Astrazeneca Plc · LSE:AZN
Astrazeneca — H1 2008 Earnings Presentation
49 slides from Astrazeneca's earnings presentation, July 2008
Slide 1: 2Q and Half Year Results 2008
Astrazeneca? 2Q and Half Year Results 2008
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding 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 presentation contains certain forward-looking statements
Slide 3: 2Q and Half Year Results 2008
Astrazeneca? 2Q and Half Year Results 2008
Slide 4: David Brennan, Chief Executive Officer
David Brennan Chief Executive Officer
Slide 5: Achievements 1H 2008
Achievements 1H 2008 Grow Core earnings per share target increased to $4.60 to $4.90 the Emerging Markets +20% to over $1 bn in Q2 business Successful mitigation of Nexium and Seroquel patent risks Productivity Culture and Restructuring and Synergy Programmes Reshape on track the Total ben
Slide 6: Headline results 1H 2008
Headline results 1H 2008 2008 2007 Actual CER $m $m growth growth S l Sales 15 633 15,633 14 239 14,239 +10% +3% Core Operating Profit 5,502 4,683 +17% +7% Net Finance Inc/(Exp) (308) 115 Core Profit Before Tax 5,194 4,798 +8% -2% Core EPS $2.53 $2.24 +13% +3% p Reported EPS $2.14 $1.97 +9% -3% Inte
Slide 7: Simon Lowth, Chief Financial Officer
Simon Lowth Chief Financial Officer
Slide 8: Agenda
Agenda 2Q 2008 headline results Regional and key brands Profit and Loss account Cash flow performance Update guidance for full year 2008 AstraZeneca Half Year Results 2008
Slide 9: Headline results 2Q 2008
Headline results 2Q 2008 2008 2007 Actual CER $m $m growth growth Sales 7 956 7,956 7 273 7,273 +9% +2% Core Operating Profit 2,737 2,409 +14% +3% Net Finance Inc/(Exp) (194) 18 Core Profit Before Tax 2,543 2,427 +5% -6% Core EPS $1.25 $1.17 +7% -4% Reported EPS $1.11 $0.95 +17% +4% AstraZeneca Half
Slide 10: Regional sales performance 2Q 2008
Regional sales performance 2Q 2008 2008 CER $m growth Sales 7,956 +2% North America 3,463 -3% US 3,126 -4% excluding Toprol-XL 3,055 +4% ROW Established Markets 3,340 +2% Western Europe 2,606 +1% Japan 518 +10% Other Established 216 +7% ROW Emerging Markets 1 153 1,153 +20% AstraZeneca Half Year Res
Slide 11: Key brand summary: 2Q 2008
Key brand summary: 2Q 2008 2008 2007 CER $ $m $ $m growth th Nexium 1,323 1,312 -4% Seroquel 1,112 963 +11% Crestor 916 678 +27% Arimidex 490 430 +6% y Symbicort 518 414 +12% Total 4,359 3,797 +8% AstraZeneca Half Year Results 2008
Slide 12: Nexium
Nexium 2Q 2008 Sales: $1,323m -4% US 1400 Volume +11% Growth in non-retail channels 1200 Retail units +0.4%* ROW 1000 $569m +11% Negative price variance 800 600 ROW US 400 Emerging Markets +36% $754m -12% 200 0 2Q 2007 2Q 2008 US ROW * Source: IMS Health, US NPA June 2008 AstraZeneca H
Slide 13: Crestor
Crestor 2Q 2008 Sales: $916m +27% 1000 800 ROW $501m +37% 600 400 US 200 $415m +18% 0 2Q 2007 2Q 2008 US ROW AstraZeneca Half Year Results 2008
Slide 14: Crestor: Only brand to gain TRx share
Crestor: Only brand to gain TRx share US TRx Share Change* Dec Jun vs Dec Crestor 8.62% 9.13% 0.51% Vytorin 12.38% 8.62% -3.76% Lipitor 32.83% 30.74% -2.09% 2.09% Generics 44.45% 49.94% 5.49% Other 1.72% 1.57% -0.15% * Source: IMS Health, US NPA June 2008 AstraZeneca Half Year Results 2008
Slide 15: Crestor
Crestor 2Q 2008 Sales: $916m +27% US Only branded statin to gain share 1000 US TRx TR +8%* Gains in new starts and switches 800 ROW $501m +37% ROW 600 Western Europe +19% Canada +30% 30% 400 Japan +150% US Dynamic share: 24%** 200 $415m +18% 0 2Q 2007 2Q 2008 US ROW * Source: IMS H
Slide 16: Seroquel
Seroquel 2Q 2008 Sales: $1,112m +11% US TRx’s +6%* 1200 Market TRx’s TRx s +3% Market leading TRx share 1000 ROW 31.6% $379m +18% Seroquel S l XR ~40% 40% off 800 Rx growth 600 US Seroquel XR LCM launches in 400 $733m +8% late 2008 to 2009 Bipolar mania and depression 200 Major Depress
Slide 17: Arimidex
Arimidex 2Q 2008 Sales: $490m +6% US TRx’s +1%* 600 Market flat Market leading TRx share 500 38.2% Patients P ti t begin b i tto reachh end d 400 ROW of 5-yr treatment term $289m +1% 300 200 US 100 $201m +13% 0 2Q 2007 2Q 2008 US ROW * Source: IMS Health, US NPA June 2008 AstraZeneca Half Ye
Slide 18: Symbicort
Symbicort 2Q 2008 Sales: $518m +12% ROW 550 Emerging Markets +29% 500 450 ROW US 400 $461m +6% Specialist trial: ~80% 350 27% share of new starts 300 Primary Care trial: 33% 250 1 in 6 new starts 200 150 Overall market (w/e 18 July) 100 NRx share 9.1%* 50 US New start share 17.6%
Slide 19: Core margin: 2Q 2008
Core margin: 2Q 2008 CER Delta vs PY $m g growth % sales CER Core Gross Margin 6,525 +4% 82.0 +170 bps Distribution (75) +14% 0.9 -10 bps Core R&D (1,265) 0% 15.9 +30 bps Core SG&A (2,656) +5% 33.4 -90 bps Core Other Income 208 -19% 2.6 -70 bps Operating Profit 2,737 +3% 34.4 +30 bps AstraZeneca Hal
Slide 20: Core margin: 1H 2008
Core margin: 1H 2008 CER Delta vs PY $m g growth % sales CER Core Gross Margin 12,732 +5% 81.5 +120 bps Distribution (141) +8% 0.9 - Core R&D (2,447) -1% 15.7 +70 bps Core SG&A (5,001) +3% 32.0 -10 bps Core Other Income 359 -10% 2.3 -40 bps Operating Profit 5,502 +7% 35.2 +140 bps AstraZeneca Half Y
Slide 21: Cash generation: first half 2008
Cash generation: first half 2008 2008 2007 $m $m Opening net cash/(debt) (9 112) (9,112) 6 537 6,537 EBITDA 5,893 4,882 Movement in working capital (445) (589) Interest paid (324) (61) Tax paid (1,108) (1,475) Other non-cash movements 276 427 Net cash from operating activities 4,292 3,184 AstraZenec
Slide 22: Cash generation: first half 2008
Cash generation: first half 2008 2008 2007 $m $m Opening net cash/(debt) (9 112) (9,112) 6 537 6,537 Net cash from operating activities 4,292 3,184 M k Merck (2 630) (2,630) - Net Acquisitions (incl. MedImmune) - (14,543) Other capital expenditure (593) (728) Dividends/Net share buy-back (2,180) (3,
Slide 23: Guidance for FY 2008
Guidance for FY 2008 Core EPS Range g of $ $4.60 to $ $4.90,, +$0.15 $ Half from further currency benefit in 2Q 2008 2H 2008 guidance based on 4Q 2007 avg. rates Half from operating and financial performance AstraZeneca Half Year Results 2008
Slide 24: Guidance for FY 2008
Guidance for FY 2008 Core EPS Range g of $ $4.60 to $ $4.90,, +$0.15 $ Sales Low to mid-single digits (CER) Core Gross Margin Maintain at 2007 level (CER) Core R&D Low to mid-single digits (CER) Core SG&A Low single digits (CER) Core Other Income Approx 2007 levels AstraZeneca Half Year Results 2008
Slide 25: Simon Lowth, Chief Financial Officer
Simon Lowth Chief Financial Officer
Slide 26: AstraZeneca R&D: Delivering on our promise
AstraZeneca R&D Delivering on our promise John Patterson, Executive Director, Development
Slide 27: Delivering on our promise
Delivering on our promise Differentiated 1H 2008 achievements; & Targeted Life Cycle Management delivered – 12 submissions Medicines Two NCE submissions Ongoing productivity improvements Faster cycle times Leaner and cost efficient organisation Stronger pipeline – 12 projects in Phase II
Slide 28: Key developments: Motavizumab
Key developments Motavizumab US BLA as RSV prophylaxis for premature infants and infants with CLD submitted Jan 08 – FDA review ongoing CHD study analysis ongoing – US sBLA submission 1H 2009 EU submission for all high risk infants 1H 2009 Phase Ph III Native N ti American A i study t d accr
Slide 29: Key developments: ONGLYZA
Key developments ONGLYZA™ Delivered NDA submission Jun 08 and EU MAA Jul 08 (15 months early) Completed Phase III – robust data package of 6 positive trials >3,000 , exposed p to ONGLYZA™ in Phase III for up p to 2 yyears >4,000 exposed in programme New data presented at ADA Jun 08 showing
Slide 30: Key developments: ONGLYZA
Key developments ONGLYZA™ ONGLYZA™ Add-On to metformin: Significant HbA1c reductions from baseline Significant reductions in HbA1c, FPG, PPG f from b li att week baseline k 24 AstraZeneca Half Year Results 2008
Slide 31: Key developments: Zactima
Key developments Zactima All four phase III studies completed recruitment on schedule: ZEST (monotherapy vs erlotinib), ZODIAC (docetaxel combination), ZEAL (pemetrexed combination) combination), ZETA (thyroid) License applications driven by event rates - event rates slowed in three studies
Slide 32: Key developments: AZD6140
Key developments AZD6140 PLATO study recruitment complete and patient follow-up initiated Approximately 18,600 patients enrolled in total EU and US submissions planned 2H 2009 AstraZeneca Half Year Results 2008
Slide 33: Phase III update: Recentin
Phase III update Recentin Phase III progression in 1st line CRC announced Feb 08 – on track EU and US submissions in CRC and rGBM planned for 2010 Encouraging new data in rGBM, renal, prostate and ovarian cancers Re-evaluating NSCLC strategy – Phase II/III BR24 study data presentation by yea
Slide 34: Phase III update
Phase III update On Phase III Project track Update ZD4054 9 ENTHUSE programme actively recruiting Publication of Phase II (EPOC - Study 6) in 4Q Q 2008 PN400 9 On track for 1H 2009 NDA Dapagliflozin 9 7 Phase III studies ongoing Phase IIb data presented at ADA 08 US and EU submissions 2010 Crestor/T
Slide 35: Phase III portfolio
Phase III portfolio Pre- Clinical Phase I Phase II Phase III portfolio LCM PN400 ONGLYZA™ C esto / Crestor/ TriLipix Z ti Zactima MEDI-561 (IPI-504) Recentin AZD0837 Recentin AZD6140 Dapagliflozin ZD4054 Motavizumab AstraZeneca Half Year Results 2008
Slide 36: AZD0837: Unmet medical need
AZD0837 Unmet medical need Atrial Fibrillation and Anticoagulation Most common sustained cardiac arrhythmia (7 m diagnosed patients)* 55-fold fold increased risk of stroke Prevalence increasing More people >65 years old More survivors of ACS Widespread under-treatment due to challenges o
Slide 37: AZD0837: Clinical experience
AZD0837 Clinical experience >900 AF patients exposed Longest exposure to date 16 months Study-7 (IR): 249 AF patients for 3 months Study-8: y 955 AF p patients,, 3-9 months treatment Study-42: Long-term safety study, 523 AF patients randomised from study-8, longest exposure 16 months Stu
Slide 38: AZD0837: Opportunity
AZD0837 Opportunity Predictable relationship between dose and blood levels Low to moderate PK variability Dose selected via biomarkers and extensive modelling, guided by Exanta experience ER formulation Once daily without ‘peaks and troughs’ No relevant food interactions Low to moderat
Slide 39: LCM update: Seroquel
LCM update Seroquel Regulatory update: Filed Approval US IR Bipolar Depression IR Bipolar Maintenance XR Schizophrenia XR Bipolar Mania 4Q 2008 XR Bipolar Depression 4Q 2008 XR Bipolar Maintenance On track 4Q 2008 3Q 2009 XR Major Depressive Disorder 4Q 2008 XR Generalised Anxiety Disorder 1Q 2009 E
Slide 40: LCM update: Iressa
LCM update Iressa MAA submitted for 2nd line adv NSCLC May 08 INTEREST study 1.0 Iressa docetaxel N 723 710 0.8 Events 593 (82.0%) 576 (81.1%) Primary Cox analysis without covariates HR (96% CI) = 1.020 (0.905, 1.150) 0.6 Conclude non-inferiority Probability in the overall per protocol (PP) popula
Slide 41: LCM update: Iressa IPASS
LCM update Iressa IPASS (Iressa Pan-Asia Study): Iressa vs carboplatin/paclitaxel in 1st line adv NSCLC 1,217 patients from Asia (adenocarcinoma histology and never smokers or long-term g light g ex-smokers)) Superior Progression Free Survival and Response Rate with Iressa relative to carbopla
Slide 42: LCM update: Symbicort, Crestor
LCM update Symbicort, Crestor Symbicort ssNDA de delivered e ed in US for o CO COPD April p 08 sNDA delivered in US for paediatric (6-11 yrs old) asthma Jun 08 On track for pMDI filing in EU for asthma/COPD 3Q 2008 Crestor Announced early closure of JUPITER in March 08 Aim to present resul
Slide 43: Faster, leaner, stronger
Faster, leaner, stronger Low to mid single digit R&D cost increase Quality Faster cycle times Consolidating our drive to 8 year cycle time PERFORMANCE Cost efficiency Cost Speed Significant cost reduction in early portfolio vs 2006 Phase I median cycle time 25 2010 ttargett 20 onths 15 mo
Slide 44: Stronger pipeline
Stronger pipeline 31 July 2008 New Filing Progression Addition MEDI-528 Motavizumab No Change ONGLYZA™ EBV vaccine* IPI-504 Pneumococcal (saxagliptin) / AZD7762 vaccine* CytoFab (MEDI-561) Metformin FDC Motavizumab AZD7325 MEDI-564* AZD9056 MEDI-538* Seroquel XR ONGLYZA™ Symbicort AZD6280 MEDI-563 A
Slide 45: Delivering on our promise
Delivering on our promise Achieving steady state 143 required i d tto d deliver li ttargets t 137 24 23 12 Phase III projects 120 12 91 106 25 10 Strengthening Phase II 20 30 25 Clinical 25 5 Strong balance of: 5 6 18 13 13 41 35 Biologics vs small 23 17 17 molecules 31 45 42 43 Pre- FIC
Slide 46: 2Q and Half Year Results 2008
Astrazeneca? 2Q and Half Year Results 2008
Slide 47: Appendix
AstraZeneca?
Slide 48: Estimated impact of currency movements on sales and earnings
Estimated impact of currency movements on sales and earnings Estimated impact of a 10% appreciation of the respective currency against the USD Sales Earnings Euro 2.6% 7.3% Sterling 0.4% -4.6% Swedish Krona 0.1% -4.4% Other currencies 2.2% 4.3% AstraZeneca Half Year Results 2008
Slide 49: 2H 2008 newsflow
2H 2008 newsflow Recentin BR24 NSCLC study to be presented Iressa IPASS study to be presented Symbicort supplementary data for Seroquel q XR Generalised Anxietyy Disorder submission EU COPD/asthma pMDI submission EU Zactima Phase III data in-house for 2nd line NSCLC, monotherapy and MEDI-561/IPI- 50