news/AZN/2023.02.09/Astrazeneca : Full Year and Q4 2022 results announcement.txt

          AstraZeneca
        

          9 February 2023 07:00 GMT
        

          Full year and Q4 2022 results
        

          Strong performance and pipeline progress in 2022 underpins 2023 outlook On track to deliver industry-leading revenue growth through 2025 and beyond
        




            Revenue and EPS summary
          


Product Sales


Collaboration Revenue Total Revenue Reported2 EPS3 Core4 EPS
            









                  FY 2022
                







                  Q4 2022
                









                  % Change
                







                  % Change
                







                  $m
                



                  Actual
                



                  CER1




                  $m
                



                  Actual
                



                  CER
                





                  42,998
                



                  18
                



                  24
                



                  10,798
                



                  (6)
                



                  2
                





                  1,353
                



                  54
                



                  56
                



                  409
                



                  (20)
                



                  (19)
                





                  44,351
                



                  19
                



                  25
                



                  11,207
                



                  (7)
                



                  1
                





                  $2.12
                



                  n/m
                



                  n/m
                



                  $0.58
                



                  n/m
                



                  n/m
                





                  $6.66
                



                  26
                



                  33
                



                  $1.38
                



                  (17)
                



                  (5)
                







Financial performance (FY 2022 figures unless otherwise stated, growth numbers and commentary at CER)
        


Total Revenue increased 25% to $44,351m, with growth coming from all therapy areas, and from the addition of Alexion, which was incorporated into the Group's results from 21 July 2021


Total Revenue in the fourth quarter was impacted by the decline in Vaxzevria. Excluding Vaxzevria, Total Revenue in the quarter increased 17%
          

Oncology Total Revenue including milestone receipts increased 20%; Oncology Product Sales increased 19%. Total Revenue CVRM5 increased 19%6, R&I7 increased 3%, and Rare Disease increased 10%6


Core Gross Margin of 80%, up six percentage points, reflecting the lower revenue from Vaxzevria and the increased share of Oncology and Rare Disease medicines. Core Gross Margin of 77% in the fourth quarter was impacted by inventory write downs and manufacturing termination fees for Evusheld


Core Total Operating Expense increased 23%, reflecting the addition of Alexion, and continued investment in new launches and the pipeline to deliver sustainable long-term growth
          

Core Operating Margin of 30%, up four percentage points


Core EPS increased 33% to $6.66. Second interim dividend declared of $1.97 per share, making a total dividend declared for FY 2022 of $2.90 for the year. The Core Tax Rate for the year was 17%, reflecting IP incentive regimes, geographical mix of profits and adjustments to prior year tax liabilities



          FY 2023 Guidance summary (Growth numbers at CER)



Total Revenue is expected to increase by a low-to-midsingle-digit percentage
          

Total Revenue excluding COVID-19 medicines8 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
          


          Pascal Soriot, Chief Executive Officer, AstraZeneca, said:
        

          "2022 was a year of continued strong company performance and execution of our long-term growth strategy. We made excellent pipeline progress with a record 34 approvals in major markets and we are initiating new late-stage trials for high potential medicines such as camizestrant, datopotamab deruxtecan and volrustomig.
        

          In 2023, we expect to see another year of double-digit revenue growth at CER, excluding our COVID-19 medicines. We will continue to invest behind our pipeline and recent launches while continuing to improve profitability. We plan to initiate more than thirty Phase III trials this year, of which ten have the potential to deliver peak year sales over one billion dollars.
        

          Our R&D success and revenue increase in 2022 demonstrate that we are on track to deliver industry-leading revenue growth through 2025 and beyond, and have set AstraZeneca on a path to deliver at least fifteen new medicines before the end of the decade."
        

          1
        




        Key milestones achieved since the prior results
      


Key regulatory approvals: US approval for Airsupra (PT027) in asthma. EU approvals for Lynparza9 in mCRPC10 (PROpel), Enhertu in gastric cancer (DESTINY-Gastric01) and HER211-low breast cancer (DESTINY-Breast04),Imfinzi in biliary tract cancer (TOPAZ-1),Imfinzi+Imjudo in HCC12 and Forxiga in heart failure with preserved ejection fraction. Five approvals in Japan, including Imfinzi and Imjudo in liver cancer (TOPAZ-1) and NSCLC13 (POSEIDON) and Calquence for treatment-naïve CLL (ELEVATE-TN)
        

Other regulatory milestones: US Fast Track designations for capivasertib in HR-positiveHER2-negative breast cancer (CAPItello-291), tozorakimab in treatment/prevention of acute respiratory failure in patients with viral lung infection (TILIA), and Orpathys plus Tagrisso in NSCLC with MET14 overexpression (SAVANNAH/SAFFRON); US Orphan Drug Designation for Saphnelo in idiopathic inflammatory myopathies; US Emergency Use Authorisation for Evusheld revised - as of January 2023, Evusheld is not currently authorised for use in the US.
        


        Guidance
      

        The Company provides guidance for FY 2023 at CER, based on the average exchange rates through 2022.
      

        Total Revenue is expected to increase by a low-to-midsingle-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
      


While challenging to forecast, Total Revenue from COVID-19 medicines (Vaxzevria, Evusheld and AZD3152, the COVID-19 LAAB15 currently in development) is expected to decline significantly in FY 2023, with minimal revenue from Vaxzevria


Total Revenue from China is expected to return to growth and increase by a low single-digit percentage in FY 2023
        

Collaboration Revenue and Other Operating Income are both expected to increase, driven by continued growth of our partnered medicines, success-based milestones, and certain anticipated transactions
        

Core Operating Expenses are expected to increase by a low-to-midsingle-digit percentage, driven by investment in recent launches and the ungating of new trials
        

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 result, 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 to December 2023 were to remain at the average rates seen in January 2023, it is anticipated that FY 2023 Total Revenue and FY 2023 Core EPS would both incur a low single-digit adverse impact versus the performance at CER.
      

        The Company's foreign exchange rate sensitivity analysis is provided in Table 17.
      

        2
      




          Table 1: Key elements of Total Revenue performance in Q4 2022
        




            Revenue type
          

            Product Sales
          

            Collaboration Revenue
          

            Total Revenue
          

            Therapy areas
          

            Oncology
          

            CVRM6


            R&I
          

            V&I18


            Rare Disease6


            Other Medicines
          

            Total Revenue
          

            Regions inc. Vaxzevria


            Emerging Markets
          


China


Ex-ChinaEmerging Markets
              US Europe Established RoW
              Total Revenue inc. Vaxzevria










                  % Change
                











                  $m
                



                  Actual
                



                  CER
                









                  10,798
                



                  (6)
                



                  2
                





 Decline of 6% (2% increase at CER) due to lower
                













                  sales of Vaxzevria16














 Strong growth in Oncology, CVRM and Rare
                













                  Disease
                





                  409
                



                  (20)
                



                  (19)
                





 $188m for Enhertu (Q4 2021: $60m)
                













 $37m for Tezspire (Q4 2021: $nil)
                













 Milestone of $105m for Lynparza






                  11,207
                



                  (7)
                



                  1
                





 Excluding Vaxzevria, Q4 2022 Total Revenue
                













                  increased by 8% (17% at CER) - see below
                



















                  $m
                



                  Actual
                



                  CER
                









                  4,046
                



                  4
                



                  12
                





 Strong performance across key medicines and
                













                  regions
                





                  2,284
                



                  12
                



                  22
                





 Farxiga up 39% (52% CER), Lokelma up 50%
                













                  (63% at CER), roxadustat up 61% (83% CER),
                













Brilinta decreased 1% (increased 4% at CER)
                





                  1,485
                



                  (7)
                



                  (1)
                





 Growth in Fasenra, Breztri and Saphnelo offset














                  by decline in Pulmicort of 33% (28% at CER)
                













                  primarily due to the impact of VBP17














                  implementation in China
                





                  1,163
                



                  (50)
                



                  (43)
                





 $734m from Evusheld (Q4 2021: $135m)
                













 $95m from Vaxzevria (Q4 2021: $1,762m)
                





                  1,816
                



                  4
                



                  10
                





 Ultomiris up 52% (62% at CER) as gMG launch
                













                  and conversion progressed; offset by decline in
                













                  Soliris
                













 Strensiq up 24% (27% at CER) reflecting
                













                  strength of patient demand and geographic
                













                  expansion
                





                  412
                



                  (2)
                



                  12
                









                  11,207
                



                  (7)
                



                  1
                











                  $m
                



                  Actual
                



                  CER
                









                  2,733
                



                  (25)
                



                  (18)
                





 Decline due to lower sales of Vaxzevria (growth
                













                  rates excluding Vaxzevria shown below)
                





                  1,194
                



                  (9)
                



                  3
                





 Second consecutive quarter of growth at CER
                





                  1,538
                



                  (35)
                



                  (29)
                





 Decline due to lower sales of Vaxzevria






                  4,788
                



                  22
                



                  22
                









                  2,308
                



                  (20)
                



                  (8)
                





 Decline due to lower sales of Vaxzevria






                  1,378
                



                  (11)
                



                  8
                









                  11,207
                



                  (7)
                



                  1
                












            Regions exc. Vaxzevria


            Emerging Markets
          


China


Ex-ChinaEmerging Markets
            


            US Europe Established RoW
          

            Total Revenue exc. Vaxzevria







                  $m
                



                  Actual
                



                  CER
                





                  2,678
                



                  7
                



                  18
                





                  1,194
                



                  (8)
                



                  4
                





                  1,484
                



                  24
                



                  33
                





                  4,788
                



                  24
                



                  24
                





                  2,268
                



                  (12)
                



                  1
                





                  1,378
                



                  4
                



                  27
                





                  11,112
                



                  8
                



                  17
                















Second consecutive quarter of growth at CER


Strong growth in Oncology and CVRM


$246m from Evusheld in Q4 (Q4 2021: $69m)
            

Growth in Oncology medicines






          3
        





          Table 2: Key elements of financial performance in Q4 2022
        




                Metric
              



                Reported
              



                Reported
              



                Core
              



                Core
              









                change
              





                change
              

















                Total
              



                $11,207m
              



                -7% Actual
              



                $11,207m
              



                -7% Actual
              





                Revenue
              



                1% CER
              



                1% CER
              

























                Gross
              



                73%
              



                13pp Actual
              



                77%
              



                3pp Actual
              





                margin20




                15pp CER
              



                4pp CER
              













                R&D
              



                $2,625m
              



                2% Actual
              



                $2,526m
              



                5% Actual
              





                expense
              



                9% CER
              



                12% CER
              























                SG&A
              



                $4,621m
              



                -10% Actual
              



                $3,583m
              



                6% Actual
              





                expense
              



                -3% CER
              



                15% CER
              























                Other
              





                29% Actual
              





                -11% Actual
              





                operating
              



                $189m
              



                $130m
              





                33% CER
              



                -7% CER
              





                income21




















                Operating
              



                10%
              



                12pp Actual
              



                23%
              



                -4pp Actual
              





                margin
              



                14pp CER
              



                -3pp CER
              























                Net finance
              



                $315m
              



                -6% Actual
              



                $245m
              



                5% Actual
              





                expense
              



                stable at CER
              



                9% CER
              























                Tax rate
              



                -16%
              



                n/m
              



                10%
              



                -7pp Actual
              





                -6pp CER
              



























                EPS
              



                $0.58
              



                n/m
              



                $1.38
              



                -17% Actual
              





                -5% CER
              




























          Comments19



Excluding Vaxzevria, Q4 2022 Total Revenue increased by 8% (17% at CER)
          

See Table 1 and the Total Revenue section of this document for further details




Increasing mix of sales from Oncology and Rare Disease medicines


Decreasing mix of Vaxzevria sales
          



Negative impact in the quarter from currency fluctuations


Inventory write downs and manufacturing termination fees relating to Evusheld reduced Gross Profit by $335m in Q4 2022
          

Mix impact from profit-sharing arrangements (e.g. Lynparza)


Reported Gross Margin impacted by unwind of Alexion inventory fair value adjustment



          + Increased investment in the pipeline
        


Core R&D-to-Total Revenue ratio of 23% (Q4 2021: 20%)
          



Market development activities for recent launches


Core SG&A-to-Total Revenue ratio of 32% (Q4 2021: 28%). The year-on-year comparison is impacted by differences in cost phasing during H2 2021 and H2 2022
          



Reported and Core OOI includes income from sale of the Waltham site
          

See Gross Margin and Expenses commentary above


Reported impacted by a reduction in the discount unwind on acquisition-related liabilities
          

The Reported and Core Tax Rates in the quarter reflected IP incentive regimes, geographical mix of profits and adjustments to prior year tax liabilities including several one-time items
          

Variations in the tax rate can be expected to continue quarter to quarter


Further details of differences between Reported and Core are shown in Table 12



          4
        





          Table 3: Pipeline highlights since prior results announcement
        




                Event
              



                Medicine
              



                Indication / Trial
              



                Event
              

















                Imfinzi +/- Imjudo
              



                NSCLC (1st-line) (POSEIDON)
              



                Regulatory approval (US, JP)
              







                Imfinzi + Imjudo
              



                Hepatocellular carcinoma (1st-line)
              



                Regulatory approval (JP)
              









                (HIMALAYA)
              




















                  Imfinzi
                





                  Regulatory
                



                  Lynparza
                









                  approvals and
                



                  Enhertu
                





                  other regulatory
                





                  actions
                



                  Enhertu
                











                  Enhertu
                






            Biliary tract cancer (TOPAZ-1) mCRPC (1st-line) (PROpel)
          

            HER2-positive breast cancer (2nd-line)(DESTINY-Breast03)
          

            HER2-low breast cancer (3rd-line)(DESTINY-Breast04)HER2-positive/HER2-low gastric (2nd-line)(DESTINY-Gastric01,DESTINY-Gastric02)
          



            Regulatory approval (EU, JP) Regulatory approval (EU)
          

            Regulatory approval (JP)
          

            Regulatory approval (EU)
          

            Regulatory approval (EU)
          









                Calquence
              



                CLL22 (ELEVATE-TN)
              



                Regulatory approval (JP)
              







                Calquence
              



                Maleate tablet formulation
              



                Regulatory approval (EU)
              







                Forxiga
              



                HFpEF23 (DELIVER)
              



                Regulatory approval (EU, JP)
              







                Airsupra
              



                Severe asthma (MANDALA/DENALI)
              



                Regulatory approval (US)
              







                Tezspire
              



                Pre-filled pen
              



                Regulatory approval (US, EU)
              

















                Enhertu
              



                HER2-mutated NSCLC (2nd-line+)
              



                Regulatory submission (EU, JP)
              





                Regulatory
              



                (DESTINY-Lung01)
              











                submissions
              



                Calquence
              



                CLL (ASCEND)
              



                Regulatory submission (CN)
              





                or acceptances
              



                Beyfortus
              



                RSV24 (MELODY/MEDLEY)
              



                Regulatory submission (US)
              







                Soliris
              



                NMOSD25




                Regulatory submission (CN)
              







                Imfinzi
              



                NSCLC (1st-line) (PEARL)
              



                Primary endpoint not met
              







                capivasertib
              



                HR26+/HER2-negative breast cancer
              



                Fast Track Designation (US)
              







                (1st-line)(CAPItello-291)
              















                Orpathys +




                NSCLC with MET overexpression
              



                Fast Track Designation (US)
              







                Tagrisso
              



                (SAVANNAH/SAFFRON)
              





                Major Phase III
              







                data readouts
              





                Treatment/prevention of acute
              







                and other
              



                tozorakimab
              



                respiratory failure in patients with viral
              



                Fast Track Designation (US)
              





                developments
              





                lung infection (TILIA)
              









                Saphnelo
              



                Idiopathic inflammatory myopathies
              



                Orphan Drug Designation (US)
              











                Revision of Emergency Use
              







                Evusheld
              



                Pre-exposure prophylaxis of COVID-19
              



                Authorisation (US) - Evusheld is not
              







                currently authorised in the US until
              



















                further notice from the FDA27





          5
        

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AstraZeneca plc published this content on 09 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 February 2023 07:12:41 UTC.