Slide 1: Full-Year and Q4 2017 Results
Full-Year and Q4 2017 Results Live presentation, conference call and webcast for investors and analysts 2 February 2018
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 Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could Oncology stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finance Pip
Slide 5: Highlights Full-Year 2017: Encouraging progress across the company
Highlights Full-Year 2017: Encouraging progress across the company Business & financials Total Revenue declined by 2%, with Product Sales improving during the year (+3% Q4 vs. -5% FY) Product Sales • Oncology: Encouraging growth across all major medicines • CVMD*: Brilinta (+29%) and Farxiga (+28%)
Slide 6: Highlights continued: News flow continued at high speed
Highlights continued News flow continued at high speed in the period Pipeline developments Oncology • Faslodex breast cancer (combinations) Approval (US, EU) • Lynparza ovarian cancer 2L Approval (JP), Priority review (CN) breast cancer Approval (US) • Tagrisso lung cancer 1L (FLAURA) Regulatory sub
Slide 7: Product Sales: Improving momentum
Product Sales: Improving momentum US patent losses (Crestor/Nexium/Seroquel) Externalisation Other out-of-patent medicines Emerging Markets (outside Emerging Markets) (established medicines) Respiratory +6% Oncology FY 2017 Brilinta & Diabetes (+11% Q4 2017) FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 F
Slide 8: 2017: A defining year
2017: A defining year Launches of new medicines Some of the key news flow from main therapy areas opportunities we had in 2017 ü Imfinzi ü ZS-9 û Fasenra ü bladder cancer hyperkalaemia asthma ü reg. decision reg. decision reg. decision ü Imfinzi ü Imfinzi û Tagrisso ü Imfinzi + treme ü NSCLC* Stage
Slide 9: 2018: Focus on return to growth
2018: Focus on return to growth Momentum improved during 2017 Significantly-improved momentum Many opportunities to support growth in 2018 (FY 2010 - Q4 2017 Product Sales growth) Lynparza Tagrisso Imfinzi launched tablet launch in 1st line lung launch in Stage III lung launched in breast cancer can
Slide 10: Agenda
Agenda Overview Growth Platforms Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could Oncology stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finance Pip
Slide 11: Growth Platforms: Improved momentum
Growth Platforms: Improved momentum China and New Oncology were top contributors Q4 2017 % Total % Product FY 2017 % Total % Product % change Revenue Sales % change Revenue Sales $m $m Growth Platforms 4,180 12 72 76 15,231 6 68 76 Emerging Markets 1,630 9 - - 6,149 8 - - Respiratory 1,334 8 - - 4,7
Slide 12: Main therapy areas: Growth in all areas
Main therapy areas: Growth in all areas New framework for reporting of Product Sales Q4 2017 % Product FY 2017 % Product % change % change $m Sales $m Sales Product Sales 5,487 3 100 20,152 (5) 100 Oncology 1,120 19 20 4,024 19 20 New CVMD 1,024 21 19 3,567 9 18 Respiratory 1,334 8 24 4,706 (1) 23 E
Slide 13: Emerging Markets: China growth accelerated
Emerging Markets China growth accelerated Product Sales accelerated China growth was a highlight; Long-term target: Mid to high single-digit other EMs solid overall 9% 12% 12% 8% • Mid to high single-digit growth in EMs continued Emerging Markets Emerging Markets 8% 8% • Growth impacted by economic
Slide 14: Emerging Markets - additional analysis
Emerging Markets - additional analysis Strong growth driven by underlying demand Impact of partnerships and divestments China Inventory • China growth reduced by • Emerging Markets outside China • China growth was not materially partnerships and divestments kept good momentum when impacted by invent
Slide 15: Respiratory: Symbicort sustained in a competitive market
Respiratory Symbicort sustained in a competitive market Steady Pulmicort growth Symbicort US and Europe Global focus: Emphasis on $m market share stable Symbicort’s competitive profile 1,500 5,000 -1% 8% US -8% 3% • Symbicort access maintained, but US 5-week NBRx 15% 33.0% market share 4,000 pricing
Slide 16: Fasenra: Our first respiratory biologic
Fasenra: Our first respiratory biologic 28-51% 1 Now approved in the US, the EU and Japan reduction in the annual asthma exacerbation rate versus placebo 116-159mL 1 significant improvement in lung function as measured by forced expiratory volume in one second (FEV1) versus placebo 75% reduction in
Slide 17: New CVMD: Brilinta and Farxiga each reached >$1bn
New CVMD Brilinta and Farxiga each reached >$1bn milestone Brilinta: Blockbuster Diabetes: Farxiga blockbuster Commercial focus maintained $m US NBRx continued to grow $m Global leadership ongoing on the two largest medicines 800 2,500 2% 20% 300 1,000 Brilinta +29% 2,000 -8% 21% 600 2% -1% • Sustai
Slide 18: Japan
Japan Tagrisso supported the sustained growth; Crestor offset Growth ongoing Key medicines remained Tagrisso: Back to growth $m +2% Q4; +4% FY volume-share leaders $m after Ryotanki1 lift in Q2 600 2,400 • Symbicort In-market growth; sales reduced by -11% 0% tough comparison and partner buying 70 2,
Slide 19: Oncology: Growth being delivered
Oncology Growth being delivered Oncology Product Sales $m New medicines boosting growth • Total Oncology +19% 1,200 • 20% of total Product Sales 1,000 • Faslodex approaching $1bn 800 • Six new medicines 2014-2020, with four 600 delivered 400 • Lynparza: Growth accelerating 200 • Tagrisso: Success in
Slide 20: Lynparza: The leading PARP inhibitor
Lynparza The leading PARP inhibitor with revitalised US growth Continued strong growth Strong US sales momentum MRK collaboration update $m +58% Q4; +35% FY Europe awaiting new tablet • US +11%, but +74% in Q4 • Continued integration of both Continued strong growth; development and commercial 100 la
Slide 21: Tagrisso and Imfinzi: Accelerating growth
Tagrisso and Imfinzi Q4: Accelerating growth Tagrisso Imfinzi $m 68 approvals; 16 awaited 350 • US +59% • Product sales $19m; $18m in Q4 Higher testing rates of ~70% 300 underpinned continued growth; • Current approvals preparing for 1st-line launch 2nd-line bladder cancer: US (3rd 250 in the market
Slide 22: Global launches underway
Global launches underway Building out the new medicines 22
Slide 23: Agenda
Agenda Overview Growth Platforms Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could Oncology stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finance Pip
Slide 24: Reported Profit & Loss
Reported Profit & Loss FY 2017 % Total Q4 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 22,465 (2) 100 5,777 2 100 - Product Sales 20,152 (5) 90 5,487 3 95 - Externalisation Revenue 2,313 38 10 290 (12) 5 Gross Margin 79.6% (1) pp* - 77.6% (-) pp - R&D Expenses 5,757 (1) 26 1,55
Slide 25: Core Profit & Loss
Core Profit & Loss FY 2017 % Total Q4 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 22,465 (2) 100 5,777 2 100 - Product Sales 20,152 (5) 90 5,487 3 95 - Externalisation Revenue 2,313 38 10 290 (12) 5 Gross Margin 81.2% (1) pp - 79.4% 1 pp - R&D Expenses 5,412 (3) 24 1,456 (4) 2
Slide 26: Externalisation Revenue: Ongoing income increased
Externalisation Revenue Ongoing income increased Increasing contribution from Ongoing Key observations $m Externalisation Revenue, incl. MRK 1,600 • Ongoing Externalisation Revenue of $821m in 2017 1,400 1,200 MRK collaboration benefit 1,000 800 • 2017: $1.85bn; ~$1.25bn in Externalisation Revenue 6
Slide 27: Continued progress and focus on cost discipline
Continued progress and focus on cost discipline Reduction in Core R&D costs: -3% FY 2017 Continued reduction in Core costs $m 1,500 1,000 • Core R&D costs 500 • FY 2017: Down by 3% 0 Investment concentrated in main therapy areas 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 20 20 20 20 20 20 20 20
Slide 28: Focus: Cash flow
Focus: Cash flow Detailed breakdown $m (0.1) 1.1 1.3 0.2 0.6 0.1 (0.5) (0.1) 2016 net cash inflow Reduction in cash Higher tax & interest Lower purchase of Lower purchase of Lower upfront Other 2017 net cash inflow before financing generated from paid property, plant and intangible assets payments o
Slide 29: 2018 Guidance and unchanged capital-allocation priorities
2018 Guidance and unchanged capital-allocation priorities Unchanged capital-allocation priorities Product Sales • Investment in the business A low single-digit percentage increase • Progressive dividend policy • Strong, investment-grade credit rating Core EPS $3.30 to $3.50 • Immediately earnings-ac
Slide 30: Agenda
Agenda Overview Growth Platforms Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could Oncology stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finance Pip
Slide 31: Q4 2017 late-stage pipeline update
Q4 2017 late-stage pipeline update Oncology Cardiovascular and Respiratory • Metabolic Diseases • • Faslodex - breast cancer • Bydureon + insulin - type-2 • Symbicort - asthma (safety): (combinations): Approval (US, EU) diabetes (DURATION-7 trial): Approval (US) Approval (EU) • Lynparza • Fasenra -
Slide 32: Oncology: FLAURA and PACIFIC regulatory submissions
Oncology FLAURA and PACIFIC regulatory submissions moving fast in lung cancer FLAURA and PACIFIC regulatory status Activity Region Timing Regulatory submission US, EU, JP H2 2017 Priority Review US Regulatory decision US H1 2018 EU, JP H2 2018 Tagrisso and Imfinzi Imfinzi submissions submission 32
Slide 33: Cardiovascular and Metabolic Diseases: Key 2018 Phase III readouts
Cardiovascular and Metabolic Diseases Key 2018 Phase III readouts Roxadustat Phase III programme Farxiga DECLARE Phase III trial First-in-class, anti-anaemia potential new medicine • Primary efficacy endpoints Patient population Company Phase III trial • Superiority for MACE (CV death, non-fatal myo
Slide 34: Respiratory: Late-stage pipeline programmes delivering
Respiratory Late-stage pipeline programmes delivering PT010 Tezepelumab Fasenra Triple combination therapy Phase III programme Data for severe (COPD, asthma) PATHFINDER (severe asthma) COPD in 2018 • Eight of the nine primary endpoints in • First Phase III trial NAVIGATOR • Approved in severe, uncon
Slide 35: Late-stage pipeline news flow in 2018 and 2019
Late-stage pipeline news flow in 2018 and 2019 Unlocking and realising the potential of new medicines H1 2018 H2 2018 2019 Regulatory decision Lynparza - ovarian cancer 2L (EU) Lynparza - breast cancer (JP) Tagrisso - lung cancer (US) Tagrisso - lung cancer (EU, JP) Imfinzi - lung cancer (PACIFIC) (
Slide 36: Agenda
Agenda Overview Growth Platforms Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could Oncology stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finance Pip
Slide 37: Pipeline-driven transformation: A new AstraZeneca emerging
Pipeline-driven transformation A new AstraZeneca emerging FY 2017 • Financials delivered and momentum in Product Sales • Unprecedented pipeline news flow Commercial execution • Strong Lynparza, Tagrisso growth, Imfinzi emerging and Calquence launched • Brilinta and Farxiga became blockbusters • Fase
Slide 38: Q&A
Q&A
Slide 39: Pipeline-driven transformation: A new AstraZeneca emerging
Pipeline-driven transformation A new AstraZeneca emerging FY 2017 • Financials delivered and momentum in Product Sales • Unprecedented pipeline news flow Commercial execution • Strong Lynparza, Tagrisso growth, Imfinzi emerging and Calquence launched • Brilinta and Farxiga became blockbusters • Fase
Slide 40: 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 41: Full-Year and Q4 2017 Results
Full-Year and Q4 2017 Results Live presentation, conference call and webcast for investors and analysts 2 February 2018