AstraZeneca PLC (LON:AZN)

Earnings Call: Q1 2021

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Apr 30, 2021

Good morning to those joining from the U. K. And the U. S. Good afternoon to those in Central Europe. Welcome, ladies and gentlemen, to AstraZeneca's Q1 2021 Results Conference Call and Webcast for Investors and Analysts. Before I hand over to AstraZeneca, I'd like to read the Safe Harbor statement. The company intends to utilize the Safe Harbor provisions of the United States Private Securities Litigation Reform Act AstraZeneca. Participants on this call may make forward looking statements with 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 on this call reflect the knowledge and information available at the time of this call. The company undertakes no obligation to update forward looking statements. Please also carefully review the forward looking statements disclaimer in the slide deck that accompanies this presentation and webcast. There will be an opportunity to ask questions after today's presentation. To for those on the webcast, you'll find an on screen text box in which to type your question. I'll now hand you over to the company. Hello, everyone. It's Pat Castor, here, CEO of AstraZeneca. Welcome to the Q1 20 51 conference call and our webcast for investors and analysts. As always, the presentation was posted to athazenikas.com Today, and we also sent it out by e mail. So please turn to Slide 2. Those are for Slide 2 and Slide 3. Those are the usual Safe Harbor statements, including one On Alexion, on Alexion being Slide 3, we'll be making comments on our performance using constant exchange rates or CER, our core financial numbers and other non GAAP measures, including total revenue and core EPS excluding any revenue or profit impact A reconciliation between non GAAP and GAAP data is contained in the results announcement. All numbers used are in US1 million dollars and they refer to the Q1 of 2021 unless stated otherwise. And finally, similar to our quarter, we need to be a little bit more limited with financial guidance to I hope you understand. So thanks for your understanding with this. Please turn to Slide 4. We plan to review the presentation first and then do Q and A until 1:15 p. M. UK time. We need to end on time due to a shareholder engagement here and starting after this meeting in lieu of a physical in your general meeting, which is not allowed to the current COVID-nineteen restrictions globally. If you keep questions short, we will try to keep answers short too. To We ask you to please ask one question only, and thank you for your help with this. And speaking of, I'm joined by Deb Fredericksen, EVP for the For the questions, we also have Fang Cheng, sorry, our EVT for Operations and IT Leon Wang, who is our EVP responsible for China and the Emerging Markets. And we also have Susan Galbraith and Christian Masaschetti, who are our Vos' VP is in charge of oncology R and D. We plan to first take questions on the ongoing business And as I have any questions on the vaccine for the aspart of the conference call in the recap, we hope that it works for everyone. Please turn to Slide 5. This is the agenda. We plan to cover all key aspects of our results today. If we move to Slide 6. 2021 started well. The 11% increase in revenue was boosted by sales for the COVID-nineteen vaccine for pandemic use. The revenue used for guidance, excluding the COVID-nineteen vaccine for pandemic use, was up 7% per CER, And it was helped by stocking last year of our low to mid single digit percentage. We had a very strong Q1 last Assurant, if you remember, with very strong growth. And therefore, we estimate that the normalized revenue growth has have been double digit low double digit in the first quarter in support of our full year guidance. Oncology increased by 16% and new CVRM by 15%. Respiratory immunology was down by 4%, impacted by last year's stocking Emerging Markets were up by 10%. Core operating profit grew by 24% supported by other operating income With the tax rate of only 8% due to the divestment of the ownership of Sierra, core EPS ended at $1.63 And was up by 63%. There was a negative impact of $0.03 per share from the pandemic vaccine. We continue to move forward with our pipeline and they support itself today, but importantly tomorrow as well. And the news flow is anticipated to pick up in the second half of the year. On the COVID-nineteen vaccine for Panavicute, we shipped and invoiced 68,000,000 doses in the Q1 with supply increasing, an effort that is supported by a very dedicated team here and also with our our shareholders around the world. A very quick note, what you see here is what we at Tarzunica Ship and Invoice, 68,000,000 doses. Atoll production was much higher than these for our global network of partners. As you know, we've established a global network, and we have many sites manufacturing and partners invoicing the MAXIM. The good start of this year supports a reconfirmation of our full year guidance. Please turn to Slide 7. Looking at the pipeline news flow since February, just a few highlights. First of all, the report for the director of our German run comes in China and the CHF positive opinion in the EU. There were a couple of regulatory cleanups within Finzi in Canada and Brazil. Importantly, Phase III trial readouts were positive with adjuvant lead acetaminophenumab in micromutantinib and breakups, We will be telling this news flow a year or later. Also later, we will detail upcoming news flow with the pickup in activity in the second half of the year. Turning to Slide 8. After financial and corporate headlines, we now take a deeper dive into our revenue. Total revenue increased by 11% in the Q1. The COVID-nineteen vaccine for Panamax use contributed 4% to growth. Clearly, Last year with revenue growth excluding the COVID-nineteen vaccine for pandemic use at 7% And double digit when adjusting for stocking in the comparable period last year. There was a negative impact from COVID-nineteen On Brilinta, the new medicines added over $800,000,000 in new sales with Swartsiga And the key oncology medicines leading the way. So COVID created a negative headwind on a number of products across the pipeline. And of course, we have this negative effect here as you see on We have accumulated sales over the past 4 quarters from those medicines that we have 13 new medicines now that contribute to growth and our diversification to all of you as we look ahead. Please turn to Slide 9. Aggregating medicines into these areas, we have solid double digit growth for oncology and new CVRM With respiratory and immunology down by 4%, mainly, as I said before, due to stocking last year. Other medicines continued to decline slightly as we become less dependent on the telemedicine. I have to say that there was an effect So I don't really see that some of these impacting those products in the Q1. As promised last quarter, our full details are provided here on the COVID-nineteen vaccine for pandemic use. From a regional viewpoint, there was growth everywhere with Europe seeing the biggest vaccine impact. The emerging markets are back, the largest region, as you can see on the slide. And so in summary, a good start in 2021 Despite some headwinds due to COVID and a tough comparison to Q1 last year, We continued making progress in all disease areas and key medicines. And that really reinforced our strategic decisions and our focus over the past years as well as our commitment to continue the strong durable top line growth. With the global revenue mix and diversified portfolio of new medicines with more to come, AstraZeneca remains really well positioned in the current situation. If we turn to Slide 10, A few words on Alexion. We've made very good progress here, and we are moving towards the closing in the Q3. Since February, we received the importance US SEC clearance as well as other regulatory clearances with a full list that is available on our website. Alexium continues to offer a compelling scientific and business complementarity, and we will and will allow us to build out in In the short and medium term, Akermes. The combined company will offer faster growth, improved profitability and cash flow, and that will sustain our positive strategy development achieved since ASCO 2020. I will now hand over to Dave to go into details in oncology. Thank you very much. And Dave, please go ahead. Our Investor Relations. Thank you, Pascal. We're pleased to report a strong growth in total revenue of 16 Assent for the oncology business, now to $3,000,000,000 in the quarter. COVID did continue to have an impact as we still see fewer cancer patients diagnosed and treated. Ann Arbor. But despite this, we saw resilience in our business as sales grew across all of our new oncology medicines from regional expansions and new launches. Our please turn to Slide 12. Starting with our lung cancer franchise, we're pleased to report that both Tagrisso and Imfinzi showed strong growth in the year active at 13% 17%, respectively, with revenue of $1,200,000,000 $556,000,000 We saw a notable impact in non small cell lung cancer diagnosis rates due to COVID. Tagrisso continues its global rollout and is now approved Aggressive countries in the first line setting and 17 countries in the adjuvant EGFR mutated setting. U. S. Tagrisso revenue was up 12 8%, where we saw continued single digit demand growth as we start to focus now on bringing Tagrisso to patients with earlier stage lung cancer. Adrienne. In China, sales were impacted with the usual stocking impacts following the first line NRDL inclusion, which took effect on the 1st March this year. The The majority of Imfinzi revenue continued to come from the U. S. Where we saw a prominent impact from COVID, despite the launch of CASP, an indication and extensive spell extensive stage small cell lung cancer. Outside of the U. S, we continue to see the revenue of Imfinzi pickup, particularly in Europe Advinci to more small cell cancer patients globally. The unique ability to combine with both esplatincarboplatinum chemotherapy will further benefit patients. Please turn to Slide 13. Lynparza continued to demonstrate progress with sales up by 33% with over half of sales coming from outside the United States. This is a result of growth across all regions as more breast and ovarian cancer patients gained access to Lynparza in the major regions of the U. S, Europe and Japan. U. S. Sales continued to grow by 28% with increases in demand as Lynparza maintained its leadership the PARP inhibitor market in both ovarian and prostate cancers as we launched the PALO-one indication in frontline HRD positive ovarian cancer Apti and the ProFound prostate cancer indication. Europe sales were up by 33% as more first line ovarian cancer patients received Lynparza As we now look forward to the ovarian PALO-one and prostate launches in Europe. Emerging market sales grew by 54%, driven by the China launch Apti and the recent inclusion in the NRDL. Japan sales amounted to $42,000,000 with growth of 17% driven again by uptake in ovarian and breast cancers. Please turn to Slide 14. I'll turn now to the newer launches, Calquence in chronic lymphocytic leukemia and in HER2 and third line HER2 positive metastatic breast Anser. I'm pleased to report that Calquent's revenue of $209,000,000 in the year, almost exclusively in the U. S. As the CLL launch continues to take effect, we're pleased to announce that Calquence is now used in 4 in 10 new patient starts our CLL BTK setting in the U. S. The launch feedback continues to be very encouraging Aspen's and as the impressive head to head data versus the incumbent BTK inhibitor reinforce our beliefs in a potential best in class medicine. We look forward to bringing Calquence to CLL patients in Europe and Japan following the recent approvals that happened at the beginning of 2021. Our shareholders. Following the Inherdu launch at the beginning of the year, we're pleased to have reported $40,000,000 in total revenue based on $81,000,000 of global sales ex AstraZeneca, booked by Daiichi Sankyo and AstraZeneca in the quarter. And HER2 is the most prescribed medicine in the third line setting of HER2 positive metastatic breast cancer. A. I'll now turn you over to Ruud for an update on our biopharmaceuticals business and emerging markets. Please turn to Slide 15. Many thanks, Dave. Today, I'm pleased to talk to you about the biopharmaceuticals business. Total revenue of biopharmaceuticals comprising new cardiovascular, renal, metabolism and respiratory and immunology was $2,900,000,000 in the quarter, Atrius. Starting with new CRM, revenue was up by 15% with total revenue at $1,300,000,000 our continued strength from Farxiga. Farxiga maintained volume market share globally with high double digit volume growth across all regions Apti as the fastest growing SGLT2 inhibitor, outgrowing the SGLT2 class globally in the U. S, Europe and Japan. In the U. S, Farxiga grew 60%, driven by the additional indication in heart failure. Outside the U. S, we saw strong performances, A and D, particularly in Europe with growth of 36%, with volume driven growth increasing and China benefiting from the NRDL listing. Please turn to Slide 16. Turning to respiratory and immunology, we reported revenue of $1,500,000,000 Adi's Q1, decreasing at 4% in the quarter, mainly due to 1 off Symbicort Offride generic in the United States, COVID impact for Pulmicort in China active and corporate stocking in quarter 1 2020. Symbicort sales were $691,000,000 with a decline of 15%, mainly due to the stocking and inventory build last year. The U. S. Saw a decline of 14%. However, underlying demand growth continues. Globally, Symbicort remained the leader in value and volume market share in the ICSLAVA class. Asia Pacific. Europe and Japan continued to see headwinds due to generic competition, whereas emerging markets were up 3% to $165,000,000 Pulmicort was down 18% in the quarter with revenue of $330,000,000 which continues to be impacted by COVID, Apti, particularly in the hospital treated patients in China. We continue to focus on growing revenue of Symbicort as well as Breastri our next question. Following the successful addition to the NRDL, please turn to Slide 17. Now I will focus on the new launch medicines. Fasenra contributed $260,000,000 of revenue in the quarter with strong growth despite COVID-nineteen with the majority continuing to come from the U. S, AstraZeneca, Germany and Japan. In the United States Fasenra continued as the leading novel biologic, up by 30% ASCENDRA with $165,000,000 in revenue. Fasenra maintained its position as the dominant IL-five blocking medicine AstraZeneca's and the top seven countries. Europe and Japan revenues were $63,000,000 $26,000,000 respectively, AstraZeneca continues to be the leading novel biologic medicine for severe uncontrolled asthma. The launch of BREXTRI for COPD is progressing well, Apti with revenue of $27,000,000 in the quarter. BRAFSTRI is now approved in 34 countries, including in the EU, U. S, China and Japan Assertib for the treatment of patients with COPD. As we look to kidney disease, Lokelma achieved potassium binder market leadership in the U. S. Acasti's Q1. Revenue in the quarter was $33,000,000 predominantly from the U. S. On roxadustat, we reported revenue of $41,000,000 in the quarter AcroZeneca. As of January 2021, AstraZeneca started recognizing the overwhelming majority We will continue to work closely with our collaborator on the next step for roxadustat in the U. S. Following the additional analyses sent to the FDA A and B and C and with the anticipated advisory committee in July. We now expect a regulatory decision in the second half of twenty twenty one. Please turn to Slide 18. Emerging markets, where revenue grew by 10% in the quarter, continued to track ahead of our long term performance ambition, which is to grow sales on average by a mid- to high single digit percentage. Outside China, total revenue was up by 11% AUM. China delivered resilient growth of 10% and continued to see some impact from Pulmicort As well as some stocking due to the recent NRDL inclusions. We look forward to the new NRDL inclusions taking effect throughout the year. New medicines grew by 30%, contributing over a third of total revenue in the region with a strong performance driven by on quality Annuity Brands and Noussigram. With this, I will hand over to Marc. Please turn to Slide 19. Thank you, Ruud, and hello, everyone. I want to take you through our financial performance in the Q1 of 2021. A. Please turn to Slide 20. As always, I will start with the reported P and L before commenting on our core results. As Pascal mentioned earlier, total revenue and product sales grew by 11% in the quarter. This included $275,000,000 of COVID-nineteen pandemic vaccine sales. Excluding the vaccine, total revenue grew by 7% and product sales grew by the same number. Please turn to Slide 21. Turning to the core P and L, the gross margin ratio Apti's Q1 was 74.6% in the quarter, impacted by the dilutive effect from the COVID-nineteen pandemic vaccine sales. Similar to quarter 4 2020, we saw a favorable mix effect, including more oncology sales being offset by the higher profit share from our collaborations. We also saw an impact in China related to recent NRDL and VBP updates on pricing. We anticipate these dynamics The gross margin percentage in total will continue to be heavily impacted by the ongoing pandemic vaccine sales As a result of our not for profit commitment. Core R and D expenses increased by 18%, partly driven by a higher number of Phase 3 programs and increased investment in the pipeline, including Camizestrone or Oran3rd. In addition to our ADC collaboration with Daiichi Sankyo, we also continue to invest adding new platforms such as cell therapy and epigenetics. Expenses related to Brasikumab are booked in R and D, Aditiate reimbursed via other operating income. Part of the increased R and D cost related to the development of the vaccine and we also incurred cost for various measures in order to keep our employees safe. Core SG and A expenses increased by 7%, an increase of about $200,000,000 acquisitions versus same quarter last year, partly driven by continued investment in China. However, as a percentage of total revenue, SG and A costs were down from 34.3% to 32.8%, and we continue to anticipate SG and A cost to decrease over time as a percentage of total revenue. Core other operating income more than doubled, driven by the divestment of our shareholding in Vylla Bio to Horizon Therapeutics. We also recorded the divestment of Crescor European Rights to Greniantale in the quarter. The core operating margin The divestment of holdings in Jelabio represented a non taxable gain, and we also had some settlements relating to prior period liabilities that we have settled with tax authorities, resulting in a core tax rate of 8.1 percent in the quarter. Excluding these benefits, the underlying core tax rate would have been around 20%. We continue to expect the full year tax rate between 18% 22%. Our core EPS was $1.63 in the quarter. There was a small negative impact AFFO 0.03 dollars per share from the pandemic COVID-nineteen vaccine. Small impacts from the pandemic vaccine commitment our expected quarter to quarter in both directions over the cycle of delivery and monitoring access to the safety of the vaccine over time. Please turn to Slide 22. Our core operating profit surpassed the $2,500,000,000 mark this quarter, helped by the Gila divestments. Collaboration revenue will increase over time and income from these divestments AUM. We will remain a material part of our P and L as some of our peripheral medicine could be well best suited active discussions in the hands of other companies. However, as a percentage of total revenue, divestments are expected to decline over time. Net debt remained stable in the quarter despite the dividend payment of $2,500,000,000 which reflects our improving cash flow profile. Reported EBITDA grew by 29% compared to same period last year. Similar to quarter 4, 2020, we saw working capital benefit in Q1 The rolling 12 months our financial results. Please turn to Slide 23. This is a familiar slide by now showing the progress we are doing converting revenue growth into profit and cash flow growth. The ratio of core operating profit expenses sorry, operating expenses to revenue remained stable at 57% Encore operating profit increased by 34%, helped by the strategic divestment mentioned previously. Cash flow from operating activities increased by $1,800,000,000 compared to the same period last year, And we also saw a sequential improvement versus quarter 4 2020. The continued profitability will help us Aditi and we have previously communicated that we also have the ambition to raise our dividend. Our shareholders. Please turn to Slide 24. Our assumptions for the full year have not changed A and R 2020 1 guidance remains unchanged. I would like to remind you that our guidance is based on constant exchange rate A and A. It does not include any revenue or profit impact from the sale of the COVID-nineteen pandemic vaccine or any impact from the proposed acquisition of Alexion. Please turn to Slide 25. We remain very excited about the proposed Alixa acquisition. As we have highlighted previously, the case for both scientific A. And business complementarity is clear, and it allows us to expand into new and broader indications in immunology and to bring Alexion life changing medicines to new markets where Alexion is not present today. A. On top of the strong C5 franchise, Alexion has an exciting pipeline, including potential new medicine We passed an important milestone earlier this month when we received clearance from the U. S. Federal Trade Commission. We are still waiting currencies from a number of other jurisdictions, but remain on track for an anticipated closure our other transaction in the Q3, and we are looking forward to welcoming our new colleagues at Alexion on board. Thank you for listening. And with that, I will now hand over to Mene. Please turn to Slide 26. Acasti. Thank you, Mark, and hello, everyone. I'll be discussing our COVID-nineteen efforts and updates on our biopharmaceuticals medicines Apti since the last quarter. I'm also joined by Dave Frederiksen, who will discuss oncology movements and upcoming news flow across the company. AUM. Please turn to Slide 27. We're now over a year into the ongoing COVID-nineteen pandemic. And while A. The global pandemic is clearly far from over. As you know, tragically, 3,000,000 people have died around the world and the number of infections globally continues to rise. AstraZeneca. From the beginning of the pandemic, AstraZeneca has been committed to having an impact on this global health emergency. Apti. This includes setting up diagnostic and testing, repositioning our existing therapies where possible and delivering 2 new programs, our long acting antibody combination AZD-seven thousand four hundred and forty two and our COVID-nineteen vaccine AZD-twelve twenty two Apti's study conducted in collaboration with the University of Oxford. Our Phase 3 trial has confirmed the vaccine's robust efficacy, including its ability to protect recipients against severe disease. This is also reconfirmed in the real world setting across millions of patients, showing that our vaccine is playing a crucial role in preventing illness, keeping people out of hospital Advent, saving tens of thousands of lives. We've delivered 68,000,000 doses of vaccine adding more than 2nd quarters in Q1 from our direct supply network. And as of today, almost 300,000,000 doses through our extended supply chain, including production access to the CIRM Institute of India. Patient safety is of the utmost importance to AstraZeneca, thrombotic thrombocytopenia events being reported with our vaccine as well as other COVID-nineteen vaccines. We remain confident antibody programs AZD-seven thousand four hundred and forty two very soon, and it's increasingly important to have different options for patients when considering protection against COVID-nineteen, AUM, and we're confident that AZD-seven thousand four hundred and forty two will have a critical part to play in the fight against the pandemic. A. Passive immunization with AZD-seven thousand four hundred and forty two will offer immediate protection against the virus potentially for up to 12 months Apti and is therefore suitably placed as both the prevention and treatment option against COVID-nineteen disease. Please turn to Slide 28. Now to briefly show some of the potential new medicines that will drive transformations in cardiovascular, Acla, Renal and Metabolic Diseases that our scientists discussed as part of our well received biopharmaceuticals event that we held on 25th March. AUM. The event was an opportunity for us to showcase the breadth and depth of our clinical programs and to illustrate the variety of modalities that we're working on A. C. And A. For a deeper dive into any of these programs across both CVRM and Respiratory Immunology. I encourage you to watch the replays of the event at astrazeneca.com/investors. Actin antibody with the potential to provide immunity directly to infants and offer immediate protection against respiratory syncytial virus or RSV RSV across an entire season with a single dose. RSV is an incredibly common and contagious pathogen asthma causing seasonal epidemics of lower respiratory tract infection, including bronchiolitis and pneumonia. It is the leading cause of hospitalization in infants worldwide. With these highly impactful positive results from Melodi, nasevimab as it becomes the first potential immunization to show long lasting protection in the general infant population, a population which has been chronically underserved, AUM and we look forward to bringing this important new immunization to patients very soon. Please turn to Slide 30. I'll now update you on progress made in our early to mid stage pipelines. Since the last update, our IL-thirty three monoclonal antibody, MEDI-three thousand five hundred and six, has now started Phase IIb trials in diabetic kidney disease. Our FLAP inhibitor, AZD5718, has completed Phase IIa trials in coronary arterial disease. And as a reminder, AZD5718 Apti is also in Phase II trials in chronic kidney disease. We also recently announced a new Phase III trial called DAPR MI, which will evaluate Farxiga add in the treatment of myocardial infarction. In respiratory and immunology, AZD-fourteen oh two Asthma. We have now started Phase II trials in asthma that's our inhaled anti IL-four and AZD-four thousand six hundred and four becomes the second Aptivar and Hale Jack inhibitor to strengthen the clinic in Phase I trials, also for the treatment of asthma. Our bispecific fusion protein MEDI ASCENDRA, 7,352 has started Phase II trials in osteoarthritic pain. And finally, Fasenra has commenced Phase III trials Ambulance pemphigoid, a rare autoimmune disorder that results in blisters, hives and itching. And I look forward to updating you on the progress of all of our medicines adding the biopharmaceuticals pipelines in months to come. I'll now hand over to Dave, and please turn to Slide 31. A. Thanks, Monet. So as I kick off this section, which is normally a section that Jose would have done, I'd be remiss not to acknowledge how shocked and sad we all are by Jose's passing. I think that we could very much argue that Anastasia Vasilgo was cancer's fiercest competitor. And I speak on behalf of an organization that says that he gives us all the inspiration to help take his place Apti and the battle against this disease that affects so many. Please turn to Slide 32. We're dedicated to continuing Jose's legacy and being a our Champion for the treatment of breast cancer using innovative science. Lynparza continues to deliver unprecedented outcomes across multiple tumor types AstraZeneca and now most recently in breast where Olimpia was recommended to move to early analysis and reporting have crossed add the superiority boundary for invasive disease survival. With this, Lynparza has the potential to transform the management of early breast cancer for patients whose disease possess ASCO, where the data will be presented for what we think is likely the new standard of care for patients. ALCIND. Discussed extensively at this year's AACR, AZD-five thousand three hundred and five is a pioneering Apti is pioneering a new frontier of PARP inhibition. It's selective for PARP1, whereas the 1st generation of medicines are dual PARP1 and PARP2 inhibitors. Add to the next slide. This selectivity has the potential to address some of the hematological adverse effects seen with existing PARP inhibitors, meaning it's well placed to deliver add clinical benefits not only as a monotherapy, but importantly in combination. And within HER2, we continue to expand its clinical trial program across a range of breast cancer tumor segments, including HER2 low and earlier disease. The next anticipated data readout will be DESTINYBREL3 Apti in the second half of this year. Please turn to Slide 33. This slide is an illustration of our bold ambition to redefine the treatment of breast cancer with our portfolio of innovative medicines that have 1st in class or best in class potential. Our aim is to again become a leading player in breast cancer with 5 foundational medicines: Lynparza and HER2 Aptacan, our TROPE-two directed antibody drug conjugate. A late breaking oral presentation for TROPE-two in triple negative breast cancer has been accepted at this year's ESMO Breast Medical Congress. As you can see, our medicines have the capability to address the largest segments of breast cancer adding new products and services to our customers. We also have the potential to define completely new segments such as the HER2 low population. To our next question. To support this vision, an industry leading clinical trial program is planned to test these medicines across multiple breast cancer subtypes and stages, both as monotherapies active and novel combinations. Please turn to Slide 34. Looking now to movements and updates across our mid stage oncology pipeline, AZD-five ANG-three zero five, our new PARP-one selective inhibitor mentioned earlier, will now enter Phase 1. This quarter, we also announced DESTINY Breast 9, the first our Phase 3 trial for ENHAR2 in first line HER2 positive breast cancer patients. And these trials join the new Phase 3 trials for camazestrant adapotumab, dorexican announced last quarter. I look forward to updating you on these and other movements and progressing throughout the year. Please turn to Slide 35. I'll end by taking you through the news flow still to come in 2021 across our entire pipeline. In oncology, we anticipate regulatory decisions for Tagrisso adjuvant non small cell lung cancer in the EU as well as Lynparza in second line prostate cancer in China. Key data readouts include the PROPEL trial for Lynparza, ANGUS Pacific 2 for Imfinzi and Destiny Breasto 3 for Enhertu in the second half of the year. Key submissions will include the aforementioned Olympiad data for Lynparza A. C. And Biopharmaceuticals will soon complete regulatory submissions for tesopelumab and severe asthma Anafrolumab and lupus and for roxadustat and Forxiga in renal indications. In terms of data readouts, we'll have results from PT027's Denali and Mandala trials in asthma and Forxiga's DELIVER active and heart failure with preserved injection function. I'll now hand it to Pascal for closing comments. Please turn to Slide 36. Thank you, Dave. Can you move to Slide 37? This is the summary, and then we'll try to be fast, but we can move to the questions. As you can see, as you heard, our sales increased by 11%. If you exclude the impact of our vaccine, The sales grew by 7%. However, as I said before, the quarter 1 last year was a very strong quarter to stock accumulation. And if we correct for this event, our sales growth in Q1 would have been low double digit, so very strong Atmos. And you will see across oncology growing 16%, CVRM 16%, vascular radiology was impacted by COVID and as a result, was down by 4%, and the emerging markets were up by 10%. Our core operating profit, as you heard, Max said, grew by 34% and our EPS helped, where the divestment of Aviat share our world's $1.63 up 53%. There was a negative a small negative impact of $0.03 per share from the pandemic vaccine. And as Mark Aspen. There will be ups and downs, small ones quarter to quarter with this vaccine. Speaking of the vaccine, we shipped and invoiced 68,000,000 doses in the Q1. But importantly, for our extended network of partnerships, We actually produced and shipped 300,000,000 doses so far until the 4th week of So very strong production that is gaining steam around the world. So with this very strong, very good There will also be a recent question from the webcast. And I please remind you, I don't believe you will listen to me, but if you could just ask one question at a time, that will be much appreciated. So perhaps we can take the first question from the conference call. And it's Peter Weir from Jefferies. Peter, go ahead. Hi. Thanks for taking my question. I'll start with the pipeline. If you can ask Meny, please. I guess Meny, maybe a save on Kamuzestra. Sorry, is that right? Go ahead, Mr. Leo. We can't hear you. Sorry. It's a pipeline question, I guess, for Mene or perhaps Avastra. On camvivestrant, please. I wonder if you could talk a little bit about your Phase II trial that you're running versus Is that designed as a superiority study? Or are you just trying to show an inferiority? I think there's a number of doses being tested. And is this regulatory pathway likely to be the Phase 3 first line? Or is it possible there's another trial could potentially be a regulatory enabling? And what are the gating factors that could potentially trigger you to consider starting early breast cancer adjuvant setting trials in chimevestrant? When could you get data in house to make that decision? Thank you. Thanks, Peter. Maybe we could then we could ask Sudan to I can start, maybe Kristian can So the Phase 2 trial, the dose ranging Phase 2 trial, the SUREENA 2 trial is designed to access to, as you say, test different doses and has a PFS endpoint. It's not designed to be a registrational study. And I'll let Christian talk about the And in terms of what we're looking for in order to trigger a move into early breast cancer, to I'd point to a couple of other things in the program. We have an ongoing window of opportunity study in the early stages of breast ATCAMCA, which is looking for the pharmacodynamic endpoints across a range of doses and helps confirm to the confidence that we have in the dose that we've got going forward and the safety in that early stage setting. And obviously, we continue to look at the safety and efficacy our program. Perhaps Kristine could just add on the professional design. Thank you, Susan. Thank you, Peter, for the question. We have shown a bit of the data with camisestrant and the efficacy tolerability profile that we have with this drug Specifically, the dose of 75 milligram that we are bringing in Phase 3 show that this has the potential to be a best in class asset. PFS 11 month clinical benefit rate more than 50%. No dose reduction, no discontinuation for adverse events. And our investigators are telling us that they are really pleased for completely absence of GI toxicity and not flashes with this drug. We announced that we started the 1st Phase III trials at Serenaphor in frontline in combination with pabociclib And we will announce soon additional trials additional registration of trials for the moment in metastatic setting. And then as Susan was mentioning, we are assessing the opportunity to move the driver early in inadequate Asian population in the right setting. Thank you, Susan. The next question is Thank you very much. I have a question on Tagrisso A. And just the cadence of sales by geography. In the U. S, penetration is high. We see a leveling off of sales. And I'm wondering when that might start to happen in other geographies that you break out such as Europe or emerging markets. There's some big consensus numbers out there, but sometimes products like this kind of come to a halt more quickly than expected just because they ramp up so fast. And then digging into China a bit more as you look forward, can you talk about what you expect to see with the Hanseo Pharma Asco. We're going to get that data at ASCO. They're on the market in second line in China. Yes, they're going to be pursuing frontline in China as well. My guess is that creates kind of a 2023 NRDL issue for So what do you expect from that program and from other competitors in China more broadly? Thanks, Fatim. And Dave, maybe you could cover those and including the Chinese situation and possibly Leon could add Warsaw because it's an important question, of course, taking this question now. Over to you, Dave. Thanks, Pascal. So Tim, in terms of the cadence that we're seeing, I think it's important to note that we saw good growth in the quarter our outlook for the Q1 of 2019. Over the same period last year, across all of the regions, China being actually the lowest of those, but add to that. That is a direct result of the NRDL impact that we had add the stock compensation. I'll come back to China a bit more specifically in a second. Maybe I'll just use this as an opportunity to talk very briefly about the U. S. Performance on Tagrisso. Tagrisso in the U. S. Has certainly been affected by the adding a number of lung cancer diagnoses in the U. S. We think it's about 30% lower today add some more color on the market. Thank you. Thank you. Thank you. And good afternoon to those in Central Europe. Welcome, ladies and gentlemen, to add some more color on the market. With that said, The duration of therapy that we're seeing in the metastatic setting has been strong and the fundamentals in the adjuvant setting that we're seeing are also Apti. We're seeing good growth in awareness, good growth in message recall. We're seeing patients getting referred from physicians to medical oncologists. Ashland. We're seeing testing rates go up. And I think that we will we should expect to see that continuing in Europe where we just got positive CHMP opinion in Adora. And I also think that, we will have an opportunity to continue to get frontline growth across the globe. Ashland. In China specifically, we had a really nice uptick in demand following adding the NRDL inclusion. That uptick in demand only for 1 quarter for the quarter of March. It's offset by the pricing impacts, not only the lower price in March, but the stock compensation that we needed to take for 2 of the months. But I'm quite confident that we're going to see top line growth in China, since you've got over 2 times the number of patients in frontline. And then lastly, on your question about HanSoh, I mean, obviously, we're as interested in seeing the data as you are. It does sound based on high level results that AppEx. PFS will be shared. It will be important to see what data they share on overall survival. It will also be important to see what sort of CNS adding more insights we can get. That's an important part of the clinical rationale on Tagrisso. I agree with you that I think that most likely our SG and A scenario would be, if approvable based on a PFS endpoint, that, that would be approval in the second half of this year, which would be NRDL inclusion adding our new customers to our customers. We're working really hard to stay in AppFront and use our 1st mover advantage not only in Frontline, but also now with China getting approval with the DORA to have an opportunity to further drive where we are in China with that indication. Thank you. Leon, anything you want to add, Closif Flies, to take a little bit in China? Yes. I think in China, we always stay ahead of this competition. And right now, Hansel's product is only second line. AUM. And now we last year, NRDL, we already get into first line. So now the penetration is rapid into the first line patients. Access to patients who would rather take a better treatment comparing with the 1st generation TKI. And also AURY. AURY. So I think we are also getting now a share of Adira patients. So I think we will be always staying ahead of this competition. So AstraZeneca. We will try our best to maintain a big market share and also with our commercial coverage because AstraZeneca in China has the largest oncology sales team. So we're almost everywhere in China, County, City, Province. So we leave no patient behind with very strong operational access. Thank you. Thank you, Leon. Simon Becker, ThreatBurns. Simon, over to you. And If I can ask my colleagues and that applies to me as well. Let's try to be short in our responses. Great. Thanks so much for taking my question. Sticking with oncology. Dave, I wonder if in light of recent IQVIA data that shows There was a pickup at the end of March in oncologist visits and new diagnosis claimed. If you could give us a bit more color on what you're seeing ask yourselves more recently in terms of the rates of new diagnosis, both in the U. S. And ex U. S. And also sticking in the U. S, I wonder if you could give us your thoughts on the broader implications this week's ODAC panel, which has looked at accelerated approvals. Thanks so much. Thanks, Simon. Doug, do you want to take this one? Yes, please. So, Simon, if we take a look longitudinally over the course of the last AstraZeneca. What we saw was that if we set the pre COVID baseline in March, across lung, ovarian, breast, CLL, which we're tracking the most closely. In late Q2, early Q3, we saw the most significant debt dropping kind of by 30% -plus relative to pre COVID baselines. We saw that grow back again as we approach towards October. And in fact, come October, I think that we were optimistic that we were going to see ourselves in the U. S. Come back to pre COVID levels. November, December, January, we began to see the impact of the 3rd wave. And as you point out, that's kind of taken us into seeing Apti's return back towards that 70% of pre COVID baseline or minus 30% in lung, CLL and ovarian. It does seem that there's been an uptick in March, but a lot of these are lagging. So I'm cautiously optimistic that it's moving back in the right direction, Ashland, but I'd like to see another couple of months. Obviously, vaccinations and kids returning to school, etcetera, helps. Adam. In terms of the second question on ODAC, I think that there is the most important thing that we take away from this is that, obviously, The ODAC panels are voting positively where there's clear unmet need. And I think that the positive votes that we saw in frontline bladder cancer were in cysts Atrium's and the largest ineligible patients where there's a general sentiment that there's a high level of unmet need in those niche populations. And I think that, it will also be quite interesting to see what happens from the FDA as it relates to they've now got to figure out ask for both of the positive ODACs what the confirmatory studies are going to be. So I still think that's yet to play out on those two elements. But I think that the main lesson, Like I said, is where there's high unmet need. I think that there's greater desire on the part of the community to have more treatment options available, which I think makes sense. Great. Thanks so much. Thanks, Dave. So next question is Sachin Jain of Bank of America. Over to you, Sachin. Hi. Thanks for taking my questions. Firstly, on TROP-two, Dave, you flagged the TNBC data at ESMO next weekend. I think that's going to be the 1st day for the latter our comparison versus TRIDELVY data on label. So are you comfortable with the data we will see will confirm a best in class profile versus the mid-30s, I think in response to it on the label or is the data simply just too early at this stage. And then if I could just one quick one for Mark on gross margin. You've discussed the drivers. Any color you can give on the magnitude of full year impact? Is the 1Q year on year roughly 300 basis point negative a fair proxy for the full year? Akermes. Thank you. Thanks for taking my question. Maybe Christian could actually cover the top two question. And Marc, if you want to jump on the gross margin question. Yes. Thank you, Sachin, for the question. Let me start touching why we believe that we have a best in class trough to ADC. The payload, top one versus SN38 is 10 times more potent. We have a very high stable linker. The half life ASCO 10/62 is 5 days, so we can have a very convenient 3 weekly schedule. We have clinical data that we shared in non small cell lung cancer with the reference rate between 20%, 25% and the median TFS 8 months that compare very well in the same setting with the competitors. Then The data, of course, I will not disclose the data that will be presented at ESMO in few days, but I think that would be add another piece of evidence is an oral presentation of preliminary data, triple negative breast cancer, But I think this would be another piece of evidence. We believe that this drug has high potential across indication. Of course, the initial focus is non small cell lung cancer, where we launched our first registrational study, And we are developing the combinations with checkpoint inhibitors, KEYTRUDA and UBARIMA. And we have, of course, a focus Okay. So on the gross margin full year impact, I cannot give you the view on the add to the growth of the year. But I can certainly reiterate that the largest factor And then the other factors, which are negative is add the profitability of the profit share that is increasing over time, and that's strongly correlated with the progression The third factor is the China pricing. We have talked about it. This is both the impact pricing as well as the value based procurement. On the positive side, I mentioned earlier on the mix If we have more oncology product, this has a beneficial impact. And obviously, there are also gains of productivity, But over the course of 2021, but they are not very large. So these are all the factors that contribute to the gross margin. Basically, what you see in the Q1, as I said in my remarks, is these dynamics are going to continue over the course end of 2021. Thank you. Thank you, Marc and Christian. James Gordon, James, go ahead. Hello, James Gordon, JPMorgan. Thanks for taking the question. A question on roxadustat. So post the recently updated Phase III data, Can you give your latest thoughts on the product's U. S. Potential in dialysis and where you now see the differentiation potentially versus ESA? I think you're now non inferior on safety in the incident and overall dialysis population, and you might even maybe look worse than ESAs in the prevalent dialysis population. So thoughts on roxo and commercial potential now ahead of the July adcom? And if you just if I could squeeze in a clarification just on the gross margin point, Your guidance, I believe, is excluding the vaccine. So if we're going to try and model it, should we just assume that the gross margin is effectively add nothing on the vaccine. So we put in whatever we want on the sales. We do no gross margin, and then we'll be able to understand what's going on, on an underlying basis for gross margin for the group. Marc, you could cover the gross margin question. Yes, remember, James, that there are more costs than cost of goods to this vaccine. There's also some accrualogens costs that we include in the price we charge. But maybe we could start with Omid covering the rosadustat question in the U. S, the differentiation and the potential of this agent as we see it today. Yes, absolutely. And thank you, James, for the question. So I think the product is still highly distance shakers For a variety of reasons. Of course, the most easy one is that this is an oral medication versus the infusion with EPO. The second clear differentiation is that roxadustat is working very well in inflamed patients. The data has clearly shown that the 3rd piece of differentiation is that it's more work in the equal non responders, roughly 15%, 20% of the patients are not responding well to EPO and those patients to get higher doses of EPO leading to higher cost of dialysis organizations. And finally, there's also a less of a need for blood transfusions with roxadustat. So I think overall, We have a very compelling offering. I think that's also reflected in the very strong sales we have seen in China, add $41,000,000 in the quarter and as driven by clearly dialysis dependent CKD as well as non dialysis. So of course, we need to wait for the advisory committee meeting. But overall, I think if we will get it through it and we are confident for that, that We still have a very differentiated product. Just to quick add again, just to arrange for Scott Gould. We're saying the The potential for this asset was always pre dialysis and this certain year remains. So we still believe there's a Very substantial potential for this product. Mark, do you want to cover the margin, Jacob? Yes. Thank you, James. So Very briefly, the there are obviously manufacturing costs, but above those manufacturing costs, we have development costs, acquisition cost and pharmaco diligence cost. But overall, these all these costs represent a small percentage of the revenue. And therefore, the gross margin itself is covering is basically covering this limited cost in percentage. Thank you. Thanks, Mark. Next is Richard Perks. Richard, go ahead. AFS. Hi. Thanks for taking my questions. Firstly, a follow-up on Tim's question because there's been a lot of discussion with investors about Aggressive risk to Tagrisso. It looks like Hanzo's data has been and you've been selected as a poster, so maybe that tells us something. But If you could help us understand your thoughts on the longer term competitive threats to Tagrisso in markets outside of China And whether being reimbursed through Medicare Part D represents a possible route to Hansel and IQRx competing on price. A. And secondly, on very interesting data on the selective path. I just wondered if you could give us a sense of what the development program going forward could look ABLOC and whether you would consider head to head trials versus Lynparza in order to fully test that profile and whether your agreement with Merck access to the access to the access to the access to the Ashland. Yes. So Richard, maybe I'll focus in as you highlighted on the competitive pressure add to our next question. I mean, I think that Tagrisso's current position AptiGas has been established based first on its clinical profile, second on the CDP and corresponding Regulatory labels that we've obtained and then thirdly, the commercial delivery. And I think all Three of those elements are going to need to be in place in order for us to see competitors make a meaningful set of inroads. I think that again on clinical profile and you alluded to the possibility of this in terms of the poster discussion, we'll have to wait and see. But I think that it's critical to remind that our FLORA approvals and the data set is based upon statistically significant PFS Asset and Overall Survival. I think that, while there are certainly potentially paths to market, in the United States and in other areas based Assignments and PFS. I think that that bar is going to be high and I think that it's going to really depend upon, also the generalizability our data set that is predominantly Chinese patients outside of China. So I don't think that the regulatory hurdles are insignificant there. I would also then secondly say on the clinical profile, we talk a lot about blood brain barrier and CNS. And so far from a preclinical standpoint, Thank that, we've got quite a bit of confidence in the Tagrisso profile and don't have as much insight into some of the other medicines. And then lastly, I do think that your point about Medicare Part D, I mean, Medicare Part D, yes, is an important part of treating lung cancer, Given the number of patients that are on Medicare, I think that it's important to note that as we get to Adora, add the value to society, to patients and to the healthcare system, even with an HTA assessment add to that. So I think the value proposition for Tagrisso and the value being generated is turning into a positive Astoria. And I think that that's something that becomes a core component of the conversations that we're going to be having with payers. Thank you, Dave. The next question is Mark Costa at Morgan Stanley. Mark, go ahead. A. Thank you, Pascal. So a question on in HER2, please, in HER2 low breast cancer. Please could you sort of help us understand Scientific and Commercial opportunity here. I know, Susan, you've been talking about sort of HER2 receptor and sterilization, and That's clearly important in terms of thinking about your confidence as you go down into IHC2 and then 1 plus patients as well. But obviously, on Slide 33, there's some combinations that you sort of look tantalizing in terms of AKT and TROP-two as well. And then Dave, on the commercial side, could you frame the patient population side of the debate? And there's seemingly a lack of competition here. So if you could So can I suggest that maybe Thanks, Mark? Sorry. Can I suggest that Christian covers the Sanofi view of this? And then, Dave, you could cover the commercial potential? Thank you, Pascal. Thank you, Marc, for the question. So Marc, As David presented, you have seen that f2 low is 50%, 55% of all breast cancer. And this is actually add the reason why we believe Enelto can be a transformational drag. This is a setting in which we are breaking the swim lanes from HER2 positive, ER positive. Actually, we capture some triple negative patients because in a subgroup of patients, triple negative Antelope. We have a readout that now has been announced in 2022, BDO-four, Daphne Breasted 4, in which we are comparing an AIR2 to standard of care that is chemotherapy, single agent chemotherapy, different agents, capsycla, the engine, cytariva, and orelbin and so on. Aperto. And I think we have confidence that Enerto can play a major role in this setting because we released data from the preliminary studies in which we observed a response rate that is 30% or higher With a very impressive duration of the response, more than 10 months and the PFS that is ranging between 8 10 months. When with any standard treatment, you expect no more than 20% response rate at PFS around 4 months. So this is an incredible opportunity for breast cancer patients and to fundamentally Great. Thanks, Christian. So then just turning to the sorry, Pascal. No, go ahead. Go first. So just turning to the commercial portion of this. Mark, I think that the two things that are at this stage, I'd say ASCO. It's worth highlighting as we think through this, and it's probably something that's worth already been getting into greater depth at ASCO or some of the other sessions. But obviously, you've got one dimension, which is we'll see, sort of, if you will, the degree of HER2 lowness, IHC2 plus, 1 plus and we'll see the data in terms of the benefits AstraZeneca as we define this new patient segment. I think that the second component that's important to remember is that in redefining this, we're going to have a mix of patients that are hormone receptor ATTR positive and patients that are triple negative that sit within this population. And so actually the competitive landscape is really different and the Previous lines of therapy are really different. So I think that as we model this and as we think about the opportunity, part of what we're going to need to see is in fact add the data in these various patient populations. I think that for the triple negative patients who are going immediately to chemo, whether they're relapsed or de novo, I think that this is going to be a very, very compelling, data set. If we've got an opportunity, obviously, to see that it's positive. In the hormone receptor AstraZeneca. I think that the question will be how early post AI and CDK4six does it make sense to begin to initiate. So these are some of the questions that we'll have to work on. Pascal, back to you. Thank you, Dave. So what I suggest we do, we take a question online from Andrew Berens at Leerink, And that actually will help me also go back to Richard's question because I realized we forgot to address Richard's question about the part. So, Antoine's question is, you highlighted your next generation PARP inhibitor, and I think it's for you, Suzanne. And you indicated that this part has greater PARP tracking. Based on the 1st generation PARP inhibitors, I thought tracking had been found not to be clinically relevant. Do you think that this will be more important with the selective part? So that will be part 1 of the question, Susan. And part 2 would be Richard's question, which is, can Can you give us a sense of the development program for the PARP 1? And would you consider going head to head against Linparza and ClinVar Plus? Go ahead, Cesar. Thank you. Thanks for the question. So first of all, I would just say that part our Chatting is important. What we've claimed in the context of the current clinically available PARP inhibitors When you adjust for the clinical dose and the relative potency of PARP trapping, you end up across the potent PARP choppers, which include talazoparib as well as alacarib. You end up at a reasonable level of efficacy when adjusted for dose. If you compare the PARP charters with voliparib, which doesn't shut PARP effectively, then you see that the efficacy with the PARP charters is indeed different, And that remains important. What we're trying to emphasize with the Part 1 selective molecule AZD5305 is that we have adding good PARP trapping capability, but the differential in both safety and efficacy is seen Atri Window, Ethan Van Alakkar with AZ-five thousand and five, and that was described well at the AACR presentation. And that leads on to the second question, which is, okay, so how might you develop a selective PARP inhibitor? And one of the key things is, first of all, With an even safer profile than we have with olaparib, I think there's an opportunity to go into early stage settings, adding a new product to the next generation. Building off what we already know is applications with the current PARP inhibitors. And we know from those, if you look across lines of therapy, You have greater effects when you go into earlier lines. So that's one part of the program that I think we're interested in. And secondly, I think you can develop add to our next question. In combination with other cytotoxic based therapies, which is something that the potent heart checkers have not been able to do without compromising on dose. So that's what we see in pre clinically, and that's what we'll be testing in the early clinical setting. And indeed, one of the cytotoxic agents we'd like to be able to combine with includes tibroisomerase inhibitors, which, of course, A part of the warhead of the ADC portfolio that we have, and we have preclinical assets in that space as well. So I think it provides a potentially quite broad development program. I would remind you that we started Phase 1 in the Q4 of last year. So we're still in the early development of AMPYTRON1 selective. It remains very exciting, and I look forward to sharing clinical data with you in the coming months. Thank you, Suzanne. Next question is from Emmanuel Obadakis at Deutsche Bank. Emmanuel, over to you. Thanks for taking the question. I'd just like to extend my condolences on behalf of the analyst community for that tragic news about Jose. Perhaps I could take a Couple of follow ups on HER2. You talked about the potential in the HER2 low breast setting commercially. We will, of course, have a second asset, Trudell, and a very similar setting made this year. So if you could just help us understand how you think those 2 might be positioned in the event they both produce positive data in that setting or non positive setting. And then on lung, and that's on lung, you had great ORR now PFS data from DESTINY LUN-one. You had a breakthrough designation a long time ago. We haven't heard anything further in terms of registration time lines. Could you just give us an update? Thank you. Thank you, Emmanuel. I think maybe Christian, if you could take those questions. Yes. I have to say that the first one, the line was a little bit disturbed. I'm not sure. Let me start, Emmanuel, with the lung. With the lung cancer, Anetto. With Anetto, we have the opportunity fundamentally to create a new segment in lung cancer. This is the vision and ultimately, the reality today. You have seen the data. There are 2 specific segments, F2 mutant. And you have seen the data. We got a breakthrough designation based on And with 60% response rate, this is a setting where ARENES, who will play a role. Represent about 2% of the lung cancer overall. This is a very active area of development. And then recently in one line conference, we released the data in HER2 positive in osmocell lung cancer, where we have an activity that is lower in terms of response rate and very good durability of the responses AFS in a setting that fundamentally is completely naive of any targeted therapy. Here we are developing combinatorial strategies in our BEST and ILANGO 3 in combination with checkpoint inhibitors in combination with cytotoxic, additional cytotoxic to bring this regimen further. So we believe that this is an important medicine that will help to appreciate even further the treatment of non small cell lung cancer in these two segments that Ed mentioned. And I would really ask you I'm candidly to repeat the first part of your question because the line was a little bit disturbed, sorry. Certainly, yes. And also, if you could just add When you expect to file with the FDA in HER2 mutant lung? And the first part of the question was just in terms of address the positioning for nHER2 and HER2 low breast relative to TRIDELDI, which of course has the TROPICS O2 study due to readout later this year? A. Sure. So the FDA interaction started, And so we will update accordingly based on the evolution of the Conversio. I think the head to low ATC segment and the potential role of another ADC like TROP-two ADC in breast cancer Africa. We discussed about HER2 low. We discussed all the data that HER2 produced in HER2 low versus On the standard of care. And I personally believe that Ertuglu can become a targeted segment, while The current TROP 2 development TROP 2 ADC development is focusing on North America population. So we need to see the level of activity. We believe that always that precision medicine ultimately does matter. Aker. And when with an air to air to low, we have a target and we will have the possibility to acquisition this medicine probably even earlier line. I was mentioning before Db-four with it out Apti in 2022 is the 1st study where we are investigating net of cardiovascular care as a second term line treatment. Now we started and we announced also A frontline study as a first chemotherapy for metastatic setting with that NIBRESTO-six in with an Ehr2 versus standard of care, Akercab site of Intax sales. So we believe that this is a this offer a different value proposition compared to up to. To You know very well we have a drop 2 ADC in development as well. And drop 2 ADC will have a place in breast cancer. I believe that that too low probably is not the face completed. I think Emmanuel is in the script I'm sorry. No, I was just going to say, just to very quickly build on what Christian said. I mean, I think that remember, it's a broad hormone receptor the population of the TRODELVI study, ours is HER2LO specific within the DESB breast04. And so I think that within that context, to patient selection, I think, is an important aspect of what we've got in VB-four. I think we could have longer durations of therapy that come out as a result of that. And so I do think that these are some important elements where there could be some good differentiation and we'll I tend to like the approach that we've taken, which is select the patients and do that based upon a strong biologic hypothesis. So I think that's the key thing that we'll look for. A. Thank you. Next question is on Robon of Citi. Robon, go ahead. Yes. A couple of questions on the competitive dynamics of Tagrisso, please. So first, one might imagine that EQRx might pursue a price based advanced supply strategy a little bit like Novartis did with inclisiran in the U. K. So assuming that this is what pans out and the data is sufficient to win approval, firstly, how much risk do you think there is to your current Tagrisso franchises in European territories as well as those areas that represent future potential demand that may not currently be contracting with you, AUM, given the entry of a deeply discounted competitive new entrant. And then second, perhaps you could update us on the timing the interim analysis and confidence around your FLORA 2 trial in combination with chemo. I ask because I'm thinking obviously about the GnJ a combination with the Phase 3 on running. G and J, it seems like they've borrowed a page from your mantle cell and calabrutinib copy book to get familiarity Amivantanab before they seek to get the full indication. Many thanks for those. Ned, do you want to take those? Yes. So on the first Andrew. I think, Andrew, the best thing that I've got to be able to draw as an analogy is I think that if we take a look at add some of the first generation TKIs that are on the market or if we take a look at dacamitinib, I think that add the strategies that have been pursued on those, which have been, I would describe as payer strategies, have not resulted in share AFFO change. And I think that, again, it goes back to that the clinical profile and efficacy, safety, our C and S are going to be the core areas where the decision making is made. And so I think that within that context, we have to see where the profile is for the EQR ExtraB. And I think that if it certainly is looking comparable, Once again, I think that it's going to be a matter of the speed with which they're able to get regulatory approvals. I think the same, frankly, applies our Investor Relations. In many respects within Europe, I think it's important to remember that within Europe, again, I think the movement with the Dura is critically important because that will be highly valued within even the HTA markets. I think that we're moving quickly to get approvals on the heels of Orbis. And I think that, add that advantage allows us to be able to solidify a very good value story within Europe. Lastly, on Flora, readout timing for that is ASCO 2022 on Florida 2. So I think that's the only thing I'd update there. Thank you. Akermes. Thank you, Dave. Next question is from Pierre Parekh, Keleur at Goldman Sachs. Thank you, Pascal. A couple of questions, please. The first Anirasimab. If you can just help us understand your level of confidence on the MALEDY kind of MEDLI study coming up, Kind of given what you have data in house from the MEDALY study, are you kind of feeling more or less confident about the MEDALY study coming up? That's one. And then separately, as we see kind of earlier this week, BEGI reported data for zanubrutinib on a head to head versus ibrutinib. Just would love your thoughts on the ALPINE study data. Thank you. Thank you, Kjell. Dave, can I ask you to cover maybe the second one? Yes. I think the main thing that I would just highlight and maybe in the spirit of being, kind of brief on this, I mean, I think that the ZANU data add 2 things. The first is that it reinforces that selective inhibition may very well matter. And so that's something certainly that has been an important part of the narrative around Calquence and that has resulted in adding the progress and good success that we've had in the U. S. And now are having opportunities for in Europe. I think the second thing that I would say is that The ALPINE data are showing response rate data. Response rate allows you to get to results fast, And there's certainly something that's beneficial about that, but those data have a medium follow-up of about a year compared to the Elevate RR, which has a medium follow-up closer to 40 months. So I do think that it's important to take a look at the maturity. I think that will affect approvability, As well as the way in which it's received. So I think those are important things to understand when you take a look at Alpine and compare to 6. Thanks, Ted. Meny? Yes. I think I mean, our confidence increased because the ATCARONE study that just read out was obviously highly positive and consistent with what we've seen in Phase 2. So overall, we clearly have a very active antibodies. I would say we have confidence in Melodie as well. Thank you. A. Next question is from Louise Rechter of Berenberg. Over to you, Jocelyn. Thank you very much. My question is on Lynparza. So from Dave's comments on diagnosis rates, it feels like Lynparza will be impacted by this. Could you confirm that and make a comment on how And also just to prepare us for the all comers prostate first line PROPEL study, your expectations here. I think the Phase 2 data was pretty compelling. But how do you see the competitive landscape as others are our outlook for 2019. Thank you. Thanks, Michelle. David, over to you. Yes. Maybe I'll take the first question and then Christian, if you want to speak to the PROPEL component on that, it might work. So, Louisa, We do see that ovarian cancer has been affected by COVID-nineteen in terms of diagnoses. Interestingly, we haven't Quite that same effect within breast cancer, and not necessarily the same degree with prostate cancer. So I think that given the fact that we've got add to our next question. As robust of a label as we do with labels in ovarian, prostate, pancreatic AstraZeneca and breast cancers. On top of that with the OLYMPIA data, which obviously we don't promote to, We look forward to having presented. I do think that that mix allows us to continue to be able to have the growth rates that we've gone through. But yes, I think that There's no question that ovarian cancer is experiencing some of the same diagnosis challenges that we've seen and hopefully that alleviates in the second half. Christian, on PROPEL. Thank you, Dave. Thank you, Luisa. So PROPEL Luisa can be actually the biggest to after Profound that already is picking up and is establishing Lynparza as a treatment in metastatic prostate cancer. I think we PROPEL that is adding an approach in first line maintenance in combination with an NHA, abiraterone acetate, active patient population, the possibility to become a standard of care as in this AT and T. PROPEL is the first study that we read out that had our trials ongoing. But I think we are the preliminary Phase II data are very supportive on these potential readouts that And this is, of course, I guess, you can imagine, we are waiting these results eagerly. The population is incredibly large, and we believe that The combination with apirateroneacetate that is a drug that is extensively used in this setting also being generic will allow Thank you, Christian. Should we move to the next question, Matt Weston of Credit Suisse. Over to you, Matt. Thank you very much. My question is for Leon on China. Leon, you've still got a number of large revenue drivers in China from legacy Astra drugs. Can you map out where you see the key risks AFFO and if you can get your crystal ball out any idea on timing. But also, I'd be very interested, given your strong position in China, how you're managing VBP? AAPI. Are there areas of growth that your findings that previously were unexpected? How easy is it to sustain incremental revenue in the face of competition? Very good question, Matt. I think we have AstraZeneca in China is a very successful company and we have quite some Aspen's legacy brand, off patent branded products, which is getting to VBP last Aditi. So I think if you ask me to predict the VBP in China, I think the VBP batch 5 will be announced sometime in May, June, implemented in quarter 3. AstraZeneca and the next wave could be insulin VBP and about biosimilar VBP and then It will be Vect 6, it will be sometime late this year or early next year. So nobody can tell when, but it's really largely up to the government agenda, but I think it ultimately will come. And how AstraZeneca managed BBP is AstraZeneca brand in China is a very all strong brand, especially for chronic disease, we have a very strong reputation and quality reputation Amandel patient consumers. And we also have very large low tier hospital sales team covering everywhere App and also Retail Pharmacy. And we recently established an online pharmacy team and department. And also we launched our own Internet Ad Hospital and Online Pharmacy in China. So basically, in the future, we expect to be a strong brand, so doctor to patient education advertising and repeat purchase and outside hospital channel, online channel will be quite important for all the VBP brands. Of course, Our future do not rely on the success of EVT brands anymore, so or legacy brands. So in China, we are very successful with Forsiga Apti and roxa and the new oncology portfolio, Tagrisso, Imfinzi, Imparza and even SODEX have a relatively very low risk of ABP. So we have a lot of inflation as well for Symbicort, Breast Fibroblastine just launching into NRDL and starting to show adding new impact on volume. So I think we have also a long list of new feature brands. I think this is really the focus, which are doing really well. Axtel. We have been very successful in new products in the past several years. Thanks, Carquins, please. AUM. It's been obviously performing very strongly. You've gone from 1 third to 40% first line new patient share in 1 quarter in the U. S, I think. A. And so the question really is, is there any reason to believe we weren't seeing similar level of uptake outside of the U. S? And if not, then are you how much upside or do you see upside to consensus numbers of around SEK 3,000,000,000 in 2025? And obviously that's particularly relevant given the margin impact that CapEx would have given the Dutch Panam box benefits. Thank you. Thanks, Naresh. Leon always wants to do better in the U. S. I'm sure he's to I guess, fortunately, China doesn't have a lot of CLL patients. So that's good. That's a good thing for China on that particular dimension. But I think that In terms of the expectations within Europe, I think an important place to Astart is that, yes, we absolutely have good expectations and ambition for Calquence within Europe. It is important to note that in the United States, Because we had the relapsed refractory mantle cell indication that we were able to drive on label use within that niche setting, which gave a number of the key centers add an opportunity to get experience with Calquence and to develop those patient experiences, particularly with the benefit risk profile. And that empirical data that they generated has actually been quite beneficial in terms of not only driving us to parity share Within that relapsed refractory mantle cell, but also within CLL. I highlight that because in Europe, we obviously don't have add some additional information on the mantle cell label coming in before that. So there is more work that we're going to need to do in order to be able to drive Calquent's experience And Calquent's utilization and going to move up that curve. With that said, I am pleased to say that we are already starting to see good progress within the U. K. Where we were able to capitalize on some opportunities that were created through COVID to be able to introduce Calquence through an EAP there. And in Germany, we've launched with pricing and reimbursement as of the 21st December. And in France, We've got an ATU. I do think the head to head data will be quite relevant within Europe, because those data, I think, will be AFFO2 European oncologists, hematologists and hemox who may not have their own data sets within that. Thanks. Thanks, Per. Next question is Michael Christian at UBS. Michael? Thanks very much. One question for Mark, please. I'm assuming you knew at the beginning of the year that you were not going to have to pay tax ask questions. So your full year guidance, the $4.75 to $5 on EPS is obviously a healthy chunk add some more color on the margin. So when I try to then triangulate that with your margin progression, I can sort of see how you get a little bit of margin improvement AUMBAR on a basis, but it isn't really all that much. So as we think about the rest of the year, what's going to hold your margin back access to the FDA. And again, I appreciate this is without the vaccine. And then a quick question for Leon. On the SGLT2s in China, Apti, sort of a weird scenario now where for CIGA is on the NRDL and is doing well, but you do have some other SCLP2s ask questions. Does that matter? And if so, how? Thank you, Michael. Can I suggest that maybe we start with the LGILT2 China question? Alain, do you want to cover this? And then Marc can cover the For SGLT2, we realized that there are adding other SGLT2 already going generic in China, already getting the VBP, but they are relatively small volumes. So VBP is a volume based our procurement, right. So relatively small volume. We are 90% plus in the GLT2 class, right. So I think We will still be good for the next 3, 4 years until we patent expire in China. So I I think beyond the patient expired, I think Fotika will gradually become a consumer brand, more repeat purchase by the long term users AstraZeneca's, it's a long term benefit well established among patients and doctors as well. So I don't worry too much about the other escalated 2 going VBP. I don't think there's any major impact in that perspective. Thanks, Claire. And Marc, the first question. Yes. So rapidly on the Vienna tax rate. So yes, we knew that the capital gain tax would not be levied. What we did not know earlier in the year At what price a transaction could be concluded, so therefore, we didn't know the quantum. We knew that it would be tax free. We also take into account event that we are anticipating from different jurisdiction on increase to in several jurisdictions of the corporate tax rate, announced to be announced and decided over the course of 2021. And we reconfirm that we expect the tax rate, the corporate tax rate to be between 18% 20% 22%, sorry. Thank you, Marc. The next question is Sam Fazoli at Bloomberg. Sam, over to you. Thank you very much, Pascal, for taking my questions. Just very quickly on the LYNPARZA Olympiad, Do you expect the data to be strong enough for regulatory approval and use take up in the market without an OS data point yet. And then on the DDR programs, Obviously, you had some V1 data. I just would love to hear your view of the competitive landscape and how this Advaira drug 15. And the ATR inhibitor has been in Phase 2 for quite a while. What is the issue with moving that forward if there is any issues? Aker. Thank you. Thank you, Sam. Susan, do you want to quote on those? Yes, happy to. Thank you. Thanks for the question. So in terms of the Olympiad data, Obviously, we've released with the press release that we've met the primary endpoint. We do anticipate that this endpoint, which is accepted in the adjuvant setting in breast cancer, can potentially lead to regulatory approval in this setting. In terms of V1, obviously, you've seen the data from the AACR about the Vintalis V1 inhibitor that's now entering and there were others that are starting to come in. We haven't already shared ASCO last year the data that was done in collaboration with Joyce Liu from the MCI looking in uterine serous carcinoma, and we have initiated a study in that setting. There are other potential opportunities for week 1, and we look forward to sharing those in the coming months. I think there will be more data coming out from that. Obviously, V1 inhibition is also associated with GI toxicity, And that's led to some of the challenges in terms of combinations. In terms of the ATR inhibitor, again, there are several different places where we're looking at the combination of ATR with other drugs in the portfolio, not just with olaparib, but also with Imprimzi. And we have shared some Apti that came out of the Hudson study in patients with non small cell lung cancer who have progressed despite our checkpoint's innovation with a PD-one or PD L1 agent. And we will be updating those data But there's also a draw attention to an abstract at ASCO, which has a post discussion In post IO melanoma as well. And so I think there's interesting data emerging from a couple of settings for the ACI. Yes. It's Christian. Just to let you know, ASCO released The plenary list, Olympia is in plenary at ASCO. So this speaks on the data that we'll be presenting And the potentially regulatory submission and discussion that can happen based on this data. Thank you, Christian. Very helpful to the point. So you have lots of very good questions. So we take 2 more And then we have to close. So Tim and Anders at Guggenheim, Tim and so back to you. Great. Thanks so much for the question. So, Pascal, for Ashish. One of the questions that we're starting to get is, with the incremental cash flow AstraZeneca that the company is going to be able to capitalize on with the Alexion acquisition. Should we anticipate AstraZeneca being more active AstraZeneca in the BD landscape. Obviously, the need to distribute equity related to Daiichi Sankyo was a question, but AstraZeneca has a very good track record for early deals. And just wondering to how we should be thinking about deal activity in the wake of a successful close of the Alexion transaction, perhaps in 2022 and going forward. And then the second question is for Susan. Susan, can you just give us your thoughts add on CDK9, MCL and the BCL-two XL in the context add the ability to combine with Calquence or other products. Of the 3, which are you most excited about? Thanks. Thank you, Silas. So the first question, the Alexion acquisition definitely helps us from a cash flow viewpoint. We should remember that the main driver of this acquisition is the And also the entry into a very important segment, Rare Diseases. Incidentally, our friends at Alexion released Their results today, and they had a very good first quarter with a 13% increase in sales. So they continue to do well. As far as the cash flow, it's of course also very important consequence of this potential acquisition. As we answer your question, it's a little bit difficult. We said that we, of course, will consider increasing the dividend and that's a decision that we have to make. And we will also deliver on and reduce debt. But it is true that it also enables us to consider additional business development. We'll continue looking at BD like we've done in the past, but you're starting to keep in mind when you're licensing products or buy We have a very rich portfolio and we really try to focus our resources on making So We always consider it even in the context of maximizing the assets we have in our existing portfolio. So Susan, second question is for you. Yes. Thanks, Seamus, for the question. So I think best of all, just to sort of categorize them, both Mcl-one and CDK-nine are essentially trying 2 different ways to target a really important target at MTL-one. Our MTL-one inhibitor is a direct inhibitor given intravenously. And actually the data, if you look at the preclinical ratio for this target, it was particularly interesting in combination with a BCR-two inhibitor, which is another Akerlofic family. So when you adjust both together, you have particularly strong activity preclinically. The challenge is always the is that combination going to have a good safety profile. So we are testing add that combination in early phase clinical trials. It's too early to say at the moment whether the safety profile is going to allow for the efficacy that we want them to see. CDK9 is a different way of targeting Mcl-one through inhibition of RNA polymerase 2, which basically stops transcription Because MCL1 is a short circuit transcript, it shuts that down in particular. It also has a broader effect. And again, that means that the safety profile is going to Apti clearly see activity in some hematologic malignancies. I'm more excited about the potential for that. But we again, we have to understand that balance of safety and efficacy. The BTL XL is not just a BTL XL inhibitor, BTL XL and BTL-two, which of course is in the development. I'll get this And it's been formulated with as an element in order to provide an optimized PKPD profile. So I think, Again, this is in early phase dose escalation studies. We're excited about that. I I think it's hard to pick between them because it's ultimately, it's going to be that benefit risk profile, and we haven't pushed them to the limit of the dose escalation yet to really understand that. So you have to be a bit patient for another few months before we can answer that question properly. Thank you, Silane. So we'll take One last question. This is Karl Barth Cohen. Still one question, please. Okay. Yes, I have one question on HER2 with a couple of parts. I'm curious if there are interim looks at DESTINY Breast 4 and if so, have any occurred yet? What does the fact that the delay just was announced ask tell us about the cadence of the accumulation of events. Is it accrual event event accrual slowing and what does that tell us? And why was Destiny 3 so far been spared of delays? Thank you. Thank you, Steve. So maybe Christian, you could take those questions. Yes, yes. Thank you, Pascal. Thank you, Steve. Steve, in general, when events are coming at a lower pace is most of the time good thing. We don't know. It's a blinded study. We are waiting the right number of events to run the analysis as predefined by the protocol. As the SSANQUE announced, we are confirming year to date, It is moving a few months later than expected, but it's really simply driven by Number of events that we are accruing. Destiny Verso III is also Actually, it's still on track for the analysis that was planned. Here, we are accruing the event As planned. So I cannot tell you more than this. I mean, we what I can tell you is Assertio. You know the assumption where both studies are based on. I spoke before about getting IMbresto 4 for L2O. For that in IMbresto 3, the level of activity we have seen with Enerto in a later line is superior than the expected level of activity of TDM-one in this specific setting, either in terms of response rate and specifically in terms of PFS. So we are still incredibly confident that all 3 will have a positive result. Thank you. Thank you, Christian. So we'll close here. Let me thank you very much for your interest in our company and your great questions. Just a couple of points in closing. We had a very good first quarter with 7% increase, excluding the vaccine at CER, Despite a very tough comparison to Q1 last year and also a headwind from COVID like all our peers or most of our peers are experiencing for the first half. We think we will continue to experience those headwinds, and we believe that the second half of the year should see an acceleration of growth. But definitely 7% is a very robust result. And as a reminder, if we correct for the inventory build of AstraZeneca Immunology will have grown, but it's impacted by COVID and the effect it has on the Pimicort and Pimicort in particular, A. Our profit is up 34%, and we are doing quite well. So we're on track. We reconfirm the guidance for the year. And with this, I will thank you again for your interest and wish you a good day. Goodbye.

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