Q2 2022 AstraZeneca PLC Earnings Call

Slide two has our usual safe harvest statement.

Slide two has our usual safe Harbor statement.

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. Numbers used are in millions of US dollars, and for the first half unless otherwise stated.

We will be making comments on our performance using constant exchange rates or CER core financial numbers and other non-GAAP measures our non-GAAP to GAAP reconciliation contained within the results announcement numbers used are in millions of U S dollars and for the first half unless otherwise stated please advance to slide.

Please advance to slide three.

Three.

This slide shows our agenda for today's call, and in a moment I'll hand over to our CEO, Pascal Sorio, to begin.

This slide shows our agenda for today's call and in a moment I'll hand over to our CEO Pascal sorry go to begin.

Following our prepared remarks, we will open the line for questions.

Following our prepared remarks, we will open the line for questions. We ask that you limit yourself.

We ask that you limit the number of questions that you have, to give everyone a fair opportunity to participate in the Q&A during the allotted time.

Limit the number of questions that you have to give everyone a fair opportunity to participate in the Q&A during the allotted time.

As a reminder, for those on the phone, please join the queue for questions by pressing star 11.

As a reminder for those on the phone please join the queue.

For questions by pressing star one one with.

With that, please advance to slide four, and I'll hand over to Pascal.

Please advance to slide four and I'll hand over to Pascal. Thanks.

Thank you Andrew Hello, everyone and welcome to this call. So if we move to slide five please.

Thank you, Andy.

Hello everyone and welcome to this happier call.

So if we move to slide five, please.

We continue to deliver through the first half of 2022, both in terms of commercial performance as well as moving our pipeline forward. Total revenue increased 48% versus prior year, to $22.2 billion and core EPS increased by 44% to $3.61. Given the strength of our underlying business, as well as increased demand for our COVID-19 medicines, which delivered $2.5 billion of revenue in the first half, we have updated our revenue guidance for the year.

We continue to deliver for the first half of 2022, both in terms of commercial performance as well as moving our pipeline forward total revenue increased 48% versus prior year to $22 2 billion.

And core EPS increased by 44% to $3 <unk>.

61.

Given the strength of our underlying business as well as increased demand for our COVID-19, medicines, which delivered $2 5 billion of revenue in the first half we have updated our revenue guidance for the year. We now expect revenue growth for the $40 to increase at a low twenties percentage.

We now expect revenue growth for the full year, to increase at the low 20s percentage.

Guidance on EPS remained unchanged, and we continue to expect a mid to high 20 percentage increase as we continue to invest in our pipeline. We've also confirmed an interim dividend of 93 cents, reflecting the board's intention to increase the dividend to $2.90 for the full year of 2022.

<unk> on EPS remained unchanged and we continue to expect a mid to high 20 percentage increase as we continue to invest in our pipeline.

We have also confirmed an interim dividend of 93.

Correcting the board's intention to increase the dividend to $2.90 for the full year of 2022.

Looking across our business, we delivered revenue growth from all these areas, reflecting not only the breadth of our portfolio, but also the depth in each of our respective disease areas.

Looking across our business, we delivered revenue growth from all of these areas, reflecting not only the breadth of our portfolio, but also the depth in each of our respective disease areas.

In the first half of the year, we reported several important late stage data readouts, including Farsiga in heart failure, Ultomeris in NMO, and Infinzi in non-small cell lung cancer. And we received significant approvals, enabling commercial launches.

In the first half of the year.

We reported several important late stage data readouts, including for Sega and heart failure, <unk> Nemo and <unk> in non small cell lung cancer, and we have received significant approvals, enabling commercial launches.

Please move to slide six.

Move to slide six.

In order to maintain our ambition, for long-term industry leading growth, we will need to maximize our launches and continue to invest in our great pipeline and our research technologies.

In order to maintain our ambition for long term industry, leading growth, we will need to maximize our launches and continue to invest in our growth pipeline and our research technologies.

First, our pipeline successes have driven, an increased need to resource commercial launches. With competition increasing in many markets, investing smartly to optimize our launches has never been more important.

First our pipeline successes have been driven have driven increased need to resource commercial launches.

With competition, increasing in many markets investing smartly to optimize our launches has never been more important spend on market development for medicines like <unk> that is also important if we're able to unlock the full potential of this medicine.

Spend on market development for medicines like Avicheld, is also important if we are to unlock the full potential of this medicine.

Based on emerging data, we need to act fast and invest to win with high potential pipeline opportunities.

Based on emerging data, we need to act fast and invest to win with high potential pipeline of opportunities.

And we have several medicines as you see here, on the second column in this chart.

And we have several medicines as we see as you see here on the second.

Collyn in this chart, we have several medicines, where our recent data has pointed to the potential for merger clinical advances and sizeable commercial opportunities. So we've lost we've listed here as you can see on this job.

We have several medicines where recent data, has pointed to the potential for major clinical advances and sizable commercial opportunities.

So we've listed here, as you can see on this chart, the successes we've experienced in the last few months, but also in the middle, the priority assets that we are fully resources for maximum potential.

The successes we've experienced in the last few months, but also in the middle the priority assets that we are fully our resources for maximum potential.

Thirdly, there is a continued need to invest in early discovery research and new technologies, to accelerate the rate of pipeline growth.

Thirdly, there is a continued need to invest in early discovery research and new technologies to accelerate that.

Eight of pipeline growth and you can see here.

And you can see here a number of those technologies, and in particular in ADCs, we've made tremendous, progress in the last two years, and Susan will highlight a little bit more examples of this.

Number of those technologies in particular I know this is we've made tremendous progress in the last two years and Susan will highlight a little bit more examples of this.

In addition to our goal of reducing SG&A spend as percentage of sales over time, in R&D, we have set bold internal targets to drive efficiencies for the use of digital solutions. For example, we have invested in remote data collection for many of our global trials, as well as the use of real-world evidence and data science to optimize trial design to improve the success rate. This improvement will make our trials more efficient, more accessible for patients, and, reduce our indirect impact on the climate.

In addition to our goal of reducing SG&A spend as a percentage of sales over time in R&D. We are we have set board internal targets to drive efficiencies for the use of digital solutions. For example, we have invested in railroad data collection for many of our global trials as well as the use of real world evidence and data.

Science to optimize trial designed to improve the success rate. This improvement will make our trials more efficient more accessible for patients and reduce our indirect impact on the climate.

We've also worked to internalize clinical operations to drive further efficiencies.

We've also walk to internalize clinical operations to drive further efficiencies.

A rigorous approach to portfolio prioritization is also being applied, which is enabling the, directing of investment, being the most promising medicine, and the discontinuation of development for others, such as the three that are mentioned here.

A rigorous approach to portfolio prioritization is also being applied which is enabling the directing of investment being the most promising medicines and the discontinuation of development for others such as the three that are mentioned here.

These decisions are difficult, but given the breadth of our portfolio, are increasingly, important.

These decisions are difficult, but given the breadth of our portfolio are increasingly important. So as you can see here, we are not only investing but we're also driving productivity improvement very aggressively.

So, as you can see here, we are not only investing, but we're also driving productivity improvement, very aggressively.

Together, these investments will help us deliver our ambition for low double-digit CAGR through, 2025, and industry-leading growth thereafter.

Together these investments will help us help us deliver our ambition for low double digit CAGR through 2025 and industry leading growth thereafter, we want to remain a fast growing company beyond 2025, and we are confident we have in our hands what it takes to be a growing company until 'twenty.

We want to remain a fast-growing company beyond 2025, and we are confident we have in our, hands what it takes to be a growing company until 2030, and hopefully even beyond 2030. At the same time, we remain committed to increasing operating leverage, and so despite the need, to invest in new launches, our pipeline and technologies will remain focused on improving operating margin. We're confident that this combination of industry-leading growth and operating leverage will drive shareholder, value.

And hopefully even beyond 2030.

At the same time, we remain committed to increasing operating leverage and so despite the need to invest in new launches our pipeline and technology. We remain focused on improving operating margin. We're confident that this combination of industry, leading growth and operating leverage will drive shareholder value.

So, please move to slide seven.

So please move to slide seven.

We look forward to a productive back half of the year, and we have several phase three, readouts, including the Emerald One trial of Infinzi in local regional liver cancer, the first phase three readout for capivacertib in HR-positive HER2-negative breast cancer, and the Messina trial of Fasenra in EOE.

We look forward to a productive a back half of the year and we have several phase III readouts, including the <unk> one trial of <unk> in local regional liver cancer.

First phase III readout for captive has certainly been helped in HR positive <unk> negative breast cancer and the message in our trial of <unk> in Europe .

And in 2023, we expect more than 20 phase three readouts.

And in 2023, we expect more than 20 phase III Readouts. The next couple of years are going to be extremely rich in clinical readouts.

The next couple of years are going to be extremely rich in clinical readouts.

We are well-positioned to deliver industry-leading growth through 2025 and beyond, as I said, and I look forward to sharing more exciting news as our pipeline progresses.

We're well positioned to deliver industry, leading growth through 2025 and beyond as I said and I look forward to sharing more exciting news as we as our pipeline progresses.

Please advance to the next slide, and I will now hand over to Ahana to walk you through, our financials in the first half of the year.

Please advance to the next slide and I will now hand over to <unk> to walk you through our financials in the first half of the year.

Thank you, Pascal, and good afternoon, everyone.

Thank you Pascal and good afternoon, everyone.

As usual, I will start with our reported P&L.

As usual I'll start with our reported P&L.

Please turn to slide nine.

Please turn to slide nine.

As Pascal has already highlighted, total revenue grew by 48 percent in the first half, benefiting, from a full quarter of Alexion sales and higher revenues from COVID-19 medicine.

As Pascal has already highlighted total revenue grew by 48% in the first half benefiting from a full quarter of Alexia on sales and higher revenues from COVID-19 medicine.

Our collaboration revenue increased to $551 million in the half, partly driven by increased, Inheritoo sales. As a reminder, Daiichi Sankyo books Inheritoo product sales in most Western markets, while, we record our share of gross profits in those regions as collaboration revenue.

Our collaboration revenue increased to 550 by $51 million and half partly driven by increase in <unk> sales.

As a reminder, Daiichi sankyo books and healthy product sales in most western markets, while we record our share of gross profits in those regions as collaboration revenue.

We record our share of the R&D and sales and marketing costs in RP&L.

We record our share of the R&D and sales and marketing cost in our P&L.

We will however booked product sales in China upon launch.

We will, however, book product sales in China upon launch.

Our reported growth margin continues to be adversely impacted by the Alexion fair value, uplift, which we anticipate to continue for another six months or so until the inventory is sold.

Our reported gross margin continues to be adversely impacted by the Alexia on fair value uplift, which we anticipate to continue for another six months or so until the inventory is sold.

Please turn to slide 10.

Please turn to slide 10.

Turning to the core P&L, our core growth margin increased by six percentage points in the, first half to 81.1%, with the second quarter benefiting from the phasing of cost recognition associated with the fulfillment of Vexeveria contracts, as well as favorable currency movements.

Turning to the core P&L, our core gross margin increased by six percentage points in the first half to 81, 1% with the second quarter benefiting from the phasing of cost recognition associated with the fulfillment of the <unk> contract as well as favorable currency movements.

Yes.

While quarterly fluctuations of the gross margin May continue we still expect the ex COVID-19 group core gross margins this year to be relatively stable compared to pre COVID-19 levels.

While quarterly fluctuations of the growth margin may continue, we still expect the ex-COVID-19, group core growth margins this year to be relatively stable compared to pre-COVID levels.

Our core operating expenses increased by 33% in the first half, driven by the addition, of Alexion, which, given timing of the consolidation, had no contribution in the first half of 2021.

Our core operating expenses increased by 33% in the first half driven by the addition of <unk>, which given timing of deconsolidation had no contribution in the first half of 2021.

To echo Pascal's comments, the increase in cost also reflects continued investments in, R&D, where several positive readouts in the last several months have ungated additional trials.

To Echo Pascal's comment the increase in costs also reflect continued investment in R&D with several positive readouts in the last several months have updated additional trials.

We also recognized a one-off charge of $89 million in the second quarter relating to, a discontinued project.

We also recognized a one off charge of $89 million in the second quarter relating to a discontinued project.

The pace of approvals following our pipeline success necessitated investment in new launches, resulting in a 29% increase in SG&A costs in the first half. But again, compared to a 2021 number, which did not include Alexion, SG&A costs during, the period also reflect increased investment behind the launch of Evushel, where we're focused on driving end-market demand.

The pace of approvals following our pipeline's success.

Necessitated investment new launches, resulting in a 29% increase in SG&A costs in the first half.

But again compared to 2021 number which did not include Alexia.

SG&A cost during the period also reflect increased investment behind the launch of <unk>. We were focused on driving end market demand. We continue to work to expand capacity following the recent dosing update.

We continue to work to expand capacity following the recent dosing update.

Our core operating margin was 33.1% in the first half and 31.2% in the second quarter, benefiting from higher growth margins.

Our core operating margin was 33, 1% in the first half and 31, 2% in the second quarter benefiting from higher gross margins.

On the net income line, we benefited from a lower tax rate in the second quarter, which, was driven by favorable adjustments when we filed our 2021 tax return in major jurisdictions.

On the net income line, we benefited from a lower tax rate in the second quarter, which was driven by favorable adjustments. When we filed our 2021 tax return in major jurisdictions.

Variations in tax rates between the quarters are expected to continue but we still anticipate a core tax rate of 18% to 22% for the full year.

Growth in tax rate between the quarters are expected to continue, but we still anticipate, a core tax rate of 18 to 22% for the full year.

Second quarter core EPS of $1.72 in the second quarter, representing 89% growth.

Second quarter core EPS of $1.72 in the second quarter represents an 89% growth. We saw some FX headwinds following the strengthening of the U.S. dollar in the period, which impacted, our revenue by more than $500 million in Q2 alone versus on a CER basis. If rates remain at the level seen at the end of June, we anticipate a mid-single-digit, adverse FX impact on both total revenue and core EPS for the full year.

We saw some FX headwinds following the strengthening of the U S dollar in the period.

Which impacted our revenue by more than $500 million in Q2 alone versus on a CER basis.

If rate remains at the level seen at the end of June we anticipate a mid single digit adverse FX impact on both total revenue and core EPS for the full year.

Please turn to slide 11.

Please turn to slide 11.

Today, we are updating our full-year guidance. We now anticipate total revenue at constant exchange rates to grow by a low-to-mid 20s, percentage, which reflects the strength of the underlying business and an updated outlook for our COVID-19 medicine.

Today, we are updating our full year guidance. We now anticipate total revenue at constant exchange rates to grow by low to mid twenties percentage, which reflects the strength of the underlying business and an updated outlook for our COVID-19 medicine.

We expect COVID-19 revenues broadly flat to 2021 with, of course, a different mix of, Bextevria and Avicheld.

We expect COVID-19 revenues broadly flat to 2021 with of course, a different mix of <unk> and have yourself.

We're also updating our guidance for core operating expenses, which are now anticipated, to grow by a mid-to-high teens percentage.

We're also updating our guidance for core operating expenses, which are now anticipated to grow by mid to high teens percentage.

This, as Pascal touched upon in his introduction, is mainly driven by additional investment, in R&D as we continue to invest in long-term growth, including promising medicines such as data, DXT, new launches across the globe, as well as a broader investment in digital and AI capabilities, to name a few.

This <unk> touched upon in his introduction is mainly driven by additional investment in R&D as we continue to invest in long term growth, including promising medicine, such as data DSD, new launches across the globe as well as the broader investment in digital and AI capabilities to name a few.

Looking ahead, we expect our R&D expenses in the second half of the year to be broadly consistent with the first half as trials progress.

Looking ahead, we expect our R&D expenses in the second half of the year to be broadly, consistent with the first half as trials progress. We have had very limited divestment so far this year, and we now anticipate other operating, income in the second half to be at similar levels as in the first half of around $200 million.

We have had very limited divestments, so far this year and we now anticipate other operating income in the second half to be at similar levels as in the first half of around $200 million.

Our 2022 outlook for China and emerging markets remains unchanged.

Our 2022 outlook for China, and emerging markets remains unchanged.

Our core EPS guidance for the full year also remains unchanged with an anticipated growth, of mid-to-high 20s percentage.

Core EPS guidance for the full year also remains unchanged with an anticipated growth of mid to high <unk> percentage.

Beyond the specific guidance, like all other companies, we're also being impacted by the, current macro environment, and we have seen a number of countries reporting high inflation numbers recently, which may ultimately also impact our cost base. You saw that our distribution costs increased by about 32% in the half versus 2021, reflecting, not only higher freight rates and inflation, but also higher volumes, including Alexion.

Beyond the specific guidance like all other companies. We're also being impacted by the current macro environment and we have seen a number of countries reporting high inflation numbers.

Recently, which may ultimately also impact our cost base you.

You saw that our distribution costs increased by about 32% in the half versus 2021, reflecting not only higher freight rates and inflation, but also higher volumes, including the lexicon.

Unlike some other industries, we're limited in our ability to pass on cost increases to, our customers.

Like some other industries, we are limited in our ability to pass on cost increases to our customers.

Please turn to slide 12.

Please turn to slide 12.

We continue to see improvements in cash flow generation, and in the first half, our net, cash inflow from operating activities increased by $1.7 billion to $4.5 billion.

We continue to see improvements in cash flow generation and in the first half our net cash inflow from operating activities increased by $1 7 billion to $4 5 billion.

In the second quarter, we paid $775 million to Shugai following a legal settlement on, Altamiris, and in the first quarter, we paid the first of three payments, $920 million to the former shareholders of Asserta. The two remaining payments of similar amounts will be paid in 2023 and 2024.

In the second quarter, we paid $775 million to chugai following illegal settlement on <unk> and in the first quarter. We paid the first just prepayments $920 million to the former shareholders of circa.

The two remaining payments of similar amounts will be paid in 2023 and 2024.

As we've previously highlighted that we also anticipate cash flows relating to prior business development transactions, including Daiichi of just above $1 billion. This year.

As we have previously highlighted, we also anticipate cash flows relating to prior business, development transactions, including Daiichi, of just above $1 billion this year.

Our current net debt to EBITDA ratio is 3.5 times.

Our current net debt to EBITDA ratio is three five times, if adjusting for Alexia <unk> fair value inventory adjustment does not affect our cash flow. The ratio is two one times.

If adjusting for Alexian Fair Value Inventory Adjustment does not affect our cash flow, the ratio is 2.1 times.

Our capital allocation priorities remain unchanged, and we continue to invest in our business, in order to deliver long-term sustainable growth. Consistent with our announcement in February, with an increase in dividend to an annualized, $2.90 per share, the Board has approved an interim dividend for 2022 of $0.93 to be paid in September.

Our capital allocation priorities remain unchanged and we continue to invest in our business in order to deliver long term sustainable growth.

<unk> with our announcement in February with an increase in dividend to an annualized $2 90 per share. The board has approved an interim dividend for 2022 of 93.

To be paid in September .

With that, I will hand over to Dave to take you through our oncology performance.

With that I will hand over to David to take you through our oncology performance.

Thank you, Aradhana.

Slide 14, please.

Slide 14 please.

We're pleased to report that our oncology total revenue grew 22% year-over-year during the, first half, underpinned by 18% growth in product sales. We saw double-digit product sales growth for Tigriso, Infinzi, and Limparza versus the, prior year, and also sequentially in the quarter.

We're pleased to report that our oncology total revenue grew 22% year over year during the first half underpinned by 18% growth in product sales, we saw double digit product sales growth for <unk> versus the prior year and also sequentially in the quarter.

As well as very strong continuing momentum for both CalQuintz and Inhertu.

As well as very strong continuing momentum for both California and in her two across regions performance was nicely balanced with the U S. Europe emerging markets and established rest of world. Each also driving double digit year on year growth importantly, we are seeing positive signs of recovery in cancer diagnosis testing and treatment rates.

Across regions, performance was nicely balanced, with the U.S., Europe, emerging markets, and, established rest of world each also driving double-digit year-on-year growth.

Importantly, we're seeing positive signs of recovery in cancer diagnosis, testing, and, treatment rates, as COVID-19 case and hospitalization rates improved over the last six months in many countries. For example, in the U.S., advanced breast cancer and ovarian cancer diagnosis rates, have returned to pre-COVID baseline levels, and lung cancer has improved to 90% of baseline. Trends were optimistic, will continue.

As COVID-19 case in hospitalization rates improved over the last six months in many countries. For example in the U S advanced breast cancer and ovarian cancer diagnosis rates have returned to pre COVID-19 baseline levels in lung cancer has improved to 90% of baseline trends, we're optimistic we'll continue and China Lockdowns in key cities.

In China, lockdowns in key cities have had an adverse impact on our medicines in the, second quarter.

<unk> had an adverse impact on our medicines in the second quarter now I'm going to turn to greater detail on each of our key oncology medicines <unk> global revenues grew by 14% in the first half in the U S growth was 11% with Q2 growing at 17%, reflecting increased underlying demand and the normalization of inventory and gross to net.

Now, I'm going to turn to greater detail on each of our key oncology medicines.

Tigriso global revenues grew by 14% in the first half.

In the U.S., growth was 11%, with Q2 growing at 17%, reflecting increased underlying demand, and the normalization of inventory and gross-to-net impacts seen in Q1.

<unk> seen in Q1 in the adjuvant setting our efforts continue to build momentum Egfr testing is now standard of care with rates greater than 80% and importantly, adjuvant drug treatment rates of eclipse seven excuse me, 60% for the first time with that said, there's still much work to do in terms of market education and driving stayed shift.

In the adjuvant setting, our efforts continue to build momentum.

EGFR testing is now standard of care, with rates greater than 80%.

And importantly, adjuvant drug treatment rates have eclipsed 60% for the first time.

With that said, there's still much work to do in terms of market education and driving, a stage shift to early disease.

Early disease and emerging markets revenues grew 17% in the half driven by continued launch momentum, especially in Latam and significant volume growth in the first line demand in China as highlighted last quarter volume growth in China has fully compensated for the lower <unk> price on.

In emerging markets, revenues grew 17% in the half, driven by continued launch momentum, especially in LATAM, and significant volume growth in the first-line demand in China.

As highlighted last quarter, volume growth in China has fully compensated for the lower, NRDL price.

On a sequential basis, EM revenues were broadly flat due to the impact of COVID-19 lockdowns, in major cities in China.

On a sequential basis <unk> revenues were broadly flat due to the impact of COVID-19, Lockdowns in major cities in China.

Turning now to Infinzi, global revenues grew 16% in the half and 20% in the second quarter, benefiting from recovery in diagnosis and chemoradiation rates in many regions.

Turning now to Infinity Global revenues grew 16% in the half and 20% in the second quarter benefiting from recovery in diagnosis and chemo radiation rates in many regions U S performance was robust with sales growing 15% in the half and 22% in Q2 as we saw an encouraging rebound.

U.S. performance was robust, with sales growing 15% in the half and 22% in Q2, as we saw an, encouraging rebound in the Pacific setting and early, spontaneous, non-promoted use in biliary tract cancer, where the TOPAS1 data has been added as Category 1 treatment in the NCCN guidelines this month.

In the Pacific setting an early spontaneous non promoted use biliary tract cancer, where the topaz. One data has been added as a category one treatment and the CCN guidelines. This month in Europe , and <unk> growth was up an impressive 29% for the half on strong uptake in small cell lung cancer based on Caspian.

In Europe, Infinzi growth was up an impressive 29% for the half, on strong uptake in small, cell lung cancer based on Caspian, and increasing use in Stage 3 lung following COVID-19 recovery.

<unk> and increasing use in stage III lung following COVID-19 recovery across the globe. Our teams are busily preparing for anticipated launches of Topaz, one and Himalaya and liver cancer.

Across the globe, our teams are busily preparing for anticipated launches of TOPAS1 in Himalaya, and liver cancer.

For Lymparza, we continue to solidify the brand as the leader in the global PARP inhibitor, class. Product sales grew 18%, led by growth in adjuvant breast cancer following the U.S. approval, based on the Olympia Phase III trial, and also supported by continued growth in HRD-positive first-line ovarian cancer and second-line castration-resistant prostate cancer. Performance was seen across regions, with U.S. sales up 11%, Europe up 20%, and established, rest of world up 27% in the half. Finally, emerging markets grew 32% on expanded patient access in ovarian cancer in China, and other EM launches.

For <unk>, we continue to solidify the brand as the leader in the global PARP inhibitor class product sales grew 18% led by growth in adjuvant breast cancer. Following the U S approval based on the Olympia Phase III trial and also supported by continued growth in HRD positive first line ovarian cancer and second line castration.

Just in prostate cancer.

Performance was seen across regions with U S sales up 11% Europe up 20% and established rest of world up 27% in the half finally emerging markets grew 32% on expanded patient access in ovarian cancer in China and other E M launches.

Turning to hematology, CalQuintz continues to show excellent momentum, with worldwide, revenues up 87% versus the first half of 2021.

Turning to hematology calc once continues to show excellent momentum with worldwide revenues up 87% versus the first half of 2021 in the U S. <unk> has crossed 55% share of new be Teekay high class starts in first line CLO consolidating its position as the clear standard of care in Europe .

In the U.S., CalQuintz has crossed 55% share of new BTKI class starts in first-line CLL, maintaining its position as the clear standard of care.

In Europe, expansion continues, resulting in 26% sequential growth from Q1, as new patient, share continues to rise as we rapidly establish leadership in several major markets.

Expansion continues resulting in 26% sequential growth from Q1 as new patient share continues to rise as we rapidly established leadership in several major markets and finally for her to <unk>.

And finally, for INHERTU, total revenue was up 129% to $204 million. In the U.S., INHERTU has already achieved a leading new patient share of 35% in second-line, HER2-positive metastatic breast cancer, rapidly displacing the prior standard of care. This is just two months after approval and launch, based on the Destiny Breast 03 Phase, 3 trial.

Total revenue was up 129% to $204 million in the U S and her two has already achieved a leading new patient share of 35% in second line. Her two positive metastatic breast cancer rapidly displacing the prior standard of care. This is just two months after approval and launch.

On the destiny breast <unk> III phase III <unk>.

Trial, Europe , and emerging markets have contributed nicely to growth as well based on launches in the third line her two positive metastatic breast cancer.

Europe and emerging markets have contributed nicely to growth as well, based on launches, in the third-line HER2-positive metastatic breast cancer.

Following presentation in Q2 at ASCO and inclusion in the NCCN guidelines, we are preparing for, anticipated launches in HER2-low metastatic breast cancer, based on Destiny Breast 04.

Following presentation in Q2 at <unk> and inclusion in the <unk> guidelines, we are preparing for anticipated launches in her two low metastatic breast cancer based on destiny Bristow for given the timing of those events. We don't believe growth for the half reflects much utilization yet in this setting across the globe. We are once again in an intense period of loss.

Given the timing of those events, we don't believe growth for the half reflects much, utilization yet in this setting.

Across the globe, we are once again in an intense period of launch activity. We're just getting started with Olympia and Destiny Breast 03, and we hope soon that that, will be followed by Destiny Breast 04, Propel, Himalaya, Topaz 1, Poseidon, and Destiny Lung-01 in the months ahead.

Activity, we're just getting started with Olympia and destiny breast <unk> three and we hope soon that that will be followed by destiny Bristow for propel MLA Topaz, one Poseidon and destiny long ago. One in the months ahead as we look to the second half. We're also looking forward to seeing data readouts from Emerald.

As we look to the second half, we're also looking forward to seeing data readouts from, Emerald 1, Phase 3 trial of Infinsi and local regional liver cancer, and Capitello 291, the first Phase 3 readout for our AKT inhibitor, Capiva Assertive, and HER2-negative breast cancer.

One phase III trial of <unk> in local regional liver cancer and capital are 291, the first phase III readout for our <unk> inhibitor, <unk> and HR positive HR negative or her two negative breast cancer collectively this list many of which represent blockbuster opportunities will be key drivers of oncology.

Collectively, this list, many of which represent blockbuster opportunities, will be key drivers, of oncology growth next year and beyond.

Growth next year and beyond I'll now hand over to Susan who will cover the pipeline in greater detail.

I'll now hand over to Susan, who will cover the pipeline in greater detail.

Thank you, Dave.

Thank you Jay Please turn to slide 15.

Please turn to slide 15.

I was very happy to be back in Chicago in June, where we once again demonstrated our, scientific leadership in cancer research at this year's ASCO.

I was very happy to be back in Chicago in June where we once again demonstrated our scientific leadership in cancer research at this year's ESCO.

During a plenary presentation, we presented an HER2 data outlining unprecedented benefit, in HER2-low metastatic breast cancer patients.

During a plenty of Panama presentation, we presented in her two data outlining unprecedented benefit in her two low metastatic breast cancer patients.

This success unlocks further opportunity to utilize HER2-targeted therapies in HER2-low, patients in breast cancer and beyond.

This success unlocks further opportunity to utilize her to targeted therapies and her two locations in breast cancer and beyond.

Y strength o'r dyddiadau wedi'u cyfrifol gan adroddiad Ysbyty Cymru o Destiny Breast 04, sy'n cael cyfrifiad priorol.

The strength of the data was collaborated by the U S submission of Destiny Buster for receiving a priority review.

Hefyd, yn ASCO, rydyn ni'n cynhyrchu canlyniadau o'r cyfrifiad, gyda capivicertib mewn metastatic ER-positive breast cancer.

Also as scope, we presented results from the fraction trial with <unk> in metastatic ER positive breast cancer.

Trwy gysylltiad o ddynion nesaf, seicwensiwyd patientiaid alterio'r pathway PI3K-AKT-P10, ac wedi'u defnyddio analysiadau subgrwpiau biomarkers.

Using next generation sequencing pediatric <unk> pizza pathway ulcer patients, who identified and expanded biomarker subgroup analyses were performed.

Roedd y cyfrifiadau yn cael eu cymryd.

Roedd y cyfrifiadau yn y subgrwpiau yma yn gweld ddefnyddio 38.9 mlynedd o ddefnyddio cyfrifiad cyhoeddus, yn hytrach na 20 mlynedd yn yr arm monotherpiaeth fulvestrannol.

Patients in this subgroup saw an impressive $38 nine months overall survival benefit so, let's just 20 months in the <unk> monotherapy arm.

Mae PI3K-AKT-P10 yn y pathway mwyaf gyfrifiadol mewn canser brest, ac mae'n bwysig iawn, oherwydd gall y cyfrifiadau gyrraedd ymdrech i dderbyniadau endocrine sylweddol.

<unk> is the most frequently mutated pathway in breast cancer and it is very important as mutations can drive resistance to endocrine therapies.

Yn mynd ati i hematologi, gyda'r cyfrifiadau o TMB486, y cyfrifiadau CD19 a CD3, rydyn ni'n cynyddu ein ambysiwn i ddarparu datblygiadau newydd innofenol ar gyfer canserau blaenau.

Moving onto hematology with acquisition of <unk> six a CD 19, CD three directed T cell engagement, we're advancing our ambition to deliver innovative new treatments across blood cancers.

Trwy gynhyrchu cyfrifiadau immun newydd, gall y cyfrifiadau TCL yn gallu darparu cyfrifiadau ar gyfer canserau blaenau nad ydyn nhw'n ymwneud â therapiaeth immun.

By generating new immune responses T cell engages could potentially deliver benefit to cancer patients not currently responsive to immunotherapy.

Mae TMB486 yn ymwneud â'r cyfrifiadau clinigol phas 1 fel monotherpiaeth mewn lymphoma non-Hodgkin B-cell, sy'n ymwneud â gynllunio i lymphomaau eraill.

<unk> six is currently in phase one clinical trials as a monotherapy in relapsed or refractory b cell non hodgkin lymphoma with plans to expand into other lymphomas.

Yn mynd ymlaen, rydyn ni'n ymwneud â datblygu TMB486 fel monotherpiaeth neu'n cyfathrebu gyda therapiaethau gysylltiedig a chyfathrebu ar gyfer canserau blaenau, gan gynnwys lymphoma B-cell, a'r lymphoma falicola.

Moving forward, we plan to develop <unk> six as a monotherapy or in combination with other targeted and setting the path of a pause in b cell malignancies, including diffuse large b cell lymphoma, as well as Follicular lymphoma.

Rydyn ni'n edrych yn ystod 16.

Please turn to slide 16.

We look forward to the shares will come with in lung cancer.

In August presenting data addressing advanced and resistant disease with targeted medicines and novel combinations.

At present results from the Savannah trial, combining <unk> and ore passes.

So the trend toward improved response rates with increasing levels of resistance with an overall response rate of 32% in all comers and 49% in high met operation patients.

Rydyn ni'n edrych ar gyfer y cyngherddau cyhoeddus a llong ym mis Agos y flwyddyn hwn, a ddatganiadau ar gyfer ddiseisiadau gyhoeddus a gysylltiedig gyda ddysgwyr rhwng meddyliau cyhoeddus a chyfathrebu gyda'r rhain.

We look forward to data from trials, such as Florida, two in suffern, broadening and elongated and the level of clinical benefit because it can provide to patients.

Rydyn ni'n cynhyrchu canlyniadau o'r tri'r Safana, gan gynnwys Tregreso a'r Orpathys.

Y cyfathrebu a ddangosodd trend ar gyfer cyhoeddusau cyhoeddus, gyda lefelau o ddiddorol, gyda chyhoeddus cyhoeddus cyhoeddus o 32% yn y cyhoeddwyr a 49% yn y personau sydd ar gyfer y cyhoeddusau cyhoeddus.

We will present data from the Tropaean lung O two trial, Dr. <unk>, plus checkpoint inhibitor pember lithium up with or without platinum chemotherapy, demonstrating promising efficacy and tolerable safety in advanced non small cell lung cancer patients without actionable genomic alterations.

The response rate seen in the <unk> and checkpoint inhibitor.

It's much more impressive than what was seen with either monotherapy.

There was also in line with Begonia trials with <unk>, plus <unk> with a 74% response rate gives us confidence both some tolerability and efficacy standpoint open above what we've seen with Io plus chemo.

Rydyn ni'n edrych ar gyfer data o dri'r flwyrtu a'r Safona, a'r cyhoeddus cyhoeddus a'r ddysgwyr rhwng meddyliau cyhoeddus a chyfathrebu gyda'r rhain.

Looking forward to next year, we have an exceptionally high level of new slow upcoming for oncology.

Rydyn ni'n cyfathrebu data o'r tri'r flwyrtu tropion, DatoDxD plus Pembrolizumab, gyda neu heb chemotherapi platnum, a ddemonstrau cyhoeddus, effeithiol a chyhoeddus i ddatblygu rhwng pathion cancer llai a ddi-ddiogelwyr, heb ddewis newid genomeg gweithredu.

Mae'r cyfraniadau sy'n cael eu gweld yn y DatoDxD a'r arm cyhoeddus, yn fwy agos na'r hyn sy'n cael ei weld gyda phethau monotherapydd.

Charles to look out for in 2023 at the European lung no one results with <unk> in the first half as well as well as Aegean Esf's NPL 31, readouts to bring in FEMSA earlier in the treatment paradigm for non small cell lung cancer, increasing the chance of cure.

Mae'r canlyniadau ar y rhan gyda'r cyfrifiad Begonia ar gyfer DatoDxD a Pembrolizumab, lle mae'r cyfrifiad 74% yn rhoi hyder i ni, o leoliad tolerwyr ac effeithiol, ar ôl ac ar ôl yr hyn rydyn ni'n ei weld gyda'r chemotherapydd.

Rydyn ni'n edrych ar ôl i flwyddyn nesaf, mae gennym niferoedd arbennig iawn o fflwyddiad newydd sy'n dod i mewn i oncologi.

Y cyfle pwysig i ni edrych amdano yn 2023 yw'r canlyniadau tropi a'r llong 01 ar gyfer DatoDxD yn y rhan cyntaf, yn ogystal â'r cyfrifiadau Aegean, EFS a BR31 i ddod i mewn i Ffimsi yn gyntaf yn y paradigm ymdrechol ar gyfer canser llong non-smoltel, a chynyddu'r cyfle i'w gofalu.

Rydw i'n mynd ar ôl i Rŵd i gofio biopharmaceuticals.

I'm now going to hand over to Ruud to cover Biopharmaceuticals. Please advance to slide 17. Thank you Susan now turning to slide 18, looking at our biopharmaceutical business <unk> total revenues were up 19% on a pro forma basis to $4 $6 billion <unk> was up 3% to $3 billion in C&I.

Gadewch i chi fynd ymlaen i safle 17.

Diolch Susan.

Gadewch i mi fynd ymlaen i safle 18.

Yn edrych ar ein busnes biopharmaceuticals, roedd cyfrifiadau cyllideb cyllideb yn cynyddu'r 90% mewn sefydliad pro forma i $4.6 miliwn.

Roedd RNI yn cynyddu'r 3% i $3 miliwn, ac roedd V&I yn darparu cyllideb cyllideb cyllideb o $2.8 miliwn.

<unk> delivered total revenues of $2 8 billion.

Farsiga achieved an impressive 62% growth driven by strong demand in type 2 diabetes, heart failure, and chronic kidney disease. Farsiga is the fastest growing SBLT2 brand globally, and strong performance across all regions provides confidence in continued growth.

For Seagate achieved an impressive 62% growth driven by strong demand in type two diabetes, Australia and chronic kidney disease <unk>.

<unk> is the fastest growing <unk> brand globally and strong performance across all regions provides confidence in continued growth.

We reported headline results in the Deliver trial for Farsiga in heart failure with preserved, ejection fraction, which Mene will cover in more detail.

We reported headline results in the delivered travel for CECO and heart failure with preserved ejection fraction, which many will cover in more detail, but needless to say we are excited about the potential opportunity to expand use in this underserved population.

But needless to say, we are excited about the potential opportunity to expand use in this underserved population.

In respiratory and immunology strong growth from <unk>, a new launch medicines restaurants of mellow and aspire was partly offset by film of course continued decline in China. Following GBP inclusion last October .

In respiratory immunology, strong growth from Fasenra and new launch medicines, Rastery, Savinello, and Tespire, was partly offset by Pulmonicort's continued decline in China following VBP inclusion last October.

Fasenra continued its market leadership position in severe eosinophilic asthma across, major markets, delivering 18% growth in the half.

For similar continued its market leadership position.

As in the civic asthma across major markets, delivering 18% growth in the halls.

We are excited about the launch of <unk> in severe asthma in its first full quarter since launch despite achieved 13% new to brand market share and we're pleased to see over 60% of new to brand share coming from the non I O five Clos with minimal impact on for Sunrun.

We are excited about the launch of Tespire in severe asthma. In its first full quarter since launch, Tespire achieved 13% new-to-brand market share, and we are pleased to see over 60% of new-to-brand share coming from the non-IO5 class with minimal impact on Fasenra.

We continue to see demand growth for southern yellow is systemic lupus erythematosus and in the U S. New to brand prescriptions reached 24% of the biological clause in the second quarter.

We continue to see demand growth for Savinello in systemic lupus erythematosus, and in the U.S., new-to-brand prescriptions reached 24% of the biological class in the second quarter.

Within VNI, Vaxavia total revenues reached $1.6 billion in the half, fulfilling the majority of initial contracts.

Within C&I for exactly a total revenues reached $1 6 billion in the halls fulfilling the majority of initial contracts.

As Pascal mentioned, Vaxavia, our COVID-19 vaccine, is estimated to have saved over 6 million lives. This analysis is based on data from Imperial College and published in The Lancet.

As Pascal mentioned fixed Sophia our COVID-19 vaccine is estimated to have saved over 6 million lives. This analysis is based on data from Imperial College and purpose in the lenses.

Avichel, our long-acting antibody, delivered, $940 million, reflecting additional contracts signed globally.

As Michelle our long acting antibody delivered $940 million, reflecting additional contracts signed globally. Please.

Please turn to slide 19.

Please turn to slide 19.

In emerging markets, total revenue was $6.2 billion in the half. Emerging markets growth, rate, including the impact of Vaxavia, was 16%, and this was split between ex-China emerging market sales, which grew 46%, and China, where sales declined 5%. Excluding the impact of Vaxavia, ex-China emerging markets grew 48%.

In emerging markets total revenue was $6 2 billion in the hall.

Emerging markets growth rate, including the impact of <unk> or 60% and this was split between ex China emerging market sales, which grew 6% to 6% and China, where sales declined 5%.

Excluding the impact of VIX area ex China emerging markets grew 48%.

As mentioned previously, the delayed VBP7 tender process completed in July, and we expect implementation in quarter 4 of this year, with full impact on silicon ZOG in 2023.

As mentioned previously the delayed GBP seven tender process completely completed in July and we expect implementation in quarter four of this year with full impact in silicon absorbed in 2023.

We reiterate our guidance and still expect total revenue for emerging markets to grow by mid-single digits in 2022, with mid-single-digit decline in China.

We recently re.

Reiterate our guidance and still expect total revenue for emerging markets to grow by mid single digits in 2022 with mid single digit decline in China.

I will now hand over to Mene to cover the R&D advancements in the periods.

I'll hand over to <unk> to cover the R&D advancements in the periods.

Thanks, Ruud.

Thanks, Ruth please turn to slide 20.

In May we report the delivered trial showed that <unk> achieved a clinically meaningful reduction in cardiovascular death, or worsening heart failure in patients with preserved ejection fraction.

Please turn to slide 20.

In May, we reported that the liver trial showed that, Farsega achieved a clinically meaningful reduction in cardiovascular death or worsening heart failure in patients with preserved ejection fraction. Together with the successful DAPR-HF trial, the liver demonstrates Farsega's efficacy across the full spectrum of heart failure, regardless of ejection fraction, and we look forward to presenting the liver's full results at the ESE in Barcelona in August.

Together with the successful <unk> trial delivered demonstrates fussy because efficacy across the full spectrum of heart failure, regardless of ejection fraction and we look forward to presenting delivers full results the DSC in Barcelona in August .

Also in the quarter, together with our partner Ionis, we disclosed positive high-level results, from the Neuro-TTR-TRANSFORM trial in hereditary trans-thoracic mediated amyloid polyneuropathy, a debilitating disease that can lead to impaired motor function.

Also in the quarter together with our partner <unk>, we disclosed positive high level results from the neuro GTR transform trial in hereditary cancer origin mediated amyloid polyneuropathy that debilitating disease that can lead to impaired motor function.

<unk> delivered a clinically meaningful improvement in the patients modified neuropathy impairment score plus seven.

Implonson delivered a clinically meaningful improvement in the patient's modified neuropathy, impairment score plus 7.

In our VNI portfolio, new data published in the New England Journal of Medicine showed, that Evershield retains neutralizing activity against the Omicron variants, BA5, BA4, and, BA2, all of which are highly prevalent globally today.

In our <unk> portfolio, New data published in the New England Journal of Medicine showed that <unk> retains neutralizing activity against the omicron veterans VA five VA for <unk>, all of which are highly prevalent globally today.

And while Evershield remains highly effective at preventing COVID-19, we're cognizant the, virus will continue to evolve, and in the quarter, we licensed an early-stage portfolio of COVID-19 antibodies from RQ Biotechnologies.

And while <unk> remains highly effective at preventing COVID-19, we are cognizant of the virus will continue to evolve and in the quarter. We licensed in early stage portfolio of COVID-19 antibodies from our Q bond technologies.

Looking ahead to the next 18 months, we have more data to come from for Sega with the <unk> phase three trial for non diabetic patients with myocardial infarction and we're excited about forthcoming phase III readouts with the sentra and three eosinophilic driven diseases.

Looking ahead to the next 18 months, we have more data to come from Farsiga with the DAPR-MI, Phase III trial for non-diabetic patients with myocardial infarction, and we're excited about forthcoming Phase III readouts with Fersenra in three eosinophilic-driven diseases, EOE, HES, and eGPA.

Acs and the GPA.

Later this year, we also anticipate seeing further Phase II data from our Solano study, confirming that AZD8233 has the potential to be a best-in-class molecule in terms of its LDL-reducing activity in patients with dyslipidemia, and that's targeting PCSK9.

Later this year, we also anticipate seeing further phase II data from our Salerno study confirming that as at the <unk> three <unk>.

Has the potential to be a best in class molecule in terms of its LDL, reducing activity in patients with <unk>.

Dyslipidemia and that's targeting <unk> canine.

We have over 10 mid-stage clinical trial readouts for the next 12 to 18 months that will fuel, the next wave of significant investment decisions, including Farsiga combinations, our MPO inhibitor, and Tazeracumab, our anti-R33 monoclonal antibody.

We have over 10 mid stage clinical trial Readouts next 12 to 18 months that will fuel. The next wave of significant investment decisions, including phosphate or combinations are MTO inhibitor and <unk> 33 monoclonal antibody.

Please move to slide 21.

Please move to slide 21.

We were also delighted with the New England Journal of Medicine publication and proud, to have developed such a highly efficacious medicine with Nacevumab.

We were also delighted with the new England Journal of Medicine publication.

Proud to develop such a highly efficacious medicine.

Within seven months RSV as you know is a leading cause of lower respiratory tract infections, such as bronchiolitis pneumonia as well as hospitalization in infants and these data show for the first time the potential to significantly protect all influence through the first RSV season, with a single dose immunization and we look for.

RSV, as you know, is a leading cause of low-respiratory tract infections, such as bronchiolitis or, pneumonia, as well as hospitalization in infants.

And these data show for the first time the potential to significantly protect all infants, through their first RSV season with a single-dose immunization, and we look forward to working with health authorities to bring Nacevumab to infants as quickly as possible.

Forward to working with health authorities to bring the seven two infants as quickly as possible.

Please now turn to slide 22, and I will now hand over to Marc to cover rare diseases.

Please now turn to slide 22, and I will now hand over to Mark to cover rare diseases.

Thank you, Mene.

Thank you Manny please turn to slide 23.

I will now turn to slide 23.

In the first half, rare diseases contributed $3.5 billion in total revenues, representing, year-on-year pro-forma increase of 10%.

In the first half rare disease contributed $3 $5 billion in total revenues representing year on year pro forma increase of 10%.

In the second quarter, we recognized certain one-off pricing adjustments in the international, region. Excluding these one-offs, pro-forma growth in the first half was 8%.

In the second quarter.

Recognize certain one off pricing adjustments in the international region.

Excluding these one offs pro forma growth in the first half was 8% emerging market sales were $206 million in the first half impacted by order timing in certain tender markets.

The leading market sales were $206 million in the first half, impacted by all the timing, in certain tender markets.

In the second quarter, the C5 franchise delivered durable pro-forma growth of 9%.

In the second quarter, the <unk> franchise delivered durable pro forma growth of 9%.

The slowing growth of Soliris reflects successful conversion to Ultimiris.

The slowing growth of Soliris reflects successful conversion to <unk>.

New market expansion and strong launch uptake in generalized myasthenia gravis in the U.S, drove Ultimiris to 31% in the second quarter.

New markets expansion and strong launch uptake in Germany, <unk> mist and <unk> in the U S globe and tumors.

231% in the second quarter.

While it is still early in the myasthenia gravis launch, at quarter end, approximately, Beyond the C5 franchise, strength C grew 18% in the quarter, driven by strong underlying demand and initiation trends in the U.S. Lastly, COSELUGO demonstrated substantial growth in the quarter, benefiting from rare, disease, organizational realignments, resulting in increased demand and market expansion.

While it is still early in the midst in agribusiness loans at quarter end approximately one third.

Our realtor munis initiation with complement naive patients, which gives us confidence in the ability to expand our addressable population to approximately 30000 patients in the United States.

Beyond this <unk> or ultra munis initiation with complement nave patients, which gives us confidence in the ability to expand our addressable population to approximately 30000 patients in the United States.

Beyond those five franchise.

<unk> grew 18% in the quarter driven by strong underlying demand and initiation trends in the U S.

Lastly, <unk> Lugo demonstrated substantial growth in the quarter benefiting from rare disease organizational realignments.

Resulting in increased demand and market expansion.

Please turn to slide 24.

Please turn to slide 24.

During the period, we reported remarkable phase III data from the intermediaries jumped <unk> trial and novel Myeloid <unk> Optica.

During the period, we reported remarkable phase 3 data from the Ultimiris champion trial, in neuromyelitis optica. As shown on the Kaplan-Mannion curve, there were zero adjugated relapses.

As shown on the Kaplan Meier curve, there was zero as hugoton relapses on the slides that you can see this is this always on tall blue line.

On the slide that you can see, this is this horizontal blue line.

Zero adjugated relapses observed in patients receiving Ultimiris. And importantly, this effect continued out to 73.5 weeks.

<unk> observed in patients receiving <unk> and importantly, this effect continued out to 73 five weeks.

These exceptional data not only represent the opportunity to bring innovative new medicine, to NMO patients, but also offers another example of the consistently strong data generated by C5 franchise, Soliris and Ultimiris in neurological indications.

This exceptional data not only represent the opportunity to bring an innovative new medicine to and then with patients. But also offers another example of the consistently strong data generated by the <unk> franchise, Soliris and <unk> in neurological indications.

Looking ahead, we're excited to continue to deliver on a pipeline with anticipated, readout for Soliris in Guillain-Barre syndrome, which is now expected in the second half of this year, and the headline results of a first-generation novel oral factor D inhibitor, Danicopan, in PNH with EVH, expected in the first half of 2023.

Looking ahead, we're excited to continue to deliver on our pipeline, we don't distribute readout for Soliris in Guillain Barre syndrome, which is now expected in the second half of this year and the headline results of our first generation novel oral factor D inhibitor, the newco, Paul <unk> with <unk>.

Expected in the first half of 2023.

Lastly, before I turn the call back to Pascal for closing commentary, I would like to highlight, two important milestones for Alexion. This year, Alexion marks its 30th anniversary in rare disease and also the first anniversary, of the deal closure.

Lastly, before I turn the call back to Pascal for closing commentary I would like to highlight two important milestones for Alex.

This year, Alex Joe marks its <unk> anniversary.

In rare disease and also the first anniversary of the deal closure with immense gratitude I would like to thank all exon colleagues.

With immense gratitude, I would like to thank our Alexion colleagues for their continued, commitment to pushing the boundaries of science and accelerating innovation to develop life-changing therapies for those living with rare disease around the world.

For their continued commitment to pushing the boundaries of science and accelerating innovation.

Develop life changing therapies for those living with rare disease around the world with that please turn to slide 25, and I will end the call to Pascal.

With that, please turn to slide 25, and I will hand over the call to Pascal.

Thank you very much, Marc.

Thank you very much Mark please move to the next slide.

Please move to the next slide.

Together with the board, I'm pleased to announce Michel Desmarais will take over from Lef Johansson, as chair following the 2023 AGM. I've worked closely with Michel since he joined our board in 2019, and I look forward to our, continued partnership in his new role.

Together with the board I am pleased to announce Michelle <unk> will take over from less Johansson as Jeff following the 2023 AGM.

Worked closely with Michelle since he joined our board in 2019, and I look forward to our continued partnership and this New award.

I'd like to thank Lef for his commitment to AstraZeneca over the years and through the, transition period.

I'd like to thank Larry for his commitment to US has I think over the years and through the transition period.

I've had an amazing 10-year period working with Lef and we've gone through a lot together, and I would really like to thank him and the board for their continued support over the last 10 years that have taken us from where we are, where we were in 2013 to where we are today in a very, very different place. And it's been really a fantastic experience working with Lef. We've been a tremendous team.

I had an amazing 10 year period, the Washington was less and we have gone through a lot together and I would really like to thank him and the board for their continued support of it let US 10 years that have taken us from where we are where we were in 2032.

Where we are today in a very very different place.

And it's been really a fantastic experience working with Leslie has been a tremendous team.

And I know Lef, Michel, and I will be working together and forming an excellent team for, the many years to come.

And I know less.

Michelle and I will be.

Working together and forming.

<unk> for the many years to come.

Now I would like to close with the slide 27.

Now I would like to close with the slide 27.

We continue to execute on our strategic priorities, which well position AstraZeneca to deliver, long-term growth. Our robust lifecycle management continues to support our top-line growth.

We continued to execute on our strategic priorities.

Which will position us cause any cuts to deliver our long term growth our office a robust lifecycle management continues to support our topline growth.

And in the half, we delivered on key phase three lifecycle management trials, including, ultramarines in NMOSD and fast CIGAR in heart failure with preserved ejection fraction.

And in the half we delivered on key phase III lifecycle management trials, including <unk>, and <unk> and fast <unk> in heart failure with preserved ejection fraction.

We continue to invest in our pipeline in order to achieve our strategic growth ambition.

We continue to invest in our pipeline and our ability to achieve our strategy growth ambition and we remain open to strategic business development, such as our acquisition of Danielle to CD 19, CD three T cell engagement and mythology.

And we remain open to strategic business development, such as acquisition of 10A02, CD19, CD3, T-cell, engager in hematology.

Importantly, we have a long runway for most of our medicines in terms of loss of exclusivity, which would provide confidence in our sustainable growth.

Importantly, we.

We have a long runway for most of our medicines in term of loss of exclusivity, which would provide confidence in our sustainable growth.

Our company has shown, has grown stronger in 2022, both in terms of revenue and pipeline, development.

Our company has shown as growing stronger in 2022, both in terms of revenue and pipeline development.

And as you have seen and heard today, we are investing thoughtfully to continue to grow, our business as an industry leading right through 2025 and beyond.

And as you have seen and heard today, we are investing investing source for it to continue to grow our business at an industry, leading right through 2025 and beyond.

We want and we believe we can be a growth story for the many years to come.

Wrong, and we believe we can be a growth story for many years to come as you can see on this slide we have everything we need to grow and we continue building on what we have.

As you can see on this slide, we have everything we need to grow and we continue building on, what we have.

At the same time, we want to continue driving our focus on improving operating margin.

At the same time, we want to continue driving our focus on improving operating margin and as you probably remember we said our goal is to get to mid to high searches in the mid to long term, we're very committed to this we're making progress in that direction.

And as you probably remember, we said our goal is to get to mid to high 30s in the mid, to long term.

We're very committed to this, we're making progress in that direction.

And the success we're experiencing with our top line revenue allows us to stay focused, on this goal of improving margin, but at the same time, continue to invest strongly in our pipeline so that we can indeed deliver top line growth, strong growth for 2025.

And the success, we're experiencing with our top line revenue allows us to.

To stay focused on this goal.

<unk> margin, but at the same time continue to invest strongly in our pipeline. So that we can indeed deliver topline growth strong growth post 2025. Thank you all for joining we'll now take your question and we'll hand the call back to Andy.

Thank you all for joining.

We'll now take your question and we'll hand the call back to Andy.

If you return to slide 28, we will now go to the Q&A.

If you would turn to slide 28, we will now go to the Q&A, but that was on the phone. Please remember to press star one to ask a question.

For those on the phone, please remember to press star 11 to ask a question.

We will take written questions from the webcast.

We will take written questions from the webcast. Please limit the number of your questions that those others on the call. We'll have time to ask their questions in the allotted time.

Please limit the number of your questions so that those others on the call have time, to ask their questions in the allotted time.

Thank you in advance.

Thank you in advance now let's take the first question from the conference call.

Now let's take the first question from the conference call.

Thanks Andy.

Okay. Thanks, Amit so the first quarter is the first question stories from Richard Parkes at BNP Paribas Richard over to you.

So the first question is from Richard Parks at BNP Paribas.

Richard, over to you.

Yes.

Yeah, another chance later on this afternoon.

Yeah.

Okay.

Later on this afternoon.

On U S drug pricing reform is looking increasingly likely that we see and lachman to that.

And it's on US drug pricing reform.

It's, looking increasingly likely that we see an enactment of that in the over the summer period.

So I wondered if you could just help us maybe get some implications for your portfolio.

Over the summer period, so I wondered if you could just help us.

Maybe some indications for your portfolio.

And obviously, two aspects to that.

Two aspects to that Medicare part D restructuring could have.

Some positive and some negative implications for your portfolio. So can you help us understand how that might balance out and then in terms of direct negotiation.

Drugs in <unk>.

<unk> some point.

Come into that basket. So could you just help us.

Understand maybe the.

Probabilities and use those.

These drugs at least gets included in the first couple of rounds of that negotiation process. Thank you. Thanks Richard.

Maybe I could ask Dave to cover part of your question and all the <unk>.

<unk> also been of course and following this very closely you could.

To this over to you there alright, thanks Pascal.

Richard you have the two elements part D. In negotiation I guess, there's a third element as well which is inflation.

Penalties, which just to address right at the back we don't see that as having much impact if any we have been pretty responsible in below inflation rates on price increases historically I think that between now and when negotiations starts in 2026 based on the current writing.

The impact overall of part D reform is quite manageable as you point out there are going to be some impacts in oncology.

Medicare Part D restructuring could have some positive, and some negative implications for your portfolio.

So can you help us understand how that might balance out?

That are negative over the period that said thats offset by some opportunities that come through patient affordability for greater adherence and compliance across the portfolio and I think in particular in our biopharmaceutical.

And then in terms of direct negotiation, you've got a few drugs in, Tegrisa, Limpasa, Quaquenta at some point could come into that basket.

In terms of negotiation.

So could you just help us understand, maybe the probabilities any of those drugs at least gets included in the first couple of rounds of that negotiation process?

We do see negotiation as a bad precedent for innovation and we think that it's going to have an impact on.

Thank you.

The speed with which innovation, particularly in areas of small populations in high unmet needs.

Thanks, Richard.

How companies and sponsors are thinking through that in terms of Astrazeneca specific.

So maybe I could ask Dave to cover part of your question.

Impacts.

Do think that starting in 2027 and beyond as you point out that Tigris, So certainly becomes a possibility for being one of the medicines that could fall into that's.

The rules, specifically for how thats being contemplated are not yet clear there via the top 50 drugs.

There'll be some selection that's made.

By that period of time, but I think that we are looking at a 2027 and beyond.

Time period. So it is certainly kind of post medium term, where I think we start to see the impact coming from the negotiation portion Ruud do you want to talk about some of the Biopharma specific elements, yes. So so very quickly and you were mentioning it.

And Ruud, you've also been, of course, following this very closely.

You could add to this.

Greater adherence is a potential upsides for <unk>.

New products in the Biopharma business, we know that persistency rates in the U S are always.

Somewhat lower than for example in Europe .

Portability out of out of pocket cost are relatively high.

In the United States. So hopefully this part D redesign.

<unk> delivered an opportunity for patients to stay long haul therapy and of course that will benefit some of our products in the biopharma business units.

Okay. Thank you.

Over to you, Dave.

Thank you Ruth Thank you, Dave such and.

Such adjourn Bank of America to switching.

Great.

So just wondering if you just give some color on how you're thinking about cost.

Thanks, Pascal.

Do you think about cost lines.

Hi can you hear me, yes, Yes go ahead, sorry, sorry.

Thinking about cost lines within that.

So R&D spend Kenny flexing up any color, where you think that goes.

The existing 21% to 22% of sales and any additional color you can give on SG&A offset to that.

Just what do you think exists.

Getting to the top versus bottom end of that margin range.

Second question is for Susan on Amazon Com App.

Dated PFS data and then it will long abstract so looks like PFS trending towards 30 months, obviously impressive versus the 18 to 19 with <unk>, It's a very small and I just wonder if you could update us on your competitive thoughts.

On the ask a cool <unk> discontinuation.

50% being lower and therefore in a cautioning that potentially hitting just wondering whether that youll fault prices is shifting.

Richard, you have the two elements, Part D and negotiation.

Thanks.

Thanks, Sachin So you want to take the first one is I'm sure. Thanks session for your question.

I guess, there's a third element as well, which is inflation penalties, which just to address right at the bet, we don't see that as having much impact, if any.

We've been pretty responsible and below inflation rates on price increases historically.

On R&D as we noted and given the number of positive Readouts. We've had clearly that's gated a number of additional studies.

And so we continue to invest in R&D.

I think we've been fairly consistent around how much we want to invest in R&D on an ongoing basis.

The sort of low 20 range and we're sort of consistent with that.

As I also mentioned, we do expect the second half to be.

Somewhat consistent with the first half of this year and going forward, obviously, we'll give guidance when we do after 2023.

On SG&A, we continue to drive improving.

<unk> margins, you've seen that our margin trajectory continues to improve and also specifically note that that margin achievement is with a much lower contribution of other income that we expect this year.

So we're continuing to drive.

S G&A and we're continuing to drive efficiency and we remain committed to our operating margin ambition that we've communicated previously.

Susan.

Thanks for the question. So we have a multi pronged approach to combinations with cyclic. So firstly, we have the floor to Sidney wishes all combination with sequent surplus tablet platinum based chemotherapy.

I would point you to encouraging phase two data from the <unk> City, which was presented at <unk> looking at this combination with platinum based chemotherapy, plus pemetrexed, which showed an amount of 67 patients and 91% response rate and a two year landmark progression free survival of 70%, which compares.

Secondly, with the data in and out of 'twenty that was presented from the Christmas Dyson.

Florida is fully recruited and it reached out in the first half of 2023. In addition of course, you've got the combination as you mentioned with <unk>.

Which is ongoing in phase III and the <unk> study and again, we have data from the Savannah study, which supported that phase III start.

With encouraging response rates, particularly in the high met amplified.

Subgroup.

We've also got combinations that are ongoing with adcs, including Patricia map. They had three directed antibody drug conjugate as well as with <unk> and I will note that <unk> and patients with actionable genomic alterations post <unk>.

Treatment with those targeted therapies showed a 35% response rate. So we're encouraged about the general potential for combinability for two questions.

Okay.

I think in addition fashion to what Susan laid out maybe just two other components that I would like to share I mean, I think the first piece when we take a look at <unk> and I mentioned this in some of the opening remarks, we are seeing from flora that duration of therapy.

I think that between now and when negotiation starts in 2026, based on the current writing, that the impact overall of Part D reform is quite manageable.

Is increasing and frankly longer than what we saw in the study and I think in part this owes to a pretty favorable side effect profile of mono therapy to grow. So I think we see pretty low mid teens level of grade three treatment related adverse events and I think that we're already seeing quite a bit longer than that from both of the sets of.

As you point out, there are going to be some impacts in oncology that are negative over the period.

<unk> I think with that being said.

I would expect to see some.

Tom.

Utilization in certain patients of the combination of both Florida too and the J&J combo are.

Our positive and I still think that the majority of the utilization that youre going to see in the metastatic setting comes from the monotherapy at this stage and I would also add we continue to grow with key catalysts of Madora Lora is on the horizon, Susan and I have both talked about Florida, two when we've initiated the adar or two study, which I think.

Continues to build on our lifecycle plan into <unk>, so that I think remains vibrant.

Thanks, Dave.

That said, that's offset by some opportunities that come through patient affordability for greater adherence and compliance across the portfolio, and I think in particular in our biopharmaceuticals unit.

Thank you Mark Purcell at Morgan Stanley Masco over to you.

A question on <unk>.

<unk> and marketing could you help us understand the level of investment you're putting behind this asset on the tour.

But if you expect going forward you had mentioned the.

Biotechnology to deal with with I'll, just touch on this but just the theater level of ambition that would be great just to follow up to what Sachin just thoughts.

Do you expect to see combination.

Use of <unk>.

Well be useful to get your perspective.

And then last one just on <unk>.

And clearly a priority asset where youre looking to invest more can you help us understand the ambitions outside lung cancer at this point. Thank you.

In terms of negotiation, we do see negotiation as a bad precedent for innovation.

Thanks, Mark So maybe we can start <unk>.

There are two questions here one is the investment in the ambition for this product and two is durability.

Thanks for the question.

And we think that it's going to have an impact on the speed with which innovation, particularly in areas of small populations and high unmet needs, how companies and sponsors are thinking through that.

In terms of AstraZeneca specific impacts, I do think that starting in 2027 and beyond, as you point out, that Tigriso certainly becomes a possibility for being one of the medicines that could fall, into this.

First of all we are pleased to see strong demand increased demand for evolution because it is clear that this is really important to protect the immuno compromised patient in the COVID-19 due to the fact that they are not able to develop the immune response after vaccination. They do believe that that demand will.

The rules specifically for how that's being contemplated are not yet clear.

There will be the top 50 drugs and there will be some selection that's made by that period, of time.

We'll continue and therefore, it is really important to make sure that we do our best to educate and increase awareness for both patients and hcp's to be able to use edison to protect to protect.

Ah patient claims need therefore, our investment.

Increasing in the 130 stores that in the proper way to make sure. That's a driver that's the drive demand and fulfill and satisfy the needs that exist to protect immuno compromised patients.

But I think that we are looking at a 2027 and beyond time period.

So it's certainly kind of post-medium term where I think we start to see the impact coming from the negotiation portion.

And then.

Given our on the durability of I think it's in the letter.

The increase that updated guidance is clear that we do see.

Kris demand.

Sure.

It's always difficult to predict and Florida costs COVID-19, the medicine, given the evolving and dynamic environment, what I can say this is Phil.

Ruud, do you want to talk about some of the biopharmaceutical elements?

That we feel strong about the need for English and specifically given the fact that English is the only monoclonal antibody approved for prophylaxis and equally the only one that has retained neutralizing activity in that space versus all on all different variants and the reason for that.

Yeah, so very quickly, and you were mentioning it, Dave.

Great adherence is a potential upside, for a few products in the biopharma business.

We know that persistency rates in the US are always somewhat lower than, for example, in Europe due to affordability. Our out-of-pocket costs are relatively high in the United States.

So hopefully this Part D redesign will deliver an opportunity for patients to stay long on therapy.

And of course, that will benefit some of our products in the biopharma business unit.

Is that it.

Design is a combination of the two monoclonal antibodies that are different but complementary activity against Navient and therefore, it was designed to evade the resistance in the future future.

Yes, So let me say positive and optimistic that it will retain its activity versus new led intesa.

Perfect.

Thank you.

However, just to add if you look at the Covid today, you could you could resonate really make the argument that term.

Thank you, Ruud.

The most important thing to do today is not necessarily to boost our people are healthy.

Thank you, Dave.

Sachin.

Sachin Jain, Bank of America.

Over to you, Sachin.

Actually to protect those who are immunocompromised and vulnerable. So those are the people who have come to people who have been transplanted people. When we have a JV or some other immune conditions because this people need to be protected vaccines don't work at all or not very well too is there represents 30% to 40% of patients who are hospitalized with COVID-19 and through.

Sachin.

Why don't we just get some color on how you think about cost?

How you think about cost lines?

Hi, can you hear me?

Yes, yes.

Go ahead.

Sorry.

How you're thinking about cost lines within that.

Sorry.

So R&D spend clearly flexing up any color where you think that goes versus the existing 21 to 22% of sales.

Many additional color you can give on SG&A offset for that.

And, you know, just what flex do you think exists in you getting to the top versus bottom end of that margin range?

Second question is for Susan on amivantamab.

Updated PFS data in the world lung abstracts.

It's a very small N. Just wondering if you could update us on your competitive thoughts on Degriso there.

Looks like PFS trending towards 30 months.

Obviously, impressive versus the 18 to 19 with Degriso accepting.

There is because the immuno compromised that tend to keep the virus in their body long and they are source of mutations and variance. So for all those reasons. It's important to protect these people and this should be number one pricing. The issue is we need to make sure physicians and patients are well aware of the product if we want to.

Make it sustainable.

And as a result.

<unk>. We are doing now is really important so we can make sure patient and physician side, you're catered and then they continue using it and beyond that the only question is.

As Carl said, we had a valiant emerged that become resistant so far hasn't been the case because the product is really very cleverly develop with two antibodies, but beyond beyond this we still.

Thank Manny mentioned it we are working on the next generation just in case.

<unk> would become resistant to <unk>. So we've got good I hope its sustainable reliable but of course, we don't know.

It's hard to predict the future with Covid as we all know the other question was combination again and that's what the <unk> do you want to cover that.

I think on the ASCO call, you'd noted IV discontinuation, C-MET 10-15% being low and therefore, you know, caution on that potentially hitting.

Yes.

As I mentioned at the <unk> events, we're planning.

Alright.

Just wondering whether your thought process is shifting at all there.

New phase III trials, which youll starts over the next 12 to 18 months. So by the end of 2023, and so obviously investing in in lung cancer and in breast cancer recently have the star of the Tropaeum breast study.

Thank you.

Thanks, Sachin.

So Arnaud, you want to take the first one and Susan the second?

Sure.

Study.

In local currency and our fellow metastatic triple negative breast cancer, and we have ongoing the pan tumor study, which is looking at the potential for this medicine across a range of other tumor types and I would remind you that chip to expression is actually highly expressed across a range of different tumor types. So do you think there is potential for this molecule and beyond breast and lung.

Thanks, Sachin for your question.

Cancer.

Okay.

Dave anything you want to add on data I think the data has the opportunity to be one of the most significant medicines within the portfolio and I think that the trophy on.

On R&D, as we noted, and given the number of positive readouts we've had, clearly that's ungated a number of additional studies.

101 data is obviously going to be the first proof case of that but I think that if we've got the ability to be able to.

Just replace.

Systemic chemotherapy in late line lung cancer alone that the opportunity is quite significant and then as we think about our biomarker might open it up to other places I think the future's Bright I think also Marc you asked a question about expectations around <unk> am event Nab.

Utilization I mean, obviously that utilization would be.

Spontaneous off label and I think probably could only occur in the U S and so just based on that while that may be something that I could envision taking place I don't think that it would affect demand in a material way.

In terms of what I'd be expecting for it to grow so.

Thank you very much maybe just Joe just to add to what was said and link it back to our investment in R&D.

And so we continue to invest in R&D.

I think we've been fairly consistent around how much we want to invest in R&D on an ongoing basis in the sort of low 20 range. And, you know, we're sort of consistent with that.

You heard Dave say that towards the Z has the potential to be.

As I also mentioned, we do expect the second half to be, you know, somewhat consistent with the first half for this year.

Very very large product and.

We have all seen the handheld to our results in home health. We can also be a very very large product.

The thing is we.

To achieve full potential we have to develop those agents across a whole range of indications.

And beyond those two products, we have a whole range of products in oncology, we have a protest and in cardiovascular medicines will have to the <unk>, we have a number of other products trading and rare diseases.

So when you consider all of this.

You really have to think you know.

Unless something really very unexpected happens, we should be a growth company, but we need to resource this product and make them big big product like the deserve to be and get to their full potential.

And going forward, obviously, we'll give guidance when we do for 2023.

On SG&A, we continue to drive improving operating margins. You've seen that our margin trajectory continues to improve and also specifically note that that margin achievement is with a much lower contribution of other income that we expect this year.

On the Oklahoma City and over to you.

Yeah.

Firstly on the shelf could you update us on the anticipated timing for the FDA approval and also some indication I'm sure you've been busy trying to build capacity what do you think capacity could land by the end of next year I'm just trying to work out how quickly you can leverage the enormous unmet medical need.

As well as your hematology oncology and autoimmune field forces, which will feed into the at risk patient population and use the proceeds to sort of bridge. The opex demands of the rest of your portfolio. So if you could talk to the limitations and how quickly you can overcome them and how much demand do you think you can grow.

Assuming the efficacy remains intact. So thats first question.

The second question is on China.

President <unk> warns president Biden that the U S is playing with fire with <unk> visit.

Obviously, a lot of geopolitical risk globally.

You have the largest Chinese business among the majors and you've worked hard to build that securing relationships local manufacturing, but I'm. Just wondering has the board considered other measures such as a partial IPO of the Chinese business with the Chinese listing akin to try and minimize the risk in case.

There's some escalation here and then finally, perhaps you could update us how interactions between utilized MX Lloyd's adults in relation to the pop one asset that you have an MX beliefs. They have some ownership will rights to that product. Thank you.

So we're continuing to drive SG&A and we're continuing to drive efficiency and we remain committed to our operating margin ambition that we've communicated previously.

Let me just take a couple of things quickly first of all I'm very happy that.

And there was not more successful than I was before limits the new guys to one question.

And those are three great questions. Although in the second comment I would make is we don't communicate with our friends at merck's or lawyers, we talked to them and of course, the lawyers getting involved at some point, but I just wanted to say we've had a tremendously positive collaboration with the team at Merck and maybe let me cover this pop one question quickly.

<unk>.

Suddenly you have had such a great collaboration.

Very much inclined.

Two to collaborate with Merck on the pop one the question is.

Under what conditions, and what timing and how do we do it but.

I cant say, we will do it but it's on a very strong consideration for us to do it and continue the fantastic collaboration and David do you have anything you want to add a little bit later, if you want to know.

So maybe let's start with <unk>.

Susan?

Sure, thanks for the question.

Two questions for you the forward into capacity.

So we have a multi-pronged approach to combinations with Sigriso. Firstly, we have the FLORA2 study, which is our combination with Sigriso plus doublet platinum-based chemotherapy.

I would point you to encouraging phase two data from the OPAL study, which was presented at ASCO, looking at this combination with platinum-based chemotherapy plus Pemetrexid, which showed in an N of 67 patients, a 91% response rate, a two-year landmark progression-free survival of 70%, which compares very favorably with the data in an N of 20 that was presented from the chrysalis data.

We are progressing with the many regulatory bodies around the world. The FDA included as you probably know the received a put a lot of fun prophylaxis already in many.

FLORA2 is fully recruited and it reads out in the first half of 2023.

Many countries, including Europe , the UK, Canada, Australia, and many others and we have the emergency approval and U S. NGL that can close with FDA for that for the fact that for the final approval of the prophylaxis equally.

In addition, of course, we've got the combination, as you mentioned, with Savalitinib, which is ongoing in phase three in the Saffron study.

Notably no debt.

<unk> recently analysis, the phase III trial with.

Treatment of the hospital patients and they do progress they does submissions of data.

And again, we have data from the Savannah study, which supported that phase three start with encouraging response rates, particularly in the high met amplified subgroup.

We've also got combinations that are ongoing with ADCs, including Petritumab, the HER3-directed antibody drug conjugate, as well as with DATO-DXD.

And I'll note that DATO-DXD in patients with actionable genomic alterations post-treatment with those targeted therapies showed a 35% response rate.

For the treatment indication.

So we're encouraged about the general potential for combinability for Sigriso.

I think in addition, Sachin, to what Susan laid out, maybe just two other components, that I'd like to share.

We do expect our approval in Europe in the second half of this year as well as progressing in the U S, Japan and China, the dialogue with our submissions as previously commented.

I mean, I think the first piece, when we take a look at TIGRISO, and I mentioned this in, some of the opening remarks, we are seeing from FLORA that duration of therapy is increasing, and frankly, longer than what we saw in the study.

And I think in part, this owes to a pretty favorable side effect profile of monotherapy, to TIGRISO.

We see pretty low mid-teens level of grade three treatment-related adverse events, and, I think that we're already seeing quite a bit longer than that from both of the sets of combinations.

As you as your family notice that is.

An important unmet need in this space and then Florida, we are doing our best to increase the capacity and make sure the able to supply as many patients as the pan.

Built from the previous in our discussions.

Discussions and.

<unk> made the continuing to increase the supply and we are confident that we will be able to supply all the contracts that you currently have and Glenn I'm going forward.

We are continuously doing in increasing the supply in the capacity as much as they can.

And on the first of all deployment or you've raised an important question and we have field forces across mythology.

Immunology et cetera. So we can deploy the sales force, but I think your question about approval, which could you just call. It out as an important one we need to get approval for that overall, not an EUA to be able to fully promote in this fundamental so we established a product in the us with China and we just.

I think with that being said, I would expect to see some utilization in certain patients, of the combination if both FLORA2 and the J&J combo are positive.

And I still think that the majority of the utilization that you're going to see in the, metastatic setting comes from the monotherapy at this stage.

And I'd also add, we continue to grow with key catalysts of ADORA.

LORA is on the horizon.

Thanks, Dave.

Susan and I have both talked about FLORA2, and we've initiated the ADORA2 study, which, I think continues to build on a lifecycle plan in TIGRISO that I think remains vibrant.

Thank you.

Mark Purcell at Morgan Stanley.

Quickly on the handover to allow them to comment more on the.

On the the situation on the ground in China.

Mark, over to you.

A question on Evershield and marketing.

Essentially we don't comment on.

What consideration we would do but we are always looking at.

Various scenarios for the different parts of the business phone southern in China. We are looking at what is the best way to continue operating in China.

Could you help us understand the level of investment you're putting behind this asset, and the durability you expect going forward?

The.

At the airports, we have always taken in China has been we are in China for China, and then more no last few years has been we've been in China for the World. What that means is we're in China to bring our medicines to the Chinese patients, but we're also in China too.

To help the world, we export from China, and we are now.

Many have mentioned the AK biotechnology deal with early-stage antibodies, so just the level, of ambition there would be great.

Connecting to Chinese innovation and looking to partner with.

Just to follow up to what Sachin just asked, do you expect to see combination use of TIGRISO, with amfantanab?

We've set up an investment fund that is investing in.

Both the companies in China, and we're looking at how can we tap into Chinese innovation to benefit patients around the world. So I'll push has really always been to be in China.

Do you expect to see combination use of TIGRISO with amfantanab as well?

It would be useful to get your perspective there.

And then the last one, just on data DxD.

You're clearly a priority asset where you're looking to invest more.

Could you help us understand the ambitions outside lung cancer at this point?

Thank you.

China for the World and the way we operate.

Thanks, Mark.

So maybe we can start with Evershield.

As always within that.

Framework, but beyond this it's hard to comment on what consideration of what options. We are actually looking at Leon do you want to comment a little bit on the situation on the ground in China.

Ishkha, there are two questions here.

One is the investment and the ambition for this product, and two is durability.

Thanks for the question.

And first of all, we are pleased to see a strong demand, increased demand for Evershield, because it is clear that it is really important to protect the immunocompromised patient in the COVID-19 due to the fact that they are not able to develop their immune response after vaccination.

Yes, I think.

The China government.

After COVID-19.

Situation.

Zero carbon policies to continue so maintaining.

Avoiding disruption, our logistics and supply chain and also protecting foreign company investment are the two most important priority for the Chinese government. So our strategy in China is very clear is the speed up our global pipeline into China, because our global Capex and kind of a lag behind so we are getting.

<unk> two <unk> go for approval next year and the PTK I'll highlight a very important product.

We also launched our color next year to indication and likely square footage.

We do believe that that demand will continue, and therefore it is really important to make, sure that we do our best to educate and increase the awareness for both patients and HCPs to be able to use Evershield to protect patients who are in need. Therefore, our investments are increasing, and we want to resource that in the proper, way to make sure that we drive demand and fulfill and satisfy the needs that exist to protect immunocompromised patients.

<unk>, we are also submitting.

This year and also hopefully we can get approval late this year, so launching zika deal in next year and the launching.

Most important rare disease products and the many new indications so tiny tiny screen in Italy for 275. The next three years will be critical for our.

New innovative pipelines were succeeding China, but of course at the same time, you can clearly put me Colgate a hit and.

Our large product the silicon and crest cooperating to getting to GBP, one by one but we are still able to maintain.

Multiple channel promotion, who keep loyal user as much as possible. So I think at the same time, we are slowing down decline on the BP portfolio.

And at the same time, pushing new indications lifecycle indications.

A large products like <unk> and <unk>, So and also launching new pipeline on top of all these growth. So I think our strategy to maintain a cost data on.

On top of our global innovation, we also established a fund.

TICC and tap into local innovation hopefully we can work closely I think with fibre Jean to Roxane, China walk with Hutchison to see matching China. So thats just the beginning I think we will have a few.

More new products in China for China, and in China for growth.

Thanks, Lauren. So next question is that I am Carlson <unk> of them over to you.

Durability.

First off the back of the <unk> Phase <unk> study and see good evening pushed into H one next year.

And then given on the durability, I think it's in our increased or updated guidance.

Just your current level of confidence or thinking on the prospects of getting placebo combinations approved of coming off patent.

It's clear that we do see increased demand this year.

It's always difficult to predict and forecast COVID-19 medicine given the evolving and, dynamic environment. But I can say that we feel strong about the durable need for Evershield, specifically, given the fact that Evershield is the only monoclonal antibody approved for prophylaxis and equally the only one that has retained neutralizing activity in that space versus all different omicron variants. And the reason for that is that Evershield was designed as a combination of the two monoclonal, antibodies with a different but complementary activity against the omicron variant.

And then secondly.

Inflationary impact on.

And I guess particular personnel cost.

How much if any of that impact have you seen already and how should we be thinking about the timing of that impact in <unk>.

Either the second half or next year. Thank you.

Many of you want to take the first one and the second one about inflation.

And therefore, it was designed to evade the resistance in the future variant.

So we stay positive and optimistic that it will retain its activity versus new variants.

So the.

So first of all just to remind you.

The loss of exclusivity of phosphate grison, a point in time, it's a range across multiple markets and our revenues are split pretty well across all the regions. So we have quite a broad timeframe in which to.

Thanks, Iskra.

Maybe just to add, if you look at COVID today, you could reasonably make the argument that, You know, the most important thing to do today is not necessarily to boost people who are healthy, it's actually to protect those who are immunocompromised and vulnerable. So those are the people who have cancer, people who have been transplanted, people who may have HIV or some other immune conditions, because these people need to be protected.

Vaccines don't work at all, or not very well.

Two is they represent 30 to 40% of patients who are hospitalized with COVID.

And three is, because they're immunocompromised, they tend to keep the virus in their body longer, and they are a source of mutations and variants.

So for all those reasons, it's important to protect these people, and it should be number one priority.

The issue is, we need to make sure physicians and patients are well aware of the product if we want to make it sustainable.

To get the combinations launched but irrespective of that the two combinations that we have moving forward is the <unk> modulator on the indicated an antagonist.

Self sufficient business case in their own right.

And as a result, the investment we're doing now is really important.

And as we've said we are expecting to get data for both of those.

By the first half of next year now in terms of the mechanisms. These are both well precedented mechanisms so as long as the molecules behave themselves.

So we can make sure patients and physicians are educated, and then they continue using it.

And beyond that, the only question is, as Iskra said, will a variant emerge that become resistant?

So far, it hasn't been the case, because the product is very, very cleverly developed with two antibodies.

We're optimistic but until we have data in hand, I wouldn't be too optimistic, but I think once we get hopefully positive data.

We're full throttle to pivotal studies and trying to launch as soon as we can.

Actually.

Within that timeframe.

But beyond this, we still, and I think many mentioned it, we are working on the next generation, just in case a variant would become resistant to Avishel.

So we've got good hope it's sustainable, durable, but of course, we don't know.

I think maybe what I could add also.

It's hard to predict the future with COVID, as we all know.

The other question was combination again, and that would exist.

<unk> from the combinations is that.

As many of you said part of it.

I don't expire as part of a time, but on top of it if you look at the sales that.

We showed you a italia the U S and the global sense is not the usual, 50%, 60% of global sales and you see here the potential of a drug that is.

Addressing a big unmet need and so a lot of sales are outside the U S. What that means is even when we lose patent protection in the U S. The products or elsewhere. The policy is not going to collapse.

Going to have a more slow.

Slow decline and so more time to launch those combinations and Keith.

Rent on this product.

Sure I think on inflation as I mentioned.

We are obviously seeing some impacts of inflation, particularly in distribution costs, but.

We continue to monitor this.

Our business is very resilient and we continue to innovate so I think.

Pricing of drugs, and so forth has to be correlated with value.

But this is something that we'll continue to monitor in terms of impact it has on our business. Thanks.

Suzanne, do you want to cover that?

Thanks, Tim.

Tim in the Sun Wolfe research Tim over to you.

Sure, thank you.

Thank you.

Data put them.

On broken long O. One what do you think good result would need to be for Astra and investors to say, while this looks like a very promising new drugs. So what's realistic.

So for WDXC, as I mentioned at the ASCO IR event, we're planning five new phase, three trials, which will start over the next 12 to 18 months, so by the end of 2023.

So obviously, investing in lung cancer and in breast cancer.

We've recently had the start of the Tropium Breast, O2 study in local recurrence in operable or metastatic triple negative breast cancer.

We expect in terms of things like hazard ratio of Tolerability and safety.

And then on.

<unk> and <unk> again can Astra clarify his views on how often it thinks it seem that amplification of the driver of progressive resistance, because thats really what J&J and others asked about successes both dependent on.

And that <unk> the trial and the literature suggests it's not that high maybe it's 20% or something but I know that.

Current estimates are out there.

So maybe a second question for Susan the first one do you want to currently.

And we have ongoing the pan-tumour study, which is looking at the potential for this medicine, across a range of other tumour types. And I remind you that TROP2 expression is actually highly expressed across a range of different tumour types. So I do think there is potential for this molecule beyond breast and lung cancer.

There are I think that in terms of what we see in trophy on lung one you've got to compare that to the background of what we see from second line plus docetaxel.

Which is the comparator arm utilization and the results that we see from that.

Docetaxel in second third line lung cancer has pretty poor response rates in that 5% to 20% range, depending on what you look at progression free survival that again is I think relatively short.

Kind of in the in the six months and below range. So certainly when we think about the opportunities to.

See what investors should be enthusiastic about I think that some of the early data.

But we're already beginning to see within the abstract I think compares quite favorably to that I don't know Susan if you want to speak to any of those elements, but I think the other piece that I would say Tim that's really important here is that for all of the advancements that have been made in advanced lung cancer through checkpoints and checkpoints plus chemotherapy the.

Dr. Diacki, is there anything you want to add?

On DADO, I think that DADO has the opportunity to be one of the most significant medicines within, the portfolio.

The majority of patients progress on those regimens and they find themselves on systemic chemotherapies and so it is a pretty enormous unmet need. This study seeks to address so do you want to comment at all on what we're seeing so far yes.

And I think that the TROPION LUNG-01 data is obviously going to be the first proof case of that.

But I think that if we've got the ability to be able to just replace systemic chemotherapy and late-line lung cancer alone, that the opportunity is quite significant.

As you're aware that actually we've already published shows a 28% response rate.

And so the median response duration of 10 and a half months. So again, if you put that into the context of what Dave just said about the expectation for current standard of care chemotherapy I think youre seeing improvement and then in terms of Tolerability a couple of things to note.

First of all the way.

Institutional lung diseases, lower with that placement and we've seen with <unk>.

<unk>.

What we do see is stemmed the taxes as it does the missing toxicity and we are investing in them.

Patient and investigator education about the management of the side effects and also.

In a digital health tools to help manage.

Patients.

Get through get through that so I think there are ways in which we can manage those side effects.

Really represent an overall benefit risk profile that is quite attractive in this in this setting I think the second thing is that David alluded to is that across the program will continue to look for opportunities.

To further refine the patient population that's the.

And then as we think about how biomarker might open it up to other places, I think the future, is bright.

I think also, Mark, you asked a question about expectations around TIGRISO amivantinab utilization.

I mean, obviously, that utilization would be spontaneous, off-label, and I think probably could only occur in the U.S. And so just based on that, while that may be something that I could envision taking place, I don't think that it would affect demand in a material way in terms of what I'd be expecting.

Best to treat as we move beyond tropaean longer one into other.

Thank you very much.

Maybe just to add to what was said and link it back to our investment in R&D, I mean, you heard Dave say that ODXD has the potential to be a very, very large product, and we have all seen the Hen-Her-To results, and Hen-Her-To can also be a very, very large product.

Now, the thing is, we, you know, to achieve full potential, we have to develop those agents, across a whole range of indications.

And beyond those two products, we have a whole range of products in oncology.

Settings.

We have implantation in cardiovascular medicines.

We have to the Arkema.

And then I think your question about the level of met.

We have a whole number of other products, including in rare disease.

And so when you consider all of this, you really have to think, you know, unless something, really very unexpected happens, we should be a growth company, but we need to resource this product and make them big, big product like they deserve to be and get to their full potential.

Especially on an amplification as a resistance mechanism to <unk>, what we've seen is it's in the range of 15% to 30%.

That range, so 15% when youre looking at circulating tumor DNA, but you can't underestimate the races.

And that type of vacation using Cte DNA alone to be looking tissue. It can be at the high end of that range. So something in that range is what we're expecting I think Tim just maybe to add onto the back to the question on data. The dos attacks Slide said, it's less than six which is true. It's probably if we gave kind of accurately. It's three to four months is what we're seeing so that's what we need to be meeting.

Within this.

Andrew Baum at CITI.

Thanks, John .

<unk> go ahead go ahead James.

Andrew, over to you.

Thanks for taking my two questions first question on lung cancer.

<unk> two is positive presumably does read to the sequester plus.

<unk> hundred 60 <unk> data.

Could that be pivotal data or when might you be able to have pivotal data particular, plus an ADC for egfr patients and then given what we saw at world lung.

60, plus keytruda.

And then youre going to do that in an all comers, who doesn't have egfr mutation. So would it be plausible that within the next 12 months. So the fact that <unk> would be going after everyone in frontline lung cancer, either with the great mutations with contributor if they don't have Egfr mutations is that the big picture plan for lung cancer.

And the second question was <unk>. So you've now got the launch an empty and you've also got coming so can you remind us what your thinking is about how much you can convert over the combined so there is also maybe its franchise over towards the nearest by the time that there is facing loss of exclusivity in 2025 I think the conversion is about 30% now is this.

Thinking that you can more than double this conversion in the next three years.

Thanks, Jim So the first question would be Susan the sick question second question Mark is about the rate of not substitution, but switch from soliris to <unk>.

By 2025, Susan do you want to yes.

Yes, so just the design of the art just said it is a platform based.

Phase two study is not designed to be a pivotal.

Study and of course in order to drive a pivotal trial design, we wanted to look at safety.

Efficacy data I'll, just reiterate what I said, we are planning to initiate a number of phase three trials over the next 18 months and we will continue to evolve.

As data emerges from the from the proof of concept driving studies.

Yeah.

So James I think your question was on the rate of conversion on yesterday RV side assume let me provide just some reference on the west of conversion and G&A, which is above 80%.

The rest of conversion on that to be what it's U S is above 50%.

So by 2025. This mean three years after launch.

Obviously, we can expect somewhere closer to.

A typical issue I believe.

In three Years' time, and then <unk>.

Hard to Jays.

But due to the excellent reserve that we have seen we believe the conversion will also be relatively lumpy.

Right.

Simon Baker.

Go ahead Thomas.

Firstly, on Evershell, could you update us on the anticipated timing for the FDA approval?

And also, some indication, I'm sure you've been busy trying to build capacity, where, you think capacity could land by the end of next year.

Two parkman ones if I may.

Firstly on <unk>, which you terminated.

I'm, assuming that that was on tolerability grounds, but any color on that would be useful.

Is that in the end of we want as a target because I noticed that Merck disclosed another we want inhibitor that patient have Ah.

Shall I say slightly less aggressive structure, then dive a search it and then secondly on <unk> I say on clinical trials Gov last week that post resolute all Kate when moved back a year primary completion.

Is that just housekeeping use of a genuine delay that thanks so much.

Thanks Simon.

You want to take the first question I mean, again, not Australia due to delays through Covid.

The Ukraine, and Russia will nothing from a data perspective.

And Susan that there was something so.

I think we wanted to remain an important target the challenge with <unk> is the combination of.

Gi diarrhea, and G sync side effects as well as the combination of that with the amount of toxicity.

And the combination of those two together please challenging so.

It is clear activity seen with the datasets are including in some difficult to treat cancers not each one serious constant.

But when we look at the overall profile versus everything else that we've got in our portfolio and what we've made as a prioritization decision to make sure that we are.

Applying our resources on the products that we think have greater transformative ability.

Patients with cancer.

Alright, thanks, so much.

Microdose UBS Microdose <unk>.

I'm just trying to work out how quickly you can leverage the enormous medical need, as, well as your hematology, oncology, and autoimmune field forces, which all feed into the at-risk patient population and use the proceeds to sort of bridge the OPEX demands of the rest of your portfolio.

And just going back to <unk>.

The increase in Opex for this year, just trying to understand the timing a lot of the pivotal data.

So if you could talk to the limitations and how quickly you can overcome them and how, much demand you think you can grow, assuming the efficacy remains intact.

Would have suggest that you should invest more in adcs and other compounds you had earlier in the year. So what's changed in July to decide to spend.

So that's the first question.

More this year in Opex.

And then just going back to have a sale of the incremental revenues you now expect in the second half how much of that is based on contracts that you have and how much of it depends on your successfully pushing the product more into commercial and nongovernment setting. Thank you.

The second question is on China.

So the second question is about it.

President Xi has warned President Biden that the U.S. is playing with fire with Pelosi's, visit.

Michelle is cloud you want to take this one.

There's obviously a lot of geopolitical risk globally.

Let me Saturday. So the revenue was predicted now for the second half of the of the.

I know that you have the largest Chinese business among the majors, and you've worked hard to, build that, securing relationships, local manufacturing.

A combination of what you are saying.

But I'm just wondering, has the board considered other measures, such as a partial IPO of the, Chinese business with a Chinese listing, akin to try and minimize the risk in case there's some escalation here?

And then finally, perhaps you could update us how interactions between your lawyers and, Merck's lawyers have gone in relation to the Part 1 asset that you have, and Merck's belief they have some ownership or rights to that product.

Thank you.

Many of that is coming from the from the contact with all of the deal but in many countries around.

Let me just say a couple of things quickly.

The global equally as I mentioned they are increasing.

The capacity as much as you can to be able to also supply and increase.

Increased supply for the for the for the patients so that theyre not that much still covers at the existing contract.

Thanks, Josh Kahn, maybe you could take the other question and also Theres a question online about clarifying total revenue guidance. So you could take the whole thing together.

Yes so.

Michael just to answer your question around Opex.

So there are a number of elements actually in Opex.

Theres, obviously increase in R&D.

And that's not just the ADC portfolio, which obviously is a big component of it but.

But it's really across the board.

That includes.

Further investments in rare diseases further investment in Biopharma as you know we've done some licensing arrangements, there as well as well as continuing to.

Invest behind her two and data as well as our internal pipeline on ADC. So it's actually a.

Quite a large portfolio that we're investing behind in R&D.

In addition, there is also SG&A, which we've talked a little bit about the <unk> of some of the spend on <unk> relating to demand creation.

We are doing but at the same time, we also have several other launches as you know.

Soft mellow still early.

The fire.

So Sandra AR as well as <unk>.

And on the oncology side multiple new indications.

It will need to continue to build the market on behind him malaria until pass.

So hopefully that addresses your question I think the second question that Pascal referred to was I think there was a clarification on total revenue guidance.

And that is a low twenties inquiries in revenue. So just so that that's clear.

Okay.

First of all, I'm very happy that Andy was not more successful than I was before, limiting, you guys to one question at a time.

Thanks, Hans also Luisa extra buying Bev and resolve it to you.

And those are three great questions, Andrew.

Okay. Thank you very much a couple of questions on Fox T. J I just wonder if you can give any more color on what we should be looking out for ESC should we expect to benefit across all components of the composite endpoint and how soon could this contribute to sales.

And the second comment I will make is, we don't communicate with our friends at Merck's, or lawyers.

And I Wonder if you've actually stated when you expect generics in China.

Comments about the phasing of <unk>.

Just wanted specifically on China.

And then second question for you Pascal because it's clear your comp.

Evidence in the growth profile beyond 2025.

Are there any areas in particular, you would highlight where your internal projections are different from consensus and perhaps just a comment on what do you factor in for pricing in that longer term view. Thank you.

We talk to them, and of course, the lawyers get involved at some point, but I just want, to say we've had a tremendously positive collaboration with the team at Merck.

So maybe I can start with this one and also clarify.

The $1 billion.

Michael was mentioning before I'm not sure.

Whether it comes from but I mean, our guidance was expenses has been low to mid <unk> mid to high so.

Yeah.

Essentially derived this particular genre of less than $1 billion remember also in the guidance we have reduced.

The other income so it's not only an expense issue. It's also reducing other income in our in our guidance.

And in terms of the increase of expenses, it's really linked to the products.

Portfolio, we've discussed.

Yeah.

Versus consensus reserve, we typically do not comment what I can say is what other products that we see as being big big potential products in.

The first two were not surprise, you and <unk>. We believe those two of very very large potential for the many reasons. We have described.

Beyond that Ocado.

<unk>, maybe I should ask Dave to comment in terms of what you see as potential and then.

Biopharma, who would you also would want to say few words about the products you see as having big potential not necessarily versus consensus, but where we see the biggest potential.

I mean, I think let me see your question is 2025 and beyond I think that Pascal <unk> point and I've mentioned this before the Adcs certainly I think secondly.

We're beginning to get momentum and enthusiasm around the next wave of Io, which includes bi specifics and I think that we'll see more on that to come.

Additionally, I believe that the PARP one selective is something that again here has early profile that gives me a lot of enthusiasm as one parser moves into exclusivity and it is the first and only in this decade within the portfolio of oncology that goes there.

Those for me are the big highlights and it's the combinations between Io and Adcs, where I really think that we've got the opportunity to do.

Some important and differentiated.

Michael approaches.

Okay.

Thank you.

Regarding the Biopharma I think in the short term clearly the trajectory of facility you guys is very promising and I will also answer your question regarding the expectation in China. The loss of exclusivity is in 'twenty to 'twenty three we don't expect a lot of impact in some we are expecting GDP in the course of 2024.

It happens, but it still has substantial potential of course, the new portfolio approach like aspire soft nello <unk> has a substantial potential in them and the midterm a product like <unk>, where we already show good results and PM and <unk>.

And then hopefully in the future also in cardiomyopathy are clear strong growth drivers for the business.

And then maybe just to ask the question around DSC and <unk> comment on the results, we will present, but I don't think folks will be disappointed in what I can maybe add is there'll be two high impact publications coming out at the same time, which hopefully will emphasize the quality of the data were presenting.

And maybe let me cover this Part 1 question quickly is, we certainly have had such a great, collaboration.

We are very much inclined to collaborate with Merck on the Part 1.

Thanks.

The last comment I would make sure we size that.

The question is, under what conditions, and what timing, and how do we do it?

One of the characteristics of our company is that we don't depend on two or three products and where you can say this one has enormous potential.

I can't say we will do it, but it's certainly a very strong consideration for us to do it, and continue the fantastic collaboration.

Have many blockbuster potential already we have more than 10 today and.

And we expect to have many more over the next few years. So so there are a number of products that can be very big and then there are others that are going to be smaller, but still blockbuster potential with more than 1 billion. So it's really adding up all these products that is going to drive the growth.

So as I think over the next seven 810 years.

Next question is filled at Barclays Emily.

My question.

And one on trophy in lung one timing I know you targeted.

The first half 'twenty three I believe that you can't go. This morning noted the potential for second half 'twenty two with the caveat that so then driven just your thoughts on the potential to see that top line data this year.

Question on the myasthenia gravis launch for Altamira. Thanks.

Thanks for the color of that one third of the sell downs complement naive just curious on.

If you think you're winning patient share in that population versus the <unk>, which is off to a strong launch and then.

And Dave, if you have anything you want to add, you can add it a bit later if you want, now.

Dave in the prepared remarks, I believe you mentioned that you werent seeing much contribution from <unk> in the first half do you expect that there will be significant sales contribution.

The produce today, given the mtc and guidelines update.

Thank you.

Thanks, Emily So Dave do you want to take the token question Marc the other question and we try to be short and maybe I can do the <unk> and the trophy on both so.

Yeah.

When Daiichi guides to second half 'twenty two there on their fiscal year.

And so that goes into first quarter of next year and when we guide to first half of 'twenty three it's on a calendar year. So.

You can triangulate the quarter that or both.

Consistently speaking about.

I think that within <unk>.

So.

Emily I think that with the NCC guidelines changing because of an overall survival benefit with the speed with which it did and we already heard the discussion ASKO the discussing not the presenter talking about how her too low was something that she was.

During for a patient that was in front of her and then we know that there are many hurt too low patients that are already easy to identify.

Do think fit.

Some level of <unk>.

Non promoted spontaneous use is likely to happen in advance of <unk>. The exact amount of that I think is something that will.

We'll just watch and see.

Okay.

As expected.

Zinc production.

Brazil music option.

Targeting SSD is expanding very rapidly.

Being communicated via <unk> seem to be taking many patients from AIG in earlier lines of therapies.

We have launched <unk> at the end of April and although it is early days I think we are seeing that we're already gaining.

Patient for about one third of the.

Of the initiations, we expect these to come.

In the future so.

And do remember that until the introduction of the <unk> and.

And production intermediaries.

And we've got Soliris was the only.

Randy the medicine and missed an obvious and was.

Switching more severe forms of nextgen.

So.

Our mission will be to.

Go down and severity and cover a larger group of patients. So early days, but it's a good start.

So maybe let's start with...

Thanks, Mark Matt Weston at credit Suisse months over to you.

Yeah.

Maybe we shall...

Two questions. If I can please the first coming back to operating costs.

The new guidance on R&D is essentially trending towards $10 billion, a radnor reiterated the low twenty's percent of R&D as your target, but I'm mindful that consensus has $9 billion of spend on a two and a half percentage point margin increase year over year for 2023.

I don't want to draw you into 'twenty three guidance, but can I just be clear messages.

Iskra, two questions for you.

The approval and the capacity.

<unk> success justifies increased investment.

Thats, what investors should be prepared for and any color you can give.

Give us around that would be great.

And then secondly, a question about mid term margins.

You commented about mid to high thirties, but obviously, you've also highlighted how much the potential of the Daiichi sankyo collaboration product could have to the future growth of Astra.

And I just wonder how you see that impacting that margin number given that your book only a very modest amount of sales.

50% of earnings so I would imagine it could easily push you over the high thirties, if they were to achieve the peak sales that you seem to be hoping for.

Yeah.

Thanks, Thanks to.

Two questions. So.

Maybe.

You can cover the margin on the first point on the.

So we are progressing with the many regulatory bodies around the world, the FDA included.

R&D spend Matt.

<unk> said to you that the <unk>.

Second half, we expect to have R&D expenses being.

As you probably know, we received approval for prophylaxis already in many countries, including Europe, UK, Canada, Australia, and many others.

And we have the emergency approval in US, and we are working closely with FDA for the, final approval of the prophylaxis.

Equally, you probably know that we recently announced the phase three trial of the treatment, of the out-hospital patients.

And we do progress with the submissions of the regulatory approvals for the treatment, indication.

Consistent with first half. So if you do that you don't get to 10.

Thus far of course, but substantially.

Substantially below 10 issue issue issue due this month.

And in terms of the question as to whether this is justified by the pipeline.

The answer is absolutely, yes, although as we will not spend it.

We do expect approval in Europe in the second half of this year, as well as progressing, in US, Japan, and China with our submissions as previously commented.

We have.

Yes.

Really a growing a rapidly growing pipeline and we need to support it.

As you fairly noticed, there is a strong and important unmet need in this space.

If you actually think about.

A product like on her to in a product like <unk>.

That's what the XD, taking them to their full potential requires pretty large.

And therefore, we are doing our best to increase the capacity and make sure we are able to, supply as many patients as we can across the globe.

Hello, Rob and a lot of investment.

And this is something that we have become more and more convinced.

Convinced we need to do and then beyond those two we have quite a number of products suddenly becomes very strong also requires investment.

And we really want to play to win we want to make sure that every one of our product with potential is still very supportive too so we expand them and maximize them.

From the previous discussions and announcements we made, we're continuing to increase the, supply, and we are confident that we will be able to supply all the contracts that we currently have. And going forward, we are continuously doing and increasing the supply and the capacity, as much as we can.

And on the fields for deployment, Andrew, you raised an important question.

As far as the margin maybe.

And we have field forces across immunology, et cetera, so we can deploy the sales force.

But I think your question about approval, which Krishka addressed, an important one.

You want to cover this but we need to keep in mind that we also have to spire. We havent been pause that we have products that are not necessarily.

We need to get approval, full approval, not an EOA, to be able to fully promote.

And it's fundamental, so we establish the product and the use.

With China, let me just say quickly and then hand over to Leon to comment more on the situation, on the ground in China, essentially, you know, we don't comment on what consideration we would do, but we are always looking at, you know, various scenarios for the different parts of the business.

So in China, we are looking at what is the best way to continue operating in China.

The approach we've always taken in China has been we are in China for China, and then more, in the last few years, our approach has been we are in China for the world.

What that means is we are in China to bring our medicines to Chinese patients, but we, are also in China to help the world.

We export from China, and we are now connecting to Chinese innovation and looking to partner.

We've set up an investment fund that is investing in biotech companies in China, and we're looking, at how can we tap into Chinese innovation to benefit patients around the world.

Oh is helping with the margin near term.

So our approach has really always been to be in China for China and for the world, and, is always within that framework.

But beyond this, it's hard to comment on what consideration or what options we are actually looking at.

Leon, do you want to comment a little bit on the situation on the ground in China?

Yeah, I think the China government is after COVID situation, zero COVID policy still continues.

So, maintaining, avoiding disruption on logistics and supply chain, and also protecting foreign company investment are the two most important priorities for the Chinese government.

Yes, I think again our <unk>.

So, our strategy in China is very clear, is speed up our global pipeline into China, because our global pipeline still in China, we lag a little bit behind.

So, we are getting in her to DBO3 and DBO4 approval next year.

Our mission remains the same in terms of margin, but as you can imagine it's always a balance between.

And the PTK Acala is very important product.

So, we will also launch Acala next year to indication.

Shorter term margin and longer term growth and Ah Pascal said, we're playing to win here and we continue to invest behind the product.

The specific question you had was around the Daiichi product and the partnership with her.

Her two and data and yes, we have high hopes and high ambitions for those but also note that we.

We do pay.

Yeah.

Our fair share of R&D and SG&A expenses, so while on the revenue line, we may not counted as product revenue is counted as cloud collaboration revenue.

Our.

Profit share.

We are contributing.

Our fair share of expenses, so we really need to look at sort of an operating profit.

Align there rather than.

The the the sort of the margins that are implied and again, we're focused on cash flow and improving our operating profit.

From a dollar standpoint, and a margin standpoint.

I mean, there's two products that can be very allows us to add this is.

They will drive tremendous growth plus 25 in until 'twenty five they will drive growth, but it will also drive a substantial investment.

This study is in oncology.

They tend to take time, there they are expensive.

And they're quite large so so that's really what you have to keep in mind. When you look at the margin, but having said that I'd just like to repeat what I said before we haven't actually changed our mission to improve our margin to mid to high single.

So as far as mid to high searches in the mid to long term horizon. So nothing has changed as far as profitability ambition is just that.

We want to make sure that we do this and at the same time, we don't improve margin at the expense of long term.

Staining boardwalks.

Emmanuel.

Hello, Yes, good ammonia Oh, sorry, okay.

Perhaps I'll take the question on <unk>, how do we kept havent seen on Monday to do in second half of the year. So just Joe degree of optimism excuse me season.

On probability of success and loss of function and given a pretty mixed history for the class and then a couple of follow ups.

And so perhaps you could just give us a bit of color on why you think you are in terms of second line metastatic share conversion from the current standard of care Tdm one.

And then I have a show you've mentioned several times. This is pertaining to efficacy, but I think it's pretty clear from recent publications that Jeff and I are at least has almost completely lost efficacy against the ISO parents.

So is there any contingency built into the contracts youre signing around returns cancellations full potential complete of loss of efficacy, which seems like a pretty high risk.

Okay.

So maybe what we could do is to then you would cover the sale of question in a minute, but when did you want to cover the.

And like Iskra put it, the EvoShell, we are also submitting this year.

And also, hopefully, we can get approval late this year.

So, launching ZigZero next year and launching two most important rare disease products, and many new indications.

So, 2023 and 2024 and 2025, the next three years will be critical for our new innovative pipeline to succeed in China.

<unk> from sort of an efficacy viewpoint on what we are working on and then you could cover the question about.

Contract, it's a great question around the antibody.

We were very specific in terms of always have having two antibodies and <unk> specifically for the reason that you're asking so we have seen.

Obviously some.

Reduction in activity will one or other antibodies brush when you put them together.

The efficacy remains intact and robust and I think and you also need to be careful not to be confusing a decrease and neutralize.

Neutralization suite of ours assays with a decrease in efficacy because that doesn't necessarily translate because you don't know what level of neutralizing activity in vitro as gassy as Chris said in the real World Studies that we're seeing with current variance. The efficacy is remaining very robust across all <unk>. So because we have to antibodies.

We are in reasonably good shape, when we say, we'll never going to get resistance, but nothing we are reasonably well protected but of course now the next generation advanced pools that we acquired are going to enable us to find additional binders that will further protect us from those resistant variants.

But of course, at the same time, you can clearly see Pomeco get a hit, and our large product, the Silicon and Crestor Berinta getting to VBP one by one.

But we are still able to maintain all multiple channel promotion to keep loyal user as much as possible.

So, I think, at the same time, we are slowing down decline on the VBP portfolio.

So, that's just the beginning.

And at the same time, pushing a new indication, lifecycle indication of large, products like Tegris and Fosica.

I think we will have, in the future, more new products in China, for China and in China for globe.

So, and also launching new pipeline on top of all these growth.

So, I think our strategy remain clear, like Pascal said, we, on top of our global innovation, we also established a fund with CICC and tap into local innovation.

Hopefully, we can work closely, I think, with FibroGene to do Roxa in China, work with Hutchison to do CMAT in China.

Erica.

Thanks, Leon.

Before you took over the contract question maybe something.

So, next question is Adam Carlson at ABG.

Wes.

Mind, you give everybody is when we talk about the efficacy of ever showed the numbers you've held efficacy against <unk> syndrome, where not only the efficacy against severe disease or whatever we're talking about by the efficacy against one symptom. So it's a tremendous level of efficacy that we have to then in the real world evidence is demonstrating its still there.

Adam, over to you.

First, off the back of the Cipotent and Fosica, face-to-face study and CKD being pushed into H1 next year, just your current level of confidence or thinking on the prospect of getting Fosica combinations approved of Fosica coming off patent.

And then secondly, on inflationary impact, and I guess particular, personnel cost, how much, if any, of that impact have you seen already, and how should we be thinking about the timing of that impact in either the second half or next year?

Thank you.

Thanks, Adam.

Mened, do you want to take the first one, and Arad now the second one about inflation?

Okay.

So what that means is we protect people not against severe disease would protect them against being symptomatic. So it's upon us to be I think a critical care, that's like a runny nose cough fever, I mean, it's small.

So, first of all, just to remind you, the loss of exclusivity of Fosica isn't a point, in time.

It's a range across multiple markets, and our revenues are split pretty well across all the regions.

Now, in terms of the mechanisms, these are both well-precedented mechanisms.

So, we have quite a broad timeframe in which to get the combinations launched.

So, as long as the, molecules behave themselves, you know, we're optimistic.

But irrespective of that, the two combinations that we have moving forward, the MR modulator and the independent antagonist, are both self-sufficient business cases in their own right.

But until we have data in hand, I won't be too optimistic.

And as we've said, we're expecting to get data for both of those by the first half of next year.

But I think once we get hopefully positive data, then I think we're, full throttle to pivotal studies and trying to launch as soon as we can.

And you see here the potential of a drug that is addressing a big unmet need.

And hopefully, you know, within that timeframe.

And so a lot of sales are outside the U.S. What that means is, even when we lose patent, protection in the U.S., the products or elsewhere, the product is not going to collapse.

I think maybe what I could add also, separate from the combinations is that, as many said, the patent expiry is spread over time, but on top of it, if you look at the sales that Ruud showed you a bit earlier, the U.S. in the global sales is not the usual 50, 60% of global sales.

We're going to have a more slow, a slower decline.

And so more time to launch those combinations and keep maintaining this product.

Sure.

I think on inflation, as I mentioned, we are obviously seeing some impacts of inflation, particularly in distribution costs.

But, you know, we continue to monitor this.

Our business is very resilient.

And then something a runny nose or cost I mean, it's really a very very impressive efficacy live on this call and I think it's really worth highlighting again that.

We continue to innovate.

So I think, you know, pricing of drugs and so forth has to be correlated with value.

But this is something that we'll continue to monitor in terms of impact it has on our business.

Thanks, Sahana.

Tim Anderson, Wolf Research.

Really believe that did the activity with the Nashville, Austin and new areas and I think that just to build on the manner of point and we do see a different level of efficacy of different antibodies and the different variants, but it is true that one or the other are really keeping the strong very strong efficacy, therefore of Indiana and the Viking.

Visit with the government and the relevant health care stakeholders being transparent in that than I do believe that.

We will find delay even in the case that the.

The resistance when it happens.

Make sure that the the delivery.

That would be needed to protect the patients and equally to find a way how to make sure that governments in that.

There'll be protected in a way.

Given the unpredictability of the COVID-19 environment I think it's also fair to say that from the vaccine unwise I think we are all working in the in the dynamic in the environment that is extremely volatile and dynamic and that's taking the <unk>.

Level of risks moving forward, making sure that you deliver medicines, both vaccines and antibodies that.

That can continue to protect the patients and prevent prevent protect them from the COVID-19.

Thanks Vishal.

So in terms of the development of Quebec City, but we were very careful to make sure that we do.

Develop the right dosing schedule so.

The intermittent dosing schedule four days on three days off.

It's something that Optimizes, the tolerability and minimize the discontinuation rate, which I think is an important feature of the design and then the second thing that builds confidence across the day six infection, which you highlighted in the presentation.

55% of patients have.

Betsy pathway to <unk> 10 loss.

And in that group, we saw really impressive improvement in not just PFS, but in overall survival with a hazard ratio of <unk> 46.

Survival.

So.

We do we do phase III trials in order to confirm the activity we've seen in phase two but we have a good level of competence in the.

And importance of this pathway.

And the ability of this molecule to inhibit the pathway well him to have that done in a tolerable way.

And I'm, just going to hand over to Dave talk about the <unk>.

A question Emmanuel on in her two we've seen really brisk.

Conversion in second line just two months after approval, we now have 35% share of second line in her two positive just to put into perspective, we saw had siloed tdm, one a year ago, probably 45% to 50% use and so the majority of that 35% use that word.

We're seeing right now in second line is coming at the expensive Tdm, one we do see some reduction in some other areas I'd also note.

That we also continue to see use some third line plus for patients who don't see.

Obviously, our who haven't had an opportunity to be able to yet get and hurt you in the second line. So I'm proud of the work that the AZ and <unk> teams are doing just two months after the launch.

Thanks, Dave so overtime.

Over time, but.

We appreciate that you are very interested in your.

Your questions on Greg's questions. We also want to respect your time, so it would take two or three more questions and then close the call Victor Sundberg Victor over to you.

Tim, over to you.

One question on the.

750 to your PD, one to say till four specific that you presented at <unk> I think it was clear that they're one of the 500 milligram cohort for us too toxic but also on the 750 milligram discuss some commented that the toxicity at a fairly similar to if you're never alone. So my question is if you agree with that assessment and if the <unk>.

500 milligram dose is the way to go forward for that program and if you think efficacy will be enough for that lower dose.

And perhaps like a quick second question as well on her too low we have quickly.

So we know that her two low expression is less common in HRD negative patients, but any data you have seen if it's also lower in earlier lines of treatment irrespective of HRD status compared to later lines of treatment for modeling purposes. Thank you.

Ron you want to cover this maybe 50 752 and festival.

At doses above 500, 750 milligrams, if you look at the.

Sure.

The effect on T cell proliferation right you are in the range of increase do you expect to get from around the time make the kicked us.

It <unk> mean that.

And we presented that with some of the data at ACR in terms of the Tolerability of obviously looking at the discontinuation rate MRI, we will continue to evaluate that but 750 and 500 milligrams, we will be presenting some more data in combination with chemotherapy.

In the non small cell lung cancer setting at the World Congress among.

So look for that as well, but we look at the totality of the data and overall, we're encouraged with the profile that we see that we can get a good tolerability profile with improved efficacy compared with what you would expect with a PD one agent alone.

And in terms of her too low and I don't see a real shift in the her two low prevalence between early and late line.

Thanks, Peter Welford of Jefferies.

Just two quick ones first stages of the comment on other operating income. The comments you made with regards to second half I'm curious does this mark at the end now as the sort of serious portfolio optimization that we've seen from astrazeneca or it should be now envisage therefore.

Due to these profits or is it more just this particular year given macroeconomic challenges managements current focus that there hasn't been the same degree we should not necessarily assume that's going to be the case in future years, and then secondly, just coming back to the SG&A just curious you've talked in the past about the fact that.

The years of investing more and more in China.

Just curious if you could update us on your thoughts there.

We're actually now taking cost out of China, or how should we think of our investment in China I will think about the SG&A trend. Thank you.

Maybe I can cover quickly OSA because.

<unk>.

Describe what we've done is sort of putting the tree.

Basically the divesting products that.

Would be better managed by someone that is done by us and someone else could create value. So we've done a lot of this is less less today of course and basically now we are trying to grow new branches to the street to make it a beautiful jewelry with launching of new products, but it doesn't mean that it's finished well basically.

We manage that as we go.

There is definitely part of it is definitely less.

Uh huh.

Older products to divest unless less although income moving forward.

The intent is really to focus on all of our products, our new products go to them and.

And develop the platform.

Yes, and I think the second question was around China and.

Whether we're investing more in SG&A in China.

Clearly, it's been a tremendous growth journey in China over the last several years.

As you know the government and pricing policies have.

Have they have put the growth they're under pressure.

That being said, we continue to invest in new products and hopefully the new product launches will drive that growth, we are managing our cost base in China in proportion to the.

The revenue decline that we see.

Again, we will continue to manage that while our while investing in innovation.

So we take the last question Seamus Fernandez Guggenheim shipments will go to you.

Yeah.

Thanks, Al and maybe it can be 94 horticultural.

Comparisons as well.

But the.

Dynamics I guess around <unk>, one quick question there.

Yeah.

Maybe you guys can just help us understand when you look at the data. David You said, you would hope that it would potentially replace late.

Late line chemotherapy, but it is also being studied in combination.

With platinum based chemotherapy. So is it your expectation that we will continue to see platinum based chemotherapy as part of these regimens or is it possible that that could be eliminated.

The regimens going forward and then secondly, just very quickly on the Covid antibody approaches just hoping you guys could give us a little color on whether or not the.

The debt.

<unk>.

The regulatory environment is changing.

Such that.

Covid antibodies can actually come to market almost in the way that.

Flu vaccines are reapproved overtime, just hoping to understand that context, a little bit better. Thanks. So much. Thanks very much. So the first one for Susan Oh, Yeah.

So why don't we start off.

And then the second one.

So.

The data that we'll present with the trip in lung two at the Congress in lung cancer. It looks at the combination both with the doublet of <unk> plus <unk>.

<unk> as well as the combination with platinum based chemotherapy.

I do think that is.

It's probably going to depend a little bit on.

Yeah.

Does it help patients presented about physicians wanting to achieve some of those patients with bulky disease that wanted to achieve.

In a rapid and durable responses.

The choice that but youll see the data that will come to us in lung cancer as it comes to <unk>, Yes, I mean, I think the only thing that I'd add in.

But as youre pointing out that sort of talk about the first sequence I think that the first step is replacing some of this late line systemic chemotherapy.

In terms of what's possible as we move into earlier lines I think that you know obviously, both platinum and Pam are utilized here and so one of the important clinical questions is the one that you're asking which is would we be able to replace both or just one of those and they've got very different on a tolerability and none.

<unk> of cycles considerations.

Consideration. So those are the kinds of things we'll be answering in the program is the phase III frontline get underway.

FX is relatively is it came over to us. So it's tempting to continue using it many of you want to cover the Orange color you want to comment.

I think it's a good question and I can I can say this isn't the hopeful to see the regulators thinking there relative to the COVID-19 medicines, both in vaccines and antibodies in the same way as adding for the flu that's definitely accelerate and any delay of the new updated vaccines in Edmond Oklahoma notice for that.

New variants coming come into the patients it's still not the case, but I'm sure you're aware that there are many discussions.

The regulators and then equally discussions between the regulators and the engines and the manufacturers in the industry, how to how to accelerate and optimize that process to be able to be.

To be agile and flexible when it comes to bringing the medicine. So that's closer to the base.

This cost will close here. Thank you so much for interest and I wish you all a good.

Good day and a good weekend. Thank you.

[music] the conference will begin shortly.

As Johan during Q&A, you can dial one one.

[music].

Okay.

Yeah.

[music].

Okay.

Okay.

Okay.

[music].

Yes.

[music].

Sure.

[music].

Okay.

So.

Hmm.

[music].

Okay.

[music].

Thank you.

On datapodimab, on tropium lung O-1, what do you think good results would, need to be for Astra and investors to say, you know, wow, this looks like a very promising new drug?

The conference will begin shortly to raise your hand during Q&A you can dial.

[music].

So what's realistic to expect in terms of things like hazard ratio and tolerability and safety?

And then on Terrisso and amivantamab again, can Astra clarify its views on how often it thinks that C-MED amplification is the driver of Terrisso resistance?

Because that's really what J&J's amivantamab success is most dependent on in that Mariposa trial.

And the literature suggests it's not that high.

Maybe it's 20 percent or something.

But I know that different estimates are out there.

[music].

[music].

So maybe the second question is for Suzanne.

The first one, do you want to cover it, Dave?

Sure.

I think that in terms of what we see in tropium lung O-1, you've got to compare, that to the background of what we see from second line plus docetaxel, which is the comparator arm utilization and the results that we see from that.

Docetaxel in second, third line lung cancer has pretty poor response rates in that five to 20 percent range, depending on what you look at.

And progression free survival that, again, is, I think, relatively short and have been in the six months and below range.

And that includes further investments in rare diseases, further investments in biopharma.

So certainly when we think about the opportunities to see what investors should be, enthusiastic about, I think that some of the early data that we're already beginning to see within the abstract, I think, compares quite favorably to that.

As you know, we've done some licensing arrangements there as well, as well as continuing to invest behind NR2 and data, as well as our internal pipeline on ADC. So, it's actually quite a large portfolio that we're investing behind in R&D.

I don't know, Susan, if you want to speak to any of those elements.

University.

But I think that the other piece that I would say, Tim, that's really important here is, that for all of the advancements that have been made in advanced lung cancer through checkpoints and checkpoints plus chemotherapy, the overwhelming majority of patients progress on those regimens and they find themselves on systemic chemotherapies.

In addition, there's also SGNA, which we talked a little bit about the ungating, of some of the spend on every shell relating to demand creation that we're doing.

And so it is a pretty enormous unmet need that this study seeks to address.

But at the same time, we also have several other launches, as you know, Cefnello is still early, Aspire, you know, Cessandra, as well as Breastfree.

Susan, you want to comment at all on what we're seeing so far?

So just so that that's clear.

And on the oncology side, multiple new indications, that we'll need to continue to build the market on, you know, behind Himalaya and Topaz.

Yes.

Thanks, Arana.

So hopefully that addresses your question.

So, you know, as you're aware, the data we've already published shows a 28 percent, response rate at the six week dose and a median response duration of ten and a half months.

So Louisa Hexter-Berenberg, Louisa, over to you.

I think the second question that Pascal referred to was, I think there's a clarification on total revenue guidance.

So, again, if you put that into the context of what Dave just said about the expectation for current standard of care chemotherapy, I think you're seeing improvement. And then in terms of tolerability, a couple of things to note.

Thank you very much.

And that is a low, 20s increase in revenue.

First of all, the rate of interstitial lung disease is lower with datapostumab, duroxican than we've seen with NHER-2.

A couple of questions.

What we do see is stomatitis as a dose limiting toxicity.

Now And Forever, Orphaned Send Help, https://cacjęzмуlla118.blogspot.com

On Farxeja, I just wonder if you can give any more, color on what we should be looking out for at ESC.

And we are investing in patient and investigator education about the management of, this side effect and also in a digital health tools to help manage, you know, how patients get through that.

Should we expect a benefit across all components of the composite endpoint?

So I think there are ways in which we can manage those side effects to really, represent an overall benefit risk profile that's quite attractive in this in this setting.

And how soon could this contribute to sales?

I think the second thing is that Dave has alluded to is that across the programme, you know, we'll continue to look for opportunities to further refine the patient population that's best to treat as we move beyond Tropion Lung 01 into other settings.

And I wonder if you've actually stated when you expect generics in China.

And then I think your question about the level of MET overexpression and metamplification as a resistance mechanism to Gristos, what we've seen is it's in the range of 15 to 30 percent range.

I heard all your, comments about the phasing of LOE, but I just wondered specifically on China.

So 15 percent when you're looking at circulating tumour DNA, but you can, underestimate the rate of metamplification using ctDNA alone.

And then the second question for you, Pascal, because it's clear your confidence in the gross profile beyond 2025.

If you look in tissue, it can be at the higher end of that range.

Are there any areas in particular you would highlight where your internal projections are different from consensus?

So something in that range as well.

And perhaps just a comment on what you do factor in for pricing in that longer term view.

I think, Tim, just maybe to add back to the question on data.

Thank you.

The dose attack slide said, it's less than six, which is true.

Thanks, Louisa.

It's probably, if we gave kind of accurately, it's three to four months is what we're seeing.

So maybe I can start with this one and also clarify the $1 billion that, Michael was mentioning before.

So that's what we need to be beating within this.

I'm not sure where that comes from.

Thanks.

But I mean, our guidance with expenses has been low to mid and now it's mid to high.

James Gordon.

So you could potentially derive this but you could also derive less than a billion.

Go ahead, James.

Remember also in the guidance, we have reduced the other income.

Thanks for taking two questions.

So it's not only an expense issue, it's also reducing other income in our guidance. And in terms of the increase of expenses, it's really linked to the products, the portfolio we've discussed.

First question on lung cancer.

Versus consensus, Louisa, we typically do not comment.

So if flora of two is positive, that presumably does read to the TIGRISO plus DS1062, the orchard data.

What I can say is what are the products that we see as being big, big potential products.

Could that be pivotal data or when might you be able to have pivotal data for TIGRISO plus an ADC for EGFR patients?

And the first two will not surprise you and HER2 and DATU DXD.

And then given what we saw at World Lung for 1062 plus Keytruda, fair to assume then that you're going to do that in all comers who don't have EGFR mutations.

We believe those two have a very, very large potential for the many reasons we've described.

So would it be plausible within the next 12 months that effectively DS1062 would be going, after everyone in frontline lung cancer, either with TIGRISO if they've got the mutations or with Keytruda if they don't have EGFR mutations?

Beyond that, in oncology, maybe I should ask Dave to comment in terms of what he sees as potential.

Is that the big picture plan for lung cancer?

And in BioPharm, Ruud, you also would, want to say a few words about the products you see as having big potential, not necessarily versus consensus, but where we see the biggest potential.

And the second question was Ultimiris.

I mean, I think, Louisa, your question is 2025 and beyond.

So you've now got the launch in MG and you've also got NMO coming.

I think that to Pascal's point, and I'd mentioned this before, the ADCs certainly.

But so can you remind us what your updated thinking is about how much you can convert over of the combined Soliris-Ultimiris franchise over to Ultimiris by the time that Soliris faces loss of exclusivity in 2025?

I think secondly, we're beginning to get momentum and enthusiasm around the next wave of IO, which includes bispecifics.

I think the conversion is about 30% now.

And I think that we'll see more on that to come.

But is the thinking that you can more than double this conversion in the next three years?

Additionally, I believe that the PARP1 Selective is something that again here has an early profile that gives, me a lot of enthusiasm as Limparsa moves into exclusivity.

Thanks, James.

And it's the first and only in this decade within the portfolio of oncology that goes there.

So the first question would be, Susan, the second question, Mark, is about, the rate of not substitution, but switch from Soliris to Ultimiris by 2025.

Those for me are the big highlights.

Susan, do you want to?

And it's the combinations between IO and ADCs where I really think that we've got the opportunity to do some important and differentiated clinical.

Yeah.

Okay, I will quickly comment, Luisa, regarding the biopharma.

So just the design of the Orchard study is a platform-based phase two study.

I think in the short term, clearly, the trajectory of Farsiga is very promising, and I will also answer your question regarding the expectation in China.

It's, not designed to be a pivotal study.

The loss of accessibility is in 2023, which we don't expect a lot of impact instantly.

And of course, in order to drive pivotal trial design, we want to look at safety and efficacy data.

We are expecting VVP in the course of 2024, if it happens, but it still has a substantial potential.

I'll just reiterate what I said.

Of course, the new portfolio of products like Tespire, Savnella, and BreastTree has a substantial potential.

We're planning to initiate a number of phase three trials over the next 18 months.

And then in the midterm, a product, like Iplontacin, where we already show good results in PN, and then hopefully in the future, also in cardiomyopathy, are clear strong growth drivers for the business.

And we'll continue to evolve that as data emerges from the proof of concept driving studies.

And then let me just answer the question around ESC and Farsiga.

So, James, I think your question was on the rate of conversion on miaste and agravis, I assume.

I can't comment on the results, we'll present, but I don't think folks will be disappointed. And what I can maybe add is there'll be two high-impact publications coming out at the same time, which hopefully will emphasize the quality of the data we're presenting.

Let me provide just some reference on the rate of conversion in PNH is above 80%.

Maybe, thanks, guys.

The rate of conversion on atypical HUS is above 50%.

I mean, the last comment that we make, Luisa, is that, you know, one, of the characteristics of our company is that we don't depend on two or three products, and where you can say this one has enormous potential, we have many blockbuster potential already.

So by 2025, this means three, years after launch, in miaste and agravis, we can expect somewhere closer to atypical HUS, I believe, in three years' time.

We have more than 10 today, and we expect to have many more over the next few years.

And any more, it's a bit hard to guess.

So there are a number of products that can be very big, and then there are others that are going to be smaller, but still blockbuster potential is more than a billion.

But due, to the excellent results that we have seen, we believe the conversion will also be relatively rapid.

So it's really adding up all these products that is going to drive the growth of AstraZeneca over the next 7, 8, 10 years.

Simon Becker.

Next question is Emily Field at Barclays.

Go ahead, Simon.

Emily?

Two pipeline ones, if I may.

My question, one on Tropian Long-O1 timing.

Firstly, on Adavacertib, which you've terminated, I'm, assuming that that was on tolerability grounds, but any comment would be useful.

I know you targeted first half 23.

And is that the end of WE1 as a target?

I believe, Daiji Sanko this morning noted a potential for second half 22 with the caveat that it's event-driven.

Because I noticed that Merck disclosed another WE1 inhibitor that appears to have a, shall I say, a slightly less aggressive structure than Adavacertib.

Just your thoughts on the potential to see that top-line data this year.

And then secondly, on Fazenra, I see on clinicaltrials.gov last week that both Resolute and Orchid, were moved back a year for primary completion.

A question on the Myasthenia Gravis launch for Altamiris.

Is that just housekeeping or was there a genuine delay there?

Thanks for the color that, you know, one-third of the sales are in compliment naive.

Thanks so much.

Just curious on, you know, if you think you're winning patient share in that population versus Vivgart, which is off to a strong launch.

Simon, do you want to take the question?

And then, Dave, in the prepared remarks, I believe you mentioned that you weren't seeing, much contribution from Db04 in the first half.

I mean, again, that's really due to delays, through COVID and the Ukraine-Russia war, nothing from a data perspective.

Do you expect that there will be significant sales contribution ahead of the PDUFA date, given the NCCN guidelines update?

So, I think we wanted to remain an important target.

Thank you.

The challenge with the davosertib, is the combination of GI, diarrhoea-inducing side effects, as well as the combination of that with bone marrow toxicity.

Thanks, Emily.

And the combination of those two together proves challenging.

So, Dave, do you want to take the Tropian question and mark the other question?

So, there's clear activity seen with the davosertib, including in some difficult-to-treat cancers like, the uterine serous carcinoma.

And we try to be short.

But when we look at the overall profile versus everything else that we've got in our portfolio, what we've made is a prioritisation decision to make sure that we, you know, apply our resources on the products that we think have a greater transformative ability for the treatments of patients with cancer.

Yeah, and maybe I can do the Db04 and the Tropian both.

Great, thanks so much.

So, when Daiji guides to second, half 22, they're on their fiscal year.

Okay, Michael Lichten at UBS, Michael, over to you.

And so, that goes into first quarter of next year.

I'm just going back to the increase in OPEX for this year, just trying to understand the timing.

And when we guide to first half of 23, it's on a calendar year.

A lot of the pivotal data that would have suggested you should invest more in ADCs and, other compounds you had earlier in the year.

So, you can triangulate, the quarter that we're both consistently speaking about.

So, what's changed in July to decide to spend a billion dollars more this year in OPEX?

I think that within Db04.

And then, just going back to Evershell, of the incremental revenues you now expect in the second half, how much of that is based on contracts that you have, and how much of it depends on you successfully pushing the product more into, I guess, a commercial and non-government setting?

So, Emily, I think that with the NCCN guidelines changing because of an overall survival benefit with, the speed with which it did, and we already heard the discussant at ASCO, the discussant, not the presenter, talking about how HER2 low was something that she was considering for a patient that was in front of her.

Thank you.

And then we know that there are many HER2 low patients that are already easy to identify.

So, the second question is about Evershell.

I do think that some level of Non-promoted spontaneous use is likely to happen in advance of PDUFA.

Iskra, do you want to take this?

The exact amount of that, I think, is something that we'll just watch and see.

Let me start with that.

As expected, with the introduction of the new approved therapeutic option, the nesting and harvest market in the United States is expanding very rapidly.

So, the revenues predicted now for the second half of the year are a, combination of what you're saying.

As has been communicated by Argenix, they seem to be taking many patients from IVIG and earlier, line of therapies.

Many of that is coming from the contracts that are already agreed with many countries around the globe.

We have launched Ultomeris at the end of April, and although it is early days, I think we are seeing that we are already gaining naive patients for about one-third of the, of the initiations. We expect this to continue in the future.

But equally, as I mentioned, we are increasing the capacity as much as we can to be able to also supply and increase the supply for the patients that are not still covered with the existing contracts.

So to remember that until the introduction of this recent introduction, Ultomeris and Vivgard, Soliris was the only branded medicine in myasthenia gravis and was treating more, severe forms of myasthenia gravis.

Thanks, Iskra.

So with Ultomeris, our mission will be to go down in severity and cover a larger group of patients.

And maybe, Ahadna, you could take the other question.

So early days, but good start.

And also, there's a, question online about the clarifying total revenue guidance.

Thanks, Marc.

So, you could take the whole thing together.

Matt Weston, Crescent Swiss.

Yeah.

Matt, over to you.

So, Michael, just to answer your question around the OPEX.

Two questions, if I can, please.

So, there are a number of elements actually in OPEX.

The first coming back to operating costs.

There's obviously increase in R&D.

The new guidance on R&D, is essentially trending towards $10 billion.

And that's not just the ADC portfolio, which obviously is a big component of it.

Radnor reiterated the low 20s percent of R&D as your target, but I'm mindful that consensus has $9 billion of spend and a two and a half percentage point margin increase year over year for 2023.

But it's really across the board.

Now, I don't want to draw you into 2023 guidance, but can I just be clear that the message is pipeline success justifies increased, investment, and that's what investors should be prepared for.

And any color you can give us around that would be great.

And then secondly, a question about midterm margins.

You commented about mid to high 30s, but obviously you've also highlighted how much the potential of the Daiichi Sankyo collaboration product could have to the future growth of Astra.

And I just wonder how you see that impacting that margin number, given that you book only a very modest amount of sales, but 50% of earnings.

So I would imagine it could easily push you over that high 30s if they were to achieve the peak sales that you seem to be hoping for.

Thanks.

Thanks, Matt.

The two questions, so maybe Radnor, you can cover the margin.

The first point on the R&D spend, Matt, Radnor said to you that the second half we expect to, have R&D expenses being consistent with first half.

So if you do that, you don't get to 10.

I mean, you know, you're not that far, of course, but you're substantially below 10 if you do this math.

And in terms of the question as to whether this is justified by the pipeline, the answer is an absolute yes.

Otherwise, we will not spend it.

We have, you know, really a growing, a rapidly growing pipeline and we need to support it. If you actually think about a product like on HER2 and a product like DATU DXD, taking, them to their full potential requires a pretty large program and, you know, a lot of investment.

And this is something that we have become more and more convinced we need to do.

And then beyond those two, we have quite a number of products, Selenic Amisestron also, requires investment.

And we really want to play to win.

We want to make sure that every one of our products with potential is totally supported, so we expand them and maximize them.

As far as the margin, maybe Radna, you want to cover this, but we need to keep in mind, that we also have to aspire.

We have Limpasa, we have products that are not necessarily always helping with the margin, near term. Yeah, I think, again, you know, our ambition remains the same in terms of margin, but as, you can imagine, it's always a balance between shorter term margin and longer term growth.

And as Pascal said, you know, we're playing to win here and we continue to invest behind, the products.

The specific question you had was around the Daiichi products and the partnership with, you know, with Inhertu and Datto, and yes, we have high hopes and high ambitions for those.

But also note that we, you know, we do pay, you know, our fair share of R&D and SG&A expenses.

So while on the revenue line we may not count it as product revenue, it's counted as collaboration, revenue, our profit share.

We are contributing, you know, our fair share of expenses.

So we really need to look at sort of an operating profit line there rather than the sort of, the margins that are implied.

And again, we're focused on cash flow and improving our operating profit from a dollar, standpoint and a margin standpoint.

I mean, these two products that can be very large, these two ADCs, they will drive tremendous, growth past 25 and until 25, they will drive growth, but it will also drive a substantial investment.

These studies in oncology, they tend to take time, they're expensive, and they're quite, large.

So that's really what you have to keep in mind when you look at the margin.

But having said that, I'd just like to repeat what I said before.

We haven't actually changed our ambition to improve our margin to mid to high 30s in, the mid to long-term horizon.

So nothing has changed there as far as our profitability ambition. It's just that we want to make sure that we do this, and at the same time, we don't improve, margin at the expense of long-term sustainable growth.

Emmanuel Pavarotti?

Thank you.

Hello?

Yeah, Emmanuel.

Oh, sorry.

Okay.

Perhaps I'll take a question on capofacertib ahead of the Capitello 291 data due in the, second half of the year.

So just your degree of optimism, excuse me, Susan, on probability of success in light of faction and given a pretty mixed history for the class.

And then a couple of follow-ups.

And Herto, perhaps you could just give us a bit of color, on where you think you are in terms of second line metastatic share conversion from the current standard of care, TDM1.

And then Evershield, you've mentioned several times, it's retained efficacy, but I think it's pretty clear from recent publications that TxGEVMAB at least has almost completely lost efficacy against the BA sub-variants.

So is there any contingency built into the contracts, you're signing around returns or cancellations for potential complete loss of efficacy, which seems like a pretty high risk?

Thank you.

So maybe what we could do is, Soudan, you'll cover the other question in a minute, but Manny, do you want to cover the Evershield from sort of an efficacy viewpoint and what we're working on?

And then Iskra, you could cover the question, about contracts.

Yeah, it's a great question around the antibodies.

I think we were very specific, in terms of always having two antibodies in Evershield specifically for the reason that you're asking.

So we have seen obviously some reduction in activity, or one or other antibodies, but actually when you put them together, the efficacy remains intact and robust.

And I think you also need to be careful, not to be confusing a decrease in neutralizing, in vitro neutralization pseudovirus assays with a decrease in efficacy because that doesn't necessarily translate because you don't know what the level of neutralizing activity in vitro is.

To go see, Iskra said in the real world studies, that we're seeing with current variants, the efficacy is remaining very robust across all the variants and so because we have two antibodies, I think we're in reasonably good shape.

And can we say we're never going to get resistance, but I think we're reasonably well protected. But of course now the next generation of antibodies, that we've acquired are going to enable us to find additional binders that will further protect us from those resistant variants if they occur.

Many before Iskra covered the contract question, maybe something that's worth reminding everybody is when we talk about the efficacy of Avershield, the numbers you've heard are efficacy against one symptom.

We're not talking about efficacy against severe disease, or whatever, we're talking about efficacy against one symptom.

So it's a tremendous level of efficacy that we have today, and then real world evidence is demonstrating it's still there.

What that means is we protect people, not against severe disease, we protect them against being symptomatic.

So it's a fantastic efficacy.

That's like a runny nose, a cough, a fever.

I mean, it's mild symptoms. Yeah, one symptom being a runny nose or a cough.

So I mean, it's really a very, very impressive efficacy.

And I think it's really worth highlighting again, that we really believe that the activity will not be lost in the new variants.

And I think that just to build on the Mena point, we do see a different level of efficacy of different antibodies in the different variants.

But it is true that one or the other, are really keeping the strong efficacy.

Therefore, I mean, and we are working with the governments, and the relevant healthcare stakeholders being transparent on that.

And I do believe that we will find a way, even in case the resistance will happen to make sure that we deliver what will be needed to protect the patients and equally to find a way how to make sure that governments will be protected in a way given the unpredictability of the COVID-19 environment.

I think it's also fair to say that from the vaccine onward, I think we are all working in the environment that is extremely volatile and dynamic.

And that we are all taking a different level of risks, moving forward, making sure that we deliver medicines, both vaccines and antibodies that can continue to protect the patients and protect them from the COVID-19.

So in terms of the development of CABIVA30, we were very careful to make sure that we, developed the right dose and schedule. So the intermittent dosing schedule, four days on, three days off, is something that optimizes the tolerability and minimizes the discontinuation rate, which I think is an important feature of the design.

And then the second thing that builds confidence is, of course, the data from Fraction, which are highlighted in the presentation, 55% of patients have the activated pathway, PF3 kinase, AKT, or P10 loss.

And in that group, we saw really impressive improvement in not just PFS, but in overall survival, with a hazard ratio of 0.46 for overall survival.

So, you know, we do phase three trials in order to confirm the activity we've seen in phase two, but we have a good level of confidence in the importance of this pathway, and in the ability of this molecule to inhibit the pathway well, and to have that done at it in a tolerable way.

And I'm just going to hand over to Dave now to talk about the INHERTU question.

It's Emanuel on INHERTU.

We've seen really brisk conversion in second line just two months, after approval. We now have 35% share of second line INHERTU positive.

Just to put into perspective we saw Kadsila TDM1 a year ago, probably in 45 to 50% use. And so the majority of that 35% use that we're seeing right now in second line is coming at the expense of TDM1.

We do see some reduction in some other areas.

I'd also note that we also continue to see use in third line plus for patients who don't see, obviously, or who haven't had an opportunity to be able to yet get INHERTU in the second line.

So proud of the work that the AZ and DS teams are doing just in two, months after the launch.

Thanks, Dave.

So we are over time, but we appreciate that you're very interested and we love your questions and they're great questions.

We also want to respect your time so we'll take two or three more questions and then close the call.

Victor Sundberg at Nordea.

Victor, over to you.

One question on MEDI 5752, your PD1 CTL4 by specific that you presented at, ASCO.

I think it was clear that the 1500 milligram cohort was too toxic, but also on the 750 milligram they discussed and commented that the toxicity looked fairly similar to ipinevil alone.

So my question is if you agree with that assessment and if the 500 milligram dose is the way to go, forward for that program and if you think efficacy will be enough at that lower dose.

And perhaps a quick second question as well on HER2 low, just quickly.

So we know that HER2 low expression is less common in HR negative patients, but any data you have seen, if it's also lower in early lines of treatment, irrespective of HR status compared to later lines of treatment, just for modeling purposes.

Thank you.

Suzanne, do you want to cover this?

Yeah, sure.

So for MEDI 5752, first of all, at doses of both 500 and 750 milligrams, if you look at the effect on T cell proliferation rate, you are in the range of increase you'd expect to get from around a 10 mg per kg dose of epilimumab or trimilumab, um and we presented that with some uh some of the data aacr in terms of the tolerability we're obviously looking at the discontinuation rate and we're you know we'll continue to evaluate that both 750 and 500 milligrams we will be presenting some more data in combination with chemotherapy um in the non-small cell lung cancer setting uh at the world congress on on lung cancer so look for that as well but we look at the totality of the data and overall we're encouraged with the profile that we see that we can um get a good uh tolerability profile um with improved efficacy compared with what you'd expect with a pd1 agent alone and in terms of HER2 low um i don't see a real shift in the HER2 low and prevalence between early and late line thanks susan peter welford and jeffreys um just two quick ones firstly just a comment on other operating income um and the comments you made with regard to second half i'm curious does this mark at the end now of the of the sort of serious portfolio optimization that we've seen from AstraZeneca and should we now envisage therefore an end to these profits or is it more just this particular year given macroeconomic challenges you know the management's current focus that hasn't been the same degree we should not necessarily assume that's going to be the case uh in the future years and then secondly just coming back to the sgna just curious you've talked in the past about the fact the years of investing more and more in china are now over um just curious if you can update us on your thoughts there um are you actually now taking cost out of china or or how should we think about investment in china uh when we think about the sgna trend thank you so maybe i can cover quickly oh i see because you know i always um describe what we've done as sort of pointing the tree right i mean and basically the divesting products that would be better managed by someone else than by us and someone else could create value so we've done a lot of this there's less less today of course and basically now we are trying to grow new branches to this tree to make it a beautiful tree with launching of new products but it doesn't mean that um it's finished i mean we'll basically manage that as we go but there's definitely peter there's definitely less older products to divest and less less other income moving forward so our intent is really to focus on our on our products our new products grow them and uh and develop the pipeline i hope yeah and i think the second question was around china and uh whether we're investing more in sgna in china um clearly it's been a tremendous growth journey in china over the last several years as you know the government and pricing policies have uh have have put the growth there under pressure um that being said we continue to invest in new products and hopefully the new product launches will will drive that growth we are managing our cost base in china uh in proportion to uh the the revenue decline that we see and again we'll continue to manage that while uh while investing in innovation thanks so we'll take the last question she must find on this as good and i'm sure much over to you, There's Pascal, and maybe you can be knighted for horticultural comparisons as well.

But the dynamics, I guess, around GATO, one quick question there, you know, maybe you, guys can just help us understand, when you look at the data, Dave, you said you would hope that it would potentially replace late line chemotherapy, but it's also being studied in combination with platinum-based chemotherapy.

So is it your expectation that we will continue to see platinum-based chemotherapy as part, of these regimens, or is it possible that that could be eliminated from the regimens going forward?

And then secondly, just very quickly, on the COVID antibody approaches, just hoping you, guys could give us a little color on whether or not the regulatory environment is changing such that COVID antibodies can actually come to market, almost in the way that flu vaccines are re-approved over time.

Just hoping to understand that context a little bit better.

Thanks so much.

Thanks very much.

So Dave, the first one.

Or Susan, or yeah?

I'm going to assume I can start off with that.

Yeah.

And then the second one.

So the data that we'll present with the tropion lung O2 at the World Congress on lung cancer, looks at a combination, both with the doublet of GATO-DXD plus PEMBRO, as well as the combination with platinum-based chemotherapy.

So I do think that it's probably going to depend a little bit on, you know, how patients, present and what physicians are wanting to achieve. So for those patients with bulky disease that want to achieve rapid and durable responses, you know, there's a choice there.

But you'll see the data at World Congress on lung cancer as it comes through.

Yeah.

I mean, I think the only thing that I'd add, and, you know, James, you're pointing out, that I sort of talk about the first sequence.

I think that the first step is replacing some of this late-line systemic chemotherapy.

In terms of what's possible as we move into earlier lines, I think that, you know, obviously, both platinum and PEM are utilized here.

And so one of the important clinical questions is the one that you're asking, which is, would, we be able to replace both or just one of those?

And they've got very different kind of tolerability and number of cycles considerations.

So those are the kinds of things we'll be answering in the program as the phase threes, in the frontline get underway.

Pemex Vax is a relatively easy chemo to use, so it's tempting to continue using it.

Mened, do you want to cover that?

Or Ischad, do you want to cover that?

I think it's a good question, and I can say that we would be hopeful to see the regulators, taking the approach of the COVID-19 medicines, both on vaccine and antibodies, in the same way as they are doing for the flu.

That would definitely accelerate and ease the way of the new updated vaccines and monoclonals, and all the new variants coming to the patients.

It's still not the case, but I'm sure you're aware that there are many discussions between, the regulators and equally discussions between the regulators and the manufacturers and the industry, how to accelerate and optimize that process to be able to continue to be agile and flexible when it comes to bringing the medicines again.

Thanks Iskra.

So we'll close here.

Thank you so much for your great interest and I wish you all a good day and a good weekend.

Thank you.

The conference will begin shortly to raise your hand during Q&A, you can dial.

, .