Edgar Filing: ASTRAZENECA PLC

Blueprint

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of July 2017

Commission File Number: 001-11960

AstraZeneca PLC

1 Francis Crick Avenue

Cambridge Biomedical Campus

Cambridge CB2 0AA

United Kingdom

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F __

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes __ No X

If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-_____________

AstraZeneca PLC

27 July 2017 07:00

H1 2017 Results

AstraZeneca performed in line with expectations as the pipeline continued to deliver

Financial Summary

	H1 2017			Q2 2017
	$m	% change		$m	% change
	$m	Actual1	CER2	$m	Actual	CER
Total Revenue	10,456	(11)	(9)	5,051	(10)	(8)
Product Sales	9,783	(11)	(10)	4,940	(10)	(8)
Externalisation Revenue	673	(2)	(1)	111	(17)	(15)

Reported Operating Profit	1,842	37	22	925	n/m	n/m
Core Operating Profit3	3,215	7	3	1,548	10	8

Reported Earnings Per Share (EPS)	$0.80	58	41	$0.38	n/m	n/m
Core EPS3	$1.86	5	1	$0.87	5	6

Financial Highlights

● The residual effects of the Crestor and Seroquel XR loss of exclusivity in the US impacted Product Sales

● Cost discipline continued:

o Reported R&D costs declined by 5% (1% at CER) to $2,802m

o Core R&D costs declined by 7% (4% at CER) to $2,617m

o Reported SG&A costs declined by 17% (15% at CER) to $4,658m

o Core SG&A costs declined by 12% (9% at CER) to $3,728m

● Reported Other Operating Income and Expense increased by 97% (101% at CER) to $839m; Core Other Operating Income and Expense increased by 105% (108% at CER) to $958m

● Reported EPS increased by 58% (41% at CER) to $0.80; Core EPS increased by 5% (1% at CER) to $1.86

● An unchanged first interim dividend of $0.90 per share

● Financial guidance for 2017 reiterated

Commercial Highlights

● The Growth Platforms grew by 2% (3% at CER) and represented 70% of Total Revenue:

● Emerging Markets: 3% growth (6% at CER), underpinned by China sales growth of 3% (8% at CER). Economic conditions in Latin America and Saudi Arabia limited overall Emerging Markets growth

● Respiratory: A decline of 6% (4% at CER), reflecting the competitive environment for Symbicort in the US

● New CVMD4: Growth of 3% (4% at CER). Brilinta growth of 26% (28% at CER) and Farxiga growth 22% (22% at CER), offset by other Diabetes

● Japan: Growth of 7% (6% at CER), with an accelerated performance in Q2 2017 reflecting the strong uptake of Tagrisso

● New Oncology5: Sales of $537m (H1 2016: $251m); particularly encouraging growth of Tagrisso. Lynparza's US performance reflected the current indication

Achieving Scientific Leadership

The table below highlights the development of the late-stage pipeline since the last results announcement:

Regulatory Approvals	Imfinzi (durvalumab) - bladder cancer (US) Faslodex - breast cancer (1st line) (EU, JP) Kyntheum (brodalumab) - psoriasis (EU, received by partner)
Regulatory Submission Acceptances	Lynparza - ovarian cancer (2nd line) (EU, JP) Bevespi - chronic obstructive pulmonary disease (COPD) (EU)
Phase III or Major Data Readouts	Imfinzi - lung cancer (PACIFIC) Bydureon - type-2 diabetes cardiovascular outcomes trial (met primary safety objective, did not meet primary efficacy objective) tralokinumab - severe, uncontrolled asthma (did not meet primary endpoint)

Pascal Soriot, Chief Executive Officer, commenting on the results said:

"Our performance in the first half was in line with expectations as we experience the loss of exclusivity of Crestor and Seroquel XR in the US. We continued to deliver transformative science across the pipeline, particularly in Oncology. Imfinzi was launched in bladder cancer while we published practice-changing data in breast cancer for Lynparza, our first-in-class PARP inhibitor. In lung cancer, we strengthened our unique portfolio focused on both the genetic drivers of disease and immunotherapy. In the first half, we shared positive results for Imfinzi in the PACIFIC trial and reported more encouraging data for Tagrisso in patients with central nervous system metastases.

"I'm excited about our pipeline-driven transformation as we continue to deliver for shareholders on our strategy to return to sustainable long-term growth. In a pivotal year for AstraZeneca, we remain focused on realising the potential of our pipeline, growing our new launch medicines and bringing our strong science to patients."

FY 2017 Guidance: Reiterated

The Company provides guidance on Total Revenue and Core EPS only. All commentary in this section is at CER and is unchanged from the prior results announcement:

Total Revenue	A low to mid single-digit percentage decline
Core EPS	A low to mid teens percentage decline*

*The Core EPS guidance anticipates a normalised effective Core tax rate in FY 2017 of 16-20% (FY 2016: 11%)

Guidance is subject to base-case assumptions of the progression of the pipeline and the extensive level of news flow listed on the following page. Variations in performance between quarters can be expected, with year-on-year comparisons expected to begin to ease in the second half of the year, given the recent annualisation of the impact of the entry of multiple Crestor generic medicines in the US.

The Company presents Core EPS guidance only at CER. It is unable to provide guidance on a Reported/GAAP basis because the Company cannot reliably forecast material elements of the Reported/GAAP result, including the fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the section 'Cautionary Statements Regarding Forward-Looking Statements' at the end of this announcement.

In addition to the unchanged guidance above, the Company also provides unchanged indications in other areas of the Income Statement. The sum of Externalisation Revenue and Other Operating Income and Expense in

FY 2017 is anticipated to be ahead of that in FY 2016. Sustainable and ongoing income6 is expected to increase further as a proportion of total Externalisation Revenue in FY 2017 (FY 2016: 21%). Core R&D costs are expected to be broadly in line with those in FY 2016 and the Company anticipates a further reduction in Core SG&A costs in FY 2017, reflecting the evolving shape of the business. A full explanation is listed in the Operating & Financial Review.

FY 2017 Currency Impact

Based only on average exchange rates in H1 2017 and the Company's published currency sensitivities, the Company continues to expect a low single-digit percentage adverse impact from currency movements on Total Revenue and a minimal impact on Core EPS. Further details on currency sensitivities are contained within the Operating and Financial Review.

Notes

1. All growth rates are shown at actual exchange rates, unless stated otherwise.

2. Constant exchange rates. These are non-GAAP measures because they remove the effects of currency movements from Reported results.

3. Core financial measures. These are non-GAAP measures because, unlike Reported performance, they cannot be derived directly from the information in the Group Financial Statements. See the Operating and Financial Review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.

4. New Cardiovascular and Metabolic Diseases, incorporating Brilinta and Diabetes.

5. New Oncology, comprising Lynparza, Tagrisso, Iressa (US) and Imfinzi.

6. Sustainable and ongoing income is defined as Externalisation Revenue, excluding initial revenue.

7. All commentary in this announcement refers to the performance in H1 2017, unless stated otherwise.

Pipeline: Forthcoming Major News Flow

Innovation is critical to addressing unmet patient needs and is at the heart of the Company's growth strategy. The focus on research and development is designed to yield strong results from the pipeline.

Mid-2017	Imfinzi +/- tremelimumab (treme) - lung cancer (MYSTIC): Data readout
H2 2017	Faslodex - breast cancer (1st line): Regulatory decision (US) Lynparza - ovarian cancer (2nd line): Regulatory decision (US) Lynparza - breast cancer: Regulatory submission Tagrisso - lung cancer (1st line): Data readout, regulatory submission Imfinzi - lung cancer (PACIFIC): Regulatory submission Imfinzi +/- treme - lung cancer (MYSTIC): Regulatory submission Imfinzi +/- treme - lung cancer (ARCTIC): Data readout, regulatory submission acalabrutinib - blood cancer: Regulatory submission (US) (Phase II)* moxetumomab - leukaemia: Data readout Bydureon - autoinjector: Regulatory decision (US), regulatory submission (EU) benralizumab - severe, uncontrolled asthma: Regulatory decision (US) tralokinumab - severe, uncontrolled asthma: Data readout
H1 2018	Lynparza - ovarian cancer (2nd line): Regulatory decision (EU, JP) Lynparza - ovarian cancer (1st line): Data readout, regulatory submission Imfinzi +/- treme - head & neck cancer (KESTREL): Data readout Imfinzi +/- treme - head & neck cancer (EAGLE): Data readout moxetumomab - leukaemia: Regulatory submission selumetinib - thyroid cancer: Data readout, regulatory submission Bevespi - COPD: Regulatory submission (JP) Duaklir - COPD: Regulatory submission (US) benralizumab - severe, uncontrolled asthma: Regulatory decision (EU, JP) tralokinumab - severe, uncontrolled asthma: Regulatory submission PT010 - COPD: Data readout
H2 2018	Imfinzi + treme - lung cancer (NEPTUNE): Data readout, regulatory submission Imfinzi +/- treme - head & neck cancer (KESTREL): Regulatory submission Imfinzi +/- treme - head & neck cancer (EAGLE): Regulatory submission Imfinzi +/- treme - bladder cancer (DANUBE): Data readout, regulatory submission roxadustat - anaemia: Regulatory submission (US) Bevespi - COPD: Regulatory decision (EU) benralizumab - COPD: Data readout, regulatory submission PT010 - COPD: Regulatory submission (JP) anifrolumab - lupus: Data readout

The term 'data readout' in this section refers to Phase III data readouts, unless stated otherwise.

*Potential fast-to-market opportunity ahead of randomised, controlled trials.

Conference Call

A conference call and webcast for investors and analysts, hosted by management, will begin at 13:30 UK time today. Details can be accessed via astrazeneca.com/investors.

Reporting Calendar

The Company intends to publish its year-to-date and third-quarter financial results on 9 November 2017.

About AstraZeneca

AstraZeneca is a global, science-led biopharmaceutical company that focuses on the discovery, development and commercialisation of prescription medicines, primarily for the treatment of diseases in three main therapy areas - Oncology, Cardiovascular & Metabolic Diseases and Respiratory. The Company also is selectively active in the areas of autoimmunity, neuroscience and infection. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information, please visit www.astrazeneca.com and follow us on Twitter @AstraZeneca.

Media Relations
Esra Erkal-Paler	UK/Global	+44 203 749 5638
Rob Skelding	UK/Global	+44 203 749 5821
Karen Birmingham	UK/Global	+44 203 749 5634
Matt Kent	UK/Global	+44 203 749 5906
Jacob Lund	Sweden	+46 8 553 260 20
Michele Meixell	US	+1 302 885 2677

Investor Relations
Thomas Kudsk Larsen		+44 203 749 5712
Craig Marks	Finance, Fixed Income, M&A	+44 7881 615 764
Henry Wheeler	Oncology	+44 203 749 5797
Mitchell Chan	Oncology	+1 240 477 3771
Lindsey Trickett	Cardiovascular & Metabolic Diseases	+1 240 543 7970
Nick Stone	Respiratory	+44 203 749 5716
Christer Gruvris	Autoimmunity, Neuroscience & Infection	+44 203 749 5711
US toll free		+1 866 381 7277

Operating and Financial Review

_______________________________________________________________________________________

All narrative on growth and results in this section is based on actual exchange rates, unless stated otherwise. Financial figures are in US$ millions ($m). The performance shown in this announcement covers the six and three-month periods to 30 June 2017 (the half or the quarter, respectively) compared to the six and three-month periods to 30 June 2016. All commentary in the Operating and Financial Review relates to the half, unless stated otherwise.

Core financial measures are non-GAAP measures because, unlike reported performance, they cannot be derived directly from the Group Condensed Consolidated Financial Statements. These non-GAAP measures are not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Core financial measures are adjusted to exclude certain significant items, such as:

● Amortisation and impairment of intangible assets, including impairment reversals but excluding any charges relating to IT assets

● Charges and provisions related to global restructuring programmes (this will include such charges that relate to the impact of global restructuring programmes on capitalised IT assets)

● Other specified items, principally comprising legal settlements and acquisition-related costs, which include fair value adjustments and the imputed finance charge relating to contingent consideration on business combinations

Details on the nature of these measures are provided on page 64 of the Annual Report and Form 20-F Information 2016. Reference should be made to the reconciliation of Core to Reported financial information included therein and in the Reconciliation of Reported to Core Performance table listed later in this announcement. The Company strongly encourages readers not to rely on any single financial measure, but to review AstraZeneca's financial statements, including the notes thereto, and other publicly-filed Company reports, carefully and in their entirety.

Total Revenue

	H1 2017			Q2 2017
	$m	% change		$m	% change
	$m	Actual	CER	$m	Actual	CER
Total Revenue	10,456	(11)	(9)	5,051	(10)	(8)

Product Sales	9,783	(11)	(10)	4,940	(10)	(8)
Externalisation Revenue	673	(2)	(1)	111	(17)	(15)

Product Sales

The residual effects of the Crestor and Seroquel XR loss of exclusivity in the US impacted Product Sales in the half. Global Product Sales declined by 11% (10% at CER) from $11,034m to $9,783m. Of the $1,251m difference, $891m was represented by the 43% decline (42% at CER) in Crestor sales; $265m was represented by the 62% decline (62% at CER) in Seroquel XR sales.

Emerging Markets sales grew by 3% (6% at CER) to $3,004m, with China sales increasing by 3% (8% at CER) to $1,419m. US sales declined by 28% to $3,013m and were, alongside the effects of the Crestor and Seroquel XR losses of exclusivity, also impacted by the sales of Symbicort, which declined by 19% in the US to $554m. Product Sales in Europe declined by 8% (5% at CER) to $2,272m. Representing 70% of Total Revenue, the Growth Platforms grew by 2% (3% at CER) to $7,295m. For further details, see the following table:

	H1 2017			Q2 2017
	$m	% change		$m	% change
	$m	Actual	CER	$m	Actual	CER
Emerging Markets	3,004	3	6	1,442	-	2
Respiratory	2,280	(6)	(4)	1,099	(10)	(9)
New CVMD	1,670	3	4	872	2	3
Japan	1,067	7	6	617	8	8
New Oncology	537	n/m	n/m	301	97	99

Total*	7,295	2	3	3,723	(1)	1

*Total Product Sales for Growth Platforms are adjusted to remove duplication on a medicine and regional basis.

Externalisation Revenue

Where AstraZeneca retains a significant ongoing interest in medicines or potential new medicines, income arising from externalisation agreements is reported as Externalisation Revenue in the Company's financial statements.

A breakdown of Externalisation Revenue in the half is shown below:

Medicine	Partner	Region	$m
Zoladex	TerSera Therapeutics LLC (TerSera)- initial revenue	US and Canada	250
Siliq (brodalumab)	Valeant Pharmaceuticals International, Inc. (Valeant) - milestone revenue	US	130
MEDI8897	Sanofi Pasteur Inc. (Sanofi Pasteur) - initial revenue	Global	127
Tudorza/Duaklir	Circassia Pharmaceuticals plc (Circassia) - initial revenue	US	64
Other			102

Total			673

The following table illustrates the level of sustainable and ongoing income within the total of Externalisation Revenue. The Company anticipates that sustainable and ongoing income will grow as a proportion of Externalisation Revenue over time.

	H1 2017				Q2 2017
	$m	% of total	% change		$m	% of total	% change
	$m	% of total	Actual	CER	$m	% of total	Actual	CER
Royalties	83	12	30	32	38	34	46	39
Milestones	145	22	(27)	(22)	9	8	(91)	(90)

Total Sustainable and Ongoing Externalisation Revenue	228	34	(13)	(8)	47	42	(64)	(63)

Initial Revenue	445	66	5	4	64	58	n/m	n/m

Total Externalisation Revenue	673	100	(2)	(1)	111	100	(17)	(15)

A number of AstraZeneca medicines were externalised or disposed after H1 2016, adversely impacting the overall year-on-year Product Sales performance in the half:

Medicine	Region	Completion	Product Sales inImpacted Regionsin H1 2016 ($m)
Anaesthetics	Global (excl. US)	September 2016	276
Toprol-XL	US	October 2016	53
Bydureon/Byetta	China	October 2016	6
Zoladex	US and Canada	March 2017	35

Total			370

Examples of sustainable and ongoing income, as part of Externalisation Revenue, are shown below:

Announcement	Medicine	Partner	Region	Externalisation Revenue
March 2017	MEDI8897	Sanofi Pasteur	Global	● Initial €120m milestone ● Up to €495m in sales and development-related milestones
February 2017	Zoladex	TerSera	US and Canada	● Initial $250m milestone ● Up to $70m in sales-related milestones ● Mid-teen percentage royalties on sales
October 2016	Toprol-XL	Aralez Pharmaceuticals Inc.	US	● Initial $175m milestone ● Up to $48m milestone and sales-related revenue ● Mid-teen percentage royalties on sales
July 2016	Tralokinumab - atopic dermatitis	LEO Pharma A/S (LEO Pharma)	Global	● Initial $115m milestone ● Up to $1bn in commercially-related milestones ● Up to mid-teen tiered percentage royalties on sales
June 2016	Anaesthetics	Aspen Global Inc.	Global (excl. US)	● Initial $520m milestone ● Up to $250m in sales-related revenue ● Double-digit percentage trademark royalties on sales
September 2015	Siliq - psoriasis	Valeant	Global, later amended to US	● Initial $100m milestone ● Pre-launch milestone of $130m ● Sales-related royalties up to $175m ● Profit sharing
March 2015	Movantik	Daiichi Sankyo Company, Ltd (Daiichi Sankyo)	US	● Initial $200m milestone ● Up to $625m in sales-related revenue

Product Sales

_____________________________________________________________________________________

The performance of key medicines is shown below, with a geographical split shown in Note 6.

Therapy Area	Medicine	H1 2017				Q2 2017
		$m	% of total*	% change		$m	% of total*	% change
		$m	% of total*	Actual	CER	$m	% of total*	Actual	CER
Oncology	Tagrisso	403	4	n/m	n/m	232	5	n/m	n/m
	Iressa	261	3	(3)	(3)	137	3	1	2
	Lynparza	116	1	18	20	59	1	9	11
	Imfinzi	1	-	n/m	n/m	1	-	n/m	n/m
	Legacy:
	Faslodex	462	5	15	16	248	5	18	18
	Zoladex	363	4	(5)	(4)	178	4	(13)	(12)
	Casodex	110	1	(12)	(10)	54	1	(14)	(11)
	Arimidex	106	1	(11)	(8)	54	1	(13)	(10)
	Others	56	1	17	17	30	1	11	11
	Total Oncology	1,878	19	18	20	993	20	17	19
CVMD**	Brilinta	496	5	26	28	272	6	27	29
	Farxiga	457	5	22	22	250	5	18	20
	Onglyza	304	3	(24)	(24)	150	3	(21)	(21)
	Bydureon	299	3	3	3	146	3	(6)	(6)
	Byetta	89	1	(36)	(35)	43	1	(43)	(43)
	Symlin	25	-	56	56	11	-	-	-
	Legacy:
	Crestor	1,191	12	(43)	(42)	560	11	(40)	(38)
	Seloken/Toprol-XL	367	4	(2)	1	181	4	(4)	(1)
	Atacand	147	2	(9)	(7)	72	1	(19)	(18)
	Others	179	2	(20)	(17)	90	2	(13)	(9)
	Total CVMD	3,554	36	(20)	(19)	1,775	36	(18)	(17)
Respiratory	Symbicort	1,383	14	(11)	(10)	706	14	(12)	(11)
	Pulmicort	563	6	3	7	226	5	(5)	(3)
	Daliresp/Daxas	92	1	30	30	48	1	20	20
	Tudorza/Eklira	71	1	(18)	(16)	34	1	(29)	(27)
	Duaklir	35	-	17	23	16	-	(6)	-
	Bevespi	4	-	n/m	n/m	3	-	n/m	n/m
	Others	132	1	(8)	(6)	66	1	(18)	(15)
	Total Respiratory	2,280	23	(6)	(4)	1,099	22	(10)	(9)
Other	Nexium	1,056	11	3	4	595	12	6	7
	Synagis	300	3	11	11	70	1	n/m	n/m
	Losec/Prilosec	136	1	(6)	(3)	68	1	(3)	-
	Seroquel XR	162	2	(62)	(62)	95	2	(58)	(58)
	Movantik/Moventig	62	1	55	55	32	1	39	39
	FluMist/Fluenz	-	-	n/m	n/m	-	-	n/m	n/m
	Others	355	4	(44)	(44)	213	4	(32)	(31)
	Total Other	2,071	21	(19)	(18)	1,073	22	(13)	(12)
	Total Product Sales	9,783	100	(11)	(10)	4,940	100	(10)	(8)

*Due to rounding, the sum of individual brand percentages may not agree to totals.

**Cardiovascular & Metabolic Diseases

Product Sales Summary

_______________________________________________________________________________________

ONCOLOGY

Product Sales of $1,878m; an increase of 18% (20% at CER). Oncology Product Sales represented 19% of total Product Sales, up from 14% in H1 2016.

Tagrisso

Product Sales of $403m; an increase of 182% (183% at CER).

Regulatory approvals were achieved in a number of new markets in the half, including Brazil, Hong Kong and Taiwan; the Company anticipates additional regulatory approvals and reimbursement decisions in due course. To date, Tagrisso has received regulatory approval in 53 countries.

In China, Tagrisso was approved in March 2017 as the first AstraZeneca medicine under the China FDA's Priority Review pathway. China sales were $23m in the half, with a better-than-expected number of patients initiating treatment. China has a relatively high prevalence of patients with an EGFR T790M mutation.

Sales in the US and Europe were $180m and $76m, respectively. While sales grew by 75% year-on-year in the US, they were stable between the first and second quarters of 2017, reflecting T790M-mutation testing rates in the half. Tagrisso was launched in Japan in H1 2016. Due to high testing rates, sales in Japan increased to $103m in H1 2017 (FY 2016: $82m).

Iressa

Product Sales of $261m; a decline of 3% (3% at CER).

Emerging Markets sales declined by 4% (1% at CER) to $129m. China Product Sales increased by 6% (11% at CER) to $75m, reflecting new pricing following the inclusion on the National Reimbursement Drug List (NRDL) in the half; this was the first update to the NRDL in China in many years. Growth in Emerging Markets was offset partly by competition from branded and generic medicines in South Korea.

Sales in the US increased to $17m (H1 2016: $10m), with sales in Europe declining by 11% (11% at CER) to $54m. Given the significant future potential of Tagrisso, the Company continues to prioritise the ongoing launch of Tagrisso.

Lynparza

Product Sales of $116m; an increase of 18% (20% at CER).

Lynparza was available to patients in 32 countries by the end of the half, with regulatory reviews underway in six additional countries. In the US, where the label for Lynparza is currently in later-line, germline BRCA-mutated advanced ovarian cancer, sales declined by 19% in the half to $50m, reflecting the introduction of competing poly ADP ribose polymerase (PARP)-inhibitor medicines in earlier lines of treatment. Sales in Europe increased by 81% (81% at CER) to $58m, following a number of successful launches.

Imfinzi

Product Sales of $1m; launched in the US on 1 May 2017.

Approved under the US FDA's accelerated-approval pathway and launched commercially on the same day, Imfinzi is currently indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma (mUC) who have disease progression during or following platinum-containing chemotherapy, or whose disease has progressed within 12 months of receiving platinum-containing chemotherapy before (neoadjuvant) or after (adjuvant) surgery. At present, there are five immunotherapy medicines approved for the treatment of bladder cancer in the US.

Legacy: Faslodex

Product Sales of $462m; an increase of 15% (16% at CER).

China sales grew by 22% (33% at CER) to $11m in the half, which was followed by the recent successful negotiation and subsequent inclusion on the NRDL. The performance in China supported overall Faslodex Emerging Markets sales growth of 15% (9% at CER) to $54m. On 11 May 2017, the Company received a label extension for Faslodex in Russia in the 1st-line monotherapy setting, based on data from the FALCON trial. Russia sales grew by 17% in the half (stable at CER) to $7m.

US sales increased by 14% to $241m, mainly reflecting a continued strong uptake of the combination with palbociclib, a medicine approved for the treatment of hormone-receptor-positive (HR+) breast cancer. Europe sales increased by 18% (22% at CER) to $133m. On 26 July 2017, the Company announced that a label extension was approved in the EU for Faslodex in the 1st-line monotherapy setting for HR+, advanced breast cancer in post-menopausal patients, also based on the FALCON trial.

On 5 June 2017, a similar label extension was approved in Japan and sales grew by 14% (14% at CER) in the half to $32m.

Legacy: Zoladex

Product Sales of $363m; a decline of 5% (4% at CER).

Emerging Markets sales growth of 10% (11% at CER) to $168m particularly reflected an increase in China sales of 32% (38% at CER) to $79m. Sales in Europe declined by 16% (11% at CER) to $67m.

Sales in Established Rest Of World (ROW*) declined by 12% (14% at CER) to $114m, driven by lower levels of use. Sales in the US declined by 26% to $14m as the Company committed resources elsewhere. On 31 March 2017, the Company completed an agreement with TerSera for the commercial rights to Zoladex in the US and Canada.

*Established ROW comprises Japan, Canada, Australia and New Zealand

Cardiovascular & Metabolic Diseases

Product Sales of $3,554m; a decline of 20% (19% at CER). CVMD Product Sales represented 36% of total Product Sales, down from 40% in H1 2016.

Brilinta

Product Sales of $496m; an increase of 26% (28% at CER).

Emerging Markets sales of Brilinta in the half grew by 33% (36% at CER) to $121m, with China Product Sales increasing by 42% (49% at CER) to $61m. This was followed by the recent successful negotiation and subsequent inclusion of Brilinta on the NRDL. Growth in Emerging Markets was underpinned by an improvement in market share, beyond geographic expansion and the breadth of hospital listings. Strong sales growth was delivered in many markets outside China, including Russia and Australia.

US sales of Brilinta, at $215m, represented an increase of 35%. The performance reflected updated preferred guidelines from the American College of Cardiology and the American Heart Association in 2016, as well as the narrowing of a competitor's label; Brilinta remained the branded oral anti-platelet market leader in the US. Sales of Brilique in Europe increased by 8% (13% at CER) to $135m, reflecting indication leadership.

Farxiga

Product Sales of $457m; an increase of 22% (22% at CER).

Emerging Markets sales increased by 89% (83% at CER) to $100m, driven by ongoing launches and improved levels of patient access. In March 2017, Forxiga became the first sodium-glucose cotransporter 2 (SGLT2) inhibitor medicine to be approved in China.

US sales declined by 1% to $206m. Sales were subdued by affordability programmes and managed-care access, while market share in the SGLT2 class remained stable. Overall, the SGLT2 class gained market share from other classes of type-2 diabetes medicines, supported by growing evidence around the cardiovascular benefits of the class.

Sales in Europe increased by 18% (24% at CER) to $105m, as the medicine continued to lead the growing class. In Japan, where Ono Pharmaceutical Co., Ltd is a partner and records in-market sales, sales to the partner amounted to $20m.

Onglyza

Product Sales of $304m; a decline of 24% (24% at CER).

The performance reflected adverse pressures on the dipeptidyl peptidase-4 (DPP-4) class and an acceleration of the aforementioned Diabetes market dynamics. Sales in Emerging Markets declined by 21% (21% at CER) to $63m as the Company focused on Farxiga. However, Onglyza entered the NRDL in China in the half. In China, the combination with metformin (Kombiglyze XR) was approved in May 2017, offering additional convenience for patients.

US sales declined by 25% to $159m. Continued competitive pressures in the DPP-4 class led to a lower market share and were only partially offset by reduced levels of utilisation of patient-access programmes. Sales in Europe declined by 29% (27% at CER) to $52m. In Japan, in-market sales are recorded by Kyowa Hakko Kirin Co., Ltd, to whom sales totalled $8m.

Bydureon/Byetta

Product Sales of $388m; a decline of 10% (9% at CER).

Sales of Bydureon and Byetta in Emerging Markets were $5m and $5m, respectively. In 2016, AstraZeneca entered a strategic collaboration with 3SBio Inc. for the rights to commercialise Bydureon and Byetta in China.

Combined US sales for Bydureon and Byetta were $301m, despite intense levels of competition. Bydureon US sales increased by 4% to $243m, representing 81% of total Bydureon/Byetta sales. The decline in US Byetta sales continued in the half; the decline of 35% to $58m reflected the Company's promotional focus on once-weekly Bydureon over twice-daily Byetta. A new Bydureon autoinjector device is under US regulatory review, with a regulatory decision (Prescription Drug User Fee Act, or PDUFA) date in Q4 2017.

Combined sales in Europe declined by 20% (17% at CER) to $60m, reflecting the commercial focus on Forxiga.

Legacy: Crestor

Product Sales of $1,191m; a decline of 43% (42% at CER).

Sales in China grew by 15% (21% at CER) to $179m, while Russia sales grew to $16m. In the US, sales declined by 85% to $153m, reflecting the market entry in July 2016 of multiple Crestor generic medicines. In Europe, sales declined by 17% (15% at CER) to $362m, reflecting the increasing presence of generic medicines. In Japan, where Shionogi Co. Ltd is a partner, but sells its own version of the medicine, Crestor maintained its position as the leading statin, with growth of 4% (3% at CER) to $260m.

RESPIRATORY

Product Sales of $2,280m; a decline of 6% (4% at CER). Respiratory Product Sales represented 23% of total Product Sales, up from 22% in H1 2016.

Symbicort

Product Sales of $1,383m; a decline of 11% (10% at CER).

Symbicort continued to lead the global market by volume within the inhaled corticosteroids (ICS) / Long-Acting Beta Agonist (LABA) class. Emerging Markets sales grew by 2% (4% at CER) to $213m, partly reflecting growth in China of 11% (18% at CER) to $89m and in Latin America (ex-Brazil), where sales grew by 29% (35% at CER) to $22m.

In contrast, US sales declined by 19% to $554m, in line with expectations of continued challenging conditions; these conditions were a result of managed-care access within the class. Competition also remained intense from other classes, such as Long-Acting Muscarinic Antagonist (LAMA)/LABA combination medicines. In Europe, sales declined by 14% (10% at CER) to $399m, reflecting competition from other branded and Symbicort-analogue medicines. In Japan, where Astellas Pharma Co. Ltd assists as a promotional partner, sales increased by 14% (13% at CER) to $100m.

Pulmicort

Product Sales of $563m; an increase of 3% (7% at CER).

Emerging Markets sales increased by 13% (19% at CER) to $396m, reflecting strong underlying volume growth. Emerging Markets represented 70% of total Pulmicort sales. China sales increased by 12% (18% at CER) to $322m and represented 57% of global sales. Use in China continued to increase, due to the prevalence of acute COPD and paediatric asthma. Legacy sales in the US and Europe declined by 26% to $78m and by 11% (9% at CER) to $48m, respectively.

Daliresp/Daxas

Product Sales of $92m; an increase of 30% (30% at CER).

US sales increased by 20% to $79m, driven by greater use of the medicine, the only oral, selective, long-acting inhibitor of the enzyme phosphodiesterase-4 available for COPD. The US represented 86% of total sales.

Tudorza/Eklira

Product Sales of $71m; a decline of 18% (16% at CER).

Sales in the US declined by 29% to $29m, reflecting lower use of inhaled monotherapy medicines for COPD and the Company's commercial focus on the launch of Bevespi Aerosphere. On 17 March 2017, AstraZeneca announced that it had entered a strategic collaboration with Circassia for the development and commercialisation of Tudorza and Duaklir in the US. Tudorza was approved and launched in the US in 2012; Duaklir is expected to be submitted for US regulatory review in 2018. The transaction closed on 12 April 2017. Circassia began its promotion of Tudorza in the US in May 2017, with market share stabilising thereafter; AstraZeneca will continue to book Product Sales in the US. Sales in Europe declined by 7% (5% at CER) to $38m.

Duaklir

Product Sales of $35m; an increase of 17% (23% at CER).

Duaklir, the Company's first inhaled dual bronchodilator, is now available for patients in over 25 countries. The growth in sales in the half was favourably impacted by the performances in Germany and the UK and the recent launch in Italy.

Bevespi

Product Sales of $4m; launched in 2017.

Bevespi Aerosphere was launched commercially in the US during the first quarter of 2017. Prescriptions in the half tracked in line with other LAMA/LABA launches. However, the overall LAMA/LABA class in the US continued to grow more slowly than anticipated. Bevespi is the first product launched on the Aerosphere co-suspension Delivery Technology delivered in a pressurised-metered device.

OTHER

Product Sales of $2,071m; a decline of 19% (18% at CER). Other Product Sales represented 21% of total Product Sales, down from 23% in H1 2016.

Nexium

Product Sales of $1,056m; an increase of 3% (4% at CER).

Emerging Markets sales declined by 6% (2% at CER) to $344m and increased by 15% to $339m in the US. The US performance was flattered by returns adjustments related to the loss of exclusivity in 2015. Sales in Europe declined by 6% (3% at CER) to $120m. In Japan, where Daiichi Sankyo is a partner, sales increased by 14% (13% at CER) to $210m.

Synagis

Product Sales of $300m; an increase of 11% (11% at CER).

US sales increased by 2% to $167m in the half, despite restrictive guidelines from the American Academy of Pediatrics Committee on Infectious Disease, which reduced the number of patients eligible for preventative therapy with Synagis. Product Sales to AbbVie Inc., which is responsible for the commercialisation of Synagis in over 80 countries outside the US, increased by 23% (23% at CER) to $133m, flattered by an element of true-up adjustments.

Seroquel XR

Product Sales of $162m; a decline of 62% (62% at CER).

Sales of Seroquel XR in the US declined by 75% to $77m. Since November 2016, several competitors have launched generic Seroquel XR medicines in the US. Sales of Seroquel XR in Europe declined by 43% (43% at CER) to $43m, also reflecting the impact of generic-medicine competition.

FluMist/Fluenz

As influenza vaccinations occur seasonally, with sales typically occurring in the second half of the year ahead of the annual influenza season, no sales were recorded in the half.

The Company confirmed in 2016 that the Advisory Committee on Immunization Practices of the US Centers for Disease Control and Prevention had provided its interim recommendation not to use FluMist Quadrivalent Live Attenuated Influenza Vaccine (FluMist Quadrivalent) in the US for the 2016-2017 influenza season. Fluenz continues to be recommended for use outside the US.

Regional Product Sales

_______________________________________________________________________________________

		H1 2017				Q2 2017
		$m	% of Total	% change		$m	% of Total	% change
		$m	% of Total	Actual	CER	$m	% of Total	Actual	CER
Emerging Markets*		3,004	31	3	6	1,442	29	-	2
	China	1,419	15	3	8	634	13	4	10
	Ex. China	1,585	16	4	4	808	16	(4)	(3)

US		3,013	31	(28)	(28)	1,528	31	(22)	(22)

Europe		2,272	23	(8)	(5)	1,143	23	(8)	(6)

Established ROW		1,494	15	3	2	827	17	2	2
	Japan	1,067	11	7	6	617	12	8	8
	Canada	238	2	(3)	(4)	113	2	(12)	(9)
	Other Established ROW	189	2	(6)	(8)	97	2	(13)	(13)


Total		9,783	100	(11)	(10)	4,940	100	(10)	(8)

*Emerging Markets comprises all remaining Rest of World markets, including Brazil, China, India, Mexico, Russia and Turkey.

Emerging Markets

Product Sales of $3,004m; an increase of 3% (6% at CER).

China sales grew by 3% (8% at CER) to $1,419m, representing nearly half of total Emerging Markets sales. Onglyza and Iressa were included on the NRDL in China in the first quarter of the year; Brilinta, Faslodex and Seroquel XR were added at the end of the half, achieving full reimbursement on the NRDL. Crestor also had its 2nd-line usage restriction removed and Zoladex was reclassified from the hormone and endocrine classification to oncology, which is expected to continue to support growth.

Sales in Latin America and Saudi Arabia were impacted by ongoing economic conditions, with sales in Latin America (ex-Brazil) declining by 13% (11% at CER) to $219m. Brazil sales increased by 5% (but declined by 12% at CER) to $185m. Russia sales increased by 11% (but declined by 10% at CER) to $115m.

Despite this, the Growth Platforms in Emerging Markets grew by 14% (18% at CER) to $998m. Sales of Symbicort grew by 2% (4% at CER) to $213m, reflecting higher prescription demand. Tagrisso launches in Emerging Markets led to H1 2017 sales of $40m. Tagrisso was launched in China in April 2017; China sales of Tagrisso totalled $23m in the half.

Product Sales of $3,013m; a decline of 28%.

The decline in sales reflected generic-medicine launches that impacted sales of Crestor and Seroquel XR. Unfavourable managed-care pricing and continued competitive intensity impacted sales of Symbicort, which declined by 19% to $554m. However, the New Oncology Growth Platform in the US grew by 42% to $248m, primarily reflecting encouraging Tagrisso sales growth of 75% to $180m in the half (H1 2016: $103m). The New CVMD Growth Platform in the US declined by 1% to $906m, reflecting the competitive environment in Diabetes.

Europe

Product Sales of $2,272m; a decline of 8% (5% at CER).

New Oncology in Europe grew by 135% (140% at CER) to $134m, partly driven by Tagrisso sales of $76m; Tagrisso was launched in Europe in January 2016. Lynparza sales of $58m represented growth of 81% (81% at CER). Forxiga sales growth of 18% (24% at CER) to $105m was accompanied by Brilique growth of 8% (13% at CER) to $135m. This growth was more than offset by declines in other areas, including a 14% decline (10% at CER) in Symbicort sales to $399m. However, Symbicort maintained its position as the number one ICS/LABA medicine, despite competition from branded and analogue medicines.

Established ROW

Product Sales of $1,494m; an increase of 3% (2% at CER).

Japan sales increased by 7% (6% at CER) to $1,067m, with an accelerated performance in Q2 2017 reflecting the launch of Tagrisso and sales of Symbicort, which offset the biennial price reduction, effective from April 2016. Symbicort sales in Japan increased by 14% (13% at CER) to $100m and, following the launch in Japan in May 2016, Tagrisso sales for the half amounted to $103m.

Nexium sales increased by 7% (5% at CER) to $253m and sales of Forxiga increased by 84% (84% at CER) to $46m.

Financial Performance

________________________________________________________________________________________

H1 2017	Reported
	H1 2017	H1 2016	Actual	CER
	$m	$m	% change
Total Revenue	10,456	11,718	(11)	(9)
Product Sales	9,783	11,034	(11)	(10)
Externalisation Revenue	673	684	(2)	(1)

Cost of Sales	(1,844)	(2,066)	(11)	(6)
\
Gross Profit	8,612	9,652	(11)	(10)
Gross Margin*	81.5%	81.5%	-	-1

Distribution Expense	(149)	(167)	(11)	(7)
% Total Revenue	1.4%	1.4%	-	-
R&D Expense	(2,802)	(2,945)	(5)	(1)
% Total Revenue	26.8%	25.1%	-2	-2
SG&A Expense	(4,658)	(5,624)	(17)	(15)
% Total Revenue	44.5%	48.0%	+3	+3
Other Operating Income and Expense	839	425	97	101
% Total Revenue	8.0%	3.6%	+4	+4

Operating Profit	1,842	1,341	37	22
% Total Revenue	17.6%	11.4%	+6	+4
Net Finance Expense	(742)	(636)	17	3
Joint Ventures and Associates	(26)	(12)	113	113
Profit Before Tax	1,074	693	55	38
Taxation	(116)	(99)
Tax Rate	11%	14%
Profit After Tax	958	594	61	43

Earnings Per Share ($)	0.80	0.51	58	41

* Gross margin, as a percentage of Product Sales, reflects Gross Profit derived from Product Sales, divided by Product Sales. In H1 2017 Cost of Sales included $41m of costs relating to externalisation activities (H1 2016: $28m).

Q2 2017	Reported
	Q2 2017	Q2 2016	Actual	CER
	$m	$m	% change
Total Revenue	5,051	5,603	(10)	(8)
Product Sales	4,940	5,469	(10)	(8)
Externalisation Revenue	111	134	(17)	(15)

Cost of Sales	(950)	(1,062)	(11)	(10)
\
Gross Profit	4,101	4,541	(10)	(8)
Gross Margin*	80.8%	80.6%	-	-

Distribution Expense	(72)	(91)	(20)	(17)
% Total Revenue	1.4%	1.6%	-	-
R&D Expense	(1,349)	(1,465)	(8)	(4)
% Total Revenue	26.7%	26.1%	-1	-1
SG&A Expense	(2,358)	(3,052)	(23)	(20)
% Total Revenue	46.7%	54.5%	+8	+7
Other Operating Income and Expense	603	370	63	65
% Total Revenue	11.9%	6.6%	+5	+5

Operating Profit	925	303	n/m	n/m
% Total Revenue	18.3%	5.4%	+13	+12
Net Finance Expense	(420)	(325)	29	(3)
Joint Ventures and Associates	(13)	(8)	55	55
Profit/(Loss) Before Tax	492	(30)	n/m	n/m
Taxation	(46)	(1)
Tax Rate	9%	(3)%
Profit/(Loss) After Tax	446	(31)	n/m	n/m

Earnings Per Share ($)	0.38	0.00	n/m	n/m

* Gross margin, as a percentage of Product Sales, reflects Gross Profit derived from Product Sales, divided by Product Sales. In Q2 2017 Cost of Sales included $3m of costs relating to externalisation activities (Q2 2016: $nil).

H1 2017	Reported	Restructuring	Intangible Asset Amortisation & Impairments	Diabetes Alliance	Other1	Core2	Core
	Reported	Restructuring	Intangible Asset Amortisation & Impairments	Diabetes Alliance	Other1	Core2	Actual	CER
	$m	$m	$m	$m	$m	$m	% change
Gross Profit	8,612	81	58	-	-	8,751	(10)	(9)
Gross Margin3	81.5%					83.0%	+1	-

Distribution Expense	(149)	-	-	-	-	(149)	(11)	(7)
R&D Expense	(2,802)	142	43	-	-	(2,617)	(7)	(4)
SG&A Expense	(4,658)	197	508	133	92	(3,728)	(12)	(9)
Other Operating Income and Expense	839	76	43	-	-	958	105	108

Operating Profit	1,842	496	652	133	92	3,215	7	3
% Total Revenue	17.6%					30.7%	+5	+4

Net Finance Expense	(742)	-	-	164	221	(357)	13	7

Taxation	(116)	(104)	(162)	(107)	(40)	(529)	15	11

Earnings Per Share ($)	0.80	0.31	0.38	0.15	0.22	1.86	5	1

1 Other adjustments include discount unwind on acquisition-related liabilities (see Note 4), provision charges related to certain legal matters (see Note 5) and foreign-exchange gains and losses relating to the classification of certain non-structural intra-group loans, pending the outcome of the current ongoing review.

2 Each of the measures in the Core column in the above table are non-GAAP measures.

3 Gross margin as a percentage of Product Sales reflects gross profit derived from Product Sales, divided by Product Sales. In H1 2017 Cost of Sales included $41m of costs relating to externalisation activities (H1 2016: $28m). Movements in Gross Margin are expressed in percentage points.

Q2 2017	Reported	Restructuring	Intangible Asset Amortisation & Impairments	Diabetes Alliance	Other1	Core2	Core
	Reported	Restructuring	Intangible Asset Amortisation & Impairments	Diabetes Alliance	Other1	Core2	Actual	CER
	$m	$m	$m	$m	$m	$m	% change
Gross Profit	4,101	43	29	-	-	4,173	(9)	(7)
Gross Margin3	80.8%					82.3%	+1	+1

Distribution Expense	(72)	-	-	-	-	(72)	(20)	(17)
R&D Expense	(1,349)	38	32	-	-	(1,279)	(8)	(4)
SG&A Expense	(2,358)	103	256	31	69	(1,899)	(10)	(7)
Other Operating Income and Expense	603	-	22	-	-	625	60	61

Operating Profit	925	184	339	31	69	1,548	10	8
% Total Revenue	18.3%					30.6%	+6	+5

Net Finance Expense	(420)	-	-	82	155	(183)	15	(1)

Taxation	(46)	(38)	(84)	(70)	(33)	(271)	28	24

Earnings Per Share ($)	0.38	0.12	0.19	0.03	0.15	0.87	5	6

2 Each of the measures in the Core column in the above table are non-GAAP measures.

3 Gross margin as a percentage of Product Sales reflects gross profit derived from Product Sales, divided by Product Sales. In Q2 2017 Cost of Sales included $3m of costs relating to externalisation activities (Q2 2016: $nil). Movements in Gross Margin are expressed in percentage points.

Profit and Loss Commentary for the Half

Gross Profit

Reported Gross Profit declined by 11% (10% at CER) to $8,612m, partly reflecting the residual effects of the Crestor and Seroquel XR loss of exclusivity in the US on Product Sales. Excluding the impact of Externalisation Revenue, the Reported Gross Profit Margin was stable (down one percentage point at CER) at 81.5%.

Core Gross Profit declined by 10% (9% at CER) to $8,751m and, excluding the impact of Externalisation Revenue, the Core Gross Profit margin increased by one percentage point to 83.0% (stable at CER), reflecting the mix of sales, the growing influence of specialty-care medicines, the impact of losses of exclusivity and the resilience of some legacy medicines in established markets.

Operating Expenses: R&D

Reported R&D costs declined by 5% (1% at CER) to $2,802m, with the Company continuing to focus on resource prioritisation and cost discipline. Core R&D costs declined by 7% (4% at CER) to $2,617m. Core R&D costs over the full year are expected to be broadly in line with those in FY 2016.

Operating Expenses: SG&A

Reported SG&A costs declined by 17% (15% at CER) to $4,658m, reflecting the evolving shape of the business. Core SG&A costs declined by 12% (9% at CER) to $3,728m. Core SG&A costs over the full year are not expected to decline by the extent seen in the first half.

The Company has continued to consolidate its operations used by multiple parts of the business. It is committed to driving simplification and standardisation through centralisation in shared services of back-office and some middle-office activities that are currently performed in various enabling units, including Finance, HR, Procurement and IT. Instead of operating numerous shared-service centres and managing outsourced vendors independently, the recently-launched Global Business Services organisation will, over time, provide integration of governance, locations and business practices to all shared services and outsourcing activities across AstraZeneca.

Other Operating Income and Expense

Where AstraZeneca does not retain a significant ongoing interest in medicines or potential new medicines, income from disposal transactions is reported within Other Operating Income and Expense in the Company's financial statements.

Reported Other Operating Income and Expense increased by 97% (101% at CER) to $839m and included:

● $291m resulting from the sale of rights to Seloken in Europe to Recordati S.p.A (Recordati)

● $165m resulting from the sale of the global rights to Zomig outside Japan to the Grünenthal Group (Grünenthal)

● $161m of gains recognised on the sale of short-term investments

● A milestone receipt of $50m in relation to the disposal of Zavicefta (ceftazidime and avibactam) to Pfizer Inc.

● Income from the monetisation of an asset related to a previously-partnered legacy medicine

Core Other Operating Income and Expense increased by 105% (108% at CER) to $958m, with the difference to Reported Other Operating Income and Expense primarily driven by a restructuring charge taken against land and buildings.

Operating Profit

Reported Operating Profit increased by 37% (22% at CER) to $1,842m. The Reported Operating Margin increased by six percentage points (four percentage points at CER) at 18% of Total Revenue. Core Operating Profit increased by 7% (3% at CER) to $3,215m. The Core Operating Margin increased by five percentage points (four percentage points at CER) to 31% of Total Revenue.

Net Finance Expense

Reported Net Finance Expense increased by 17% to $742m, primarily reflecting an adverse foreign-exchange impact caused by the strengthening of sterling and euro against the dollar. Reported Net Finance Expense increased by 3% at CER, reflecting the impact of a bond issuance in the half and an increase in Net Debt that was driven by the majority investment in Acerta Pharma in February 2016. Excluding the discount unwind on acquisition-related liabilities and the adverse foreign-exchange impact, Core Net Finance Expense increased by 13% (7% at CER) to $357m.

Taxation

The Reported and Core tax rates for the half were 11% and 19% respectively. The Reported tax rate was lower than the 2017 UK Corporation Tax Rate of 19.25%, mainly due to the impact of tax settlements and non-taxable fair value adjustments relating to contingent consideration on business combinations. The Core tax rate was lower than the aforementioned 2017 UK Corporation Tax Rate, mainly due to the impact of tax settlements.

The net cash tax paid for the half was $336m, representing 31% of Reported Profit Before Tax and 12% of Core Profit Before Tax. Reduced net tax cash payments primarily reflected refunds following a previously-disclosed agreement of inter-government transfer pricing agreements. The Reported and Core tax rates for the comparative period were 14% and 17%, respectively.

Earnings Per Share (EPS)

Reported EPS of $0.80 represented an increase of 58% (41% at CER). Core EPS grew by 5% (1% at CER) to $1.86. The Core performance was driven by continued progress on cost control and an increase in Other Operating Income and Expense, partly offset by a decline in Total Revenue.

Dividends

The Board has recommended an unchanged first interim dividend of $0.90 (68.9 pence, 7.40 SEK) per Ordinary Share.

Cash Flow and Balance Sheet

Cash Flow

The Company generated a net cash inflow from operating activities of $338m in the half, compared with $1,374m in the comparative period. The reduction reflected a lower profit, after deductions of gains on disposal of intangible assets, as well as a higher increase in working capital and short-term provisions due to a significant increase in the level of debt factoring in the comparative period.

Net cash outflows from investing activities were $351m in the half compared with $3,948m in the comparative period. The prior-period outflow primarily reflected the upfront payment as part of the majority investment in Acerta Pharma.

The cash payment of contingent consideration in respect of the Bristol-Myers Squibb Company share of the global Diabetes alliance amounted to $185m in the half, comprising a $100m milestone payment in respect of Qtern and royalty payments.

Net cash inflows from financing activities were $146m in the half compared to outflows of $6m in the comparative period.

Capital Expenditure

Capital expenditure amounted to $549m in the half, which included investment in the new global headquarters in Cambridge, UK, as well as strategic manufacturing capacity in the UK, the US, Sweden and China.

Debt and Capital Structure

At 30 June 2017, outstanding gross debt (interest-bearing loans and borrowings) was $19,725m (30 June 2016: $17,579m). Of the gross debt outstanding at 30 June 2017, $2,933m was due within one year (30 June 2016: $1,060m). The Company's net debt position at 30 June 2017 was $13,012m (30 June 2016: $12,734m).

On 5 June 2017, the Company announced that it had priced a global bond offering totalling $2bn; the offering closed on 12 June 2017. The intended use of the net proceeds of the issue was for general corporate purposes, including the potential refinancing of existing indebtedness. The transaction consisted of the following three tranches:

● $1bn of five-year fixed-rate notes with a coupon of 2.375%

● $0.75bn of 10-year fixed-rate notes with a coupon of 3.125%

● $0.25bn of five-year floating-rate notes

Capital Allocation

The Board's aim is to continue to strike a balance between the interests of the business, financial creditors and the Company's shareholders. After providing for investment in the business, supporting the progressive dividend policy and maintaining a strong, investment-grade credit rating, the Board will keep under review potential investment in immediately earnings-accretive, value-enhancing opportunities.

Foreign-Exchange Rates

Sensitivity

The Company provides the following currency sensitivity information:

Average Exchange Rates Versus USD

Impact Of 5% Strengthening In Exchange Rate Versus USD ($m)1

Currency

Primary Relevance

FY 2016

H1 20172

% change

Total Revenue

Core Operating Profit

EUR

Product Sales

0.90

0.92

-2%

+179

+123

JPY

Product Sales

108.84

112.43

-3%

+104

+71

CNY

Product Sales

6.65

6.87

-3%

+131

+74

SEK

Costs

8.56

8.86

-3%

-98

GBP

Costs

0.74

0.79

-7%

+29

-131

Other3

+194

+124

1Based on 2016 results at 2016 actual exchange rates.

2Based on average daily spot rates between 1 January and 30 June 2017.

3Other important currencies include AUD, BRL, CAD, KRW and RUB.

Foreign-Exchange Hedging

AstraZeneca monitors the impact of adverse currency movements on a portfolio basis, recognising correlation effects. The Company may hedge to protect against adverse impacts on cash flow over the short to medium term. As at 30 June 2017, AstraZeneca had hedged 96% of forecast short-term currency exposure that arises between the booking and settlement dates on Product Sales and non-local currency purchases.

Related-Party Transactions

There have been no significant related-party transactions in the period.

Principal Risks and Uncertainties

It is not anticipated that the nature of the principal risks and uncertainties that affect the business, and which are set out on pages 20 to 21 of the Annual Report and Form 20-F Information 2016, will change in respect of the second six months of the financial year. Further information on our key risk management and assurance processes are set out on pages 214 to 225 of the Annual Report and Form 20-F Information 2016. In summary, the principal risks and uncertainties listed in the Annual Report and 20-F Information 2016 are:

a) Medicine Pipeline and Intellectual Property Risks

Failure or delay in delivery of pipeline and new medicines; failure to meet quality, regulatory and ethical medicine approval and disclosure requirements; failure to secure and protect product intellectual property.

b) Commercialisation Risks

Competitive pressures including externally driven demand, pricing and access; failures or delays in quality execution of commercial strategies.

c) Supply Chain and Business-Execution Risks

Failure to maintain a supply of compliant, quality product; failure of information technology and data security and privacy; delivery of gains from productivity initiatives; failure to attract, develop, engage and retain talented and capable employees at all levels.

d) Legal, Regulatory and Compliance Risks

Safety and efficacy of marketed products is questioned; adverse outcome of defence of product, pricing and practices litigation; failure to meet regulatory and ethical expectations on commercial practices, including bribery and corruption, and scientific exchanges.

e) Economic and Financial Risks

Failure to achieve strategic plans and meet targets and expectations.

Corporate and Business Development Update

________________________________________________________________________________________

The highlights of the Company's corporate and business development activities since the prior results announcement are shown below:

a) Agreement for Seloken In Europe

On 22 May 2017, AstraZeneca announced that it had entered into an agreement with Recordati for the commercial rights to Seloken/Seloken ZOK (metoprolol tartrate and metoprolol succinate respectively) and associated Logimax fixed-dose combination (metoprolol succinate and felodipine) treatments in Europe. Metoprolol succinate is a beta-blocker for the control of hypertension, angina and heart failure. AstraZeneca will continue to commercialise the medicines in all other markets, where it holds the rights.

Recordati paid AstraZeneca $291m upon completion of the agreement in June 2017 (completion pending in Romania). AstraZeneca will also receive sales-related income through tiered royalties, initially at a double-digit percentage of sales. AstraZeneca manufactures and supplies the medicines to Recordati under a supply agreement. Based on the level of ongoing interest AstraZeneca will retain in the brands in Europe, the $291m upfront and tiered royalties are reported under Other Operating Income and Expense in the Company's financial statements.

b) Agreement with Grünenthal to divest rights to migraine treatment Zomig

On 7 June 2017, AstraZeneca announced that it had entered an agreement with Grünenthal for the global rights to Zomig (zolmitriptan) outside Japan. Zomig is indicated for the acute treatment of migraines and cluster headaches, an area of medicine outside AstraZeneca's strategic focus.

Grünenthal paid AstraZeneca consideration of $200m in June 2017, of which $165m was reported within Other Operating Income and Expense in the first half, with the remainder being deferred. AstraZeneca will also receive up to an additional $102m in future milestone payments. Grünenthal acquired the rights to Zomig in all markets outside Japan, including the US, where the rights were previously licensed to Impax Pharmaceuticals (Impax). Impax continues to market Zomig in the US. AstraZeneca continues to manufacture and supply the medicine to Grünenthal during a transition period.

c) Collaboration to develop and commercialise anticalin-based inhaled treatments for Respiratory Diseases

On 3 May 2017, AstraZeneca announced a strategic collaboration in respiratory diseases with Pieris Pharmaceuticals, Inc. (Pieris) to develop novel inhaled drugs that leverage Pieris's Anticalin platform. Anticalin molecules are engineered proteins which can mimic antibodies by binding to sites either on other proteins or on small molecules. They are smaller than monoclonal antibodies, offering the potential of direct delivery to the lung.

AstraZeneca will make upfront and near-term milestone payments to Pieris in the amount of $57.5m, anticipated in Q3 2017. Pieris has the potential to receive development-dependent milestones and eventual commercial payments for all products not exceeding $2.1bn, as well as tiered royalties on the sales of any potential products commercialised by AstraZeneca.

d) Senior Executive Team (SET) changes

On 28 April 2017, a number of changes to the SET took effect. Iskra Reic was appointed Executive Vice President (EVP), Europe, with responsibility for sales, marketing and commercial operations across AstraZeneca's businesses in 30 European countries. Jamie Freedman was appointed EVP & Head, Oncology Business Unit, with responsibility for sales, marketing, and medical affairs and diagnostics activities for Oncology medicines globally, as well as Oncology commercial operations in the US, UK, Spain, Italy, Germany and France. Both became members of the SET, reporting to the Chief Executive Officer. In addition, having joined the SET in December 2016, the responsibilities of Leon Wang, EVP, International were expanded to add Latin America & Brazil, Russia & Eurasia, and the Middle East & Africa to his previous Asia-Pacific territories. He continues to report to the Chief Executive Officer.

Research and Development Update

________________________________________________________________________________________

A comprehensive table with AstraZeneca's pipeline of medicines in human trials can be found later in this document.

Since the results announcement on 27 April 2017 (the period):

Regulatory Approvals	4	- Imfinzi - bladder cancer (US) - Faslodex - breast cancer (1st line) (EU, JP) - Kyntheum (broadalumab) - psoriasis (EU) (received by partner)
Regulatory Submission Acceptances	2	- Lynparza - ovarian cancer (2nd line) (EU, JP) - Bevespi - COPD (EU)
Phase III or Major Data Readouts	3	- Imfinzi - lung cancer (PACIFIC) - Bydureon - type-2 diabetes CVOT (met primary safety objective, did not meet primary efficacy objective) - tralokinumab - severe, uncontrolled asthma (did not meet primary endpoint)
New Molecular Entities(NMEs) In Phase III Trials Or Under Regulatory Review	12	Oncology - Imfinzi + treme - multiple cancers - acalabrutinib - blood cancers - moxetumomab pasudotox - leukaemia - selumetinib - thyroid cancer - savolitinib - kidney cancer Cardiovascular & Metabolic Diseases - ZS-9 (sodium zirconium cyclosilicate)* - hyperkalaemia - roxadustat* - anaemia Respiratory - benralizumab - severe, uncontrolled asthma*, COPD - tralokinumab - severe, uncontrolled asthma - PT010 - COPD Other - anifrolumab - lupus - lanabecestat - Alzheimer's disease
Projects in Clinical Pipeline	129

*Under Regulatory Review

The table shown as of 27 July 2017

ONCOLOGY

AstraZeneca has a deep-rooted heritage in Oncology and offers a growing line of new medicines that has the potential to transform patients' lives and the Company's future. At least six Oncology medicines are expected to be launched between 2014 and 2020, of which Lynparza, Tagrisso and Imfinzi are already benefitting patients. An extensive pipeline of small-molecule and biologic medicines is in development and the Company is committed to advancing New Oncology, primarily focused on lung, ovarian, breast and blood cancers, as one of AstraZeneca's five Growth Platforms.

At the recent 2017 American Society of Clinical Oncology (ASCO) annual meeting, AstraZeneca presented new data on its expanding line of cancer medicines through 100 Company-sponsored and supported abstracts, including five 'Best of ASCO' presentations, 11 oral presentations and eight poster discussions. Content highlighted new data on approved and potential new medicines from the Company's pipeline across multiple scientific platforms and tumour types.

a) Lynparza (multiple cancers)

During the period, the Company received regulatory submission acceptance in the EU for Lynparza's SOLO-2 trial in women with germline BRCA-mutated, platinum-sensitive relapsed ovarian cancer. Among other objectives, this regulatory submission aimed at bringing the new Lynparza tablets to patients in the EU. Furthermore, the Company made a regulatory submission in Japan for the use of Lynparza in 2nd-line, BRCA-mutated advanced or metastatic ovarian cancer. This followed an Orphan Drug Designation received during the first quarter of 2017. Presently, there are no approved medicines in Japan to treat BRCA-mutated ovarian cancer.

At the 2017 ASCO annual meeting, the Company presented positive results from the Phase III OlympiAD trial of patients with HER2-negative, metastatic breast cancer, harbouring germline BRCA1 or BRCA2 mutations. Results showed a statistically-significant and clinically-meaningful improvement in progression-free survival (PFS) for patients treated with Lynparza tablets (300mg twice daily), compared to treatment with physician's choice of standard-of-care (SoC) chemotherapy. The trial met its primary endpoint, showing that patients treated with Lynparza had a 42% reduction in the risk of disease worsening or death (hazard ratio, HR=0.58; 95% CI 0.43-0.80) and a median PFS of 7.0 vs 4.2 months compared to those who received chemotherapy (capecitabine, vinorelbine, eribulin). The primary endpoint was assessed by blinded independent central review (BICR). The OlympiAD trial was the first positive outcome in a Phase III trial to evaluate the safety and efficacy of a PARP inhibitor beyond ovarian cancer.

b) Tagrisso (lung cancer)

While the original results of the AURA3 trial were presented in 2016, a follow-on analysis at the 2017 ASCO meeting showed that Tagrisso also demonstrated efficacy in those patients with disease progression to the central nervous system (CNS). The data were consistent with earlier clinical and pre-clinical findings showing the potential of Tagrisso to penetrate the blood-brain barrier. In the newly-shared results of AURA3, Tagrisso 80mg once-daily tablets demonstrated that, in patients with CNS metastases, there was no significant imbalance in the hazard ratio (HR=0.32 or 68% reduction in the risk of disease worsening or death) compared to patients in AURA3 overall (HR=0.30). In the AURA3 trial, the adverse-event profiles for Tagrisso and platinum-based doublet chemotherapy were consistent with previous trials.

c) Faslodex (breast cancer)

On 26 July 2017, the Company announced approval in the EU for the expansion of Faslodex use into 1st-line treatment of hormone-receptor positive, metastatic breast cancer. The approval was based on data from the Phase III FALCON trial, where Faslodex 500mg demonstrated superiority over anastrozole 1mg in the treatment of locally-advanced or metastatic breast cancer in post-menopausal patients who had not received prior hormonal-based medicine for HR+ breast cancer. The FALCON trial data showed that Faslodex significantly reduced the risk of disease worsening or death by 20% (HR=0.80). This new indication for Faslodex was approved in Japan and Russia during the period and is under review in the US.

d) Savolitinib (kidney cancer)

AstraZeneca, and its partner Hutchison China MediTech Limited, announced in June 2017 that they had initiated a global, pivotal Phase III, open-label, randomised multi-centre registrational trial of the highly-selective inhibitor of c-MET receptor tyrosine kinase, savolitinib, in c-MET-driven papillary renal cell carcinoma (PRCC). This is the first pivotal trial ever conducted in c-MET-driven PRCC and the first molecularly-selected trial in renal cell carcinoma (RCC), a form of kidney cancer. The SAVOIR trial is designed to support registration of this potential medicine in the US and EU and is supported by the results of the Phase II trial.

e) Imfinzi (multiple cancers)

The Company continues to advance multiple monotherapy trials of Imfinzi and combination trials of Imfinzi with tremelimumab and other potential new medicines. The combination of Imfinzi and tremelimumab is being assessed in Phase III trials in bladder cancer, non-small cell lung cancer NSCLC, small cell lung cancer (SCLC), head and neck squamous cell carcinoma (HNSCC) and in Phase I/II trials in hepatocellular carcinoma, gastric cancer, pancreatic cancer and haematological malignancies.

Bladder Cancer

On 1 May 2017, Imfinzi received accelerated approval in the US for the treatment of patients with locally-advanced or mUC who have disease progression during or following platinum-containing chemotherapy, or whose disease has progressed within 12 months of receiving platinum-containing chemotherapy before (neoadjuvant) or after (adjuvant) surgery. Approval was granted in an 'all-comer' population based on both tumour response rate and duration of response. Data from Study 1108, which supported this approval, was shared at the recent 2017 ASCO annual meeting and showed a 17.0% objective response rate (ORR) by BICR in all-comers and a 26.3% ORR in patients with PDL1-positive tumours.

The STRONG trial, a Phase IIIb, modular, five-year safety, open-label trial commenced dosing in the period and will evaluate the safety of the fixed dosing of Imfinzi + tremelimumab combination therapy or Imfinzi monotherapy in patients with advanced solid tumours (via tumour specific modules). The first tumour module dosed was bladder cancer.

Ongoing key trials include:

Name	Phase	Line of Treatment	Population	Design	Timelines	Status
DANUBE	III	1st line	Cisplatin chemo- therapy- eligible/ ineligible bladder cancer	Imfinzi, Imfinzi + treme vs SoC chemotherapy	FPCD1 Q4 2015 LPCD2 Q1 20173 First data anticipated H2 2018	Recruitment completed

1First Patient Commenced Dosing

2Last Patient Commenced Dosing

3Global trial, excluding China

Lung Cancer

During the period, the Company maintained strong momentum in its immunotherapy efforts in lung cancer, with an early data readout from the PACIFIC trial. This is a Phase III, randomised, double-blinded, placebo-controlled multi-centre trial of Imfinzi as sequential treatment in patients with locally-advanced, unresectable (Stage III) NSCLC, who had not progressed following standard platinum-based chemotherapy concurrent with radiation therapy. A planned interim analysis focused on PFS, conducted by an Independent Data Monitoring Committee, concluded that the trial had already met a primary endpoint by showing statistically-significant and clinically-meaningful reduction in the risk of disease worsening or death (PFS), as assessed by a blinded and independent review panel, in patients receiving Imfinzi compared to placebo. The results also demonstrated a favourable benefit/risk profile. The trial will continue in order to evaluate overall survival (OS), the other primary endpoint, which will be assessed in due course as specified by the protocol. AstraZeneca plans to submit the initial results from the PACIFIC trial for presentation at a forthcoming medical meeting.

Additional progress was made in the treatment of lung cancer when the last patient commenced dosing in the NEPTUNE trial, as well as first patient commencing dosing in the POSEIDON trial. Ongoing key trials are included in the following table:

Name	Phase	Line of Treatment	Population	Design	Timelines	Status
Monotherapy
ADJUVANT*	III	N/A	Stage Ib-IIIa NSCLC	Imfinzi vs placebo	FPCD Q1 2015 First data anticipated 2020	Recruitment ongoing
PACIFIC	III	N/A	Stage III unresectable NSCLC	Imfinzi vs placebo	FPCD Q2 2014 LPCD Q2 2016 Final OS data anticipated 2019	Recruitment completed PFS data positive Q2 2017
PEARL	III	1st line	NSCLC (Asia)	Imfinzi vs SoC chemotherapy	FPCD Q1 2017 First data anticipated 2020	Recruitment ongoing
Combination therapy
MYSTIC	III	1st line	NSCLC	Imfinzi, Imfinzi + treme vs SoC chemotherapy	FPCD Q3 2015 LPCD Q3 2016 First data anticipated mid-2017	Recruitment completed
NEPTUNE	III	1st line	NSCLC	Imfinzi + treme vs SoC chemotherapy	FPCD Q4 2015 LPCD Q2 2017 First data anticipated H2 2018	Recruitment completed
POSEIDON	III	1st line	NSCLC	Imfinzi + SoC, Imfinzi + treme + SoC vs SoC chemotherapy	FPCD Q2 2017 First data anticipated 2019	Recruitment ongoing
ARCTIC	III	3rd line	PDL1- low/neg. NSCLC	Imfinzi, tremelimumab, Imfinzi + treme vs SoC chemotherapy	FPCD Q2 2015 LPCD Q3 2016 First data anticipated H2 2017	Recruitment completed
CASPIAN	III	1st line	Small-cell lung cancer (SCLC)	Imfinzi + SoC, Imfinzi + treme + SoC vs SoC chemotherapy	FPCD Q1 2017 First data anticipated 2020	Recruitment ongoing

*Conducted by the National Cancer Institute of Canada

Head and Neck Cancer

During the period, there was no update from the ongoing programme. Ongoing key trials include:

Name	Phase	Line of Treatment	Population	Design	Timelines	Status
Combination therapy
KESTREL	III	1st line	HNSCC	Imfinzi, Imfinzi + treme vs SoC	FPCD Q4 2015 LPCD Q1 2017 First data anticipated H1 2018	Recruitment completed
EAGLE	III	2nd line	HNSCC	Imfinzi, Imfinzi + treme vs SoC	FPCD Q4 2015 First data anticipated H1 2018	Recruitment ongoing

CARDIOVASCULAR & METABOLIC DISEASES

AstraZeneca has been a driving force in cardiovascular (CV) science for more than 100 years and continues to be a pioneer in the industry, both with its current portfolio and innovation-rich pipeline. This therapy area includes a broad diabetes portfolio, differentiated devices and unique small and large-molecule programmes to reduce morbidity, mortality and organ damage across CV, renal and metabolic diseases.

a) Brilique (CV disease)

During the period, a new formulation of Brilique 90mg, an orally-dispersable tablet (ODT), was approved by the EMA, making Brilique the first and only P2Y12 receptor inhibitor to be made available in ODT form in Europe. This approval will expand the use of Brilique in patients who are unable to swallow traditional tablets of the medicine.

b) Farxiga (type-2 diabetes)

At the 2017 American Diabetes Association (ADA) Scientific Sessions, AstraZeneca presented over 50 abstracts, including updated safety data on the risk-benefit profile of Farxiga and data from the DURATION-8 trial evaluating the efficacy and safety of Farxiga in combination with Bydureon.

In the updated safety analysis of Farxiga, data pooled from 30 Phase IIb/III clinical trials showed no new safety signals and the incidence of adverse events was generally similar to that in the control groups. Importantly, there was no imbalance in lower-limb amputations, with eight (0.1%) patients and seven (0.2%) patients identified in the Farxiga and control groups, respectively.

c) Bydureon (type-2 diabetes)

Data from the DURATION-7 trial were presented in the period at the 2017 ADA meeting. The trial assessed the efficacy and safety of adding Bydureon or placebo to insulin, in patients whose type-2 diabetes was inadequately controlled with basal insulin and metformin. The trial showed that a once-weekly injection of Bydureon is an effective and well-tolerated option for patients with type-2 diabetes and shows benefits, such as 25.1% of patients achieving target A1C levels, lower fasting glucose levels, reduced body weight (1.5kg) and better glycaemic control than patients on placebo. During the period, regulatory submissions for adding these results to the existing Bydureon label were accepted in the US and the EU.

The results from the Phase III EXSCEL cardiovascular outcomes trials are covered below.

d) Medicines in CV outcomes trials

As a follow-up to the CVD-REAL real-world evidence study presented at the 2017 American College of Cardiology Session and Expo, AstraZeneca shared additional findings at the 2017 European Society of Cardiology Heart Failure meeting and at the 2017 ADA meeting from the main data set of over 300,000 patients. The findings showed that patients with and without established CV disease were at a lower risk of both death and heart failure after initiation of treatment with SGLT2 medicines versus other oral anti-diabetic (OAD) medicines. The lower risk of events with SGLT2 medicines versus other OAD medicines was consistent across sub-groups and geographies, suggesting that SGLT2 medicines may benefit a broad population of patients.

In analyses specific to Farxiga, compared to DPP-4 medicines in a two-country data set of approximately 34,000 patients, data showed that Farxiga was associated with lower risk of hypertensive heart failure (HF) (37%) and death (27%), as well as a Major Adverse Cardiac Events (MACE), a composite endpoint of CV death, non-fatal myocardial infarction or non-fatal stroke (29%), and hospitalisation for kidney disease (62%). In this Farxiga-specific data set, the majority of patients (79%) did not have established CV disease at the time their medical records were first evaluated.

During the period, the Company announced that the EXSCEL trial had met its primary safety objective of non-inferiority for MACE, in adults with type-2 diabetes at a wide range of CV risk. These results addressed the US FDA requirement that medicines to treat type-2 diabetes are not associated with an increase in CV risk. Fewer CV events were observed in the Bydureon arm of the trial; however, the efficacy objective of a superior reduction in MACE did not reach statistical significance. Data were consistent with the known safety profile of Bydureon and will be presented at the September 2017 European Association for the Study of Diabetes meeting in Lisbon, Portugal.

Ongoing outcomes trials for patients with type-2 diabetes or dyslipidaemia (abnormal levels of lipids and lipoproteins in the blood) are highlighted in the following table:

Medicine	Trial	Mechanism	Population	Primary Endpoint	Timeline
Bydureon	EXSCEL	GLP-1 agonist	~14,000 patients with type-2 diabetes	Time to first occurrence of CV death, non-fatal myocardial infarction or non-fatal stroke	Data presentation: EASD1, September 2017
Farxiga	DECLARE	SGLT2 inhibitor	~17,0002 patients with type-2 diabetes	Time to first occurrence of CV death, non-fatal myocardial infarction or non-fatal stroke	H2 2018 (final analysis)
Farxiga	DAPA-HF	SGLT2 inhibitor	~4,500 patients with heart failure	Time to first occurrence of CV death or hospitalisation for HF or an urgent HF visit	FPCD Q1 2017
Farxiga	DAPA-CKD	SGLT2 inhibitor	~4,000 patients with chronic kidney disease (CKD)	Time to first occurrence of ≥50% sustained decline in eGFR3 or reaching ESRD4 or CV death or renal death	FPCD Q1 2017
Epanova	STRENGTH	Omega-3 carboxylic acids	~13,000 patients with mixed dyslipidaemia	Time to first occurrence of CV death, non-fatal myocardial infarction or non-fatal stroke	2019 (final analysis)

1European Association for the Study of Diabetes

2Includes ~10,000 patients who have had no prior index event (primary prevention) and ~7,000 patients who have suffered an index event (secondary prevention)

3Estimated Glomerular Filtration Rate

4End Stage Renal Disease

e) ZS-9 (sodium zirconium cyclosilicate) (hyperkalaemia)

In April 2017, the EMA informed AstraZeneca that the Marketing Authorisation Application decision process for ZS-9 was put on hold until the agency had performed an inspection of the dedicated substance-manufacturing facility in Texas. This followed receipt of a second Complete Response Letter from the US FDA, as announced on 17 March 2017. During the period, the Company made progress in addressing the manufacturing deficiencies identified by the FDA inspection and expects to provide an update in due course.

RESPIRATORY

AstraZeneca's Respiratory portfolio is aimed at transforming the treatment of asthma and COPD through combination inhaled therapies, biologics for the unmet medical needs of specific patient populations and an early pipeline focused on disease modification.

The growing range of medicines includes up to four anticipated launches between 2017 and 2020. The capability in inhalation technology spans both pressurised metered-dose inhalers and dry-powder inhalers to serve patient needs, as well as the innovative Aerosphere co-suspension Delivery Technology, a focus of AstraZeneca's future-platform development for respiratory-disease combination therapies.

a) Benralizumab (asthma)

During the American Thoracic Society international conference in May 2017, the Company presented data for the Phase III ZONDA trial, showing a statistically-significant and clinically-meaningful reduction in daily-maintenance, oral corticosteroid (OCS) use compared with placebo for patients with severe, uncontrolled OCS-dependent eosinophilic asthma receiving benralizumab. Patients treated with benralizumab achieved a median reduction in OCS dose of 75% and were more than four times as likely to reduce their OCS dose than those on placebo. Benralizumab also reduced overall exacerbation rates by 70% and exacerbations requiring emergency-department visits or hospitalisations by 93%. These positive trial results were published simultaneously in the New England Journal of Medicine.

b) Tralokinumab (asthma)

During the period, the STRATOS 1 trial of tralokinumab, an anti-interleukin-13 (IL-13) human monoclonal antibody, did not meet its primary endpoint of a significant reduction in the annual asthma exacerbation rate (AAER) in the overall population of severe, uncontrolled-asthma patients, compared with placebo. However, a clinically-relevant reduction in AAER was observed in a sub-population of patients with an elevated biomarker associated with increased IL-13 activity. This sub-group of patients will now be the focus for the future analysis of STRATOS 2, the second ongoing pivotal Phase III trial, which is anticipated to report later this year. Potential future regulatory submissions for tralokinumab will be dependent on the combined analysis of both STRATOS 1 and STRATOS 2.

c) PT010 (COPD)

PT010 is currently in Phase III trials in patients with moderate to severe COPD. During the period, the last patient commenced dosing in both the KRONOS and TELOS trials. Data for PT010 is anticipated in the first half of 2018.

OTHER

a) Brodalumab (psoriasis)

On 20 July 2017, AstraZeneca announced that its partner, LEO Pharma, was granted full approval by the EMA for Kyntheum (brodalumab) for the treatment of adult patients with moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy and have failed to respond or no longer respond to other systemic therapies. Through a collaboration agreement, LEO Pharma holds exclusive rights to develop and commercialise Kyntheum in Europe.

In the US, brodalumab is approved under the brand name Siliq and marketed by AstraZeneca's partner, Valeant.

b) Anifrolumab (lupus)

During the period, the Company completed the enrolment of the first of two Phase III trials (TULIP 1) of anifrolumab in patients with moderate-to-severe systemic lupus erythematosus (SLE, or lupus). Data readouts from both the TULIP 1 and TULIP 2 trials are expected in H2 2018, with anticipated regulatory submissions in 2019.

The Company also enrolled the first patient into the SLE Prospective Observational Cohort Study (SPOCS) trial, a unique, AstraZeneca-led collaboration between industry and academic centres to characterise SLE disease activity, treatment, patient reported outcomes, comorbidities, healthcare resource use and the impact on quality of life among the general population of patients with moderate to severe SLE and by the type-I Interferon gene signature (IFNGS) test high-versus-low patient groups. SPOCS will enrol c.1,500 patients and provide important information about possible associations of type-I IFNGS with disease characteristics and outcomes for patients with moderate-to-severe SLE.

AstraZeneca Development Pipeline 30 June 2017

________________________________________________________________________________________

AstraZeneca-sponsored or -directed trials

Phase III / Pivotal Phase II / Registration

New Molecular Entities (NMEs) and significant additional indications

Regulatory submission dates shown for assets in Phase III and beyond. As disclosure of compound information is balanced by the business need to maintain confidentiality, information in relation to some compounds listed here has not been disclosed at this time.

Compound	Mechanism	Area Under Investigation	Date Commenced Phase	Estimated Regulatory Acceptance Date / Submission Status
Compound	Mechanism	Area Under Investigation	Date Commenced Phase	US	EU	Japan	China
Oncology
acalabrutinib#	BTK inhibitor	B-cell malignancy	Q1 2015	H2 2017 (Orphan drug)
acalabrutinib#	BTK inhibitor	1st-line chronic lymphocytic leukaemia	Q3 2015	2020 (Orphan drug)	2020 (Orphan drug)
acalabrutinib#	BTK inhibitor	relapsed/refractory chronic lymphocytic leukaemia, high risk	Q4 2015	2020 (Orphan drug)	2020 (Orphan drug)
acalabrutinib	BTK inhibitor	1st-line mantle cell lymphoma	Q1 2017	2023
selumetinibASTRA	MEK inhibitor	differentiated thyroid cancer	Q3 2013	2018 (Orphan drug)	2018
moxetumomab pasudotox# PLAIT	anti-CD22 recombinantimmunotoxin	hairy cell leukaemia	Q2 2013	2018 (Orphan drug)
Imfinzi# (durvalumab#) + tremelimumabARCTIC	PD-L1 mAb + CTLA-4 mAb	3rd-line non-small cell lung cancer	Q2 2015	H2 2017	H2 2017	H2 2017
Imfinzi# (durvalumab#) + tremelimumab MYSTIC	PD-L1 mAb + CTLA-4 mAb	1st-line non-small cell lung cancer	Q3 2015	H2 2017	H2 2017	H2 2017
Imfinzi# (durvalumab#) + tremelimumab NEPTUNE	PD-L1 mAb + CTLA-4 mAb	1st-line non-small cell lung cancer	Q4 2015	2019	2019	2019	2020
Imfinzi# (durvalumab#) + tremelimumab + chemotherapy POSEIDON	PD-L1 mAb + CTLA-4 mAb	1st-line non-small cell lung cancer	Q2 2017	2019	2019	2019	2020
Imfinzi# (durvalumab#) + tremelimumab + SoC CASPIAN	PD-L1 mAb + CTLA-4 mAb + SoC	1st-line small cell lung cancer	Q1 2017	2019	2019	2019
Imfinzi# (durvalumab#) + tremelimumabKESTREL	PD-L1 mAb + CTLA-4 mAb	1st-line head and neck squamous cell carcinoma	Q4 2015	H2 2018	H2 2018	H2 2018
Imfinzi# (durvalumab#) + tremelimumabEAGLE	PD-L1 mAb + CTLA-4 mAb	2nd-line head and neck squamous cell carcinoma	Q4 2015	H2 2018	H2 2018	H2 2018
Imfinzi# (durvalumab#) + tremelimumab DANUBE	PD-L1 mAb + CTLA-4 mAb	1st-line bladder cancer	Q4 2015	H2 2018	H2 2018	H2 2018
Lynparza¶ + cediranib CONCERTO	PARP inhibitor + VEGF inhibitor	recurrent platinum-resistant ovarian cancer	Q1 2017	2019
Cardiovascular & Metabolic Diseases
Epanova	omega-3 carboxylic acids	severe hypertriglyceridemia		Approved		2018
ZS-9 (sodium zirconium cyclosilicate)	potassium binder	hyperkalaemia		-	Accepted1	2019
roxadustat# OLYMPUS (US) ROCKIES (US)	hypoxia-inducible factor prolyl hydroxylase inhibitor	anaemia in chronic kidney disease/end stage renal disease	Q3 2014	2018			Initiated2
Respiratory
Bevespi Aerosphere (PT003)	LABA/LAMA	chronic obstructive pulmonary disease		Launched	Accepted	2018	2018
benralizumab# CALIMA SIROCCO ZONDA BISE BORA GREGALE	IL-5R mAb	severe asthma		Accepted	Accepted	Accepted	2021
benralizumab# TERRANOVA GALATHEA	IL-5R mAb	chronic obstructive pulmonary disease	Q3 2014	H2 2018	H2 2018	2019
PT010	LABA/LAMA/ ICS	chronic obstructive pulmonary disease	Q3 2015	2019	2019	H2 2018	2019
tralokinumab STRATOS 1,2 TROPOS MESOS	IL-13 mAb	severe asthma	Q3 2014	2018	2018	2018
Other
anifrolumab# TULIP	IFN-alphaR mAb	systemic lupus erythematosus	Q3 2015	2019 (Fast Track)	2019	2019
lanabecestat# AMARANTH + extension, DAYBREAK-ALZ	beta-secretase inhibitor	alzheimer's disease	Q2 2016	2020 (Fast Track)	2020	2020

¶ Registrational Phase II trial

# Collaboration

1 CHMP positive opinion received

2 Rolling New Drug Application (NDA) regulatory submission initiated in Q4 2016

Phases I and II

NMEs and significant additional indications

Compound	Mechanism	Area Under Investigation	Phase	Date Commenced Phase
Compound	Mechanism	Area Under Investigation	Phase	Date Commenced Phase
Oncology
Imfinzi# (durvalumab#)	PD-L1 mAb	solid tumours	II	Q3 2014
Imfinzi# (durvalumab#) + tremelimumab	PD-L1 mAb + CTLA-4 mAb	hepatocellular carcinoma (liver cancer)	II	Q4 2016
Imfinzi# (durvalumab#) + tremelimumab	PD-L1 mAb + CTLA-4 mAb	gastric cancer	II	Q2 2015
Imfinzi# (durvalumab#) + AZD5069	PD-L1 mAb + CXCR2 antagonist	pancreatic ductal adenocarcinoma	II	Q2 2017
Imfinzi# (durvalumab#) + AZD5069 or Imfinzi#(durvalumab#) + AZD9150#	PD-L1 mAb + CXCR2 antagonist or PD-L1 mAb + STAT3 inhibitor	head and neck squamous cell carcinoma	II	Q3 2015
Imfinzi# (durvalumab#) + dabrafenib + trametinib	PD-L1 mAb+ BRAF inhibitor + MEK inhibitor	melanoma	I	Q1 2014
Imfinzi# (durvalumab#) + AZD1775#	PD-L1 mAb + Wee1 inhibitor	solid tumours	I	Q4 2015
Imfinzi# (durvalumab#) + MEDI0680	PD-L1 mAb + PD-1 mAb	solid tumours	II	Q3 2016
Imfinzi# (durvalumab#) or Imfinzi# (durvalumab#) + (tremelimumab or AZD9150#)	PD-L1 mAb or PD-L1 mAb + (CTLA-4 mAb or STAT3 inhibitor)	diffuse large B-cell lymphoma	I	Q3 2016
Imfinzi# (durvalumab#) + Iressa	PD-L1 mAb+ EGFR inhibitor	non-small cell lung cancer	I	Q2 2014
Imfinzi# (durvalumab#) + MEDI0562#	PD-L1 mAb + humanised OX40 agonist	solid tumours	I	Q2 2016
Imfinzi# (durvalumab#) + MEDI9197#	PD-L1 mAb + TLR 7/8 agonist	solid tumours	I	Q2 2017
Imfinzi# (durvalumab#) + MEDI9447	PD-L1 mAb + CD73 mAb	solid tumours	I	Q1 2016
Imfinzi# (durvalumab#) + monalizumab	PD-L1 mAb + NKG2a mAb	solid tumours	I	Q1 2016
Imfinzi# (durvalumab#) + selumetinib	PD-L1 mAb + MEK inhibitor	solid tumours	I	Q4 2015
Imfinzi# (durvalumab#) + tremelimumab	PD-L1 mAb + CTLA-4 mAb	solid tumours	I	Q4 2013
tremelimumab + MEDI0562#	CTLA-4 mAb + humanised OX40 agonist	solid tumours	I	Q2 2016
Lynparza + AZD6738	PARP inhibitor + ATR inhibitor	gastric cancer	II	Q3 2016
Lynparza + AZD1775#	PARP inhibitor + Wee1 inhibitor	solid tumours	I	Q3 2015
savolitinib#	MET inhibitor	papillary renal cell carcinoma	II	Q2 2014
Tagrisso + (selumetinib# or savolitinib#) TATTON	EGFR inhibitor + (MEK inhibitor or MET inhibitor)	advanced EGFRm non-small cell lung cancer	II	Q2 2016
Tagrisso BLOOM	EGFR inhibitor	CNS metastases in advanced EGFRm non-small cell lung cancer	II	Q4 2015
AZD1775# + chemotherapy	Wee1 inhibitor + chemotherapy	ovarian cancer	II	Q4 2012
AZD1775#	Wee1 inhibitor	solid tumours	II	Q1 2016
vistusertib	mTOR inhibitor	solid tumours	II	Q1 2013
AZD5363#	AKT inhibitor	breast cancer	II	Q1 2014
AZD4547	FGFR inhibitor	solid tumours	II	Q4 2011
MEDI-573#	IGF mAb	metastatic breast cancer	II	Q2 2012
AZD0156	ATM inhibitor	solid tumours	I	Q4 2015
AZD2811#	Aurora B inhibitor	solid tumours	I	Q4 2015
AZD4635	A2aR inhibitor	solid tumours	I	Q2 2016
AZD4785	KRAS inhibitor	solid tumours	I	Q2 2017
AZD6738	ATR inhibitor	solid tumours	I	Q4 2013
AZD8186	PI3k inhibitor	solid tumours	I	Q2 2013
AZD9150#	STAT3 inhibitor	haematological malignancies	I	Q1 2012
AZD9496	selective oestrogen receptor downregulator (SERD)	ER+ breast cancer	I	Q4 2014
MEDI-565#	CEA BiTE mAb	solid tumours	I	Q1 2011
MEDI0562#	humanised OX40 agonist	solid tumours	I	Q1 2015
MEDI0680	PD-1 mAb	solid tumours	I	Q4 2013
MEDI1873	GITR agonist fusion protein	solid tumours	I	Q4 2015