Slide 1: Year-to-date and Q3 2018 results
Year-to-date and Q3 2018 results Conference call and webcast for investors and analysts 08 November 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: Speakers
Speakers Pascal Soriot Dave Fredrickson Mark Mallon Executive Director and Executive Vice President, Executive Vice President, Chief Executive Officer Oncology Business Unit Global Products and Portfolio Strategy, Global Medical Affairs, Corporate Affairs Marc Dunoyer Sean Bohen Executive Director a
Slide 4: Agenda
Agenda Overview Oncology New CVRM, Respiratory, EMs Finance Year-end pipeline update Closing and Q&A 4
Slide 5: Strategic business focus is paying off
Strategic business focus is paying off Product sales growth (CER1) YTD2 2018 Q3 2018 Oncology, New CVRM3, Respiratory +19% +27% Other -23% -19% 1. Constant exchange rates. 2. Year to date. 3. New Cardiovascular, Renal and Metabolism incorporating Brilinta, Diabetes and Lokelma. 5
Slide 6: Strategic portfolio transformation continues
Strategic portfolio transformation continues Oncology, New CVRM and Respiratory Oncology, New CVRM and Respiratory $m were up 19% YTD and 27% in Q3 2018 now comprise >70% of total business 6,000 100% 90% 5,000 80% 70% 4,000 60% 3,000 50% 40% 2,000 30% 20% 1,000 10% 0 0% Q1 2017 Q2 2017 Q3 2017 Q4 20
Slide 7: Launches continue to support a 2018 return to growth
Launches continue to support a 2018 return to growth Strategic transformation of AstraZeneca reached inflection point Business and financials Product sales increased by 2% and by 9% in the quarter • Strong performance of new medicines1 (+76%) and China • Adverse impact of divestments (1-2%) and gene
Slide 8: Q3 2018 late-stage pipeline news
Q3 2018 late-stage pipeline news Continued progress across main areas Pipeline news Oncology • Lynparza ovarian cancer 2L Approval (CN) ovarian cancer 1L Regulatory submission acceptance (EU, JP, CN) pancreatic cancer Orphan Drug Designation (US) • Tagrisso lung cancer 1L Approval (JP), regulatory s
Slide 9: 2018: return to sales growth on track
2018: return to sales growth on track Product sales reached the inflection point Unchanged 2018 expectations Medicines important for - Q4 2017 a tough comparison product sales in 2018 Lynparza Tagrisso Imfinzi ongoing launch of tablet in ongoing launch in ongoing launch in ovarian and breast cancer
Slide 10: Product sales: new medicines progressing well
Product sales: new medicines progressing well >$1.8bn in incremental sales; growth of 76% YTD 2018 $m 700 >$1.8bn incremental sales from new medicines 600 in YTD 2018 compared to YTD 2017 500 400 300 200 100 0 Calquence Brilinta Fasenra Lynparza Farxiga Imfinzi Tagrisso Oncology CVRM Respiratory. Ab
Slide 11: Product sales: growth across all main therapy areas
Product sales: growth across all main therapy areas Oncology, New CVRM and China all performed very strongly Q3 2018 % product YTD 2018 % product % change % change $m sales $m sales Product sales 5,266 9 100 15,281 2 100 Oncology 1,597 57 30 4,261 44 28 New CVRM 1,027 19 20 2,901 12 19 Respiratory 1
Slide 12: Agenda
Agenda Overview Oncology New CVRM, Respiratory, EMs Finance Year-end pipeline update Closing and Q&A 12
Slide 13: Oncology: New medicines launching well
Oncology New medicines launching well Total Oncology sales: New medicines Lynparza, Tagrisso, $m +44% YTD, +57% Q3 Imfinzi and Calquence added $1.2bn 1,750 • Lynparza: strong growth globally; encouraging, ongoing 1,500 launch in Japan and China 1,250 1,000 • Tagrisso: sustained very high growth; inc
Slide 14: Lynparza: Quickly expanding benefits to more patients
Lynparza Quickly expanding benefits to more patients Five quarters of strong Leading PARP inhibitor $m growth: +110% in Q3 approved in >60 countries 200 • US +168% • Established RoW $35m Broad label in ovarian cancer and Successful launches in Japan 150 launch in breast cancer. Capsule ($25m, $15m Q
Slide 15: Lung cancer: Tagrisso
Lung cancer: Tagrisso Success in 2nd line; becoming standard of care in 1st line Accelerated performance in Approved in >80 Stage IV, 1st-line launches $m all markets: +105% in Q3 countries worldwide to expand patient benefits 600 • US +109% 500 Continued momentum in 2nd line; • Unprecedented 1st-li
Slide 16: Lung cancer: Imfinzi
Lung cancer: Imfinzi Strong uptake in unresectable, Stage III NSCLC (PACIFIC) Q3 sales: $187m; PACIFIC Stage III launch US patient infusions $m increasing ex-US use gaining global momentum continue to increase 200 800 • >40 global approvals obtained 700 US, average daily patient infusions • Sales ad
Slide 17: Haematology: Calquence and Lumoxiti
Haematology: Calquence and Lumoxiti Emerging franchise; initially in small indications Calquence highlights Lumoxiti $m 20 • Sales $38m, US only • US approval in September for 3rd- line hairy cell leukaemia - first • Encouraging early uptake AstraZeneca immunotoxin 15 Increased to >1/3 of new-patien
Slide 18: New CVRM: Brilinta and Farxiga sustained strong performance
New CVRM Brilinta and Farxiga sustained strong performance Continued growth Strong Diabetes growth $m in Brilinta sales $m Farxiga and Bydureon up Brilinta +18%: continued good Farxiga +32% growth across all major regions • US (+24%); market growth 750 +19% 2,250 compounded by market share +10% gain
Slide 19: Respiratory: Improving performance
Respiratory Improving performance; Fasenra, Pulmicort offsetting Symbicort Respiratory product US competitive; new medicines, Fasenra launch $m sales and growth Emerging Markets encouraging performing strongly 1,200 +5% 3,600 +2% US -6% US $129m with $62m in Q3 -5% +3% • Symbicort (-19%); improving
Slide 20: Respiratory: Fasenra
Respiratory: Fasenra Leading novel respiratory biologic; unsurpassed efficacy and dosing US Germany Japan Market share Market share, dynamic Market share, dynamic (new-to-brand Rx) (new patients + switch) (new patients + switch) • Text or graphics • Text or graphics • Text or graphics Competitor Fas
Slide 21: Emerging Markets: China continued to outperform
Emerging Markets China continued to outperform China continued very strongly (+27%) Sales continued to grow ahead of the long-term Ex-China growth (-2%) impacted by divestments commitment of mid to high single-digit growth 12% 12% 16% Emerging Markets • Ex-China growth -2% Emerging Markets 8% 8% 12%
Slide 22: Agenda
Agenda Overview Oncology New CVRM, Respiratory, EMs Finance Year-end pipeline update Closing and Q&A 22
Slide 23: Reported Profit and Loss
Reported Profit and Loss YTD 2018 % total Q3 2018 % total % change % change $m revenue $m revenue Total revenue 15,673 (8) 100 5,340 (13) 100 - Product sales 15,281 2 97 5,266 9 99 - Externalisation revenue 392 (81) 3 74 (95) 1 Gross margin 78.4% (2) pp1 - 78.1% 1 pp - Operating expenses2 11,589 (2)
Slide 24: Core Profit and Loss
Core Profit and Loss YTD 2018 % total Q3 2018 % total % change % change $m revenue $m revenue Total revenue 15,673 (8) 100 5,340 (13) 100 - Product sales 15,281 2 97 5,266 9 99 - Externalisation revenue 392 (81) 3 74 (95) 1 Gross margin 79.8% (2) pp - 79.4% (0) pp - Operating expenses1 10,253 2 65 3
Slide 25: Externalisation revenue
Externalisation revenue Limited Q3 income; Q4 anticipated to improve with Merck payments Limited initial and ongoing revenue in Q3 Highlights from $m Significant income anticipated in Q4 from Merck externalisation revenue 1,600 1,400 • Limited Q3 initial externalisation revenue; $10m with 1,200 ongo
Slide 26: Total core operating expenses increased by 2%
Total core operating expenses increased by 2% Core R&D: benefitting from productivity initiatives Operating expenses remain in $m focus with sequential declines 1,500 1,000 • Core R&D costs declined by 6%, and by 6% in Q3 500 • Continued high activity level and new trials offset by 0 productivity im
Slide 27: Readiness for the UK leaving the EU (Brexit)
Readiness for the UK leaving the EU (Brexit) Significant preparations to handle different scenarios Safeguarding access to Ensuring supply chain between medicines for patients UK and Swedish factories • EU medicines testing standards • Duplication of testing for UK-tested accepted in the UK if no de
Slide 28: 2018 guidance on track; unchanged capital allocation
2018 guidance on track; unchanged capital allocation Product sales Capital-allocation A low single-digit percentage increase priorities Investment in the business Core EPS Progressive dividend policy Strong, investment- grade credit rating $3.30 to $3.50 Immediately earnings-accretive, value-enhanci
Slide 29: Agenda
Agenda Overview Oncology New CVRM, Respiratory, EMs Finance Year-end pipeline update Closing and Q&A 29
Slide 30: 2018 year-end pipeline update
2018 year-end pipeline update Significant news flow supports sustainable growth Lynparza Fasenra Lynparza Imfinzi Lynparza Imfinzi Lynparza Tagrisso Lumoxiti breast cancer severe asthma ovarian cancer 2L lung cancer SIII breast cancer lung cancer SIII ovarian cancer 2L lung cancer 1L HCL 3L approval
Slide 31: Lynparza: Advancing to 1st-line use and into new tumour types
Lynparza Advancing to 1st-line use and into new tumour types 2018 successful: SOLO-1 2019 to continue momentum: Data and approvals Strong PFS benefit Potential for new indications (investigator-assessed, 50.6% maturity) SOLO-1 • Data readouts H1 2019 1st-line OC: submission EU, Japan, - pancreatic c
Slide 32: Tagrisso: FLAURA delivery and expansion into earlier use
Tagrisso FLAURA delivery and expansion into earlier use Standard-of-care treatment FLAURA 2019 focus on remaining in two lung-cancer settings PFS almost doubled 1st-line approvals and OS2 1st line • China regulatory decision (FLAURA trial, EGFR mutation) • Final FLAURA OS H2 2019 Approved: ~40 count
Slide 33: Imfinzi: PACIFIC rollout and upcoming catalysts
Imfinzi PACIFIC rollout and upcoming catalysts Significant regu- PACIFIC Upcoming milestones: latory success Solid OS benefit more lung and non-lung 1.0 • Data readouts >40 Q4 2018/H1 2019 0.9 Probability of Overall Survival - lung cancer 1L (MYSTIC) (final OS) (Q4) 0.8 0.7 0.6 - lung cancer 1L (NE
Slide 34: Haematology: Lumoxiti approval; Calquence readying for CLL
Haematology Lumoxiti approval; Calquence readying for CLL Lumoxiti Calquence Lifecycle plans moving forward Hairy cell leukaemia (3L) Mantle cell lymphoma Chronic lymphocytic leukaemia • US approval in September • Fast-to-market approval based on • Two first randomised Phase III following priority r
Slide 35: New CVRM: CV outcomes trials in focus
New CVRM CV outcomes trials in focus Farxiga’s DECLARE CV- Full suite of CV outcomes trial across key medicines in New CVRM outcomes trial positive Medicine Trial Patients Data readouts • Statistically-significant reduction in Farxiga DAPA-HF Heart failure, reduced ejection 2020 fraction the composi
Slide 36: New CVRM: Renal franchise building: Lokelma, roxadustat
New CVRM Renal franchise building: Lokelma, roxadustat Lokelma: potential best-in-class roxadustat: potential, first-in-class, oral treatment for hyperkalaemia HIF-PHI inhibitor for anaemia of CKD1 Regulatory status Patients Company Phase III trial ANDES • 2018: approval (EU, US) Anaemia in CKD OLYM
Slide 37: Respiratory: Future inhaled platform moving steadily ahead
Respiratory Future inhaled platform moving steadily ahead Bevespi Aerosphere: fixed-dose PT010: Phase III KRONOS trial demonstrated exacerbation rate dual bronchodilator for COPD reduction of PT010 vs. LAMA/LABA in moderate-severe COPD Regulatory status 2018 • Regulatory news H2 2019: regulatory sub
Slide 38: Respiratory: Unique biologics portfolio
Respiratory Unique biologics portfolio Fasenra: long-term safety and Fasenra and tezepelumab Tezepelumab: Phase III efficacy from the BORA trial target different aspects of programme first data the inflammatory cascade anticipated in 2020 Phase III BORA trial presented at European Respiratory Societ
Slide 39: Late-stage pipeline events in 2019, 2020 timeframe
Late-stage pipeline events in 2019, 2020 timeframe Busy news flow continues; sustaining return to sales growth Q4 2018 / H1 2019 H2 2019 2020 Regulatory Lynparza - breast cancer (EU) Lynparza - ovarian cancer 1L (EU, JP, CN) PT010 - COPD (CN) Tagrisso - lung cancer 1L (CN) decision roxadustat - anae
Slide 40: Agenda
Agenda Overview Oncology New CVRM, Respiratory, EMs Finance Year-end pipeline update Closing and Q&A 40
Slide 41: AstraZeneca has returned to growth
AstraZeneca has returned to growth Significant inflection point in product sales • Financials improved • Sales returned to growth – Very strong launches continued; reduced impact of Crestor EU/Japan and divestments • Total revenue impacted by lower externalisation in the quarter • Core operating exp
Slide 42: Q&A
Q&A
Slide 43: AstraZeneca has returned to growth
AstraZeneca has returned to growth Significant inflection point in product sales • Financials improved • Sales returned to growth – Very strong launches continued; reduced impact of Crestor EU/Japan and divestments • Total revenue impacted by lower externalisation in the quarter • Core operating exp
Slide 44: YTD and Q3 2018 results
YTD and Q3 2018 results Conference call and webcast for investors and analysts 08 November 2018