Slide 1: H1 2017 Results
H1 2017 Results Conference call and webcast for investors and analysts 27 July 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, pe
Slide 3: Presenters
Presenters Pascal Soriot Mark Mallon Jamie Freedman 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 Dir
Slide 4: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune system, resulting in enhanced anti- Closing and Q&A tumour immunity 4
Slide 5: Highlights H1 2017: In line with expectations
Highlights H1 2017: In line with expectations Business & financials Total Revenue declined as anticipated, reflecting mainly the tail impact of Crestor’s and Seroquel XR’s US loss of exclusivity Sales from Growth Platforms increased • Emerging Markets: Up 6%, some impact from economic conditions in
Slide 6: Highlights, continued: Pipeline news summary
Highlights, continued Pipeline news summary Pipeline Oncology • Imfinzi bladder cancer Approval (US) lung cancer Stage III Phase III PACIFIC: Met PFS1 primary endpoint lung cancer 1L Phase III MYSTIC: Did not meet PFS primary endpoint • Tagrisso lung cancer 1L Phase III FLAURA: Met primary endpoint
Slide 7: Total Revenue: An inflection point approaching
Total Revenue: An inflection point approaching New AstraZeneca emerging visibly from patent losses $m 14,000 12,000 10,000 US patent losses (Crestor/Nexlum/Seroquel) 8,000 Externalisation Other out-of-patent medicines (outside Emerging Markets) Emerging Markets (established medicines) 6,000 Respirat
Slide 8: 2017: Becoming a defining year
2017: Becoming a defining year Launches of new medicines Some of the key news flow opportunities in 2017 ✓ PDUFA from main therapy areas ✘ Q4 2017 benralizumab Imfinzi ZS-9 benralizumab ✓ bladder cancer hyperkalaemia asthma reg. decision reg. decision reg. decision ✓ ✘ ✓ ✓ Imfinzi NSCLC Stage III Im
Slide 9: Lynparza affirmed as the globally-leading PARP inhibitor
Lynparza affirmed as the globally-leading PARP inhibitor Merck collaboration expands potential, in particular for IO combos • Establishes Lynparza as the preferred PARP- inhibitor backbone of future PD-1/PD-L1 combinations • Accelerates Lynparza’s development with the leading PD-1 inhibitor in clini
Slide 10: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune system, resulting in enhanced anti- Closing and Q&A tumour immunity 10
Slide 11: Growth Platforms: Focus further strengthened
Growth Platforms: Focus further strengthened Q2 2017 % % Total H1 2017 % % Total $m change Revenue $m change Revenue Growth Platforms 3,723 1 74 7,295 3 70 Emerging Markets 1,442 2 - 3,004 6 - Respiratory 1,099 (9) - 2,280 (4) - New CVMD1 872 3 - 1,670 4 - Japan 617 8 - 1,067 6 - New Oncology2 301 9
Slide 12: Emerging Markets: China performing well
Emerging Markets China performing well Product Sales growth China continued solidly; Long-term target: Mid to high single-digit Growth Platforms strong Emerging Markets 6% Emerging Markets 12% 12% • Mid to high single-digit growth continues 8% • Some impact of economic conditions in 6% 4% 2% LatAm/M
Slide 13: Respiratory: Continued challenging market for Symbicort
Respiratory Continued challenging market for Symbicort US prescription stability; Global focus: Emphasis on Steady Pulmicort growth $m Symbicort differentiation Symbicort’s superior profile 1,200 2,400 -4% 3% US -17% 1,000 2,000 • Pricing pressure continued as 7% expected 800 1,600 • Bevespi off to
Slide 14: Bevespi in the US
Bevespi in the US Good, but early path Bevespi Competitor 1 Competitor 2 Maximise bronchodilation2 Weekly NBRx volume1 Achieved a 381mL 14.8% improvement in peak inspiratory capacity Jul-17 Jan-17 Jun-17 Mar-17 Apr-17 Feb-17 May-17 Bevespi is indicated for the long-term, maintenance treatment of air
Slide 15: New CVMD: Sharper focus on Brilinta and Farxiga
New CVMD Sharper focus on Brilinta and Farxiga Brilinta: Strong execution; Diabetes: Farxiga growth drives Commercial focus sharpened $m US NBRx continued to grow $m global market leadership on differentiated medicines 300 500 28% 600 1,200 -4% 400 36% 1,000 3% Brilinta 200 300 13% 400 800 • Continu
Slide 16: Japan: Tagrisso supports business growth
Japan Tagrisso supports business growth Strong growth Forxiga now the leading SGLT2 Tagrisso: Supported $m Q2 2017: Up 8% inhibitor based on value US $m +5 by testing rates >90% 700 1,200 64 6% 600 1,000 500 39 39 800 400 28 600 n/m 300 13% 15 400 13% 200 0 200 3% Q1 Q2 Q3 Q4 Q1 Q2 100 2016 2016 201
Slide 17: Oncology: Q2 2017 first quarter since 2010 with ~$1bn
Oncology Q2 2017: First quarter since 2010 with ~$1bn in Product Sales Oncology Product Sales $m New medicines boosting growth • Total Oncology 1,200 • 20% growth and 19% of total Product Sales 1,000 • Faslodex (+16%) benefited from recent label 800 expansions into 1st-line use and combination 600 •
Slide 18: Tagrisso: Strong growth
Tagrisso Strong growth Continued global growth Global commercial execution 1st-line opportunity as seen $m in EGFRm2 cohort from Phase I • US: T790M1-mutation testing rate holding back access to Tagrisso 60 250 • Progress being made on EGFRm patients who received Tagrisso improving testing and 200 i
Slide 19: Imfinzi
Imfinzi Strategic US launch in bladder cancer; preparing for lung cancer Bladder cancer Stage III unresectable NSCLC US launch PACIFIC trial 8 • Met PFS primary endpoint based on interim analysis - trial continues to assess OS1 primary endpoint, Weeks since launch anticipated in 2019 at the latest 2
Slide 20: Lynparza: Global leader
Lynparza Global leader Significant news flow expected US to benefit from ovarian 2L $m and breast-cancer indication ~ 14 bevacizumab (VEGF) combo PAOLA-1 Potential launches cediranib Data 2019+ 80 (VEGFr) combo Early breast Data 2019 1L cancer 60 SOLO-1 trial 2019+ OLYMPIA trial Prostate Data 2019+
Slide 21: Lynparza - Merck collaboration
Lynparza - Merck collaboration Establish as the preferred PARP-inhibitor backbone of future PD-1/PD-L1 and DNA Damage Response (DDR) combinations BRCAm Combination with IO Combination with DDR HRRm Combination with VEGF(r) Lynparza combinations market opportunity Monotherapy BRCAm HRRm Biomarker neg
Slide 22: Lynparza - Merck collaboration: leading PD-1 in clinical trials
Lynparza - Merck collaboration Accelerates development with the leading PD-1 in clinical trials Ongoing trials for approved PD-1/L1 medicines 4% 11% Keytruda 39% Imfinzi nivolumab atezolizumab 33% avelumab 13% Combined more than half of all ongoing trials Source: Sanford C. Bernstein, LLC, 21 July 2
Slide 23: Lynparza - Merck collaboration: Summary
Lynparza - Merck collaboration Summary ✓ Combines capabilities of two main oncology players ✓ Establishes Lynparza as the preferred PARP-inhibitor backbone of future PD-1/PD-L1 combinations ✓ Accelerates Lynparza’s development with the leading PD-1 inhibitor in clinical trials, Keytruda ✓ Maximises
Slide 24: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune system, resulting in enhanced anti- Closing and Q&A tumour immunity 24
Slide 25: Reported Profit & Loss
Reported Profit & Loss H1 2017 % Total Q2 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 10,456 (9) 100 5,051 (8) 100 - Product Sales 9,783 (10) 94 4,940 (8) 98 - Externalisation Revenue 673 (1) 6 111 (15) 2 Gross Margin 81.5% (1) - 80.8% - - R&D Expenses 2,802 (1) 27 1,349 (4) 2
Slide 26: Core Profit & Loss
Core Profit & Loss Opex reduction larger than anticipated for FY 2017 H1 2017 % Total Q2 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 10,456 (9) 100 5,051 (8) 100 - Product Sales 9,783 (10) 94 4,940 (8) 98 - Externalisation Revenue 673 (1) 6 111 (15) 2 Gross Margin 83.0% - - 82
Slide 27: Continued progress and focus on cost discipline
Continued progress and focus on cost discipline Reduction in Core R&D costs Continued reduction in Core costs $bn (4)% 1.5 • Reduction in Core R&D costs 1.0 • H1 2017: Down by 4% 0.5 • FY 2017: Core R&D costs are expected to be 0.0 broadly in line with those in FY 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 28: Core Operating Profit margin underpinned by news flow
Core Operating Profit margin underpinned by news flow Core Operating Profit margin supported by Core Operating Profit margin Core gross margin and reduced expenses • Core Gross Margin strategically supported over time, by the growing influence of speciality-care medicines • Core R&D costs not target
Slide 29: 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 Revenue Progressive dividend policy Low to mid single- Low to mid teens digit percentage percentage Strong, investment-grade credit rating decline decline Immediately e
Slide 30: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune system, resulting in enhanced anti- Closing and Q&A tumour immunity 30
Slide 31: Q2 2017 late-stage pipeline update
Q2 2017 late-stage pipeline update Cardiovascular & Oncology Respiratory Metabolic Diseases • Imfinzi • Bydureon - type-2 diabetes: Met • Bevespi - COPD: Regulatory - bladder cancer: Approval (US) - lung cancer: primary safety objective in CVOT; submission acceptance (EU) Stage III (PACIFIC): Met PF
Slide 32: Oncology: Highlights from ASCO 2017 Annual Meeting
Oncology: Highlights from ASCO 2017 Annual Meeting 100 abstracts; broad presence with Lynparza, Tagrisso & Imfinzi DNA Damage Response 1 Lynparza OlympiAD Phase III trial in BRCA-mutated metastatic breast cancer and SOLO- 2 trial health-related quality of life in BRCA-mutated, metastatic ovarian can
Slide 33: AstraZeneca in non-small cell lung cancer (NSCLC)
AstraZeneca in non-small cell lung cancer (NSCLC) Overview of approved medicines and ongoing Phase III trials Patients with EGFR- Iressa ✓ ✓ ✓ mutated tumours EGFRm ~15-20% of patients, Tagrisso Tagrisso Tagrisso but double in Asia ADAURA (2021/2022) FLAURA T790M POSEIDON CTx (2019) Patients with no
Slide 34: NSCLC: Three major news items
NSCLC: Three major news items Imfinzi and Tagrisso continue to inform Stage III unresectable (10-15% of NSCLC) Stage IV metastatic (~1/2 of NSCLC) PACIFIC trial MYSTIC trial FLAURA trial 80-85% EGFR wild type 15-20% EGFR mutated (double in Asia) • Met a primary endpoint of • Did not meet PFS endpoin
Slide 35: Imfinzi: MYSTIC trial has more data to come
Imfinzi: MYSTIC trial has more data to come 2017 H1 2018 Primary endpoints Imfinzi + treme combo Mid-2017 ✘ PFS in ‘expressers’ PFS final analysis Imfinzi + treme combo OS interim analyses OS in ‘expressers’ OS final analysis Imfinzi OS interim analyses OS in ‘expressers’ OS final analysis Illustrat
Slide 36: Imfinzi: Overview of ongoing Phase III trials
Imfinzi: Overview of ongoing Phase III trials Broad development programme in NSCLC patients ADJUVANT PACIFIC MYSTIC NEPTUNE PEARL POSEIDON ARCTIC Stage Ib-IIIa Stage III Stage IV / 1L Stage IV / 1L Stage IV / 1L Stage IV / 1L Stage IV / 3L unresectable EGFR/ALK wt EGFR/ALK wt EGFR/ALK wt EGFR/ALK wt
Slide 37: Imfinzi: Expected upcoming news flow
Imfinzi: Expected upcoming news flow Ongoing Phase III trials across tumour types ✔ = Imfinzi = fully recruited = Imfinzi +/- treme Head & neck cancer, EAGLE ✔ ✔ bladder cancer (UC1) 2L H&N 2 KESTREL DANUBE 1L H&N 1L bladder Lung cancer POSEIDON (NSCLC) 1L IO-IO-CTx triple PEARL ✔ ✔ ✔ 1L (Asia) ARCT
Slide 38: Oncology: News flow to intensify
Oncology: News flow to intensify Upcoming key late-stage news events Faslodex Lynparza breast cancer 1L ovarian cancer 2L reg. decision (US) reg. decision (US) acalabrutinib Imfinzi Lynparza blood cancer lung cancer Stage III breast cancer reg. submission (US)1 reg. submission reg. submissions Major
Slide 39: CVMD: Highlights from medical meetings
CVMD: Highlights from medical meetings Jointly addressing metabolic / cardio / renal risks - June - - August - - September - • Farxiga - Type-2 diabetes (T2D) • Brilinta - CV disease • Farxiga - Type-1 diabetes CVD-REAL real-world evidence New insights from PEGASUS-TIMI Phase III DEPICT-1 trial prim
Slide 40: Late-stage pipeline news flow in 2017 and 2018
Late-stage pipeline news flow in 2017 and 2018 Unlocking and realising the potential of new medicines H2 2017 H1 2018 H2 2018 Regulatory decision Faslodex - breast cancer 1L (US) Lynparza - ovarian cancer 2L (EU, JP) Bevespi - COPD (EU) Lynparza - ovarian cancer 2L (US) benralizumab - severe, uncont
Slide 41: Agenda
Agenda Overview Growth Platforms Oncology Finance Pipeline and news flow Antibody that blocks inhibitory signals from the tumour to cells of the immune system, resulting in enhanced anti- Closing and Q&A tumour immunity 41
Slide 42: Pipeline-driven transformation continues
Pipeline-driven transformation continues New AstraZeneca steadily emerging during 2017 • H1 2017 in line with expectations – Financials on track – Guidance reiterated – Continued busy pipeline news flow • 12 new potential medicines in Phase III/under registration • Oncology progressing – Tagrisso, L
Slide 43: Q&A
Q&A 43
Slide 44: H1 2017 Results
H1 2017 Results Conference call and webcast for investors and analysts 27 July 2017