AstraZeneca(AZN) - 2024 Q1 - Quarterly Results

Financial Performance - Total Revenue for Q1 2024 increased by 19% to $12,679 million, driven by an 18% rise in Product Sales[5] - Core EPS rose by 13% to $2.06, impacted by a $241 million gain in the prior year from the disposal of Pulmicort Flexhaler US rights[5] - The company expects Total Revenue and Core EPS for FY 2024 to increase by a low double-digit to low teens percentage[8] - Total revenue for Q1 2024 reached $12,679 million, representing a 17% increase compared to Q1 2023[22] - Earnings per share increased by 21% to $1.41, reflecting strong financial performance[70] - Reported profit before tax rose by 24% to $2,800 million[71] - Gross profit for Q1 2024 was reported at $10,461 million, with a core gross profit of $10,491 million, reflecting a 15% increase year-over-year[72] - Operating profit was $3,115 million, with an operating margin of 25%, while core operating profit was $4,310 million, reflecting a margin of 34%[72] - Profit for the period was $2,180 million, an increase of 20.9% from $1,804 million in the same quarter last year[107] Revenue Growth by Segment - Oncology segment reported a 26% growth in revenue, while CVRM and Rare Disease segments grew by 23% and 16% respectively[5] - The US market contributed $5,124 million in revenue, representing a 19% increase[11] - Oncology revenue was $5,108 million, accounting for 40% of total revenue, with a 23% year-over-year growth[21] - Tagrisso generated $1,595 million in revenue, a 12% increase, while Imfinzi saw a 29% increase to $1,113 million[21] - The company achieved a 20% increase in BioPharmaceuticals: CVRM revenue, totaling $3,060 million[21] - Enhertu revenue surged by 79% to $461 million, reflecting strong demand in HER2-expressing tumors[21] - Total revenue from Rare Disease medicines increased by 12% to $2,096 million, representing 17% of overall total revenue[62] - Ultomiris generated $482 million in the US, with a 27% actual change[63] Research and Development - R&D expenses for Q1 2024 were $2,783 million, reflecting a 7% increase, with a core R&D-to-Total Revenue ratio of 21%[13] - R&D expenses amounted to $2,783 million, representing 22% of total revenue, with a core R&D expense of $2,698 million, which is 21% of total revenue[72] - The company is focused on expanding its product pipeline and enhancing its market presence through strategic collaborations and new product launches[158] Acquisitions and Collaborations - The acquisition of Gracell Biotechnologies was completed for an upfront cash consideration of approximately $1.0 billion, with a total potential transaction value of $1.2 billion[16] - AstraZeneca's acquisition of Icosavax, Inc. was finalized for approximately $0.8 billion, with a potential total value of $1.1 billion[16] - The company reported a 59% increase in alliance revenue to $457 million in Q1 2024, driven by Enhertu and Tezspire[23] - Collaboration Revenue is anticipated to increase substantially due to success-based milestones and certain expected transactions[8] - AstraZeneca's collaboration revenue increased to $45 million in Q1 2024, up from $27 million in Q1 2023, reflecting a growth of 66.7%[107] Sustainability Initiatives - AstraZeneca's sustainability initiatives include a partnership to reduce greenhouse gas emissions by 80% at its Wuxi site[17] - The company plans to reduce Scope 1 and 2 greenhouse gas emissions by up to 80% in China through a clean heat agreement[93] - AstraZeneca received the Sustainability Award at the 2024 Reuters Pharma Awards Europe for its efforts in electronic product information[93] Legal and Regulatory Matters - AstraZeneca's lawsuit against the US Department of Health and Human Services regarding the Inflation Reduction Act was dismissed in March 2024[143] - The company is involved in multiple inquiries into drug marketing and pricing practices, with no material developments reported[145] - The only remaining legal case regarding gastric cancer is scheduled for trial in January 2025[137] - AstraZeneca's appeal against the reversal of a favorable ruling in the PARP Inhibitor Royalty Dispute is pending with the Supreme Court of the United Kingdom[140] Financial Position and Cash Flow - Net cash inflow from operating activities was $2,486 million, down from $3,133 million in Q1 2023, primarily due to changes in working capital[79] - Capital expenditure for Q1 2024 was $417 million, up from $247 million in Q1 2023, with expectations for substantial increases in 2024[81] - Net debt increased by $3,939 million to $26,449 million as of March 31, 2024, driven by acquisitions and changes in borrowings[82] - Cash and cash equivalents at the end of Q1 2024 were $7.8 billion, compared to $5.8 billion in Q1 2023, reflecting a year-over-year increase of 34%[116] - The Group's total equity decreased to $37.5 billion in Q1 2024 from $39.2 billion in Q1 2023, a decline of 4.4%[110]