Earnings Call: Q4 2014

Feb 5, 2015

All right. Good afternoon, everybody. Welcome to this Annual Results Conference. Really a pleasure to be with you today and really a pleasure to report on, quite frankly, what has been a, in many ways, a very busy year for us, a very unusual year, but also a very remarkable year. And we feel we've made a fair amount of progress in the last 12 months. So I'll give you a quick overview of our results. Luc, who is our Head of Product Strategy EVP Head of Product Strategy, will cover the growth platforms in more details. Marc will take you through our financials. And finally, Briggs will cover the pipeline progression. And then, of course, we'll go to the Q and A. So 2014 was really a year where when we focused on implementing our strategy. And we believe we did make quite some progress in returning to growth. In particular, our growth platforms delivered collectively a 15% growth rate. And they now represent about 53% of our total sales. So quite remarkable. And as you can see here, they all grew except Japan, and we'll cover Japan a little bit later. But as you probably know, we were faced with price reductions, but also the impact of generics in the oncology market was much more important than expected because the dynamics in the generic market have changed in Japan. And finally, we had a recall in the last quarter for Nexium. Almost the most exciting part is the enormous progress we made rebuilding our pipeline and now turning this into a reality. A year ago, we told you here is what we're doing with our pipeline, but really, we didn't have much reality to this pipeline yet. Now we are turning this into approvals. We got approval for DuraClear, which we acquired recently. We filed Lisinohad. We got good data for brodalumab. We filed Saxadapa, an important combination for diabetes franchise. Really important results with Pegasus and Brilinta. We got approval for Lynparza in the U. S. And Europe, and we are now in the process of launching this product. Very good success in the U. S. So far, very early days. So we cannot conclude and should not conclude too quickly, but really very, very good response so far. We filed IRESR and also we got a pool for Moventik. And finally, what is not listed here is we also got the scheduling information that we got the scheduling from Movantik in the U. S. So we are ready to launch very soon. I think the key message that I want to leave you with here is that we actually delivered our guidance for the year. And I think it's really something that I would like to maybe ask you to remember is that we try to deliver what we said we were going to do. And essentially, we guided up at the end of Q3 for the full year, and we delivered exactly what we said we were going to deliver. In fact, on the core EPS front, a little bit better, but broadly speaking, you could say, very much on track. And when we guided on 2014, of course, we knew the Q3 year to date pictures. And by definition, people could have expected what Q4 was going to look like. And but the important point is we got exactly where we said we would get. Another message on this slide is the growth rate in China. It hasn't stopped. We have consistent quarter after quarter growth rate north of 20%. The market is slowing down a little bit in China, the market growth rate, but still we experienced very strong growth throughout the whole year. We are the number 2 in China, as you know. We have the fastest or one of the fastest growth right there. And China is now 2nd largest national market on a global basis. So very exciting development there, but also very good results in other markets in the emerging market region. So let me start with the approvals. We got 6 we got approved for 6 new sorry, we got 6 NDAs or BLA approvals in 2014. So it's a record for us as a company historically, but it's also a pretty strong performance from an industry viewpoint. And some of them products of valuable importance to our business long term, but many of them are really quite critical to our core franchises. We also got additional approvals with DuraClear and the Badurian pen. Luc will tell you more about the Badurian DCP in a minute, but I can say that so far, we're doing quite well with it in the United States. And importantly, over the next couple of years, and Briggs will come back to this, we are on track to deliver 7 to 8 potential enemy submissions, quite a number of them in 2015, but another number in 2016, and about half of those are in oncology. So very exciting news flow from a pipeline viewpoint over the next couple of years. Now let me stop a minute on this slide and attract your attention to it. When we actually set up the organization 2 years ago, we actually tried to come up with a model that would increase accountability, would increase empowerment and autonomy and would enable people to be more entrepreneurial and move faster. And as a result, we came up with a model that has 2 biotech companies. 1 is called MedImmune, which is really focusing on biologics and immunotherapy. And the other one is called AstraZeneca IMED, which is really focusing on small molecules. And those 2 biotechs have a clear role, which is to discover and early develop products and bring them to a point in time when we can transition them to the late stage organization. Sometimes Phase 1, typically it's at the end of Phase 2. And of course, we have some flexibility there, especially in oncology, to move into late stage development earlier. But fundamentally, we have 2 biotechs and the transition products to our late stage organization called AstraZeneca. But we also retained the we always had in mind that we may actually decide to create value in a different manner, to create value with partners, not necessarily by ourselves. And what has happened is we believe our productivity in R and D and research and early development has really improved so rapidly that we get to a point today where we can't do everything ourselves. So what we've decided to do is to typically develop and commercialize ourselves the products that belong to our core therapy areas and then partner and create values for partnerships for other products that we will not develop ourselves. And it's an important aspect to consider because one option for us, of course, was to completely cut out research in areas that we believe are not necessarily our core franchises. But we thought we have very strong science, and we need to find bring this science to patients and create value for the company out of it. The base inhibitor that we partnered with Lilly last year is a very good example of this. This is a great product. Whether it works or not, we still don't know, of course. But potentially, it could really make a difference to the treatment of Alzheimer. We found a great partner who understands Alzheimer disease far better than we would. They are taking the lead developing it. We are we've got a great relationship and create long term value and short infections, infections, adjunctive treatment or prophylaxis. Those are agents who have received which have received breakthrough designations by the FDA, very great products, great science. This is really not an area where we have strengths and we don't have capabilities. And again, we don't have resources to do everything. So another example where we could potentially out license or find partners to develop. An important dimension because essentially, you got to keep in mind that we if we were about a company, that's exactly what we would be doing. We would be looking for partners to develop some of our products. So it's not because we are a large pharma that we can't operate as a small biotech. So some of the work we're going to do is going to be similar to what a biotech company would do. Now if I move to the return to growth agenda, I told you our growth platforms, they represent 53% of our sales. They grew 15% collectively in 2014. And you can see here, we've moved from 41% to 53 percent in 2014. Now the challenge for us, of course, is that the non growth platforms, So clearly, we have moved very nicely over the last couple of years, So clearly, we have moved very nicely over the last 2 years in the first phase, rebuilding our pipeline. Now we are getting into the next phase of our transformation, which is 2015, 2016, where our underlying business is growing fast, but of course, we have to deal with the patent expiries that create headwinds. You can see here that we've had several consecutive quarters of growth. Q4 actually grew 3%. The 2% reported is after reclassification of the excise fee, which Marc will talk briefly about a bit earlier. I think importantly, I just wanted to attract your attention to one point is that the consensus didn't consider the excise fee in its totality by product. And you have to keep in mind we accounted for we paid actually because the government, as you know, changed the methodology, and we ended up paying 2 quarters of excess fees in the last quarter. So we accounted for 2 quarters of excess fees in Q4. The impact by product is roughly 4%. So when you look at product by product and you compare sales to consensus, you got to remember consensus is not adjusted for those 4%. So I'll stop here and hand over to Luc. Thank you, Pascal. And this transition represents an important point for the company. You can see here in this slide here the performance of the growth drivers, the growth platforms in 2014 was very consistent and demonstrated that we could compete and perform well in our chosen segments. In addition, with the progress of the pipeline in oncology and the launch of Lynparza, we're signaling here that oncology is the emerging 6th growth platform. In terms of Brilinta, I think it's fair to say it was a very good year for Brilinta. There are a number of events both commercially, but also in terms of the evidence base and the regulatory environment, which had the effect of increasing confidence around this product and how it could help patients. And this translated into share gains. You can see here on the left hand side the leading indicator for the hospital market in terms of units purchased. You can see here we've moved ahead of our competitor and that continues the trend into 2015. On the right hand side a lagging indicator you can see here the NBRx trends again is in favor of this product. We look at discharge share in the U. S. And again this is part of this halo effect in confidence around this product. We saw discharge share move up across all markets with the exception of Germany. One thing I'd like to point out is that the discharge right hand side, you can see a number of market shares. On the right hand side, you can see a number of market shares and uptake graphs here. And again, we have a good trajectory there across the business with this product. Also interestingly right now in the U. S. Around 20% of patients make it to 12 months. In Europe that figure is higher. It's around 50%. So our view is that this flow of evidence should further encourage the usage of this product for longer terms. In terms of diabetes, broad performance here. Firstly, just starting at the bottom Onglyza, we had historically directed resources away from Onglyza to focus on Farxiga and the dual chamber pen. I think to date that has proven to be an effective decision. We've been able to essentially hold the business there. There was some decline in share over the year, but NBRx towards the end of the year were actually stable. For Biater, again, a good performance considering the level of focus. Bydureon, we launched the dual chamber pen and Farxiga, I'll come back to Bydureon in the next slide. For Farxiga, again, strong growth. This class is extremely attractive. It has a number of attributes. If we looked at switches, people are coming off insulin as well as moving up from metformin. So a very diverse group of patients there. Despite what is a very competitive environment, we've been able to hold our share and again we continue to do well with Farxiga. The other dimension here which is not necessarily visible to people is outside of the U. S. We have a very dominant position here with Farxiga and you can see across markets which launched before the U. S. Continue to uptake there. So again, it's an encouraging trend. For Bydureon, we launched the dual chamber pen. We've covered this in Q3, but you did see a very strong uptake and reception to this device. It's a device which is popular with patients and you can see that we're able to grow our share in a market itself which I think probably surprised some people in terms of how much it grew. On the right hand side, you can see new prescriptions for the tray, which is the legacy configuration and the new dual chamber pen. What's interesting about this chart, you can see there's around a 40% split. If you break that down, 70% of the patients who are NBRx for the Bydurean pen are actually new to the product. So it's not purely just a switching out of patients who are on the old configuration to the new Julichime pen, which again is encouraging. In terms of Symbicort, we spent some time of this at Q3. We signaled to you that we would expect pressure in Q4 and early this year, particularly in the U. S. Around pricing. I think that has come to pass. Again, we view this as a step change. We were aware this was coming. We have prepared for it. And we're now in that process of moving forwards. For Europe, there are a number of analogs or mandatory price cuts. Part of our argument here and interest in this portfolio and this product in particular of course is the defensive And for emerging markets, again, this is a very attractive product and has a relatively low profile in terms of sales right now in emerging markets relative to Pulmicort. For emerging markets overall, firstly with China, you can see here strong growth has continued. If we look at the MIT IMS share in China, essentially we would double the market growth rate. So again, we feel very confident about our business in China. We often get asked, are you too reliant on China? You can see here, this is the growth rate of emerging markets outside of China, ex factory and there's a nice trend there as we start to see the growth platforms have an increasing share of the business in emerging markets. In terms of Japan ex factory, there was a negative number. If we look in market, we grew well ahead of the market. The market overall itself did contract, but we grew ahead of the market both in the full year and also in the quarter. You can see their strong performance particularly from Nxiom where we've taken share. We've been able to hold our place with Crestor despite the presence of some competitive dynamics there and Symbicort again we are able to hold our share quite comfortably. In terms of quarter 1, that's the last quarter that we'll see the effect of the price drops earlier in this year and we believe we're well positioned for growth in Japan in 2015. And in conclusion, we've also got some exciting news coming. We'll update you more fully on this in quarter 1. Firstly, with Lomantic, we're preparing to launch in the U. S. There's the news today, of course, with Julicleer. And in Europe, we're now at advanced stages of launching this product and we have a very exciting uptake so far in Europe with Lynparza where we're already seeing this impact on patients. There was a large group of patients who were aware of their BRCA status and advanced disease who are waiting for this product. We've seen a very rapid uptake as the slide indicates here so far and we'll give you some more color around this good news in quarter 1. With that, I'll hand over to Mark. Thank you, Luc, and good afternoon, everyone. So I'm going to walk you through the financial performance and the financial priorities for 2014, a review of those and then give some views about 2015. So first of all, on 2014, as Pascal has mentioned, we have met our guidance for the year, our upgraded guidance for the year. We have continued to invest behind our accelerating pipeline, and we have also invested behind our growth platforms, and especially in the last quarter of the year. And I want to signal here that the investment behind those growth platforms in the Q4 of the year has peaked. We continue to redeploy across our profit and loss statement. We try to keep the largest possible flexibility on the balance sheet. We are trying to generate cash rapidly, and you will see some measure of this. And we also have taken a loan at the end of a bond at the end of the year, which was also very oversubscribed. So let me turn to the explanation about the type of redeployment we do. If you look at base year of 2012, we were spending about onethree of our expenses on G and A, and you see now this ratio has reduced to a quarter to 24%. Most of the money is allocated to the sales, marketing and medical expenses. And I'll provide 2 examples of this of item which have been reduced. Predominantly, it's IT cost and also the facilities cost. If you look at the facilities cost, it's interesting to know that the R and D facilities cost have reduced in these 2 years by 30%. So we try to reduce the cost of our footprint to be able to devote more money to the projects. I was talking about the cash generation. This provides a view of our cash conversion cycle. We were at 69 days of sales in 2012. We will finish the year 2014 at 45, which I think is a very good performance. We have provided some comparison to the industry. Obviously, we do not have the comparator for 2014, but you can see the progression at least for AstraZeneca's metrics from 69 days to 45 over the last 2 years. We are going to continue those efforts in cash generation. This is important for us to be able to fund our development. On the debt and cash on the debt side, we have this credit rating with Moody A2, AA- with Standard and Poor's. As I was mentioning earlier, we had bond in November we took a bond in November at a rate of 0.875%. This bond was 4x oversubscribed. And we finished the year with a net debt of €3,200,000,000 So it gives us a lot of financial flexibility. Comparison for the quarter 4 2014 to the Q4 of 2013. As you can see, the rate of increase on core R and D as well as core SG and A is are important. On R and D, it was the supporting the pipeline, the growing pipeline, predominantly immuno oncology, but also respiratory and the biologics as well as our large program, Parthenon, behind Brilinta. For the SG and A, this was predominantly the integration of BMS, the sort of mechanical impact of it, but also the launches of Forxiga, Biodorion Pain as well as later in the year, Lynparza and the preparation of Movantik. We also had in the later part of the year the integration of Almirall. So all this points to a very opportunistic investment in quarter 4 2014. And as I said earlier on, we estimate that this investment has now peaked. Again, we have fully met our 2014 upgraded guidance. You can see on the right side of this slide the ratios. Our gross profit was at 81%, core R and D at 19%, core SG and A at 39%, and we have also provided an indication about the core tax rate for both 20142013. So you have an improvement of the core tax rate of about 4%. We made the guidance a little bit better at 4.28%. And you have the decline of 8%. We had announced we had guided for a 10% decline in EPS. So now just Pascal mentioned it earlier on, we have made a reclassification of the U. S. Branded Transco fee in 2014. We did this over the Q4 of the year. And you have a $113,000,000 This is for the second half the impact of the second half of 2014. In terms of annualized impact, this represents about 2% on our U. S. Brands. Obviously, it varies brand to brand, but it's about 2%. Pascal mentioned the 4%. If you look at the quarter impact, this is 4%, 2% on half year. So this is the reclassification of the excise fee that the U. S. Government is levying. And we used to treat it as an SG and A like the rest of the industry. We are now taking it as a sales deduction from the second half of twenty thirteen. A word about the guidance. It's probably hard to read. The little note at the bottom says we are assuming that the launch of Nexium generic is imminent, but it's a very important assumption in defining our guidance for the year 2015. As far as sales revenue, so we plan the sales to decline by mid single digit percentage. The core EPS will increase by low single digit percent. And then we're also providing some sensitivity for the currency. They have obviously impacted many companies, including AstraZeneca. On the left, you have the average rate for 2014 as well as where they are on average for the month of January. And then on the right of this slide, we have provided a sensitivity analysis on both the sales and the core operating profit for the major currencies. You will note that some of these impacts are negative and some of them are positive. Obviously, we have countries where we have more cost and revenues, and the opposite is also true. We had a very we continue to have a very busy year in business development. On the respiratory front, we integrated first Almirall and did a deal with Cernod Cylogen. We had the cardiovascular also disposal of Metralepine. And oncology, you see there a variety of different transactions. So we continue to focus our business development on the 3 core areas. This is the only areas where we are investing for business development. And the deal that we announced this morning, we have we had acquired first the deal with Almirall, and this is in a way complementary to this Almirall transaction. We now obtained from Aktavis the U. S. Sorry, U. S. And Canada rights for the Almirall part of the portfolio and also another product in the respiratory area called Dali Respe, which is an oral PD for used in COPD as an add on, in particular for patients who are refractory to ICSLABA. So this complements the acquisition we did with Almirall. It makes us in possession of a global portfolio and also a very good DPI on the U. S. Market. The consideration is €600,000,000 and there's also an additional €100,000,000 payment, which contains quite a lot of different contractual obligations, which are to be resolved, waivers and noncompete clause and all sort of agreements between Admiral, Aktaviz and AstraZeneca. This has been resolved, and we were very happy to announce it this morning. So overall, it gives another focus for us on the respiratory area after a very good year on the respiratory platform with our products. With this, I'm going to pass the ball to Briggs. Thanks very much, Mark. So good to see you all. Since we just met with you in November, I'll try not to repeat too much of what we talked about at the Investors Day and I'll give you a top line summary of 2014 and then highlight some of the things that you should look for as we go into 2015. So again, I think it was a very good year from an R and D point of view. I think I mentioned at the Investors Day that we have set for ourselves this aspiration of improving the lives of 200,000,000 patients. And we understand that that requires individual health care professionals to sit down with patients, talk to them about their disease and talk to them about treatment options and eventually recommend to them an AstraZeneca product. And so we understand that our obligation to generate evidence, strong evidence of the kind of evidence that health care professionals are going to need to have that conversation. And we think 2014 has been a good year for us in terms of generating that kind of evidence. Outstanding performance Pascal referred to in terms of NDA approvals for new molecular entities, which we think is at the top of the charts for our industry. We've talked a lot about rebuilding the Phase III pipeline. I think we've made good progress there and focusing our R and D spend on our core therapeutic areas. As I mentioned previously, about 90% of our spend now in 2015 will go into our This slide I showed you at Investor's Day, there's This slide I showed you at Investors Day, there's a couple of updates since we met with you in November from a pipeline point of view. The submissions both in the U. S. And EU for lisinurad, the submission in the U. S. For Saxdapa fixed dose combination, the approval in both the U. S. And Europe for Lynparza and the approval for Movantik in Europe and the descheduling of Movantik in the U. S. So again, we think some highlights of things that have happened since we saw you in November. I have a couple of slides to go through each of our core therapeutic areas with a couple of other advances that have happened since November. So first, let's start with Rhea. I think many of you probably saw the data we presented at AACR, 3 key molecules, cifolumab, which is an antibody against interferon, the data Phase 2 data in lupus, which we had a positive trial, looked like a good molecule. Mabrilimimab, the Phase II data, Phase IIb data in rheumatoid arthritis, the MRD IR population again hit the key endpoints and had a favorable safety profile we think. And of course the lisinurad data, the Phase 3 gout data, which is the foundation of our submission to regulators around the world. The other program that has started since we met with you in November is a program that I don't think we've talked much about in an earlier stage of asthma. These are in GINA Step 2 patients. So in GINA Step 2 patients the standard of care is an ICS plus a reliever essentially what patients get. Fair amount of data suggests that patients are not particularly compliant with their ICS. And so as their asthma starts to worsen, they just use their short acting beta agonist and they never really get the anti inflammatory effect that they need. So this program underlying it is a hypothesis that in fact if you gave them Symbicort as their reliever, they would actually get both the fast acting beta agonist and the anti inflammatory. It builds on the smart concept that we have in many countries around the world, the maintenance and reliever therapy that we have with Symbicort, which is enabled by the fact that Flomotoro is such a fast acting beta agonist. So this program has just got underway since we met with you. Cardiovascular metabolic, regulatory submissions for Saxodapa, we started now a program with Forxiga in Type 1 diabetes with the hypothesis that you would potentially be able to decrease insulin dosages, maybe minimize hypoglycemia, get some of the weight loss and antihypertensive effects that you get with Farxiga. So that program is now underway and we started the CV outcomes trial for EPANOVA in a targeted population of patients who have high triglycerides and low HDL. The PEGASUS trial, I'm sure many people in the room would like me to talk more about the data from the PEGASUS trial. You know I can't do that, But I do invite you to come to San Diego in March where it will be presented at ACC and you can then see the full data package of the PEGASIS trial. And again, we do have many ongoing outcomes trials. This concept of continuing to generate new evidence on Brilinta. We'll probably have a CV outcomes trial reading out every year over the next couple of years. Some recent highlights of what's happened in oncology. We've talked about the Lynparza approval. The label is slightly different in Europe than the U. S. Europe is the maintenance indication. In the U. S, it's the people have failed 3 prior therapies, but all for patients who have BRCA1 mutant ovarian cancer. We filed ERISA in the U. S. And have a PDUFA date in the Q3. Some other sort of key milestones of things that have read that have completed as we've gone through the remainder of 2014. We've completed the enrollment in the trial that will support the 9,291 approval, the 9,291 filing, hopefully an approval in the Q2 of this year. We also completed the enrollment of the mesothelioma study with tremolimimab. This is a placebo controlled trial. That trial is now fully enrolled. We've completed the enrollment in the triplet studying in melanoma, a BRAF inhibitor plus MEK inhibitor plus PD L1. The concept they're trying to ask whether we can combine immunotherapy with these small molecules. That program we've completed enrollment. Then just say a couple of things about ARCTIC and the adjuvant trial. So the ARCTIC Phase III trial, I want to be very clear. There are 2 arms to the trial. One arm of the trial is in patients who are PD L1 positive. We essentially we're trying to confirm what we think will happen at Lantix. So patients get randomized standard of care or monotherapy PD L1. That part of the trial is open and recruiting. The second arm, arm B of that trial is in patients who are PD L1 negative and that is a 4 arm trial of Tremi alone, 4,736 alone, the combination or standard of care. That arm has not started to enroll yet. We now have a clear view of our dosing strategy and that arm should open up very soon. I'm not going to say much more about that dosing strategy. We'll talk about that at ASCO and I'll talk about that in just a minute. So the ARCTIC monotherapy arm is open. The combination therapy arm should open shortly. And then the first patient has been enrolled in the adjuvant trial. To our knowledge, this is the first adjuvant trial with a PD-onePD L1 inhibitor being run with NCI Canada. So we're very excited to get that underway. And then finally, for the murine OX40, we have a Phase 1 program where we have monotherapy combination with PD L1, which is already enrolling. We've now opened up the combination with Tremi arm. There's a 4th arm, which is a combination with rituximab, which is open, but we haven't dosed yet. And I think it's important to highlight that now that we have a clear view of our dosing strategy for the combination of 4,736 with Tremi, We anticipate that over the course of this year, we could open between somewhere around 13, what I call registration trials. They could be Phase 2 or Phase 3 registration trials. So they're either ongoing or will open this year. In that constellation, we think probably about half of those will be combination using the 4,736 Tremi combination. This is the exact same slide I showed you at Investors Day of news flow that you should anticipate as we go through the year. When I put the slide together, I didn't anticipate that every single row would get a green check. Somewhere along the way, we might get a red X. But at least so far, the ones we told you in November would read out over the 2015 news flow cycle, the things there is green checks. So I think I've gone through most of these in terms of things we've accomplished. The one new one that I'll just highlight here is the was not on the chart when showed it to you in November is the uveal melanoma study with selumetinib. This is a trial of, tikarbasine versus tikarbasine plus selumetinib. As the events have accrued in that trial, it's now looking like that trial could read out this year. And depending on when that reads out, it could potentially even be filed this year. So I just wanted to add that as a new line on our potential news flow. And then just to drill a little bit more into news flow in oncology through 2015, we have a number of abstracts at AACR. I've just highlighted a couple of them here. The Phase 1 data for our c MET inhibitor and our PI3 kinase beta delta inhibitor. At ASCO, there'll be for PD L1 monotherapy. We'll have an update on the non small cell lung cancer population as well as the head and neck population. And as I referenced earlier, the triplet combination of BRAF MEK 4,736. We'll also have an update on the combination study in non small cell lung cancer. This is the Phase 1b dose escalation study combining 4,736 with Tremi to try to set some expectations. At this point, we've dosed about 70 patients in various cohorts as we've done the dose escalations. Some started at lower doses, the more recent patients being enrolled at the in the dose range where we think we'll take into Phase III. And some of them will have relatively short follow-up because they've been dosed more recently, but it gives you a feel for rough numbers of patients that we'll be presenting. And I think that will help inform you of what our dosing strategy is. The items on the right hand panel are things that we also think we're not entirely sure when these will the data will come out. So I'll just sort of take through them. As I said, the Phase 2 data for 9,291. I talked already about the uveal melanoma trial for selumetinib. There's also some data that will come out sometime this year in pediatric neurofibromatosis. Some scientists at the NIH have been studying selumetinib in that disease and have some interesting data, which they'll be sharing with the scientific community sometime this year. The ATLANTIC trial, which is our 3rd line potentially fast registration trial, that data should mature as the year progresses and there could be an avenue for us to present some of that. The TRME MEASO trial, as I said, it's fully enrolled and we have a series of interim analyses to look at the data as we as the events accrue. I think the latest that we would have all the events accrued and be able to report out on that would be the end of the year. But there's a possibility depending on how the data comes out, it could come out earlier. For the 2014, which is our dual mTOR inhibitor, there's data both in combination with flvestrantpasodex and a trial in combination with paclitaxel where there's some interesting data in squamous cell lung cancer. The V1 inhibitor, there's a trial comparing standard chemotherapy plus or minus the V1 inhibitor, which also may read out this year and some Phase II data for our c Met inhibitor in papillary renal cell carcinoma. So there are some other things that could hit your radar as the year progresses. So I think with that, I'll stop and open it up to Pascal to take questions. Thanks, Brie. So I'll very quickly conclude and move to the Q and A session. Just in summary, we are very much on track. I think this is really the message to you. We delivered our upgraded guidance exactly what we said we would do. Our growth platforms are very much on track, growing 15% this year altogether. We invested quite a lot in 2014, in particular in the last quarter of the year. That's very clear. But as Mark said, the our investment has peaked. We felt 2014 was clearly a special year because if you think about it, we had many launches. It's really rare that one single company has to deal with so many launches. We had several launches or relaunches in diabetes. We still have Brilinta in launch mode. We continued relaunching our respiratory franchise, as you know, that for a period of time in the past had probably been neglected a little bit. And then we had to start preparing for Nipasa, start preparing for Moventik. So quite a substantial investment. Moving into 2015, I think we are in a different phase where, of course, we're going to have to work on our productivity and then manage our expenses. We believe we have a plan. We believe we can do it. The pipeline is very much on track. If anything, anything, in many areas, we're ahead of what we expected, but very much on track to deliver. And just to remind you, our core EPS in 2015 should grow by at CER by low single digit percent. So essentially, our expenses, our investment has peaked in 2014, and EPS in 2014 bottomed out, and we hope to grow by low single digit rate in 2015. So I'll stop here and open the session for Q and A. Maybe Alexandra and Sachin and Jeff. Thank you. This is Alexandra Halber from UBS. Bruce, I just want to clarify that I understand something correctly, which was you said you got a start 13 registrational trial for the PD L1 overall, of which half of it in the combination. Is that correctly what you said? Okay. Okay. And then I know you're not going to say much more on the dosing of Arctic, but maybe you would say tell us a little bit more how many patients you have now seen in the Phase Ib study. You said about 40 months ago. Where is that number now? And on the basis of how many patients will they be able to feel confident to determine the you seem to already have determined it, but how many patients did you actually then do that, those finding decision? Secondly, question on this huge spike we've seen on SG and A, almost $500,000,000 year on year increase or quarter on quarter increase, and I know some of that was the fee. I get conceptually what you're doing, but could you please give us some color on exactly what those incremental EUR 300,000,000 or EUR 400,000,000 were spent? Then lastly, on Symbicort. We've already seen an impact in the Q4. And in the press release, you've been referring to increased co pay assistance in anticipation of the formulary changes. Can you just give us roughly some color what exactly is that you're doing so that we already have in terms of the increased co pay? Is that similar to the card you have for Faxija and Sigduo? So we start with Brink and Mark for the expenses and look for SYMDEKO? Yes. So the Phase 1b study in non small cell lung cancer where we're doing the dose escalation, as I said, we'll have somewhere in the order of 70 patients when we present at ASCO. And that's the data set that we're using to make the decision. Regarding the what you refer to as a spike of SG and A, so I think I can tell you that the totality of the increase has been spent behind the growth brands. So in other words, no increase has gone toward the established brands. The biggest part of the increase has gone to diabetes. And in diabetes, you have 2 factors: the mechanical sort of integration of the BMS part, and there is also an organic growth in launching and promoting for CIGA and launching the dual chamber for Bridurium. So that's this is the largest part of it. And just to add, Marc, think about 2 launches in diabetes, Badyrov and dual channel pen and then Zig Duo in the United States. On top of it, we got to 12 months post launch of Farxiga, so we were able to start DTC. So there's an element of DTC that didn't exist before also in the United States. So and there are many other things, as Mark said, but those are certainly important points. Luc, do you want to call back on the call? So I think to take it a little bit further back, we'd anticipated that something like this might have happened. So I guess the advantage of anticipation is that we'd had quite a time to prepare. What we're trying to do is to remove the impact of the patient at the point of conversion. I don't want to give too much color on it because we had this time to prepare, we've able to be able to combine a number of programs together, which we're confident will enable us to compete. So I think we can give a little bit more color around whether that's worked in Q1. The idea is really to make sure that those patients who lose cover and access are not disadvantaged and can stay on the product. And in fact, the early indication we have is quite encouraging, but it's very early days. So Sachin? Sachin Jain, Bank of America. Questions on similar topics. So firstly, on the CTLA-four PD L1 combo, just you said you sorted dosing. Is there anything else material pending for that study start? Or is it just administrative here? Secondly, on the 6 to 7 combo starts, how many different tumors is that across? And then related in the different tumors, are you using the same dose across the different tumors? And if you're not, if you could contrast that versus Bristol, who I think are using different doses. So that's kind of topic 1. Topic 2 is just on the guidance. Your earnings guidance is very clear. I wonder if you could just help me with some of the mechanics in between. Any color on how much SG and A could fall on any additional color on the divestment income over and above metroliptin? Thanks. Yes. So for the to start the combo study, it is more administrative. I think we are have a very clear view of how that will work. The I think for today, I probably won't give you a precise answer on the number of tumor types. Give you a precise answer on the number of tumor types. What we've talked about previously clearly are lung cancer and neck cancer and you know those programs. So I think I'll pause on that one. And then what was the third part of your question? If it is more than 2 tumors, which I'm guessing it is, is it the same dose across all and contrast it versus Bristol who are using different dosing? Yes. Currently, our assumption is that it will be the same dose across all, but that's probably not as firm a final answer just yet. So returning to your question of guidance for 2015. We try to make it as clear as possible. We gave you the assumption we are taking on the imminent launch of Nexium generic. We have also provided a guidance on the sales line, and we also provided a guidance on the EPS line. We are not going to provide any specific guidance on any line of the P and L as we did for 2014 as we manage our operating expenses and all other factors affecting our company together. Just a very rough indication, the since you asked for it, the SG and A will probably decrease in value and in percentage compared to 2014. Yes. Fertin, I think maybe just to add on this is we gave a top line and a bottom line guidance. And it's we don't want to give more details at this point, not because we want to be difficult, but simply because you have to I mean, I know you realize, it's a very fluid environment with a lot of assumptions. One big assumption is next year. We assume the launch of generics is imminent. That's our growing in assumption. Now exactly when do they launch is not defined, as you know, because they have to build inventory. They have had approval from the FDA that requires dissolution tests to be performed on the 1st batches. So precisely when we know it's imminent. We know exactly they're going to launch soon, but precisely when, we don't know. We don't know the pricing strategy that they would pursue, so that we don't know the speed of decline. So we really want to keep enough flexibility to be able to be entrepreneurial and flexible and redeploy, as we've done in 2014, redeploy to take advantage of opportunities when they arise. And so the commitment we give our investors and our shareholders is we will deliver what we said we're going to do, just like we did in 2014. And we want flexibility in between to be able to be entrepreneurial and adjust to the circumstances. Geoff? James Gordon from JPMorgan. Three questions, please. One was on Symbicort. When I look at the Q4 price and mix in the U. S, it looks quite a hit for the 19%. But I assume some of that's exceptional to do with the excise fee as well. So what would be sort of the true underlying negative price and mix in Symbicore? And would that be a good run rate for 2015? Were there other reasons it might look quite different for 2015? So just a quick point. We don't give guidance product by product. But having said that, I mean, sure, Lou can give you some more color on Yes. I think it's very much what we said at Q3, which is we would expect pricing pressure. There were plans that we were prepared not to lower our price to that point. So we've tried to do that. I think it's to say we had a very strong year in 2014 to see that again in 2015. Again, we've signaled that there will be more pressure there. And on the pricing, GSK seemed to indicate that they had secured some positioning not just for 2015 but also for 2016. Have you signed multiyear contracts? And could or could we see another step down? I'd rather not disclose that at this point, because we see that as competitive. But clearly, we our aim is to get that mix right. We see this as a step change. There is the excise fee, of course, that plays into that, which can distort it a little bit. But again, we see this as initial step change, and then we're back out there competing for share right now. Jeff, the one thing I said before maybe just to restate it is that the impact of the excess fleet in quarter 4 was 4% across the board. It's a little bit more of our Symbicort actually. You saw in Mark's slides on an annualized basis was 2.8%. So a little bit more than 4% for the 4th quarter is one thing that you should take into account. And in terms of long term contracts, we see every day that if a better offer comes along, long term contracts are reopened by our customers immediately. So it's really hard to say I'm going to sign up a very long term contract. We have some of those, but we always know that people reopen those contracts. They are the customers in the end. So we try to negotiate, but it's not that easy. Thank you. And the second question was just on OX40, where I know you've got 3 products or 3 molecules in development, and it seems to keep getting more and more crowded. So Roche has got 1, Pfizer's got 1, GSK announced they've got 1. Do you think it is going to be very, very crowded in NOX40? I think even more And what is there going to be a lot of differentiation between all the different products? Well, I mean, Briggs, maybe you want to cover this. We as you know, we have 3. We have the murine, the humanized antibody and then we have the fusion protein. The fusion protein potentially would be could be differentiated from everything else and be more effective. The question is what safety profile will we get. So we will know when we have run the Phase I study. So FHLGRP-fourteen has the potential to be differentiated, and the rest is probably a question of combination and a question of speed, Brad, Steve. Yes. So I think it will be crowded based upon what we've heard from competitors and people entering seems to be an attractive target to many people. As Pascal said, we have and you noted, we have 3 different things that we want to sort out which one would be the best. How to differentiate whether they differentiate, time will tell. It was similar, I think, in the PD-one, PD L1. There were hypotheses about one is better than the other and time will tell. But I do think that it's an attractive target. We think it is. And we do think that, again, we wouldn't be surprised that the real place that these show up is in combinations. And so having available our own CTLA-four and our own PD L1 to think about combinations with OX40 we think positions us well. But for sure it's going to be crowded. Thanks. And then just a final question, which was that the Farxiga or Farxiga prescription trends look really good, but you still don't I haven't seen your report out exactly what the sales are. And is that because there's very big discounting or couponing and that's why the sales don't look as impressive as the prescription trends? Or are you going to start reporting the sales for 2015? Well, actually, no, it was simply that our competition didn't report sales. So we decided not to report sales. So we'll report sales in 2015. I know that. Now the for both Symbicort and Farxiga in the 1st part of this year, what we have to deal with is the change in formulary listings that you're well aware of. And so we have plans to deal with those, but certainly, we have built in our plans also a short term impact on our trajectory, both for Symbicort and certainly Farxiga. And Q1 sales, we will report the Farxiga sales well, the Farxiga family, Farxiga plus Thank you. Could I ask one question from our participants on the telephone and then I'll come back to the room. Is there a question on the telephone? Tim Anderson. Tim Anderson. Okay. So well, the name doesn't show up anyway. Okay. So, Tim Anderson. So, Tim, go ahead. There's nothing on the screen here. Thank you. And I joined late. So my apologies if you've already touched on some of these things. On mergers and acquisitions, it's a question I've asked in the past. How much of a priority is it for management to pursue transactions that would specifically pull forward the trough year of 2017? And I guess the specific question here is, are you willing to say that there's an upper limit to the size of the deals that you would be considering in the next year or 2? Second question is just on the PEGASUS results that came out that were positive. Can you just help quantify what that means for Brilinta realistically there's been some news on the wires that Pfizer is buying Hospira for $19,000,000,000 My guess is that you would probably concur that the odds of Pfizer coming back after Astra are now seeing even lower than they may have been before. But would love to hear your updated perspective on that. Thanks, Tim. So I mean, we'll start with your last question and probably leave it at your own conclusion. The only Pfizer, no. I mean, the answer to your question, I don't have it, but I can only deal with probabilities. And I think it's relatively logical to think the probability of a return has substantially reduced. I guess that's probably the only thing we could say at this point. In terms of Pegasus, Luc, maybe you want to cover this. Just one thing is that you have to wait we have to wait for the data to be in the label to be able to fully promote that new indication for PEGASUS for BioNTech. Yes. And there's obviously a limit to what I can speculate right now because of the status of the data. But ultimately, this should have a positive impact for this product because you increase confidence on the part of interventional cardiologists that are using this in the lab. When the patient is discharged from the hospital, they're more likely to have stronger instructions to continue treatment. So this should have an impact, we hope, on the days of treatment, the length of treatment. I mentioned before that many patients are not making it to a full 12 months. In a number of markets, for example, in Europe, where you have reimbursement, you have this higher initial conversion and many of these patients stay on for longer, as I said, 50%. But a number of health care systems stop these patients immediately at 12 months. In the U. S, by contrast, you have less patients coming on initially, but that's changing rapidly. Once they're on the product, they do tend to stay on for longer beyond 12 months, which is not something that we promote. And I think there's just a broader halo effect if we look across the whole program and out over a number of years in different indications, gives people confidence that this mechanism is doing what they hope that it would do. Just maybe to add is that a couple of points is we were always confident in our PLATO data and we suddenly defended that study. But at the end of the day, we had to accept it was only one study. And now we have a second study that reconfirms the benefit of this product in ACS. So hopefully, we can hope that this debate is behind us. The controversy is behind us. And as Luc said, it will help people build confidence. But the second thing is that over time and I say over time because 2015, we cannot really promote this data at all. So we have to wait for the label. But over time, it will help us in paracola in the U. S. Because in the U. S. You only have 20% of patients who stay on the drug for 12 months. In Europe, 50%. And quite frankly, it was already the case with BLAVIS before. It's certainly very much the case for Brilinta. But as we demonstrate stroke Pegasus, but also with the help of studies like APOLLO that really shows that patients who have had an event and are not treated with OAP are very much at a high risk of facing a recurring event. If we use this body of evidence, we have good arguments to convince physicians that they should really make sure their patients stay on the drug. Marc, do you want to cover the last point? So briefly, I mean, it's a difficult question to answer. Is there a limit to a deal? I think we don't really look at it in such a way for us. We explore opportunities by looking at whether this outside opportunity is aligned with our core strategies. The second criteria we use is, is it are we going to do a better job than the team in place? Are we going to be a better owner? And the third, obviously, is the price and the impact on our earnings. So these are the 3 parameter we look I don't think there are physical limitation to debt today. I mean the debt market is relatively easy, and the cost of the debt is very low. So this for us, the debt capacity or the limit to the deal is not what we look at. It has to be absolutely aligned with our strategy, and that's these are the key areas we look at. Yes. I mean our primary focus is really to turn this pipeline into a reality. We've got a lot of great projects here that can help patients and create enormous value. We've got a help patients and create enormous value. We've got a focus on making this happen. But we will continue looking for opportunities because it is clear that we have a bridge between now and 2017. We have 2 years to go that are suddenly years where we're making good progress, but we're also facing headwinds with Nexium and Crestor, but on expiries. So if we were able to find an acquisition that would help us bridge to 2017 and build further strengths in our core areas, we would do it. But as Marc said, the 3 criteria that we use, we try to follow in a disciplined manner. And we've looked at many, many opportunities. And it's really hard to find one that would address our criteria so far, but we'll certainly keep looking. Nicolas Guirangina, Morgan Stanley. Three questions, please. The first one is with regards to the ATLANTIK trial. In light of the recent developments, how would you rate the probability of filing maybe 4,7, 36 on the back of a single arm trial? And could you discuss the possible scenarios depending on BMS labeled in 3rd and second line lung cancer? The second question is a financial one. Your guidance of flat reported EPS versus revenues down low double digit implies significant SG and A cut to the tune of €1,500,000,000 if my math are correct. So don't you see any risk of impacting the U. S. Primary care oriented growth platform? And could you give us a few examples of things you can cut without impacting those platforms? And the final question is a quick respiratory one. Any specific reason behind the strong performance of Pulmicort in emerging market in Q4? And is that sustainable? Thank you. Great question. So Atlantic, maybe Briggs, you want to cover and Marc you'll cover the expenses. So I think it's fair to say that it's a fairly dynamic environment that we're living in terms of PD-one, PD L1s. I will say that what we've heard from BMS and the readout of their Phase 3 trial, the Merck announcements and Roche are sort of what we anticipated evolving in this space, which is why we started Atlantic in a third line population, which as best we understood at the time we started that trial, was a population that was still available. As I've said multiple times, the ability for us to file Atlantic, of course, depends on exactly what happens with our competitors in terms of their filing and their labels. And it depends on what data we generate from that trial. Again, it's a dynamic field and we have to see what data comes together. But at this point, we still think there is a window that allows us the strategy we laid out, which is a has a fast to market strategy with 3rd line. So Mark, you can comment on the expenses. Let me just quickly cover the PumiCorp question. The PumiCorp success is really driven by China. That's very much a Chinese event. And it is really quite an exciting development I have to say because for many reasons. First of all, it's used in pediatrics pediatric asthma essentially. In the last couple of years I mean and those kids are treated in nebulizing centers. In the last couple of years, we've gone from 200, 300 nebulizing centers to more than 2000. We've helped build more than 2000 nebulizing centers in China. And so we've been able to bring Filmicore to all those kids who actually need to be treated. And I think Filmicore today is one of the biggest products in the Chinese marketplace actually. So it's exciting because we are helping those kids. Now we're moving to home care treatment. So we because the problem is they go to this nebulizing center. Some of them are exposed to infections of course. So we're trying to now move to home nebulizing treatment. And the last thing is that it actually bodes well for the long term because in China patients today are treat I mean doctors are treating asthmatic patients during the acute phase of asthma. They don't treat on a maintenance basis. That's why you see Symbicort and as they are growing, but they're not that enormous considering the size of China. So if we do a good job educating the medical profession, there's an enormous potential to treat patients on a maintenance basis in asthma. And then there's the whole COPD segment, of course. Marc, do you want to provide a Yes. Just talking about the 1.5% decrease on SG and A. I think you're forgetting one very important part, and we have referred to it at the Investor Day. I also mentioned it today. I want to repeat again. We are going to look and accelerate our exploration for externalization. So it's probably a part that you are you need to take into account in your modeling. We can't provide you with any clearer indication today, but this is an it's going to be an important part of our revenues for 20 15. Then on the structure of the spend, obviously, our G and A line is going to continue decreasing. If you look, historically, this line has decreased. It will continue decreasing. We are doubling our effort in containing our cost on the G and A line. And then on the sales, marketing and medical, the only indication I can give you is that the medical is going to increase because this is the evolution of our portfolio from a primary care portfolio to a specialty care. So the medical line is going to increase, but the 2 other lines are going to be either stable or for marketing in reduction. Just some indications. Should I take the next question on the telephone? Marc Larke, Deutsche Bank. Marc, do you want to go ahead? Yes. Hi, gentlemen. I'm sort of intrigued by your comment about China now being your 2nd largest market. For most of your peers, it's a nice to have. But in your case, it's now getting quite vital. So that being the case, I think probably most of us are not quite as attuned to the dynamics of that market as we would like. So perhaps you could give us some prognosis for the Chinese market itself. You talked about some of your individual products like Pulmicore, but for the market itself because I think I've seen data suggesting that the double digit footfall through hospitals has dropped to 6%, 7%. And obviously, the government and the regions are looking to sort of cut prices. So are we now looking at an era of high single digit growth in China rather than double digits? Or very interested in your thoughts. Thank you. Well, do you want to cover this one, Luca? So I think this it's going to remain a very attractive market in terms of our business. And obviously, respiratory is very important, but also cardiovascular. Pulmicort is dominant today. Symbicort is a relatively small part of our business and one that we're very actively seeking to grow along with Brilinta and the diabetes portfolio, of course. In terms of the outlook for the market, I mean, it's clearly slowing, but it's still at a growth rate of around 12%, which is certainly not slow. In terms of structural changes, I think that's the open debate we've had for a couple of years now. I think there's a number of people that are of the belief that if the economy further slows, the government will direct funding into healthcare in the interest of stability. They recognize that they have a structural challenge in the country, whether it is diabetes, cardiovascular disease or also COPD. So I think we remain quite optimistic. In terms of exact numbers, we wouldn't want to give exact numbers at this point for our business, but it's an attractive market. In the future, it's going to reward innovation. And again, we feel our pipeline is well presented there if we look over the next 10 years. The 12% market Luc was referring to, I mean, we certainly continue outpacing this quite substantially as a company. And the market is slowing down. We've seen this before in China. There was a period of time when it slowed down and then accelerated again. So it's not because it's at 12 today, which as Luc said, is a very hectic growth rate in the 1st place. But it's not because it's at 12 today it will stay there. It could accelerate again for the reasons Luc was describing, which is the government is going to have to invest more in health care. And so that's going to help the market. Private insurance slowly developing that will help also access. And in the end, you're going to have tensions between price pressures, just like in every other market, and at the same time, volume expansion. And if you look, for instance, at diabetes, we have with Onglaisa in China, in the half of the country that we managed as a company, the other half was BMS, and we've now recovered it since October. In the half of the country managed, we have 40% share. So we're trying not to achieve this on a national basis. The problem is, of course, this class of agent is not reimbursed yet. But when it becomes reimbursed, we'll suddenly leverage the market share we've got. So we suddenly see China as a very, very important market. As we said, for some companies, it's less important. But for us, it's very important. We see it as a very, very big market in the future. As Luc says, there will be more room for innovative medicines as well, cancer and others. So and we have now almost 7,000 people in China. So that really is going to be a very, very important country very important market and very important country for us. There was another line from Seamus Fernandez at Leerink. Seamus, do you want to go ahead? Sure. Thank you so much for the question. So just quickly to start off, can you talk a little bit about the diabetes market and the combination opportunity of the SGLT2 inhibitor plus the DBB4 inhibitor. Maybe how important you think the role in terms of getting combination pricing right is going to play in the competitive dynamic? Or do you really think that the product is so differentiated that it will that important pricing and discounting won't play a significant role? Second question is, again, on diabetes. I believe you started a combination trial of the SGLT2 inhibitor in combination with BYDURION. Can you talk a little bit about the reasons for initiating that trial? I know there have been some very positive case reports in that regard, but would love to hear your thoughts on that and the strategy of bringing those 2 products in combination. And then lastly, the adjuvant trial, I think, is something that really differentiates AstraZeneca when it comes to the prospects of having a late introduction with your monotherapy. So can you talk a little bit about the opportunity in the adjuvant setting and how you reach into that market? And really, maybe give us a little bit of a better sense of the size of that market as you look at it? Thanks so much. Whether we start to cover pricing here. So I think just at a macro level, we're very attracted to the concept of combinations. I think with the DPP-4s, we've seen good uptake ourselves. I didn't mention it, but we've had a strong launch of ZIGDUO in the U. S, very encouraging. So to have Saxodafone in the portfolio is something that we're looking forward to. In terms of pricing structure, I think it's fair to say it's unlikely to be 1 +1 equals 2. Now whether that is 1.2, 1.6, 1.5 or 1.8, In some degree, we're going to inherit that structure because, of course, we're second to the market. But again, we are very encouraged. We think there's a clear place, and it reflects the evolution of the disease, and it makes it easier for patients to take this as well as co pays, so attractive. The SGLT2 plus badeurine combination, the logic behind it is that some patients who take SGLT2 regain weight. And then some experts are speculating there's a regulation of glucagon and then people gain appetite and they start eating more. So by using SGX-two in combination with a GLP-one, you could potentially block this increased appetite and really achieve very, very substantial weight loss reductions. Because if you look at the effect of the SGLT-two and the quantity of glucose people lose when they're taken in SGLT-two, if you calculate the weight loss impact, it would be much, much more than what you actually see in the clinical trials. So the hope is by combining the 2, we would see a very, very substantial weight loss. So that, that would be the ideal combination for those patients who are diabetic and have excess weight. Briggs, do you want to add anything to that? Yes. So, she was saying a question about the adjuvant opportunity is one that's going to evolve because obviously with the increased screening that people are now doing based upon some of the lung cancer screening trial, there are some who are estimating that those I mean the adjuvant trial is 1b2 and 3a, right. So it's earlier stage patients. And there's a with increased screening, it's possible that, that population will actually increase over what we see today. So you probably have the sort of standard epidemiology of the presentation by stage. But by the time the adjuvant trial reads out, it may in fact be moving patients into earlier stages. And as you can imagine, the adjuvant setting is going to be very large from what we know from all the products. But we basically, what we're trying to do is take a variety of approaches to this immunotherapy franchise. 1 is to find a way to get to the market as quickly as possible, as many of our peers are doing. 2 is to find indications where we would be first and think about the long term. And so the adjuvant is part of that long term thinking. And then 3, of course, is the combination where instead of being a challenger and trying to catch up, we could in the combination setting, we could be actually a leader, leader with another company or a true leader depending on what the other combination development looks like. So certainly, we're approaching this from a variety of angles. Should we return to the room and Thank you. Simon Baker from Exane. Three quick questions. Firstly, on the Sigma study with Symbicort. Can you give us a little bit more of your rationale for doing that study now, particularly as we get close to loss of exclusivity in the U. S? I do note from clinicaltrials dot gov that there don't appear to be any U. S. Sites in that study. Is that partly explained by where you're targeting this indication? Secondly, on FX, you very helpfully gave us some more sensitivity on FX. I just wonder if you could go a little bit further and give us the relative proportions or some sense of the relative proportions of the currencies in the other bucket, so Australian dollar ruble, 1 etcetera. And thirdly and apologies if I missed this earlier, have you given any guidance on the tax rate for 2015? Thank you. So two questions for you, Mark and one for Brian. So let me take the Sigma question first. So remember I said Sigma builds off of the smart indication, which is the Symbicort maintenance and reliever. We don't have smart in the U. S. So you can think about the Sigma opportunity as a follow on in the markets where we do have the smart indication, which I think addresses your question about where. And again, I think to Pascal's point and the comments about Pulmicort, if you think about some of these earlier stage asthmatics in other markets around the world where there's a need for new therapies, we think there could be a significant opportunity here, although probably unlikely in the U. S. So trying to answer your question on the relative weight of the other currencies. I believe the 5 currency that I mentioned on the table are the 5 main ones among the others. I do not recall the exact proportion of it, but I assume that these are the 5 main ones and that the other would be obviously much more limited. But I can find this information for you. I don't have it. Murray, I think the robot in the restaurant had a big impact. The robot simply our business is not that huge, but drop in the robot, as you know, is enormous. So we could get back to you on this, but those are really 2 substantial ones. The table gives you the if each of these currencies were impacted by 5%, what would be the impact? So obviously, you want to know a relative weight or it. I don't have the answer for you. I believe those are the main ones. Regarding the tax rate, you have seen that in 2013, we were roughly at 20%, 16% in 2014. And 2015 is probably going to be between the 2. Narush Chauhan from Liberum. A couple of questions please. On Crestor, could you please help us with what's still remaining in terms of marketing effort both in terms of DTC and Salesforce? And then on R and D costs, it would appear to me that there's some downward pressure this year with the PEGASUS study and the Saksadapa study now ending. Can you give us some sense of what you feel the upward pressures are through 20 15? Yes. The upward pressure, I'm very sorry, Jean Pierre, if you have more to add, but the upward pressures are the new projects we've progressed into Phase III, but very much immuno oncology as a whole and immuno oncology in particular. That's where the upward pressure is, 13 programs in Phase II, Phase III, this is quite a substantial investment. And we have to support that franchise. So we certainly are putting a lot of efforts in this oncology business, both from an early development Phase III, but also late stage development. So anything you want to add? No, I think you hit it. And Crestor, I don't know if you have the numbers in mind, but it's quite small. It's relatively small now. Yes. It's really focusing on select plans and defending at that level. Every model in the U. S, Luke, shows that you need to promote products until almost the last day before patent expiry if you want to maximize the value. But of course, you promote very differently and at much, much more much, much lower levels. So our investment behind craft stores reduced very substantially. Everything goes behind not everything, but almost everything, especially in U. S. And Europe, goes behind our growth platforms. Any more questions? We have one on the line. Who's this? Matias. Matias, go ahead. Thanks. Matthias Zek from Danske Bank Markets. Three questions, please. One of your peers was recently granted breakthrough designation for its anti PD L1 antibody non small cell lung cancer. Could you remind me if you submitted a request for your anti PD L1 antibody with the FDA or not? And if not, why? Secondly, can you comment on what your gross to net was in the U. S. During 2014 and what to expect for 2015 as this is very much in investors' mind at these days? And lastly, with regards to the Almirall portfolio, which was part of your books for the last 2 months, you state in the report that it generated sales of $30,000,000 Is that a good run rate to think for 2015 in this region and this opportunity? Or was there something in particular to take into account during the transition phase? Thanks so much. [SPEAKER JEAN FRANCOIS LABADIE:] So, Boris, do you want to cover the first question, Marc, the amount of question? And the gross to net question, just to be sure, much is gross to net of what? The U. S. The sales. A total U. S, okay. Yes. So we don't comment on whether we've submitted for breakthrough. We will obviously tell you if we were to get breakthrough. What I can tell you is that we continue to have conversations with FDA. We got breakthrough designation for 9,291. We got breakthrough for some of the antibodies that Pascal referred to earlier and antibiotics. So we continue to have those conversations. And should there be a data set that they get excited about that they would entertain us applying, I think they would be clear about that. So that's all I can say about the breakthrough at this point. Marc? So on the impact of Almirall, do you have for the last 2 months of 2014, the Aclira, one of the brand. We also received approval we received approval on DuraClear, and this product is going to be launched. You must also take into consideration that we received some revenues and milestones from regional partners of Almirall, and these are included in other incomes. These are substantial amount of money. So it's not you have impacts not only on the sales level but also on the other income in the last quarter of 2014. And the gross to net, I don't know if we disclosed this information. Actually, I don't think we have in the past. Thomas, We haven't, no. So I mean it is, of course, substantial, but we don't disclose that information. Good. So one more question. Maybe the last one, Thomas. Matt, do you want to go ahead Matt? Thank you very much. It's Matt Quakiston from Credit Suisse. A couple of questions if I can. The first one relates to the income from partnering and or divestiture of products. I mean on a simple calculation, it looks like you're expecting at least $1,000,000,000 of income this year if we follow the guidance around costs and revenue. Can you confirm that is the realms of the number that you're thinking of? But then can you also tell us how you're thinking of 2016 2017 on a relative income basis? Obviously, if you can't afford to invest in these assets, which is why you're looking to partner them, the flow of them should diminish over time. And particularly as you talk about 2017 being the return to earnings growth, is that from an underlying base without the supplementary income? Or you think the operational performance of the business will accelerate so rapidly that it can overcome the hurdle of these one time gains? And then I know we don't like to talk about reported earnings versus core, but I do notice that in Q4 there was a €636,000,000 charge in SG and A for the Bristol Alliance. Can you explain what that is? Have you written down the value of what you acquired from Bristol? And if so, why? So the series of great questions, Marc, maybe I'll ask you to answer one of those. But the first question, we don't disclose specific numbers. I think the one thing I would say is that you got to think about this partnering externalization, however we call it, as a part of our business model. It's not a 2015 or 2016 event. It's an ongoing event. If you saw what we have coming through the pipeline in preclinical from 2 of our 2 units, you would understand what I'm talking about. There's a number of projects there and then we can't develop everything. So essentially, we had 2 options either substantially reduce research and development and kill a lot of things or actually decide to indeed take our operating model to its final end, which is let those units operate really as biotechs that will actually create value with other companies. And we see that from the discussions we are having with a variety of people, we see that we can create value. So why stop those projects when we actually can take them to patients and create value for the company? So see this as an ongoing sustainable part of our business model. Now in terms of numbers, I don't have them here and certainly we will not comment on those anyway. But it's not a 2015, 2016 event. It's part of the business model moving forward. Now the contingent consideration, the BMS, it's actually not bad news in terms of a write off. It's actually sort of good news, but it's a complex accounting issue that Marc can take his progress. Thank you. So first of all, let me correct. It's not a write down. It's the other way around. Basically, we need to account for the future payment or future consideration contingent consideration that we would have to pay to BMS. And as we perform our long term planning, we get these results. And the mechanical formula tells us how much money we would owe to BMS. And this year, this amount of these obligations has increased. Therefore, we have to take it to non core. So it's not a write down. It's increasing our contingent obligations contingent consideration that we will have to pay obviously for forecast. Correct. Understood, Marc. Can I a very quick follow-up there? It was the surprise that it then jumped so significantly in 4Q. So do you basically revalue your contingent considerations in the Q4? Or in the Q4, you substantially increased your expectations for the performance of diabetes and that led to the revaluation? So the answer to that question is that we do a long range plan once per year. We do it in the last quarter of the year. When we have this basis for calculation, we apply to the formula or to the royalty rate that we have to pay, and we calculate at that time. So it's the first part of your option. It's influenced by the mix of products and the total sales that we're forecasting. But as Marc said, we redo our plan starting in September culminating to a presentation with a presentation to the Board in November. And in the course of the last quarter, we revalued the long range plan and the various parts of that, including diabetes. And immediately, we have to take this charge to the P and L. Those are the standards. I know we've had many discussions on the topic. We don't decide the accounting standards. That's the way we have to do it, and we just apply them. Anything you want to add? There was another question on the externalization. I think what we can say, we're not going to give you any amount. But if you use 2014 as sort of a base, what we can say that it's going to accelerate. We are going to redouble our effort, and it's going to intensify the standardization projects or negotiation we have with 3rd parties. And by the way, the as soon as we take this consideration, it has an impact also on our tax rate, as you can imagine, because that's that influence this contingent consideration has an impact on our taxable earnings. And of course, the reported tax rate is influenced by this accounting event. So I will stop here and thank you all for your participation and your great questions. And I wish you a great afternoon. Thank you very much.