Astrazeneca Plc · LSE:AZN

Astrazeneca — Q2 2007 Earnings Presentation

39 slides from Astrazeneca's earnings presentation, 2007

  1. Slide 1: Cautionary Statement Regarding Forward-Looking Statements

    Cautionary Statement Regarding Forward-Looking Statements In order to utilise the ‘Safe Harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995, AstraZeneca is providing the following cautionary statement. This presentation contains forward-looking statements with re

  2. Slide 2: Agenda

    David Brennan CEO Agenda ƒ Business overview ƒ R&D update ƒ Financial performance AstraZeneca 2Q and HY Results 2007 AstraZeneca 2Q and HY Results 2007 2

  3. Slide 3: Strategic priorities

    2Q and HY Results 2007 Strategic priorities “MAKING THE MOST MEANINGFUL DIFFERENCE TO PATIENT HEALTH THROUGH GREAT MEDICINES” Reshape Change our Strengthen Grow behaviour the the and our the pipeline business business culture OUR VALUES AstraZeneca 2Q and HY Results 2007 AstraZeneca 2Q and HY Result

  4. Slide 4: Strengthen the pipeline; MedImmune

    Strengthen the pipeline Themes Valued ƒ Create more flexible R&D organisation medicines ƒ Increase speed and quality to enhance research and development process ƒ Fully implement new Disease Area Strategy ƒ Drive externalisation ƒ Innovate through biopharmaceuticals Progress ƒ 2 progressions to Phas

  5. Slide 5: Grow the business; Reshape the business

    Grow the business Themes Customer- ƒ Deliver on our key brands centric mindset ƒ Innovate selling model and develop world-class marketing skills ƒ Intensify customer support programs ƒ Accelerate emerging markets growth Progress ƒ Symbicort™ ƒ US launch Grow ƒ SMART™ roll-out ROW the business ƒ Sero

  6. Slide 6: Change our behaviour and our culture

    Change our behaviour and our culture Themes Responsible ƒ Changing our behaviour, starting from the top leaders who make every interaction ƒ Embed the new Leadership Capabilities and a count culture of accountability ƒ Start a Values Dialogue at all levels in the organisation ƒ Strengthen and measur

  7. Slide 7: Headline results 2Q and 1H 07

    Headline results 2Q 07 2007 2006 Actual CER $m $m growth growth Sales 7,273 6,625 +10% +6% Operating profit 1,973 2,131 -7% -11% Reported EPS $0.95 $1.02 -7% -11% Restructuring $0.18 - MedImmune $0.06 - Adjusted EPS $1.19 $1.02 +17% +13% AstraZeneca 2Q and HY Results 2007 Headline results 1H 07 2007

  8. Slide 8: Accelerate emerging markets growth; Key growth drivers

    Accelerate emerging markets growth CER Emerging Markets $m growth 12% Other Established US 6% 45% US 3,268 +6% Japan 6% Established ROW 2,842 +3% Western Europe Emerging ROW 889 +21% 31% AstraZeneca 2Q and HY Results 2007 2Q 2007 sales: Key Growth Drivers Sales CER $m growth Nexium™ 1,312 +0% Seroqu

  9. Slide 9: Nexium sales and US PPI market

    Nexium™ - PPI for ulcers and reflux disease Q2 07 Sales: $1,312m +0% 1400 1200 ROW 1000 $457m +2% 800 600 US $855m -1% 400 200 0 Q2 06 Q2 07 US ROW Source: IMS NGPS+ June 2007 AstraZeneca 2Q and HY Results 2007 US PPI Market - TRx EU Growth Trends* Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 78% 69% 70

  10. Slide 10: Nexium; Crestor

    Nexium™ - PPI for ulcers and reflux disease Q2 07 Sales: $1,312m +0% ƒ US volume growth Q2 07: 1400 ƒ Omeprazole +48% ƒ Nexium™ +3% 1200 ROW ƒ All other PPI brands unchanged 1000 $457m +2% ƒ Refine strategy 800 ƒ Clinical differentiation 600 US ƒ Wider spread between volume $855m -1% and revenue gro

  11. Slide 11: US statin market; Crestor

    US statin market - generic impact Statins : Lipitor™ impacted 6.00 5.27 4.00 NRx Share Point Change 2.00 0.64 0.37 0.00 -0.06 -0.31 -1.34 -2.00 -4.00 -4.22 -6.00 01/05/07 01/19/07 02/02/07 02/16/07 03/02/07 03/16/07 04/27/07 05/11/07 05/25/07 06/08/07 06/22/07 03/30/07 04/13/07 Crestor™ ™ Lipitor Lo

  12. Slide 12: Arimidex; Seroquel

    Arimidex™ Q2 07 Sales: $430m +10% ƒ US TRx +9% 500 ƒ Market leading TRx 38% share 450 400 ROW 350 $252m +7% ƒ Japan +13% 300 ƒ Emerging Markets +16% 250 200 150 US 100 $178m +14% 50 0 Q2 06 Q2 07 US ROW Source: IMS NPA (Retail, Mail Order and Long-Term Care) June 2007 AstraZeneca 2Q and HY Results 2

  13. Slide 13: Symbicort; Summary

    Symbicort™ - fixed combination for asthma and COPD Q2 07 Sales: $414m +25% ƒ US launch 25 June 450 ƒ Good managed care access 400 ƒ Specialist initial target: 350 ROW Primary Care to follow 300 $384m +15% 250 ƒ ROW 200 ƒ Western Europe sales +15% 150 ƒ Emerging Europe sales +27% 100 ƒ SMART™ roll-ou

  14. Slide 14: AstraZeneca R&D: Strengthening the Pipeline

    AstraZeneca R&D Strengthening the Pipeline John Patterson - Executive Director, Development Excellent progress with the pipeline 2007 - Strengthening the Pipeline ƒ Accelerating Delivery ƒ Reducing development timelines ƒ Increasing number of projects ƒ Reshaping the business ƒ Building Pipeline Mom

  15. Slide 15: Accelerating Delivery

    Accelerating Delivery Set new ‘time to market’ target - 8 years ƒ Driving quality: ƒ Increased throughput: record number Quality of “First Time In Man” - 14 so far in 2007 vs 12 in 2006 overall ƒ Early termination strategy enriches quality ƒ Building a culture of continuous PERFORMANCE improvement:

  16. Slide 16: Accelerating Delivery across the pipeline

    Accelerating Delivery …..across the pipeline Smaller studies increase speed: Better design: ƒ Up to 6 months and $ saved in Phase II GERD ƒ Candidate Drugs in CV/GI and Alzheimer's projects Lead Optimisation reducing n=230 400 time from 30 to 18 months n=525 1200 Pre-Clinical Phase I Phase II Phase

  17. Slide 17: Building Pipeline Momentum

    Building Pipeline Momentum February 2007 AZD9272 AZD2479 AZD5896 AZD5672 AZD9684 AZD2281 AZD6610 AZD5099 AZD7928 CAT-354 ZD4054 Iressa ™ AZD5069 CAM-3001 AZD2392 AZD8931 Dapagliflozin Seloken/Toprol-XL™ AZD4992 AZD9935 AZD9215 AZD7762 Zactima ™ Seroquel XR ™ AZD3988 AZD9468 AZD5904 Symbicort™ AZD167

  18. Slide 18: Building Pipeline Momentum: progressions since February

    Building Pipeline Momentum Progressions since February 2007 Progression No change AZD5672 AZD2281 AZD5099 CAT-354 ZD4054 AZD5069 CAM-3001 AZD8931 Dapagliflozin AZD4992 AZD9935 AZD7762 Zactima ™ Seroquel XR ™ AZD3988 AZD9468 AZD5904 Symbicort™ PN400 Seroquel ™ pMDI AZD3825 AZD8848 AZD5904 CytoFab ™ N

  19. Slide 19: Building Pipeline Momentum: additions as at July 2007

    Building Pipeline Momentum Additions as at 26 July, 2007 MedImmune- Partnered MEDI-564 (MedImmune) Addition MEDI-563 (MedImmune) Pneumococcal Progression vaccine MEDI-561 (MedImmune) (MedImmune) Addition AZD3241 MEDI-560 & Progression MEDI-528 AZD1940 (MedImmune) (MedImmune) No Change AZD1236 MEDI-5

  20. Slide 20: Strengthening Late Stage Pipeline

    Building Pipeline Momentum Strengthening Late Stage Pipeline ƒ Phase III ƒ 8 projects vs 5 in February 2007 ƒ 4 new since February 2007 ƒ 1 withdrawal ƒ 2 progressions ƒ 1 addition from MedImmune ƒ 1 new Recentin™ indication ƒ Phase II ƒ 17 projects ƒ 8 Phase IIb: AZD6244 – anti-proliferatives AZD56

  21. Slide 21: Phase III Recentin

    Building Pipeline Momentum Phase III - Recentin™ ƒ Inhibits all 3 VEGF receptors ƒ Preclinically shown to be one of the most potent and selective VEGF signalling inhibitors ƒ HORIZON I completed recruitment ƒ ASCO Data: Glioblastoma ƒ 27.6% alive and progression free at 6 months, PFS 111 days and OS

  22. Slide 22: Phase III saxagliptin; New Phase III ZD4054

    Building Pipeline Momentum Phase III - saxagliptin ƒ DPP-IV for Type II Diabetes ƒ First saxagliptin phase III data (add on to metformin) presented at ADA 2007 ƒ Expected filing in 1H 2008 NDA Percent of patients achieving Fasting Plasma Glucose – adjusted mean HbA1C<7% at week 24 (LOCF) change from

  23. Slide 23: New Phase III dapagliflozin

    Building Pipeline Momentum New Phase III - dapagliflozin ƒ Potential ‘First in Class’ SGLT2 to meet need in diabetes market ƒ Phase IIb dose-ranging study completed; data presentation targeted for ADA 2008 ƒ Start of two Phase III studies during Q3 07 Dapagliflozin Increases Dapagliflozin Reduces FS

  24. Slide 24: Late stage pipeline; Pipeline II highlights

    Building Pipeline Momentum Strengthening Late Stage Pipeline ƒ Phase III ƒ 8 projects vs 5 in February 2007 ƒ 4 new since February 2007 ƒ 1 withdrawal ƒ 2 progressions ƒ 1 addition from MedImmune ƒ 1 new Recentin™ indication ƒ Phase II ƒ 17 projects ƒ 8 Phase IIb: AZD6244 – anti-proliferatives AZD56

  25. Slide 25: Biologics highlights; Seroquel LCM developments

    Building Pipeline Momentum Biologics Highlights Asthma Phase II - MEDI-528 ƒ A monoclonal antibody against IL9 ƒ Results from first Phase II trial expected 2H07 Monoclonal ƒ 2 additional Phase II studies in asthmatics anticipated 2H07 Antibodies Phase I - MEDI-563 (IL-5 receptor MAb), CAT354 (IL-13)

  26. Slide 26: LCM Developments: Seroquel, Crestor, Symbicort

    Building Pipeline Momentum LCM Developments - Seroquel™ TCA SSRI SNRI Seroquel™ Antidepressive efficacy Serotonin YES YES YES YES Norepinephrine YES NO YES YES Dopamine NO NO NO YES TA ATA Seroquel™ Antipsychotic efficacy Dopamine YES YES YES Serotonin NO YES YES Norepinephrine NO NO YES AstraZeneca

  27. Slide 27: Transforming AZ's Science Base

    Transforming AZ’s Science Base MedImmune ƒ Agreed R&D operating model ƒ Conducted first portfolio review ƒ Few overlaps ƒ Strong complement of activities and technologies ƒ Industry-leading AZ/MedImmune capabilities across small molecules, biologics and vaccines R&D Day focused on Biologics 6th Dec

  28. Slide 28: Appendix: Looking ahead: 2007 news flow

    Appendix Looking ahead: 2007 News flow AZD3480 Phase IIb start AZD9056 Phase IIb start Motavizumab BLA submission Motavizumab Native American Study PN400 Phase III decision Medi-528 Phase II data Crestor™/ Fibrate Ph III decision Recentin™ Phase III GBM Seroquel™ : US XR bipolar Dapagliflozin Phase

  29. Slide 29: 2Q and HY Results 2007: Agenda

    2Q and HY Results 2007 Jon Symonds - Chief Financial Officer Agenda ƒ Headline Results ƒ MedImmune ƒ Core EPS ƒ Restructuring ƒ Underlying Business Performance ƒ 2007 Expectations ƒ Capital Structure Considerations AstraZeneca 2Q and HY Results 2007 AstraZeneca 2Q and HY Results 2007 29

  30. Slide 30: Headline EPS Results: Quarter Two

    Headline EPS Results: Quarter Two $0.06 $1.19 CER Growth $0.18 Inc. Toprol-XL™: 13% $1.02 $0.95 Ex. Toprol-XL™: 15% Reported Restructuring MedImmune Underlying 2006 AstraZeneca 2Q and HY Results 2007 MedImmune: Impact on Operating Profit $m Underlying Business (19) One-time acquisition costs (49) Am

  31. Slide 31: MedImmune: acquisition-related synergies

    MedImmune: acquisition-related synergies ƒ Acquisition target - “Towards $500m” ƒ Committed synergies - $450m by 2009 ƒ Rising to over $500m by 2010 ƒ Long term synergies come from: ƒ Small molecules, biologics and vaccines ƒ AZ, MedImmune and CAT AstraZeneca 2Q and HY Results 2007 MedImmune: acquis

  32. Slide 32: MedImmune acquisition accounting; Core EPS

    MedImmune: acquisition accounting $m Goodwill 8,596 Subject to impairment tests Intangible assets 8,329 Amortisation charge of $420m p.a. Deferred tax liabilities (2,473) Other net liabilities (569) Total consideration 13,883 AstraZeneca 2Q and HY Results 2007 Core EPS ƒ Recognises increased amortis

  33. Slide 33: Restructuring; Underlying financial performance

    Restructuring Programme H107 Charge Headcount $m $m Global Supply Chain 750 281 3,300 European Sales Force 300 146 1,800 IS and Business Infrastructure 450 2 1,800 R&D 100 29 700 Total 1,600 458 7,600 ƒ Benefits in excess of $900m per annum by 2010 ƒ Total charge in 2007 estimated at $900m - balance

  34. Slide 34: Margin progression; Guidance

    Margin progression Q2 Actual delta CER delta Currency Gross Margin +0.8 +0.1 +0.7 SG&A +2.3 +2.5 -0.2 +3.1 +2.6 +0.5 R&D -1.7 -1.2 -0.5 Other Income +0.2 +0.2 - Operating Profit +1.6 +1.6 - Note: Margin deltas represent percentage point changes versus prior year on an excluding MedImmune, excluding

  35. Slide 35: Capital structure considerations

    Capital structure considerations 1 Jan 2007 30 June 2007 $m $m Debt (1,087) (1,384) Short term borrowings (136) (14,015) Cash 7,760 5,311 Net Cash / (Debt) 6,537 (10,088) Refinancing principles ƒ Strong investment grade credit rating sought ƒ Short term borrowing reduced to core gross debt ($8-9bn)

  36. Slide 36: Appendix: Headline operating profit results Q2

    Appendix Headline operating profit results – Q2 07 3000 2,452 2500 376 103 CER Growth 2,131 Inc. Toprol-XL™: 11% 1,973 2000 Ex. Toprol-XL™: 14% 1500 1000 500 0 Reported Restructuring MedImmune Underlying 2006 AstraZeneca 2Q and HY Results 2007 AstraZeneca 2Q and HY Results 2007 36

  37. Slide 37: Headline EPS and operating profit results H1 07

    Headline EPS results – H1 07 250 $0.06 $2.25 CER Growth $0.22 $1.97 Inc. Toprol-XL™: 15% 200 $1.92 Ex. Toprol-XL™ : 17% 150 100 50 0 Reported Restructuring MedImmune Underlying 2006 AstraZeneca 2Q and HY Results 2007 Headline operating profit results – H1 07 5000 458 103 4,704 CER Growth 4,143 4,107

  38. Slide 38: Underlying performance and margin progression H1 07

    AZ underlying financial performance: H1 07 H1 2007 2006 CER Sales Reported 14,239 12,805 8% Toprol-XL™ (670) (732) Underlying 13,569 12,073 9% Operating Profit ex-MedI/Rest 4,704 4,107 13% Toprol-XL™ (570) (569) Underlying 4,134 3,538 15% AstraZeneca 2Q and HY Results 2007 Margin progression: H1 07

  39. Slide 39: Core EPS

    Core EPS Q2 07 Q2 06 CER H1 07 H1 06 CER $m $m $m $m Reported EPS $0.95 $1.02 -11 $1.97 $1.92 +1 Restructuring Costs $0.18 - $0.22 - Amortisation of intangible assets: MedImmune acquisition $0.02 - $0.02 - Merck arrangements $0.02 $0.02 $0.03 $0.03 Core EPS $1.17 $1.04 +9 $2.24 $1.95 +13 AstraZeneca

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