AstraZeneca Annual Report and Form 20-F Information 2011

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AstraZeneca has a proud tradition ofdeveloping great medicines that makea meaningful difference to patient health.Looking ahead, we remain committed todeveloping innovative and valued medicinesthat improve the health of people aroundthe world, benefit society and provide anacceptable return for our shareholders.In my review I want to outline some of thesteps we took and decisions we made in2011 to secure our future business success.If we are to be one of the winnersin the sector we need to make thenecessary changes both to whatwe do and how we do it.David R Brennan Chief Executive OfficerOperational highlights-2%Revenue in the US was down 2%+10%Emerging Markets revenueincreased by 10%7979 projects in clinical development,including 9 in Phase III or underregulatory review; 21 withdrawnduring the year7%Ranked in the top 7% in the sectorin the Dow Jones SustainabilityWorld and European Indexes, withour highest assessment score todate of 85%8 Chief Executive Officer’s ReviewAstraZeneca Annual Report and Form 20-F Information 2011
Chief Executive Officer’s ReviewA trusted partnerWe cannot secure our success if we do not have good relationshipswith those with whom we do business. Trust is critical to achievingthis: we need to connect with our stakeholders, including patients,physicians, regulators, governments and payers, if we are tounderstand their needs and challenges. We also need to earn andmaintain the trust of our customers, partners and other stakeholders.This requires us to do things in the right way and to behave inaccordance with our core values.That is why I set such store by our Global External Interactions Policy,launched in April 2011, which provides a single, common, principlebasedapproach to all our interactions worldwide with public officials,healthcare professionals and community organisations. The introductionof the policy drove changes in the way we market and sell our productsand I believe we now lead the industry in this area of business.Our commitment to acting responsibly and the sustainabledevelopment of our Group was further reinforced in 2011 by thepublication of our new Responsible Business Plan, which is closelyaligned to our business strategy and its priorities.The growing importance of compliance and ethics to our reputationand business operations was demonstrated during the year by theappointment of Katarina Ageborg, our new Chief Compliance Officer,to the SET.World class Research and DevelopmentAt the core of our strategy to be a focused, integrated, innovationdriven,global, prescription-based biopharmaceutical business isthe need to have an R&D function with world class productivity. In hisChairman’s Statement on page 6, Louis Schweitzer outlined how weare redoubling our efforts to deliver this through the use of innovativeand collaborative ways of working. Our focus is on ensuring moreeffective and efficient delivery of our research objectives across ourtherapeutic portfolio.Our results in 2011 were mixed. We were pleased by the FDA’sapproval in July of Brilinta, our treatment for acute coronarysyndromes. Brilinta, or Brilique, its trade name in Europe, is nowapproved in 64 countries, launched in 37 and under review in a further39. Also on a positive note, Caprelsa (vandetanib), for the treatment ofthyroid cancer, has been launched in the US and received a positiveCHMP opinion in the EU. Axanum, for the prevention of cardiovascularevents, Komboglyze TM , for diabetes, and Fluenz, our influenza vaccine,were also approved in the EU. In Japan, both Nexium and Faslodexwere launched following approvals earlier in the year.During 2011, two of the Phase III trials for TC-5214, our neurosciencecollaboration with Targacept, did not meet their primary endpoint.In December, we also announced that our investigational compoundolaparib (AZD2281) for the treatment of ovarian cancer will notprogress into Phase III. As a result of these two events we recordedan impairment charge of $435 million.We were also disappointed during the year by the withdrawal ofzibotentan (for prostate cancer). Axanum was also withdrawn in theUS. In January 2012, we received a Complete Response Letter fromthe FDA for our submission for dapagliflozin. We, together with BMS,remain committed to this treatment for diabetes and will work closelywith the FDA to provide additional clinical data.Increased collaborationOur focus on developing in-house capabilities is matched by ourdesire to develop a more outward-looking organisation committed toaccessing the best science, regardless of its origin. Indeed, six of ournine projects in Phase III/Registration and 12 out of 24 in Phase II weresourced externally.During 2011, we completed a number of transactions to strengthenour long-term development. These included the in-licensing oftremelimumab from Pfizer, and our groundbreaking collaborationwith the UK Medical Research Council providing academicresearchers with access to over 20 AstraZeneca compounds.Our plans for R&D will see us build further on this collaborativeway of working.Global orientationOur future success requires us to develop global strategies tocommercialise our products effectively. These need to be tailoredto local needs in both mature and emerging markets.As part of that drive, we announced our decision to invest $200 millionin a manufacturing facility in China and our agreement to acquire aChinese company that will give us access to a portfolio of medicinesused to treat infections. In Russia, we invested $150 million in amanufacturing plant and announced plans to establish a newpredictive science centre.We are also committed to playing our part in the global challengeof providing sustainable access to healthcare for all those who needit. Our strategy recognises the complexities surrounding the issuewhich range from the affordability of medicines to the availability ofhealthcare systems and the resources to make them effective.Stronger customer orientationAs the Chairman noted, there is no let up in sight on the downwardpressure we face on the price of medicines. More than ever, we needto demonstrate their value to those who buy them. Our collaborationswith HealthCore and IMS will help us undertake ‘real world’ studies tounderstand how to treat disease most effectively and economically.We also need to undertake more studies such as the Brilinta PLATOstudy demonstrating that, even at a higher price, it is a more costeffective treatment than the generic alternative.Equally, we need to recognise the changing shape of healthcaresystems. Those who work in them are working more intensively andwith less time to research medicines. We are therefore piloting newways of working to meet their needs. These include the use of digitalchannels which offer information that is available when it is needed,and without having to leave the office.Operational efficiencyOur continued drive for operational efficiency is typified by thedesign and construction of our new plant in China, which is using‘Lean’ production principles from the outset. We are also streamliningprocesses and moving to a more flexible cost base in order toremain competitive.As we reshape our business to meet the needs of our customersefficiently, we are seeing reductions in the workforce across much ofour organisation, particularly in our mature Established Markets and inour R&D organisation. This reshaping includes plans for further R&Dsite consolidation. These are difficult decisions as they go to the heartof AstraZeneca, our people. Where possible, we seek to redeploy staffor assist with outplacement and, together with my colleagues, I remaincommitted to managing these changes in the right way, in accordancewith local employment laws, our standards and core values.A confident futureOur industry is undergoing a period of fundamental change. If we areto be one of the winners in the sector we need to make the necessarychanges both to what we do and how we do it. I am confident thatwithin AstraZeneca we have people with the skills to do that and paytribute to their continued efforts in 2011 to ensure we deliver on ourcommitments to patients, society and our shareholders. I look forwardto working with them to build on those efforts in 2012.David R BrennanChief Executive OfficerOverviewAstraZeneca Annual Report and Form 20-F Information 2011 Chief Executive Officer’s Review 9
Page 1 and 2: healthAstraZeneca Annual Reportand
Page 3 and 4: Financial summary$33.6bnSales down
Page 5 and 6: China: We announcedour decision to
Page 7 and 8: OverviewOperational overview7979 pr
Page 9: Chairman’s StatementI would like
Page 13 and 14: The process of getting a drug to ma
Page 15 and 16: OverviewnovationInnovation drives p
Page 17 and 18: Our Strategy and PerformanceMore pe
Page 19 and 20: Using the full range of innovative
Page 21 and 22: Our strategyMissionto make the most
Page 23 and 24: Our strategic priorities to 2014Our
Page 25 and 26: Our performance in 2011Our performa
Page 27 and 28: Business shapePeopleResponsible bus
Page 29 and 30: Strategy and PerformanceaborationIm
Page 31 and 32: Delivering our strategyOur strategy
Page 33 and 34: Development projects20112010 129342
Page 35 and 36: Investing in capabilitiesA core com
Page 37 and 38: Patent expiries for our key markete
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Page 41 and 42: Product qualityWe are committed to
Page 43 and 44: We have a global approach, supporte
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Page 49 and 50: Delivering our strategyResponsible
Page 51 and 52: India has the fastest growing numbe
Page 53 and 54: ProtestsAstraZeneca acknowledges th
Page 55 and 56: Also in 2011, the DIHR in collabora
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Page 59 and 60: Pipeline by Therapy Area at 31 Dece
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Therapy Area ReviewIn September, we
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Therapy Area ReviewGastrointestinal
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Therapy Area ReviewInfectionTherapy
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Therapy Area ReviewIn the pipelineI
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Therapy Area ReviewOur financial pe
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Therapy Area ReviewOncologyTherapy
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Therapy Area Reviewendpoints of pro
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Therapy Area ReviewOur financial pe
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healthinnovationReducing the number
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Geographical ReviewUSAstraZeneca is
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Geographical ReviewEmerging Markets
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Disciplined execution of our strate
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Financial ReviewMeasuring performan
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Financial ReviewResults of operatio
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Financial ReviewFinancial position
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Financial ReviewCapitalisation and
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Financial ReviewResults of operatio
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Financial ReviewSensitivity analysi
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Financial Reviewover the performanc
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healthcollaborationFighting the ris
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Board of Directors and Senior Execu
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Board of Directors and Senior Execu
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Corporate Governance ReportOperatio
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Corporate Governance ReportThe Boar
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Corporate Governance ReportDuring 2
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Corporate Governance ReportBusiness
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Corporate Governance ReportPolitica
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Directors’ Remuneration ReportDav
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Directors’ Remuneration ReportVar
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Directors’ Remuneration ReportAdd
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Directors’ Remuneration ReportSum
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Directors’ Remuneration ReportSum
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Directors’ Remuneration ReportIn
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Directors’ Remuneration ReportPer
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Directors’ Remuneration ReportGai
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RiskManagement reporting and assura
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RiskCommercialisation and business
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RiskCommercialisation and business
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RiskSupply chain and delivery risks
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RiskEconomic and financial risks co
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Financial StatementsPreparation of
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Financial StatementsConsolidated St
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Financial StatementsConsolidated St
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Financial StatementsGroup Accountin
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Financial StatementsProperty, plant
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Financial StatementsNotes to the Gr
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Financial Statements3 Finance incom
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Financial Statements4 Taxation cont
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Financial Statements6 Segment infor
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Financial Statements9 Intangible as
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Financial Statements10 Other invest
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Financial Statements15 Financial in
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Financial Statements15 Financial in
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Financial Statements18 Post-retirem
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Financial Statements18 Post-retirem
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Financial Statements20 Share capita
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Financial Statements23 Financial ri
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Financial Statements23 Financial ri
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Financial Statements24 Employee cos
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Financial Statements25 Commitments
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Financial Statements26 LeasesTotal
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Financial StatementsIndependent Aud
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Financial StatementsCompany Account
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Financial Statements4 ReservesShare
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Financial StatementsGroup Financial
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Development PipelineNCEsPhase III/R
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Development PipelineNCEsPhases I an
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Shareholder Information> For shares
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Shareholder InformationDocuments on
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Corporate InformationHistory and de
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GlossaryThe following abbreviations
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Index2011 performance summary 23Acc
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Contact informationRegistered offic
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AstraZeneca Annual Report and Form 20-F Information 2011

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