Apr 26 2012
First quarter results reflect challenging revenue picture. Pipeline strengthened by Amgen collaboration, the agreement to acquire Ardea Biosciences and positive CHMP opinion for FORXIGA (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.