Slide 1: Year-To-Date and Q3 2017 Results
Year-To-Date and Q3 2017 Results Conference call and webcast for investors and analysts 09 November 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, pe
Slide 3: Presenters
Presenters Pascal Soriot Mark Mallon Dave Fredrickson Executive Director and Executive Vice President, Executive Vice President and Chief Executive Officer Global Products & Portfolio Head, Oncology Business Unit Strategy, Global Medical Affairs, Corporate Affairs Marc Dunoyer Sean Bohen Executive D
Slide 4: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune Closing and Q&A system, resulting in enhanced anti- tumour immunity 4
Slide 5: Highlights YTD 2017: Performance in line with expectations
Highlights YTD 2017: Performance in line with expectations Business & financials Total Revenue decreased by 3% with the decline in Product Sales decelerating (-2% Q3 vs -8% YTD) Growth Platforms improved • Emerging Markets: Up 7%; accelerating in Q3 • China: Up 10%; five additional medicines reimbur
Slide 6: Highlights, continued: Q3 2017 Unprecedented pipeline news flow
Highlights, continued Q3 2017: Unprecedented pipeline news flow Pipeline developments Oncology • Faslodex breast cancer 1L Approval (US) • Lynparza ovarian cancer 2L, 4L/tablets Approval (US) breast cancer Regulatory submission, Priority Review (US, JP) • Tagrisso lung cancer 1L Breakthrough Therapy
Slide 7: Product Sales: An inflection point approaching
Product Sales: An inflection point approaching A new AstraZeneca is emerging from the patent losses $m 20,000 18,000 16,000 US patent losses (Crestor/Nexlum/Seroquel) 14,000 12,000 Externalisation Other out-of-patent medicines 10,000 (outside Emerging Markets) Emerging Markets (established medicines
Slide 8: 2017: Already a defining year
2017: Already a defining year Launches of new medicines Some of the key news flow from main therapy areas opportunities in 2017 PDUFA Q4 2017 benralizumab ✓ Imfinzi bladder cancer ZS-9✘ hyperkalaemia benralizumab asthma ✓ reg. decision reg. decision reg. decision ✓ ✓ ✘ Imfinzi / Tagrisso ✓ ✓ Imfinzi
Slide 9: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune Closing and Q&A system, resulting in enhanced anti- tumour immunity 9
Slide 10: Growth Platforms: Solid Q3 with improving performance
Growth Platforms: Solid Q3 with improving performance Q3 2017 % Total % Product YTD 2017 % Total % Product % change % change $m Revenue Sales $m Revenue Sales Growth Platforms 3,760 6 60 77 11,055 4 66 75 Emerging Markets 1,515 10 - - 4,519 7 - - Respiratory 1,092 (2) - - 3,372 (3) - - New CVMD 873
Slide 11: Emerging Markets
Emerging Markets Strong China growth Product Sales accelerated Solid Emerging Markets; Long-term target: Mid to high single-digit China growth increased 12% 12% 10% • Mid to high single-digit growth continued Emerging Markets Emerging Markets 8% 7% • Growth impacted by economic conditions in 6% LatA
Slide 12: Respiratory: Continued challenging market for Symbicort
Respiratory Continued challenging market for Symbicort Overall US and Europe Global focus: Emphasis on Steady Pulmicort growth $m market share stability Symbicort’s competitive profile -3% -2% Symbicort US -13% 0% • Symbicort pricing pressure US 5-week NBRx -4% 3,000 32.1% market share 1,000 7% cont
Slide 13: New CVMD: Strong Brilinta and Farxiga performance
New CVMD Strong Brilinta and Farxiga performance Brilinta: Strong performance; Diabetes: Farxiga global Commercial focus continued on $mUS NBRx continued upwards $m leadership continued the two differentiated medicines 300 2,000 -3% 24% 750 -3% Brilinta +31% 32% 600 200 1,500 -2% • Continued solid g
Slide 14: Bydureon BCise now approved in the US
Bydureon BCise now approved in the US Will help compete in a dynamic diabetes market New, easy-to-use, once-weekly medicine for type-2 diabetes Up to 1.4% HbA1c1 reduction Unique, continuous-release microsphere delivery system Up to 3.1lbs Weight loss 1. Glycated haemoglobin. Source: US prescribing
Slide 15: Japan: Steady growth supported by Tagrisso
Japan Steady growth supported by Tagrisso Growth continued Key medicines grew well and Tagrisso: Q3 reduced by $m +4% Q3; +5% YTD continued to lead their markets US Ryotanki1 lift in Q2 2017 $m +5 600 1,600 5% -7% • Symbicort n/m Growth and market leadership; 70 64 n/m 8% partner buying patterns 0%
Slide 16: Oncology: Quarterly sales now >$1bn
Oncology Quarterly sales now >$1bn Oncology Product Sales $m New medicines boosting growth • Total Oncology +19% 1,200 • Already 20% of total Product Sales 1,000 800 • Six new medicines 2014-2020 with four delivered 600 • Lynparza • Tagrisso 400 • Imfinzi: Strategic US launch May 2017 in bladder 200
Slide 17: Lynparza: Global leader in DNA damage response
Lynparza Global leader in DNA damage response Back to strong growth US returned to growth in Q3 MRK collaboration status since $m H1 2017 Results announcement 100 • Europe • Joint Steering Committee and Steady progress in 2L ovarian subteams created and agreed 80 cancer, despite capsule label commer
Slide 18: Lung cancer: Tagrisso and Imfinzi
Lung cancer: Tagrisso and Imfinzi Quickly progressing with making medicines available to patients Tagrisso Imfinzi Locally-advanced, unresectable NSCLC $m 300 • US 250 Higher testing rates underpinned growth 7 Regulatory submissions1 200 • Europe Positive reimbursement decision Other Q3 achievements
Slide 19: Calquence
Calquence For adult patients with previously-treated mantle cell lymphoma 40% Complete response rate 80% Objective response rate Source: US prescribing information. 19
Slide 20: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune Closing and Q&A system, resulting in enhanced anti- tumour immunity 20
Slide 21: Reported Profit & Loss
Reported Profit & Loss YTD 2017 % Total Q3 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 16,688 (3) 100 6,232 10 100 - Product Sales 14,665 (8) 88 4,882 (2) 78 - Externalisation Revenue 2,023 50 12 1,350 n/m 22 Gross Margin 80.3% (2) pp1 - 77.7% (4) pp - R&D Expenses 4,206 (1) 2
Slide 22: Core Profit & Loss
Core Profit & Loss YTD 2017 % Total Q3 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 16,688 (3) 100 6,232 10 100 - Product Sales 14,665 (8) 88 4,882 (2) 78 - Externalisation Revenue 2,023 50 12 1,350 n/m 22 Gross Margin 81.8% (1) pp - 79.6% (4) pp - R&D Expenses 3,956 (2) 24 1,3
Slide 23: Externalisation Revenue: Sustainable income increased
Externalisation Revenue Sustainable income increased Increasing contribution from Sustainable and Key observations $m Ongoing Externalisation Revenue, incl. MRK 1,600 • Sustainable and Ongoing Externalisation Revenue 1,400 1,200 annualising at >$500m in 2017 1,000 800 • MRK collaboration expected to
Slide 24: Continued progress and focus on cost discipline
Continued progress and focus on cost discipline Reduction in Core R&D costs Continued reduction in Core costs $m (2)% 1,500 YTD • Reduction in Core R&D costs 1,000 • YTD 2017: Down by 2% 500 • FY 2017: Core R&D costs are expected to be broadly 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 in line w
Slide 25: Focus: Cash flow
Focus: Cash flow Detailed breakdown 244 162 $m 622 537 157 30 28 194 2,581 2,185 YTD 16 net cash inflow Reported operating Depreciation, (Increase)/decrease in (Gains)/losses on Fair value movement on Non-cash and other Interest paid Tax paid YTD 17 net cash inflow from operating activities profit a
Slide 26: 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-digit Towards the percentage decline favourable end of a Strong, investment-grade credit rating low to mid teens p
Slide 27: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune Closing and Q&A system, resulting in enhanced anti- tumour immunity 27
Slide 28: Q3 2017 late-stage pipeline update
Q3 2017 late-stage pipeline update Cardiovascular & Oncology Respiratory • Metabolic Diseases • • Faslodex - breast cancer 1L: Approval (US) • Brilinta - prior MI: Approval (CN) • Symbicort - COPD exacerbations: Approval (US) • Lynparza • Farxiga + Bydureon - type-2 - ovarian cancer 2L, 4L/tablets:
Slide 29: Oncology: Highlights from ESMO
Oncology Highlights from ESMO European Society for Medical Oncology (ESMO) Regulatory progress Potential new standards of care in lung cancer • Tagrisso - EGFRm 1L NSCLC • Imfinzi - locally-advanced (Stage Tagrisso FLAURA (FLAURA) III), unresectable NSCLC • Regulatory submission acceptances anticipa
Slide 30: Cardiovascular & Metabolic Diseases: Highlights from ESC and EASD
Cardiovascular & Metabolic Diseases Highlights from ESC and EASD European Society European Association for of Cardiology (ESC) the Study of Diabetes (EASD) • Sub-analysis of Phase III • Forxiga - type-1 diabetes (Phase PEGASUS trial showed that 60mg III DEPICT 1 trial): Brilinta twice daily reduced
Slide 31: Respiratory: Highlights from ERS
Respiratory Highlights from ERS1 Benralizumab Q8W annual asthma exacerbation rate reduction by Tezepelumab annual asthma exacerbation rate vs. placebo at week 52 eosinophil ranges (full analysis set, pooled) irrespective of baseline biomarker status • Severe, uncontrolled asthma • Severe, uncontroll
Slide 32: 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 Q4 2017 H1 2018 H2 2018 Regulatory decision benralizumab - severe, uncontrolled asthma (US) Lynparza Lynparza - breast cancer (JP) - ovarian cancer 2L (EU, JP) - breast cancer (US) Imfinzi - lung ca
Slide 33: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune Closing and Q&A system, resulting in enhanced anti- tumour immunity 33
Slide 34: Pipeline-driven transformation gathers pace
Pipeline-driven transformation gathers pace A new AstraZeneca is steadily emerging from 2017 • YTD and Q3 2017 in line with expectations • Financials on track • Guidance reiterated/updated • Unprecedented pipeline news flow • Business execution • Lynparza back to US growth, Tagrisso excels, Imfinzi
Slide 35: Q&A
Q&A 35
Slide 36: Pipeline-driven transformation gathers pace
Pipeline-driven transformation gathers pace A new AstraZeneca is steadily emerging from 2017 • YTD and Q3 2017 in line with expectations • Financials on track • Guidance reiterated/updated • Unprecedented pipeline news flow • Business execution • Lynparza back to US growth, Tagrisso excels, Imfinzi
Slide 37: 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 availab
Slide 38: Year-To-Date and Q3 2017 Results
Year-To-Date and Q3 2017 Results Conference call and webcast for investors and analysts 09 November 2017