Earnings Call: Q3 2017

Nov 9, 2017

Of the United States Private Securities Litigation Reform Act of 1995. Participants on this call may make forward looking statements respect to the operations and financial performance of AstraZeneca. Although we believe our expectations are based on reasonable assumptions, by their very nature, forward looking statements involve risks and uncertainties and may be influenced by factors that could cause actual results to differ materially from those expressed or implied by these forward looking statements. Any forward looking statements made this call reflect the knowledge and information available at this time on this call. The company undertakes no obligation to update forward looking statements. Please also carefully review the forward looking statements disclaimer that accompanies this presentation and webcast. I will now hand you over to Pascal Soriot. Hello, everyone. It's Pascal Soriot here, CEO of AstraZeneca. Welcome to the year to date and Q3 2017 results conference call and our webcast for investors and analysts. We are here in Cambridge, U. K, our global headquarters. We have people on the phone and the webcast. The presentation, as always, is available on astrazeneca.com for you to download. Please turn to slide 2. This is our usual Safe Harbor statement. So please turn to slide 3. We plan to spend about 30 minutes today on the presentation and then leave the same time for Q and A. If you want to ask questions on the phone, you can get in the line already now by pressing star 1. There's also an option to ask questions online if you want as part of the webcast. And we would like to provide everyone with an opportunity to ask questions, so please limit to 1 question per person in the first round. Thank you for your help. Today, I'm joined by Marc Dunoyer, our CFO Marc Malan, Executive Vice President of Global Portfolio and Product Strategy, Global Medical Affairs and Corporate Affairs. We also have Sean Bohen, our EVP of Global Development and Chief Medical Officer. And then we also welcome Dev Frederiksen, our new Executive VP and Head of the Oncology Business Unit. Dev was previously the Head of our Japanese business, launching Tagrisso there with great success. And before that, Dave was head of the U. S. Oncology business of AstraZeneca, and he launched Lynparza in Tagrisso in the U. S. Market. Dave replaces Jamie Friedman, who is now the President of our Canadian organization. Jamie has moved back to his native Toronto. Please turn to Slide 4. Here is today's agenda, which I think you will be familiar with. So let's turn to slide 5. On our conference call today, we will be making comments on our financial performance using core reporting metrics and at constant exchange rates, which are both non GAAP measures. All numbers will refer to $1,000,000 and growth rates at constant exchange rates for CER unless we otherwise state. With the formalities behind me, I will now kick off. In summary, the business performance in the 1st 9 months continued in line with our expectations. Total revenue decreased as anticipated and reflected the tail impact of Crestor's and Cerroquale's ex our U. S. Loss of exclusivity. The decline in product sales decelerated from 8% year to date to only 2% in the Q3. Sales from our growth platforms increased overall and actually improved during the Q3 in particular in the emerging markets and specifically in China where we are doing extremely well. Emerging market sales were up by 7%. Within this region, China continued to excel with a 10% growth rate. Underlying growth is actually closer to 15% and accelerating. There was a diminishing negative impact from the overall economic and geopolitical situation in some countries in the international region. Our respiratory business improved in the Q3 versus year to date, but also continued to be impacted by sales of SYMBICORT in the U. S. While this medicine remained a global leader in its class. In what we call new CVMD, Brilinta continued with a high growth. And in diabetes, Farxiga continued to be the number 1 the world number 1 in its class and also got back to growth in the important U. S. Market. Japan was up by 5%. And finally, oncology, now 20% of the total business continues up with new oncology medicine, Lynparza, back to U. S. Growth. We had a very nice trend for Lynparza. And Tagrisso also continuing its global launch. Earnings per share were as expected and are now supported and updated. Our 2017 guidance where 2017 core EPS anticipated to be closer to the low teens percentage decline. As you know, we upgraded our guidance. Finally, we made progress on our sustainability agenda with 2 listings by the Dow Jones Sustainability Index as well as a very favorable A listing by CDP for Climate and Water. Please turn to slide 6. Our pipeline news flow continued since the last results announcement. This list may even be the most extensive list we've ever presented. Therefore, I will only cover a few highlights. Lynparza, first of all, got U. S. Approval in the second line setting over ovarian cancer with a broad label. But importantly, we also had tablets approved at the same time. This was important for patients and for our company and our partner Merck with the upcoming life cycle program for the medicine. So as I said before, we've seen a very nice uptick of our LYNPARZA prescriptions in the last few weeks. We presented the exciting Phase 3 data from Tagrisso's FLORA trial at ESMO and we got a breakthrough therapy designation for first line use in the U. S. We also presented the Phase 3 data from Imfinzi's specific trial at ESMO and we've achieved 7 regulatory submissions including the U. S, EU, Japan and a few others. Together with Tagrisso, Imfinzi will make up a strong future presence in lung cancer, building on the legacy of IRASA and a of IRESSA and a quite unique opportunity in our industry today. Last but not least, Calquence became our 4th new oncology medicine and the first for AstraZeneca in and the first for AstraZeneca in breast cancer. This was a major milestone for the majority investment in Acerta that we announced in December 2015, a very exciting product with a nice label and the team is ready to go. As usual, Sean will cover more pipeline milestones later. So please turn to slide 7. When we look at product sales, we continue to see underlying growth, now 5%. This growth comes from our 3 main therapy areas of oncology, CVMD and respiratory and from the emerging markets, And we expect this growth to become more visible as we fully annualize the key patent expiries. And as we see our new launches gain momentum, we expect to see an acceleration of our growth rate for the growth platforms. During 2017, we've seen an improving quarterly performance for product sales and we look forward to keeping you updated on this journey. Turning to Slide 8. As we deliver on improved sales performance and we return to growth, our focus on commercial execution will become more important. There are good examples today. For instance, the emerging markets, Brilinta, Farxiga, oncology, we've launched an unprecedented number of new medicines with Benralizumab expected this quarter. This will be our 1st biologic medicine in our respiratory to treat severe uncontrolled asthma. As with most years, there are positives and negatives like the recent setback for trilukinumab. However, overall, on an aggregate basis, it has been a defining year for our company and a year with unprecedented news flow. We're committed to returning this company to growth in product sales, which will be the first time in many years and will be a successful conclusion of the pipeline driven transformation since 2012. This really would not have been possible without the support and the dedicated work of all AstraZeneca colleagues around the world. Together, we look forward to keeping you shareholders updated on the continued journey ahead. With this, I will stop here and hand over to Mark Mallon for our review of product sales and growth platforms. Thank you, Pascal. I'm pleased to be here today to update you on the performance of our growth platform. So let's get started with the next slide, please. Today, I will cover our non oncology growth platforms and hand over to Dave to cover new oncology. The growth platforms demonstrated overall growth in the quarter with a small acceleration during Q3, but with continued headwinds in respiratory. Combined revenue of our growth platforms represented over 3 quarters of the product sales year to date and good momentum was seen in emerging markets, new CVMD and in new oncology. Next slide, please. Firstly, starting with emerging markets. We continue to be in line with our long term performance guidance of mid- to high single digit growth in product sales. Underlying growth without the impact from partnerships and divestments, as Pascal mentioned, was approximately 5% higher. China exerted a strong quarter with growth up to 10% in the year to date, mainly driven by respiratory, CV Metabolic and Tagrisso. Outside of China, we saw good growth across the region with Russia and Brazil outgrowing the local markets. Next slide, please. Respiratory sales continue to see challenges in the year with pricing pressure in the U. S. Easing slightly. Sales declines in the U. S. And Europe are being largely offset by emerging markets and established rest of world performance. With Symbicort, we're seeing a slight easing with product sales now down by 4% in the quarter. This reflects some moderation in pricing headwinds in the U. S. And competitive dynamics in Europe. We believe the easing is partially driven by our ability to differentiate with Symbicort, which continues to lead volume share in the ICSLABA class globally. In the U. S. And Europe, Symbicort product sales declined by 15% and 11%, respectively. Symbicort in emerging markets delivered growth of 8%, with China sales up by 18% in the year. Pummelcort continued to demonstrate strong growth up to 7% year to date, mainly driven again by China, the biggest market for the product. The VIVEPSI launch continues with new to brand share stabilizing. Next slide, please. In new CVMD, sales were up by 5% despite intense competition with emerging markets continuing to offset a slower U. S. Performance. Brilinta delivered product sales of $780,000,000 in the year to date with 31% growth. A notable pickup was seen in the quarter with 67% growth in the U. S. And continued strength in emerging markets, including China. Overall, the diabetes franchise exhibited a softer year to date with sales down 3%. U. S. Sales declined by 10% as a result of intense pricing pressure and competition for market share. Farxiga maintained a 40% volume share globally with product sales of $742,000,000 in the year to date and 24% growth. In the U. S, Farxiga product sales returned to growth, up 4% in the quarter, in part due to optimized affordability programs. Forexiga continued to deliver strong growth in Europe and in emerging markets with sales up 27% and 72%, respectively. We maintain leadership and share of voice across many markets. Next slide, please. And staying on diabetes, we're really pleased to announce an improved device for Bydureon, Bydureon B Size, previously known as the auto injector. Bydureon B Size was approved by the U. S. FDA in October and has been accepted for review in Europe. The improved device plays at par with other devices in the weekly GLP-one market, delivering a weekly bidurant dose in a new formulation that requires no reconstitution. Next slide, please. And in Japan, we continue to grow with product sales up by 5% in the year, driven by Torrisso and Forxiga. Diabetes continued to impress, up 14% in Japan, driven by FORCEGA growth, up 60%. FORCEGA is now the leading in the S52 class in value and volume terms, with class exhibiting strong growth. Crestor, our largest product, saw its 1st generic enter during the quarter, and we do expect more soon, which will be an important factor as we move into 2018. We continue to have great success with Tagrisso, with although with a slight sequential dip due to the ryotanki lift seen in Q2. Just as a reminder, prescriptions for new medicines in Japan are limited to 2 weeks for their 1st year on the market. As a lift of this restriction occurred in Q2, there was a volume bonus at that point. So with this, I will now hand over to Dave, the Head of Oncology Business Unit. Dave? Thanks, Mark. I want to say how much I appreciate the opportunity to speak to you all on the phone today and look forward to meeting many of you soon. Just as oncology supported steady growth in Japan, you can see from the chart on Slide 16 that strong oncology sales in Q3 2017 made an important contribution to our global performance for the quarter. We exceeded $1,000,000,000 in quarterly sales, up 19% versus the same quarter last year. And as Pascal mentioned, oncology sales now comprise over 20% of total product sales. Also with the approval of Calquence on October 31, we've now delivered 4 new medicines within our new oncology portfolio and we are on track to deliver against our commitment of 6 new medicines by 2020. Later in my section, I'll speak in more detail about Calquence as well as commercial performance of Lynparza, Tagrisso and our regulatory efforts for Imfinzi and lung cancer. But before I do that, a brief update on Imfinzi and bladder cancer. The U. S. Approval and launch in this setting has been strategically important for us, allowing us to raise awareness, open accounts, obtain formulary access and set important groundwork for the future potential launches in lung cancer. Imfinzi was the 4th of now 5 PD PD L1s to launch in the second line bladder space. And in this competitive space, we have seen steady progress month over month with market share now in the mid single digits in our 1st full quarter post approval. Slide 17, please. So turning now to Lynparza. We saw strong performance in the quarter with sales of $81,000,000 as steady growth continued in Europe. And again, as Pascal mentioned, very noteworthy, we drove a resurgence in U. S. Performance following the SOLO-two approval, which expanded our label to second line maintenance in ovarian cancer and importantly marked the launch of tablets, eliminating the pill burden for patients that we had with capsules. Looking forward, several important catalysts over the coming year for Lynparza with potential launches of the tablet formulation in Europe, breast cancer in the United States and launches within Japan. The Merck collaboration is progressing well and we've had various joint working teams already established and good collaboration well underway. I'm working closely with Frank Clyburn, my counterpart at Merck, and together we're rapidly advancing the collaboration between our two companies. We look forward to the Merck sales force coming on board in 2018 and both companies eventually developing equal sized field force efforts on LYNPARZA. With this combined we expect LYNPARZA to remain the leading PARP inhibitor. Please turn to Slide 18. Now turning to lung cancer and Tagrisso and the soon to be expected Imfinzi. Tagrisso demonstrated continued growth on the quarter with global sales of $248,000,000 We are on pace to eclipse $1,000,000,000 in annualized sales. You already heard about the strong performance in Japan. In the U. S, performance was underpinned by continued efforts to drive testing, where now 2 out of 3 patients are tested for their T790M status. One such initiative is a voucher program for plasma testing, which provides streamlined process for plasma draw, testing and delivery of results. Also, very importantly, we saw strength in emerging markets with sales of $45,000,000 in the quarter, China being the key driver. As we look to Imfinzi, following on the exciting PACIFIC data and locally advanced unresectable non small cell lung cancer, which we shared at ESMO, and the simultaneous New England Journal of Medicine publication, we are very pleased to announce that we've achieved 7 regulatory submissions to date in the key markets, including U. S, EU and Japan. We've also initiated an early access program globally to allow patients to have access to this new therapy. Please now turn to Slide 19. Lastly, we are very excited to have announced the U. S. Approval of Calquence, also known as acalibrutin, our BTK inhibitor in development for blood cancers. We received approval in a smaller indication for previously treated mantle cell lymphoma. We estimate that about 3,000 patients are diagnosed with mantle cell lymphoma each year in the U. S. Based on its efficacy, a 40% complete response rate and an 80% objective response rate combined with its safety profile, we believe Calquence is a compelling best in class option for previously treated MCL patients. The launch of Calquence was our 5th launch of a new product or line extension in oncology in the U. S. In 2017. Our launch experience and execution continues to build and with Calquence, our field force was in front of customers within hours of approval and we shipped product into the channel within 24 hours. While still very early, initial feedback in the marketplace has been positive and we look forward to a more thorough update on the launch and the year end results. With this, I'll now hand it over to Mark for the financials. Thank you, Dave, and hello, everyone. I'm going to spend the next few minutes taking you through our financial performance in the year to date. Please turn to Slide 21. As usual, I will begin by showing you the reported P and L numbers before turning to the core performance. Total revenue declined by 3% in the 1st 9 months of the year with product sales impacted by the receding effects of the Crestor and Cerrocoa Lexar losses of exclusivity in the United States. As you heard earlier from Pascal, product sales has seen a gradual quarterly improvement during the year. Exchange revenue grew by 50% in the year to date with income from Merck of CHF 1,000,000,000 making up around half of the total. Please turn to Slide 22. If we now turn to the core performance, we can look further down the P and L and see that our gross margin ratio in the year to date was down at 81.8 percent from 82.9% in the same period of 2016. In the Q3, however, our gross margin ratio declined by 4 percentage points to 79.6%, impacted by unusually high level last year and manufacturing variances this year as well as the initiating profit share agreement on Lynparza. As part of the agreement, we will book all product sale of Lynparza and reflect the profit share again through our cost of sales. This is in line with the comments I made back in July that we wouldn't anticipate such a high core gross margin ratio that we saw in the first half over the whole of 2017. It's important to note that the core gross margin was also impacted by losses of exclusivity and supply agreements on externalized or divested medicines. Turning to operating expenses. Core R and D costs declined by 2% in the year to date and core SG and A costs declined by 5%. These reductions reflected our unrelenting focus on cost discipline. We did see an uplift in core SG and A cost of 4% in the quarter, reflecting some specific factors. I will talk more about SG and A cost in a moment. Core other operating income nearly doubled in the 1st 9 months, reflecting the level of disposal activity. The core tax rate in the year to date was 18%. You may remember that last year, a one off tax benefit impacted our quarter 3 performance at that time. Please turn to Slide 23. I know that some of you find it challenging to model our future external revenues. Here, I'd like to provide you some more clarity as well as reiterate that externalization remains a key part of our strategy. We have talked to you for some time about sustainable and ongoing external revenue. In the 1st 9 months of the year, even when you take account of the Merck collaboration, this was 26% of total external revenue versus 22% in the whole of 2016. Over time, we see this proportion rising further. The Merck collaboration is expected to provide further and increasing income in the years to come. We recognized around $1,000,000,000 in external revenue in the Q3 from Merck with $600,000,000 deferred to the balance sheet. This will be released via the profit and loss account over time. As you may remember, the agreement also includes payment by Merck of CAD750 1,000,000 for certain license options over 2017 to 2019 and up to CAD6 €6,150,000,000 contingent upon successful achievement of future approval and sales milestone for monotherapy We anticipate the 3rd milestone in 2018. Please turn to Slide 24. This familiar slide illustrates the important progress in reducing our operating cost base. As I just mentioned, our OpEx base continued to reduce with core R and D cost and core SG and A cost declining so far this year. I did say in July that from time to time, you may see the occasional rise in core SG and A cost and that's what you saw in the Q3 as we had a low comparison as evidenced by the chart, made early investment in upcoming launches and also invested in emerging markets and in particular China. I want to make it clear however that I remain committed to our principle of core discipline as we look to reduce SG and A cost further over time and become a more efficient company. Please turn to Slide 25. This new slide illustrates our cash flow performance in the year to date. Cash generation is a commitment and a key focus for me, Pascal and the rest of the management team as we look to maximize our cash flows during our return to growth. On this chart, I want to highlight the EUR 622,000,000 improvement in reported operating profit as well as a slower increase in working capital. The progress that we have made, especially in payables, has been outweighed by increases in inventory level, including inventory of new biologic medicine, and I'm determined to address this. As we look at net cash flow from operating activities on this slide, you can see that we strip out the gain on disposal, which are then added back further down in the cash flow statement. With the good news on the approval of Calquent, it is worth reconfirming that we will soon pay $1,500,000,000 to the selling shareholders of Acerta Pharma. However, overall, the near $400,000,000 improvement in cash generation in the 1st 9 months was very encouraging, especially as we enter 2018. Please turn to Slide 26. I'd like to conclude with this more familiar slide, and I want to reiterate and refine the 2017 guidance, which is at constant exchange rate. I expect a low to mid single digit percentage decline in total revenue. The guidance for core EPS has however been updated today. Core EPS is now anticipated to decline towards the more favorable end of the lowtomidteens percentage range. This refinement partly reflects the final agreement on the accounting for the Merck collaboration on Lynparza. Outside of guidance, the total of external revenue and other operating income is still expected to be ahead of that of 20 16. As I mentioned, sustainable and ongoing income is expected to increase as a proportion of external revenue over time. We anticipate that core R and D cost will be broadly in line with 2016. And as just mentioned now, we will reduce core SG and A cost for this year. We remain very disciplined on cost as we return to growth. And finally, I want to reiterate our cost allocation priorities. We will continue to strike the balance between the interest of the business, our financial creditors and our shareholders. After providing for investment in the business, supporting the progressive dividend policy and maintaining our strong investment grade credit ratings, we will then keep under review any potential investments in value enhancing and immediately earnings accretive opportunities. That is last on the list. With that, I will hand over to Sean. Thank you, Mark. I will now run through the late stage pipeline events since the last results announcement and highlights of recent data presentations. I will then wrap up with a look at our upcoming news flow. Please turn now to Slide 28. For the quarter, most pipeline news supports progress in each of our main therapy areas. In oncology, we received several U. S. Breakthrough therapy designations. Imfinzi received U. S. BTD for patients with Stage III unresectable non small cell lung cancer. Submission to the U. S, EU, Japan and regulatory authorities in other countries were also made in the quarter. Tagrisso received US BTD after meeting its primary endpoint of progression free survival in the first line FLORA trial. Calquence also received U. S. Breakthrough designation, which subsequently led to approval by the FDA in October. In Type 2 diabetes, Bydurean B size, the auto injector received U. S. Approval and EU regulatory submission acceptance. Furthermore, we received U. S. And EU approval for the combination of Farxiga and Bydureon in type 2 diabetes. In respiratory, Symbicort received U. S. Approval for COPD exacerbations for duicleer, another Phase III trial met its primary endpoint for COPD. Further on data readouts, tralikinumab did not meet its primary endpoints in severe uncontrolled asthma in 2 trials. Please turn to Slide 29. At ESMO, results from the Phase III FLORA trial showed a statistically significant and clinically meaningful PFS benefit with Tagrisso over the current standard of care erlotinib or gefitinib. As first line treatments in previously untreated patients with locally advanced or metastatic epidermal growth factor receptor mutation positive non small cell lung cancer. Median PFS was nearly doubled at 18.9 months for Tagrisso compared with 10.2 months for the current first line EGFR Tyrosine Kinase inhibitors. Improvements were seen in all pre specified subgroups, including patients with and without brain metastases. For FLORA, we anticipate regulatory submission acceptances during the Q4 of 2017. Furthermore, at ESMO results from the pivotal Phase III PACIFIC trial also showed a statistically significant and clinically meaningful PFS benefit with Imfinzi in patients with locally advanced Stage III unresectable non small cell lung cancer following standard chemoradiation therapy, clinical setting where there are currently no approved Japan, Switzerland, Canada, Australia and Brazil have been achieved. We anticipate first regulatory decisions in the first half of 2018. Please turn now to Slide 30. For Brilinta, we presented at ESC the subanalysis of data from the Phase 3 PEGASIST TIMI54 trial, demonstrating a 29% risk reduction in CV death from treatment with berlinta 16 milligrams given twice daily versus placebo in patients taking low dose aspirin, but still at high risk for an atherothrombotic event, a major cause of acute coronary syndrome and CV death. At EASD, we presented the Farxiga DEPICT-one results, which highlighted the safety and efficacy of Farxiga in patients with Type 1 diabetes uncontrolled on insulin. The trial demonstrated significant and clinically relevant reductions from baseline in hemoglobin A1c, weight reductions and also lowered daily insulin dose at 24 weeks versus placebo. The BYDURIAN XL trial results were also presented at EASD. As a reminder, the trial met its primary safety objective, but did not meet its primary efficacy objective. Please turn to Slide 31. We believe our biologics portfolio for severe asthma is emerging as the strongest in the industry. Today, the science points to a precision approach. Benralizumab is an anti eosinophil monoclonal antibody that targets the IL-five receptor, thereby inducing direct and near complete depletion of eosinophils via antibody dependent cell mediated cytotoxicity. We believe benralizumab is the precision biologic with the best clinical profile for severe asthma patients with an eosinophilic phenotype. Tezepelumab is a 1st in class investigational monoclonal antibody that blocks thymic stromal lymphopoietin or TSLIP. Recent Phase IIb clinical data from a study known as PATHWAY evaluated tazepalumab in a broad population of severe asthma patients. The results were published in the New England Journal of Medicine and presented as a late breaking abstract at ERS. T:slip is produced in response to pro inflammatory stimuli such as allergens, viruses and other pathogens in the lung and acts as an upstream master switch driving multiple downstream inflammatory pathways, including Th2 cytokines such as IL-four, IL-five and IL-thirteen. However, TSLIP also activates many types of cells involved in non Th2 driven inflammation and may play a role in non Th2 driven disease. Please turn to Slide 30 2. As you know, 2017 was a busy year. Activity will continue into 2018. Before the end of 2017, we expect to receive U. S. Regulatory decision on benralizumab for severe uncontrolled asthma. We expect regulatory submission acceptance for Tagrisso in first line non small cell lung cancer. In 2018, we expect Lynparza in first line ovarian cancer data from LYNPARZA in first line ovarian cancer from SOLO-one, the final MYSTIC OS data, plus a number of other news items, including first data readouts for IO trials, Kestrel and EAGLE in head and neck cancer. We will also see data on PT10 and COPD. Starting this time next year, we'll begin to see readouts for lupus for manifrolumab and have the potential for quite a few regulatory submissions before the end of next year. Importantly, we also expect a number of regulatory decisions, including for lung cancer, we hope to soon have Tagrisso benefit patients in the first line setting as well as have Imfinzi benefiting patients with unresectable Stage III non small cell lung cancer. Thank you all for your continued support, and thanks to all the hardworking people who come to work every day to make this happen. I will now hand back to Pascal for closing comments. Thank you, Sean. Please turn to Slide 34. So before we end and move to the Q and A, let me summarize. Our performance to date was in line with expectations. A new AstraZenecaG grew underlying product sales by 5%. Our financials were on track. We have graded our guidance for revenue and core EPS. We updated we upgraded this core EPS guidance to a low mid teen decline. During the period, we also had an unprecedented amount of pipeline news flow. We delivered good execution with Lynparza back to U. S. Growth. Tagrisso continued its global rollout and we completed the important regulatory submission for Imfinzi specific trial. We also saw our first medicine for blood cancer Calquence. Everyone in the company is proud of the significant difference our new medicines make to patients' lives. Outside of oncology, emerging markets continued to impress and Brilinta time Farxiga continued solidly too. We're looking forward to sharing more news flow from our pipeline that we think will further support our return to growth. We will now go to the Q and A. All of our callers? Thanks in advance and perhaps we can take the first question from the conference call. There's one question here from Richard Fox at Deutsche Bank. Richard, go ahead. Hi. Thank you very much for taking my question. I was struggling to pick which one to choose. But so I'll go with the obvious one, which is around 2018. Obviously, not asking you to give guidance now, but maybe you could talk about the pushes and pulls to performance in 2018. I mean, you talked about returning the company to product sales growth, but I'm wondering about how we should think about profitability. And obviously, the extent to which you continue to generate additional externalization revenue will impact that. So I wondered if you could talk about how you expect that to evolve in 2018? Thanks very much. Thanks, Richard. Good question. Let me quickly comment on the sales and then I'll ask Marc to comment on the P and L in more details. As far as sales, you got to see 2 major moving parts really. 1 is the last part of our patent expiries. We're losing Crestor next year in Europe. You know that, but I think it's important to keep in mind. But that's the last one. And sort of by the end of next year, we'll be without any major patent expiries for quite some years after that. But certainly, next year, that's happening. On the positive side, we have a raft of launches. We're launching we're in the process of launching 7 new products. So that's a very substantial number of launches that will boost our growth. We also have obtained reimbursement food reimbursement in China, 5 products that are on the national drug reimbursement list that will further accelerate our growth rate in China. So those are kind of mostly the 2 big growth the big events on the top line. And of course, as we continue moving forward, these new launches will drive our growth more and more rapidly. So you have to see us become a company with a rapid growth rate as we emerge out of this final part of expiry next year. Marc, do you want to add any color on the externalization and the cost? Yes. Maybe a few factors to talk about 2018 without giving a detailed guidance. So first of all, there are 2 structural issues. The first one is as we transition from Primary Care to a mix of Primary and Specialty Care over time. And therefore, the proportion of Specialty Care and the Greater Oncology products will help our operating leverage. The second structural issue is we continue with our cost discipline and productivity initiative. We have seen that in the last 3 years 2015, 2016 2017 that we have derived continuous improvement in our productivity and also this has shown as cost savings. So these are the 2 positives. You asked also a question about the externalization and other income, and I can confirm that they will continue. This is part of our business model. But we can also see that 2017 will probably be a peak in our externalization and disposals. And lastly, as Pascal was just referring to, we have several launches, which have taken place in the immediate past or near future. And therefore, we also have to do justice to these products so that we put them on the best possible trajectory. So I think these four factors have to be combined to arrive at a good projection for 2018. And I'd be happy to provide a more detailed guidance when we meet for the Q4 early next Tim Anderson at Bernstein. Tim, do you want to go ahead? Yes. Thank you. More of a kind of a science question. On tumor mutation burden, can you describe how you guys are incorporating this into any of your trials? For example, is there a way you might incorporate this into Mystic like Bristol is contemplating with 227 even if only for exploratory purposes? And then just a quick question on the dividend. With Glaxo, there's fears of dividend risk. With Astra, do we have anything to fear? Are there any particular items that could create uncertainty with your dividend as you look forward over the next couple of years? Thanks, Tim. So let me start with the dividend and I'll ask Sean to cover the scientific question and then I'll ask Marc to cover the dividend again. So what I want to say about the dividend is, it has and we have said it from the beginning, it has been part of our value proposition that we actually realized that it takes time to rebuild our pipeline, rebuild the company. And in the meantime, we were very committed to dividend because our shareholders have to be rewarded for their patience. So I will say that what I said before, we're committed to the dividend today, tomorrow or the day after. Our commitment to the dividend is full. Sean? Yes. Sure. Thanks, Tim, for the question. To answer your question, so in the trials that are already ongoing and enrolling, obviously, it's hard to incorporate a new exploratory marker prospectively. Retrospectively, we didn't collect tissue from the patients in the MYTHIC trial, and it does give the opportunity to look at things like TMB or even other markers like interferon signature as exploratory endpoints with a retrospective analysis. We have not finalized plans for that, however, or analyzing it as an option. One thing I would add is, tumor mutational burden is not one simple test. It's not quite like PD L1 expression. Techniques that you use, what where you look for the mutations, how you measure the load remain quite variable. So that's a complexity that we see, but we're definitely examining it closely. Policy. I've just mentioned it a few minutes ago in my presentation on the capital allocation priorities. So I can reaffirm once again that we are all committed to a progressive dividend policy for the company. Thanks, Matt. Sachin at Bank of America. Sachin Jain, Bank of America. Thanks for questions. On the recent study start with Ido in the Pacific setting, maybe just outline why you chose Ido versus CTLA-four? And then Sean, I think I asked the question sort of frequently, but how do you think about Ido versus CTLA for broader development beyond the single study? And then just a clarification on Mystic, if I could. My interpretation of the messaging has changed from the 2Q call from don't over interpret PFS and OS still has a chance to one of limited confidence in the combo and the real focus being mono. So I wanted to check whether that shift is correct. If so, what's behind it? And does the delay to Merck's KEYNOTE-one hundred and eighty nine change your thought process at all? Thank you. Thanks. We'll let Sean cover this. But let me just say, overall, I don't think there is any shift at least in our view. I mean, there's no new news, let's say, that would shift our confidence. But Sean, do you want to go ahead? Sure. So the first question was about iDo versus CTLA-four in Stage 3 unresectable maintenance setting like PACIFIC. It's important to recognize that when you go into maintenance setting, tolerability is a very important aspect of the regimen that you choose and was indeed one of the real unknowns for Imfinzi as a single agent prior to doing PACIFIC. It turned out that the tolerability is quite favorable, particularly in light of the PFS benefit that was demonstrated. We know that adding trinolimumab to Imfinzi adds autoimmune toxicity. And so it's really a question of whether that tolerability would support a maintenance indication that led to looking at an idle combination where tolerability looks quite similar to, again, single agent Imfinzi. And that consideration will also be carried as we look forward into other combinations and whether we might go into this maintenance setting after chemoradiotherapy. I think with regard to broado combos, hopefully, I just answered the question with the last part. We consider not only evidence of efficacy, but also tolerability. Messaging around MYSTIC, yes, I agree with Pascal. We haven't really changed our messaging or our confidence. Our messaging almost 2 years ago now was that we thought overall survival was the endpoint that better captured the benefit of I O therapies. I think over the course of that period since we changed Mystic, we feel even more strongly based on data from both our own data and in the field as a whole that, that's true. The difference, I guess, I would say, and you're right, overall survival remains to be analyzed. So we expect the results first half of next year, and it still is quite possible that, that will be a positive result even though PFS was not a positive result. The last part I would say with regard to combo versus mono, perhaps the only thing that's changed over time is that there's more mono data showing that that's a validated treatment paradigm and PD-one, PD L1 as a mechanism of action for non small cell lung cancer. So in one case, we have a test hypothesis, which is durvatremia. In another case, we have a fair amount of data that monotherapy can benefit at least subsets of patients in this setting. So that might be the only thing that's changed. Yes. And I think you were very clear, Q2, Sean, that we saw a lot of probability for the combination and certainly not achieving PFS was not a good sign either. So I don't I think we were relatively clear. Sometimes the use of words, I guess, can be read one way or another. But Andrew at Citi, do you want to go ahead? Yes. Hi, thanks. A couple of questions. Number 1, just to confirm that neither within the PFS OS or OS of Mystic is a prospective analysis in TMB high patients as part of the primary analysis. I think that's what Sean's saying, but I just wanted to confirm. And then the question is, why didn't you? Was it a question of lacking power? Was it data capture that you just didn't have enough sample sets or some other issue? And then a couple of other quick ones. Timing for the expansion of the Lynparza program with Merck, we're obviously expecting many more trials to be announced. When should we expect them to hit clinical trials? And then finally, if Pascal wants to say something about Jonathan Friedman's departure to Canada and David's attention? Sean, do you want to cover the first two questions? Sure. So TMB High and Mystic, again, no, there is not a prospective analysis. It would be a retrospective exploratory analysis for TMB high versus low. Why is that? A couple of reasons for that. 1, when Mystic was designed and enrolled, the TMB hypothesis didn't really exist as a hypothesis. PD L1 expression hypothesis was the stronger hypothesis. I would add at this point in time, I think in non small cell lung cancer that really remains the validated hypothesis that PD L1 high is a better predictor of benefit from I O therapy. And so as I said, we do have the opportunity to potentially look at TMB in a retrospective exploratory sense. The last part I would say is I do not think as a diagnostic modality that TMB has been operationalized in a way that really lends itself to a companion diagnostic yet. That's a consideration we also use. There was another question about LYNPARZA program with expansion with Merck. Yes. Expansion of LYNPARZA program with Merck. Obviously, these discussions are ongoing. I will say that, from Dave talked a little bit about the success that they're having in the collaboration in the commercial setting. The development collaboration is also progressing very, very nicely and we're formulating plans and beginning to implement them. So as those turn into trials, we will announce them collectively and you'll also see them appearing on clinicaltrials.gov. So that should be coming next year. So the last question as far as Jamie, we are as a company very committed to talent development. And essentially what I've learned in my career as far as learning and developing is 2 things. 1 is you have to experience different roles, both in the field and globally. So we want people to alternate global and local roles. And the second is, what I've also learned is, there is the perfect development plan that you can put together and then there is the opportunities that arise and you seize those opportunities when they arise. So what happens here is that it's a great opportunity for Jamie to gain field experience. He's never led a country, so that's a great experience to learn the country to lean the country. And secondly, his parents are aging. He's from Toronto. So it's a great opportunity to match personal development and also the personal family dimension. So that's basically what happened here and I really think that it's a fantastic opportunity to develop 2 leaders. In fact, Jamie in the field based leadership role, commercial role and look forward to working with Dave who comes historically from Genentech actually or Genentech and joined us in the U. S. Organization a few years back and has been in Japan for the recent past. So that's really there's nothing more than this behind this move. It's really a talent development move, Andre. So let's move to Vincent at Morgan Stanley. Thank you for taking my questions. I mean, on product sales, on the Imfinzi, I mean, there is no sales contribution this quarter, €1,000,000 for the 1st 9 months. Should we expect sales contribution in lung as from Q4 on the back of the updated NCCN guidelines or later in the beginning of next year when it is approved? And it's more or less the same question for Calquence. I mean, should we expect Calquence to remain a kind of niche product waiting for the next label extensions as from 2020? Or do you think you can generate more than the MCL indication? Thanks, Vincent. So Dave speaking of you, it's a good opportunity for you to cover those two questions. Absolutely. So thank you for both questions. So on Imfinzi, certainly, we today promote only in the second line bladder setting, is where we have our approval and we were encouraged certainly by the NCCN's category 2A finding for the data coming out of PACIFIC. That NCCN compendia listing occurred on the 29th September, so the last week in Q3. So obviously, it had no impact on any 3rd quarter treatment decisions. Certainly, we know that NCCN guidelines do factor into physician treatment decisions and formulary decisions within institutions. We won't be promoting at all in the setting as we don't have a label until we do get approval next year. And we do feel that this is a tremendous opportunity once we have the opportunity to launch into the Stage 3 setting. Imfinzi is the 1st medicine to come into a setting and to show results like the ones that Sean talked through. And so we really see this as a great opportunity for future growth. In terms of Calquence, again, the opportunity that we have in front of us and where we launched into is in the mantle cell lymphoma space. We have ongoing studies in CLL and we'll look forward to seeing those results come back. We believe that in mantle cell, we've got a best in class therapeutic And we have every expectation of pursuing the mantle cell marketplace with that as the objective of making it as such. Thank you, Dave. Alex, BMO, go ahead. Okay. Good morning, folks. Thank you for taking the questions and congratulations on Calcuins and all the progress in oncology. Just following up on the earlier Pacific question, how should we think about uptake in this setting? Are these patients readily diagnosed or is the rate limiting factor going to be the inflow of patients? Just want to get a better sense of how we should think about the trajectory. And also, could you please provide your outlook on diabetes? Obviously, getting more and more competitive and other SGLT2 and GLP-one expected in 20 18. So how should we think about your growth prospects there? Thank you very much. Thank you, Alex. Two great questions. One question, sorry. One Pacific uptake for you, Dave. And then the other one, the diabetes market, Mark Mallon will take this one. So Mark would be happy to talk about diabetes because we still have great expectations for diabetes. Should we start with specific there? Sure. Absolutely. So Alex, I guess maybe to start on this, and it was the second question within yours around is this regularly diagnosed. I think it's worth a reminder that so in Stage 3, the design of the study was such that Imfinzi was added in maintenance following chemo radiotherapy. And so what this means is that actually physicians know very well who their patients are today in Stage 3 on chemoradi chemoradiotherapy will end and begin thinking about adding Imfinzi on to them. Chemotherapy will end and begin thinking about adding Imfinzi on to that. So there really is a group of patients that today are already in Stage 3 that are being treated with CRT. The majority of those patients do achieve disease control and would be therefore eligible for treatment with Imfinzi. Today, the primary therapy or the primary approach that physicians take is watch and wait. And they watch and wait basically for a progression to take place. And with Imfinzi now, they have an opportunity to provide, if approved, active therapy within that setting. So that's how I would think about the uptake within that setting in that regard. Bob? Thanks, Alex, for your question. Thomas, I don't know if this is allowed, but can I give like a bottle of champagne for first person that asks a question about CV metabolic or respiratory? So I'm very happy to answer the question. So the short answer, we continue to be very positive and excited about possibilities and growth in the diabetes area, both for Orsiga and the SGLT2 class and also Bydurean in the GLP-one class. I think the thing to keep in mind with Forxiga is to understand how much more potential there is for the SGLT2 class. This is a class that's now been shown in clinical studies and also with our CVV real to have a very material impact on heart failure, CV mortality, on likely renal disease. And the penetration of the class is still relatively low. So the headroom to grow and make a huge difference for patients is enormous. We are the leader globally, as I mentioned in my remarks. We think Percega has got a great profile. We're excited about the possibilities with the DECLARE study coming next year, which is the only study that's looking at primary prevention, as well as the secondary prevention. So really see lots of possibilities for OCS GLT2 class and very confident in ForeSeeger's position. We're also very excited with the possibilities of launching Bydureon B size. We've got a product, a new device that is very competitive with the weekly devices. And it's a lot of people still need further glucose and weight control. And so we're looking forward to launching that and ready to go. Thanks, Mark. Just one other is that we have a better access profile for next year in the U. S. For Farxiga. So it's a good threshold. So to make sure we cover as many questions as we can because we have a few questions waiting with we will extend the call for 15 minutes to 1:15 U. K. Time. So I will maybe move to one question online and I will read it out. I think it's for you Sean. How should we view the decision to initiate new pivotal trials with the Tremi Jova combo this quarter, for instance, in liver and the HIMALAYA trial, when the benefit from the combo remains unclear. Why not wait until more proof of the benefit from the combo is available, not least to manage your return on investment? Yes. It's a great question. So thank you for the question. There are a couple of things about durbitromycombo that I think are important to capture. The first is that, as you know, with anti CTLA-four even as a single agent, different tumor types have different levels of sensitivity to the mechanism of action. And we believe similarly that different tumor types will likely have different levels of sensitivity to the ImfinziTrimmy combo. And what that means is that a PFS readout from Mystic not only may not read through to an OS readout from Mystic, but lung cancer may not read through to other tumor types. We believe that we have an opportunity for the combination in hepatocellular carcinoma liver cancer, and that's why we initiated the HIMALAYA trial. The HIMALAYA trial has as a comparator the standard of care Sorafenib. It has Imfinzi monotherapy and then it also has the Dervitrami combo. So the reason we don't wait is because we feel like it's an independent opportunity and of course time sensitive. Certainly. And lung would not inform us that much in the end as you said. So Jo Walton from the Credit Suisse. Jo, go ahead. Thank you. Respecting your one question limit, I'd like you to go back and talk a little bit more about costs, if possible. The consensus expectation for marketing costs on your core numbers is for a small decline in 2018. Given that you have so many drugs to launch and you clearly want to maximize their opportunity, do you think that that is still a realistic expectation? And in terms of costs, could you also address what may be happening at the gross margin level and how quickly it will turn back to being above 80%? Thank you, Jo. Marc? I will start with the second question, Jo. First of all, the gross margin. So you have seen that the impact on the Q3, we had the gross margin ratio of 79.6%. We have signaled that this was unusual and therefore, I would not recommend that it would be used as a measure of underlying performance. However, we have also said that earlier in the year that the first half would not reproduce in the second half. So I believe for margin ratio, the if you look at the year to date and the quarter 3 2017, this could provide a good indication for where 2017 is going to finish. And I do not expect enormous variations for 2018. I will provide more detailed guidance next year in February. But as of today, what I can say that there shouldn't be large variation in the gross margin ratio over 20 And then your next question, I can only go back to the earlier explanation, which is you have structural trends, which is our move towards more Specialty and Oncology Care. We continue our cost discipline. We have productivity initiative. But as you point out, there are also quite a few launches to support presently and in the near future. So all of this will be taken into consideration as we finalize our budget for next year. And I would be happy to comment further or we'll take into consideration as we finalize our budget for next year. And I would be happy to comment further detail in February 2018. Thank you, Marc. Marc Persol at Redburn. Marc, go ahead. Yes, thanks very much. I was just going to ask for a little bit more color, if I may, on Lynparza. Recently, some positive data in glioblastoma, they're very exciting in combination with radiotherapy. And obviously, internally, you have some early stage data for Lynparza in combination with Imfinzi. So I know you're not going to say specifically which trials you're starting next year, but can you help us understand sort of how broad this opportunity is in terms of sort of tumor types and lines of therapy based on the data you've seen so far? And if as you're focusing on the Stage 3 unresectable patients, whether there's an opportunity in combination with chemo radiation? And just related to that, in terms of the Merck, dollars 750,000,000 of option payments, given how competitive the IO and PARP inhibitor space is, under what circumstances would the full $750,000,000 not be realized over the next 12 months as these trials I expect are going to start in 2018? In the slides, there's a suggestion that, that €750,000,000 will also shift into 2019 as well. So maybe we should start with the second question, which relates to milestones, some that gives you more time. Yes. These options, the 3 years, it is an option for 3 years, 2017, 2018 2019. So we expect this option to continue over the years. But of course, as they are optioned, they are at the decision of our collaborator. So we expect them to be paid, but obviously we can't be certain. Okay. So the other question related to Linparza shown in combination with PD-one, but also this GBM assume the reference was to this GBM study done in Scotland that was communicated recently. I assume, Marc, that's what you are referring to or where you were No, exactly. There seems to be a very broad potential broad mechanism of action here using Lynparza in combination with other agents. So just some thoughts there based on the data you have in house in that recent study you mentioned, PASCAR. So it's a broad question about combination with Zayo and other agents. Yes. So let me go let me start with the IOPARP combination. Obviously, we're not going to share data that we haven't published, but that we have and we know about it. So, I hate to disappoint, but that's the way that this is going to end up. Obviously, the study we have that's ongoing is MEDIOLA. MEDIOLA has really demonstrated the tolerability of the combination, which is our first step in development and that then gives us the opportunity to opportunistically expand into a variety of other indications and we've shared some of those, the Lynparza indication, BRCA mutated ovarian cancer, platinum sensitive, HER2 negative breast cancer, small cell lung cancer, a place that we've looked at IO, gastric cancer. So those are things we've shared with everyone. We then will also look opportunistically at what we would like to initiate as Phase III programs, and we'll announce them in due course once we've started them. And we'll look at outside data as well and decide what opportunities we want to initiate and complete. With regard to combinations more broadly, I think again, there are a lot that we can explore and some of it we'll be using preclinical data to prioritize, some of it will really be empirical as we generate safety data on the combinations and then again use the trials to expand if they're tolerable, opportunistically. And I think there was a question also about, PACIFIC, the idea of using a Lynparza IO combination. Chemo radiation, yes. Yes. Okay. So, good. Again, as I mentioned there, I think 2 things going on. 1 is we want some evidence that the combination is has showed some level of activity before proceeding. And then the other thing I mentioned in that maintenance setting that is important is tolerability. So expanding the Lynparza, Imfinzi and Imfinzi Trimii combination gives us the opportunity to assess that tolerability and generate data to decide which regimen or both seem appropriate for going into an Imfinzi maintenance setting a bit like Pacific. Thanks, Sean. Mark, as it relates to your specific GBM question, it's a small Phase 1 study. Got to remember, Lynparza doesn't cross the blood brain barrier, but in circumstances like with GBM when the barrier is disrupted, the study showed that it penetrates it. So we'll have to see what we do with this study. But we also have other DDR regions that do potentially penetrate the blood brain barrier and maybe better option than Lynparza. But certainly a very interesting thing to look at. James Gordon at JPMorgan. James, do you want to go ahead? Sure. Thanks for taking the question. A question on HIMALAYA, which was how does the HIMALAYA CTLA-four dosing differ to Mystic? Is it higher and is it an ongoing CTLA-four dose? And if so, if there are differences in the dosing, what made you choose this different dosing approach? And similarly, I could see a reference to the STRONG trial. Is that a different approach in how CTLA-four is administered? Also just one clarification, I think there was a comment about final OS in H1-eighteen implying that if there were interim OS analyses, they've already taken place. They would presumably have informed any newer approaches you're using in terms of how you're going to dose CTLA-four? So I'll take the 2 separately. The first, Himalaya. So we have what we've disclosed about HIMALAYA. So HIMALAYA again is the unresectable hepatocellular carcinoma study, has 4 arms. One is a standard of care Sorafenib, but then we also have single agent Imfinzi. And then we have and that Imfinzi is given monthly at a flat dose of 1500 milligrams. I think what we have disclosed is that we have 2 different doses and regimens of tremolimumab in the combination arms, but we haven't disclosed what those are exactly. And so we're not going to do that now. We'll do that in due course. The other question was, 1, was that informed by Mystic? The answer is no, it wasn't informed by Mystic. It was informed by other data we have. And then the other question was commenting on an interim. I'll do a couple of things with the interim question, overall survival interim question. We don't comment on if or when they will occur. I will tell you that if the IDMC doesn't tell us that there's something to look at, we don't even see the data. So that it wouldn't inform anything because it wouldn't get to the company. We do that in order to preserve the integrity of the endpoint for the final analysis, which is in the first half, as we've mentioned many times, of 2018. So it really isn't Mystic that's informing this, it's other information that we have. Thank you, Sean. Keyur, Goldman Sachs. Keyur, go ahead. Good afternoon and thank you for taking my questions, please. Just on 2018, consensus has moved significantly over the last 3 months and is now forecasting 2017. Do you think that is directionally the right place for consensus to be at? And then within that, Mark, you already confirmed that externalization in 2018 would be lower than that in 2017. Would that also be true for the cumulative of externalization plus other operating income? Thank you. Yes. So let me comment first on your second question. So what I said just a few minutes ago, I said that the total of external revenues and other income in 2017 would be sort of peaking. And therefore, one can conclude from there that the level of externalization and other income in 2018 will be at the lower level than 2017. However, I said that this is still part of our strategy and therefore this is part of our business model and will continue. So you can expect a reasonable amount of externalization revenues and other income also in 2018. Thank you, Marc. So we'll take 2 last questions, one online, which is a quick one and then one from Simon at Exane. So the online question is why is there a regulatory timing change for Arctic from second half of twenty seventeen, first half of twenty eighteen? Sean, do you want to cover that? Yes, sure. That is accurate observation. We've updated the timing to delay it from the end of 2017 to the first half of twenty eighteen. The regulatory timing change is a knock on effect from the data availability timing change being pushed out. The way that Arctic is designed, its 3rd line or later non small cell lung cancer, and it has both PFS and OS as primary endpoints. The thing is that in third line non small cell lung cancer, because the patients really don't have good therapeutic alternatives, progression and death occur fairly close to each other. So that the overall survival there's only one analysis that's triggered and it's triggered by the maturation of overall survival. And it's just an event rate accumulation that it hasn't accumulated the overall survival events to initiate the database lock and analysis. Thanks, Sean. Very clear. Simon, Exane. Simon, go ahead. Thanks so much for taking my question. Let me return to the outlook. I know you're not going to give any guidance on 2018, so let me try my luck on 2019, 2020 and beyond. In terms of the how we should think about the margin evolution. At the moment, you have R and D in the high 20s as a percentage of sales, which is one of the highest in the industry as you're developing the pipeline. It's reasonable to assume at some point in the future that, that will decline to a more normalized level. So I was wondering if you could give some thoughts on how we should think about how that evolves in the qualitative terms over the coming years? And similarly with SG and A, as you achieve this move from Primary to Specialty Care, high 30s SG and A as a percentage of sales would be somewhat unusual for a specialty focused company. 1 would expect it to come down. And again, how should we think about longer term trajectory of that spend? Thanks so much. So let me just make a general comment and then Marc you can also add. I mean 2020, if you kind of project yourself to that year, it's an important year for us. And it's I can tell you it's very firmly on our radar screen because we are entering this very critical period of execution where we have to turn the pipeline into a reality for patients, of course, but also a commercial reality. It has to turn into top line and earnings growth. So you have to think of, as I said earlier, you have to think of our company as we leave the last panel expiry Crestor Europe behind us next year. And we have to see us as a fast growing company. So by 2020, we certainly would expect those ratios to drop as the top line grows rapidly. We have the critical mass and the ratios would drop. So we can't give specific numbers, but it is clear that the goal will be to improve operating margin and the horizon is not that far, it's 2020. And it's really going to be driven by, of course, cost management as always, but very much a very, very good top line growth. Marc, any additional question? I can only go over the various factors. As I said earlier on, I think our discipline to contain cost will continue. We have a greater productivity because we have several initiatives across the company. We are moving definitely with the greater place that the oncology products are taking. We are moving towards a more specialty care company. So therefore, I think the phenomenon of normalization of the R and D as well as SG and A is going to continue. And you are on the right track, but also signaled earlier on that we also need to take care in the short term of the launch of several new products. So all this has to be sort of aggregated for you to derive projections on 2018, 2019 or 2020. Thanks so much. Thank you, Marc. We got a couple of people still on the line for Q and A. If you send the questions to the IR team, we'll make sure you get answers back as soon as possible. So let me now close and summarize again to say that our performance is very much in line with expectations. We can see the new AZ emerge and we have underlying product sales growing by 5% for this new AstraZeneca. Our financials are on track, in fact doing quite well to the extent that we were able to upgrade our guidance a little bit for the year and we certainly continue working hard to do even better if we can, but we are on the right track. We are as I said, we are very much moving into an execution mode. We're launching Tagrisso. They've talked about a $1,000,000,000 running rate already and we are going to get first line indication hopefully very soon. Lynparza is back to growth. The last few weeks have been really, really pleasing for Lynparza in the U. S. We are gearing up for the launch of Stage 3 Imfinzi. They've said, bladder was really a nice way to get ourselves prepared. We've done quite well actually in a very tough market in the bladder segment, but really essentially was about getting electronic processing of claims in the systems to get formulary listing and we're getting ready for Pacific. Calquence is our new launch. So we're really proud as a company to make a difference to cancer. And beyond cancer, we're also making good progress. Brilinta is now a $1,000,000,000 drug and growing very, very fast. Farxiga is doing also well. The emerging markets in particular China are doing well. So all of this, as I said earlier, will see us emerge as a fast growing company in the not so distant future. So thank you so much for your attention. And I also want to take this opportunity to thank very much our colleagues from around the world for delivering such an outstanding results from a pipeline viewpoint, but also now from a commercial viewpoint. Thank you so much, everybody.