AstraZeneca Q1 2023 Earnings Call Transcript

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Provided by Quartr
April 27, 2023

Key Takeaways

  • Q1 Financials: Total revenue of $10.9 billion was stable year-on-year while core EPS rose 6% to $1.92, and the company reaffirmed its full-year 2023 guidance.
  • Emerging Markets & China: Ex-COVID sales grew 15% overall, driven by a 22% increase in emerging markets and a third consecutive quarter of growth in China.
  • Pipeline Momentum: Six new Phase III trials have been initiated so far in 2023 (out of 30 planned), including studies in lung cancer combinations, eosinophilic esophagitis, COVID-19 prophylaxis, breast cancer and prevention of acute kidney injury.
  • Oncology Growth: The oncology franchise delivered 19% revenue growth to over $4 billion, with Tagrisso up 15%, Imfinzi up 56%, Lynparza up 10%, Calquence up 31% and Enhertu up 203%.
  • Rare Disease Update: Ultomiris sales grew 61% as patients converted from Soliris (down 13%), but the Wilson disease program AZ-PRMT5 (ALX01840) was discontinued after follow-up studies showed mixed results.
AI Generated. May Contain Errors.
Earnings Conference Call
AstraZeneca Q1 2023
00:00 / 00:00

There are 24 speakers on the call.

Operator

Good morning to those joining from the U. K. And the U. S. Good afternoon to those in Central Europe, and good evening to those listening in Asia.

Operator

Welcome, ladies and gentlemen, to AstraZeneca's Q1 2023 results webinar for investors and analysts. Before I hand over to AstraZeneca, I'd like to read the Safe Harbor statement. The company intends to utilize the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Participants on this call may make forward looking statements with respect to the operations and financial performance of AstraZeneca. Although we believe our expectations are based on reasonable assumptions, by their very nature, Forward looking statements involve risks and uncertainties and may be influenced by factors that could cause actual results Any forward looking statements made on this call Reflect the knowledge and information available at the time of this call.

Operator

The company undertakes no obligation to update forward looking statements. Please also carefully review the forward looking statements disclaimer in the slide deck that accompanies this presentation. There will be an opportunity to ask questions after today's presentations. Please use the raise a hand feature to indicate you wish to ask a question at any And with that, I will now hand you over to the company.

Speaker 1

Thank you, operator, and good afternoon, everyone. Andy Briner here, Head of Investor Relations at AstraZeneca and I'm very pleased to welcome you to AstraZeneca's Q1 2023 conference call. As usual all materials presented are available on our website. This slide contains our usual safe harbor statement. We will be making comments on our using constant exchange rates or CER, core financial numbers and other non GAAP measures.

Speaker 1

A non GAAP to GAAP Reconciliation is contained within the results announcement. Numbers today are in 1,000,000 of U. S. Dollars unless otherwise stated. This slide shows our agenda for today's call.

Speaker 1

Following prepared remarks, we will open the line up for questions. We will try and address as many questions as we can during the allotted time. Although I would ask that participants limit the number of questions you ask to allow others a fair chance to participate in the Q and A. As a reminder, With that, Pascal, over to you.

Speaker 2

Thank you, Andrew. Andy, hello, everyone. Please advance to Slide 5. We delivered total revenue of $10,900,000,000 in the Q1, which was stable compared to the prior year. This performance is really quite remarkable when you consider that a 15% growth in revenue from our ex COVID medicines Offset the decline in revenue from our COVID-nineteen medicines of $1,500,000,000 in the quarter.

Speaker 2

Core earnings per share grew 6% Compared to the Q1 of 2022, this growth reflects both the decline in COVID-nineteen medicine revenues As well as important investments we are making in our business to advance our pipeline and deliver on the full promise of our recently launched medicines. Based on our strong fundamentals and outlook for the year, we are reiterating our 2023 guidance. Please move to the next slide. Excluding our COVID-nineteen medicines and in addition to our broad base of growth across these areas, We delivered strong growth across all regions. Importantly, in the emerging markets, our ex COVID-nineteen medicine grew by 22%.

Speaker 2

In China, we have now seen 3 successive quarters of growth as we continue to launch innovative medicines And growth outpaces anticipated declines in some of our older medicines. This growth is a clear reflection of the value of our broad portfolio And our sustained focus on emerging markets over time. Our business is highly resilient with pipeline momentum accelerating As a result of both internal and external innovation, please move to Slide 7. One illustration of this momentum is our focus on initiating 30 Phase III trials in 2023. I'm pleased to announce we have already dosed patients in 6 new Phase III trials since the start of the year.

Speaker 2

This include 2 trials of DATO DXD in combination with IO Medicines, reflecting our confidence in the promise of these regimens To enhance outcomes for patients with lung cancer. Given that inflammatory cells play a key role In the ozanophilic esophagitis and with t sleeping at the top of the inflammatory cascade, we've initiated the crossing trial for TESPIRE, Our anti T sleep antibody in EoE. Supernova is a trial of our novel antibody AZD-three thousand one hundred and fifty two For the prophylactic treatment of COVID-nineteen with potential approval in the second half of this year. Here, our aim is to protect People who don't mount an effective immune response to vaccination, which represents about 2% of the population. COMBRIA 1 is our first trial investigating camisestrant, our next generation oral SERB in the driven breast cancer setting where there is significant opportunity to improve long term outcomes.

Speaker 2

Finally, we initiated a trial of ULTOMIRIS for the prevention of acute kidney injury associated with cardiac surgery. This represents an area of high unmet need. With currently no approved therapies, acute kidney injury can occur in up to 20% of patients undergoing cardiac surgery, But the risk increases to over 60% in patients with chronic kidney disease. The ARTEMIS trial focuses on those patients with kidney ischemia Compliment plays a key role. While we plan to provide an update each quarter on our new Phase III trial starts, We expect majority to those in the second half of this year.

Speaker 2

Now please turn to Slide 8, and Aradhna can take you through our financial highlights in the quarter As well as provide some insights into how we are fully embracing artificial intelligence and machine learning across our business. Over to you, Aradhana.

Speaker 3

Thank you, Pascal, and good afternoon, everyone. As usual, I will start with our reported P and L. Please turn to Slide 9. Total revenue in the Q1 was stable compared to the prior year. Recall that Q1 of last year benefited from around 1.6 Excluding COVID-nineteen medicines, total revenue increased by 15% in the first quarter.

Speaker 3

In an effort to increase transparency, starting in Q1, we will break out recurring revenues from partnered products into separate line called Alliance Revenue. This line will include royalties and profit shares from partner medicines such as Inherto and Aspire in geographies where our partner books Product sales. Upfront and milestone payments will continue to be reported as collaboration revenue. Hopefully, this results in improved visibility to revenue from partnered medicines. Finally, we saw some relatively large core adjustments last year as a result of the unwind of the Alexion fair value inventory uplift.

Speaker 3

However, we only had $36,000,000 of this in the quarter, and it will be minimal in the future. Please turn to the next slide, which depicts our core P and L. Our core gross margin in the Q1 was 83.3%, an increase of 4 percentage points compared to the prior period, which was negatively impacted by higher COVID-nineteen sales. Q1 2023 core gross margin also benefited from product mix and lower production cost from prior quarters. On a full year basis, we still anticipate a slight improvement in gross margins compared to pre pandemic levels.

Speaker 3

This is driven by lower COVID-nineteen revenue, higher oncology and Alexion sales, but impacted by increasing contribution from partnered medicines And higher costs relating to inflation. In the second half of the year, we expect the usual seasonal impact from FluMist as well as incremental cost Core operating expenses increased by 9% in the quarter. However, this was partly due to lower costs in the prior year period. As Pascal mentioned, we started 6 new trials in year to date, and we anticipated starting 30 during the full year, Which will affect quarterly R and D cost phasing with R and D expenses in subsequent quarters expected to be higher than in Q1. On the SG and A side, we continue to invest behind our launches, including new indications for infancy and in HER2 And our respiratory portfolio.

Speaker 3

On a full year basis, we still expect core operating expenses to increase by lowtomidsingledigit percentage, But there will be quarter on quarter variability. Other operating income of $379,000,000 in the quarter Includes a gain from the divestment of Pulmicore Flexhaler in the U. S. On top of some background level of other operating income from historical Taking these elements together, core EPS increased by 6% at constant exchange rate To $1.92 in the quarter. Earlier this month, we announced the simplification of the agreement with Sobei and Sanofi on Nirsevimab.

Speaker 3

This will simplify our P and L and result in us recognizing $718,000,000 of other operating income in the second quarter Following the release of the liability on our balance sheet, much of which had been expensed through our core P and L. Now please turn to Slide 11. Our cash flow from operating activities of $3,100,000,000 was stable in the quarter despite the significant decline in COVID-nineteen revenue. We continue to work on improving cash conversion and have already made significant progress on that journey. Net debt increased by $2,100,000,000 to $25,100,000,000 driven by the 2nd interim dividend payment of around $3,000,000,000 and approximately $2,000,000,000 in deal payments, including a second payment Of around $900,000,000 to Asserta shareholders and roughly $800,000,000 for the recent Cincor acquisition.

Speaker 3

For the full year, we still expect deal payments tied to prior business development transactions to be at a similar level as last year. Our current net debt to EBITDA ratio is 2.3x or 1.9 if adjusting for the Alexion fair value uplift. As Pascal stated earlier, our guidance for the full year remains unchanged. We continue to anticipate total revenue, excluding COVID-nineteen, To increase by low double digit percentage, including COVID-nineteen medicines, we anticipate total revenue to increase by lowtomidsingle digit percentage. Core EPS is anticipated to increase by high single digit to low double digit percentage.

Speaker 3

Based on average March FX rates, we anticipate a low single digit adverse FX impact on both total revenue and core EPS. Please turn to Slide 12. As a company that thrives on innovation, we are constantly evolving our ways of working And I have embedded AI broadly across the organization. Over the course of this year, we plan to update you with some real world examples Each quarter on how this has helped us to improve productivity and drive innovation. This will help you to understand why we're making significant investments in this area.

Speaker 3

First, we'll focus on R and D where we have over 400 data scientists employed and over 100 active AI projects underway. Later in his prepared remarks, Meny will provide examples of AI and drug discovery. With Pat, please turn to Slide 13, and I will hand over to Dave to take you through our Oncology business performance.

Speaker 4

Thank you, Aradhana. Slide 14, please. Oncology delivered solid performance in the Q1 with total revenues of over $4,000,000,000 up 19% versus 2022. We saw double digit product sales growth across the U. S, Europe, emerging markets and established rest of world, Driven by new indication launches and continued demand generation.

Speaker 4

Now turning to our individual medicines, Tagrisso Global Revenues grew by 15% in the quarter. In the U. S, we saw sustained demand in both Adora and Flora, coupled with improved duration of therapy in Flora. In Europe, growth of 8% was offset by pricing clawbacks in certain markets. Tagrisso performance in China was strong, Recovering is expected following 4th quarter hospital budget management dynamics, resulting in 1st quarter growth of 17% in emerging markets.

Speaker 4

Lynparza, the leading PARP inhibitor globally, delivered 1st quarter product sales growth of 10%. The U. S. Was impacted by de docking following an inventory build in the Q4 in anticipation of the PROPEL approval. While there are opportunities for continued demand expansion in the U.

Speaker 4

S, These growth areas are more challenging. Specifically, we continue to work on improving HRD testing rates in ovarian as well as BRCA testing and prescribing rates In hormone receptor positive breast cancer, outside the U. S, we're encouraged by LYNPARZA growth in Europe of 18%, Including strong launch trajectory for PROPEL in Germany. Turning now to Imfinzi. Total revenues inclusive of Imjudo Grew an impressive 56% fueled by new launches.

Speaker 4

This performance was driven by 66% growth in the U. S. With strong uptake across new indications, particularly Topaz 1 in Himalaya, and in Europe and Japan, Early launch momentum from Topaz 1 has been encouraging. Calquent's total revenues increased 31% year on year, supported by ex U. S.

Speaker 4

Demand growth. As expected, U. S. Performance in the Q1 was impacted by destocking following Malyate tablet approval in the Q3 of last year. Looking at new starts in TRx share in the frontline CLL setting, Calquence remains the clear standard of care in the face of increasing class competition.

Speaker 4

That said, we do see some impact on new share in both the relapsed refractory and frontline settings. Turning now to inhertu. Total revenue was up 2 0 3 percent in the Q1 to $257,000,000 In the U. S, and HER2 new patient share is now approximately 50% across both second line HER2 positive and hormone receptor positive HER2 low post chemo metastatic breast cancer reflecting the strength of our underlying clinical data. Across European markets, we are seeing rapid uptake And HER2 positive metastatic breast cancer.

Speaker 4

Finally, we achieved exciting regulatory milestones in the quarter, Including first approvals in China for Calquence in mantle cell lymphoma and in HER2 and second line HER2 positive metastatic breast cancer. Now please turn to Slide 15. In the past, we have made clear our ambition to transform patient outcomes in breast cancer, and you have seen our teams deliver towards achieving that goal. Now for the first time, we're laying out our ambition in lung cancer, and by the year 2,030, we are aiming for at least half of all lung cancer patients To be eligible for an AstraZeneca medicine. While this is a high bar, we've built a clear road map to deliver on this ambition.

Speaker 4

Focusing first in late stage non small cell lung cancer, we have a broad portfolio of life cycle management and novel programs, And our success depends on our ability to deliver innovative medicines in both IO sensitive and biomarker driven tumor settings. Tagrisso is the established standard of care in adjuvant and frontline EGFR mutated non small cell lung cancer, and we are looking to solidify its position As the backbone TKI therapy in EGFR mutated space through additional combination trials, we are accelerating development of our next wave IO assets, Leveraging experience with Imfinzi across multiple tumor types and continuing to advance our ADC portfolio within HER2 and HER2 expressing tumors And our Trop-two targeted ADC Datto DX. Furthermore, we have recently disclosed multiple registrational trials For both novel combination regimens and bispecifics, underpinning this roadmap is also continued and important investment behind new technologies, Including screening and testing tools as well as innovative platforms such as cell therapies. We are excited about the year ahead With important lung cancer data to support achievement of our 2,030 ambition. And with that, please move to the next slide, And I'll transition to Susan to cover key R and D highlights.

Speaker 5

Thank you, Dave. Continuing on the theme of lung cancer, It's been an exciting quarter for early stage disease, during which we've shared details of 2 key data sets that further validate the importance of moving lung cancer diagnosis and treatment To earlier stages of disease, where patients have the highest potential for cure. First, at AACR, we shared the updated data from the AGIEN trial. This tested the impact of adding Imfinzi to neoadjuvant chemotherapy and then continuing as adjuvant monotherapy. We'd already reported encouraging pathologic complete response data for this trial in June last year.

Speaker 5

At AACR, we reported the planned interim analysis of event free survival, which demonstrated that patients treated with the Imfinzi based regimen Had a 32% reduction in the risk of recurrence, progression events or death versus chemotherapy alone. We also shared updated pathologic complete response data showing a 4 fold increase with the addition of Imfinzi compared to chemotherapy alone. We look forward to discussing these data with global regulatory authorities with the goal of providing this important new treatment option to patients. 2nd, last month, we shared positive high level results from the ADAURA Phase III trial, reporting that Tagrisso Showed a strong overall survival benefit compared to placebo in the adjuvant treatment of patients with EGFR mutated non small cell lung cancer. This follows the encouraging data we presented at ESMO last year with continued benefits for Tagrisso in terms of disease free survival and immediate disease free survival of nearly 5.5 years.

Speaker 5

The overall survival data which we are delighted have been selected for an ASCO plenary are the first for a Phase III to demonstrate survival benefit in this adjuvant setting. And they add to the extensive body of evidence generated for Sadogrisso, which has now shown a statistically significant and clinically meaningful OS benefit In both the early adjuvant and late stage metastatic settings, reinforcing its standard of care position across lines. We've also had positive readouts from the DUO O trial of Lynparza plus Imfinzi added to chemotherapy and bevacizumab in patients with newly diagnosed ovarian cancer Without a BRCA mutation, as well as a clinically meaningful data for INHER2 across multiple HER2 expressing tumor types from the DESTINY pan tumor O2 trial, Both these data sets will be showcased at ASCO this year. Please turn to Slide 17. In addition to AGEON, AACR provided an opportunity for us to share data from across our diverse industry leading oncology portfolio, Including several highlights from our early stage pipeline.

Speaker 5

We shared the first clinical data from the armored GPC3 CAR T therapy, cCAR31, In patients with advanced hepatocellular cancer as well as preclinical data for our armored steep 2 CAR T AZD-seven fifty four in prostate cancer models. Both these therapies have been designed using our dominant negative transforming growth factor beta receptor armoring, which aims to resist the immunosuppressive tumor microenvironment And enhance the potential effectiveness of CAR T in solid tumors. We're encouraged by 3 out of 6 deep and durable responses at the second dose level And the persistence of CAR T copies out to at least 149 days, which is substantially more than has been observed with any other GPC3 CAR T products. We also presented preclinical data from our in house ADC platform. Our ADCs have been designed to maximize therapeutic index with a proprietary linker payload.

Speaker 5

The platform has a novel potent topoisomerase 1 inhibitor, which provides bystander tumor kill activity and a linker designed to provide A high degree of stability in the peripheral circulation with minimal free payload exposure. AZD-nine thousand five hundred and ninety two, a Biospecific ADC targeting EGFR unmet and AZD8205 targeting B7 H4 are already in Phase 1 An AZD5335 targeting folate receptor alpha will enter the clinic later this year. Finally, we provided our first disclosure for the novel lead epigenetics molecule, AZ PRMT5 inhibitor, Loss of the MTAP gene occurs across approximately 15% of all tumors, and this provides an opportunity to selectively target these tumors and spare healthy tissue. This program will enter Phase 1 shortly. And with this, please advance to the next slide, and I'll hand over to Ruud to cover Biopharmaceuticals performance.

Speaker 6

Thank you, Susan. Please turn to Slide 19. Total revenue from biopharmaceuticals was $4,500,000,000 in the quarter With CVRM growing 22% and R and I growing 8%. Revenues from our COVID-nineteen medicines declined to 155 $1,000,000 due to the completion of our vaccine contracts last year and lower Evusheld sales in the United States and Europe. Farxiga continued to be the main driver in global CVRM, growing 39% to $1,300,000,000 Driven by multiple geographies including the U.

Speaker 6

S, Europe, Japan and the emerging markets. Although it's worth noting that Forxiga Enjoyed some gross to net benefits in quarter 1 that may not recur in future quarters. We also saw over 60% growth for roxadustat in China And for Lokelma globally. Lokelma is now available in 27 markets having achieved potassium binder market share leadership in 8 of these markets. R and I's growth to $1,600,000,000 was helped by a recovery of demand for inhaled products in China as lockdown restrictions eased And also strong growth in Europe and other emerging markets.

Speaker 6

Please turn to Slide 20. Over the last 2 years, the downward trends In Symbicort, Pulmicort and other older brands has been more than offset by growth from Fasenrad, TESPAI, Savnelo and Breastri. These combined brands grew at 46% in quarter 1 and they now make up over 1 third of R and I revenue. Biologics are a fast growing class of medicines and only a 5th of patients who are eligible for a biologic medicine are currently receiving 1. Fasenra continues to sustain leadership in total market share in severe eosinophilic asthma and Tespais launch momentum continues at a rapid pace.

Speaker 6

In quarter 1, we saw continued growth in the U. S. And rapid uptake elsewhere in Japan And rapid uptake elsewhere. In Japan, the SPY has already captured new to brands absolute leadership just a few months after launch. The SPY is now available in 6 markets and the auto injector was approved in the U.

Speaker 6

S. And the EU at the start of the year. Our inhaled portfolio also contains innovative medicines that have a long life cycle ahead. Next year, Supra will add a 5th medicine Our newly launched brands and in quarter 1, Breastory grew 73%. Breastory is benefiting from increased awareness of triple therapies, Which was boosted by the 2023 report for the global initiative for chronic obstructive lung disease.

Speaker 6

The report advocated a short ended path to triple fixed dose therapies in order to reduce mortality. In recent quarters, Breastory has accelerated new patient share gains In the U. S. And Europe and retained its leadership position in China with a 70% share of new to brand prescriptions. This quarter we also announced a new production site in Chengdao which will support Breast 3's continuous growth in China Which is home to 100,000,000 patients with COPD.

Speaker 6

With that, I will now hand over to Mene who will discuss the development programs that will Drive future innovation of our biopharmaceuticals portfolio.

Speaker 7

Thank you, Ruud, and please turn to Slide 21. This slide outlines our assets across asthma and COPD. And as Ruud highlighted, we have a strong legacy in Respiratory Medicine. With our broad portfolio, we're committed to continued respiratory leadership. Here, we highlight the breadth our commercial portfolio and illustrate our focus on emerging science involving immune mechanisms, lung damage and cell repair processes.

Speaker 7

Our on market inhaled medicines are already considered frontline standard therapies. And we're also developing a number of novel Add on oral, inhaled and biologic therapies for patients whose diseases are not adequately controlled by existing medicines. Our IL-thirty three targeted antibody, tazarakumab, offers a differentiated mechanism of action. The reduced form of IL-thirty three regulates the T2 pathway responsible for inflammatory drive, whilst the oxidized form of IL-thirty three regulates the RAGE pathway responsible For epithelial dysfunction and mucus production, entozarachimab inhibits both signaling pathways with the potential To reverse key pathogenic features of COPD, TESPA, our anti T slip remains the first and only biologic in asthma Approved without biomarker or phenotype. T SLIP is an epithelial cytokine that sits at the top of multiple inflammatory cascades and is critical in the initiation and persistence of multiple drivers of airway inflammation.

Speaker 7

We also have several other early stage assets in our pipeline, including an inhaled T slip and an inhaled JAK, which should enter Phase 2 in the second half of this year based on solid proof of mechanism data. We are confident this rich pipeline will provide the right building to continue to drive leadership in respiratory diseases over the long term. Please turn to the next slide. At AAN, we presented 66 weeks data for emcloncisin in ATTR polyneuropathy, building on the 35 week data presented last Cboe on the co primary endpoints of reduction of transthyretin and on the modified neuropathy impairment score plus 7 As well as the Norfolk quality of life questionnaire. It was really encouraging to see the continued improvement on the quality of life questionnaire, Which is designed to capture and quantify the impact of neuropathy on the lives of patients.

Speaker 7

ATTR PN patients have identified sensory deficits and autoimmune GI symptoms as the most difficult symptoms to manage And thus continued and sustained improvement in the quality of life questionnaire is an important indication of clinical benefit for these patients. We look forward to sharing this data with regulators globally as we seek approval for emplotasan. At ECCMID, We also provided new data on AZED-three thousand one hundred and fifty two, our COVID-nineteen logacting antibody. In vitro studies demonstrated that AZD-three thousand one hundred and fifty two neutralizes all COVID-nineteen variants, including Archurus, The latest variant of concern, and we hope to make ASR-three thousand one hundred and fifty two available as a new prophylactic treatment in the second half of this year. Please turn to Slide 23.

Speaker 7

As Aradhana discussed earlier, artificial intelligence is embedded across our organization. And within R and D, we're using AI across all our therapy areas to discover new medicines more efficiently. Understanding the biology of disease is critical to identifying the right drug targets and pathways. It's one of the most important decisions we make in drug We're applying AI and machine learning to build biomedical knowledge graphs across all our disease areas. And these visual representations depict relationships between vast data sets derived both within and external to AstraZeneca.

Speaker 7

Now scientists use these knowledge graphs to glean novel insights into disease biology as well as new pathways and targets to prosecute. AI enabled processes are also transforming the discovery of small and large molecule leads. Within small molecule drug discovery, we use proprietary AI enabled platforms to generate small molecules twice as fast as our traditional These algorithms use both generative models and novel scoring functions. In antibody discovery, We use AI enabled deep screening programs to identify potential lead antibodies in as little as 3 days compared to traditional methods, which take several months. The scale and pace with which these new AI and machine learning innovations can accelerate drug discovery is really And we look forward to providing additional examples of AI driven innovation over the balance of the year.

Speaker 7

Please move to the next slide. And I will now hand over to Marc to cover rare diseases.

Speaker 8

Thank you, Mene. Please move to Slide 25. In the Q1, rare disease total revenues grew 14%, contributing $1,900,000,000 The strong performance in the quarter was primarily driven by patient demand as well as some benefit from certain tender market orders. Ultomiris grew 61% in the quarter, reflecting successful and accelerated conversion from Soliris Across shared indications. In Myristina Gravis, we saw an increased number of complement naive patients treated with ULTOMIRIS, Advancing our ambition to expand ULTOMIRIS Hughes into a broader population, which we estimate to be 2 to 3 times larger Then the addressable SOLIRIS patient population.

Speaker 8

Consequently, SOLIRIS declined 13% in the quarter as conversion Accelerated. However, this decline was partially offset by growth in NMO and tender market order timing In certain emerging markets. Though we are excited by the strong performance in the quarter, I want to mention a couple of key dynamics. First, as we continue to execute our conversion strategy from Soliris to Ultomiris, Ultomiris annual treatment cost is approximately 1 third lower than Soliris. Furthermore, additional indication from Ultomiris require Negotiation in some legislations as the eligible patient population expands.

Speaker 8

Therefore, as we move from ultra rare such as PNH To rare population such as myctana gravis, we anticipate increased pricing pressure. We fully expect the patient volume growth to offset the impact of this negotiation, although they present pricing headwinds in the near term. We remain confident in our C5 franchise conversion and expansion strategies. And for the full year, We expect Ultomiris revenue to be broadly in line with that of Soliris. Beyond the complement, Strensiq grew 28% and Cosilugo grew over 2x in the 1st quarter, Driven by strength of patient demand and geographic expansion.

Speaker 8

Please move to next slide. At the American Academy of Neurology Congress Earlier this week, we presented data across myasthenagravis, NMO and dermatomyositis. Notably, we presented real world data highlighting the clinical benefit of C5 inhibition, evaluating the change in concomitant therapies For patients receiving SODERIS. In practice, HEPs initially treat patients with high dose oral corticosteroids to manage symptoms. And then when symptoms are under control, they evaluate the use of additional therapies to sustain symptom control And ultimately, look to minimize steroid usage.

Speaker 8

At 1 year treatment with SOLIRIS, 76% of patients Reducing high dose steroid use further demonstrating the clinical benefit of C5 inhibition on patient outcomes. We hope to show a similar reduction in our Ultomiris registry where analysis is ongoing. We have highlighted new Phase 1 data in our 3rd generation C5 inhibitor, gefirlimab, a novel bispecific Evogene antibody. Its low molecular weight enables subcutaneous self administration, binding to albumin to extend half life, Which allows for convenient weekly dosing. The results demonstrated gefirlimab favorable safety And tolerability profile as well as its ability to achieve near complete terminal complement inhibition.

Speaker 8

This data further supports ongoing direct to Phase III PREVELL trial in adult Myasthena Gravis. Separately, following discussion with regulatory authorities, I'm disappointed to announce the termination of our ALXION-eighteen forty Wilson disease program despite positive results from the Phase III FOCUS trial announced in 2021. Data from the program will be presented at an upcoming medical Congress. Please turn to next slide. In addition to our strength in CD5, I also wanted to highlight our complement Factor D inhibitor.

Speaker 8

Factor D is a regulator of the alternative pathway upstream of C5. The selective inhibition of the alternative pathway Allows the other pathways to remain intact to fight infection and this may provide a safety advantage. We believe that factor D is the most tractable target given its stable circulating concentration in the plasma. With 3 differentiated assets, our Factor D portfolio has a potential to unlock value in several indication, including PNH, Myasthenia gravis, geographic atrophy and renal indications. Our most clinically advanced is Danica Pan, Which most recently was submitted for regulatory approval in PNH patients with clinically significant extravascular hemolysis.

Speaker 8

We have also seen positive Phase 2 from Premier Copan as a monotherapy in PNH And ALXION 2,080, the third of Factor D has recently dosed in Phase 1. We look forward to providing further updates on our Factor D portfolio and our broader pipeline in future quarters. Please turn to Slide 29, and I will hand the call back to Pascal for closing remarks.

Speaker 2

Thank you, Marc. So if we move to the next slide, please. So for the remainder of 2023, we have a number of important trial readouts that have the potential to redefine care for patients. This includes the 1st Phase III trial of DATO DXD in lung cancer. And I'm pleased to tell you that we now expect the results from a second trial of DATO DXD, Tropyon Brace Store 1 in the second half of this year.

Speaker 2

Finally, we are making excellent progress towards our medium and long term strategic ambitions, And I'm thrilled to announce we are the top ranked pharmaceutical company on the Financial Times 2023 Europe Climate Leaders List. Looking ahead, this is shaping up to be another exciting year for our company, and I look forward to updating you on our progress. With that, I'll hand the call back to Andy.

Speaker 1

Thank you, Pascal. We'll now move to the Q and A with all of our executive team members participating shown here. As a reminder, raise your hand in Zoom or type your With that, let's move to the first question.

Speaker 2

Thanks. The first question is, thanks, Andy, from Sachin at BoA. Sachin, go ahead.

Speaker 9

Thanks, everyone. Two questions, please. First topic is Datto DXD 2 part and TLO2 and 4 are due ASCO. So I wondered, Susan, if you could just give us some color on what we should be looking for. Are we expecting PFS data?

Speaker 9

And is it fair to be comparing that to KEYNOTE-one hundred and eighty nine as we think about confidence into 'seven and 'eight. And then just on the breast data you mentioned, Pascal, TB01, and you've also got TB02 In TNBC next year, so I wonder if Dave could just frame for us how he thinks about the commercial opportunity of these two indications that haven't really been discussed much by investors. Feels to us that there could be $2,000,000,000 to $3,000,000,000 opportunity combined. Any thoughts there? And then a quick follow on for Dave on Calcents.

Speaker 9

Just wondering if you could a bit more detail on the Beijing competition you're seeing. Thank you.

Speaker 2

Thanks very much, Sachin. So Susan, do you want to take the first one? Or should we Yes. And then, David, you'll take the other one?

Speaker 5

Yes, sure. So obviously, with the TL02, we're going to have updated data with the combination of DXD with immuno oncology agents and again with TOLF4, we have data in combination with chemotherapy plus Other agents. So I think you can look at durable response rate. It's always difficult to look at endpoints like progression free survival in single arm studies There are differences in patient populations that are accrued versus other things that are out there. But that's what I suggest you look for.

Speaker 4

Great. So on, Sachin, your first question around the opportunity with Datto, in breast cancer, Maybe the first thing that I would just point out here, and we talked about this in the context of Destiny Breast 4 and Destiny Breast 6, a large number Breast cancer patients in the metastatic setting, hormone receptor positive and triple negative are treated today with systemic chemotherapy. We think we've got one of the leading antibody drug conjugate portfolios between in HER2 and datto to be able to hopefully replace Much of that chemotherapy used today with antibody drug conjugates. And so there's certainly A multi blockbuster opportunity in breast cancer to replace that systemic chemotherapy. Now exactly how the puzzle pieces and the overlap Between 'four, 'six, Tropion Breast 1, I think we need to see some of the data and how that plays out.

Speaker 4

But I'd encourage you to think about, and that's the reason we talk about kind of the breast cancer as a portfolio. I talked about lung cancer as a portfolio today because I think that we've got an opportunity across those assets To be able to really create very good commercial opportunity by replacing systemic chemo. Maybe the last just kind of point here Of note on TB01, so that study is in a post endocrine therapy and post first Systemic therapy, that's an earlier line than what we've seen out of TROPICS-two. So I think that, that gives you a sense competitively too, That it's well positioned competitively depending on the data. On Calquence and what we've been seeing There, we continue to win the overwhelming majority of new starts in the frontline CLL setting.

Speaker 4

This is really our key area of promotional focus. In terms of market share, we are seeing impact from Zanu as a new entrant. We've seen the majority of their impact come in the relapsed We have seen some impact come in the frontline setting. Some of their impact in the frontline setting has Come at the expense of Calquence, though the majority of it has come at the expense of Ibrutinib, the 1st generation BTKI. I would also say that within this context, we certainly expect the BTK market to be competitive going forward.

Speaker 4

I'm quite confident that our team is very well prepared. We have important data coming out at ASCO on a matched analysis, indirect comparison between Ascend and Alpine, that we're hearing early positive response from investigators on. And, we'll continue to, work hard to keep Calquence as the clear standard of care within the frontline setting.

Speaker 2

Thanks, Dave. James Gordon at JPM. Go ahead, James.

Speaker 10

Hello. James Gordon from JPMorgan. Thanks for taking the questions. 2, please. What about the C5 franchise and also competition?

Speaker 10

So Novartis presented their detailed iptacopan Factor B data, and it did suggest potentially competitive efficacy Versus SOLIRIS and ULTOMIRIS, and it's oral. But do you think it does look competitive? How should we read that data? Can we compare it to what you've shown for SOLIRIS and ULTOMIRIS in PNH? And you mentioned you've got a few things of your own.

Speaker 10

So you've got Factor Ds. But is the focus more the Factor Ds now or is the excitement more actually on 17/20? When do you think you could have either 17/20 or a monotherapy Factor D on the market to compete with Novartis? And the And question was just on Imfinzi, really strong performance in Q1. Can you break down the performance a bit?

Speaker 10

Is much of that the acceleration coming from Himalayan liver or And is the performance very front end weighted because in judo you charge more upfront and then it sort of tapers off over the patient's treatment? Or is this like a clean Q1 number we can extrapolate For the rest of the year.

Speaker 2

So James, actually, thank you. The first question was actually 2 questions. So it's 3 questions in total. Marc, do you want to take the first two and see if I have franchise in Iptacopan and also then the factor of the portfolio versus 'seventeen, 'twenty?

Speaker 8

Yes. So first of all, the first the question on Iptacopan, recent data versus C5. So first of all, I would like to caution everybody on Doing indirect comparison of very different clinical trials, especially when the population that are included in the trials Very different. Just to provide an illustration of that, the C5 inhibitors of Alexion, sorry, Les Saint Germain Term. MIRIS usually include bone marrow failure patient who do represent about 30% to 40% of the Actual PNH population.

Speaker 8

The second difference, the second visible difference is that the trials of Iptacopan are enriched With EVH, extravascular hemolysis and anemia patients suffering from anemia And therefore, when you measure improvement of hemoglobin, it's probably easier to demonstrate a benefit. But just to go back to the comparison, We as you have said, James, we also believe in the potential for proximal inhibitors, Factor B or Factor D To play a role in the treatment of PNH, whether this will be in co therapy as we have already demonstrated with Danicopan Our first factor D or whether it will be in monotherapy as we are trying to demonstrate in Vermicompan, we this remains to be seen. The key objective for PNH are obviously the control of intravascular hemolysis And to prevent thrombosis, otherwise you are increasing significantly the mortality risk. So we need to be seeing these results over time. Again, co therapy versus monotherapy.

Speaker 8

To turn to your second question or third question, I don't All you know is 'seventeen-'twenty. For us 'seventeen-'twenty is an improved generation of the first 2C5, it's a subcut formulation provided on a weekly regimen. We are still continuing the development. We see we have a trial in Myasthenia gravis that is progressing very well. So we are not abandoning the 3rd generation of C5.

Speaker 8

We are also exploring the Factor D. And as I described in my script, we have 3 of these Factor D And each of them will be positioned slightly differently across the development momentum.

Speaker 2

Thanks, Marc.

Speaker 4

So James, there are two parts to your question. As I understand it, the first is around the sources of growth that Sit within the Imfinzi number, and then the second is really the durability of that growth. On the first piece, I'm really pleased to say that the growth It's coming from multiple areas for Imfinziem Judo. We see across geographies and also across indications That the performance was really driven for the quarter. Maybe to start first and importantly, we do see, Albeit a minority, still an important part of the growth coming from the existing indications.

Speaker 4

So Pacific has strengthened. Caspian continues to grow across The globe as we work against it, the lion's share of the growth has come from new indications, TOPAZ-one being the most Significant of those, and we've seen really brisk uptake across U. S, Japan, Europe. Himalaya is also growing and continuing to grow nicely. And in fact Poseidon is an area where approved, so in the U.

Speaker 4

S. In particular, but also now getting underway in Japan, we're beginning to make inroads there as well. On your question specifically about injudo, just to share and to be helpful, injudo sales for the quarter were 37,000,000 And for last quarter, they were $15,000,000 So it's actually a minority of the $900,000,000 in the quarter. So it's not a front loaded In judo effect that you're seeing here, this really is, Infinzi, TRxs that's driving this. And I expect us to continue to grow going forward.

Speaker 4

I do think we've probably got a little bit of bolus on Topaz 1, but I think all the other dimensions that I've described are ones that we expect to continue to move ahead.

Speaker 2

Thank you, Dave. Peter Welford, Jefferies. Go ahead, Peter.

Speaker 11

Hi. Thanks for taking the questions. So I've got 2 R and D ones. Firstly, just looking at the tazarocumab that you've many The profile, just wondering if you can give us any thoughts following the recent COPD data that we've had in Biologics' success there In terms of does that impact your thinking at all in development in this space and equally more broadly biologics in COPD? And can you just outline The population in particular you're looking at in the tazarukinab COPD Phase 3 study and how that differs?

Speaker 11

And then secondly on farx seizure combos, I know this comes up every quarter, but can you just give us an update if there is any on any data you have for both, I guess, the MRA, the Singapore now that's in house and also the ERA And your latest thinking in terms of where we may see those programs move into Phase 3s? Thank you.

Speaker 7

So the First question on Tazo and our COPD programs. I mean, I think overall, and I think I said this in the last quarter, I'm encouraged to see a molecule a biologic molecule work in COPD because I think it sort of gives us confidence that actually the programs we With Fasenra, with Tozo, hopefully with our t slip molecules as well, we'll ultimately be positive. I think in terms of obviously, we need to see the Phase II data from our Phase II studies that are running with Tozo, although we've obviously started Phase III as well Based on some of the data we've already seen, but I think I would say our confidence is high. The profile of The patients that we have in our anti R33 program is looking at both smokers and former smokers and current smokers, People with more than 2 exacerbations and ultimately will be helped Defined by the Phase 2 study that's reading out for the Fasenra program in COPD, which is the most advanced program we have, we're basing it off our 2 failed Phase 3 programs, and that's in patients that have had exacerbations, again, 3 or more exacerbations And also have high eosinophil counts.

Speaker 7

So overall, I think I'm more optimistic now that I've seen the program work in the biologic space, but ultimately, it will be determined by readouts from our data.

Speaker 2

Farxiga combo, really?

Speaker 7

Farxiga combos, again, I think the Phase II data is moving well. I can't talk about it too much because we haven't announced the data. But I would say we're very much still on track, both in terms of the zippodapa program, the MR program and baxrostat As a monotherapy, but also in combination and hopefully during the course of the year, we'll be able to talk about the Phase III investment decisions, but it's a little bit too soon yet to talk about Data specifically, but I would say they're still on track in terms

Speaker 2

of our expectations for Phase III IDs and launches. Thank you, Meny. And then ultimately, Peter, the objective is really to develop a portfolio of Combinations that will address different patient segments and complement each other and cover the whole field very well. But of course, this is still depending on a series of data sets. Emily Field at Barclays.

Speaker 2

Good, Emily.

Speaker 12

Hi. Sorry, I had to unmute. Yes, two questions from me. One, just You mentioned on Tagrisso, one of the drivers this quarter was improved duration of therapy for FLORA. I was just wondering if you could provide more color around that as we're getting asked a lot Particularly ahead of 1 whenever we may see Mariposa.

Speaker 12

And then just, CAMHISESTRAINT and ADJUVANT, I know that design of Cambria 1 does allow for Prior CDK foursix for 2 years, but does a potential change in adjuvant standard of care, we'll see at ASCO change your thinking about that Study, or just any thoughts on adjuvant there? Thank you.

Speaker 2

Thanks. Deb, do you want to take the first one and Sudan the second one?

Speaker 4

Yes. So in terms of, Emily, the duration of therapy that we're seeing in the real world context, in the U. S. And in Europe, We are seeing it longer than the median PFSs and DOT that we saw in Adora. So Obviously, that was in the high-18s.

Speaker 4

I would say that we're now sort of seeing it depending upon where we are, Somewhere between kind of 'twenty one and 'twenty four. And the exactness of that is to be determined. But I think to the point that you're making, it's obviously quite relevant As we think about how clinicians see the efficacy that they get from monotherapy Tagrisso, and it's something that Commented on in past quarters that certainly the efficacy that's coming through the monotherapy together with the tolerability is what gives us confidence That monotherapy is going to continue to be the first choice for many patients, based upon that DOT that we're seeing in the real world from FLORA.

Speaker 5

So thanks for the question about Cambria's estrogen. So the Cambria 1 study is designed to To that patient population that have had 2 to 5 years of adjuvant endocrine therapy with or without a CDK4six inhibitor. So the Reinforcement of the benefit that you see of a CDK4six inhibitor in the adjuvant setting, I think, actually makes this trial even more relevant Because there are patients that can benefit from extended adjuvant therapy in adjuvant setting, and these are patients with intermediate or high risk of recurrence. So I think the changes in the adjuvant setting are in line with our expectations. And of course, Cambria 1 does allow For both rivoCyclib and bemecyclib.

Speaker 2

Thank you, Suzanne. Andrew Baum at Citi. Over to you, Andrew.

Speaker 13

Yes, thank you. A question for Meny and then one for Susan. So for Meny, you have an allosteric oral PCSK9 inhibitor that doesn't have a food interaction, which differentiates itself from Merck's agent, You have got an open label Phase II trials, you're seeing data, but it's very difficult to find any published clinical data including your patterns Of indications of efficacy of LDL lowering, just to give some sense of contrast versus both repatha Praluent but also Merck's data. So perhaps you could share with us, given you have highlighted it, I know you're excited about the product, given the data that you have seen, animal as well as human, Are you comfortable that it's going to deliver efficacy in a similar ballpark to the Praluent, Repatha and Merck, at least in terms of LDL lowering? So that's the first question.

Speaker 13

And then the second question to Susan, pop inhibitors are absent from your Lung Cancer Domination Master Plan, I'm just curious whether this is because you're concerned about Toxicity in combining with topoisomerase inhibitors, whether you think that the efficacy doesn't have a strong enough rationale or there's something else I might be missing here? Thank you.

Speaker 7

So shall I go first to the floor, please, Cescence. It's a great question. And we're being somewhat cagey, I think, on purpose because obviously, it is a very competitive Base, Andrew. So am I confident that we're going to have a target product profile that's competitive? What I'll say is that we've Given ourselves like we did actually for the injectable PCSK9, I think a tough threshold for what we would take forwards into More expensive late stage studies and so that's the profile we need to hit.

Speaker 7

I'm hoping we're going to get there. I'd like To see a few more patients dosed, I'm encouraged by what I'm seeing, but I won't get too excited yet until we've seen a bit more And of course when we have then we'll be able to share it more broadly. But I think it looks encouraging, but I wouldn't it's not a home run yet.

Speaker 5

So thanks for the question about PARP inhibitors in non small cell lung cancer. So there are a subset of lung cancer patients that have Sets of lung cancer patients that have mutations in HRR genes that may have increased sensitivity to PARP inhibition. We're awaiting the readout of studies that looking at the combination of PARP inhibition plus IOM therapy. And we're also in dose escalation in combination with ADCs in a number of the trials. So I think it just reflects The map that you see is, as we see that evolution with the things that we currently have in hand that are ready to move into Phase 3 or close to Phase 3.

Speaker 5

Of course, we anticipate that the standards of care can continue to evolve as data evolves.

Speaker 14

Thank you.

Speaker 2

Thank you, Suzanne. Tim Anderson at Wolfe, over to you, Tim.

Speaker 15

Okay. Thank you. On Tagrisso, Astra usually maintains That Tagrisso monotherapy will likely remain the backbone for most patients in frontline lung. Yet you started this small combination study with amavantumab In Frontline, so can you talk about the rationale behind that? And why start that only recently?

Speaker 15

Why wouldn't you Started that many months ago even all the way back in 2022. What was the trigger? And why such a small size Trials that so you can quickly advance it into a larger Phase III. And then just on DAT IDXD, are you as confident as ever Ahead of the readout of Tropan Lung 1. Thank you.

Speaker 2

Okay. Doug, you take the first one and so the second one?

Speaker 4

Yes. So, Tim, I Just again to ground on our view for the EGFR mutated space, we see Tagrisso clearly as the back Bone of therapy for all patients being treated for EGFR mutated within obviously our labeled And we think the majority are mono, but we've also made really clear that we do know that there is a desire to treat some patients with combination therapy. And really here we see FLORA2, with combination therapy and really here we see FLORA 2 as being, hopefully, if the results in the Phase 3 look like those from OPAL, appropriate for a certain subset of patients. We also have acknowledged and seen that, As the CRYSTALIS data and the Mariposa data were unfolding that there may indeed be a role for some subset Patients to be treated with the amavantinab combo. It's within that context that we've initiated the study that you described.

Speaker 4

It's called Dara, it's a non registrational medical affairs led study. It's a relatively small practice informing study as opposed to something with registrational intent, really trying to answer questions for those who might have it down the road Around the safety and the combinability of Tagrisso and amivantinab in the future if there was a physician who was interested in that. So I would Say that this isn't in any way a departure from the view that we've got on Tagrisso. It is an additive component To a belief that Tagrisso is the backbone of therapy moving forward. Okay.

Speaker 5

And in terms of DASTA DXD, at the risk of being boring, I want to be entirely consistent with what we Which is that the profile that we have for DASA DXD, we're confident about based on the design of the ADC with the linker warhead combination. And the data in lung cancer, in particular, from the data from the Phase I study, which is not just showing a response rate in Later lung cancer patients, but the durability of response is what gives us confidence in the ability to beat the standard of care in the second line study. But we run Phase III trials in order to get the results, and we're eagerly awaiting the results of the TROPION Lung 1, as is everybody on the call. Thank you.

Speaker 2

Thanks, Susanne. Simon Baker, Redburn, over to you, Simon.

Speaker 14

Thank you, Pascal. Two questions, if I may. Firstly, on Datto, And apologies if I missed a comment on this, but the timing on Tropium Breasto 1 appears to have accelerated quite significantly. I just wonder if there's anything you could Comment on that. And also with Datto, there was a very interesting poster at AACR looking at resensitization in resistant cell lines, the specific example being SRFN11 loss being resensitized with ATR inhibitors.

Speaker 14

I just wondered how fits in with your clinical development programs and the potential that would open up for multiple treatment lines with Datto. And then secondly, changing the subject entirely, probably one for you, Pascal. I just wondered what your initial thoughts were on yesterday's Proposals for pharma legislation reform proposed by the European Commission. Thanks so much.

Speaker 2

Susan, do you want to cover the first two?

Speaker 5

Yes. So for TROPIA Bresto 1, I think we're delighted that the accrual for this trial was 6 months ahead of which I think just reflects the level of unmet need and the level of interest in the data program for this particular setting. So that's really the explanation for the acceleration. Thanks for spotting the data that we had at AACR. I do think the ATR Combination is an interesting one.

Speaker 5

That's one of a number of different combinations that we're looking at with our ADC portfolio.

Speaker 2

Thanks, Helane. The European question, Simon, I mean, there are 2 parts to it. I think one part is really the sort of a long The impact of something like this on Europe. And I think really that as it relates to Europe, I mean, this is the wrong response To an important issue, and the issue is access to medicines in Europe. And we know that Europe Has been behind the U.

Speaker 2

S. In term of access. But quite frankly, it's also falling behind Japan and it's rapidly falling behind China as well. That has been associated with Europe also falling behind the U. S, but Now also China in terms of clinical trials and emergence of biotechs.

Speaker 2

I mean, I was in China the last Couple of weeks and you can see the innovation is really impressive in that country. So that's really this Potential legislation is really not a good idea in terms of securing a strong licenses sector in Europe. In terms of the impact on the industry and our company, it really is something that will evolve over time because first It will take a couple of years for various stakeholders and participants to comment and discussions will take place. Nothing will be Coming into legislation for another 2 years, so in terms of commenting on the impact, I think it is a little bit early in details and we should wait for The end result of this discussion and see what comes out as the legislation. But I guess really again, the sort of general underlying message that this kind of What's sense is that Europe is not really the most attractive place for the industry to invest in.

Speaker 2

And The reality is that there's an enormous amount of innovation in the U. S. To tap into. We've all known that, There is a rapidly increasing very, very large amount of innovation in China actually. So the next question is Matthias Ekblom at Andres Banken and Matias, over to you.

Speaker 16

I have 2, please. So staying on China, which you touched upon in the previous question, I was Curious to hear a bit more on why you decided to bring it up in the CEO statement in this report emphasizing the growth and pace of innovation, If it was something in particular that made it sensible to bring up in this quarter and not earlier. And then secondly, I'm curious to understand if there is more color to provide on the decision to terminate 1840, Mark mentioned it on the call. I know that regulators asked for 2 mechanistic studies. What's the outcome of those, the final piece?

Speaker 16

And does this, to any extent, change the character of what rare disease assets that would interest AstraZeneca going forward? Thanks so much.

Speaker 2

So thanks. Just I'll take the first one, and I'll ask also Leon to jump in. And Marc, maybe you want to take the Wilson termination question. The reason I've brought it up is that I really think that we wanted to signal that China is back. I mean, the economy is bouncing back.

Speaker 2

The government is very focused on what they call high quality growth. Science and innovation is one of their priorities across all sorts of industrial sectors, of course, not only life sciences. They're focused on a green development. They're focused on collaboration. And they really are implementing a very impressive Program in term of stimulating economy and driving innovation.

Speaker 2

And that plays into a whole series of New innovative technologies and products that are coming out of the biotech sector. So we wanted to signal this because First of all, China is an important market, of course. And then it's also not only an important market in term of helping patients and driving growth, but it's also an important market in tapping into innovation, Leon can talk about this and maybe also Siouhan could comment on some of the Deals we did and Susanne was also in China for a couple of weeks. So we both came back Definitely impressed with the progress that has been made in this country. And the last reason I wanted to signal it is that It plays to our strengths as a company.

Speaker 2

We are the largest pharma company in China. We have a tremendous team and really it Positions us very well to benefit from everything that's happening in that country. Leon, do you want to sort of comment and Maybe you could also comment on some of the things we are doing across China and the various headquarters, etcetera.

Speaker 17

Yes. I think before I comment on China, I think emerging market is overall quite exciting. And China is about 14%, 15%. And Outside of China emerging market are growing much faster, also 14%, 15%. So it's really worth looking at.

Speaker 17

And within China, I think we are number 1 company with a quite solid position. And we actually speed up our global import product portfolio rapidly to benefit the Chinese patients. So this year, we have INCR2 and also Calquence and also we launched our rare disease portfolio. So All these things are very exciting for importer portfolio. And also we have a US1 $1,000,000,000 fund, venture fund investing Into companies, we are familiar and also attractive.

Speaker 17

I think Susan And Manny's global research team are helping us to identify interesting targets to invest. So and plus we are also closely working with many China rising startup companies and We like what we work with the HatchMed on developing their Cmed drug, savolitinib. And also as a starting point and in the future, I mean, Susan's team also signed several deals in cell therapy and also in Cloudy, 18.2. And also, we hope also to tap into the non oncology rising innovation in China. So I think China innovation like Pascal put it in the past 2, 3 weeks, we traveled across and meeting a lot of interesting startup companies And it is really exploding.

Speaker 17

So we hope instead of watching, I think we are leading company in China. So we should benefit from rising innovation in China To make these innovation also accessible to the patient outside China.

Speaker 5

So thanks, Leon. And just couple of comments on the deals that we've done. So as you said, building on the relationship we've had with Hutchison Medipharma for savolitinib, recently done 3 deals in the last 12 months with Cellular Biomedicine Group for the cell therapy asset. We're there Helping by running the investigator initiated trial with our GPC III construct. And this actually helps us accelerate That program and gain clinical experience faster than we could otherwise.

Speaker 5

We also have done a deal with Harbour Biomed for T cell engager targeting claudine 18.2, which is an important target on gastric and pancreatic cancer. And then with KeyMed access to an antibody drug conjugate with an MMAE, Warhead again targeting claudin18.2. So I do think, as Pascal has said, we've come back from China excited and energized by the interactions we've got there the level of innovation and the science, the quality, the number of companies that are starting up in that space, It's very exciting and the quality of the investigators that you can work with is also really good. So I think It is an opportunity for us to leverage our position there and help us to actually not just think about China delivering for China, but China innovation delivering for globally relevant indications and accelerating that. So I think that's the opportunity that's there to be

Speaker 2

Thanks, Susan. Marc, can you just

Speaker 6

speak on?

Speaker 8

First of all, let me remind you of the The reason why Alexo invested in 1940 Wilson disease is a disease with an extremely high medical need where no innovation has Taken place for decades beyond the copper collectors. So this is why Alex, you invested in it. Regarding the recent decision that we made, it's basically a case of looking at the totality of data And also close interaction with regulators. The Phase III that we Produced in 2021 produced positive results, but then we conducted, as you mentioned, 2 mechanistic study Those results were less clear. So when you look at the overall the totality of the data, it was not possible for us You know demonstrate clearly a benefit risk for the Wilson population and then we decided to discontinue.

Speaker 2

Thank you, Mark. James Quigley at Morgan Stanley. Go ahead, James.

Speaker 18

It's Mark Persol from Morgan Stanley. Apologies with the mix up. Two questions. Firstly, Pascal, could you Help us understand and put into context the pan tumor opportunity for Ener2. So firstly, the sort of probability and breadth If the pan tumor approval you may get from the PAN TURMO-two trial, plans to move into earlier lines And then the importance of the PANTTRUMO-one trial in HER2 mutant cancer in terms of wrapping up a sort of broader opportunity there.

Speaker 18

And then sort of secondly, the lung cancer slide 15 is super helpful. I just wondered, given the sort of progress, the investment that's being made in gastric and GI tumors, Could you sort of provide us some perspective of where you're heading here? I sort of know, as Susan just mentioned, the call in 18.2 ADC Opportunities, obviously, validated with the Astellas monoclonal antibody and response rates of over 75% and potential combination there. So The gastric opportunity, firstly. And then secondly, the colorectal cancer opportunity where the EGFR CMET bispecific ADC looks super exciting.

Speaker 18

So your thoughts there would be great.

Speaker 2

Thanks very much, Suzanne. Do you want to cover those?

Speaker 5

Okay. So thanks for the interest in the pan tumor in HER2 data, which, As I said, are going to be shared at ASCO. So I think we probably have more detailed conversation there about the breadth. Obviously, this is something we're going to need to discuss with regulatory authorities. And there'll be a question about the appropriate biomarker cutoff Across different indications.

Speaker 5

So I think we are also, of course, looking at the HER2 mutant setting. There is an overlap Between the HER2 mutation and HER2 over expressions, so the HER2 mutant tumors are quite often highly over expressing as well. But I think there will be Data that we'll look at that which I think helps support the data that we'll have from the PAN HER2 over expressing segment. And then in terms of moving into GI cancers with the TOPAZ and HIMALAYA data that Dave's already referenced, I think we have a beachhead into these tumors with Imfinzi, but I think there is significant opportunity to improve on the current standard of care. And that's why we're excited about the Claudine 18.2 ADC asset there.

Speaker 5

Obviously, we're also looking at combinations of ADC plus IO agents across The portfolio. With regards to the EGFR MET bispecific in colorectal cancer, yes, there is overexpression Of both of these targets within colorectal cancer, I think we also have to look at the activity level in patients that have had prior Topoisomerase inhibition in some of the GI tumors, which is something that is relevant. And of course, colorectal cancer Often over expresses membrane pumps that can pump out warhead. So I think we just need to see the clinical data In order to understand what the real potential is for these molecules, but you're right that this is an area of interest for us. Thanks.

Speaker 2

Thank you, Suzanne. Seamus Fernandez, Guggenheim. Seamus, over to you.

Speaker 19

Thanks for the question. So Really my only question is on Iplantrisen. We saw some impressive data presented At the recent NEURO meeting, just hoping that you could comment on that and also follow-up with the broader plans An opportunity that you see in the overall ATTR setting, particularly given your plans on the cardiac side And the overall competitive landscape. Thanks.

Speaker 2

Thanks so much. Meny, do you want to cover it from the R and D and then viewpoint? Maybe Ruud could jump in and also give a sense of the potential.

Speaker 7

So I think we were particularly pleased with the functional data in terms of quality of life because we continue to See an improvement, which I think is looks, I think, quite compelling. And obviously, I think the data that we've seen now and the consistency of our data gives us more Confidence given the mechanism that this is going to work well in cardiomyopathy as well. So I think overall, we're very pleased. We're excited with the submission and the filing in polyneuropathy and waiting with anticipation for the cardiomyopathy data at

Speaker 6

the moment. Ruud? Yes. So a little bit the scoping of the opportunity. There are roughly 40,000 patients with ATTR PM.

Speaker 6

It's a relatively small population, but there's a very large overlap with the main indication cardiomyopathy. As we have announced, FDA has accepted our filing, and we are expecting hopefully a positive outcome in the second half This year and the team in the United States is working of course on the pre launch activities. And equally, we are preparing ourselves for the Centimeters indication, the much larger indication. Roughly there are between 300,500,000 patients worldwide with Centimeters, but there's also a tremendous under diagnosis in the Centimeters. Most of those patients are detected very late in the disease state.

Speaker 6

Clearly, with our activities in the HFpEF Indication with Farxiga, we are expecting that the diagnosis rate will at least double moving forward. So all in all, it's a very substantial population in order to promote our products in the Centimeters category. Of course, that will be a little bit later. That will be after 2024. But all in all, all the lights at the moment are clearly green.

Speaker 2

Thanks, Rod. Emmanuel Pavardakis, Deutsche Bank.

Speaker 20

Thanks for taking the question. Perhaps first one on PROPEL, Head of the Advisory Review tomorrow. Any perspectives you could give us on the FDA's stance that appears keen to potentially restrict approval to not just the HRO, but Actually the Braca subgroup patients. So I'd be interested to hear your thoughts on those documents and expectations into tomorrow. And then perhaps a question on floor 2 ahead of the imminently due headline data.

Speaker 20

Perhaps you could help Frame our expectations on PFS in light of the OPAL data that was presented at ASCO last year where you saw a 70% PFS rate at 24 months. Should we be thinking of a high 20s median PFS as achievable? Or is a number radically different to that Either below or above also, if possible. Thank you very much.

Speaker 2

Thanks, Emmanuel. I think they are both for you, Susanne. You're very prepared for us today, as always.

Speaker 5

Yes. So obviously, we'll know tomorrow the outcome of the PROPEL ODAC, but I'd make three points. First of all, There is a mechanism of action for interaction of the androgen receptor downstream signaling in Olaparib. So AR is involved in DNA repair in AR driven cells and actually depends on PARP-one. So with the combination, You get increased DNA damage selectively in AR driven cells regardless of the BRCA status, and we have data, to demonstrate that.

Speaker 5

So this is different from the monotherapy settings such as ovarian cancer, late line settings. And that difference in mechanism of is reflected in the data from 3 randomized clinical trials, the Study 8, Phase 2 study, the PROPEL study and TALApro II, which recently read out, Which all show similar effect sizes with strong benefit both in BRCA wild type as well as in BRCA mutant. This effect, however, is dependent on dose because it's dependent On the PARP trapping effect, hence the difference I think with magnitude. The second point I'll make is the effect size in the BRCA wild type cannot be explained False negative ctDNA testing. There's high agreement for the ctDNA and tissue testing at 94%.

Speaker 5

So if you look at the Patients that are ctDNA negative and tissue undetermined, that's 226 patients in the PROPEL study. Only 6 Could be effectively misclassified. This cannot explain the effect size. And third point is that the evidence does not support that there's an OS detriment. I think Identifying the double negatives, both ctDNA and tissue based negative study is looking at a subgroup of a subgroup.

Speaker 5

And in fact, in the Bracket undetermined group, the OS hazard ratio is 0.71. So if you look at the totality of the data and the totality of the secondary endpoints, I think it Supports a good benefit risk profile for olaparib in this patient population in combination With Aberration. So that's our position. We'll represent that strongly at the ODAC tomorrow, and we look forward to seeing what the results of that are. In terms of FLORA 2, the OPAL data that was published is in a reasonable sized patient population, about 60 patients.

Speaker 5

So I think it gives you a reasonable confidence About the limits of the medium PFS, which in that study was 31 months, So I think that's the basis for assumption for FLORA 2. You can obviously get some regression to the mean as you move from Phase 2 to Phase But I think we're confident in that effect size and the tolerability profile that we actually see for the combination. So I think this is going to be An important potential new opportunity for Tagrisso and represents a choice that then patients can have. Not every patient will want a combination therapy, but I think it represents a potential opportunity for those patients with bulkier disease or the Thanks, Suzanne.

Speaker 21

Thank you very much. Two questions, if I can. The first is a follow-up on Tropian Breasto 1. Susan, you mentioned that recruitment was 6 months ahead of But the readout has been brought forward, I think, nearly 18 months. So can you explain the difference?

Speaker 21

Is it that you've shifted Focus to the PFS endpoint or co primary endpoint rather than OS, any further commentary would be very helpful. And then secondly, a question on Tropian Lung 1 similar to the one we've just had on FLORA 2. We're all looking forward to that press release and we're hoping that we're going

Speaker 4

to see

Speaker 21

that Astra favored comments of clinically meaningful. Can someone on the call Set out what clinically meaningful would be in your view so that we aren't surprised when we subsequently see the data.

Speaker 5

So thanks for the questions. To start with TROPIA and BRESTO-one, we have a dual primary endpoint of For PFS and OS in this study, the endpoints haven't changed. But the rapid accrual Just gives us the opportunity for that to be read out at an earlier point. And I think what we've guided before was beyond the end of this year versus now coming into this year. So I don't think it really is as big a shift in the time lines as you're indicating.

Speaker 2

I think, Susan, maybe this is A good time to give yourself a pat on the back and your team because our recruitment has been incredibly fast and the team has done a beautiful job.

Speaker 5

Yes. Well, let me give all the credit to the team because they're the ones that have done the work. So Christian Massachece's team and Michel Sampel, who's led the operations team, have done a great job here. In terms of Tropy and Lungo 1, what we said before in terms of clinical meaningfulness, you're expecting If you look at the Contact 1 data set, something in the range of 4 to 5 months median PFS For the control arm, I think, is a reasonable assumption. And it's well sized for a clinically meaningful benefit, We should probably be in the range of 2 to 3 months on that background.

Speaker 5

So I don't think that's changed either.

Speaker 2

Thank you. Luisa Hector, Berenberg. Luisa, go ahead.

Speaker 22

Hi, there. Thanks, Pascal. So Maybe just a quick one again for Susan on when we might see the first response rate data for the internal ADCs that you highlighted. And then perhaps just if you can quantify, in Q1 Anything on price impact? There seem to be various movements, particularly European clawbacks were mentioned in the press release.

Speaker 22

So maybe split between U. S. And Europe, any impact on price? And then stocking or gross to net Impacts which were also scattered throughout the press release. Thank you.

Speaker 2

Thank you, Luisa. Susan, do you want to take the first one and Rod, you would take the second one? Or may and if, Dave, you want to step in also? Please do so, but maybe start with Rene?

Speaker 5

Yes. I would anticipate that we would share data probably next year for the early phase ADCs.

Speaker 6

Okay. And regarding, Luisa, the clawbacks in itself in Europe specifically are Unusual, we are facing that year after year. It's our normal business practice and we are just flagging it In order to provide a little bit more color to our business performance, that's also true in the United States. As you know very well, of course, in the United States, we are negotiating our prices on an annual basis. And there are rebates and of course, gross to net adjustments.

Speaker 6

And we at least in the foreseeable future, We expect to continue that. And of course, there is new legislation potentially coming in our on our way in the United States with the IRA. But all in all, currently, it's clearly business as usual.

Speaker 4

I mean, I think the only piece, Louisa, that I'd add to that is that I commented in my remarks On Calquence and Lompar's stocking in the quarter, I don't have much more to add, but that certainly was relevant for both of those brands. And then on price in the U. S. And well seen that we took some price increases in line with what we thought was appropriate. But keep in mind that in the quarter, the impact of that is relatively negligible because you've got price actions that are in place for a lot of the distributors and the payers and the GPOs, just to try

Speaker 2

to put a bit more color on your question. Thanks. Michael Lushton, UBS.

Speaker 23

Thank you. Two questions, please. Just going back to the speed of recruitment for Both Flora II and Mariposa, how do you square that with your view that monotherapy EGFR Is going to be the standard of care if it has to be squared at all. Just interested in your thought that both of these trials have recruited very, very quickly. And a quick question for Dave.

Speaker 23

What was the underlying growth for Lynparza in Q1 if you strip out the inventory work done at Appresume came out of the For parallel expectations.

Speaker 5

I just want to clarify, TBO1 is a breast cancer?

Speaker 2

No, no. Fluorato and Mariposa are recruited fast. And what does that mean in terms of physicians' interest in this combination?

Speaker 5

Well, I mean, there are patients who will want even more benefit than can be achieved with monotherapy, to Griswil. But I'm just pointing out that you look at the totality of patients that you're treating with EGFR mutant lung cancer, a lot of them are elderly. And Oral monotherapy that they can take at home is an attractive option. But if you're looking at patients that want to accrue at Clinical trial sites and academic centers, that's a different patient population. We're often looking for more options.

Speaker 5

So I think there's a large number of patients that have got first line metastatic non small cell lung cancer. It's a big indication. There's lots of opportunity to improve on the current standard of care now.

Speaker 2

Jeff, maybe you could comment on Nipasa, but also from a commercial a viewpoint, how do you see this FLORA2 and Mariposa combination and physicians' reactions to those?

Speaker 4

Absolutely. So on Lynparza, Michael, on a sequential first versus fourth quarter, On the global sales, we see growth across Europe in demand. We see growth in Rest The world also within international. In terms of within the U. S.

Speaker 4

Right now, I would say the demand is relatively stable net of The stocking that we described, I again made comments on this. There is opportunity for us to continue to grow Lynparza. Some of these opportunities are more challenging. It's about driving testing rates in ovarian and the HRD population. It's about really creating even further imperative in driving testing For BRCA in breast cancer among hormone receptor positive patients where the unmet need and the or the Received unmet need is not quite the same as it is in triple negative.

Speaker 4

Transitioning, again, just to go to Pascal's Question to me around the opportunity for FLORA 2. We know that there are certain patients with presentation of more aggressive disease. We also know that certainly if we're able to replicate the PFS results and the response rates of nearly 90% that we see in Opel, Along with the PFS of 31 months that we are seeing within Opal that there will be a subset of patients for whom that combination is something that Physicians may very well want to be utilizing. And so as Susan said, while we believe that the majority of patients will be seen as most It's appropriate for monotherapy because it's oral, because we're getting good, approaching 2 years PFS And because the side effect profile is well understood for certain patients where the disease appears more aggressive, getting that response rate using And I think that that could translate into further growth in terms of duration of therapy as well in terms of the period of time

Speaker 2

Thank you, Dave. We'll take the last question, Amara Singh at Intron. Go ahead, Amara.

Speaker 9

Hi, there. Thanks. It's Naresh Chouhan from Intron. Just a question on a couple of questions on Calquence, please. Some work we've done suggests that VENCLEXA is eating into that CLL space.

Speaker 9

So just could you help us understand how fast the BTK class is growing? And then secondly, how do you see pricing evolving for the BTKs and particularly for Caquence? It seems to us that improved the price has been falling quite materially over the last year or so. Thank you.

Speaker 2

Thanks.

Speaker 4

So thanks for the question. On the first of the questions, and really I guess I'll focus my answer In the U. S, what we're seeing is that venetoclax has been Relatively stable in terms of its front line, second line and frankly, third line CLL share, I think that within that context, we have actually seen growth in the BTKI Class, I think one of the benefits that's come from a new entrant in this next generation BTKIs is that it's created Class growth, which I think has been certainly beneficial to Calquence. In terms of your second question, it's a good one and an important one. Historically, I've commented that contracting pricing gross to net has been Relatively, I would say, sort of rational and lower pressure, we do see mounting gross to net pressures in the U.

Speaker 4

S. Within the BTKI class. And I do think that as we look forward towards IRA and negotiation and the possibility that first generation BTKIs enter in, That's something that we certainly expect to see more pressures on the class moving forward.

Speaker 2

Thanks, Dev. So thank you so much for all your great questions and we wish you a great rest of the day. Thanks. Bye bye.

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