On February 8, 2024 AstraZeneca reported Full year and Q4 2023 Financial Results (Press release, AstraZeneca, FEB 8, 2024, View Source [SID1234639950]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Revenue and EPS summary
FY 2023
Q4 2023
% Change
% Change
$m
Actual
CER1
$m
Actual
CER
– Product Sales
43,789
2
4
11,323
5
5
– Alliance Revenue2
1,428
89
89
424
69
67
– Collaboration Revenue2
594
(1
)
(1
)
277
75
74
Total Revenue
45,811
3
6
12,024
7
8
Total Revenue ex COVID-19
45,488
13
15
12,036
16
16
Reported EPS
$3.84
81
96
$0.62
7
5
Core3 EPS
$7.26
9
15
$1.45
5
7
Financial performance for full year 2023 (Growth numbers at CER)
Total Revenue $45,811m, up 6% despite a decline of $3,736m from COVID-19 medicines4
Excluding COVID-19 medicines, Total Revenue increased 15% and Product Sales increased 14%
Double-digit Total Revenue growth from Oncology 21%, CVRM 18%, R&I 10%, and Rare Disease 12%
Core Product Sales Gross Margin5 of 82%, up two percentage points, reflecting the decline in sales of lower margin COVID‑19 medicines
Core Operating Margin of 32% increased by two percentage points including the previously announced gain from an update to the contractual relationships for Beyfortus, totalling $712m and recorded as Core Other operating income. In the quarter, higher SG&A expense drove lower operating margins, partly due to phasing of expenses and increased investment in launches for Airsupra, Wainua and Truqap
The Core Tax Rate for the year was 17%. In the fourth quarter, the tax rate was negatively impacted by reviews by tax authorities, administrative appeal processes and other adjustments, offset by a routine intragroup reorganisation of IP, leading to a tax rate of 10% in the quarter
Core EPS increased 15% to $7.26
Second interim dividend declared of $1.97 per share, making a total dividend declared for FY 2023 of $2.90 per share
Total Revenue and Core EPS in FY 2024 are each expected to increase by a low double-digit to low teens percentage at CER
Pascal Soriot, Chief Executive Officer, AstraZeneca, said:
"As AstraZeneca celebrates its 25th anniversary, we are pleased to report another year of strong financial performance and scientific progress, with double-digit earnings growth, and investment in exciting areas of science, including antibody drug conjugates and cell therapies, that lay the foundations for long-term success.
We expect another year of strong growth in 2024, driven by continued adoption of our medicines across geographies. Our differentiated and growing portfolio of approved medicines, global reach and rich R&D pipeline give us confidence that we will continue to deliver industry-leading growth."
Key milestones achieved since the prior results announcement
Three first approvals for new molecular entities: Truqap (capivasertib), Wainua (eplontersen), Voydeya (danicopan)
US approvals for Truqap plus Faslodex in HR-positive, HER2-negative advanced breast cancer with biomarker alterations (CAPItello-291), and Wainua for ATTRv-PN (NEURO-TTRansform). China approvals for Imfinzi in mBTC (TOPAZ-1) and Beyfortus for prevention of RSV in infants (MEDLEY/MELODY). First approval, in Japan, for Voydeya, as an add-on therapy to Ultomiris or Soliris for PNH with EVH (ALPHA)
Enhertu granted Priority Review in the US for patients with metastatic HER2-positive solid tumours
Guidance
The Company issues its Total Revenue and Core EPS guidance for FY 2024 at CER, based on the average foreign exchange rates through 2023.
Total Revenue is expected to increase by a low double-digit to low teens percentage
Core EPS is expected to increase by a low double-digit to low teens percentage
Collaboration Revenue is expected to increase substantially, driven by success-based milestones and certain anticipated transactions
Other operating income is expected to decrease substantially (FY 2023 included a $241m gain on the disposal of Pulmicort Flexhaler US rights, and a $712m one-time gain relating to updates to contractual arrangements for Beyfortus)
The Core Tax rate is expected to be between 18-22%
The Company is unable to provide guidance on a Reported basis because it cannot reliably forecast material elements of the Reported results, including any fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the cautionary statements section regarding forward-looking statements at the end of this announcement.
Currency impact
If foreign exchange rates for February 2024 to December 2024 were to remain at the average rates seen in January 2024, it is anticipated that both FY 2024 Total Revenue and Core EPS would incur a low single-digit adverse impact versus the performance at CER. The Company’s foreign exchange rate sensitivity analysis is provided in Table 19.
Investor Day
AstraZeneca will host an Investor Day on 21 May 2024.
For more information, see www.astrazeneca.com/investor-relations.html.
Table 1: Key elements of Total Revenue performance in Q4 2023
% Change
Revenue type
$m
Actual %
CER %
Product Sales
11,323
5
5
* Excluding COVID-19 medicines, Q4 2023 Product Sales increased by 14%
Alliance Revenue
424
69
67
* $281m for Enhertu (Q4 2022: $188m)
* $80m for Tezspire (Q4 2022: $37m)
* $41m for Beyfortus (Q4 2022: $nil)
Collaboration Revenue
277
75
74
* $245m Lynparza regulatory milestone (Q4 2022: $105m)
* $27m Beyfortus sales milestone (Q4 2022: $nil)
Total Revenue
12,024
7
8
* Excluding COVID-19 medicines, Q4 2023 Total Revenue increased by 16%
Therapy areas
$m
Actual %
CER %
Oncology
4,989
23
24
* Strong performance across all key medicines and regions
CVRM
2,702
18
18
* Farxiga up 36% (35% at CER), Lokelma up 38%, roxadustat up 27%, Brilinta declined 5% (4% at CER)
R&I
1,675
13
13
* Fasenra up 10% (9% CER), Breztri up 72%. Saphnelo and Tezspire also continue to grow rapidly, partially offset by a 16% decline in Symbicort following entry of a generic competitor in the US in the third quarter
V&I
413
(64
)
(66
)
* $6m revenue from COVID-19 mAbs and ‑$17m for Vaxzevria, both resulting from historic contracts (Q4 2022: $734m and $95m respectively)
* Beyfortus $122m, including $41m of Alliance Revenue for AstraZeneca’s share of gross profits outside US, $27m of Collaboration Revenue for a sales milestone and $54m of Product Sales from product supplied to Sanofi
Rare Disease
1,971
9
9
* Ultomiris up 39% (38% at CER), partially offset by decline in Soliris of 15% (13% at CER)
* Strensiq up 12% (13% at CER) and Koselugo up 46% (48% at CER) reflecting strong patient demand
Other Medicines
274
(33
)
(32
)
* Nexium generic competition in Japan
Total Revenue
12,024
7
8
Regions inc. COVID-19
$m
Actual %
CER %
US
5,101
7
6
Emerging Markets
2,783
2
8
– China
1,382
16
16
– Ex-China Emerging Markets
1,401
(9
)
2
Europe
2,880
25
17
Established RoW
1,259
(9
)
(6
)
Total Revenue inc. COVID-19
12,024
7
8
* Growth rates impacted by lower sales of COVID-19 medicines (see table below)
Regions ex. COVID-19
$m
Actual %
CER %
US
5,101
12
12
Emerging Markets
2,791
15
22
– China
1,382
16
16
– Ex-China Emerging Markets
1,409
14
27
Europe
2,884
33
25
Established RoW
1,259
4
8
Total Revenue ex. COVID-19
12,036
16
16
Table 2: Key elements of financial performance in Q4 2023
Metric
Reported
Reported
change
Core
Core
change
Comments6
Total Revenue
$12,024m
7% Actual
8% CER
$12,024m
7% Actual
8% CER
* Excluding COVID-19 medicines, Q4 2023 Total Revenue increased by 16%
* See Table 1 and the Total Revenue section of this document for further details
Product Sales Gross Margin
80%
+6pp Actual
+6pp CER
80%
+3pp Actual
+2pp CER
+ In the prior year period, gross margins were reduced due to inventory write-downs and manufacturing contract terminations for Evusheld
* Variations in Product Sales Gross Margin can be expected between periods due to product seasonality, foreign exchange fluctuations and other effects
R&D expense
$3,073m
17% Actual
15% CER
$2,914m
15% Actual
14% CER
+ Increased investment in the pipeline
* Core R&D-to-Total Revenue ratio of 24% (Q4 2022: 23%)
+ Quarterly phasing impact
SG&A expense
$5,371m
16% Actual
16% CER
$4,034m
13% Actual
12% CER
+ Market development for recent launches and pre-launch activities
* Core SG&A-to-Total Revenue ratio of 34% (Q4 2022: 32%)
+ Quarterly phasing impact
Other operating income and expense7
$107m
-43% Actual
-42% CER
$107m
-17% Actual
-15% CER
‒ Discontinuation of brazikumab development
Operating Margin
10%
+1pp Actual
+1pp CER
23%
Stable
* See Product Sales Gross Margin, expenses and Other operating income and expense commentary above
Net finance expense
$337m
7% Actual
3% CER
$259m
5% Actual
1% CER
+ Higher rates on floating debt and bond issuances
+ Increased Interest expense on income tax balances
‒ Higher interest received on cash and short-term investments
Tax rate
-7%
+9pp Actual
+13pp CER
10%
Stable
‒ Intragroup purchase of intellectual property
+ Reviews by tax authorities, administrative appeals and changes to certain deferred tax balances
* Variations in the tax rate can be expected between periods
EPS
$0.62
7% Actual
5% CER
$1.45
5% Actual
7% CER
* Further details of differences between Reported and Core are shown in Table 14
Table 3: Pipeline highlights since prior results announcement
Event
Medicine
Indication / Trial
Event
Regulatory approvals and other regulatory actions
Truqap
HR-positive HER2-negative advanced breast cancer with biomarker alterations (CAPItello-291)
Regulatory approval (US)
Imfinzi
Biliary tract cancer (TOPAZ-1)
Regulatory approval (CN)
Wainua
ATTRv-PN (NEURO-TTRansform)
Regulatory approval (US)
Beyfortus
RSV (MELODY-MEDLEY)
Regulatory approval (CN)
Voydeya
PNH with EVH (ALPHA)
Regulatory approval (JP)
Regulatory submissions or acceptances*
Lynparza
gBRCA breast cancer (adjuvant) (OlympiA)
Regulatory submission (CN)
Lynparza + Imfinzi
Endometrial cancer (1st-line) (DUO-E)
Regulatory submission (US, EU, JP)
Enhertu
HER2-expressing tumours (DESTINY-PanTumor02, DESTINY-Lung01, DESTINY-CRC02)
Regulatory submission (US), Priority Review (US)
Enhertu
HER2+/HER2-low gastric (1st-line) (DESTINY-Gastric01)
Regulatory submission (CN)
Imfinzi + Imjudo
NSCLC (neoadjuvant) (AEGEAN)
Regulatory submission (EU)
Wainua
ATTRv-PN (NEURO-TTRansform)
Regulatory submission (EU)
Fasenra
EGPA (MANDARA)
Regulatory submission (US, EU, JP)
Ultomiris
NMOSD (CHAMPION-NMOSD)
Regulatory submission (US)
Ultomiris
gMG
Regulatory submission (CN)
Major Phase III data readouts and other developments
Imfinzi
NSCLC (unresectable, Stg. III) (PACIFIC-2)
Primary endpoint not met
acoramidis 8
ATTR-CM
Primary endpoint met
*US, EU and China regulatory submission denotes filing acceptance
Upcoming pipeline catalysts
For a table of anticipated timings of key trial readouts, please refer to page 3 of the Clinical Trials Appendix, available on www.astrazeneca.com/investor-relations.html.
Table 4: Phase III trials started since 1 January 2023
Medicine
Trial name
Indication
datopotamab deruxtecan
AVANZAR
NSCLC (1st-line)
TROPION-Lung07
Non-squamous NSCLC (1st-line)
TROPION-Breast04
Neoadjuvant/adjuvant triple-negative or HR-low/HER2-negative breast cancer
TROPION-Breast05
PD-L1-positive locally recurrent inoperable or metastatic TNBC
camizestrant
CAMBRIA-1
HR-positive/HER2-negative adjuvant breast cancer
CAMBRIA-2
HR-positive/HER2-negative adjuvant breast cancer
Truqap
CAPItello-292
HR-positive/HER2-negative advanced breast cancer
volrustomig
eVOLVE-Cervical
High-risk locally advanced cervical cancer
eVOLVE-Lung02
mNSCLC (1st-line) with PD-L1 <50%
eVOLVE-Meso
Unresectable malignant pleural mesothelioma (1st-line)
eVOLVE-HNSCC
Unresected, locally advanced HNSCC
rilvegostomig
ARTEMIDE-Biliary01
BTC with curative intent
saruparib
EvoPAR-PR01
HRRm and Non-HRRm mCSPC
zibo/dapa
ZENITH High Proteinuria
CKD with high proteinuria
Saphnelo
DAISY
Systemic sclerosis
baxdrostat
BaxHTN
Uncontrolled, including treatment-resistant, hypertension
Tezspire
CROSSING
Eosinophilic oesophagitis
Breztri
LITHOS
Mild to moderate asthma
ATHLOS
COPD
pMDI portfolio
HFO1234ze + Breztri
COPD
HFO1234ze
Mucociliary clearance in healthy volunteers
HFO1234ze
Asthma
tozorakimab
MIRANDA
COPD
ipavibart (AZD3152)
SUPERNOVA
COVID-19 prophylaxis
Ultomiris
ARTEMIS
Cardiac surgery-associated acute kidney injury
ALXN2220
DepleTTR-CM
Transthyretin amyloid cardiomyopathy
efzimfotase alfa (ALXN1850)
HICKORY
Hypophosphatasia
Corporate and business development
In November 2023, AstraZeneca launched Evinova, with an ambition to become a leading provider of digital health solutions to better meet the needs of healthcare professionals, regulators and patients. Evinova will prioritise bringing to market established and scaled digital technology solutions already being used globally by AstraZeneca to optimise clinical trial design and delivery. Globally-leading clinical research organisations Parexel and Fortrea have entered into agreements to offer Evinova digital health solutions to their wide customer base.
In December 2023, AstraZeneca entered into a definitive agreement to acquire Icosavax, Inc (Icosavax). The acquisition strengthens AstraZeneca’s late-stage pipeline with Icosavax’s lead investigational vaccine candidate, IVX-A12, a potential first-in-class, Phase III-ready, combination VLP vaccine that targets both RSV and hMPV. RSV and hMPV are both leading causes of severe respiratory infection and hospitalisation in adults 60 years of age and older and those with chronic conditions such as cardiovascular, renal and respiratory disease. Subject to the satisfaction of the conditions in the merger agreement, the acquisition is expected to close in the first quarter of 2024.
In December 2023, AstraZeneca entered into a definitive agreement to acquire Gracell Biotechnologies Inc. (Gracell), a global clinical-stage biopharmaceutical company developing innovative cell therapies for the treatment of cancer and autoimmune diseases. The proposed acquisition will enrich AstraZeneca’s growing pipeline of cell therapies with GC012F, a novel, clinical-stage FasTCAR-enabled BCMA and CD19 dual-targeting CAR-T therapy, a potential new treatment for multiple myeloma, as well as other haematologic malignancies and autoimmune diseases including systemic lupus erythematosus. The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions, including regulatory clearances, and Gracell shareholder approval.
In February 2024, AstraZeneca announced that it is investing $300 million in a state-of-the-art facility in Rockville, Maryland to establish life-saving cell therapy platforms for critical cancer trials and future commercial supply. To align with clinical trial timelines, the site will initially focus on pivotal clinical trial manufacturing of CAR-T cell therapies to meet current clinical supply demand. More than 150 new highly skilled jobs will be created to initially focus on manufacturing T-cell therapies to enable clinical trials to be conducted around the world. Over time, the site may expand its focus to support other therapy areas.
Sustainability highlights
Through the Sustainable Markets Initiative Health Systems Task Force, AstraZeneca announced an industry-first renewable power agreement in China together with four global healthcare leaders and renewable energy company Envision Energy, resulting in potential annual emissions savings of approximately 120,000 tonnes, the equivalent of taking 25,000 cars off the road. See the Sustainability section in this document for further details.
Conference call
A conference call and webcast for investors and analysts will begin today, 8 February 2024, at 11:45 UK time. Details can be accessed via astrazeneca.com.