Q Results. 29 April 2016

Transcription

1 Q Results 29 April 2016

2 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, performance and financial condition of the Group, including, among other things, statements about expected revenues, margins, earnings per share or other financial or other measures. Although we believe our expectations are based on reasonable assumptions, any forward-looking statements, by their very nature, involve risks and uncertainties and may be influenced by factors that could cause actual outcomes and results to be materially different from those predicted. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and AstraZeneca undertakes no obligation to update these forward-looking statements. We identify the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in such statements. Important factors that could cause actual results to differ materially from those contained in forward-looking statements, certain of which are beyond our control, include, among other things: the loss or expiration of, or limitations to, patents, marketing exclusivity or trademarks, or the risk of failure to obtain and enforce patent protection;; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage;; effects of patent litigation in respect of IP rights;; exchange rate fluctuations;; the risk that R&D will not yield new products that achieve commercial success;; the risk that strategic alliances and acquisitions, including licensing and collaborations, will be unsuccessful;; the impact of competition, price controls and price reductions;; taxation risks;; the risk of substantial product liability claims;; the impact of any delays in the manufacturing, distribution and sale of any of our products;; the impact of any failure by third parties to supply materials or services;; the risk of failure of outsourcing;; the risks associated with manufacturing biologics;; the risk of delay to new product launches;; the difficulties of obtaining and maintaining regulatory approvals for products;; the risk of failure to adhere to applicable laws, rules and regulations;; the risk of failure to adhere to applicable laws, rules and regulations relating to anticompetitive behaviour;; the risk that new products do not perform as we expect;; failure to achieve strategic priorities or to meet targets or expectations;; the risk of an adverse impact of a sustained economic downturn;; political and socio-economic conditions;; the risk of environmental liabilities;; the risk of occupational health and safety liabilities;; the risk associated with pensions liabilities;; the risk of misuse of social medial platforms and new technology;; the risks associated with developing our business in emerging markets;; the risk of illegal trade in our products;; the risks from pressures resulting from generic competition;; the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring programmes;; economic, regulatory and political pressures to limit or reduce the cost of our products;; the risk that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects;; the impact of failing to attract and retain key personnel and to successfully engage with our employees;; the impact of increasing implementation and enforcement of more stringent anti-bribery and anti-corruption legislation;; and the risk of failure of information technologyand cybercrime. Nothing in this presentation / webcast should be construed as a profit forecast. 2

3 Agenda Overview Pascal Soriot Growth Platforms Luke Miels Finance Marc Dunoyer Pipeline Sean Bohen Closing Pascal Soriot 3

4 Q1 2016: Good start to the year;; advancing the strategy Continued delivery Total Revenue +5%;; Growth Platforms +6% Core SG&A cost decline, slower Core R&D cost growth despite M&A Four regulatory approvals, four regulatory designations Advancing the strategy Sharpening focus on main therapy areas: Oncology, Respiratory, Cardiovascular & Metabolic Disease Driving productivity improvements: $1.1bn annual savings from end Absolute values at Constant Exchange Rates (CER). Growth rates at CER unless otherwise stated

5 Q1 2016: Total Revenue up 5%;; SG&A down 6% $m % change % Total Revenue % currency impact Total Revenue 6, (4) Core R&D 1, (3) Core SG&A 2,127 (6) 35 (4) Core EPS ($) 0.95 (7) - (5) 5 Absolute values at actual exchange rates. Growth rates at CER

6 Q1 2016: Pipeline headlines Four approvals;; four designations Regulatory approvals Bevespi Aerosphere (PT003) - COPD (US) Potential regulatory submissions of new medicines Zurampic - gout (EU) Brilique - post-mi (EU) Tagrisso - lung cancer (JP) Regulatory designations Breakthrough Therapy: durvalumab - bladder cancer (US) Orphan Drug: acalabrutinib - blood cancers (EU) MEDI neuromyelitis optica (US) Fast Track: MEDI hospitalised influenza A (US) acalabrutinib (blood cancer) roxadustat (anaemia) (CN) benralizumab (severe asthma) durva + treme (lung, head & neck, pancreatic cancers) durvalumab (lung, head & neck cancer) moxetumomab (leukaemia) selumetinib (lung cancer) Status since the prior results announcement on 4 February 2016

7 Growth Platforms Luke Miels EVP, Global Product & Portfolio Strategy, Global Medical Affairs and Corporate Affairs

8 Growth Platforms: Resilient performance despite challenging conditions Q $m % change % Total Revenue Growth Platforms 3, Respiratory 1, Brilinta/Brilique Diabetes Emerging Markets 1, Japan 429 (7) - New Oncology 99 n/m - 8 Absolute values at actual exchange rates. Growth rates at CER

9 Respiratory: Strength in Emerging Markets Growth supported by new medicines Evolution of Respiratory portfolio Continued strength in Emerging Markets $m 1, % +38% +14% Established medicines PT010 Combination medicines benralizumab Biologic medicines US +4% Symbicort volume growth partly offset by managed care implementation EU (14)% Lower market growth;; increased competitive pressure from analogues 0 (7)% Q tralokinumab Emerging Markets +20% China uptake continues;; +34%, in particular Pulmicort;; +24% in overall EM Symbicort Pulmicort Other 9 Absolute values at actual exchange rates. Growth rates at CER

10 Brilinta/Brilique: Continued momentum in all markets Consistent high growth across markets US oral anti-platelet class market share total prescriptions Global execution of lifecycle management $m % +22% +109% +19% +52% 94% 93% 92% 91% 90% 6% 4% 2% 0% 90.8% 4.8% 4.4% 1/03/14 2/07/14 3/14/14 4/18/14 5/23/14 6/27/14 8/01/14 9/05/14 10/10/14 11/14/14 12/19/14 1/23/15 2/27/15 4/03/15 5/08/15 6/12/15 7/17/15 8/21/15 9/25/15 10/30/15 12/04/15 1/08/16 2/12/16 3/18/16 BRILINTA Competitor 1 Competitor 2 US New ACC and AHA guidelines: Brilinta preferred over clopidogrel in ACS EU Approval for post-mi indication Indication leadership across EU markets Emerging Markets China strongest growth (+229%);; improved/innovative market access 10 0 Q US Emerging Markets Europe Est. ROW Absolute values at actual exchange rates. Growth rates at CER Source: IMS Health NPA, weekly data through w/e1 April 2016

11 Diabetes: Global franchise growth continues Quarterly growth continues at >20% Absolute Q growth of Diabetes franchise by geography Strong growth in all markets $m % (30)% US $m 47 US +14% Farxiga benefit from access and increased focus % +128% EM EU EU +18% Growth from Farxiga and Bydureon from increasing Diabetes footprint 0 +20% Q Est. RoW 14 Emerging Markets +65% Continued Forxiga launch, Onglyza uptake Onglyza Bydureon Other Fa(o)rxiga Byetta 11 Absolute values at actual exchange rates. Growth rates at CER Absolute values at CER in bar chart above

12 Emerging Markets: Growth in line with long-term ambitions On track with long-term goals Broad-based performance Emerging Markets China +12% +12% +8% +4% +6% FY 2012 FY 2013 FY 2014 FY 2015 Q % +19% +17% +15% +11% Established portfolio benefits from better diagnosis, access and patient demographics/trends Balanced presence: ~Half in China, Brazil +19%, Russia +5% Challenging conditions in some Latin-American and Middle-Eastern markets New medicines and pipeline well-positioned for growing patient needs, e.g. Tagrisso in Asia FY 2012 FY 2013 FY 2014 FY 2015 Q Long-term target: Mid-to-high single-digit growth 12 Growth rates at CER

13 Japan: Performance reflects April price cuts Growth supported by new products Leading dynamic patient share Established products to be augmented by new opportunities $m Maintaining strong market (7)% (6)% (2)% (24)% 38% 25% 22% 35% 30% 21% 21% 17% 15% share despite challenging external environment Tagrisso regulatory approval;; higher prevalence of EGFR mutation 13 +2% Symbicort Nexium Crestor 0 Q AZ Competitor 1 Competitor 2 Crestor Symbicort Nexium Other Absolute values at actual exchange rates. Growth rates at CER Source: IMS, February 2016 Long-term target: Low single-digit growth

14 New Oncology Launches progressing well $m Lynparza (ovarian cancer) Global Product Sales Q Q Q Q Q US EU Intl Global Product Sales $44m Launched in 21 countries;; regulatory reviews ongoing in 14 Steady increase in ovarian cancer patients with known BRCA status 80% 60% 40% 20% 0% BRCA testing rates Q3 14 Q1 16 Q4 14 Q1 16 US 4L+ EU4 2L PSR US: Steady growth in testing rates EU: Half of eligible patients know BRCAm status US: 4th line+ patients EU4 (France, Germany, Italy & Spain): 2nd line platinum-sensitive recurrent patients Source: IPSOS Oncology monitor 5,000 4,000 3,000 2,000 1,000 Tagrisso (lung cancer) US cumulative unit demand volume 0 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Global Product Sales $51m Testing rates growing rapidly in markets where launched FDA approval of ctdna test expected Q Absolute values at actual exchange rates

15 Finance Marc Dunoyer Chief Financial Officer

16 Q1 2016: Financial headlines Total Revenue $6.1bn, +5% Adverse currency impact 4% BACEinhibitor Celgene PD-L1 Growth Platforms 56% of total 1, +6% Externalisation Revenue $550m, +78% Core SG&A costs reduced 6% decline to $2.1bn 35% of Total Revenue, a 420 basis-point reduction from Q Increased financing costs Acquisition of ZS Pharma Investment in Acerta Pharma Other Operating Income reduction, -81% Core EPS $0.95, -7% Adverse currency impact 5% As a percentage of Total Revenue Absolute values at actual exchange rates. Growth rates and guidance at CER

17 Profit & Loss Top-line strength combined with Core SG&A cost discipline Q $m % change % Total Revenue Total Revenue 6, Product Sales 5, Externalisation Revenue Core Cost of Sales (966) Core Gross Profit 5, Core R&D (1,429) Core SG&A (2,127) (6) 35 Core Tax Rate 17% - - Core EPS $0.95 (7) Gross Profit as % of Total Revenue reflects Gross Profit derived from Product Sales, divided by Product Sales. Absolute values at actual exchange rates. Growth rates at CER

18 Continued progress and focus on cost discipline Core SG&A cost reduction delivered Decline in Core R&D costs from Q $bn 2.5 $bn SM&M G&A Q Q Q Q Q Q Q Q Q Q Absolute values at constant exchange rates. SM&M = Sales, Medical & Marketing. G&A = General & Administration

19 Advancing strategy: Sharpening focus, enhancing operational effectiveness, adjusting the cost structure ACTIONS 1. Sharpening focus on main therapy areas;; BACEinhibitor Celgene PD-L1 prioritise investment;; increase for Oncology 2. Reduce Core SG&A costs - Global, regional and country levels - Greater use of shared services 3. Reshape manufacturing - Streamline costs;; implement biologics capacity build 4. Continue overall productivity and simplification efforts across business & R&D FINANCIAL IMPLICATIONS - Once implemented end 2017 annual benefit of ~$1.1bn versus FY 2015, primarily in Core SG&A - Mitigating the growth of Core R&D costs from an accelerating pipeline - Restructuring charges of ~$1.5bn, virtually all cash guidance unchanged

20 A year of challenges and opportunities $4.26 Core EPS Crestor Dilution Currency Growth Platforms Potential approvals Increasing Externalisation Revenue and Other Operating Incomes Cost discipline EMBEDDED IN GUIDANCE FY

21 FY 2016 guidance & capital-allocation priorities FY 2016 guidance Total Revenue Low to mid single-digit percentage decline Capital-allocation priorities Core EPS Low to mid single-digit percentage decline Investment in the business Progressive dividend policy Strong, investmentgrade credit rating Earningsaccretive opportunities 21 Growth rates and guidance at CER

22 Pipeline Sean Bohen EVP, Global Medicines Development & Chief Medical Officer

23 Key regulatory designations received in the period 1 Recognition of pipeline quality and progress continued Breakthrough Therapy: durvalumab - bladder cancer (US) Orphan Drug: Acalabrutinib (chronic lymphocytic leukaemia (CLL) / small lymphocytic lymphoma (SLL);; mantle cell lymphoma (MCL);; lymphoplasmacytic lymphoma (Waldenström s macroglobulinaemia, WM) (EU) MEDI neuromyelitis optica (US) Fast Track: MEDI hospitalised influenza A (US) Status since the prior results announcement on 4 February 2016

24 Q1 late-stage pipeline headlines Respiratory, Inflammation & Autoimmunity (RIA) Symbicort - COPD: Approval pressurised metered-dose inhaler (pmdi) (EU) Bevespi - COPD: Approval (US) Zurampic - gout: Approval (EU) Cardiovascular & Metabolic Disease (CVMD) Brilique - post-mi: Approval (EU) - stroke: SOCRATES missed primary endpoint Infection, Neuroscience & Gastrointestinal (ING) AZD Alzheimer s disease: Phase II safety interim met;; ungating Phase III programme Oncology Tagrisso - lung cancer: -Approval (JP) -CAURAL trial will not re-start -FLAURA 1st-line trial fully recruited -encouraging 1st-line data at ELCC tremelimumab - mesothelioma: DETERMINE trial did not meet primary endpoint durva + treme trial started: Phase II unresectable liver cancer 24 Status since the prior results announcement on 4 February 2016

25 Tagrisso Phase I efficacy updates Encouraging first-line activity continues Response rate: 77% confirmed ORR (95% CI 64-87%, 80/160mg dose combined, by investigator) Progression-free survival: 19.3 months (95% CI 13.7-NC, 80/160mg dose combined, by investigator) 25 Source: Presentation at European Lung Cancer Conference 2016

26 Celgene IO collaboration: One year on Durvalumab s rapid progress in blood cancer Trial Disease Design Phase I Multiple myeloma (relapsed/refractory) Protocol complete Trial initiation durvalumab +/- pomalidomide +/- dexamethasone Phase I Phase I/II Multiple myeloma (newly diagnosed) Non-Hodgkin s lymphoma/ chronic lymphocytic leukemia durvalumab + revlimid +/- dexamethasone Mid 2016 durvalumab +/- lenalidomide + rituximab or ibrutinib or rituximab + bendamustine Mid 2016 Phase I/II Non-Hodgkin s lymphoma (untreated high-risk DLBCL) durvalumab + rituximab-chop chemotherapy or durvalumab + revlimid + rituximab- CHOP chemotherapy H Phase I/II Phase II Myelodysplastic syndrome/acute myeloid leukaemia (high risk) Myelodysplastic syndrome (azacitidine injection failures) azacitidine +/- durvalumab Mid 2016 CC-486 +/- durvalumab Mid

27 Pipeline newsflow in Realising potential of new medicines Q H H Regulatory decisions ZS-9 - hyperkalaemia (US) saxa/dapa - type-2 diabetes (EU) cediranib - ovarian cancer (EU) CAZ AVI - serious infections (EU) brodalumab - psoriasis (US, EU) ZS-9 - hyperkalaemia (EU) Regulatory submissions saxa/dapa - type-2 diabetes (US) Bevespi Aerosphere - COPD (EU) benralizumab - severe asthma (US, EU) roxadustat - anaemia (CN) acalabrutinib - blood cancer (US) Brilinta/Brilique - PAD Lynparza - gastric, breast, ovarian (2nd line) cancers selumetinib - lung cancer durvalumab - H&N cancer (HAWK) Key data readouts benralizumab - severe asthma Lynparza - gastric cancer Brilinta/Brilique - PAD 1 Lynparza - breast, ovarian (2nd line) cancers selumetinib - lung cancer durvalumab - H&N cancer (HAWK) acalabrutinib - blood cancer Lynparza - ovarian cancer (1st line) durvalumab - lung cancer (PACIFIC) durva + treme - lung cancer (MYSTIC, ARCTIC) - head and neck cancer (CONDOR) PAD = Peripheral Arterial Disease

28 Closing Pascal Soriot Chief Executive Officer

29 Q1 2016: Good start to the year;; advancing the strategy Continued delivery Total Revenue +5%;; Growth Platforms +6% Core SG&A cost decline, slower Core R&D cost growth despite M&A Four regulatory approvals, four regulatory designations Advancing the strategy Sharpening focus on main therapy areas: Oncology, Respiratory, Cardiovascular & Metabolic Disease Driving productivity improvements: $1.1bn annual savings from end Absolute values at CER. Growth rates at CER unless otherwise stated

30 Q Results 29 April 2016