A focused biopharmaceutical company
General presentation for investors and analysts 20 June 2018 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; effects of patent litigation in respect of IP rights; 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 that R&D will not yield new products that achieve commercial success; the risk of delay to new product launches; the risk that new products do not perform as we expect; the risk that strategic alliances and acquisitions, including licensing and collaborations, will be unsuccessful; the risks from pressures resulting from generic competition; the impact of competition, price controls and price reductions; the risks associated with developing our business in emerging markets; the risk of illegal trade in our products; the difficulties of obtaining and maintaining regulatory approvals for products; the risk that regulatory approval processes for biosimilars could have an adverse effect on future commercial prospects; the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring programmes; the risk of failure of critical processes affecting business continuity; economic, regulatory and political pressures to limit or reduce the cost of our products; failure to achieve strategic priorities or to meet targets or expectations; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage; the risk of substantial product liability claims; 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 anti-competitive behaviour; the impact of increasing implementation and enforcement of more stringent anti-bribery and anti-corruption legislation; taxation risks; exchange rate fluctuations; 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 impact of failing to attract and retain key personnel and to successfully engage with our employees; the risk of misuse of social medial platforms and new technology; and the risk of failure of information technology and cybercrime. Nothing in this presentation / webcast should be construed as a profit forecast.
2 Strategic priorities 1 2 3 Achieve Return Be a great scientific to growth place to work leadership
3 New Cambridge, UK R&D centre and HQ Scientific collaborations key driver behind move
4 Focused strategy Three therapy areas
Cardiovascular, Oncology Respiratory Renal & Metabolism
Commitment to further focus the portfolio
5 R&D productivity: Sustainable progress A new AstraZeneca with science-based culture
Scientific publications FDA BTDs granted in AZN’s Sustainable level of potential High-impact publications main therapy areas 2016-2017 new medicines in Phase II trials Medium-impact publications Other publications Oncology CVRM 5 5 5 Respiratory Other
36 35 34 1,054 4 33
27
2 2 2 2 397
AstraZeneca (AZN) and industry peers/competitors (CP) 1-7. Source: Internal analysis. High-impact (rating > 15); medium-impact Source: Internal analysis based on focr.org. Includes Breakthrough Therapy (rating > 5); other (rating < 5). Designations (BTD) in the three main AstraZeneca therapy areas. 6 Late-stage pipeline news flow Unprecedented activity level in ‘17
Forxiga Siliq benralizumab Imfinzi Kyntheum Lynparza Symbicort Imfinzi Tagrisso type-2 diabetes psoriasis severe, uncontrolled asthma bladder cancer psoriasis ovarian cancer 2L, 4L/tablets COPD exacerbations lung cancer (PACIFIC) lung cancer (FLAURA) Approval (CN) Approval (US, by partner) Regulatory submission (JP) Approval (US) Approval (EU, by partner) Approval (US) Approval (US) Reg. submission (US, EU, JP) Reg. submission (EU, JP)
roxadustat Tagrisso Qtern ZS-9 Faslodex Bevespi Farxiga + Bydureon Calquence anaemia Fasenra lung cancer (AURA3) type-2 diabetes hyperkalaemia breast cancer 1L COPD2 type-2 diabetes mantle cell lymphoma Completed reg. submission severe, uncontrolled asthma Full approval (US, EU) Approval (US) CHMP1 opinion (EU) Approval (EU, JP) Reg. submission (EU) Approval (US, EU) Approval (US) (CN, by partner) Approval (US)
ZS-9 Lynparza Lynparza Tagrisso hyperkalaemia ovarian cancer 2L breast cancer Faslodex Bydureon BCise Brilique Bydureon BCise Fasenra lung cancer Complete Reg. submission Reg. submission breast cancer type-2 diabetes autoinjector prior myocardial infarction type-2 diabetes autoinjector severe, uncontrolled asthma Approval (CN) Response (US) (EU, JP) (US, JP) Approval (US) Reg. submission (EU) Approval (CN) Approval (US) CHMP opinion (EU)
Regulatory actions Significant patient benefits anticipated to support return to growth
Data & designations
Lynparza Farxiga Imfinzi Tagrisso tralokinumab Farxiga Duaklir Tagrisso breast cancer type-2 diabetes lung cancer (PACIFIC) lung cancer (FLAURA) severe, uncontrolled asthma type-1 diabetes COPD lung cancer (FLAURA) Phase III positive CVD-REAL study Phase III positive (PFS3) Phase III positive Phase IIIs negative Phase IIIs positive Phase III positive Breakthrough Therapy Designation (US)
inebilizumab Lynparza Bydureon Imfinzi Calquence moxetumomab tezepelumab Imfinzi neuromyelitis optica ovarian cancer type-2 diabetes (CVOT) lung cancer (MYSTIC) mantle cell lymphoma hairy cell leukaemia severe, uncontrolled lung cancer (PACIFIC) spectrum disorder Orphan Drug Phase III met primary safety Phase III negative Breakthrough Therapy Phase IIIs positive asthma Breakthrough Therapy Orphan designation designation (JP) objective; did not meet primary (PFS) Designation (US) Phase IIb positive Designation (US) (EU) efficacy objective
1. The Committee for Medicinal Products for Human Use. 2. Chronic obstructive pulmonary disease. 1. Progression-free survival. Status as of 14 December 2017. Favourable / unfavourable news. 7 Late-stage pipeline and key lifecycle medicines Significant opportunities exist in all three therapy areas
Cardiovascular, Oncology Respiratory Renal & Metabolism
Lynparza1, 2 roxadustat2 PT010 multiple cancers anaemia COPD / asthma
Tagrisso1, 2 tezepelumab lung cancer severe, uncontrolled asthma
Imfinzi1, 2 multiple cancers
Calquence1 blood cancers Other
moxetumomab pasudotox2 anifrolumab leukaemia lupus
tremelimumab multiple cancers
selumetinib thyroid cancer
savolitinib kidney cancer 1. Lifecycle development programme. 2. Under regulatory review in major jurisdiction. Status as of 20 June 2018. 8 Full pipeline of new medicines (NMEs)
Phase I Phase II Phase III 31 New Molecular Entities 21 New Molecular Entities 8 New Molecular Entities Small molecule Large molecule Small molecule Large molecule Small molecule Large molecule
AZD0156 AZD4831 MEDI0562# adavosertib# (AZD1775)+chemotherapy MEDI0382 Lynparza¶+cediranib CONCERTO Imfinzi#+tremelimumab MYSTIC ATM solid tumours MPO HFpEF hOX40 solid tumours Wee1+chemo ovarian cancer GLP-1/glucagon type-2 diabetes PARP+VEGF recurrent Pt-R ovarian PD-L1+CTLA-4 1L NSCLC
AZD1390 AZD9977 MEDI1873 AZD4547 MEDI5884# savolitinib# SAVOIR tezepelumab# NAVIGATOR SOURCE ATM healthy volunteer study MCR cardiovascular GITR solid tumours FGFR solid tumours cholesterol modulation cardiovascular MET pRCC TSLP severe uncontrolled asthma
AZD2811# AZD1402# MEDI3726# capivasertib (AZD5363)# MEDI6012 selumetinib ASTRA anifrolumab# TULIP Aurora solid tumours inhaled IL-4Ra asthma PSMA prostate AKT breast cancer LCAT cardiovascular MEK differentiated thyroid cancer Type I IFN receptor SLE
AZD4573 AZD5634 MEDI4276 vis t us ert ib MEDI3902 PT010 CDK9 hematalogical malignancies inhaled ENaC cystic fibrosis HER2 solid tumours mTOR 1/2 solid tumours Psl/PcrV Pseudomonas pneumonia LABA/LAMA/ICS COPD
AZD4635 AZD7594+abediterol# MEDI5083 AZD5718 MEDI8852 lanabecestat# A2aR inhibitor solid tumours Inhaled SGRM+LABA asthma/COPD CD40 ligand fusion protein solid tumours FLAP coronary artery disease influenza A treatment BACE early alzheimer's disease
AZD4785 AZD0284 MEDI7247 AZD8601# MEDI8897# KRAS solid tumours RORg psoriasis/respiratory antibody drug conjugate haems VEGF-A cardiovascular passive RSV prophylaxis Applications Under Review
AZD5153 oleclumab verinurad prezalumab# 2 New Molecular Entities BRD4 solid tumours CD73 solid tumours URAT-1 chronic kidney disease primary Sjögren’s syndrome Small molecule Large molecule AZD5991 MEDI7219 abediterol# suvratoxumab roxadustat# moxetumomab pasudotox# PLAIT MCL1 hematalogical malignancies anti-diabetic type-2 diabetes LABA asthma/COPD α-Toxin Staphylococcus pneumonia HIFPH anaemia CKD/ESRD CD22 3L HCL
AZD6738 MEDI3506 AZD1419# ATR solid tumours IL-33 COPD inhaled TLR9 asthma
AZD8186 MEDI0700# AZD7594 PI3Kβ solid tumours BAFF/B7RP1 SLE Inhaled SGRM asthma/COPD 1 Includes significant fixed-dose combination projects, and parallel indications that are in a separate therapy area. AZD9496 MEDI1341 AZD7986# # Partnered and/or in collaboration; ¶ Registrational Phase II/III study. SERD ER+ breast alpha synuclein parkinson's disease DPP1 COPD
MEDI9197# MEDI1814# AZD8871# TLR 7/8 solid tumours amyloidβ alzheimer's disease MABA COPD Oncology Cardiovascular, Renal & Metabolism Respiratory Other
MEDI7352 AZD9567 NGF/TNF osteoarthritis pain SGRM RA/respiratory Status as of 18 May 2018. 9 Late-stage pipeline news flow 2018 & 2019 Unlocking and realising potential of new medicine
Q2 2018 H2 2018 2019 Regulatory decision Tagrisso - lung cancer (EU) Lynparza - breast cancer (JP) Lynparza - breast cancer (EU) Lokelma - hyperkalaemia (US) Tagrisso - lung cancer (JP) Imfinzi - lung cancer (PACIFIC) (EU, JP) moxetumomab pasudotox - HCL 3L (US) Bydureon autoinjector - type-2 diabetes (EU) Bevespi - COPD (EU) Regulatory submission Duaklir - COPD (US) Bevespi - COPD (JP) Lynparza - pancreatic cancer Lynparza - ovarian cancer 1L Imfinzi + treme - lung cancer 1L (NEPTUNE) Imfinzi +/- treme Imfinzi +/- treme - lung cancer (MYSTIC) - lung cancer (POSEIDON) - head & neck cancer 2L (EAGLE) - small-cell lung cancer (CASPIAN) selumetinib - thyroid cancer - bladder cancer 1L (DANUBE) - head & neck cancer 1L (KESTREL) PT010 - COPD Calquence - chronic lymphocytic leukaemia Fasenra - COPD Brilinta - CAD2/type-2 diabetes CVOT Farxiga - type-2 diabetes CVOT (DECLARE) roxadustat - anaemia (US) anifrolumab - lupus Key Phase III data Lynparza - ovarian cancer 1L Imfinzi +/- treme Lynparza - pancreatic cancer - lung cancer (MYSTIC) (final OS) Imfinzi - lung cancer (PACIFIC) (final OS) readouts Fasenra - COPD (TERRANOVA) - head & neck cancer 2L (EAGLE) Imfinzi + treme - lung cancer 1L (NEPTUNE) - head & neck cancer 1L (KESTREL) Imfinzi +/- treme selumetinib - thyroid cancer - lung cancer (POSEIDON) - small-cell lung cancer (CASPIAN) Farxiga - type-2 diabetes CVOT1 (DECLARE) - bladder cancer 1L (DANUBE) roxadustat - anaemia Calquence - chronic lymphocytic leukaemia Brilinta - CAD/type-2 diabetes CVOT 1. Cardiovascular outcomes trial. anifrolumab - lupus Farxiga - heart failure 2. Coronary artery disease. lanabecestat - Alzheimer’s disease Status as of 18 May 2018. 10 2018: return to growth on track Momentum to improve during the year
Q1 impacted by Crestor EU/JP; divestments Medicines that are impacting Comparisons easing as the year progresses Product Sales growth in 2018
Lynparza Tagrisso Imfinzi ongoing launch of tablet in ongoing launch in ongoing launch in ovarian and breast cancer 1st-line lung cancer unresect. sIII lung cancer BMS Alliance Diabetes Diabetes Brilinta Farxiga continued continued global growth global growth and the DECLARE trial
Crestor Fasenra annualisation of ongoing launch in Product Sales growth Sales Product loss of exclusivity severe, uncontrolled (EU, JP) asthma
FY FY FY FY FY FY FY Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2013 2014 2015 2016 2017 2017 2017 2017 2018 2018: low single-digit growth in Product Sales
Change (Product Sales growth) and 2018 guidance at CER. 11 Product Sales: Oncology, China were the key drivers Overall performance impacted by Crestor EU / JP, divestments
Q1 2018 % Product % change $m Sales
Product Sales 4,985 (2) 100
Oncology 1,230 33 25
New CVRM 900 8 18
Respiratory 1,181 (6) 24
Other 1,674 (19) 34
Emerging Markets 1,765 8 35
-of which China 1,025 22 21
Product Sales values at actual exchange rates; change at CER. 12 Strategic value-creation framework R&D productivity & focus drive decisions
Externalisation1 (milestones/royalty) Accelerate/enhance value; or new medicines outside focus
Focus on three Product Sales R&D productivity main therapy (Including Growth Platforms) areas
‘Following the science’ Oncology Other Operating leads to innovation CVRM - Cardiovascular, Income2 in and outside areas of Renal & Metabolism Disposal, typically of legacy focus Respiratory medicines outside focus
1. Medicines in which AstraZeneca maintains a significant future interest. Income through (recurring) milestones and royalty. 2. One-off disposal income and legacy royalty income. 13 Emerging Markets Geographic platform for growth
China 15% of Europe Product Sales US 24% of Product Sales Japan 31% of 11% of Product Product Sales Sales
Emerging Rest of Markets World (ex-China) Established 16% of (ex-Japan) Product Sales 4% of
2017 Product Sales as reported. Product Sales 15 Emerging Markets Primary care key to success
51%
32% Asia 68% $70-90bn growth 49% 15% North America Europe $185-215bn $42-49bn 85% growth growth 9%
6% AFME 91% $15-20bn Specialty care Latin growth America Primary care $20-25bn growth 94%
40% World 60% $305-335bn growth Share of absolute growth 2016-2021 by region, specialty and primary care
Source: IMS Market Prognosis, September 2016; QuintilesIMS Institute, October 2016. Chart notes: Growth in US$ using constant exchange rates. Asia: China, India, Russia, CIS states, SE Asia, Oceania and Japan. AFME: Africa and Middle East. 16 Core Profit & Loss
Q1 2018 % Total % change $m Revenue Total Revenue 5,178 (9) 100 - Product Sales 4,985 (2) 96 - Externalisation Revenue 193 (67) 4 Gross Margin 78.8% (4) pp - Operating Expenses 3,349 (1) 65 - R&D Expenses 1,240 (12) 24 - SG&A Expenses 2,028 6 39 Other Operating Inc. & Exp. 124 (64) 2 Tax Rate 18% - - EPS $0.48 (51) -
Absolute values at actual exchange rates; change at CER. Gross Margin reflects Gross Profit derived from Product Sales, divided by Product Sales. 17 Sustainability As a company built on delivering positive health outcomes, sustainability underpins everything AstraZeneca does
• As we strive to reach 200 million patients by 2025, we are evolving our approach and in 2017 rolled out a roadmap that further embedded sustainability into the Company’s DNA • This will ensure AstraZeneca effectively addresses the most fundamental issues for business, shareholders, society and the environment
19 Sustainability - recent highlights
#2 Overall in Pharmaceuticals, Biotechnology and Life Sciences industry group #1 in sector: Health Outcomes Contribution, Marketing Practices, Climate Strategy
Healthy Heart Africa Program: Over one million patients screened in Increased the number of senior managers who are 2015, exceeding its year-one target women to 42%
Achieved a 21.2% cut in our greenhouse gas footprint from 2010 100% of employees trained on Code of Conduct levels
20 Great place to work Discovery, development and commercial structure
Late-stage Discovery and early development development Commercial
Innovative Medicines and Early Development Biotech Unit (AstraZeneca Research Global and Early Development) Global Portfolio Internal and Collaborations and Medicines & external combinations Development Market opportunities Product Strategy MedImmune Biotech Unit (MedImmune Research and Early Development
21 Great place to work
Gothenburg, Sweden Cambridge, UK Gaithersburg, US Strategic R&D Centre Headquarters Strategic R&D Centre
22 Great place to work Realising company vision
1. A passion for people 2. Strong, supportive, development leadership at all levels
6. Access to medicines Values and 3. Flawless technology & social responsibility Purpose and ways of working
5. Environmental 4. Energising sites and sustainability workplaces
23 Great place to work External recognitions
24 Encouraging launches underpin 2018 return to growth Financials on track - commercial execution - guidance reiterated
• Financials on track • Product Sales as anticipated – Strong execution of launches; offset by tail of Crestor EU/JP and divestments • Total Revenue impacted by lower Initial Externalisation Revenue • Core operating expenses declined by 1%
• Newer medicines delivered $0.4bn in additional sales vs. Q1 2017 and 66% growth • Lynparza, Tagrisso, Imfinzi all very strong • CVRM blockbusters Brilinta and Farxiga continued growth • Respiratory competitive, but Fasenra off to a rapid start • China maintained fast growth
• Pipeline continued to deliver important news flow
• 2018 guidance reiterated
Absolute values, change and guidance all at CER. 25 On track: Long-term goals
>$45bn in 2023
2012-2014 2015-2017 2018+ Building strong Delivering on return Sustainable delivery foundations to growth and growth
Target is at constant exchange rates (2013) which is equivalent to ~$40bn at current exchange rates. 26 Investor Relations
Thomas Kudsk Larsen Craig Marks Henry Wheeler Cambridge, UK Cambridge, UK Cambridge, UK [email protected] [email protected] [email protected] T: +44 20 3749 5712 T: +44 20 3749 5714 T: +44 20 3749 5797 M: +44 7818 524185 M: +44 7881 615764 M: +44 7788 354619
Nick Stone Christer Gruvris Jen Kretzmann Cambridge, UK Cambridge, UK Cambridge, UK [email protected] [email protected] [email protected] T: +44 20 3749 5716 T: +44 20 3749 5711 T: +44 xx xxxx xxxx M: +44 7717 618834 M: +44 7827 836825 M: +44 7469 408333
Mitchell Chan Washington D.C., US [email protected] +1 240 477 3771 Toll free +1 866 381 7277 astrazeneca.com/investors
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