Q4 2022 AstraZeneca PLC Earnings Call

Number of questions you ask to allow a third chance for others to participate in the Q&A.

As a reminder to ask a question. Please use the raise the hand function and zoom.

<unk> you can click the Q&A button and write your question online.

Please advance to the next slide and with that Pascal I'll hand over to you. Thanks, Andy and Hello, everyone. Welcome to this call.

We can move to slide five.

We delivered a strong 2022 performance, finishing the year with total revenue and EPS at the upper end of our guidance range, which I'm sure you will remember we have granted twice during the year.

We reported total revenue for the full year of $44 4 billion.

Which represents an increase of 25% at CER core EPS was $6 60 66.

Which is up 33% compared to the prior year, our business fundamentals remain strong supported by our diverse portfolio of products and also our broad geographic footprint. It is from this base of strength that we are announcing our 2023 guidance, we expect core EPS to increase by a high single digit to low.

Low double digit percentage.

Even that we anticipate a very substantial decline in demand for current medicines in 2023.

This guidance is clear evidence of the strength of the underlying business as well as our commitment to delivering improved profitability.

Please advance to slide six.

Excluding our current medicines, we now have 12 blockbuster medicines and we've made remarkable progress in our pipeline over the year with eight positive phase III Readouts and a record 34 regulatory approvals in key markets.

Our pipeline momentum continues to build and I'm pleased to tell you that we are planning to initiate more than 30 additional phase III studies in 2023, and we believe 10 of these trials have blockbuster potential.

Yes, just a few examples of phase III trials, we are initiating based on promising data we saw in the year in oncology. We are moving our next generation of all subcommittee restaurants.

Into the adjuvant breast cancer, setting and we are progressing to bi specific antibodies into several new phase III trials.

Following our proposed acquisition of Cinco, we intend to initiate a phase III trial of backfill starts in hypertension.

And lastly, we have an opportunity in rare diseases to raise the standard of care and once again for patient with Hypophosphatasia with with all exon 18 50 on next generation hospitals as today's Alpha please advance to slide seven.

In order to stay at the forefront of scientific innovation. We are also making strategic investments in new platforms and technologies that have potential to drive additional waves of innovation.

With a few examples listed here.

To date, we have not only been able to build a sizable pipeline for one with the potential to add significant value to patients and their treating physicians as is clearly evident from the many accolades that our medicines received this past year. So as you can see we are working on today, we are working on tomorrow, which is 2025, 2%.

And we're also working on the loan.

Long term with those new investments in new technology, Please advance to slide eight.

Today, we are announcing our ambition to launch at least 15, new medicines by the end of the decade, which will support our ambition to deliver industry, leading revenue growth over the long term looking first at 2023, we're confident that the strength of our underlying portfolio will enable us to outgrow expected revenue declines from October <unk>.

<unk> medicines.

Over the mid term excluding the current medicines, we're on track to deliver on our previously stated ambition of low double digit total revenue.

CAGR growth through 2025, which is expected to come from our existing medicines and new launches.

When we look to the long term, we're on track to deliver industry, leading growth well beyond 2025 and.

Underpinning this confidence is the strength of our commercial portfolio.

Also the extensive pipeline we are developing additionally, while the portfolio has a relatively low exposure to loss of exclusivity compared to peers, we take a very proactive approach, which which starts many years in advance.

As you can see here we have three examples were follow on medicines are being identified and underway.

<unk> initiated to replace revenues that may be lost following the few patent expiries that are expected to occur before 2030 and of course. The focus here is on the <unk> franchise management lean Pother replacement was above one and the switch of service service to intermediaries.

The scale and promise of our pipeline with a strong track record of delivery and the growth outlook for our company is very exciting indeed.

Importantly.

We also have a clear trajectory to reduce greenhouse gas emissions with targets that have been verified by the science based targets initiative.

And finally, we remain focused on our ambition to improve operating margins as we stated before.

And now I will handover to hard not to take you through our financials and provide more insight into our 2000 industry guidance over to you.

Thank you Pascal and good afternoon, everyone.

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

Please turn to slide nine.

As Pascal mentioned total revenue increased by 25% in 2022.

Yes.

Fiscal year guidance of a low 20 percentage increase.

Excluding COVID-19 medicine total revenue increased by 15%.

Collaboration revenue increased by 56%, partially driven by higher and Hilton sales.

As a reminder, we booked our share of gross profits from most major markets as collaboration revenue.

Test fire, we book our share of gross profits from the U S. As collaboration revenue and ex U S sales booked as product sales.

Please turn to the next slide.

Our core gross margin on product sales increased by six percentage points to 80% in 2022, driven by lower <unk> sales compared to the prior year and favorable product sales margin with higher proportion of oncology and a full year of Alexia on medicine.

In the fourth quarter of $335 million cost of inventory write down and other termination fees negatively impacted core gross margin by approximately three percentage points.

Core R&D cost increased by 24% in 2022, driven by initiation of a number of new late stage trials in areas, where we have seen promising data as well as a full year of Alexia on R&D costs.

We have also increased investments in early research, including discovery and new platforms and technologies to maintain scientific leadership.

R&D as a percentage of total revenue remained in line with our expectations around 21%.

SG&A investment increased by 21%, reflecting a full year of alexia on costs as well as new launches and prelaunch support.

As Pascal mentioned in his introduction, we received 34 regulatory approvals in major markets last year, which also impact SG&A cost as they need to invest behind these launches.

However, core SG&A costs as a percentage of total revenue decreased in line with our commitment to deliver operating leverage.

Our core operating margin was 30% in 2022, an improvement over 2021, when our operating margin was 27%, reflecting the impact from the February sales.

We continue to focus on steadily improving our margins without compromising on our top line growth ambition.

Core EPS of $6.66 wasn't the upper end of our full year guidance and was impacted by the <unk> cost I previously mentioned, but benefited from a lower tax rate for the year, partly as a result of much lower tax rate in fourth quarter 2022.

The core tax rate in the fourth quarter was 10% due to favorable one off adjustments.

Incentive regimes.

Graphical mix of products and profits and adjustment to prior year tax liabilities.

Please turn to slide 11.

Our cash flow performance continues to improve and in 2022 net cash inflow from operating activities increased by $3 8 billion.

298 billion driven by strong.

Conversion and continuous focus on cash generation.

We saw Capex of $1 1 billion driven by investments in manufacturing capacity R&D equipment and Alexia on integration.

We anticipate capex to increase in 2023 to support business growth and sustainability priorities.

In 2022, we had deal payments relating fast transactions of just about $2 billion.

And we anticipate a similar level in 2023.

Our net debt decreased by $1 4 billion to $22 9 billion.

Our net debt to EBITDA ratio decreased to two five times.

If adjusting for the Alexia on inventory fair value adjustment, which does not impact our cash flow the ratio decreased to one eight times.

Most of the fair value inventory from Alexia <unk> has now been expense with just over $100 million more to come in 2023.

Our capital allocation priorities remain unchanged with number one priority being reinvestment in the business.

Please turn to slide 12.

I am pleased to share our 2023 guidance with you as a reminder, all our guidance is at constant exchange rates.

We expect total revenue to increase by low to mid single digit percentage excluding.

Excluding our COVID-19 medicines, we anticipate total revenue to increase by low double digit percentage.

As implied by the guidance, we anticipate a substantial decline in COVID-19 revenue.

With minimum minimal <unk> sales.

This guidance assumes some antibody sales, including revenue in 2023 from our next generation antibody <unk> hundred $1 five two.

We anticipate the core gross margin will benefit from lower Covid revenue and then we will see a slight improvement versus pre pandemic levels.

We will continue to focus on continuous margin improvement, while managing the impact of inflation on the cost of raw materials and goods.

In China, we expect to return to growth in 2023 with 2022, having been more of a transition year due to pricing dynamics relating to BBB and our deal.

Of course, the short term impact of the current Covid wave in China is difficult to predict.

While maintaining a strong strong focus on cost management and operating leverage we will continue to invest in the pipeline and core operating expenses are anticipated to increase by low to mid single digit percentage.

Collaboration revenue and other operating income are anticipated to increase versus 2020 to incur.

The increase in collaboration revenue is partly driven by continued strength in <unk> sales as well as certain success based milestone payments.

Other operating income anticipates certain expected transactions that may or may not materialize during the course of the year.

The core tax rate is anticipated to be between 18% and 22%.

We have previously highlighted that the U K tax rate is anticipated to increase from 19% to 25% in April .

We will also start seeing implementation of the global minimum tax rate in many countries.

Core EPS is anticipated to grow by high single low double digit percentage at constant exchange rates.

Based on average January FX rates, we anticipate a low single digit adverse FX impact on both total revenue and core EPS in 2023.

With that I will hand over to Dave to take you through our oncology performance. Thank you Rodney and we're pleased to report please turn to slide 15 oncology total revenues for the full year 2022 grew 20% year over year underpinned by 19% growth in product sales in the fourth quarter oncology.

<unk> delivered total revenues of over $4 billion.

Reflecting a 12% increase year over year, we saw strong double digit growth in product sales across the U S Europe and emerging markets with established rest of world impacted by rising COVID-19 hospitalization rates in Japan.

Turning now to our individual medicines to Grisso global revenues grew by 12% in the fourth quarter in the U S. Fourth quarter growth was fueled by continued a door of momentum and increased Florida duration of therapy, we saw solid growth of 17% and Europe , despite impact from pricing claw backs in certain markets.

China tourists or revenues in the fourth quarter were impacted by hospital budget management execution in China remains strong and we expect demand to outpace the pricing impact following an RDR reenlistment, which will take effect in March limb parser remains the leading PARP inhibitor globally with fourth quarter product sales growth of 17%.

And we received a milestone tied to the European approval of propel in the quarter.

We saw double digit sales growth in the U S. Europe established rest of world in the emerging markets supported by increased penetration in breast ovarian and prostate cancers.

Turning now to intrinsic revenues grew 27% in the fourth quarter fueled by new indications in the U S. In Europe , we saw robust U S growth of 37%, reflecting rapid launch uptake in biliary tract cancer. We saw strong initial demand from Juno for use in combination with <unk> following FDA approval.

<unk> for <unk> and Poseidon.

In the fourth quarter, we reported <unk> total revenues of $588 million, reflecting 53% growth driven by increased penetration across key markets and the growing BT K inhibitor class in the U S. We saw destocking in the quarter, which reduced by half the third quarter inventory.

Build following the launch of the Maleate tablet formation, we expect this inventory build to be fully depleted by the end of the first quarter. This year and finally in her two total revenue was up 224% in the fourth quarter to $216 million in the U S and her two achieved approximately 50% new patient share.

And second line her two positive metastatic breast cancer and over 40% of HR positive her two low post chemo new patient share.

Turning to slide 16, you'll see important near term performance drivers across our key oncology medicines, turning first to <unk>, we anticipate gradual expansion in the frontline setting and continue to Dora momentum as previously mentioned, we still anticipate a mandatory price reduction in Japan to take effect in 2023.

To date, we've seen a strong launch for <unk> in biliary tract cancer, and we're establishing in Cimzia in combination with them judo in lung and liver cancers. These are both tumor areas, where we're building out our global presence and these investments will position us well to deliver on future launches across the portfolio.

<unk> remains the leading PARP inhibitor in first line HRD positive ovarian cancer, where we continue to improve HRD testing rates in BRCA mutated breast cancer, we continue to drive testing in share, particularly in early HR positive breast in late December <unk> in combination with Abiraterone received Europe .

Approval in prostate cancer with an all comers label, reflecting the strength of the phase III propel trial in the U S. We continue to work with the FDA on the propel approval following the agency's request for more time to conduct their review.

<unk> continues to gain momentum in frontline CLO and exited the fourth quarter with 64% new patient share in the U S, which we expect to be durable in the face of competition. We're excited about the recent positive <unk> opinion for the maleate tablet formulation, which will address an important patient need and allows for.

<unk> with Ppas.

We see continued demand for in her two in second line her two positive metastatic breast cancer and strong adoption in her two low we're excited to expand her too low in Europe . Following the recent approval of <unk> finally, as Susan will next recap, we look to file <unk> for HR positive advanced breast cancer.

Patients following strong phase III results with that I'll now hand, it over to Susan who will cover key pipeline progress since our last report as well as new opportunities, we're progressing into late stage development.

Thank you Jay Please turn to the next slide.

We had our largest ever presence at the San Antonio breast cancer Symposium in December of last year, demonstrating the high potential of our breast cancer portfolio to redefine the treatment paradigm.

A key highlight is phase III data for capital at 291, which demonstrated that <unk> led to a.

A significant and clinically meaningful improvement in progression free survival versus an active control or placebo plus <unk>.

With a 40% reduction in the risk of disease progression or death in the overall trial population.

We have a total of 291 validates the use of vaca to inhibition to address acquired resistance to endocrine therapy, and CDK, four and six inhibitors, regardless of a biomarker.

And also as a potential new standard of care in second line therapy for patients with estrogen receptor driven disease.

We look forward to the submission of the data with the U S FDA granting us fast track designation.

The kind of assistance a potential best in class next generation <unk> the <unk>.

As to Sabrina two trial showed improved progression free survival, providing confidence that <unk> can become the backbone of endocrine therapy of choice across all <unk> in breast cancer.

With two pivotal phase III trials in the metastatic setting ongoing Serena for answering a six.

We will soon initiate our first trial and the early setting with Cambria one.

This is an extended adjuvant trials that will evaluate whether switching consented to endocrine therapy with or without of MSI clip to come assessment after two to five years.

Bruce invasive breast cancer free survival in patients with ER positive <unk> negative early breast cancer at high risk of recurrence.

<unk> is a critical opportunity with the potential to increase cure rates and a population moderate to high risk industries such as the current.

Some additional trials with <unk>.

Stage, please turn to slide 19.

Towards the end of 2022, we reported.

Important data for our Hematological portfolio at Ash.

This included new long term follow up data from the phase one two trial.

There was a one.

For a PTK inhibitor <unk> and <unk>.

Treatment naive and relapsed refractory chronic lymphocytic leukemia section.

We also presented interim phase one data.

Is it the <unk> eight six our CD 19, CD three next generation bi specific T cell engagements.

We're very encouraged by the strong objective response rate and favorable tolerability profiles seen in heavily pretreated patients.

Diffuse large b cell and Follicular lymphomas.

Further development as planned as these results reinforce our belief today is that the old 486 provides an opportunity to reach patient populations beyond those reached by current CD 20 therapies.

Business in the next slide.

As we have signaled the development program for our took two ADC <unk>.

<unk> continues to expand with a new phase III trial in lung cancer.

Enzo will evaluate <unk> plus a PD one inhibitor <unk> versus <unk> plus chemotherapy in first line advanced non small cell lung cancer.

This trial allows recruitment of patients regardless of their tumor histology or PD lone status and.

And we will be the first to use trip to as a biomarker in both the primary analysis and as a stratification factor.

The primary endpoints in both the trip to the ITT population.

Sometimes are complements to other ongoing trials with investigator.

Combinations of <unk> and <unk>.

<unk> seven in the PD lone less than 50% population tropaean alone in the PD lone more than 50% group.

Please move to the next slide.

Finally, I am excited to update you on some progression throughout by specific programs.

<unk> and <unk>, both of which will be moving into phase III. This year.

Well look to make is our PD one <unk> four by specific and based on the longer term follow up data for the 750 milligram dose the confidence to move this into late stage trials.

The <unk> sensitive tumors.

We will be initiating five phase III trials with both of us to make this shift including in non small cell lung cancer.

In addition, our PD one ticket by specific Vivek estimate is continuing to progress.

The first patients being dosed in the phase II cohort of the <unk> zero one trial in first line non small cell lung cancer.

Our phase II program continues to grow with the Gemini trial in gastric cancer, and we plan to sell the first phase III with more details available later in the year.

Please advance to the next slide and I'll hand over to Ruud to cover Biopharmaceuticals.

Thanks, Susan Please turn to slide 22.

Revenue from Biopharmaceuticals group.

11% at constant exchange rates to $20 billion in 2022.

Total revenue from CVR <unk> was $9 2 billion growing at 90% in the year, we spoke seeger delivering over $1 billion in every quarter and growth of over 50%.

In our respiratory and immunology business, we saw strong growth in our biological medicines, such as for Sunrun, Despite soft mellow.

Along with continued progress for <unk> that growth offsets the generic pressure from older medicines, such as Pulmicort symbicort and deliver us.

Overall Rmi total revenue grew 3%.

Total revenue from our P&I portfolio was up 8% with COVID-19 broadly flat as expected.

Please turn to slide 23.

In 2023, we approach to be bringing the transformative benefits of our more modern medicines to more patients around the world and we will continue to expand into new geographies with plans for launching in over 30 countries with aspire and nearly 20, each for breast <unk> and soft mellow.

This is Brian .

<unk> seen very strong momentum since its launch this time last year and it has already achieved new to brand share of over 20% in the United States.

In 2023, we will look to extend that trends and replicated in other major markets.

<unk> is also enjoying good growth doubling revenues in 2022.

In 2023, we intend to capitalize on the growth of the fixed dose combination triple class and raise awareness among patients and pulmonologists of the benefits that this medicine Briggs.

<unk> is the first and only rescue therapy to treat underlying information in asthma.

This year, we will educate practitioners and patients about this new class of medicine and building a market, Texas ahead of commercial launch.

So <unk> is the first new treatment for lupus as Lee in over a decade and has quickly become the new to brand share leader in the intra venous segments in the United States.

We have successfully launched in eight markets at the end of 2022 and by expanding across Europe and other markets. We can bring this medicine to even more patients in 2023.

And of course procedure is continuing its impressive growth held by its expansion into heart failure with preserved ejection fraction following to deliver results.

With such a strong portfolio of innovative products, we remain very excited about the long term prospects followed by our pharmaceuticals business.

With that I will now turn the call over to <unk> to cover our pipeline.

Thank you Ruud and please turn to slide 24.

I want to start by providing some highlights from our mid to late stage pipeline and CVR rem, demonstrating the depth and breadth across our portfolio.

I won't go through all these assets in detail, but I wanted to draw your attention to the areas, we are focusing on namely cardio renal metabolic and liver diseases.

Supporting our commitment to cardio renal diseases, you will see in the quarter, we announced our plans to acquire a cynical, adding back <unk> a novel <unk> inhibitor, which further strengthens our pipeline and I'll go into more detail on this in the next slides.

The other thing to point out is our progress with <unk> in phase II for Nash <unk> also being investigated in heart failure with preserved ejection fraction, which is currently in phase two b and also in COPD, which is in phase Iia.

This is a mechanism first in class mechanism targeting myeloperoxidase, which is known to cause the formation of hypochlorous acid, which interferes with micro bus the function.

Preclinical models, we've seen robust efficacy, which reduced inflammation fibrosis and also improves microvascular function to see it as a very exciting first in class mechanism with broad application across our portfolio.

I'm also very excited about some of the progress you've seen with our earlier stage assets, such as our long acting relaxin and heart failure with pulmonary hypertension.

<unk> three <unk> nucleotide for genetically driven Nash and are all small molecule oral <unk> inhibitor with Dyslipidemia and I look forward to sharing updates on these molecules with clinical data in the coming quarters.

Please turn to next slide.

And I want to showcase in more detail for Sega combinations and how they are differentiated from each other.

First <unk> is a selective mineral courts could receptor modulator, which believe could have reduced risk of hyperkalemia versus conventional MRI antagonists we.

We have an ongoing phase II study looking at <unk> patients with heart failure population, which has limited treatment options.

Second is <unk>, our <unk> receptor antagonist, which has been shown to improve renal blood flow and reduce albumin urea and vascular stiffness.

The selective profile is it percent unencumbered nature, plus Seeger is expect to reduce significant side effects of fluid retention, a hallmark of traditional endothelin receptor antagonists.

<unk> phase III trial in <unk> patients with micro Albin urea.

And this combination is also being investigated in liver cirrhosis and recently dosed in phase II.

And finally <unk> <unk>.

They are being investigated as a monotherapy for treatment resistant hypertension, we believe when combined with placebo with significantly benefit patients with hypertension and several other cardio renal diseases.

<unk> is shown to be effective at reducing systolic blood pressure without of target inhibition of cortisol synthesis.

And this treatment paradigm would offer a much needed option for patients with <unk> and hypertension, and we're planning to initiate phase III trials for this molecule through the course of this year.

Please turn to the next slide.

Here I'm highlighting some key late stage assets that have progressed will plans progressed during the year.

Our IL 33 monoclonal antibody to the Rocky Mab entered phase III trials for adults hospitalized with viral lung infections with acute respiratory failure.

Merging all 33 signs and viral lung infections provided confidence to advance to phase III.

During the quarter, we also dosed all phase one three supernova trial, which investigates the safety and efficacy of our next generation long acting antibody <unk> hundred one <unk>, two and COVID-19 pre exposure prophylaxis settings in immunocompromised patients.

<unk> hundred <unk> to neutralize all known veterans from Alpha all the way to <unk> one five.

The immuno bridging trial design has been agreed in principle with both FDA and the EMA shortening the time between discovery and approval.

We will aim to make the new lab available in the second half of 2023 subject to trial Readouts and regulatory reviews.

And finally, we're expanding soft mellow into new auto immune diseases planning two new phase III starts this year in scleroderma and police mono sciences.

Please move to the next slide now now hand over to Mark to cover rare diseases.

Thank you and please move to slide 28.

In 2022 rare disease total revenues grew 10% on a pro forma basis.

Contributing $7 $1 billion.

Throughout the year, we saw continued durable growth, but we'll see five franchise, which grew 7%.

<unk> grew 42% in the year and 62% in the quarter.

Reflecting an accelerating and successful conversion.

Consider these across <unk> and <unk>.

In Mg.

Consequently, soliris declined 5% in the year.

Which was partially offset by the growth in anymore.

<unk> remain the market leader.

Beyond the <unk> franchise strengths seek delivered 18% in the year and 27% in the quarter.

Due to increased awareness and diagnosis.

As well as geographical expansion.

<unk> contributes.

Contributed significant growth in the quarter.

He is now available in 20 markets 28 markets.

Our geographic expansion continues.

<unk> of course, I think our footprint and we launched in 11 more countries in 2022.

This figure includes China.

Where soliris as loans in <unk> and then typical its U S late in 2022.

Our rare disease medicines.

<unk> in 57 countries and we are well on track to achieve a 100 countries by 2030.

Please move to the next slide.

I wanted to spend some time discussing.

Discussing our approach to <unk>.

Our conversion from Soliris to <unk> is now well over 80% for both patients and payers.

We'll switch for both convenience and cost reasons.

<unk> is an ultra rare nonsense.

Threatening blood disorder.

<unk> by Intravascular hemolysis.

At the edge, which is caused by an uncontrolled activation of the complement system.

Elevated LDH, either biomarker for <unk> and <unk> inhibitors.

Over 83000 patient years of experience and long term safety and efficacy data.

Demonstrating <unk> continued and sustain LDH reduction for patients.

The large majority of the patient on <unk> are very well controlled.

There is a sub population.

10% to 20% of patients.

That do experience clinically meaningful extravascular hemolysis.

They are on <unk> inhibitors.

Based on patient data from the two largest studies.

<unk> in <unk> patients.

We have developed <unk>, a new whole factor D. As an add on therapy for these patients and.

And we plan to submit our data to regulators in the first half of this year.

Please move to <unk>.

Next slide.

Here I wanted to showcase two of our planned phase III trials for the year.

First is <unk> in cardiac surgery associated acute kidney injury.

Part of vulnerable expansion plans for two minutes.

Acute kidney injury is a high unmet medical need causing patients to endure.

Of kidney function renal replacement therapy and risk of mortality.

For patient with <unk> the risk of Hai following cardiac surgery is increased by 60% to 80%.

We will focus on the subset of those patients with kidney ischemia, where complement reservoir.

This program is unique as we plan to use <unk> in equivalent that you've way a single dose given prior to surgery in these <unk> patients and exciting opportunity with blockbuster potential.

So another phase III planned for this year is $18 50.

Which is our next generation <unk> Alpha in April for switches.

<unk> has been optimized by all researchers for a longer half life.

To allow for less frequent dosing.

We are also built it to have a better enzymatic activity.

We can dose at lower volumes and to have a superior manufacturing process.

We believe.

But this improved therapy will allow us to deliver more than two times the addressable population.

Relative to <unk>.

Gives us great opportunity for geographic expansion.

Bringing this medicine to <unk> patients, where there are no other treatment options.

And with that please turn to slide 30, and I will be on.

On the call back to Pascal. Thank you Marc can even move please to slide to the next slide.

Thus, we said before we delivered a great performance in 2022, and very importantly, we made significant progress with our pipeline.

We are very confident that 2023 will be another great year for our company.

With the growth of our underlying business more than offsetting the decline in demand for our Colgate medicines.

We're expecting to announce the results of at least 18 phase III trials in 2023.

And I've called out a handful of significant wants to look out four on this slide as you can see on the left hand side.

Our pipeline progress together with the strength of our strategic product portfolio makes us confident to delivery to deliver industry, leading growth for many years to come.

We expect to launch at least 15, new medicines by 2030.

Lastly, we have set bold bold targets for our company to reduce emissions.

I very much hope that leading by example to address climate change means by all of us to do so as much as that come.

With that I will hand, the call back to Andy.

Thank you Pascal and our stake is not will be joined by other members of our executive team to go to the Q&A. As a reminder, you can raise your hand, and GM or type of questions by the Q&A button, we will try to answer as many questions as we can during the call. Although please limit the number of questions that you asked to allow all on the call a fair chance to.

Right.

With that Pascal I'll hand over to you to start the Q&A. Thank you Andy on where to start with.

The online question by under Obama on the whole go ahead.

Thank you so much and apologies for the background noise.

First question in relation to risk and this is an observation rather than a question.

Youre expediting a number of particular oncology programs into phase III from phase. One obviously you have been emboldened by some of your experiences with Doctor to XD.

<unk> for example, but how do you think about managing that risk.

The balance of the time within the April portfolio, and then second question in relation to your prophylactic COVID-19 antibodies.

If you have to get approval under EUA or full approval and does that impact how you're able to use your field force to promote the drug.

The significant uptick in the fourth quarter, perhaps the removal of EUA.

About the smartphone guide revenue perspective, thank you.

Thanks, Sandro summary, Suzanne you can cover the first question and a niche higher cover the second one inches authority UA and use of sinful.

Okay. Thanks for the question and so I think in terms of the acceleration of products them early sites into light sites, we do have.

Because see expansions in all of the trials, where we've moved product since until late phase decision, making so we have a robust dose.

Selection dataset, and we have robust both efficacy and safety data set to support those.

Investments.

And in the case of the ADC with a clinically validated.

Linker warhead combination and based on the data we've already seen with within her two which together with the data that we have with debt to poach them deluxe account across multiple trials gives us confidence in the profile and similarly with the bi specifics I would just comment that I think the Cta LIFO.

Very well validated target the challenge has been the Tolerability and the design of <unk> is designed to address specifically that challenge and we're encouraged by the data that we've seen particularly with longer follow up and to support that so I feel that we're not just accelerated number of acceleration on the pace of.

Good data that convinces us that this is a.

A good balanced risks.

Uh huh.

Yes.

Thanks, Andrew for the question as you as you fairly notice definitely advancing the development of our new antibody and we do aim to make it available to the patients in the second half of this year.

By developing the clinical development program, we also consulted with our regulators, including FDA and that is that as our agreements to basically look at the immuno bridging data from the study and.

Grant emergency approval based on those data and the key reason for that is the significant unmet need in this long acting monoclonal antibody. The same resolution we remain the only option.

Given time for the for the protection for the immuno compromised patients.

On your second part of the question on the promotion that is absolutely correct that any emergency approval.

Dictate how much you can do and the promotion of the field force in U S. But it's also important to note that during the call. They then because of the high unmet need.

Different exceptions.

All stakeholders do understand the importance of education and raising awareness both in a patient population that needs protection as well as in the health care professionals and we do believe that.

That will continue again, given the high unmet need and given the fact that COVID-19 is here to stay and those patients will need protection going forward.

Thank you very much.

Just had run at the Andaz banking not just over to you.

Thank you so much two questions. Please firstly on manufacturing capabilities at the company is known as one of the strongest in small molecule manufacturing within the industry, but.

But as the company moves into more complex modalities within R&D like cell therapies I'm curious to hear if in the medium term there is a need as well as to step up your in house capabilities within manufacturing for those areas as well and then secondly, when I look at consensus predictions for both 24 and 25 top line is below double digit down for <unk>.

Six and 2007 and around 45% growth, which I doubt would be enough to quantify is the industry leading growth, so which areas are perhaps beyond 25.

As for the company.

It remains underestimated by the street. Thanks, so much.

Thank you Richard So let me just try to cover the first one.

We think we have strong manufacturing capabilities in small molecules, but also in large multi carriers. We have been developing this over the last number of years and as you've seen from our presentation. We have now several biologics.

Now in terms of new technologies. It is true that moving forward, we will need new capabilities and we are working on this.

<unk> therapy of course, but in other fields as well so we definitely are.

Looking at this end.

We will build the capabilities, we need is the pipeline of races and we.

We develop we get data from products that give us confidence that we need to get up but definitely we are looking at it from a CMC viewpoint already owned.

With many technologies.

Second question, we don't actually guide by products.

So.

Not exactly sure how to answer your question right in terms of judgment based on the consensus consensus is looking at a variety of products.

This.

We don't need to say that.

We think we can derive growth across the totality of our portfolio first of all emerging dependent expiries as we've explained here.

Secondly, launching new products and thirdly growing the.

Existing products, we have in the pipeline now I don't know if any of my colleagues want to add anything here, it's a little bit difficult to give you guidance by products related.

Yes, we have 15 new launches.

And definitely lots of growth in our so called commercial portfolio, our existing products, but the 15, new launches of this our enemies and beyond. This we have allows range of line of lifecycle management programs. We launched 30 30, new phase III. This year a lot of those are.

Cycle management programs that will add sales to existing products.

<unk> will become part of the consensus as.

Before realized what those studies.

I think the Cmos.

We've gone through we've got so much more than this the next question comes from Tim Anderson of.

Jim over to you.

Okay.

Thank you.

Two questions on data DXP the decision to move into a new phase III trial in frontline lung.

Interpreted as you, having even higher confidence in the pending trophy.

Stroke longer one readout in second line.

Is that a fair read through that we can make.

Decision to move into a new frontline trial totally independent.

What drove a one shows and then second question is on earnings guidance, you're kind enough to give us revenue guidance for 23, excluding COVID-19 revenues the earnings guidance still contains COVID-19 contribution.

The sports results year on year could you give us an idea of what that earnings guidance would be if you exclude COVID-19 from the pace in 2022 as well as 2023.

Great question Jim.

First one certainly can cover on the second one.

No we don't.

Split EPS for our profit by product franchise.

Thank God knows you could give some color to this Susan you want to cover the first one yes. Thanks for the question. So the confidence industrial is monotherapy and the second line is built from the monotherapy experience that we've got and previously and the confidence to move into.

The advance and.

Study is built from the some of the data that you've seen with the European lung <unk> two data set with the combination with <unk>.

Immune checkpoints inhibitors, so I think.

Well you know what that shows is there's also activity in PD lone low.

Patient population with that combination as well.

Then of course, we've been working on developing chip.

<unk> biomarker based on the.

The initial data so I think there's different elements that are involved in the event of subsidy.

I would just say that we have confidence built across multiple data sets.

For the <unk> program.

Yeah, and as it relates to Covid related contribution for 2023.

Again, we don't breakdown profitability byproduct, but I can just say that.

The Covid contribution is not material to profitability in 2023, we did mention that we are advancing.

The next generation antibody, obviously, we have some expectations and before year end, but we're also obviously spending.

<unk> on clinical trials and are actively recruiting that so.

The net contribution is not expected to be material.

Thanks, Alan So Tim I'm sure you will triangulate those numbers, but if you do that then.

Combined with.

<unk>, which is very minimal profitability for Covid in 'twenty, three and you look at what's a good estimate for 'twenty two I'm sure you realize the underlying profit growth for the rest of the business is very substantial so definitely well on prior careers growing settlement profitability from.

The underlying.

Business <unk> reserve are for you.

Hi, guys. Thanks for taking my questions.

Our next Gen ready sorry, one for Marc just in terms of confidence in the.

<unk> given some of the recent competitiveness launching and having data and perhaps you could also highlight the advantages of <unk>.

Subcutaneous T 51720.

Which I think is just starting phase III myasthenia gravis or when might we see some data for that and what are the advantages that.

You can all back and on the cost side, yeah, there's a lot of commentary around.

Your savings.

After the deal it looks like.

Synergies are higher.

But this seems to be on a gross level scientists for any reinvestments should.

Should we expect any of that increase in cost savings just want to the bottom line or do you plan to reinvest thank you.

Okay.

Thank you for the year three question I will take them in order. The first one is our confidence in <unk> five.

Yes.

If your subsidy see true that they are growing growing competition in <unk> and we have always.

We had always modeled that we deal with.

Said.

Our franchise <unk> franchise would be durable sustainable, but it would not be static in other words.

We're going to lose to some competition in all of our earlier indications, but we're going to grow into new indication and we are continuing to pioneer.

Development on <unk>.

With two minutes, but as you mentioned 17, 'twenty and other products in the complement cascade to gain.

Hearing a new indication today are described one of them.

Got you.

So jewelry associated API, but there are several others several other new indications that we would pioneer.

For the C five inhibitors.

Talking about 2017 20 it is.

Absolutely you're right that we have initiated a phase III trial in <unk> obvious upon us as initiated late last year.

We expect to readout in a number of months, obviously your field that we know well.

So good formulation as you have.

And so size and we have a big hope with this product. We will also study potentially other indications for <unk> by specific 17 'twenty.

In the coming months.

Talking about the synergies into the fact that we have been able to find quite a lot of synergies.

In manufacturing in enabling functions, but also also synergies in the scientific.

World, where we can when Alex shown can now tap into many of the existing capabilities.

In research and development and a.

A lot of exchange of animal models.

Chemical library high scope of screening.

The variety of synergies is wide and we do reinvest part of the synergies into beefing up on research and development capabilities.

For us to develop a more molecules, we expect to have by the end of 2023.

About then.

<unk> in phase III trials. So for this is a great increase in comparison to what we had in the past and of course, we will provide.

When these products become ready for phase III, we will provide visibility and explain what they.

Hum.

They're going to pull to produce.

To this end caremark.

Maybe just.

Some further corridor resolve on addiction.

It is a very good company very strong company has a very strong team good science good products.

Essentially in and also very high profitability as you know very well from bus numbers that I think John was publishing so our goal is really not to try and the.

Optimize the cost base, we are generating a lot of cost synergies and we're investing quite a bit of this in the pipeline because our goal is to drive the top line. If we drive the topline mechanically we will improve the operating margin of the overall astrazeneca. So we are really investing in our pipeline we are investing in expanding the coverage of globe.

Bali, and China emerging markets et cetera, et cetera, that's really the goal we have.

Operating margin improvements as a percentage they really have to come from other parts of the company, but for Alex John It's really top line driven focus and.

The next one is Jeff Gordon in Japan jumped over to you.

Hello, James Gordon Jpmorgan, Thanks for taking the questions and I'll try and restrain myself with a number of questions. Just asked two of our upcoming pipeline data points.

First one was on tax.

<unk> and upcoming Chiller, one data. So this stages in refractory lung assuming you do show a significant benefit versus chemo.

How should we extrapolate that to the <unk>.

Sure Charles.

Would we extrapolate just the absolute benefit on PFS or OS or would it be the proportional hazard ratio that we would extrapolate.

The first question please.

And the second question also upcoming single floor to data to go on chemo.

How confident that's going to show a clinically meaningful benefit to justify extra talks and extreme convenience and chemo and.

How do you think now that might stack up versus what J&J much safer. So neither posted with that combo approach. We're also going to get phase III data end of this year.

So those are both for you okay. Thank you and thanks for the questions.

Yes.

Yesterday it stay again as I've said I think the data in the second line show the potential for improving on the current standard of care, but of course, you're going to get.

In the second line responses in a subset of the total patient population its really the durability of those responses.

That drives the.

Confidence.

In the efficacy component the first line trial isn't just about.

And <unk> is that combinations of <unk> with the immunotherapy agents and again, what we have seen is something where youre seeing enhanced response rates.

And what you would just look at from what you would expect from the individual components. So I think that's really well.

It gives us confidence about the first line and I don't think it's as straightforward.

Extrapolation from the data that you've just seen in tayloe on it is taken into account the other day.

The portfolio.

Florida too.

The confidence for that is based on the again, we spoke to them.

Phase II data set that's already been published the Opel dataset.

Which showed a really high response rates of around 90% of the hi.

Durable progression free survival, which.

If.

Recapitulated in Florida, two would represent a significant improvement over the standard of care in <unk>.

And in line with what the smaller dataset that we've seen from the.

Hi.

A combination of savings. So I think that's what gives us confidence yes. It does come at a tolerability profile, but there are some patients who are symptomatic.

Is that something because of their disease that might want a higher response rate and the opportunity to have that longer time.

Therapy, and again, the chemotherapies that any given for fixed duration inflow or two so I still think that it represents a reasonably convenient overall regimens patients in that setting.

Thank you Suzanne Christopher I would've said, Chris go ahead.

Yeah.

Thank you very much for taking my questions.

One is just a follow up on <unk>.

Which is.

Can you tell us what proportion of it roughly has actually made it from.

Some shelves and the arms.

Im thinking about this fat article mid last year, but.

Tracking sales for this one doesn't work like other drugs.

Then.

So if there are any.

Ways that you can use to that you could share with us that'd be great to hear.

And then.

The second question, so, California going forward.

I noted your remark about durability, but.

Obviously.

The competition is now.

Now better positioned than <unk>.

So strategically.

Obviously calkins is supposed to be a backbone.

Consulting.

Metrology franchise built on combos. So how do these recent competitive advances affect that strategy.

And your outlook for <unk> going forward. Thanks.

Thanks.

Thanks Christopher.

Because you can cover the second one the second one is for you Dave.

<unk> question, we don't agree with the effective conversion is stronger, but I'm sure you kind of elaborate on the subsidiary so let's start with what we thought it was a simple one.

Thanks for the question.

<unk>.

When we look overall I mean, there are such a huge difference is across geography that is really difficult to give you one number but it's also true that if you look at the countries that emotion was available earlier basically from December 2000, 22021, you will see the numbers did go let's go up to eight years.

90% of the deliver doses that are utilized in the hospitality and obviously.

In your arms of the patients.

There is also a port.

Of note to mention that in some geographies like for example, Japan.

Few months ago, the actually got the approval obviously those numbers so they've got a very low all in all I think what is really important is that as this is a new market and there is a huge needs to increase education and awareness around the need and the.

Availability of those options within the hospitality. It is important to continue helping patients in hcp's two to understand that and I do believe that that will definitely impact the utilization across the globe.

Okay.

Okay. So I think on.

Christopher the first piece and Pascal alluded to this I mean, we really do believe that calc once is well positioned.

Within the next generation <unk> class and I think that it's worth spending a minute on a couple of the things that <unk>.

Underscoring that conviction and are also part of the readiness and training that we've got across the globe as we do come into a more competitive space.

First and foremost it's important to note that we've done our own.

Important work to be taking a look at our matched indirect comparison.

It is important to do and as you do that our sand and alpine.

Really do show very similar results were in the midst of doing a similar piece of work ought to look at elevate TN in Sequoia and I think that the reason for this is pretty straightforward which is that.

Indirect for the.

Cross trial comparisons that were being made between the two head to head studies were really not very appropriate comparisons to be made because they are looking at very different treatment populations. So on the efficacy dimension, we see very well positioned I think also of note.

In terms of hypertension and also on neutropenia.

Cal quench absolutely could have some opportunities for differentiation there that's resonating with our advisors as well so when we take a look at the exit share that we had in 2022 in the frontline <unk> setting, we eclipsed 60% getting close to 65%.

We see even in the early January movement, certainly that Theres been uptake of Jana Britain, there, but the uptake we believe based on our charts is predominantly in later lines, which doesn't come out of some of the acuity of claims data that you see and we're well prepared.

Take on competition in the year ahead, but we think we are well positioned to be able to do it.

Thank you Dave.

I think they're very go over to you Eric.

I think you might be on mute, we can't hear you.

Can you hear me now.

Yep, Okay sorry.

So a couple of questions first a couple on the financials.

First one is capex the fast growing companies those days are suggesting a significant increase in capex Novo Nordisk say doubling capex. This year versus last could you quantify maybe the level of increase in Capex in 'twenty three versus 22. Please.

Similar question about Oi.

Expecting an increase in other operating income this year versus last were coming from very high level of $1 5 billion not so long ago. So how should we think about.

Any figure between the $450 million last year in the one 5 billion two years ago. So that's for the financial part and then maybe a question for Alex <unk> and Mark Thanks, Mark for clarifying about the <unk> franchise.

I'd be even more specific about the incoming competition from <unk> sure. This slide on <unk>, how do you see these new drugs competing with.

With <unk> and ultimately the kind of.

Market share split between these drug and the existing <unk> franchise also astrazeneca. Please thank you.

Thanks, Eric.

The first two are for your I guess sure.

So we do expect an increase in Capex and we.

We won't give specific capex guidance, obviously, but I can give you some color on where that increase is coming from.

So firstly as you can imagine we have the addition of the full year of.

Alexia on Capex and as Pascal mentioned, we are investing.

And Alexia on the.

The second example is we did announce a new API facility that we're going to put in Ireland.

And that Capex is going to add to the capex.

Thirdly, we do have obviously investments in several sustainability initiatives and including our Nextgen propellant.

So that's another investment that we're making both in per balance as well as other sustainability initiatives.

And then we are as part of our.

Sort of continuous improvement, making several system and infrastructure investments.

In our operating systems that will also add to Capex again, we're not giving a specific guidance, but those are some of the elements that go into potentially increasing capex.

As it relates to your question on other operating income.

We have we're giving some color on that as part of our overall guidance based on what our current view is today I did mention that we expect an increase in collaboration revenue as our.

Partnered products are very successful.

We expect some increase in milestone and we do expect some increase in other income I would say, we're sort of past most of the.

Bigger divestitures and the the history I'd say, we're sort of through most of the portfolio reorganization, but there may be certain other transactions that happen this year potentially.

Mark before you cover the Ericsson question, let me just add a little bit from <unk>.

Yes.

And our next generation component.

As a as a.

Sustainability initiative, but it's also a business continuation of business expansion initiative, because it's very clear that over the next few years, we don't know exactly when but it's clear that over the next few years couple answers there.

None today will no longer be approved and allows for market is already quite a number of initiatives in many countries to bundle those products. So you can imagine that we definitely need to transition our corporate on those products to the next generation for parent that has no impact on.

Greenhouse gas emissions.

Mark over to you.

Yes, thank you for that.

A question on the impact Gabor, Eric So basically we have Alex <unk> has many years over that I mentioned.

9000 euros of of data on these so we know that the complete.

Inhibition of the terminal.

Terminal complement is obscene necessary to maintain efficacy sustained efficacy <unk> now. It is also true that the small portion and we.

We see that it's about 10% to 20% of this population has some extravascular hemolysis.

And the study that.

Several companies have produced we have produced one with an equal Boeing we are doing all the studies resolve all the factor D. Over the same four novartis have done studies in these fixed harvest extravascular hemolysis patients and when you do <unk>.

<unk> <unk> more.

<unk> inhibitors such as affected.

Or effect to be you can improve on hemoglobin and youre getting can improver on anemia, and so on so so I think it is a very interesting data.

Sure.

The strategy that we're following is to provide the newco Paul as we're not done on the backbone of Soliris or <unk> and we have seen very good.

A question for the treatment of.

Proximal.

Complement inhibitors in monotherapy. They do have short term efficacy. The question is whether this long term efficacy will be maintained.

And whether the patients.

Of course with an oral treatments, we need to ensure the complete compliance of the patient for in a therapy, where the inhibition of the exhibition has to be complete and sustained so that's going to be for long term data to be equivalent.

The overall therapies can open probably.

We regret to field <unk>.

<unk> for some patients but of course, we will need we really be expecting longer term data to be absolutely sure of that.

And Caremark, Mark Purcell Morgan Stanley Mark over to you.

Yes, thank you very much Pascal.

Two questions one on.

The second one on file sugar RCM.

On Saturday XT tripping, along I want that appears to be a bit of a debate at the moment given today as to the top line data disclosure, which could be positive it could be negative, but if we look back at pan tumor I want on the non small cell lung cancer cohort PFS was six nine months and I don't believe extended uptake since since the 2021.

Data clearly duration of exposure was it was quite low five months because these are very frail patients over 60% of them with third line plus so.

As you sort of go forward and these patients have a better life.

Likely to better tolerate mucositis instead of the types of things like that how should we think about PFS benefit in there.

And the second line setting I think we have a well understand that docetaxel should show a four to five months benefit in this setting, but how should we think about the PFS benefit as you come forward in Lyon and then should we expect these data presented at <unk> ESMO. This year and then second in terms of <unk>. It would be really useful to help us understand how far CECO revenues.

Between diabetes.

C J D.

Failure, obviously, we recognize there's overlap between those but it's more in terms of thinking about the future. When we look at the sort of range of combination opportunities you have on slide 24, it would be great to understand sort of where the bigger opportunities lie.

Based on Phase II data, where you believe you will drive most differentiation fresh is sto two monotherapy, thanks very much.

Thanks Mark.

Back to you again or do you want to cover the second one and some of the.

The potential.

So thanks for the question.

Thanks familiar with.

The lung cohort from the champion Punchy study as you say, it's close to a seven month median PFS and are more heavily pre treated patient population.

So.

Again, one would expect that in an earlier line you might get a little better than that but that's you know we'll have to wait and see for the for the child to read out and then in terms of the timing is an event driven trial, we guided to the first half.

That's that's what we're still expecting to see and of course, depending on the timing.

I'll then make the data available.

It's an upcoming call.

Congrats dependent on those timing.

Okay and regarding your question about the split the market's a bit of a difficult question because there are substantial differences across different <unk>.

Broker fees, primarily in the emerging market international markets is still heavily driven by diabetes, but if you look at the United States.

Europe is roughly two thirds of the patients are coming from Australia and chickadee.

Actually youre mentioning is a substantial overlap moving forward, we truly believe that there is a substantial opportunity for our combinations into heart failure segments in the chronic kidney disease segments.

<unk> are very well under served and we believe is the excellent profile of our Seeger and potentially also for them the antihypertensive effects of.

<unk> as well as <unk>.

977, we have a unique opportunity to further expand that.

Per population in both <unk> and heart failure.

Thanks, Michael.

I can understand that.

And as many of you wanted to add some seamless zeros to deliver of Ingalls is at a very high unmet medical need in the efficacy.

The data around that I think is a pretty interesting and so I think we'll get a readout there and just to point out and I know you know this but the price points.

Diabetes versus heart failure, <unk> and some of these.

Types of CK, two because there are obviously various flavors of it so different price points relative to the diabetes price. The placebo has been based on.

Okay.

Tenants UBS over to Michael.

Thank you Pascal two questions. Please one back to Susan.

Advanced trial is only asking hey.

No efficacy question off of that on top of Carboplatin plus of Lindsey not a replacement question of chemotherapy, which is the question that along with seven is asking given that the biomarker is being looked at here. Just wondering why you wouldn't also asked the the replacement question, then and that phase III.

And then a question for or maybe Pat Kennedy I'm just.

Just wondering what the latest update would be for China, given the <unk> probe.

Process is now a yearly process are you happy with the pricing levels qualitatively that you've seen.

I think it's a stable system that allows you to operate.

More predictably going forward after what we saw last year.

Yes.

Thanks, Michael So Susan.

If you want to cover this one and we are we have Leon online. So the China question then can take.

And so.

When adding carboplatin them too.

We don't see a substantial.

Yeah.

Increased.

<unk> with the Tolerability of that you know again, you when you're giving the platinum for a set number of.

Cycles and so this is a reasonably well tolerated regimen and that you said the replacement question is being asked elsewhere across the program.

I think the question is really that we're focusing on one zone and cross histologist include squamous as well as.

In non squamous non small cell lung cancer and across PD Lone subgroups, and then asking the question about the benefit in the biomarker patient population.

Two purposes.

Thank you Suzanne Leon <unk>.

Yes.

This year, we have.

Several major drug getting to an IPO renew.

And also we are paying for our C met Doug from Hutch Med.

It's a new entry and also we have some application of new indication for.

440, <unk> and also product so right now what we.

I don't think we received the final result of price reduction level and also indication, but based on the.

Latest information I think the trend of <unk>.

Predictable and transparent, especially on the renewal so based.

Based on the 2021 result, I think for CCAR, our anti diabetes drug last year, I think get a quite a good result for our renew and also I think this year, we expect no big surprise on renew and also quite many encouraging news.

Government encouragement on innovate innovative drugs and also additional index.

And also reimbursement renewals, so I think the tender on the China and audio side is quite there probably.

Thank you Michael.

Like are there other.

Good thing about the system as it is becoming more formulaic more driven by you know.

Approaches or formula as we can understand and therefore zone said, it's a lot more predictable.

Richard Parkes Exane.

Alright, thanks, very much for taking my questions.

First on <unk>.

Going back to Andrew's comments about risk profile in the phase III starts specifically thinking about the specifics of the <unk> PD, one you've got very strong phase II data.

PD, one seems a bit more speculative based on what we're seeing with.

And a temporary effect could you talk about what <unk> got in house somewhat.

Advantages you think past specific might have.

Great.

One.

Combinations that would be really helpful. If you can.

Planning to start <unk> combinations as well would be helpful.

The.

Second question.

One of your ambition is to extend the last cyclical then pause franchises.

Selective.

However that currently holds outside of the and positive relationship with Merck.

Wondering if you could discuss any partners to bring an asset within lob tailing I wanted a decision might be made on that thank you.

Thanks, Richard So theres, one for Susanne and one for Dave I guess.

And thanks for the question Richard.

So again, the PD one element of the bi specific programs.

Same as I'll say.

The assets that we've got.

So that's one element of it.

PD one pitch it doesn't add a challenge from a safety perspective.

On the background of PD, one so obviously with the PD one <unk> four dose selection has been important to get that right therapeutic window for the tolerability profile, whilst driving the efficacy of PD one pitch it.

This is this is safe combination.

The preclinical data that we have.

Does show some potential for differentiation, although there is you're well aware the extrapolation of that into the clinic as challenging with these models. So what I would just say is that by having both elements of the combination on one molecule. It does help us with a combination philosophy for other things that we want to put into that and we'll be happy to shed Melissa.

<unk>.

The plans for that.

We start dosing the first patients in the phase III.

Richard in terms of our plans moving forward around development and commercialization of.

<unk> 305, it's really consistent with what we had said in the past we're developing it independently. It's an early development now just moving into phase III any commercial arrangements, we've really yet to decide and we'll wait for more data with that said, we're minded to extend the collaboration and build on the joint success.

<unk> that we've had together.

With Mark online parser, but of course that depends on.

Green on any terms, but we really have benefited greatly from our collaboration together in the collective work through the two teams are doing.

Thanks, Dave and in Canada.

<unk> over to you.

Okay.

Yes, I don't hear you.

Yes can you hear me now yeah.

Yes go ahead, okay, great. Thanks, so much.

First question is just on the.

The sort of impact on some of the older products as it relates to the NR Dl.

The magnitude of the decline that we could see in cielo Ken.

And in China year over year.

And then also the time when we might see Nexium generic actually introduced in Japan I know those were two.

Fairly large tail products for the company and we will see impacts year over year, and just wanted to get a sense of at least the relative profitability of the.

Those products because I think it's important to gauging just how robust the overall performance of the company is outside of that and then the second question.

I just wanted to better understand the choice.

Of stratify by Trop two expression.

And if that is something that you're gaining learnings from.

In the <unk>.

From the from the second line study or if you think that would apply in the second line setting.

Versus some of the disclosures that you made for the new phase III.

And the first line setting today, thanks, so much.

Susan can you program our response to this one.

And then we'd ask Leon to cover Silicon question or do you take the Nextgen Japan.

So thanks for the question Seamus.

Yeah.

So the data to support the.

<unk> market come some multiple different settings, including daily.

Combination data, but yes, absolutely we'll be looking at the champion lung one data.

As well when that reads.

So I do think that that's important we do know that champion.

<unk> is highly expressed in many different.

Kansas.

But I think Oh.

Optimizing for the.

The expression and heterogeneity of expression.

It's something that can potentially identify the patient population that's hub.

More likely to respond or more likely to get a durable benefit I think that's an important consideration not just in lung cancer, but the cost of the potential indications.

Leon do you want to cover the <unk> question, Thanks for that.

Yes.

Seneca is quite a big product okay.

Pete.

Tender loss and I think the last lines of Pulmicort so accurate.

Launching PD.

<unk> of our portfolio and launched to offset.

<unk> losses.

But I think I said it is a quality product.

It has.

<unk> thousand 13 million patients.

The largest de novo patients in China.

Offsetting a productive silicon so actually the prices low and.

<unk> has three indication and coronary heart disease.

Hypertension and heart failure, so actually is a quite a good product and the classical and branded so we will do a lot of consumerism and making sure our loyal user of silicon.

I'll still be sticky grid and also the length of treatment.

For silicon is quite a bit of patients stick to it because of the heart rate. So we.

We also will do a lot of digital channel education, and also we have a pipe a successful business in China, our retail pharmacy. So I think it will reflect the drop.

Quite a significantly but gradually it will pick up because.

More and more patients will take the drug for long term and loyal customer will stay with the product and.

We will still be promoting a lot of other cardiovascular products within the hospital and Astrazeneca is the number one company totally but also the number one company in cardiovascular renal space. So we have a blocks for sika and so many other products to be quite active and also we have a new product in hypertension, which is coming so I think all in all I.

Im not too pessimistic about the silicon future.

Thank you Leon just too early to try to attain on the same look at.

Crestor in China, which we have consumer eyes and.

And the price is low as Leon said those are chronic conditions and patients take these products over a long period of time.

We have a very extensive capabilities online.

And pharmacy based activities. So we think we can consumer aceto, Ken a little bit like we've done with Cristal.

Regarding the Nexium, Japan question.

Last are the exclusivity in Japan late last year and instantly we have seen generics coming into the marketplace. So the expectation for 2023 is a sharp decline in our <unk> business in Japan.

Thank you.

Jo Walton credit Suisse, Joe over to you.

Hi, Thank you.

A couple please.

Degrees sale I believe Pascal you've said that you're confident that you can keep going with that said despite.

Perhaps because of orphan drug elements I wonder if you could tell us a little bit about that because degree.

<unk> I guess could be mentioned as one of the drugs when they give the list.

Later this year.

Our Radnor I wonder if I could ask an earlier question a different way just in terms of candidates.

If you could give us some sense of how much it contributed to earnings in 2022, we can all win.

Just thinking about what we think will be in 'twenty three it's just that.

Level that has been today.

And my final question is just on your confidence in being able to control the operating costs.

Obviously growing much faster in 2022, and you were expecting them to in 2023 and I'm mindful of the incredible expansion of R&D that you are doing all of which cost money and you do have new products that need a lot of marketing support.

Oh, you're going to be are you fairly confident that you can provide all the support that you need in 'twenty three.

Only mid single digit growth.

Operating expenses.

And last two questions.

Questions you'll ever another for you and then the first one maybe Dave you can start with this one the Tegra <unk>.

So Joe on this.

As you know CMS is still in the midst of rulemaking.

To determine exactly how both the list of.

First 10, which come out later this year will be determined and then also how the exclusions are going to be managed in terms of the list of the first 10.

We will see exactly how rulemaking goes through.

My sense is is that on a gross sales basis that <unk> would not likely makes the first 10 in the first go through but obviously, we'll have to see that I do think that.

It would be likely to come in as you move through over the course of the years, which gets to the next question and I think that there is absolutely an orphan drug designation exemption that's clear within.

The law and I think that.

We certainly are minded that is one that.

It could very well be applied to <unk> and that's work that will be continuing to advance.

Thank you for your questions.

In terms of Covid contribution in 2020, Q again, I won't give specific numbers, but I can give you. Some some colors that may that may help you. So if you look at our total call. It Covid medicines in 2022 that was about $4 billion.

Split almost half and half between back separately.

And have yourself.

That said we are the majority of that as you know was initial contract. So was not really a major contribution and for every Sheldon we had guided as you know in 2022 that the gross margin for that is lower than our.

Our corporate gross margins and then you also saw from today's results that we did take a charge.

For the <unk> inventory and contract. So I think you can piece all of that together to see what what that contributed in 2022.

As it relates to your question on operating cost management.

That is always a.

And ongoing.

Give and take and pushing pool without within the company, we are committed to our <unk>.

Investment in R&D.

And.

While you can see obviously, the Turkey clinical phase III that we expect to start. This year. We also had 34 approvals last year. So there are some trials that are sort of coming off their their main phase of investment and other trials that are starting this year that being said we're constantly.

<unk> doing portfolio prioritization to make sure we are able to.

Fund, the most promising and most value generating assets in our portfolio.

Also with those for example, the 34 regulatory approvals many of them were already in areas that we are in so again, we try to get operating leverage in those areas. Some of them are in new areas. So for example, with our with Himalaya and Topaz, we're building more in Spain.

He says that we were not in but in the case of breast cancer. For example, we are leveraging.

Infrastructure and sales force, where we already are present, so again, we have operating leverage and in areas that were new in entering we billed as needed.

Thank you Ana. Thank you just one addition on.

<unk> 2022 of the cost base is not that great right relative to.

Typical pharmaceutical products that you have to launch them promote sort of profitability in 2002 was actually pretty good and in 'twenty three as Ana said it will be very minimal.

You don't have to face those pieces those sediments together, but again as I said earlier.

If you do it you would say that the underlying profitability.

Sorry, the profitability of the underlying businesses is improving very nicely from 'twenty to 'twenty three with.

With respect to maybe the last question from Emmanuel Papadakis at Deutsche Bank over to them in Europe .

Thanks for taking the question.

Perhaps a follow up question on margins given your finished 20% or 30% you've guided for.

<unk> growth of low to mid single digits for both revenues and Opex that implies, particularly limited expansion 23. So can you just.

Reconfirm your commitment to the mid to high <unk> margin.

And give us some sense of what the path looks like beyond 2023, when do we get to that mid thirties number for example.

And then maybe a second question on.

And then pause or ahead of the propel a delay.

Okay decision could you give us a sense of your current label expectations in light of both CMA decision and that slightly mixed overall survival data you presented us last year, where there was an inversion of the early part of the cuts to what extent is that months would you be appropriate when considering.

Prospect funnel come a level and maybe since the last person I'll try and squeeze in if it's Dave I think you mentioned that I may have missed it and how to market shares in second line. Her two positive in July where are they now what could take thank you.

Thanks.

Do you want to take the first one.

Yes so.

We are.

<unk> committed to our ambition.

Just as a reminder, that is an ambition and not guidance.

And you can see we are constantly operating improving our operating margins you can see that 2022 operating margins were better than 2021.

We are continuously working on productivity improvements, but again there are various elements.

Everything from sort of a mix shift and mix improvement gross margin improvement and.

Again operating leverage on the on the SG&A line, while not compromising on the investment in R&D. So again, it's a balance that we try to strike between.

Steadily improving our operating margin, while still investing for that.

Strong growth post 2025.

Thanks, Tom.

In terms of the propel data.

We're confident in the benefit risk.

Across the patient population so in the ITT.

Including the <unk>.

Okay Wild type.

We also have.

Confidence in the biological plausibility of the benefit of interaction between <unk> inhibition and androgen receptor inhibition.

Because actually androgen receptor.

<unk> signaling is involved in DNA repair in AI driven cancer cells.

And we are present not just <unk>.

And then some clinical data looking at this interaction.

The ACL prostate cancer meeting, which is in March.

So I think.

You have to understand what the rationale is for why they interaction is relevant in the in the wild type population as well as in the HR mutated population and then you have to look at the overall clinical benefit which with a five month improvement in PFS and attend to improvement in OS curves, yes, they separate light but.

They look good.

I think that we're confident in the overall population and we're happy to see that.

She got that reflected in the EU label. So we'll continue that dialogue with the regulators around the world on it.

With respect Emmanuel to in her two in the U S.

We have gotten to approximately 50% new patient share in second line. Her two positive so in the <unk> population and over 40% in hormone receptor positive her two low post chemo share so thats the gasoline Bristow for population.

Just two things on your second question for how high could it go.

There is still some concisely use that exists in the marketplace. Today, there is a decent amount of fragmentation with.

With various utilization of of various her two directed agents in some some chemotherapies, but I expect us to continue to grow in <unk> III.

And if you look at in Europe .

Ken Siler had at its peak as much as 70% share. So I think that it's important to note that as you get into marketplaces, where could style actually had a greater percentage of the stack.

Standard of care I think that that certainly represents the next.

Goal that we have for those teams in terms of penetration than we'd like to go beyond that in the <unk> population.

Again, I think that we've got with the overall survival results and the fact that systemic chemotherapy is just frankly.

Not delivering adequate efficacy and safety for patients as a second chemo auction with advanced breast cancer that we've got an opportunity to continue to grow I do think you saw that the Q3 growth was aided by some bolus, but I think we continue to grow from where we are here and looking forward to.

Our launches across the globe not just the U S throughout 2023.

Thank you. Thank you recover they will close for today here. Thank you so much for again your interest in yogurt questions. Let me just close by saying again that we.

We're very much on track with our ambition to deliver.

Topline revenue that is the best of the.

That is an industry leading growth rate with a double low double digit growth rate to 2025 and continued growth.

25 to 2030, we're working very hard on our pipeline.

And importantly also.

Working very hard on re prioritizing constantly and improving our productivity. So we deliver also on our ambition to improve our operating margin over the next few years certainly we're very much on track with that too in the long run.

Instead hold to it but of course, we will have to consider the version of the pipeline and the need for reinvestment as we see fit but for now we are focused on 2025 as a base camp one and very much on track with that thank you again for all your.

Interest and have a good day.

Okay.

Okay.

They're recording has stopped.