AstraZeneca PLC · LSE:AZN
AstraZeneca — CSFB Pharma Conference 2003
66 slides from AstraZeneca's conference presentation, 2003
Slide 1: AstraZeneca
Astrazeneca?
Slide 2: Simon Barter, Vice-President Strategic Marketing
Simon Barter Vice-President Strategic Marketing
Slide 3: Outline
Outline Global Healthcare Environment Pricing & Reimbursement Pressures Demonstrating Value
Slide 4: Global Healthcare Environment
Global Healthcare Environment
Slide 5: Total Healthcare Spend as a Percentage of GDP
Growth in Healthcare Spend as Percent GDP 1990 - 2000 % 14.0 Total Healthcare Spend as a Percentage of 12.0 Gross Domestic Product 10.0 8.0 6.0 4.0 2.0 0.0 1960 1970 1980 1990 2000** Source: OECD Year Health Data 2003 United Kingdom France Germany Italy Japan Spain United States
Slide 6: Pharmaceutical Expenditure as Percent Healthcare Spend (2001)
Pharmaceutical Expenditure as Percent Healthcare Spend (2001) USA 12.4% UK 19.5% Sweden 13.5% Spain 15.1% Japan 15.9% Italy 22.3% Germany 14.3% France 21.0% Czech Republic 21.9% Australia 12.4% 0% 5% 10% 15% 20% 25% Source: OECD Health at a Glance OECD Indicators 2003 Percent of Healthcare Expenditu
Slide 7: US - Medical Spending Breakdown (2001)
US - Medical Spending Breakdown (2001) " ! Source : CMS (HCFA), 2001 projected data
Slide 8: Pricing & Reimbursement Pressures
Pricing & Reimbursement Pressures
Slide 9: Prescriber Dilemma
Pharmaceutical Prescriber Payer, Govt, Industry Drive Authority Drive Dilemma • high unmet need • efficacy • budget constraints • market growth • safety profile • cost containment potential • convenience • appropriate patient • maximising • cost impact selection profitability • use of generics • max
Slide 10: Key Pressures
Key Pressures Most country authorities introducing a range of cost containment mechanisms to :- • Reduce price levels • Reduce number of patients able to access new treatments • Or both ! Global price differentials ; particularly US - ROW are becoming increasingly transparent Pharma companies seek t
Slide 11: Global Price Differentials
Global Price Differentials UK, Germany France, Spain US Canada EU WAC/Ex Mf Level Ex Mf Level Ex Mf Level
Slide 12: Global Price Differentials
Global Price Differentials Rebates Samples Access Programmes REAL NET DIFFERENTIAL UK, Germany France, Spain US Canada EU WAC/Ex Mf Level Ex Mf Level Ex Mf Level
Slide 13: New Product & Generic Utilisation
New Product & Generic Utilisation New molecule consumption is significantly lower outside US (eg France, Canada consumption per capita is 50% of US) US generic prices are mostly lower than European generic prices Generic uptake in US is more rapid post-patent than in other markets Speed of uptake of
Slide 14: Uptake of Innovation
Uptake of Innovation Geographical breakdown (by main markets) of sales of new medicines launched during the period: 1998 - 2002 USA EU Japan ROW 70% 18% 4% 8% Source: IMS HEALTH: MIDAS, Sept 2001/2002
Slide 15: Potential High Impact Factors - US
Potential High Impact Factors - US Referencing and Cross Border Trade from Canada – downward price pressures Medicare coverage Increased rebates/discounts to ensure formulary position with large customers Increased co-pay could lead to increased generic utilisation
Slide 16: US Pricing Sustainability
US Pricing Sustainability Downward 1. Ability to continue price Driver increases 2. Medicare Rx benefit 3. State response to budget deficits Upward Driver 4. Increasing private payer influence 5. Reimportation
Slide 17: US Sales Channels are complex and dynamic
US Sales Channels are complex and dynamic – Net price depends on source of sales TOTAL Rx MARKET PRIVATE SECTOR PUBLIC SECTOR EMPLOYER NO RX COVERAGE FEDERAL STATE RX COVERAGE (CASH) 3rd PARTY HOSP/LTC NON STATE CASH VA/DOD MEDICAID PBM CONTRACT PROGRAMS Distribution of Business
Slide 18: US - The difference between perception and reality
US - The difference between perception and reality 2002 2012 New Catalogue Price Catalogue Price Rebates Net Realized 2012 Price Rebates increased New Net Realized Price
Slide 19: Potential High Impact Factors - EU
Potential High Impact Factors - EU Direct price controls / cuts / freezes Internal Reference prices (either at chemical or class level) Pharmacoeconomics in supporting price level and reaching reimbursement decision Generic prescribing and automatic substitution of brands at eg pharmacy level Access
Slide 20: Increasing International Referencing
Increasing International Referencing ITALY FRA GRE IRE AUST HOLL UK BEL SPAIN US GER PORT JAPAN SWITZ NOR FIN DEN SWED
Slide 21: Potential High Impact Factors - ROW
Potential High Impact Factors - ROW Price transparency - there is no such thing as a confidential price agreement Developing markets are learning from the established markets and are putting tough measures in place Compulsory licensing is an increasing threat if price is considered too high Diversio
Slide 22: The pharmaceutical industry is an attractive sector
The pharmaceutical industry is an attractive sector... Therapy Area CAGR 2002 - 2007 (%) 60 20 18 Theraoy Area Va lue s ($bn) • Areas of continued high unmet 50 16 14 medical need 40 12 – e.g. oncology, obesity, diabetes 30 10 8 and Alzheimer’s disease 20 6 10 4 • Advances in biomedical science 2 0
Slide 23: Demonstrating Value
Demonstrating Value
Slide 24: A cynic is a person who knows everything about the price
”A cynic is a person who knows everything about the price and nothing about the value” Oscar Wilde
Slide 25: The Need To Show Value
The Need To Show Value An increasing expectation from payers to demonstrate value of new products Generics are being ‘promoted’ by authorities so value of brand must be demonstrated • to patients who have to pay extra for brands • to payers who have budget targets to meet • to prescribers incentivis
Slide 26: Response To Environmental Change
Response To Environmental Change Physicians Show Value Consumers Third-party payers Politicians Revenue generation Patient access
Slide 27: Aspects of Value
Aspects of Value Added Medicines Socio- Unmet Need Medical Budget economic Benefit Impact Impact ! # $% & " ' (
Slide 28: Building Value
Building Value Price Incremental medical benefit Savings in medicines budget Other healthcare cost offsets Convenience Innovative Alternative product
Slide 29: Generating Value Statements to Support Price
Generating Value Statements to Support Price Price and Market Access Support Evidence WTP Policy Economic Generation Clinical Budgetary Value Statements Market Pricing Payer Other Research Research Research Research • Prescribers • Prescribers • National • Disease • KOLs • KOLs • Regional burden • P
Slide 30: Value Demonstration Starts Early
Value Demonstration Starts Early Phase III/IIIb Phase I/II Launches CD prenomination Development 1 year Negotiation & concept testing for launch pre-launch s Strategy Initiation Support Strategy Communications Implementation Pricing and market Integrate value Refine the final Support for local acces
Slide 31: Reflecting Innovation in Early Portfolio
Reflecting Innovation in Early Portfolio class on mkt. 11% class in develop 16% no precedent 51% precedent from another class 22%
Slide 32: Summary
Summary Pharma prices will remain under pressure Significant volume growth exists The Value of Pharmaceuticals must be justified The reward for innovation will remain AstraZeneca is well placed to succeed
Slide 33: Mike Rance, Vice-President Corporate Affairs
Mike Rance Vice-President Corporate Affairs
Slide 34: 9M 2003 Headline results
9M 2003 Headline results 9M 03 9M 02 CER $m $m growth Sales 13,974 12,940 +2% Operating profit 3,262 3,282 -7% EPS $1.40 $1.39 -6% Share repurchase $607m $896m
Slide 35: Portfolio Transformation
Portfolio Transformation 2001 3Q 2003 MAT Growth/ Base Base Launch Expiry Growth/ Launch Expiry
Slide 36: Q3 2003 Portfolio Transformation
Q3 2003 Portfolio Transformation: Moving annual totals 9,000 8,000 7,000 Crestor® 6,000 Faslodex® Iressa® Symbicort® 5,000 $m Nexium® Arimidex® 4,000 Zomig® Atacand ® 3,000 Casodex® Seroquel® 2,000 1,000 0 Q3 00 Q3 01 Q3 02 Q3 03
Slide 37: Top growth markets
Top growth markets 0 500 1000 1500 2000 2500 C10A1 HMG-COA Reductase Inhibitors A2B2 Acid Pump Inhibitors N5A1 Atypical Antipsychotics B3C Erythropoietin products N3A Anti-Epileptics R3F1 B2-stim+cortic inhalants C9C Angioten-II antag, plain USD Growth N6A1 Anti-depressants Q2 03 MAT vs Q2 02 MAT L4
Slide 38: Seroquel: US NRx in anti-psychotic market
0% 5% 10% 15% 20% 25% 30% 35% Jan-00 Feb-00 Mar-00 Market share Apr-00 May-00 Jun-00 Jul-00 market Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Source: IMS Health, IMS (NPA Plus
Slide 39: Seroquel Bipolar Mania - effective and well tolerated
Seroquel® Bipolar Mania – effective and well tolerated 0 * p<0.05 ** p<0.01 Change from baseline* *** p<0.001 -5 * ** Placebo -10 *** -15 *** *** *** Seroquel® -20 *** *** *** -25 47 14 21 28 42 56 70 84 Day *Young Mania Rating Scale
Slide 40: Q3 2003 New Launches
Q3 2003 New Launches Moving annual totals 4,500 4,000 3,500 3,000 2,500 $m 2,000 1,500 1,000 500 0 Q3 01 Q3 02 Q3 03 Nexium® Symbicort® Iressa® Faslodex® Crestor®
Slide 41: Total Prescription Market Share (PPI)
US PPI TRx market share 60% Total Prescription Market Share (PPI) 50% 40% 30% 20% 10% 0% 00 Ja 1 Ja 2 M 0 M 0 Se 0 No 0 M 1 M 1 S 1 N 1 M 2 M 2 Se 2 02 M 3 M 3 S 3 3 0 1 2 3 -0 -0 -0 -0 0 -0 0 -0 l-0 0 0 -0 l-0 -0 0 -0 l-0 0 -0 l-0 -0 n- v- n- n- v- n- p- p- ov ar ar ar ar ep ep ay ay ay ay Ju Ju Ju
Slide 42: Nexium reaches $3 billion within 3 years
Nexium® reaches $3 billion within 3 years Global sales $bn 6 Lipitor® 5 4 Plavix® Nexium® Zyprexa® 3 Seretide® Vioxx® Celebrex® 2 1 0 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Source: IMS Health MIDAS, June 2003
Slide 43: Symbicort
Symbicort® 400 350 COPD approved in 300 31 countries $m 250 Single Therapy 200 submission planned Q4 2003 150 Phase III studies 100 underway in US 50 0 9M 01 9M 02 9M 03
Slide 44: CRESTOR
Wy) CRESTOR rosuvastatin calcium
Slide 45: STELLAR - LDL-C
STELLAR – LDL-C Dose (log scale) 10mg 20mg 40mg 80mg 0 Mean percentage change in -10 LDL-C from baseline -20 -20% -24% -28% -30 -30% -35% -37% -39% -40 -43% -46% -48% -46% -50 -52% -51% * -55% -60 * * Rosuvastatin n=473 Atorvastatin n=634 Simvastatin n=648 Pravastatin n=485 *p<0.002 RSV 10mg vs ATV
Slide 46: STELLAR - HDL-C
STELLAR – HDL-C 12% Mean percentage change in HDL-C from baseline * * 10% 9.4% 9.6% 8% 7.6% 6% 5.7% 4% 4.8% 4.4% 2% 2.0% 0% 10mg 20mg 40mg 80mg Dose (log scale) Atorvastatin n=634 *p<0.002 RSV 20mg vs ATV 20, 40 & 80mg; RSV Rosuvastatin n=473 40mg vs ATV 40 & 80mg
Slide 47: Apo A-I facts
Apo A-I facts Apo A-I – Lipoprotein in the HDL particle Epidemiology - High apo A-I gives low CV risk Mechanism of action – Reverse cholesterol transport Apo A-I administration • Synthetic apo A-I – increased cholesterol excretion • Apo A-I Milano – regression of plaque
Slide 48: STELLAR - Apo A-1
STELLAR – Apo A-1 Apo A-I: % Change From Baseline - Crestor vs Rosuvastatin (Week 6) 10 8.8 Crestor 8.2 Atorvastatin % change from baseline 8 7 5.6 6 5 4 3.5 2 0.1 N = 150 149 152 149 143 146 159 0 P < .002 RSV 10 mg vs ATV 40 mg 10 20 40 10 20 40 80 P < .002 RSV 20 mg vs ATV 40 mg, 80 mg P < .002 R
Slide 49: ASTEROID
ASTEROID
Slide 50: Galaxy Program
Galaxy ASTEROID STELLAR AURORA POLARIS COMETS PLUTO CORONA GALAXY os uenv PROGRAM ORBITAL JUPITER METEOR LUNAR MERCURY II MERCURY | AstraZeneca
Slide 51: ™
™
Slide 52: Exanta - Oral Direct Thrombin Inhibitor
ExantaTM -Oral Direct Thrombin Inhibitor Prompt onset and offset of anticoagulation Wider therapeutic margin than warfarin Predictable pharmacokinetics Low potential for food and drug interactions No dose adjustment No coagulation monitoring Sarich TC, et al. J Am Coll Cardiol 2003;41:557. Eriksson
Slide 53: Warfarin for Atrial Fibrillation - Limitations
Warfarin for Atrial Fibrillation - Limitations Lead to Inadequate Treatment Adequacy of Anticoagulation in Patients with AF in Primary Care Practice No warfarin INR above target 65% 6% INR in target range 15% Subtherapeutic INR 13% Samsa GP, et al. Arch Intern Med 2000;160:967.
Slide 54: The SPORTIF Programme
The SPORTIF Programme Patients With Non-valvular AF and Risk Factors for Stroke n=7,329 Adjusted-dose Fixed-dose Warfarin Exanta (INR 2-3) (36 mg bid) SPORTIF III 23 nations Open-label (n=3,407) SPORTIF V US, Canada Double-blind (n=3,922)
Slide 55: SPORTIF Programme - Stroke and Systemic Embolism
SPORTIF Programme Stroke and Systemic Embolism Intention-to-treat Analysis Cumulative Event Rate (%year) 7 SPORTIF III V 6 Warfarin 5 Exanta TM 1.6% /year 2.3% /year 4 3 2 1.2% /year 1 1.6% /year 0 0 3 6 9 12 15 18 21 24 Months
Slide 56: SPORTIF Programme - Primary Analyses
SPORTIF Programme Primary Analyses Intention-to-treat Analysis ExantaTM Better Warfarin Better -0.66 SPORTIF III p=0.10 +0.45 SPORTIF V p=0.13 -0.03 Pooled p=0.94 -4 -3 -2 -1 0 1 2 3 4 Difference in Absolute Event Rates (Exanta TM – Warfarin)
Slide 57: SPORTIF Programme - Major Bleeding
SPORTIF Programme Major Bleeding On-treatment Analysis 4 Warfarin Exanta TM 3.1% p=0.054 Event Rate (%/year) 3 2.4% 2.5% 2 1.9% 1.8% 1.3% 1 0 SPORTIF III SPORTIF V Pooled
Slide 58: SPORTIF V - Liver Enzyme Elevation
SPORTIF V Liver Enzyme Elevation ALT >3 x ULN 50 Warfarin Exanta TM 14 40 38 12 Incidence (% ) Number of Patients 35 10 p<0.001 8 30 6.0% 6 4 20 2 0.8% 0 10 ALT >3x 10 7 ULN 6 3 4 4 3 12 2 2 2 2 1 1 1 1 1 1 12 1 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Months
Slide 59: SPORTIF Programme - Net Clinical Benefit
SPORTIF Programme - Net Clinical Benefit Primary Events + Major Bleeding + Death On-treatment Analysis Warfarin ExantaTM 14 Event Rate (% per year) 12 RRR = 26% RRR = 7% RRR = 16 % 10 p=0.019 p=0.527 p=0.038 8 6.2% 6.3% 5.8% 6.2% 6 5.2% 4.6% 4 2 0 SPORTIF III SPORTIF V Pooled
Slide 60: SPORTIF Programme - Conclusions
SPORTIF Programme - Conclusions ExantaTM profile in high-risk patients with nonvalvular AF Fixed oral dosing without coagulation monitoring Effectiveness noninferior to well-controlled warfarin in preventing stroke and systemic embolic events Less bleeding than warfarin Elevated liver enzymes in ~6%
Slide 61: Q2 2003 Portfolio Transformation
Q2 2003 Portfolio Transformation: Moving annual totals 9,000 8,000 7,000 Crestor® 6,000 Faslodex® Iressa® Symbicort® 5,000 $m Nexium® Arimidex® 4,000 Zomig® Atacan ® 3,000 Casodex® Seroquel® 2,000 1,000 0 Q3 00 Q3 01 Q3 02 Q3 03
Slide 62: Portfolio transformation
Portfolio transformation Absorb generic erosion Exanta™ Fund the launch Crestor® programme Iressa® 2003 EPS range Faslodex® increased to at or just Symbicort® above top of range $1.65 - $1.75 Nexium® Casodex® Strong sales and Arimidex® earnings growth from 2004 Zomig® Seroquel® Atacand®
Slide 63: AstraZeneca
Astrazeneca?
Slide 64: Back Up
Back Up
Slide 65: Decision Tree to balance Price with achieving patient access
Decision Tree to balance Price with achieving patient access Are there any comparable therapeutic alternatives? No Yes Is this product where “global” Assess external parameters availability will be expected? e.g. reimbursement, comparators, generics i.e. need /patient access. Yes No Are there price
Slide 66: Considering EU Free Movement of Goods
Considering EU Free Movement of Goods Parallel trade will happen wherever price differences exist Business disruption creates complexity in supply chain management Trade will continue as the level of price convergence is less than predicted and Parallel Traders are continuing to work on lower margin