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

Pascal Soriot: Thank you, Iskra. Karlsson, important point to remember because if a mother is vaccinated out of season and the baby is born out of season, then basically when the season comes, there’s no protection left with the vaccine. I mean, so it works both ways and this product nirsevimab is really in the end the best protection for babies. Luisa Hector at Berenberg.

Luisa Hector: Thank you, Pascal. Maybe to follow-up on R&D, I just wonder what the impact of inflation is on the cost of running the big Phase III trials? And whether you have incorporated IRA into your R&D investment decision process already? Thank you.

Pascal Soriot: Aradhana, do you want to take the first one? And maybe Mene and Susan, could give comments on the second question.

Aradhana Sarin: So thanks for the question, we are seeing some impact of inflation on the cost of our clinical studies. And it’s not just the impact of inflation, but also the impact of some of the labor shortage, which includes nurses and doctors and facility, shortages that a lot of the sites are experiencing. So we are seeing some impact of that on our studies. And then maybe Dave can address the question on the inflation reduction.

Menelas Pangalos: From an R&D perspective, the question was how much is it impacting R&D? So I would say, as with — as we do every year, we look at the business cases, launch dates of all of our indications of the NME or LCMS, and we make our based on that. And, of course, the Inflation Reduction Act is part of that assessment now. What I would say is, the piece that concerns me the most is the difference between small molecules and large molecules, the 9 versus 13 years, because I think, obviously, that adds some complexity to actually the mix of your pipeline. And so I would say, has the potential to encourage us to disinvest in small molecules potentially relative to larger molecules or more complex modalities, because they’ll have a longer exclusivity period.

Pascal Soriot: Now, there are two major problems with this one is the small molecule point that Mene was raising. And the second is, there is a disincentive to start with small indications that’s mostly true for oncology, where if you have to start with a third-line indication, patients would benefit from this, but we may not do it in the future or not launch in the U.S., we may launch elsewhere in the world, but not launch in the U.S., until we have approval for a larger indication because the clock starts as soon as you get approval. So that those are really negative factors that are real problems with this investment, this inflation reducing lower. So with this, I would like to thank you all for your interest in our company and wish you all a good rest of the day. Thank you.