AstraZeneca PLC (NASDAQ:AZN) Q3 2023 Earnings Call Transcript

Page 3 of 12

Patients with PD-L1 low lung cancer remain a group of high unmet need. And we continue to see that current PD-1 and PD-L1 agents have more limited benefit, even when combined with chemotherapy within this patient population. Previous data such as those from our Phase III POSEIDON trial of Imfinzi + Imjudo, demonstrate that CTLA-4 inhibition can improve the benefit in this group. This is the basis for our Phase III trial eVOLVE-Lung02 which investigate whether volrustomig plus chemotherapy can improve outcomes versus standard of care pembrolizumab plus chemotherapy. eVOLVE-Lung02, is just one of the four bispecific trials we’ve announced this year with two others for volrustomig and one for rilvegostomig. Next slide please. Our industry leading ADC development program continues to move at pace with five wholly-owned antibody drug conjugates now in the clinic, and many more in preclinical development.

Recent data shared at the ASCO virtual plenary illustrates the potential of our Claudin 18.2 directed antibody drug conjugate. Patients with Claudin 18.2 positive gastric or gastro esophageal cancer treated with AZD0901 showed an encouraging 33% confirmed response rate and a medium progression free survival of around five months. Claudin 18.2 is highly expressed in 50% to 60% of gastric cancers. AZD0901 has potential to build on the important data we’ve already delivered with Enhertu in HER2 positive gastric cancer and the emerging data from MATTERHORN for imfinzi in resectable gastric cancer, thus accelerating our leadership in GI cancers. Next slide please. Finally, I want to touch on our expanding presence in cell therapy. We now have three CAR-T’s in development, all of which include our transforming growth factor receptor beta [indiscernible] armouring.

This armouring is designed to resist the immune suppressive tumor microenvironment and enhance the potential effectiveness in solid tumors. We’ve seen encouraging data in humans with our GPC3 [CAR-T] [ph] AZD7003 which demonstrates that this armouring is likely important for CAR-T persistence when compared to other CAR-T’s targeting GPC3 without armouring. We’re also exploring the potential of our T cell receptor therapies following the acquisition of Neogene Therapeutics. TCR-T’s are an emerging modality that enable the identification of intracellular targets unlocking biology that was previously inaccessible by cell therapy. Neogene already have three open INDs, two of which have moved into clinical development. Finally, we recently announced our collaboration and investment agreement with Cellectis.

This collaboration leverages the Cellectis talent technology, which has been successfully used in the clinic to solve key challenges with allogeneic CAR-Ts and can precisely edit the genome in vivo to target the source of the genetically defined disease or tumor. We believe this collaboration will accelerate our development pipeline and unlock new ways to precisely target a broader range of cancers, as well as other types of disease. And with that, please advance to the next slide. And I’ll pass over to Ruud to cover biopharmaceuticals performance.

Ruud Dobber: Thank you, Susan. Next slide please. Biopharmaceuticals delivered total revenue of $13.6 billion in the first nine months of 2023 driven by growth of 19% in CVRM and 9% in R&I. Key highlights from the quarter included another record breaking performance of Farxiga, now annualizing at more than $6 billion per year. Farxiga is truly a global brand with double-digit growth across all our main regions, and the fastest expansion coming from emerging markets outside of China. In R&I, revenue growth from launches has more than offset the impact of generic competition for Symbicort in the United States. Emerging markets continues to generate strong growth, particularly for inhaled products, such as Breztri, which grew by 69% in the quarter.

And in V&I, the first commercial sales of Beyfortus generated $67 million of product sales and aligns revenue for AstraZeneca. And we also received our final regulatory milestone from our partners Sanofi following approval by the FDA. Next slide, please. We continue to invest in long-term research that can change clinical practices and differentiate our medicines and this is a particularly important part of our growth strategy for R&I with its portfolio of relatively young and fast growing medicines, with many years of extra liquidity remaining combined the key medicines that will drive R&I revenues grew by 42% year-on-year in quarter three. This has been driven by a combination of class expansion for modern biological medicines, and inhale therapies and our share gains within those growing markets.

On the slide here we have one example. Tezspire has quickly established a leading share in the first year of its launch in countries such as Germany and Japan. In other examples, Breztri is now the fastest growing medicine within the triple therapy class. And Fasenra remains the leading biologic for severe eosinophilic asthma. We anticipate continuous growth for Fasenra, following recent positive readouts from MANDARA trial in EGPA, and the MIRACLE trial for severe eosinophilic asthma in China. The growth in our four key R&I medicines has more than offset the impact of generics on all the medicines, and they now make up nearly half of the therapy area’s total revenue. And of course, we look forward to adding a fifth new medicine to this list, when Airsupra launches in 2024.

In CVRM, Farxiga maintained its position as the fundamental treatments in heart failure and CKD, and it continues to broaden its use among physicians. One of the drivers behind its recent growth has been the increase in diagnosis rates for CKD. Early diagnosis is an important factor for improving outcomes for patients. And we hope to see this trend continue with more patients being identified at the earliest stage of the disease. Like R&I, our CVRM portfolio is evolving in a way that can generate long-term sustainable growth and after today’s blockbuster products inevitably reach the end of the exclusivity period. Our cohort of developing medicines includes [indiscernible] for ATTR, and a PDUFA date for our ATTR-PN submission is in quarter four.

Assuming approval, we expect to launch that indication in early 2024. We’re also developing novel molecules that target hyperkalemia, high proteinuria, and hypertension. These are areas of high unmet medical needs in patients with heart failure and CKD. For further details of the progress of those programs, I will now hand it over to Sharon.

Sharon Barr: Thanks, Rudd. Next slide please. I’m delighted to be joining my first quarterly call in my new role and would first like to thank Mene and the teams for your continued support and for helping me settle in. In the third quarter we made significant progress on our fixed dose combinations with Farxiga or dapagliflozin which address pockets of high unmet medical need and where we aim to show significant benefit versus standard of care. Balcinerone is our selective mineralocorticoid receptor modulator and in combination with Dapagliflozin, we see opportunity to see lower rates of hyperkalemia in heart failure patients with chronic kidney disease. Preclinical data has shown a separation of organ protective effects from acute effects on electrolytes, which predicts a reduced hyperkalemia risk.

Page 3 of 12