AstraZeneca(AZN) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue grew by 21% in Q3 2024 and 19% year-to-date, with core EPS increasing by 27% to $2.08 in Q3 and 11% year-to-date [11][12][30] - Alliance revenue increased by 50% to$ 1.5 billion, driven by sales for Enhertu and Tezspire [23] - Net cash inflow from operating activities improved by $989 million in the first nine months [28] - Net debt increased by$ 3.8 billion, with a net debt-to-EBITDA ratio of 1.8 times [29] Business Line Data and Key Metrics Changes - Oncology total revenues grew 22% to $16 billion in the first nine months, with Tagrisso global revenues growing 17% [33][34] - BioPharmaceuticals delivered total revenue of$ 15.9 billion in the first nine months, representing growth of 20% [56] - Rare disease revenue grew 14% to $6.4 billion, with Ultomiris achieving a blockbuster quarter with 35% growth [72] Market Data and Key Metrics Changes - Emerging markets outside of China grew by 30% year-to-date, now accounting for 14% of total revenue [14] - The U.S. market contributed 43% of total revenue, with Europe at 21% and China at 13% [14] Company Strategy and Development Direction - The company announced a$ 3.5 billion investment in the U.S. for manufacturing and R&D, aiming to increase its market share in the U.S. [15][84] - The company is focused on expanding its oncology portfolio and has multiple high-value Phase 3 readouts expected [19][76] - The long-term goal is to achieve $80 billion in total revenue by 2030, with a mid-30s percentage operating margin by 2026 [78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high-teens percentage growth for total revenue and core EPS for the full year [30] - The company acknowledged potential headwinds from the IRA and VBP in China but remains optimistic about overall growth momentum [86] - Management emphasized the importance of innovation and the U.S. market's role in supporting future growth [84] Other Important Information - The company is committed to its presence in China and continues to invest in R&D despite ongoing investigations [17][18] - The company is advancing its pipeline with several new medicines and indication expansions expected to drive future growth [76] Q&A Session Summary Question: U.S. election implications and investment focus - Management indicated that pharmaceuticals are typically not subject to import duties and emphasized the importance of the U.S. market for innovation and growth [81][83] Question: Confidence in the 2025 outlook - Management expressed confidence in achieving growth despite potential headwinds, citing strong momentum across the portfolio [85][86] Question: Materiality of impact from the investigation in China - Management stated it is too early to judge the impact but acknowledged that growth in China may slow next year [92][93] Question: Confidence in Dato-DXd and FDA review - Management highlighted ongoing discussions with the FDA regarding subgroup analyses and expressed confidence in the potential of Dato-DXd based on recent data [95][100]