Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Probably one of the most interesting stories is what is
Speaker 2: happening with AstraZeneca, this huge UK healthcare company, holding its
Speaker 2: first capital markets day in ten years. This is the
Speaker 2: UK's most valuable company. It's on the foot See one hundred.
Speaker 2: The most valuable company on the foot see one hundred.
Speaker 2: What it's saying this morning is that it's going to
Speaker 2: almost double sales to eighty billion dollars by twenty thirty.
Speaker 2: It's going to launch twenty new medicines by the end
Speaker 2: of the decade as well. We're joined by Aaron Hannah Saren,
Speaker 2: the company's CFO, to discuss these targets. Good morning, Very
Speaker 2: nice to have you on the program. You've got a
Speaker 2: busy day coming up, so we're really gratefully spending some
Speaker 2: time with us this morning to lay out what you
Speaker 2: are seeing over the next ten years. The eighty billion
Speaker 2: revenue target that you've announced this morning implies kind of
Speaker 2: seven eight percent top line growth during that period. The
Speaker 2: market doesn't see you generating those sort of numbers, or
Speaker 2: hasn't up until now. What is the market missing about
Speaker 2: the potential this company has that will get it to
Speaker 2: those kinds of growth rates.
Speaker 3: Thanks for having me. That's exactly why we're actually hosting
Speaker 3: this investor day here today at the DISK. We are
Speaker 3: very excited about this bold ambition that we've set for
Speaker 3: twenty thirty, and it's actually not just one medicine but
Speaker 3: a whole portfolio of medicine that we will highlight. The
Speaker 3: breadth and scope of our medicines is truly incredible, and
Speaker 3: it ranges everything from oncology and rare diseases to the
Speaker 3: medicines in biopharma for metabolic disorders as well as respiratory
Speaker 3: And the growth that we anticipate is both from existing
Speaker 3: products as well as the twenty new medicines that we
Speaker 3: expect to launch by twenty thirty.
Speaker 2: It's really interesting you haven't included obesity in that list.
Speaker 2: Maybe you come back and discuss that in just a moment,
Speaker 2: but oncology clearly absolutely front and center as we work
Speaker 2: our way through this period. How big is oncology going
Speaker 2: to be for astrosenica as we get to the end
Speaker 2: of this period, how big a slice of the pie
Speaker 2: is oncology going to represent.
Speaker 3: You know, oncology continues to grow very strongly today. Oncology
Speaker 3: is about forty percent of the business, and we expect
Speaker 3: very strong double digit growth in oncology, both in new
Speaker 3: medicines as well as our existing medicines and new indications
Speaker 3: for those medicines. Overall, we have over one hundred and
Speaker 3: twenty Phase two and three studies going on for our medicines,
Speaker 3: and again we're working on a whole bunch of new
Speaker 3: medicines that you'll hear about today.
Speaker 1: Rathern I talk to us a little bit about your
Speaker 1: manufacturing plans here. Recently there have been investments in facilities
Speaker 1: in Dunkirk, Singapore, Liverpool, even Maryland as well. In light
Speaker 1: of some of the kind of crackdown that US regulatory
Speaker 1: authorities are putting in terms of where supply chains extend
Speaker 1: into Asia. How is Astroseneca tackling that manufacturing story.
Speaker 3: So our manufacturing investments are very strategic. They are aligned
Speaker 3: very much with the new modalities and the new technologies
Speaker 3: that we have in our pipeline. So the announcement, for
Speaker 3: example in Maryland is for cell therapy products, which we
Speaker 3: see as sort of a completely new modality that will
Speaker 3: change how cancer care and autoimmune diseases are treated. What
Speaker 3: we announced a couple of days ago in Singapore is
Speaker 3: for antibody drug conjugates. We expect that antibody drug conjugates
Speaker 3: will replace traditional chemotherapy over the next decade, and so
Speaker 3: we're making these investments ahead of what we see coming
Speaker 3: in our pipeline because we know that these medicines have
Speaker 3: the potential to be very large medicines.
Speaker 1: Well, speaking of your pipeline and these targets, even just
Speaker 1: in terms of releasing the new twenty medicines, you're looking
Speaker 1: at between twenty thirty. That's already beating some of the
Speaker 1: estimates that you had laid out. I want to say
Speaker 1: just a couple of months ago.
Speaker 3: Rather, I talk to us.
Speaker 1: A little bit about the buyback story here. Some of
Speaker 1: your peers are executing some really big buybacks at this time.
Speaker 1: If you're looking to have this much success in the
Speaker 1: next five ten years, where do you stand on returning
Speaker 1: some of that capital to shareholders.
Speaker 3: So our capital allocation priorities haven't really changed. First and foremost,
Speaker 3: the capital allocation is back investment into the business. We
Speaker 3: continue to invest, as you mentioned in capital plans, to
Speaker 3: sustain that growth, but also we invest somewhere between low
Speaker 3: twenties percentage of our revenue in R and D our.
Speaker 3: Second is to maintain a strong investment grade rating. We
Speaker 3: had taken on significant amount of debt as we did
Speaker 3: the Alexion transaction back in twenty twenty early twenty twenty one,
Speaker 3: and we've reduced that leverage and today's standard under two
Speaker 3: times leverage. Thirdly, we are returning capital to shareholders. At
Speaker 3: our recent Animal meeting, we announced an increase in our dividends,
Speaker 3: So dividend is generally our way to return capital to
Speaker 3: shareholders as well as obviously capital appreciation we have not
Speaker 3: historically done by BA and again we look at total
Speaker 3: shareholder returns, so the appreciation in the stock as well
Speaker 3: as the return of capital via dividends.
Speaker 4: Rather than good morning. So you can ask you about
Speaker 4: obesity drugs. Clearly you've been very successful in oncology and
Speaker 4: the businesses has focused on that and on other areas,
Speaker 4: but around obesity, that's where a lot of the market
Speaker 4: chasser and excitement has been of late. What is Astra's
Speaker 4: plan when it comes to obesity.
Speaker 3: So we have an oral molecule and oral GLP one
Speaker 3: that we're working on. We are going to begin various
Speaker 3: two different phase twos this year. In addition, we have
Speaker 3: an earlier molecule, which is long acting amulon. Both of
Speaker 3: those mechanisms are targeting weight management, and most importantly are
Speaker 3: strategies actually to combine them with agents that help with comorbidity.
Speaker 3: So in addition to weight management, many of these patients
Speaker 3: actually have heart disease or kidney disease, or hypertension or
Speaker 3: hygh cholesterol. So it's really being able to provide a
Speaker 3: single solution and single oral solution for these patients. And
Speaker 3: that's really what we're focusing on, and we're going to
Speaker 3: do studies that show the outcomes with these drugs are
Speaker 3: very beneficial. So that's the hope and expectations for the
Speaker 3: weight management projects that we have in our pipeline.
Speaker 4: Rather, we've talked about the production facilities that you have
Speaker 4: in lots of different parts of the world. Clearly a
Speaker 4: very global business still based in the UK, and you're
Speaker 4: coming to us from I know your R and D
Speaker 4: facility in Cambridge. How committed to a UK listing is
Speaker 4: a business like Astraseneca? Do you think is much talked
Speaker 4: about here at the moment about certain very high profile
Speaker 4: businesses thinking about possibly listing elsewhere in the United States,
Speaker 4: for example.
Speaker 3: Well, we're very happy with our primary listing here in
Speaker 3: the UK. As you mentioned, I am here at our
Speaker 3: Discovery Center, which is called the DISC in Cambridge. This
Speaker 3: is a brand new facility and really state of the art,
Speaker 3: and we have over twenty two hundred scientists working here
Speaker 3: for treatment for cancer. We do expect that our portfolio
Speaker 3: of medicines in oncology, for example, will be able to
Speaker 3: potentially treat over half of all potential cancers by twenty thirty.
Speaker 3: So again we have very ambitious targets, not just financial,
Speaker 3: but also in the way we're transforming care.
Speaker 2: Carry on the conversation and talk more about geography. The
Speaker 2: United States has its biosecure acts which it's pushing through
Speaker 2: now the UK there are rumblings about something similar. Asta
Speaker 2: is a company that has invested heavily in China. Are
Speaker 2: these issues going to become more problematic? Is that investments
Speaker 2: in China going to become more difficult? Are you worried
Speaker 2: that the UK may ultimately go down the same route
Speaker 2: that we're seeing with the United States and its relations
Speaker 2: to China.
Speaker 3: We have a very large and successful business in China,
Speaker 3: as you mentioned, and not only is it a commercial business,
Speaker 3: but I think because of our standing and history in China,
Speaker 3: we do have access to a lot of research that
Speaker 3: is also coming out of China, and we've done licenses
Speaker 3: and partnerships and BD transactions with companies with innovative companies
Speaker 3: in China. We've also invested in manufacturing in China. But again,
Speaker 3: our supply chains are very robust. Those were tested during
Speaker 3: COVID and we did not miss a single dose for
Speaker 3: a single patient across the globe. But also they're segregated
Speaker 3: in ways, so for example, some of the facilities that
Speaker 3: we have in China actually supplied China for China or
Speaker 3: in the emerging market. So I think we try to
Speaker 3: manage our entire supply chain network so it is very
Speaker 3: mitigated from a risk standpoint.
Speaker 2: This is a slightly left field question, but I'm going
Speaker 2: to pose it anyway. UK universities are really struggling with
Speaker 2: foreign students right now, and how we deal with foreign
Speaker 2: students here in the UK is becoming a sort of
Speaker 2: hot political issue. How much does do Zenica rely on
Speaker 2: foreign students coming through places like Cambridge in terms of
Speaker 2: providing the knowledge base that you ultimately rely on to
Speaker 2: invent to create new drugs.
Speaker 3: Well, I count comments specifically on foreign students or not,
Speaker 3: but we do have a very large program to support
Speaker 3: the university. So for example, here in Cambridge we work closely,
Speaker 3: very much with the university. Here we also have a
Speaker 3: pH d student program where we provide internships for those
Speaker 3: PhD students and not just again in Cambridge, but across
Speaker 3: the UK. So again our intention is to support science
Speaker 3: and to support research regardless of where those students come
Speaker 3: from and really help, okay you know, develop the best
Speaker 3: medicines rather.
Speaker 4: Thank you very much, aradan As Saarmy and astro Zenica
Speaker 4: CFO joining us there