AstraZeneca
12 November 2024
9M and Q3 2024 results
Upgrade to full year 2024 guidance underpinned by strong underlying growth momentum
Revenue and EPS summary
| 9M 2024 | % Change | Q3 2024 | % Change | ||||
| $m | Actual | CER[1] | $m | Actual | CER | ||
| – Product Sales | 37,576 | 16 | 19 | 12,947 | 18 | 20 | |
| – Alliance Revenue | 1,498 | 49 | 50 | 559 | 48 | 50 | |
| – Collaboration Revenue | 108 | (66) | (66) | 59 | (39) | (40) | |
| Total Revenue | 39,182 | 16 | 19 | 13,565 | 18 | 21 | |
| Reported EPS | $3.57 | 11 | 21 | $0.92 | 4 | 17 | |
| Core[2] EPS | $6.12 | 5 | 11 | $2.08 | 20 | 27 | |
Financial performance for 9M 2024 (Growth numbers at constant exchange rates)
‒ Total Revenue up 19% to $39,182m, driven by a 19% increase in Product Sales and continued growth in Alliance Revenue from partnered medicines
‒ Total Revenue growth from Oncology was 22%, CVRM 21%, R&I 24% and Rare Disease 14%
‒ Core Product Sales Gross Margin[3] of 82%
‒ Core Operating Margin of 32%
‒ Core Tax Rate of 20%
‒ Core EPS increased 11% to $6.12. In the prior year period, Core EPS included gains totalling $953m from the disposal of Pulmicort Flexhaler US rights and updated contractual arrangements for Beyfortus
‒ Guidance for FY 2024 Total Revenue and Core EPS growth at CER upgraded to high teens percentage growth
Pascal Soriot, Chief Executive Officer, AstraZeneca, said:
“Our company has continued on its strong growth trajectory in the first nine months of 2024. Total Revenue and Core EPS were up 21% and 27% respectively in the third quarter, reflecting the increasing demand for our medicines across Oncology, BioPharmaceuticals and Rare Disease and supporting an upgrade to our full year 2024 guidance.
In the year to date we have announced the results for multiple positive high-value trials and are working to bring these new options to patients as quickly as possible. Additionally, the quality and impact of our scientific research was well recognised this quarter with data for AstraZeneca medicines featuring in an unprecedented five Presidential Plenary sessions at the two major oncology conferences in September.
We are highly encouraged by the broad-based underlying momentum we are seeing across our company in 2024, and growth looks set to continue through 2025, providing a solid foundation to deliver on our 2030 ambition.
Finally, we take the matters in China very seriously. If requested we will fully cooperate with the authorities. We remain committed to delivering innovative life-changing medicines to patients in China.”
Key milestones achieved since the prior results announcement
‒ Positive read-outs for Tagrisso plus Orpathys in EGFRm NSCLC with high levels of MET overexpression and/or amplification (SAVANNAH), Calquence in combination with venetoclax, with or without obinutuzumab in previously untreated CLL (AMPLIFY), and the next generation propellant for Breztri. Koselugo in adult patients with NF1-PN (KOMET), Tezspire in severe chronic rhinosinusitis with nasal polyps (WAYPOINT)
‒ US approvals for Tagrisso in unresectable, Stage III EGFRm NSCLC (LAURA) and Imfinzi plus chemotherapy in resectable early-stage NSCLC (AEGEAN) and FluMist for self-administration. EU approvals for Imfinzi plus chemotherapy followed by Imfinzi alone in mismatch repair deficient endometrial cancer (DUO-E), Imfinzi plus chemotherapy followed by Lynparza and Imfinzi in mismatch repair proficient endometrial cancer (DUO-E) and Fasenra for EGPA (MANDARA). China approvals for Enhertu in unresectable, locally advanced or metastatic HER2-mutated NSCLC (DESTINY-Lung02, DESTINY-Lung05), Enhertu in locally advanced or metastatic HER2-positive gastric or gastroesophageal junction adenocarcinoma (DESTINY-Gastric06), and Fasenra for severe eosinophilic asthma (MIRACLE)
Guidance
Given the strength of underlying Product Sales and Alliance Revenue, as well as increased confidence in achieving certain sales-based milestones, the Company raises its Total Revenue and Core EPS guidance for FY 2024 at CER.
Total Revenue is expected to increase by a high teens percentage (previously a mid teens percentage)
Core EPS is expected to increase by a high teens percentage (previously a mid teens percentage)
‒ Other elements of the Income Statement are expected to be broadly in-line with the indications issued in the Company’s H1 2024 earnings statement
The Company is unable to provide guidance on a Reported basis because it cannot reliably forecast material elements of the Reported results, including any fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the cautionary statements section regarding forward-looking statements at the end of this announcement.
Currency impact
If foreign exchange rates for October 2024 to December 2024 were to remain at the average rates seen in September 2024, it is anticipated that FY 2024 Total Revenue would incur a low single-digit percentage adverse impact compared to the performance at CER (unchanged from previous guidance), and Core EPS would incur a mid single-digit percentage adverse impact (unchanged from previous guidance). The Company’s foreign exchange rate sensitivity analysis is provided in Table 17.
China
As previously disclosed, the Company is aware of a number of individual investigations by the Chinese authorities into current and former AstraZeneca employees. To the best of the Company’s knowledge, the investigations include allegations of medical insurance fraud, illegal drug importation and personal information breaches. Recently Leon Wang, EVP International and AstraZeneca China President was detained. The Company has not received any notification that it is itself under investigation. If requested, AstraZeneca will fully cooperate with the Chinese authorities.
Table 1: Key elements of Total Revenue performance in Q3 2024
| % Change | ||||||||||
| Revenue type | $m | Actual % | CER % | |||||||
| Product Sales | 12,947 | 18 | 20 | |||||||
| Alliance Revenue | 559 | 48 | 50 | * $49m Beyfortus (Q3 2023: $17m)* $361m Enhertu (Q3 2023: $266m)* $123m Tezspire (Q3 2023: $74m) | ||||||
| Collaboration Revenue | 59 | (39) | (40) | * $56m Beyfortus (Q3 2023: $71m) | ||||||
| Total Revenue | 13,565 | 18 | 21 | |||||||
| Therapy areas | $m | Actual % | CER % | |||||||
| Oncology | 5,569 | 19 | 22 | * Tagrisso up 14% (17% at CER), Calquence up 24% (25% at CER), Enhertu Total Revenue up 50% (55% at CER) | ||||||
| CVRM | 3,159 | 18 | 20 | * Farxiga up 25% (27% at CER), Lokelma up 40% (42% at CER) | ||||||
| R&I | 1,959 | 26 | 29 | * Breztri up 56% (57% at CER). Saphnelo up 63% (64% at CER), Tezspire up >2x, Symbicort up 27% (31% CER) | ||||||
| V&I | 460 | 48 | 49 | * Beyfortus Total Revenue up 73% (72% at CER), FluMist up 34% (31% at CER) | ||||||
| Rare Disease | 2,148 | 9 | 11 | · Ultomiris up 33% (35% at CER), partially offset by decline in Soliris of 22% (18% at CER), Strensiq up 20% (21% at CER) and Koselugo up 37% (39% at CER) | ||||||
| Other Medicines | 270 | (12) | (8) | |||||||
| Total Revenue | 13,565 | 18 | 21 | |||||||
| Regions | $m | Actual % | CER % | |||||||
| US | 6,008 | 23 | 23 | |||||||
| Emerging Markets | 3,423 | 15 | 23 | |||||||
| – China | 1,671 | 15 | 15 | |||||||
| – Ex-China Emerging Markets | 1,752 | 16 | 31 | |||||||
| Europe | 2,875 | 22 | 22 | |||||||
| Established RoW | 1,260 | (1) | 4 | |||||||
| Total Revenue | 13,565 | 18 | 21 | |||||||
Key alliance medicines
‒ Combined sales of Enhertu, recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted to $2,729m in 9M 2024 (9M 2023: $1,844m).
‒ Combined sales of Tezspire, recorded by Amgen and AstraZeneca, amounted to $843m in 9M 2024 (9M 2023: $438m).
Table 2: Key elements of financial performance in Q3 2024
| Metric | Reported | Reported change | Core | Core change | Comments[4] | |
| Total Revenue | $13,565m | 18% Actual 21% CER | $13,565m | 18% Actual 21% CER | * See Table 1 and the Total Revenue section of this document for further details | |
| Product Sales Gross Margin | 76% | -5pp Actual -4pp CER | 81% | Stable Actual and CER | * Variations in Product Sales Gross Margin can be expected between periods, due to product seasonality (e.g. FluMist and Beyfortus sales are weighted to the second half of the year), foreign exchange fluctuations and other effects‒ Reported Product Sales Gross Margin impacted by PAAGR[5] inventory related restructuring charges taken in the quarter | |
| R&Dexpense | $3,115m | 21% Actual 21% CER | $3,068m | 23% Actual 24% CER | + Increased investment in the pipeline* Core R&D-to-Total Revenue ratio of 23% (Q3 2023: 22%) | |
| SG&A expense | $5,143m | 7% Actual 8% CER | $3,605m | 8% Actual 9% CER | + Market development for recent launches and pre-launch activities* Core SG&A-to-Total Revenue ratio of 27% (Q3 2023: 29%) | |
| Other operating income and expense[6] | $25m | -65% Actual -61% CER | $24m | -65% Actual -61% CER | ||
| Operating Margin | 16% | -1pp Actual Stable CER | 32% | +1pp Actual +2pp CER | * See commentary above on Gross Margin, R&D, SG&A and Other operating income and expense | |
| Net finance expense | $274m | -6% Actual -15% CER | $329m | 46% Actual 35% CER | + New debt issued at higher interest rates+ Higher level of Net debt | |
| Tax rate | 22% | +5pp Actual +5pp CER | 19% | Stable Actual and CER | * Variations in the tax rate can be expected between periods | |
| EPS | $0.92 | 4% Actual 17% CER | $2.08 | 20% Actual 27% CER | * Further details of differences between Reported and Core are shown in Table 12 |