AstraZeneca PLC — Earnings Release 2010

Mar 15, 2011

How does health connect us all?

AstraZeneca 2010 In Brief

AstraZeneca 2010 In Brief A

Acute coronary syndromes – or ACS – is a term used to describe sudden chest pain and other symptoms caused by an insufficient blood supply to the heart. They are the most common manifestation of coronary heart disease (CHD) with over 2.5 million occurrences in the developed world each year. Despite the availability of current treatment options, data suggests that up to 15% of patients die within one year of their cardiovascular event.

Brilinta/Brilique (ticagrelor tablets) is an oral antiplatelet treatment we have developed for ACS. The clinical development for Brilinta/Brilique included the PLATO study, one of the largest clinical trials we have ever undertaken, involving 18,624 patients in 43 countries. PLATO was designed to reflect current clinical management of ACS patients and to establish whether Brilinta/Brilique could improve cardiovascular outcomes beyond those afforded by clopidogrel (Plavix™/Iscover™). The overall PLATO results demonstrated the superiority of ticagrelor in reducing heart attacks and cardiovascular death in patients with ACS. The data has provided the basis for regulatory filings worldwide.

For more than half a century, AstraZeneca has been at the forefront of R&D in cardiovascular diseases. Brilinta/Brilique was discovered at our laboratories in the UK and represents another example of our commitment to developing and delivering innovative medicines that make a meaningful difference to patient health.

Who can help me survive a heart attack?

Health is something that connects us all

In our mission to make a meaningful difference to the world's health, we work closely with governments and regulators, those who pay for healthcare, our partners in industry and academia, and doctors. Through our activities we touch a great number of people's lives and we are acutely conscious of our responsibility to patients and society in general.

You will find more detail and further information on all the case studies featured in this document on our website, astrazeneca.com/ annualreport2010

6 Focus on six areas of healthcare 61,000

61,000 employees worldwide

10 10 medicines with sales of over \$1 billion in 2010

100 Active in over 100 countries

AstraZeneca is a focused, integrated, innovation-driven, global, prescription-based biopharmaceutical business

Our mission is to make a meaningful difference to patient health through great medicines

We are committed to acting responsibly and to the sustainable development of our business

Our mission requires us to do things in the right way – to behave in accordance with our values and act with integrity

We believe that our approach delivers lasting value for patients, society and our shareholders

What we do

We discover, develop and commercialise prescription medicines for six important areas of healthcare: Cardiovascular, Gastrointestinal, Infection, Neuroscience, Oncology and Respiratory & Inflammation

We have a broad range of medicines that includes established treatments for many serious illnesses such as our antibiotic, Merrem/Meronem and Losec/Prilosec for acid related diseases

We use our scientific and commercial skills to develop a pipeline of innovative new medicines to meet medical need

We had 10 medicines with sales of more than \$1 billion each in 2010

Cardiovascular Crestor for managing cholesterol levels

Seloken/Toprol-XL hypertension, heart failure and angina

Atacand for hypertension and heart failure

Gastrointestinal Nexium for acid reflux

Infection Synagis for RSV, a respiratory infection in infants

Neuroscience Seroquel IR for schizophrenia and bipolar disorder

Seroquel XR for schizophrenia, bipolar disorder and major depressive disorder

Oncology Arimidex for breast cancer

Zoladex for prostate and breast cancer

Respiratory & Inflammation Symbicort for asthma and chronic obstructive pulmonary disease

Our activities touch many people's lives and we are committed to working in a spirit of collaboration to achieve our goal of better health for patients

For patients and doctors, we provide medicines for some of the world's most serious illnesses

For the people who pay for healthcare, we work to make sure that our medicines offer value for money

For our employees, we provide a culture in which they can feel appreciated, energised and rewarded for their contribution

For our shareholders, we aim to deliver value through our continued focus on innovation and running our business efficiently

For the wider community, we want to be valued for the contribution our medicines make to society and trusted for the way in which we do business

We recognise the value of collaborative work and so continually seek to develop new ways of working with others who complement our existing skills, enhance our internal innovation or bring extra value to what we do

Who we are How we work Where we work

We have a global reach but local knowledge, being active in over 100 countries, with a growing presence in emerging markets such as China, Mexico, Brazil and Russia

In 2010, we had sales of \$13,727 million in the US, \$9,168 million in Western Europe, \$5,176 million in Established Rest of World markets and \$5,198 million in Emerging Markets

Combining our disease area expertise with country-specific knowledge helps us to market and sell medicines that best meet local needs

Of our 61,000 employees worldwide, 45.6% are in Europe, 30.5% in the Americas and 23.9% in Asia, Africa and Australasia

Around 15,700 people work in our R&D organisation and we have 14 principal R&D centres in eight countries, including Sweden, the US and the UK

We have 9,300 employees at 23 Supply and Manufacturing sites in 16 countries

\$4.2bn

Core investment of \$4.2 billion in our R&D organisation in 2010

80

Over 80 major externalisation transactions completed over the past three years

46%

46% of sales and marketing workforce based in Emerging Markets compared with 16% in 2002

23 23 Supply and Manufacturing sites

Sales \$m (unchanged)

2010	33,269	2010	13,603
2009	32,804	2009	13,621
2008	31,601	2008	10,958

Core gross margin \$m (-1%)

2010	27,024	2010	6.71
2009	27,217	2009	6.32
2008	25,408	2008	5.10

\$ (+7%)

Net cash flow from operating activities \$m

2010	10,680
2009	11,739
2008	8,742

Reported operating profit \$m (-1%)

Core earnings per Ordinary Share \$ (+5%)

Core operating profit \$m (unchanged)

2010	11,494
2009	11,543
2008	9,144

Reported basic earnings per Ordinary Share

Reported gross margin \$m (-1%)

2010	26,880	2010	5.60
2009	27,029	2009	5.19
2008	25,003	2008	4.20

Dividend information

Dividend for 2010	\$	Pence	SEK	Payment date
First interim dividend	0.70	44.9	5.12	13 September 2010
Second interim dividend	1.85	116.7	11.99	14 March 2011
Total	2.55	161.6	17.11

Distributions to shareholders \$m	2010	2009	2008
Dividends	3,361	2,977	2,739
Share repurchases	2,6041	–	610

Share repurchases in 2010, net of proceeds from the issue of share capital equal to \$494 million, were \$2,110 million.

Our year in brief Operational overview

92

92 projects in clinical development, including 9 in Phase III or under regulatory review. 34 withdrawn during the year

7%

Revenue in the US fell 7%, while revenue in Rest of World rose by 7%

\$5bn

Annual Crestor and Seroquel sales exceeded \$5 billion each

\$5.1bn

Revenue in Emerging Markets grew to over \$5.1 billion, a 16% increase

The first phase of the restructuring programme is now complete, resulting in annual benefits of \$2.4 billion

\$2.1bn Net share repurchases totalled \$2.1 billion in 2010

• Single R&D organisation in place, including new leadership team, global organisation structure and governance framework

• Vimovo approved in the US and the EU; Brilique approved in the EU with Complete Response Letter received for Brilinta in the US; Kombiglyze™ XR (Onglyza™/metformin combination) approved in the US; decisions made in December to discontinue development of motavizumab and Certriad

• Completed a deal with Rigel for the Phase III development of fostamatinib (for rheumatoid arthritis), and TC-5214, our neuroscience collaboration with Targacept, also entered Phase III development

• Agreement with HealthCore, which maintains the largest commercially insured population data environment in the US, enables 'real world' studies of health outcomes

• Portfolio of more than 100 generic products being licensed across 30 Emerging Markets for marketing under our brand

• Crestor substance patent upheld in the US courts

• Ranked in the top 8% in the sector in the Dow Jones Sustainability World and European Indexes

• Reviewed and revised Responsible Business Plan to align it with strategic business priorities

• Additional ways of reporting sales and marketing performance introduced to support increased transparency

• Improvement in senior leader communications with employees but slight decline in employee engagement

All growth rates are at CER

How can I help manage my asthma?

Approximately 300 million people worldwide suffer from asthma. It is one of the most common chronic diseases and its prevalence is increasing every year, especially among children. It is estimated that by 2025 there will be an additional 100 million sufferers.

Although asthma cannot be cured, it can be treated effectively. Research shows that with the right treatment nearly all asthma patients can achieve and maintain good asthma control, enabling them to live full and active lives.

Our Symbicort medicine provides important improvement in the health of many patients with asthma. Symbicort pMDI (pressurised metered-dose inhaler) is approved in the US for the treatment of asthma in patients 12 years of age and older.

Outside the US, our Symbicort Turbuhaler maintenance and reliever therapy (SMART) combines both regular maintenance and as-needed reliever therapies. It is the only asthma treatment regime to do so and allows patients to control daily symptoms and reduce the severity and number of asthma attacks using a single inhaler. It gives asthma patients what they want in daily symptom control and also gives them what they need in the longer term – improved asthma management.

What is being done to improve health in China?

AstraZeneca is one of the country's fastest growing multinational pharmaceutical companies. At present, most of our business comes from big hospitals in 200 of the largest cities that have a population of more than one million. We are investing to improve our sales capabilities in these and in a further 100 large cities.

At the same time, nearly 900 million people live outside big cities and the Chinese government is investing \$125 billion between 2009 and 2011 to support healthcare reform by expanding basic healthcare insurance and upgrading community and rural hospitals. We have plans to build a sustainable business in this broader market.

We are also supporting the Chinese Ministry of Health in improving patient health with an innovative programme to increase the capacity of community healthcare services by strengthening the training of general practitioners. In collaboration with the China Medical Association, which will be providing the training, AstraZeneca is sponsoring a three-year programme. It will help train some 30,000 community general practitioners so that they can better treat some common chronic diseases.

TB is the leading cause of death in people living with HIV. Together, the two diseases are a deadly combination. In Uganda, there is the added burden of malaria, which causes more illness and death than any other single disease. The diseases are linked but Ugandans with TB/ HIV, malaria and other conditions have to attend separate health services for treatment.

Our partnership with the African Medical and Research Foundation (AMREF) is focused on developing a model for the integrated management of TB, HIV/AIDS and malaria that provides a framework for effective and efficient healthcare at local and national levels.

Working in collaboration with the Ugandan government in the districts of Luwero and Kiboga in central Uganda, the partnership has focused on increasing laboratory diagnostic capacity and improving community-based healthcare management. Progress to date includes the completion and handover to local district management teams of four new laboratories and the establishment of 328 village health teams with over 1,300 people trained in health promotion in their local communities. In addition, a study of drug logistics management revealed significant knowledge gaps and out of stock supply problems. Subsequently, 108 health workers have been trained in drug logistics management to help prevent shortages.

Who is improving my healthcare?

In a world where there is increasing pressure on healthcare budgets, we can be more effective if we can identify the patients likely to benefit most from particular medicines. We have experience of this personalised healthcare approach with our lung cancer therapy Iressa.

At one stage Iressa had its submissions withdrawn because its benefits failed to reach statistical significance in the overall population. However, it worked well on some patients and subsequent analysis of data from clinical studies showed that it was superior to conventional chemotherapy in 1st line treatment of lung cancer patients who had a mutation of the EGFR gene.

Identifying the right treatment for the right patient at the right time and to embed it as part of routine clinical practice was the major challenge for Iressa. We worked with a variety of healthcare professionals (HCPs) to improve education and best practice in EGFR testing. Workshops involving pathologists, oncologists and respiratory physicians were run around the world. These were complemented by digital activities, including websites, e-learning, and even iPhone applications, to promote best practice and facilitate routine diagnostic testing.

As the first personalised medicine in lung cancer, Iressa is pioneering, not just for the benefits it offers patients, but for the way in which it has brought together different groups of HCPs and changed the way patients are tested and treated as part of routine clinical practice.

How do I find a cancer treatment that's right for me?

Further information

AstraZeneca 2010 In Brief

This document contains information, including financial information, extracted from the Annual Report and Form 20-F Information 2010 (Annual Report) for AstraZeneca PLC (the Company). The Company and its subsidiaries are variously referred to herein as 'AstraZeneca', the 'Group', 'we', 'us' and 'our'. This information is provided solely for the convenience of current and future members of the Company and is only intended to introduce the information contained in the Annual Report. Consequently, it should not be read as a substitute for the Annual Report itself. It is not intended to satisfy any statutory and/or regulatory requirements in the UK or elsewhere. Accordingly, it should only be read in conjunction with the Annual Report. The Company, its subsidiaries, Directors and officers shall not be liable for the consequence of any action taken solely in reliance on the information contained in this document.

Website

A copy of the Annual Report is available on our website, astrazeneca.com/annualreport2010. It is also available by request from the Company Secretary.

Statement of dates

Except as otherwise stated, references to days and/or months in this document are references to days and/or months in 2010.

Trade marks

Trade marks of the Group appear throughout this document in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol are all trade marks of the Group.

Inclusion of reported performance, core financial measures and constant exchange rate growth rates

The following measures are referred to in this document:

• Reported performance. Reported performance takes into account all the factors (including those which we cannot influence, principally currency exchange rates) that have affected the results of our business as reflected in our Group Financial Statements prepared in accordance with International Financial Reporting Standards as adopted by the EU and as issued by the International Accounting Standards Board.

• Core financial measures. These are non-GAAP measures because unlike Reported performance they cannot be derived directly from the information in the Group's Financial Statements. These measures are adjusted to exclude certain significant items, such as charges and provisions related to our global restructuring programmes, amortisation and impairment of the significant intangibles relating to the acquisition of MedImmune in 2007, the amortisation and impairment of the significant intangibles relating to our current and future exit arrangements with Merck in the US and other specified items. See the 2010 Reconciliation of Reported results to Core results table on page 82 of the Annual Report for a reconciliation of Reported to Core performance.

• Constant exchange rate (CER) growth rates. These are also non-GAAP measures. These measures remove the effects of currency movements (by retranslating the current year's performance at the previous year's exchange rates and adjusting for other exchange effects, including hedging). A reconciliation of the Reported results adjusted for the impact of currency movements is provided in the 2010 Reported operating profit table on page 82 of the Annual Report. Throughout this document, growth rates are expressed at CER unless otherwise stated. AstraZeneca's determination of non-GAAP measures together with our presentation of them within our financial information may differ from similarly titled non-GAAP measures of other companies.

Defined terms

Unless otherwise defined in this document, defined terms used in this document shall have the meaning given to them in the Annual Report.

Registered office and corporate headquarters

AstraZeneca PLC 2 Kingdom Street London W2 6BD UK

Tel: +44 (0)20 7604 8000 Fax: +44 (0)20 7604 8151

Cautionary statement regarding forward-looking statements

The purpose of this document is to provide information to the members of the Company. The Company and its Directors, employees, agents and advisors do not accept or assume responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act of 1995 and the UK Companies Act 2006, we are providing the following cautionary statement: This document contains certain forwardlooking statements with respect to the operations, performance and financial condition of the Group. Forward-looking statements are statements relating to the future which are based on information available at the time such statements are made, including information relating to risks and uncertainties. Although we believe that the forward-looking statements in this document are based on reasonable assumptions, the matters discussed in the forward-looking statements may be influenced by factors that could cause actual outcomes and results to be materially different from those expressed or implied by these statements. The forward-looking statements reflect knowledge and information available at the date of the preparation of this document and the Company undertakes no obligation to update these forward-looking statements. We identify the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in such statements. Important factors that could cause actual results to differ materially from those contained in forward-looking statements, certain of which are beyond our control, include, among other things, those factors identified in the Principal risks and uncertainties section from page 96 of the Annual Report. Nothing in this document or in the Annual Report should be construed as a profit forecast.