AstraZeneca
28 July 2023
H1 and Q2 2023 results
Strong revenue and EPS growth, reflecting momentum of recent launches and robust commercial execution
Revenue and EPS summary
| H1 2023 | Q2 2023 | ||||||
| % Change | % Change | ||||||
| $m | Actual | CER[1] | $m | Actual | CER | ||
| – Product Sales | 21,448 | (1) | 3 | 10,882 | 2 | 5 | |
| – Alliance Revenue[2] | 627 | >2x | >2x | 341 | >2x | >2x | |
| – Collaboration Revenue2 | 220 | (16) | (15) | 193 | n/m | n/m | |
| Total Revenue | 22,295 | 1 | 4 | 11,416 | 6 | 9 | |
| Total Revenue ex COVID-19 | 21,961 | 12 | 16 | 11,237 | 14 | 17 | |
| Reported[3] EPS[4] | $2.34 | >4x | >6x | $1.17 | >5x | >9x | |
| Core[5] EPS | $4.07 | 13 | 21 | $2.15 | 25 | 38 | |
Financial Performance (H1 2023 Figures Unless Otherwise Stated, Growth Numbers At CER)
‒ Total Revenue $22,295m, up 4% despite a decline of $2,181m from COVID-19 medicines[6]
‒ Excluding COVID-19 medicines, Total Revenue increased 16% and Product Sales increased 15%
‒ Total Revenue from Oncology medicines increased 22%, CVRM[7] 20%, R&I[8] 10%, and Rare Disease 12%
‒ Core Product Sales Gross Margin[9] of 83%, up three percentage points, reflecting the decline in sales of lower margin COVID‑19 medicines, the cost of production in prior periods, and ongoing mix shift to more speciality medicines
‒ In Q2 2023, Core Other operating income and expense included the previously-announced gain resulting from an update to the contractual relationships for Beyfortus (nirsevimab), totalling $712m
‒ Core EPS increased 21% to $4.07. Interim dividend maintained at $0.93 (71.8 pence, 9.64 SEK)
‒ Reiterating guidance for FY 2023 Total Revenue and Core EPS
Pascal Soriot, Chief Executive Officer, AstraZeneca, Said:
“Each of our non-COVID-19 therapy areas saw double-digit revenue growth, with eight medicines delivering more than $1bn of revenue in the first half, demonstrating the strength of our business. Several medicines grew rapidly including Ultomiris, Imfinzi/Imjudo and Farxiga, with revenues up 64%, 57% and 40% respectively.
Our pipeline momentum continues with eight positive pivotal trials for our Oncology medicines so far this year, and we are encouraged by the positive data from TROPION-Lung01, the first pivotal trial of datopotamab deruxtecan. We look forward to sharing the data with the medical community at an upcoming medical congress and are proceeding to file the data with the US Food and Drug Administration.
And finally, as part of our flagship sustainability programme, Ambition Zero Carbon, we announced a $400m investment in AZ Forest, raising our commitment to plant 200 million trees by 2030.”
Key Milestones Achieved Since The Prior Results Announcement
‒ Key positive read-outs: datopotamab deruxtecan in lung cancer (TROPION-Lung01), Tagrisso in NSCLC[10] (FLAURA2), Lynparza + Imfinzi in endometrial cancer (DUO-E), Imfinzi in gastric and gastroesophageal cancers (MATTERHORN)
‒ Key regulatory approvals: US approvals for Lynparza in BRCA-mutated prostate cancer (PROpel), Farxiga in HF[11] regardless of ejection fraction (DELIVER), and Beyfortus for the prevention of RSV[12]; EU approvals for Ultomiris in NMOSD[13]; China approval for Enhertu in HER2[14]-low metastatic breast cancer, Soliris in gMG[15] and Koselugo in neurofibromatosis
‒ Other milestones: capivasertib in combination with Faslodex granted priority review in the US for advanced HR[16]-positive breast cancer
Guidance
The Company reiterates guidance for FY 2023 at CER, based on the average foreign exchange rates through 2022.
Total Revenue is expected to increase by a low-to-mid single-digit percentage.
Excluding COVID-19 medicines, Total Revenue is expected to increase by a low double-digit percentage.
Core EPS is expected to increase by a high single-digit to low double-digit percentage.
‒ Total Revenue from COVID-19 medicines (Vaxzevria[17] and COVID‑19 mAbs[18]) is expected to decline significantly in FY 2023
‒ Total Revenue from China is expected to return to growth and increase by a low-to-mid single-digit (previously low single-digit) percentage in FY 2023
‒ Alliance Revenue and Collaboration Revenue are both expected to increase[19], driven by continued growth of our partnered medicines and success-based milestones
‒ Core Operating expenses are expected to increase by a low-to-mid single-digit percentage, driven by investment in recent launches and the ungating of new trials following pipeline success
‒ The Core Tax Rate is expected to be between 18-22%
The Company is unable to provide guidance on a Reported basis because it cannot reliably forecast material elements of the Reported results, including any fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the cautionary statements section regarding forward-looking statements at the end of this announcement.