And just at the end, I need to mention that DL still is the subject to closing.
Pascal Soriot : So Luisa, your second question, the R&D spend, as we’ve said before, we expect to keep in the low 20 percentage as a percentage of revenue. And our improvement will come from his name. And so we are very committed to achieving this margin expansion in the midterm, as we’ve communicated for quite some time. We are on track and remitted to this and really is about leveraging the critical mass and some of these products that have required sorry, a lot of promotion at scale in terms of promotional efforts. If you look at the base, look at — I mean, Farxiga will be even potentially declining in promotion. So we can manage with this large SG&A spend we have to manage, I should say, so that we can actually deliver this midterm ambition.
Now the long-term ambition in operating margin is something we will define over the next couple of years as we see the progression of the pipeline. Because quite honestly, what we’ve seen in the last 2 to 3 years is an expansion of our pipeline. We have a number of products now in the pipeline, the PCSK9 of course, that we believe can drive a lot more top line growth than could have been anticipated, say, a couple of years ago. So depending on how the pipeline shapes up. We’ll have to decide what our percentage margin ambition is, but I’ve said many times before, and I want to be clear, what we focus on is the absolute dollar value and the cash flow we deliver. So if we had — and I’m not saying we will, but if we had to compromise on the future progression of operating margin beyond the mid-30s, we had to comprise on the percentage, it will be because we deliver more top line.
And the same or more absolute dollar value in operating profit and cash flow. Ultimate I keep saying we deliver value to shareholders with dollars not percentage, right? And so really, if we can deliver even more growth than we had anticipated 2 years ago, it will drive more profit. And so we’ll have to adjust this over the next couple of years based on our pipeline. But with the firm commitment that in absolute value, we will deliver a substantial growth in top line but also in bottom line growth. Do you have microphone there?
Eric Le Berrigaud : Eric Berg Stifel. Two questions. First for Aradhana, coming back on 1 of your comments before on CapEx. So CapEx anticipated to grow by maybe as much as 50%. How should we think about this going forward? Is it a 1-year sharp increase? Or should we think about CapEx staying around $2 billion for the next few years or then percentage of revenues? Or how should we model this? And maybe the second question for you, Ruud and Sharon, about maybe the next wave of innovation into the biologics in respiratory. We see 1 competition coming with long-acting IL-5. We see more interest for the TSLP targeting in — also with long acting, but also combining with other targets. How — what is AstraZeneca doing for the next wave and to build on the existing franchise?
Aradhana Sarin : Sure. Thank you for the question. On CapEx, if you look over the last several years and you benchmark us against our peers, we’ve actually underinvested in CapEx substantially. And that’s also because we had other opportunities to invest and so forth. But when you look forward, and especially this year, we’ve given guidance on specifically, we’re investing behind a number of products that we’re bringing forward, right? So we just announced the cell therapy facility in Rockwell. So again, Susan talked about the whole cell therapy ambition. That requires upfront investment in CapEx. And again, some of that is at risk, obviously. We’re investing in our own API plant in Dublin. And that’s also because we’re trying to become more self-sufficient as it relates to API.
We announced an inhaled facility in Qingdao, and that’s to fulfill the demand that we expect for Breast03 for example, to come out of China. And in addition, we are investing in our ERP systems, which as I would say, for many, many years being under invested in. So there are a number of these investments that we’re making behind our pipeline. And you’ve seen from recent transactions and other investments that some of our peers are doing and have done that it has become increasingly important to have more and more self-reliant supply chains. And oftentimes, you see companies not being able to fulfill their growth ambition because of underinvestment in supply. So we’re sort of getting ahead of this curve for the pipeline and the new opportunities.
Pascal Soriot : One of the things this plant in Qingdo will support this our growth ambition in the respiratory market in China. If you look at COPD in China is totally underdeveloped. I mean the treatment is the disease is extremely prevalent production, smoking, aging. So there’s a lot of COPD, but the market is totally underdeveloped. Today, we have 65 or more percent market share with Breast03 in the triple segment in China. And as the market develops, we’re working very hard and expanding it as we market develop and we have local manufacturing, there’s enormous potential for products like Breast03 and that is really why we decided to make this investment.
Ruud Dobber : Quickly regarding, let’s say, the future of the biologics, and Sharon will comment on the science in the moment. So despite the progress we have seen in the last few years with drugs like [indiscernible]. It’s also a fact of life that there’s still a high unmet medical need and that remains. So still patients are suffering from multiple executions in the severe asthma segment as well as COPD. So we’re going to bet on new mode of actions, the CNs 33 clearly 1 of the examples I’m sure Sharon will say a little bit more about that. But also, we have an anti-tSip in development. And it will be quite spectacular to have an inhaled biologic in order to help those patients suffering from a very severe disease. So new mode of actions, hopefully will unlock the power of those medicines and this indication. And you will see, I think, a lot of studies in the next few years, both in asthma and COPD order to generate the evidence that it can work.
Sharon Barr: So I’ll build on that and really continue forward with Ruud’s message, in which we are proud of both following the science and thinking about patient needs as we create our next wave of therapeutics. So we’re aware that patients with respiratory disease with asthma and COPD, are first treated in the community and then progressed to specialty care. And so we’re creating a range of therapeutics that are able to meet the needs of their care providers, but also building on the science that we increasingly understand about these diseases. So in asthma, building on our success with Fasenra and aspire moving forward to thinking about how Tozorakimab can be effective there. Tozorakimab is a differentiated therapeutic in that this anti-IL-33 is hitting both the ST2 and the RAGE/EGFR pathways.
So it’s able to address the inflammatory piece of the disease as well as mucus production in remodeling, which we think is going to be very powerful for patients. And then thinking about how patients are accessing their care, moving into the pre-biologic space with an inhaled T-slip which we think is a very novel mode of delivery and will allow us to broaden this modality to a larger number of patients as well as an inhaled JAK inhibitor and an oral FLAP inhibitor. So really expanding our science in the pre-biologic space. Thinking about COPD, which is the major unmet metal need worldwide, building on our success with Breast tree and again, thinking about how we’re delivering an inhaled T-slip in the pre-biologic space, offering patients those options as well as an IRAK4 inhibitor, and again, evaluating midiparstat in that space.
So we are offering patients a number of different opportunities to address rare disease with the general practitioners and then also to access biologics and different mechanisms as they moving into specialty care. I hope that answers your question.
Eric Le Berrigaud: On the IL-33, even physicians has seen less data than from Sanofi and from [indiscernible 1:34:27] on the Phase II you’re already into Phase II issue. Can we think about getting more Phase II this year or any planning to give more?
Aradhana Sarin: As you know we’re so encourage that data we’d like to Phase III in that program and we’ll look forward sharing our Phase II date as it becomes available at our coming medical conference.
Ruud Dobber : So there are two big ones ongoing one is the NTR 33. It’s also in acute respiratory failure. And hopefully we will see data after the next season. So someone next year and if positive, fingers crossed we’ll be the first then NTR 33 in a complete new segments where there’s very big unmet medical needs. The second one clearly, our phase three trial in the in the COPD space, we’ve added an additional arm, a high dose and that trial is ongoing. And we’ll read out in the next two years.
Pascal Soriot : Maybe we take the last question. Is that okay, Andy? So Gonzalo, question on Gonzalo, over to you.
Gonzalo Artiach: Hi, could you hear me?
Pascal Soriot : Yes.
Gonzalo Artiach : Hi, Gonzalo from ABG [indiscernible 1:35:35]. I have a couple of questions. The first 1 is on Airsupra. It follows the previous question from the audience. And how big is the expected sales force and commercial team for Airsupra? And what is the current level of awareness of this drug from doctors today? Also in ’23, you have been preparing for the launch of it. So what is the biggest challenge based on your experience through the year to penetrate the market that 1 could expect it to be quite conservative? And the second question is on Tagrisso. It seemed from your report today that the demand in China had some hospital ordering dynamics. So could you give us some color on that? And how much is expected to affect 2024? And the same for the Australian government rebates looking also into ’24 and beyond? Thank you.
