Creating an environment where science thrives Dr Menelas Pangalos EVP Innovative Medicines & Early Development

2 July 2014 What we will cover today…

AstraZeneca today: science at the heart of everything we do

Learning from the past to identify the potential drivers of scientific success

Stimulate a more collaborative, more permeable research ecosystem

2 What we will cover today…

AstraZeneca today: science at the heart of everything we do

Learning from the past to identify the potential drivers of scientific success

Stimulate a more collaborative, more permeable research ecosystem

3 We are on an ambitious journey

Acknowledged leaders in our core TAs Return to growth

Rebuild the pipeline

2014 2017 2020 After 2020 Late stage pipeline Revenues expected At least 10 new Leadership in rebuilt focused on 3 to be broadly in line medicines expected core TAs & a balance of core TAs with 2013 to be launched since specialty and primary 2013 care

4 Note: The line is illustrative and is not representative of revenue We are focused on in our 3 core therapy areas

Respiratory, Infection CV- Metabolism Oncology Inflammation Neuroscience & Vaccines & Autoimmunity

Core Therapy Areas Opportunity-focused

Heart Cancer Asthma disease Diabetes 350 million people 7 million lives 235 million 17 million affected today lost every year sufferers today deaths every year

5 We have a growing and accelerating pipeline

Phase 1 - 32 NMEs Phase 2 - 28 NMEs Phase 3 / Reg - 11 NMEs

Small molecule Large molecule Small molecule Large molecule Small molecule Large molecule Volitinib (AZD6094) MEDI0639 AZD4547 MEDI-573 selumetinib moxetumomab MET solid tumours DLL-4 solid tumours FGFR solid tumours IGF MBC MEK solid tumours CD22 HCL

AZD1208 MEDI-565 AZD1775 MEDI-551 olaparib

PIM haems CEA BiTE solid tumours Wee-1 ovarian CD19 CLL/DLBCL PARP BRCA IL-17R psoriasis/psoriatic ovarian/gastric/breast arthritis AZD9150 MEDI3617 AZD2014 lesinurad STAT3 haems ANG-2 solid tumours mTOR solid tumours CTLA-4 mesothelioma URAT1 gout IL-5R asthma

AZD9291 MEDI6469 selumetinib MEDI4736 PT003 EGFRm+ solid tumours mOx40 solid tumours MEK 2L KRAS-ve NSCLC PD-L1 NSCLC LABA/LAMA COPD

AZD8186 MEDI0680 AZD5363 (SLE) PT001 PI3Kβδ solid tumours PD-1 solid tumours AKT breast IFNa SLE LAMA COPD

AZD6738 MEDI4736+tremelimumab AZD5069 MEDI8968 Epanova ATR CLL/H&N PD-L1+CTLA-4 solid tumours CXCR2 antagonist asthma IL-1R COPD/HS hypertriglyceridaemia

AZD8848 MEDI4736+dabraf+trametinib AZD2115 naloxegol Inhaled TLR7 agonist asthma PD-L1+BRAF+MEK MABA COPD GM-CSFR RA PAMORA OIC

AZD7624 moxetumomab RDEA3170 MEDI7183 CAZ AVI Inhaled p38 inhibitor COPD CD22 pALL URAT1 gout α4β7 UC/Crohn’s BLI/cephalosporin SBI

AZD4721 MEDI5872 AZD4901 CXCR2 COPD B7RP1 SLE Hormone modulator PCOS IL-13 asthma/IPF

AZD1419 MEDI9929 tenapanor MEDI2070 TLR9 asthma TSLP asthma NHE3 inhibitor ESRD/CKD IL-23 Crohn’s

PT010 MEDI-551 roxadustat (AZD9941) (MEDI-546) LABA/LAMA/ICS COPD CD19 MS HIF anaemia CKD/ESRD IFNaR SLE

AZD3293 MEDI6012 AZD3241 benralizumab BSECDR Alzheimer's LCAT arterial thrombosis MPO Parkinson's Disease IL-5R COPD

AZD6423 MEDI8111 AZD5213 brodalumab NMDA suicidal ideation Rh-factor II trauma/bleeding H3R Tourette’s/neuropathic IL-17R asthma pain ATM AVI MEDI4893 AZD5847 BL/BLI SBI staph alpha toxin SSI oxazolidinone TB

AZD0914 MEDI-559 (PRVV) CXL GHyrAR serious infection RSV prophylaxis BLI/cephalosporin MRSA

MEDI-550 Panflu library

MEDI9287 Oncology RIA CVMD Neuroscience Infection H7N9 avian influenza

6 6

Pipeline table as of 31st March 2014 What we will cover today…

AstraZeneca today: science at the heart of everything we do

Learning from the past to identify the potential drivers of scientific success

Stimulate a more collaborative, more permeable research ecosystem

7 We reviewed our full IMED portfolio from 2005-2010

Number of small molecule compounds in portfolio (2005–2010)

248 32 Active compounds Parked + Closed compounds 36 180 Successful compounds 25

49 106 180 25 30 51 106 8 21 51 22 21 6 9 6 Pre-nom Pre-clin Ph I Ph IIa Ph IIb

Total compounds/ 225 142 73 54 projects in scope1

▪ > 80% of 2005-2010 portfolio compounds assessed ▪ Compounds assessed in each phase separately

1 Compounds / projects excluded for a variety of reasons, for example, investigational compounds, biologics, old projects, or data not readily available; Active projects were not included in Pre-clinical and Phase I analyses

8 Our analysis has driven development of our 5R framework

. Strong link between target and disease Right target . Differentiated efficacy . Available and predictive biomarker

. Adequate bioavailability and tissue exposure . Definition of PD biomarkers Right tissue . Clear understanding of preclinical and clinical PK/PD . Understanding of drug–drug interactions

. Differentiated and clear safety margins Right safety . Understanding of secondary pharmacology risk . Understanding of reactive metabolites, genotoxicity, drug–drug interactions . Understanding of target liability

Right patients . Identification of the most responsive patient population . Definition of risk–benefit for given population

. Differentiated value proposition versus future standard of care Right commercial . Focus on market access, payer and provider potential . Personalised healthcare strategy, including diagnostic and biomarkers

Right culture . Truth seeking versus milestone seeking behaviours

Lessons learned from the fate of AstraZeneca's drug pipeline: a five-dimensional framework Cook et al Nature Reviews Drug Discovery 13, 419–431 (2014) 9 Lung cancer is a stratified disease

Historical View 1987 2004 2012

Large-cell KRAS KRAS KRAS Adeno- Unknown carinoma EGFR EGFR Squamous Unknown Unknown

• Worldwide, lung • Discovery showed • AstraZeneca in • Global genomics cancer is the most that NSCLC cells can collaboration with initiatives (e.g., TCGA) common cause of harbor a single external groups show identify multiple cancer-related death specific mutated that clinical response additional primary (1.3M deaths) KRAS oncogene to Gefitinib correlates genetic “drivers” • Traditional with EGFR mutations classification used morphology AZD9291 targets the EGFR mutant T790M

. Mutations in the EGFR tyrosine kinase domain leads to an oncogenic phenotype & acquired resistance

. Drugs like Iressa (gefitinib) & Tarseva face resistance with new mutations in EGFR

. 50% of the acquired resistance due to a secondary mutation, T790M in exon 20 of EGFR (gatekeeper mutation)

. AZD9291 has been designed to target T790M mutation which drives resistance to standard of care drugs

11 Mutant EGFR inhibitor builds on gefitinib resistance

. Mutations in the EGFR tyrosine kinase domain leads to an oncogenic phenotype & acquired resistance

. Drugs like Iressa (gefitinib) & Tarseva face resistance with new mutations in EGFR

. 50% of the acquired resistance due to a secondary mutation, T790M in exon 20 of EGFR (gatekeeper mutation)

. AZD9291 has been designed to target T790M mutation which drives resistance to standard of care drugs

12 Mutant EGFR inhibitor builds on gefitinib resistance

. Mutations in the EGFR tyrosine kinase domain leads to an oncogenic phenotype & acquired resistance

. Drugs like Iressa (gefitinib) & Tarseva face resistance with new mutations in EGFR

. 50% of the acquired resistance due to a secondary mutation, T790M in exon 20 of EGFR (gatekeeper mutation)

. AZD9291 has been designed to target T790M mutation which drives resistance to standard of care drugs

13 Dialing out potential liabilities in our compound

Target CO-1686 (IC50 μM) AZD9291 (IC50 μM) Assay Type

w/tEGFR 1.1 0.480 Phospho/ whole-cell

Act mutEGFR 0.061 0.017 Phospho/ whole-cell

T790M mutEGFR 0.032 0.015 Phospho/ whole-cell

HER2 0.488 0.123 Phospho/ whole-cell

IGF1R 0.26 2.9 Biochemical

14 AZD9291: Overall response rate* 64% in T790M+; Longest response > 9 months and ongoing

40 Best percentage change from baseline in target lesion

# # T790M+ evaluable patients, expansion cohorts only (n=107)

20 D D

0 D D

D D D D D -20 D D

D D D D -40 D D D 20 mg QD D D -60 40 mg QD 80 mg QD D D 160 mg QD D -80 240 mg QD 20 mg 40 mg 80 mg 160 240 mg mg ORR% 50% 62% 68% 64% 83% (N) (5/10) (18/29) (23/34) (18/28) (5/6)

Overall disease control rate (CR+PR+SD) = 94%

Janne P et al ASCO 2014 – Abstract 8009. *Includes confirmed responses and responses awaiting confirmation; # represents imputed values. Population: all dosed centrally confirmed T790M+ patients with a baseline RECIST assessment and an evaluable response (CR/PR, SD or PD), N=107 (from 120 T790M+ patients, 13 patients with a current non-evaluable response are not included). QD, once daily; D, Discontinued The 5R story for AZD9291

Candidate Research Clinical Selection

Right target

Right tissue

Right safety

Right patients

Right commercial potential 16 β-secretase (BACE1) is a key processing enzyme of amyloid precursor protein

. BACE1 activity leads to the release of the Highly promising approach to address unmet medical need in Aβ fragment Alzheimer’s

. Mutations in APP result in increased APP Ab42 (b-secretase) BACE activity and Aβ production Ab BACE 40 1 . Familial AD is linked to mutations in APP

. There are also mutations in BACE that g-secretase 2

confer protection to AD Plaque

. Inhibition of BACE1 should reduce production of Aβ and reduce disease progression

AZD4694 PET ligand imaging

17 AZD3293 targets the BACE1 enzyme

. We are using structure based design Crystal Structure of AZD3893 (yellow) against BACE1 in complex with BACE1 (gray)

. Targeting BACE1 has several challenges:

. Large binding pocket

. Compound must cross BBB

. Potential for off-target effects

. AZD3293 is a new chemical series with pM potency in human cells and long off- rates with purified protein

18 Lowering of Aβ in CSF and brain tissue with AZD3293

Brain Ab40 (guinea pig) Amyloid-β peptide (Aβ) production is a key . 120

driver in AD pathophysiology 100

80

40 b 60 . Familial mutations in APP leads to

Brain A Brain 40 % Ab40 (10 mol/kg) (% vehicle) of increased Aβ production and AD 20 % Ab40 (30 mol/kg) % Ab40 (100 mol/kg) 0 2 4 8 16 24 . >80% lowering of amyloid in the brain of Hours after dose two preclinical species CSF Ab40 (guinea pig)

120

100 . Significant & dose-dependent reduction in

80

40 b Aβ biomarkers in plasma and CSF in 60

healthy volunteers & Alzheimer’s patients in A CSF 40

% Ab40 (10 mol/kg) (% vehicle) of Phase I clinical studies 20 % Ab40 (30 mol/kg) % Ab40 (100 mol/kg) 0 2 4 8 16 24 Hours after dose

19 AZD3293 (Phase 1): BACE1 inhibitor for delayed progression of Alzheimer’s Disease demonstrates target engagement in the clinic

Reduction of Ab in CSF in Healthy . Amyloid-β peptide (Aβ) production is a key Volunteers – continuous sampling

driver in AD pathophysiology Placebo

. Familial mutations in APP leads to increased Aβ production and AD

15mg AZD3293 . >80% lowering of amyloid in the brain of two preclinical species

50mg AZD3293 . Significant & dose-dependent reduction in Aβ biomarkers in plasma and CSF in healthy volunteers & Alzheimer’s patients in Phase I clinical studies

20 Safety margins, reduced hERG and improved potency against BACE1 diminish QT liability of AZD3293

Study AZD3293 AZD3839 Margins (Cmax Margins (Cmax free at 50% Aβ free at 50%* Aβ reduction) reduction) Dog ECG (tox study) 220x 11x (NOEL) Dog ECG telemetry 45x 5x (NOEL)

hERG IC50 (uM) 15 4.8 BACE1 IC50 (uM) 0.0005 0.036

*20% extrapolated to 50% based on linear relation

21 The 5R story for AZD3293

Candidate Research Clinical Selection

Right target

Right tissue

Right safety

Right patients

Right commercial potential 22 What we will cover today…

AstraZeneca today: science at the heart of everything we do

Learn from the past to identify the potential drivers of scientific success

Stimulate a more collaborative, more permeable research ecosystem

23 AZ are an active collaborator with industry and academia

24 We have more than 200 active collaborations with academic institutions

Here’s a few examples

• University of Strathclyde • University of Warwick • University of Aberdeen • University of Leicester • University of Stirling • University of East Anglia • University of Glasgow • University of Swansea • University of Dundee • University of Cardiff • University of Edinburgh • University of Bristol • University of Newcastle • University of Exeter • University of York • University of Oxford • University of Belfast • University of Reading • University of Durham • University of Southampton • University of Huddersfield • University of Surrey • University of Leeds • University of Sussex • University of Liverpool • University of Cambridge • University of Sheffield • Brunel University London • University of Manchester • Imperial College London • University of Nottingham • University College London • University of Loughborough • Kings College London • University of Birmingham • Queen Mary University of London

25 We work openly with UK biotech and academia in a number of different ways…

Collaboration on the stratified medicines programme with Cancer Research UK and Pfizer to create a pioneering clinical trial for patients with advanced non-small cell lung cancer

AZ, GSK and the University of Manchester: Manchester Collaborative Centre for Inflammation Research - translational research centre for inflammatory diseases

Acquisition of Spirogen, specialist in antibody-drug conjugate technology for use in oncology

Four-year collaboration with Heptares: challenging G-protein coupled receptor targets in neuroscience, CV and inflammatory disorders research.

Two-year collaboration with Conformetrix: compound interaction with targets and delivery of quality compound design and higher probability of success.

26 …continuing to progress ground breaking agreements to be a leader in Open Innovation

. AZ one of three industry . 22 deprioritised AZ . Unique joint centre for founders modeled in compounds research on CVMD part after AZ/MRC . MRC funding of £10M over alliance . Integrated Cardio Metabolic 3 years Centre located on KI . 14 ‘discontinued’ AZ . 106 applications submitted Campus compounds (1 biologic) from 37 UK institutions – all ‘patient ready’ . Focused on identifying and . 6 Clinical and 7 pre-clinical . 3 of 9 projects funded validating novel targets on funded proposals with AZ compound three strategic research themes: Cardiac . 3 additional investigator- Regeneration, Islet Health sponsored projects and Diabetic Nephropathy spawned from the 27 programme

Our new Open Innovation initiatives will help us push the boundaries of science

Clinical Compound Bank

New Molecule Profiling

Pharmacology Toolbox

R&D Challenges

Target Innovation openinnovation.astrazeneca.com

Suggestion Box

28 Our move to the Cambridge Biomedical Campus present further opportunties for collaboration

Future hospital site Addenbrooke’s Hospital The Rosie Hospital Laboratory of Molecular Biology

New UK R&D Centre and Global Corporate Headquarters

School of Clinical Medicine

Cambridge Institute

29 Our new Cambridge research centre will be designed with openness and collaboration in mind

30 View from Papworth Hospital

A groundbreaking collaboration will see IMED scientists work side by side with MRC researchers

. Innovative collaboration to create AstraZeneca MRC UK Centre for Lead AstraZeneca MRC UK Discovery Centre for Lead Discovery

. MRC-supported researchers working side-by-side with IMED scientists at CBC site

. Significant investment from AZ and MRC

. AZ will gain early access to MRC funded science and the ability to in-license up to 15 projects/year

31 ClosingConclusions thoughts…

We have the strategy, size and focus to succeed

One of the most exciting pipelines in the industry

We believe in scientific collaboration and open innovation

Science and innovation is at the heart of our culture

32 33 Questions