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Total Revenue $24.7bn, +1%:
Growth Platforms: Now 57% of total, +11%
Core R&D investment underpinned by:
Core Gross Margin on Product Sales up by 1% point
Core SG&A cost reduction of 2% and 11% in Q4
Externalisation Revenue ~$1b;; Other Operating Income ~$1.5bn
2016 Guidance (CER):
Total Revenue: A low to mid-single-digit percent decline
Core EPS: A low to mid-single-digit percent decline
Pascal Soriot, Chief Executive Officer, commenting on the results said:
“We delivered a strong pipeline and financial performance in 2015 as we begin the next phase in our strategic journey. The Growth Platforms delivered an 11% rise in Product Sales that, along with the 7% increase in Core EPS, demonstrated the underlying strength of our business. Our culture of innovation continued to drive R&D productivity, with six regulatory approvals in the year.
This momentum will continue in 2016 as we anticipate six regulatory submissions and around ten major data readouts. We strengthened the strategic importance of Oncology, bringing to patients next-generation therapies such as Tagrisso in lung cancer and Lynparza in ovarian cancer, as well as a promising immuno-oncology pipeline. Alongside this organic progress, we also continued to invest in our main therapy areas through key agreements with Acerta Pharma, ZS Pharma, and Takeda.
As we face the transitional period of patent expiry for Crestor in the US, we’re confident that our strong execution on strategy, combined with the benefits of focused investments and new launches, keeps us on track to return to sustainable growth in line with our targets.”
FY 2015 Commercial Highlights
The Growth Platforms grew by 11% in the year, representing 57% of Total Revenue. ‘New Oncology’ is included for the first time, reflecting its long-term importance for the Company’s future growth:
1. Respiratory: +7%, before completion of the acquisition of Takeda’s Respiratory business
2. Brilinta/Brilique: +44%, underpinned by a recently-extended US label and positive CHMP opinion
3. Diabetes: +26%, including +76% in Emerging Markets. Global Farxiga/Forxiga growth of 137%
4. Emerging Markets: +12%, including China and Latin America each growing by 15%
5. Japan: +4%, including +8% in Q4 2015
6. New Oncology: Contributed $119m, comprising Lynparza, Iressa (US) and Tagrisso
Total Revenue increased by 1% to $24,708m in the year, comprising Product Sales of $23,641m (down by 1%) and Externalisation Revenue of $1,067m (up by 140%). Based on actual exchange rates, Total Revenue declined by 7% in the year, reflecting the particular weakness of key trading currencies against the US dollar.
The decline in Product Sales was primarily driven by the US market entry of Nexium generic products from February 2015, as well as full-year adverse impacts from Synagis guideline changes in 2014 and the change in accounting for the US Branded Pharmaceutical Fee, following issuance of final regulations in 2014.