AstraZeneca PLC — Earnings Release 2022

Nov 10, 2022

National Storage Mechanism | Additional information RNS Number : 9054F AstraZeneca PLC 10 November 2022 AstraZeneca PLC 10 November 2022 07:00 GMT YTD and Q3 2022 results Record number of regulatory approvals and guidance uplift underpinned by strong business performance Revenue and EPS summary YTD 2022 Q3 2022 % Change % Change $m Actual CER[1] $m Actual CER - Product Sales 32,200 29 35 10,590 9 16 - Collaboration Revenue 944 >2x >2x 392 >3x >3x Total Revenue 33,144 30 37 10,982 11 19 Reported[2] EPS[3] $1.54 >4x >4x $1.06 n/m n/m Core[4] EPS $5.28 47 52 $1.67 55 70 YTD 2022 Financial performance (growth numbers and commentary at CER[5]) ��� Total Revenue increased 37% to $33,144m, with growth coming from all disease areas, and from the addition of Alexion, which was incorporated into the Group's results from 21 July 2021 ��� Oncology Total Revenue increased 24%, inclusive of milestone payments from MSD[6] for Lynparza. Oncology Product Sales increased 20%. Total Revenue from R&I[7] increased 4%, CVRM[8] increased 19%[9] and Rare Disease increased 10%9 ��� Core Gross Margin of 81%, up six percentage points at CER, reflecting the lower revenue from initial Vaxzevria contracts and the increased share of specialty care medicines ��� Core Total Operating Expense increased 26%, reflecting the addition of Alexion, continued investment in new launches and the pipeline, to deliver sustainable long-term growth ��� Core Operating Margin of 32%, up six percentage points at CER, benefitting from favourable phasing and product mix ��� Core EPS increased 52% to $5.28 ��� FY 2022 Core EPS at constant exchange rates now expected to increase by a high twenties to low thirties percentage, vs previous guidance of a mid-to-high twenties increase. At actual exchange rates, FY 2022 Core EPS growth is anticipated to be impacted by a currency headwind[10] of a mid-to-high single-digit percentage, versus previous guidance of a mid single-digit headwind Key milestones achieved since the prior results ��� Key data: Positive Phase III read-outs for danicopan in PNH-EVH[11] (ALPHA) and for capivasertib in 2nd-line HR-positive, metastatic breast cancer (CAPItello-291) ��� Key regulatory approvals: 19 approvals in major markets since H1 2022 results, including US approvals for Enhertu in HER2[12]-low breast cancer (DESTINY-Breast04) and advanced NSCLC[13] (DESTINY-Lung02), Imjudo and Imfinzi in advanced liver cancer (HIMALAYA), Imfinzi in advanced biliary tract cancer (TOPAZ���1); EU approval for Beyfortus for the prevention of RSV[14] lower respiratory tract disease (MELODY/MEDLEY); EU and Japan approvals for Ultomiris in gMG[15] (CHAMPION-MG), Tezspire in severe asthma (NAVIGATOR) and Lynparza in early breast cancer (OlympiA) ��� Other regulatory milestones: US Priority Review for Lynparza for 1st-line metastatic castration-resistant prostate cancer (PROpel) Pascal Soriot, Chief Executive Officer, AstraZeneca, said: "AstraZeneca continues to see the benefit of our sustained investment in R&D, with 19 major regulatory approvals since our last earnings call. After a strong performance in the year to date, we have increased our Core EPS guidance for the full year 2022. Additionally, recent encouraging data for several of our pipeline programmes have given us the confidence to proceed with additional late-stage clinical trials as we maintain our focus on delivery of our growth ambitions. I would also like to highlight the announcement at COP27 to accelerate the delivery of our net zero strategy. Our company intends to lead by example on this increasingly important objective for the world." Guidance The Company updates its FY 2022 guidance at CER, due to the strong performance in the year to date. The guided range for FY 2022 Core EPS has been increased to a high twenties to low thirties percentage; the final outcome within that range will depend on the timing of Evusheld deliveries and collaboration milestones linked to regulatory events. At actual exchange rates, it is anticipated that FY 2022 Total Revenue growth will also be impacted by a currency headwind of a mid single-digit percentage, and that FY 2022 Core EPS growth will be impacted by a currency headwind of a mid-to-high single-digit percentage (see 'Currency impact', below). Total Revenue is expected to increase by a low twenties percentage (unchanged) Core EPS is expected to increase by a high twenties to low thirties percentage (previously mid-to-high twenties percentage) Other elements of the Income Statement are expected to be broadly in line with the indications issued in the Company's H1 2022 results announcement (29 July 2022). AstraZeneca continues to recognise geopolitical and supply chain uncertainties on overall business performance. Variations in performance between quarters can be expected to continue. The Company is unable to provide guidance on a Reported basis because AstraZeneca 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 The growth numbers in the guidance above are provided at CER, based on the average exchange rates through 2021. If foreign-exchange rates for November to December 2022 were to remain at the spot rates seen on 31 October 2022, it is anticipated that FY 2022 Total Revenue would incur a mid single-digit adverse impact versus the performance at CER, and FY 2022 Core EPS would incur a mid-to-high single-digit adverse impact (previously a mid single-digit adverse impact). The Company's foreign-exchange rate sensitivity analysis is provided in Table 17. Table 1: Key elements of Total Revenue performance in Q3 2022 % Change Revenue type $m Actual CER Product Sales 10,590 9 16 Strong Oncology and BioPharmaceuticals sales $1,734m from medicines acquired with Alexion Collaboration Revenue 392 >3x >3x $160m for Enhertu (Q3 2021: $52m) $26m for Tezspire (Q3 2021: $nil) Milestones of $75m for Lynparza, $62m for Nexium and $40m for tralokinumab Total Revenue 10,982 11 19 Disease areas $m Actual CER Oncology 4,039 20 27 Good performance across key medicines and regions CVRM9 2,351 11 18 Farxiga achieved its third consecutive blockbuster quarter with $1,103m in revenues R&I 1,499 1 5 Growth across Breztri and Fasenra offsetting a decline in Pulmicort of 33% (31% at CER) primarily due to the impact of VBP[16] implementation and COVID-19 lockdowns in China V&I[17] 878 (29) (24) $180m from Vaxzevria[18] (Q3 2021: $1,050m) $536m from Evusheld (Q3 2021: $nil) Rare Disease9 1,741 4 11 $518m from Ultomiris which was up 37% (47% at CER) Other Medicines 474 34 50 Includes a Collaboration Revenue milestone of $62m for Nexium. Nexium revenue in Q3 2021 was negatively impacted by a transition in distribution partners Total Revenue 10,982 11 19 Regions inc. Vaxzevria $m Actual CER Emerging Markets 2,856 (10) (4) Decline due to lower sales of Vaxzevria (growth rates excluding Vaxzevria shown below) - China 1,541 3 8 Q3 2021 was negatively impacted by Tagrisso inventory phasing and stock compensation following NRDL[19] changes - Ex-China Emerging Markets 1,316 (21) (15) Decline due to lower sales of Vaxzevria US 4,650 34 34 Europe 2,065 8 23 Established RoW 1,412 7 26 Total Revenue inc. Vaxzevria 10,982 11 19 Regions exc. Vaxzevria $m Actual CER Contribution of medicines acquired with Alexion Emerging Markets 2,826 13 20 $102m - China 1,541 3 8 - Ex-China Emerging Markets 1,285 26 37 $102m US 4,650 34 34 $1,069m Europe 2,002 14 30 $351m Established RoW 1,325 22 45 $212m Total Revenue exc. Vaxzevria 10,803 23 31 $1,734m Table 2: Key elements of financial performance in Q3 2022 Metric Reported Reported change Core Core change Comments[20] Total Revenue $10,982m 11% Actual 19% CER $10,982m 11% Actual 19% CER See Table 1 and the Total Revenue section of this document for further details Gross Margin[21] 72% 10pp Actual 11pp CER 81% 6pp Actual 7pp CER + Addition of Alexion + Increasing mix of Oncology sales ��� Impact from profit-sharing arrangements (e.g. Lynparza) ��� Reported Gross Margin impacted by unwind of Alexion inventory fair value adjustment R&D Expense $2,458m -32% Actual -28% CER $2,357m 10% Actual 16% CER + Addition of Alexion + Increased investment in the pipeline following ungating of additional late-stage trials Reported R&D Expense in Q3 2021 included a $1,172m impairment charge Core R&D-to-Total Revenue ratio of 21% (Q3 2021: 22%) SG&A Expense $4,277m 5% Actual 9% CER $3,160m 10% Actual 16% CER + Addition of Alexion + Market development activities for recent launches, including Evusheld + Core SG&A-to-Total Revenue ratio of 29% (Q3 2021: 29%) Other Operating Income[22] $106m >2x Actual >2x CER $107m >2x Actual >3x CER Includes income from royalties and prior transactions Operating Margin 11% 28pp Actual 30pp CER 31% 8pp Actual 9pp CER See Gross Margin and Expenses commentary above Net Finance Expense $324m 1% Actual 2% CER $254m 16% Actual 14% CER + Foreign exchange movements + Interest rate increase on floating rate liabilities Reported impacted by discount unwind on acquisition-related liabilities Tax Rate -78% n/m 18% -3pp Actual -3pp CER 18% Core Tax Rate in the quarter reflected geographical mix of profits and favourable adjustments to prior year tax liabilities in a number of major jurisdictions Reported affected by a $883m deferred tax credit arising from a legal entity reorganisation to integrate Alexion Variations in the tax rate can be expected to continue quarter to quarter EPS $1.06 n/m $1.67 55% Actual 70% CER Further details of differences between Reported and Core are shown in Table 12 Table 3: Pipeline highlights since prior results announcement Event Medicine Indication / Trial Event Regulatory approvals and other regulatory actions Tagrisso NSCLC (adjuvant) (ADAURA) Regulatory approval (JP) Imfinzi Biliary tract cancer (TOPAZ-1) Regulatory approval (US) Imfinzi Liver cancer (1st-line) (HIMALAYA) Regulatory approval (US) Lynparza gBRCA[23] breast cancer (adjuvant) (OlympiA) Regulatory approval (EU, JP) Lynparza HRD[24]-positive advanced ovarian cancer (1st-line maint.) (PAOLA-1) Regulatory approval (CN) Enhertu HER2-low breast cancer (3rd-line) (DESTINY-Breast04) Regulatory approval (US) Enhertu HER2m[25] NSCLC (2nd-line+) (DESTINY-Lung02) Regulatory approval (US) Calquence Maleate tablet formulation Regulatory approval (US) Forxiga CKD[26] (DAPA-CKD) Regulatory approval (CN) Tezspire Severe asthma (NAVIGATOR) Regulatory approval (EU, JP) Beyfortus RSV (MELODY/MEDLEY) Regulatory approval (EU) Evusheld COVID-19 (PROVENT/TACKLE) Regulatory approval (JP) Evusheld COVID-19 (TACKLE) Regulatory approval (EU) Soliris PNH and aHUS[27] Regulatory approval (CN) Ultomiris gMG (CHAMPION-MG) Regulatory approval (EU, JP) Koselugo NF1-PN[28] (SPRINT) Regulatory approval (JP) Regulatory submissions or acceptances Lynparza Prostate cancer (1st-line) (PROpel) Priority Review (US) Enhertu HER2-low breast cancer (3rd-line) (DESTINY-Breast04) Regulatory submission (CN) Farxiga/Forxiga HFpEF[29] (DELIVER) Regulatory submission (US, EU, JP, CN) Ultomiris NMOSD[30] (CHAMPION-NMOSD) Regulatory submission (US, EU, JP) Major Phase III data readouts and other developments capivasertib HR+/HER2-neg breast cancer (1st-line) (CAPItello-291) Primary endpoint met monalizumab Recurrent or metastatic HNSCC[31] (2nd-line) (INTERLINK-1) Efficacy threshold not met Fasenra EoE[32] (MESSINA) One of two dual-primary endpoints not met Soliris Guillain-Barr�� syndrome Primary endpoint not met danicopan PNH with extravascular haemolysis Primary endpoint met Corporate and business development In October 2022, AstraZeneca entered a definitive agreement to acquire LogicBio Therapeutics, Inc. (NASDAQ: LOGC), a pioneering genomic medicine company. The proposed acquisition aims to rapidly accelerate Alexion's growth in genomic medicines through LogicBio's unique technology, experienced rare disease R&D team, and expertise in pre-clinical development. Sustainability summary AstraZeneca attended COP27, where the Sustainable Markets Initiative Health Systems Task Force collectively made significant commitments to tackle the climate crisis, setting a benchmark for others to drive action at scale. Some commitment highlights include supply chain emissions, which drive approximately 50% of healthcare emissions: the Task Force members have committed to align on a set of common supplier standards and jointly explore green transportation corridors. The patient care pathway drives approximately 45% of healthcare emissions, and the Task Force has committed to build an end-to-end care pathway emissions standard to measure emissions across the care pathway, as well as align and publish product-level lifecycle management assessment data to increase transparency on emissions. The Task Force has also committed to leverage digital health solutions to decarbonise clinical trials. Conference call A conference call and webcast for investors and analysts will begin today, 10 November 2022, at 11:45 GMT. Details can be accessed via astrazeneca.com. Reporting calendar The Company intends to publish its full year and fourth quarter results on Thursday 9 February 2022. Operating and financial review All narrative on growth and results in this section is based on actual exchange rates, and financial figures are in US$ millions ($m), unless stated otherwise. Unless stated otherwise, the performance shown in this announcement covers the nine-month period to 30 September 2022 ('the year to date' or 'YTD 2022') compared to the nine-month period to 30 September 2021 (YTD 2021), or the three-month period to 30 September 2022 ('the quarter' or 'Q3 2022') compared to the three-month period to 30 September 2021 (Q3 2021). Core financial measures, EBITDA, Net Debt, CER, Initial Collaboration Revenue and Ongoing Collaboration Revenue are non-GAAP financial measures because they cannot be derived directly from the Group's Interim financial statements. Management believes that these non-GAAP financial measures, when provided in combination with Reported results, provide investors and analysts with helpful supplementary information to understand better the financial performance and position of the Group on a comparable basis from period to period. These non-GAAP financial measures are not a substitute for, or superior to, financial measures prepared in accordance with GAAP. Core financial measures are adjusted to exclude certain significant items, such as: ��� Amortisation and impairment of intangible assets, including impairment reversals but excluding any charges relating to IT assets ��� Charges and provisions related to restructuring programmes, which includes charges that relate to the impact of restructuring programmes on capitalised IT assets as well as Post Alexion Acquisition Group Review items ��� Alexion acquisition-related items, primarily fair value adjustments on acquired inventories and fair value impact of replacement employee share awards ��� Other specified items, principally the imputed finance charge relating to contingent consideration on business combinations, legal settlements and the one off deferred tax credit arising from the internal reorganisation to integrate Alexion ��� The tax effects of the adjustments above are excluded from the Core Tax charge Details on the nature of Core financial measures are provided on page 54 of the Annual Report and Form 20-F Information 2021. Reference should be made to the Reconciliation of Reported to Core financial measures table included in the financial performance section in this announcement. Gross Margin, previously termed Gross Profit Margin, is the percentage by which Product Sales exceeds the Cost of sales, calculated by dividing the difference between the two by the sales figure. The calculation of Reported and Core Gross Margin excludes the impact of Collaboration Revenue and any associated costs, thereby reflecting the underlying performance of Product Sales. EBITDA is defined as Reported Profit before tax after adding back Net Finance Expense, results from Joint Ventures and Associates and charges for Depreciation, Amortisation and Impairment. Reference should be made to the Reconciliation of Reported Profit before tax to EBITDA included in the financial performance section in this announcement. Net Debt is defined as Interest-bearing loans and borrowings and Lease liabilities, net of Cash and cash equivalents, Other investments, and net derivative financial instruments. Reference should be made to Note 3 'Net Debt' included in the Notes to the Interim financial statements in this announcement. Ongoing Collaboration Revenue is defined as Collaboration Revenue excluding Initial Collaboration Revenue (which is defined as Collaboration Revenue that is recognised at the date of completion of an agreement or transaction, in respect of upfront consideration). Ongoing Collaboration Revenue comprises, among other items, royalties, milestone revenue and profit-sharing income. Reference should be made to the Collaboration Revenue table in this Operating and financial review. The Company strongly encourages investors and analysts not to rely on any single financial measure, but to review AstraZeneca's financial statements, including the Notes thereto, and other available Company reports, carefully and in their entirety. Due to rounding, the sum of a number of dollar values and percentages in this announcement may not agree to totals. Total Revenue Table 4: Disease area and medicine performance YTD 2022 Q3 2022 % Change % Change Product Sales $m % Total Actual CER $m % Total Actual CER Oncology 10,885 33 14 20 3,797 35 15 22 - Tagrisso 4,102 12 11 16 1,398 13 12 20 - Imfinzi 2,031 6 14 19 737 7 19 26 - Lynparza 1,949 6 13 19 659 6 12 19 - Calquence 1,469 4 74 77 566 5 60 63 - Enhertu 52 - >5x >5x 23 - >4x >4x - Orpathys 34 - >3x >3x 11 - 11 16 - Zoladex 717 2 - 6 240 2 (4) 5 - Faslodex 259 1 (21) (14) 81 1 (21) (10) - Iressa 90 - (39) (37) 27 - (35) (31) - Arimidex 85 - (20) (16) 24 - (28) (23) - Casodex 63 - (48) (45) 21 - (46) (40) - Others 34 - (9) (1) 10 - (18) (10) BioPharmaceuticals: CVRM9 6,907 21 13 18 2,348 21 11 19 - Farxiga 3,204 10 49 58 1,101 10 38 50 - Brilinta 1,013 3 (10) (7) 338 3 (10) (7) - Lokelma 208 1 71 80 79 1 59 69 - Roxadustat 148 - 2 4 57 1 4 9 - Andexxa9 111 - 7 14 41 - 5 17 - Crestor 824 2 (2) 4 277 3 (7) - - Seloken/Toprol-XL 705 2 (6) (2) 238 2 2 10 - Bydureon 207 1 (29) (28) 66 1 (30) (29) - Onglyza 205 1 (28) (25) 66 1 (21) (17) - Others 282 1 (9) (7) 85 1 (11) (8) BioPharmaceuticals: R&I 4,318 13 (3) - 1,427 13 (4) 1 - Symbicort 1,919 6 (6) (2) 630 6 (7) (1) - Fasenra 1,015 3 13 17 353 3 10 15 - Breztri 282 1 >2x >2x 103 1 >2x >2x - Saphnelo 69 - >10x >10x 33 - >10x >10x - Pulmicort 479 1 (33) (31) 145 1 (33) (31) - Daliresp 161 - (5) (4) 52 - (4) (3) - Bevespi 43 - 11 13 14 - 6 8 - Others 350 1 (21) (20) 97 1 (36) (33) BioPharmaceuticals: V&I 3,607 11 51 59 873 8 (27) (21) - Vaxzevria 1,713 5 (20) (16) 173 2 (83) (81) - Evusheld 1,451 4 n/m n/m 537 5 n/m n/m - Synagis 384 1 >2x >2x 104 1 (15) (1) - FluMist 59 - (22) (13) 59 1 (19) (10) Rare Disease9 5,236 16 4 10 1,741 16 4 11 - Soliris9 2,918 9 (7) (2) 901 8 (13) (6) - Ultomiris9 1,371 4 27 35 518 5 37 47 - Strensiq9 687 2 13 15 237 2 17 20 - Koselugo 149 - >2x >2x 48 - 82 81 - Kanuma9 111 - 6 11 37 - 1 5 Other Medicines 1,247 4 (4) 4 404 4 17 30 - Nexium 986 3 (1) 8 311 3 20 36 - Others 261 1 (12) (10) 93 1 9 13 Product Sales 32,200 97 29 35 10,590 96 9 16 Collaboration Revenue 944 3 >2x >2x 392 4 >3x >3x Total Revenue 33,144 100 30 37 10,982 100 11 19 Table 5: Collaboration Revenue YTD 2022 Q3 2022 % Change % Change $m % Total Actual CER $m % Total Actual CER Enhertu: alliance revenue[33] 332 35 >2x >2x 159 41 >3x >3x Tezspire: alliance revenue 42 4 n/m n/m 26 7 n/m n/m Lynparza: regulatory milestones 250 26 n/m n/m 75 19 n/m n/m Tralokinumab: sales milestone 110 12 n/m n/m 40 10 n/m n/m Vaxzevria: royalties 67 7 (19) (22) 6 2 (87) (87) Other royalty income 54 6 - - 18 5 (4) (3) Other Collaboration Revenue 89 9 (4) 12 68 17 >10x >10x Total 944 100 >2x >2x 392 100 >3x >3x Table 6: Total Revenue by disease area YTD 2022 Q3 2022 % Change % Change $m % Total Actual CER $m % Total Actual CER Oncology 11,493 35 19 24 4,039 37 20 27 BioPharmaceuticals9 15,078 45 16 21 4,728 43 (2) 4 - CVRM9 6,927 21 13 19 2,351 21 11 18 - R&I 4,478 14 - 4 1,499 14 1 5 - V&I 3,673 11 49 56 878 8 (29) (24) Rare Disease9 5,236 16 4 10 1,741 16 4 11 Other Medicines 1,337 4 (5) 3 474 4 34 50 Total 33,144 100 30 37 10,982 100 11 19 Table 7: Total Revenue by region YTD 2022 Q3 2022 % Change % Change $m % Total Actual CER $m % Total Actual CER Emerging Markets 9,013 27 5 8 2,856 26 (10) (4) - China 4,597 14 (2) (1) 1,541 14 3 8 - Ex-China 4,415 13 13 20 1,316 12 (21) (15) US 13,132 40 58 58 4,650 42 34 34 Europe 6,429 19 24 37 2,065 19 8 23 Established RoW 4,570 14 38 55 1,412 13 7 26 Total 33,144 100 30 37 10,982 100 11 19 Table 8: Total Revenue by region - excluding Vaxzevria YTD 2022 Q3 2022 % Change % Change $m % Total Actual CER $m % Total Actual CER Emerging Markets 8,262 25 10 15 2,826 26 13 20 - China 4,551 14 (3) (2) 1,541 14 3 8 - Ex-China 3,711 11 33 44 1,285 12 26 37 US 13,053 39 57 57 4,650 42 34 34 Europe 6,104 18 37 52 2,002 18 14 30 Established RoW 3,945 12 33 50 1,325 12 22 45 Total 31,364 95 35 42 10,803 98 23 31 Oncology Oncology Total Revenue increased by 19% (24% at CER) in YTD 2022 to $11,493m and represented 35% of overall Total Revenue (YTD 2021: 38%). This included Lynparza Collaboration Revenue of $250m (YTD 2021: $nil) and Enhertu Collaboration Revenue of $335m (YTD 2021: $137m). Product Sales increased by 14% (20% at CER) in YTD 2022 to $10,885m, reflecting new launches and increased patient access for Tagrisso, Imfinzi, Lynparza and Calquence partially offset by declines in some older medicines. Oncology Total Revenue grew 20% (27% at CER) in Q3 benefiting from new launches for Imfinzi, Calquence and Enhertu and improvement in rates of lung cancer diagnosis and treatment. Tagrisso Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 4,102 1,211 1,472 777 642 Actual change 11% 20% 14% 7% (4%) CER change 16% 22% 14% 19% 10% Region Drivers and commentary Worldwide Increased use of Tagrisso in adjuvant and 1st-line setting Emerging Markets Increased 1st-line use in China and continued growth in other Emerging Markets Rising demand from increased patient access in China continues to offset the impact of the March 2021 NRDL price reduction Q3 2022 growth of 29% (35% at CER) benefited from the comparison to Q3 2021, which was negatively impacted by inventory phasing and stock compensation relating to NRDL changes in March 2021 In China, COVID-19 related lockdowns continued to have an adverse impact in Q3, though at a lower level than Q2 US Increased EGFR[34] testing rates Greater use in 1st-line with longer duration of treatment and increasing adjuvant penetration, partially offset by lower 2nd-line use Europe Greater use in 1st-line and adjuvant settings, with longer duration of treatment, partially offset by lower 2nd-line use Established RoW Increased use in 1st-line setting and launch progress in adjuvant including Japan Q3 Total Revenue decline of 12% (growth of 5% at CER) impacted by a COVID-19 wave in Japan Imfinzi Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 2,031 224 1,102 402 303 Actual change 14% 6% 20% 16% - CER change 19% 9% 20% 29% 14% Region Drivers and commentary Worldwide Increased use of Imfinzi to treat patients with ES-SCLC[35] Recovery in rates of diagnosis and treatment following the COVID-19 pandemic Q3 Worldwide Total Revenue growth of 19% (26% at CER) Emerging Markets Growth in ex-China, offset by an adverse impact in CRT[36] rates and hospital use of infused oncology medicines due to COVID-19 lockdowns in several major cities in China US New patient starts across Stage III NSCLC and ES-SCLC A strong launch in biliary tract cancer after approval by the US FDA in September based on the TOPAZ-1 Phase III trial Europe Increased market penetration in ES-SCLC, growth in the number of reimbursed markets, an ongoing recovery in rates of diagnosis and treatment Established RoW New reimbursements Lynparza Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 2,199 358 896 743 202 Actual change 28% 27% 13% 63% 8% CER change 33% 30% 13% 75% 22% Product Sales Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,949 358 896 493 202 Actual change 13% 27% 13% 8% 8% CER change 19% 30% 13% 20% 22% Region Drivers and commentary Worldwide Lynparza remains the leading medicine in the PARP[37]-inhibitor class globally across four tumour types, as measured by total prescription volume Total Revenue includes $250m in regulatory milestones received from MSD and recognised in Europe, in respect of the approval in the US and EU for the adjuvant treatment of patients with gBRCAm[38] breast cancer, based on the data from the OlympiA Phase III trial Q3 Product Sales growth of 12% (19% at CER) Emerging Markets Increased patient access following admission to China's NRDL as a 1st-line maintenance treatment for BRCAm[39] ovarian cancer patients, with effect from March 2021; also launches in other markets US US launch in early breast cancer following US FDA[40] approval in March based on data from the OlympiA Phase III trial Growth in use in breast, ovarian and prostate cancers Europe Increasing HRD testing rates and use in 1st-line HRD-positive ovarian cancer, increased Lynparza uptake in BRCAm mCRPC[41] and gBRCAm HER2-negative advanced breast cancer and the EU launch in gBRCAm early breast cancer following EMA[42] approval in August based on data from the OlympiA Phase III trial Established RoW New product launches and high levels of HRD testing in Japan Enhertu Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 387 51 254 77 4 Actual change >2x >6x >2x >4x >10x CER change >2x >6x >2x >4x >10x Region Drivers and commentary Worldwide Excluding Japan, Enhertu global in-market sales recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted to $750m in the year to date (YTD 2021: $293m) AstraZeneca's Total Revenue of $387m includes $335m of Collaboration Revenue from its share of gross profit in territories where Daiichi Sankyo records product sales and royalties on sales in Japan Q3 Worldwide Total Revenue growth of >3x Emerging Markets Strong uptake in early launch markets US US in-market sales, recorded by Daiichi Sankyo, amounted to $532m in the year to date (YTD 2021: $253m) US launches in 2nd-line HER2-positive metastatic breast cancer after US FDA approval in May based on data from the DESTINY-Breast03 Phase III trial; and in 3rd-line+ HER2-low metastatic breast cancer after US FDA approval in August based on the DESTINY-Breast04 Phase III trial Europe Growth in 3rd-line+ HER2-positive metastatic breast and launch in 2nd-line HER2-positive metastatic breast cancer after EMA approval in July based on data from the DESTINY-Breast03 Phase III trial Established RoW In Japan, AstraZeneca receives a mid-single-digit percentage royalty on sales made by Daiichi Sankyo Calquence Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,469 28 1,192 200 49 Actual change 74% >2x 58% >2x >4x CER change 77% >2x 58% >3x >5x Region Worldwide Q3 Worldwide Total Revenue growth of 60% (63% at CER) US Increased new patient market share led to a strong performance, despite continued COVID���19 impacts on CLL[43] diagnosis rates Maleate tablet formulation launch in August resulted in uptake by patients taking proton pump inhibitors and demand due to channel inventory build Europe Increased market share in new patient starts after launches in the region Orpathys Orpathys Total Revenue of $35m in the year to date (YTD 2021: $10m), growth was driven by the 2021 launch in China, where it is approved for patients with lung cancer and MET[44] gene alterations. Other Oncology medicines YTD 2022 % Change Total Revenue $m Actual CER Zoladex 738 1% 7% Increased use in ex-China Emerging Markets, offsetting a price cut in Japan Faslodex 259 (21%) (14%) Generic competition Iressa 90 (39%) (37%) Continued share loss to next generation TKIs[45] Arimidex 85 (20%) (16%) Casodex 63 (48%) (45%) Ongoing impact from VBP implementation Other Oncology 34 (9%) (1%) BioPharmaceuticals Including Vaccines & Immune Therapies medicines, BioPharmaceuticals Total Revenue increased by 16% (21% at CER) in YTD 2022 to $15,078m, representing 45% of overall Total Revenue (YTD 2021: 51%). Growth was driven by strong Farxiga performance and growth in Evusheld. Cardiovascular, Renal & Metabolism CVRM Total Revenue increased by 13% (19% at CER) to $6,927m in YTD 2022, driven by a strong Farxiga performance, and represented 21% of overall Total Revenue (YTD 2021: 24%). Farxiga Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 3,208 1,224 748 955 281 Actual change 49% 40% 48% 64% 48% CER change 58% 46% 48% 82% 64% Region Worldwide Farxiga volume is growing faster than the overall SGLT2[46] market in all major regions Additional benefit from growth in the overall SGLT2 inhibitor class Further HF[47] and CKD launches and updated treatment guidelines including from ESC[48] and AHA[49]/ACC[50]/HFSA[51]. HF and CKD indications now launched in >100 markets Emerging Markets Growth despite generic competition in some markets. Solid growth in ex-China Emerging Markets, particularly Latin America In China, Forxiga's NRDL status was renewed in the fourth quarter of 2021. Benefit from uACR[52] and MRF[53] screening programs US Regulatory approval for HEFrEF[54] in May 2020, treatment of CKD in May 2021 Both approvals included patients with and without T2D[55] Farxiga continued to gain in-class brand share, driven by HF and CKD launches Europe The beneficial addition of cardiovascular outcomes trial data to the label, the HFrEF regulatory approval in November 2020, and CKD regulatory approval in August 2021 Forxiga continued gaining in-class market share in the period Established RoW In Japan, AstraZeneca sells to collaborator Ono Pharmaceutical Co., Ltd, which records in-market sales. Continued volume growth driven by HF and CKD launches Brilinta Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,013 222 538 215 38 Actual change (10%) (13%) (4%) (18%) (20%) CER change (7%) (11%) (4%) (9%) (16%) Region Emerging Markets Adverse impact from Brilinta's inclusion in China's VBP programme Strong growth in ex-China Emerging Markets US, Europe Slower market recovery of oral antiplatelet therapies following the pandemic Lokelma Lokelma Total Revenue increased 71% (80% at CER) to $208m in YTD 2022, driven by Lokelma extending its branded market share lead in the US and also achieving total potassium binder market share leadership in the period. Continued progress in Europe from recent launches across the region where Lokelma extended its market share in the period. In China, Lokelma admitted to the NRDL with effect from 1 January 2022. Andexxa On a pro forma basis, Andexxa Total Revenue increased 17% (24% at CER) to $121m. Roxadustat Total Revenue increased 2% (4% at CER) to $151m. Total Revenue also increased quarter-on-quarter, with roxadustat benefitting from increased volumes in China following NRDL price cuts. Other CVRM medicines YTD 2022 % Change Total Revenue $m Actual CER Crestor 825 (2%) 4% Sales growth at CER driven by Emerging Markets, offset by declines in the US and Europe Seloken 706 (6%) (2%) Emerging Markets sales impacted by China VBP implementation of Betaloc[56] oral in H2 2021. Betaloc ZOK VBP to be implemented in Q4 2022 Onglyza 205 (28%) (25%) Ongoing impact from VBP implementation Bydureon 207 (29%) (28%) Continued competitive pressures Other CVRM 282 (9%) (7%) Respiratory & Immunology Total Revenue from R&I medicines was stable in YTD 2022 (increased 4% at CER) at $4,478m and represented 14% of overall Total Revenue (YTD 2021: 18%). In the third quarter, R&I Total Revenue grew 5% at CER primarily driven by the performance of recent launch brands, including Fasenra, Tezspire, Breztri and Saphnelo, and revenue milestones; this growth more than offset the sustained erosion of Pulmicort revenue following its inclusion in VBP in China in Q4 2021, and a marginal decline in Symbicort revenue. Symbicort Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,919 476 718 445 280 Actual change (6%) 4% (11%) (11%) (3%) CER change (2%) 8% (11%) (1%) 3% Region Worldwide Symbicort remains the global market leader within stable ICS[57]/LABA[58] class Emerging Markets Growth in Emerging Markets driven primarily by market share growth in China, Latin America and Asia Area US Strong market share performance, consolidating leadership in a declining ICS/LABA market, offset by pricing pressure Europe Resilient market share in growing ICS/LABA market, offset by pricing pressure Established RoW Double digit growth in Canada and Australia/New Zealand, driven by market share gain Sales in Japan declined due to generic erosion and the annual mandatory price reduction in April 2022 Fasenra Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,015 30 649 229 107 Actual change 13% 99% 17% 9% (10%) CER change 17% 95% 17% 21% - Region Worldwide Fasenra continues to be market leader in severe eosinophilic asthma in major markets, and leading in the IL-5 class Emerging Markets Strong volume growth driven by launch acceleration in Brazil and other markets US Maintained a strong new-to-brand share in the severe uncontrolled asthma market Europe Market leader in new-to-brand share of the severe uncontrolled asthma market Established RoW Maintained market leadership in Japan, partially offset by price erosion and impact in the dynamic market related to surge in COVID-19 cases Breztri Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 282 71 164 22 25 Actual change >2x 76% >2x >5x 43% CER change >2x 78% >2x >6x 66% Region Worldwide Breztri continued to gain market share within growing fixed-dose triple class across major markets Emerging Markets In China, the FDC triple class continued to penetrate the inhaled maintenance market whose growth has been impacted by COVID-19 Breztri continued its market share leadership within the fixed-dose triple class US Consistent new-to-brand and total market share growth within the fixed-dose triple class Europe Sustained growth across markets as new launches continue to progress Established RoW Strong new-to-brand market share performance in Japan within COPD[59], with the market impacted by access restrictions related to surge in COVID-19 cases Saphnelo Total Revenue of $69m in the year to date (YTD 2021: $1m) was driven by sales acceleration in the US, where Saphnelo achieved NBRx leadership in the i.v.[60] segment for SLE[61] and received a permanent J-code facilitating reimbursement. Growth was further supported by a strong launch in Germany and steady growth in Japan. Tezspire Tezspire is approved in the US, EU and Japan for the treatment of severe asthma without biomarker or phenotypic limitation. Total Revenue of $42m in the year to date (YTD 2021: $nil) was comprised entirely of Collaboration Revenue, and reflected the strong early launch performance in the US. Amgen records sales in the US and AstraZeneca records its share of gross profits in the US as Collaboration Revenue. Other R&I medicines YTD 2022 % Change Total Revenue $m Actual CER Pulmicort 479 (33%) (31%) Revenue from Emerging Markets decreased 41% to $339m, impacted by VBP implementation in China and lower rates of elective surgery and limited access to nebulisation centres due to COVID-19 lockdowns Daliresp 161 (5%) (4%) Bevespi 43 11% 13% Other R&I 469 3% 4% Collaboration Revenue of $118m (YTD 2021: $12m), including $111m of milestones relating to tralokinumab (YTD 2021: nil) Product Sales of $350m decreased 21% (20% at CER) Vaccines & Immune Therapies Total Revenue from V&I medicines increased to $3,673m (YTD 2021: $2,465m) and represented 11% of overall Total Revenue (YTD 2021: 10%). Vaxzevria Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,780 751 79 325 625 Actual change (20%) (34%) n/m (56%) 82% CER change (16%) (35%) n/m (51%) 96% Region Worldwide Revenue in the third quarter decreased by 83% (82% at CER) due to the conclusion of many of the initial Vaxzevria contracts Emerging Markets $46m of Collaboration Revenue came from a Chinese sub-licensee producing vaccines for export Revenue in the third quarter decreased by 95% (96% at CER) US Purchases by the US government for donation overseas No revenue recorded in the second and third quarters Europe Revenue in the third quarter decreased by 62% (56% at CER) vs Q3 2021 Established RoW Sales in Japan, Canada and Australia Revenue in the third quarter decreased by 63% (59% at CER) Evusheld Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,450 167 850 198 235 Actual change n/m n/m n/m n/m n/m CER change n/m n/m n/m n/m n/m Region US Evusheld received Emergency Use Authorisation for the prevention of COVID-19 in December 2021 AstraZeneca continued to fulfil the US Government's order for 1.7m units Emerging Markets Multiple government contracts in Central and Eastern Europe, Latin America and South East Asia Europe Approved in the EU for prevention of COVID-19 in March 2022 and treatment in September 2022 Established RoW Approved in Japan for prevention and treatment of COVID-19 in August 2022 Other V&I medicines YTD 2022 % Change Total Revenue $m Actual CER Synagis 384 >2x >2x Strong RSV season Ex-US rights reverted to AstraZeneca after 30 June 2021, from AbbVie Inc. In Q3 2022, Synagis sales decreased by 15% (1% CER) FluMist 59 (22%) (13%) Rare Disease On a pro forma basis, Total Revenue from Rare Disease medicines increased by 4% (10% at CER) in YTD 2022 to $5,236m, representing 16% of overall Total Revenue. Performance was driven by the durability of the C5 franchise, Soliris and Ultomiris, following Ultomiris gMG launch and expansion into new markets, and continued Soliris NMOSD growth. Strensiq and Koselugo performances were driven by continued patient demand and market expansion efforts, respectively. These tables show pro forma growth rates for each of the medicines acquired with Alexion, calculated by comparing YTD 2022 revenues with the medicine's revenues from 1 January 2021 to 30 September 2021. Soliris Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 2,918 218 1,688 627 385 Actual change9 (7%) (29%) (3%) (20%) 20% CER change9 (2%) (9%) (3%) (10%) 34% Region US Performance impacted by successful conversion to Ultomiris in PNH, aHUS and gMG, partially offset by Soliris growth in NMOSD Ex-US Growth driven by continued expansion of neurology indications, gMG and NMOSD, in new markets Ultomiris Total Revenue Worldwide Emerging Markets US Europe Established RoW YTD 2022 $m 1,371 34 771 347 219 Actual change9 27% >2x 23% 55% - CER change9 35% >3x 23% 74% 18% Region Worldwide Performance driven by gMG launch in the US and expansion into new markets Quarter-on-quarter variability in revenue growth can be expected due to Ultomiris every eight week dosing schedule and lower average annual treatment cost per patient compared to Soliris US Performance driven by successful conversion from Soliris across PNH, aHUS and gMG with increased utilisation from complement-na��ve patients in gMG Ex-US Rapid conversion in new launch markets Other Rare Disease medicines YTD 2022 % Change Total Revenue $m Actual CER Commentary Strensiq9 687 13% 15% Performance driven by strong patient demand Koselugo 149 >2x >2x Growth driven by expansion in new markets and tender market order timing Kanuma9 111 6% 11% Continued demand growth in ex-US markets Other medicines (outside the main disease areas) YTD 2022 % Change Total Revenue $m Actual CER Commentary Nexium 1,063 (3%) 7% Collaboration Revenue of $78m (YTD 2021: $92m) Nexium (oral) was included in China's VBP programme implemented in February 2021 and Nexium i.v. was implemented in the fifth round of VBP in October 2021 Others 273 (12%) (10%) Financial performance Table 9: Reported Profit and Loss YTD 2022 YTD 2021 % Change Q3 2022 Q3 2021 % Change $m $m Actual CER $m $m Actual CER Total Revenue 33,144 25,406 30 37 10,982 9,866 11 19 - Product Sales 32,200 25,043 29 35 10,590 9,741 9 16 - Collaboration Revenue 944 363 >2x >2x 392 125 >3x >3x Cost of Sales (9,491) (7,812) 21 28 (2,982) (3,757) (21) (18) Gross Profit 23,653 17,594 34 40 8,000 6,109 31 41 Gross Margin 70.5% 68.8% +2pp +2pp 71.8% 61.4% +10pp +11pp Distribution Expense (380) (322) 18 25 (126) (120) 5 13 % Total Revenue 1.1% 1.3% - - 1.1% 1.2% - - R&D Expense (7,137) (7,152) - 4 (2,458) (3,610) (32) (28) % Total Revenue 21.5% 28.2% +7pp +7pp 22.4% 36.6% +14pp +14pp SG&A Expense (13,798) (10,117) 36 41 (4,277) (4,090) 5 9 % Total Revenue 41.6% 39.8% -2pp -1pp 38.9% 41.5% +3pp +3pp OOI[62] & Expense 325 1,345 (76) (75) 106 37 >2x >2x % Total Revenue 1.0% 5.3% -4pp -4pp 1.0% 0.4% +1pp +1pp Operating Profit/(Loss) 2,663 1,348 98 >2x 1,245 (1,674) n/m n/m Operating Margin 8.0% 5.3% +3pp +3pp 11.3% -17.0% +28pp +30pp Net Finance Expense (936) (922) 1 6 (324) (320) 1 2 Joint Ventures and Associates (4) (55) (93) (91) 1 (7) n/m n/m Profit/(Loss) before tax 1,723 371 >4x >4x 922 (2,001) n/m n/m Taxation 668 90 >7x >7x 720 350 >2x >2x Tax rate -39% -24% -78% -18% Profit/(Loss) after tax 2,391 461 >5x >5x 1,642 (1,651) n/m n/m Earnings per share $1.54 $0.33 >4x >4x $1.06 $(1.10) n/m n/m Table 10: Reconciliation of Reported Profit before tax to EBITDA YTD 2022 YTD 2021 % Change Q3 2022 Q3 2021 % Change $m $m Actual CER $m $m Actual CER Reported Profit/(Loss) before tax 1,723 371 >4x >4x 922 (2,001) n/m n/m Net Finance Expense 936 922 1 6 324 320 1 2 Joint Ventures and Associates 4 55 (93) (91) (1) 7 n/m n/m Depreciation, Amortisation and Impairment 4,000 4,338 (8) (4) 1,334 2,788 (52) (49) EBITDA 6,663 5,686 17 26 2,579 1,114 >2x >2x EBITDA of $6,663m in the year to date (YTD 2021: $5,686m) has been negatively impacted by the $3,175m (YTD 2021: $1,044m) unwind of inventory fair value uplift recognised on the acquisition of Alexion. EBITDA of $2,579m in the quarter (Q3 2021: $1,114m) has been negatively impacted by the $857m (Q3 2021: $1,044m) unwind of inventory fair value uplift recognised on the acquisition of Alexion. The unwind of inventory fair value is expected to depress EBITDA over the year in line with associated revenues, and by a smaller amount in 2023. Table 11: Reconciliation of Reported to Core financial measures: YTD 2022 YTD 2022 Reported Restructuring Intangible Asset Amortisation & Impairments Acquisition of Alexion Other Core Core % Change $m $m $m $m $m $m Actual CER Gross Profit 23,653 156 24 3,186 (1) 27,018 43 48 Gross Margin 70.5% 81.0% +7pp +6pp Distribution Expense (380) 2 - - - (378) 17 24 R&D Expense (7,137) 57 83 23 - (6,974) 25 29 SG&A Expense (13,798) 263 3,060 35 1,197[63] (9,243) 20 24 Total Operating Expense (21,315) 322 3,143 58 1,197 (16,595) 22 26 Other Operating Income & Expense 325 (8) - - - 317 (76) (76) Operating Profit 2,663 470 3,167 3,244 1,196 10,740 63 69 Operating Margin 8.0% 32.4% +6pp +6pp Net Finance Expense (936) - - 207 (729) 16 21 Taxation 668 (93) (581) (748) (1,078)[64] (1,832) 84 90 EPS $1.54 $0.25 $1.67 $1.61 $0.21 $5.28 47 52 Table 12: Reconciliation of Reported to Core financial measures: Q3 2022 Q3 2022 Reported Restructuring Intangible Asset Amortisation & Impairments Acquisition of Alexion Other Core Core % Change $m $m $m $m $m $m Actual CER Gross Profit 8,000 75 8 866 (1) 8,948 21 30 Gross Margin 71.8% 80.8% +6pp +7pp Distribution Expense (126) 1 - - - (125) 5 12 R&D Expense (2,458) 19 77 5 - (2,357) 10 16 SG&A Expense (4,277) 65 979 5 68 (3,160) 10 16 Total Operating Expense (6,861) 85 1,056 10 68 (5,642) 10 16 Other Operating Income & Expense 106 1 - - - 107 >2x >3x Operating Profit 1,245 161 1,064 876 67 3,413 50 63 Operating Margin 11.3% 31.1% +8pp +9pp Net Finance Expense (324) - - - 70 (254) 16 14 Taxation 720 (32) (194) (202) (871) (579) 31 43 EPS $1.06 $0.08 $0.56 $0.44 ($0.47) $1.67 55 70 Profit and Loss drivers Gross Profit ��� The Gross Margin (Reported and Core) in the year to date was impacted by: ��� Positive mix effects: the increased contribution from Rare Disease and Oncology medicines had a positive impact on the Gross Margin ��� Negative mix effects: sales of Vaxzevria and medicines with profit-sharing arrangements (primarily Lynparza) had a dilutive impact on the Gross Margin ��� Pricing pressure relating to procurement programmes in China ��� Reported Gross Profit was also impacted by the unwind of the fair value adjustment to Alexion inventories at the date of acquisition. The fair value uplift is expected to unwind through Reported Cost of Sales in line with associated revenues, and in YTD 2022, the impact of the fair value uplift unwind on Cost of Sales was $3,175m (YTD 2021: $1,044m) ��� Currency fluctuations had a small positive impact on Gross Margin in the year to date. Currency fluctuations may have a positive or negative impact on Gross Margin in future quarters ��� Variations in Gross Margin performance between periods can be expected to continue R&D Expense ��� Reported and Core R&D Expense was impacted by: ��� The acquisition of Alexion in July 2021 ��� Recent positive data read outs for several high priority medicines that ungated late-stage Oncology trials ��� The advancement of a number of mid-stage clinical development programmes in BioPharmaceuticals ��� Investment in platforms, new technology and capabilities to enhance R&D productivity ��� The decrease in Reported R&D Expense is primarily due to the prior year including an impairment charge of $1,172m, recognised in Q3 2021 on an intangible asset related to the acquisition of Ardea Biosciences, Inc. SG&A Expense ��� The increase in Reported and Core SG&A Expense was driven by: ��� The acquisition of Alexion ��� Market development activities for recent launches ��� Reported SG&A Expense was also impacted by amortisation of intangible assets related to the Alexion acquisition and other acquisitions and collaborations, and a $775m legal settlement with Chugai Other Operating Income ��� Reported Other Operating Income of $325m consisted primarily of royalties and disposal proceeds on small divestments, including the divestment of rights to Plendil in the second quarter ��� In YTD 2021, Reported Other Operating Income of $1,345m included $776m of divestment gains from AstraZeneca's share of Viela Bio, Inc. and $309m from the commercial rights to Crestor in over 30 countries in Europe (excluding UK and Spain) Net Finance Expense ��� The increase in Reported and Core Net Finance Expense in the year to date was driven by financing costs on debt for the Alexion transaction , with a reduction in the discount unwind on acquisition-related liabilities, including the Diabetes Alliance which impacted Reported Net Finance Expense ��� In Q3 2022, the Net Finance Expense was also impacted by rising interest rates Taxation ��� The effective Reported Tax Rate for the nine months to 30 September 2022 was (39%) and the Core tax rate was 18%, and (24%) and 17% respectively in the nine months to 30 September 2021 ��� The Reported Tax Rate for the nine months included a one-time favourable net adjustment of $883m to deferred taxes arising from an internal reorganisation to integrate the Alexion organisation which took place in the quarter. The legal entity reorganisation did not result in any corporate income tax payable however did result in an estimated one-off deferred tax adjustment of $883m at Q3 to reflect the substantively enacted tax effects which would arise in impacted jurisdictions going forwards. A further $47m credit movement is included in OCI. This adjustment is based upon full-year forecast estimates and therefore may change for the full year results. This adjustment was excluded from the Core tax charge ��� 2021 Reported and Core Tax Rates were impacted by one-off items in 2021, including the non-taxable gain on the divestment of Viela and updates to estimates of prior period tax liabilities following settlements with tax authorities ��� The net cash paid for the year to date was $1,335m (YTD 2021: $1,198m) representing 77% of Reported Profit before tax (YTD 2021: 323%). The cash tax amount increased due to the increase in profits and the impact of Non-core charges on the level of Reported Profit before tax and effects of US rules around deferral of tax relief on R&D costs. The cash tax rate decreased compared to 2021 due to the impact in YTD 2021 of low Reported Profit before tax ��� The Reported Tax rate of (39%) was lower than the Core Tax Rate of 18% primarily due to the impact of the aforementioned internal restructuring. YTD 2022 Reported and Core Tax rates also benefited from the geographical mix of profits and favourable adjustments to prior year tax liabilities in a number of major jurisdictions ��� On 20 July 2022, the UK Government issued draft legislation in relation to the new global minimum tax framework, expected to be brought into effect in the UK from 2024. The UK corporation tax rate continues to be expected to increase to 25%, effective April 2023. The Company is currently assessing potential impact of these draft rules upon its financial statements Table 13: Cash Flow summary YTD 2022 YTD 2021 Change $m $m $m Reported Operating Profit 2,663 1,348 1,315 Depreciation, Amortisation and Impairment 4,000 4,338 (338) Decrease in Working Capital and Short-term Provisions 3,458 2,063 1,395 Gains on Disposal of Intangible Assets (88) (371) 283 Gains on Disposal of Investments in Associates and Joint Ventures - (776) 776 Fair value movements on contingent consideration arising from business combinations 293 33 260 Non-Cash and Other Movements (973) (370) (603) Interest Paid (608) (522) (86) Taxation Paid (1,335) (1,198) (137) Net Cash Inflow from Operating Activities 7,410 4,545 2,865 Net Cash Inflow/(Outflow) before Financing Activities 4,699 (5,600) 10,299 Net Cash (Outflow)/Inflow from Financing Activities (6,465) 4,700 (11,165) The increase in Net Cash Inflow from Operating Activities of $2,865m primarily reflected an underlying improvement in business performance, including the contribution from Alexion. The Reported Operating Profit of $2,663m in the period includes a negative impact of $3,175m relating to the unwind of the inventory fair value uplift recognised on the acquisition of Alexion. This is offset by a corresponding item (positive impact of $3,175m) in Decrease in Working Capital and Short-term Provisions. Overall, the unwind of the fair value uplift has no impact on Net Cash Inflow from Operating Activities. The change in Working Capital and Short-term Provisions of $1,395m, whilst being positively impacted by the aforementioned inventory fair value uplift unwind, has been adversely impacted by the reduction of Vaxzevria working capital balances predominantly within Trade and other payables. Capital Expenditure Capital Expenditure amounted to $719m in the year to date (YTD 2021: $768m) including expenditure relating to Alexion. The Company anticipates stable Capital Expenditure in FY 2022 relative to FY 2021. Table 14: Net Debt summary At 30 Sep 2022 At 31 Dec 2021 At 30 Sep 2021 $m $m $m Cash and cash equivalents 4,458 6,329 7,067 Other investments 440 69 82 Cash and investments 4,898 6,398 7,149 Overdrafts and short-term borrowings (743) (387) (605) Lease liabilities (878) (987) (962) Current instalments of loans (4,665) (1,273) (2,139) Non-current instalments of loans (23,013) (28,134) (28,206) Interest-bearing loans and borrowings (Gross Debt) (29,299) (30,781) (31,912) Net derivatives (141) 61 90 Net Debt (24,542) (24,322) (24,673) Net Debt increased by $220m in the year to date to $24,542m. Details of the committed undrawn bank facilities are disclosed within the going concern section of Note 1. Details of the Company's solicited credit ratings are disclosed in Note 3. Capital allocation The Board's aim is to continue to strike a balance between the interests of the business, financial creditors and the Company's shareholders. The Company's capital allocation priorities include investing in the business and pipeline, maintaining a strong, investment-grade credit rating, potential value-enhancing business development opportunities, and supporting the progressive dividend policy. In approving the declaration of dividends, the Board considers both the liquidity of the company and the level of reserves legally available for distribution. Dividends are paid to shareholders from AstraZeneca PLC, a Group holding company with no direct operations. The ability of AstraZeneca PLC to make shareholder distributions is dependent on the creation of profits for distribution and the receipt of funds from subsidiary companies. The consolidated Group reserves set out in the Condensed consolidated statement of financial position do not reflect the profit available for distribution to the shareholders of AstraZeneca PLC. Summarised financial information for guarantee of securities of subsidiaries AstraZeneca Finance LLC ("AstraZeneca Finance") is the issuer of 0.700% Notes due 2024, 1.200% Notes due 2026, 1.750% Notes due 2028 and 2.250% Notes due 2031 (the "AstraZeneca Finance Notes"). Each series of AstraZeneca Finance Notes has been fully and unconditionally guaranteed by AstraZeneca PLC. AstraZeneca Finance is 100% owned by AstraZeneca PLC and each of the guarantees by AstraZeneca PLC is full and unconditional and joint and several. The AstraZeneca Finance Notes are senior unsecured obligations of AstraZeneca Finance and rank equally with all of AstraZeneca Finance's existing and future senior unsecured and unsubordinated indebtedness. The guarantee by AstraZeneca PLC of the AstraZeneca Finance Notes is the senior unsecured obligation of AstraZeneca PLC and ranks equally with all of AstraZeneca PLC's existing and future senior unsecured and unsubordinated indebtedness. Each guarantee by AstraZeneca PLC is effectively subordinated to any secured indebtedness of AstraZeneca PLC to the extent of the value of the assets securing such indebtedness. The AstraZeneca Finance Notes are structurally subordinated to indebtedness and other liabilities of the subsidiaries of AstraZeneca PLC, none of which guarantee the AstraZeneca Finance Notes. AstraZeneca PLC manages substantially all of its operations through divisions, branches and/or investments in subsidiaries and affiliates. Accordingly, the ability of AstraZeneca PLC to service its debt and guarantee obligations is also dependent upon the earnings of its subsidiaries, affiliates, branches and divisions, whether by dividends, distributions, loans or otherwise. Please refer to the consolidated financial statements of AstraZeneca PLC in our Annual Report on Form 20-F and reports on Form 6-K with our quarterly financial results as filed or furnished with the SEC[65] for further financial information regarding AstraZeneca PLC and its consolidated subsidiaries. For further details, terms and conditions of the AstraZeneca Finance Notes please refer to AstraZeneca PLC's Form 6-K furnished to the SEC on 28 May 2021. Pursuant to Rule 13-01 and Rule 3-10 of Regulation S-X under the Securities Act of 1933, as amended (the "Securities Act"), we present below the summary financial information for AstraZeneca PLC, as Guarantor, excluding its consolidated subsidiaries, and AstraZeneca Finance, as the issuer, excluding its consolidated subsidiaries. The following summary financial information of AstraZeneca PLC and AstraZeneca Finance is presented on a combined basis and transactions between the combining entities have been eliminated. Financial information for non-guarantor entities has been excluded. Intercompany balances and transactions between the obligor group and the non-obligor subsidiaries are presented on separate lines. Table 15: Obligor group summarised Statement of comprehensive income YTD 2022 YTD 2021 $m $m Total Revenue - - Gross Profit - - Operating loss (3) (131) Loss for the period (404) (553) Transactions with subsidiaries that are not issuers or guarantors 502 5,731 Table 16: Obligor group summarised Statement of financial position At 30 Sep 2022 At 30 Sep 2021 $m $m Current assets 5 12 Non-current assets - - Current liabilities (3,067) (2,347) Non-current liabilities (22,556) (25,721) Amounts due from subsidiaries that are not issuers or guarantors 7,349 12,137 Amounts due to subsidiaries that are not issuers or guarantors (301) (299) Foreign exchange The Company's transactional currency exposures on working-capital balances, which typically extend for up to three months, are hedged where practicable using forward foreign-exchange contracts against the individual companies' reporting currency. Foreign-exchange gains and losses on forward contracts for transactional hedging are taken to profit or loss. In addition, the Company's external dividend payments, paid principally in pounds sterling and Swedish krona, are fully hedged from announcement to payment date. Table 17: Currency sensitivities The Company provides the following currency-sensitivity information: Average spot rates vs USD Spot rate vs USD Annual impact of 5% strengthening in FY average rate vs USD ($m) [66] Currency Primary Relevance FY 2021[67] YTD 2022[68] Change (%) 31 Oct 2022 Change[69] (%) Total Revenue Core Operating Profit CNY Total Revenue 6.43 6.62 (3) 7.31 (12) 277 158 EUR Total Revenue 0.85 0.94 (10) 1.01 (16) 317 160 JPY Total Revenue 109.83 128.34 (14) 148.02 (26) 229 158 Other[70] 420 196 GBP Operating Expense 0.73 0.80 (9) 0.86 (16) 61 (93) SEK Operating Expense 8.58 9.92 (13) 10.98 (22) 6 (82) Sustainability Since the last quarterly report, AstraZeneca: Access to healthcare ��� CEO Pascal Soriot spoke at the UN General Assembly (UNGA) alongside heads of state and global leaders, including UN Secretary General Ant��nio Guterres and World Health Organization (WHO) Director-General Dr Tedros, on "Ending the COVID-19 Pandemic through Equitable Access to Vaccines, Tests and Treatments" ��� Progressed, with the Partnership for Health System Sustainability and Resilience (PHSSR), research in 13 Phase 2 countries, with key findings to be presented at the Global PHSSR Summit on 22-23 November. PHSSR launch events were held in Saudi Arabia and Brazil. Vietnam signed a three-year MoU with the Ministry of Health, including implementation projects furthering PHSSR recommendations ��� Expanded the Healthy Heart Africa (HHA) programme into Nigeria in collaboration with the Nigeria Ministry of Health and the National Primary Healthcare Development Agency, and its implementing partner PSI. HHA also expanded into Zanzibar in collaboration with the Zanzibar Ministry of Health and its implementing partner HIPZ. Over 29 million blood pressure screenings have been conducted since launch in 2015 ��� Supported the largest delegation at the One Young World Summit in Manchester, with over 80 Young Health Programme (YHP) scholars and young AstraZeneca employees attending, together with senior executives who also hosted a site visit and workshops at the AstraZeneca Macclesfield site. The Company also announced a US $50,000 Lead2030 grant with One Young World, to support youth-led non-profits tackling air pollution for healthy people and a healthy planet Environmental protection ��� AstraZeneca attended COP27, where through the Sustainable Markets Initiative Health Systems Task Force made significant commitments to tackle the climate crisis, setting a benchmark for others to drive action at scale. This is the first time the global health sector has taken collective action to decarbonise, across our supply chains, patient care pathways, and clinical trials. ��� Participated in the launch of the Sustainable Markets Initiative China Council, endorsed by President Xi Jinping and HM King Charles III, in his former role as HRH Prince of Wales. ��� Attended the inaugural meeting of the SMI China Council at the CEO and Senior Executive Team level, which provides an important forum for cross-sector collaboration on sustainability. The Company was the only healthcare company invited to attend, offering the opportunity for a leadership role in accelerating action on climate change and supporting sustainability goals for a healthy society and planet ��� Engaged at the World Economic Forum Sustainable Development Impact Meetings in New York during Climate Week, driving thought leadership on a range of topics including the interconnection of health and climate, accelerating the delivery of net-zero health systems, the circular economy and health equity. The Company's integrated approach to sustainability also included engagements on inclusion and diversity and health systems resilience ��� Marked the fifth anniversary of Climate Group's global electric transport initiative, EV100, by participating in a Climate Week panel event on "Steering the global market towards EV100," sharing the experience of working towards its goal of a fully electric vehicle fleet by end of 2025 as a key part of the Ambition Zero Carbon programme ��� Participated in a World Water Week event in Stockholm, Sweden, to share its water stewardship strategy and how it is improving circularity at its sites to reduce reliance on natural resources and improve water quality, increasing water efficiency at a local level and building climate resilience ��� Spoke at a Reuters panel discussion "Drive environmental sustainability across biopharma to create meaningful system-wide change" on the connection between climate and health, and the industry's role in accelerating the delivery of net-zero health systems ��� Published a concept letter in collaboration with regulators, academics, and industry as part of PREMIER, a European Innovative Health Initiative project led by the Company to find solutions to managing pharmaceutical pollution. The paper discusses how greener design could help minimise the impact on the environment of active pharmaceutical ingredients excreted from patients ��� Received the prestigious Indiana Department of Environmental Management Governor's Award for Environmental Excellence in the category of 'Five-Year Continuous Improvement' for its manufacturing site in Mount Vernon, Indiana Ethics and transparency ��� Marked International Day of the Girl with its #GirlsBelongHere2022 initiative in collaboration with Plan International, welcoming more than 350 young women across 35 countries to step into leadership positions, join boardroom conversations and participate in roundtables and masterclasses. All of the Senior Executive Team participated, including country and regional leadership teams. Regions and functions also drove their own initiatives ��� Furthered its commitment to gender and health equity through YHP awarding 80% of "Step Up" grants totalling $160,000 to women-led non-profit organisations working to improve the health of young people in their communities ��� Launched a #ScienceCan sustainability campaign to shine a spotlight on the Company's work to drive sustainability across its interconnected strategic priorities through pioneering science. The campaign outlines the efforts to build a sustainable future for people, society, and the planet. All employees are being asked to crowdsource ideas in teams and identify ways to support the delivery of the Company's sustainability goals and identify objectives for 2023, to effect change from the grassroots level ��� Celebrated its annual Power of Diversity day with the launch of a refreshed Global Inclusion and diversity strategy setting out priorities across three focus areas - Inclusion, Diversity and External Impact ��� Marked Global Ethics Day with the launch of its annual Code of Ethics training for all employees, and with the launch of its Supplier Diversity Programme in Sweden, progressing the target to launch supplier diversity programmes in 10 countries by 2025 to accelerate inclusion and growth of local small and diverse businesses Research and development This section covers R&D events and milestones that have occurred since the prior results announcement on 29 July 2022, up to and including events announced on 9 November 2022. A comprehensive view of AstraZeneca's pipeline of medicines in human trials can be found in the latest clinical trials appendix, available on www.astrazeneca.com/investor-relations. The clinical trials appendix includes tables with details of the ongoing clinical trials for AstraZeneca medicines and new molecular entities in the pipeline. Oncology AstraZeneca presented new data across its diverse portfolio of cancer medicines at two major medical congresses during the quarter: the IASLC 2022 World Conference on Lung Cancer (WCLC) in August, and the European Society for Medical Oncology (ESMO) in September. At ESMO, 75 abstracts featured 15 approved and potential new medicines from AstraZeneca across 13 different tumour types. Significant new trials in Oncology initiated during the period included TROPION-Lung07 a Phase III trial of datopotamab deruxtecan in 1st-line PDL1[71]-low NSCLC patients with PD-L1 TPS[72]<50% and LATIFY, a Phase III trial of ceralasertib in combination with Imfinzi in NSCLC patients whose disease has progressed on or after prior anti-PD-L1 therapy and platinum-based chemotherapy. Tagrisso At WCLC in August, preliminary results from the SAVANNAH Phase II trial showed that Tagrisso plus Orpathys demonstrated an ORR[73] of 49% (95% CI[74] 39-59%) in patients with EGFRm NSCLC with high levels of MET overexpression and/or amplification, defined as IHC90+[75] and/or FISH10+[76], whose disease progressed on treatment with Tagrisso. This combination is being further evaluated in the SAFFRON Phase III trial. During the period, Tagrisso was approved in Japan for the adjuvant treatment of patients with EGFRm NSCLC after surgery based on the results from the global ADAURA Phase III trial. Updated results from follow-up of the ADAURA Phase III trial presented at ESMO in September demonstrated a sustained, clinically meaningful improvement in disease free survival compared to placebo in the adjuvant treatment of patients with early-stage (IB, II and IIIA) EGFRm NSCLC after complete tumour resection, with nearly three in four patients treated with adjuvant Tagrisso alive and disease-free at four years. Imfinzi and Imjudo During the period, Imfinzi was approved in the US for the treatment of patients with locally advanced or metastatic biliary tract cancer, in combination with chemotherapy, based on the results from the TOPAZ-1 Phase III trial. In October, Imfinzi in combination with a single priming dose of Imjudo (tremelimumab) was approved in the US for the 1st-line treatment of patients with unresectable HCC based on the results from the HIMALAYA Phase III trial. At ESMO, updated TOPAZ-1 results for Imfinzi plus chemotherapy (gemcitabine plus cisplatin) in biliary tract cancer showed enhanced clinical efficacy after an additional 6.5 months of follow-up, demonstrating a 24% reduction in the risk of death versus chemotherapy alone (based on a hazard ratio of 0.76; 95% CI, 0.64-0.91). Updated median OS[77] was 12.9 months versus 11.3 with chemotherapy. More than two times as many patients were estimated to be alive at two years versus chemotherapy alone (23.6% versus 11.5%). Lynparza In August, Lynparza was approved in the European Union for the adjuvant treatment of patients with gBRCAm high-risk early breast cancer and in Japan for BRCAm patients in the same setting based on the results from the OlympiA Phase III trial. During the period, the Company and MSD received US regulatory submission acceptance with Priority Review for Lynparza in combination with abiraterone and prednisone or prednisolone for the treatment of adult patients with mCRPC based on the PROpel Phase III trial. At ESMO, AstraZeneca presented positive long-term follow-up results from the PAOLA-1 Phase III trial in the pre-specified descriptive analysis of the HRD-positive subgroup, and from the SOLO-1 Phase III trial in patients with BRCA mutations of Lynparza with or without bevacizumab. Both trials showed clinically meaningful improvements in OS. Further results showed PFS[78] in combination with bevacizumab for HRD-positive patients, versus active comparator, bevacizumab, and as monotherapy for patients with BRCA mutations, versus placebo, respectively. Five-year follow-up of the PAOLA-1 Phase III trial demonstrated that 65% of HRD-positive patients treated with Lynparza plus bevacizumab were alive at five years versus 48.4% treated with bevacizumab and placebo. Data from the SOLO-1 Phase III trial demonstrated 67% of advanced ovarian cancer patients with BRCA mutations treated with Lynparza were alive at seven years versus 47% on placebo. In September, Lynparza was approved in China for the maintenance treatment of HRD-positive patients with advanced ovarian cancer who are in complete or partial response to 1st-line platinum-based chemotherapy in combination with bevacizumab, based on the PAOLA-1 Phase III trial. During the period, AstraZeneca and MSD announced the voluntary withdrawal of the Lynparza indication for patients with gBRCAm advanced ovarian cancer who have been treated with three or more lines of chemotherapy. The decision to withdraw was made in consultation with the US FDA and based on a recent subgroup analysis that indicated a potential detrimental effect on OS for Lynparza compared to the chemotherapy control arm in the subgroup of patients who had received three or more lines of chemotherapy. Calquence In August, AstraZeneca's new maleate tablet formulation of Calquence was approved in the US for all current indications, including adult patients with CLL, SLL[79] and for patients with relapsed or refractory MCL[80], under accelerated approval based on results from the ELEVATE-PLUS trials. The tablet can be taken with gastric acid-reducing agents, including proton pump inhibitors, antacids and H2-receptor antagonists. Enhertu In August, AstraZeneca and Daiichi Sankyo's Enhertu was approved in the US for the treatment of patients with unresectable or metastatic HER2-low (IHC 1+ or IHC 2+/ISH-) breast cancer who have received a prior chemotherapy in the metastatic setting or developed disease recurrence during or within six months of completing adjuvant chemotherapy. The approval by the US FDA was based on positive results from the DESTINY-Breast04 Phase III trial. During the period, Enhertu was also approved in the US for the treatment of adult patients with unresectable or metastatic NSCLC whose tumours have activating HER2 mutations and who have received a prior systemic therapy. The accelerated approval by the US FDA was based on the results of the DESTINY-Lung02 Phase II trial. In August, positive high-level results from the DESTINY-Breast02 Phase III trial of Enhertu versus physician's choice of treatment showed the trial met the primary endpoint, demonstrating a statistically significant and clinically meaningful improvement in PFS in patients with HER2-positive unresectable and/or metastatic breast cancer previously treated with trastuzumab emtansine. The trial also met the key secondary endpoint of improved OS. Datopotamab deruxtecan (Dato-DXd) At WCLC in August, initial results from the TROPION-Lung02 Phase Ib trial demonstrated promising clinical activity and a tolerable safety profile for Dato-DXd in combination with pembrolizumab with or without platinum chemotherapy in patients with previously untreated or pre-treated, advanced or metastatic NSCLC. The data showed an ORR in the overall population of 37% (median follow-up of 6.5 months) in patients treated with Dato-DXd and pembrolizumab (doublet therapy) and an ORR of 41% (median follow-up of 4.4 months) in patients receiving Dato-DXd, pembrolizumab and platinum chemotherapy (triplet therapy). A DCR[81] of 84% was seen with both the doublet and triplet combination therapy in the overall population that comprised both 1st-line and 2nd-line settings. In previously untreated patients, ORRs of 62% (eight of the 13 patients receiving doublet therapy) and 50% (10 of 20 patients receiving triplet therapy) were observed. Eight partial responses were seen in patients receiving doublet therapy and 10 partial responses (three pending confirmation) were seen in patients receiving triplet therapy. A DCR of 100% was observed with doublet therapy and a DCR of 90% was observed with triplet therapy. Camizestrant In October, positive high-level results from the SERENA-2 Phase II trial showed that AstraZeneca's next-generation oral selective estrogen receptor degrader camizestrant met the primary endpoint of demonstrating a statistically significant and clinically meaningful PFS benefit at both 75mg and 150mg dose levels versus Faslodex (fulvestrant) 500mg in post-menopausal patients with estrogen receptor-positive locally advanced or metastatic breast cancer, previously treated with endocrine therapy. Capivasertib In October, positive high-level results from the CAPItello-291 Phase III trial showed that AstraZeneca's AKT[82] inhibitor capivasertib in combination with Faslodex (fulvestrant) demonstrated a statistically significant and clinically meaningful improvement in PFS versus placebo plus Faslodex in patients with HR-positive, HER2-low or HER2-negative locally advanced or metastatic breast cancer, following recurrence or progression on or after endocrine therapy (with or without a CDK4/6[83] inhibitor). Monalizumab During the quarter, AstraZeneca informed Innate Pharma SA that the INTERLINK-1 Phase III trial will be discontinued, as a result of the trial not meeting a pre-defined threshold for efficacy at a planned futility interim analysis, with the decision being recommended by an Independent Data Monitoring Committee. INTERLINK-1 evaluated monalizumab in combination with cetuximab versus cetuximab in patients with recurrent or metastatic squamous cell carcinoma of the head and neck who have been previously treated with platinum-based chemotherapy and PD-L1 inhibitors. BioPharmaceuticals - CVRM Farxiga Full data from the DELIVER Phase III trial was presented at the European Society of Cardiology Congress in August 2022. In the trial, which evaluated Farxiga in patients with heart failure with preserved ejection fraction, Farxiga reduced the composite outcome of cardiovascular death or worsening of heart failure by 18% with all individual components contributing to the superiority of the primary endpoint. The findings were consistent across key subgroups examined and extend the benefits of Farxiga to the full spectrum of patients with heart failure irrespective of left ventricular ejection fraction status. The trial also showed a symptom benefit in patient-reported outcomes measured by the Kansas City Cardiomyopathy Questionnaire total symptom score. In a separate pre-specified pooled analysis from the Phase III DAPA-HF and DELIVER trials, Farxiga demonstrated reduction in cardiovascular death by 14% and reduction in death from any cause by 10% in patients with heart failure irrespective of ejection fraction. In September 2022, Forxiga was approved for the treatment of chronic kidney disease in China based on the data from the DAPA-CKD trial. Eplontersen In the period, AstraZeneca and Ionis Pharmaceuticals, Inc. presented data from the NEURO-TTransform Phase III trial in patients with hereditary transthyretin-mediated amyloid polyneuropathy (ATTRv-PN) at the International Symposium on Amyloidosis. In the trial, eplontersen demonstrated a significant and clinically meaningful change from baseline for co-primary and secondary endpoints at 35 weeks compared to external placebo group. On the co-primary endpoint of serum transthyretin concentration from baseline, eplontersen showed an 81.2% reduction. BioPharmaceuticals - R&I AstraZeneca presented new data across the R&I portfolio at the European Respiratory Society (ERS) International Congress 2022, with a total of 78 accepted abstracts, including 14 late breakers and 21 oral presentations. Tezspire In September, Tezspire was approved in the EU as an add-on maintenance treatment in patients 12 years and older with severe asthma who are inadequately controlled with high dose inhaled corticosteroids plus another medicinal product. Also in September, Tezspire was approved in Japan for the treatment of bronchial asthma in patients with severe or refractory disease in whom asthma symptoms cannot be controlled with mid- or high-dose inhaled corticosteroids and other long-term maintenance therapies. Results from the DESTINATION Phase III extension trial were presented at ERS 2022. Tezspire demonstrated an overall long-term safety and efficacy profile consistent with the PATHWAY Phase II and NAVIGATOR Phase III trials, sustained over 104 weeks in a broad population of severe asthma patients regardless of biomarker status. Additional analyses of the CASCADE Phase II and NAVIGATOR Phase III trials were also presented at the ERS International Congress 2022. The CASCADE Phase II mechanistic trial showed Tezspire as the first biologic to reduce mucus plugging compared to placebo. Reduction in mucus score with Tezspire was correlated with improvements in lung function. Mucus plugging as a clinical feature may predict the risk of future exacerbations and lung function decline in severe asthma. Fasenra During the period, AstraZeneca discontinued the Phase III MAHALE trial for the treatment of non-cystic fibrosis bronchiectasis, due to strategic portfolio prioritisation; this discontinuation was not related to any safety or efficacy findings. In October 2022, AstraZeneca disclosed results from the MESSINA Phase III trial, evaluating Fasenra for the treatment of eosinophilic esophagitis. In the trial, Fasenra did not meet one of the two dual-primary endpoints, demonstrating a statistically significant improvement in histological disease remission but not in dysphagia symptoms compared to placebo. No new safety concerns were identified. The company will continue to analyse the complete data set and results will be shared at an upcoming medical meeting. Tozorakimab Data from the ACCORD-2 Phase II trial examined tozorakimab, in patients hospitalised with COVID-19. Results showed that patients receiving tozorakimab on top of standard of care had a 32 percent relative risk reduction in respiratory failure and death, this increased to 57% in IL-33 high patients (IL-33 high was defined as a baseline IL-33 level of >30.15 U/ml). This data suggests tozorakimab may be a novel therapy for patients with acute respiratory failure. BioPharmaceuticals - V&I Beyfortus (nirsevimab) In November 2022, Beyfortus was approved in the EU for the prevention of RSV lower respiratory tract disease in newborns and infants during their first RSV season. The European Commission is the first regulatory body to grant approval to Beyfortus. The approval was based on results from the Beyfortus clinical development programme, including the MELODY Phase III, MEDLEY Phase II/III and Phase IIb trials. Evusheld In August 2022, Evusheld was granted Special Approval for Emergency in Japan for adults and adolescents for both prevention (pre-exposure prophylaxis) and treatment of symptomatic disease caused by SARS-CoV-2 infection. In prevention, Evusheld is approved for use in those whom SARS-CoV-2 vaccination is not recommended and who may have an inadequate response to a COVID-19 vaccine due to immunodeficiencies. Recipients of Evusheld for prevention should not be currently infected with or have had recent known exposure to a person infected with SARS-CoV-2. In treatment, Evusheld is approved for those with risk factors for severe SARS-CoV-2 infection who do not require supplemental oxygen. The decision marked the first global marketing approval for Evusheld as a treatment for COVID-19. In September 2022, Evusheld was approved in the EU for the treatment of adults and adolescents with COVID-19 who do not require supplemental oxygen and who are at increased risk of progressing to severe COVID-19. Both the Japan and EU treatment approvals were based on results from the TACKLE Phase III treatment trial. In October 2022, the FDA updated the authorised Fact Sheets for Evusheld to inform health care providers and individuals that Evusheld may not be effective at preventing COVID-19 caused by SARSCoV-2 viral variants that Evusheld does not neutralise. Vaxzevria In October 2022, Vaxzevria had its conditional marketing authorisation in the EU converted into a standard marketing authorisation by the EMA. The standard marketing authorisation covers the use of Vaxzevria in both a primary vaccination series, and as a third dose booster. As the primary vaccination needs of the US are being met already, AstraZeneca has decided that it will not submit a Biologics Licence Application for Vaxzevria in the US. The Company will continue to focus its efforts on ensuring availability of Vaxzevria elsewhere around the world, including submissions for its use as a booster. Rare Disease Soliris During the period, AstraZeneca received results from the GBS-301 Phase III trial, conducted in Japan, evaluating Soliris on top of standard-of-care IVIg[84] as a treatment for Guillain-Barr�� Syndrome. Soliris, on top of IVIg, did not achieve statistical significance on the primary endpoint of time to first reaching a Hughes FG score ��� 1. During the period, Soliris received full approval in China for the treatment of PNH and aHUS. Ultomiris In August 2022, Ultomiris was approved in Japan for the treatment of adult patients with gMG who are anti-acetylcholine receptor antibody-positive and whose symptoms are difficult to control with high-dose intravenous immunoglobulin therapy or plasmapheresis. In September 2022, Ultomiris was approved in Europe as an add-on to standard therapy for the treatment of adult patients with gMG who are anti-acetylcholine receptor antibody-positive. Approvals by the Japanese Ministry of Health, Labour and Welfare and the European Commission, were based on positive results from the CHAMPION-MG Phase III trial which showed that Ultomiris was superior to placebo in the primary endpoint of change from baseline in the Myasthenia Gravis-Activities of Daily Living Profile (MG-ADL) total score at Week 26, a patient-reported scale that assesses patients' abilities to perform daily activities. During the period, AstraZeneca discontinued the Phase III trial for Ultomiris in complement-mediated thrombotic microangiopathy, due to strategic portfolio prioritisation. This discontinuation was not related to any safety or efficacy findings. In October 2022, AstraZeneca presented new data showing significant advances for the treatment of anti-aquaporin-4 antibody-positive NMOSD at the European Committee for Treatment and Research in Multiple Sclerosis Congress based on results from the Ultomiris CHAMPION-NMOSD Phase III trial. These new data and insights underscored the critical role of C5 inhibition in treating AQP4 antibody-positive NMOSD which, when treated with Ultomiris, the first and only long-acting C5 inhibitor, demonstrated zero relapses with a median treatment duration of 73 weeks. Koselugo In September, Koselugo was approved in Japan for paediatric patients with NF1-PN. Danicopan (ALXN2040) During the period, the Company announced that danicopan, an add-on to Ultomiris or Soliris, met the primary endpoint in Phase III ALPHA trial for patients with paroxysmal nocturnal haemoglobinuria who experience clinically significant extravascular haemolysis. Interim results demonstrated statistically significant improvement compared to placebo in haemoglobin levels from baseline to week 12. AstraZeneca will present these data at a forthcoming medical meeting and intends to proceed with regulatory submissions in the coming months. Interim financial statements Table 18: Condensed consolidated statement of comprehensive income: YTD 2022 For the nine months ended 30 September 2022 2021 $m $m Total Revenue 33,144 25,406 Product Sales 32,200 25,043 Collaboration Revenue 944 363 Cost of Sales (9,491) (7,812) Gross profit 23,653 17,594 Distribution expense (380) (322) Research and development expense (7,137) (7,152) Selling, general and administrative expense (13,798) (10,117) Other operating income and expense 325 1,345 Operating profit 2,663 1,348 Finance income 50 42 Finance expense (986) (964) Share of after tax losses in associates and joint ventures (4) (55) Profit before tax 1,723 371 Taxation 668 90 Profit for the period 2,391 461 Other comprehensive (loss)/income Items that will not be reclassified to profit or loss Remeasurement of the defined benefit pension liability 1,283 592 Net (losses)/gains on equity investments measured at fair value through other comprehensive income (21) 144 Fair value movements related to own credit risk on bonds designated as fair value through profit or loss 1 4 Tax on items that will not be reclassified to profit or loss (291) 71 972 811 Items that may be reclassified subsequently to profit or loss Foreign exchange arising on consolidation (2,493) (368) Foreign exchange arising on designated borrowings in net investment hedges (321) (275) Fair value movements on cash flow hedges (214) (103) Fair value movements on cash flow hedges transferred to profit or loss 250 137 Fair value movements on derivatives designated in net investment hedges 33 22 Costs of hedging (11) (6) Tax on items that may be reclassified subsequently to profit or loss 95 37 (2,661) (556) Other comprehensive (loss)/income, net of tax (1,689) 255 Total comprehensive income for the period 702 716 Profit attributable to: Owners of the Parent 2,387 459 Non-controlling interests 4 2 2,391 461 Total comprehensive income attributable to: Owners of the Parent 701 714 Non-controlling interests 1 2 702 716 Basic earnings per $0.25 Ordinary Share $1.54 $0.33 Diluted earnings per $0.25 Ordinary Share $1.53 $0.33 Weighted average number of Ordinary Shares in issue (m) 1,548 1,374 Diluted weighted average number of Ordinary Shares in issue (m) 1,560 1,382 Table 19: Condensed consolidated statement of comprehensive income: Q3 2022 For the quarter ended 30 September 2022 2021 $m $m Total Revenue 10,982 9,866 Product Sales 10,590 9,741 Collaboration Revenue 392 125 Cost of Sales (2,982) (3,757) Gross profit 8,000 6,109 Distribution expense (126) (120) Research and development expense (2,458) (3,610) Selling, general and administrative expense (4,277) (4,090) Other operating income and expense 106 37 Operating profit/(loss) 1,245 (1,674) Finance income 15 15 Finance expense (339) (335) Share of after tax profits/(losses) in associates and joint ventures 1 (7) Profit/(Loss) before tax 922 (2,001) Taxation 720 350 Profit/(Loss) for the period 1,642 (1,651) Other comprehensive loss Items that will not be reclassified to profit or loss Remeasurement of the defined benefit pension liability 252 (100) Net (losses)/gains on equity investments measured at fair value through other comprehensive income (9) 171 Fair value movements related to own credit risk on bonds designated as fair value through profit or loss (1) 2 Tax on items that will not be reclassified to profit or loss (16) 19 226 92 Items that may be reclassified subsequently to profit or loss Foreign exchange arising on consolidation (1,167) (427) Foreign exchange arising on designated borrowings in net investment hedges (126) (45) Fair value movements on cash flow hedges (76) (44) Fair value movements on cash flow hedges transferred to profit or loss 119 64 Fair value movements on derivatives designated in net investment hedges (1) 15 Costs of hedging 2 (4) Tax on items that may be reclassified subsequently to profit or loss 49 19 (1,200) (422) Other comprehensive loss, net of tax (974) (330) Total comprehensive income/(loss) for the period 668 (1,981) Profit/(Loss) attributable to: Owners of the Parent 1,640 (1,652) Non-controlling interests 2 1 1,642 (1,651) Total comprehensive income/(loss) attributable to: Owners of the Parent 667 (1,982) Non-controlling interests 1 1 668 (1,981) Basic earnings per $0.25 Ordinary Share $1.06 $(1.10) Diluted earnings per $0.25 Ordinary Share $1.05 $(1.10) Weighted average number of Ordinary Shares in issue (m) 1,548 1,496 Diluted weighted average number of Ordinary Shares in issue (m) 1,559 1,496 Table 20: Condensed consolidated statement of financial position At 30 Sep 2022 At 31 Dec 2021 At 30 Sep 2021 $m $m $m Assets Non-current assets Property, plant and equipment 8,352 9,183 9,214 Right-of-use assets 875 988 948 Goodwill 19,707 19,997 20,081 Intangible assets 39,585 42,387 44,104 Investments in associates and joint ventures 53 69 39 Other investments 1,049 1,168 1,546 Derivative financial instruments 112 102 90 Other receivables 792 895 811 Deferred tax assets 3,436 4,330 3,697 73,961 79,119 80,530 Current assets Inventories 5,078 8,983 10,528 Trade and other receivables 9,336 9,644 8,258 Other investments 440 69 82 Derivative financial instruments 105 83 60 Intangible assets 82 105 100 Income tax receivable 725 663 596 Cash and cash equivalents 4,458 6,329 7,067 Assets held for sale - 368 - 20,224 26,244 26,691 Total assets 94,185 105,363 107,221 Liabilities Current liabilities Interest-bearing loans and borrowings (5,408) (1,660) (2,744) Lease liabilities (210) (233) (229) Trade and other payables (17,694) (18,938) (18,663) Derivative financial instruments (68) (79) (54) Provisions (377) (768) (972) Income tax payable (1,093) (916) (987) (24,850) (22,594) (23,649) Non-current liabilities Interest-bearing loans and borrowings (23,013) (28,134) (28,206) Lease liabilities (668) (754) (733) Derivative financial instruments (290) (45) (6) Deferred tax liabilities (3,479) (6,206) (6,400) Retirement benefit obligations (919) (2,454) (2,449) Provisions (930) (956) (726) Other payables (4,882) (4,933) (5,140) (34,181) (43,482) (43,660) Total liabilities (59,031) (66,076) (67,309) Net assets 35,154 39,287 39,912 Equity Capital and reserves attributable to equity holders of the Parent Share capital 387 387 387 Share premium account 35,137 35,126 35,118 Other reserves 2,081 2,045 2,039 Retained earnings (2,471) 1,710 2,200 35,134 39,268 39,744 Non-controlling interests 20 19 168 Total equity 35,154 39,287 39,912 Table 21: Condensed consolidated statement of changes in equity Share capital Share premium account Other reserves Retained earnings Total attributable to owners of the parent Non-controlling interests Total equity $m $m $m $m $m $m $m At 1 Jan 2021 328 7,971 2,024 5,299 15,622 16 15,638 Profit for the period - - - 459 459 2 461 Other comprehensive income - - - 255 255 - 255 Transfer to other reserves - - 15 (15) - - - Transactions with owners: Dividends - - - (3,884) (3,884) - (3,884) Issue of Ordinary Shares 59 27,147 - - 27,206 - 27,206 Changes in non-controlling interest - - - - - 150 150 Share-based payments charge for the period - - - 384 384 - 384 Settlement of share plan awards - - - (811) (811) - (811) Issue of replacement share awards upon acquisition - - - 513 513 - 513 Net movement 59 27,147 15 (3,099) 24,122 152 24,274 At 30 Sep 2021 387 35,118 2,039 2,200 39,744 168 39,912 At 1 Jan 2022 387 35,126 2,045 1,710 39,268 19 39,287 Profit for the period - - - 2,387 2,387 4 2,391 Other comprehensive loss - - - (1,686) (1,686) (3) (1,689) Transfer to other reserves - - 36 (36) - - - Transactions with owners: Dividends - - - (4,486) (4,486) - (4,486) Issue of Ordinary Shares - 11 - - 11 - 11 Share-based payments charge for the period - - - 471 471 - 471 Settlement of share plan awards - - - (831) (831) - (831) Net movement - 11 36 (4,181) (4,134) 1 (4,133) At 30 Sep 2022 387 35,137 2,081 (2,471) 35,134 20 35,154 Table 22: Condensed consolidated statement of cash flows For the nine months ended 30 September 2022 2021 $m $m Cash flows from operating activities Profit before tax 1,723 371 Finance income and expense 936 922 Share of after tax losses of associates and joint ventures 4 55 Depreciation, amortisation and impairment 4,000 4,338 Decrease in working capital and short-term provisions 3,458 2,063 Gains on disposal of intangible assets (88) (371) Gains on disposal of investments in associates and joint ventures - (776) Fair value movements on contingent consideration arising from business combinations 293 33 Non-cash and other movements (973) (370) Cash generated from operations 9,353 6,265 Interest paid (608) (522) Tax paid (1,335) (1,198) Net cash inflow from operating activities 7,410 4,545 Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired - (9,263) Payments upon vesting of employee share awards attributable to business combinations (297) (203) Payment of contingent consideration from business combinations (570) (470) Purchase of property, plant and equipment (719) (768) Disposal of property, plant and equipment 17 10 Purchase of intangible assets (1,298) (714) Disposal of intangible assets and assets held for sale 442 584 Purchase of non-current asset investments (28) (190) Disposal of non-current asset investments 42 - Movement in short-term investments, fixed deposits and other investing instruments (321) 120 Payments to associates and joint ventures (5) (55) Disposal of investments in associates and joint ventures - 776 Interest received 26 28 Net cash outflow from investing activities (2,711) (10,145) Net cash inflow/(outflow) before financing activities 4,699 (5,600) Cash flows from financing activities Proceeds from issue of share capital 11 10 Repayment of loans and borrowings (1,261) (2,934) Issue of loans - 11,942 Dividends paid (4,364) (3,856) Hedge contracts relating to dividend payments (127) (28) Repayment of obligations under leases (182) (173) Movement in short-term borrowings 378 (261) Payment of Acerta Pharma share purchase liability (920) - Net cash (outflow)/inflow from financing activities (6,465) 4,700 Net decrease in cash and cash equivalents in the period (1,766) (900) Cash and cash equivalents at the beginning of the period 6,038 7,546 Exchange rate effects (86) (73) Cash and cash equivalents at the end of the period 4,186 6,573 Cash and cash equivalents consist of: Cash and cash equivalents 4,458 7,067 Overdrafts (272) (494) 4,186 6,573 Notes to the Interim financial statements Note 1: Basis of preparation and accounting policies These unaudited condensed consolidated Interim financial statements for the nine months ended 30 September 2022 have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' (IAS 34), as issued by the International Accounting Standards Board (IASB), IAS 34 as adopted by the European Union, UK-adopted IAS 34 and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The unaudited Interim financial statements for the nine months ended 30 September 2022 include Alexion's results for the period. Alexion's post-acquisition results were consolidated into the Group's results from 21 July 2021 therefore the respective comparative periods shown are not entirely comparable with the current period. The unaudited Interim financial statements for the nine months ended 30 September 2022 were approved by the Board of Directors for publication on 10 November 2022. This results announcement does not constitute statutory accounts of the Group within the meaning of sections 434(3) and 435(3) of the Companies Act 2006. The annual financial statements of the Group for the year ended 31 December 2021 were prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006. The annual financial statements also comply fully with IFRSs as issued by the IASB and International Accounting Standards as adopted by the European Union. Except for the estimation of the interim income tax charge, the Interim financial statements have been prepared applying the accounting policies that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2021. The comparative figures for the financial year ended 31 December 2021 are not the Group's statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and have been delivered to the registrar of companies; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006. Global and/or geopolitical events There were no material accounting impacts identified relating to COVID-19 during the nine months ended 30 September 2022. The Group's current focus is to continue compliant business operations in Russia and Ukraine, focussing on safeguarding our employees, ensuring continuity of supply of essential and life-saving medicines and contributing to humanitarian relief efforts. There are no material accounting impacts arising from the conflict impacting our YTD 2022 reporting. The situation is dynamic and any future impact on our business is uncertain. The Group will continue to monitor these areas of increased judgement, estimation and risk for material changes. Going concern The Group has considerable financial resources available. As at 30 September 2022, the Group had $9.3bn in financial resources (Cash and cash-equivalent balances of $4.5bn and undrawn committed bank facilities of $4.9bn available, with only $5.6bn of borrowings due within one year). These facilities contain no financial covenants, were undrawn at 30 September 2022 and are now available until April 2026. The Group's revenues are largely derived from sales of medicines covered by patents which provide a relatively high level of resilience and predictability to cash inflows, although government price interventions in response to budgetary constraints are expected to continue to affect adversely revenues in some of our significant markets. The Group, however, anticipates new revenue streams from both recently launched medicines and those in development, and the Group has a wide diversity of customers and suppliers across different geographic areas. Consequently, the Directors believe that, overall, the Group is well-placed to manage its business risks successfully. Accordingly, the going concern basis has been adopted in these Interim financial statements. Legal proceedings The information contained in Note 6 updates the disclosures concerning legal proceedings and contingent liabilities in the Group's Annual Report and Form 20-F Information 2021. Note 2: Intangible assets In accordance with IAS 36 'Impairment of Assets', reviews for triggers of impairment or impairment reversals at an individual asset or cash-generating-unit level were conducted, and impairment tests carried out where triggers were identified. As a result, total net impairment charges of $44m have been recorded against intangible assets during the nine months ended 30 September 2022 (YTD 2021: $1,492m net charge). Net impairment charges in respect of medicines in development and launched medicines were $61m (YTD 2021: $1,371m) and $nil (YTD 2021: $121m charge) respectively. Note 3: Net Debt The table below provides an analysis of Net Debt and a reconciliation of Net Cash Flow to the movement in Net Debt. The Group monitors Net Debt as part of its capital-management policy as described in Note 28 of the Annual Report and Form 20-F Information 2021. Net Debt is a non-GAAP financial measure. Table 23: Net Debt At 1 Jan 2022 Cash flow Non-cash & other Exchange movements At 30 Sep 2022 $m $m $m $m $m Non-current instalments of loans (28,134) - 4,662 459 (23,013) Non-current instalments of leases (754) - 28 58 (668) Total long-term debt (28,888) - 4,690 517 (23,681) Current instalments of loans (1,273) 1,261 (4,653) - (4,665) Current instalments of leases (233) 186 (181) 18 (210) Commercial paper - (249) - - (249) Bank collateral received (93) (66) - - (159) Other short-term borrowings excluding overdrafts (3) (63) - 3 (63) Overdrafts (291) (8) - 27 (272) Total current debt (1,893) 1,061 (4,834) 48 (5,618) Gross borrowings (30,781) 1,061 (144) 565 (29,299) Net derivative financial instruments 61 73 (275) - (141) Net borrowings (30,720) 1,134 (419) 565 (29,440) Cash and cash equivalents 6,329 (1,758) - (113) 4,458 Other investments - current 69 375 - (4) 440 Cash and investments 6,398 (1,383) - (117) 4,898 Net Debt (24,322) (249) (419) 448 (24,542) Non-cash movements in the period include fair value adjustments under IFRS 9. The Group has agreements with some bank counterparties whereby the parties agree to post cash collateral on financial derivatives, for the benefit of the other, equivalent to the market valuation of the derivative positions above a predetermined threshold. The carrying value of such cash collateral held by the Group at 30 September 2022 was $159m (31 December 2021: $93m) and the carrying value of such cash collateral posted by the Group at 30 September 2022 was $376m (31 December 2021: $47m). Cash collateral posted by the Group is presented within Other investments - current as at 30 September 2022. Restricted cash and cash equivalents as at 30 September 2022 totalled $94m (31 December 2021: $47m). The equivalent GAAP measure to Net Debt is 'liabilities arising from financing activities', which excludes the amounts for cash and overdrafts, other investments and non-financing derivatives shown above and includes the Acerta Pharma share purchase liability of $1,618m (31 December 2021: $2,458m), $852m of which is shown in current other payables and $766m is shown in non-current other payables. Net Debt increased by $220m in the year to date to $24,542m. Details of the committed undrawn bank facilities are disclosed within the going concern section of Note 1. During the nine months ended 30 September 2022, there were no changes to the Company's solicited credit ratings issued by Standard and Poor's (long term: A-; short term: A-2) and from Moody's (long term: A3; short term: P���2). Note 4: Financial Instruments As detailed in the Group's most recent annual financial statements, the principal financial instruments consist of derivative financial instruments, other investments, trade and other receivables, cash and cash equivalents, trade and other payables, lease liabilities and interest-bearing loans and borrowings. The Group has certain equity investments held at $175m at 30 September 2022 (31 December 2021: $104m) that are categorised as Level 3 in the fair value hierarchy and for which fair value gains of $50m (FY 2021: $nil) have been recognised in the nine months ended 30 September 2022. In the absence of specific market data, these unlisted investments are held at fair value based on the cost of investment and adjusting as necessary for impairments and revaluations on new funding rounds, which are seen to approximate the fair value. All other fair value gains and/or losses that are presented in Net losses on equity investments measured at fair value through other comprehensive income in the Condensed consolidated statement of comprehensive income for the nine months ended 30 September 2022 are Level 1 fair value measurements, valued based on quoted prices in active markets. Financial instruments measured at fair value include $1,489m of other investments, $2,816m held in money-market funds, $295m of loans designated at fair value through profit or loss and ($141m) of derivatives as at 30 September 2022. With the exception of derivatives being Level 2 fair valued, the aforementioned balances are Level 1 fair valued. The total fair value of interest-bearing loans and borrowings at 30 September 2022, which have a carrying value of $29,299m in the Condensed consolidated statement of financial position, was $27,664m. Table 24: Financial instruments - contingent consideration 2022 2021[85] Diabetes alliance Other Total Total $m $m $m $m At 1 January 2,544 321 2,865 3,323 Settlements (561) (9) (570) (470) Disposals - (121) (121) - Revaluations 320 (27) 293 60 Discount unwind 121 5 126 169 At 30 September 2,424 169 2,593 3,082 Contingent consideration arising from business combinations is fair valued using decision-tree analysis, with key inputs including the probability of success, consideration of potential delays and the expected levels of future revenues. The contingent consideration balance relating to BMS's share of the global diabetes alliance of $2,424m (31 December 2021: $2,544m) would increase/decrease by $242m with an increase/decline in sales of 10%, as compared with the current estimates. Note 5: Pensions and other post-retirement benefit obligations The net pensions and other post-retirement benefit obligations position, as recorded under IAS 19, at 30 September 2022 was a liability of $821m (31 December 2021: $2,454m liability). Pension schemes in a net surplus position at 30 September 2022 totalled $98m (31 December 2021: $nil) and are recorded within Other receivables in non-current assets. Pension schemes in a net deficit position at 30 September 2022 totalled $919m (31 December 2021: $2,454m) and are recorded within Retirement benefit obligations in non-current liabilities. The decrease in the net liability of $1,633m is driven by actuarial gains of $1,283m that have been reflected within the Condensed consolidated statement of comprehensive income. Changes in actuarial assumptions, primarily movements in discount rates, led to a decrease in the net liability in the year to date of $3,541m (a decrease in UK, Sweden, US and RoW liabilities of $2,271m, $776m, $301m and $193m respectively), which reflected increases in corporate bond yields. These movements were partially offset by decreases in the pension fund asset values in the year to date of $2,258m (a decrease in UK, Sweden and US assets of $1,802m, $172m and $294m respectively and an increase in RoW of $10m). Note 6: Legal proceedings and contingent liabilities AstraZeneca is involved in various legal proceedings considered typical to its business, including litigation and investigations, including Government investigations, relating to product liability, commercial disputes, infringement of intellectual property (IP) rights, the validity of certain patents, anti-trust law and sales and marketing practices. The matters discussed below constitute the more significant developments since publication of the disclosures concerning legal proceedings in the Company's Annual Report and Form 20-F Information 2021 and the Interim Financial Statements for the six months ended 30 June 2022 (the Disclosures). Unless noted otherwise below or in the Disclosures, no provisions have been established in respect of the claims discussed below. As discussed in the Disclosures, the majority of claims involve highly complex issues. Often these issues are subject to substantial uncertainties and, therefore, the probability of a loss, if any, being sustained and/or an estimate of the amount of any loss is difficult to ascertain. Unless specifically identified below that a provision has been taken, AstraZeneca considers each of the claims to represent a contingent liability and discloses information with respect to the nature and facts of the cases in accordance with IAS 37. There is one matter concerning legal proceedings in the Disclosures, which is considered probable that an outflow will be required, but for which we are unable to make an estimate of the possible loss or range of possible losses at this stage. In cases that have been settled or adjudicated, or where quantifiable fines and penalties have been assessed and which are not subject to appeal, or where a loss is probable and we are able to make a reasonable estimate of the loss, AstraZeneca records the loss absorbed or makes a provision for its best estimate of the expected loss. The position could change over time and the estimates that the Company made, and upon which the Company have relied in calculating these provisions are inherently imprecise. There can, therefore, be no assurance that any losses that result from the outcome of any legal proceedings will not exceed the amount of the provisions that have been booked in the accounts. The major factors causing this uncertainty are described more fully in the Disclosures and herein. AstraZeneca has full confidence in, and will vigorously defend and enforce, its IP. Matters disclosed in respect of the third quarter of 2022 and to 10 November 2022 Patent litigation Enhertu US patent proceedings As previously disclosed, in October 2020, Seagen Inc. (Seagen) filed a complaint against Daiichi Sankyo Company, Limited in the US District Court for the Eastern District of Texas (the District Court) alleging that Enhertu infringes a Seagen patent. AstraZeneca co-commercialises Enhertu with Daiichi Sankyo, Inc. in the US. After trial in April 2022, the jury found that the patent was infringed and awarded Seagen $41.82m in past damages. In July 2022, the District Court entered final judgment and declined to enhance damages on the basis of wilfulness. The parties await consideration of post-trial motions. As previously disclosed, in December 2020 and January 2021, AstraZeneca and Daiichi Sankyo, Inc. filed post-grant review (PGR) petitions with the US Patent and Trademark Office (USPTO) alleging, inter alia, that the Seagen patent is invalid for lack of written description and enablement. The USPTO initially declined to institute the PGRs, but in April 2022, the USPTO granted the rehearing requests, instituting both PGR petitions. Seagen subsequently disclaimed all patent claims at issue in one of the PGR proceedings. In July 2022, the USPTO reversed its institution decision and declined to institute the other PGR petition. AstraZeneca and Daiichi Sankyo, Inc. have requested reconsideration of the decision not to institute review of the patent. Farxiga US patent proceedings As previously disclosed, in 2018, in response to Paragraph IV notices, AstraZeneca initiated ANDA litigation against Zydus Pharmaceuticals (USA) Inc. (Zydus) in the US District Court for the District of Delaware (the District Court). In May 2021, the trial against Zydus proceeded and in October 2021, the District Court issued a decision finding the asserted claims of AstraZeneca's patent as valid and infringed by Zydus's ANDA product. In August 2022, Zydus appealed the District Court's decision. Patent proceedings outside the US As previously disclosed, in Canada, since January 2021, AstraZeneca has been defending against invalidity and/or non-infringement allegations advanced by Teva and Sandoz against all three Forxiga-related patents listed on the Canadian Patent Register. The parties have resolved these matters and these proceedings are now concluded. Faslodex Patent Proceedings outside the US As previously disclosed, in Japan, Sandoz K.K. and Sun Pharma Japan Ltd (Sun) sought to invalidate the Faslodex formulation patent at the Japan Patent Office (JPO) and AstraZeneca is defending the challenged patent. Sun has withdrawn from the JPO patent challenge. In May 2022, the JPO held the hearing in the matter and issued its preliminary decision in September 2022 upholding various claims of the challenged patent and determining that other patent claims were invalid. A final JPO decision is forthcoming. Lokelma US patent proceedings In August 2022, in response to Paragraph IV notices, AstraZeneca initiated ANDA litigation against multiple generic filers in the US District Court for the District of Delaware. No trial date has been scheduled. Symbicort US patent proceedings As previously disclosed, AstraZeneca is involved in ongoing ANDA patent litigation with Mylan Pharmaceuticals Inc. (Mylan) and Kindeva Drug Delivery L.P. (Kindeva) brought in the US District Court for the Northern District of West Virginia (the District Court). A trial in the matter was held in May 2022 and closing arguments were held in June 2022. A decision is awaited. As previously disclosed, in April 2022, AstraZeneca filed a separate ANDA action against Mylan and Kindeva in the District Court asserting infringement of a patent covering Symbicort. In June 2022, Mylan and Kindeva responded and claimed noninfringement of the asserted patent and that the asserted patent is invalid. A trial in the matter is scheduled for December 2022. Product liability litigation Onglyza and Kombiglyze US proceedings In the US, AstraZeneca is defending various lawsuits alleging heart failure, cardiac injuries, and/or death from treatment with Onglyza or Kombiglyze. In February 2018, the Judicial Panel on Multidistrict Litigation ordered the transfer of various pending federal actions to the US District Court for the Eastern District of Kentucky (the District Court) for consolidated pre-trial proceedings with the federal actions pending in the District Court. In the previously disclosed California State Court coordinated proceeding, AstraZeneca's motion for summary judgment was granted in March 2022. The District Court granted AstraZeneca's motion for summary judgment in August 2022. Plaintiffs are in the process of appealing both decisions. Nexium and Losec/Prilosec US proceedings As previously disclosed, in the US, AstraZeneca is defending various lawsuits brought in federal and state courts involving multiple plaintiffs claiming that they have been diagnosed with various injuries following treatment with proton pump inhibitors (PPIs), including Nexium and Prilosec. The vast majority of those lawsuits relate to allegations of kidney injuries. In particular, in May 2017, counsel for a group of such plaintiffs claiming that they have been diagnosed with kidney injuries filed a motion with the Judicial Panel on Multidistrict Litigation (JPML) seeking the transfer of any currently pending federal court cases as well as any similar, subsequently filed cases to a coordinated and consolidated pre-trial multidistrict litigation (MDL) proceeding. In August 2017, the JPML granted the motion and consolidated the pending federal court cases in an MDL proceeding in federal court in New Jersey for pre-trial purposes. A trial in the MDL previously scheduled for November 2022 has been rescheduled to March 2023. In addition to the MDL cases, there are cases filed in several state courts around the US; a case that was previously set to go to trial in Delaware state court was dismissed in October 2022. In addition, AstraZeneca has been defending lawsuits involving allegations of gastric cancer following treatment with PPIs. One such claim is filed in the US District Court for the Middle District of Louisiana and was scheduled to go to trial in January 2023. That case has been postponed and a new trial date has not yet been set. Commercial litigation AZD1222 Securities Litigation US proceedings As previously disclosed, in January 2021, putative securities class action lawsuits were filed in the US District Court for the Southern District of New York against AstraZeneca PLC and certain officers, on behalf of purchasers of AstraZeneca publicly traded securities during a period later amended to cover 15 June 2020 through 29 January 2021. The Amended Complaint alleges that defendants made materially false and misleading statements in connection with the development of AZD1222, AstraZeneca's vaccine for the prevention of COVID-19. In September 2022, the court granted AstraZeneca's motion to dismiss the Amended Complaint with prejudice, disallowing any further amendments. Plaintiffs have appealed this decision. US 340B Litigations and Proceedings US proceedings As previously disclosed, in September 2021, AstraZeneca was served with a class-action antitrust complaint filed in federal court in New York by Mosaic Health alleging a conspiracy to restrict access to 340B discounts in the diabetes market through contract pharmacies. In September 2022, the court granted Defendants' motion to dismiss the Complaint. Plaintiffs are now seeking leave to amend their complaint. Table 25: YTD 2022 - Product Sales year-on-year analysis[86] World Emerging Markets US Europe Established RoW $m Act % chg CER % chg $m Act % chg CER % chg $m % chg $m Act % chg CER % chg $m Act % chg CER % chg Oncology 10,885 14 20 2,723 12 15 4,695 24 2,037 12 24 1,430 (2) 11 Tagrisso 4,102 11 16 1,211 20 22 1,472 14 777 7 19 642 (4) 10 Imfinzi 2,031 14 19 224 6 9 1,102 20 402 16 29 303 - 14 Lynparza 1,949 13 19 358 27 30 896 13 493 8 20 202 8 22 Calquence 1,469 74 77 28 n/m n/m 1,192 58 200 n/m n/m 49 n/m n/m Enhertu 52 n/m n/m 34 n/m n/m - - 14 n/m n/m 4 n/m n/m Orpathys 34 n/m n/m 34 n/m n/m - - - - - - - - Zoladex 717 - 6 507 9 13 11 2 100 (11) (2) 99 (23) (12) Faslodex 259 (21) (14) 121 (1) 5 15 (37) 44 (53) (48) 79 (12) 2 Iressa 90 (39) (37) 75 (39) (37) 6 (33) 2 (53) (48) 7 (41) (33) Arimidex 85 (20) (16) 66 (19) (16) - 25 1 (79) (85) 18 (19) (7) Casodex 63 (48) (45) 44 (53) (52) - (99) - (87) (85) 19 (28) (18) Others 34 (9) (1) 21 (2) 4 1 n/m 4 (3) 8 8 (34) (25) BioPharmaceuticals: CVRM 6,907 13 18 3,181 9 14 1,783 9 1,413 25 39 530 18 32 Farxiga 3,204 49 58 1,224 40 46 748 48 955 64 82 277 49 65 Brilinta 1,013 (10) (7) 222 (13) (11) 538 (4) 215 (18) (9) 38 (20) (16) Lokelma 208 71 80 15 n/m n/m 122 50 21 n/m n/m 50 74 n/m Roxadustat 148 2 4 148 2 4 - - - - - - - - Andexxa 111 7 14 - - - 62 (25) 29 43 55 20 n/m n/m Crestor 824 (2) 4 630 6 10 50 (15) 30 (31) (24) 114 (17) (7) Seloken/Toprol-XL 705 (6) (2) 689 (6) (2) - n/m 9 6 8 7 (13) (6) Bydureon 207 (29) (28) 2 - 2 177 (27) 28 (34) (27) - (97) (94) Onglyza 205 (28) (25) 98 (35) (31) 60 (3) 30 (37) (30) 17 (31) (29) Others 282 (9) (7) 153 1 4 26 (32) 96 (13) (11) 7 (37) (30) BioPharmaceuticals: R&I 4,318 (3) - 1,102 (16) (14) 1,963 12 795 (13) (3) 458 (3) 5 Symbicort 1,919 (6) (2) 476 4 8 718 (11) 445 (11) (1) 280 (3) 3 Fasenra 1,015 13 17 30 99 95 649 17 229 9 21 107 (10) - Breztri 282 n/m n/m 71 76 78 164 n/m 22 n/m n/m 25 43 66 Saphnelo 69 n/m n/m - - - 66 n/m 1 n/m n/m 2 n/m n/m Pulmicort 479 (33) (31) 339 (41) (41) 53 1 50 1 12 37 8 16 Daliresp 161 (5) (4) 2 (16) (11) 151 (2) 7 (39) (33) 1 (20) (18) Bevespi 43 11 13 4 32 35 31 10 7 5 16 1 17 37 Others 350 (21) (20) 180 (14) (13) 131 40 34 (74) (71) 5 (52) (47) BioPharmaceuticals: V&I 3,607 51 59 995 (7) (6) 942 n/m 693 (20) (12) 977 n/m n/m Vaxzevria 1,713 (20) (16) 684 (35) (36) 79 n/m 325 (56) (51) 625 82 96 Evusheld 1,451 n/m n/m 167 n/m n/m 850 n/m 199 n/m n/m 235 n/m n/m Synagis 384 n/m n/m 144 n/m n/m 2 (91) 123 51 63 115 n/m n/m FluMist 59 (22) (13) - (74) (74) 11 (52) 46 (10) 3 2 n/m n/m Rare Disease 5,236 4 10 315 (10) 8 3,175 7 1,079 (2) 10 667 11 26 Soliris 2,918 (7) (2) 218 (29) (9) 1,688 (3) 627 (20) (10) 385 20 34 Ultomiris 1,371 27 35 34 n/m n/m 771 23 347 55 74 219 - 18 Strensiq 687 13 15 25 35 25 546 16 59 (4) 8 57 - 16 Koselugo 149 n/m n/m 22 n/m n/m 114 57 13 n/m n/m - - - Kanuma 111 6 11 16 9 7 56 10 33 (1) 12 6 11 20 Other medicines 1,247 (4) 4 608 (18) (14) 112 (17) 95 (29) (25) 432 50 72 Nexium 986 (1) 8 437 (24) (19) 94 (4) 37 (22) (13) 418 51 73 Others 261 (12) (10) 171 5 7 18 (52) 58 (33) (31) 14 39 48 Total Product Sales 32,200 29 35 8,924 5 8 12,670 56 6,112 19 32 4,494 39 56 Table 26: Q3 2022 - Product Sales year-on-year analysis[87] World Emerging Markets US Europe Established RoW $m Act % chg CER % chg $m Act % chg CER % chg $m % chg $m Act % chg CER % chg $m Act % chg CER % chg Oncology 3,797 15 22 931 15 21 1,716 27 696 9 25 454 (9) 9 Tagrisso 1,398 12 20 406 29 35 521 18 268 4 19 203 (12) 5 Imfinzi 737 19 26 90 15 19 413 30 135 12 29 99 (1) 18 Lynparza 659 12 19 117 22 26 314 16 164 6 22 64 (5) 12 Calquence 566 60 63 12 n/m n/m 457 48 79 n/m n/m 18 n/m n/m Enhertu 23 n/m n/m 15 n/m n/m - - 6 n/m n/m 2 n/m n/m Orpathys 11 11 16 11 11 16 - - - - - - - - Zoladex 240 (4) 5 176 4 11 4 43 31 (17) (5) 29 (28) (13) Faslodex 81 (21) (10) 40 (4) 5 5 (39) 12 (49) (41) 24 (19) - Iressa 27 (35) (31) 22 (33) (29) 2 (47) 1 (49) (56) 2 (30) (19) Arimidex 24 (28) (23) 18 (25) (21) - n/m - (93) n/m 6 (29) (17) Casodex 21 (46) (40) 17 (40) (37) - n/m (1) n/m n/m 5 (46) (33) Others 10 (18) (10) 7 (13) (6) - - 1 (20) (8) 2 (38) (25) BioPharmaceuticals: CVRM 2,348 11 19 1,081 9 16 632 9 469 20 37 166 11 30 Farxiga 1,101 38 50 410 28 38 279 38 329 55 78 83 35 57 Brilinta 338 (10) (7) 76 (1) - 187 (6) 65 (23) (12) 10 (36) (34) Lokelma 79 59 69 9 n/m n/m 45 37 8 n/m n/m 17 31 59 Roxadustat 57 4 9 57 4 8 - - - - - - - - Andexxa 41 5 17 - - - 20 (29) 11 2 17 10 n/m n/m Crestor 277 (7) - 216 (4) 2 15 (16) 9 (17) (4) 37 (16) - Seloken/Toprol-XL 238 2 10 233 2 10 - n/m 3 9 22 2 (18) (18) Bydureon 66 (30) (29) - (4) (1) 58 (28) 8 (40) (31) - n/m n/m Onglyza 66 (21) (17) 32 (24) (19) 20 12 9 (45) (37) 5 (34) (32) Others 85 (11) (8) 48 9 15 8 (24) 27 (27) (25) 2 (52) (45) BioPharmaceuticals: R&I 1,427 (4) 1 371 (12) (8) 663 9 244 (17) (5) 149 (6) 4 Symbicort 630 (7) (1) 169 13 18 237 (13) 133 (14) (2) 91 (6) 2 Fasenra 353 10 15 12 87 78 229 15 77 2 16 35 (15) (2) Breztri 103 n/m n/m 28 n/m n/m 58 n/m 8 n/m n/m 9 38 68 Saphnelo 33 n/m n/m - - - 32 n/m - - - 1 n/m n/m Pulmicort 145 (33) (31) 103 (40) (40) 16 (6) 14 (4) 9 12 - 10 Daliresp 52 (4) (3) 1 74 87 49 (1) 2 (43) (35) - (55) (54) Bevespi 14 6 8 2 12 22 10 11 2 (22) (11) - 95 25 Others 97 (36) (33) 56 (25) (21) 32 (5) 8 (81) (77) 1 (55) (44) BioPharmaceuticals: V&I 873 (27) (21) 134 (78) (78) 305 670 182 (28) (16) 252 (12) 2 Vaxzevria 173 (83) (81) 24 (96) (97) - - 62 (62) (56) 87 (63) (59) Evusheld 537 n/m n/m 73 n/m n/m 294 n/m 57 n/m n/m 113 n/m n/m Synagis 104 (15) (1) 37 n/m n/m - n/m 17 (55) (48) 50 (4) 17 FluMist 59 (19) (10) - n/m n/m 11 (53) 46 (7) 6 2 n/m n/m Rare Disease 1,741 4 11 110 36 61 1,084 7 345 (10) 6 202 (1) 18 Soliris 901 (13) (6) 84 32 69 523 (13) 190 (27) (15) 104 (5) 10 Ultomiris 518 37 47 4 (40) (37) 315 49 122 40 63 77 7 32 Strensiq 237 17 20 8 73 53 192 22 18 (10) 4 19 (8) 12 Koselugo 48 82 81 7 n/m n/m 36 42 5 n/m n/m - - - Kanuma 37 1 5 7 15 (1) 18 7 10 (15) - 2 2 21 Other medicines 404 17 30 213 5 12 37 (9) 28 (21) (15) 126 93 n/m Nexium 311 20 36 148 (5) 3 31 (3) 10 (7) 8 122 n/m n/m Others 93 9 13 65 37 44 6 (28) 18 (27) (25) 4 (22) (19) Total Product Sales 10,590 9 16 2,840 (9) (3) 4,437 30 1,964 3 18 1,349 2 20 Table 27: Collaboration Revenue YTD 2022 YTD 2021 $m $m Enhertu: alliance revenue 332 134 Tezspire: alliance revenue 42 - Lynparza: regulatory milestones 250 - Tralokinumab: sales milestones 110 - Vaxzevria: royalties 67 83 Other royalty income 54 54 Other Collaboration Revenue 89 92 Total 944 363 Table 28: Other Operating Income and Expense YTD 2022 YTD 2021 $m $m Brazikumab licence termination funding 104 77 Divestment of rights to Plendil 61 - Divestment of Viela Bio, Inc. shareholding - 776 Crestor (Europe ex-UK and Spain) - 309 Other 160 183 Total 325 1,345 Other shareholder information Financial calendar Announcement of full year and fourth quarter results 9 February 2023 Announcement of first quarter 2023 results 27 April 2023 Dividends are normally paid as follows: First interim: Announced with the half year results and paid in September Second interim: Announced with full year results and paid in March Contacts For details on how to contact the Investor Relations Team, please click here. For Media contacts, click here. Addresses for correspondence Registered office Registrar and transfer office Swedish Central Securities Depository US depositary Deutsche Bank Trust Company Americas 1 Francis Crick Avenue Cambridge Biomedical Campus Cambridge CB2 0AA Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA Euroclear Sweden AB PO Box 191 SE-101 23 Stockholm American Stock Transfer 6201 15th Avenue Brooklyn NY 11219 United Kingdom United Kingdom Sweden United States +44 (0) 20 3749 5000 0800 389 1580 +46 (0) 8 402 9000 +1 (888) 697 8018 +44 (0) 121 415 7033 +1 (718) 921 8137 db@astfinancial.com Trademarks Trademarks of the AstraZeneca group of companies appear throughout this document in italics. Medical publications also appear throughout the document in italics. AstraZeneca, the AstraZeneca logotype and the AstraZeneca symbol are all trademarks of the AstraZeneca group of companies. Trademarks of companies other than AstraZeneca that appear in this document include Arimidex and Casodex, owned by AstraZeneca or Juvis�� (depending on geography); Beyfortus, a trademark of Sanofi Pasteur Inc.; Enhertu, a trademark of Daiichi Sankyo; Losec, owned by AstraZeneca or Cheplapharm (depending upon geography); Seloken, owned by AstraZeneca or Taiyo Pharma Co., Ltd (depending on geography); Synagis, owned by AstraZeneca or Sobi aka Swedish Orphan Biovitrum AB (publ). (depending on geography); and Tezspire, a trademark of Amgen, Inc. Information on or accessible through AstraZeneca's websites, including astrazeneca.com, does not form part of and is not incorporated into this announcement. AstraZeneca AstraZeneca (LSE/STO/Nasdaq: AZN) is a global, science-led biopharmaceutical company that focuses on the discovery, development, and commercialisation of prescription medicines in Oncology, Rare Disease, and BioPharmaceuticals, including Cardiovascular, Renal & Metabolism, and Respiratory & Immunology. Based in Cambridge, UK, AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. Please visit astrazeneca.com and follow the Company on Twitter @AstraZeneca. Cautionary statements regarding forward-looking statements In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act of 1995, AstraZeneca (hereafter 'the Group') provides the following cautionary statement: This document contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group, including, among other things, statements about expected revenues, margins, earnings per share or other financial or other measures. Although the Group believes its expectations are based on reasonable assumptions, any forward-looking statements, by their very nature, involve risks and uncertainties and may be influenced by factors that could cause actual outcomes and results to be materially different from those predicted. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and the Group undertakes no obligation to update these forward-looking statements. The Group identifies 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 the Group's control, include, among other things: ��� the risk of failure or delay in delivery of pipeline or launch of new medicines ��� the risk of failure to meet regulatory or ethical requirements for medicine development or approval ��� the risk of failures or delays in the quality or execution of the Group's commercial strategies ��� the risk of pricing, affordability, access and competitive pressures ��� the risk of failure to maintain supply of compliant, quality medicines ��� the risk of illegal trade in the Group's medicines ��� the impact of reliance on third-party goods and services ��� the risk of failure in information technology or cybersecurity ��� the risk of failure of critical processes ��� the risk of failure to collect and manage data in line with legal and regulatory requirements and strategic objectives ��� the risk of failure to attract, develop, engage and retain a diverse, talented and capable workforce ��� the risk of failure to meet regulatory or ethical expectations on environmental impact, including climate change ��� the risk of the safety and efficacy of marketed medicines being questioned ��� the risk of adverse outcome of litigation and/or governmental investigations ��� intellectual property-related risks to our products ��� the risk of failure to achieve strategic plans or meet targets or expectations ��� the risk of failure in financial control or the occurrence of fraud ��� the risk of unexpected deterioration in the Group's financial position ��� the impact that global and/or geopolitical events such as the COVID-19 pandemic and the Russia-Ukraine war, may have or continue to have on these risks, on the Group's ability to continue to mitigate these risks, and on the Group's operations, financial results or financial condition Nothing in this document, or any related presentation/webcast, should be construed as a profit forecast. - End of document - [1] Constant exchange rates. The differences between Actual Change and CER Change are due to foreign exchange movements between periods in 2022 vs 2021. 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] Reported financial measures are the financial results presented in accordance with UK-adopted International Accounting Standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) and International Accounting Standards as adopted by the European Union. [3] Earnings per share. [4] Core financial measures are adjusted to exclude certain items. The differences between Reported and Core measures are primarily due to items related to the acquisition of Alexion, amortisation of intangibles, impairments, restructuring charges, and, as previously disclosed, a charge to provisions relating to a legal settlement with Chugai Pharmaceutical Co. Ltd (Chugai) that led to a payment of $775m in Q2 2022. A full reconciliation between Reported EPS and Core EPS is provided in Tables 12 and 13 in the Financial performance section of this document. [5] In FY 2022, Total Revenue from Koselugo is included in Rare Disease (FY 2021: Oncology) and Total Revenue from Andexxa is included in BioPharmaceuticals: CVRM (FY 2021: Rare Disease). The growth rate shown for each disease area has been calculated as though these changes had been implemented in FY 2021. [6] AstraZeneca is collaborating with MSD (Merck & Co., Inc. in the US and Canada) to develop and commercialise Lynparza. [7] Respiratory & Immunology. [8] Cardiovascular, Renal and Metabolism. [9] YTD 2022 growth rates on medicines acquired with Alexion have been calculated on a pro forma basis comparing to the corresponding period in the prior year; Q3 2022 growth rates have been calculated comparing to the corresponding 92���day period in the prior year, which covers both pre-acquisition and post-acquisition performance. The growth rates shown for the Rare Disease and CVRM disease areas include these pro forma adjustments. [10] The anticipated impact of foreign exchange movements on FY 2022 results assumes that exchange rates through November to December 2022 remain at the spot rates seen on 31 October 2022. [11] Paroxysmal nocturnal haemoglobinuria with extravascular haemolysis. [12] Human epidermal growth factor receptor 2. [13] Non-small cell lung cancer. [14] Respiratory syncytial virus. [15] Generalised myasthenia gravis. [16] Volume-based procurement. [17] Vaccines & Immune Therapies. [18] Vaxzevria is AstraZeneca's trademark for the Company's supply of the AstraZeneca COVID-19 Vaccine. In the financial tables in this report, 'Vaxzevria Total Revenue' includes Collaboration Revenue from sub-licensees that produce and supply the AstraZeneca COVID���19 Vaccine under their own trademarks. [19] National reimbursement drug list. [20] In Table 2, the plus and minus symbols denote the directional impact of the item being discussed, e.g. a '+' symbol next to a R&D Expense comment indicates that the item increased the R&D Expense relative to the prior year. [21] Gross Profit is defined as Total Revenue minus Cost of Sales. The calculation of Reported and Core Gross Margin excludes the impact of Collaboration Revenue and any associated costs, thereby reflecting the underlying performance of Product Sales. [22] Where AstraZeneca does not retain a significant ongoing interest in medicines or potential new medicines, income from divestments is reported within Reported and Core Other Operating Income and Expense in the Company's financial statements. [23] Germline (hereditary) breast cancer gene. [24] Homologous recombination deficiency. [25] Human epidermal growth factor receptor mutant. [26] Chronic kidney disease. [27] Atypical haemolytic uraemic syndrome. [28] Neurofibromatosis type 1 plexiform neurofibromas. [29] Heart failure with preserved ejection fraction. [30] Neuromyelitis optica spectrum disorder. [31] Head and neck squamous cell carcinoma. [32] Eosinophilic esophagitis. [33] Alliance revenue (previously referred to as share of gross profits) comprises income arising from collaborative arrangements, where AstraZeneca is entitled to a profit share, but does not include product sales where AstraZeneca is leading commercialisation in a territory. Alliance revenue is included within Collaboration Revenue. [34] Epidermal growth factor receptor. [35] Extensive-stage small cell lung cancer. [36] Chemoradiation therapy. [37] Poly ADP ribose polymerase. [38] Germline (hereditary) breast cancer gene mutation. [39] Breast cancer gene mutation. [40] US Food and Drug Administration. [41] Metastatic castration resistant prostate cancer. [42] European Medicines Agency. [43] Chronic lymphocytic leukaemia. [44] Mesenchymal-epithelial transition. [45] Tyrosine kinase inhibitor. [46] Sodium-glucose cotransporter 2. [47] Heart failure. [48] European Society of Cardiology. [49] American Heart Association. [50] American College of Cardiology. [51] Heart Failure Society of America. [52] Urine albumin creatine ratio. [53] Measured renal function. [54] Heart failure with reserved ejection fraction. [55] Type-2 diabetes. [56] Betaloc is the brand name for Seloken in China. [57] Inhaled corticosteroid. [58] Long-acting beta-agonist. [59] Chronic obstructive pulmonary disease. [60] Intravenous injection. [61] Systemic lupus erythematosus. [62] Other Operating Income. [63] Other SG&A Expense of $1,197m predominantly includes the $775m charge to provisions relating to the legal settlement with Chugai and $293m of fair value movements on contingent consideration arising from business combinations. [64] Other Taxation of ($1,078m) includes an estimated one-off favourable net adjustment of ($883m) to deferred taxes arising from an internal reorganisation to integrate the Alexion organisation. [65] Securities Exchange Commission. [66] Based on best prevailing assumptions around currency profiles. [67] Based on average daily spot rates in FY 2021. [68] Based on average daily spot rates 1 Jan 2022 to 30 Sep 2022. [69] Change vs the average spot rate for the previous year [70] Other currencies include AUD, BRL, CAD, KRW and RUB. [71] Programmed death ligand 1. [72] Tumour Proportion Score. [73] Overall response rate. [74] Confidence interval. [75] An ImmunoHistoChemistry score of greater than 90. [76] A Fluorescence In Situ Hybridization score of greater than 10. [77] Overall survival. [78] Progression free survival. [79] Small lymphocytic lymphoma. [80] Mantle cell lymphoma. [81] Disease Control Rate. [82] Serine/threonine protein kinase. [83] Cycline-dependent kinase 4/6. [84] Intravenous immunoglobulin. [85] As at 30 September 2021, Alexion's contingent liabilities of $300m had been recognised in Contingent consideration. After the acquisition date IFRSs permit the acquirer to retrospectively adjust the provisional amounts recognised for a business combination during the measurement period to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognised as of that date. During the measurement period these liabilities were reclassed and reported within Other payables as at 31 December 2021. The comparative 2021 column therefore excludes these liabilities. [86] The table provides an analysis of year-on-year Product Sales, with Actual and CER growth rates reflecting year-on-year growth. Due to rounding, the sum of a number of dollar values and percentages may not agree to totals. YTD 2022 growth rates on medicines acquired with Alexion have been calculated on a pro forma basis comparing to the corresponding period in the prior year. The growth rates shown for Rare Disease and CVRM disease area totals include these pro forma adjustments. [87] The table provides an analysis of year-on-year Product Sales, with Actual and CER growth rates reflecting year-on-year growth. Due to rounding, the sum of a number of dollar values and percentages may not agree to totals. Q3 2022 growth rates have been calculated comparing to the corresponding 92-day period in the prior year, which covers both pre-acquisition and post-acquisition performance. The growth rates shown for Rare Disease and CVRM disease area totals include these pro forma adjustments. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. 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