Edited Press Release
In the fourth quarter, a further $516 million in restructuring and synergy costs was charged to the accounts, bringing the total costs for the full year to $881 million (of which $219 million are non-cash items).
This annual total reflects an extension in the scope of the previously announced $1,975 million programme which commenced in 2007, AstraZeneca said.
New initiatives include further rationalisation of the global supply chain, additional restructuring of the sales and marketing organisation and business infrastructure. When fully implemented, these and other new business reshaping activities, combined with revised estimates for the original 2007 programme (7,600 job reductions), will result in the overall programme delivering a reduction of 15,000 positions by 2013.
As a result of the expanded scope of these business reshaping programmes, total programme charges for restructuring and synergies are now estimated to reach $2,950 million (up from $1,975 million).
The Company anticipates that most of the remaining $1.1bn will be charged by 2010.
When fully implemented, programme benefits are now estimated to reach $2.5bn per annum (up from $1.4bn); with $2.1bn in savings expected before the end of 2010, and the balance to be realised by 2013, the company said.
David Brennan, Chief Executive Officer, said: "...We are also making good headway in further improving the efficiency of our organisation. The expansion in the scope of our restructuring efforts is another important step towards sustaining our long-term competitiveness."
Sales in the fourth quarter increased by 4% at CER, but were unchanged on an as reported basis as a result of the negative impact of exchange rate movements.
Sales in the U.S. were up 3%, as the adverse impact from generic competition for Toprol-XL is now annualised. Sales in the Rest of World were up 5%.
Sales in Established Markets were up 3%. Sales growth in Emerging Markets remained strong, with sales up 13% in the quarter to $1,023 million.
There were a number of intangible asset impairment charges taken in the fourth quarter, some of which affected Core operating profit, others which are excluded from Core profit and only affect reported operating profit.
Included within Core operating profit are intangible asset impairments charges totalling $184 million, the largest of which is a $115 million charge for impairment of intangible assets relating to Pulmicort Respules following the at risk generic launch by Teva and the subsequent settlement of patent litigation.
There were a total of $150 million of intangible asset impairments charged to reported operating profit which are excluded from operating profit on a Core basis. These intangible assets, arising from the acquisition of MedImmune, relate to revised forecasts for future royalties related to HPV vaccines ($90 million) and other items ($60 million) principally related to the return of rights to the heat shock protein 90 (Hsp90) drug candidates IPI-504 (MEDI-561) and IPI-493 to Infinity Pharmaceuticals.
Core operating profit in the fourth quarter was up 5% to $2,685 million, chiefly as a result of sales growth and higher other income, partially offset by the impairment relating to Pulmicort Respules and other provisions within cost of goods sold.
Reported operating profit decreased by 9% to $1,892 million as a result of higher restructuring costs and intangible asset impairments taken in this quarter compared to the fourth quarter 2007.
Core earnings per share in the fourth quarter were $1.25 compared with $1.10 in the fourth quarter 2007, a 6% increase at CER. It is estimated that there was 7 cents of currency benefit to Core EPS in the fourth quarter.
Core earnings per share benefited from lower net interest expense, the result of a fair value gain relating to certain long-term bonds in issue, and a lower number of shares outstanding.
Reported earnings per share in the fourth quarter were $0.86, a 9% decrease, as a result of higher restructuring and intangible asset impairment charges.
Strengthening the pipeline remains a key priority for the Company, it said.
The AstraZeneca pipeline now includes 144 projects, including 98 projects in the clinical phase of development. There are 10 projects currently in late stage development, either in Phase III or under regulatory review.
Of particular note, the Phase II pipeline is now more than 50% larger than it was at this time last year. Across the portfolio, 44 projects have successfully progressed to their next phase (including 17 molecules entering first human testing); 32 compounds have been added from Discovery research; 10 compounds have been withdrawn.
Four important projects (including two new molecules) are awaiting registration at this time, AstraZeneca said.
MedImmune announced on Nov. 28, 2008 the receipt of a Complete Response Letter (CRL) from the U.S. FDA seeking additional information in connection with the Biologics License Application (BLA) for motavizumab for the prevention of serious respiratory syncytial virus disease.
MedImmune is confident that it can respond to the outstanding questions and, based upon the Company's current understanding, does not foresee a need to conduct further trials, but will be submitting data from our already completed study in full term infants with congenital heart defects.
MedImmune will continue discussions with the FDA reviewers and, subject to this dialogue, now expects to respond in the second half of 2009, AstraZeneca said.
Reviews of the regulatory submissions for ONGLYZATM (saxagliptin), the new diabetes compound developed in collaboration with Bristol-Myers Squibb, are progressing in the U.S. and in Europe.
Regulatory review continues for the Marketing Authorization Application submitted to the European Medicines Agency seeking approval for Iressa as a treatment for locally advanced or metastatic non-small cell lung cancer in patients who have been pre-treated with platinum-containing chemotherapy, the company said.
On Dec. 24, 2008, AstraZeneca announced that it received a CRL from the U.S. FDA in conjunction with the supplemental New Drug Application for Seroquel XR for the treatment of Major Depressive Disorder (MDD).
AstraZeneca said it will continue discussions with the FDA and will provide a response to the agency in due course. The MDD submission in Europe is also under regulatory review, as are the applications for Generalised Anxiety Disorder in the U.S. and in Europe.
Up to four regulatory filings for new chemical entities are planned for 2009, including: Zactima for the treatment of pre-treated advanced non-small cell lung cancer in combination with chemotherapy; PN400, the combination of enteric coated naproxen and immediate release esomeprazole for the treatment of arthritic pain in patients at risk of developing gastric ulcers; Brilinta (formerly known as AZD6140), the oral antiplatelet agent in development for the treatment of patients with acute coronary syndrome; and the fixed dose combination product containing Crestor and Abbott's Trilipix, for the management of mixed dyslipidaemia.
On Dec. 11, 2008, the Company announced that it returned worldwide rights to Infinity Pharmaceuticals for the development and commercialisation of Infinity's heat shock protein 90 (Hsp90) drug candidates IPI-504 (MEDI-561) and IPI-493.
MEDI-561 was in Phase III development for the treatment of patients with refractory gastrointestinal stromal tumours (GIST), a rare tumour of the gastrointestinal tract.
The first regulatory submissions for Crestor based on the JUPITER trial results are planned starting in the second quarter of 2009, the company said.
A programme of work aimed at resolving the stability issues related to AZD0837 tablets remains underway, however the Company now estimates that the Phase III trial programme in atrial fibrillation will not start until the second half of 2009.
Until then, AZD0837 will be reclassified as a Phase II project on the Company's pipeline table.
In late November 2008, the Company received the FDA Complete Response Letter regarding Nexium I.V. supplemental New Drug Application for Peptic Ulcer Bleed.
The application has not received the FDA's approval in its present form. The Company is reviewing their comments and will respond in due course. The E.U. submission is still being reviewed by the European regulatory authorities.
In January 2009, the U.S. Food and Drug Administration (FDA) granted an additional six-month period of market exclusivity to Seroquel for its licensed indications, based on studies the Company conducted in adolescents with schizophrenia and children and adolescents with bipolar mania.
The Seroquel patent expires on 26 September 2011. The allowed six-month paediatric exclusivity period, which takes effect upon expiration of the patent, will extend the exclusivity of Seroquel to 26 March 2012.
As previously disclosed, Seroquel U.S. Prescribing Information is being updated to include additional safety information for children and adolescents, the company said.
Seroquel is not currently indicated anywhere in the world for the paediatric population.
Cash generated from operating activities was $8,742 million in the year, compared with $7,510 million in 2007. The increase of $1,232 million was principally driven by an increase in operating profit before depreciation, amortisation and impairment costs of $1,814 million, a decrease in tax payments of $354 million and lower working capital outflows of $233 million offset by an increase in interest payments of $355 million and a decrease in non-cash items of $814 million which includes movement on provisions.
Net cash outflows from investing activities were $3,896 million in the year compared with $14,887 million in 2007.
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Publié le 29 janvier 2009 Copyright © 2009 Dowjones