ASTRAZENECA PROVIDES AN UPDATE ON THE STATUS OF ITS ARRANGEMENTS WITH MERCK & CO., INC.

AstraZeneca today announced that, under the provisions of the agreements relating to the restructuring of the AstraZeneca and Merck & Co. joint venture in the United States, AstraZeneca has been informed that Merck has elected not to exercise the First Option related to the relinquishment of Merck’s rights over the products not covered by the Partial Retirement (see paragraph below), other than Nexium™ and Prilosec™. As a result of this decision, contingent payments will continue on the products Atacand™, Lexxel™, Plendil™ and Entocort™ until at least 2010, at which time AstraZeneca may exercise this option at the 2008 Appraised Value of approximately $650 million. The Appraised Value also includes rights to certain products that are still in clinical development (AZD6140, AZD3355, AZD0328 and AZD2327). AstraZeneca made contingent payments in respect of the products included in the First Option of $69 million in 2007.

Other aspects of the scheduled termination arrangements will proceed as previously disclosed:

· The Partial Retirement of Merck’s limited partnership interest, under which Merck’s rights in respect of certain products will end. The products covered by the Partial Retirement include Toprol-XL™, Pulmicort™, Rhinocort™ and Symbicort™. AstraZeneca made contingent payments in respect of these products amounting to $182 million in 2007. AstraZeneca will pay Merck approximately $4.27 billion in respect of the Partial Retirement.
· A true-up of the Advance Payment, which was triggered at the time of the merger between Astra and Zeneca, under which Merck relinquished all rights, including contingent payment on future sales, to potential Astra products with no existing or pending US patents at the time of the merger, amounting to a payment by Merck to AstraZeneca of approximately $0.24 billion, inclusive of interest.
· Settlement of the loan note receivable by AstraZeneca from Merck, in the amount of $1.4 billion inclusive of accrued interest.

The combined effects of these three items will be a net cash outflow from AstraZeneca to Merck of approximately $2.63 billion upon settlement during the first quarter 2008.

Under the provision of the agreements a Second Option exists whereby AstraZeneca has the option to repurchase Merck’s interests in Prilosec™ and Nexium™ in the US. This option is exercisable by AstraZeneca in 2012 should AstraZeneca exercise the First Option in 2010. Exercise of the second option by AstraZeneca at a later date is also provided for in 2017 or if combined sales of the two products fall below a minimum amount provided, in each case, that the First Option has been exercised. The exercise price for the Second Option is the net present value of the future annual contingent payments on Prilosec™ and Nexium™ as determined by the average valuation of two appraisers (one selected by each party) at the time of exercise, which is subject to a potential true-up mechanism under certain conditions. AstraZeneca made contingent payments in respect of US sales for Prilosec™ and Nexium™ amounting to $931 million in 2007.

Further details on the accounting treatment of these events from an AstraZeneca perspective will be provided in conjunction with the Q1 2008 earnings announcement on 24 April, 2008.

About AstraZeneca
AstraZeneca is a major international healthcare business engaged in research, development, manufacturing and marketing of prescription pharmaceuticals and supplier for healthcare services. AstraZeneca is one of the world's leading pharmaceutical companies with healthcare sales of US $29.55 billion and is a leader in gastrointestinal, cardiovascular, neuroscience, respiratory, oncology and infection product sales. AstraZeneca is listed in the Dow Jones Sustainability Index (Global) as well as the FTSE4Good Index.