Slide 1: Q1 2017 Results
Q1 2017 Results Conference call and webcast for investors and analysts, London, UK 27 April 2017
Slide 2: Forward-looking statements
Forward-looking statements In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995, we are providing the following cautionary statement: This document contains certain forward-looking statements with respect to the operations,
Slide 3: Presenters
Presenters Pascal Soriot Mark Mallon Executive Director and Executive Vice President, Chief Executive Officer Global Portfolio and Product Strategy, Global Medical Affairs, Corporate Affairs and International West Marc Dunoyer Sean Bohen Executive Vice President, Executive Director and Global Medici
Slide 4: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 4
Slide 5: Highlights: A good start to 2017
Highlights A good start to 2017 Business & financials Total Revenue declined, primarily reflecting tail of Crestor US loss of exclusivity ‘New AstraZeneca’ Product Sales grew by 6% in Q1 • Emerging Markets up 9%;; now the largest sales region – China: Tagrisso approved and launched;; Forxiga approve
Slide 6: Highlights, continued: Pipeline-driven transformation continues
Highlights, continued Pipeline-driven transformation continues Pipeline Oncology • Tagrisso lung cancer Approval (US, EU;; full approval, CN) • Lynparza ovarian cancer Reg. submission (2L) (US) (Priority Review) Orphan Drug Designation (JP) breast cancer Positive Phase III trial Cardiovascular & •
Slide 7: Total Revenue: An inflection point approaching
Total Revenue: An inflection point approaching New AstraZeneca emerging strongly from patent losses $m 7,000 6,000 5,000 US patent losses (Crestor/Nexium/Seroquel) 4,000 Externalisation Other out-of-patent medicines Emerging Markets (outside Emerging Markets) (established medicines) 3,000 2,000 Re
Slide 8: 2017: Potential to be a defining year
2017: Potential to be a defining year Launches of new medicines Some of the key news flow from main therapy areas opportunities in 2017 benralizumab durvalumab bladder cancer ZS-9✘ hyperkalaemia benralizumab asthma ✓ reg. decision reg. decision reg. decision durvalumab / ✓ Tagrisso durva + treme NS
Slide 9: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 9
Slide 10: Growth Platforms: Good start to 2017
Growth Platforms: Good start to 2017 Respiratory stable;; growth in all other areas Q1 2017 % % Total $m change Revenue Growth Platforms 3,572 5 66 Emerging Markets 1,562 9 - Respiratory 1,181 0 - New CVMD1 798 6 - Primary Japan 450 3 - focus today New Oncology2 236 139 - 1. New CVMD comprises
Slide 11: Emerging Markets
Emerging Markets Higher growth overall Product Sales growth An encouraging performance;; Long-term target: Mid to high single-digit successful execution 9% 12% 12% • Overall growth improved in Q1 2017 Emerging Markets Emerging Markets 7% 8% • Faster pace many markets, in particular 6% 4% Middle-E
Slide 12: Respiratory: A stable performance
Respiratory A stable performance Symbicort global leader;; US, Europe competitive;; Stable Q1 2017 Product Sales Europe volume relatively stable Emerging Markets growth $m 0% 1,200 1,200 16% US -18% Symbicort Competitor • Symbicort competitive pricing 1,000 1,000 environment continued;; regained Gl
Slide 13: Respiratory - strategy
Respiratory - strategy Therapy area with potential for biopharmaceutical leadership Drivers of market growth Strength in inhaled Leading biologics Disease portfolio modification Biologics Backbone of care Early intervention Transforming outcomes Inhaled +8% Established medicines Benralizumab Epithe
Slide 14: New CVMD: Focus on Brilinta and Farxiga
New CVMD Focus on Brilinta and Farxiga Diabetes: Farxiga growth drives Brilinta: Growth in all markets Key observations global market leadership $m $m -1% 250 250 27% 600 600 Brilinta 200 200 500 500 14% • Continued growth across all 54% 150 150 400 400 markets 12% 300 300 -27% 100 100 200 200 24%
Slide 15: Japan: Back to growth; Tagrisso helping to change the business
Japan Back to growth;; Tagrisso helping to change the business Up 3% despite ~6% price cut Tagrisso: Further increase in Tagrisso: 7% sequential CER and partnering in anaesthetics T790M-mutation testing growth Q4 2016 to Q1 2017 $m US +5 $m 7% seq. 500 500 39 39 3% 85% 400 400 28 69% 300 300 59% 53
Slide 16: New Oncology: Important growth
New Oncology Important growth Tagrisso Commercial execution: Lynparza (lung cancer) Tagrisso JP account openings (ovarian cancer) $m $m 60 60 180 50 50 800 40 40 600 120 400 30 30 200 20 20 60 0 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 Months since launch 10 10 Tagrisso afatinib alectinib 0 crizotinib das
Slide 17: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 17
Slide 18: Reported Profit & Loss
Reported Profit & Loss Q1 2017 % Total % change $m Revenue Total Revenue 5,405 (10) 100 - Product Sales 4,843 (12) 90 - Externalisation Revenue 562 3 10 Gross Margin 82.3% (2) - R&D Expenses 1,453 2 27 SG&A Expenses 2,300 (8) 43 Other Operating Income 236 n/m 4 Tax Rate 12% - - EPS $0.42 (35) A
Slide 19: Core Profit & Loss
Core Profit & Loss SG&A reduction larger than anticipated for FY17 Q1 2017 % Total % change $m Revenue Total Revenue 5,405 (10) 100 - Product Sales 4,843 (12) 90 - Externalisation Revenue 562 3 10 Gross Margin 83.6% (1) - R&D Expenses 1,338 (3) 25 SG&A Expenses 1,829 (12) 34 Other Operating Incom
Slide 20: Continued progress and focus on cost discipline
Continued progress and focus on cost discipline Reduction in Core R&D costs $bn (3)% • Reduction in Core R&D costs 1.5 1.0 • Q1 2017: Down by 3% 0.5 • FY 2017: Core R&D costs are expected to 0.0 be broadly in line with those in FY 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 14 14 14 14 15 15 15 15 1
Slide 21: FY 2017 guidance and capital-allocation priorities
FY 2017 guidance and capital-allocation priorities Guidance Capital-allocation priorities Total Core EPS Investment in the business Revenue Progressive dividend policy Low to mid single- Low to mid teens digit percentage percentage Strong, investment-grade credit rating decline decline Immediate
Slide 22: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 22
Slide 23: Q1 2017 late-stage pipeline highlights
Q1 2017 late-stage pipeline highlights Main therapy areas Cardiovascular & Oncology Respiratory Metabolic Diseases • Lynparza • Forxiga - type-2 diabetes: • Symbicort - COPD1 exacerbations: Ovarian Approval (CN);; major data CVD- Regulatory submission (US) -Regulatory submission (2L) (US) REAL
Slide 24: Oncology highlights from recent meetings
Oncology highlights from recent meetings Progress across launched and pipeline medicines Immuno-Oncology Updated Phase I/II efficacy and safety data from Study 1108 for patients with locally-advanced or metastatic urothelial bladder cancer Immuno-Oncology Further concordance between PD-L1 diagno
Slide 25: Lynparza: Ovarian cancer
Lynparza: Ovarian cancer Compelling efficacy and safety Compelling efficacy data from SOLO-2 Compelling safety data, patient convenience (ovarian cancer 2L maintenance) % (events, n) Anemia Neutropenia Thrombocytopenia Investigator assessment Grade ≥3 Grade ≥3 Grade ≥3 SOLO-2 19.5% (38) 5.1% (10)
Slide 26: Durvalumab and durva + treme
Durvalumab and durva + treme Phase III news flow;; 2017 a key year = durvalumab = durva +/- treme ✔ = fully recruited ✔ 2 Bladder cancer DANUBE (UC1) 1L Head & neck cancer KESTREL 1L ✔ EAGLE 2L Lung cancer POSEIDON (NSCLC) 1L IO-IO-CTx triple ARCTIC ✔ 3L PD-L1 low/neg. NEPTUNE 1L (final OS) PEAR
Slide 27: CV outcomes: SGLT2 class reduced morbidity/mortality
CV1 outcomes: SGLT2 class reduced morbidity/mortality Farxiga strengthened by first real-world study in >300,000 patients CVD-REAL study Hospitalisation for heart failure or all-cause death Key ongoing CV outcomes trials Bydureon Phase III EXSCEL trial Data, regulatory submission now expected in
Slide 28: Late-stage pipeline news flow in 2017 and 2018
Late-stage pipeline news flow in 2017 and 2018 Unlocking and realising the potential of new medicines Q2 2017 / mid-2017 H2 2017 2018 Regulatory decision Faslodex - breast cancer (1L) (JP) Faslodex - breast cancer (1L) (US, EU) Bydureon - autoinjector (US) durvalumab - bladder cancer (US) Lynp
Slide 29: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 29
Slide 30: Pipeline-driven transformation on track
Pipeline-driven transformation on track New AstraZeneca steadily emerging this year • Good start to 2017 – Financials on track – Guidance confirmed – Strong pipeline news flow • 12 new potential medicines in Phase III/under registration • Oncology progressing ahead of expectations – Tagrisso, Lynpa
Slide 31: Q&A
Q&A 31
Slide 32: Use of AstraZeneca webcast, conference call and presentation slides
Use of AstraZeneca webcast, conference call and presentation slides The AstraZeneca webcast, conference call and presentation slides (together the ‘AstraZeneca Materials’) are for your personal, non- commercial use only. You may not copy, reproduce, republish, post, broadcast, transmit, make availa
Slide 33: Q1 2017 Results
Q1 2017 Results Conference call and webcast for investors and analysts, London, UK 27 April 2017