AstraZeneca PLC (NASDAQ:AZN) Q3 2022 Earnings Call Transcript

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Aradhana Sarin: Sure. So to address your question relating to gross margins going forward and looking long-term, again, we remain committed to improving our gross margins. But I think 80%-ish is a pretty good gross margin in our industry. Now there are again a lot of variables that will determine what that long-term looks like. The first and the most important one is the mix of our products. And that depends obviously on price, which again, is different in oncology in rare diseases versus in biopharma. It’s different, for example, in China versus other geographies, et cetera. Secondly, we are constantly working on improving efficiencies, and our operating, our manufacturing et cetera, to make sure we drive efficiencies there.

Thirdly, it depends very much on the cost that we get our product for the APIs, the raw materials, all of that has a direct bearing. And that’s where we are seeing some impacts of inflation that we continue to manage through long-term contracts and procurement activity. And then fourthly, it depends also on the mix of collaboration revenue. So when you look at gross margin as a percentage, you have to be careful a little bit because as we derive more revenues from the collaboration line item that actually is reflective of the gross margins of those products. So I think there again, many variables, and we continue to drive on all of them. Dave?

David Fredrickson: So on Tagrisso, we’ve seen on a constant exchange rate basis continued sequential growth on the brand and the duration of therapy from FLORA has been one of the drivers of that. But our progress on ADORA has also been a contributor. Now, it’s been a much longer educational process than what we were able to do and metastatic. And I think in large part, it’s because we’re really trying to change behaviors. Just if I refer back to where we were 18, 24 months ago, there’s a lot of patients who are not getting treated with adjuvant therapy at all in the lung cancer setting. There’s a belief that surgery alone is sufficient. We’ve been effectively changing that and making good inroads against that, along with also ensuring that patients that are undergoing surgery in those early stages of disease are referred to multidisciplinary teams and medical oncologist so that they can receive therapy.

So we’ve been making good progress against it, but it’s a slower process that will, I know, ultimately pay off in terms of patient outcomes and in terms of duration of therapy. And we also continue to work on improving screening efforts so that more patients can be identified on the front end. And again, this is something that takes time and effort. And the last thing I will note that we’re happy about is that we do also now have the adjuvant approval in Japan, which gives us another market to begin moving against this objective of using it as a growth driver.

Pascal Soriot: Thanks, Dave. The biggest issue is really screening and diagnosing patients early in lung cancer which is the big problem compared to breast cancer, for instance. Emmanuel Papadakis, Deutsche Bank. Emmanuel, over to you.

Emmanuel Papadakis: Thank you for taking the question. Perhaps I’ll start with a follow-up on camizestrant. It was mentioned several times that you’ve thought this vindicated the potential in earlier lines, and I assume you’re referring to adjuvant as part of that, excuse me. But you’ve yet I believe, to initiate an adjuvant study. So perhaps you could give us an update in your plans on whether this makes it likely you’ll proceed in a broad or adjuvant population. And then perhaps on Ultomiris. Good quarter, perhaps you could just give us an update on how the MG launch is going, sources of patients, where you are in terms of converting Soliris share? Where you think you are in terms of new starts. And if you’d be happy to provide an opinion, I think we’d love to hear your perspective on the competitive implications of the recent factor D data in PNH as well. Thank you.

Pascal Soriot: Marc, you want to start with this question first.

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