Slide 1: H1 2018 Results
H1 2018 Results Presentation, conference call and webcast for investors and analysts 26 July 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 Dave Fredrickson Mark Mallon Executive Director and Executive Vice President, Executive Vice President, Chief Executive Officer Oncology Business Unit Global Products & Portfolio Strategy, Global Medical Affairs, Corporate Affairs Marc Dunoyer Sean Bohen Executive Director a
Slide 4: Agenda
Agenda Overview Oncology Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could CVRM, Respiratory, EMs stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finan
Slide 5: Strategic business focus is paying off
Strategic business focus is paying off The main therapy areas accelerated growth Product Sales growth (CER1) Q2 2018 H1 2018 Oncology, New CVRM2, Respiratory +19% +14% Other -32% -25% 1. Constant exchange rates. 2. New Cardiovascular, Renal and Metabolism incorporating Brilinta and Diabetes. 5
Slide 6: Launches continue to support 2018 return to growth
Launches continue to support 2018 return to growth Portfolio transformation of AstraZeneca is nearing completion Business & financials Product Sales declined by 2% and only by 1% in the quarter • Strong performance of new medicines1 (+69%) and China • Offset by divestments (~2%) and EU/JP Crestor ge
Slide 7: The pipeline continued to deliver
The pipeline continued to deliver Late-stage pipeline quarterly highlights Pipeline news Oncology • Lynparza breast cancer Approval (JP) ovarian cancer 1L Met primary endpoint • Tagrisso lung cancer 1L Approval (EU) • Imfinzi unresectable, Stage III NSCLC1 Approval (JP) Met primary OS endpoint • sel
Slide 8: 2018: return to sales growth on track
2018: return to sales growth on track The sales momentum continued to improve Return to sales growth expected in H2 2018 as Medicines impacting impact from Crestor EU/JP and divestments eases Product Sales in 2018 Lynparza Tagrisso Imfinzi ongoing launch of tablet in ongoing launch in ongoing launch
Slide 9: Product Sales: new medicines continued forward
Product Sales: new medicines continued forward >$1bn in additional sales and growth of 69% in H1 2018 $m >$1bn 350 300 Total additional sales from new medicines compared to H1 2017 250 200 150 100 50 0 Bevespi Calquence Fasenra Brilinta Lynparza Farxiga Imfinzi Tagrisso Absolute values at CER. 9
Slide 10: Product Sales: Oncology and China performed strongly
Product Sales: Oncology and China performed strongly Global performance impacted by Crestor EU/JP and divestments Q2 2018 % Product H1 2018 % Product % change % change $m Sales $m Sales Product Sales 5,030 (1) 100 10,015 (2) 100 Oncology 1,434 40 29 2,664 37 27 New CVRM 974 9 19 1,874 9 19 Respirato
Slide 11: Agenda
Agenda Overview Oncology Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could CVRM, Respiratory, EMs stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finan
Slide 12: Oncology: New medicines continued to drive strong performance
Oncology New medicines continued to drive strong performance Total Oncology New medicines Lynparza, Tagrisso, $m Product Sales Imfinzi and Calquence added $0.7bn 1,600 • Oncology +37%; now 27% of total Product Sales 1,400 1,200 • New medicines contributed $0.7bn in additional 1,000 sales vs. H1 2017
Slide 13: Lynparza: Expanding benefits to more patients
Lynparza Expanding benefits to more patients Four quarters of strong Leading PARP inhibitor Upcoming key $m growth: +147% in Q2 approved in >50 countries milestones 160 140 • US +198% • 1st-line ovarian cancer (BRCAm) Tablet formulation, broad label in data presentation in H2 2018; 120 ovarian cance
Slide 14: Lung cancer: Tagrisso
Lung cancer: Tagrisso Strong 2nd-line business; step change from 1st-line launches Strong performance in Approved in >75 1st-line launches will $m all markets: +77% in Q2 countries worldwide widen patient benefits 450 400 • US +89% • Unprecedented 1st-line Continued momentum in 2nd line progression-
Slide 15: Lung cancer: Imfinzi
Lung cancer: Imfinzi Continued fast uptake in unresectable, Stage III NSCLC (PACIFIC) Q2 Product Sales: $122m, PACIFIC launch Increasingly more US patients $m including first ex-US use gaining global momentum are treated with Imfinzi 140 • Product Sales ~doubled to 120 $122m in Q2; total $184m in H1
Slide 16: Haematology: Calquence and moxetumomab
Haematology: Calquence and moxetumomab Emerging franchise; initially in smaller indications Calquence Moxetumomab pasudotox $m Product Sales highlights under US priority review 15 • Product Sales $20m, US only • First AstraZeneca/MedImmune immunotoxin • Encouraging early uptake 10 Maintained ~1/4 of
Slide 17: New CVRM: Brilinta and Farxiga delivered strong results
New CVRM Brilinta and Farxiga delivered strong results Brilinta Product Diabetes Product Sales and growth $m Sales and growth $m Brilinta +18%: Continued double- 750 1,500 Farxiga +36% digit growth across all major regions +8% • US (+29%); increased market +5% share from contract gains; +5% overall
Slide 18: Respiratory: Improving performance
Respiratory Improving performance; Fasenra and Pulmicort offsetting Symbicort Respiratory Product US competitive; new medicines, Fasenra launch $m Sales and growth Emerging Markets encouraging performing strongly 1,500 3,000 US -10% US $67m +7% 0% • Symbicort (-21%); relatively stable • Very encoura
Slide 19: Respiratory: Fasenra
Respiratory: Fasenra The leading novel respiratory biologic Competitor Fasenra $65m Q2 2018 Product Sales US, market share, new-to-brand Rx (from $21m in Q1 2018) Launched Fasenra now launched in the US, Japan and the EU (Germany, Denmark, Sweden) Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 201
Slide 20: Emerging Markets: China continued strongly
Emerging Markets China continued strongly China continued very strongly (+24%) All three main therapy Ex-China growth (-3%) impacted by divestments areas performed well 12% 12% 12% 20 Emerging Markets Emerging Markets 10% 8% 8% • Mid to high single-digit growth continued 6% 4% Growth ex-China reduce
Slide 21: Agenda
Agenda Overview Oncology Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could CVRM, Respiratory, EMs stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finan
Slide 22: Reported Profit & Loss
Reported Profit & Loss H1 2018 % Total Q2 2018 % Total % change % change $m Revenue $m Revenue Total Revenue 10,333 (5) 100 5,155 (1) 100 - Product Sales 10,015 (2) 97 5,030 (1) 98 - Externalisation Revenue 318 (54) 3 125 14 2 Gross Margin 78.6% (3) pp1 - 79.9% (2) pp - Operating Expenses2 7,814 (1)
Slide 23: Core Profit & Loss
Core Profit & Loss H1 2018 % Total Q2 2018 % Total % change % change $m Revenue $m Revenue Total Revenue 10,333 (5) 100 5,155 (1) 100 - Product Sales 10,015 (2) 97 5,030 (1) 98 - Externalisation Revenue 318 (54) 3 125 14 2 Gross Margin 80.0% (3) pp - 81.3% (2) pp - Operating Expenses1 6,877 2 67 3,5
Slide 24: Externalisation Revenue
Externalisation Revenue Merck collaboration becoming a stable source of income Regular payments from Merck Highlights from $m No Initial Revenue in Q2 2018 Externalisation Revenue 1,600 1,400 1,200 • No initial Externalisation Revenue in Q2; $102m from 1,000 partnering legacy medicines in H1 800 600
Slide 25: Total Core Operating Expenses increased by 2%
Total Core Operating Expenses increased by 2% Core R&D: benefitting from productivity initiatives Operating expenses $m remain in sharp focus 2,000 • Core R&D costs declined by 5% 1,000 • Maintained activity level; continued benefit from 0 productivity improvements and Merck collaboration Q 014 Q 01
Slide 26: FY 2018 guidance reiterated; unchanged capital allocation
FY 2018 guidance reiterated; 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-en
Slide 27: Agenda
Agenda Overview Oncology Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could CVRM, Respiratory, EMs stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finan
Slide 28: Oncology: continued pipeline success
Oncology: continued pipeline success Next wave of medicines highlighted at ASCO Regulatory and other American Society of Clinical Oncology development progress (ASCO) Annual Meeting 2018 • Approvals • Lynparza - Lynparza - breast cancer (JP) Study 08 randomised Phase II trial in prostate cancer - Ta
Slide 29: CVRM: Lokelma US approval; Farxiga and MEDI0382 in focus at ADA 2018
CVRM Lokelma US approval; Farxiga and MEDI0382 in focus at ADA 2018 Regulatory and other American Diabetes Association development progress (ADA) Scientific Sessions 2018 • Approval • MEDI0382 • Farxiga - Lokelma - hyperkalaemia (US) - Phase IIa trial showed - Farxiga + a DPP-4 inhibitor significant
Slide 30: Respiratory: A biologics portfolio that follows the science
Respiratory A biologics portfolio that follows the science Fasenra: Tezepelumab: distinctively targets and potential best-in-disease rapidly depletes eosinophils Phase II efficacy • Text or graphics Clear patient phenotype in clinical • Severe, uncontrolled asthma practice • Please keep standard siz
Slide 31: Precision medicines help drive portfolio transformation
Precision medicines help drive portfolio transformation Oncology and Respiratory speciality-care medicines are in focus Diagnostic status Twenty two diagnostic test approvals Approved Development Exploratory in three major markets (US, EU, JP) EGFRm (Epidermal growth factor receptor mutation) BRCAm
Slide 32: 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 H2 2018 H1 2019 H2 2019 Regulatory decision Tagrisso - lung cancer 1L (JP) Lynparza - breast cancer (EU) Forxiga - type-1 diabetes (EU, JP) Imfinzi - unresectable, Stage III NSCLC (EU) moxetumomab p
Slide 33: Agenda
Agenda Overview Oncology Pancreatic beta cells at different stages of regeneration: AstraZeneca is investing in research that could CVRM, Respiratory, EMs stimulate the regeneration of beta cells in the pancreas with the aim of stopping the progression of, or reversing, the course of diabetes. Finan
Slide 34: Encouraging launches underpin 2018 return to growth
Encouraging launches underpin 2018 return to growth Financials on track - commercial execution - guidance reiterated • Financials on track • Product Sales improved, as anticipated – Very strong launches offset by the impact of Crestor EU/JP and divestments • Total Revenue impacted by lower Initial E
Slide 35: Q&A
Q&A
Slide 36: Encouraging launches underpin 2018 return to growth
Encouraging launches underpin 2018 return to growth Financials on track - commercial execution - guidance reiterated • Financials on track • Product Sales improved, as anticipated – Very strong launches offset by the impact of Crestor EU/JP and divestments • Total Revenue impacted by lower Initial E
Slide 37: Investor Relations
Investor Relations Thomas Kudsk Larsen Henry Wheeler Nick Stone Cambridge, UK Cambridge, UK Cambridge, UK thomas.larsen@astrazeneca.com henry.wheeler@astrazeneca.com nick.stone@astrazeneca.com T: +44 20 3749 5712 T: +44 20 3749 5797 T: +44 20 3749 5716 M: +44 7818 524185 M: +44 7788 354619 M: +44 77
Slide 38: 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 39: H1 2018 Results
H1 2018 Results Presentation, conference call and webcast for investors and analysts 26 July 2018