AstraZeneca's revenue in the fourth quarter was unchanged at CER and on an actual basis as exchange rate movements were neutral to reported revenue. Adjusted for the disposal of Astra Tech, revenue growth was 2 percent. Revenue performance in the quarter was impacted by government price interventions and the loss of around $450 million in revenue to generic competition. US revenues were up 5 percent despite absorbing an estimated 3.2 percent negative impact from the implementation of US healthcare reform measures. In the US, much of the year-on-year impact from recent generic competition has unwound, allowing good growth for Seroquel, Crestor, Symbicort and ONGLYZATM to show through. Revenue in the Rest of World was down 3 percent. Revenue in Western Europe was down 15 percent on a double digit volume decline combined with a mid-single digit decline in realised selling prices. Revenue in Established Rest of World was up 3 percent as good growth in Japan more than offset generic losses in Canada. As expected, revenue in Emerging Markets returned to double digit growth in the quarter.
Core operating profit in the fourth quarter was $2,990 million, up 1 percent. Core gross margin was higher than last year, largely on a positive variance from mix (including a mix uplift resulting from the disposal of Astra Tech). Expenditures in Core SG&A were down 12 percent compared with the fourth quarter 2010, reflecting a more evenly phased quarterly pattern of expenditures this year compared with last and the disposal of Astra Tech. Efficiency gains continue to provide the headroom to invest in support of new product launches and Emerging Markets growth whilst absorbing the excise fee imposed by the enactment of US healthcare reform measures, which amounted to 2 percent of Core SG&A expense in the quarter.
Revenue for the full year of $33,591 million was down 2 percent at CER but was up 1 percent on an actual basis as the result of the favourable impact of exchange rate movements. Revenue performance for the full year was impacted by government pricing interventions and generic competition, which combined to reduce revenue by some $3 billion. Revenue in the US was down 2 percent, as was revenue in markets outside the US. Revenue in Western Europe was down 11 percent, with mid-single digit declines in both volume and price. In Established Rest of World markets, revenue was up 4 percent. Revenue in Emerging Markets was up 10 percent for the full year.
Core operating profit was $13,167 million for the full year, down 4 percent, a decline larger than the decline in revenue, largely due to the higher intangible impairments charged to Core R&D expense in the fourth quarter this year. The increase in R&D expense, together with lower Core other income, combined to more than offset the benefits from lower Core SG&A expense and a higher gross margin. Reported operating profit was up 10 percent, including the Astra Tech gain in the third quarter 2011.
David Brennan, Chief Executive Officer, said: "Disciplined execution of our strategy has delivered a good performance in 2011 in the face of intensified pricing pressure and generic competition. Our strong cash flow supported a significant increase in cash distributions to shareholders and continued investment to drive future growth and value. While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, R&D based strategy, and today we have announced further steps to drive productivity in all areas to improve returns on our investment in innovation."
About AstraZeneca
AstraZeneca is a global, innovation-driven biopharmaceutical business with a primary focus on the discovery, development and commercialisation of prescription medicines for gastrointestinal, cardiovascular, neuroscience, respiratory and inflammation, oncology and infectious disease. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide.