Welcome to AstraZeneca's Half Year and Q2 Results 2024 Webinar for Investors and Analysts. Before I turn the call over to AstraZeneca, I want to share the safe harbor statement. The company plans to use the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Participants on this call may make forward-looking statements regarding AstraZeneca's operations and financial performance. While we believe our expectations are based on reasonable assumptions, forward-looking statements inherently involve risks and uncertainties that may lead to actual results differing significantly from those indicated or suggested. Any forward-looking statements made during this call are based on the knowledge and information available at that time. The company does not have an obligation to update any forward-looking statements. Please review the forward-looking statements disclaimer in the accompanying slide deck carefully. Now, I would like to hand the conference over to the company.

A warm welcome to AstraZeneca's half-year and second-quarter 2024 presentation conference call and webcast for investors and analysts. I'm Andy Barnett, head of investor relations. And before I hand over to Pascal and other members of our executive team, I would like to cover some important housekeeping points. Firstly, all the materials presented today as additional resources, including updated epidemiology tables and our recent Investor Day materials, are available on our Investor Relations website. This slide contains our safe harbor statement, which I'd encourage you to take time to read. We will be making comments on our performance using constant exchange rates, or CER, core financial numbers, and other non-GAAP measures. A non-GAAP to GAAP reconciliation is contained within the results announcement and all numbers quoted are in millions of U.S. dollars unless otherwise stated. This slide shows the agenda for today's call. Following our prepared remarks, we'll open the line for questions. We will try to address as many questions as we can during the allotted time, although I did ask the participants to limit the number of questions you ask to allow others a fair chance to participate in the Q&A. And with that, Pascal, I'll hand the floor over to you.

Thank you very much, Andy. Good morning, good afternoon, good evening, everybody. In the first half of the year, total revenue grew by 18%, driven predominantly by strong underlying demand for our medicines across key therapy areas and geographies. We recorded a record second quarter with almost $13 billion of revenue. Core operating profit increased to $8.4 billion, while core EPS increased 5% to $4.03. On both measures, it is important to recall that in the first half of 2023, the company benefited from onetime other core operating income totaling $1.1 billion. Adjusting for other operating income, growth in core operating profit and core EPS in the first half would have been higher. This shows that we continue to work on leverage with faster operating margin growth and revenue. With the strength of our underlying business, I'm pleased to announce we've upgraded our full year guidance. We now expect both total revenue and core EPS to increase by mid-teens percentages. It is a strong upgrade. Collaborative revenue, as you've probably noted, is not growing. Aradhana will provide you with additional detail shortly in our prepared remarks. Please move to the next slide. Taking a closer look at our total revenue performance in the first half, we continued to benefit from our diverse broad-based business. We delivered double-digit growth in the U.S., in Europe, in emerging markets, ex China, and in China, we delivered growth of 15%, nearly 30% ex China. Oncology biopharmaceuticals and rare diseases all delivered double-digit growth in the first half of the year, supported by increasing demand for our leading medicines. Please move to the next slide. We saw continued pipeline momentum in the first half of the year, delivering several potentially transformative phase 3 trial readouts and new approvals across our therapy areas. Since our Investor Day in May, we reported positive results for the phase 3 NIAGARA trial of Imfinzi, which marks an important step toward building our presence in bladder cancer. We received FDA approval for Imfinzi in endometrial cancer based on the DUO trial, and we received breakthrough designation for ADRIATIC in limited stage small cell lung cancer. Additionally, breakthrough designations were granted for Tezspire in COPD, following the encouraging results from the phase 2b course trial and eneboparatide in high-property design with phase 3 results expected in the first half of next year. Taken together, the collection of phase 3 readouts and new launches listed on this slide will support underlying momentum in the future growth potential of our business. With that, please advance to the next slide, and I will hand over to Aradhana, who will take you through our financials.

Thank you Pascal, and hello, everyone. Next slide, please. As usual, I will start with our reported P&L. As Pascal just highlighted, we have had a very strong start to the year with total revenue increasing 18%. This was driven largely by substantial product sales growth across the portfolio. Alliance revenue also increased by 50% in the first half, mainly driven by an increase in HER2 sales in regions where Daiichi Sankyo recorded revenue. Please turn to the next slide. This is our core P&L. In the first half, total revenue grew 18%, as I just mentioned, and our core product sales gross margin was 82.4%. We've previously said that we anticipate a slightly lower core product sales gross margin for the full year versus 2023, and we expect downward pressure in the second half driven by the usual seasonal impact of medicines such as FluMist, as well as increased supply costs, which come at a lower gross margin. In the first half, both SG&A and R&D costs increased 15%. We expect R&D expenses for the full year to be toward the upper end of our indicated low 20s percentage range due to accelerated trials and the inclusion of expenses following the closure of various business development transactions, including Gracell, Fusion, and Amolyt. All operating profit in the first half increased by 7% despite a significant decline in other operating income. Recall that in the first half of 2023, other operating income was $1.1 billion related to the gains by the disposal of the U.S. rights of Pulmicort Flexhaler and the amended before agreement. Reflecting the aforementioned substantial decline in other operating income, core EPS grew 5% at CER to $4.03. Please turn to the next slide. In the first half, net cash inflow from operations grew by around 15% to $700 million. Net debt increased by $3.8 billion to $26.3 billion, driven by the recent acquisitions, which created a total cash outflow of over $5 billion. We also made the final payment to the former shareholders of Acerta and paid the second interim dividend in the first quarter. We continue to expect a roughly 50% increase in tangible capex in 2024 as we invest in both increased capacity and new capabilities. Tangible capex of $799 million in the first half included maintenance capex as well as investments in our new API facility in Ireland, a new inhaled manufacturing site in Qingdao, China, and our new cell therapy manufacturing site in Rockville, Maryland. In May, we announced plans to build a new end-to-end ADC manufacturing site in Singapore. As previously communicated, we anticipate deal payments related to past transactions to be in the same range as last year or around $2 billion. Finally, our current net debt to adjusted EBITDA ratio is now at 1.8 times. Please move to the next slide. As you can see on this slide, strong performance of our leading medicines across key therapy areas supports our full year guidance upgrade. In the first half, eight of our medicines delivered total revenue above $1 billion. Next slide, please. We now anticipate total revenue and core EPS to increase by mid-teens percentage at constant exchange rates, up from our previous guidance of a low double-digit to low teens percentage. Importantly, this upgrade does not include any increase in collaboration revenue. Last year, we booked $594 million in collaboration revenue, which reinforces this upgrade is entirely driven by an improvement in underlying performance from our product sales and alliance revenues. Based on average June FX rates, we continue to anticipate a low single-digit adverse FX impact on total revenue and a mid-single-digit adverse impact on core EPS. With that, please advance to the next slide, and I will hand over to Dave, who will take you through our oncology performance.

Thank you, Aradhana. Next slide, please. Oncology total revenues grew 22% to $10.4 billion in the first half, driven by strong demand for our key medicines and building on momentum gained from the first quarter. Tagrisso global revenues grew 12% in the quarter, reflecting further global demand for ADAURA, initial launch uptake for FLAURA2 in some of our markets, and continued expansion of treatment duration in the frontline setting. Calquence's total revenues increased 22% in the second quarter with sequential growth of 10%, driven by sustained BTK inhibitor leadership in frontline CLL and continued international expansion. Imfinzi total revenues grew 18%. As expected, growth was impacted by the 25% price reduction in Japan, and we anticipate a second mandatory price reduction of 11% in Japan, which reflects the shift from weight-based to fixed dosing to take effect from August. We continue to see strong demand for Imjudo in combination with Imfinzi in both liver and non-small cell lung cancers, demonstrating total revenue growth of 19% in the quarter. Lynparza remains the leading PARP inhibitor globally across all tumor types, delivering sales growth of 7%. In HER2, total revenues increased 49% in the second quarter with sustained market share leadership in second-line HER2-positive breast cancer. We also received positive feedback from the medical community following the presentation of DESTINY-Breast06 data last month, which we believe supports continued expansion in HER2 low. Following in HER2's tumor-agnostic approval in April, we saw encouraging early launch signals in the quarter with 13 NCCN guidelines updated and a rapid increase in physician awareness. Taken together, we expect to see a return to sequential growth in the third quarter for HER2. Finally, our recently launched novel AKT inhibitor, Truqap, delivered $92 million in the second quarter for total revenues, reflecting strong adoption in the biomarker altered population. Looking ahead, we're pleased with the U.S. approval of DOE expanding Imfinzi into the endometrial setting. Additionally, we look forward to bringing the benefit of FLAURA2 to more patients globally following approvals in Europe, Japan, and China, further cementing Tagrisso as a backbone standard of care in EGFR-mutated non-small cell lung cancer. And finally, the recent approval of CAPItello-291 in Europe will help to build additional launch momentum for Truqap. With that, please advance to the next slide, and I'll hand over to Susan to cover key R&D highlights from the quarter.

Thank you, Dave. Over the past quarter, we've presented several practice-changing data sets. At ASCO, we had two back-to-back plenary sessions for LAURA and ADRIATIC, demonstrating our leadership in early-stage lung cancer. The strength of these data was reinforced by the inclusion of LAURA as a Category 1 recommendation in the NCCN guidelines within 12 days of data presentation and its acceptance for priority review in the United States. We also presented the data for DESTINY-Breast06 in a special oral session at ASCO. DESTINY-Breast06 is the first phase 3 trial of a HER2-directed therapy or an antibody-drug conjugate to show benefit across both the HER2 low and HER2 ultra-low breast cancer population. This data set represents the opportunity for more patients to receive HER2 therapy and for them to receive it earlier prior to chemotherapy. Finally, at EHA, we shared the results from Echo, extending the reach of Calquence earlier into mantle cell lymphoma. These data show that Calquence in addition to standard of care chemo-immunotherapy improved progression-free survival and had an early trend for improved overall survival, the first BTK inhibitor to show an overall survival trend in this setting. The positive high-level results from NIAGARA, a trial for Imfinzi plus chemotherapy followed by Imfinzi maintenance in the muscle-invasive bladder cancer setting, signals our potential expansion into bladder cancers. There are approximately 120,000 patients with muscle-invasive bladder cancer globally, and even after cystectomy, patients still experience high rates of recurrence and a poor prognosis. This makes the positive event-free survival and overall survival results from NIAGARA incredibly important, and we look forward to sharing these data at an upcoming congress. Beyond Niagra, our broader program targets all stages of bladder cancer as we look to redefine the outcomes for patients with this challenging disease. And with that, please advance to the next slide, and I'll pass over to Ruud to cover biopharmaceuticals performance.

Thank you so much, Susan. Next slide, please. Our biopharmaceuticals medicines delivered total revenue of $10.4 billion in the first half of 2024, representing growth of 17%. Total revenue growth for both CVRM and R&I was 22%, and we were very pleased to see Farxiga had $1 billion of revenue versus the first half of 2023, further strengthening our franchise in cardiorenal diseases. In the second quarter, Farxiga delivered 49% growth in Europe and 38% growth in the emerging markets. We saw 16% growth in the U.S. compared to the prior year, though sequential growth was impacted by inventory movements following the launch of North line generic in the first quarter. Following Wainua's approval in ATTR polyneuropathy at the end of 2023, we have seen encouraging launch uptake for this ultra-rare disease, which can be fatal if left untreated. Wainua starts include a mix of patients who are new to treatment, some who have switched from other medicines, and some who are using Wainua as an add-on to their existing medication. In the second quarter, R&I was our fastest-growing therapy area, up 26%. We saw strong growth across the portfolio with global sales from the Tezspire alliance on track to achieve blockbuster status this year. Equally, Brezstri saw strong growth of 51% in the first 6 months, and like Tezspire is on track to achieve blockbuster status. Finally, it has been another strong quarter for Symbicort in the United States and emerging markets. Airsupra continues to see strong volume uptake following its launch at the start of the year, with revenues reflecting introductory discounts as access builds. Next slide, please. I will now hand over to Sharon to discuss the latest developments from the biopharmaceutical pipeline.

Thank you, Ruud. We have had several exciting data presentations in the first half across our biopharmaceuticals R&D portfolio. In the second quarter, we presented two key data sets from our CVRM portfolio that support our confidence in their multi-blockbuster potential. At EAS, we presented the phase 1 data for AZD0780, our oral PCSK9 inhibitor for hyperlipidemia. In this trial, AZD0780 delivered a statistically significant LDL-C reduction of 52% on top of standard-of-care statin resulting in a 78% reduction from baseline. This efficacy, combined with the excellent bioavailability of the compound means that we can dose once daily with no food effect or need for fasting. Nearly 70% of patients with cardiovascular disease are not meeting their guideline-directed LDL-C target despite high-intensity statin use. This potential best-in-class profile may offer patients a convenient option to achieve LDL-C targets. We are now moving at pace with AZD0780 into the next stage of development with a phase 2b trial ongoing and data expected in the first half of 2025. In May, we presented data from the phase 2b MIRACLE trial of balcinrenone with dapagliflozin for heart failure and CKD. This is one of three novel combinations we are developing that leverage dapagliflozin as a foundational treatment. The combination offers the benefit of SGLT2 therapy and leverages the unique mechanism of action and selectivity profile of balcinrenone, an MR modulator that has been shown to retain the organ protective effects of MR antagonists without increasing hyperkalemia. The MIRACLE trial showed this combination resulted in a numerical decrease in UACR compared to dapagliflozin alone. Importantly, it did not increase hyperkalemia at the doses selected for phase 3. These data inform the ongoing Balance HF phase 3 trial in heart failure patients with kidney disease. Currently, only 25% of patients with heart failure and CKD, Stage 2b are recommended an MR antagonist as standard of care due to the risk of hyperkalemia. By combining balcinrenone and dapagliflozin, we aim to deliver an innovative mechanism to treat a broader population with heart failure and CKD. Let's move to the next slide, and I will now hand over to Marc, who will cover our rare disease portfolio.

Thank you, Sharon. Can we go to the next slide, please? Rare disease grew 15% to $4.2 billion in the first half, driven by growth in neurology indications, increased patient demand, and continued global expansion. As per the previous quarter, the growth rate at CER includes a small benefit from countries with high inflation. In the second quarter, Ultomiris revenue grew 36% with the vast majority of growth coming from neurology indications, generalized myasthenia gravis, and NMOSD. In PNH, we achieved over 80% conversion to Ultomiris across major markets, and the recent launch of VOYAGER is progressing well, providing benefits for the PNH patients we experienced clinically significant extravascular hemolysis. Beyond complement, Strensiq and Koselugo grew 14% and 45%, respectively, driven by continued patient demand and new launches. Please advance to the next slide. In July, we closed our acquisition of Amolyt Pharma, which expands our rare endocrinology portfolio with the addition of eneboparatide, currently in phase 3 for patients with hypoparathyroidism. Hypoparathyroidism is characterized by the deficiency in parathyroid hormone production, which results in significant deregulation of calcium and phosphate. This can lead to life-altering symptoms and potentially chronic kidney disease. Hypoparathyroidism most commonly occurs post-surgery, often related to thyroid disease. Many of these patients are women, and over half of the patients with hypoparathyroidism are peri or post-menopausal women who are at greater risk of osteoporosis. It is one of the largest known rare diseases with over 250,000 patients across the U.S., EU, and Japan. Clinical priorities for hypoparathyroidism include normalization of serum and urine calcium levels, a reduction of dependence on calcium and vitamin D supplementation, as well as restoring normal bone turnover and preserving bone mineral density. In May 2024, eneboparatide received fast track designation from the FDA, reflecting the seriousness of the disease and the potential for eneboparatide to address the urgent unmet need. We anticipate data from the phase 3 CALYPSO trial in the first half of 2025. And as a reminder, we expect eneboparatide to be a blockbuster opportunity. With that, please advance to the next slide, and I will hand back to Pascal for closing remarks.

Thank you, Marc. Next slide, please. At our recent Investor Day, we outlined a new ambition for our company to deliver $80 billion in total revenue by 2030. While this target is ambitious, it is risk-adjusted, meaning we did not assume all of our programs would be successful. Importantly, this ambition doesn't assume future M&A. We also reaffirmed our ambition to achieve a mid-30s percentage core operating margin by 2026, and we are on track to achieve this. Beyond 2026, we will target at least a mid-30s percentage core operating margin. Further progression there will depend on our pipeline and our portfolio evolution. Finally, given our ongoing pipeline momentum, we upgraded our previous ambition, and we now expect to launch at least 20 new products by the end of the decade and are already well on our way. Next slide, please. Illustrated on these slides are the medicines, compounds, and RAIs that we believe have peak revenue potential greater than $5 billion. Importantly, a large number of these are already on the market, and the majority of those still in development are in registrational trials. In addition, we believe that by 2030, we will have over 25 medicines delivering at least $1 billion in annual revenue—almost double the number of blockbusters today. Turn to the next slide, please. In the first half of the year, we delivered five positive phase 3 trials and several important new approvals and launches. Looking ahead, we anticipate readouts from over 40 phase 3 trials before the end of 2025, mainly for assets that we believe have greater than $5 billion peak revenue potential. Importantly, we will be sharing data later this year from multiple early-stage trials that support investment in potentially high-value disruptive technologies. This includes data for our bispecific antibodies, in-house antibody-drug conjugates, as we seek to extend our lead in this important innovative area of oncology, as well as emerging data for our portfolio of medicines to address weight management. We look forward to sharing data from our oral GLP1 and glucagon and long-acting Amarin phase 1 trials. These are a few of the important investments that will fuel growth in 2030 and beyond. And as I've said before, by the end of 2025, it will be clear to investors that we are on track for the 2030 goal we've set ourselves. And of course, I realize on the assumption many of those trials, not necessarily all of them, but many will succeed. With that, please advance to the next slide, and we will go to the Q&A.

And with that, let's move to the first question from Mark Purcell at Morgan Stanley. Over to you, Mark.

Two questions. Could you help us understand what you perceive the sustainability is of growth in the legacy products that did incredibly well in the second quarter? So I guess I'm talking Symbicort, Pulmicort, Crestor, Brilinta, Zoladex, and Forxiga. So that's a sort of a mix of different drivers there, but emerging market revenue growth was strong in all of these. And so hopefully, you could help us gain some perspective there. And then secondly, a question for Susan. For Imfinzi in bladder cancer, obviously, you'll weigh on NIAGARA data. Can you help us understand the opportunity in the two other trials that I can read out in the next 12 months to focus that in NIPC but also the non-muscle-invasive bladder cancer trial, Protomatic, which looks very interesting.

Thank you, Mark. Two great questions, and I'll ask Susan to answer the second one, maybe let me try to address the first one, which really allows me to make maybe a broader comment on our upgraded guidance. You've seen our upgraded guidance for the whole year. I think it's important to keep in mind that in this upgraded guidance, we expect continued strength in the same momentum of growth in our core strategic products. Many of our older products, we also expect to continue growing. There is an area of uncertainty around two products, Symbicort and Farxiga, Farxiga in particular in China because we—I'm not yet sure of the timing of the VBP process. And Symbicort, Ruud could comment on this a little later if necessary. But in the U.S., in particular, there's some uncertainty around the durability of the ongoing trend. Now those uncertainties could resolve positively, in which case we would definitely have an upside versus what we expect today. But this is important to keep in mind that the core strategic products are very much on track in the second half, a good trend, and the area of uncertainty, which we've reflected in our guidance for the year, is mostly related to those two products in Symbicort and Farxiga. With this, Susan?

Yes. Thank you. So I appreciate the question, Mark. The opportunity for I-O in bladder cancer, I think, is actually significant. And we've obviously seen other trials that are positive, but I'm excited by the NIAGARA data, not just because we've hit on EFS but OS. I think this bodes well for the VOLGA study. Obviously, EV, enfortumab vedotin has shown activity both as monotherapy and also exciting data in combination with pembro in the first line of bladder cancer. I think the opportunity for that combination with durvalumab and with chemo in the VOLGA study in the perioperative setting is really exciting. The non-muscle invasive bladder cancer is also a really important indication. And again, given the NIAGARA data, I think that has to increase the probability that there's a good opportunity there for Imfinzi. So we're excited about all of this in totality coming together and seeing what the opportunity is to further improve on the outcomes of patients with bladder cancer at all stages of the disease.

Thanks, Susan. Maybe, Dave, you could add some further insights on this indication and—Ruud, if you want to comment on Symbicort in particular, I think Farxiga has been covered it, but if there is anything you want to add on Symbicort, over to you, Dave.

Thanks. Mark, building off Susan's commentary on the studies and the unmet need and the opportunity. If we take a look at bladder cancer in aggregate. So NIAGARA, VOLGA together with atomic I think—and obviously, we need to see positive study results, but this is a blockbuster plus opportunity in aggregate from these. I think that NIAGARA, as Susan says, gives good reason to believe in Imfinzi within this bladder cancer setting. I'd also say that importantly, these are catalysts that are coming within the '24, '25 period in terms of the news flow. So we don't have to wait a long time to understand whether those opportunities will materialize or not. Ruud?

Yes. Thank you, Dave. So three remarks regarding the Symbicort performance. First of all, the brand remains doing very well, not only in the United States, as you have seen, but also in the emerging markets. Clearly, in emerging markets, there's no reason to believe that will slow down anytime soon. There's a lot of loyalty across the markets, and the brand in the United States is slightly more complex. We saw generic competition entering the market in 2023. We have launched our own authorized generic some years ago. And equally—and I think that's an important event. We have reduced our list price at the beginning of this year. As a result of all those factors, we have seen a very substantial increase in the volumes, but also regarding our price. Whether that is sustainable, time will tell. But at least in the short term, we still hope that Symbicort will remain a very strong brand in the United States.

Thank you, Ruud. So as you can see, there is, of course, uncertainty on Farxiga and Symbicort. As I said before, if those uncertainties resolve positively over the next few months, then there is certainly upside. But for now, that's how we see the trend. James Gordon, JPM. James, over to you.

Hello. James Gordon, J.P. Morgan. A question about collaboration revenues because I noticed within the guidance that it's no longer expected to increase this year. And I can see two elements that look that might have changed. So firstly, for PARP1 and a potential partnership, it looked like the previous guidance may have allowed for a contribution for that. But you've now started phase 3 for prostate and breast, and you're doing that so low. So is that fair that you're now assuming that you are going to end up doing this product by itself? And how should we read that? Is that a lack of interest from external partners? Does that mean the asset doesn't look as exciting? Or are you still as excited about PARP1 as a product even if it's just you doing it by yourself? The other element, I think, could be that you could have got a milestone from Merck on Lynparza passing through a sales threshold. So is that right that, that could be Lynparza getting just pushed out a year for hitting $3 billion? Or could it be that Lynparza is not talking out? Because I don't think you gave a peak sales for Lynparza at the Investor Day. Is that because there's some other things to be worried about, for instance, the patent might go in China at the end of this year? Or do you think it's just you get there but just a year later to get that milestone? Thanks.

A couple of very quick comments, actually, James, great questions. But quick comments before I hand over to Susan in terms of our confidence in the PARP1 asset, which is very strong. No question about it. And maybe Dave in terms of Lynparza trend. Very quickly, Lynparza, in China, you really get impacted when you go VBP, not necessarily when you lose patent protection as you know very well. So I don't think that's really a factor. A general comment on collaboration revenue. It's not visible from the outside, of course, but I can tell you any deal we do, whether it's a licensing in or a partnership deal. Typically, we work one year, sometimes two years on those deals before we conclude them. And the reason is basically, we want to make sure that we set up a partnership that is both strategically valuable and also creates value for our shareholders, but also is structured in a way that enables the partnership to be successful. We don't want to get into partnerships when we cannot operate successfully together with our partners and all our partnerships, quite frankly, are extremely successful. We have great relationships with our partners, whether it's Merck, whether it's Amgen, Daiichi Sankyo. Each time we really make a special effort to make sure that the whole thing is operationally structured. So the consequence of this is the timing of these partnerships is a little bit unpredictable. And so we don't guide specifically on the content of the collaboration revenue line, just like we don't guide specifically on the individual product sales. But at this point in our guidance, we concluded the best is to assume relatively stable collaboration revenue overall and things can always change, of course, as we go through the year. But that we thought was the best reflection of where we are at this point. Dave, do you want to cover the Lynparza specific question? And then Susan, you could talk about the confidence we have in PARP1.

Sure. I was pleased in the second quarter with Lynparza to see that sequentially, we saw 7% growth in Q2 versus Q1. I think that—what's important to note there is we know that in the U.S., in particular, we've seen some real negative class pressure, particularly as second-line label modifications were made just in terms of all of the class going through those elements. I think that in the U.S., Q1 marks the bottom of where we were, and that you see sequential U.S. growth coming into the quarter. I think that's coming from strength that we're seeing on driving within breast cancer, continued strength in the areas of frontline ovarian cancer, and I'm optimistic that we'll continue to see sequential growth in the U.S. moving forward. As we take a look at Europe and Japan, we also saw sequential growth in those regions, and I think that, that's really, really important as well. On Lynparza, internationally, for the quarter, there are some stocking dynamics in both Brazil and within Russia, those happen to be our two largest international markets as we kind of take a look at Lynparza performance. But I'm optimistic that Lynparza has a good solid second half sequentially in front of us, and we continue to focus on our areas. I look forward to driving DOE and the opportunities that we have to do that. And I think that that's my outlook for the medicine.

Yes. Thank you. And just to add, I'm really very pleased with the development of sipavibart, first of all, because in terms of the discovery, it's come from our understanding of how we can improve on the great medicine that Lynparza is. Secondly, as the data matures in both our PETRA and PALOMA trials, we have presented most recent updates earlier this year. As the data mature, both the efficacy and safety data look really very encouraging to deliver on what we're hoping for from this medicine. We do have a broad clinical development plan. You've got two trials that already posted, the EvaPARprostate01 and the initial breast cancer study, but there's multiple other opportunities that are being developed, and I think there's going to be a great opportunity for this to be a very important medicine moving forward.

Thank you, Susan. So I think the key message here in the end is, it's very good to see that we are actually able to upgrade substantially the guidance while considering collaboration revenue will remain stable. So that really reflects a strong momentum in our core business, in particular, our core strategic products. But also our more traditional products in the emerging markets. As I said, there is uncertainty around Symbicort and Farxiga; those may resolve positively. We'll have to see over the next two to three months. And the collaboration revenue, of course, as always, like for products, there's always movements and noise in this total forecast, but could also vary around what we are forecasting today. Let's move to the next one, which is a question from Gonzalo Artiach, Danske. Gonzalo, over to you.

Hi. Good afternoon. Can you hear me?

Yep.

Hi. Gonzalo Artiach from Danske Bank. Thank you for taking my questions. I have a couple. The first one on Dato-DXd. Is there any detail you could provide us in terms of interactions with the FDA ahead of the PDUFA meeting on TRUPION-Lung01 potential approval? Have you had any sign of a potential outcome? Any detail here would be appreciated. And the second one on Truqap, the launch seems that it's going very well. I was wondering if you have any hypothesis for it failing also in the biomarker population in the triple-negative breast cancer study? And if you have any pullbacks from your failed study in the approved indication?

Thank you, Gonzalo. Can I suggest, Susan, you cover that, but also Truqap from a sort of scientific viewpoint. And Dave, you could say a few words about the trend we see in the market.

Thank you. So the TROPION-Lung01 filing remains under review. Discussions with the FDA are ongoing. I don't have any new updates to share with you on this filing at the moment. What I would say in terms of the second half of this year is that in congresses later this year, we've already announced the TL01 high-level results, but we'll share those data at an upcoming congress. And just as a note, we're also finalizing and making progress on the biomarker work for TL01. And again, I think we mentioned this before, but we'll also share updated data on the biomarker as a congress later this year. In terms of Truqap, first of all, yes, it was disappointing that we didn't meet the primary endpoint for the data in the triple-negative breast cancer setting. But I think the data that we've already got with CAPItello-291 and what we're looking forward to for the CAPItello-281 trial in prostate cancer is looking at the interaction of AKT and endocrine signaling both in breast cancer and prostate cancer. So in both settings, there's a kind of a reciprocal relationship between the endocrine signaling. So as ER is inhibited, you're signaling through the AKT pathway goes up and vice versa, and the same with the antigen receptor and AKT. One of the things that gives us confidence in the CAPItello-281 indication, which is very significant, is the data that we've seen from the CAPItello-291 setting in the endocrine breast cancer setting. We know that in the patient group of prostate cancer, that's a group that has particularly poor prognosis, and that's the group that we're focused on for CAPItello-291. Overall, I think we're very encouraged by the uptake that you've seen with the Truqap launch following the 291 results, and we look forward to seeing the full potential for this medicine as the other trials read out.

So just coming on to the performance. I mean in short summary, the uptake has been strong. the adoption of biomarker testing has been also impressive. The uptake was very rapid in the prevalent population, which you see oftentimes with a late line approval, second line plus, like the one that we had. Very importantly, we see that the incident population, new starts is also strong, and that's going to be what allows us to continue to grow moving forward into the half. Just to reiterate on what Susan said, certainly is a near-term news flow. We look forward to the 281 data for CAPItello-281 opportunity to, if positive, expand into prostate cancer, which is an important opportunity for this medicine.

Thanks, Susan and David. And let me just add that those antibody-drug conjugates are often called smart chemo. Smart has to be targeted. It means you need a biomarker, and it's really good to see the progress we're making with the test that Susan was describing because that could really create substantial value for data and the use of this agent in lung cancer in particular, if we could put in place targeted treatment to get a strategy. Next question is Rajan Sharma at Goldman Sachs.

Hi. Hopefully, you can hear me. Thanks for taking my question. So firstly, could you just maybe discuss potential implications to Wainua's cardio transform trial in ATTR-CM following some competitor data that we saw last month. Essentially, does that positive data for the competitor increase your confidence in cardio transform? Can you just remind us on timelines for that trial? I think your partner talked about potentially seeing data in 2025. It'd be good to get your perspectives on that. And then secondly, just on automorous. Could you maybe just share the dynamics that you're seeing in myasthenia gravis? There have been a couple of your competitors who've also reported strong market growth in assessing this morning. So some color on source of patients for automorous and how you see this evolving on the forward will be helpful.

Thank you for the question. It's a nice opportunity to draw attention to eplontersen, which is currently in an ongoing study cardio transform to evaluate the efficacy of eplontersen in ATTR cardiomyopathy. As you mentioned, the HELIOS-B trial read out earlier this year, which we view as validation of the silencing mechanism to address ATTR amyloidosis. We are continuing to progress our own cardio transform study together with our collaborators, Ionis. This is the largest ever study run for ATTR cardiomyopathy and is powered to be able to evaluate a number of subsets within the study. We want to be sure to give eplontersen the greatest chance to demonstrate its potential for these patients. With regards to the timing of trial readout, we are currently tracking toward our previously anticipated timelines and are actively in discussion with our collaborators. As we evaluate the data emerging from HELIOS-B at the upcoming ESC conference, I would also remind you that we have additional reasons for optimism. In our polyneuropathy study and a planned subset analysis, we looked at readouts of cardiac structure and function for eplontersen and demonstrated a positive benefit within that set analysis. So we look forward to the full readout of cardio transform.

From the beginning of 2023, the growth of the branded market in myasthenia gravis in the United States, but also around the world, has been very dynamic. This is accelerating with the arrival of new clinical options for patients. We mentioned in my prepared remarks that the growth of Ultomiris for the second quarter is 36%. I also said that predominantly this growth came from myasthenia gravis and the launch in NMO in the United States. We are continuing to have a very sustained growth on neurology indications, both of them. We anticipate the growth rate of branded medicine in the myasthenia gravis to remain very solid and robust in the months and years to come with the arrival of many clinical options.

Thank you very much, Marc. Next question is from Sachin Jain at Bank of America. Sachin, over to you.

Thanks for taking the question. Just a couple on upcoming pipeline data. So one for Sharon and then one for Susan. Firstly, for Sharon on obesity, given the moves in the sector, there's obviously a lot of focus ahead of you presenting data later in the year. I wonder if you could just comment first on Eccogene and remind us why you think it's best-in-class. How would you think about data relative to the 6% weight loss we saw from Roche? And then on Amylin, I wonder if you could just touch on the commentary on mechanism around calcitonin potentially better safety relative to the Zealand data, which looked very tolerable. And then for Susan, just a follow-on on TL01. As we look today for a guess at World Lung, I wonder if you could comment on the importance of the non-squamous subset and where the FDA is focused there at all in your recent interactions. Thank you.

So thank you, Sachin. Should we start with Dato and Tier 1, Susan?

So obviously, the FDA is interested in seeing the OS data and following the readout that we shared with the FDA. As I said, we will share the OS data at an upcoming congress in the second half. I think we can answer the questions once we share the data really on that point.

Thank you, Susan. Regarding obesity, Sharon, could you take that?

Yes. Thank you, Sachin, for the questions, and thank you for the focus on our weight management portfolio. Your first question was about AZD5004, the molecule that we in-licensed from Eccogene and together are bringing forward with our collaborators at Eccogene. I'll remind everyone that this is an orally bioavailable GLP-1 receptor agonist that is suitable for once-daily dosing and has demonstrated a very positive PK/PD profile. We moved forward into a phase 1 study, which read out earlier this year. That was a highly controlled inpatient four-week study in monotherapy. We saw no red flags in that study, and we are encouraged to move forward with two phase 2b studies, launching later this year, one in type 2 diabetes and one in obesity. I would note that 5004 is not our only focus in weight management. We are exploring both incretin and non-incretin pathways. You referred to this when you asked about our Amylin molecule. So AZD6234 is a long-acting Amylin agonist. We, like others in the field, are aware that balancing selectivity between Amylin and calcitonin is a really important feature for these molecules. We know that Amylin itself promotes satiety and protects lean muscle mass, and we think that selectivity for Amylin over calcitonin offers a better tolerability profile. As a field, we're trying to understand how exactly to dial in that selectivity, but to date, the profile that we have generated with AZD6234 looks very positive. We will be sharing updates on phase 1 progress for AZD6234 as well as AZD9550, which is our dual GLP-1 glucagon agonist at an upcoming meeting.

Thank you, Sharon. Next question is from Tim Anderson at Wolfe. Jim, over to you.

Thank you. A couple of questions. On data, you have a phase 3 TROPION-Breast02 frontline triple-negative data coming out this year, and it's on a similar timeline as Gilead's phase 3 ASCENT 3 trial. These are fairly similar in design. So that means we should be able to do reasonably like-for-like comparisons of your drug to Gilead, which will help test whether your drug is better, as far off and claims it is. Can you just frame out what you think we'll see and whether in side-by-side comparisons, are we likely to conclude that your drug is better? And then second question on emerging markets, notable because in aggregate, they are higher in sales than what your European sales are and the growth is high. My question is on margins in emerging markets. You had at one point given some metrics on operating margins. How do those compare today? Are they margin dilutive, or are they holding up going forward?

Thank you, Tim. Maybe a quick comment on the first one. We said before that the emerging markets, they're not uniform. It varies by subregion to subregion. But if you look at them in aggregate, you don't get there the level of operating margin you typically get in the U.S., of course, as we can expect. But we got operating margins that are certainly viable and supportive of continuing to invest in this region. It's probably closer to a European setup than the U.S. setup. But definitely driving a lot of growth and a lot of profit and cash flow ultimately. So good place to be in specialty, especially when you consider products like cardiovascular products or obesity products that you can deliver in an oral form. And then you're not talking about addressing the needs of patients in the U.S. primarily and a little bit in Europe, but you can address the needs of patients around the world. The volume upside is an almost, as you can see every day with Farxiga and its development or even a Symbicort or Tezspire. Overall, I think we are very happy to be in the emerging markets. It drives our growth, and the margin aspect is included in our outlook anyway. So Susan, did I give you enough time for the Dato question? Go ahead.

Thank you, Pascal, and thank you for the question. So first of all, just as a reminder, the things that are different about Dato-DXd versus some of the other TROP2 ADCs is that because we've got a stable linker stable in the peripheral circulation, cleavable in the microenvironment that means that you've got a longer half-life with this drug. It also means that as the drug is delivered to the cancer cells that express TROP2, the internalization is an important factor in the activity. What that reflects is lower free payload in the peripheral circulation. That leads to lower bone marrow toxicity events. We've already shown that in multiple trials that you can do in the style comparison. So you've got low discontinuation rates and lower bone marrow-related adverse events. I think that will also translate through to in terms of the durability of treatment. We have seen already that we know and we know that the levels of sensitivity to TROP2-based ADCs are high in the breast cancer setting, particularly in the triple-negative breast cancer setting. We are optimistic about the results of the TROPION-Breast02 data. I hope that this will confirm that we have what is a best-in-class TROP2 ADC in that setting and in other settings as well. Reminder that, of course, in lung cancer, one of the advantages of that lower bone marrow toxicity profile is also that you can combine it with chemotherapy, which I think some of the other TROP2 ADC struggle to do. Overall, very confident about the profile we have with this drug and the opportunity for it in multiple settings, not just in lung and breast cancer but other settings as well. I do think that the biomarker work that we've done in lung cancer is something that will also help us differentiate this molecule across a range of other different indications.

Thank you, Susan. Also a good opportunity to remind everybody that Dato is also under review for the breast cancer indication. That's included in our outlook for the next few months. The next question is Emmanuel Papadakis at Deutsche Bank.

Thank you for taking the question. Maybe a question on Imfinzi and the upcoming advisory committee taking place this week. Just your anticipation on the decision we might see today in light of those agency ADC briefing documents. In particular, I'm just trying to understand your company's decision to effectively ignore longstanding agency advice on that perioperative trial design? What it might imply in terms of the outlook for the asset in early lung cancer in light of the BR31 mess. Could you share your thoughts on midterm growth indications where we see a negative decision on the approval of the indication?

Susan, do you want to cover the first one? Will you take the second one? Or Leon, if we are sure we have Leon on the line because I can't see him. Right. OK, cool. Okay. So maybe Susan, you start and then Leon will cover the second question.

Yes, sure. Thank you. So as you've noted, Emmanuel, the ODAC, Oncology Drug Advisory Committee discussing perioperative trial designs is happening later today. So it's probably best not to make too many comments apart from the fact that gene has met its primary endpoint in both pathologic complete response and a statistically significant and clinically meaningful improvement in event-free survival, which is also recognized in the briefing document. I do think there's a discussion that the FDA wants to have about the future design of perioperative trials in general, as you have the opportunity for add-on designs and potentially an increase in pathologic complete response rate. Then there's a debate about the relative contribution of continuing combination treatments into the adjuvant setting. Our well-established safety profile for Imfinzi in the treatment of early-stage lung cancer is built off the PACIFIC data that we've had. I think the profile for Imfinzi is well established in that setting, and we look forward to the discussion. I think that will help inform future trial designs.

Yes. Yes, I think there's still uncertainty about when Farxiga will get VBP. But if it does come, it should be late this year. So I think there usually will be some price cut, but there is no exact timing. It will be different product by product, usually less than 30%.

Alright. Thank you, Leon. The next question is Peter Welford at Jefferies.

Hi. Yes, thanks for taking my question. Two, first of all, just for Brad, if I can, just on the costs. I wonder if you could just talk a little bit about how we should think about the phasing and perhaps not as site specific, but any specific thing in terms of how we should think about the relative weighting of the costs do you think about this year, both SG&A and R&D in the first versus the second half. You gave some helpful commentary on the gross margin for us. And then secondly, just going back to data. I wonder if we can press Susan, has the FDA definitively said yet that there will not be an ADCOM for TL01? Or is that question still open? I’m wondering if you could just set the scene for us for AVANZAR, please, going into next year—obviously an important study for the future of this molecule. You talked a bit about the biomarker work. I guess when you look at that biomarker work, how that sort of impacts your thinking now for the Avanza analysis, there's nothing really changed there.

Susan, do you want to start and then Aradhana?

Yes, of course. As you know, there’s a PDUFA date for Dato-DXd, and we've learned that announcements of advisory committees can happen at any time during the review process. Unfortunately, I don't have any updates on the Dato-DXd filing for TL01 today. Regarding AVANZAR, I believe this is a significant study, and we plan to present some data from our near COAST 2 trial at a congress later this year. This trial focuses on the neoadjuvant treatment of non-small cell lung cancer, particularly examining the combination of Dato-DX and Imfinzi. You may recall our previous data from the BEGONIA study in triple-negative breast cancer, which showed an unprecedented 79% response rate with very durable responses for that combination. The data from that study, along with the TL02 and TL04 studies, provide us with confidence regarding both safety and compatibility, not only with certain therapies but also with platinum-based chemotherapy, which could improve response rates further. The biomarker research is crucial as it may help us identify the best benefit-risk profile in both the AVANZAR and TROPION-Lung10 studies, where we are examining the combination with our PD-1 TIGIT molecule. I am hopeful about the potential of combining Dato with immuno-oncology treatments in the frontline setting and believe that we can optimize the benefit-risk balance using biomarker data. I look forward to sharing the optimistic results from the COAST 2 trial as we advance this combination into earlier treatment lines.

Thank you, Susan. Next question is from Matt Weston at UBS.

Thank you, Pascal. Two questions, please. The first is a follow-up to Aradhana on James's question about collaboration income. I understand there may be a degree of uncertainty. But given that we had a lump sum in our model, is that something we should think about now falling into 2025 or is it something we should just stop considering? And then secondly, either for Dave or Pascal, there continues to be a lot of investor debate on the secondary consequences of Medicare Part D reform as insurers take on 60% of catastrophic risk. Companies that have commented seem to have very different views ranging from no impact to a meaningful increase in rebates. Where does Astra stand based on your current interactions with insurers and PBMs ahead of the January 1st date?

So, Dave, maybe you could cover the second part. I mean, I think maybe a quick comment on this Part D piece actually, Matt, is that I think you're going to hear different responses from different companies based on the type of products and portfolio they have because it affects more some products than others. We see this in our own company; different products are affected differently. So you're going to have low impact to a high impact to major impact. So it really depends on the overall portfolio we have. In our case, we have a portfolio that, as you know, covers primary care all the way to more expensive specialty care products. So we are kind of a mix of things. So maybe, Dave, you want to cover this in more detail. And then Aradhana, will you cover the CR question, collaboration revenue?

Matt, on your primary question around how Part D contracting is going. We're still in the midst of finalizing Part D contracting for 2025. Within that context, as ever, the importance of a differentiated product profile is the most important element as we enter into those discussions. Certainly, we've seen more focus on the payers on how they think about clinical differentiation and competition. But again, these are the same discussions that we've always been having with payers and where it's incumbent upon us to make sure that we're differentiating our medicines and showing the clinical value that they can provide. I think that our oncology portfolio, in particular, is well suited for that. Not necessarily part of your question, but I think it's also worth noting on Part D that we are seeing the improvements in patient affordability or the reduction in patient out-of-pocket to be translating into more patients being able to have access to medicines within what I would call kind of your normal distribution channels, so outside of free programs. We're also seeing signs of improvements within abandonment. These are positive aspects that come out of the IRA. While in aggregate, I think that IRA represents a couple of headwinds that we've spoken about. I believe they are manageable, and we have a portfolio that allows us to grow through it.

Yes, on the collaboration revenue, again, we're obviously not going to give guidance for 2025. But the upgrade that we did on our guidance is, again, based on the strength of our underlying business and the performance in both product sales and alliance revenue. The collaboration revenue generally includes things like sales-based milestones or potential transactions. They remain uncertain. Our guidance is based on the assumption that there's no increase in CER versus last year. But again, we've considered various scenarios, including a decline, and we've based our revised guidance based on our current best estimates.

Thank you, Aradhana. Next question is from Mattias Haggblom at Handelsbanken.

Thanks so much for taking the question. Which is related to IRA any early effects in terms of development decisions affecting your pipeline. A leading CRO recently called out the cancellations of large planned clinical trials within big pharma in response to IRA. I'm curious if AstraZeneca already at this stage has made similar decisions to sacrifice certain small molecule assets, perhaps at the benefit of a biological or more complex molecule due to IRA. If so, maybe you could share any concrete examples with us. In addition, we talk about how IRA has changed the way you think about business development as well as resource allocation internally.

So maybe let me address this. The challenge was more focused on molecules, there is no question. But as you can see from our pipeline and our investments, what we've communicated, as we move forward, we're investing in bispecifics, cell therapies, ADCs, and all of those agents, of course, are not small molecules. In a way, we are shifting a little bit away from small molecules. It doesn't mean we're not going to be in small molecules; we would be. Now what I will mean for us is—and that's really unfortunate, actually—but it will mean we will develop those, if you think of a product that has a small indication to start with, we will develop these smaller indications. We will launch them around the world, but in the U.S., we will have to wait before we file because we can't start the clock for a small indication where we would record low sales for a couple of years or three years. In Basel, that would have been a good example of this. So that's one issue. The other issue is on the back end of it, if a product is a major medicine and a new indication will change that status when we consider not launching it in the U.S. Those are some implications of IRA, and those are quite unfortunate. We are working now to advocate for change for fix to the IRA that would address this issue of what we call orphan indications or orphan diseases. Anything any of you want to add? No? Good? Peter Verdult at Citi. Peter?

Yes. Apologies for switching between conference calls. This is Peter Verdult from Citi. Thank you for addressing my questions. I have two. Firstly, for Dave, I understand it has only been seven weeks since ASCO, and the NCCN updates for DESTINY-Breast06 are not available yet. However, are there any early key performance indicator changes for Tagrisso, Imfinzi, or in HER2 following the recent data presentations? Lastly, for Aradhana, I realize you have touched on some of these points, but I want to clarify. Is it correct to assume that you have projected flat collaboration revenue, with potential upside risks for this year? Also, you haven't factored in ongoing gross to net paper dynamics, despite their possibility. Additionally, you have accounted for Farxiga facing impacts from VBP this year. I know you may not want to delve into every assumption, but any insights on these three points would be greatly appreciated.

Thank you, Peter. Maybe unless you understood Aradhana. The second question, I was not clear about the gross to net, what you actually meant by this.

The favorable adjustment—I think there's some favorable gross-to-net dynamics on Symbicort in the U.S.

I see. OK. Aradhana, do you want to cover that?

Yes. So as I mentioned, we have assumed that we have flat collaboration revenue. As Leon mentioned, there is still some risk to the Farxiga VBP that we've assumed in our plan. And I think we've again assumed some risk in terms of uncertainty from the Symbicort pricing dynamics as well in our latest guidance.