Slide 1: 3Q and Nine Months Results 2013
3Q and Nine Months Results 2013 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding 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 presentation contains certain forward-looking statements
Slide 3: 3Q and Nine Months Results 2013 - Pascal Soriot
3Q and Nine Months Results 2013 Pascal Soriot, Chief Executive Officer 3
Slide 4: 3Q 2013 highlights
3Q 2013 highlights • 3Q revenue down 4% CER: ~ $350m decline from loss of exclusivity • Good progression of our 5 growth platforms • $232m of CER growth; +8% • 3 regulatory filings accepted • 4 business development transactions • Financial guidance confirmed for full year 4 4
Slide 5: Key growth platforms
5 Key growth platforms Total (unduplicated) +8% Emerging Mkts +5% Japan +5% Brilinta +208% Diabetes +60% Respiratory +4% 0 50 100 150 200 250 CER $ growth (millions) 5 5
Slide 6: 3Q 2013 highlights
3Q 2013 highlights • 3Q revenue down 4% CER: ~ $350m decline from loss of exclusivity • Good progression of our 5 growth platforms • $232m of CER growth; +8% • 3 regulatory filings accepted • 4 business development transactions • Financial guidance confirmed for full year 6 6
Slide 7: Headline results 3Q and Nine months 2013
Headline results 3Q and Nine months 2013 3Q 2013 CER YTD 2013 CER $m growth $m growth Revenue 6,250 -4% 18,867 -7% Core Operating Costs* (3,215) +9% (9,446) +3% Core Operating Profit 2,027 -29%** 6,407 -21% Core EPS $1.21 -26%** $3.82 -23% Reported EPS $0.99 -16%† $2.46 -31% * Combined Core R&D and
Slide 8: Regional revenue performance 3Q 2013
Regional revenue performance 3Q 2013 2013 CER CER Fx $m growth $m $m Global Revenue 6,250 -4% (297) (135) US 2,360 -8% (213) - Europe 1,630 -4% (57) 76 YTD Established ROW 941 -8% (94) (176) ($364m) Japan 611 +5% 38 (150) Canada 144 -32% (70) (4) Other Established ROW 186 -23% (62) (22) Emerging Mar
Slide 9: Regional revenue performance 3Q 2013
Regional revenue performance 3Q 2013 2013 CER CER $m growth $m Global Revenue 6,250 -4% (297) US 2,360 -8% (213) LOE; some destocking (Crestor & Nexium) Europe 1,630 -4% (57) Improving trend on LOE impact 9 9
Slide 10: Regional revenue performance 3Q 2013
Regional revenue performance 3Q 2013 2013 CER CER $m growth $m Global Revenue 6,250 -4% (297) US 2,360 -8% (213) LOE; some destocking (Crestor & Nexium) Europe 1,630 -4% (57) Improving trend on LOE impact Established ROW 941 -8% (94) Japan 611 +5% 38 Good underlying performance Canada 144 -32% (70)
Slide 11: Japan: Continued strong market share performance
Japan: Continued strong market share performance Volume market share YTD Change vs PY 28.8% +2.2 pts 13.2% +11.1 pts 19.0% +5.8 pts 35.0% +5.2 pts 11 11
Slide 12: Regional revenue performance 3Q 2013
Regional revenue performance 3Q 2013 2013 CER CER $m growth $m Global Revenue 6,250 -4% (297) US 2,360 -8% (213) LOE; some destocking (Crestor & Nexium) Europe 1,630 -4% (57) Improving trend on LOE impact Established ROW 941 -8% (94) Japan 611 +5% 38 Good underlying performance Canada 144 -32% (70)
Slide 13: AstraZeneca is 2nd largest multinational in China with strong YTD growth
AstraZeneca is 2nd largest multinational in China with strong YTD growth Top 10 MNC YTD Sales Value Growth Rate Million USD Percent 21.5% 1 PFIZER 1,042 224 1,265 13.0% 18.5% 2 ASTRAZENECA 806 149 955 13.8% 10.5% 3 SANOFI 759 79 838 -2.5% 7.4% 4 BHC 751 -55 806 -2.7% 21.8% 5 ROCHE 653 142 796 9.2% 3
Slide 14: Regional revenue performance 3Q 2013
Regional revenue performance 3Q 2013 2013 CER CER $m growth $m Global Revenue 6,250 -4% (297) US 2,360 -8% (213) LOE; some destocking (Crestor & Nexium) Europe 1,630 -4% (57) Improving trend on LOE impact Established ROW 941 -8% (94) Japan 611 +5% 38 Good underlying performance Canada 144 -32% (70)
Slide 15: Brilinta/Brilique
Brilinta/Brilique 3Q 2013 Sales: $75m US $m • Driving execution of performance 80 acceleration plan EM 70 $8m EST ROW 60 $5m ROW 50 EUR • Steady progress 40 $44m 30 20 10 US $18m 0 3Q 12 3Q 13 15 15
Slide 16: US Acceleration Plan implementation was expedited
US Acceleration Plan implementation was expedited 2013 1Q 2Q 3Q 4Q New messaging elevating CV mortality Strategy New brand identity and Messaging Unmet need in field Competitive Selling Primary Care Promotion Engagement Leading HCP Education Investment All but Across the Additional CV Specialty prom
Slide 17: Brilinta NBRx and TRx share trends
Brilinta NBRx and TRx share trends TRx Share NBRx Share 7.0% 6.3% 6.0% 5.0% 4.0% 3.0% 2.0% 1.6% 1.0% 0.0% 17 Source: IMS NPA 17
Slide 18: Brilinta/Brilique: Europe
Brilinta/Brilique: Europe OAP Volume Market Share (All Channels) – GERMANY OAP Volume Market Share (All Channels) – ITALY BRILINTA prasugrel BRILINTA prasugrel 10.0% 3.0% 8.0% 7.1% 2.6% OAP DOT Mkt. Share 2.5% OAP DOT Mkt. Share 6.0% 6.9% 2.0% 2.1% 1.5% 4.0% 1.0% 2.0% 0.5% 0.0% 0.0% OAP Volume Marke
Slide 19: Brilinta: RoW performance
Brilinta: RoW performance OAP Volume Market Share (All Channels) – CANADA BRILINTA prasugrel 3.0% 2.7% 2.5% OAP DOT Mkt. Share OAP 2.0% Volume Market Share (All Channels) – CANADA 1.5% 1.0% 1.0% 0.5% 0.0% OAP Volume Market Share (All Channels) – AUSTRALIA BRILINTA prasugrel 3.0% OAP DOT Mkt. Share 2
Slide 20: Diabetes franchise
Diabetes franchise 3Q 2013 Revenue: $206m $m 250 Symlin 200 $10m Forxiga $3m Bydureon $43m 150 Byetta $57m 100 50 Onglyza $93m 0 3Q 12 3Q 13 20 Source: IMS HEALTH MDART 20
Slide 21: Onglyza Family Share
Onglyza Family Share(5 week Rolling Share) 14% 16% 18% 20% 22% 24% 20-Jul 27-Jul 3-Aug 10-Aug 17-Aug 24-Aug 31-Aug 7-Sep 14-Sep 21-Sep 28-Sep 5-Oct 12-Oct 19-Oct 26-Oct new entrants 2-Nov TRx Share 9-Nov 16-Nov 23-Nov 30-Nov 7-Dec Chart shows Rolling 5 weeks share of DPP4 Market 14-Dec 21-Dec 28-Dec
Slide 22: Bydureon Family (5 week Rolling Share)
Bydureon Family (5 week Rolling Share) 30% 32% 34% 36% 38% 40% 42% 44% 46% 48% 50% 20-Jul 27-Jul 3-Aug 10-Aug 17-Aug 24-Aug 31-Aug 7-Sep 14-Sep 21-Sep 28-Sep 5-Oct 12-Oct 19-Oct 26-Oct TRx Share 2-Nov 9-Nov 16-Nov 23-Nov 30-Nov Chart shows Rolling 5 weeks share of GLP Market 7-Dec 14-Dec 21-Dec 28-D
Slide 23: Diabetes franchise
Diabetes franchise 3Q 2013 Revenue: $206m $m Onglyza franchise 250 • Stable market share in highly competitive US market with new entrants Symlin 200 $10m Forxiga $3m Byetta/Bydureon Bydureon $43m • New to Brand share performance improves 150 in 3Q on stabilising Byetta trend and growth for Bydureon
Slide 24: Symbicort
Symbicort 3Q 2013 Sales: $839m +7% CER US • Symbicort TRx’s +18% vs market +2% $m • TRx share at 25.0% in Sept 2013, +2.7 pts since December 2012 EM 800 $73m +16% • New patient share 31.3% in September EST ROW 700 $110m +11% 600 ROW 500 EUR • Symbicort sales in ROW were $532m, +3% $349m -3% 400 • Ja
Slide 25: Symbicort: US market share trend
Symbicort: US market share trend 32% 31.3% 30% 28% 27.9% 26.4% 26% 25.0% 24% 23.5% 22.3% 22% 20% 18% 16% NTC Share NRx Share TRx Share 25 Source: IMS Monthly NPA data for NRx and TRx shares, IMS NPA APLD data for NTC shares 25
Slide 26: Achieve scientific leadership
Achieve scientific leadership Regulatory filings 1 • • Epanova: US NDA accepted Naloxegol (opioid-induced constipation) - Europe: MAA accepted - US: NDA submitted; awaiting acceptance • Olaparib (BRCA mutated serous ovarian cancer) - Europe: MAA accepted based on Phase II data Phase III starts Achie
Slide 27: Growing late-stage pipeline: 11 Phase III NMEs
Growing late-stage pipeline: 11 Phase III NMEs Small molecule Large molecule naloxegol metreleptin opioid induced constipation lipodystrophy CAZ AVI brodalumab BLI/cephalosporin SBI IL-17R psoriasis Phase 3 / Reg - 6 NMEs At 31 December 2012 lesinurad URAT1 gout fostamatinib SYK RA Oncology RIA CVMD
Slide 28: Growing late-stage pipeline: 11 Phase III NMEs
Growing late-stage pipeline: 11 Phase III NMEs Small molecule Large molecule naloxegol metreleptin opioid induced constipation lipodystrophy CAZ AVI brodalumab BLI/cephalosporin SBI IL-17R psoriasis Phase 3 / Reg - 6 NMEs At 31 December 2012 lesinurad URAT1 gout Epanova hypertriglyceridaemia Busines
Slide 29: Growing late-stage pipeline: 11 Phase III NMEs
Growing late-stage pipeline: 11 Phase III NMEs Small molecule Large molecule naloxegol metreleptin opioid induced constipation lipodystrophy CAZ AVI brodalumab BLI/cephalosporin SBI IL-17R psoriasis Phase 3 / Reg - 6 NMEs At 31 December 2012 lesinurad URAT1 gout Epanova hypertriglyceridaemia Busines
Slide 30: Business development aligned with priority TAs
Business development aligned with priority TAs Early Stage CV/Metabolism Oncology Respiratory/Inflammation/ Autoimmune NGM enteroendocrine cells AccurinTM mRNA mRNA Diabetes/Obesity nanomedicine 3 preclinical projects ACP-501 Reverse cholesterol RDX5791 transport End stage renal disease AMP-514 & ch
Slide 31: Achieve scientific leadership
Achieve scientific leadership Regulatory filings 1 • • Epanova: US NDA accepted Naloxegol (opioid induced constipation) - Europe: MAA accepted - US: NDA submitted; awaiting acceptance • Olaparib (BRCA mutated serous ovarian cancer) - Europe: MAA accepted based on Phase II data Phase III starts Achie
Slide 32: 3Q and Nine Months Results 2013 - Simon Lowth
3Q and Nine Months Results 2013 Simon Lowth, Chief Financial Officer 32
Slide 33: Core margin: 3Q 2013
Core margin: 3Q 2013 CER Delta vs $m % % sales PY CER Revenue 6,250 -4% - Core Gross Margin 5,147 -6% 82.4 -120 bps Distribution (81) -9% 1.3 0 bps 33 33
Slide 34: Core margin: 3Q 2013
Core margin: 3Q 2013 CER Delta vs $m % % sales PY CER Revenue 6,250 -4% - Core Gross Margin 5,147 -6% 82.4 -120 bps Distribution (81) -9% 1.3 0 bps Core SG&A (2,154) +11% 34.5 -460 bps 34 34
Slide 35: Core SG&A trend
Core SG&A trend 2300 2200 +6% +11% 2100 -2% 2000 $ (millions) 1900 1800 1700 1600 1500 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 35 35
Slide 36: Core margin: 3Q 2013
Core margin: 3Q 2013 CER Delta vs $m % % sales PY CER Revenue 6,250 -4% - Core Gross Margin 5,147 -6% 82.4 -120 bps Distribution (81) -9% 1.3 0 bps Core SG&A (2,154) +11% 34.5 -460 bps Core Other Income 176 -60% 2.8 -380 bps 36 36
Slide 37: Core margin: 3Q 2013
Core margin: 3Q 2013 CER Delta vs $m % % sales PY CER Revenue 6,250 -4% - Core Gross Margin 5,147 -6% 82.4 -120 bps Distribution (81) -9% 1.3 0 bps Core SG&A (2,154) +11% 34.5 -460 bps Core Other Income 176 -60% 2.8 -380 bps Core Pre-R&D Profit 3,088 -20% 49.4 -960 bps 37 37
Slide 38: Core margin: 3Q 2013
Core margin: 3Q 2013 CER Delta vs $m % % sales PY CER Revenue 6,250 -4% - Core Gross Margin 5,147 -6% 82.4 -120 bps Distribution (81) -9% 1.3 0 bps Core SG&A (2,154) +11% 34.5 -460 bps Core Other Income 176 -60% 2.8 -380 bps Core Pre-R&D Profit 3,088 -20% 49.4 -960 bps Core R&D (1,061) +7% 17.0 -180
Slide 39: Phase 4 restructuring programme
Phase 4 restructuring programme Total cost 1Q 13 2Q 13 3Q 13 $m $m $m $m R&D 1,380 291 62 53 SG&A 790 240 160 126 COGS 130 12 86 6 Total 2,300* 543 308 185 Phasing Costs: ~$1,300m in 2013; balance split broadly evenly between 2014/15; small residual in 2016 Benefits: ~$800m by end 2016, around ½ by
Slide 40: Cash generation: Nine months 2013
Cash generation: Nine months 2013 Q3 2013 Q3 2012 $m $m Opening net funds (1,369) 2,849 EBITDA 6,281 7,938 Movement in working capital (257) (957) Tax & interest paid (1,511) (2,493) Non-cash and other movements 409 (388) Net cash from operating activities 4,922 4,100 40 40
Slide 41: Cash application: Nine months 2013
Cash application: Nine months 2013 9 mo 2013 $m Opening net debt (1,369) Net cash from operating activities 4,922 Net PPE Investment (304) Net Intangible Asset Investment (913) Dividends/Share issues (3,193) Acquisitions (825) Other movements 76 Closing net debt (1,606) Gross debt (10,275) Cash/Cash
Slide 42: Guidance (Core basis)
Guidance (Core basis) Revenue (CER) Mid-to-High single-digit decline Core Operating Costs (CER) Low-to-mid single-digit increase vs 2012 (R&D + SG&A) (Towards top of range) Core other income ~$700 million Reported tax rate Around 23 percent Core EPS (CER) Decline significantly > than revenue decline
Slide 43: 3Q and Nine Months Results 2013 - Pascal Soriot
3Q and Nine Months Results 2013 Pascal Soriot, Chief Executive Officer 43
Slide 44: Q&A
3Q and Nine Months Results 2013 Q&A 44
Slide 45: 3Q 2013 summary
3Q 2013 summary • Financial performance in 2013 reflects the impact of loss of exclusivity • Investment in our growth platforms and our pipeline • 5 Key growth platforms up 8 percent • Growing late stage pipeline • 3 regulatory filings accepted • 3 Phase III starts • Late stage pipeline now contains
Slide 46: 3Q and Nine Months Results 2013
3Q and Nine Months Results 2013 46