AstraZeneca Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
April 25, 2024

There are 23 speakers on the call.

Operator

Good morning

Speaker 1

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.

Speaker 1

Welcome, ladies and gentlemen, to AstraZeneca's First Quarter Results 2024 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 to differ materially from those expressed or implied by these forward looking statements.

Speaker 1

Any forward looking statements made on this call reflect the knowledge and information available at the time of this call. 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 and webinar. There will be an opportunity to ask questions after today's presentation. Please use the raise a hand feature to indicate you wish to ask a question, And with that, I'll now hand you over to the company.

Speaker 2

A warm welcome to AstraZeneca's Q1 2024 Presentation Conference Call and Webcast. I'm Andy Barnett, Head of Investor Relations at AstraZeneca. And before I hand over to Pascal and other members of the executive team, I would like to cover some important housekeeping points. Firstly, all of the materials presented today are available on our website. This slide contains our Safe Harbor statement, which I'd encourage you to take the time to read.

Speaker 2

We will be making comments on our performance using constant exchange rates, or CER, core financial numbers and other non GAAP measures. A non GAAP to GAAP reconciliation is contained within the results announcement. All numbers quoted are in 1,000,000 of U. S. Dollars unless otherwise stated.

Speaker 2

This shows the agenda for today's call, And following our prepared remarks, we will open the line for questions. As usual, we will try and address as many questions as we can during the allotted time, although I would ask participants to limit the number of questions you ask to allow others a fair chance to participate in the Q and A. And with that, Pascal, I will hand over to you.

Speaker 3

Thank you, Andy. Good day, everybody. I'm pleased to report that we have made a very strong start in 2024. Total revenue grew by 19% in the Q1, reflecting continued strong demand and core earnings per share rose by 20 13%, sorry. Recall, the Q1 of 2023 benefited from a $240,000,000 gain in other operating income following the divestment of Pulmicorte Flexhaler in the U.

Speaker 3

S. Collaboration revenue and other operating income were minimal this quarter, which makes the EPS year over year growth all the more impressive. We're also pleased to announce an increase in the annual dividend of 7% at the Annual General Meeting earlier this month. This increase is in line with our progressive dividend policy and reflects the continuing strength of AstraZeneca's investment proposition for shareholders. Please advance to the next slide.

Speaker 3

We saw strong double digit growth across our therapy areas in the Q1. This is also the Q1 where quarterly revenue from our oncology and biopharma businesses exceeded $5,000,000,000 and where this has exceeded $2,000,000,000 reflecting the value our medicines bring to patients globally. We saw 19% growth in both the U. S. And Europe this quarter, driven by strong demand.

Speaker 3

Our business grew substantially in the emerging markets, and growth was pronounced especially pronounced outside of China, driven by our sustained presence and commitment to these markets. Next slide, please. Our strong pipeline momentum has continued into 2024. We announced positive trial results for LoRa and Adriatic, both of which have been selected for presentation during the ASCO plenary, reflecting the important benefits seen for lung cancer patients. As a reminder, there are 5 presentation at the plenary, so 2 out of 5 is very unusual result.

Speaker 3

We saw a number of exciting new approvals in the Q1. The approval of Tagrisso in combination with chemotherapy establishes a new benchmark for efficacy in frontline EGFR mutated non small cell lung cancer. The approval of HER2 in previously treated HER2 positive cancers is the 1st tumor agnostic approval for HER2 directed therapy and offers new hope for patients with the right range of cancers. And finally, ULTOMIRIS was approved in an MRD and we are now working on establishing Ultomiris as the new standard of care for this debilitating disease. These approvals further build on the momentum we are seeing from other recent approvals listed here, and we're investing to ensure that each of these new opportunities reach full commercial potential.

Speaker 3

Adriatic and LoRa, if approved, coupled with the 3 approval I've just described and the ongoing launches, have the potential to deliver several $1,000,000,000 in total revenue, additional revenue in 2,030. And this is what our pipeline is delivering in the Q1 of 2024. With that, please advance to the next slide, and I will hand over to Ahad now, who will take you through our Q1 financials.

Speaker 4

Thank you, Pascal. And as usual, I will start with our reported P and L. Please turn to the next slide. Total revenue in the Q1 increased by 19% to $12,700,000,000 predominantly resulting from strong product sales, which grew by 18%. The underlying demand for our medicines across the board was very strong in the quarter across both brands and across geographies.

Speaker 4

And as a result, Alliance revenue increased by 59 percent to $457,000,000 driven by profit shares in regions where our partner booked product sales. Please turn to the next slide, which shows our core P and L. The product sales core gross margin was 82% in the quarter. As previously stated, we still expect gross margin for the year to be slightly lower than last year due to strong growth for partnered medicines, including Inertu and TESPYRE as well as increased product supply to Sanofi for Bifortis into the 2024, 25 RSV season. In the second half, we see additional impact from usual seasonal impact for medicines such as FluMist.

Speaker 4

Total operating expense increased by 15% in the quarter. R and D spend increased by 18%, partly driven by the Phase 3 trial starts, including our DAPA combinations with inclusive of investments we are making to maximize the potential medicines acquired in recent business development transactions. We continue to show operating leverage. Supporting the 19% revenue growth, SG and A increased by 13% in the quarter. We have seen strong initial uptake for Air Supra, TrueCap and Benua in the U.

Speaker 4

S. And we're investing behind this revenue growth as well as behind our existing brands such as Breast Tree and Forxiga. We're also increasing our promotional efforts We're also increasing our promotional efforts behind our rare disease medicines to support continued growth. We anticipate quarterly variations in our operating expenses given the dynamic nature of our business. Despite the limited contribution from other operating income this quarter, we saw core operating profit growth of 15% and core EPS of $2.06 Please turn to the next slide.

Speaker 4

In the Q1, cash flow from operations was $2,500,000,000 We saw CapEx of $417,000,000 in the quarter, and we continue to anticipate CapEx to increase by approximately 50% on a full year basis to support increased manufacturing capacity and support our growth. We had deal payments of $2,900,000,000 including upfront payments for icosavax and gracel acquisition, both of which closed during the Q1. We also paid the 3rd and final payment to the former shareholders of Acerta. Lastly, we paid the 2nd interim dividend for 2023. At the end of our Q1, our net debt to EBITDA ratio was 1.9 times.

Speaker 4

We anticipate the announced Fusion and Amyloid transactions to close in the coming months, strengthening our radiopharmaceutical capabilities and expanding our presence in rare endocrinology. As a result of recent business development refinancing, we expect finance expenses to grow compared to prior year. Reflecting the strength of our business, we are reiterating our full year guidance for both total revenue and core EPS at constant exchange rates. With that, please advance to the next slide, and I will hand over to Dave, who will take you through our oncology performance.

Speaker 5

Thank you, Aradhana. Next slide, please. Oncology total revenues grew 26% to $5,100,000,000 in the Q1, driven both by double digit growth across all regions and strong demand for our key medicines. Tagrisso Global Revenues grew 15% in the quarter, reflecting continued global demand for Adora and Flora. Following U.

Speaker 5

S. Approval in February, we've seen strong initial interest and early uptake for FLORA 2 in the frontline setting with oncologists particularly focused on patients with L858R mutations and CNS metastases at baseline. Lynparza delivered product sales growth of 11% in the Q1 and remains the leading PARP inhibitor globally across all tumor types. Imfinzi total revenues grew 33% on continued strength in biliary tract cancer with TOPAZ-one, which is now approaching peak market share penetration in the U. S, Japan and Europe.

Speaker 5

Launches continue at pace across emerging markets where biliary tract incidence and prevalence is high, and as previously communicated, we recognized a 25% mandatory price reduction in Japan effective from February 1 and anticipate a second mandatory price discount later this year. For the first time, we have split out Imjudo in our reporting and are pleased with its launch trajectory. We've established a strong foundation in hepatocellular carcinoma with Himalaya and see continued growth in non small cell lung cancer with Poseidon. Calquent's total revenues increased 35% in the 1st quarter, driven by sustained BTK inhibitor leadership in frontline CLL across the U. S.

Speaker 5

And Europe. And HER2 total revenues increased 79% in the Q1. Again, we drove sequential market share growth in second line HER2 positive breast cancer in the U. S. And Europe where considerable growth remains.

Speaker 5

We see continued adoption in HER2 low across many global markets and eagerly await the Destiny Breasto-six readout, which brings the potential for further expansion moving into HER2 one line earlier. Following approval in November last year, we are pleased with the strong TRUcap adoption in the biomarker altered population, achieving $50,000,000 in the Q1 total revenues. Looking forward, we anticipate further expansion of Tagrisso with the approval of FLORA2 in frontline non small cell lung cancer and maximizing the U. S. Launch of INHER2 across HER2 expressing tumors.

Speaker 5

Lastly, we're excited that both Adriatic in limited stage and Lauren's stage 3 unresectable lung cancer have been selected for the ASCO plenary session. Each of these represents substantial growth opportunities in the near future and beyond as Pascal has already outlined. With that, please advance to the next slide and I'll hand over to Susan to cover key R and D highlights in the quarter.

Speaker 6

Thank you, Dave. We've had an exciting start to the year with a number of key presentations, including data for our new generation PARP inhibitor, soriparib, in advanced solid tumors presented at this year's AACR. This quarter, we announced the proposed acquisition of Fusion Pharmaceuticals, furthering our ambition to redefine the backbone of current cancer treatment. Along with chemotherapy, radiotherapy has been a mainstay of cancer treatment for decades. In fact, 30% to 50% of all patients receive radiotherapy.

Speaker 6

Whilst this treatment is effective, there's also toxic off target effects. Fusion has developed a clinical stage portfolio of radio conjugates that are designed to deliver radiation therapy to the tumor cells in a more targeted manner than external beam radiation. As we've discussed already, we believe the future of cancer care is in combinations and there's immense potential to combine radio conjugates with other modalities in our pipeline, including next generation IO bispecifics, cell therapy, T cell engagers and our DNA damage response agents. Importantly, the planned acquisition of Fusion accelerates our radiopharmaceutical manufacturing to commercial scale capabilities by over 3 years and offers additional security in Actinium supply with multi source supply agreements in place. The lead pipeline candidate, FPI-two thousand two hundred and sixty five, has potential to be the 1st actinium based PSMA targeted radiotherapy approved for the treatment of post lutetium metastatic castrate resistant prostate cancer.

Speaker 6

FBI-two thousand two hundred and sixty five is differentiated and has potential to be both more potent and tolerable than currently approved beta emetic omidi conjugates. Data presented earlier this month at AACR demonstrated further validation of FPI-two thousand two hundred and sixty five's efficacy and tolerability. PSA50 response was achieved in 50% of patients overall in 43% of the lutetium treated patient population and 54% of the lutetium naive population. Furthermore, there were 0 discontinuations related to xerostomia, a common toxicity. We believe that our proven expertise in targeted delivery together with Fusion's clinical stage portfolio and manufacturing capabilities presents an opportunity for clear leadership in the ready conjugate space.

Speaker 6

And with that, please advance to the next slide, and I'll pass over to Ruud to cover Biopharmaceuticals performance.

Operator

Thank you, Susan. Next slide, please. Biopharmaceuticals delivered total revenue of $5,200,000,000 in the Q1 of 2024, representing growth of 16%. Our key underlying growth drivers remain in place, including the continued growth of the largest cardiorenal medicine on the market, Farxiga The increased uptake of our biological medicines in severe asthma and the ongoing momentum behind Brasserie, our inhaled COPD medicine. In the United States, demand for Farxiga was strong in the quarter and benefited from the launch of an authorized generic.

Operator

We saw solid growth in emerging markets despite the entry of generic competition in some countries. Presently, we still anticipate Farxiga maybe included in China VBP in the second half of twenty twenty four. Additionally, we saw a strong Symbicore performance in the Q1 despite generic pressures. This was particularly evident in emerging markets where we saw strong underlying demand in both China and ex China markets, strengthening its position as market leader in the region. Awareness of Ssupra continues to grow and more than 18,000 healthcare practitioners have prescribed this new medicine, translating into 65,000 prescriptions in the quarter.

Operator

The performance has been particularly strong among specialists. Supra already has over 15% of Nulshear prescriptions by allergists and over 10% share of prescriptions from pulmonologists. As as Supra is still in the 1st few months of launch, our revenues in quarter 1 did not reflect the full extent of initial demand due to introductory discounts. These introductory discounts will fade through the year as we continue to expand access. Awareness is also building for Waynewa and we are very pleased to report our first revenues this quarter following its recent approval for ATTR polyneuropathy in the United States.

Operator

Waynewa has only been available for a few weeks, but we are seeing good uptake among patients, including some who are new to the class of medicine and some that have switched from other brands. Finally, we saw continued sales from BayFortis in quarter 1, albeit with the expected seasonal drop versus quarter 4. We were particularly pleased to see the real world data coming out of the U. S. With the Center of Disease Control reporting that Bifortis was 90% effective at preventing infants from being hospitalized with RSV.

Operator

Next slide, please. I will now hand over to Sharon to discuss our ongoing development program for Waynewa in TTTR cardiomyopathy, where we have the potential to reach up to 500,000 patients globally.

Speaker 7

Thanks, Ruud. I wanted to take the opportunity to highlight results from 66 week analysis of exploratory cardiac endpoints in the Phase 3 neuro TRANSFORM study of Wainua in hereditary ATTR polyneuropathy. In a predefined cardiac subgroup of hereditary ATTR polyneuropathy patients, treatment with aplantercen showed stabilization or improvement in cardiac function and structure relative to external placebo, including levels of NT proBNP, a measure of cardiac stress, and a trend towards improvement in echocardiographic parameters such as left ventricular wall thickness, diastolic and stroke volume. These results provide confidence in our Phase 3 cardio TRANSFORM trial in ATTR cardiomyopathy. ATTR cardiomyopathy is a systemic, progressive and fatal condition that typically leads to progressive heart failure and often death within 3 to 5 years from disease onset.

Speaker 7

With more than 1400 patients enrolled, Cardio Transform is the largest, most comprehensive ATTR cardiomyopathy study, and importantly includes cardiovascular outcome endpoints. In other key programs, we continue to maximize the opportunity for our best in class SGLT2 inhibitor, Farxiga. We have the potential to manage cardiorenal disease through 3 distinct mechanisms. Complementary dual mechanisms combining dapagliflozin with balsinrinone, baxtrastat, or zebotentin. I am delighted to announce that all three combinations are now in Phase 3.

Speaker 7

Please move to the next slide. And I will now hand over to Mark, who will cover our rare disease portfolio.

Speaker 8

Thank you, Sharon. Can I get the next slide, please? I'm delighted to report Rare Disease delivered our first $2,000,000,000 total revenue quarter, up 16% year on year. The growth rate at CR includes a small benefit from countries with high inflation. Growth was driven by neurology indication, increased patient demand and launches in new markets.

Speaker 8

In the quarter, ULTOMIRIS revenue grew 34%, with the vast majority of growth coming from generalized myasthenagravis. GMD patients grew by 41%, driven by demand in Europe and established Rest of the World. In the U. S, we saw the highest number of new to brand patients in the quarter, supported by our increased promotional activities. During the quarter, we received U.

Speaker 8

S. Approval of ULTOMIRIS in MISD. In the Phase III CHAMPION NYD trial, ULTOMIRIS demonstrated 0 adjudicated relapses over 138 weeks. Given the strength of this data, we expect ULTOMIRIS to be the treatment of choice for relapsing patients, naive to Biologics. We expect patient on SOLIDRIS to convert to ULTOMIRIS over the short term.

Speaker 8

Following approval in the U. S. And EU of OIDAYA, an add on therapy, ensure that PNH patients will experience clinically significant extravascular hemolysis are able to continue on standard of care, ULTOMIRIS or SOLIRIS. Beyond complement, both Strensiq and Cosilugo grew 21% 80%, respectively, driven by continued patient demand as well as order timing in certain tender markets. Please advance to the next slide.

Speaker 8

During the quarter, we announced our plans to acquire Amolid Pharma, which includes a Phase III asset, eneboparatide, for patient with hypoparathyroidism. Hypoparathyroidism is characterized by deficiency in parathyroid hormone production, which results in significant dysregulation of calcium and phosphate, leading to life altering symptoms and complications, potentially including chronic kidney disease. It is one of the largest known rare diseases. Phase 2a data from enaboparatide showed a normalization of serum capsulin level and a reduction in dependence on daily calcium and vitamin D supplements, both clinical priorities for treating patients. Data also suggested that enaboparatide has a potential to restore normal bone turnover and preserve bone mineral density.

Speaker 8

We believe enaboparatide has blockbuster potential and anticipate data from the Phase 3 Calypso trial in 2025. With that, please advance to the next slide, and I will hand back to Pascal for closing remarks.

Speaker 3

Thank you, Marc. Can I have the next slide, please? As you have heard, our company has made a very strong start to 2024 with demand for our medicines continuing to grow. Looking ahead, we are once again anticipating multiple pivotal trials to read throughout the remainder of the year. Several important potential catalysts are shown here, as well as Destiny Bristow 6, which Dave spoke about earlier.

Speaker 3

I would like to highlight Capital 281, which will be the 1st registrational study of TRUCA in prostate cancer, an important potential new growth driver for this medicine. Since our full year 2023 update, we have initiated the 8 pivotal trials shown here, all of which are potentially transformative for patients and could meaningfully accelerate our growth. In addition to the exceptional delivery from our internal pipeline, we've also been very active with business development, building capabilities and adding new platforms to strengthen our R and D efforts in key areas, which we believe have the potential to radically improve patient outcomes, including radio conjugates, gene therapies and cell therapies. We're very much looking forward to sharing more details about our pipeline and the long term outlook for our company at our upcoming Investor Day on the 21st May. Please advance to the next slide, and we will go to the Q and A.

Speaker 3

As Andy mentioned at the start of the call, please limit the number of questions you ask to allow others a fair chance to participate. For those online, please use the raise your hand function on Zoom. And with that, let's move to the first question, which is from James Gordon at JPM. Over to you, James.

Speaker 9

Hello, James Gordon, Chegg, Morgan. Thanks for taking the questions. First question is on 'twenty four guidance. So it's very strong revenue growth 19%. In order not to grow revenues at teens for the year, it looks like you need to only grow at about 10% for the rest of the year.

Speaker 9

So in terms of headwinds we should be mindful of that would drive 9 percentage points of deceleration. And I heard a comment on maybe Foziga BVP and Imfinzi price in Japan. But anything else and in particular for FASIGA, SYMPAKO and Tagrisso that were very strong this quarter, are there things through the year we need to watch out for? Or does that look quite sustainable? And also on 'twenty four guidance, just on OpEx, the ratios look pretty good today, but this is with a strong top line before the 2 deals close.

Speaker 9

So if revenue growth is a little slower through the year and you consolidate these deals, do we need to be careful on those ratios? Or can you still keep a pretty high margin? And if I could squeeze in a quick second question, just ecogene and the oral GLP-one. So I believe you've expanded the trial and maybe taking dosing higher. So on that, what is the latest thinking in terms of where we might see the data?

Speaker 9

I didn't see a reference to And how are you now thinking about how competitive this product might look in terms of the weight loss and other aspects versus some other recent readouts from competitors?

Speaker 3

Thank you, James. James, sorry, Aradhana, maybe you can take the first one. And Sharon, would you take the second one?

Speaker 4

Great. Thank you, James, for the question. It is obviously early in the year. And as you know, generally, we don't update or provide more color on the guidance in Q1. You've seen from the reported results, the underlying trend in our revenue product sales is very, very strong across the board.

Speaker 4

You've also mentioned some of the uncertainties that Ruud also mentioned as well as Dave. So those uncertainties are there for the remainder of the year. However, if our momentum continues the way it has been in the Q1 and some of these uncertainties on VBP pricing, etcetera, are in our favor, you can think about our product revenues, our product sales and alliance revenues could be at the upper end of our range or higher. So, but again, we're not updating our guidance at this point. We will continue to invest in our R and D for the long term, including the acquired product and continue to invest in SG and A to drive the top line momentum that you've seen.

Speaker 4

Operating leverage continues to be a focus for us. Again, you've seen this quarter as well, 19% revenue growth and 13% SG and A growth. And we will try to maintain stronger revenue growth than expense growth in the coming quarters as well. Would that maybe Sharon?

Speaker 7

Sure. So thank you for the question about AZD-five thousand and four, our oral GLP-one receptor agonist. We're really excited about this molecule and its potential to treat the interrelatedness of cardiometabolic and cardiorenal disease. You asked specifically about the Phase I study and as I'm sure you're aware, we completed together with ECOGENE a highly controlled inpatient Phase I earlier this year. We have the data in hand and look forward to presenting that at an upcoming medical conference later this year.

Speaker 7

You also asked about how we view the competitive position of this molecule. And recognizing that it is a highly competitive field, we do feel very optimistic about the potential for this molecule as a standalone as well as in combination. So when we think about how we're treating obesity and metabolic health, I think we honestly do ourselves a disservice by referring to this as obesity. What I'd like us to do is think about this more clearly as treating the interconnectedness of disease. And to that end, we are uniquely well positioned to combine this orally available molecule with other molecules in our So when we think about this, we can imagine that at a fixed dose, we may So when we think about this, we can imagine that at a fixed dose, we may want one dose that would be compatible for fixed additional weight loss in obesity indications.

Speaker 7

And we'll keep that in mind as we continue to design our clinical development programs moving forward. We have publicly stated that we will be launching 2 Phase 2b studies later this year, one in obesity and one in type 2 diabetes.

Speaker 3

Thank you, Sean. And James, you asked a question of the dose, but you got to remember that not everybody needs to lose the same amount of weight. And so as you target higher weight loss, as Sean was talking about in the obesity segment, you would expect to have to go through a titration regimen and get to a higher dose. So it's not surprising that we would explore different doses depending on how much weight loss patients are needing. The next question is Seamus Fernandez of Guggenheim.

Speaker 3

Over to you, Seamus.

Speaker 10

Great. Thanks for the question. So I guess as Pascal, a little bit of a preview of the upcoming analyst event, just hoping that you could provide us with a little bit of color on how you're thinking about potential for updated guidance. Is the most important factor of the meeting really giving and helping us understand long term visibility around revenue or is it more on margins or a little bit of both? And then just a second question, As we think about the 3 products that you've highlighted on the biopharma side of the business, the oral PCSK9, the GLP1 and, the long acting amylin.

Speaker 10

Just hoping you could help us or help provide some context around of the 3, which you're most excited about and perhaps when we might see data on all 3? Thanks.

Speaker 3

Thanks, Thomas. So the first question about the Investor Day, I guess I would like to invite you to join us in beautiful Cambridge to see more of the details of what we're going to present. But the short answer to your question is a little bit of both. Essentially, what we want to do is show people how we are looking at what I call today, tomorrow and the day after. Today is what do we intend to deliver in terms of our financial progression in 2024, 2025, 2026.

Speaker 3

Tomorrow is what are the products we are going to launch that will drive our growth between 2025 2030? What is our strategy there? What do we intend to do with our pipeline? And what are the products we believe are growth drivers to 2,030? And the day after tomorrow is really the sort of post-two thousand and thirty period.

Speaker 3

And what are what do we believe are the technologies that will shape the future of medicine in oncology and beyond? And how are we building some of those platforms that will help us shape participate in shaping the future of medicine in the therapy areas where we are. So that's really what we want to do at the Investor Day. And we also offer, for those of you early risers and will be physically on-site, we'll also give you a chance to look around our site and experience a little bit what we have on-site. The second question, let me give you a couple of comments and then maybe Rod and Sean could add.

Speaker 3

We're always more excited about products for which we have more advanced data. Those 3 products are, of course, exciting, but we have more data for the PCSK9, which is a very exciting product and also more data for the old GLP-one. Long acting, I mean, it is technically interesting, but we need more data, but it suddenly so far looks pretty good. And we think we can actually, as Sharon said, with the combination of the GLP-one and the rest of our pipeline, not only the PCSK-nine, but also DAPA and also potentially baxfostat, we can make a difference in the segment of patients who need to lose weight, but also manage their cardiovascular risk factors. And in the obese segment, where people need to lose 20%, 25% of their weight, then we can look at combining our GLP-one with the long acting M1,000,000 and some other mechanisms.

Speaker 3

Sharon, if you want to maybe also add a little bit on how you see this pipeline?

Speaker 7

Sure. So I'll jump in on both. People often ask about which molecule I'm more excited about. And I find that very difficult to answer because obviously, I'm very invested in all of them. But the first one that you asked about was our oral PCSK9 inhibitor.

Speaker 7

And we are extremely excited about the potential for this molecule. We will be releasing phase 1 data at an upcoming conference in the very near future. But I think it's safe to say that we set ourselves a very high bar with this molecule. We ask that it be able to meet a major unmet medical need. We know that despite high intensity statins, about half the patients with cardiovascular disease are not hitting our LDL targets.

Speaker 7

And so we asked this molecule to be able to offer substantial lowering on top of statins. And we're very encouraged by the data that we see. So we are actively moving forward with this molecule in clinical development and thrilled to be sharing the data at an upcoming conference. Relatedly, you asked about our obesity portfolio. And again, I think I would really think of it more as our optimal weight management weight and interrelated cardiometabolic and cardiorenal disease.

Speaker 7

So we are positioned to go beyond short term weight loss and to deliver long term weight management and healthy lean mass management, addressing cardiometabolic risk and also organ protection. And we think that we'll be able to achieve this by driving forward with multiple mechanisms in combination, thinking about both the incretin pathways, as we've discussed earlier with 4 and non incretin pathways, for example, with long acting amylin. Long acting amylin, as you can imagine, is a different route of administration And we think could offer some additive benefits outside of that, that we're already seeing in the incretin pathway. So we are accelerating several assets through Phase 1. We spoke earlier about 5,004.

Speaker 7

AZD6234 is our long acting amylin. AZD95 50 is our GLP-one glucagon dual receptor agonist. And both of those latter 2 molecules are progressing through Phase 1. We look forward to sharing the data with you when ready.

Speaker 3

Thanks, Sharon. Ward, anything you wanted to add or? No. Cool. So let's move to the next question.

Speaker 3

Sachin Jain at Bank of

Speaker 11

there. Thanks for taking my questions. Sachin Jain, Bank of America. First one is for Dave on TrueCap. Strong first quarter, just any initial launch feedback.

Speaker 11

And then I'm going to try and go to Ross talk to a SEK2 billion for their PI3 ks yesterday. I wonder if you could talk about the relative profile of your asset relative to that and whether you'd go bigger than $2,000,000,000 in breast and size the prostate opportunity that Pascal specifically called out? Our second question is for Susan. Avanza is due in 25. When do we see the data that informs on your confidence?

Speaker 11

And what I'm after there is timing of any TROP-two biomarker data? And what should we focus on from TLO2 at ASCO? But I think, Daichi, you've commented too. And then last quick question for Sharon, Iplontis since now 25 plus, do you still plan an interim next year? Thank

Speaker 3

you. Yes. Doug, do you want to start?

Speaker 5

Sure. Thanks, Sachin, for the question. So on TRUcap, we are really pleased with the launch and following what was really positive reception to the presentation of the data. We've seen that the uptake is really moving quite nicely. And I think that uptake in the biomarker population really speaks to the need to extend endocrine based therapies.

Speaker 5

We see testing rates are well established by NGS in the U. S. So we've got over 60% on that. And while there was a previous standard of care with the PI3 ks, we're seeing that rapidly get displaced, though still plenty of opportunity to continue to grow within that segment. So demand is off to a very good start, though I think that there is certainly much more opportunity for us to continue to grow.

Speaker 5

There's some late line bolus that we're probably seeing within the numbers as well. But again, I think that the underlying demand and the indication that we've got is very, very strong. On your specific question also around comparison think that you first have to take a look at the inclusion criteria. The inclusion criteria are certainly different between that study and 291. In that study, the inclusion criteria only include patients who have progressed during or within 12 months of adjuvant ET completion.

Speaker 5

It's also limited to the PIK3CA patient population. So if you take a look at 291 within that context, we really have the de novo and the non early relapsers in this second line post CDK4six plus AI setting in addition to the fast progressors. And I see more like 3 quarters of the patients falling into this de novo non early relapser population. So I'm enthusiastic about the opportunity in breast cancer. I'm enthusiastic about the opportunity in prostate cancer.

Speaker 5

And I think you put these 2 together and we've got the potential for TRUcap to be a multi blockbuster.

Speaker 3

Suzanne? Okay.

Speaker 6

Thanks, Dave. So for Avanzar, again, yes, as I've said, the trial's going, well. But the trip to biomarker data, I expect that we would be able to share those data at the Congress within the next 12 months certainly. And as far as ASCO goes, one thing beyond the lung cancer data that I would encourage you today to look at is the I SPY-two data, which is a neoadjuvant study in breast cancer, again, looking at the combination of datto and Imfinzi in that setting. So, you know, I think we continue to be happy with the profile that we're seeing for datto plus IO across the first line settings in lung cancer.

Speaker 6

The safety is looking very reasonable because we've got many patients now enrolled into those first line settings. And again, as we move this combination into the earlier lines in settings like the neoadjuvant setting, I think both the safety and the efficacy profile look encouraging. So that's what I would point you to, Asco. Thanks.

Speaker 3

Thanks, Suzanne.

Speaker 7

And then your last question, I believe, was about the Eplantercin Cardio Transform trial and our expected timeline for readout on that one. So as I mentioned earlier today, we remain extremely optimistic and excited about the potential for this molecule. And I showed you some early data that came from our NEURO TRANSFORM study, which demonstrated a benefit on cardiac structure and function, which gives us additional confidence in the potential for the molecule as we walk through the CARDIO TRANSFORM study.

Speaker 3

This molecule has the potential to be

Speaker 7

a best in class So to that end, we would like to give this trial the best chance for success. So to that end, we would like to give this trial the best chance for success and to be able to read the full trial data at the 1 40 week time point. That in mind, we'll continue to scan the competitive landscape and make the appropriate decisions as we move forward.

Speaker 3

Thank you, Sean. And touching on part of your question, we never comment, as you know, on interim analysis. So of course, we will not do anything we will not do it here either. Next question is Tim Anderson at Wolfe. Tim, over to you.

Speaker 3

I'm going

Speaker 11

to start writing up.

Speaker 12

Hi, thanks.

Speaker 13

A couple of questions. On Datto, just an update on your thinking on the lung filing in the U. S, if the overall survival data only continues to be directionally supportive and doesn't fall below the upper end threshold of 1. Is that enough to get U. S.

Speaker 13

Approval? And then what would that mean for ex U. S. Approval? And when is that next survival look going to occur?

Speaker 13

And then the second question is, just emerging markets. China, obviously, has slowed from years ago for lots of companies. What really stands out in your results is that non China Emerging Market segment, which is substantial now continuing to grow, but it's just not clear to me what the drivers of that are in terms of geographies and products and therefore what the future growth expectations should be in those non China markets. So if you could add some commentary, that

Speaker 14

would be helpful. Thank you.

Speaker 3

Thank you. So maybe, Susan, you could take the first one.

Speaker 6

Yes. So for DASAD XD's Tropion Lung 1 study, obviously, we've announced that we have filed, obviously, for all regulatory authorities OS in lung cancer is an important component that they'll want to look at. And we said that the timing of the OS data cut is around the middle of the year. As you know already that we saw an overall trend in favor of OS on the data arm in the ITT. But what we also saw is in the non squamous group, a more positive trend with the upper end of the composite interval just crossing 1.

Speaker 6

So we were looking and hoping that we'll see both of those continue or improve. And I think that will be important piece for the regulatory authorities to look at. Thank you.

Speaker 3

Thanks, Susan. And the second one may be Leon, who is online, I believe. Leon, can you actually comment on that one?

Speaker 15

Yeah. I think, Tim, actually, across the all geographic, AstraZeneca emerging market has been doing growing rapidly and almost no exception. And of course, there is some currency depreciation in certain countries, but overall still very, very strong growth. And we are also in line with the global new product launch. I think Tagrisso, Forsiga, these oncology brands and also rare disease as a new growth driver and is also doing very well across the emerging market.

Speaker 15

And all in all, on top of that, the paid post patent expired products, legacy products that they are still quite that we spend very little resource and also growing nicely to support as cash cow our new launches. And also across the region, we are speeding up approval in many emerging markets. So we launched new products much earlier than before.

Speaker 3

Thanks, Leon. So net net, Tim, you have really two factors. One is we have a very strong commercial footprint in those countries now. We are actually the number one pharma company in the international region. And so we are leveraging this strong commercial footprint across all subregions.

Speaker 3

The second factor is we actually, a couple of years ago, invested more resources into a specific international region regulatory team. And that team has been fast tracking filing and approvals of new products in those countries who historically were falling behind priority geographies. And now we still launch after the U. S. And Europe or Japan in those countries, but not that much later.

Speaker 3

And we are still working on accelerating this. So those two factors are really the most important growth drivers. Next question I think is Matthias Zagblom at Handelsbanken. Matthias, over to you.

Speaker 14

Gersenbach. Matthias Zagblom, Handelsbanken. Two questions, please. So firstly, on Datodix, you initiated a couple of additional Phase III programs during the quarter with your partner. So what makes you so confident to continue to invest into these programs or ask perhaps differently with investor community still skeptical to day to day?

Speaker 14

What in particular is it you see that investors may miss? And then secondly, as one of few companies with both bispecific antibody as well as cell therapy capabilities in house, Can you talk about how you think about engaging these tools into autoimmune disease where there is emerging early data from both sets of technologies that looks promising? Thanks so much.

Speaker 3

Thanks, Matias. So first question, I think, would go to Susanne. And the second, Sharon, you'll take that one. Okay.

Speaker 6

Yes. So thanks for asking the question about DATO DXD. So yes, we have announced that we've we're starting TROPION Lung 10, which is a combination with rilgosplig, our PD-one TIGIT bispecific and DATO compared to pembro in locally advanced first line non small cell lung cancer. And again, that is a program where we're going to be looking at this activity in a biomarker selected group as well. But it also includes the ability to compare vilvigostimibe directly with pembro in that setting.

Speaker 6

So I think what underpins confidence there is both the combinability with IO that we have seen in different settings, the potential for the some added efficacy for the addition of the TIGIT mechanism of action as part of this bispecific within the PD L1 greater than 50% patient population as well. And we think that this can be a winning combination in that setting. The other important study that I draw your attention to is the Tropian Lung 14 study. This is a common nation of Dassault DXD and Tagrisso in the first line non squamous EGFR mutant non small cell lung cancer. And again, this builds on safety and efficacy data that we've seen from the ORCHARD platform study that we have in a post 3rd generation EGFR inhibitor patient population in the EGFR mutant and also the safety and combinability for that combination.

Speaker 6

So that's what gives us confidence. As you may have seen in the Tropion Lung 5 data that was published, there's actually really good activity for Datto DXD within the EGFR mutant population. And given the FLORA 2 data, which we've also seen, I think that that also builds confidence in the ability to combine Tagrisso with chemotherapy and directed agents. And so I think this has Silane. Lung cancer?

Speaker 3

Thank you, Suzanne. Joanne?

Speaker 7

Sure. So thank you very much for the question about cell therapy and bispecifics and autoimmune disease. Because I think it's a really interesting topic that has become a key focus for us. As we think about how we manage diseases of immune dysregulation, we are moving from managing symptoms to modifying disease by addressing the causality of disease. And the mechanisms that you mentioned, cell therapy and bispecific molecules are 2 excellent modalities that allow us to really address the causality of disease.

Speaker 7

So to that end, we have invested in internal capabilities, but also accelerated our ambition with recent acquisitions. As you saw, we very recently closed an acquisition of GreyCell, which brought to us some, I think, leading capabilities that allow us to really accelerate our ambitions in cell therapy for patients with autoimmune disease. And specifically, Greycell has a BiCAR T, which they have used to complete an investigator initiated trial trial in China for patients with systemic lupus erythematosus or SLE. And we look forward to sharing those data at an upcoming medical conference. But I think it's safe to say that the data that we have seen across the patients treated is at least as compelling as anything that we have seen in the published literature.

Speaker 7

Because it gives us lots of excitement and optimism about how we may be able to address SLE for patients moving forward. At the same time, we're also investing in our internal platforms for creating T cell engagers, which we think also could be a very powerful modality in the autoimmune space.

Speaker 3

Thank you, Sharon. Mark Purcell at Morgan Stanley. Mark, over to you.

Speaker 16

Yes. Thank you very much, Pascal. Two questions. The first one, the U. S.

Speaker 16

Oral oncology products, the product sales there were very strong in the quarter. Could you help us understand the impact of treatment initiation dynamics and potential changes in affordability? And then secondly, on the Fusion Pharmaceuticals platform, for SP12265, could you help us understand your plans for moving into the sort of pretaxane setting? Would you do a head to head trial there versus Plavicto potentially combined with PARP-one? Obviously, understanding that the post Plavicto opportunity itself has blockbuster potential anyway.

Speaker 16

Thank you very much.

Speaker 5

So, Mark, thanks. I'll take the first question, probably Susan on the second. I mean, I think the first important piece is that within the quarter on our oral oncolytics, particularly with Calquence and Tagrisso, we saw a strong market share performance. Calquence remaining, the leading BTKI and frontline CLL and strong continued demand growth for Tagrisso and adjuvant in frontline and encouraging early FLORA 2 launch. With that said, encouraging trends of lower abandonment and improved access due to affordability, though it really is too early to quantify.

Speaker 5

And of course, recall, Mark, that in 2024, there's no added liability associated with Part D, whereas it comes in in 25. But we'll continue to keep updated on how those dynamics on affordability evolve over the course of the year.

Speaker 3

And Marc, on your second question, the deal hasn't closed, and so we are not able to comment at this point in time. Sorry about this. And hopefully, we can give you an answer pretty soon. Richard Parks, Alexane. Richard, over to you.

Speaker 17

Hi. Thanks for taking my questions. Firstly, sometimes when speaking to investors, I get the perception that there's a feeling that AstraZeneca is maybe spreading itself too thinly with expansion into vaccines, cell therapy, radioligand. Just wondering how you respond to that, whether you see any risk of the organization losing focus and how you're thinking about some of those investments in new platforms. It feels to me like this more you're just thinking about that the day after tomorrow.

Speaker 17

So that would be very helpful. And then on ASPURA, could you just talk a little bit more about the opportunity you're seeing? Obviously, we've seen some very large drugs in that category in the past and just thinking about how your thinking has evolved on the opportunity since the launch. Thank you.

Speaker 3

Thanks, Richard. Let me try the first question and maybe, Rod, you could cover the second one. So the first question, I think first point is, I'm sure you've realized, we have a very, very strong team and people are very focused on oncology, biopharma, rare disease and managing their portfolios. 2nd point is we are now a 50 kind of a $50,000,000,000 company. So you really need a portfolio to continue growing.

Speaker 3

And I think this is one of our strengths. We're not depending on 2 or 3 products. We have a portfolio of products that are driving our growth. And we can actually highlight that better to you at the Investor Day very soon. 3rd point I would make is that actually this portfolio actually gives us the opportunity to combine.

Speaker 3

And again, that's what we want to highlight during the Investor Day. We're in a unique position to combine in oncology across ADCs, bispecific, potentially in bispecific IO, potentially in the long run, take an approach to solid tumors to address the tumor with a combination of ADCs and bispecific and follow this with TCEs or cell therapy. In the cardiovascular space, Sean has covered it, we can combine across the GLP-one and PCSK-nine or the other agents, DARPA, of course. So I think these are the things that actually help us. On the vaccine front, I think there's sometimes a misperception of what we're trying to do.

Speaker 3

We're not trying to build a vaccine business like vaccine companies have. We are actually targeting vaccines that will be synergistic, strategic to our oncology vaccine and antibodies, by the way, that are synergistic to oncology or respiratory disease, products that will protect patients from exacerbations of COPD or asthma, products that will protect patients from COVID or flu infections if they are, say, cancer patients, blood cancers in particular. So this is really what we are trying to do, always try to be implementing a sort of a strategic synergy across our portfolio and leverage our expertise and our strengths in various places. So I don't think we are too thin and then too thin spread. And the challenge and the opportunity in our industry is always to be able to think about today, but also the long term.

Speaker 3

It would be very easy, quite frankly, or easier to focus on the next 4, 5 years. But we also have to think about what is going to shape the medicine in 5 to 10 years. So that this company remains a growth organization, not only in the next few years, but in the long run. And so that's always the challenge is really to manage our near term, long term. But also, it's an opportunity.

Speaker 3

If we do that well and if we play our hand very well, we can be very differentiated as a company. So, Rod, over to you.

Operator

Yes, of course. And thank you so much for the question, Richard. So first of all, the S3 Prize is quite a unique product in the United States because it's the 1st rescue therapy for asthma patients above 18 years of age. It's a very substantial market, the short acting beta agonist market. Just to give you a little bit of context, roughly 35,000,000 inhalers are prescribed every year for the 18 plus population in the United States.

Operator

So the volumes are very, very substantial. And we truly believe that we have a product in place, which can change the treatment paradigm of as needed rescue medication in the U. S. Of course, it's still early days, but the fact that we already see a very substantial number of scripts every week plus that more and more physicians are prescribing it, I truly believe that over the next few years that this product will become a blockbuster molecule. And equally, we're also looking for other opportunities in other geographies in the world, especially in the Middle East.

Operator

We see good opportunities to launch the product there as well in the next few months. So all in all, very bullish regarding the forecast and the potential of this product moving forward.

Speaker 3

Thanks, Rod. Next question is from Christopher Ode at ZEB. Christopher, over to you.

Speaker 12

Can you hear me?

Speaker 3

Yes.

Speaker 12

Good. So yes, I guess, first question is a lot of the key sort of Part D products and I guess the U. S. In general had really strong performance. Can you quantify how big a headwind the typical U.

Speaker 12

S. Coverage resets amounted to and what factors beyond strong demand? Help explain why Q1 was so strong and roughly how much did they collectively contribute then to top line growth, noting that, for example, Farxiga was one of those factors with the authorized generic? And then my second question, which pipeline events for the rest of 2024 do you get most excited about? And which do you think the Street might be under appreciating?

Speaker 12

And what are we missing, if so? And if I could sneak in the last one, you said M and A will slow down earlier today, I've read, as you've got most of what you need. I know you don't have a KRAS though. Perhaps you could tell us what your thoughts are around KRAS and why that isn't in your portfolio?

Speaker 3

Thank you. Thanks, Christophe. So maybe, Oud, you could take the first one and I'll try to address the others.

Operator

Yes, yes, an excellent question. We've seen very strong growth in the United States for both Farxiga and Symbicort. It's driven by 2 different factors. First of all, we have launched an authorized generic of Farxiga in the United States for the option for patients to have a lower cost option as well. And so far, we are very pleased with that introduction of this new not new medicine, but this new offer to patients.

Operator

And of course, we will not know until, let's say, a few quarters more how the products will perform. But so far, the feedback has been extremely strong. Equally, I think it's important that looking at Farxiga in totality, that the growth across the world is extremely strong on the basis of the CKD and heart failure indications. And there's no reason to believe that that will slow down anytime soon. So that's good news.

Operator

Symbicort, we have lowered our list price, the so called WACC price in the United States, like other competitors have done as well. So we need to see how that will evolve in the next few quarters. So it's a little bit of a new dynamic in Part D, let's say, in quarter 1 for our products. But all in all, a very nice first few months, and we will monitor it very closely, of course, moving forward.

Speaker 3

Thanks, Rod. Let me try the other two questions quickly in interest of time. The pipeline and what is more exciting until 2,030, Christopher, I would again invite you to join us in Cambridge. We are offering free tickets, a visit to beautiful Cambridge, and I'm sure we'll find a way to give you a nice lunch too. On the M and A, I said it will slow down.

Speaker 3

It didn't mean it will be 0. What I meant to say earlier in term of slowing down is from a technology, from a platform viewpoint, I think we have acquired and built most of what we need for now and we need to execute on what we've got. But it doesn't mean, of course, BD will come down to 0. And in terms of the specific last question, I can't answer this one, but we have our own internal program, and we can discuss some of those things again in Cambridge. So I'll move to Eric Loberrigo at Stifel.

Speaker 3

Over to you, Eric.

Speaker 14

Thank you, Pascal. First question to come back on FOXIGA and Symbicort in the U. S. Maybe more specifically on FOXIGA, is there any way we can get any idea about the one off that could be into the Q1 numbers with inventory buildup for the authorized generic? And on Symbicort, in the context of the drug being genericized in the U.

Speaker 14

S, we're expecting sales to go down. It was up 28% in Q1. What could be the dynamic for U. S. Symbicort for the full year 2024?

Speaker 14

And then a more general question, we see more and more companies simplifying, streamlining the organization by combining the different divisions in one single like vaccine with pharma or Onco with the rest of pharma. And you're still operating with different entities like Onco, Biopharma, Alexion, VNI. Could you maybe summarize maybe your thinking about doing things differently, but the benefits of doing the way you do and benefits versus risk and complexity? Thank you.

Speaker 3

Yes. So let me start with this question and, Ode, you can cover Farxiga and Symbicort in the U. S. It's not steel. It's actually we moved to that structure not that long ago, a few years, of course, but in our industry, 2, 3 years is not a long 4 years is not a long time.

Speaker 3

I fully believe in the importance of being focused. On the one hand, people say you have too much. On the other hand, we say, well, put everything together. So I think the reason why we can succeed with our portfolio and leverage that portfolio is because indeed we are focused, we're focused on oncology, biopharm and rare disease. And anybody who's operated in oncology, I think would hopefully agree with me that oncology is very specific, rare disease is very specific.

Speaker 3

Environment they are in. And secondly, create a talent to understand the environment they are in. And secondly, create a culture and a community where people feel they work together to the same goal. In the case of cancer, the goal is eliminate cancer as a cause of death. And every community in the company has this total focus, that shared purpose.

Speaker 3

And that's what drives people. People come to work to make a difference and make a difference in the field they are in and the field they love typically. So I think this is really the reason why we can actually succeed and we'll intend to keep that structure as it is. Oud, over to you.

Operator

Yes. Thank you once again, Erik, for the two questions. First of all, once again, let me remind you about the U. S. Is a very important market for Farxiga, there's no doubt, but it only represents less than 25% of our global sales.

Operator

And we are very pleased to see that the brand is growing extremely fast, not only in the United States, but across all the other geographies. Specifically to your question, can you provide a split between the authorized generic and the brands? The short answer is we're not going to do But equally, of course, you can look at the script volume. If you analyze the script volume of Farxiga, it's the Farxiga brand as well as the authorized generic. Now whether the strong initial growth will continue moving forward, we need to see that.

Operator

We simply don't know. Equally for Symbicort, Symbicort, it's quite amazing that after 20 more than 20 years of initial launch that Symbicort is still analyzing more than $2,000,000,000 a year, very fast growth again in the emerging markets, but also equally this year so far in the United States. And that's heavily driven by the fact that we have an authorized generic available as well as we have also lowered our WACC, the so called list price in the United States. So it becomes more affordable for many patients. And once again, whether that will continue during the course of the year needs to be seen.

Operator

But so far, it's very pleasing to see that both brands are off of a very strong start in the United States as well as outside of the United States.

Speaker 3

Thanks, Roos. Maybe I would add that everybody talks about 1 offs. And to be honest, I'm not sure why there's such a focus on one offs. If you look at Farxiga in the U. S, Q4 sales were $450,000,000 Q1 sales are $470,000,000 And if you look at the trends over the last few quarters, we've had a very strong trend.

Speaker 3

And if you marry that to combine this with the prescription trend Oud was talking about, They certainly a little bit of stock up, but it is not really what drives the trend for Farxiga. It's a very strong trend, not only in the U. S, but across the world. So every country is behaving the same way. We have very strong uptake in kidney disease, heart disease, diabetes, etcetera.

Speaker 3

Next one is Steve Scala at Cowen. Over to you, Steve.

Speaker 18

Thank you so much. I have two questions. First, Db06 hit its primary completion in March. Is the data in house? And is that underpinning your confidence?

Speaker 18

And second, why is there what seems to be a long delay in presenting the oral GLP-one in oral PCSK-nine data. I can think of 4 possible reasons. 1, there's a lack of appropriate venues. 2, AstraZeneca is strategizing on next steps on how to approach the market and wants to figure this out first. 3, there's some issue with the molecules or data that you're working through, perhaps it is underwhelming.

Speaker 18

Or 4, we're just being too optimistic on how long this all takes. So any thoughts would be appreciated. Thank you.

Speaker 3

Thanks, Steve. So let me just address the last one quickly, and then we could talk about Db06. And you forgot one option, which is our policy. And our policy is to present data at medical congresses, and that's what we have decided to do. We stick to this.

Speaker 3

But maybe your second option is also part of it, for sure. We are, in the meantime, strategizing what we're going to do with our portfolio and how we develop this product. But really, the driving force is simply we debated it internally because you raised a good point, but we concluded we didn't want to do a to come up with an exception here. And so you have to wait for the next potential option as a medical Congress. We are, by the way, have said, and I think I can confirm, we're starting Phase 2 this year.

Speaker 3

So we are very much on track, and we will not be preparing Phase 2 if we were not confident with the overall GLP-one. Gb-six, Susanne, do you want to cover that?

Speaker 6

Yes, sure. So Destiny Bristo-six is obviously a setting earlier than Destiny Bristo-four. It includes the IHC 1 plus and 2 plus as well as a group of the ultra low group. And the confidence in Destiny Breasto 6 is really built from the Destiny Breasto 4 dataset, which we obviously presented some time ago. So we are looking forward to the data.

Speaker 6

We said it's first half of this year, so hopefully you don't have to wait too long for getting those data, and we're eager to share them with you. Again, just as a reminder, the primary endpoint is PFS in the HER2 low group, so that the IHC 1+ and 2+ and then there'll be descriptive analysis of the ultra low patient population as well. And as a reminder further, you know, the, even though these patients are below the 1 plus category, they still have a higher number of her 2 receptors on the cell surface than normal epithelium. So just to put numbers on that normal epithelium for HER2 is about 20,000 receptors per cell. At the 1 plus to 2 plus range is between 100,200,000.

Speaker 6

So in that ultra low group, you've got somewhere between 200,000 receptors per cell. So you can see that there's a probably a significant proportion of that group that will have a higher expression level of HER2 on the cell surface than normal epithelium would. And that's one of the reasons why we think there's a potential to go beyond the 1 plus group into that ultra low group growth benefit over the current standard of care chemotherapy.

Speaker 3

Thanks, Sudan. Next question is from Simon Baker of Redburn. Over to you, Simon.

Speaker 19

Thank you, Pascal, for taking my questions. 2, if I may, please. Firstly, going back to FarxSeq, I just wonder if you could talk us through the rationale for the timing of the authorized generic now. I may be missing something, but the compromise pattern goes in October 25. So some thoughts there would be helpful.

Speaker 19

Alongside also the FDA issuing a request pediatric studies in March 2019, that hasn't yet been reflected in the orange book. So I just wondered what the status of that was. And then secondly, on TROPION LUNG-ten, you've moved forward with one of the combinations, which is in the TROPOLAM-four study, obviously, high confidence. I just wondered where your confidence rests with the combination with vorasantimic and sevestimic?

Speaker 3

Thank you, Simon. So, Rod, in the past, you were complaining not questions to Well Pharma. You're not going to complain too many questions. No, no, no.

Operator

Could be less, but no, it's a great question, Simon. So why now? It's relatively straightforward. First of all, we have a huge opportunity still in CKD and heart failure. And it is clear from all the analytics we have done that a lower cost option for some of those patients are very important in order to capture even more volume.

Operator

The second one is also true that to some extent it also mitigates the impact of a potential MCAP, so the inflation penalty in the United States as well. So those two factors were important regarding the timing. Regarding the pediatric indication, it's not yet in the orange book, so that's a very good observation. But equally, we feel comfortable that the FDA will grant us the pediatric indication. And hence, our base assumption is still that the patent will stay in place still April 2026, which we have signaled multiple times.

Speaker 3

Thank you. Susanne, do you want to cover the second question?

Speaker 6

Yes. So the TROPION Lung 10 studies, as I mentioned before, is the combination with vilvigostimibe and datto. And it's in a patient population that's greater than 50%. As we said before, what we see in terms of the, evolution of the IO checkpoint inhibitor landscape is a segmentation. And our 2 bispecifics, we see the rilvigostimic PD-one TIGIT as being focused on the IO sensitive or highly expressing PD L1 part of the population and that's in line with what you see in terms of the patient population in tropion lung 10.

Speaker 6

And volvastimic, we're focusing that on the tumor types where CTLA-four sensitivity has been demonstrated and can add extra efficacy. Obviously, with volvastimab, it is designed to be better tolerated than the combination of CTLA-four and PD-one separately because it only binds CTLA-four in the presence of PD-one. And we have shown an improved safety profile, but it still does have more side effects than you get with a PD-one agent on its own or with relugustumig. So we will select that drug where it will make the biggest difference. And you'll see that as you see the evolution of the EVOLVE studies with volvestomeg.

Speaker 3

Thank you, Susan. Next question is from Andrew Berens at Leerink. Over to you, Andrew.

Speaker 20

Thanks, and congrats on the strong quarter. I had a big picture question on the AKT class, given the results of Chukap. Just wondering how you see it integrating in the evolving paradigms. It's obviously incredibly dynamic and specifically would like to know how you guys see the AKT class integrating with CDK2 agents, CDK4 selected drugs, the oral surge, degraders and also the ADCs that are starting to spread their wings into a number of these areas.

Speaker 3

Okay, Andrew. Thank you. And thank you for asking one question. Actually, Suzanne, over to you.

Speaker 6

Yeah. So thanks for the question. So AKT is obviously part of the PI3 kinase AKT pathway, which is the most commonly mutated or aberrant pathway in cancer. So we think this is a very important mechanism. And we are looking at combinations of capivasertib with Kamizestran oral cert, a drug that's already in multiple Phase 3 trials as well.

Speaker 6

So I think there's potential for it to be further expanded beyond the current set of trials that we've already got in the development. And I do think there are data that it can be a potential combination agent with a number of the other things that you raised. We do have a CDK2 inhibitor, a highly selective CDK2 inhibitor, which we profiled at the AACR meeting that was in San Diego earlier this month. We think that's a very exciting molecule that will address the resistance mechanisms to the CDK4six inhibitors. And so I do think that this class of agents can be combined with the emerging both new endocrine backbone agents and the newer versions of things that address the CDK4 mechanism and the resistance to CDK4, which typically is represented by sensitivity to CDK2 inhibition.

Speaker 5

Just maybe to also build on to Susan's answer, and I think what's important and great about this is we're talking about leadership in breast cancer and as part of that leadership in breast cancer, we're really looking to build and improve upon the 2 existing pillars in the treatment of metastatic disease and then adding a third. And the existing treatments and existing pillars are ET plus or minus CDK4six and then obviously chemotherapy. I think what's important about the AKT class is it gives an opportunity for patients to continue to stay on ET based therapies, which has a lot of benefits associated with it. We also know, though, that at some point, ET therapies are no longer effective and that it's a time to start to switch towards chemotherapy. And within that, that's where the ADCs now create a third new pillar that sits in between classical chemotherapy and ET based approaches.

Speaker 5

We hope that Db06 will provide even a further therapy option that sits within this. But you start to see the opportunity to begin to offer to physicians more options for how they can think about treating their patient as the disease progresses and we've got best in class therapies to go into each of those pillars and then gives us an opportunity to look at combinations down the road.

Speaker 3

Thanks, Dave. Actually, this discussion gives me a chance to go back to, I think, the question Richard was asking earlier about the pipeline. I mentioned combinations, but also this pipeline enables us to actually shape the treatment algorithm, as Dave was suggesting a minute ago, in breast cancer or lung cancer. And it also enables us to better partner with lung cancer oncologists or breast cancer oncologists and really truly be part of the way breast or lung cancer or other cancers are treated. And it's true for cardiologists, not only managing cardiovascular risk, but also if you look at amyloidosis, we have 2,220, which is an amyloid depleter, and we also have a plantarasen.

Speaker 3

So again, all of those things will give us a great chance to partner with key physicians, but also leverage our portfolio to shape treatment algorithms and look at combinations. Emilie, over to you.

Speaker 21

Hi, thanks for taking my questions. Just 2 on respiratory. You know, a lot of excitement about the tezepelumab COPD data to be presented at ATS. Given what we've seen so far, is it your expectation that this would be taken in late stage development in a broader eosinophil population, I. E.

Speaker 21

Over 150s and over 300s? And then on the back of that, you know, similar to the obesity question that was asked earlier, you have so many assets in late stage development in COPD. Maybe asking from our side, what should we be focusing on in terms of just all of the late stage COPD programs that you have? Thank you.

Speaker 7

Sure. Thanks so much for the question. So I'll start with your first one, which was about tezepelavab, and our Phase 2 course study. And then I will speak more broadly about this COPD portfolio. So you touched on TESI and our recent Phase 2 trial completion.

Speaker 7

And we look forward to presenting those data at ATS in the very near future. As I'm sure you know, TESI is a monoclonal antibody directed against TSLIP. It is the only biologic approved for severe asthma with no phenotype, and we see tremendous potential for this molecule in COPD. The course phase 2 study was specifically designed to look at a broader population of patients irrespective of inflammatory drivers, eosinophil levels, emphysema, chronic bronchitis, and smoking status, while other trials were more limited. And this included a pre specified subgroup analysis in populations with different eosinophilic levels, so including below 150, above 150, and above 300.

Speaker 7

We will present the data that we fully analyzed at the upcoming ATS meeting, but I will only venture to say that we are excited about the possibility of tesi in a broader population. It is worth noting that other molecules in this class are playing in the high eosinophilic levels at more than 300 per microliter. And that's only about 35% of the population that's eligible for biologics. But those above 150 eosinophils per microliter are about 65% of the biologics eligible population in COPD. So we think that's a really important differentiator for this molecule.

Speaker 7

Now you also mentioned, I think you also asked us about our plans to go forward together with our collaborators at Amgen. We are actively planning the next stage of development. You asked about our overall portfolio in COPD. And I think it's worth mentioning here that COPD is a very heterogeneous disease with multiple drivers. And to that end, we think that there are multiple mechanisms that may have substantial clinical benefit.

Speaker 7

So we are testing multiple mechanisms. And we are testing them in populations that allow us to differentiate them from each other. Tozirakumab, as we have previously described, is a differentiated IL-thirty three monoclonal antibody because it can bind and block both ST2 and RAGE EGFR signaling. We think that's really important in disease, because it not only blocks the inflammatory pathways, but it can also block mucus production and epithelial remodeling through RAGE EGFR. So we view that as a differentiated mechanism, which we think may also have very broad utility in the COPD population.

Speaker 7

So early days, we are reading into our Phase 2 data and thinking about our Phase 3 plans going forward. But I think that we have the potential to be really paradigm shifting for people living with COPD.

Speaker 22

Hi. Thanks, Pascal. Perhaps I could touch on capital allocation. So your high burden of the deal related payments does start to ease at the end of this year. So that improves your cash flow outlook.

Speaker 22

So will this lead to a change in the nature of deals which you can do? And perhaps you could remind us of your dividend policy given slightly unusual announcement of the 2024 dividend recently? Thank you.

Speaker 3

Thanks, Luisa. Arnaud, your favorite question? Yes.

Speaker 4

Thank you, Luisa. So our capital allocation priorities remain unchanged. As you've seen, we've been very active on the BD front, but we also now sort of need to create value actually from the acquisitions and the partnership transactions we've done. So we need to focus on execution of those transactions. We did announce a 7% dividend increase in line with our progressive dividend policy, but also recall that we did not increase dividends in 2022.

Speaker 4

And so the board takes a decision on when and how they can increase dividends based on our overall capital allocation priorities. But the capital allocation remains unchanged.

Speaker 3

Thank you, Arnaud. So thank you very much for all your great question. I think it is time for us to respect your time and close this call. Again, thank you so much for your great question and your interest in Strassonica, and have a good rest of the day.

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Earnings Conference Call
AstraZeneca Q1 2024
00:00 / 00:00