Q1 2024 results

Rhea-AI Summary

AstraZeneca reports very strong Q1 2024 financial results with a 19% increase in total revenue, driven by growth in product sales and alliance revenue. Core EPS grew by 13% to $2.06. The company reaffirmed its guidance for FY 2024, expecting double-digit growth in revenue and EPS. Key milestones include positive trial results for Imfinzi and Tagrisso in lung cancer.

Positive

• Total revenue up 19% to $12,679m in Q1 2024
• Core EPS increased by 13% to $2.06
• Double-digit growth in Total Revenue from Oncology, CVRM, R&I, and Rare Disease
• Total dividend for FY 2024 to increase by $0.20 per share to $3.10
• Positive trial results announced for Imfinzi and Tagrisso in lung cancer
• US approvals for Tagrisso and Enhertu in various cancer indications
• Guidance for FY 2024: Total Revenue and Core EPS to increase by low double-digit to low teens percentage

Negative

• None.

Insights

Financial Analyst

AstraZeneca's Q1 2024 financial report exhibits robust growth, with total revenue soaring by 19% to $12,679 million, paired with an 18% uptick in product sales. The 13% increase in Core EPS to $2.06 is noteworthy, especially considering the high product sales gross margin of 82%. While the EPS growth lags behind revenue expansion, this can be attributed to the prior year's one-time gain from the disposal of Pulmicort Flexhaler rights. The dividend hike of $0.20 per share to $3.10 reflects confidence in the company's financial health and commitment to shareholder returns. However, investors should note other operating income is projected to decline due to the absence of similar one-time gains experienced in the previous year, which could affect profitability metrics moving forward.

Pharmaceutical Industry Expert

The emphasis on AstraZeneca's pipeline advancements and regulatory approvals is vital. Key trial successes like Imfinzi and Tagrisso in lung cancer represent significant strides in oncology, potentially securing the company's competitive advantage. The US and global approvals for a myriad of treatments, including Enhertu and Ultomiris, indicate regulatory confidence and market expansion. The anticipated presentation of trial results at the ASCO conference could trigger additional investor interest. However, the pharmaceutical landscape is heavily reliant on continuous innovation and pipeline progression, where any setbacks could have adverse effects on future earnings expectations.

Market Research Analyst

From a market perspective, AstraZeneca's strategy of increasing collaboration revenue, primarily from success-based milestones, underlines a business model that leverages partnerships for growth. The sustained forecast for revenue and core EPS suggests management's confidence in stable financial growth, although investors should remain aware of the volatility inherent in pharmaceutical markets, especially surrounding trial outcomes and drug approvals. The company's forecasted core tax rate of 18-22% aligns with industry standards, ensuring there are no unexpected tax burdens that could impact profitability.

Very strong revenue and EPS growth in the first quarter coupled with exciting pipeline delivery

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

Revenue and EPS summary

		Q1 2024		% Change
		$m		Actual		CER1
- Product Sales		12,177		15		18
- Alliance Revenue		457		59		59
- Collaboration Revenue		45		66		66
Total Revenue		12,679		17		19
Reported EPS		$1.41		21		30
Core2 EPS		$2.06		7		13

Financial performance for Q1 2024 (Growth numbers at CER)

• Total Revenue up 19% to $12,679m, driven by an 18% increase in Product Sales and continued growth in Alliance Revenue from partnered medicines
• Double-digit growth in Total Revenue from Oncology at 26%, CVRM at 23%, R&I at 17%, and Rare Disease at 16%
• Core Product Sales Gross Margin³ of 82%
• Core Operating Margin of 34%
• Core Tax Rate of 21%
• Core EPS increased 13% to $2.06. The increase in Core EPS was lower than Total Revenue growth principally due to a $241m gain in the prior year period on the disposal of Pulmicort Flexhaler US rights
• As announced at the Annual General Meeting on 11 April 2024, the total dividend for FY 2024 will increase by $0.20 per share to $3.10 per share
• Total Revenue and Core EPS guidance at CER for FY 2024 reiterated

Pascal Soriot, Chief Executive Officer, AstraZeneca, said:

"AstraZeneca had a very strong start in 2024 with substantial Total Revenue growth of 19% in the first quarter.

Our strong pipeline momentum continued and already this year we announced positive trial results for Imfinzi and Tagrisso that were unprecedented in lung cancer, the data from both of these studies will be presented during the ASCO plenary in June. We are also looking forward to seeing the results of several other important trials throughout the year.

At our Annual General Meeting we were pleased to announce a 7% increase in the annual dividend, and at our Investor Day on 21 May 2024 we will outline the evolution of our company, underscoring our confidence in sustaining industry-leading growth."

Key milestones achieved since the prior results announcement

• Positive read-outs for Tagrisso in unresectable, Stage III EGFRm NSCLC (LAURA), Imfinzi in LS-SCLC (ADRIATIC)
• US approvals for Tagrisso with the addition of chemotherapy for EGFRm NSCLC (FLAURA2), Enhertu in HER2-positive solid tumours (DESTINY-PanTumor02, DESTINY-Lung01, DESTINY-CRC02) and Ultomiris for NMOSD. US and EU approval for Voydeya as an add-on therapy to Ultomiris or Soliris for PNH with EVH (ALPHA). Japan approval for Truqap plus Faslodex in unresectable or recurrent PIK3CA-, AKT1-, or PTEN-altered HR-positive, HER2-negative breast cancer (CAPItello-291)
• Datopotamab deruxtecan BLAs accepted in the US for non-squamous NSCLC (TROPION-Lung01) and HR-positive, HER2-negative breast cancer (TROPION-Breast01)

Guidance

The Company reiterates its Total Revenue and Core EPS guidance for FY 2024 at CER, based on the average foreign exchange rates through 2023.

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

Core EPS is expected to increase by a low double-digit to low teens percentage

• Collaboration Revenue is expected to increase substantially, driven by success-based milestones and certain anticipated transactions
• Other operating income is expected to decrease substantially (FY 2023 included a $241m gain on the disposal of Pulmicort Flexhaler US rights, and a $712m one-time gain relating to updates to contractual arrangements for Beyfortus)
• The Core Tax rate is expected to be between 18-22%

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

Currency impact

If foreign exchange rates for April 2024 to December 2024 were to remain at the average rates seen in March 2024, compared to the performance at CER it is anticipated that FY 2024 Total Revenue would incur a low single-digit adverse impact and Core EPS would incur a mid single-digit adverse impact (previously low single-digit). The Company's foreign exchange rate sensitivity analysis is provided in Table 16.

Investor Day

AstraZeneca will host an Investor Day on 21 May 2024. For more information, see www.astrazeneca.com/investor-relations.html.

Table 1: Key elements of Total Revenue performance in Q1 2024

			% Change
Revenue type		$m	Actual %		CER %
Product Sales		12,177	15		18
Alliance Revenue		457	59		59			* $339m Enhertu (Q1 2023: $220m) * $77m Tezspire (Q1 2023: $43m)
Collaboration Revenue		45	66		66			* $45m Farxiga (Q1 2023: $24m)
Total Revenue		12,679	17		19
Therapy areas		$m	Actual %		CER %
Oncology		5,108	23		26			* Strong performance across all key medicines and regions
CVRM		3,060	20		23			* Farxiga up 43% (45% at CER) with continued demand growth and the launch of an authorised generic in the US, Lokelma up 16% (19% at CER), roxadustat up 24% (28% at CER), Brilinta decreased 3% (1% at CER)
R&I		1,886	15		17			* Continued strong growth from Fasenra up 6% (6% CER), Breztri up 52% (54% CER). Saphnelo up 94% (95% CER) and Tezspire up >2x (>2x CER). Symbicort was up 12% (14% CER)
V&I		232	(35	)	(34	)		* Beyfortus revenue was $46m (Q1 2023: $nil), which more than offset a $27m decline in Synagis * The drop in V&I revenue was driven by lower sales of COVID-19 mAbs and Vaxzevria. Vaxzevria revenues are now included in the 'Other' V&I line
Rare Disease		2,096	12		16			* Ultomiris up 32% (34% at CER), partially offset by decline in Soliris of 11% (8% at CER) * Strensiq up 20% (21% at CER) and Koselugo up 68% (82% at CER) reflecting strong patient demand, and also tender market order timing
Other Medicines		297	(7	)	-
Total Revenue		12,679	17		19
Regions		$m	Actual %		CER %
US		5,124	19		19
Emerging Markets		3,732	18		26
- China		1,748	9		13
- Ex-China Emerging Markets		1,984	27		40
Europe		2,634	22		19
Established RoW		1,189	(5	)	2			* Decline in COVID-19 mAbs revenue
Total Revenue		12,679	17		19

Combined sales of Enhertu, recorded by Daiichi Sankyo Company Limited (Daiichi Sankyo) and AstraZeneca, amounted to $879m in Q1 2024 (Q1 2023: $531m).

Combined sales of Tezspire, recorded by Amgen and AstraZeneca, amounted to $216m in Q1 2024 (Q1 2023: $105m).

Table 2: Key elements of financial performance in Q1 2024

Metric	Reported	Reported change	Core	Core change		Comments4
Total Revenue	$12,679m	17% Actual 19% CER	$12,679m	17% Actual 19% CER		* See Table 1 and the Total Revenue section of this document for further details
Product Sales Gross Margin	82%	Stable	82%	-1pp Actual -1pp CER		* Variations in Product Sales Gross Margin can be expected between periods due to product seasonality, foreign exchange fluctuations and other effects
R&D expense	$2,783m	7% Actual 7% CER	$2,698m	17% Actual 18% CER		+ Increased investment in the pipeline * Core R&D-to-Total Revenue ratio of 21% (Q1 2023: 21%)
SG&A expense	$4,495m	11% Actual 12% CER	$3,413m	12% Actual 13% CER		+ Market development for recent launches and pre-launch activities * Core SG&A-to-Total Revenue ratio of 27% (Q1 2023: 28%)
Other operating income and expense5	$67m	-83% Actual -83% CER	$65m	-80% Actual -80% CER		‒ The prior year quarter included a $241m gain on the disposal of Pulmicort Flexhaler US rights
Operating Margin	25%	+1pp Actual +2pp CER	34%	-2pp Actual -1pp CER		* See commentary above on Other operating income and expense
Net finance expense	$302m	5% Actual 1% CER	$245m	2% Actual -3% CER		+ Higher rates on floating debt and bond issuances ‒ Higher interest received on cash and short-term investments
Tax rate	22%	+2pp Actual +2pp CER	21%	+2pp Actual +2pp CER		* Variations in the tax rate can be expected between periods
EPS	$1.41	21% Actual 30% CER	$2.06	7% Actual 13% CER		* Further details of differences between Reported and Core are shown in Table 11

Table 3: Pipeline highlights since prior results announcement

Event	Medicine	Indication / Trial	Event
Regulatory approvals and other regulatory actions	Enhertu	HER2-expressing tumours (DESTINY-PanTumor02)	Regulatory approval (US)
	Tagrisso	EGFRm NSCLC (1st-line) (FLAURA2)	Regulatory approval (US)
	Truqap	HR+/HER2-neg breast cancer (2nd-line) (CAPItello-291)	Regulatory approval (JP)
	Beyfortus	RSV (MELODY-MEDLEY)	Regulatory approval (JP)
	Ultomiris	NMOSD (CHAMPION-NMOSD)	Regulatory approval (US)
	Voydeya	PNH with EVH (ALPHA)	Regulatory approval (US, EU)
Regulatory submissions or acceptances*	Dato-DXd	Non-squamous NSCLC (2nd- and 3rd-line) (TROPION-Lung01)	Regulatory submission (US)
	Dato-DXd	HR+/HER2- breast cancer (inoperable and/or met.) (TROPION-Breast01)	Regulatory submission (US, EU, JP, CN)
	acoramidis	ATTR-CM (ALXN2060-TAC-302)	Regulatory submission (JP)
Major Phase III data readouts and other developments	Tagrisso	EGFRm NSCLC (unresectable Stg. III) (LAURA)	Primary endpoint met
	Imfinzi	SCLC (limited-stage) (ADRIATIC)	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 February 2024, AstraZeneca completed the acquisition of Gracell Biotechnologies, Inc. (Gracell), a global clinical-stage biopharmaceutical company developing innovative cell therapies for the treatment of cancer and autoimmune diseases. The acquisition enriches AstraZeneca's growing pipeline of cell therapies with AZD0120 (formerly GC012F), a novel, clinical-stage T-cell (CAR-T) therapy. AZD0120 is a potential new treatment for multiple myeloma, as well as other haematologic malignancies and autoimmune diseases, including SLE. The upfront cash portion of the consideration was approximately $1.0 billion. Combined, the upfront and potential contingent value payments represent, if achieved, a transaction value of approximately $1.2 billion. AstraZeneca acquired the cash and cash equivalents on Gracell's balance sheet, which totalled $209 million at the close of the transaction.

In February 2024, AstraZeneca completed the acquisition of Icosavax, Inc., a US-based clinical-stage biopharmaceutical company focused on developing differentiated, high-potential vaccines using an innovative, protein virus-like particle platform. The upfront cash portion of the consideration was approximately $0.8 billion. Combined, the upfront and maximum potential contingent value payments represent, if achieved, a transaction value of approximately $1.1 billion. AstraZeneca acquired the cash, cash equivalents and marketable securities on Icosavax's balance sheet, which totalled $192 million at the close of the transaction.

In March 2024, AstraZeneca announced that it has entered into a definitive agreement to acquire Amolyt Pharma, a clinical-stage biotechnology company focused on developing novel treatments for rare endocrine diseases. The proposed acquisition will bolster the Rare Disease late-stage pipeline and expand 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. The upfront cash portion of the consideration is $0.8 billion at deal closing. Combined, the upfront and maximum potential contingent value payments represent, if achieved, a transaction value of $1.05 billion. AstraZeneca will acquire all of Amolyt Pharma's outstanding shares on a cash and debt free basis. Subject to the satisfaction of customary closing conditions in the acquisition agreement, including regulatory clearances, the transaction is expected to close by the end of the third quarter of 2024.

In March 2024, AstraZeneca entered into a definitive agreement to acquire Fusion Pharmaceuticals Inc., a clinical-stage biopharmaceutical company developing next-generation radioconjugates. This complements AstraZeneca's leading oncology portfolio with the addition of the Fusion pipeline of RCs, including their most advanced programme, FPI-2265, a potential new treatment for patients with mCRPC. 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 upfront cash portion of the consideration is approximately $2 billion. Combined, the upfront and maximum potential contingent value payments represent, if achieved, a transaction value of approximately $2.4 billion. AstraZeneca will acquire the cash, cash equivalents and short term investments on Fusion's balance sheet, which totalled $234 million as of 31 December 2023. The transaction is expected to close in the second quarter of 2024, subject to customary closing conditions, including the approval of Fusion shareholders and regulatory clearances.

Sustainability highlights

Our newly announced collaboration with China Resources Gas and Everbright Environment will supply biomethane and biomethane-based steam to our Wuxi site. Using domestic waste, including food and plant waste, this new partnership will enable us to reduce our greenhouse gas emissions footprint by 80% in China.

AstraZeneca announced at WEF that it will be one of the inaugural Early Adopter organisations that intend to start making disclosures aligned with the Taskforce on Nature-related Financial Disclosures Recommendations in corporate reporting.

AstraZeneca also hosted an annual Sustainability call for shareholders, reiterating its continued commitment to deliver across our pillars; Access to Healthcare, Environmental Protection and Ethics and Transparency. A recording of the call and accompanying materials are available on the AstraZeneca IR website.

Conference call

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

Reporting calendar

The Company intends to publish its H1 and Q2 2024 results on 25 July 2024.

To read AstraZeneca's Q1 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 in the Financial performance section of this document.
3			The calculation of Reported and Core Product Sales Gross Margin excludes 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240424435897/en/

Global Media Relations team

global-mediateam@astrazeneca.com

+44 (0)1223 344 800

Source: AstraZeneca

FAQ

What was AstraZeneca's total revenue growth in Q1 2024?

Total revenue increased by 19% to $12,679m in Q1 2024.

How much did Core EPS grow in Q1 2024?

Core EPS grew by 13% to $2.06 in Q1 2024.

What are some key milestones achieved by AstraZeneca since the last results announcement?

Key milestones include positive trial results for Imfinzi and Tagrisso in lung cancer, US approvals for Tagrisso and Enhertu in various cancer indications, and guidance for FY 2024 expecting double-digit growth in revenue and EPS.

What is AstraZeneca's dividend per share for FY 2024?

The total dividend for FY 2024 will increase by $0.20 per share to $3.10 per share.

What is AstraZeneca's guidance for FY 2024 in terms of Total Revenue and Core EPS growth?

AstraZeneca expects Total Revenue and Core EPS to increase by a low double-digit to low teens percentage for FY 2024.