Strong growth and pipeline momentum with three new medicines approved since the third quarter

AstraZeneca:

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.

Reporting calendar

The Company intends to publish its Q1 2024 results on 25 April 2024.

To read AstraZeneca's Full Year and Q4 2023 Financial Results press release in full, click here.

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¹		Constant exchange rates. The differences between Actual Change and CER Change are due to foreign exchange movements between periods in 2023 vs. 2022. CER financial measures are not accounted for according to generally accepted accounting principles (GAAP) because they remove the effects of currency movements from Reported results.
²		Effective 1 January 2023, the Group has updated the presentation of Total Revenue. For further details of the presentation of Alliance Revenue and Collaboration Revenue, see the Basis of preparation and accounting policies section of the Notes to the Condensed consolidated financial statements section.
³		Core financial measures are adjusted to exclude certain items. The differences between Reported and Core measures are primarily due to costs relating to the acquisition of Alexion, amortisation of intangibles, impairments, legal settlements and restructuring charges. A full reconciliation between Reported EPS and Core EPS is provided in Table 13 and Table 14 in the Financial performance section of this document.
⁴		The COVID-19 medicines are Vaxzevria, Evusheld, and sipavibart (AZD3152) – the COVID-19 antibody currently in development.
⁵		The calculation of Reported and Core Product Sales Gross Margin (formerly termed as Gross Margin) excludes the impact of Alliance Revenue and Collaboration Revenue.
⁶		In Table 2, the plus and minus symbols denote the directional impact of the item being discussed, e.g. a ‘+' symbol next to an R&D expense comment indicates that the item increased the R&D expense relative to the prior year.
⁷		Income from disposals of assets and businesses, where the Group does not retain a significant ongoing economic interest, continue to be recorded in Other operating income and expense in the Company's financial statements.
⁸		Partnered with BridgeBio Pharma Inc (BridgeBio) – AstraZeneca has rights to commercialise acamoridis in Japan

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AstraZeneca Full year and Q4 2023 Financial Results