At the earnings call, the company declared an interim dividend of $1.71 in 4Q09, reflecting a y/y increase of 14%. The dividend is to be paid on March 15, 2010.  This interim dividend brings the FY09 dividend to $2.30, up 12% y/y.

Cash generated from operating activities amounted to $11.74 billion in the year ending December 31, 2009, compared with $8.74 billion in the corresponding period in 2008.  The improvement primarily reflects the strong underlying performance and improved working capital management.

As of December 31, 2009, outstanding gross debt (including loans, short-term borrowings, and overdrafts) was $11.06 billion compared with $11.85 billion on December 31, 2008.

At the conference call, the company said that it will repurchase up to $1 billion in shares during 2010.  There were no repurchases in 2009; instead 3.5 million shares were issued in consideration of share option exercises for a total of $135 million.

The company expects the restructuring program to benefit with $1.9 billion per annum by 2014.  Additional restructuring charges of $2.0 billion are anticipated between 2010 and 2013.
 

During the FY09 earnings call, the company said it will reduce its workforce by 12%, or about 8,000 jobs, by 2014, as part of a cost-saving initiative.

On January 18, 2010, AstraZeneca and Dako Denmark A/S entered into a collaboration agreement to develop companion diagnostic tests for multiple AstraZeneca oncology projects.  As per the terms of the agreement, the companies will work together to develop diagnostic tests to help physicians determine the most appropriate cancer treatment for patients.

On December 23, 2009, AstraZeneca announced that it agreed to acquire French drug developer Novexel in a $350 million deal.  AstraZeneca will pay Novexel an additional $75 million if certain development milestones are reached.  AstraZeneca also struck a deal with Forest Laboratories (FRX) to collaborate on the development of two combination antibiotics, each of which uses Novexel’s experimental product NXL-104.  The deal with AstraZeneca gives Forest worldwide rights to NXL-104 in combination with the antibiotic ceftaroline.  As per the terms of the agreement, AstraZeneca will share the cost of the drugs’ development with Forest while Forest will pay AstraZeneca half the acquisition costs for Novexel and get the US rights to another product involving NXL-104 and the drug ceftazidime.

On December 3, 2009, AZN and Targacept Inc. entered into a deal potentially worth more than $1 billion to develop a depression drug, TC-5214 (completed Phase IIb trials).  As per the terms of the agreement, AstraZeneca will pay Targacept $200 million upfront.  Targacept will get up to an additional $540 million if specified development, regulatory, and early sales milestones are achieved.  In addition, the company is eligible to receive up to $500 million if further sales-related milestones are achieved as well as significant stepped double-digit royalties on worldwide sales.  AstraZeneca and Targacept plan to jointly design a global Phase III clinical trial for the drug, which is anticipated to begin in mid 2010 with the goal of filing a new drug application (NDA) with the FDA in 2012.

AstraZeneca and Nektar Therapeutics (NKTR) have a worldwide license agreement, for two drug development programs:  NKTR-118, in Phase III trail for the treatment of opioid-induced constipation, and NKTR-119, in the early stage to deliver products for the treatment of pain without constipation side effects.  As per terms of the agreement, AstraZeneca will be responsible for global manufacturing and marketing for both programs and will make an upfront payment of $125 million to Nektar for both NKTR-118 and NKTR-119.  Additionally, NKTR is eligible to receive up to $235 million in aggregate payments upon the achievement of certain regulatory milestones, as well as tiered sales milestone payments of up to $375 million if the products achieve considerable levels of sales.

AstraZeneca and Forest Laboratories (FRX) have an agreement to jointly develop and market Forests’ antibiotic drug Ceftaroline in all markets outside US, Canada, and Japan.  Ceftaroline is intended for the treatment of complicated skin and skin structure infections (cSSSi) and community-acquired bacterial pneumonia (CABP).  As per the agreement, AstraZeneca will pay Forest an undisclosed signing fee, sales-related royalties, and payments for reaching certain sales milestones.  Forest plans to file a NDA for the drug with the FDA in 1H10 with AstraZeneca filing a Marketing Authorization Application (MAA) in Europe by the end of 2010.

AstraZeneca and Merck & Co. (MRK) plan to jointly develop two early-stage cancer medications – Merck’s MK-2206 and AstraZeneca’s AZD6244 – in Phase I clinical trial for the treatment of solid cancer tumors.  They will be sharing costs jointly, and will consider opportunities for further clinical development following the results from Phase I trials.
 

The generic competition that AZN is expected to face in 2010-2013 for its various drugs puts a significant amount of pressure on the company to commercialize its late-stage pipeline.

AZN has a relatively weak Phase III pipeline, and will have to continue product in-licensing in order to fill this gap.

The litigation about the enforceability of the Crestor composition of matter patent continues.  A loss of Crestor US exclusivity in 2010 would negatively impact the shares of the company.