Pursuant to Rule 12b-23(a) of the Securities Exchange Act of 1934, as amended, the information for the 20072009 Form 20-F of AstraZeneca PLC (the(“AstraZeneca” or the “Company”) set out below is being incorporated by reference from the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated and submitted on March 12, 2008.25, 2010.
References below to major headings include all information under such major headings, including subheadings, unless such reference is part of a reference to a subheading, in which case such reference includes only the information contained under such subheading. Graphs and tabular data are not included unless specifically identified below. Photographs are also not included.
In addition to the information set out below, the information set forth under the headings “Cautionary statement regarding forward-looking statements” on the inside front cover, the information set forth under the headings “Trade marks”, “Inclusion of reported performance, core financial measures and constant exchange rate growth rates”, “Statements of competitive position, growth rates and sales”, “AstraZeneca websites”, “External/third party websites”, “Definitions”, “Use of terms”, “Statements of dates”, “Statements and “Figures” on the inside front cover, the paragraph regarding trade marks of competitive position”, “Statements of growth rates, sales and market data” and “AstraZeneca websites”the AstraZeneca group on the inside back cover, “Cross-reference to Form 20-F” on page 205 and the information“Glossary” on pages 202206 to 204,207, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
Not applicable.
Not applicable.
A. Selected Financial Data
B. Capitalization and Indebtedness
Not applicable.
C. Reason for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
On March 23, 2010, the US healthcare reform bill was signed into law by President Obama. For further discussion as to the proposed US healthcare reforms, please see the information set forth under the heading “—Principal risks and uncertainties” on the pages referenced above of the Company’s “Annual Report and Form 20-F Information 2009”.
ITEM 4 - INFORMATION ON THE COMPANY
A. History and Development of the Company
The information (including tabular data) set forth under the headings “Additional Information—Corporate Information—History and Developmentdevelopment of the Company” on page 200,204, “Directors’ Report—Our Performance—Resources, Skills and Capabilities—SupplyOur resources” on pages 25 and Manufacturing—Supply capability” on page 34,32, “Directors’ Report—Reviews—Financial Review—Financial Position, Including position, including cash flow and liquidity – 2009—Property, plant and equipment” and “—Cash Flowflow” on pages 39 and Liquidity—41, respectively, “Directors’ Report—Reviews—Financial Review—Financial position, including cash flow and liquidity – 2008—Property, plant and equipment”, “—Cash flow” and “—Investments, divestments and capital expenditure” on pages 81 to 83, “Directors’ Report—Financial Review—Acquisition of MedImmune”, on pages 8343, 44 and 84,44, respectively, “Financial Statements—Notes to the Financial Statements—Note 8—7—Property, Plantplant and Equipment”equipment” on page 139 and “—Note 22—Acquisitions of business operations” on pages 131 and 132 and “Financial Statements—Notes154 to the Financial Statements—Note 24—Acquisitions of Business Operations” on pages 145 to 148,156, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
B. Business Overview
The information set forth under the heading “AstraZeneca and our Year in Brief” on page 1, the information (including graphs and tabular data) set forth under the headings “Directors’ Report”“Introduction—Our year in brief” on pages 82 to 76,3, “Directors’ Report—Performance” on pages 12 to 35 and “—Reviews” on pages 50 to 78, “Additional Information—Development Pipeline” on pages 196 to 198”, “Financial Statements—Notes to the Financial Statements—Statements —Note 1—Product revenue information” on page 133, and “—Note 6—Segment Information” on pages 128137 to 129, “Financial Statements—Notes to the Financial Statements—Note 7—Product Sales Information” on page 130138 and “Statements of competitive position”position, growth rates and sales” on the inside backfront cover, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
Restructuring Initiatives
As disclosed in the information set forth under the headings referenced above, the Company plans to implement certain restructuring initiatives in its Research and Development (“R&D”) organization from 2010 as part of its ongoing restructuring programs. These R&D initiatives are designed to achieve material efficiency savings in R&D, which will partially mitigate the increase in R&D investment that would be required as projects in the current pipeline progress to the more resource intensive, later phases of development.
Through its previously announced restructuring programs, the Company had realized annualized benefits of US $1.6 billion by the end of 2009, which are expected to grow to approximately US $2.4 billion by the end of 2010. These programs have involved job reductions of 12,600 positions and, to the end of 2009, have resulted in the incurrence of US $2.5 billion in restructuring costs.
Through the Company’s next phase of restructuring plans (which includes the R&D initiatives, as well as completion of previously announced programs and some additional initiatives in supply chain, selling, general and administration), it expects to realize a further US $1.9 billion in estimated annual benefits by the end of 2014. Of this, the R&D initiatives are expected to result in approximately US $1 billion of annual savings, of which 50% is estimated to be cost savings and the other 50% cost avoidance.
The Company expects to incur restructuring costs of US $2.0 billion for the next restructuring phase, of which US $1 billion is estimated to be the cost of implementation of the R&D initiatives (approximately 60% of which is estimated to be cash costs).
The Company’s next phase of restructuring, when fully implemented, may involve up to an additional 10,400 reductions in job positions. Based on preliminary estimates, approximately 3,500 of these 10,400 positions may be affected by the implementation of the R&D initiatives, although after taking account of positions retained and
relocated to other sites, investment in new skills and capabilities and further expansion of Biologics activities, the net reduction due to these initiatives may fall to approximately 1,800 positions.
Results of Horizon Study Evaluating RECENTIN
On February 27, 2008,March 8, 2010, the Company announced the top-line results of a Phase II/III study evaluating RECENTIN (cediranib) compared with Avastin (bevacizumab) in patients with first-line metastatic colorectal cancer (mCRC). This study, HORIZON III, assessed the efficacy of cediranib compared with bevacizumab, both in combination with chemotherapy. Clinical activity was observed in the cediranib arm of the study and there was no statistically significant difference between treatment arms on the efficacy endpoints examined. However, the efficacy did not meet the pre-specified criteria for the primary endpoint of non-inferiority in progression-free survival.
The spectrum of adverse events associated with cediranib was broadly consistent with previous studies. HORIZON III continues with ongoing collection of overall survival data.
This is the first of two pivotal studies of cediranib in first-line mCRC. The other study, HORIZON II, is assessing the efficacy of cediranib combined with chemotherapy vs. chemotherapy alone, and data are expected in the coming months. Results from both studies will determine the clinical utility, if any, for cediranib in colorectal cancer and decisions regarding regulatory filing. Data from both of these studies will be submitted to a forthcoming medical meeting in the second half of 2010.
Results of a Phase III study with cediranib in treating recurrent glioblastoma are also expected in the first half of 2010. Exploratory evaluations of cediranib in other tumors are also ongoing.
Update on the Company’s Arrangements with Merck
Information on the Company’s arrangements with Merck & Co., Inc. (“Merck”) is set forth under the heading “Financial Statements—Notes to the Financial Statements —Note 25—Arrangements with Merck” on pages 166 to 168 of the Company’s “Annual Report and Form 20-F Information 2009” included as exhibit 15.1 to this Form 20-F dated March 25, 2010, which is incorporated by reference. Capitalized terms used below and not defined have the meanings ascribed to them in Note 25.
On March 1, 2010, the Company announced that, its HORIZON III Phase II/III head-to-head studyunder the provisions of RECENTIN (cediranib, AZD2171)the agreements relating to the restructuring of the joint venture in the US between the Company and Merck (the “Agreements”), the Company has notified Merck that it will exercise the First Option related to the relinquishment of Merck’s rights over the products not covered by the Partial Retirement (which occurred in March 2008), other than Nexium and Prilosec and the right to receive contingent payments in respect of the authorized generic version of felodipine. Products covered by the First Option include Entocort, Atacand and Plendil, and certain products still in development, including Brilinta, AZD3355, AZD6765 and AZD2327. The Company expects to consummate this option in April 2010, which will result in the payment to Merck of the Appraised Value of US $647 million. As previously disclosed, in accordance with chemotherapy versus bevacizumab (Avastin)the Agreements, in 2008 a third party appraisal resulted in a calculation of the Appraised Value, being the net present value of the future contingent payments in respect of all agreement products not covered by the Partial Retirement, other than Prilosec and Nexium. Upon consummation of the First Option, contingent payments will cease on the products covered by the First Option. The Company made contingent payments in respect of the products included in the First Option of US $47 million in 2009. Merck’s continuing contingent payment interest in respect of the authorized generic version of felodipine is the result of Ranbaxy Pharmaceuticals, Inc. becoming the exclusive US distributor of this product. Such contingent payments will continue for the duration of this arrangement.
Under the Agreements a Second Option exists whereby the Company has the option to repurchase Merck’s interests in Prilosec and Nexium in the US. Now that the Company has exercised the First Option, the Second Option is exercisable by the Company in 2012, or in 2017, or if combined annual sales of the two products fall below a minimum amount. The Company’s consummation of the Second Option will end the contingent payments in respect of Prilosec and Nexium and will effectively end the Company’s relationship with, chemotherapyand obligations to, Merck (other than some residual manufacturing arrangements). The exercise price for the Second Option is the net present value of the future annual contingent payments on Prilosec and Nexium as determined at the time of
exercise. The Company made contingent payments in patientsrespect of Prilosec and Nexium amounting to US $726 million in 2009.
Consummation of the First Option will give rise to additional amortization expense, associated with first line metastatic colorectal cancer (CRC)intangible assets related to relief from contingent payments to Merck for products covered by the First Option, in the range of US $10 million to US $45 million per annum charged to Cost of Goods Sold, with the amount of the charge dependent on the launch status of the covered pipeline compounds. A further amortization expense of approximately US $60 million per annum will be progressing directly intocharged to SG&A, related to the ability to exploit these products and to exploit other opportunities in the Cardiovascular and Neuroscience therapy areas that the Company was previously prevented from doing by Merck’s interest in these products. For the purposes of calculating Core financial measures, the Company will exclude only the amortization expense related to therapy area intangibles (i.e., that charged to SG&A) from the Core financial measures calculations.
AstraZeneca and Rigel Pharmaceuticals Sign Worldwide License Agreement for Fostamatinib Disodium
On February 16, 2010, the Company and Rigel Pharmaceuticals, Inc. (“Rigel”) announced an exclusive worldwide license agreement for the global development and commercialization of fostamatinib disodium (R788), Rigel’s late-stage investigational product for rheumatoid arthritis (“RA”) and additional indications. Fostamatinib disodium, which has completed a comprehensive Phase III at 20mg. PatientsII program, is the furthest developed oral Spleen Tyrosine Kinase (“Syk”) inhibitor being evaluated for RA. Inhibiting Syk is thought to block the intracellular signaling of various immune cells implicated in the destruction of bone and cartilage which is characteristic of RA.
Once the agreement is effective, the Company will make an upfront payment to Rigel of US $100 million with up to an additional US $345 million payable if specified development, regulatory and first commercial sale milestones are achieved. Rigel will also continuebe eligible to be recruited at 20mg intoreceive up to an additional US $800 million of specified sales-related milestone payments if the first line CRC HORIZON II studyproduct achieves considerable levels of RECENTIN with chemotherapy versus chemotherapy alone.commercial success, as well as significant stepped double-digit royalties on net sales worldwide. The Company is responsible for all development, regulatory filings, manufacturing and global commercialization activities in all licensed indications under the contract. Effectiveness of the agreement is contingent on expiration or termination of the waiting period under the US Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The HORIZON Independent Data Monitoring Committee (IDMC) conductedCompany will design a planned endglobal phase III program, anticipated to begin in the second half of Phase II (EOP II) review2010, with the goal of efficacyfiling new drug applications with the US Food and tolerabilityDrug Administration (the “FDA”) and the European Medicines Agency (EMEA) in 2013. Fostamatinib disodium is being developed as a next generation oral RA therapy in adults who have failed to respond adequately to a traditional disease modifying anti-rheumatic drug (DMARD), such as methotrexate, where a TNF biologic add-on treatment would currently be considered. Under the terms of the agreement, the Company will also receive exclusive rights to Rigel’s portfolio of oral Syk inhibitors, as well as for additional indications for fostamatinib disodium beyond RA.
FDA Approves New Indication for CRESTOR
On February 9, 2010, the Company announced the approval by the FDA of CRESTOR (rosuvastatin calcium) to reduce the risk of stroke, myocardial infarction (heart attack) and arterial revascularization procedures in individuals without clinically evident coronary heart disease but with an increased risk of cardiovascular disease (“CVD”) based on age (men ≥50 and women ≥60), high-sensitivity C-reactive protein (hsCRP) ≥ 2 mg/L, and the presence of at least one additional CVD risk factor, such as hypertension, low HDL-C, smoking, or a family history of premature coronary heart disease.
The FDA approval was based on data from HORIZON I, HORIZON IIthe JUPITER (Justification for the Use of statins in Primary prevention: an Intervention Trial Evaluating Rosuvastatin) study which evaluated the impact of CRESTOR 20 mg on reducing major cardiovascular (CV) events in a previously unstudied population. In JUPITER, CRESTOR significantly reduced the relative risk of heart attack by 54%, stroke by 48%, and HORIZON III. Data from HORIZON I, in second line colorectal cancer, would notarterial revascularization by itself have contributed to a positive EOP II decision. However, when combined46% compared with a review of data from HORIZON II and III by the IDMC, the IDMC confirmed the HORIZON programme in 1st line CRC could continue and HORIZON II and III had met pre-defined EOP II criteria.placebo.
AstraZeneca also announced that the National Cancer Institute of Canada Clinical Trials Group (NCIC-CTG) has informed AstraZeneca that the BR24 Phase II/III study of RECENTIN at 30mg in first line non-small cell lung cancer (NSCLC) will not continue into Phase III following the planned end of Phase II efficacy and tolerability analysis by the study’s Data Safety Monitoring Committee. Although evidence of clinical activity was seen, there appeared to be an imbalance in toxicity and therefore the study was considered not to have met the pre-defined criteria for automatic continuation into Phase III.
AstraZeneca is working in close collaboration with the NCIC-CTG to understand the BR24 data further.4
In addition to colorectal and non-small cell lung cancer, the RECENTIN development programme includes trials in recurrent glioblastoma and a number of signal search studies in other tumours.
C. Organizational Structure
The information set forth under the headings “Directors’ Report—Corporate GovernanceGovernance—Business Organisation and Managing Risk—Corporate Governance: Governance—Other Matters—matters—Subsidiaries and principal activities” on page 4598 and “Financial Statements—Principal Subsidiaries” on page 177,186, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
D. Property, Plants and Equipment
The information (including tabular data) set forth under the headings “Directors’ Report—Our Resources, Skills and Capabilities—Main Facilities” on page 37, “Directors’ Report—Reviews—Financial Review—Financial Position,position, including Cash Flowcash flow and Liquidity—liquidity – 2009—Property, plant and equipment” and “—Financial position, including cash flow and liquidity – 2008—Property, plant and equipment”, on page 81, “Additional Information—pages 39 and 43, respectively, “Directors’ Report—Corporate Governance—Risk—Industry/Economic Environment Risks—Principal risks and uncertainties—Legal, regulatory and compliance risks—Environmental/occupational health and safety liabilities” on page 196,85, “Financial Statements—Notes to the Financial Statements—Note 27—25—Commitments and contingent liabilities—Environmental costs and liabilities” on pages 160 to 161page 168, “—Note 7—Property, plant and “Financial Statements—Notes to the Financial Statements—Note 8—Property, Plantequipment” on page 139 and Equipment”‘Additional Information—Corporate Information—Property” on pages 131 to 132,page 204, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
ITEM 4A - UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The information (including graphs and tabular data) set forth under the headings “Directors’ Report—Geographical Review—North America—US—Medicare Part D prescription drug benefit”Performance—Business Environment—World pharmaceutical markets” on page 70,13, “Directors’ Report—Our Resources, Skills and Capabilities—Sales and Marketing—Price regulation”Reviews—Financial Review” on pages 3136 to 32, “Directors Report—49, “—Reviews—Geographical Review” on pages 50 to 54, “—Reviews—Therapy Area Review—Sales by Therapy Area” (comprising tabular data only) on page 55, “—Reviews—Therapy Area Review—Our financial performance” (comprising tabular data only) on pages 57, 61, 63, 66, 69 toand 72, “—Reviews—Therapy Area Review—Financial performance 2009/2008” on pages 59, 61, 64, 67, 70 and 74, “Directors’ Report—Financial Review” on pages 77 to 96, “Directors’ Report—Our Performance—Resources, Skills and Capabilities—Research and Development” on pages 2322 to 26,27, “Directors’ Report—Corporate Governance—Risk—Principal risks and uncertainties—Commercialization and business execution risks—Competition, price controls and price reductions” on page 83, “Financial Statements—Notes to the Financial Statements—Note 15—Interest Bearing Loans14—Interest-bearing loans and Borrowings”borrowings” on page 135, “Financial Statements—Notes144, “—Note 15—Financial risk management objectives and policies” on pages 144 to the Financial Statements—146, “—Note 16—Financial Risk Management Objectives and Policies”instruments” on pages 136146 to 137, “Financial Statements—Notes to the Financial Statements—152, “—Note 17—Financial Instruments” on pages 138 to 141, “Financial Statements—Notes to the Financial Statements—Note 21—Reserves—Nature19—Capital and purpose of otherreserves—Other reserves” on page 145153 and “Financial Statements—Notes to the Financial Statements—“—Note 27—25—Commitments and Contingent Liabilities”contingent liabilities” on pages 158166 to 174,184, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
On February 28, 2008,March 23, 2010, the Company announced that,US healthcare reform bill was signed into law by President Obama. For further discussion as to the proposed US healthcare reforms, please see the information set forth under the provisionsheading “—Competition, price controls and price reductions” on page 83 referenced above of the agreements relatingCompany’s “Annual Report and Form 20-F Information 2009”.
AstraZeneca Reaches Agreement with UK Tax Authorities over Transfer Pricing
Subsequent to approval of the Company’s financial statements for the year ended December 31, 2009 on January 28, 2010, on February 23, 2010 AstraZeneca entered into an agreement with HM Revenue & Customs in the UK (“HMRC”) to settle a long-running transfer pricing dispute and certain other outstanding UK tax matters. The material elements of the transfer pricing dispute are set forth under the headings “Directors’ Report—Reviews—Financial Review—Critical accounting policies and estimates—Taxation” on pages 48 and 49 and “Financial Statements—Notes to the restructuringFinancial Statements —Note 25—Tax” on page 184, in each case of the AstraZenecaCompany’s
“Annual Report and Merck & Co. joint ventureForm 20-F Information 2009” included as exhibit 15.1 to this Form 20-F dated March 25, 2010, incorporated by reference.
The settlement will result in the United States, AstraZeneca has been informed that Merck has elected notGroup paying £505 million to exercise the First Option relatedresolve all claims made by HMRC in relation to the relinquishmenttransfer pricing dispute for the 15-year period from 1996 to the end of Merck’s rights over the products not covered by the Partial Retirement, other than Nexium and Prilosec.2010. Of this, £450 million (US $720 million at December 31, 2009 exchange rates) is estimated for accounting purposes as being in respect of periods prior to December 31, 2009. As a result of this decision, contingent payments will continue onsettlement, the products Atacand, Lexxel, Plendiljoint referral of this issue to the UK Tax Court by the Company and Entocort until at least 2010, at which time AstraZeneca may exercise this option at the 2008 Appraised Value of approximately $650 million. The Appraised Value also includes rights to certain products that are stillHMRC, as disclosed in clinical development (AZD6140, AZD3355, AZD0328 and AZD2327). AstraZeneca made contingent payments in respectNote 25 of the productsFinancial Statements in Company’s “Annual Report and Form 20-F Information 2009”, will be withdrawn.
The provision for the transfer pricing dispute is included in the First Optiontotal net transfer pricing provision of $69US $2,327 million disclosed under “Directors’ Report—Reviews—Financial Review—Critical accounting policies and estimates—Taxation” and in 2007.
Other aspectsNote 25 of the scheduled termination arrangements will proceed as follows:
| · | The Partial Retirement of Merck’s limited partnership interest, under which Merck’s rightsFinancial Statements, in each case of the Company’s “Annual Report and Form 20-F Information 2009” on the pages referenced above. The effect of this settlement and developments in other transfer pricing matters is a reduction in the accrual for tax contingencies of US $194 million which has been credited to income in respect of certain products will end. The products covered by the Partial Retirement include Toprol-XL, Pulmicort, Rhinocort and Symbicort. AstraZeneca made contingent payments in respect of these products amounting to $182 million in 2007. AstraZeneca will pay Merck approximately $4.27 billion in respect of the Partial Retirement. |
| · | A true-up of the Advance Payment, which was triggered at the time of the merger between Astra and Zeneca, under which Merck relinquished all rights, including contingent payment on future sales, to potential Astra products with no existing or pending US patents at the time of the merger, amounting to a payment by Merck to AstraZeneca of approximately $0.24 billion, inclusive of interest. |
| · | Settlement of the loan note receivable by AstraZeneca from Merck, in the amount of $1.4 billion inclusive of accrued interest. |
The combined effects of these three items will be a net cash outflow from AstraZeneca to Merck of approximately $2.63 billion upon settlement during the first quarter 2008.of 2010 and a total net transfer pricing provision of US $2,165 million (including the US $720 million resulting from the settlement). The potential for reasonably possible additional losses has also reduced from US $575 million to US $450 million.
Further details on the accounting treatment of these events from the Company’s perspective will be provided in conjunction with the Q1 2008 earnings announcement on April 24, 2008.
ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The information set forth under the headings “Directors’ Report — Report—Corporate Governance—Business Organisation and Corporate Governance—Board of Directors at 31 December 2007”December” and “—Senior Executive Team at 31 December” on pages 1888 and 1989, and “Remunerationpages 90 and 91, respectively, “Directors’ Report—Corporate Governance—Directors’ Remuneration report—Executive Directors’ and Senior Executive Team’s Report—Remuneration and Termsterms of Employment—employment for Executive Directors and other SET members—Variable performance-related remuneration—Policy on external appointments and retention of fees” on page 105,110 and “—Directors’ Remuneration Report—Directors’ emoluments in 2009—Directors’ remuneration-US dollars” (last sentence only) on page 113, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
On February 18, 2008, the Company announced the appointment of Jean-Philippe Courtois to the Board of Directors as a Non-Executive Director with immediate effect. Jean-Philippe Courtois, age 47, is President of Microsoft International and a Senior Vice-President of Microsoft Corporation, having joined Microsoft in 1984. He has previously served as Chief Executive Officer and President of Microsoft Europe, Middle East and Africa.
B. Compensation
The information (including graphs and tabular data) set forth under the headings “Remuneration“Directors’ Report—Corporate Governance—Directors’ Remuneration Report” on pages 98101 to 114,119, “Financial Statements—Notes to the Financial Statements—Note 25—Post-Retirement Benefits”23—Post-retirement benefits” on pages 148156 to 153, “Financial Statements—Notes to the Financial Statements—161, “—Note 26—24—Employee Costscosts and Share Option Plansshare option plans for Employees”employees” on pages 153161 to 158165 and “Financial Statements—Notes to the Financial Statements—“—Note 29—27—Statutory and Other Information—other information—Key management personnel compensation”, on page 175,185, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
C. Board Practices
The information set forth under the headings “Directors’ Report—Corporate Governance—Business Organisation—Organisation and Corporate Governance—Board of Directors at 31 December 2007”December” on pages 18 to 19, “Directors’ Report—Corporate Governance88 and Managing Risk—Corporate Governance: 89, “—Senior Executive Team at 31 December” on pages 90 and 91, “—Operation of the Board of Directors”Board” on pages 92 and 93, —Board Committee membership” (including tabular data) and “—Corporate Governance and Managing Risk—Corporate Governance: Directors” each on page 93, “—Operation of Board Committees” on pages 3894 to 42,96, “—Corporate Governance and Managing Risk—Corporate Governance: Principal corporate governance requirements—UK and US Governance Requirements—The US Sarbanes-Oxley Act of 2002”corporate governance requirements” on pages 96 to 97 and “—The New York Stock Exchange”US corporate governance requirements” on page 97, “Directors’ Report—Corporate Governance—Directors’ Remuneration Report—Variable performance-related remuneration—Service contracts” and “—Non-Executive Directors”, each on page 43, “Business Report—Business Organisation—Chief Executive Officer and Delegation of Authority”110, and “—Senior Executive Team” each on page 20, and “Directors’Directors’ Remuneration Report—Executive Director’s and Senior Executive Team’s Remuneration and Terms of Employment—Audit—Details of Executive Directors’ service contracts at 31 December 2007”2009” and “—Non-Executive Directors’ terms and conditions” (consisting of tabular data), “—Service contracts” and “—Non-Executive Directors”, each on page 105,111, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
Neither John Buchanan nor Bo Angelin, both of whom are current Non-Executive Directors of the Company, will present themselves for re-election at the Company’s Annual General Meeting in 2010 and both will leave the Company’s Board of Directors at the close of the Annual General Meeting.
D. Employees
The information set forth under the headings “Directors’ Report—Our Performance—Resources, Skills and Capabilities—People—CommunicationPeople” (comprising the graphical data, the first paragraph, and the information set forth under “Engagement and dialogue” and “—Employee relations”, each“Managing the impact of business change” only) on page 36pages 33 and 34 and “Financial Statements—Notes to the Financial Statements—Note 26—24—Employee Costscosts and Share Option Plansshare option plans for Employees”employees” (including the tabular data) on pages 153161 to 158,165, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
E. Share Ownership
The information (including graphs and tabular data) set forth under the headings “Financial Statements—Notes to the Financial Statements—Note 26—24—Employee Costscosts and Share Option Plansshare option plans for Employees”employees” on pages 153161 to 158, “Remuneration165, “Directors’ Report—Directors’ Remuneration Report—Variable Remuneration” (including tabular data) on pages 102 to 105, “Remuneration Report—Corporate Governance—Directors’ Remuneration Report—Directors’ Interestsinterests in Shares”shares” on pages 110115 to 112, “Remuneration Report—Directors’ Remuneration Report—Share Options” on page 113, “—Directors’ Remuneration Report—Gains by Directors on Exercise of Share Options” on page 114,119, and “Additional Information—Shareholder Information—Major Shareholdings—Title of class”shareholdings” on pages 200 and 201 and “—Options to Purchase Securitiespurchase securities from Registrantregistrant or Subsidiaries” (consisting of tabular data and related text), bothsubsidiaries” on page 188,201, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The information set forth under the heading “Additional Information—Shareholder Information—Major Shareholdings”shareholdings” on pages 187 to 188200 and 201 of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
B. Related Party Transactions
The information set forth under the headings “Financial Statements—Notes to the Financial Statements—Note 29—27—Statutory and Other Information—Related party transactions” on page 175185 and “Additional Information—Shareholder Information—Related Party Transactions”party transactions” on page 188,201, in each case of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
C. Interests of Experts and Counsel
Not applicable.
ITEM 8 - FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
The information (including graphs and tabular data) set forth under the headings “Directors’ Report—Reviews—Financial Review—Capitalisation and Shareholder Return—shareholder return—Dividend and share re-purchases” on page 84,42, “Directors’ Report—Corporate GovernanceGovernance—Business Organisation and Managing Risk—Corporate Governance: Governance—Other Matters—Returnsmatters—Distributions to shareholders”shareholders and dividends for 2009” on pages 45 to 46,page 98, “Financial Statements” on pages 118124 to 176185 (including the information set forth under the subheading “Notes to the Financial Statements”), “Financial Statements—Principal Subsidiaries” on page 177, “Financial Statements—Group186, “Group Financial Record” on page 184,193, and “Additional Information—Shareholder Information” on pages 186199 to 192,203, in each case of the Company’s “Annual Report and
Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
B. Significant Changes
SincePlease see the publicationinformation above under Item 5 – “Operating and Financial Review and Prospects—AstraZeneca Reaches Agreement with UK Tax Authorities over Transfer Pricing”, for information as to the settlement between the Company and HM Revenue & Customs in the UK, entered into subsequent to the approval of the Company’s Annual Report and Form 20-F Information 2007,financial statements for the Company has become aware of certain developments withyear ended December 31, 2009, in respect to currently pending litigation involving the Company and/or its affiliates, as described in more detail below.
Average Wholesale Price Class Action Litigation
A verdict was reached in February, 2008 in the Montgomery County Circuit Court awarding $40 million in compensatory damages and $175 million in punitive damages for alleged false and misleading reporting of prices for drugs reimbursed by the Alabama State Medicaid Agency in the US.
The Company was among 73 pharmaceutical manufacturers named in a lawsuit filed in 2005 by the Alabama Attorney General, alleging that misleading and false reported prices had caused Alabama Medicaid to reimburse pharmacists too much money on prescriptions filed for Medicaid patients.
The Company considers the lawsuit to be legally and factually unfounded, and believes that serious errors occurred during the proceedings and that the verdict should not be upheld. The Company believes that it has fully complied with the law, government guidelines and contracts that govern Medicaid pricing.
The Company announced on February 22, 2008 that it intends to seek reconsideration or reversal of the verdict through appeal, in which it is confident that it will prevail and so no provision has been made for these awards.
The information set forthtransfer pricing dispute disclosed under the heading “Financial Statements—Notes to the Financial Statements—Note 25—Commitments and Contingent Liabilities—Average Wholesale Price Class Action Litigation” atcontingent liabilities—Tax” on page 171184 of the Company’s “Annual Report and Form 20-F Information 2007” included as exhibit 15.1 to this Form 20-F dated March 12, 2008 is incorporated by reference.2009”.
Patent Litigation (Seroquel)
On March 12, 2008,18, 2010, a New Jersey state court jury returned a verdict in favor of the Company announced that a trial date has been set for patent litigation in the US District Court forfirst Seroquel product liability case to go to trial. For further information as to these product liability cases, please see the District of New Jersey against Teva Pharmaceutical Industries Ltd. (‘Teva’) and Sandoz, Inc. (‘Sandoz’) alleging infringement of AstraZeneca’s patent as a result of Teva’s and Sandoz’s filings of Abbreviated New Drug Applications (‘ANDAs’). The ANDAs seek approval to market generic versions of Seroquel (quetiapine fumarate tablets) in the US before Seroquel’s patent expires in 2011. The US District Court for the District of New Jersey has set a date for trial beginning on 11 August 2008.
The information set forth under the heading “Financial Statements—Notes to the Financial Statements—Note 25—Commitments and Contingent Liabilities—contingent liabilities—Legal proceedings—Seroquel (quetiapine fumarate)—Patent Litigation” atProduct liability” on pages 168177 and 169178 of the Company’s “Annual Report and Form 20-F Information 2007”2009”.
B. Significant Changes
Please see the information above under Item 5 – “Operating and Financial Review and Prospects—AstraZeneca Reaches Agreement with UK Tax Authorities over Transfer Pricing”, for information as to the settlement between the Company and HM Revenue & Customs in the UK, entered into subsequent to the approval of the Company’s financial statements for the year ended December 31, 2009, in respect of the transfer pricing dispute disclosed under the heading “Financial Statements—Notes to the Financial Statements—Note 25—Commitments and contingent liabilities—Tax” on page 184 of the Company’s “Annual Report and Form 20-F Information 2009”.
Other than as disclosed herein, since the date of the annual consolidated financial statements included as exhibit 15.1 toin this Form 20-F dated March 12, 2008 is incorporated by reference.
25, 2010, no significant change has occurred.A. Offer and Listing Details
The information (including graphs and tabular data) set forth under the heading “Additional Information—Shareholder Information” on page 186199 of the Company’s “Annual Report and Form 20-F Information 2007”2009” included as exhibit 15.1 to this Form 20-F dated March 12, 200825, 2010 is incorporated by reference.
In addition, the table below sets forth, for the periods indicated, the reported high and low share prices of AstraZeneca PLC, on the following bases: