaccine supply and manufacturing inquiries
In June 2021, Argentina’s Federal Criminal Prosecutor’s Office (the Prosecutor) contacted AstraZeneca Argentina seeking documents and electronic records in connection with a local criminal investigation relating to the public procurement and supply of Vaxzevria in that country. In October 2021, the Prosecutor filed a submission with the presiding court requesting dismissal of the criminal investigation, and that request was granted by the court in February 2022. This matter is now closed.
Legal proceedings brought by AstraZeneca which have been concluded
Canadian pricing matter
In October 2017, Alexion filed proceedings in the Federal Court of Canada to seek judicial review of a determination by the Canadian Patented Medicine Prices Review Board (PMPRB) that Alexion had excessively priced Soliris in a manner inconsistent with the Canadian pricing rules and guidelines. In June 2022, the parties resolved this matter. This matter is now concluded.
Other
US 340B litigations and proceedings
US proceedings
AstraZeneca is involved in several matters relating to its contract pharmacy recognition policy under the 340B Drug Pricing Program in the US. AstraZeneca has sought to intervene in
Administrative Dispute Resolution proceedings have also been initiated against AstraZeneca before the US Health Resources and Services Administration.
As previously disclosed, in January 2021, AstraZeneca filed a separate lawsuit in the US District Court for the District of Delaware alleging that an Advisory Opinion issued by the Department of Health and Human Services violates the Administrative Procedure Act. In June 2021, the District Court found in favour of AstraZeneca, invalidating the Advisory Opinion. Prior to the District Court’s ruling, however, in May 2021, the US government issued new and separate letters to AstraZeneca (and other companies) asserting that our contract pharmacy policy violates the 340B statute. AstraZeneca amended the complaint to include allegations challenging the letter sent in May, and in February 2022, the District Court ruled in favour of AstraZeneca invalidating those letters sent by the US Government. In January 2023, the Court of Appeals affirmed the District Court decision in AstraZeneca’s favour.
In September 2021, AstraZeneca was served with a class-action antitrust complaint filed in the US District Court for the Western District of New York (the District Court) by Mosaic Health alleging a conspiracy to restrict access to 340B discounts in the diabetes market through contract pharmacies. In September 2022, the District Court granted Defendants’ motion to dismiss the Complaint. Plaintiffs are now seeking leave to amend their complaint.
Additional government inquiries
As is true for most, if not all, major prescription pharmaceutical companies, AstraZeneca is currently involved in multiple inquiries into drug marketing and pricing practices. In addition to the investigations described above, various law enforcement offices have, from time to time, requested information from the Group. There have been no material developments in those matters.
Tax
AstraZeneca considers whether it is probable that a taxation authority will accept an uncertain tax treatment. If it is concluded that it is not probable that the taxation authority will accept an uncertain tax treatment, where tax exposures can be quantified, a tax liability is recognised based on either the most likely amount method or the expected value method depending on which method management expects to better predict the resolution of the uncertainty. Tax liabilities for uncertain tax treatments can be built up over a long period of time but the resolution of such tax exposures usually occurs at a point in time, and given the inherent uncertainties in assessing the outcomes of these exposures (which sometimes can be binary in nature), we could, in future periods, experience adjustments to the liabilities recognised in respect of uncertain tax treatments that have a material positive or negative effect on our results in any particular period. Details of the movements in relation to material uncertain tax treatments are discussed below.
AstraZeneca faces a number of audits and reviews in jurisdictions around the world and, in some cases, is in dispute with the tax authorities. The issues under discussion are often complex and can require many years to resolve. Tax liabilities recognised for uncertain tax treatments require management to make key judgements with respect to the outcome of current and potential future tax audits, and actual results could vary from these estimates.
The total net tax liability recognised in the Group Financial Statements in respect of uncertain tax positions is $
F-59
Transfer pricing
The net tax liability included in the Group Financial Statements to cover the worldwide exposure to uncertain tax treatments is $
For transfer pricing matters, including items under tax audit, AstraZeneca estimates the potential for additional tax liabilities above the amount provided where the possibility of the additional liabilities falling due is more than remote, to be up to $
There were no uncertain tax treatments relating to transfer pricing which give rise to potential for additional tax liabilities where the possibility of the additional liabilities falling due is more than remote.
Management believes that it is unlikely that these additional liabilities will arise. It is possible that some of these contingencies may change in the future to reflect progress in tax authority reviews, to the extent that any tax authority challenge is concluded, or matters lapse including following expiry of the relevant statutes of limitation resulting in a reduction in the tax charge in future periods. Management continues to believe that AstraZeneca’s positions on all its transfer pricing positions, audits and disputes are robust, and that AstraZeneca has recognised appropriate tax balances, including consideration of whether corresponding relief will be available under Mutual Agreement procedures or unilaterally.
The increase in the net tax liability for uncertain tax positions relating to transfer pricing of $
Other uncertain tax treatments
Included in the net tax liability is $
For these other tax liabilities in respect of uncertain tax treatments, AstraZeneca estimates the potential for additional liabilities above the amount provided where the possibility of the additional liabilities falling due is more than remote, to be up to $
For uncertain tax treatments relating to other tax matters for which no tax liability has been recognised, AstraZeneca estimates the potential for additional tax liabilities where the possibility of the additional liabilities falling due is more than remote to be up to $
Timing of cash flows and interest
The Group is currently under audit in several countries and the timing of any resolution of these audits is uncertain.
It is not possible to estimate the timing of tax cash flows in relation to each outcome. It is anticipated that tax payments may be required in relation to a number of significant disputes which may be resolved over the next one to two years. AstraZeneca considers the tax liabilities set out above to appropriately reflect the expected value of any final settlement. Some of the items discussed above are not currently within the scope of tax authority audits and may take longer to resolve.
Included within other payables is a net amount of interest arising on tax contingencies of $
31 Statutory and other information
| 2022 |
| 2021 |
| 2020 | ||
$m | $m | $m | |||||
Fees payable to PricewaterhouseCoopers LLP and its associates: |
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Group audit fee |
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Fees payable to PricewaterhouseCoopers LLP and its associates for other services: |
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The audit of subsidiaries pursuant to legislation |
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Attestation under s404 of Sarbanes-Oxley Act 2002 | | | | ||||
Audit-related assurance services |
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Other assurance services |
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Fees payable to PricewaterhouseCoopers Associates in respect of the Group’s pension schemes: |
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The audit of subsidiaries’ pension schemes |
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$
$
Included in the 2021 Audit-related assurance services and Other assurance services are $
Related party transactions
The Group had no material related party transactions which might reasonably be expected to influence decisions made by the users of these Financial Statements.
F-60
Key management personnel compensation
Key management personnel are defined for the purpose of disclosure under IAS 24 ‘Related Party Disclosures’ as the members of the Board and the members of the SET.
| 2022 |
| 2021 |
| 2020 |
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$’000 | $’000 | $’000 |
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Short-term employee benefits |
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Post-employment benefits |
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Share-based payments |
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Total remuneration is included within employee costs (see Note 29).
32 Subsequent events
On 9 January 2023, it was announced that AstraZeneca had entered into a definitive agreement to acquire CinCor Pharma, Inc. (CinCor), a US-based clinical-stage biopharmaceutical company, focused on developing novel treatments for resistant and uncontrolled hypertension as well as chronic kidney disease. On 23 January 2023, AstraZeneca initiated a tender offer to acquire all of CinCor’s outstanding shares for a price of $
On 16 January 2023, AstraZeneca completed the acquisition of Neogene Therapeutics Inc. (Neogene). AstraZeneca acquired all outstanding equity of Neogene for a total consideration of up to $
On 30 January 2023, AstraZeneca completed the sale of its West Chester site in Ohio, US, to National Resilience, Inc. On completion of the sale, the Property, plant and equipment assets associated with this transaction of $
On 2 February 2023, the Group entered into an additional $
Group Subsidiaries and Holdings
In accordance with section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates, joint ventures and joint arrangements, the place of incorporation, registered office address, and the effective percentage of equity owned as at 31 December 2022 are disclosed below. Unless otherwise stated the share capital disclosed comprises ordinary shares which are indirectly held by AstraZeneca PLC.
Unless otherwise stated the accounting year ends of subsidiaries are 31 December. The Group Financial Statements consolidate the Financial Statements of the Company and its subsidiaries at 31 December 2022.
At 31 December 2022 |
| Group Interest |
|
Wholly owned subsidiaries |
|
| |
Algeria | |||
AAPM SARL | | % | |
Number 20, Micro-Economic Zone, Hydra Business Center, Dar El Medina, Algiers, Algeria | |||
Argentina |
|
| |
AstraZeneca S.A. |
| | % |
Nicolas de Vedia 3616, Piso 8, Ciudad Autónoma de Buenos Aires, Argentina |
|
| |
Alexion Pharma Argentina SRL | | % | |
Avenida Leandro N. Alem 592 Piso 6, Buenos Aires, Argentina | |||
Australia |
|
| |
AstraZeneca Holdings Pty Limited |
| | % |
AstraZeneca Pty Limited |
| | % |
Alexion Pharmaceuticals Australasia Pty Ltd | | % | |
66 Talavera Road, Macquarie Park, NSW 2113, Australia |
|
| |
LogicBio Australia Pty Limited | | % | |
Level 40, 2-26 Park Street, Sydney, NSW 2000, Australia | |||
|
| ||
Austria |
| ||
AstraZeneca Österreich GmbH |
| | % |
Landstraßer Hauptstraße 1A, A-1030 Wien, Austria |
| ||
Alexion Pharma Austria GmbH | | % | |
Donau-City-Straße 7, 30. Stock, DC Tower, Vienna 1220, Austria | |||
Portola Österreich GmbH (in liquidation) | | % | |
Mooslackengasse 17, 1190 Wien, Austria |
| |||
Belgium |
|
| |
AstraZeneca S.A. / N.V. |
| | % |
Alfons Gossetlaan 40 bus 201 at 1702 Groot-Bijgaarden, Belgium |
| ||
Alexion Pharma Belgium Sprl | | % | |
Alexion Services Europe Sprl | | % | |
de Meeûssquare 37, Bruxelles 1000, Belgium | |||
|
| ||
Bermuda | |||
Alexion Bermuda Holding ULC | | % | |
Alexion Bermuda Limited | | % | |
Alexion Bermuda Partners LP | | % | |
Canon's Court, 22 Victoria St., Hamilton Bermuda | |||
Brazil |
|
| |
AstraZeneca do Brasil Limitada |
| | % |
Rod. Raposo Tavares, KM 26, 9, Cotia, Brazil |
|
| |
Alexion Farmacêutica América Latina Serviços de Administração de Vendas Ltda. | | % | |
Alexion Serviços e Farmacêutica do Brasil Ltda | | % | |
Av. Dr Chucri Zaidan, 1240, 15° andar, CEP 04711-130, Ed. Morumbi Corporate – Golden Tower Vila São Francisco, São Paulo, Brazil |
|
| |
Bulgaria |
| ||
AstraZeneca Bulgaria EOOD |
| | % |
1057 Sofia, Izgrev Region, 36 Dragan Tsankov Blvrd, Bulgaria |
| ||
| |||
Canada |
|
| |
AstraZeneca Canada Inc.1 |
| | % |
Suite 5000, 1004 Middlegate Road, Ontario, L4Y 1M4, Canada |
|
Alexion Pharma Canada Corporation | | % | |
1300-1969 ST Upper Water, Halifax, NS B3J3R7, Canada | |||
| |||
Cayman Islands |
|
| |
AZ Reinsurance Limited |
| | % |
18 Forum Lane, 2nd Floor, Camana Bay, Grand Cayman, P.O. BOX 69, Cayman Islands |
| ||
|
| ||
Chile |
| ||
AstraZeneca S.A. |
| | % |
AstraZeneca Farmaceutica Chile Limitada |
| | % |
Av. Isidora Goyenechea 3477, 2nd Floor, Las Condes, Santiago, Chile |
|
| |
| |||
China |
|
| |
AstraZeneca Pharmaceutical Co., Limited |
| | % |
No. 2, Huangshan Road, Wuxi, Jiangsu Province, China |
| ||
AstraZeneca (Wuxi) Trading Co. Ltd |
| | % |
Building E, Huirong Plaza, Jinghui Road East, Xinwu District, Wuxi, Jiangsu Province, China |
| ||
AstraZeneca Investment (China) Co., Ltd |
| | % |
199 Liangjing Road, China (Shanghai) Pilot Free Trade Zone, Shanghai, China |
|
| |
AstraZeneca Pharmaceutical (China) Co. Ltd |
| | % |
No 9 Medical Avenue, Jiangsu Province, Taizhou, China |
|
| |
AstraZeneca Pharmaceutical (Beijing) Co., Ltd |
| | % |
1F, Building No.4, No.8 Courtyard, No.1 Kegu Street, Beijing Economic-Technological Development Area, Beijing 100176, China |
|
F-61
AstraZeneca (Guangzhou) Pharmaceutical Co., Ltd |
| | % |
Room 406-178, No. 1, Yichuang Street, (China-Singapore Guangzhou Knowledge City) Huangpu District, Guangzhou City, China |
| ||
AstraZeneca Investment Consulting (Wuxi) Co., Ltd | | % | |
Room 808, 8F, Building 99-2 Linghu Avenue, Xinwu District, Wuxi, Jiangsu, China | |||
AstraZeneca Pharmaceutical (Hangzhou) Co., Ltd | | % | |
12F 14F, Building 1, Shuli Plaza, 758 Fei Jia Tang Road, Gongshu District, Hangzhou, Zhejiang Province, China | |||
AstraZeneca Global RD (China) Co., Ltd | | % | |
16F, 88 Xizang North Road, Jing’an District, Shanghai, China | |||
AstraZeneca Pharmaceutical (Chengdu) Co., Ltd. | | % | |
10th Floor, Building 11 (Building E11), No. 366, Hemin Street, Chengdu High-tech Zone, China (Sichuan) Pilot Free Trade Zone, China | |||
AstraZeneca Pharmaceutical (Shanghai) Co., Ltd | | % | |
B1F, 8F 9F, 88 Xizang North Road, Jing’an District, Shanghai, China | |||
Alexion Pharmaceuticals (Shanghai) Company Limited | | % | |
Room 702 , No 1539 West Nanjing Road, Jing'an District, Shangai, China | |||
|
| ||
Colombia |
|
| |
AstraZeneca Colombia S.A.S. |
| | % |
Av Carrera 9 No. 101-67 Office 601, Bogotá, 110231, Colombia |
|
| |
Alexion Pharma Colombia S.A.S. | | % | |
Carrera 9 # 115 - 06 /30 Edificio Tierra Firme Oficina 2904 Bogota D.C., Colombia | |||
Costa Rica |
|
| |
AstraZeneca CAMCAR Costa Rica, S.A. |
| | % |
San José, Escazú, Roble Corporate Center, 5to piso, Costa Rica |
|
| |
Croatia |
|
| |
AstraZeneca d.o.o. |
| | % |
Radnicka cesta 80, 10000 Zagreb, Croatia |
|
| |
Czech Republic |
| ||
AstraZeneca Czech Republic, s.r.o. |
| | % |
U Trezorky 921/2, 158 00 Prague 5, Czech Republic |
| ||
Alexion Pharma Czech s.r.o. | | % | |
Novodvorská 994/138, Braník, 142 00 Prague, Czech Republic | |||
Denmark |
|
| |
AstraZeneca A/S |
| | % |
World Trade Center Ballerup, Borupvang 3, DK- 2750 Ballerup, Denmark |
| ||
Egypt |
|
| |
AstraZeneca Egypt for Pharmaceutical Industries SAE |
| | % |
6th of October City, 6th Industrial Zone, Plot 2, Giza, Egypt |
| ||
AstraZeneca Egypt LLC |
| | % |
47 St. 270 New Maadi, Maddi, Cairo, Egypt |
|
| |
Drimex LLC |
| | % |
Plot 133, Banks’ District, 5th Settlement, New Cairo, Cairo, Egypt |
| ||
Estonia |
| ||
AstraZeneca Eesti OÜ |
| | % |
Harju maakond, Tallinn, Lasnamäe linnaosa, Valukoja tn 8/1, 11415, Estonia |
| ||
Finland |
|
| |
AstraZeneca OY. |
| | % |
Itsehallintokuja 4, Espoo, 02600, Finland |
| ||
France |
| ||
AstraZeneca S.A.S |
| | % |
AstraZeneca Reims Production SAS |
| | % |
Tour Carpe Diem-31, Place des Corolles, 92400 Courbevoie, France |
| ||
AstraZeneca Dunkerque Production SCS |
| | % |
224 Avenue de la Dordogne, 59640 Dunkerque, France |
| ||
Alexion Europe S.A.S. | % | ||
Alexion Pharma France S.A.S. | % | ||
103-105 Rue Anatole France 92300 Levallois-Perret, France | |||
Germany |
| ||
AstraZeneca Holding GmbH |
| | % |
AstraZeneca GmbH |
| | % |
Friesenweg 26, 22763, Hamburg, Germany |
| ||
Sofotec GmbH |
| | % |
Benzstrasse 1-3, 61352, Bad Homburg v.d. Hohe, Germany |
| ||
AstraZeneca Computational Pathology GmbH2 |
| | % |
Bernhard-Wicki-Straße 5, 80636, Munich, Germany |
| ||
Portola FRG GmbH | | % | |
Fraunhoferstraβe 12, Planegg, 82152, Germany | |||
Alexion Pharma Germany GmbH | | % | |
Landsberger Straße 300, 80687 Munich, Germany | |||
Greece |
|
| |
AstraZeneca S.A. |
| | % |
Agisilaou 6-8 Marousi, Athens, Greece |
|
| |
Hong Kong |
|
| |
AstraZeneca Hong Kong Limited |
| | % |
Unit 1 – 3, 11/F., 18 King Wah Road, North Point, Hong Kong |
|
| |
Hungary |
|
| |
AstraZeneca Kft |
| | % |
1st floor, 4 building B, Alíz str., Budapest, 1117, Hungary |
|
| |
India |
|
| |
AstraZeneca India Private Limited3 |
| | % |
Block A, Neville Tower, 11th Floor, Ramanujan IT SEZ, Taramani, Chennai, Tamil Nadu, PIN 600113, India |
|
| |
Alexion Business Services Private Limited | | % | |
9th Floor, Platina, G Block Plot No. C-59, Bandra-Kurla Complex Bandra (East), Mumbai 400051, India | |||
Iran |
|
| |
AstraZeneca Pars Company |
| | % |
Suite 1, 1st Floor No. 39, Alvand Ave., Argantin Sq., Tehran 1516673114, Iran |
| ||
Ireland |
|
| |
AstraZeneca Pharmaceuticals (Ireland) Designated Activity Company |
| | % |
4th Floor, South Bank House, Barrow Street, Dublin, 4, Republic of Ireland |
| ||
Alexion Pharma Holding Limited | | % | |
Alexion Pharma International Operations Limited | | % | |
Alexion Pharma Development Limited | | % | |
College Business Technology Park Blanchardstown Road North Dublin 15, Republic of Ireland | |||
Israel |
|
| |
AstraZeneca (Israel) Ltd |
| | % |
Atirei Yeda 1, Building O-Tech 2, POB 8044, Kfar Saba, 4464301, Israel |
| ||
Alexion Pharma Israel Ltd | | % | |
4 Weizmann Str., Tel-Aviv-Jaffa, Israel | |||
Italy |
|
| |
Simesa SpA |
| | % |
AstraZeneca SpA |
| | % |
Alexion Pharma Italy Srl |
| | % |
Viale Decumano 39, 20157, Milan, Italy | |||
Japan |
|
| |
AstraZeneca K.K. |
| | % |
Grand Front Osaka Tower B, 3-1, Ofuka-cho, Kita-ku, Osaka, 530-0011, Japan |
|
| |
Alexion Pharma GK | | % | |
Ebisu First Square, 18-14, Ebisu 1-chome, Shibuya-ku, Tokyo, Japan | |||
Kenya |
|
| |
AstraZeneca Pharmaceuticals Limited |
| | % |
L.R. No.1/1327, Avenue 5, 1st Floor, Rose Avenue, Nairobi, Kenya |
|
| |
Latvia |
|
| |
AstraZeneca Latvija SIA |
| | % |
Skanstes iela 50, Riga, LV-1013, Latvia |
|
| |
Lithuania |
| ||
AstraZeneca Lietuva UAB |
| | % |
Spaudos g., Vilnius, LT-05132, Lithuania |
|
| |
Luxembourg |
| ||
AstraZeneca Luxembourg S.A. |
| | % |
Rue Nicolas Bové 2A – L-1253, Luxembourg |
| ||
Malaysia |
|
| |
AstraZeneca Asia-Pacific Business Services Sdn Bhd |
| | % |
12th Floor, Menara Symphony, No 5 Jalan Prof, Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia |
| ||
AstraZeneca Sdn Bhd |
| | % |
Nucleus Tower, Level 11 12, No. 10 Jalan PJU 7/6, Mutiara Damansara, 47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia |
|
| |
Mexico |
| ||
AstraZeneca Health Care Division, S.A. de C.V. |
| | % |
AstraZeneca, S.A. de C.V. |
| | % |
Av. Periferico Sur 4305 interior 5, Colonia Jardines en la Montaña, Mexico City, Tlalpan Distrito Federal, CP 14210, Mexico |
| ||
Alexion Pharma Mexico S. de R.L. de C.V. | | % | |
Paseo de los Tamarindos 90, Torre 1 piso 6 - A Col., Bosques de la Lomas, CP 05120 D.F, Mexico | |||
Morocco |
| ||
AstraZeneca Maroc SARLAU |
| | % |
92 Boulevard Anfa ETG 2, Casablanca 20000, Morocco |
| ||
The Netherlands |
| ||
AstraZeneca B.V. |
| | % |
AstraZeneca Continent B.V. |
| | % |
AstraZeneca Gamma B.V. |
| | % |
AstraZeneca Holdings B.V. |
| | % |
AstraZeneca Jota B.V. |
| | % |
AstraZeneca Rho B.V. |
| | % |
AstraZeneca Sigma B.V. |
| | % |
AstraZeneca Treasury B.V. |
| | % |
AstraZeneca Zeta B.V. |
| | % |
Prinses Beatrixlaan 582, 2595BM, The Hague, The Netherlands |
| ||
AstraZeneca Nijmegen B.V. |
| | % |
Lagelandseweg 78, 6545 CG Nijmegen, The Netherlands |
| ||
Acerta Pharma B.V. |
| | % |
Aspire Therapeutics B.V. | | % | |
Kloosterstraat 9, 5349 AB, Oss, The Netherlands | |||
Portola Netherlands B.V. | | % | |
Prins Bernhardplein 200 JB Amsterdam 1097, The Netherlands | |||
Alexion Pharma Netherlands B.V. | | % | |
Herengracht 282 Amsterdam 1016BX, The Netherlands | |||
Alexion Holding B.V. | | % | |
Alexion Pharma Foreign Holdings, B.V. | | % |
F-62
Prinses Beatrixlaan 582, 5895 BM, The Hague, The Netherlands |
At 31 December 2022 |
| Group Interest |
|
New Zealand |
|
| |
AstraZeneca Limited |
| | % |
Pharmacy Retailing (NZ) Limited t/a Healthcare Logistics, 58 Richard Pearse Drive, Mangere, Auckland, 1142, New Zealand |
|
| |
Nigeria |
|
| |
AstraZeneca Nigeria Limited |
| | % |
11A, Alfred Olaiya Street, Awuse Estate, Off Salvation Street, Opebi, Ikeja, Lagos, Nigeria |
|
| |
Norway |
|
| |
AstraZeneca AS |
| | % |
Karvesvingen 7, 0579 Oslo, Norway |
|
| |
Pakistan |
|
| |
AstraZeneca Pharmaceuticals Pakistan (Private) Limited4 |
| | % |
Office No 1, 2nd Floor, Sasi Arcade, Block 7, Main Clifton Road, Karachi, Pakistan |
|
| |
Panama |
|
| |
AstraZeneca CAMCAR, S.A. |
| | % |
Bodega #1, Parque Logistico MIT, Carretera Hacia Coco Solo, Colon, Panama |
|
| |
Peru |
|
| |
AstraZeneca Peru S.A. |
| | % |
Calle Las Orquídeas N° 675, Int. 802, Edificio Pacific Tower, San Isidro, Lima, Peru |
|
| |
Philippines |
|
| |
AstraZeneca Pharmaceuticals (Phils.) Inc. |
| | % |
16th Floor, Inoza Tower, 40th Street, Bonifacio Global City, Taguig 1634, Philippines |
|
| |
Poland |
|
| |
AstraZeneca Pharma Poland Sp.z.o.o. |
| | % |
Alexion Pharma Poland Sp.z.o.o. | | % | |
Postepu 14, 02-676, Warszawa, Poland |
|
| |
Portugal |
|
| |
Astra Alpha Produtos Farmaceuticos Lda |
| | % |
AstraZeneca Produtos Farmaceuticos Lda |
| | % |
Novastra Promoção e Comércio Farmacêutico Lda |
| | % |
Novastuart Produtos Farmaceuticos Lda |
| | % |
Stuart-Produtos Farmacêuticos Lda |
| | % |
Zeneca Epsilon – Produtos Farmacêuticos Lda |
| | % |
Zenecapharma Produtos Farmaceuticos, Unipessoal Lda |
| | % |
Rua Humberto Madeira, No 7, Queluz de Baixo, 2730-097, Barcarena, Portugal |
|
| |
Puerto Rico |
|
| |
IPR Pharmaceuticals, Inc. |
| | % |
Road 188, San Isidro Industrial Park, Canóvanas, 00729, Puerto Rico |
|
| |
Romania |
|
| |
AstraZeneca Pharma S.R.L. |
| | % |
12 Menuetului Street, Bucharest Business Park, Building D, West Wing, 1st Floor, Sector 1, Bucharest, 013713, Romania |
|
|
Russia |
|
| |
AstraZeneca Industries, LLC |
| | % |
8 1st Vostochniy lane, Dobrino village, Borovskiy district, Kaluga region 249006, Russian Federation | |||
AstraZeneca Pharmaceuticals, LLC |
| | % |
Building 1, 21 First Krasnogvardeyskiy lane, floor 30,rooms 13 and 14, Moscow, 123112, Russian Federation |
|
| |
Alexion Pharma OOO LLC | | % | |
Building 1, 21 First Krasnogvardeyskiy lane, floor 29, Moscow, 123112, Russian Federation | |||
Singapore |
|
| |
AstraZeneca Singapore Pte Limited |
| | % |
10 Kallang Avenue #12-10, Aperia Tower 2, 339510, Singapore |
|
| |
South Africa |
|
| |
AstraZeneca Pharmaceuticals (Pty) Limited |
| | % |
17 Georgian Crescent West, Northdowns Office Park, Bryanston, 2191, South Africa |
|
| |
South Korea |
|
| |
AstraZeneca Korea Co. Ltd |
| | % |
21st Floor, Asem Tower, 517, Yeongdong-daero, Gangnam-gu, Seoul, 06164, Republic of Korea |
|
| |
Alexion Pharma Korea LLC | | % | |
41 FL., 152 Teheran-ro (Yeoksam-dong Gangam Finance Center), Gangnam-gu Seoul Republic of Korea | |||
Spain |
|
| |
AstraZeneca Farmaceutica Holding Spain, S.A. |
| | % |
AstraZeneca Farmaceutica Spain S.A. |
| | % |
Laboratorio Beta, S.A. |
| | % |
Laboratorio Lailan, S.A. |
| | % |
Laboratorio Tau S.A. |
| | % |
Fundación AstraZeneca | % | ||
Parque Norte, Edificio Álamo, C/Serrano Galvache no 56., 28033 Madrid, Spain |
|
| |
Alexion Pharma Spain S.L. | | % | |
Av Diagonal Num.601 P.1,Barcelona 08028, Spain | |||
Sweden |
|
| |
Astra Export Trading Aktiebolag |
| | % |
Astra Lakemedel Aktiebolag |
| | % |
AstraZeneca AB |
| | % |
AstraZeneca Biotech AB |
| | % |
AstraZeneca BioVentureHub AB |
| | % |
AstraZeneca Holding Aktiebolag5 |
| | % |
AstraZeneca International Holdings Aktiebolag6 |
| | % |
AstraZeneca Nordic AB |
| | % |
AstraZeneca Pharmaceuticals Aktiebolag |
| | % |
AstraZeneca Södertälje 2 AB |
| | % |
Stuart Pharma Aktiebolag |
| | % |
Tika Lakemedel Aktiebolag |
| | % |
SE-151 85 Södertälje, Sweden |
|
| |
Aktiebolaget Hassle |
| | % |
Symbicom Aktiebolag6 |
| | % |
431 83 MoIndal, Sweden |
|
| |
Astra Tech International Aktiebolag |
| | % |
Box 14, 431 21 MoIndal, Sweden |
|
| |
Alexion Pharma Nordics Holding AB | | % | |
Alexion Pharma Nordics AB | | % |
Kungsgatan 3, Stockholm 111 43, Sweden | |||
Switzerland |
|
| |
AstraZeneca AG |
| | % |
Neuhofstrasse 34, 6340 Baar, Switzerland |
|
| |
Spirogen Sarl6 |
| | % |
Rue du Grand-Chêne 5, CH-1003 Lausanne, Switzerland |
|
| |
Portola Schweiz GmbH (in liquidation) | | % | |
c/o Tom Schaffner Schärer Rechtsanwälte Hintere Bahnhofstrasse 6, 5000 Aarau, Switzerland | |||
Alexion Pharma GmbH | | % | |
Giesshübelstrasse 30, Zürich 8045, Switzerland | |||
Taiwan |
|
| |
AstraZeneca Taiwan Limited |
| | % |
21st Floor, Taipei Metro Building 207, Tun Hwa South Road, SEC 2 Taipei, Taiwan |
|
| |
Alexion Pharma Taiwan Ltd | | % | |
Room 1153, 11F, No1, SongZhi Rd Taipei, 11047 Taiwan | |||
Thailand |
|
| |
AstraZeneca (Thailand) Limited |
| | % |
Asia Centre 19th floor, 173/20, South Sathorn Rd, Khwaeng Thungmahamek, Khet Sathorn, Bangkok, 10120, Thailand |
|
| |
Tunisia |
|
| |
AstraZeneca Tunisie SaRL |
| | % |
Lot n°1.5.5 les jardins du lac, bloc B les berges du lac Tunis, Tunisia |
|
| |
Turkey |
|
| |
AstraZeneca Ilac Sanayi ve Ticaret Limited Sirketi |
| | % |
YKB Plaza, B Blok, Kat:3-4, Levent/Beşiktaş, Istanbul, Turkey |
|
| |
Zeneca Ilac Sanayi Ve Ticaret Anonim Sirketi |
| | % |
Büyükdere Cad., Y.K.B. Plaza, B Blok, Kat:4, Levent/Beşiktaş, Istanbul, Turkey |
|
| |
Alexion Ilac Ticaret Limited Sirketi | | % | |
İÇERENKÖY MAHALLESİ UMUT SK. AND OFİS SIT. NO: 10 12/73 ATAŞEHİR İSTANBUL 10-12/73 Turkey | |||
Ukraine |
|
| |
AstraZeneca Ukraina LLC |
| | % |
54 Simi Prakhovykh street, Kiev, 01033, Ukraine |
|
| |
United Arab Emirates |
|
| |
AstraZeneca FZ-LLC |
| | % |
P.O. Box 505070, Block D, Dubai Healthcare City, Oud Mehta Road, Dubai, United Arab Emirates |
|
| |
Alexion Pharma Middle East FZ-LLC | | % | |
Dubai Science Park, 501, Floor 5, EIB Building No. 2, Dubai, United Arab Emirates | |||
United Kingdom |
|
| |
Ardea Biosciences Limited |
| | % |
Arrow Therapeutics Limited |
| | % |
Astra Pharmaceuticals Limited |
| | % |
AstraPharm6 |
| | % |
AstraZeneca China UK Limited |
| | % |
AstraZeneca Death In Service Trustee Limited |
| | % |
AstraZeneca Employee Share Trust Limited |
| | % |
AstraZeneca Finance Limited |
| | % |
F-63
AstraZeneca Intermediate Holdings Limited5 |
| | % |
AstraZeneca Investments Limited |
| | % |
AstraZeneca Japan Limited |
| | % |
AstraZeneca Nominees Limited |
| | % |
AstraZeneca Quest Limited |
| | % |
AstraZeneca Share Trust Limited |
| | % |
AstraZeneca Sweden Investments Limited |
| | % |
AstraZeneca Treasury Limited6 |
| | % |
AstraZeneca UK Limited |
| | % |
AstraZeneca US Investments Limited5 |
| | % |
AZENCO2 Limited |
| | % |
AZENCO4 Limited |
| | % |
Cambridge Antibody Technology Group Limited |
| | % |
KuDOS Horsham Limited |
| | % |
KuDOS Pharmaceuticals Limited |
| | % |
Zenco (No. 8) Limited |
| | % |
Zeneca Finance (Netherlands) Company |
| | % |
MedImmune Limited |
| % | |
1 Francis Crick Avenue, Cambridge Biomedical Campus, Cambridge, CB2 0AA, United Kingdom |
| | % |
MedImmune U.K. Limited |
| | % |
Plot 6, Renaissance Way, Boulevard Industry Park, Liverpool, L24 9JW, United Kingdom |
|
| |
Syntimmune Limited | | % | |
21 Holborn Viaduct, London, EC1A 2DY United Kingdom | |||
Alexion Pharma UK Limited | | % | |
Portola Pharma UK Limited (in liquidation) | | % | |
3 Furzeground Way, Stockley Park, Uxbridge, Middlesex UB11 1EZ United Kingdom | |||
United States |
|
| |
Amylin Ohio LLC7 | | % | |
Amylin Pharmaceuticals, LLC7 |
| | % |
AstraZeneca Collaboration Ventures, LLC7 |
| | % |
AstraZeneca Pharmaceuticals LP8 |
| | % |
Atkemix Nine Inc. |
| | % |
Atkemix Ten Inc. |
| | % |
BMS Holdco, Inc. |
| | % |
Corpus Christi Holdings Inc. |
| | % |
Omthera Pharmaceuticals, Inc. |
| | % |
Optein, Inc. | | % | |
Stauffer Management Company LLC7 |
| | % |
Zeneca Holdings Inc. |
| | % |
Zeneca Inc. |
| | % |
Zeneca Wilmington Inc.5 |
| | % |
AstraZeneca Finance LLC7 | | % | |
AstraZeneca Finance and Holdings Inc. | | % | |
Namor Merger Sub, Inc9 | | % | |
Ardea Biosciences, Inc | | % | |
1800 Concord Pike, Wilmington, DE 19803, United States |
|
| |
ZS Pharma Inc. |
| | % |
1100 Park Place, Suite 300, San Mateo, CA 94403, United States |
|
| |
AlphaCore Pharma, LLC7 |
| | % |
333 Parkland Plaza, Suite 5, Ann Arbor, MI 48103, United States |
|
| |
AZ-Mont Insurance Company |
| | % |
76 St Paul Street, Suite 500, Burlington, VT 05401, United States |
|
| |
MedImmune, LLC7 |
| | % |
MedImmune Ventures, Inc. |
| | % |
One MedImmune Way, Gaithersburg, MD 20878, United States |
|
| |
Pearl Therapeutics, Inc. |
| | % |
200 Cardinal Way, Redwood City, CA 94063, United States |
|
| |
Caelum Biosciences Inc. | | % | |
1200 Florence Columbus Road, Bordentown, NJ 08505, United States | |||
Alexion Services Latin America Inc. | | % | |
600 Brickell Ave, Miami, FL 33131, United States | |||
Portola USA, Inc | | % | |
Portola Pharmaceuticals LLC | | % | |
270 East Grand Avenue South San Francisco, CA 94080, United States | |||
Achillion Pharmaceuticals Inc, | | % | |
Alexion Delaware Holding LLC | | % | |
Alexion Pharma LLC | | % | |
Alexion Pharmaceuticals, Inc. | | % | |
Syntimmune, Inc. | | % | |
Alexion US1 LLC | | % | |
Savoy Therapeutics Corp | | % | |
Wilson Therapeutics USA, Inc. | | % | |
TeneoTwo, Inc | | % | |
LogicBio Therapeutics, Inc | % | ||
121 Seaport Boulevard Boston, MA 02210, United States | |||
Acerta Pharma LLC7 | | % | |
121 Oyster Point Boulevard, South San Francisco, CA 94080, United States | |||
LogicBio Securities Corporation | | % | |
65 Hayden Avenue, Lexington, MA 92421, United States |
At 31 December 2022 |
| Group Interest |
|
Uruguay |
|
| |
AstraZeneca S.A. |
| % | |
Yaguarón 1407 of 1205, 11.100, Montevideo, Uruguay |
|
| |
Venezuela |
|
| |
AstraZeneca Venezuela S.A. |
| % | |
Gotland Pharma S.A. |
| % | |
Av. La Castellana, Torre La Castellana, Piso 5, Oficina 5-G, 5-H, 5-I, Urbanización La Castellana, Municipio Chacao, Estado Bolivariano de Miranda, Venezuela |
|
| |
Vietnam |
|
| |
AstraZeneca Vietnam Company Limited |
| % | |
18th Floor, AB Tower, 76 Le Lai, Ben Thanh Ward, District 1, Ho Chi Minh City, Vietnam |
|
| |
Subsidiaries where the effective interest is less than 100% |
| ||
India |
|
| |
AstraZeneca Pharma India Limited3 |
| % | |
Block N1, 12th Floor, Manyata Embassy Business Park, Rachenahalli, Outer Ring Road, Bangalore-560 045, India |
|
| |
Indonesia |
|
| |
P.T. AstraZeneca Indonesia |
| % | |
Perkantoran Hijau Arkadia Tower F, 3rd Floor, JI. T.B. Simatupang Kav. 88, South Jakarta, 12520, Indonesia |
|
| |
Joint Ventures |
|
| |
China |
|
| |
WuXi MedImmune Biopharmaceutical Co., Limited (in liquidation) |
| % | |
Room 1902, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong |
|
| |
IHP HK Holdings Limited | % | ||
Unit 5805, 58/F., Two International Finance Centre 8 Finance Street, Central, China |
United Kingdom |
|
| |
Archigen Biotech Limited (in liquidation) |
| % | |
Centus Biotherapeutics Limited |
| % | |
1 Francis Crick Avenue, Cambridge Biomedical Campus, Cambridge, CB2 0AA, United Kingdom |
|
| |
Ireland | |||
Centus Biotherapeutics Europe Limited (in liquidation) | % | ||
6th Floor, South Bank House, Barrow Street, Dublin 4, Republic of Ireland | |||
United States |
|
| |
Montrose Chemical Corporation of California |
| % | |
Suite 380, 600 Ericksen Ave N/E, Bainbridge Island, United States |
|
| |
Significant Holdings |
|
| |
China |
|
| |
Dizal (Jiangsu) Pharmaceutical Co., Ltd. |
| % | |
199 Liangjing Rd, Zhangjiang Hi-Tech Park, Pudong District, Shanghai, 201203, China |
|
| |
Wuxi AstraZeneca-CICC Venture Capital Partnership (Limited Partnership) | | % | |
Room 808, 8F, Building 99-2 Linghu Avenue, Xinwu District, Wuxi, Jiangsu, China | |||
Beijing Falikang Pharmaceutical (China) Co. Ltd | | % | |
No. 69 Fushi Road, Haidian District, Beijing, 100143, China | |||
United Kingdom |
|
| |
VaxEquity | % | ||
Lab 4 Cambridge Science Park, Unit 204 Milton Road, Cambridge CB4 0GZ, United Kingdom | |||
United States | |||
C.C. Global Chemicals Company | % | ||
PO Box 7, MS2901, Texas, TX76101-0007, United States | |||
Associated Holdings |
|
| |
France | |||
Medetia SAS | | % | |
Institute Imagine 24, Boulevard du Montparnasse 75015, Paris, France | |||
Israel | |||
AION Labs | % | ||
Oppenheimer 4 Rehovot, 7670104, Israel | |||
Sweden |
|
| |
Swedish Orphan Biovitrum AB (publ) |
| % | |
Tomtebodavägen 23A, Stockholm, Sweden |
|
| |
Ondosis | % | ||
BioVentureHub, Pepparedsleden 1, 431 83 Mölndal, Sweden | |||
United Kingdom |
|
| |
Niox Group plc |
| % | |
Hayakawa Building, Edmund Halley Road, Oxford Science Park, Oxford, OX4 4GB, United Kingdom |
|
| |
United States |
|
| |
AbMed Corporation |
| % | |
68 Cummings Park Drive, Woburn, MA 01801, United States |
|
|
F-64
Aristea Therapeutics, Inc. |
| % | |
122770 High Bluff Drive, #380, San Diego, CA 92130, United States |
|
| |
Baergic Bio, Inc. |
| % | |
1111 Kane Concourse, Suite 301 Bay Harbor Islands, FL 33154, United States |
|
| |
Regio Biosciences | % | ||
2277 Research Blvd, Suite 225, Rockville, MD 20850, United States | |||
Employee Benefit Trust | |||
The AstraZeneca Employee Benefit Trust |
| 1 | Ownership held in ordinary and class B special shares. |
| 2 | Ownership held in common shares, preferred shares 2003, preferred shares 2003 ex (A), preferred shares 2003 ex (B), preferred shares Series D, preferred shares Series E and preferred shares Series F. |
| 3 | Accounting year end is 31 March. |
| 4 | Accounting year end is 30 June. |
| 5 | Directly held by AstraZeneca PLC. |
| 6 | Ownership held in Ordinary A shares and Ordinary B shares. |
| 7 | Ownership held as membership interest. |
| 8 | Ownership held as partnership interest. |
| 9 | With effect from 13 January 2023, Namor Merger Sub Inc. was merged with and into Neogene Therapeutics, Inc., with Neogene Therapeutics, Inc. being the surviving corporation. |
F-65