What science can do AstraZeneca Annual Report and Form 20-F Information 2017 AstraZeneca Annual Report and 20-F Form Information 2017 Welcome We are a global, science-led biopharmaceutical business and in this Annual Report we report on the progress we made in 2017 in pushing the boundaries of science to deliver life-changing medicines. can Science Expand treatment options Oncology | From page 48 Understand disease Cardiovascular & Metabolic Diseases | From page 52 Transform outcomes Respiratory | From page 56 Front cover and inside Important information for readers of this Annual Report Directors’ Report front cover image: For more information in relation to the inclusion of The following sections make up the Directors’ Report, Upstream intervention in Reported performance, Core financial measures and which has been prepared in accordance with the the inflammatory cascade. constant exchange rate (CER) growth rates as used requirements of the Companies Act 2006: in this Annual Report, please see the Financial Review When lungs are stressed by on page 66. > Chairman’s Statement allergens, pathogens or irritants, > Chief Executive Officer’s Review epithelial cells produce Definitions > Business Review cytokines that trigger multiple The Glossary and the Market definitions table from > Therapy Area Review downstream inflammatory page 235 are intended to provide a useful guide to terms > Financial Review: Financial risk management pathways in the lungs. and AstraZeneca’s definitions of markets, as well as to > Corporate Governance: including the Audit Committee AstraZeneca is researching acronyms and abbreviations, used in this Annual Report. Report and Corporate Governance Report antibodies that bind to these > Directors’ Responsibility Statement upstream epithelial cytokines Use of terms > Development Pipeline to prevent a range of In this Annual Report, unless the context otherwise > Sustainability: supplementary information inflammatory responses. requires, ‘AstraZeneca’, ‘the Group’, ‘we’, ‘us’ and ‘our’ > Shareholder Information refer to AstraZeneca PLC and its consolidated entities. Strategic Report Cautionary statement regarding forward‑looking statements The following sections make up the Strategic Report, A cautionary statement regarding forward-looking which has been prepared in accordance with the statements and other essential information relating requirements of the Companies Act 2006: to this Annual Report can be found on page 240. > AstraZeneca at a glance > Chairman’s Statement > Chief Executive Officer’s Review > Marketplace > Business model and life-cycle of a medicine > Strategy and Key Performance Indicators > Business Review > Therapy Area Review > Risk Overview > Financial Review Strategic Report Strategic Report Contents AstraZeneca at a glance 2 Chairman’s Statement 4 Chief Executive Officer’s Review 5 Marketplace 8 Business model and life-cycle of a medicine 14 Strategy and Key Performance Indicators 17 Business Review 22 Therapy Area Review 46 > Oncology 48 > Cardiovascular & Metabolic Diseases 52 > Respiratory 56 > Other Disease Areas 60 Risk Overview 63 Financial highlights Financial Review 66 Total Revenue* Net cash flow from operating activities down 2% to $22,465 million at actual down 14% at actual rate of exchange Corporate Governance rate of exchange (down 2% at CER), to $3,578 million Corporate Governance comprising Product Sales of $20,152 million Chairman’s Introduction 86 and Externalisation Revenue of $2,313 million Corporate Governance Overview 87 2017 $22,465m 2017 $3,578m Board of Directors 88 2016 $23,002m 2016 $4,145m Senior Executive Team 90 2015 $24,708m 2015 $3,324m Corporate Governance Report 92 Audit Committee Report 100 $22.5bn $3.6bn Directors’ Remuneration Report 105 Reported operating profit Core operating profit down 25% at actual rate of exchange up 2% at actual rate of exchange to $3,677 million (down 28% at CER) to $6,855 million (unchanged at CER) 2017 $3,677m 2017 $6,855m 2016 $4,902m 2016 $6,721m 2015 $4,114m 2015 $6,902m Financial Statements Financial $3.7bn $6.9bn Financial Statements Auditors’ Report 129 Consolidated Statements 135 Group Accounting Policies 139 Reported EPS Core EPS Notes to the Group for the full year down 14% at actual rate for the full year down 1% at actual rate Financial Statements 145 of exchange to $2.37 (down 15% at CER) of exchange to $4.28 (down 2% at CER) Group Subsidiaries and Holdings 190 2017 $2.37 2017 $4.28 Company Statements 194 2016 $2.77 2016 $4.31 Company Accounting Policies 196 2015 $2.23 2015 $4.26 Notes to the Company Financial Statements 197 $2.37 $4.28 Group Financial Record 199 Financial Review from page 66. * As detailed on page 140, Total Revenue consists of Product Sales and Externalisation Revenue. Additional Information Additional Information For more information Development Pipeline 202 within this Annual Report Patent Expiries of Key Marketed Products 208 For more information see Risk 210 www.astrazeneca.com Geographical Review 221 Sustainability: supplementary information 227 Shareholder Information 228 Trade Marks 234 Glossary 235 Index 239 This Annual Report is also available on our website, www.astrazeneca.com/annualreport2017 AstraZeneca Annual Report & Form 20-F Information 2017 / Contents 1 AstraZeneca A global biopharmaceutical business at a glance delivering medicines to patients through innovative science and excellence in development and commercialisation. Our Purpose is to push the boundaries of science to deliver life-changing medicines. We want to be valued and trusted by our stakeholders as a source of great medicines over the long term. Our strategic priorities Reflect how we are 1. Achieve Scientific Leadership working to achieve 2. Return to Growth our Purpose 3. Be a Great Place to Work A science-led Distinctive R&D innovation strategy capabilities: 11 Small molecules, ne molecular entities s in ase III/ Strategy and Key Performance oligonucleotides pivotal ase II or uner regulator reiew Indicators from page 17. and other emerging covering 1 inications drug platforms, as well as biologic 2017 11 medicines, including 201 12 immunotherapies, 201 1 and innovative 201 1 delivery devices Broad R&D platform in Oncology Cardiovascular & Respiratory three main areas Our ambition is to Metabolic Diseases We aim to transform We are also eliminate cancer We are following the the treatment of selectively active Achieve Scientific Leadership as a cause of death science to transform respiratory disease in the areas of from page 23 and Therapy through scientific how cardiovascular, with our growing autoimmunity, Area Review from page 46. discovery and renal and metabolic portfolio of medicines neuroscience collaborations. diseases are and scientific and infection We seek to achieve understood, interact research targeting this by means of and impact one disease modification exploiting the another power of four scientific platforms Portfolio of specialty and Oncology Cardiovascular & Respiratory Other Disease Areas primary care products Metabolic Diseases (Product Sales) $4,024m $7,266m $4,706m $4,156m 20% of total 36% of total 23% of total 21% of total 2016: $3,383m 2016: $8,116m 2016: $4,753m 2016: $5,067m 2015: $2,825m 2015: $9,489m 2015: $4,987m 2015: $6,340m Tagrisso sales up 126% Brilinta sales of $1,079 Symbicort sales of Nexium sales down 4% (126% at CER) and approved million, up 29% (29% at $2,803 million, down 6% (3% at CER) to $1,952 million in more than 60 markets CER) and Forxiga sales (6% at CER) Sales of Synagis up 1% Iressa sales of $528 million, of $1,074 million, up 29% Sales of Pulmicort up (1% at CER) to $687 million (28% at CER) up 3% (3% at CER); Lynparza 11% (12% at CER) at Seroquel XR sales of $332 sales of $297 million, up 36% Sales of Onglyza were $1,176 million million, down 55% (55% (35% at CER) down by 15% (16% at Fasenra approved in the at CER) CER) to $611 million Imfinzi launched in the US in US in November FluMist/Fluenz sales of May and sales of $19 million; Legacy sales: Crestor $78 million, down 25% Calquence launched in the down 30% (30% at CER) (28% at CER) US in October and sales of to $2,365 million $3 million 2 AstraZeneca Annual Report & Form 20-F Information 2017 / Strategic Report Strategic Report Oncology. See page 48 Cardiovascular & Metabolic Diseases. See page 52 Respiratory. See page 56 Global commercial US Emerging Markets Europe Established presence, with strength Rest of World in Emerging Markets (Product Sales) $6,169m $6,149m $4,753m $3,081m 31% of total 30% of total 24% of total 15% of total 2016: $7,365m 2016: $5,794m 2016: $5,064m 2016: $3,096m 2015: $9,474m 2015: $5,822m 2015: $5,323m 2015: $3,022m Commercial Highlights: Emerging Markets: Sales New CVMD: Sales growth Japan: 1% growth in sales New Oncology: Sales Growth Platforms grew growth of 6% (8% at CER), of 9% (9% at CER). Strong (4% at CER), underpinned growth of 98% (98% at in line with long-term performances from Farxiga by the growth of Tagrisso CER). Sales of Tagrisso by 5% (6% at CER) in 2017 ambitions. China sales in and Brilinta, with sales and Forxiga, partly mitigated reached $955 million to and represented 68% of the year grew by 12% (15% exceeding $1 billion in 2017 by the impact of the entry become AstraZeneca’s Total Revenue at CER), supported by the Respiratory: Sales declined of generic competition to largest-selling Oncology launches of new medicines by 1% (1% at CER). Sales of Crestor in the second half medicine of the year Return to Growth from page 26. Symbicort declined by 6% (6% at CER) and Pulmicort sales rose by 11% (12% at CER) Our talented employees: Committed to achieving 61,100 our Purpose in a sustainable employees 3 way and upholding our 2016: 59,700 6 Values by fostering a strong 2015: 61,500 1 AstraZeneca culture Strategic R cetre 5 8 arige 4 2 7 aiterrg S Be a Great Place to Work from page 34.