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2014-05-06

AstraZeneca: AstraZeneca issues update on strategy to deliver value to shareholders

The Board of AstraZeneca PLC ("AstraZeneca" or "the Company") is today
publishing a presentation updating on the continued progress in
executing its strategy, which centres on achieving scientific
leadership, strengthening its growth platforms and returning to
growth. The presentation will demonstrate AstraZeneca's excellent
growth prospects, rapidly progressing pipeline and the future
delivery of shareholder value as an independent company. The
presentation and the contents of this announcement are based on the
key sources, bases and assumptions set out at the end of this
announcement.

In addition, the Company is providing new, long-term, financial
targets which highlight the significant potential for shareholder
value creation. From 2017 to 2023 AstraZeneca is targeting strong and
consistent revenue growth leading to annual revenues of greater than
$45 billion by 2023. Operating leverage is expected to result in core
earnings growth in excess of revenue growth during this period.

Transformation of AstraZeneca is well underway

AstraZeneca has achieved momentum in the delivery of its clearly
defined strategic objectives:

· Under the new management team, AstraZeneca is executing its
strategy successfully and is re-positioned for a return to growth;

· Significant transformation of the pipeline has already been
delivered since 2012;

· Scientific discoveries have been accelerated to extend the late
stage pipeline, including access to multiple technologies which place
AstraZeneca at the heart of immuno-oncology development; and

· Five key growth platforms are sustaining near-term growth and
AstraZeneca remains confident that 2017 revenues should be broadly in
line with 2013.

AstraZeneca has a growing and accelerating late stage pipeline

The progressive changes AstraZeneca has made have fuelled the
transformation of the pipeline. The presentation demonstrates:

· A comprehensive portfolio strongly positioned to exploit
synergistic combinations of small molecules and biologics in
oncology;

· Key mid-stage pipeline assets showing significant promise,
including MEDI4736, AZD9291, olaparib, PT003 & PT010 (LABA/LAMA and
triple LABA/LAMA/ICS), benralizumab, and the fixed dose combination
saxagliptin/dapagliflozin;

· Accelerated timelines set out for key Phase II and Phase III
assets;

· Near term value driven by multiple data readouts, regulatory
milestones and 19 NME candidates for registration trial starts in
2014/15;

· Attractive optionality with additional assets showing significant
promise: AZD3293/(BACE), brodalumab, roxadustat,
anifrolumab/sifalimumab, tralokinumab, mavrilimumab and a broad
immuno-oncology portfolio; and

· Aggregate risk-adjusted pipeline peak year sales potential of
around $23 billion and non risk-adjusted pipeline peak year sales
potential of around $63 billion.

New long-term revenue targets for AstraZeneca's five key growth
platforms

AstraZeneca has sharpened its focus on five key growth platforms and
the presentation sets out its long-term revenue targets:

· Brilinta ~$3.5 billion in 2023, driven by investment in on-going
clinical studies to access broader opportunities;

· Diabetes ~$8 billion in 2023, reinforced by the strong launch of
Farxiga/Forxiga in the US and Germany, the fixed dose combination
saxagliptin/dapagliflozin, and the rapid integration of the BMS
alliance;

· Respiratory ~$8 billion in 2023, driven by a strong current
product franchise and a diverse emerging pipeline covering a broad
set of patients;

· Emerging Markets - mid-to-high single-digit growth, building on
the growth in China and introduction of innovative products. Q1
growth in China of 22% (at CER); and

· Japan - low single-digit growth, sustained by key products
including Nexium, Crestor and Symbicort which enjoy medium-term
market exclusivity.

New financial targets

In March 2013 AstraZeneca announced its new strategy. As part of its
annual planning process later in 2013 it revised its ten year
business plan to reflect this new strategy. This is the basis of the
new information published today which sets out the financial targets
underpinning the Board's confidence in AstraZeneca's independent
strategy:

· The Company continues to invest in the key growth platforms,
maximising the impact of new product launches and benefits of 2013
business development activity. As previously stated, the Company
expects 2017 revenues will be broadly in line with those of 2013;

· From 2017 to 2023 AstraZeneca is targeting strong and consistent
revenue growth leading to annual revenues of greater than $45 billion
by 2023, and operating leverage is expected to result in core
earnings growth in excess of revenue growth during this period.

Pascal Soriot, Chief Executive of AstraZeneca, said: "AstraZeneca is
completing its transformation, and now has the right size, focus and
team to deliver on one of the most exciting pipelines in the
pharmaceutical industry. We have fostered a culture of innovation
where science is at the heart of what we do and today we set out the
greatly improved quality of our mid and late stage pipeline and its
significant commercial potential. We are continuing to create
significant value for shareholders from our independent strategy."

Leif Johansson, Chairman of AstraZeneca, said: "The increasingly
visible success of our independent strategy highlights the future
prospects for our shareholders. These are benefits that should fully
accrue to AstraZeneca's shareholders."

Additional information

Today's presentation also includes the following information in
relation to non risk-adjusted peak year sales estimates for key
pipeline assets:

· Non-risk adjusted peak year sales potential for AstraZeneca's key
pipeline assets:

· MEDI4736 (inc. combination therapies) ~$6.5 billion (compared to
analyst estimates of $2 billion - $7 billion);

· AZD9291 (monotherapy) ~$3 billion (compared to analyst estimates
of $1 billion - $2 billion);

· Olaparib ~$2 billion (compared to analyst estimates of $1.5
billion - $3 billion);

· PT003 / PT010 ~$4 billion (compared to analyst estimates of $3.5
billion - $4 billion);

· Benralizumab ~$2 billion (compared to analyst estimates of $1
billion - $2 billion); and

· Saxagliptin/dapagliflozin fixed dose combination ~$3 billion.
· Non-risk adjusted peak year sales potential for AstraZeneca's
four further pipeline assets:

· Brodalumab ~ analyst estimates of $0.5 billion - $1.5 billion;
· Anifrolumab/sifalimumab ~$1 billion (compared to analyst estimates of $0.2 billion - $1 billion);
· Roxadustat/FG-4592 ~ analyst estimates of $1 billion - $2.5 billion; and
· AZD3293 (BACE) ~$5 billion (compared to analyst estimates of $0.5 billion - $3 billion).

Key sources, bases and assumptions

The AstraZeneca forecasts and targets in this announcement and the
presentation are derived from the AstraZeneca Long Range Plan for
2014 to 2023 (the "LRP"), the AstraZeneca papers produced to support
the LRP and AstraZeneca papers subsequently produced as part of the
business planning process. AstraZeneca produces a long range plan
annually. The LRP was updated in the last quarter of 2013 and was
reviewed by the Board of Directors in December 2013, and then,
following revisions to reflect the acquisition of BMS' interest in
the Diabetes franchise, reviewed by the Board of Directors in January
2014. The forecasts and targets are based on AstraZeneca's risk
adjusted measures, where applicable.

Peak year sales referred to in this announcement and the presentation
are AstraZeneca management estimates for the highest annual net
sales. Estimates are made based on customary forecasting
methodologies used in the pharmaceutical industry. Many of the peak
year sales occur in years later than 2023, but are consistent with
the plans and projections of the LRP period. Analyst estimates
referred to in the announcement are set out in the slide
presentation.

Peak year sales may occur in different years for each NME depending on
trial outcomes, launch dates and exclusivity periods amongst other
things. The aggregation is for the peak year sales of each NME and
not for one particular year. The peak year sales are net sales at
nominal values and are undiscounted.

Risk-adjusted peak year sales are non-risk adjusted peak year sales
adjusted for the individual probability of launch of each NME and the
probability of success in further life

cycle management trials. Estimates for these probabilities are based
on industry wide data for relevant clinical trials in the
pharmaceutical industry at a similar stage of development.

The development life cycle of pharmaceutical products is such that
there is a range of possible outcomes from clinical development
driven by numerous variables including safety, efficacy and product
labelling as well as commercial factors including the patient
population, the competitive environment, pricing and reimbursement.
Accordingly, the actual revenues achieved in due course will be
different, perhaps materially so, from the risk adjusted sales
figures in this announcement and the presentation and should be
considered in this light.

In the case of the calculation of the aggregate risk-adjusted peak
year sales potential of around $23 billion and non risk-adjusted peak
year sales of around $63 billion, they each include each NME and key
line extensions currently identified as in Phase III, Phase II and
those in Phase I included in the LRP as launching before the end of
2023.

The long-term revenue targets in this announcement and the
presentation are consistent with the LRP for the period 2014-2023 at
constant exchange rates, reflecting net sales. They reflect revenue
forecasts adjusted for the individual probability of launch of each
NME and the probability of success in further life cycle management
trials. Estimates for these probabilities are based on industry wide
data for relevant clinical trials in the pharmaceutical industry at a
similar stage of development.

Attention is drawn to the notice set out under the heading Forward
Looking Statements below.

- ENDS -

NOTES TO EDITORS

A presentation for analysts and investors will be held at 13:00 BST
and can be joined live, via teleconference and webcast. Details can
be found on the AstraZeneca Investor Relations website
www.astrazeneca.com/investors

About AstraZeneca

AstraZeneca is a global, innovation-driven biopharmaceutical business
that focuses on the discovery, development and commerciali...

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