Astrazeneca Plc · LSE:AZN
Astrazeneca — Investor Day (December 2018)
77 slides from Astrazeneca's investor day presentation, Dec 13, 2018
Slide 1: China and Emerging Markets
China and Emerging Markets Webcast and conference call for investors and analysts 13 December 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: Emerging Markets: key to company transformation
Emerging Markets: key to company transformation Clear focus has driven Emerging Markets now more Main therapy areas all growing $m portfolio transformation $m than 1/3 of global sales faster in Emerging Markets 2,000 35% 6,000 90% Percent of total product sales Product sales CAGR, YTD 2013-18 1,500
Slide 4: Speakers
Speakers Leon Wang Kristina Rodnikova Pelin Incesu Executive Vice President, Vice President, Oncology Vice President, Commercial International; President, International; Vice President, Middle Strategy International AstraZeneca China East & Africa, Russia and Eurasia 4
Slide 5: Agenda
Agenda Emerging Markets China Oncology CVRM Respiratory Closing and Q&A 5
Slide 6: Agenda
Agenda Emerging Markets China Oncology CVRM Respiratory Closing and Q&A 6
Slide 7: Emerging Markets: growing importance
Emerging Markets: growing importance Strong, sustained growth: meeting aspirations each year Emerging Markets now AstraZeneca’s Emerging Markets long-term revenue largest sales region (% of global product sales) target: mid to high single-digit growth1 16% 12% 12% Emerging Markets Emerging Markets 1
Slide 8: Emerging Markets: portfolio of diverse markets
Emerging Markets: portfolio of diverse markets Product sales performing strongly in 2018 Emerging Markets total $5,124m +12% Russia New CVRM $123m $611m -24% Oncology Respiratory Other China +39% $2,847m Middle East Brazil +27% & Africa $1,173m $1,147m $800m $285m $731m Asia Pacific Total CVRM +15%
Slide 9: Significant growth engines across the region
Significant growth engines across the region ‘Frontier markets’ ‘Rising stars’ ‘Big emerging’ ‘Developed’ (by distributor) South Korea Gulf states Mexico GDP per capita China Turkey Saudi Arabia Brazil Taiwan Sub-Saharan Africa Egypt Russia Hong Kong Sri Lanka Malaysia India Singapore Sudan Vietnam
Slide 10: Specialty care: large opportunity
Specialty care: large opportunity Proportion of total product sales 24% 36% Europe 23% US 76% EMs 64% 77% 36% Est. RoW 64% Specialty care Primary care Product sales, YTD 2018. 10
Slide 11: Emerging Markets: leveraging legacy and new medicines
Emerging Markets: leveraging legacy and new medicines Oncology Main therapy roxadustat New CVRM areas Respiratory PT010 Oncology Legacy CVRM medicines Other 11
Slide 12: Emerging Markets: top-10 medicines
Emerging Markets: top-10 medicines Fast-growing and well-diversified portfolio New medicines Product sales YTD 2018 ($m) % change % of total Tagrisso 266 206 5 Forxiga 242 57 5 Brilinta 232 31 5 Older medicines Product sales YTD 2018 ($m) % change % of total Pulmicort 688 16 13 Crestor 631 7 12 Nexi
Slide 13: Emerging Markets: pipeline delivering
Emerging Markets: pipeline delivering Significant, recent regulatory approvals across the region H2 2018 approval highlights • Lynparza - ovarian cancer: India, China, Brazil • Tagrisso - lung cancer (1st line): India, Singapore • Imfinzi - lung cancer (Stage III, unresectable): Brazil, United Arab
Slide 14: Unmet medical needs are increasing
Unmet medical needs are increasing Oncology: all-cancer incidence CVRM: obesity prevalence Respiratory (millions) (millions) Asthma 2030 22 2030 891 • 339m patients worldwide affected by asthma. Seven patients die every 10 minutes as a result of asthma 2015 15 2015 710 Chronic obstructive pulmonary
Slide 15: Emerging Markets: to dominate world GDP growth
Emerging Markets: to dominate world GDP growth 2023 contribution to annual growth in world economy China becoming a dominant player US share of growth contribution to decline: • 12% in 2019 • 9% in 2023 India US Turkey Saudi Arabia Established Rest of World markets South Korea Egypt Philippines Mala
Slide 16: Bringing AstraZeneca to life: Emerging Markets
Bringing AstraZeneca to life: Emerging Markets 16
Slide 17: Emerging Markets: strategy
Emerging Markets: strategy Expansion Innovation Partnership • Portfolio selling • Patient-centric, fully- • Central and local integrated ecosystems government • Retail • New-medicine • Business development • Customer base localisation • Local healthcare • Market access • Medicine development provide
Slide 18: Agenda
Agenda Emerging Markets China Oncology CVRM Respiratory Closing and Q&A 18
Slide 19: China: strong growth outlook
China: strong growth outlook Second-largest Steadily-growing Growth drives higher $tn economy in the world $bn pharmaceutical market spend as % of GDP 9% 15% CAGR 7% CAGR CAGR 19 6.2% 160 140 6% 7% China forecast GDP 40 5% CAGR (2018-2020e) 12 120 37 34 32 100 14 13 12 80 12 5 4 60 3 3 3 2010 2015 2
Slide 20: Demographic trends driving demand for quality healthcare
Demographic trends driving demand for quality healthcare Ageing population Rapid urbanisation Growing middle class (population by age group) (rural vs. urban residents) (population by household income) 170 cities with more than one million inhabitants by 2030 16% 9% 14% 50% 60% 55% 72% 91% 86% 50% 3
Slide 21: Three basic health-insurance funds
Three basic health-insurance funds National and provincial reimbursement Other Urban employee basic medical Urban resident basic medical New rural cooperative medical insurance (UEBMI) insurance (URBMI) insurance list (NRCMI) 290 million 380 million 670 million people covered people covered people c
Slide 22: Healthcare reforms enhancing innovation and access
Healthcare reforms enhancing innovation and access Fast-track approvals for More-frequent NRDL1 review IP rights and the innovative medicines cycles and NEDL2 adjustments impact of generics • Accelerated regulatory review • Broader access, especially in • Regulatory data protection and approval time
Slide 23: Bringing AstraZeneca to life: China
Bringing AstraZeneca to life: China 23
Slide 24: AstraZeneca: a trusted healthcare partner in China
AstraZeneca: a trusted healthcare partner in China >$750m >13,000 employees throughout China investment in the discovery and development of life-changing medicines Headquarters in In China since 1993 Shanghai #2 pharmaceutical multinational company (MNC) in China Rankings AstraZeneca’s second-larges
Slide 25: Consistently outperforming the China market
Consistently outperforming the China market… In-market growth of AstraZeneca vs. overall market 24% 19% 17% 16% 15% 13% 12% 12% 9% 8% 4% 3% 2013 2014 2015 2016 2017 YTD 2018 AstraZeneca Overall market Source: IQVIA. 25
Slide 26: …across all city tiers
…across all city tiers In-market growth of AstraZeneca vs. peers and overall market by city tier Distribution of city tiers by total in-market hospital sales 26% 15% 16% 15% 14% 12% 45% 11% 10% 24% 4% 5% 4% 3% 16% Tier 1 Tier 2 Tier 3 Low-tier cities -3% AstraZeneca MNCs Overall market Tier-1 cities
Slide 27: …and in all therapy areas
…and in all therapy areas Oncology CVRM CV market share 10% Diabetes market share 3% Market share 8% Share growth +0.8% Share growth +0.9% Share growth +1.8% #3 company with fastest growth #3 company with fastest MNC growth Respiratory Other Market share 45% Share growth +1.5% Market share 12% Share
Slide 28: Underpinned by a quality supply chain
Underpinned by a quality supply chain Taizhou supply site Wuxi supply site China distribution centre >70 countries the Wuxi supply site is now delivering quality medicines to more than 70 countries 28
Slide 29: Patient-centric, holistic disease management
Patient-centric, holistic disease management Prevention to early diagnosis Diagnosis and treatment Post treatment Validation of Electronic Follow-up Tracking Awareness Screening diagnosis recording treatment diagnosis Self-assessment Standard of care 360⁰ service Internet of things Big data Artifici
Slide 30: China Innovation Centre: integrated ecosystem models
China Innovation Centre: multiple, fully-integrated ecosystem models for the main therapy areas Chronic disease Integrated centre for management centre lung-cancer treatment 41 centres Pilot stage Integrated centre for China chest- prostate-cancer pain centre diagnosis and treatment 669 centres 77 c
Slide 31: At the forefront of local innovation
At the forefront of local innovation AstraZeneca - Chinese SDIC1 Fund Local category-1 partnerships Joint Venture (Nov 2017) Oncology • Co-development of savolitinib (c-Met3 inhibitor), including in combination with Tagrisso • Out-licensed AZD3759 (EGFR4 inhibitor) - non-small cell lung cancer CVRM
Slide 32: China: Oncology strategy
China: Oncology strategy Lead in lung and Accelerate breast prostate cancer and ovarian cancer Lung cancer • Faslodex uptake following NRDL • Continue Iressa expansion • Tagrisso 2nd line following NRDL • Zoladex ovarian function suppression inclusion and 1st-line launch readiness • Lynparza 1st/2nd
Slide 33: China: CVRM strategy
China: CVRM strategy Strong CV base New CVRM • Strong foundation with Seloken Brilinta: uptake and expansion and Crestor to expand to county following NRDL hospitals, CHCs and retail Diabetes • Forxiga entered into eight PRDLs1 • Onglyza gaining share • Fully-integrated ecosystem • Broad endocrinolo
Slide 34: China: Respiratory strategy
China: Respiratory strategy Maximise nebulisation Accelerate development of the coverage across China respiratory maintenance market • Expand outpatient • Shape market environment department nebulisation to address low diagnosis, capacity standard-of-care treatment • Optimise patient nebulisation an
Slide 35: China: strategy
China: strategy Expansion Innovation Partnership • Portfolio selling • Patient-centric, fully- • Central and local integrated ecosystems government • Retail • New-medicine • Business development • Customer base localisation • Local healthcare • Market access • Medicine development providers and laun
Slide 36: Agenda
Agenda Emerging Markets China Oncology CVRM Respiratory Closing and Q&A 36
Slide 37: Oncology: annual cancer incidences
Oncology: annual cancer incidences c.75% of new cancers in Emerging Markets c.13 million Western cases annually in Europe, 8% Emerging Markets North America, Eastern Asia, 13% 31% Central and Eastern Europe, 7% Others, 20% South-Central Asia, 10% South America, South-Eastern 6% Asia, 6% Source: GLOB
Slide 38: Oncology: lung and breast cancer highest incidence
Oncology: lung and breast cancer highest incidence EMs have high rates of stomach, liver and HNSCC1 cancers US, EU, Australia Emerging Markets Breast, 12% Lung, 12% Lung, 11% Breast, 11% Other, 46% Other, 43% Stomach, 8% Prostate, 10% Liver, 6% CRC, 10% Prostate, 5% Bladder, 4% Oesophagus, CRC, 10%
Slide 39: Oncology: lack of healthcare infrastructure
Oncology: lack of healthcare infrastructure Example: different availabilities of radiation therapy Additional investment needed to provide $bn full access to radiotherapy, by region 10 2 1 1 0 Asia Pacific Africa Latin America Europe North America Source: E. Zubizarreta et al., Clinical Oncology 29
Slide 40: Examples: AstraZeneca improves access to care
Examples: AstraZeneca improves access to care Partnering to improve treatments across Emerging Markets Healthcare education Infrastructure build Improving access Developing multidisciplinary teams to Diagnostic infrastructure and networks Multiple compassionate and affordability improve patient outc
Slide 41: Oncology: delivering strong growth across all regions
Oncology: delivering strong growth across all regions Middle East & Africa Ex-China Oncology 200% 42% 244% Russia 5% 700% Asia -26% 194% -1% Latin America Brazil 433% 500% 9% 6% Oncology growth (Lynparza, Tagrisso, Imfinzi, Calquence) Legacy oncology growth (Faslodex, Zoladex, Iressa) Product sales
Slide 42: Oncology: accelerating access to meet unmet medical need
Oncology: accelerating access to meet unmet medical need 42
Slide 43: Oncology: regulatory approvals and reimbursement accelerating
Oncology: regulatory approvals and reimbursement accelerating 3+ years 3+ years usual time to gain approval for a new usual time to gain access in reimbursed markets medicine post US FDA approval and limited access in self-paid markets Regulatory approval progress • Brazil first global approval of T
Slide 44: Lung cancer
Lung cancer Leader in EGFR lung cancer and emerging in Immuno-Oncology Iressa Tagrisso Imfinzi • Remain market leader across Asia • First-in-world approval achieved in • Expanding access through Brazil for 1st-line use patient-access programmes • Continue to expand access • Continue to expand access
Slide 45: Lynparza
Lynparza The first PARP inhibitor and the undisputed market leader 2nd-line 1st-line Expand to ovarian cancer ovarian cancer other cancers • Established market leadership • Expand to 1st-line ovarian cancer Breast • Expand access • Broaden ability to test for BRCA and expand access • Quality and sus
Slide 46: Haematology: first launch of Calquence
Haematology Expand beyond US with first launch of Calquence Lower incidence of leukaemia across Regulatory status Emerging Markets, yet still unmet medical need (Age-standardised rates incidence of blood cancers per 100,000 people) Nov 2018 regulatory approval received in UAE 10.3 Asia Africa 10.6 1
Slide 47: Oncology: sources of innovation
Oncology: sources of innovation Innovation focus on improving patient access, outcomes and care • Timely diagnosis and disease awareness • Physician and allied health education and systems of care • Extending care beyond urban setting to regional areas • Improved access to innovative medicines 47
Slide 48: Agenda
Agenda Emerging Markets China Oncology CVRM Respiratory Closing and Q&A 48
Slide 49: CVRM: high unmet medical need in Emerging Markets
CVRM: high unmet medical need in Emerging Markets CV diseases are the #1 cause of death globally Ischemic heart disease mortality rates Number of patients with diabetes worldwide (age standardised, per 100,000) and per region in 2017 and 2045 (age 20-79) Ischemic heart disease mortality (100,000) 12
Slide 50: CVRM: changing clinical practice today, pushing boundaries tomorrow
CVRM: changing clinical practice today, pushing boundaries of science tomorrow + Stop disease and regenerate organs + Bring CV protection and slow down disease 3 Deliver superior efficacy on main indication and immediate complications 2 Shifting focus from treating patients with a single disease, to
Slide 51: CVRM in Emerging Markets: improve outcomes, address disease overlap
CVRM in Emerging Markets: improve outcomes, address disease overlap with both legacy and new medicines Atherosclerosis Metabolic Heart failure Renal Lokelma Brilinta Roxadustat Forxiga Legacy medicines 51
Slide 52: CVRM: legacy medicines and New CVRM
CVRM: legacy medicines and New CVRM Legacy medicines provide stable base business Strong growth from New CVRM YTD growth rates for New $m CVRM and legacy medicines 400 46% 350 359 300 Legacy 21% New CVRM medicines 250 7% 211 2% 0% 200 150 -8% -13% 100 Brilinta Onglyza Atacand Forxiga Seloken Byetta/
Slide 53: Forxiga: potential in Emerging Markets
Forxiga: potential in Emerging Markets Leveraging AstraZeneca’s presence Top-ten countries of Example: in Brazil, Forxiga is the largest- Million adults with diabetes selling oral, innovative anti-diabetic medicine 30% China 110 27% 24% India 69 21% 18% US 29 15% Brazil 14 12% 9% Russian Federation
Slide 54: Forxiga: DECLARE trial
Forxiga: potential in Emerging Markets DECLARE trial provides potential to change T2D1 treatment DECLARE met one of two Secondary endpoints not formally DECLARE paving the way in primary endpoints (CVD2/hHF3) tested, but showed positive trend cardio-renal for Emerging Markets Renal composite endpoin
Slide 55: Brilinta: TREAT trial in STEMI patients
Brilinta: TREAT provides the opportunity to bring benefit to STEMI patients treated with fibrinolytic therapy in EMs Unmet medical need • Prior to TREAT, no large-scale trials evaluating safety and efficacy of Brilinta in STEMI1 patients undergoing fibrinolysis • Access to timely PCI2 is often not a
Slide 56: Brilinta: market share continues to grow
Brilinta: market share continues to grow Strong increase in value share, potential to Outperforming market growth further improve with expansion and new launches (Brilinta & OAP1 market growth YTD 2018) 15% Other TREAT UAE Turkey 12.4% Taiwan Value market share 12% Saudi Russia 9.6% Mexico 9% Korea
Slide 57: Lokelma
Lokelma Asia has more than 20 million patients with a life-threatening complication, like hyperkalaemia in CKD HARMONIZE-Global regulatory submissions in Russia, Taiwan and South Korea HARMONIZE-Asia data readout in H2 2019 2020 China regulatory submission 57
Slide 58: We follow the science: CKD and roxadustat
We follow the science: CKD and roxadustat Past >40 million patients in Asia have chronic kidney disease 58
Slide 59: Roxadustat: potential to transform treatment of anaemia in CKD
We follow the science: CKD and roxadustat Roxadustat: potential to transform the treatment of anaemia in CKD CKD anaemia is currently characterised as erythropoietin (EPO) and iron deficiency Past Patients receive EPO supplements and extra iron to encourage erythrocyte production Patients were previ
Slide 60: Roxadustat
Treating CKD anaemia enables the body to stimulate complete erythropoiesis Roxadustat Future China regulatory decision anticipated Q4 2018 Hypoxia-inducible factor prolyl hydroxylase (HIF-PHI) inhibitor • Overcomes defective oxygen sensing • Stimulates EPO production • Mobilises iron • Body coordina
Slide 61: Agenda
Agenda Emerging Markets China Oncology CVRM Respiratory Closing and Q&A 61
Slide 62: Respiratory: asthma and COPD prevalence
Respiratory Asthma and COPD prevalence growth highest in low-income areas 339 million 384 million 1 2 Asthma COPD 32% patients worldwide patients worldwide Chart: growth of affected by asthma affected by COPD diagnosed prevalent cases of asthma and 23% COPD over the period 20% 19% Seven Third 2017-2
Slide 63: Respiratory: Emerging Markets strategy
Respiratory: Emerging Markets strategy Building on a long-term commitment to respiratory disease Expansion Address Transform • Acute standard of care and • SABA over-reliance in asthma • Patient outcomes by delivering a AstraZeneca’s respiratory • Exacerbations in asthma and differentiated biologics
Slide 64: Respiratory: sales in Emerging Markets
Respiratory: sales in Emerging Markets Pulmicort sales underpin overall respiratory growth FY 2017: Respiratory product YTD 2018: ex-China markets represent 30% $m sales grew to more than $1.3bn respiratory sales growth in Emerging Markets 21% CAGR 1,400 1,200 30% 1,000 800 600 $1.1bn 400 200 70% 0
Slide 65: Respiratory: expanding nebulisation centres
Respiratory: expanding nebulisation centres Transforming the standard of care for children in Emerging Markets Russia 2+ rooms and 300+ nebulisers Egypt 15,000+ 350+ rooms and nebulisers 500+ nebulisers Thailand, Malaysia & Vietnam Mexico 50+ rooms and Saudi Arabia/Gulf states 30+ rooms and 40+ room
Slide 66: Respiratory: following the science to drive early adoption
Respiratory: following the science to drive early adoption Symbicort: SYGMA data Increase rates of diagnosis and Fasenra: the potential of demonstrates use as a anti- treatment of COPD patients biologics in severe asthma inflammatory reliever therapy three times 70% 80-85%1 more likely to receive SA
Slide 67: Partnering with governments to build and strengthen health systems
Memorandum of Increase in understanding Partnering with number of nebulisation (Singapore, Indonesia, India, governments to build rooms Thailand) and strengthen health May Jun Sep systems for improved Patient access Innovation Partnership care in respiratory FAZBEM patient disease programme 67
Slide 68: Healthy Lung
Healthy Lung Asia May Jun Sep Partnerships Skills Capacity and access 68
Slide 69: Agenda
Agenda Emerging Markets China Oncology CVRM Respiratory Closing and Q&A 69
Slide 70: Significant opportunity to continue to drive growth
Significant opportunity to continue to drive growth Emerging Markets are key to AstraZeneca’s transformation • China • Significant favourable macroeconomic and demographic trends • The importance of legacy and primary-care medicines • A perfectly-relevant portfolio of medicines - in market now and m
Slide 71: Q&A
Q&A 71
Slide 72: Appendix
Appendix AstraZeneca What science can do
Slide 73: China National Essential Drug List
China National Essential Drug List 2018 inclusions 2012 inclusions Therapy area Medicine International non-proprietary name Therapy area Medicine International non-proprietary name Oncology Iressa gefitinib CVRM Betaloc metoprolol CVRM Brilinta ticagrelor Other Diprivan1 propofol CVRM Forxiga dapagl
Slide 74: China National Reimbursement Drug List
China National Reimbursement Drug List Year Therapy Medicine International Year Therapy Medicine International area non-proprietary name area non-proprietary name 2018 Oncology Tagrisso osimertinib 2004 Oncology Zoladex goserelin 2017 Oncology Faslodex fulvestrant 2004 CVRM Zestril1 lisinopril 2017
Slide 75: China National Reimbursement Drug List
China National Reimbursement Drug List Year Therapy Medicine International Year Therapy Medicine International area non-proprietary name area non-proprietary name 2004 Other Nexium2 esomeprazole 2000 Other Losec7 omeprazole 2004 Other Seroquel IR1 quetiapine 2000 Other Rhinocort Aqua1 budesonide 200
Slide 76: Use of AstraZeneca conference call, webcast and presentation slides
Use of AstraZeneca conference call, webcast 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 77: China and Emerging Markets
China and Emerging Markets Webcast and conference call for investors and analysts 13 December 2018