1
00:00:02,440 --> 00:00:06,760
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:07,000 --> 00:00:09,040
Speaker 2: Probably one of the most interesting stories is what is

3
00:00:09,039 --> 00:00:14,320
Speaker 2: happening with AstraZeneca, this huge UK healthcare company, holding its

4
00:00:14,840 --> 00:00:16,840
Speaker 2: first capital markets day in ten years. This is the

5
00:00:16,960 --> 00:00:19,959
Speaker 2: UK's most valuable company. It's on the foot See one hundred.

6
00:00:20,000 --> 00:00:21,840
Speaker 2: The most valuable company on the foot see one hundred.

7
00:00:22,000 --> 00:00:24,200
Speaker 2: What it's saying this morning is that it's going to

8
00:00:24,200 --> 00:00:27,440
Speaker 2: almost double sales to eighty billion dollars by twenty thirty.

9
00:00:27,480 --> 00:00:29,680
Speaker 2: It's going to launch twenty new medicines by the end

10
00:00:29,680 --> 00:00:33,640
Speaker 2: of the decade as well. We're joined by Aaron Hannah Saren,

11
00:00:33,760 --> 00:00:38,959
Speaker 2: the company's CFO, to discuss these targets. Good morning, Very

12
00:00:39,040 --> 00:00:40,600
Speaker 2: nice to have you on the program. You've got a

13
00:00:40,600 --> 00:00:43,640
Speaker 2: busy day coming up, so we're really gratefully spending some

14
00:00:43,680 --> 00:00:45,680
Speaker 2: time with us this morning to lay out what you

15
00:00:45,760 --> 00:00:49,640
Speaker 2: are seeing over the next ten years. The eighty billion

16
00:00:49,920 --> 00:00:53,159
Speaker 2: revenue target that you've announced this morning implies kind of

17
00:00:53,320 --> 00:00:56,840
Speaker 2: seven eight percent top line growth during that period. The

18
00:00:56,840 --> 00:01:00,240
Speaker 2: market doesn't see you generating those sort of numbers, or

19
00:01:00,280 --> 00:01:04,200
Speaker 2: hasn't up until now. What is the market missing about

20
00:01:04,200 --> 00:01:07,160
Speaker 2: the potential this company has that will get it to

21
00:01:07,280 --> 00:01:08,720
Speaker 2: those kinds of growth rates.

22
00:01:09,440 --> 00:01:13,479
Speaker 3: Thanks for having me. That's exactly why we're actually hosting

23
00:01:13,560 --> 00:01:17,240
Speaker 3: this investor day here today at the DISK. We are

24
00:01:17,319 --> 00:01:20,800
Speaker 3: very excited about this bold ambition that we've set for

25
00:01:20,959 --> 00:01:25,120
Speaker 3: twenty thirty, and it's actually not just one medicine but

26
00:01:25,240 --> 00:01:29,000
Speaker 3: a whole portfolio of medicine that we will highlight. The

27
00:01:29,080 --> 00:01:32,120
Speaker 3: breadth and scope of our medicines is truly incredible, and

28
00:01:32,160 --> 00:01:35,640
Speaker 3: it ranges everything from oncology and rare diseases to the

29
00:01:35,680 --> 00:01:39,640
Speaker 3: medicines in biopharma for metabolic disorders as well as respiratory

30
00:01:40,360 --> 00:01:43,920
Speaker 3: And the growth that we anticipate is both from existing

31
00:01:44,000 --> 00:01:46,720
Speaker 3: products as well as the twenty new medicines that we

32
00:01:46,800 --> 00:01:48,440
Speaker 3: expect to launch by twenty thirty.

33
00:01:49,880 --> 00:01:52,120
Speaker 2: It's really interesting you haven't included obesity in that list.

34
00:01:52,200 --> 00:01:54,560
Speaker 2: Maybe you come back and discuss that in just a moment,

35
00:01:54,600 --> 00:01:58,680
Speaker 2: but oncology clearly absolutely front and center as we work

36
00:01:58,720 --> 00:02:01,800
Speaker 2: our way through this period. How big is oncology going

37
00:02:01,840 --> 00:02:04,040
Speaker 2: to be for astrosenica as we get to the end

38
00:02:04,120 --> 00:02:06,880
Speaker 2: of this period, how big a slice of the pie

39
00:02:06,920 --> 00:02:08,480
Speaker 2: is oncology going to represent.

40
00:02:09,120 --> 00:02:12,639
Speaker 3: You know, oncology continues to grow very strongly today. Oncology

41
00:02:12,720 --> 00:02:15,560
Speaker 3: is about forty percent of the business, and we expect

42
00:02:15,680 --> 00:02:20,440
Speaker 3: very strong double digit growth in oncology, both in new

43
00:02:20,480 --> 00:02:23,760
Speaker 3: medicines as well as our existing medicines and new indications

44
00:02:23,800 --> 00:02:27,560
Speaker 3: for those medicines. Overall, we have over one hundred and

45
00:02:27,600 --> 00:02:31,960
Speaker 3: twenty Phase two and three studies going on for our medicines,

46
00:02:32,120 --> 00:02:34,600
Speaker 3: and again we're working on a whole bunch of new

47
00:02:34,639 --> 00:02:36,600
Speaker 3: medicines that you'll hear about today.

48
00:02:37,160 --> 00:02:38,480
Speaker 1: Rathern I talk to us a little bit about your

49
00:02:38,520 --> 00:02:42,280
Speaker 1: manufacturing plans here. Recently there have been investments in facilities

50
00:02:42,320 --> 00:02:46,720
Speaker 1: in Dunkirk, Singapore, Liverpool, even Maryland as well. In light

51
00:02:46,840 --> 00:02:49,760
Speaker 1: of some of the kind of crackdown that US regulatory

52
00:02:49,800 --> 00:02:52,919
Speaker 1: authorities are putting in terms of where supply chains extend

53
00:02:52,960 --> 00:02:57,280
Speaker 1: into Asia. How is Astroseneca tackling that manufacturing story.

54
00:02:57,880 --> 00:03:02,959
Speaker 3: So our manufacturing investments are very strategic. They are aligned

55
00:03:03,080 --> 00:03:06,280
Speaker 3: very much with the new modalities and the new technologies

56
00:03:06,320 --> 00:03:09,160
Speaker 3: that we have in our pipeline. So the announcement, for

57
00:03:09,240 --> 00:03:12,760
Speaker 3: example in Maryland is for cell therapy products, which we

58
00:03:12,800 --> 00:03:15,639
Speaker 3: see as sort of a completely new modality that will

59
00:03:16,360 --> 00:03:20,480
Speaker 3: change how cancer care and autoimmune diseases are treated. What

60
00:03:20,560 --> 00:03:23,360
Speaker 3: we announced a couple of days ago in Singapore is

61
00:03:23,400 --> 00:03:27,560
Speaker 3: for antibody drug conjugates. We expect that antibody drug conjugates

62
00:03:28,400 --> 00:03:32,840
Speaker 3: will replace traditional chemotherapy over the next decade, and so

63
00:03:32,919 --> 00:03:36,480
Speaker 3: we're making these investments ahead of what we see coming

64
00:03:36,520 --> 00:03:39,800
Speaker 3: in our pipeline because we know that these medicines have

65
00:03:39,920 --> 00:03:42,440
Speaker 3: the potential to be very large medicines.

66
00:03:42,760 --> 00:03:45,080
Speaker 1: Well, speaking of your pipeline and these targets, even just

67
00:03:45,120 --> 00:03:47,240
Speaker 1: in terms of releasing the new twenty medicines, you're looking

68
00:03:47,240 --> 00:03:49,560
Speaker 1: at between twenty thirty. That's already beating some of the

69
00:03:49,680 --> 00:03:51,240
Speaker 1: estimates that you had laid out. I want to say

70
00:03:51,280 --> 00:03:52,160
Speaker 1: just a couple of months ago.

71
00:03:52,600 --> 00:03:53,360
Speaker 3: Rather, I talk to us.

72
00:03:53,280 --> 00:03:55,200
Speaker 1: A little bit about the buyback story here. Some of

73
00:03:55,280 --> 00:03:58,440
Speaker 1: your peers are executing some really big buybacks at this time.

74
00:03:58,680 --> 00:04:00,720
Speaker 1: If you're looking to have this much success in the

75
00:04:00,720 --> 00:04:03,680
Speaker 1: next five ten years, where do you stand on returning

76
00:04:03,720 --> 00:04:05,480
Speaker 1: some of that capital to shareholders.

77
00:04:06,080 --> 00:04:10,560
Speaker 3: So our capital allocation priorities haven't really changed. First and foremost,

78
00:04:10,640 --> 00:04:14,520
Speaker 3: the capital allocation is back investment into the business. We

79
00:04:14,560 --> 00:04:19,080
Speaker 3: continue to invest, as you mentioned in capital plans, to

80
00:04:19,120 --> 00:04:23,440
Speaker 3: sustain that growth, but also we invest somewhere between low

81
00:04:23,480 --> 00:04:26,640
Speaker 3: twenties percentage of our revenue in R and D our.

82
00:04:26,680 --> 00:04:30,760
Speaker 3: Second is to maintain a strong investment grade rating. We

83
00:04:30,880 --> 00:04:34,320
Speaker 3: had taken on significant amount of debt as we did

84
00:04:34,360 --> 00:04:38,160
Speaker 3: the Alexion transaction back in twenty twenty early twenty twenty one,

85
00:04:38,240 --> 00:04:41,159
Speaker 3: and we've reduced that leverage and today's standard under two

86
00:04:41,160 --> 00:04:45,640
Speaker 3: times leverage. Thirdly, we are returning capital to shareholders. At

87
00:04:45,640 --> 00:04:50,599
Speaker 3: our recent Animal meeting, we announced an increase in our dividends,

88
00:04:50,600 --> 00:04:54,000
Speaker 3: So dividend is generally our way to return capital to

89
00:04:54,040 --> 00:04:58,080
Speaker 3: shareholders as well as obviously capital appreciation we have not

90
00:04:58,680 --> 00:05:02,359
Speaker 3: historically done by BA and again we look at total

91
00:05:02,400 --> 00:05:05,520
Speaker 3: shareholder returns, so the appreciation in the stock as well

92
00:05:05,560 --> 00:05:08,799
Speaker 3: as the return of capital via dividends.

93
00:05:08,560 --> 00:05:10,320
Speaker 4: Rather than good morning. So you can ask you about

94
00:05:10,440 --> 00:05:14,360
Speaker 4: obesity drugs. Clearly you've been very successful in oncology and

95
00:05:14,400 --> 00:05:17,080
Speaker 4: the businesses has focused on that and on other areas,

96
00:05:17,240 --> 00:05:20,240
Speaker 4: but around obesity, that's where a lot of the market

97
00:05:20,560 --> 00:05:24,279
Speaker 4: chasser and excitement has been of late. What is Astra's

98
00:05:24,320 --> 00:05:25,839
Speaker 4: plan when it comes to obesity.

99
00:05:26,880 --> 00:05:30,159
Speaker 3: So we have an oral molecule and oral GLP one

100
00:05:30,200 --> 00:05:34,279
Speaker 3: that we're working on. We are going to begin various

101
00:05:34,520 --> 00:05:37,920
Speaker 3: two different phase twos this year. In addition, we have

102
00:05:38,000 --> 00:05:41,680
Speaker 3: an earlier molecule, which is long acting amulon. Both of

103
00:05:41,720 --> 00:05:47,200
Speaker 3: those mechanisms are targeting weight management, and most importantly are

104
00:05:47,200 --> 00:05:52,200
Speaker 3: strategies actually to combine them with agents that help with comorbidity.

105
00:05:52,360 --> 00:05:55,760
Speaker 3: So in addition to weight management, many of these patients

106
00:05:55,839 --> 00:06:00,320
Speaker 3: actually have heart disease or kidney disease, or hypertension or

107
00:06:00,920 --> 00:06:04,680
Speaker 3: hygh cholesterol. So it's really being able to provide a

108
00:06:04,720 --> 00:06:08,360
Speaker 3: single solution and single oral solution for these patients. And

109
00:06:08,800 --> 00:06:11,240
Speaker 3: that's really what we're focusing on, and we're going to

110
00:06:11,279 --> 00:06:15,120
Speaker 3: do studies that show the outcomes with these drugs are

111
00:06:15,240 --> 00:06:19,039
Speaker 3: very beneficial. So that's the hope and expectations for the

112
00:06:19,080 --> 00:06:22,040
Speaker 3: weight management projects that we have in our pipeline.

113
00:06:22,320 --> 00:06:25,080
Speaker 4: Rather, we've talked about the production facilities that you have

114
00:06:25,160 --> 00:06:27,039
Speaker 4: in lots of different parts of the world. Clearly a

115
00:06:27,160 --> 00:06:30,360
Speaker 4: very global business still based in the UK, and you're

116
00:06:30,400 --> 00:06:31,719
Speaker 4: coming to us from I know your R and D

117
00:06:31,800 --> 00:06:36,159
Speaker 4: facility in Cambridge. How committed to a UK listing is

118
00:06:36,160 --> 00:06:38,440
Speaker 4: a business like Astraseneca? Do you think is much talked

119
00:06:38,440 --> 00:06:41,719
Speaker 4: about here at the moment about certain very high profile

120
00:06:41,800 --> 00:06:45,479
Speaker 4: businesses thinking about possibly listing elsewhere in the United States,

121
00:06:45,520 --> 00:06:46,080
Speaker 4: for example.

122
00:06:46,640 --> 00:06:49,159
Speaker 3: Well, we're very happy with our primary listing here in

123
00:06:49,200 --> 00:06:52,680
Speaker 3: the UK. As you mentioned, I am here at our

124
00:06:53,080 --> 00:06:56,440
Speaker 3: Discovery Center, which is called the DISC in Cambridge. This

125
00:06:56,560 --> 00:06:59,160
Speaker 3: is a brand new facility and really state of the art,

126
00:06:59,400 --> 00:07:03,520
Speaker 3: and we have over twenty two hundred scientists working here

127
00:07:04,600 --> 00:07:08,280
Speaker 3: for treatment for cancer. We do expect that our portfolio

128
00:07:08,360 --> 00:07:11,840
Speaker 3: of medicines in oncology, for example, will be able to

129
00:07:11,920 --> 00:07:16,120
Speaker 3: potentially treat over half of all potential cancers by twenty thirty.

130
00:07:16,200 --> 00:07:20,480
Speaker 3: So again we have very ambitious targets, not just financial,

131
00:07:20,640 --> 00:07:23,200
Speaker 3: but also in the way we're transforming care.

132
00:07:23,440 --> 00:07:27,160
Speaker 2: Carry on the conversation and talk more about geography. The

133
00:07:27,240 --> 00:07:31,000
Speaker 2: United States has its biosecure acts which it's pushing through

134
00:07:31,080 --> 00:07:35,640
Speaker 2: now the UK there are rumblings about something similar. Asta

135
00:07:35,760 --> 00:07:39,280
Speaker 2: is a company that has invested heavily in China. Are

136
00:07:39,320 --> 00:07:43,280
Speaker 2: these issues going to become more problematic? Is that investments

137
00:07:43,280 --> 00:07:45,960
Speaker 2: in China going to become more difficult? Are you worried

138
00:07:46,000 --> 00:07:49,040
Speaker 2: that the UK may ultimately go down the same route

139
00:07:49,200 --> 00:07:51,400
Speaker 2: that we're seeing with the United States and its relations

140
00:07:51,400 --> 00:07:51,920
Speaker 2: to China.

141
00:07:52,440 --> 00:07:55,760
Speaker 3: We have a very large and successful business in China,

142
00:07:55,840 --> 00:07:59,560
Speaker 3: as you mentioned, and not only is it a commercial business,

143
00:07:59,600 --> 00:08:02,120
Speaker 3: but I think because of our standing and history in China,

144
00:08:02,600 --> 00:08:05,360
Speaker 3: we do have access to a lot of research that

145
00:08:05,440 --> 00:08:08,960
Speaker 3: is also coming out of China, and we've done licenses

146
00:08:09,040 --> 00:08:13,760
Speaker 3: and partnerships and BD transactions with companies with innovative companies

147
00:08:13,760 --> 00:08:19,280
Speaker 3: in China. We've also invested in manufacturing in China. But again,

148
00:08:19,520 --> 00:08:22,920
Speaker 3: our supply chains are very robust. Those were tested during

149
00:08:22,960 --> 00:08:25,560
Speaker 3: COVID and we did not miss a single dose for

150
00:08:25,600 --> 00:08:29,600
Speaker 3: a single patient across the globe. But also they're segregated

151
00:08:29,640 --> 00:08:33,320
Speaker 3: in ways, so for example, some of the facilities that

152
00:08:33,360 --> 00:08:36,559
Speaker 3: we have in China actually supplied China for China or

153
00:08:36,679 --> 00:08:39,600
Speaker 3: in the emerging market. So I think we try to

154
00:08:39,640 --> 00:08:43,200
Speaker 3: manage our entire supply chain network so it is very

155
00:08:43,880 --> 00:08:46,080
Speaker 3: mitigated from a risk standpoint.

156
00:08:47,559 --> 00:08:49,480
Speaker 2: This is a slightly left field question, but I'm going

157
00:08:49,520 --> 00:08:52,680
Speaker 2: to pose it anyway. UK universities are really struggling with

158
00:08:52,720 --> 00:08:55,440
Speaker 2: foreign students right now, and how we deal with foreign

159
00:08:55,480 --> 00:08:57,319
Speaker 2: students here in the UK is becoming a sort of

160
00:08:57,400 --> 00:09:01,200
Speaker 2: hot political issue. How much does do Zenica rely on

161
00:09:01,280 --> 00:09:04,240
Speaker 2: foreign students coming through places like Cambridge in terms of

162
00:09:04,280 --> 00:09:07,959
Speaker 2: providing the knowledge base that you ultimately rely on to

163
00:09:08,080 --> 00:09:09,520
Speaker 2: invent to create new drugs.

164
00:09:10,080 --> 00:09:13,240
Speaker 3: Well, I count comments specifically on foreign students or not,

165
00:09:13,480 --> 00:09:16,720
Speaker 3: but we do have a very large program to support

166
00:09:17,480 --> 00:09:21,120
Speaker 3: the university. So for example, here in Cambridge we work closely,

167
00:09:21,240 --> 00:09:24,360
Speaker 3: very much with the university. Here we also have a

168
00:09:24,400 --> 00:09:28,600
Speaker 3: pH d student program where we provide internships for those

169
00:09:28,800 --> 00:09:32,120
Speaker 3: PhD students and not just again in Cambridge, but across

170
00:09:32,160 --> 00:09:36,120
Speaker 3: the UK. So again our intention is to support science

171
00:09:36,160 --> 00:09:40,199
Speaker 3: and to support research regardless of where those students come

172
00:09:40,240 --> 00:09:43,720
Speaker 3: from and really help, okay you know, develop the best

173
00:09:43,760 --> 00:09:44,839
Speaker 3: medicines rather.

174
00:09:45,000 --> 00:09:47,040
Speaker 4: Thank you very much, aradan As Saarmy and astro Zenica

175
00:09:47,120 --> 00:09:48,320
Speaker 4: CFO joining us there