AstraZeneca’s H1 and Q2 2024 Financial Results

Rhea-AI Summary

AstraZeneca (AZN) has reported strong financial results for H1 and Q2 2024, leading to an upgrade in FY 2024 guidance. Total Revenue increased by 18% to $25,617m, driven by an 18% rise in Product Sales and growth in Alliance Revenue. Key highlights include:

- Oncology, CVRM, R&I, and Rare Disease segments all saw 22% growth or higher
- Core EPS increased by 5% to $4.03
- Interim dividend increased by 7c to $1.00
- FY 2024 guidance upgraded: Total Revenue and Core EPS now expected to grow by a mid teens percentage

The company also reported positive Phase III study results and regulatory approvals for several key drugs, including Imfinzi, Calquence, Enhertu, Truqap, and Tagrisso.

Positive

• Total Revenue increased by 18% to $25,617m in H1 2024
• Product Sales grew by 18% in H1 2024
• Oncology, CVRM, R&I, and Rare Disease segments all saw 22% growth or higher
• Core Product Sales Gross Margin of 82%
• Interim dividend increased by 7c to $1.00
• FY 2024 guidance upgraded for both Total Revenue and Core EPS
• Five positive Phase III studies announced year-to-date
• Multiple regulatory approvals received for key drugs in various markets

Negative

• Core EPS growth (5%) was lower than Total Revenue growth due to prior year gains
• Other operating income expected to decrease substantially in FY 2024
• Core Operating Margin of 33%, potentially indicating increased costs

Insights

Financial Analyst

AstraZeneca's H1 2024 financial results demonstrate robust growth, prompting an upgrade in full-year guidance. The 18% increase in Total Revenue to $25,617 million is particularly impressive, driven by strong Product Sales across all therapeutic areas. Oncology, CVRM and R&I each grew by 22%, while Rare Disease saw a 15% increase.

The Core EPS growth of 5% to $4.03, while positive, lagged behind revenue growth. This discrepancy is primarily due to one-time gains in the previous year, including a $241 million gain from the Pulmicort Flexhaler US rights disposal and a $712 million gain related to Beyfortus contractual arrangements. Adjusting for these factors, the underlying operational performance appears strong.

The upgraded FY 2024 guidance, now projecting mid-teens percentage growth for both Total Revenue and Core EPS, signals management's confidence in the company's trajectory. This upward revision, without assuming an increase in Collaboration Revenue, underscores the strength of AstraZeneca's core business operations.

Investors should note the robust Core Product Sales Gross Margin of 82% and the Core Operating Margin of 33%, indicating efficient cost management. The 7% increase in interim dividend to $1.00 per share further reinforces the company's financial health and commitment to shareholder returns.

Medical Research Analyst

AstraZeneca's H1 2024 results reflect significant progress in its clinical pipeline, particularly in oncology and rare diseases. The positive Phase III readouts for Imfinzi in bladder cancer (NIAGARA), Calquence in mantle cell lymphoma (ECHO) and Enhertu in HR-positive, HER2-low metastatic breast cancer (DESTINY-Breast06) are potential game-changers. These studies could lead to expanded indications and increased market share in highly competitive therapeutic areas.

The regulatory approvals for Imfinzi in endometrial cancer, Truqap in breast cancer and Tagrisso with chemotherapy in NSCLC across multiple regions (US, EU, Japan and China) are particularly noteworthy. These approvals not only validate AstraZeneca's R&D efforts but also pave the way for near-term revenue growth.

The company's focus on 'disruptive technologies' including antibody-drug conjugates, bispecifics, cell and gene therapies, radioconjugates and weight management medicines positions it well for long-term growth. These innovative approaches have the potential to address unmet medical needs and capture significant market share.

Investors should closely monitor the progress of these pipeline assets and newly approved indications, as they will be important drivers for AstraZeneca's ambitious $80 billion revenue target by 2030. The company's ability to consistently deliver practice-changing clinical results bodes well for its future growth prospects in the highly competitive pharmaceutical landscape.

Strong underlying growth supports FY 2024 guidance upgrade, with both Total Revenue and Core EPS now expected to increase by a mid teens percentage at CER¹

CAMBRIDGE, United Kingdom--(BUSINESS WIRE)-- AstraZeneca:

Revenue and EPS summary

		H1 2024	% Change			Q2 2024	% Change
		$m	Actual	CER		$m	Actual	CER
- Product Sales		24,629	15	18		12,452	14	18
- Alliance Revenue		939	50	50		482	42	42
- Collaboration Revenue		49	(78)	(78)		4	(98)	(98)
Total Revenue		25,617	15	18		12,938	13	17
Reported EPS		$2.65	13	23		$1.24	6	15
Core2 EPS		$4.03	(1)	5		$1.98	(8)	(3)

Financial performance for H1 2024 (Growth numbers at constant exchange rates)

• Total Revenue up 18% to $25,617m, driven by an 18% increase in Product Sales and continued growth in Alliance Revenue from partnered medicines
• Total Revenue growth from Oncology was 22%, CVRM 22%, R&I 22%, and Rare Disease 15%
• Core Product Sales Gross Margin³ of 82%
• Core Operating Margin of 33%
• Core Tax Rate of 20%
• Core EPS increased 5% to $4.03. The increase in Core EPS was lower than Total Revenue growth principally due to gains recognised in the prior year, specifically a $241m gain on the disposal of Pulmicort Flexhaler US rights (Q1 2023), and a $712m gain relating to updates to contractual arrangements for Beyfortus (Q2 2023)
• Interim dividend increased 7c to $1.00 (77.6 pence, 10.79 SEK) has been declared
• Guidance for FY 2024 increased, with Total Revenue and Core EPS anticipated to grow by a mid teens percentage at CER (previously a low double-digit to low teens percentage). An increase in Collaboration Revenue is not assumed in the upgraded guidance

Pascal Soriot, Chief Executive Officer, AstraZeneca, said:

“Building on our strong growth in the first half of the year and continued underlying demand for our medicines we are upgrading our FY 2024 guidance for both Total Revenue and Core EPS.

At our Investor Day in May we set out a new revenue ambition to deliver $80 billion of Total Revenue by 2030. This is a clear reflection of the substantial growth potential we see from both our approved medicines and those in our late-stage pipeline. Already this year we have announced five positive, potentially practice-changing Phase III studies that are anticipated to meaningfully contribute to our growth.

In the year to date we have continued to make encouraging progress with several disruptive technologies, including antibody drug conjugates, bispecifics, cell and gene therapies, radioconjugates, and weight management medicines, all of which have the potential to drive our growth beyond 2030.”

Key milestones achieved since the prior results announcement

• Positive read-outs for Imfinzi in combination with chemotherapy in muscle-invasive bladder cancer (NIAGARA), Calquence in untreated mantle cell lymphoma (ECHO), Enhertu in HR-positive, HER2-low metastatic breast cancer (DESTINY-Breast06)
• US approvals for Imfinzi in combination with chemotherapy followed by Imfinzi monotherapy for primary advanced or recurrent endometrial cancer that is mismatch repair deficient (DUO-E). EU approvals for Truqap in combination with Faslodex for biomarker-positive estrogen receptor-positive, HER2‑negative advanced breast cancer (CAPItello-291), Tagrisso with the addition of chemotherapy for 1st‑line EGFRm NSCLC (FLAURA2). Japan and China approvals for Tagrisso with the addition of chemotherapy for the 1st­­‑line EGFRm NSCLC (FLAURA2)

Guidance

Due to strong underlying growth in Product Sales and Alliance Revenue, the Company raises its Total Revenue and Core EPS guidance for FY 2024 at CER, based on the average foreign exchange rates through 2023.

Total Revenue is expected to increase by a mid teens percentage (previously a low double-digit to low teens percentage)

Core EPS is expected to increase by a mid teens percentage (previously a low double-digit to low teens percentage)

• An increase in Collaboration Revenue is not assumed in the upgraded guidance (previously assumed a substantial increase)
• Other operating income is expected to decrease substantially (FY 2023 included a $241m gain on the disposal of Pulmicort Flexhaler US rights, and a $712m one-time gain relating to updates to contractual arrangements for Beyfortus)
• The Core Tax rate is expected to be between 18-22%

The Company is unable to provide guidance on a Reported basis because it cannot reliably forecast material elements of the Reported results, including any fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the cautionary statements section regarding forward-looking statements at the end of this announcement.

Currency impact

If foreign exchange rates for July 2024 to December 2024 were to remain at the average rates seen in June 2024, it is anticipated that FY 2024 Total Revenue would incur a low single-digit percentage adverse impact compared to the performance at CER, and Core EPS would incur a mid single-digit percentage adverse impact. The Company’s foreign exchange rate sensitivity analysis is provided in Table 17.

Table 1: Key elements of Total Revenue performance in Q2 2024

			% Change
Revenue type		$m	Actual %	CER %
Product Sales		12,452	14	18
Alliance Revenue		482	42	42		• $344m Enhertu (Q2 2023: $255m) • $104m Tezspire (Q2 2023: $62m)
Collaboration Revenue		4	(98)	(98)		• Q2 2023 included $180m for COVID-19 mAbs
Total Revenue		12,938	13	17
Therapy areas		$m	Actual %	CER %
Oncology		5,331	15	19		• Tagrisso up 8% (12% at CER) due to strong global demand, Calquence up 21% (22% at CER) with sustained leadership in 1L CLL. Enhertu Total Revenue up 46% (49% at CER)
CVRM		3,160	18	22		• Farxiga up 29% (32% at CER), Lokelma up 36% (41% at CER)
R&I		1,905	23	26		• Breztri up 44% (47% at CER). Saphnelo up 65%, Tezspire up 97% (>2x at CER), Symbicort up 20% (25% CER)
V&I		119	(57)	(53)		• The drop in V&I revenue was primarily driven by lower Collaboration Revenue from COVID-19 mAbs • Beyfortus revenue was $35m (Q2 2023: $2m), which more than offset a $6m decline in Synagis
Rare Disease		2,147	10	14		• Ultomiris up 33% (36% at CER), partially offset by decline in Soliris of 14% (8% at CER) • Strensiq up 13% (14% at CER) and Koselugo up 43% (45% at CER)
Other Medicines		276	(11)	(5)
Total Revenue		12,938	13	17
Regions		$m	Actual %	CER %
US		5,571	17	17
Emerging Markets		3,386	9	18
- China		1,630	13	18
- Ex-China Emerging Markets		1,756	5	18
Europe		2,732	24	24
Established RoW		1,249	(5)	6
Total Revenue		12,938	13	17

Key partnered medicines

• Combined sales of Enhertu, recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted $1,772m in H1 2024 (H1 2023: $1,169m).
• Combined sales of Tezspire, recorded by Amgen and AstraZeneca, amounted to $507m in H1 2024 (H1 2023: $257m).

Table 2: Key elements of financial performance in Q2 2024

Metric	Reported	Reported change	Core	Core change		Comments4
Total Revenue	$12,938m	13% Actual 17% CER	$12,938m	13% Actual 17% CER		• See Table 1 and the Total Revenue section of this document for further details
Product Sales Gross Margin	82%	Stable Actual Stable CER	83%	Stable Actual Stable CER		• Variations in Product Sales Gross Margin can be expected between periods due to product seasonality (e.g. FluMist and Beyfortus in H2), foreign exchange fluctuations and other effects
R&D expense	$3,008m	13% Actual 13% CER	$2,872m	12% Actual 13% CER		+ Increased investment in the pipeline • Core R&D-to-Total Revenue ratio of 22% (Q2 2023: 22%)
SG&A expense	$4,929m	-1% Actual 1% CER	$3,735m	13% Actual 16% CER		+ Market development for recent launches and pre-launch activities • Core SG&A-to-Total Revenue ratio of 29% (Q2 2023: 29%)
Other operating income and expense5	$60m	-92% Actual -92% CER	$60m	-92% Actual -92% CER		‒The prior year quarter included a $712m gain relating to updates to contractual arrangements for Beyfortus
Operating Margin	21%	Stable Actual +1pp CER	32%	-6pp Actual -5pp CER		• See commentary above on Gross Margin, R&D, SG&A and Other operating income and expense
Net finance expense	$343m	-7% Actual -7% CER	$285m	10% Actual 10% CER		+ Higher level of Net debt
Tax rate	20%	+7pp Actual +7pp CER	19%	+2pp Actual +2pp CER		• Variations in the tax rate can be expected between periods
EPS	$1.24	6% Actual 15% CER	$1.98	-8% Actual -3% 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	Imfinzi	Primary advanced or recurrent endometrial cancer with mismatch repair deficiency (DUO-E)	Regulatory approval (US), CHMP positive opinion (EU)
	Imfinzi + Lynparza	Primary advanced or recurrent endometrial cancer with mismatch repair proficiency (DUO-E)	CHMP positive opinion (EU)
	Tagrisso	EGFRm NSCLC (1st-line) (FLAURA2)	Regulatory approval (EU, JP, CN)
	Truqap	Biomarker-positive ER-positive HER2-negative locally advanced or metastatic breast cancer (CAPItello-291)	Regulatory approval (EU)
Regulatory submissions or acceptances*	Tagrisso	EGFRm NSCLC (Stage III unresectable) (LAURA)	sNDA acceptance and Priority Review (US)
	Dato-DXd	Non-squamous NSCLC (2nd- and 3rd-line) (TROPION-Lung01)	Regulatory submission (EU)
	sipavibart	Prevention of COVID-19 (SUPERNOVA)	Regulatory submission (EU)
Major Phase III data readouts and other developments	Calquence	Mantle cell lymphoma (1st‑line) (ECHO)	Primary endpoint met
	Dato-DXd	Locally advanced or metastatic NSCLC (TROPION-Lung01)	Dual primary endpoint OS not met in the intention to treat population
	Enhertu	HER2-low breast cancer (2nd-line) (DESTINY-Breast-06)	Primary endpoint met
	Imfinzi	Muscle-invasive bladder cancer (NIAGARA)	Primary endpoint met
	Imfinzi	Adjuvant use in early-stage PD-L1 ≥25% NSCLC (Adjuvant BR.31)	Primary endpoint not met
	Truqap	Locally advanced or metastatic TNBC (CAPItello-290)	Primary endpoint not met
	sipavibart	Prevention of COVID-19 (SUPERNOVA)	Primary endpoint met
*US, EU and China regulatory submission denotes filing acceptance

Upcoming pipeline catalysts

For recent trial starts and anticipated timings of key trial readouts, please refer to the Clinical Trials Appendix, available on www.astrazeneca.com/investor-relations.html.

Corporate and business development

In May 2024, AstraZeneca announced its intention to build a $1.5 billion manufacturing facility in Singapore for antibody drug conjugates (ADCs), enhancing global supply of its ADC portfolio. ADCs are next-generation treatments that deliver highly potent cancer-killing agents directly to cancer cells through a targeted antibody. The planned greenfield facility, supported by the Singapore Economic Development Board, will be AstraZeneca’s first end-to-end ADC production site, fully incorporating all steps of the manufacturing process at a commercial scale. Manufacturing of ADCs is a multi-step process that comprises antibody production, synthesis of chemotherapy drug and linker, conjugation of drug-linker to the antibody, and filling of the completed ADC substance.

In May 2024, AstraZeneca completed an additional $140m equity investment in Cellectis, a clinical-stage biotechnology company. The equity investment and a research collaboration agreement, announced in November 2023, will leverage the Cellectis proprietary gene editing technologies and manufacturing capabilities, to design up to 10 novel cell and gene therapy products for areas of high unmet need, including oncology, immunology and rare diseases. In Q4 2023, Cellectis received an initial payment of $105m from AstraZeneca, which comprised a $25m upfront cash payment under the terms of a research collaboration agreement and an $80m equity investment. Now that the additional $140m equity investment has closed, AstraZeneca holds a total equity stake of c.44% in Cellectis and AstraZeneca continues to treat its investment in Cellectis as an associate.

In June 2024, AstraZeneca completed the acquisition of Fusion Pharmaceuticals Inc., a clinical-stage biopharmaceutical company developing next-generation radioconjugates. The acquisition marks a major step forward in AstraZeneca delivering on its ambition to transform cancer treatment and outcomes for patients by replacing traditional regimens like chemotherapy and radiotherapy with more targeted treatments. The acquisition complements AstraZeneca’s leading oncology portfolio with the addition of the Fusion pipeline of radioconjugates, including FPI-2265, a potential new treatment for patients with mCRPC, and brings new expertise and pioneering R&D, manufacturing and supply chain capabilities in actinium-based radioconjugates to AstraZeneca. See Note 5 for further information.

In July 2024, AstraZeneca completed the acquisition of Amolyt Pharma, a clinical-stage biotechnology company focused on developing novel treatments for rare endocrine diseases. The acquisition bolsters the Alexion, AstraZeneca Rare Disease late-stage pipeline and expands on its bone metabolism franchise with the notable addition of eneboparatide (AZP-3601), a Phase III investigational therapeutic peptide with a novel mechanism of action designed to meet key therapeutic goals for hypoparathyroidism. In patients with hypoparathyroidism, a deficiency in parathyroid hormone production results in significant dysregulation of calcium and phosphate, which can lead to life-altering symptoms and complications, including chronic kidney disease. See Note 7 for further information.

Sustainability highlights

At the 77th World Health Assembly in Geneva, Switzerland in May, AstraZeneca convened Ministers of Health, industry, civil society and patient groups. Areas of focus for engagement, led by Ruud Dobber, EVP BioPharmaceuticals, included the need to increase early action to prevent, diagnose and treat disease and to accelerate collaboration to build resilient, equitable and net zero health systems.

Conference call

A conference call and webcast for investors and analysts will begin today, 25 July 2024, at 11:45 UK time. Details can be accessed via astrazeneca.com.

Reporting calendar

The Company intends to publish its 9M and Q3 2024 results on 12 November 2024.

To read AstraZeneca's H1 and Q2 2024 Financial Results press release in full including the glossary, please click here.

1	Constant exchange rates. The differences between Actual Change and CER Change are due to foreign exchange movements between periods in 2024 vs. 2023. 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	Core financial measures are adjusted to exclude certain items. The differences between Reported and Core measures are primarily due to costs relating to the amortisation of intangibles, impairments, legal settlements and restructuring charges. A full reconciliation between Reported EPS and Core EPS is provided in Table 11 and Table 12 in the Financial performance section of this document.
3	The calculations for Reported and Core Product Sales Gross Margin exclude the impact of Alliance Revenue and Collaboration Revenue.
4	In Table 2, the plus and minus symbols denote the directional impact of the item being discussed, e.g. a ‘+’ symbol next to a comment related to the R&D expense indicates that the item resulted in an increase in the R&D spend relative to the prior year.
5	Income from disposals of assets and businesses, where the Group does not retain a significant ongoing economic interest, continue to be recorded in Other operating income and expense in the Company’s financial statements.

 

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Global Media Relations team

global-mediateam@astrazeneca.com

+44 (0)1223 344 800

Source: AstraZeneca

FAQ

What was AstraZeneca's (AZN) Total Revenue for H1 2024?

AstraZeneca's Total Revenue for H1 2024 was $25,617 million, representing an 18% increase at constant exchange rates.

How much did AstraZeneca's (AZN) Core EPS grow in H1 2024?

AstraZeneca's Core EPS increased by 5% to $4.03 in H1 2024 at constant exchange rates.

What is AstraZeneca's (AZN) updated guidance for FY 2024?

AstraZeneca has upgraded its FY 2024 guidance, now expecting both Total Revenue and Core EPS to grow by a mid teens percentage at constant exchange rates.

Which therapeutic areas showed strong growth for AstraZeneca (AZN) in H1 2024?

Oncology, CVRM (Cardiovascular, Renal and Metabolism), R&I (Respiratory & Immunology), and Rare Disease all showed strong growth of 22% or higher in H1 2024.

What was AstraZeneca's (AZN) interim dividend for H1 2024?

AstraZeneca declared an interim dividend of $1.00 per share, which represents a 7 cent increase from the previous year.