Cautionary Statement Regarding Forward Looking Statements Forward-Looking Statements In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995 e are pro iding the follo ing ca tionar statement This presentation contains certain for ard looking Act 1995, we are providing the following cautionary statement: This presentation contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. Although we believe our expectations are based on reasonable assumptions, any forward-looking statements, by their very nature, involve risks and uncertainties and may be influenced by factors that could cause actual outcomes and results to be materially different from those predicted The forward-looking statements reflect knowledge and information be materially different from those predicted. The forward looking statements reflect knowledge and information available at the date of preparation of this presentation and AstraZeneca undertakes no obligation to update these forward-looking statements. We identify the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in such statements. Important factors that could cause actual results to differ materially from those contained in forward-looking statements, certain of which are beyond our control, include, among other things: the loss or expiration of patents, marketing exclusivity or trade marks, or the risk of failure to obtain patent protection; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage; exchange rate fluctuations; the risk that R&D will not yield new products that achieve commercial success; the risk that strategic alliances or the integration of acquired b i ill b f l th i t f titi i t l d i d ti t ti ik th businesses will be unsuccessful; the impact of competition, price controls and price reductions; taxation risks; the risk of substantial product liability claims; the impact of any failure by third parties to supply materials or services; the risk of failure to manage a crisis; the risk of delay to new product launches; the difficulties of obtaining and maintaining regulatory approvals for products; the risk of failure to observe ongoing regulatory oversight; the risk that new products do not perform as we expect; the risk of environmental or occupational health and safety that new products do not perform as we expect; the risk of environmental or occupational health and safety liabilities; the risks associated with conducting business in emerging markets or the failure to develop our business in such markets; the risk of reputational damage; the risk of product counterfeiting; and the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring programmes. Nothing in this presentation should be construed as a profit forecast.
In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995 e are pro iding the follo ing ca tionar statement This presentation contains certain for ard lookingAct 1995, we are providing the following cautionary statement: This presentation contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. Although we believe our expectations are based on reasonable assumptions, any forward-looking statements, by their very nature, involve risks and uncertainties and may be influenced by factors that could cause actual outcomes and results to be materially different from those predicted The forward-looking statements reflect knowledge and informationbe materially different from those predicted. The forward looking statements reflect knowledge and information available at the date of preparation of this presentation and AstraZeneca undertakes no obligation to update these forward-looking statements. We identify the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in such statements. Important factors that could cause actual results to differ materially from those contained in forward-looking statements, certain of which are beyond our control, include, among other things: the loss or expiration of patents, marketing exclusivity or trade marks, or the risk of failure to obtain patent protection; the risk of substantial adverse litigation/government investigation claims and insufficient insurance coverage; exchange rate fluctuations; the risk that R&D will not yield new products that achieve commercial success; the risk that strategic alliances or the integration of acquired b i ill b f l th i t f titi i t l d i d ti t ti i k thbusinesses will be unsuccessful; the impact of competition, price controls and price reductions; taxation risks; the risk of substantial product liability claims; the impact of any failure by third parties to supply materials or services; the risk of failure to manage a crisis; the risk of delay to new product launches; the difficulties of obtaining and maintaining regulatory approvals for products; the risk of failure to observe ongoing regulatory oversight; the risk that new products do not perform as we expect; the risk of environmental or occupational health and safetythat new products do not perform as we expect; the risk of environmental or occupational health and safety liabilities; the risks associated with conducting business in emerging markets or the failure to develop our business in such markets; the risk of reputational damage; the risk of product counterfeiting; and the risk of failure to successfully implement planned cost reduction measures through productivity initiatives and restructuring programmes. Nothing in this presentation should be construed as a profit forecast.
AstraZeneca believes emerging g gmarkets are a sustainable opportunityopportunity
Our goal is to continue double-digit growth, with emerging markets becoming ~25% of AZ sales by 2014emerging markets becoming ~25% of AZ sales by 2014
AZ emerging markets revenue goalg g g
$12bn
$8bn
$4bn
20142009$0bn
Our strategy in emerging markets has three elements
Emerging markets strategy
Continue to grow Extending our Broaden portfolio to
A B CContinue to grow our presence in the large BRIC-MT markets
Extending our geographic foot-print by increasing our involvement in
Broaden portfolio to selectively include branded generics
markets our involvement in high-growth small and mid-size markets
Executing our strategy will create double-digit growth
CB
C
A
Growth in small and mid-sized
markets
2009 2014Branded generics
Growth in BRIC-MT
markets
We will grow our presence in the largest emerging marketsemerging markets
G t tf li f i ti b dGrow our strong portfolio of existing brands
• Drive increased share
E dContinue to grow
A• Expand our coverage
(geographic, customers & channels)
Launch AstraZeneca’s highly relevant
Continue to grow our presence in the large BRIC-MT markets g y
pipeline products
Launch a highly selective portfolio of b d d i
markets
branded generics
Our highly relevant pipeline will be a large source of growth in emerging marketsgrowth in emerging markets
ExamplesLifecycle management on our core innovative brands
Key AZ launches with emerging market relevance Brilinta / BriliqueOnglyzaVimovoDapagliflozin
E i k t l t i li i C bi iEmerging market relevant in-licensing CubicinCeftarolineNXL104 combinationsPi illi / t b tPiperacillin / tazobactamCimziaNKTR-118TC5214TC5214
Now let us consider two of our most important markets
China
Xudong YinMarketing Company President, China
China
Rubens PedrosaMarketing Company President,
Brazil
Marketing Company President, Brazil
AstraZeneca believes emerging g gmarkets are a sustainable opportunityopportunity
Emerging MarketsEmerging Markets Investor DayInvestor Day ChinaChinaMarch 16, 2010
China is the single largest emerging market opportunity
China Rx market sales
Constant exchange rate ~$80bn
~$30bn
+20%
~$30bn
~$10bnSales rank among world h k t 9th 5th 3 d
201420092004pharma markets … 9th 5th 3rd
… and catching up to 8th 4th 2nd… and catching up to 8th 4th 2nd
Source: IMS Global Market Prognosis, June 2009
Reasons to believe in sustainable market growth
Economic growth Growing health burdengand large increases in middle class
g
Significant expansion of medical infrastructure
Healthcare reform driving large expansion of insurance coverage
AstraZeneca is the #2 pharma company in China
Rx market share, 2009, %, ,0 0.5 1.0 1.5 2.0 2.5
Pfizer/Wyeth
Bayer
AstraZeneca hospital demand sales in China grew 31% from 2008
Yangzijiang
Sanofi-Aventisgto 2009, outpacing market growth
Ke Lun
Roche
Hengrui
Shandong Qilu
NovartisSource: IMS
AstraZeneca has seen consistent above-market growth in Chinagrowth in China
AstraZeneca sales in China1
$811m$811m
+32%
$203
$437m
$203m
20092004 2007
1 Actual exchange rates. Source: AZ internal data
AstraZeneca: A strong culture of "In China for China"A strong culture of In China, for China
Sh h YYi X d F d i k Ch Shuhwa YangFinance, Commercial & Administration
Years with AZ: 5Finance commercial
Yin XudongMarketing Company President
Years with AZ: 7Experience: Sales
Fredrick Chu General Manager Hong Kong
Years with AZ: 3Experience: Sales Finance, commercialExperience: Sales,
Marketing, StrategyExperience: Sales, Marketing
Meade Zhang Human ResourcesIngrid Zhang
Sales & MarketingYears with AZ: 2Experience: HRYears with AZ: 6
Experience: Sales, Marketing, Strategy
Wayne ShiPC Marketing
Years with AZ: 8Experience: Sales, Marketing
Shan GuohongPrimary Care Sales
Years with AZ: 7Experience: Sales, Marketing
Allan ChanCommercial Excellence Academy
Years with AZ: 20Experience: Sales
Top commercial leaders are all Chinese and have been with AZ since 2004I d l di ff ( hi d l h )
Industry leading staff turnover rate (a third lower than average)
We have a strong business presence across China
Geographic coverage
• 5 Regions
People
• 2000+ sales reps added 5 eg o s
• 22 Branches
• 45 Offices
000 sa es eps addedsince 2003
• Rigorous semi-annual 45 Offices
• Covering 300 cities, with 200 being the focus
talent review to all 3,000+ employees
• Heavy investment in people gHeilongjiang
JilinInner Mongolia
• Heavy investment in people development including AZ Academy, EMBA/MBA, E t l t i i
Hebei
ShandongShanxiNingxia
Gansu
Qinghai
Xinjiang
Jiangsu
BeijingExternal trainings, International Assignments
Liaoning
Sichuan
FujianJiangxi
AnhuiHubei
Hunan
ShanghaiHenanShaanxi
Gansu
Guizhou
Xizhang
Jiangsu
ZhejiangChongqing
GuangdongGuangxi
Hainan
Guizhou
Yunnan
We have supported this with investments in manufacturing and R&Dmanufacturing and R&D
• Additional $10 m invest-ed to increase capacity
• Plant approved for China and export to EU and
• Further $35m invested to meet
• New site opened in Wuxi following
• Further $100m
Manufacturing
2001 2006 2008 2010
and export to EU and countries adopting EU standards
invested to meet growing demand in China
in Wuxi following investment of$134m
$100m expansion planned
2001 2004 2010
2007
2002 2003 2005 2006 20092007
2001 2006 2008 2010
2008
2007
• Focus is on benefit and value of innovative medicine for
• Innovation Centre China (ICC) opened in Zhangjiang as part
R&D
Chinese/Asian patients• Initial work concentrates
on cancer in Chinese patients, working with l l i tifi t l t
in Zhangjiang as part of $100m R&D investment in China
local scientific talent
Our strategy going forward
Begin to establish leadership
Drive growth with current core brands
Solidify leadership with new products
Begin to establish leadership in “Broad Market”
• Additional sales force• Capitalise on health
reforms with strategies tocore brands• Increasing productivity• Improve coverage in
~100 additional cities
• Additional sales force capacity in top cities
• Leading marketing and sales capabilities
reforms with strategies to reach a greater share of the Chinese patient population
1
100 additional cities sales capabilities
Key products entering reimbursement list in 2009
1
New ProductsCeftaro-line
Dapag-liflozin
80
Vimovo
1 IV formulation
We have successfully boosted growth in the past following NRDL listingfollowing NRDL listing
Sales
1
NRDL listing
Ɩ Ɩ Ɩ Ɩ Ɩ Ɩ Ɩ
200908070605042003
1 Oral formulation. Source: AZ
Our strategy going forward
Begin to establish leadership
Drive growth with current core brands
Solidify leadership with new products
Begin to establish leadership in “Broad Market”
• Additional sales force• Capitalise on health
reforms with strategies tocore brands• Increasing productivity• Improve coverage in
~100 additional cities
• Additional sales force capacity in top cities
• Leading marketing and sales capabilities
reforms with strategies to reach a greater share of the Chinese patient population
1
100 additional cities sales capabilities
Key products entering reimbursement list in 2009
1
New ProductsCeftaro-line
Dapag-liflozin
82
Vimovo
1 IV formulation
Our core portfolio has enjoyed high growth and still has high growth potential driven by brand loyalty
Segment growthAZ product growth
has high growth potential driven by brand loyalty
Sales in China 2009*
$146m
Segment growthCAGR, 2004-09**
AZ product growthCAGR, 2004-09**
32%19%
$117m
$130m 25%22%
26%24%
$65m
$66m 32%73%
30%34%
$56m
$62m 36%55%1
40%48%
$24m
$
$22m
28%
77%2
3 %4%
51%
31%
83
$18m 37%54%
1 2005-09. 2 2006-09. Source: *AZ; **IMS
Industry leading customer segmentation and targeting capability enables AZ to continue to increase productivitycapability enables AZ to continue to increase productivity
Proprietary customer insights Industry leading productivity –
• We profiled 250,000 doctors out
increasing at >10% a year
Sales rep productivity 1st half 2009
of 1.3m in China, building a valuable proprietary customer database
Roche
Novo Nordisk
• Using our database, we rigorously segmented and targeted the relevant physicians
Bayer
Pfizertargeted the relevant physicians
• This has allowed us to continue to boost the productivity of our
l f
Novartis
Sanofi A entis
MSD
sales force Sanofi-Aventis
GSK
Lilly
We are expanding our coverage into an additional 100 cities to extend the value of these core brands100 cities to extend the value of these core brands
Core coverage Increasing coverage (~200 cities)
• High frequency visits to doctors by sales reps
(~100 cities)
• Investing in sales force to increase coverage and sales rep frequencyby sales reps coverage and sales rep frequency
Coupled with a holistic segmentation of physicians and tailored promotional effortsand tailored promotional efforts
AZ China’s success will be enhanced by newly reimbursed productsnewly reimbursed products
AZ has had success in getting Our products are in large markets reimbursement for four key brands
• Update to National Reimbursement Drug List (NRDL) initiated in 2009
with high growth
Total market 2009, $mDrug List (NRDL) initiated in 2009 by government
- Last update to NRDL in 2004
CAGR 04-09
32% 30% 45% 25%
• Four AZ brands successfully added to NRDL
~$800m-1,200m
- Expected to get reimbursement in provinces in 2010 ~$200m-
400m~$200m-
400m ~$150m-300m
StatinsPPIs Beta-blockers
Asthma/COPD
Source: IMS; AZ analysis
AZ has built capabilities to launch our new highly relevant brands in China 1 2 years after majorrelevant brands in China 1-2 years after major established markets
Pipeline products Segment value1, 2009
Patient need
$300 500 >100m estimated to have heart disease in China$300-500m >100m estimated to have heart disease in China
$300-500m 40m diabetics with further
Dapagliflozin
$300-500m 40m diabetics with further 20m pre-diabetic patients
Ceftaroline
$350-700m ~5.2% of hospital patients in China have hospital-acquired infections, with one of the highest rates of antibiotic resistance
Vimovo $100-200m Surveys show 25-50% of adults over 50 in China suffer from osteoarthritis
1 Assumes the following IMS ATC classification: Brilinta (B1C), Onglyza (A10J, A10K, A10L, A10M, A10N), Cubicin (J1X), Ceftaroline (J1D, post-3rd generation cephalosporins). Source: IMS, AZ analysis; China Daily; International Diabetes Foundation; National Nasocomial Infections Surveillance System; Journal of Globalization and Health
Strong local customer insights allow us to launch new products with maximum impactproducts with maximum impact
AZ tailored its Symbicort strategy Symbicort share in Chinabased on China-specific insights
• Innovative and proprietary market research approaches across
Therapeutic segment sales, 2009
research approaches across multiple cities and physician types:
- Enabled a better physician and 16%
patient segmentation and identification of priority segments
- Supported differentiated 84%Supported differentiated messaging between pulmonologists and paediatricians (efficacy vs fast-control) – a S bi t h ld 16% h i k t
84%
( y )different distribution of messages vs. established markets
Symbicort held 16% share in market, despite not having reimbursement –unlike key competitors
Healthcare reform is creating an opportunity in the “Broad Market”Broad Market
The government is committed to investing $125bn to support healthcare g g $ ppreform between 2009 and 2011, which includes
• $64bn to expand basic healthcare insurance
• $38bn to build and upgrade community / rural hospitals
These investments will help stimulate a new “broad market”
89Source: MOH; China infobank; Literature research; AZ analysis
In part driven by government investment in insurance
Brazil is a high-growth market with strong fundamentals
Brazil market sales constant $25bexchange rate ~$25bn
~$17bnGrowth in the prescription (ethical)
8%+
$
~$10bn
prescription (ethical) drug segment is expected to continue to outpace overall market
201420092004
Sales rank among world pharma markets … 11th 10th 9th
pgrowth through 2014
… and catching up to
10th 9th 8th
Source: IMS Global Market Prognosis, June 2009
Reasons to believe in sustainable market growth
• GDP-growth boosting household incomes g gand leading to middle class growth
• Primarily out of pocket payment for medicines• Primarily out-of-pocket payment for medicines with patients willing to pay for innovation, quality, and services
• Targeted increases in government spend on health care
• Ageing population is driving a disease profile that favours chronic therapies and long termthat favours chronic therapies and long-term engagement with healthcare stakeholders
GDP growth fuelling expansion of the middle class
% of Households
30
15 to 20 million new consumers b iddl
20became middle class during the last decade
201010
Household income0 70605040302010
02002
Source: Economist Intelligence Unit, 2010
ouse o d co e$ '000
AstraZeneca is the #7 multi-national pharmaceutical company in Brazil but has significantly increased its rankcompany in Brazil but has significantly increased its rankRx market share, 2009, %
Local player Growth rate, 2004-09 %
EMS
0 1 2 3 4 5 6 7 8
Novartis
2004-09, %
28%38%
Aché Labs
EMS
RocheSanofi-Aventis
38%19%30%17%
MedleyEurofarma
Aché LabsPfizer
17%14%32%33%Eurofarma
MerckAbbott
AstraZeneca has improved from #15 in
33%35%10%30%
Castro MarquesGlaxoSmithKlineBayer
improved from #15 in Brazil in 2004
30%
16%13%
28%Cas o a quesJohnson & Johnson
Source: IMS
18%8%
AstraZeneca has seen consistent above-market growth in Brazilgrowth in Brazil
AstraZeneca sales in Brazil1
$457m30%
$330m
~30% p.a.
We have grown
$134m
consistently at twice the market, which averaged 10-12% growth per year $134mover the same period
200920072004
1 Actual exchange rate. Source: AZ internal
AstraZeneca Brazil has built a strong local organisation
Thomaz BonattoRubens Pedrosa Sergio Pompilio Jose E. NevesCFO
Years with AZ: 13
Marketing Company President
Years with AZ: 3
Legal and Corporate Communications Director
Years with AZ: 2
Medical Director
Years with AZ: 12
Jeroen CommissarisPrimary Care BU Head
Jerson FibraMarket Research, Training & Business Support Director
Years with AZ: 10
Jorge MazzeiRegulatory, Corporate Affairs & Business Development Director
Christian SchneiderSpecialty Care BU Head
Years with AZ: 4
Daniela Castanho
Years with AZ: 6Years with AZ: 10
Miguel Monzu
Years with AZ: 4
Cecilia Abe a e a Cas a oOperations Director
Years with AZ: 11
gue o uHuman Resources Director
Years with AZ: 5
Cec a beCompliance Officer
Years with AZ: 6We have over 580 sales reps in Brazil covering ~15 products
AstraZeneca recognized as one of the “Great Places to Work in Brazil”
AstraZeneca elected “Best Pharmaceutical Company in
across ~10 therapeutic areas
the Great Places to Work in Brazil for 5 consecutive years (2005-09)Brazil” due to distinguished
performance in 2008
Our strategy going forward
Introduce AstraZeneca’s new global launch
Launch selected branded generics and local in-licensed
Drive share and existing innovative brands
Grow our business in public reimbursement
new global launch products products
BrandedgenericsCeftaroline
Vimovo
Dapag-liflozinliflozin
Our capabilities allow us to continue our momentum
We have improved our …to boost our sales of Crestorsegmentation and targeting…
Crestor salesNumber of GPs i it d f C t
Average details peri it d GP
$67m
visited for Crestor visited GP per year
~9,000 -25%90
~120+29%
$22m
+208%~6,500 ~90
$
% of all Brazilian GPs visited 2009
F th l b t ibl l i li i l t i l lt
% of all Brazilian GPs visited, 200916%
20092006
Source: AstraZeneca
Further sales boost possible leveraging clinical trial results
We have successfully entered the growing public segmentpublic segment
The government is investing to cover …and AZ has already achieved success a limited set of major diseases…
• Coverage for a targeted set of chronic diseases including cancer and
positioning products for reimbursement
• Positioned Seroquel for public reimbursement in schizophrenia
schizophrenia
• 100% coverage of all health costs
G t d j t d t
• Ongoing discussions for Crestor and Brilinta
• Government spend projected to increase further
Seroquel sales in public reimbursementDrug sales in public reimbursement$45
$2.2bn
$3.7bn$45m
20092004 2007
$14m
2009
Source: Ministry of Health, AstraZeneca
20092004 2007 2009
Our pipeline products are well-suited for patientneeds in Brazilneeds in Brazil
Pipeline products Segment value1, 2009
Patient need
$150 200 32% of all deaths in Brazil attributable to$150-200m 32% of all deaths in Brazil attributable to cardiovascular disease
$250-300m About 8 million people in Brazil have diabetes
Dapagliflozin
$250-300m About 8 million people in Brazil have diabetes. An additional 1.5 million are pre-diabetic
Ceftaroline
$200-250m Roughly 1.5 million hospital-associated infections with several associated fatalities. Doctors are keen for new therapeutic options with activity against MRSA and Gram-negative pathogensMRSA and Gram negative pathogens
Vimovo $550m More than 5 million people affected by osteoarthritis in Brazil with increasing role of NSAIDs that present positive patient safety profiles
1 Assumes the following IMS ATC classification: Brilinta (B1C), Onglyza/Dapagliflozin (A10J, A10K, A10L, A10M, A10N), Cubicin (J1X), Ceftaroline (J1D), Vimovo(N2B). Source: IMS; British Journal of Medicine, International Diabetes Foundation, Globocan
present positive patient safety profiles
AstraZeneca is also launching locally relevant in-licenses and branded genericslicenses and branded generics
Cimzia is an exciting local opportunity We are also launching a selective branded in Brazil
• AstraZeneca in-licensed Cimzia from UCB as a Brazil-specific opportunity
generics portfolio…
You will hear more detail on our branded generics strategy later in the presentation
• Cimzia will enter an ~$300m market for rheumatoid arthritis and Crohn’s disease
Ci i h b fi i l f t d• Cimzia has beneficial safety and simplicity of administration versus other therapies available on the market
• AstraZeneca has a very strong record in delivering technical content to medical specialists that will be active in treatment
• AZ has capabilities to obtain public reimbursement
Our aspiration in Brazil
• Enter the top 10 in the next 5 years and continue to outgrow the market
• Drive increased share in our existing brands
- Leverage our strong commercial capabilities
G t t d t bli- Grow our targeted access to public reimbursement
• Launch AZ’s new brands as well as branded generics and local in-licenses
AstraZeneca believes emerging g gmarkets are a sustainable opportunityopportunity
Our strategy in emerging markets has three elements
Continue to grow Extending our Broaden portfolio to
A B CContinue to grow our presence in the large BRIC-MT markets
Extending our geographic foot-print by increasing our involvement in
Broaden portfolio to selectively include branded generics
markets our involvement in high-growth small and mid-size markets
Beyond BRIC-MT, AZ sees many important markets
2009 Rx market value
Market value CAGR 2004 09Market value CAGR 2004-09
GDP per capita, 2009 (PPP)PolandPoland$6.9bn7.0%$17,989
Thailand$3.0bn14.9%$7,998
V l
Romania$2.8bn19.0%$11,755
Philippines$2.3bn8.5%$
$ ,
Venezuela$4.8bn24.2%$12,496
Algeria$2.3bn13.1%$6 855
$3,536
Indonesia$2.5bn9 5%Argentina
$3.8bn16.8%$14,126
$6,855
South Africa$2 0bn
Saudi Arabia$2 9bn
9.5%$4,149
$2.0bn9.4%$9,961
$2.9bn11.2%$23,388
Source: IMS; IMF World Economic Outlook
Small and mid-sized markets outside BRIC-MT are material and could add $60bn in the 5 yearsmaterial and could add $60bn in the 5 years
Emerging markets incremental sales forecast 2009-14g g
~$150bn+10-12% p.a.
~$90bn If growth continues at historical rates (10-12% per
Small and mid-
historical rates (10 12% per annum), small and mid-sized markets will add $60bn in sales by 2014 Small and mid-
sized markets20142009
y
Source: IMS for 2009; AZ Projections for 2014 at historical growth
We believe we have significant upside potential in small and mid sized marketsand mid-sized markets
Middle East / North Africa
Maged GobranArea Vice President, Middl E /N h Af i
Middle East / North Africa(MENA)
Middle East/North Africa
Emerging MarketsEmerging Markets Investor DayInvestor Day Middle East / NorthMiddle East / North Africa (MENA)Africa (MENA)March 16, 2010
Middle East & North Africa (MENA) a collection of small and mid sized markets– a collection of small and mid-sized markets
Tunisia
LebanonSyria
Iraq
Tunisia
Morocco
Qatar
BahrainKuwait
q
Jordan
EgyptLibya
Algeria
West Bank
Oman
Saudi Arabia
UAE
gyp
Yemen
17 markets, ~300 million population
Together small and mid-sized markets can contribute significant growthsignificant growth
AstraZeneca sales in MENA1
$336m• ~3 times market growth
• Fastest growing pharmacoi MENA
+29% p.a.
$210m in MENA
• ~$250m added 2004-09$95
$210m
$95m
200920072004
1 Actual exchange rates. 17 markets as shown. Source: AZ internal data
Growth in small and mid-sized markets like MENA is possible with empowered local leaderspossible with empowered local leaders
Mehdi FerdjiouiTarek Rabah Mohamed Makhlouf jCountry Manager Algeria
AlgerianWorked in Algeria
President Gulf
Lebanese / CanadianWorked in Gulf and Brazil
President Saudi Arabia
EgyptianWorked in UAE, Egypt, Saudi Arabia
Mehtap ArslanHR Gulf
Hicham MirghaniMarketing Maghreb
Issam Abu GhaidaFinance Middle East
TurkishWorked in Turkey, UAE
French / SudaneseWorked in France, Morocco
Palestinian / AustrianWorked in Austria, Switzerland, Germany, Saudi Arabia, Egypt
Nibal ZarourMarketing Levant
Michel BennajiLegal Middle East
Rula KassemMarketing Company President Levant
LebaneseWorked in Lebanon
French / TunisianWorked in France, Belgium
JordanianWorked in Jordan
Have added ~600 FTEs since 2004 (now at ~1 000) while building qualityHave added 600 FTEs since 2004 (now at 1,000) while building quality
Our strategy going forward
Expand our market
Example – AlgeriaDrive share in our currently marketed portfolio
Introduce AZ’s new global launch products
coverage
Example – Saudi Arabiap
Example – Saudi Arabia
p
Saudi Arabia is an attractive market with high growth
Saudi Arabia Rx market sales Key growth drivers
Saudi Arabia
y g
• Strong economic fundamentals and natural resource wealth$4.3-5.2bn
• Increasing unmet medical need – especially cardio-metabolic
$4.3 5.2bn
• Growth in private insurance coverage
I t t t i$1 7bn
$2.9bn
• Investments to improve healthcare quality and access in public payers
$1.7bn
2009 2014E12004
1 Projection based on sustained growth at 8-12% per annum. Source: IMS Global Market Prognosis, June 2009; AZ analysis
In Saudi Arabia, we have tailored our approach to the three different segments of the marketthree different segments of the market
Saudi Arabia
Traditional focus of AZ Saudi Arabia Expanding our business in Saudi Arabia
Private physicians & clinics% of market value – 61%
Ministry of Health% of market value – 17%
Institutions% of market value – 22%
We rapidly deployed resources and built capabilities to grow across all three markets segmentsac oss a t ee a ets seg e ts
We have more than doubled our sales in Saudi Arabia
Saudi Arabia
AZ sales in Saudi Arabia
+20%$97m
$39m
20092004
Source: AstraZeneca
Our major brands have significant momentum
Sales in Saudi Arabia
Saudi Arabia
Sales in Saudi Arabia of our top brands*2009
$22
AZ product growthCAGR, 2004-09**
Segment growthCAGR, 2004-09**
20% 15%
$22m
$22m 20% 15%
22% 20%$22m 22% 20%
29% 14%$10m
$9m 17% 16%
$8m 39%1 19%
1 2005-09 growth. Source: *AstraZeneca **IMS
Our pipeline products are well-suited to patient needs across Saudi Arabiaacross Saudi Arabia
Saudi Arabia
Pipeline products
Segment value1, 2009
Patient need
$50 150 30% f d th l t d t h t$50-150m 30% of deaths are related to heart disease or atherosclerosis
$100-300m Out of the top 10 countries for diabetes
Dapagliflozin
$100-300m Out of the top 10 countries for diabetes prevalence worldwide, six are in the MENA region including Saudi Arabia
Ceftaroline
$100-200m ~4% of all Saudi Arabian hospital patients are infected by MRSA
Vimovo $50-150m ~53% of men and ~61% of women in Saudi Arabia suffer from Osteoarthritis
• Started building sales force focusing on large cities- 100 reps- 10 FLSM- 2 SLSM2 SLSM
• Grew to #10 pharma company with 30% YoY sales growth2009
Source: AZ
In Algeria we continue to expand our local presence and will be launching key productswill be launching key products
AZ will now introduce 5-10 of Our products are in large markets its large global brands in the next 3 years
Brands have seen very strong
with high growth
Total market 2009Brands have seen very strong performance in other markets
E l
CAGR 04-09
~$60mExamples $60m
~$45m
~$30m~$40m
~$30m
~$15m
Statins Calcium-channel blockers
Anti-psyschotics
Hormone antagonists
PPIs
24% 14% 6% 25%31%
Source: IMS
blockers
In Algeria we continue to expand our local presence and organisation to support key product launchesorganisation to support key product launches
Supported with expanded Explore local manufacturing optionspp porganisation
Number of reps
p g p
Expected benefits from local manufacturing presence
• Mitigate risk from import restrictions
• Simplify and accelerate registration procedure
300++200
procedure
• Reinforce negotiation position in pricing and IP discussions2014E2009
100+
2014E2009
• Triple current sales force
• Develop local marketing and medicalDevelop local marketing and medical teams (~15 people) to support promotion activities
Source: AZ
MENA – an example of the potential of small and medium sized marketsmedium-sized markets
• Small and mid-size markets can aggregate up to form a material business
• We have significant untapped potential in some large marketsin some large markets
• We have a portfolio and pipeline that is incredibly relevant to the MENA regionincredibly relevant to the MENA region
• A larger number of small markets may reflect a higher level of complexity, but can be managed effectively as a portfolio
AstraZeneca believes emerging g gmarkets are a sustainable opportunityopportunity
Our strategy in emerging markets has three elements
Continue to grow Extending our Broaden portfolio to
A B CContinue to grow our presence in the large BRIC-MT markets
Extending our geographic foot-print by increasing our involvement in
Broaden portfolio to selectively include branded generics
markets our involvement in high-growth small and mid-size markets
Brands dominate the market as brands are the best proxy for qualitythe best proxy for quality
Emerging market sales1, 2009, Ex-manufacturerg g , ,
~$50bn
~$30bn(~17%) ~$180bn
(~28%)
~$90bn(~50%)( 50%)
Branded Branded Commodity
~$10bn (~5%)
Patented originalsgenericsgenerics Totaloriginals
1 Projected from 17 selected markets (China, Turkey, India, South Korea, Brazil, Mexico, Poland, Russia, Taiwan, Hungary, Romania, Egypt, Algeria, Saudi Arabia, South Africa, Ukraine, UAE) to reflect total in emerging markets. Source: IMS; AZ analysis.
Why we believe we can succeed in branded generics
We are well positioned for success / profitabilityp p y
• We have the capabilities needed
- AstraZeneca is a world leader across emerging and establishedAstraZeneca is a world leader across emerging and established markets at building brands
• We will follow a highly focused branded generics strategy
- Stringent criteria to select only markets and products where we can achieve success
• Branded generics planned for:
~30 markets out of 100+ selected
~100 molecules out of 2,000+ originally profiled
Our strategy is focused on where we can compete profitablycan compete profitably
We focus on products where we can…p
• Leverage AZ infrastructure, sales force, strength, and presence
• Focus on quality as a primary factor in customer product selectionFocus on quality as a primary factor in customer product selection
• Differentiate our product through dosage, formulation, combinations, etc…
• Create a ‘new’ market where products have demand but are not promoted or are under promoted by the originator
• Strengthen AZ positioning across the portfolio in government tenders without addition sales force resources
… and where we can obtain favourable pricing – e.g. similar to our branded originals
We have chosen a highly selective initial portfolio of ~100 molecules~100 molecules
Molecules to be launched as branded generics, number of g ,molecules by TA
~30-40
~20-3015 25
~20-30
~5-15~10-20~15-25
Other2RespiratoryGIOncologyCV1CNS
Aligned to areas of AstraZeneca expertise
1 Including Diabetes; 2 Most common drugs in this group are anticoagulants, painkillers and anti-infectives. Source: AZ Internal
We will expand our relationship with Torrent to support the ramp up of our branded generics businessthe ramp-up of our branded generics business
• Torrent has a proven ability to manufacture to AstraZeneca’s high p y gstandards and a strong track record in a wide range of products
• We have a license and supply contract with Torrent for 18 products in 9 markets
• AstraZeneca will expand the agreement to cover additional products and markets to support the roll out of its branded generics businessmarkets to support the roll-out of its branded generics business
• AstraZeneca and Torrent have agreed a “heads of terms” defining the key pillars of a long-term strategic partneringy p g g p g
Let us show you two examples of our BGx country strategyof our BGx country strategy
Poland
Jerzy GarlickiMarketing Company President, Poland
M i
Ricardo Alvarez-TostadoMarketing Company President, MexicoMexico Mexico
Poland is a growing market with the government serving as the primary payeras the primary payer
Poland Rx market salesConstant exchange rate
• Government is the i
~$10bn
~10% p.a.primary payer
• Patients make significant co-pays for drugs listed
~$7bnp y g
for reimbursement
• Physicians are largest influencers in medicine /
~$5bn
Sales rank among world pharma markets
influencers in medicine / brand selection
• Prescriptions written for f
19th 18th 17th
specific brands, with limited switching
201420092004
Source: IMS Global Market Prognosis, June 2009
AstraZeneca has seen consistent above-market growth in Polandgrowth in Poland
AstraZeneca sales in Poland1
AZ tl k d• AZ currently ranked as #9 MNC in Poland (2009), up from #14 in 2004
$133m~14% p.a.
• Largest products in Poland are Zoladex, Pulmicort, Seloken and Symbicort
$68m
• Sales force of 300+ FTEs across ~10 therapeutic areastherapeutic areas
20092004
1 Actual exchange rate. Source: AZ internal data
Poland has a large BGx market estimated at ~$4.6bn
Total Rx sales1, 2009,
Branded generics
• ~75% of the market by value is branded
d ff t t
37%and off-patent
• Only 4% of the market by value is unbranded
4%Commodity generics
22%Patented y%originals
37%
Branded originals
1 Categorisation based on Q1-Q2 2008 data; retail market only. Source: IMS, AZ analysis
Why AZ believes Poland provides a sustainable BGx marketsustainable BGx market
• Physicians strongly prefer branded products; preferences y g y p p ; punlikely to shift significantly in next 3-5 years
• Unprompted switching at pharmacies occurs rarely (<5%)Unprompted switching at pharmacies occurs rarely (<5%)
• BGx market expected to grow at 5-6% through 2015
• Branded generics are attractively priced, with discounts from originator product prices typically limited to 5-30%
• Feasible for AZ to register branded BGx in ~18 months through the EU Mutual Recognition Process
Our initial product portfolio of ~25 molecules over 2 years will represent a material uplift for AZ Poland2 years will represent a material uplift for AZ Poland
Therapy Area RationaleNumber of moleculespy
Support AZ’s Meronem positioning for hospital tenders
Anti-infectives
Build on AZ’s leadership in CV and leverages CV salesforce
AstraZeneca Poland 2014 revenues (%)
BGx
Cardiovascular
Leverages available capacity in CNS salesforce (Seroquel only product)
15-20%Central nervous system
Leverage AZ oncology reputation and strengthens position in tenders
80-85%
Core business
Oncology
Build on AZ’s leadership in Respiratory with Symbicort
Core business
Respiratory
Source: AZ analysis
We have ‘proof of concept’ in Poland
Pliva had little success with a generic version f T id
…With success coming only after partnering with AZ b d d iof Torasemide…
• Menarini first launched Trifas in 2000 in Poland
AZ on a branded generic
• By 2006, market underdeveloped with Menariniunderpromoting Trifas
- Trifas is a branded version of torasemide, a loop diuretic
• Pliva launched a commodity generic version
• AstraZeneca partnered with Pliva in 2006 to sell branded generic torasemide as Diuver
of torasemide in 2004
- Pliva supported the product with minimal promotion or engagement with stakeholders
- Product supported exclusively by AZ reps
• AstraZeneca successfully promoted the product with no added infrastructure or increase in sales force
- Generic gained almost zero share with Trifas maintaining almost constant share
increase in sales force
- AZ leveraged existing coverage of target customers (e.g. cardiologists) and strong reputation in CVreputation in CV
Success of an AstraZeneca promoted branded generic in Polandgeneric in Poland
Torasemide sales, 2004-09, $m, , $
• Diuver is the leader inDiuver Diuver is the leader in Torasemide with 37% sales share in therapeutic segment
Trifas
AstraZeneca begins exclusive promotion of
• Entire Torasemide market has grown >5x since AZ launch
exclusive promotion of Diuver
• Have also launched branded generics in oncology (Pamisol –pamidronic acid) and anti-pamidronic acid) and antiinfectives (Sumamed –azithromycin IV)
Mexico is a growing market with patients typically self paying for medicinesself-paying for medicines
Mexico Rx market salesConstant exchange rate
• Market primarily patient t f k t t
~$13bnCAGR ~6%
out-of-pocket payment
• Government spending on health limited to poorest
~10bnp
populations and social security targeted to lower income populations
~$7bn
Sales rank among world pharma markets
• Physicians largest influencers and prefer branded products10th 13th 14th
• Prescriptions rarely required with patients preferring brands
201420092004
144Source: IMS Global Market Prognosis, June 2009
AstraZeneca has been highly successful in Mexico
AstraZeneca sales in Mexico1• AstraZeneca is the fastest growing• AstraZeneca is the fastest growing
of the top 20 companies from 2001 to 2009 moving from rank #17 in 2001 to rank #8 in 2009$334m
• AZ are leaders in key therapeutic segments including:− Losec and Nexium for PPIs
$261m
$334m
$206m− Crestor in statins− Tenormin and Seloken for
beta-blockers
200920072004
− Pulmicort in inhaled corticosteroids
• Sales share of Seroquel XR in• Sales share of Seroquel XR in Mexico is highest of any market worldwide
• Sales force total of ~600 FTEs
Dip in 2009 sales due to massive contraction in Mexico economy (-7% GDP growth, 2008-09) and
one-time charge due to change in distribution model
1451 Actual exchange rate. Source: AZ internal data
• Sales force total of 600 FTEs across ~15 therapeutic areas
one time charge due to change in distribution model
Mexico has the highest prices for branded generics among large Emerging Marketsamong large Emerging Markets
Retail price comparison across Emerging Markets1, Indexp p g g ,
Mexico
Russia
Brazil
Poland
Turkey
1 Sample size includes 19 large BGx products. Source: IMS; AZ analysis
Using the AZ criteria and approach, our initial BGx portfolio will represent a material uplift for AZ Mexicoportfolio will represent a material uplift for AZ Mexico
Th A R ti lNumber of
l lTherapy Area Rationale
Build on AZ’s leadership in CV
Leverage reputation and relationships
molecules
Cardiovascular
Build on AZ’s leadership in GI with
Leverage reputation and relationships with GPs, Internal Medicine, and Endocrincologists to support market development for Onglyza AstraZeneca Mexico 2014
revenues (%)
Diabetes
Gastro intestinal pLosec and Nexium
Build on AZ’s relationships with psychia-trists and leverage additional CNS sales force capacity
BGx
Neurology
Gastro-intestinal
10-20%
Oncology
Pain/ Support market development for
Leverage AZ oncology reputation
80-90%
Build on AZ’s leadership in Respiratory with Symbicort
Core business
Respiratory
Pain/inflammation
Support market development for Vimovo
Source: AZ
~30
Example product Diabetes fixed dose combinationDiabetes fixed dose combination
Product overview Why AstraZeneca can win
• Diabetes product prescribed heavily by GPs (~70% of all scripts) and internists (~20%)
• AstraZeneca has high recognition with GPs and internists due to strong primary care brands (e g Nexiuminternists (~20%)
• Product has favourable clinical profile and dosing versus key competitors,
primary care brands (e.g. Nexium, Crestor, Seloken, Symbicort)
• Product can leverage existing sales though captures low share due to lack of physician awareness of benefits
• Physicians switching to fixed-dose
force relationships and capacity to ensure physicians are aware of benefits vs competitors
Physicians switching to fixed dose combinations due to improved patient compliance
• Will also help build AstraZeneca diabetes franchise
A t Z j t th t it illAstraZeneca projects that it will capture 10-15% of this type of combination by 2015
Source: Interviews; IMS; team analysis
Example product – We understand how to successfully position branded genericsposition branded generics
Average unit Mexico oralanti-diabetics
We can successfully
Pricing Volume ValueNo. ofplayers
~16
price premium in segment
8-10x8%High 37% yand profitably position our branded generic anti-diabetic in these
16 8-10xMedium 13%
8%High 37%
segments~16 3-5x22%
Low cost, highly competitive commoditised mass
~125 1xLow 41%79%
market – (low priced BGx, commodity Gx)
Source: IMS
Key takeaways on our branded generics plan
• We are taking a selective approach in branded generics, focused g pp g ,on the markets and products where we can compete profitably
• Our plan will create a material business amounting to 10-15% of ourOur plan will create a material business amounting to 10-15% of our emerging markets business by 2014
We have the capabilities required to successfully execute on our plans• We have the capabilities required to successfully execute on our plans
• The business is ‘real’ – we are putting in place the partnerships to source our initial 100 molecule portfolio
Our strategy in emerging markets has three elements
Emerging markets strategy
Continue to grow Extending our Broaden portfolio to
A B CContinue to grow our presence in the large BRIC-MT markets
Extending our geographic foot-print by increasing our involvement in
Broaden portfolio to selectively include branded generics
markets our involvement in high-growth small and mid-size markets
Our goal is to continue double-digit growth, with emerging markets becoming ~25% of AZ sales by 2014emerging markets becoming ~25% of AZ sales by 2014
AZ emerging markets revenue goalg g g
$12bn
$8bn
$4bn
20142009$0bn
Emerging MarketsEmerging Markets Investor Day y
16 March 2010
Drivers of AstraZeneca success to date
We were 1st to invest in China, the largest Emerging Market opportunity, g g g pp y
We have been successful at catching up quickly in other markets
We have built strong local organisations to successfully manage local market dynamics
We support our local organisations with the best practice of our global capabilities
We have a diverse portfolio of relevant products
Our strategy in emerging markets has three elements
Emerging markets strategy
Continue to grow Extending our Broaden portfolio to
A B CContinue to grow our presence in the large BRIC-MT markets
Extending our geographic foot-print by increasing our involvement in
Broaden portfolio to selectively include branded generics
markets our involvement in high-growth small and mid-size markets
Emerging markets are forecast to contribute ~70% of pharma growth in the next 5 years~70% of pharma growth in the next 5 years
Worldwide pharmaceutical sales$955bn$130bn
Emerging Markets 70%
$55bnEstablished Markets 30%
$765bn
2009E 2014E
Emerging markets projected to grow at a 12% CAGR from 2009-2014
1 Emerging markets are all markets outside EU-15, Norway, Switzerland, Iceland; US, Canada, Japan, Australia, New Zealand. Source: IMS extrapolation.
