First quarter results reflect challenging revenue picture. Pipeline strengthened by Amgen collaboration, the agreement to acquire Ardea Biosciences and positive CHMP opinion for FORXIGATM (dapagliflozin) in Europe.
- Revenue for the first quarter was $7,349 million, down 11 percent at constant exchange rates (CER).
- Loss of exclusivity on several key brands accounted for 8 percentage points of the revenue decline, which included the recognition of a $223 million returns reserve against US trade inventories of Seroquel IR following generic launches at the end of March 2012.
- Emerging Markets revenue increased by 1 percent at CER, reflecting the quarterly phasing that the Company anticipated. Company anticipates a rebound in the remaining three quarters, but achieving double-digit growth for the full year may be a challenge.
- Core EPS was $1.81 in the first quarter, a 19 percent decline at CER compared with the first quarter last year, which benefited by $0.46 from two one-off gains. Excluding these gains, Core EPS would have increased by 2 percent compared with last year.
- Core gross margin in the first quarter 2011 included a $131 million benefit ($0.07 per share) from settlement of patent disputes with PDL BioPharma, Inc.
- Core EPS in the first quarter 2011 benefited by $0.39 as a result of agreements reached between the UK and US governments over certain tax matters.
- The third phase of the restructuring programme is being implemented with pace, reflected in the $702 million in restructuring costs taken in the first quarter.
- Reported EPS was down 39 percent at CER to $1.28.
- Decline in Reported EPS is significantly larger than the decline in Core EPS, largely the result of restructuring costs that were $0.37 higher than the first quarter 2011.
- Net cash distributions to shareholders in the first quarter were $3,417 million, through dividend payments of $2,505 million and net share repurchases of $912 million.
- Core EPS target range for the full year lowered to $5.85 to $6.15.
