AstraZeneca Annual Report and Form 20-F Information 2008

Externalisation

Our externalisation strategy continues to focus on enhancing our internal innovation through investment, external partnerships, alliances and acquisitions that further strengthen our pipeline of new products and our Strategic Planning and Business Development (SPBD) team works closely with R&D, global marketing and finance teams to deliver these objectives.

We have completed over 40 major externalisation deals in the last two years, including the acquisitions of MedImmune and Arrow Therapeutics in 2007, as well as numerous smaller deals to enhance and strengthen the overall health of the portfolio.

We believe that every collaboration is unique, and we work with potential partners to structure deals that leverage each party’s capabilities and assets. Major transactions in the last two years have included the in-license of rights to Cubicin^™ (an antibiotic) from Cubist in certain geographies and a co-development and co-commercialisation agreement with Abbott for a combination of Crestor and Trilipix^™. We recently extended our co-development and co-commercialisation agreement with Bristol-Myers Squibb Company regarding saxagliptin (Onglyza^™) and dapagliflozin (two products in development for the treatment of Type 2 diabetes) to include dapagliflozin in Japan. We also concluded an exclusive worldwide agreement with MAP Pharmaceuticals to develop and commercialise Unit Dose Budesonide (UDB), MAP Pharmaceuticals’ proprietary nebulised formulation of budesonide.

Important early stage collaborations have included deals with Argenta and Silence Therapeutics and more recently with Columbia University in the US regarding both cardiovascular and neurology opportunities. Additionally, we have also formed a significant number of early stage partnerships to ensure that we have access to the latest science and technology.

Our externalisation strategy is not restricted to securing in-licensing deals and research or commercial collaborations. It represents an important component of our efforts to maximise value from our portfolio and incorporates value creation through disposal. To that end, we have completed a number of out-licensing transactions and disposals in 2008, including the transfer out of assets relating to certain gastrointestinal projects to create a new entity, Albireo. We also concluded a fostering agreement with Cancer Research UK under which they will conduct the early development of an Src Kinase Inhibitor at their own cost with AstraZeneca retaining options on the product upon completion of certain development milestones.

We continue to strengthen our biologics capability through externalisation and completed a number of significant transactions during 2008 including deals with Direvo Biotech and SBI Biotech Co.

During 2008 we broadened the scope of activity by MedImmune Ventures, a captive venture capital fund, set up to access leading-edge technology emerging within the biotechnology world. MedImmune Ventures will now seek opportunities on a more global basis to stay at the forefront of novel science accessing the most innovative start-ups in biotechnology.

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