AstraZeneca PLC · LSE:AZN
AstraZeneca — H1 2000 Earnings Presentation
60 slides from AstraZeneca's earnings presentation, 2000
Slide 1: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements In order to utilise the ‘Safe Harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995, AstraZeneca is providing the following cautionary statement. This presentation contains forward-looking statements with re
Slide 2: Half Year Results 2000
AstraZeneca Half Year Results 2000
Slide 3: Business performing well
Business performing well - On track to deliver targets in 2000
Slide 4: First Half Results summary
First Half Results summary Continuing (incl. Agrochemicals) 1st Half Constant 2000 Currency $m % Sales 9,544 +8 Operating Profit 2,389 +16 EPS 0.96 +18
Slide 5: Business performing well
Business performing well - On track to deliver targets in 2000 - Synergy programme delivering forecast benefits - $600 million in 2000 - Syngenta plans in place
Slide 6: Products
AstraZeneca
Slide 7: Losec
Losec® 1 0 - +7% CER 1H 0 2000 8 L % Z 0 o % a - Prilosec® US 6 s anti-secretory 0 Sales where Losec® substance n % e market share 4 patent expired 1999 t 0 c maintained % ®a 2 0 c - Losec® sales % ® maintained Source: IMS MIDAS E 2 3 4 where x Quarterly MAT substance p i patent Countries with Losec
Slide 8: Current engines for growth
Current engines for growth $m % growth (CER) Atacand® 124 +78 Arimidex® 82 +36 Casodex® 220 +35 Seroquel® 204 +116 Zomig® 132 +58 Total 762 +62
Slide 9: Casodex: monotherapy driving growth
Casodex®: monotherapy driving growth - Fastest growing hormonal 1600 UK therapy 1400 for prostate Monotherapy cancer 1200 launch - No 1 anti- 1000 androgen Sales ($000s) in world 800 Sweden - Market leader 600 in Japan 400 - First monotherapy 200 launches 0 - Lifecycle 1 month 6 months programme pos
Slide 10: Seroquel: switches from atypicals drive growth
Seroquel®: switches from atypicals drive growth - Rapid growth in 60 Seroquel US 40 * Prescriptions (000) - European 20 launches underway 0 - Japanese launch -20 olanzapine soon -40 - New studies and risperidone indications on -60 track 98 99 98 98 99 99 98 00 99 97 -80 p p n c c n ar ar ar c Se Se
Slide 11: Current engines for growth: activities
Current engines for growth: activities Atacand®: Atacand® Plus CLAIM SCOPE, CHARM, DIRECT Zomig®: Arimidex®: Rapimelt™ 1st line Nasal Spray ATAC Japan Seroquel®: Casodex®: European & Japanese Monotherapy launches Early prostate cancer New indications
Slide 12: Five opportunities for future growth
Five opportunities for future growth - Nexium® - ODTI* - Iressa™ - Viozan™ - The Superstatin (ZD4522) *Oral Direct Thrombin Inhibitor
Slide 13: Nexium
Nexium® - DDW: first meaningful improvement over Losec® - EU MR achieved - First launch in Sweden to specialists 14 August - Pricing in Sweden - Pricing strategy combines clinical benefits with value for money - Nexium® 40mg priced at small discount to Losec® 20mg
Slide 14: Nexium: entering launch phase
Nexium®: entering launch phase - Sweden 14 August 2000 - 3Q: launches in UK & Denmark - 4Q: launches in Norway, Germany & Ireland - US launch early 2001 - 2001: continuous launch roll-out
Slide 15: ODTI
ODTI* - METHRO II: superiority over dalteparin in total hip and knee surgery - First NDA 2Q 2001 for orthopaedic surgery *Oral Direct Thrombin Inhibitor
Slide 16: Iressa and Viozan
Iressa™ and Viozan™ - Iressa™ - phase I & II completed: striking efficacy in NSCLC - fast track status with FDA: submissions from 4Q 2001 - Viozan™ - phase II: significant improvement in COPD symptoms - currently in phase III: MAA/NDA 4Q 2001
Slide 17: The Superstatin (ZD4522)
The Superstatin (ZD4522) - Phase II data confirms early promise - outstanding dose-related reductions in LDL-C - impressive effects across full lipid profile - no safety concerns with doses up to 80mg/day - Phase III: > 4000 patients - Commitment confirmed by manufacturing investment - NDA/MAA/JNDA
Slide 18: Winning in the US
Winning in the US
Slide 19: David Brennan, Senior Vice President, AstraZeneca US
David Brennan Senior Vice President, AstraZeneca US
Slide 20: Winning in the US
Winning in the US - Significant achievements to date - Appropriate investment to compete in today’s US pharmaceutical market - Poised to launch megabrands - Clear reasons for optimism
Slide 21: Significant US accomplishments
Significant US accomplishments - Prioritised US business portfolio - Positioned to become “employer of choice” - Achieved +16% MAT May 2000 sales growth* - Grew market share *Source: IMS Retail & Provider Perspective
Slide 22: Excellent US growth in first half
Excellent US growth in first half - US sales +12% - US sales (ex-Prilosec®) +15% - Arimidex® +63% - Zomig® +76% - Seroquel® +116% - Rhinocort® Aqua®: 7.1% market share* *Source: IMS NPA New Rx share of Aqueous Market June 2000
Slide 23: Megabrand opportunities in the US: Nexium
Megabrand opportunities in the US: Nexium® - Acid control market is large - US sales MAT May 2000 > $9 billion, 17% growth over prior MAT - Success in market driven by efficacy - Significant unmet needs - 25% of PPI users are unsatisfied - 10-25% of patients are on high dose or concomitant therapy S
Slide 24: Megabrand opportunities in the US: Nexium
Megabrand opportunities in the US: Nexium® - Nexium® is the first and only PPI proven in clinical trial to be more effective than Prilosec® - Exciting market research confirms it’s a winner - AstraZeneca leads GI market and is uniquely qualified to introduce next advance in treating GI disorders
Slide 25: Megabrand opportunities in the US: statin
Megabrand opportunities in the US: statin - Dyslipidemia market is large - US sales 1999 > $7.2 billion, 24% growth over 1998 - Statins are drug of choice - 96% of sales in cholesterol market were for statins Source: IMS Retail & Provider Perspective
Slide 26: Megabrand opportunities in the US: statin
Megabrand opportunities in the US: statin - Significant untreated population - only 25% of patients who qualify for drug therapy receive it - Lowering LDL is key attribute for success - In phase II clinical trials ZD4522 lowers LDL by unprecedented 65% Source: American Heart Association, 1999 Report
Slide 27: Sales potential increasing
Sales potential increasing US relative promotional spending for megabrands US sales of megabrands 4,5 4,0 3,5 Sales $ billion 3,0 2,5 2,0 1,5 1,0 0.5 0 Zocor® Lipitor® Celebrex® Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Zocor® Lipitor® Celebrex® 1st 12 mo 2nd 12 mo 3rd 12 mo Pro
Slide 28: Nexium / ZD4522: exploiting the opportunity
Nexium® / ZD4522: exploiting the opportunity - Dynamic commercialisation strategy - DTC advertising - e-Business - Sales force
Slide 29: AstraZeneca US sales force
AstraZeneca US sales force 7000 6000 5000 4000 CSO AZ Full Time 3000 2000 1000 0 Current Expanded
Slide 30: AstraZeneca US sales force
AstraZeneca US sales force 7000 6000 5000 4000 CSO AZ Full Time 3000 2000 1000 0 Current Expanded
Slide 31: Top US sales forces
Top US sales forces Total full-time reps CSO Pfizer + WL(est) GW + SKB(est) AstraZeneca* Expanded Bristol-Myers Squibb Merck Johnson & Johnson Novartis Aventis 0 1000 2000 3000 4000 5000 6000 7000 8000 Number of Customer Contact Representatives * Actual Sales Force numbers used for AstraZeneca Sourc
Slide 32: AstraZeneca US: sales by therapeutic area
AstraZeneca US: sales by therapeutic area Resp Resp CNS Pain GI CNS Oncology Pain GI Oncology CV CV 2000 2004 Note: Pie charts not to scale
Slide 33: AstraZeneca US: Winning in the US
AstraZeneca US - Building a record of achievement - Benchmarked our plans to megabrand scale - Growing confidence in the product profiles - Investing in a top tier sales force Winning in the US
Slide 34: Jon Symonds, Chief Financial Officer
Jon Symonds Chief Financial Officer
Slide 35: Financial review
Financial review - Sales & profit analysis - Margins - Quarterly phasing - Syngenta update
Slide 36: Sales trends 2000: Healthcare
Sales trends 2000: Healthcare +9 +8 +8 Half Year Q1 Q2
Slide 37: Operating profit trends 2000: Healthcare
Operating profit trends 2000: Healthcare +15 +14 +14 Half Year Q1 Q2
Slide 38: Operating profit trends 2000: Healthcare
Operating profit trends 2000: Healthcare - 2000 synergy benefits increased to $600 million - 55% of benefits in 18 months - Currency impact in 1H: 2% (3% before hedging) - Full year currency impact 2-3%
Slide 39: EPS trends 2000: Ongoing business
EPS trends 2000: Ongoing business +21 +19 +17 Half Year Q1 Q2
Slide 40: EPS trends 2000: Ongoing business
EPS trends 2000: Ongoing business - Stronger EPS growth due to cash flow - Q2 1999 Merck payments - Tax rate reduction target of 1% in 2000 - 2000 EPS target remains subject to currency
Slide 41: Healthcare margin
Healthcare margin 1H99 1H00 2Q99 2Q00 Margin 24.8 26.4 + 1.6 25.4 27.2 + 1.8 COGS - 0.9 - 0.4 R&D + 0.3 + 0.5 S,G & A + 2.1 + 1.6 Other + 0.1 + 0.1 - COGS up - higher manufacturing costs ahead of launches/mix - Phasing of R & D - increased costs in second half - S,G&A costs to increase with launch p
Slide 42: Healthcare: quarterly trends
Healthcare: quarterly trends - Sales and profit targets unchanged - Sales growth - second half stronger than first - Losec®: very strong Q3 1999 comparator - Benefit of launches in Europe - Stronger Q4 than Q3
Slide 43: Healthcare: quarterly profit trends
Healthcare: quarterly profit trends 1000 800 600 400 200 0 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
Slide 44: Agrochemicals
Agrochemicals - Significantly improved business growth - sales up 8% - profits up 23% - benefits of restructuring initiatives - Market upturn not yet apparent - USA unchanged - European sales affected by adverse conditions - particularly for Fungicides - Latin America and Asia Pacific showing improv
Slide 45: Syngenta
Syngenta - EU approval granted - FTC discussions progressing - Financing/listing process well advanced - On track for fourth quarter completion - Restructuring charge to be taken on final separation
Slide 46: Launch programme
Launch programme Lower cost Higher cost Iressa Viozan™ ZD4522 ™ OD Nexium® TI - Nexium® - high cost launch: Losec® resources repositioned - ZD4522 - high cost launch - Iressa™ - specialist product - ODTI - phased launch as new indications added - `Viozan™ - mid cost launch
Slide 47: Managing the launch phase: investment
Managing the launch phase: investment - Aggressive investment to deliver product potential - Optimise profile across short, medium and long term horizons - Financial strategy recognises: - earlier delivery of synergies - resource prioritisation - further cost control
Slide 48: Managing the launch phase: benefits
Managing the launch phase: benefits - Rapid uptake of Nexium® - ZD4522 achieves major market position - Strong growth platform from 2003 - 27% margin target
Slide 49: Dr Tom McKillop, Chief Executive Officer
Dr Tom McKillop Chief Executive Officer
Slide 50: Analysts predict a wide spectrum of outcomes
Analysts predict a wide spectrum of outcomes 7 Operating profit 6 $bn 5 4 3 1998 1999 2000 2001 2002 2003 2004 2005
Slide 51: A scenario
A scenario - Generic omeprazole in the US - late 2001 - Nexium® achieves expected superiority label - ZD4522 gains 20% market share - Industry attrition rates for other products
Slide 52: Enhanced Confidence
malatclarecre Confidence Astrédleneces?
Slide 53: Appendices
AstraZeneca Appendices
Slide 54: GI and CV milestones
GI and CV milestones Atacand® Plus: launch Analyst visit to in US, Oct 2000 AZ Mölndal 11-12 Dec 2000 Nexium® first Nexium®: launches ZD4522: additional European launch in UK & Denmark phase II data, AHA Sweden, Aug 2000 3Q 2000 New Orleans, 11 Nov 2000 August December Nexium®: launches Nexium®: US
Slide 55: Respiratory, Oncology & Specialist milestones
Respiratory, Oncology & Specialist milestones Arimidex®: FDA approval 1st line indication 4Q 2000 Symbicort®: first European approval Seroquel®: launch in Sweden Aug 2000 in Spain, 3Q 2000 Zomig®: MAA nasal spray submission 4Q 2000 August December Seroquel®: approval in Japan 3Q 2000 Merrem®: sNDA P
Slide 56: Sales by business: half year analysis
Sales by business: half year analysis 1H 99 1H 00 Total Vol Price Exch Other $m $m % % % % % Healthcare 7,382 7,806 +6 +9 -1 -2 - Agrochemicals 1,612 1,681 +4 +9 -1 -4 - Specialties 615 - -100 - - - -100 Other Trading 49 57 +16 - - - +16 Group Total 9,658 9,544 -1 +9 -1 -2 -7
Slide 57: Sales by business: second quarter analysis
Sales by business: second quarter analysis 2Q 99 2Q Total Vol Price Exch Other $m $m% % % % % Healthcare 3,752 3,945 +5 +11 -3 -3 - Agrochemicals 949 975 +3 +6 -1 -2 - Specialties 319 - -100 - - - -100 Other Trading 28 26 -7 - - - -7 Group Total 5,048 4,946 -2 +8 -1 -2 -7
Slide 58: Operating profit by business: half year analysis
Operating profit by business (before exceptional items) half year analysis Constant 1H 99 1H 00 Total Exch Currency $m $m % % % Healthcare 1,834 2,058 +12 -2 +14 Agrochemicals 283 343 +21 -2 +23 Specialties 71 - -100 - -100 Other Trading -14 -12 +16 - +16 Group Total 2,174 2,389 +10 -2 +12
Slide 59: Operating profit by business: second quarter analysis
Operating profit by business (before exceptional items) second quarter analysis Constant 2Q 99 2Q 00 Total Exch Currency $m $m % % % Healthcare 954 1,073 +12 -2 +14 Agrochemicals 212 242 +14 - +20 Specialties 40 - -100 - -100 Other Trading -11 -3 +73 - +73 Group Total 1,195 1,312 +10 -2 +12
Slide 60: Half Year Results 2000
AstraZeneca Half Year Results 2000