20-F: AstraZeneca Highlights Commitment to Science, Sustainability, and Ethical Practices in Annual Report

AstraZeneca's annual report emphasizes its dedication to scientific innovation, sustainability, and ethical conduct, showcasing its financial performance and strategic priorities.

Summary

• AstraZeneca's annual report highlights its commitment to science, sustainability, and ethical practices.
• The company's total revenue increased by 3% to $45.811 billion, driven by product sales, alliance revenue, and collaboration revenue.
• AstraZeneca is focused on delivering at least 15 new medicines between 2023 and 2030 and becoming carbon negative.
• The company is committed to reducing its Scope 1 and 2 GHG emissions by 98% by 2026 and halving its entire value chain footprint by 2030.
• AstraZeneca is investing in nature-based solutions, such as planting 200 million trees by 2030, to benefit planetary and societal health.
• The company is committed to high ethical standards, as demonstrated by its Code of Ethics and compliance programs.
• AstraZeneca is working to improve access to healthcare, particularly in lowand middle-income countries, through various programs and partnerships.
• The company is committed to diversity and inclusion, with 50.1% of senior middle management roles held by women.
• AstraZeneca is pioneering new approaches to clinical trials by integrating data science, digital health technology, and AI.
• The company is committed to transparency and publishes information about its clinical research, including anonymized patient-level data and trial result summaries.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial performance, pipeline progress, and commitment to sustainability and ethical practices. However, it also acknowledges certain challenges and risks, resulting in a high but not perfect sentiment score.

Positives

• AstraZeneca's total revenue increased by 3% to $45.811 billion in 2023.
• The company aims to launch at least 15 new medicines between 2023 and 2030.
• AstraZeneca is committed to reducing Scope 1 and 2 GHG emissions by 98% by 2026.
• The company is investing $400 million in the AZ Forest program to plant 200 million trees by 2030.
• AstraZeneca reached 66.4 million people through its access to healthcare programs.
• The company received an AA rating in the MSCI ESG Ratings assessment.
• AstraZeneca is transitioning to next-generation respiratory inhalers with near-zero climate impact propellant by 2030.
• The company is pioneering new approaches to clinical trials by integrating data science, digital health technology and AI.
• AstraZeneca is committed to transparency and publishes information about its clinical research, including anonymized patient-level data and trial result summaries.
• AstraZeneca is committed to transparency and publishes information about its clinical research, including anonymized patient-level data and trial result summaries.

Negatives

• There was some impact on demand in the second half of the year, mainly with oncology products, following the government anti-corruption campaign announced in July 2023.
• Established Rest of World Product Sales decreased by 14% (8% at CER) to $5,099 million, with sales in Japan down 10% (3% at CER) to $3,705 million.
• The company identified four confirmed external breaches across its Commercial business and 3,758 instances of employee and third-party non-compliance with policies.

Risks

• Failure or delay in the delivery of our pipeline or launch of new medicines.
• Failure to meet regulatory or ethical requirements for medicine development or approval.
• Failures or delays in the quality or execution of the Groups commercial strategies.
• Pricing affordability, access and competitive pressures.
• Failure to maintain supply of compliant, quality medicines.
• Illegal trade in the Groups medicines.
• Reliance on third-party goods and services.
• Failure in information technology or cybersecurity.
• Failure of critical processes.
• Failure to collect and manage data in line with legal and regulatory requirements and strategic objectives.
• Failure to attract, develop, engage and retain a diverse, talented and capable workforce.
• Failure to meet regulatory or ethical expectations on environmental impact, including climate change.
• Safety and efficacy of marketed medicines is questioned.
• Adverse outcome of litigation and/or governmental investigations.
• IP risks related to our products.
• Failure to achieve strategic plans or meet targets or expectations.
• Geopolitical and/or macroeconomic volatility disrupts the operation of our global business.
• Failure in financial control or the occurrence of fraud.
• Unexpected deterioration in the Groups financial position.

Future Outlook

AstraZeneca expects another year of strong growth in 2024, driven by continued adoption of its medicines across geographies.

Management Comments

• I was pleased we were able to report another year of strong financial development and scientific progress, with double-digit earnings growth, and investment in exciting areas of science that lay the foundations for long-term success.
• Looking ahead, we expect another year of strong growth in 2024, driven by continued adoption of our medicines across geographies.
• Our differentiated and growing portfolio of approved medicines, global reach and rich R&D pipeline give us confidence that we will continue to grow faster than the industry over the near and medium term.

Industry Context

The announcement highlights AstraZeneca's performance in the context of a growing pharmaceutical sector, increasing demand for healthcare, and evolving global trends such as geopolitical tensions, economic pressures, and climate change.

Comparison to Industry Standards

• AstraZeneca was the second-largest multinational pharmaceutical company in Emerging Markets, as measured by prescription sales, and the fifth fastest-growing top 10 multinational pharmaceutical company in Emerging Markets in 2023.
• AstraZeneca is the largest pharmaceutical company in the hospital sector in China, as measured by sales value.
• AstraZeneca is the second-largest prescription-based pharmaceutical manufacturer in Japan with a 6.1% value market share of Innovative Branded pharmaceutical sales by value.
• AstraZeneca received a rating of AA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment.
• AstraZeneca was included in the Dow Jones Sustainability Index Top 20% of 2,500 of the worlds largest companies and in Europe Index.
• AstraZeneca was listed in Financial Times European Climate Leaders for the third consecutive year.
• AstraZeneca was included in Forbes Worlds Top Companies for Women.

Management Changes

Corporate Governance

Legal Proceedings

• In July 2023, AstraZeneca entered into a global settlement agreement with Bristol-Myers Squibb Co., E.R. Squibb & Sons, LLC, and Ono Pharmaceutical Co., Ltd. that resolves all patent disputes between the companies relating to Imfinzi and Imjudo.
• In January 2024, the USPTO issued a decision that Seagen's patent is unpatentable, invalidating all claims asserted against Enhertu.
• In December 2023, the arbitration panel made a final award of $46.43m in favour of the Sellers.
• In February 2024, the US Court of Appeals for the Sixth Circuit affirmed the grant of summary judgment in the consolidated federal cases.
• In October 2023, the pending appeal was dismissed.
• In May 2023, the US Court of Appeals for the Second Circuit affirmed the dismissal.

Stakeholder Impact

• The company is committed to operating in a way that recognises the interconnection between business growth, the needs of society and the limitations of our planet.
• The company is committed to building resilient and sustainable health systems and improving equitable access to healthcare.
• The company is committed to providing a safe and healthy working environment for our employees and partners.

Next Steps

• Continue to progress the pipeline and launch new medicines.
• Continue to invest in R&D and business development opportunities.
• Continue to implement the Ambition Zero Carbon strategy and reduce GHG emissions.
• Continue to improve access to healthcare and build health system resilience.
• Continue to foster an inclusive and diverse workforce.

Key Dates

Keywords

AstraZeneca, pharmaceuticals, sustainability, innovation, oncology, CVRM, R&D, pipeline, revenue, ethics, access to healthcare, climate change, clinical trials, rare disease, biopharmaceuticals