Slide 1: Full-Year and Q4 2016 Results
Full-Year and Q4 2016 Results Presentation and webcast for investors and analysts, London, UK 2 February 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,
Slide 3: Today's presenters
Today’s presenters Pascal Soriot Marc Dunoyer Executive Director and Executive Director and Chief Executive Officer Chief Financial Officer Sean Bohen Mark Mallon Executive Vice President, Executive Vice President, Global Portfolio and Product, Global Medicines Development Global Medical Affairs, an
Slide 4: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 4
Slide 5: Highlights: FY expectations met; pipeline-driven transformation continues
Highlights FY expectations met;; pipeline-driven transformation continues Business & Financials Total Revenue primarily reflected Crestor generics, lack of US FluMist and the tail of the US Nexium loss of exclusivity ’New AstraZeneca’ grew by 6% in FY and by 6% in Q4 • Emerging Markets performed we
Slide 6: Highlights, continued: pipeline in Q4
Highlights;; continued FY expectations met;; pipeline-driven transformation continues Pipeline in Q4 Oncology • Durvalumab - bladder cancer: Regulatory submission (US), Priority Review (US) • Tagrisso - lung cancer (AURA3 trial): Regulatory submissions (US, EU), Priority Review (US) • Faslodex -
Slide 7: Total Revenue: Inflection point approaching
Total Revenue: Inflection point approaching New AstraZeneca is emerging from patent losses $bn 30,000 25,000 US patent losses (Crestor/Nexium/Seroquel) 20,000 Externalisation 15,000 Other out-of-patent medicines (outside Emerging Markets) Emerging Markets (established medicines) 10,000 Respiratory
Slide 8: 2017: Potential to be a defining year
2017: Potential to be a defining year Launches of new medicines Some of the key from main therapy areas opportunities in 2017 benralizumab durvalumab ZS-9 benralizumab bladder cancer hyperkalaemia asthma reg. decision reg. decision reg. decision durvalumab / Tagrisso durva + treme NSCLC 1L NSCLC1 1
Slide 9: Key Phase III medicines & lifecycle
Key Phase III medicines & lifecycle Rich pipeline across three therapy areas Cardiovascular & Metabolic Oncology Respiratory Diseases durvalumab1 ZS-91 benralizumab1 multiple cancers hyperkalaemia severe, uncontrolled asthma / COPD durva + treme roxadustat tralokinumab multiple cancers anaemia seve
Slide 10: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 10
Slide 11: Growth Platforms: Stable performance overall
Growth Platforms: Stable performance overall Emerging Markets improving;; strong growth in Oncology Q4 2016 % % Total FY 2016 % % Total $m change Revenue $m change Revenue Growth Platforms 3,728 3 67 14,491 5 63 Emerging Markets 1,486 7 - 5,794 6 - Respiratory 1,210 (5) - 4,753 (3) - Diabetes 59
Slide 12: Growth Platforms: Stable performance overall
Growth Platforms: Stable performance overall Emerging Markets improving;; strong growth in Oncology Q4 2016 % % Total FY 2016 % % Total $m change Revenue $m change Revenue Growth Platforms 3,728 3 67 14,491 5 63 Emerging Markets 1,486 7 - 5,794 6 - Respiratory 1,210 (5) - 4,753 (3) - Diabetes 59
Slide 13: Emerging Markets
Emerging Markets Improved performance overall;; softness in some markets Product Sales growth Good fundamentals;; balanced performance Long-term target: Mid to high single-digit Emerging Markets • Well-balanced business 15% 8% 7% 12% 12% 6% • China less than half of total 6% 10% 8% • Other key ma
Slide 14: Respiratory
Respiratory Symbicort continued as global leader in competitive market Symbicort global leader and US, Europe competitive Q4 improved sequentially Europe volume has stabilised Emerging Markets growth $m Global market share volume US -16% 1,400 5,000 -3% Symbicort Competitor • Volume growth offset
Slide 15: Respiratory: Bevespi Aerosphere launched
Respiratory: Bevespi Aerosphere launched First Pearl medicine available in the US for COPD1 • Intelligent formulation for a pMDI using patented CO-SUSPENSION™ Delivery Technology2,3 • First and only LAMA/LABA in the familiar pMDI device2,4 • Maximise bronchodilation5… achieved a 381-mL improvement
Slide 16: Diabetes
Diabetes Global growth with focus on Farxiga Farxiga largest AstraZeneca Farxiga global leader in Growth in all regions Diabetes medicine SGLT2 class by volume $m US +5% 700 3,000 Farxiga Competitor 1 • Growing market, but intense +3% Competitor 2 competition for market share 600 +11% 50% 2,500 41.8
Slide 17: Japan
Japan Performance reduced by April price cuts;; transformation underway Q4 Product Sales reduced by Solid in-market performance Tagrisso starting to change Crestor inventory reductions improved market-share rank the Japanese business $m $m #6 700 2,500 45 -3% 40 -5% 600 39 2,000 -5% 35 -8% 500
Slide 18: Brilinta
Brilinta Solid growth continued Growth across Brilinta reached peak US Strong execution of all markets new prescription share lifecycle management $m US 250 +37% 1,000 Brilinta Competitor 1 • Positive momentum from changes to +39% competitor’s label 14.6% 200 +62% 800 16% • 60mg ~10% of new prescrip
Slide 19: New Oncology
New Oncology Launches progressing well Tagrisso Tagrisso 2016 Lynparza (lung cancer) key milestones (ovarian cancer) $m $m 160 $423m 250 140 A strong first year for Tagrisso 200 120 100 80 46 150 Number of countries with regulatory 60 approval 100 40 50 20 0 12,000 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Slide 20: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 20
Slide 21: Reported Profit & Loss
Reported Profit & Loss FY 2016 % Total Q4 2016 % Total % change % change $m Revenue $m Revenue Total Revenue 23,002 (5) 100 5,585 (12) 100 - Product Sales 21,319 (8) 93 5,260 (15) 94 - Externalisation Revenue 1,683 59 7 325 77 6 Gross Margin 80.8% 10bps - 78.0% (310)bps - R&D Expenses 5,890 2 26
Slide 22: Adjustments
Reported to Core EPS explanation Reported EPS $2.77 $ FY 2016 Notes Reductions in SG&A reflecting Restructuring 0.69 progression to New AstraZeneca Adjustments Acquisition of MedImmune;; Merck Intangibles 0.78 US business transaction, others Net amount of intangible amortisation and Diabetes Allianc
Slide 23: Core Profit & Loss
Core Profit & Loss Product Sales decline;; good progress on cost control FY 2016 % Total Q4 2016 % Total % change % change $m Revenue $m Revenue Total Revenue 23,002 (5) 100 5,585 (12) 100 - Product Sales 21,319 (8) 93 5,260 (15) 94 - Externalisation Revenue 1,683 59 7 325 77 6 Gross Margin 82.0%
Slide 24: Continued progress and focus on cost discipline
Continued progress and focus on cost discipline Stabilisation in Core R&D costs now realised $bn 2 • Growth in Core costs 5% yoy • FY up by 5% and Q4 up by 2% 1 • Investment focused on a number of potential medicines in pivotal trials 0 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3
Slide 25: Core R&D investment stabilising
Core R&D investment stabilising Investment weighted towards Oncology Sharper focus on main therapy areas 7,000 5% 4% 6,000 5,000 28% • FY 2017 Core R&D costs are expected 12% 29% 4,000 20% 28% to be at a similar level to FY 2016 25% 3,000 24% 32% 23% 2,000 19% 43% 42% 1,000 37% 29% 0 2013 2014 2015
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 Low to mid teens Revenue percentage Progressive dividend policy Low to mid single- decline digit percentage Strong, investment-grade credit rating decline Immediate
Slide 27: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 27
Slide 28: Q4 late-stage pipeline highlights
Q4 late-stage pipeline highlights Main therapy areas Cardiovascular & Oncology Respiratory Metabolic Diseases • durvalumab - bladder cancer: • Bydureon - type-2 diabetes: • Symbicort - asthma: -Regulatory submission (US) Phase III DURATION-7 trial Regulatory approval SMART1 (aged -Priority R
Slide 29: Oncology highlights from recent meetings
Oncology highlights from recent meetings Progress across launched and pipeline medicines Acalabrutinib Acalabrutinib Phase I/II trial: Monotherapy in Phase I/II trial: Monotherapy in patients intolerant to ibrutinib patients with Richter’s transformation Tagrisso Durvalumab Phase III AURA3 trial: 2L
Slide 30: Lung cancer: Tagrisso
Lung cancer: Tagrisso First randomised Phase III trial to demonstrate superiority AURA3 - 2L T790M NSCLC Investigator assessment2 PFS by Tagrisso Chemo investigator (N=279) (N=140) Median PFS, 10.1 4.4 months (95% (8.3;; 12.3) (4.2;; 5.6) CI) 0.30 (0.23;; 0.41) HR (95% CI) p<0.001 Tagrisso Platinum
Slide 31: Lung cancer: IO Phase III trials overview
Lung cancer: IO Phase III trials overview Comprehensive programme across the disease ADJUVANT PACIFIC MYSTIC NEPTUNE PEARL *NEW* ARCTIC Stage Ib-IIIa Stage III 1L EGFR/ALK wt 1L EGFR/ALK wt 1L EGFR/ALK wt 3L EGFR/ALK wt unresectable Non-sq/sq Non-sq/sq Non-sq/sq Non-sq/sq PD-L1 expressers PD-
Slide 32: Durvalumab and durva + treme Phase III news flow
Durvalumab and durva + treme Phase III news flow;; H1/mid-2017 key = durvalumab = durva +/- treme ✔ = fully recruited Bladder cancer DANUBE (UC1) 1L Head & neck cancer KESTREL EAGLE 1L 2L Lung cancer (NSCLC) MYSTIC 1L (PFS) ✔ MYSTIC 1L (final OS) ✔ PEARL 1L (Asia) ARCTIC 3L PD-L1 neg. ✔ PACIFIC ✔
Slide 33: Late-stage pipeline news flow 2017 & 2018
Late-stage pipeline news flow 2017 & 2018 Unlocking and realising potential of new medicine H1 2017 / mid-2017 H2 2017 2018 Regulatory decision Faslodex - breast cancer (1L) (JP) Faslodex - breast cancer (1L) (US, EU) benralizumab - severe, uncontrolled asthma (EU) Tagrisso - lung cancer (AURA
Slide 34: Agenda
Agenda Overview Growth Platforms Finance Pipeline and news flow Closing and Q&A 34
Slide 35: Pipeline-driven transformation on track
Pipeline-driven transformation on track New AstraZeneca emerging from patent cliff • Financials on track;; met guidance for the year • 12 new potential medicines in Phase III/under registration • Oncology progressing ahead of expectations – Tagrisso – Immuno-Oncology • Busy news flow over next 6-
Slide 36: Q&A
Q&A 36
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 availa