Q4 2023 AstraZeneca PLC Earnings Call

Unnamed Speaker: We actually did achieve the goal we set ourselves 10 years ago to reach $45 billion in sales in 2023. And, in fact, I could argue we overachieved it because, at the current exchange rates, 20.45 billion gold is probably closer to 40 billion. And I don't want to say, I don't want to, to say just to kind of pat ourselves on the back, even though I'd like to do this and celebrate our team's effort.

We set ourselves 10 years ago to reach 45 billion sales in 2023.

And in fact, I could argue we over achieved it because.

At the current exchange rates, our 2040 5 billion go probably is closer to 40.

<unk> 40 billion and I won't I don't want to say I don't want it to two first just to kind of put ourselves into back even though I'd like to do this and celebrate our teams our fault, but I wonder I Wonder I mentioned it because we.

Unnamed Speaker: But I want to, I want to mention it because we always do this with our eyes on the long-term and growth. And we are embarking on another 10-year cycle. And, you know, we have announced an R&D day because we want to refresh our strategy and show you what we are planning to do over the next 10 years. But we got this $45 billion through ups and downs. And I have to say often a lot of skepticism, but always with our eye on the long-term growth rate. And that's what we're going to do.

We always did this with <unk>.

All eyes on the long term and growth.

We are embarking on another 10 year cycle.

We have announced an R&D day, because we wanted to refresh our strategy and show you.

What we are planning to do over the next 10 years, but we got this $45 billion.

Screw ups and downs and I have to say often a lot of skepticism.

But always on our with our eye on the long term growth rate and that's what we're gonna do we believe we can grow and we believe over the next 10 years, we will deliver superior growth and that's of course going to drive our profitability as a result of it but all of our growth and sustainable strong growth is really what we are after.

Unnamed Speaker: We believe we can grow. And we believe over the next 10 years, we will deliver superior growth. And that's, of course, going to drive our profitability as a result of it. But growth and sustainable, strong growth is really what we are after. And we've done this all following the science.

We've done this call following the science and.

Unnamed Speaker: And again, we are embarking on a new cycle, and we're investing in new science that will shape the future of medicine and shape the future of this company. We can talk more about that.

Again, we're embarking on a new cycle and we're investing in new science that will shape, the future of medicine and shape. The future of this company and we can talk more about this we have achieved this through disciplined investment even though we often have.

Unnamed Speaker: We have achieved this through disciplined investment, even though we often have extensive debates inside the company. And right now, it's challenging everybody to be even more disciplined in terms of our investment. But, you know, we've constantly focused our investment on where we can deliver the most growth and also continuously focusing on oncology, cardiovascular disease, respiratory disease, and more recently increasing our investment and keeping our eye on immune diseases and finally rare diseases. And the company we have today, and the team we have today, is very different from what it was 10 years ago.

Extensive debate inside the company and now it's changing everybody to be even more disciplined in terms of our investment but.

We've constantly focused our investment on where we can deliver the most growth.

<unk> also continuously focusing on oncology cardiovascular disease.

Trey this is more of it more recently, increasing are increasing our investment and keeping our eye on immune diseases and finally, a rare diseases.

And the company, we have today and the team we have today is very different from what it was 10 years ago.

Unnamed Speaker: And it's really rewarding to see the progress we've made and the strengths we have developed in our portfolio, but also in the strength of the talent in the company. The way we operate in oncology today, and the same in the other TAs, is very, very different. And it gives me confidence we can actually deliver another cycle of very strong growth over the next 10. And importantly, we delivered our upgraded guidance for the year. 15 percent growth excluding COVID. We had been guided to increasing to low teens. So 15 percent is slightly better.

And it's really rewarding to see the progress we've made on the strengths we have developed in our portfolio, but also in the strength of the talent in the company. The way we operate in oncology today and the same in the other Tas is very very different and it gives me confidence we can actually deliver another cycle of very.

Loan growth over the next 10 years.

So importantly, we delivered our upgraded guidance for the year.

15% growth excluding COVID-19.

We had guided to increasing to low teens.

So 15% is slightly better.

Unnamed Speaker: On the EPS front, we grew by 15 percent, which is also slightly better than our upgraded guidance for the year. And in quarter four, we saw an opportunity because we had a tax benefit. We saw an opportunity to invest to drive further growth and stronger growth next year and the years after as we are launching new products and expanding our footprint. You saw that emerging markets outside of China grew by 35 percent. China itself is rebounding and growing again, so China is back on the growth trajectory, and this year should be another good year.

On the EPS once we go by 15%, which is also slightly better than our greater guidance.

For the year and in the quarter four we saw an opportunity because we had.

A tax benefit we saw an opportunity to invest to drive further growth and stronger growth next year and the years. After hours, we are launching new products and expanding our footprint you saw that the emerging markets out of China grew by 35%.

China itself is rebounding and growing again so.

China is back again on the gross.

Victory in this shale should be another good year, we've been improving our operating margin you see a drop in 'twenty, one but that was a bit of an artifact because it's driven by the very large corporate sales, we experienced and of course those were at no profit. So it dilutes, our operating margin, but essentially you can see our continuous.

Unnamed Speaker: We've been improving our operating margin; you see a drop in 21, but that was a bit of an artifact because it's driven by the very large COVID sales we experienced, and of course, those were at no profit, so it dilutes our operating margin. But essentially, you can see our continuous progress, and I wanted to say today that we are committed to our goals of the mid-30s in the mid-term, and, of course, long-term, will depend on our growth opportunities and our pipeline, in particular. So we are doing three things.

Continuous progress and I wanted to say today that we're committed to all goes off mid thirties by.

In the midterm and of course long term.

Will be depending on our growth opportunities in our pipeline in particular.

So we are doing.

Doing three things as I've said before we are driving.

Unnamed Speaker: As I've said before, we're driving, we are focusing on today, we're driving growth, top line growth, and operating margin so we deliver our financial goals. And that now is 2024, really.

We are focusing on the on today, we are driving growth.

Top line growth and operating margin, so we deliver our financial goals.

Nowadays.

2024 really were.

Unnamed Speaker: We're building the pipeline, continuously building the pipeline so that we drive growth tomorrow, which is 25 to 2030. And we are investing in new technologies and new products to shape the future of medicine and drive long-term growth. And what I call long-term growth is what I often refer to as being the day after tomorrow, and it's 28, 29, and beyond.

We're building the pipeline continuously by within the pipeline so that we drive.

Gross two more which is 25 to 2030 and we are investing in new technologies and new products to shape, the future of medicine and drive long term growth in what I call long term growth is what I often refer to as being the day after tomorrow, and it's 28 29 and beyond.

Unnamed Speaker: Ultimately, our goal is to remain a high growth company for the next period of time, 10 years and beyond. You can see here that our revenue is spread across a variety of therapy areas. But, you know, oncology, as you know, very well, biopharma, as you know, very well in rare diseases. And we had growth across all therapy areas, oncology 21%, CVRM 18%, RNI 10%. Of course, VNI declined because we had a massive decline in COVID sales.

Our goal is to remain a high growth company for the next period of time 10 years and beyond.

You can see here that.

Our revenue is spread across a.

Alrighty of therapy areas, but.

Oncology as you know very well Biopharma as you know very wet in rare disease.

And we had growth across all therapy areas oncology, 21% CVR them, 18%, 10% of course, we are now a decline because we had a massive decline in corporate sales.

Unnamed Speaker: And rare diseases grew by 12%, which is more than most people expected and actually more than we ourselves expected. If you remember, we predicted that we could grow this rare disease business by a single digit. But in fact, we're delivering a low double-digit growth rate, and Mark will talk more about this. All geographies did very well, 14% in the US, 20% in the emerging market, which is 35% ex-China, and 8% in China. And you can see here the growing importance of emerging markets outside of China. In Europe, we grew by 17% and established the rest of the world, 8%.

And where does this goal by 12%, which is more than most people had expected and actually more than we.

As expected if you remember we guided that we could grow by high single digit described this as a business, but in fact, well delivering low double digit growth rate.

Mark will talk more about this.

All geographies did very well, 14% in the U S 20% in the emerging market, which is 35% ex China and 8% in China.

And you can see here the growing importance of the emerging markets outside of China.

In Europe, we grew by 17% and his team and established rest of the world, 8%, Japan is starting to be impacted by the loss of exclusivity on Nexium of course.

Unnamed Speaker: Japan is starting to be impacted by the loss of exclusivity of Nexium, of course. But still, 8% growth is a pretty nice number there. So again, well diversified growth across geographies and across our disease area. So the tomorrow, so this is the after this is the today and tomorrow is really the pipeline during the pipeline.

But still 8% growth is a pretty nice number there. So again well diversified go also caused geographies and across all disease areas.

So the two mol. So this this is the after this is day today and tomorrow is really the pipeline already in the pipeline.

Unnamed Speaker: We guided earlier this year that we had a goal of 30 new phase 3 sites. We've achieved 27. We're short by three, that is a little bit delayed and starting in early 24 instead of 23, but 27 is a very large number of phase 3 starts. Importantly, 10 of those have the potential to be blockbusters, either new products or new indications, a blockbuster, of course, being more than a billion. So we have 10 of these phase 3 trials that, if they are successful, will deliver billions of dollars in sales or more each. We have also achieved 24 regulatory approvals across major markets.

We guided earlier this year that we had a goal of 30, new phase III, we've achieved 27.

We strolled by three that a little bit delayed in starting in the early 24 instead of 'twenty three but 27 is a very large number of phase III starts importantly, 10 of those have a potential to be blockbusters is on new products or new indications.

Broke best of calls being more than 1 billion. So we have 10 of these phase III trials that if theyre successful will deliver 1 billion sales or more each.

We also achieved 24 regulatory market.

Regulatory approval across major markets and finally, we got approval for four new medicines and we are on track to deliver 15, new molecular entities launches by 2030 and as you can see you can see on this slide those approvals and all of those new medicines range from Biopharma, which has two parts.

Unnamed Speaker: And finally, we got approval for four new medicines, and we are on track to deliver 15 new molecular entities launched by 2030. And as you can see on this slide, those approvals, those new medicines range from biopharma with their Supra to oncology with Trucap. Again, back to biopharma with Wenua and Plantersan, and also rare diseases, Alexion with Danicopans, Void AR approval in PNH. So across the whole pipeline, we are launching new medicines. And finally, what I call the day after tomorrow is really this new technology, those new platforms. And so what are we trying to do here?

Ecology with took up.

Again back to Biopharma.

Biopharm with Wainwright protests and <unk>.

And also a rare diseases, Alex John with any coupons Voidee Paul.

And peanuts, so across the whole pipeline.

We are launching new medicines.

And finally, what I call the day after tomorrow is really.

This new technology is both new platforms and so what are we trying to do here.

Unnamed Speaker: First of all, we have, we believe, a tremendous opportunity to leverage our growing pipeline of antibody drug conjugates with our IO-Bi-specific antibody. So in the ADC space, we started with this collaboration with Daichi Sankyo, which you know very well. We've now built our own internal portfolio of ADCs. We have six ADCs that are totally owned by AstraZeneca with unique targets and unique warheads. And there's more to come; we can talk about it later, but we're working on multiple targets and warheads. And, importantly, we can combine those with our bi-specifics.

First of all we have we believe a tremendous opportunity to leverage our growing pipeline of antibody drug conjugates with Io bi specifics.

So in the ADC a space we started with this collaboration with Daiichi Sankyo that you know very well.

We've now built our own internal portfolio of rare disease, where six adcs.

And that all totally owned by Astrazeneca with unique targets and unique warheads and theres more to come way.

We can talk about it later, but we are working on.

Multiple targets and what and finally and importantly, we can combine those with our bi specifics and we have three of those two that are more advanced.

Unnamed Speaker: And we have three of those, two that are more advanced and are very exciting products. And we believe in oncology, this ADC combination with IO can totally transform the way cancer is treated and position us as one of the few companies that has the potential to leverage this combination. We're working on cell therapy because we believe cell therapy will be an important technology for the future. Today, those are mostly CAR T's in hematology. We want to take this into solid tumors. We want to take this into allergenic, off-the-shelf cell therapy.

And a very exciting products and we believe in oncology.

D C combination with Io can totally transform the way cancer is treated and position us as one of the few companies that has the potential to leverage this combination.

We work on cell therapy, because we believe so.

Our therapy will be an important technology for the future today those are mostly car Ts in hematology.

We want to take this into solid.

Solid tumors, we wanted to take this into allogeneic off the shelf cell therapy, and we also wanted to take this into immune diseases and we started working on this so what do we have been doing is leveraging our own internal effort and our internal technologies and combining this with putting together.

Unnamed Speaker: And we also want to take this to immune diseases, and we started working on this. So what we have been doing is leveraging our own internal effort and our own internal technologies and combining this with putting together a series of technologies and platforms that have the potential for us not only to deliver what I was just talking about, which is moving into solid tumors, moving into allergenic cell therapy, and moving into immune diseases. And we now have a complete set of what we need.

Get.

A series of.

<unk> and platforms.

That has really the potential for us not to deliver what I was just talking about which is moving into solid tumors.

<unk> into allogeneic search.

Search RPM moving into immune diseases, and we now have a complete set of what we need them now it's all a question of integration and execution, but we have the technology that are required to achieve our long term goal is in search of RPM. You released you've got really stood here neogen quell Syracuse great style.

Unnamed Speaker: Now it's a question of integration and execution, but we have the technology that is required to achieve what our long-term goal is in cell therapy. And you've got Neogen, QEL, Selectives, Gricell, and all of those together will enable us to build what we want to do in oncology and biopharm. Another technology that we believe will shape the long-term is T-cell engagers. And again, we've done that with our own internal effort and complemented it with BD. The BD we do is not a random BD. It's always with a view to build a strong presence in some of the technologies we've identified. And we've done this with ADC.

And all of those together will enable us to build what we want to do in oncology and Biopharma.

The technology that we believe will shape the long term its T cell engages and again, we've done that with our own internal effort and complemented with.

Our BD <unk>.

Speaker Change: <unk>, we do is not a random BD, it's always with a view to build a strong presence in some of the techs.

Speaker Change: Technologies, we've identified.

Speaker Change: And we've done this we do see we're doing it with cell therapy, we're doing it with T cell engages and finally, we do it in a gene therapy with a focus on rare diseases.

Unnamed Speaker: We're doing it with cell therapy. We're doing it with T cell engagers. And finally, we do it in gene therapy with a focus on rare diseases. If you are in rare diseases, you really have to have a gene therapy approach complementing your portfolio. And of course, here you know well the Pfizer gene therapy portfolio acquisition and the Selective collaboration. So this is really what we believe is gonna drive a little bit of midterm growth with Daiichi Senkyo's collaboration and some of the agencies, but mostly looking at driving growth, 28, 29, and beyond, so we can deliver growth today and more in the day after. So with this, I'll hand over to Aradhana, who's going to take you for the final.

Speaker Change: In rare diseases, you really have to have a gene therapy approach complementing our portfolio and of course here you know well.

Speaker Change: Pfizer gene therapy portfolio acquisition and complemented with the selective collaboration.

Speaker Change: So this is really what we believe is going to drive a little bit on midterm growth with Daiichi sankyo collaboration and some of the bdcs, but mostly looking at driving growth 28, 29 and beyond so we can deliver our growth today tomorrow and the day after.

Speaker Change: So with this I'll hand, it over to Oh, no I was going to take years for the financials.

Unnamed Speaker: Over to you. Oops. Sorry.

Speaker Change: You're up sorry.

Speaker Change: Thank you.

Aradhana Sarin: Thank you, Pascal. As Pascal mentioned in his opening comments, total revenue increased six percent in 2023, which was at the top end of our updated guidance range. Product sales increased by 4% despite a decline of $3.8 billion in COVID-19 product sales in the year. Alliance revenue increased by 89% driven by hire and her sales in regions where Daiichi Sankyo books product sales.

Thank you Pascal.

Speaker Change:

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

Speaker Change: John mentioned in his opening comments total revenue increased 6% in 2023, which was at the top end of our updated guidance range.

Speaker Change: <unk> sales increased by 4% despite a decline of $3 8 billion in COVID-19 product sales in the year.

Speaker Change: Alliance revenue increased by 89% driven by higher sales in regions, where Daiichi sankyo books product sets.

Aradhana Sarin: Turning to the core P&L, our core product sales. Our core product sales growth margins increased by two percentage points to 81.7%. This step-up in gross margin was driven by lower COVID-19 revenues in 2023. In 2024, we anticipate a slightly lower product sales growth margin percentage driven by higher sales in emerging markets, increased before test product supply, higher production costs in certain facilities as well as higher product sales for partnered products and regions where we book sales and then pay out a profit share to our partners through cost of sales. Core operating costs increased by 9% in 2023.

Speaker Change: Turning to the core P&L.

Speaker Change: Core product sales.

Speaker Change: Okay.

Speaker Change: Our core product sales gross margins increased by two percentage points to 81, 7%.

Speaker Change: This step up in gross margin was driven by lower COVID-19 revenues in 2023.

Speaker Change: In 2024, we anticipate a slightly lower product sales gross margin percentage driven by higher sales in emerging markets.

Speaker Change: Increased before test product supply higher production costs in certain facilities as well as higher product sales a partnered product in regions, where we book sales and then pay out our profit share to our partners to cost of sales.

Speaker Change: Core operating costs increased by 9% in 2023.

Aradhana Sarin: R&D costs increased by 9% driven by 27 new phase 3 starts last year, including multiple trials of our PD-1 CTLA-4 bispecific merostamic and our oral CERD kamizastron. R&D costs as a percentage of total revenue were 22%, in line with our ambition. As expected, poor SG&A stepped up in the fourth quarter relative to the third quarter in 2023. We increased our investment in new launches behind Winoowa, Trucap, and AirSupra and continue to invest behind indications expansions such as Torshiga and CKD in heart failure and Mfinzi across tumor types. Our full-year core tax rate of 17% came in slightly below our guidance.

Speaker Change: R&D cost increased by 9% driven by 27, new phase III starting last year.

Speaker Change: Clothing multiple trials of our PD, one <unk> four by specific more restaurant.

Speaker Change: And our oral steroid Kansas restaurants.

Speaker Change: R&D cost as a percentage of total revenue was 22% in line with our ambition.

Speaker Change: As expected core SG&A stepped up in the fourth quarter relative to the third quarter and 2020 clean.

Speaker Change: We increased our investment in new launches behind we knew the true path and Ashton bra and continue to invest behind indications expansion, such as fashion Guy and CTD in heart failure in infancy across tumor types.

Speaker Change: Our full year core tax rate of 17% came in slightly below our guidance.

Aradhana Sarin: The fourth-quarter tax rate benefited from an adjustment to deferred taxes following an intra-group purchase of certain intellectual property, offset by unfavorable tax rulings in certain jurisdictions. Overall, our P&L allowed us to increase investments in both R&D and SG&A in the fourth quarter. Core EPS for the full year 2023 was $7.26, a growth of 15% versus the prior year. As Pascal stated earlier, we have made good progress on both top and bottom line delivery in recent years, and we remain on track to deliver both industry-leading growth and improve operating margin to the mid-30s in the mid-term, balanced by the need for continued investment to drive top-line growth in both the near-term and mid-term and long-term Today, we're pleased to announce our 2024 full year guidance. We anticipate

Speaker Change: In the fourth quarter tax rate benefited from an adjustment to deferred taxes. Following an intra group those shades of certain intellectual property offset by unfavorable tax ruling in certain jurisdictions.

Speaker Change: Overall, our P&L allowed us to increase investments in both R&D and SG&A in the fourth quarter.

Speaker Change: Core EPS for the full year 2020, 'twenty was $7.26 a growth of 15% versus the prior year.

Speaker Change: As Pascal stated earlier, we have made good progress on both top and bottom line delivery in recent years and we remain on track to deliver both industry, leading growth and improve operating margin to the mid cookies in the midterm.

Speaker Change: Balanced by the need for continued investment to drive topline growth in both the near term and current and long term.

Speaker Change: Today, we're pleased to announce our 2020 for full year guidance.

Speaker Change: We anticipate.

Aradhana Sarin: We anticipate our total revenue of low double digits to low teens percent increase and our core EPS of low double digits to low teens percent increase as well. Collaboration revenue is expected to increase substantially driven by success-based milestones and certain anticipated transactions. Other operating income, on the other hand, is anticipated to decrease substantially.

Speaker Change: We anticipate total revenue of low double digits to low teens percentage increase and our core EPS of low double digits to low teens percentage and claims as well collab.

Speaker Change: Collaboration revenue is expected to increase substantially driven by success based milestones and certain anticipated transactions.

Speaker Change: Other operating income on the other hand is anticipated to decrease substantially recall that in 2023 included a one off gain of around $700 million.

Aradhana Sarin: Recall that in 2023, it included a one-off gain of around $700 million related to the renegotiated before test agreement and another $240 million related to the sale of Pulmicort in the U.S. If FX rates for February to December were to remain at average rates seen in 2024 January, we anticipate a low single-digit adverse FX impact on both revenue and core EPS in 2024. Cash flow from operating activities increased by $537 billion in 2023. We continue to focus on improving our cash conversion and have already made significant progress in this area. Deal payments amounted to approximately $4 billion, of which nearly half related to past business development payments, including milestone payments to Daiichi Senkyou.

Related to the renegotiated before this agreement and another 240 million related to the sale of Pulmicort in the U S.

Speaker Change: If FX rates from February to December were to remain at average rates seen in 2020 for January we anticipate low single digit adverse FX impact on both revenue and core EPS in 2024.

Speaker Change: Cash flow from operating activities increased by $537 million in 2023.

We continue to focus on improving our cash conversion and have already made significant progress in this area.

Speaker Change: These payments amounted to approximately 4 billion of which nearly half related to past business development payments, including milestone payments to Daiichi sankyo.

Aradhana Sarin: For this year, we again anticipate about $2 billion in deal payments relating to historical transactions. CapEx in 2023 was around $1.4 billion. In 2024, we anticipate a significant step up in CAPEX, potentially in the 50% range, driven by investments in new manufacturing capabilities, such as API, inhaled products, and cell therapy. Our net debt at the end of 2023 was $22.5 billion.

Speaker Change: But this year, we again anticipate about $2 billion deal payments relating to historical transactions.

Speaker Change: Capex in 2023 was around $1 $4 billion in.

Speaker Change: In 2024, we anticipate a significant step up in capex potentially in the 50% range driven by investments in new manufacturing capabilities, such as API and health products in cell therapy.

Speaker Change: Our net debt at the end of 2023 was $22 $5 billion and given very recent BD transactions totaling about 2 billion. We anticipate this to remain at about the same level in 2024.

Aradhana Sarin: And given very recent BD transactions totaling about 2 billion, we anticipate this to remain at about the same level in 2024. With this in mind, our finance expense is expected to increase given the current interest rate environment. Our net debt to adjusted EBITDA ratio is 1.6 times on a last 12-month basis. Our capital allocation priorities remain unchanged, with our number one priority being to reinvest in the business, both in the pipeline and behind new launches. We remain committed to maintaining a strong investment-grade rating and will continue to pursue value-enhancing business development transactions. Towards the end of last year, we announced a license agreement with Ecogene and the proposed acquisitions of ICOSOVAX and GrayCell. Finally, we maintain a progressive dividend policy defined as either a stable or increasing dividend. With that, I will hand over to Dave.

Speaker Change: With this in mind, our finance expense is expected to increase given the current interest rate environment.

Speaker Change: Our net debt to adjusted EBITDA ratio is one six times on the last 12 month basis.

Speaker Change: Our capital allocation priorities remain unchanged with our number one priority to reinvest in the business both in the pipeline and behind new launches.

Speaker Change: We remain committed to keeping a strong investment grade rating and we will continue to pursue value enhancing business development transactions.

Speaker Change: Towards the end of last year, we announced a license agreement with <unk> and the proposed acquisition of Iqos of Ax and grateful.

Speaker Change: Finally, we maintain our progressive dividend policy defined as either stable or increasing dividend.

Speaker Change: With that I will hand over to Dave.

Dave: Thanks, Aradhana. I really appreciate that. Oncology total revenues of $18.4 billion in the full year period grew 21% versus the prior year, and that was driven by strong global demand for our key medicine. Tegriso global revenues grew 6% in the fourth quarter, reflecting strong double-digit growth for the US and Europe.

Dave: Thanks, Rodney I really appreciate that so oncology total revenues of $18 $4 billion and the full year period grew 21% versus the prior year and that was driven by strong global demand of our key medicines.

Dave: <unk> global revenues grew 6% in the fourth quarter, reflecting strong double digit growth for the U S and Europe performance in the quarter was partially offset by continued impact from the June 2023 mandatory price reduction in Japan.

Dave: Performance in the quarter was partially offset by continued impact from the June 2023 mandatory price reduction in Japan, as well as expected impact from hospital ordering dynamics in China and a rebate reclassification in Australia. In the fourth quarter, Limparza delivered 8% product sales growth and remains the leading PARP inhibitor globally, despite ongoing class- In the period, we recognized $245 million in regulatory milestones for Merck following the U.S. Propel approval and BRCA-mutated prostate cancer. Infinzi, inclusive of Imjudo, grew 52% in the fourth quarter, fueled by further global demand growth in gastrointestinal. In 2024, we expect continued progress with Topaz 1 in Himalaya, although Topaz 1 demand in the U.S. will moderate as the regimen is now established as the clear standard of care. In Japan, a 25% price reduction based on sales took effect in February of this year.

Dave: As well as expected impact from hospital ordering dynamics in China, and a rebate reclassification in Australia and.

Dave: In the fourth quarter Lin parser delivered 8% product sales growth and remains the leading PARP inhibitor globally. Despite ongoing class challenges in the period, we recognized $245 million in regulatory milestones for Merck following the U S. Propel approval in BRCA mutated prostate cancer in <unk> inclusive of some judo grew.

Dave: 52% in the fourth quarter fueled by further global demand growth and gastrointestinal tumors. In 2024, we expect continued progress with Topaz, one an MLA, although topaz one demand in the U S will moderate as the regimen is now established as the clear standard of care.

Dave: In Japan of 25% price reduction based on sales took effect in February of this year and additional mandatory price reduction is anticipated later this year based on recent fixed dosing approvals.

Dave: An additional mandatory price reduction is anticipated later this year based on recent fixed dosing approval. CalQuint's total revenues increased 14% in the fourth quarter, driven by continued new patient share gains across both frontline and relapsed refractory CLL. In HER2, total revenues of $364 million in the fourth quarter increased 68% year-on-year.

Dave: <unk> total revenues increased 14% in the fourth quarter, driven by continued new patient share gains across both frontline and relapsed refractory CLO.

Dave: And her to total revenues of $364 million in the fourth quarter increased 68% year on year in the U S and Germany, we're very encouraged by new patient share gains and the her two positive setting firmly establishing and her team as the undisputed standard of care across her two positive and hurt.

Dave: In the U.S. and Germany, we're very encouraged by new patient share gains in the HER2-positive setting, firmly establishing HER2 as the undisputed standard of care across HER2-positive and HER2-low metastatic breast cancer. In November of last year, we received approval for Trucap, our novel AKT inhibitor, in the U.S. and for Infinzi Topaz 1 in China. Importantly, we received a priority review designation for Inhertu. For Inhertu expressing tumors, an adjuvant use of Tegresso was added for the first time to the NRDL in China at no discount.

Dave: Too loud metastatic breast cancer.

Dave: In November of last year, we received approval for true cap our novel AK T inhibitor in the U S and foreign <unk> Z Topaz one in China.

Dave: Partly we received a priority review designation for and hurt you in her two expressing tumors and adjuvant use of Progresso was added for the first time to be in our deal in China at no discount.

Susan Mary Galbraith: With the exciting approval of TrueCap, we have the opportunity to further extend our leadership in breast cancer, including in the hormone receptor positive landscape. And HER2 is the established standard of care in late-line HER2 low tumors, and we look forward to the results of the Destiny Breast 06 trial in the first half of this year and the opportunity to bring HER2 one line earlier and expand into HER2 ultra-low tumors. Data from the Tropion Breast O1 trial of DADO-DX and hormone receptor positive HER2 low breast cancer were presented at ESMO last year during the presidential symposium; discussions with health authorities and pre-launch planning activities are already well underway. Finally, aligned with our ambition to establish a new endocrine therapy backbone, we now have several pivotal trials ongoing in the frontline for our next generation oral CERD camazestrin, including in combination with CDK4-6 inhibitors and Trucap.

Dave: We see exciting approval of true cap, we have the opportunity to further extend our leadership in breast cancer, including in the hormone receptor positive landscape in her two is the established standard of care in late line. Her two low and we look forward to the results of the destiny breast <unk> six trial in the first half of this year.

Dave: And the opportunity to bring in her two one line earlier and expand into her to ultra low tumors.

Dave: Data from the <unk> breast or one trial of data Dx in hormone receptor positive her two low breast cancer was presented at ESMO last year during the presidential symposium discussions with health authorities and prelaunch planning activities are already well underway.

Dave: Finally aligned with our ambition to establish a new endocrine therapy backbone. We now have several pivotal trials ongoing in the frontline for a next generation oral CERN cameras estrin, including in combination with CDK four six inhibitors and true cap.

Susan Mary Galbraith: TrueCap is being very well received by the clinical community in the United States, and we are already seeing rapid adoption with the majority of new starts in patients with biomarker-altered tumors who have previously received a CDK4-6 inhibitor, which is consistent with our views of the addressable population. We see potential for TRUCAP to become the new standard of care and second line for endocrine-treated patients with PIK3CA, AKT1, or P And with that, we'll advance to the next slide, and I'll hand over to Susan to cover the R&D highlights of the quarter. Thank you, Dave.

Dave: True cap is being very well received by the clinical community in the United States and we are already seeing rapid adoption with the majority of new starts in patients with biomarker altered tumors, who have previously received a CDK four six inhibitor, which is consistent with our views of the addressable population.

Dave: We see potential for true cap to become the new standard of care in second line for endocrine treated patients with <unk>.

Dave: One more P 10 altered tumors and with that we will advance to the next slide and I'll hand over to Susan to cover R&D highlights in the quarter.

Susan: Thank you Dave.

Susan Mary Galbraith: In December, we entered into a definitive agreement to acquire GrayCell Technologies, which furthers our cell therapy ambitions across oncology and autoimmune diseases. GrayCell has a proprietary cell therapy manufacturing platform called FastCar. The FastCar platform has several key benefits. First, it significantly reduces the manufacturing time from between one and three weeks to 22 to 36 hours, with the opportunity to improve median turnaround time and also enable increased manufacturing capacity as well as predictability of CAR-T delivery.

Susan: In December we entered into a definitive agreement to acquire <unk> technologies, which further cell cell therapy ambition across oncology and autoimmune diseases.

Susan: <unk> has a proprietary cell therapy manufacturing platform called fast call.

Susan: The <unk> platform.

Susan: Platform.

Susan: Several key benefits first it significantly reduces the manufacturing time from between one and three weeks to 22 to 36 hours.

Susan: With the opportunity to improve medium turnaround time.

Susan: And also enable increased manufacturing capacity as well as predictability of car T delivery.

Susan Mary Galbraith: Second, a lower dose of cells needs to be manufactured for each patient, which reduces the risk of cytokine release syndrome, and that can improve the safety profile. And third, the shorter manufacturing time delivers more fit T-cells, and this potentially improves the efficacy of this CAR-T. This proposed acquisition also enriches our growing pipeline of cell therapies with GCO-12F, a novel clinical stage dual BCMA and CD19 targeting autologous CAR-T. Phase 1 data were presented at the ASH meeting in December. In 22 patients with newly diagnosed high-risk multiple myeloma, the objective response rate was 100%.

Susan: Second a lower dose of cells need to be manufactured for each patient.

This is the risk cytokine release syndrome.

Susan: And that can improve the safety profile.

Susan: And third the shelter manufacturing time deliver fits of T cells and this potentially improve the efficacy of this car T.

Susan: This proposed acquisition also enriches our growing pipeline of cell therapies with GCI 12 F. A novel clinical stage two will be CMA on CD 19 targeting autologous car T.

Susan: Phase one data presented at the Ash meeting in December.

Susan: In 22 patients with newly diagnosed high risk multiple myeloma.

Susan: <unk> response rate was 100%.

Susan Mary Galbraith: And we saw a minimal residual disease positivity rate between 95% and 100% six to 12 months after infusion. This demonstrates the promise of this potential therapy when you move it into an early-aligned setting. Safety was also favorable, with only 27% of patients experiencing either grade 1 or 2 cytokine release syndrome and no grade 3 or above events. Additionally, we did not see any neurological toxicity which can be associated with this type of therapy.

We saw a minimal residual disease negativity right between 95, and 100% six to 12 months after infusion.

Susan: Demonstrates the promise of this potential therapy, when you move it into an earlier line setting.

Susan: Safety was also favorable with only 27% of patients experiencing either grade one or two cytokine release syndrome, and no grade three or above events.

Susan: Additionally, we did not see any neurological toxicity, which can be associated with this type of therapy.

Ruud: With a median follow-up time of 18.8 months, median PFS and median duration of response had not been reached, also highlighting the durability of the response. We believe that GCO12F has potential applications across haematologic malignancies, including multiple myeloma, and will further bolster our haematology pipeline, adding to QALQEN's AZD0486, our CD19-CD3 next-generation bispecific We also have two further homegrown haematology molecules which have just entered the clinic, a CD123 antibody drug conjugate AZD9829 and a PRMC5 inhibitor AZD3470. We look forward to updating you on our exciting haematology pipeline over the course of this year. And with that, can you please advance to the next slide? And I'll pass over to Ruud to cover biopharmaceutical performance. Thank you so much, Susan.

Susan: With a median follow up time of 18.8 months median PFS and median duration of response had not been reached also highlighting the durability of the response.

Susan: We believe that <unk> has potential applications across hematologic malignancies, including multiple myeloma and will further bolster our hematology pipeline, adding to calpine.

Susan: Eight six our CD 19 city three next generation bi specific T cell engagements.

Susan: And as a D 03050, Gee plc, five day targeting antibody drug conjugate.

Susan: We also have two further homegrown hematology molecules, which just entered the clinic.

Susan: 123 antibody drug conjugate is nine eight to nine on a pay on C. Five inhibitor is a D. Three full acceptance of it.

Susan: Look forward to updating you on our exciting hematology pipeline over the course of this year.

Speaker Change: And with that can you. Please advance to the next slide and I'll pass over to root cause of Biopharmaceuticals component. Thank you. So much Susan Biopharmaceuticals delivered total revenue of $18 $4 billion in 2023, driven by growth of 18% and silver and 10% in R&R.

Ruud: Biopharmaceuticals delivered total revenue of $18.4 billion in 2023, driven by growth of 18% in CVRM and 10% in RNI. Highlights for the year included Fasega nearing six billion dollars in total revenue and RNI returning to double digit growth. Turning now to the fourth quarter, where, within R&I, nearly half of the total revenue came from Vesenrat, Tespias, Savnella, and Br

Root Cause: Key highlights for the year includes especially you got nearing $6 billion in total revenue and <unk> returning to double digit growth.

Speaker Change: Turning now to the fourth quarter, where it was in R&R nearly half of the total revenue came from for Sunrun. Despite yourself NELA umbrella Street. These.

Ruud: These medicines grew by a combined 40% more than offsetting the impact of Symbicort generic entry. And in V&I, Wave Fortis continued to see strong demand in its first RSV season, generating $95 million of product sales and Alliance revenue for AstraZeneca in the quarter. Lastly, we received our first sales-related milestone payment from Sanovi, totaling $27 million.

Speaker Change: These medicines group grew by a combined 40% more than offsetting the impact of Symbicort generic entry.

And then via night, maybe Ford has continued to see strong demand in its first RSV season, generating $95 million of product sales and alliance revenue fosters anika in the quarter Lastly.

Speaker Change: Lastly, we received our first sales related milestone payments from Sanofi totaling $27 million.

Ruud: We have recently launched three innovative new medicines within biopharmaceuticals. Launches in new areas of science and medicine require us to raise awareness among patients and practitioners and often to build additional sales forces. Maximizing early momentum for these launch brands is critical to delivering on their full potential. Iplontacin is an amylodosis treatment that we're developing in partnership with Ionis. In January, it launched the brand new Wenua for patients with ATTR polyneuropathy, a debilitating ultra-rare disease which is generally fatal within a decade if left untreated. AirSupra is the first rescue medicine to reduce exacerbation and treat the underlying inflammation.

Speaker Change: We have recently launched three innovative new medicines within Biopharmaceuticals launches in new areas of science and medicine requires to raise awareness among patients and practitioners and often to build additional sales forces.

Speaker Change: <unk> early momentum for these brands is critical to delivering on their full potential.

Speaker Change: You pull in person.

Speaker Change: I mean, those as treatments that we're developing in partnership with <unk>.

Speaker Change: In January we launched was the brand name <unk> for patients with <unk> Polyneuropathy debilitating ultra rare disease, which is January generally faithful within a decades if left untreated.

Speaker Change: As soon as the first rescue medicine to reduce exhibition and treat the underlying inflammation.

Ruud: And we have shown, in the Mandela trial, a 28% reduction in the risk of severe asthma exacerbations in adult patients compared to albuterol. We formally launched AirSupra last month for adult patients, and over time, we hope to see primary care physicians in the United States change 50 years of prescribing habits. As mentioned, we are off to a strong start and are only halfway through the first RSV season that Bayfortis has been available for infants. Following continuous strong demand and the recent approval in China, we are planning for a substantial increase in capacity in 2024. We continue to invest behind the Fasiga brand, with growth being driven across the globe by recent launches in heart failure and chronic kidney disease. In the coming years, we aim to continue to build on this franchise with new combination medicines in development that address unmet needs in hypertension, heart failure, and CKD.

And we have shown with <unk> at 28% reduction in the risk of severe asthma, exacerbations and adult patients compared to elbit role.

Speaker Change: We formally launched <unk> last month for adult patients and over time, we hope to see primary care physicians in the United States change 50 years of prescribing habits.

Speaker Change: As mentioned, we are off to a strong start and are only half way through the first RSV season that the fortress has been has been available for infants.

Speaker Change: Following continued strong demand and the recent approval in China, We're planning for a substantial increase in capacity in 2024.

Speaker Change: We continue to invest behind the first seeger brands with growth being driven across the global.

Speaker Change: The globe by recent launches in heart failure, and chronic kidney disease.

Speaker Change: In the coming years, we aim to continue to build on this franchise with new combination medicines in development that address unmet needs in hypertension heart failure and she could eat.

Ruud: And with additional targets in our late-stage and early-stage pipeline, our CVRM portfolio is set to expand and evolve over the mid- to long-term. We recently commenced phase three trials for Baxterstat in uncontrolled and resistant hypertension, as well as for Zevitatin combined with Depakliflozin, addressing patients with CKD and high proteinuria. Iplontacin is also being evaluated for the treatment of ATTR cardiomyopathy, which is estimated to affect up to half a million patients worldwide.

Speaker Change: With additional enemies and our late stage and early stage pipeline, our CPM portfolio is set to expense and evolve over the mid to long term.

Speaker Change: We recently commenced a phase III trials for a bunch of stuff in uncontrolled and resistant hypertension as well as for Zebra tends and combines is depo <unk> flows and addressing patients with <unk> and high proteinuria.

Speaker Change: It pulls us and is also being evaluated for the treatment of <unk> cardiomyopathy, which is estimated to affect up to a half a million patients worldwide.

Ruud: Our Phase 3 Cardiotransform trial is the largest of its kind, and it's powered to show a cardiovascular mortality benefit. And we are very pleased to share today that we have obtained fast-track designation from the FDA for our cardiomyopathy regulatory file. I will now hand over to Sharon to present the latest developments from the biopharma pipeline. Thank you so much, Ruud.

Speaker Change: Oh phase III cardio transform trial is the largest of its kind and is powered to show a cardiovascular mortality benefits and we are very pleased to share today that we have obtained fast track designation from the FDA for a cardiomyopathy regiments regulatory fall I.

Speaker Change: I will now hand over to Sharon to present, the latest developments from the Biopharma pipeline. Thank you.

Sharon: Thanks, so much for it.

Sharon: I wanted to take this opportunity to highlight our current portfolio in immunology, as well as provide more color on our recent business development deals focused on immune-mediated diseases. In Safinello's Pivotal Phase III TULIP trials in systemic lupus erythematosus, we saw positive changes in the skin. We are building on this and expanding into new indications. We have started enrolling patients in our Phase 3 DAISY trial of Safinello in patients with systemic sclerosis, a chronic disease characterized by diffuse fibrosis and vascular abnormalities in the skin, joints, and internal organs, which can be fatal.

Sharon: I wanted to take this opportunity to highlight our current portfolio in immunology as well as provide more color on our recent business development deals focused on immune mediated diseases.

Sharon: In <unk> pivotal phase III tulip trials and systemic lupus erythematosus, we saw positive changes in cutaneous lupus.

Sharon: Building on this and expanding into new indications, we have started enrolling patients in our phase III daily trial of <unk> in patients with systemic sclerosis.

Sharon: Chronic disease characterized by diffuse fibrosis, and vascular abnormalities in the skin joints and internal organs, which can be fatal.

Sharon: We also have plans to initiate two other Safinello Phase III trials this year in cutaneous lupus and myositis. Our recent business development deals have accelerated our ambitions in immune-mediated diseases. Emerging data from Dr. Shett's academic group have shown the potential for long-term remission with CAR T cells in systemic lupus erythematosus.

We also have plans to initiate two others personnel of the phase III trials this year in cutaneous lupus and myositis.

Sharon: A recent business development deals have accelerated our ambitions in immune mediated diseases emerging data from Doctor Schatz academic has shown the potential for long term remission with car Ts in systemic lupus erythematosus.

Sharon: Part of our definitive agreement to acquire Graycell includes autologous CAR-Ts with an ongoing Phase I investigator-initiated trial with GCO12S, a CD19 and BCMA CAR-T in 15 Chinese patients with SLA. We look forward to sharing the Phase 1 data at an upcoming conference. Our collaboration with Quell is designed to develop multiple engineered T-regulatory cell therapies, which have the potential to be transformative in type 1 diabetes and inflammatory bowel diseases. Treg cell therapies have a unique approach of modulating the immune system to reduce inflammation and prevent immune-mediated damage to tissue.

Part of our definitive agreement to acquire Greenhill includes autologous car Ts with an ongoing phase one investigator initiated trial with GCE O 12 F. A CD 19, and Bcm, a car T and 15 Chinese patients with SMA.

Sharon: We look forward to sharing the phase one data at an upcoming conference.

Sharon: Our collaboration with <unk> is designed to develop multiple engineered T regulatory cell therapies, which have the potential to be transformative in type one diabetes and inflammatory bowel diseases.

Sharon: T Reg cell therapies have a unique approach is modulating the immune system to reduce inflammation and prevent immune mediated damage to tissues.

Sharon: Qwell's innovative platform of armored Tregs could enable sustained clinical benefit. And finally, our collaboration with Selectus allows us to explore the potential of an allogeneic CAR T platform. Off-the-shelf availability of allogeneic CAR-T cells is expected to reduce the time and cost associated with manufacturing these innovative transformational cell therapies, as well as our internal capabilities. We are building a platform for a pipeline in immune-mediated diseases with transformative potential. I will now hand over to Mark, who will cover our rare disease portfolio. So, thank you, Sharon.

<unk> innovative platform on armored T regs could enable sustained clinical benefit.

Sharon: And finally, our collaboration with select US allows us to explore the potential of an allogeneic car T platform.

Sharon: Off the shelf availability from allogeneic car T cells is expected to reduce the time and cost associated with manufacturing.

Sharon: With these innovative transformational cell therapies as well as our internal capabilities we.

Sharon: We are building a platform for our pipeline in immune mediated diseases with transformative potential.

I will now hand over to Mark who will cover our rare disease portfolio.

Mark: So thank you Sharon and for rare disease.

Mark: And for rare diseases, total revenue achieved $7.8 billion in 2023, up 12% year over year, driven by growth in neurology indications, increased patient demand, and launches in Newmark. In the quarter, ultramarine risk grew 38% and plus 52% for the full year, driven by neurology indications, with a vast majority of growth coming from generalized myasthenia gravis patients who were naive to the brand. As previously indicated, Ultimiris revenues were broadly in line with Soliris for the year.

Mark: Total revenue achieved seven $8 billion in 2023.

Mark: 12% year over year, driven by growth in neurology indications.

Mark: This patient demand and launches in new markets.

Mark: In the quarter <unk> grew 38%.

Mark: And plus 52% for the full year, driven by neurology indication with the vast majority of growth.

Mark: From Geneva, Myasthenia gravis patients were naive to branded treatments.

Mark: As previously indicated to me. These revenues were broadly in line with Sony raise for the year, but if you look at the fourth quarter in terms of risk revenues exceeded <unk>.

Mark: But if you look at the fourth quarter, Ultimiris revenues exceeded Soliris. Our conversion strategy is progressing well, with a majority of patients already converted across PHN, atypical hemolytic uremic syndrome, and GMG in our major markets. We continue to launch both medicines globally and expect the C5 franchise, Soliris, and Ultimiris, revenues to remain sustainable and durable. Beyond complement, both Stransic and Cocelugo grew 13% and 48%, respectively, driven by continued patient demand. I'm also delighted to announce that we have started enrolling patients in phase 3 trials for transtiretine amyloid cardiomyopathy, as well as for hypophosphatase. Alexion 2220 is a monoclonal antibody designed to deplete toxic amyloid fibrils in the heart with the potential to treat TTR cardiomyopathy in combination with standard of care stabilizers or silencers. A phase three trial is recruiting a broad range of patients with moderate and severe disease.

Mark: Our conversion strategy is progressing well with the majority of patients already converted across PHN attribution, and we need to <unk> syndrome, and gmg in all major markets.

Mark: We continue to launch both medicines globally and expect the CFO fungi, Sony recently communities revenues to remain sustainable and durable.

Mark: Beyond complements both strengths Sequin casino go.

Mark: 13, and 14%, respectively, driven by continued patient demand.

Mark: I'm also delighted to announce that we have started enrolling patients in office three trials for postulating amyloid cardiomyopathy as well as full hypophosphatasia.

Mark: Alex from 'twenty to 'twenty is a monoclonal antibody designed to deplete took seats toxic amyloid few wisdom the hubs with a potential to treat GTO are doing with <unk> in combination with standard of care stabilizers or sciences.

Mark: Our phase III trial is recruiting a broad range of patients with moderate and severe disease.

Mark: It has been designed with hard cardiovascular endpoints, all-cause mortality, and cardiovascular events, which are extremely important for patients and clinicians, as well as for regulators and payers. We have begun enrollment in our phase 3 program, for asphynophortase alpha in apophosphatase, including two trials in the pediatric setting, investing both nave and switch patients, as well as a larger trial in n These trials represent a broad set of hypophosphatasia patients, including those with both skeletal and functional improvement.

Mark: It has been designed with hub cardiovascular and bonds all cause mortality.

Mark: And cardiovascular events, which are extremely important for patients and clinicians as well as for regulators and payers.

Mark: We have begun enrollment in our phase III program with four days Alpha in April for strategy, including.

Mark: Including two trials in the pediatric setting investing both naive and switch patients as well as the larger trial in naive adults and adolescence.

Mark: These clients represent a broad set of hypophosphatasia patients, including those with both skeletal.

Mark: And functional improvements.

Mark: We believe that this product with every two-week dosing and lower-volume injections, coupled with improved manufacturing, creates a significant opportunity to increase the addressable population by three times as compared to strengths. We have made great progress in our last-stage pipeline, with nine phase three programs on the way. And our 10th program, with Domiris and Aigan, is initiating. With that, peace and all, best counts.

Mark: We believe that this well.

Mark: Product with every two week dosing and lower volume injections.

Mark: Copper was important manufacturing creates a significant opportunity to increase the addressable population by three times as compared to <unk>.

Mark: We have made great progress in our late stage pipeline with nine phase III programs underway and authentic program is stimulus in Aegon is initiating soon.

Peter: With that Peter.

Peter: We'd get wesco.

Unnamed Speaker: Thank you, Mark. I'm going to the last slide. This is really to show you that over the next few months, we have quite a number of catalysts that are going to drive us across oncology, biopharmaceuticals, but also rare diseases. And you have a few here that are listed. Of course, a number are missing. We also have Flora II, which will deliver updated OS data in the course of 2024. But some of the most important ones here are going to drive the growth of several of our important products. Laura for Tagrisso, Destiny Breast 06 driving an R2, and Tropion Breast 02 with DattoDxD. The waypoint study, studying Tespire in chronic sinusitis with nasal polyps and finally MRO2 infinzib.

Peter: Thank you Mark.

Peter: For most of the last slide.

This is really to show you that over the next few months, we have a <unk>.

Quite a number of catalysts that are going to drive us across our oncology Biopharma also rare diseases.

Peter: And you have a few here that are listed.

Peter: Of course, a number of missing and we have also have a.

Peter: Flora tool that will deliver.

Peter: Updated Oh as data in the course of 2024, but some of the most important one is once you're all going to drive the growth of several of our important products roll off altogether. So.

Peter: <unk> six <unk> driving a now to Taco embraced the auto is the to the exit.

Peter: <unk> study.

Studying <unk> in clinic, sinusitis with nasal polyps and finally ammo to infinity, but there is of course a lot more than this.

Unnamed Speaker: But there is, of course, a lot more than this. The other point I wanted to make in conclusion is that the midterm pipeline is actually emerging very rapidly. We have some very good data coming out of our specific portfolio, and there will be more data points communicated during the course of this year. Our ADCs, we'll also have more data to share about our ADCs and how this pipeline is shaping up.

Peter: The point I wanted to make in conclusion is that.

Peter: The.

Peter: Amidst the midterm pipeline is actually emerging very rapidly we have some very good data coming up out of our bi specifics portfolio and there will be more data points communicated in the course of this year.

Speaker Change: Hey, this is.

Speaker Change: We'll have more data to share about our agencies on how this pipeline is shaping up.

Unnamed Speaker: We have an emerging metabolism portfolio that, you know, we don't talk about much yet, but it is actually progressing very nicely. We have a very exciting oral PCSK9 that is making good progress. Baxrostat is for hypertension, and it is now in phase three. And finally, we have, of course, the oral GLIP1 agent we licensed in. And the beauty about those agents is that they can be combined. They can be combined

Speaker Change: We have an emerging metabolism portfolio that.

Speaker Change: We don't talk much yet, but is actually progressing very nicely. We have a very exciting all pieces canine that is making good progress bucksaw start is for hypertension is in nine phase III.

Speaker Change: And finally, we have of course, the all glib one agent we license staying in the beauty about those agencies that they can be combined and it can be combined with or do you see that coming to combine between them.

Unnamed Speaker: They can be combined between themselves. And so we have here a metabolism portfolio that is really starting to take good shape. And beyond the products I've mentioned, there's more to come, of course, in obesity, but also in cardiovascular, heart disease, and renal disease, cell therapy. We will this year communicate some of the results of our mid-stage studies progression, and finally, we will also be communicating information about our new DDR pipeline and, in particular, the PAP1 selective. So, as you can see here, quite a lot of new data coming up, both from the phase 3 pipeline but also from our mid-stage pipeline that will give you a sense for what is coming up and why we believe, why we're so excited, why we believe we can continue to drive top-line growth over the next 10 years and drive improvement and profitability as a result of that. Finally, I want to invite you all to R&D Day.

Speaker Change: Themselves and so we have your metabolism portfolio that is really starting to take good shape and beyond the products that I mentioned there is more to come of course in meta in obesity, but also in cardiovascular.

Speaker Change: <unk> disease and renal disease.

Speaker Change: Choppy we will.

Speaker Change: This year.

Speaker Change: Communication some of the results of our <unk>.

Speaker Change: Mid stage studies progression and finally, we will also be communicating information about our newer DDR pipeline in particular the pop one set active so as you can see here quite a lot of.

Speaker Change: New data coming up both from the phase III pipeline, but also from a mid stage pipeline that will give you a sense for what is.

Speaker Change: Coming up and why we believe why were so excited and why we believe we can continue to drive.

Speaker Change: Top line growth over the next 10 years and.

Speaker Change: Drive improvement in profitability as a result of this.

Speaker Change: Finally, I want to invite invite you all to our R&D day.

Unnamed Speaker: This will be in Cambridge, at this. Our new R&D center, you will see as you, for those of you who join us on the 21st of May, you will see this is a fantastic site and our teams are very excited to be there, and I'm sure it will drive further momentum in our R&D productivity. And the reason we do this R&D Day is, as I said before, we've just completed our 10-year journey that we started in 2014. We're engaging in the next phase of our journey, the next 10 years, and we thought it was a good time to sit back and update our strategy and show you why we are so confident that the future is bright for AstraZeneca. So with that, I'll stop here and then open the floor for questions. James.

Speaker Change: This will be income bridge of the disc.

Speaker Change: Our new R&D Center.

Speaker Change: You would see as you are.

Speaker Change: For those of you join.

Speaker Change: Join us on the 24th of May.

Speaker Change: Series, a fantastic site and our teams are very excited to be there and I'm sure. It will drive further momentum in our R&D productivity.

Speaker Change: And the reason we do this our R&D days.

Speaker Change: As I said before we've just completed our 10 year old journey that we started in 2014 were engaging in the next phase of our John in the next 10 years and we thought it's a good time to sit back and update our strategy and show you why we are.

Speaker Change: So confident that the show is bright for Astrazeneca.

Speaker Change: So as they start to stop here and open the floor for questions James.

James: Good luck.

James: Uh huh.

James Daniel Gordon: Amen. Thank you, James Gordon from JPMorgan. I'll ask just two questions, please.

James: Thank you James Gordon from J P. Morgan.

James Daniel Gordon: Just two questions. Please.

Unnamed Speaker: The first one was on revenues for this year. So the guidance, low double-digit or low teams, is a revenue target, but I think bears are worried that lots of that is collaboration revenues growing and product sales slowing. So can you just say, is that fair?

James Daniel Gordon: The first one was on revenues for this year.

James Daniel Gordon: So the the guidance low double digit or low teens.

Speaker Change: It is a revenue target I think bears are worried that lots of that as collaboration revenues growing and product sales slowing. So can you just say is that fair or do you also think that you can sustain the same sort of pace of product sales growth or is it really about collaboration revenue is taking over from product sales. That's the first question. Please and then I think the second question. The other thing that some better said today is that.

Unnamed Speaker: Do you also think that you can sustain the same sort of pace of product sales growth, or is it really about collaboration revenues taking over from product sales? That's the first question, please. And I think that the second question, the other thing that some bears have said today, is that the top line guidance is about the same pace as the bottom line guidance. So that would imply, then, that margins might be about flat. And then I think, on slide six, you said that in the medium term, margins will get to the mid-30s. But does that mean margins will be flat this year and then have to have a big inflection in 25 and 26 to get there? So thoughts on that and whether there is going to be lots more OPEX and how that's going to work, please. Thank you, James. Great questions, and you will open the floor, I'm sure.

Speaker Change: The top line guidance is about the same pace as the bottom line guidance. So that would imply that the margins might be about flat and then ive seen I think it was slide six you said that the in the medium term margins will get to the mid thirties, but does that mean margins to be flat this year and thats, a big inflection in 'twenty, five and 26 to get there.

Speaker Change: I see.

Speaker Change: So on that and whether whether there is gonna be lots more opex and how that's going to work. Please.

Speaker Change: James Great questions and Uh Huh.

Speaker Change: You will open the floor I'm sure, but let me just be very category I code here, our product sets are going to go out very strongly.

Unnamed Speaker: But let me just be very categorical here. Our product sales are going to grow very strongly. So the collaboration revenue, of course, is adding to that growth, but certainly product sales are very much on track to deliver the kind of growth that is included in the guidance range that we are communicating. Yeah, I mean, if you look at just, for example, the growth in 2023 across the franchises, right, with oncology growing 21%, you know, rare disease 12%, and 18% in CBRM. So, you know, and all of that is from current products. We expect that momentum to continue into the coming year. Obviously, you know, different products have different sorts of dynamics and so forth.

Speaker Change: The collaboration revenue of course are adding to that growth.

Speaker Change: But sell any products that are very much on track to deliver.

Speaker Change: The kind of growth that is included in the guidance range that we are communicating.

Speaker Change: Yes, I mean, if you look at just for example, the growth in 2023 across the franchises right with oncology growing 21% and rare disease dropped about 18% and CVR and so we you know and all of that is from current products.

Speaker Change: So we expect that momentum to continue into the coming year, obviously different products have different.

Speaker Change: Sort of dynamics on and so forth. So the growth will come in product sales from both current products as well as some of the new launches that we have though you don't get there they're early in their launch trajectory.

Unnamed Speaker: So the growth will come from product sales from both current products, as well as some of the new launches that we have, though, you know, again, they're early in their launch trajectory. I think on your second question, so we have given, obviously, a range on both top line and bottom line, but some of the other elements that I mentioned in my prepared remarks, one was, for example, the finance expense that we expect slightly to go up given the transactions that we did towards the end of last year and so forth, and refinancing of some of the debt that we have. The second element is that we obviously benefited a little bit from the tax rate last year. So that tax rate benefit will also not be there.

Speaker Change: I think on your second question. So when we have given obviously a range on both topline and bottom line, but some of the other elements that I mentioned in our in my prepared remarks.

Speaker Change: One was for example, the finance expense that we expect slightly to go up given the transactions that we did towards the end of last year, and so forth and and refinancing for some of the debt that we have.

Speaker Change: The second element is we obviously benefited a little bit from the tax rate a lofty herschelle that tax rate benefit will also not be there. So if you look at the totality of the P&L.

Unnamed Speaker: So if you look at the totality of the P&L, those will also be elements. And we get to the range that we have on EPS, you know, and when you take that into account, obviously, we expect the revenue growth to be pretty strong, but the operating expense growth to be lagging behind the revenue. And that's what's going on. Yeah.

Speaker Change: Those will also be elements and we get to the the range that we have on EPS.

Speaker Change: And when you take that into account and obviously, we expect the.

Speaker Change: The revenue growth to them.

Speaker Change: We be pretty strong, but the operating expense growth to be lagging the revenue growth and that's that's what operating leverage.

Speaker Change: Okay.

Speaker Change: Yes.

Emily Field: Hi Emily Field from Barclays, I have a couple of questions on oncology. The first is DATS or DXT; the Avanzar study must have enrolled pretty quickly to be having a readout in 2025. If that study were to be positive, would you file based on that study? I know it's designed somewhat differently to TLO7 and TLO8. And then on HER2 for Destiny Breast 06.

Speaker Change: Hi.

Emily Field: Emily field from Barclays I have a couple of questions on oncology.

Emily Field: The first one <unk> study must have enrolled pretty quickly to be having a readout in 2025 and that's what you were to be positive would you file based on that study I know its design somewhat differently to TLO seven nano <unk>.

Emily Field: And then on in her two for Tuscany Bristow six.

Unnamed Speaker: How much does the inclusion of the ultra-low population expand the addressable patient set? I think you said before that HER2 low is about 50% of breast cancers. How much bigger does that get with HER2 ultra-low?

Emily Field: Much does the inclusion of the ultra low population expand the addressable patients that I think you've said before that hurts you LOE was about 50% of breast cancers, how much bigger does that got with her two ultra low.

Unnamed Speaker: Yes, so for Avanza... Michael, can you hear me? Yes, accrual has gone very well, which I think demonstrates the interest in the potential, not just of DATO-DXD but the combination, in particular, of DATO-DXD plus immune checkpoint inhibition. As you know, we've seen exciting data in a couple of different settings from the tropion lung O2 and O4 datasets, as well as the begonia study in triple negative breast cancer. I think investigators are very interested in that, and the potential that this has to further improve outcomes for patients with first-line non-small cell lung cancer. The study is progressing very quickly in recruitment, as you pointed out. The second one is Db06 and the low, maybe for you, Daigo?

Emily Field: Yes.

Speaker Change: Well Michael.

Michael: Yes, it could have gone very.

Speaker Change: Sorry, well, it's just I think it demonstrates the interest and the potential not just in <unk>, but the combination of particular with after tax day, plus immune checkpoint inhibition as you know we've seen exciting data.

Speaker Change: In a couple of different settings from the champion long ago, two and a full datasets as well as the begonia study in triple negative breast cancer I think investigators are very interested in.

Speaker Change: The potential that this has to further improve the outcomes for patients with first line non small cell lung cancer.

Speaker Change: The study is progressing very quickly in our recruitment as you pointed out the second one is <unk> and the low maybe for you David Yeah. So.

Unnamed Speaker: Yeah. So thanks, Emily, for the question on that. So I think as we go, there are two things that I think are important about Db06: the first one is that it expands the opportunity, if it's positive, like you highlighted, to move into the ultra low. Specifically on that question, just to lay this out.

Speaker Change: Thanks for the question on that so I think as we.

Speaker Change: Two things that I think are important about <unk>. The first one is is that it expands the opportunity. If it's positive like you highlighted to move into the ultra low specifically on that question just to lay this out.

Unnamed Speaker: So if we look at hormone receptor positive metastatic breast cancer, within the 60% are IHC 1 plus and 2 plus. So that's the HER2 low that's covered by Db04. Then we've got 25% that we estimate that's in this zero to one category. So that's how much it adds to this. And then you've got about 15% that are the true zeros. So first, there is that expansion outside of the one pluses into the ultra lows. And then also it's moving a line early.

Speaker Change: If we look at hormone receptor positive metastatic breast cancer within the 60% or the IH seeing one plus two plus so that's the.

Speaker Change: Are too low that's covered by <unk> then we've got 25% that we estimate that's in this zero to one category. So that's how much it adds within this and then you've got about 15% that are the truth zeros.

Speaker Change: First is that expansion outside of the one pluses and into the ultra lows and then also it's moving align earlier and.

Matthew Weston: So by moving the line earlier, there are two opportunities to see growth, and it'll be data dependent. But one of those is, of course, a longer duration of therapy you'd hope to get as you move earlier. The other is that if the data are really compelling, you could see that that puts some pressure on what we see is a lot of endocrine recycling that takes place within these patients. So again, that'll be data-dependent. We'll have to see what the magnitude of the benefit is, but there are three different opportunities for O6 to contribute to growth, and yeah. Thank you. Matthew Weston from UBS. Two questions. And if the first one I can stick with, and her too, as well.

Speaker Change: So by moving align earlier, there's two opportunities to see growth and it'll be data dependent but one of those is of course a longer duration of therapy, you would hope to get as you move earlier. The other is is that if the data are really compelling you can see that that put some pressure on what we see is a lot of endocrine recycling. It takes place within these patients so again that'll be data dependent.

Speaker Change: We'll have to see what the magnitude of benefit ALS, but theres three different opportunities for <unk> to contribute to growth moving forward.

Speaker Change: Yes.

Speaker Change: Matthew Weston from UBS two questions. So the first one I can stick with her to as.

Matthew Weston: As well I think for Q U S sales probably were a little bit light in terms of growth of what people were expecting when Daiichi reported them. So total end user sales and at the time I think Daiichi commentary.

Unnamed Speaker: I think 4Q US sales probably were a little bit light in terms of growth compared with what people were expecting when Daiichi reported them. So total end user sales. And at the time, I think Daiichi commented that penetration was reaching a plateau in some of the US markets, but with the data expansion coming, there was going to be much more opportunity. I think a lot of investors felt that the HER2 low was significantly bigger than suggesting it had already plateaued. So I'd love to understand what's going on there.

Matthew Weston: Penetration was.

Matthew Weston: Reaching plateau and some of the U S market, but with the data expansion coming there was going to be much more opportunity I think a lot of investors felt that hurts your low was significantly bigger than suggesting an annuity plateaued. So I'd love to understand what's happening, but also David if you could touch on head to Pan tumor it seems to fly under the radar maybe will actually be quite a significant.

Unnamed Speaker: But also, Dave, if you can touch on HER2 pan tumour, it seems to fly under the radar and may well actually be quite a significant indication. And then, rather on the second question, you've added into guidance that there's essentially pointing to a one-time asset sale being something to take into account for 2024. I don't remember you doing that for quite some time, suggesting it might be of a significant size. Is there any way you can help frame it?

David: Difficult indication and then if a rapid on the second question.

David: <unk> added into guidance.

David: Essentially pointing to a onetime asset sale being something to take into account for 2024.

David: Remember youre doing that for quite some time, suggesting it might be of a significant size is there any way you can help frame it.

David: Okay.

Unnamed Speaker: Let me start. So, Matthew, on in her to, and I made this comment in my prepared remarks, and I think that it's an important piece, which is I have been commenting in quarters past that we had found that we had hit a 50% really kind of threshold that we were running into in both HER2 positive and HER2 low, but that we knew that there was opportunity to drive continued growth beyond that. And I was really pleased to see, and we've been really pleased to see, that we've been putting more effort into our promotional efforts within the U.S. and large markets within Europe. We've done that in conjunction with the TrueCap launch to really make sure that we've got the promotional muscle that we need out there, and we're seeing movement in the HER2 positive new patient start. And so that's moving in the right direction and going at the right level. Now, if you think about where we were, basically, Matthew, what I think happened was we had replaced a lot, if not almost all of the counseling.

Speaker Change: Let me start so Matthew on and her too and I made this comment in my prepared remarks, and I think that's an important piece, which is why I had been commenting in quarters past that we had found that we had hit.

Speaker Change: Our 50%.

Speaker Change: Really kind of threshold that we were running into in both her two positive and her too low, but we knew that there was opportunity to drive continued growth beyond that and I was really pleased to see and we've been really pleased to see that we've been putting more effort against our promotional efforts within the U S and large markets within Europe, we've done that in conjunction with the true cap launched.

Speaker Change: Make sure that we've got the promotional muscle that we need out there and we're seeing movement in the her two positive new patient starts and so thats moving in the right direction and going the right level now if you think about where we were basically Matthew what I think happened was we had replaced a lot if not almost all of the kids silent use.

Unnamed Speaker: And now we're moving into some harder yards, but we're getting traction again. We turn to Her Too Low, which is again an opportunity for continued growth beyond where we've gotten. It is, in many respects, a more complicated discussion to be able to have because we're talking about multiple therapeutic alternatives that exist within the hormone receptor positive space. And we're obviously working on testing efforts. All of this, though, I think that, again, I've got optimism that we have an opportunity to continue to grow. I think that INHERTU has a lot of growth in front of it with O3 and O4 still in the U.S., and still in Europe, and I think that O6, which Emily just asked about, would be further tailwinds to add. Pantumer,

Speaker Change: And now we're moving into some harder yards, but we're getting traction against it.

Speaker Change: We turned to her too low or too low is again, an opportunity for continued growth beyond where we've gotten to.

Speaker Change: It is in many respects a more.

Speaker Change: Complicated discussion to be able to have because we're talking about multiple therapeutic alternatives that exist within the hormone receptor positive space. We're obviously working on testing efforts all of this though I think that again I've got optimism that we've got an opportunity to continue to grow.

Speaker Change: And her two has a lot of growth in front of it with <unk> three and <unk> four still in the U S still in Europe, and I think that <unk> much Emily just asked about would be further tailwind to add it up until now.

Unnamed Speaker: Pantumer is a spot where, right now, we've got breakthrough therapy designation in later lines in the highest of overexpressed. And so I think that when you take a look at that population, you've got several thousands of patients across multiple tumor types that could be addressed with this. And while our early label might be relatively modest compared to, for example, the 03 and 04 opportunities, I think that the more evidence generation that takes place, the more that we continue to do work in this space, and if we can demonstrate at the lower levels of expression, I think Pantumer is exactly that third leg of the stool that Susan and I were talking about to add to her two positive breasts and her two low to be a good growth driver in the mid Sorry for Andro, Aradhana, do you want to cover this?

Speaker Change: And tumor.

Speaker Change: Pan tumor is a spot where right now we've got breakthrough therapy designation in later lines and the highest of over expresses.

Speaker Change: And so I think that when you take a look at that population you've got several thousands of patients across multiple tumor types that could be addressable for this.

Speaker Change: And while our early label might be relatively modest compared to for example, the <unk> four opportunities I think that the more evidence generation that takes place the more that we continue to do work in this space and if we can demonstrate in the lower levels of expression I think pan tumor is exactly that third leg of the stool.

Speaker Change: That Susan and I were talking about to add to her two positive breast and her too low to be a good growth driver in the midterm four and her team.

Speaker Change: So I'm very fond of.

Speaker Change: So we talked about the other income, which we expect to decline substantially and again last year remember there were two particular transactions that contributed a large amount. So we've not signaled any any asset sales, we do expect collaboration revenue to increase substantially.

Aradhana Sarin: So, you know, we talked about the other income, which we expect to decline substantially. And again, last year, remember, there were two particular transactions that contributed a large amount. So we've not signaled any asset sales.

Aradhana Sarin: We do expect collaboration revenue to increase substantially. And we've talked about milestones and, you know, potential transactions we're contemplating, but we're not in a position to give more details today. And we'll see how the year unfolds.

Speaker Change: And are we talking about milestones and potential transactions, we are contemplating but we're not in a position to give more details today and we'll see how the year unfolds.

Andrew Balman: Super briefly, one thing that I forgot to mention on this NCCN guidelines have now included endometrial, cervical, and ovarian cancer for and her to within the population that we got the priority review for. So I do think that that's an acknowledgment that the clinical community is seeing the benefit. Honorable, Thank you. It's Andrew Balman, Citi.

Speaker Change: Pascal Super briefly wanted to ask you that I forgot to mention on this end CCN guidelines have included now endometrial cervical and ovarian four and her two within the population that we got the priority review for.

Pascal: So I do think that that's an acknowledgment that the clinical community is seeing the benefit of that study.

Pascal: Hello.

Pascal: Thank you, it's Andrew Baum at Citi, staying with and her team.

Unnamed Speaker: Staying with in HER2 and a pan-tumor trial. So you have HER2 low as part of that trial, and there have been very clear signals and many malignancies that in HER2 is active. And obviously, you have the manufacturing. It's been de-risked.

Pascal: And Ghansham.

Andrew Baum: Consumer trial. So you have heard too low as part of that trial and that has been very clear signals in many malignancies, such as active and obviously you have the manufacturing it's been de risked. So my question is are you, leaving money on the table by not switching to expedite development for individual Hudson low indications, but it looks like.

Unnamed Speaker: So my question is, are you leaving money on the table by not seeking to expedite development for individual HER2 low indications? Because it looks like you're not going to get approval for pan-tumor in HER2 low. So you're going to need to set up the trials.

Andrew Baum: We're not going to get approval for Pan Cima, and Hershey low so youre going to need a set of trials. There are competitors with her two assets. We've initiated trials in those how to low settings. So have you just left what space for a competitor to come in when you've got an asset that you could be monetizing in that setting and then the second question is in relation to Truecar.

Unnamed Speaker: There are competitors with HER2 assets who have initiated trials in those HER2 low settings. So have you just left white space for a competitor to come in when you've got an asset that you could be monetizing in that setting? And the second question is in relation to TrueCap. I'm curious what you think of the Innovolucid data and how that's going to impact the use of TrueCap, given you're hitting the same PI3KA-KT pathway. Many thanks and to Ronda Rousey.

Andrew Baum: Curious what you think is the interval to sit data.

Andrew Baum: And how that's going to impact the use of Truecar. Given you are hitting the same <unk> pathway. Many thanks.

Andrew Baum: Yeah.

Unnamed Speaker: That's it for this week's edition of The Daily Telegraph. Join us again next week for a brand-new edition of The Telegraph. Yeah, so for the white space question, when you've got a brand like Inhertu which has really, you know, exceptional activity across, I think the philosophy is to make sure that we develop it to the maximum of its potential. So, again, not everything that we're planning to do is currently visible, but you'd expect to see, you know, other trials. So, you know, I do think that we can build on what we've actually seen with Panchima, and I think it creates a lot of opportunity there. So we intend to leave as little white space as possible.

Speaker Change: Yes, so for the <unk>.

Speaker Change: First question.

Speaker Change: When you go to a brand like in Hep C, which has really.

Speaker Change: Exceptional activity across I think the philosophy is to make sure that we develop it to the maximum of its potential. So again not everything that we're planning to do is currently physical but you would expect to see.

Speaker Change: Other trials.

Speaker Change: I do think that we can build on what we've actually seen with punchy mode and I think it creates a lot of opportunity there. So we intend to leave.

Speaker Change: Leave us little white space as possible.

Speaker Change: And took on and in terms of the.

Unnamed Speaker: And in terms of the market size, yeah, sure. I mean, I think that what I would comment on most, Andrew, is that we're seeing very positive receptivity to TrueCap. We've seen strong uptake in terms of the number of new patients that are being started on therapy. And we're actually hearing an awful lot of desire among the community to have seen a broader label based upon the data sets that were presented and what we'd seen. And obviously, within the context of the competitive landscape, the TrueCap data will ultimately be looked at within that context, but I think it really is showing favorably within that context. And we anticipate that we'll continue to have a strong launch for the medicine through the year and look forward to the additional life cycle readouts that we're going to have on the heels of the 295.

Speaker Change: No just the market size, but yeah sure I mean.

Speaker Change: I think that what I would comment.

Speaker Change: On most Andrew is that we're seeing very positive receptivity to true cap.

Speaker Change: Seen strong uptake in terms of number of new patients that are being started on therapy.

Speaker Change: We're actually hearing an awful lot of desire among the community to have seen a broader label based upon the datasets that were presented and what we've seen and obviously within the context of the competitive landscape.

Speaker Change: The true cap data will ultimately be looked at within that context, but I think it really is showing favorably within that context, and we anticipate that we'll continue to have a strong launch.

Speaker Change: For the medicine through the year and look forward to the additional lifecycle readouts that we're going to have on the heels of obviously the 291.

Unnamed Speaker: So, you know, again, there are other opportunities, I would just say, with competitive assertives. It's a combination, but also remember that it treats a broader group of patients than just the PI3K and alpha mutant group. You've got the P10, and you've got the AKT activation as well. So there are multiple ways in which it is different, but I think that the first line space is also something that is

Speaker Change: Okay.

Speaker Change: Other opportunities I would just say with a with.

Speaker Change:

Speaker Change: So it's a combination but also remember the.

Speaker Change: It's a broader group of patients than just the pay off of kind of alpha.

Speaker Change: And you've got the 8-K T activation as well so there's multiple ways in which it is different but I think that's the first line space is also something that is.

Unnamed Speaker: Andrew, I think that the piece on this, and maybe I skipped over it because I thought it was kind of without saying, but TrueCap is post-CDK 4.6, and Envo is not. So we are looking at different populations in different spots. It is a different population. So they're taking into that first line of testing fast progressing is not, you know, even if you take the same population that went into 291 and look at them in the first line, they don't completely overlap with the malicious patient population. It's Peter Welford to Geoffrey's.

Speaker Change: Yes.

Speaker Change: Andrew I mean, I think that that is on this and maybe I skipped over it because I thought it was kind of without saying, but true cap is post CDK four sex.

Speaker Change: And <unk> is not.

Speaker Change: Yes.

So we are looking at different populations.

It is a different population so they they taking into that first line testing faster glasses.

Speaker Change: No.

Speaker Change: Even if you take the same population that went into two nine wanted to look at them in the first line. It does completely of a lot with the.

Speaker Change: Thanks Ya population that's clear.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: It's Peter Welford Jefferies two questions to get to the norm and so first question is on the on the Investor event on the 20 <unk> I think it was called after it's an R&D event I guess curious can you outline is this going to be in it and very much focused on the midterm pipeline will you also be giving that that 10 year vision.

Peter Welford: Sticking to the norm, the first question is about the investor event on the 21st of May, or I think it was called afterward an R&D event. I guess, curious. Can you outline? Is this going to be an event very much focused on the midterm pipeline? Or will you also be giving that 10-year vision?

Unnamed Speaker: And on that, is this going to be a 10-year vision setting another 10-year revenue aim? And, I guess, what sort of granularity should we anticipate when we look forward to how you're going to set the revenue aim for the next period? And then the second one is on S-Supra.

Speaker Change: And on that is this going to be a turnkey efficient setting another 10 year revenue aim.

Speaker Change: And I guess, what sort of granularity should we anticipate will be deployed to yes. How are you going to San Diego for the next period.

Speaker Change: And then the second one is on the as subprime.

Unnamed Speaker: So you mentioned, obviously, that 2023 was pretty much a year of building access, building awareness, building this. I guess, curious now, in 2024, the comment made, I think, was, over time, we expect the US PCPs to change 50 years of habit. I mean, that sounds as though there's still a lot of slog to go. So you're talking about, you know, how have the payer discussions gone? Was that successful?

Speaker Change: So you mentioned, obviously that the 2023 was pretty much a year of building access building awareness building I guess curious now in 'twenty 'twenty four you would cause them to comment made I think it was over time, we expect to see a USPS fees to change 50 years of habit.

Speaker Change: As Andrew said, there's still a lot of smoke together she used to about how empty payer discussions gone was that successful is the barrier now the doctors or should treat triple b a year will be put anything in the model or is this another year, where we should thinking about the inflections yet to come.

Unnamed Speaker: Is the barrier now the doctors? Or, you know, should 2024 be a year where we put something in the model? Or is this another year where we should really be thinking about the inflection check? So two great questions. Peter, let me just cover the first one, and Ruud, you could cover Supra.

Speaker Change: So to Greg's question on Peter Let me just cover the first one and the old you could cover Super. So they are on today really whether we want to do as I explained earlier is explaining what our strategy is and why we think we can go.

Unnamed Speaker: So on R&D day, really, what we want to do, as I explained earlier, is explain what our strategy is and why we think we can grow strongly over the next 10 years. So we are, of course, gonna look at our mid-term pipeline, but we also want to look at the investments we're making in new technologies, new platforms that will actually deliver growth from 28, 29, and beyond. So we actually give you a good understanding of not only the near-term but also the mid-term and the long-term. As it relates to whether we're gonna set up a long-term revenue ambition, we may, but we haven't decided this. But I can tell you that we are very, very confident that we can actually grow very strongly over the next few years and work through some of the issues that have been mentioned by some, for instance, Medicare Part D reform. We can work through that.

Speaker Change: Really over the next 10 years. So we are of course going to look at our mid term pipeline, but also we want to look at the investments, we're making in new technologies new platforms.

Speaker Change: That will actually deliver growth from 'twenty eight 'twenty nine and beyond so we actually give you a good understanding of not only the near term, but also the midterm and the long term.

Speaker Change: As it relates to whether we're going to set up long term.

Speaker Change: Our revenue ambition, we made but we haven't decided that this.

Speaker Change: But I can tell you that we are very very confident that we.

Speaker Change: We can actually go very strongly over the next few years and walk through some of the issues that have been mentioned by some for instance, Medicare part D reform, we can walk through that.

Unnamed Speaker: In the end, the impact of this is there, but it's relatively limited. I hesitate to use the word marginal, but it is quite small in the context of our global sales. So we can work through this, we can work through the patent expiries that we have that are limited and continue to deliver very strong growth. And, of course, it's not gonna be the same growth number every year, but if you look at it over the next five years and then 10 years, we can suddenly grow. And that's what we actually want to hopefully convince you as we share our strategy, and we'll see whether we come up with a number or not.

Speaker Change: In the end the impact of this is there, but it's relatively limited.

Speaker Change: Use the world margin ore bodies is quite limited in the context of a global sales. So we kind of work through this we can walk through the patent expiries that we have that are limited and continue to deliver.

Speaker Change: Very strong growth and of course, it's not going to be the same gross number every year, but if you look at it over the next five years and Nintendos Wii Southern he can go and that's what we actually want to.

Speaker Change: Hopefully convince you.

Speaker Change: As we share our strategy and where do you see whether we come up with a number on the colon Yeah. Let me first we articulate as let's say the excitement we have regarding <unk> first of all this is a very substantial markets in the United States alone.

Unnamed Speaker: Yeah, let me first re-articulate, let's say, the excitement we have regarding Asupra. First of all, this is a very substantial market. In the United States alone, there are roughly 15 to 18 million prescriptions only for salbutaryl in the asthma 18 plus indication.

Speaker Change: Roughly 15 to 18 million scripts only for sub neutral in the asthma 18 close indication.

Unnamed Speaker: Having said that, we started our journey in order to gain access last year, and the good news is we now have formulary listings in three of the largest commercial PBMs, based on registration. We were just too late in order to get Part D. So, we are bidding for Part D in the course of 2024. So, hopefully, that will create more access moving forward. Many patients, anyway, are in commercial, are younger patients. What we have seen in the first few weeks, it's still very early days, is a very good number of trialists, already thousands of GPs, but also specialists, are prescribing AstraZeneca. Having said that, access is still, let's say, an issue we are working through.

Speaker Change: We started our journey in order to gain access.

Speaker Change: Last year. So the good news is we have now formulary listings in three of the largest commercial pbms.

Speaker Change: Based on the registration we were just to live in order to get part D. So we are bidding for part D. In the course of 2020 for Sanofi that will create more access moving forward. Many patients anyway are in commercial are younger patients. What we have seen in the first few weeks is still very early days is a very nice.

Speaker Change: A number of drivers already thousands of GPS, but also a specialist.

Speaker Change: Our our prescribing a supra having said that.

Speaker Change: <unk> is still let's say an issue we are working through so we need to buy down the road.

Unnamed Speaker: So, we need to buy down the course, the script, the course per script quite substantially. So, my clear feeling is we are off to a very strong start in the United States, but equally, of course, it will take time to get enough access in order to switch off the now conversion, and hence, then the sales will follow. It's more or less the pattern we have seen with Breast Street.

Speaker Change: The of course the scripts.

Speaker Change: Of course per script quite.

Speaker Change: Quite substantially so my my Mic list is well off of a very strong start in the United States with equally of course, it will take time to get enough access.

Speaker Change: In order to switch off in our conversion and hence then the sales will follow as more or less the pattern, we've seen with <unk> and <unk>.

Unnamed Speaker: You have seen in the announcement. Breast Street is growing over 70%. It's on its way to becoming a blockbuster, hopefully, very soon, and I think we are expecting the same pattern also for AstraZeneca moving forward. I think the really important point, as Ruth said, is really to expect that this is not an oncology new indication that really addresses a big unmet need with a very fast cell swamping up. It's more progressive. But the beauty of this kind of inhaled product is that when you are established, you have a very durable asset. I mean, look at Simbicol.

Speaker Change: And the announcement bursaries growing over 70%, it's almost way to become a blockbuster.

Speaker Change: Hopefully very soon and I think we are expecting the same pattern also far for Ashford Prime moving forwards I think are really important foreign to us who's head is really.

Speaker Change: We expect that this this is not.

Speaker Change: And oncology new indications that are.

Speaker Change: So it really addresses a big unmet need with a very fast search ramp up it's more progressive but the beauty of this kind of inhaled.

Speaker Change: Products is that when you are established you have a very durable asset I mean look at Symbicort, it's been around for a long long time, and it's still out there and it's still a very good product with good says very good profitability. So we have to have the resilience to get it to the right level and then it will stay at a good.

Unnamed Speaker: It's been around for a long, long time, and it's still out there, and it's still a very good product with good sales and very good profitability. So we have to have the resilience to get it to the right level, and then it will stay at a good level for a long time to come because there's not a huge amount of competition and there is a clear unmet need. Emmanuel. It's Mark Purcell from Morgan's family.

Speaker Change: Level for a long time to come because there's not a huge amount of competition and there is a clear unmet need there.

Speaker Change: I mean, you're right.

Speaker Change: It's Mark Purcell from Morgan Stanley. Thank you two questions.

Mark Purcell: Thank you. Two questions. The first one is for Aradhana, I guess.

Mark Purcell: First one for our retina I guess.

Aradhana Sarin: Some people have been concerned by this morning about the certain anticipated transactions part of your CR guidance, which you expect to increase substantially in 2024. I guess they've triangulated that with part one selected moving forward. And the last time you moved forward with a part inhibitor, you had a one point six billion upfront milestone from a partner. So can you confirm that R&D potential revenues are still in the low 20s? I presume it is.

Mark Purcell: Some people have been concerned by this morning is that the sudden anticipated transactions part of you'll see our guidance, which you expect to increase substantially in 2024.

Mark Purcell: Against that Triangulates to that with a pump one selective moving forward and the last time you move forward with a PARP inhibitor you had $1 6 billion up from Austin from a partner.

Mark Purcell: Can you confirm the R&D is essentially revenues, it's doing that I <unk> I presume at age, but more importantly could you give us some quantitative guidance on SG&A, which obviously stepped up a lot in Q4, and just where that rule on food, but full year 'twenty four.

Aradhana Sarin: But more importantly, can you give us some qualitative guidance on SG&A, which obviously stepped up a lot in Q4 and just where that will land for the full year? And then the second question is about your CKM syndrome pipeline. I guess, you know, this is all about going after symptomatic diseases like obesity and preservative action, and heart failure to capture asymptomatic diseases like CKD. So could you help us understand the opportunity here and the level of investment you're going to put behind this combination of assets, this franchise, and then specifically the ecogene drug? We're getting a lot of questions around manufacturing. If you can help us understand how many CMC steps this product has, given that with orthoglipin, it's estimated to be over 30 and therefore incredibly difficult to scale. Thank you.

Mark Purcell: And then the second question is on your <unk>.

Mark Purcell: She can syndrome pipeline I guess you know this is all about getting off to symptomatic diseases like obesity in preserved ejection heart failure to capture.

Mark Purcell: Asymptomatic diseases like CK D. C could you help us understand the the opportunity here.

Mark Purcell: The level of investment you're going to put behind.

Mark Purcell: This combination of assets. This franchise and then specifically on the encouraging drunk, we're getting a lot of questions around manufacturing. If you can help us understand how many CMC steps. This product has given it was off a good point estimates to be over 30, and therefore incredibly difficult to scale. Thank you.

Aradhana Sarin: Sure, so on the sGNA front, you know, if you look at the fourth quarter last year, which I think you mentioned is a concern in terms of the step up. If you look at the last several years, the fourth quarter is always one of our largest quarters in terms of sGNA. That does not mean that's the run rate sort of obviously going forward.

Mark Purcell: Huh.

Speaker Change: Sure so on the SG&A front.

Speaker Change: If you look at our fourth quarter last year, which I think you mentioned this is a concern in terms of the step up.

Speaker Change: If you look at last several years the fourth quarter is always one of our largest quarter in terms of SG&A that does not mean that the run rate.

Aradhana Sarin: And then when you look at 2023 and our updated guidance and some of these, you know, some of the DAX transactions and net tax changes that we had in mind. And we managed the whole P&L. So we chose to invest in certain areas, including some of the launches that you heard about from Root and so forth. So that sort of explains the fourth quarter of 2023.

Speaker Change: Obviously going forward and then when.

When you look at 2023, and our updated guidance and some of these are you know.

Speaker Change: Some of the tax.

Speaker Change: Transactions and a net tax changes that we were we.

Speaker Change: We had in mind.

Speaker Change: And we manage the whole P&L. So we chose to invest in in certain areas, including some of the launches that you heard about from route and so forth. So.

Speaker Change: So that sort of explains the fourth quarter of 2023.

Aradhana Sarin: I think looking ahead to 2024, we've obviously given guidance on the top line and the bottom line. I've talked about some of the increase you'll have in finance expenses. I've talked a little bit about the growth margin expectations. And so, you know, you can sort of consider that and see where the SG&A growth will be. We are obviously committed to operating leverage. And we do expect that, you know, given those puts and takes, that SG&A growth will be lower than total revenue. Emmanuel, just to add to this, I understand now the question also, the concern that you mentioned, and connecting to James, all your questions.

Speaker Change: I think we're looking on 2024, we've obviously given guidance on topline and bottom line I've talked about some of the increase you will have in and finance expenses of talked a little bit about the gross margin expectations and so.

Speaker Change: Can you sort of consider that and see where the SG&A growth will be a we are obviously committed to operating leverage and we do expect that.

Speaker Change: Given those puts and takes that the SG&A growth will be lower than the.

Speaker Change: Total revenue growth.

Speaker Change: Yeah, maybe I'll just to add to this.

Speaker Change: I understand the question also the concern that you mentioned and connecting to John's earlier question I think it's important to keep in mind that we have.

Aradhana Sarin: I think it's important to keep in mind that we believe product sales, in our guidance, will grow strongly. I mean, the guidance is low double-digit to low teens, right? So that's a range.

Speaker Change: We believe the products since I know guidance put ourselves gregoire strongly when the guidance is low double digit to low teens right. So that's a range.

Aradhana Sarin: And product sales will be in that range. So messages, our top line revenue growth is not driven by messages. I mean, it's not dependent on this, as you said.

Speaker Change: And.

Speaker Change: Product sales would be in that range. So messages our topline revenue growth is not driven.

Speaker Change: I mean, it's not dependent on this on this one off so as you as you said, yes.

Aradhana Sarin: Yeah, so let me first phrase the opportunity in CKD, Mark. There are more than 800 million patients around the world suffering from CKD. And despite the progress we have seen in the last few years, especially the SDLT2 class, including our own Farsiga, there's still a huge unmet medical need. And hence our, let's say, excitement. Also, the products we have in development, clearly one is the combination of the apiculofluorescent placebo Tenten. And, of course, Sharon can talk about that as well.

Speaker Change: Yes, So let me first state that has the opportunity and she can be a mark there are more than 800 million patients around the world suffering from <unk>.

Speaker Change: Despite the progress we have seen in the last few years, especially as you will see two clos, including our own for Sega.

Speaker Change: There's still a huge unmet medical needs and hence our excitement is also the products. We have in developments clearly one is the combination of ethical social placebo tension.

Speaker Change: Of course, Sharron can I can talk about that.

Sharon: It makes us quite bullish about this opportunity. Now, equally, Mark is developing an election potential molecule. This is a space where many companies have left the field, the kidney space, while we believe that there are huge opportunities based on our pipeline in order to really build a very strong pipeline. So I don't know whether you want to talk a little bit about one of the combinations, Sharon.

Speaker Change: As well makes us quite bullish about this opportunity and are equally a mark is.

Speaker Change: <unk> intellectual potential eigen.

Our molecule. This is a space where many companies have left the field. So the the kidney space. While we believe that there are huge opportunities based on our pipeline in order to really build a very strong pipeline. So I don't know whether you want to talk a little bit about one of the combination so sure I'm sure.

Sharon: Sure. You asked us about the scope of our investment, and then I'll also address your question about our space, our focus on metabolism. So to reframe what Rude said, there are 20 million people living with CKD and hypertension in the US alone. So clearly, this is a very large market, and it speaks to the interrelatedness of cardiorenal and cardiometabolic disease. So thinking about how we can address the different flavors of CKD with our portfolio, we are advancing the Baxtro-DAPA combination. It's in phase three for CKD. We have Balsinrinone combined with Dapagliflozin; the Miracle Phase II study in CKD with heart failure achieved high-level results at the end of last year, and we really look forward to sharing those at an upcoming conference. And we are in the thick of phase three planning at this point, and then the combination of zebotentin with Dapagliflozin allows us to address CKD with high proteinuria.

Speaker Change: So you asked us about the scope of our investment and then I'll also address your question about our space I focus on metabolism. So to reframe, what Reed said, there are 20 million people living with TKD in hypertension in the U S alone. So clearly this is a very large market and it speaks to the interim.

Speaker Change: Related to this as cardio renal and cardio metabolic disease, so thinking about how we can address the different flavors of TKD with our portfolio. We are advancing the Baxter dapper combination. It's in phase three for <unk>, we have both in Reno and combined with Catholic I suppose in the Miracle Phase two study in <unk> with <unk>.

Speaker Change: Heart failure achieved high level results at the end of last year, and we really look forward to sharing those at upcoming conference and we are in the deck a phase III planning at this point and then the combination is the boat Hinton with ethics and allows us to address CK D with high proteinuria and we have initiated the zenith zenith phase III trial, so clearly wherever.

Sharon: And we have initiated the Zenith Phase III trial. So clearly, we're heavily invested in this space, and we view this as an opportunity to manage the complexity of cardiorenal disease and to help people manage their overall health. With that in mind, we do think that our metabolism portfolio dovetails very nicely with these efforts to achieve organ protection while managing health because we understand that these diseases are highly interconnected. So if we think that there are 64 million people with heart failure worldwide, 15 million alone in Europe, and we know that 50% of those patients have renal impairment and 42% have some interrelated metabolic disease, it makes sense that we want to continue to expand our portfolio in the metabolism space.

Speaker Change: We invested in this space and we view this as an opportunity to manage the complexity of cardio renal disease and to help people manage their overall health.

Speaker Change: With that in mind, we do think that our metabolism portfolio dovetails very nicely with these efforts to achieve Oregon protection, while managing health because we understand that these diseases are highly interconnected.

Speaker Change: So if we think that there are 64 million people with heart failure worldwide 15 million alone in Europe and Europe alone.

Speaker Change: And we know that 50% of those patients have renal impairment and 42% have some interrelated metabolic disease. It makes sense that we want to continue to extend our portfolio and the metabolism space.

Sharon: We have been, I think, very open about the acquisition and our interest in the 5004 program. Also, this is not our only program. This is one piece of our overall focus on metabolic disease. Moving along at a fast pace, we also have a long-acting amylin as well as a GLP-1-glucagon dual agonist.

Speaker Change: We have been I think very open about the acquisition and our and our interest in the fives years ago for program. Although this is not our only program. This is one piece of our overall focus on metabolic disease moving along at pace. We also have a long acting amylin as well as edge L. P. One glucagon dual agonist.

Sharon: Speaking briefly about 5004, we are excited about this asset. We are encouraged to see it move forward into two Phase IIb trials this year. Would you like to say a few words about the manufacturing steps? Actually, I'll say two things.

Speaker Change: Speaking briefly to fives years. Therefore, we are excited about this asset we are encouraged to see it move forward into two phase <unk> trials this year.

Speaker Change: You want to say a few words about manufacturing steps.

Speaker Change: Actually I'll say two things.

Unnamed Speaker: The first is that one key focus for 5004 is being able to simplify our manufacturing process and come up with a simpler synthetic route. And together with our collaborators at EcoGene, I think we're making substantial progress on that. The second thing that I will say continues to speak to the interconnectedness of diseases, which is that 5004 as an orally bioavailable molecule is very well suited to potential combinations with other oral molecules in our portfolio. And so I would include in that list Farcega, as well as our oral PCSK9 inhibitor. And so we look forward to sharing the results of our phase one trial, which has only recently wrapped up. This was a highly controlled four week inpatient trial that was piloted by EcoGene.

Speaker Change: The first is that one key focus four or five years ago for us being able to simplify our manufacturing process and.

Speaker Change: And come up with a simpler synthetic route and together with our collaborators at <unk> I think we're making substantial progress on that front. The second thing that I will say continues to speak to the interconnectedness of disease, which is that five years ago score as an orally bio available molecule is very well suited to potential combinations with other oil and all that.

Speaker Change: Tools in our portfolio.

Speaker Change: And so I would include in that list hum, forcing him as well as our oil P. C. S. Canine inhibitor and so we look forward to sharing results of our phase one trial, which only recently wrapped up this was a highly controlled four week in patient trial that was piloted by.

Unnamed Speaker: We achieved database lock at the end of December, and we look forward to sharing the data at an upcoming medical conference. Maybe one quick point is that everybody focuses on obesity, but there is this big segment of people who are not obese, they're overweight, so they don't need to lose 25% of their weight; they just need to lose a bit of weight, and they have metabolic disease, sometimes with organ damage as well. And in that segment, which is extremely large and where payers are more likely to pay, managing the various dimensions of the metabolic syndrome with PCSK9, with DAPA, with Baxrostat and being able to combine them is going to be a substantial advantage if you have this portfolio that we have. Thanks, Pascoe. Simon Baker from Redfern Atlantic.

Speaker Change: <unk>, we achieved database lock at the end of December and we look forward to sharing the data at an upcoming medical conference.

Speaker Change: And then maybe one quick point is that everybody focuses on obesity.

Speaker Change: This big segment of people.

Speaker Change: Obese or overweight so there.

Speaker Change: They'll need to lose 25% weight to lose a bit of a wait and they have metabolic disease, sometimes with organ damage as well and then that segment, which is extremely large and whether payers are more likely to pay.

Speaker Change: Managing the various dimensions of the metabolic syndrome with a P C. As kirana is depo.

Speaker Change: With box cluster and being able to combine who's going to be a substantial advantage. If youll have this portfolio of the three Hudson.

Speaker Change: Thanks, Bhaskar as summer break from Redfin Atlantic two for me. Please firstly on <unk> and <unk> now they've both been on the market for a while I Wonder if you could give us an update on the characteristics of the prescribers and patients so far for both drugs.

Simon Baker: Two questions, if I may please. Firstly, on Tespire and Safinello. Now they've both been on the market for a while, I wonder if you could give us an update on the characteristics of the prescribers and patients so far for both drugs. Next, on Gracel and Fastcar.

Speaker Change: Question on Grace selling fosco.

Unnamed Speaker: If you could just give us an idea of how easily scalable that manufacturing technology is, and also give us a bit more color on the comment that Gracel has made in the past, that there was a substantial manufacturing cost advantage here, which sounds like it could be quite significant as you move into autoimmune areas. Any color on that would be very much appreciated.

Speaker Change: If you could just give us an idea of how easily scalable manufacturing technologies and also.

Speaker Change: A bit more color on the comment that <unk> made in the past it was a substantial manufacturing cost at Val teacher, which.

Bhaskar: It sounds like it could be quite significant as you move into autoimmune and if he has any color on that would be of a much. Appreciate it. Thank you Yeah, Let me first start.

Unnamed Speaker: Thank you. Yeah, let me first start with your question about Tespire. The product is doing very well, not only in the United States but also in other markets. We have just launched, and we have leading NBRX, so new-to-brand market shares in countries like Spain and Germany. The patient population is a very interesting one. It's primarily patients who have, let's say, a moderate or normal fill count but are allergic.

Speaker Change: Yeah of course Novartis aspire.

The product is doing very well not only in the United States, but also equally in the markets. We have just launched we have a leading <unk> brands market shares in countries like Spain, and Germany. The patient population is a very interesting one is primarily the patients who have a let's say.

Speaker Change: Moderates or normal using the silicones with our allergic.

Unnamed Speaker: So the low T2 patient population is highly dominant in what we see so far. But equally, we also know from our clinical studies that Tespire is also very well established in the highest fills in the United States. So the broad utility of the product and no need for a biomarker, no need for phenotyping, make it a highly attractive choice for especially allergists and more and more common allergists as well. So we have high expectations and, together with our partner, Amgen, I think it's fair to say that the product is on its way to becoming a blockbuster anytime soon. So that's that one. Sapnella is another very nice story.

Speaker Change: So the low T T. Two patient population is highly dominance in what we see so far but equally we also know from all clinical studies that the spy is also a very a very well established in the hydrogen fills in the United States. So the broad utility of the products and no need for it.

Speaker Change: Biomarker no need for Phenotyping makes it a highly attractive choice for especially allergist and more and more pulmonologists to us as well so we have high expectations and together with our partner.

Amgen and I think it's fair to say that the product is on its way to become a blockbuster anytime soon so that's that's one soft NELA as another very nice story, it's the only interferon receptor antagonist.

Unnamed Speaker: It's the only interfering receptor antagonist. As we all know, lupus is a disease with multiple manifestations and multiple organ manifestations. It's particularly impactful on skin disease, and we have seen very, very strong feedback from rheumatologists that patients primarily with skin manifestations are reacting very well to Sapnella. Similarly, we are only operating in the intravenous market as we speak. So we have been doing for the last one and a half, two years, a relatively large study for the subcutaneous formulation. And I truly believe, hopefully, next year that study will read out, and if we have a positive readout, it will provide another clear opportunity. And as Sharon mentioned in her remarks, we are very keen to move Sapnella into multiple other indications in order to further grow the brand to become also an equally blockbuster brand in the next few years. Thanks for tuning in. Do you want to comment on Grayson's performance?

Speaker Change: As we all know lupus is a disease with multiple manifestations of multiple organ manifestations, it's particularly.

Speaker Change: Impactful on skin disease.

Speaker Change: And we have seen very very strong feedback from rheumatologists. Thus patients primarily was skin manifest and then there's the stations are reacting very well on the on soft mellow equally equally while all the only operating in the intravenous markets as we speak. So we are doing for the last one and a half two years.

Speaker Change: It's a relatively large study for shipping for a subcutaneous formulation.

Speaker Change: And that's really believe hopefully next year that study will read out and if we have a positive readout as will provide another clear opportunity and as Sharon mentioned in her remarks, we are very keen to move stuff and that will also and multiple other indications in order to further grow the brand's two also equally a blockbuster brands in the next few years. Thanks, Switzerland.

Speaker Change: Do you want to comment on a question.

Unnamed Speaker: So, as I mentioned in my pair remarks, the actual time that you need to manufacture the fast car is substantially shorter than for some other currently commercially available CAR T therapies. That's one component of the turnaround time, obviously. So it's one component of the manufacturing cost. I think it does help with scalability because the amount of time that you need to process each individual patient's batch is also shorter within the manufacturing facility. So what that means is that you do get increased capacity for a given size of the manufacturing building that you've created. So that's important. But also, it means that you can be more predictable about delivery.

Switzerland: As I mentioned in my life.

Switzerland: Pat remarks.

Switzerland: The.

Switzerland: Actual time that you need to manufacture.

Switzerland: The first kind of a substantially shorter than for some other currently commercially available car T therapies that one component of the turnaround time obviously.

Switzerland: So it's one component also of the manufacturing cost.

Pat: I think it does help with scalability because.

Pat: The amount of time, then you need to process each individual patients batches also shortly within the manufacturing facility. So what that means is that you do get increased capacity for a given size of the manufacturing.

Pat: You know building that.

Pat: You created so that's that's important but also it means that you can be more predictable about the delivery.

Susan Mary Galbraith: And because you're actually generating a smaller total number of cells that have to be delivered to the patient, the likelihood of success of each of those is higher. So all of these things, I think, contribute to the overall benefit that we see from the FASCAR process. Thanks, Suzanne. Maybe we could take one online question. Tim Anderson, Wolf Research.

Pat: And because you're actually generating a smaller total number of the cells that have to be delivered to the patient the likelihood of success of each of those is higher so all of these things I think contributes to the overall benefit that we see from the <unk> process.

Speaker Change: Thanks, Suzanne maybe we could take one online question, Tim Anderson Wolfe Research, we'll go to you.

Timothy Anderson: Tim, it's over to you. Thank you. Any headwinds to revenue growth for individual key brands in 2024 that you'd like to call out, you know, relative to where you see consensus? For example, in rare diseases, you're facing some new competition. In oncology, you talked about HER2, but what about, you know, Tegresso or CalQuest? CalQuest in the U.S. seems to be stalling out, for example.

Timothy Anderson: Alright, thank you.

Timothy Anderson: Any headwinds to revenue growth for individual key brands in 2020 further you'd like to call out relative to where you see consensus so in rare diseases, you're facing some new competition in oncology you talked about in her too but what about.

Timothy Anderson: Progresso or calc went to calpine in the U S seems to be stalling up for example.

Unnamed Speaker: And then the second question on Datto, any risk to approval in the U.S. for lung and non-squamous based on what you have today? To me, the regulatory precedent says it should be low risk and you should get approved, but that's not necessarily the consensus view. So what's your confidence here? And what happens if OS misses and non-squamous remains supportive, but doesn't formally fit? Thanks, Tim. What I propose, Mark, is that you cover Bultomiris and the general competitive environment. Dave, you could cover for Kyle Quince and Tagriso.

Timothy Anderson: And then second question on <unk> any risk to approval in the U S and long in non squamous based on what you have today to meet the regulatory precedence as it should be low risks and you should get approved but that's not necessarily the consensus views of what's your confidence here and what happens if OS.

Mrs at non squamous remain supportive, but doesn't formally yes. Thank you.

Speaker Change: Thanks, Tim.

Speaker Change: Proposed Marc you cover.

Marc: Tommy Harrison and the general competitive environment, maybe you could cover Cal coincidentally so.

Susan Mary Galbraith: And Tagriso might also talk about, you know, not only the headwinds but also the potential upsides. And then, Susan, would you cover that too? So, let me start with Ultimiris.

Marc: And maybe also talk about you know not only the headwinds, but also the potential upsides.

Marc: And then Susanne you cover that too.

Speaker Change: So let me start with Dolby voice.

Mark: So basically, the headwind that we can anticipate is the introduction of biosimilars in the PNH indication. Two competitors started to gain approval in 2000.

Speaker Change: So basically the headwind that we can anticipate the introduction.

Speaker Change: Biosimilars in the <unk> indication.

Speaker Change: Two competitors have started to gain approval in 2000.

Speaker Change: 'twenty three the impact on 'twenty suite is still very limited, but obviously this could increase over time the way we gone through Rag. This had witnessed by converting as fast as possible from Saudi These two is diminishing in the main indications both neurology indication is windows.

Dave: The impact on 23 is still very limited, but obviously this could increase over time. The way we counteract this headwind is by converting as fast as possible from Soliris to Ultimiris, and in the main indications, both a neurology indication as well as a PNH, the conversion is very high. It's in the magnitude of 80%. That's the first thing.

Speaker Change: The conversion is very high it seemed the magnitude of 80% that's the first thing.

Dave: The way we are also sustaining the growth of the complement franchise is by expanding our regional presence, and we have increased it significantly in 2023. We still have more work to do in 2024. We are increasing the number of approvals and reimbursement for Soliris as well as for Ultimiris. And lastly, this is the long-term work that we have been doing to make this franchise, the C5 franchise, sustainable. We are continuing to develop new indications. We have NMO that has been approved recently in Europe and Japan with very rapid uptake. We are soon to get U.S. approval, but we will also continue with other indications which are presently in phase three. So not only on the C5, and then we have also, if we want to, but C5, we have the nanobody by specific 1720, that is well advanced in phase three and should come to the market in Myasthenia Gravis very soon. A future, a very bright future for the C5 franchise and the complement So very directly on your first question, which is, are there any places where there's headwinds relative to consensus?

Speaker Change: The way, we also sustaining the grille.

Speaker Change: Growth of the complements to franchise is by expanding our regional presence and we have augmented significantly in 2020 free we still have more work to do in 'twenty. Four we are increasing the number of approval and reimbursement for <unk>.

And lastly, this is a long term work, but we have been doing to assist them to make the surf one size two five French are sustainable we are continuing to develop new indications with iva anymore that has been approved recently in Europe, and Japan with very rapid uptake.

Speaker Change: We are soon to get the U S approval, but we would also continue with all the indications which are presently.

Speaker Change: In phase III, so nothing on the C. Five and then we have also.

Speaker Change: We wanted to but C. Five we have the.

Speaker Change: Now nobody by specific 17 20 different when you might have that is advancing in phase III and food.

Speaker Change: Coming to the market.

Speaker Change: I missed it and I got to be soon very soon so there is.

Speaker Change: Future, a very bright future for the C. Five franchise and they complement franchise will go.

Speaker Change: Thanks, Marc turning to oncology and Tim on your question very directly on your first question, which is are there any places where theres headwinds relative to consensus I commented in my prepared remarks on the only one that I would call out, but I think it is important which is that in Japan in February we had repriced.

Dave: I commented in my prepared remarks on the only one that I would call out, but I think it's important, which is that in Japan in February, we had a repricing on infancy that I'm not sure is built into all of the models moving ahead. And we do anticipate, because of some changes from weight-based to fixed dosing that we will see another infancy price adjustment in Japan. With that said, on the specific question about Tegriso, I'm enthusiastic about where Tegriso ends the year and where it comes into next year. As I mentioned, we're seeing good underlying demand growth sequentially within the U.S. and within Europe, and I think that is coming on the heels of Adora and Flora performing well. We've got an opportunity in China, despite the competition that we're seeing there, to move out of this anti-corruption shadow that I think has affected the ability to be able to really take advantage of a leadership position that we have. Not all doing the right thing, but just in terms of, you know, access in general to oncologists has been more limited.

Speaker Change: Singh on Infinity.

Timothy Anderson: That I'm not sure is built into all of the models moving ahead, and we do anticipate because of some changes from weight base to fixed dosing that we will see another.

Timothy Anderson: And Japan and <unk>.

Timothy Anderson: Price adjustment with that said on the specific question about <unk>.

Timothy Anderson: <unk>.

Timothy Anderson: I'm enthusiastic about where current Tegra <unk> ends the year and where it comes into next year.

Timothy Anderson: As I mentioned, we're seeing good underlying demand growth sequentially within the U S and within Europe, and I think that is coming on the heels of a dora.

Timothy Anderson: And Florida are performing well.

Timothy Anderson: We've got an opportunity in China. Despite the competition that we're seeing there to move out of this anti corruption.

Timothy Anderson: <unk> that I think has affected the ability to be able to really take advantage of our leadership position that we have all doing the right thing, but just in terms of access and general Oncologists has been more limited we've got Florida, two which knock on wood, we'll see an approval on here sometime within the year, We've got Lora, which I think is a.

Dave: We've got Flora 2, which, knock on wood, we'll see an approval on here sometime within the year. We've got Flora, which I think is a really important catalyst that we'll read out again here within the first half. So I look at the outset of this, and I think also on a competitive landscape basis, Flora 2 positions us pretty nicely on CalQuints. No question that we've got a competitive environment, and we've got direct competition. But I also like what our U.S. and European teams have been able to do on Face.com.

Really important catalyst.

Timothy Anderson: And that will read out again here within the first half so I look at the outset on this and I think also on a competitive landscape basis, Florida, two positions us pretty nicely.

Timothy Anderson: <unk> no question that we've got a competitive environment and we've got a direct competition, but I also like what our U S and European teams have been able to do in the face of that competition.

Dave: I think that within that, we've got a leadership position within frontline CLL that we've been able to maintain. I think if you take some of the month or the quarterly phasing out of the situation, we've seen really good, strong underlying demand growth on calc plants throughout the entirety of the year. I'm hopeful and optimistic that the copay, uh, within the U. S. is lowered. Pascal talked about this in his remarks, and we see affordability go from patients having to pay 5% of the catastrophic to zero, and therefore a copay cap that is $2,000, that this is gonna give patients the ability to be able to stay on and have greater adherence to continuous treatment and progression on DTK therapies. So again, we have to see that play out.

Timothy Anderson: Within that we've got a leadership position within frontline CLO that we've been able to maintain.

Timothy Anderson: Thank you if you take some of the months are the quarterly phasing out of the situation. We've seen really good strong underlying demand growth on Cal clients throughout the entirety of the year I'm hopeful and optimistic that as co pay.

Within the U S is lowered Pascal talked about this in his remarks, and we see affordability Goh from <unk>.

Patients have any pay 5% of the catastrophic to zero and therefore, a co pay cap that is $2000, but this is going to give patients the ability to be able to stay on and have greater adherence to continuous treatment to progression on <unk> therapy. So again, we like to see that play out we have to see how that works through.

Dave: We have to see how that works out. But I think that these are elements that give me enthusiasm about the oncology portfolio and the opportunities in front of us. I think this copay cap should really not be underestimated because if you look at the US system on the Medicare side now, it is gonna be a very, very good system. I mean, many countries have copays.

Timothy Anderson: But I think that these are elements that give.

Timothy Anderson: Give me enthusiasm about the oncology portfolio and in the opportunities in front of US I think this coffee cup should really not be underestimated because if you look at the U S system on the Medicare side now it is going to be a very very good system.

Dave: I mean, Australia has copays, Switzerland has copays, many countries have copays. And here in the United States, people, patients are gonna be able to say, I'm not gonna pay more than $2,000 a year, regardless of how many drugs I receive, regardless of how much they cost. $2,000. Now, you might say $2,000 is a fair amount of money, but, you know, if you have car insurance and house insurance, that's going to cost you at least that.

Timothy Anderson: Many countries have co pays I mean, Australia, husk opus with central Scoop as many countries of Copays and here in the United States people patients are going to be able to say I'm not going to pay more than $2000 a year.

Timothy Anderson: Regardless of how many drugs are.

Timothy Anderson: Regardless of how much that cost $2000.

Timothy Anderson: You might say $2000 is a fair amount of money, but I wish you have a car insurance health insurance, that's going to cost you or at least that and many people were kind of full days and it's a great level of reassurance in terms of taking your medicines and and.

Dave: And many people can't afford this, and it's a great level of reassurance in terms of taking your medicines and being adherent to them. And for us, it will mean a reduction in the amount of free goods we have to give, which has been increasing substantially in the last few years as more and more people cannot afford to cover the co-pay. And thank you.

Timothy Anderson: And being a thereon to them and for US It would mean a reduction.

Timothy Anderson: Of free goods, we have to give which has been increasing substantially in the last few years.

Timothy Anderson: People more and more people who cannot afford to Colorado.

Timothy Anderson: Colorado cookies.

Timothy Anderson: And thank you, it's Luisa Hector from <unk> question.

Louisa Hector: It's Louisa Hector from Berenberg with a question on data. I'm sorry, it's all right. So can I say, first of all, thanks for the question. You know, we're confident that data DxD is going to be an important medicine in the treatment of non small cell lung cancer. Obviously, we've been having ongoing discussions with the regulatory authorities. TLA-1 is a trial with a dual primary endpoint, and obviously, we met PFS as one of those primary objectives. But OS is going to be important in the second to third line setting.

Question on the <unk>.

Speaker Change: Alright, that's all right second half okay.

Well thanks for the question.

Speaker Change: We're confident that that's a big state is going to be important medicine in the treatment of non small cell lung cancer.

Speaker Change: Obviously, we've been having ongoing discussions with the regulatory.

Speaker Change: Regulatory authorities.

Speaker Change: Taylor one.

Speaker Change: A child with a dual primary end point and obviously when that PFS is one of those prime with but I was just going to be important in the second to third line setting when do you think historically other than checkpoints inhibitors no Maxim to demonstrate benefit in Docetaxel. Currently remains the standard of care I'll remind you that in the non squamous population.

Susan Mary Galbraith: When you think historically, other than checkpoint inhibitors, no medicines have demonstrated OS benefit, and dosetaxel currently remains the standard of care. I'll remind you that in the non-squamous population, the data that we presented at ASCO, we showed that the hazard ratio in the non-squamous population for OS was 0.77 with a confidence interval that only just overlapped one.

Speaker Change: The data that we presented at Africa, we showed that the hazard ratio and then I'm just gonna start I'll ask one point 77, where the confidence interval that only just overlapped at once there's one point or one of the upper end. So I think that shows that we're not just seeing a progression free survival benefit, but there's a strong trend within that pace.

Susan Mary Galbraith: So it was 1.01 at the upper end. So I think that shows that we're not just seeing a progression-free survival benefit, but there's a strong trend to OS within that patient population. So, you know. Quite often, as is normal, as the OS events mature, we'll often have an update of the OS during a period of review, and we'd anticipate that during the period of review for TLO1, we could update the OS. Thank you, Louisa, at Berenberg.

Speaker Change: <unk> population and so you know.

Quite often.

Speaker Change: As is normal.

Speaker Change: Mature well I don't have an update of the of the L. S. During a period of review and we'd anticipate that joined the periodic reviews for Taylor one we can update D O S.

Alright.

Diamondback: Thank you Luisa at Diamondback.

Diamondback: I would like to ask Scott to comment on the Iqos of Ax deal and just the attractions of the of the assets there and the opportunity to enter the IC market and then also maybe to pivot from that.

Louisa Hector: I would like to ask Iskra to comment on the ICOSOVAX deal and just the attractions of the assets there and the opportunity to enter the RSV market. And then, maybe, to pivot from that slightly bigger picture question, but essentially a margin question, sorry. You know, you've shown us the fabulous pipeline progress, the breadth and depth. We see entry into new therapeutic areas, modalities, vaccines, obesity, cell therapies, et cetera. So it's really bubbling. So really, it's about how you can be so confident in some margin expansion in the medium term. How, you know, how can that happen?

Speaker Change: Slightly bigger picture question.

Speaker Change: But are sent to your margin question sorry.

Scott: You've shown us the fabulous pipeline progress the breadth and depth, we see the entry into new therapeutic areas and modalities vaccine that is T cell therapies et cetera. So.

Scott: So it's really Bubbling, so really it's about how you can be so confident and some margin expansion midterm, how how can that happen is there a point where selling costs the infrastructure stabilizes.

Unnamed Speaker: Is there a point where selling costs and the infrastructure stabilize? How do these fabulous products compete for the R&D budget? Is it about strict?

Scott: How do these fabulous products compete for R&D budget is about strict almost nutrition, making sure absolutely. The best projects are moving forward. So just any color on that so that you can give us confidence in the ability to raise margins given all the excitement within the pipeline. Thank you.

Unnamed Speaker: almost attrition, making sure that absolutely the best projects are moving forward. So just any color on that so that you can give us confidence in the ability to raise margins, given all the excitement within the pipeline. Thank you.

Unnamed Speaker: Thank you, Lisa, for the question and for your interest. So the proposed acquisition of ICOSOVOX really strengthens our late-stage pipeline in vaccines and immune therapies because ICOSOVOX's lead asset is the combination RSVH and PV vaccine. That is phase three ready, and the important that is important assets from two different perspectives. On the one hand, this is a next generation vaccine technology within the respiratory vaccines because it's a protein virus like particle vaccine, and the importance of that vaccine is that they have the potential to be better, more effective, and safer than a non-VLP vaccine. So basically, what you can expect to see from this vaccine is higher efficacy and a longer durability of the effect, and at the same time, a better safety profile. The second important aspect of this is that this is a combination of the RSV and HMPV vaccines. And although there are a number of RSV vaccines for the adult population available in the market, there are no preventative or therapeutic options for HMPV.

Speaker Change: Thanks, Lisa for the question Blayne addressed.

Speaker Change: The proposed acquisition of a high cost of oxo really strengthen our late stage pipeline in vaccine and immunotherapy, because Ed Caso X. Our lead asset is the combination honest speech and believe vaccine.

Speaker Change: That is phase III ready and are important this is important to us it's for two different perspective on one side. This is a next generation vaccine technology of interest respiratory vaccines, because it's a protein lightest like particle vaccine and influences from deadlock theme is that they.

Speaker Change: Have a potential to be better more effective and more safe than than annoying to VLT vaccines. So basically what you can expect.

Speaker Change: To see from from dose vaccine is still have a higher efficacy and longer durability of the effect and at the same time that the safety profile of <unk>.

Speaker Change: Second important aspect of this is that this is a combination of Odyssey and H M. T V.

Speaker Change: A vaccine and although the number that you can either that there are a number of Odyssey vaccine for the adult population available in the market. There are no neither preventative or to the deductions for <unk> and maybe that's the writers that the many of you will even though I've heard about it but they contended that the Odyssey an H M D.

Unnamed Speaker: And maybe that's a virus that many of you have never even heard about. But I can tell you that RSV and HMPV are basically among the leading causes of severe respiratory infections. And if you look at the numbers of hospitalizations and infections, basically at a similar rate between HMPV, RSV, and flu, and therefore, we feel we are excited to use this vaccine to, on the one side, accelerate and bring it to patients as soon as possible. On the other side, it's a great strategic fit because it really builds on AstraZeneca's experience in RSV as well as builds on our therapeutic leverage And just at the end, I need to mention that the deal is still subject to closing. Thank you.

Speaker Change: We are basically among the leading causes of the severe respiratory infections and if you look at the numbers of the hospitalization and infections that basically in the similarity between HBV RSV and flu and therefore, they feel that they feel excited too.

Speaker Change: It was with vaccines that alongside accelerates and bring it to patients as soon as possible on the other side, it's a great strategic fit because it really builds and astrazeneca experiencing Odyssey as well has been so now we've got up there with the leverage.

Speaker Change: The patients that are at risk of respiratory diseases, and then just said D&A I need to mention that the deal is still that is still subject to closing.

Unnamed Speaker: So Rizal, your second question, the R&D spend, as we've said before, we expect to keep in the low 20s, 20s percentage as a percentage of revenue, and our improvement will come from SG&A. And so we are very committed to achieving this margin expansion in the midterm, as we've communicated for quite some time now. We're on track, and we're committed to this, and it really is about leveraging the critical mass, and some of these products that have required, sorry, a lot of promotion are at scale in terms of promotional effort. If you look at the breast treatment, look at, I mean, Farsiga will be potentially declining in promotion.

Speaker Change: Thank you.

Speaker Change: <unk> your second question.

Speaker Change: The R&D spend as we've said before we expect to keep <unk>, 20th Twentyish percentage as a percentage of revenue.

Speaker Change: And our improvement would come from SG&A.

Speaker Change: And so we are very committed to achieving this.

Speaker Change: Margin expansion in the midterm as we've communicated for quite some time, we're on track and we're committed to this.

Speaker Change: And really is about our.

Speaker Change: Leveraging the critical mass in some of these products that are.

Speaker Change: Required sorry, a lot of promotion.

Speaker Change: It's scale in terms of promotional efforts Utica terrible history okay.

Speaker Change: First figure we'd be even potentially declining in promotion.

Unnamed Speaker: So we can manage with this large SDNA span. We have to manage, I should say, so that we can actually deliver this midterm ambition. Now, the long-term ambition for operating margin is something we will define over the next couple of years as we see the progression of the pipeline. Because, quite honestly, what we've seen in the last two to three years is an expansion of our pipeline. We have a number of products now in the pipeline, the PCSK9, and the GLEAP1, of course, by Xfrostat, that we believe can drive a lot more top-line growth than could have been anticipated, say, a couple of years ago. So depending on how the pipeline shapes up, we'll have to decide what our percentage margin ambition is.

Speaker Change: So we can manage with this.

Speaker Change: Large SG&A spend.

Speaker Change: We have to manage I should say so that we can actually deliver this midterm ambition.

Speaker Change: Now the long term ambition.

Speaker Change: Operating margin is something we will define.

Speaker Change: Over the next couple of years as we see the progression of the pipeline.

Speaker Change: Because quite honestly, what we have seen in the last two to three years is an expansion of our pipeline. We have a number of products now in the pipeline the <unk> canine.

Speaker Change: One of course back slow start that we believe can drive a lot lot more topline goals then could have been anticipated say a couple of years ago.

Speaker Change: So depending on how the pipeline sure.

Speaker Change: <unk>.

Speaker Change: We'd have to decided what.

Speaker Change: Percentage margin ambition is but I've said, many times before and I want to be clear, while we focus on is the OXXO to Don our value in the cash flow we deliver them.

Unnamed Speaker: But I've said many times before, and I want to be clear, what we focus on is the absolute dollar value and the cash flow we deliver. So if we had to, and I'm not saying we will, but if we had to compromise on the future progression of operating margin beyond the mid-30s, we had to compromise on the percentage, it would be because we delivered more top line and the same or more absolute dollar value in operating profit and cash flow. Because ultimately, as I keep saying, we deliver value to shareholders with dollars, not percentage, right?

Speaker Change: So if we had and I'm not saying, we will but if we had to compromise on the future progression of operating margin beyond beyond the mid thirties, whereas to comprise on the percentage it will be because we deliver more top line.

Speaker Change: And the same or more.

Speaker Change: I've sort of dollar value and.

Speaker Change: Operating profit and cash flow, because ultimately as I keep saying.

Speaker Change: There is a value to two two.

Speaker Change: Shareholders was done hours not percentage right and so really if we can deliver even more growth than we had anticipated two years ago. It will drive more profit and so we'd have to adjust this although the next couple of years based on our pipeline, but with the firm commitment that in absolute value we will.

Unnamed Speaker: And so really, if we can deliver even more growth than we had anticipated two years ago, it will drive more profit. And so we'll have to adjust this over the next couple of years based on our pipeline, but with this firm commitment that, in absolute value, we will deliver substantial growth in the top line, but also in the bottom line. Do we have a microphone there?

Speaker Change: The levo.

Speaker Change: The substantial growth in topline, but also in bottom line goals.

Speaker Change: We have a microphone.

Speaker Change: Yeah.

Speaker Change: All right.

Aradhana Sarin: Eric, two questions first for Aradhana, coming back on one of your comments before on CapEx. So CapEx is expected to grow by maybe as much as 50%. How should we think about this going forward? Is it a one-year sharp increase or should we think about CapEx staying around $2 billion for the next few years or thinking in percentage of revenues, or how should we model this?

Speaker Change: And then can I go Stifel two questions first for our retina coming back on one of your comment before on Capex.

Stifel: So capex anticipated to grow by maybe as much as 50% how should we think about this going forward to easy to one year.

Stifel: Sharp increase or should we think about capex being around 2 billion for the next few years or the same percentage.

Stifel: Percentage of revenues or how should we model this.

Unnamed Speaker: And maybe the second question for you, Red and Sharon, about maybe the next wave of innovation in respiratory. We see one competition coming with long-acting IL-5. We see more interest for the TSLP targeting also with long-acting, but also combined with all the targets. How, what is AstraZeneca doing for the next wave and to build on the existing franchise? Thank you.

Speaker Change: Maybe the second question for you read and Sharon about maybe the next one.

Speaker Change: <unk> innovation into the biologics in respiratory we see one competition coming with a long acting IL size, we see more interest for the GSL P. Targeting in also with long acting, but also combining with all of the targets.

Speaker Change: What is astrazeneca doing for the next ways and to build on the existing franchise. Thank you.

Aradhana Sarin: Thank you for the question. On CapEx, you know, if you look over the last several years and you benchmark us against our peers, we've actually underinvested in CapEx substantially. And, you know, that's also because we had other opportunities to invest and so forth. But when you look forward, and especially this year, which we've given guidance on specifically, we're investing behind a number of products that we're bringing forward

Sure. Thank you for the question.

Speaker Change: On Capex.

Speaker Change: If you look over the last several years and you benchmark us against our peers, we've actually under invested in Capex substantially and.

Speaker Change: That's also because we had other opportunities to invest and so forth.

Speaker Change: But when you look forward and especially this year, we have given guidance on specifically.

Speaker Change: We're investing behind a number of products that we're bringing forward right. So we just announced the launch of the cell therapy facility and Rockwell. So again, Susan talked about the whole cell therapy ambition that requires upfront investment in.

Unnamed Speaker: So we just announced the cell therapy facility in Rockville. So again, Susan talked about the whole cell therapy ambition, you know, that requires upfront investment in CapEx. And again, some of that is at risk, obviously.

Speaker Change: And Capex and again some of that is at risk obviously.

Unnamed Speaker: You know, we're investing in our own API plant in Dublin. And that's also because, you know, we're trying to become more self-sufficient as it relates to API. We announced an inhaled facility in Qingdao, and that's to..., you know, fulfill the demand that we expect for breastfeed, for example, to come out of China. And in addition, you know, we are investing in our ERP systems, which, you know, have, as I would say, for many, many years been underinvested in. So, you know, there are a number of these investments that we're making behind our pipeline. And, you know, from recent transactions and other investments that some of our peers are doing, and have done, that it has become increasingly important to have more and more self-reliant supply chains. And oftentimes, you see companies not being able to fulfill their growth ambitions because of under-investment in supply.

Speaker Change: We're investing in our own API plant in now and in Dublin, and that's also because we're trying to become more self sufficient as it relates to API, we announced our inhaled <unk> facility in Qingdao and that's too.

Speaker Change: Fulfill the demand that we expect for for breast <unk> for example to come out of China and in addition.

Speaker Change: We are investing in our ERP system, which.

Speaker Change: Has that I would say it for many many years been underinvested in so yeah. There are a number of these investments that we're making behind our pipeline and you've seen from recent transactions and other investments that.

Speaker Change: Some of our peers are doing and have done that it has become increasingly important to have more and more self reliant supply chains and oftentimes you see companies.

Speaker Change: Not being able to fulfill their growth ambition because of underinvestment in and supply. So we're we're sort of getting ahead of this curve for the pipeline and the new opportunities.

Aradhana Sarin: So we're sort of getting ahead of this curve for the pipeline and for the new opportunity. One of the things that, you know, that this plant in Jingdao will support is our growth ambition in the respiratory market in China. If you look at COPD in China, it's totally underdeveloped. I mean, the treatment is, the disease is extremely prevalent: pollution, smoking, aging.

Speaker Change: One of the things that.

Speaker Change: You know that the this plant in Qingdao, which supported our growth ambition in the respiratory market in China. If you look at COPD in China is totally under developed I mean, the treatment is the disease is extremely prevalent pollute.

Speaker Change: Pollution.

Unnamed Speaker: So there's a lot of COPD, but the market is totally underdeveloped. Today, we have 65 or more percent market share with Bryce III in the triple segment in China. And, you know, as the market develops, we're working very hard on expanding it. As the market develops and we have local manufacturing, there's enormous potential for products like Bryce III, and that is really why we decided to make this investment. Quickly regarding, let's say, the future of biologics, and Sharon will comment on the science in a moment. So despite the progress we have seen in the last few years with what were like the Spire and Fasunra, it's also a fact of life that there's still a high medical need that remains. So still, patients are still suffering from multiple exacerbations in the severe asthma segment as well as COPD. So we're going to bet on new modes of action. The NTL33 is clearly one of the examples.

Speaker Change: King aging so there's a lot of COPD, but.

Speaker Change: The market is totally under developed today, we have 65 or more percent market share was growth story in the triple segment in China.

Speaker Change: And as the market develops we're working very hard in expanding it.

Speaker Change: From a market develop and we have local manufacturing there is enormous potential for products like voice trends.

That is really why we decided to make this investment.

Speaker Change: We quickly regarding let's say the future of the biologics and Sharon walk momentum.

Speaker Change: On the signs in the moment so despite the progress we have seen in the last few years I always like to aspire to Sunrun is also a fact of life that there's still a high unmet medical needs and it remains so so still patients are suffering from multiple access to patients in the severe asthma as my segment as well in COPD. So were going to bet on new mode of actions TNT Alta.

Speaker Change: <unk> three is clearly one of the examples I'm sure Sharon I will say a little bit more about that but also we have an NTT slipped and development than it would be quite spectacular to have our inhaled <unk>.

Unnamed Speaker: I'm sure Sharon will say a little bit more about that, but we also have an anti-T-slip in development. It would be quite spectacular to have an inhaled biologic in order to help those patients suffering from a very severe disease. So new modes of action hopefully will unlock the power of those medicines and this indication. And you will see, I think, a lot of studies in the next few years, both in asthma and COPD, in order to generate the evidence that it can work from the, and really continue forward with Ruud's message, in which we are proud of both following the science and thinking about patient needs as we create our next wave of therapeutics. So we're aware that patients with respiratory disease, such as asthma and COPD, are first treated in the community and then progressed to specialty care.

Speaker Change: Biologic in order to help those patients suffering from a very severe disease. So a new mode of actions.

Speaker Change: He will unlock the power of awful those medicines.

Speaker Change: In this indication.

Speaker Change: You will see I think a lot of studies in the next few years, both in asthma and COPD.

Speaker Change: In order to actions to generate the evidence that those can work.

So I'll build on that and and really continue forward with wins message.

Speaker Change: Which we are proud of both following the science and thinking about patient needs as we create our next wave of therapeutics. So we're aware that patients with respiratory disease with asthma and COPD. Our first treated in the community and then progressed specialty care and so we're creating a range of therapeutics that are able to meet the needs of their care providers, but also.

Unnamed Speaker: And so we're creating a range of therapeutics that are able to meet the needs of their care providers but also build on the science that we increasingly understand about these diseases. So in asthma, building on our success with Fisenra and Tespire, we're moving forward to thinking about how toziracumab can be effective in that disease. Toziracumab is a differentiated therapeutic in that this anti-IL33 is hitting both the ST2 and the RAGE-EGFR pathways.

Speaker Change: Building on the science that we increasingly understand about these diseases.

Speaker Change: In asthma building on our success with the sentiment is fire, we're moving forward to thinking about how to recommend can be affected there because iraq, a mab is a differentiated therapeutic in that this anti IL 33 is hitting both the S. P. Two and the wage Egfr pathways. So with April to address the inflammatory piece of it.

Unnamed Speaker: So it's able to address the inflammatory piece of the disease as well as mucus production and tissue remodeling, which we think is gonna be very powerful for patients. And I'm thinking about how patients are accessing their care, moving into the prebiologic space with an inhaled T-slip, which we think is a very novel mode of delivery and will allow us to broaden this modality to a larger number of patients, as well as an inhaled JAK inhibitor and an oral FLAP inhibitor. So really expanding our science in the prebiologic space.

Speaker Change: As these as well as mucus production in tissue remodeling, which we think is going to be very powerful for patients.

Speaker Change: And then thinking about how patients are accessing their care moving into the pre biologic space with an inhaled T Slim, which we think is a very novel.

Speaker Change: Mode of delivery and will allow us to broaden this modality to a larger number of patients as well as an inhaled JAK inhibitor and an oral flap inhibitor, so really expanding our science in the pre biologic space.

Unnamed Speaker: Thinking about COPD, which is still a major unmet medical need worldwide, building on our success with BreastTree, and again, thinking about how we're delivering an inhaled T-slip in the prebiologic space, offering patients those options, as well as an IRAC4 inhibitor, and again, evaluating midoperistat in that space. So we are offering patients a number of different opportunities to address their disease with their general practitioners and then also to access biologics and different mechanisms as they move into specialty care. I hope that answers your question. I can add on aisle 33; it looks like even physicians have seen less data than from Sanofi and from Roche in phase 2. You're already into phase 3.

Speaker Change: Thinking about C O P D, which is still a major unmet medical need worldwide building on our success with <unk> and again thinking about how we're delivering an inhaled T slipped in the pre biologic space offering patients those options as well as in Iraq for inhibitor and again evaluating mid purse that in that space. So we are offering.

Speaker Change: Patients a number of different opportunities to address their disease with their general practitioners and then also to access biologics and different mechanisms as they're moving into specialty care and I hope that answers your question.

Speaker Change: Second on the IL 33, it looks like even physicians have seen less data than from Tennessee and from Roche on the phase two you're already into phase III should we think about getting more phase two this year or when are you planning to give more.

Unnamed Speaker: Should we think about getting more phase 2 this year or when are you planning to give more? Yeah, as you know, we were so encouraged by our data that we moved right to phase 3 in that program, and we'll look forward to sharing our phase 2 data as it becomes available at an upcoming medical conference. So there are two big ones ongoing. One is the NTL-33, and it's also in acute respiratory failure.

Speaker Change: As you know we.

Speaker Change: We were so encouraged by our data we moved right to phase three and that program and we'll look forward to sharing our phase two data as it becomes available at an upcoming medical conference.

Speaker Change: Two big Big ones ongoing one is <unk> 33, it's also in acute respiratory failure.

Unnamed Speaker: And hopefully, we will see data after the next season, so somewhere next year. And if positive, fingers crossed, it will be the first NTL-33 in a completely new segment where there's a very big medical need. The second one, clearly, I'll face a free trial in the COPD space. We've added an additional arm, a higher dose, and that trial is ongoing, and we'll read it out in the next two years. Maybe we'll take the last questions out of candy. So Gonzalo, the question online, Gonzalo at ABJ, over to you. Hi, can you hear me?

Speaker Change: And hopefully we will see data after the next season, so somewhat next year and if positive fingers crossed it will be the first then NGL for 33, and a complete new segments, where there's a.

Speaker Change: Very big unmet medical needs. The second one clearly Oh phase three trial in the COPD space.

Speaker Change: Other than the additional arm.

Speaker Change: A higher dose in that trial is ongoing and will readouts in the next two years.

Speaker Change: Maybe we take the last questions out of Canada. So Gonzalo a question online Gonzalo with LPG or I'll go to you.

Gonzalo: Great. Hi, hi, Gonzalo from AVG, Sundar Kolir. I have a couple of questions. The first one is about AirSupra.

Gonzalo: Hi can you hear me.

Gonzalo: Yeah.

Gonzalo: Great Hi, Hi, Gus Hello for me be decent in Korea.

Gonzalo: I have a couple of questions and the first one is on air Supra. It follows that the previous question from the audience.

Unnamed Speaker: This follows the previous question from the audience. How big is the expected sales force and commercial team for AirSupra? And what is the current level of awareness of this drug from doctors today?

Gonzalo: How big is the expected sales force and commercial the commercial team for a super App and what is that the current level of awareness of this drug.

Unnamed Speaker: Also, at 23, you have been preparing for the launch of the drug. So, what is the biggest challenge, based on your experience through the year, to penetrate a market that one could expect to be quite conservative? And the second question is about Tagriso.

Gonzalo: From doctors today.

Gonzalo: So in 'twenty three that you have been preparing for the launch.

Gonzalo: So what is the biggest challenge based on your experience through the year and to penetrate the market that one could expect it to be quite conservative.

Gonzalo: And the second question its integrity. So it seems from your reports today that the demand in China had some issues at the hospital or the dynamics.

Unnamed Speaker: It seems from your report today that demand in China has some issues with the hospital ordering dynamics. So, could you give us some color on that? And how much is expected to affect 2024? And the same for the Australian government rebates looking also into 2024 and beyond. Thank you. I will try to answer all the questions in a concise way. First of all, the field force. I'm not going to, let's say, give you complete numbers, but it's a very substantial force.

Gonzalo: So could you give us some color on that and how much is the Ed is expected to affect 2024 and the same for the Australian government rebates looking also into 'twenty four and beyond thank you.

Speaker Change: So let me try to answer all the questions and Nicole size, where it first of all the field force I'm not going to let's say.

Speaker Change: It gives you complete numbers, but it's a very substantial field force is substantial for two reasons, we're detailing on the on the allergists as well as Pulmonologists as well as we are detailing on the almost very large number of primary care physicians are the good news is that field force is a shelf field force with restaurant, so we try to be.

Unnamed Speaker: It's substantial for two reasons. We're detailing on the allergist as well as the pulmonologist, as well as detailing on a very large number of primary care physicians. Now, the good news is that Field Force is a shared service with breast treatment.

Unnamed Speaker: So we try to be very economically savvy in order to make sure that we're not going over the top. The awareness, we have used 2023 to create a very substantial amount of awareness. The awareness is over 80% at the level of both the allergist and the pulmonologist, and especially the allergists are the first prescribers.

Speaker Change: Economically savvy in order to make sure that we're not going over the over the top the awareness. We have you are spending 23 to create a very substantial amount of awareness do you. When this is over 80% at the level of both the allergists and Pulmonologists and especially the allergist.

Speaker Change: Are the first prescribers, we started in the software in the last quarter.

Unnamed Speaker: We started in a soft way in the last quarter, and in the last quarter, we had already 5,000 trialists, especially at the specialist level for SUPRA. Once again, the biggest challenge, and that's the last question you asked, what is the, not the headwind, but what is the biggest challenge? The biggest challenge is we are very happy that the three large commercial PBMs have now listed as SUPRA, but there are multiple downstream PBMs, and we still need to gain access there. Now, there's nothing specific to SUPRA.

Speaker Change: Last quarter, we had over 5000 trailers, especially at the specialist level 444 S. Reprice once again the biggest challenge in this is the last question you were asking whether or not the headwind, but what is the biggest challenge. The biggest challenges. We are very happy that the three large commercial pbms have now listed as supra.

Speaker Change: But there are multiple downstream PBS.

Speaker Change: Pbms and we still need to gain access there is nothing specific to ask supra is just a fact of life of the U S environment. So we're working very diligently villains Ya Li with all our market access teams or in order to create that access and equally we're going to bid for part D. In the course of this year as well.

Unnamed Speaker: It's just the fact of life in the US environment. So we're working very diligently with our market access teams in order to create that access, and equally, we're going to bid for Part D in the course of this year as well. So on to Grisso, within China, the fourth-quarter hospital ordering dynamics we've seen for the last several years, and it just really has to do with hospitals managing their budgets as they come to the end of the calendar year, which is also the fiscal year. So it doesn't, for me, carry any weight into the outlook for 2024. In fact, as I think about how we enter into 2024, certainly, we continue to face competition, but where we don't face nearly as much competition is in the adjuvant setting. I think it's important to remind you that there's a sizable EGFR population within China, 30 to 40%. Also, thoracic surgeons do have the ability to prescribe systemic treatments.

Speaker Change: Okay. Thanks.

Speaker Change: Excellent.

Speaker Change: So within China, the fourth quarter hospital ordering dynamics, we've seen for the last several years and it just really has to do with hospitals managing their budgets as they come to the end of the calendar year, which is also the fiscal year. So it doesn't for me.

Speaker Change: Three any weight into outlook for 2024 and in fact as I think about how we enter into 2024.

Speaker Change: Certainly we continue to face competition, but where we don't face nearly as much competition is in the adjuvant setting I think it's important to remind that there is a sizeable egfr population within China, 30% to 40% also of thoracic surgeons do have the ability to prescribe systemic therapies. So therefore, there's a relatively high adjuvant.

Unnamed Speaker: So therefore, there's a relatively high adjuvant treatment rate, and we had Adora added to the NRDL with no discussion. So I think that we come into the year with an opportunity to see growth on the really real demand side of things, and there are many fewer competitors that are playing within that adjuvant space. And our data, I think, stand out as being the most impressive there. The Australia rebate reclassification is almost a direct offset between what you see on the Zolidex established rest of world beat and the Tegrisa rest of world beat. It's mostly a one-time event.

Speaker Change: Right and we had a dora added into DNR D L with no discount so.

Speaker Change: So I think that we come into the year with an opportunity to see growth in these really real demand side side of things and there are many fewer competitors that are playing within that adjuvant space in our data I think stand out as being the most impressive there.

Speaker Change: The Australia rebate reclassification is almost a direct offset between what you see on Nozomi IDEXX established rest of world beat and the Tigris a rest of world beat.

Dave: And I say mostly just because there's some carryover through the year, but I don't anticipate talking about it ever again. Thank you, Dave. So, thank you so much for your interest and your great questions. Maybe I just want to close this meeting with a few messages. The first one is just kind of taking into account all the questions asked today.

Speaker Change: Mostly a one time event and I say, mostly just because there are some.

Speaker Change: Carry on through the year, but I don't anticipate talking about it ever again.

Speaker Change: Hum.

Speaker Change: Thank you guys. So thank you so much for your.

Speaker Change: Interest and your great questions have you ever lost a few messages to to close this meeting. The first one is just kind of taking into account all the questions as to the first one is product sales in 2024, we will still have very strong product saves in the product says wingo.

Unnamed Speaker: The first one is product sales in 2024. We will still have very strong product sales, and they will grow. I mean, the growth of product sales is coherent with the guidance we gave for top line revenue. So the clear message is that we are not dependent on collaboration or revenue to grow in 2024. Our portfolio is doing very well, and all our geographies are doing very, very well. The second message is that we are committed to this mid-term operating margin. And it is, of course, challenging because, as you said, we have a very big portfolio and we have to invest in this growth. But we will get there. We are committed to this, and we're working towards it, making good progress. You saw the margin expansion on one of the slides, and we'll continue in that direction. The third message, perhaps, is that we believe we can manage through the Part D reform, and I mention it because I know some people have speculated this is going to be a big problem. It is a small headwind.

Speaker Change: The growth of product sales in is coherent with the guidance we gave.

Speaker Change: No.

Speaker Change: Topline revenue. So the clear message is we are not dependent on on collaborations revenue to grow in 2020 for our portfolio is doing very well in all our geographies are doing very very well.

Speaker Change: The second.

Speaker Change: Messages, we are committed to this.

Speaker Change: Operating margin in.

Speaker Change: It is of course challenging because as you said, we have a very big portfolio and we have to invest in music all of us, but we will get there. We are committed to this and we're working towards is making good progress you saw the margin expansion.

Speaker Change: And one of the slides and we'll continue in that direction.

Speaker Change: The third message maybe is.

Speaker Change: We believe we can manage who the part D reform as I mentioned it because I know some people have speculated this is going to be a big problem.

Unnamed Speaker: I mean, headwinds. We have headwinds constantly in one market to another, one product to another. The beauty of our pipeline and our footprint geographically is when one product faces a headwind, another product picks up. Remember, we have 13 products that are at blockbuster status today, and one geography is struggling a bit. Another one is doing better, and that's really the model as we have it. But overall, the Part D, and we've spent a lot of time, our teams have spent a lot of time working on modeling this, the incremental rebates that we will have to deal with, you know, are first of all in part compensated by the reduction in free goods, which is substantial for some of our oncology medicines.

Speaker Change: It is a small headwinds I mean, the headwinds we have headwinds or constantly in one market to another one product to another the beauty of our pipeline and our footprint geographically is one one products face a headwind another product picks up remember we have 15 products that are blockbuster status today.

Speaker Change: In one geography is struggling a bit on the other one is doing better and that's that's really the model and as we have it.

Speaker Change: But overall the part D and we spent a lot of time our teams I've spent a lot of time working on modeling this the incremental.

Speaker Change: Rebates.

Speaker Change: That we we would have to to deal with.

Speaker Change: You know is first of all in part compensated by the reduction of free goods, which is substantial for some of our oncology medicines and overall the net effect is telling you a negative but it's really totally manageable in the context of our total global sales in the growth rates, we're experiencing and finally, but importantly.

Unnamed Speaker: And overall, the net effect is certainly negative, but it's really totally manageable in the context of our total global sales and the growth rate we're experiencing. And, finally, but importantly, you know, we are absolutely confident we can deliver very strong long-term growth, and that's really what we want to show you and, hopefully, convince you at this R&D day. And I hope many of you will join us in the beautiful DISC, where we have tremendously talented teams that are doing a great job. We have today a huge number of collaborations in the Cambridge area, and this is really leading to very good productivity from our R&D efforts. With this, thank you very much, and again, thanks for your great questions.

Speaker Change: We are absolutely confident we can deliver a very strong long term growth and that's really what we want to show you.

Speaker Change: And hopefully convince you of this R&D then.

Speaker Change: Hope many of you will join us in the beautiful disk wherever we have that.

Speaker Change: Tremendous a tremendously talented teams that are doing a great job. We have today a huge number of collaborations in the coverage area and this is really leading to very good productivity from our R&D efforts with this thank you very much and again thanks for your great questions.